Document:

Exhibit
10.1

 

LICENSE
AGREEMENT

 

BY
AND BETWEEN

 

PROCESSA
PHARMACEUTICALS, INC.

 

AND

 

ELION
ONCOLOGY, INC

 

DATED
AS OF AUGUST 23, 2020

 

     

     

    

 

Table
of Contents

  

	 	Page
	 	 
	ARTICLE
    I DEFINITIONS	1
	ARTICLE
    II GRANTS OF RIGHTS	12
	2.1
    Condition Precedent.	12
	2.2
    Licenses.	13
	2.3
    Rights Retained by the Parties	13
	2.4
    Section 365(n) of the Bankruptcy Code	14
	2.5
    Transfer of Elion Material and Know-How	14
	ARTICLE
    III DEVELOPMENT	14
	3.1
    General	14
	3.2
    Exchange of Information Regarding Development	14
	ARTICLE
    IV COMMERCIALIZATION	15
	4.1
    General	15
	4.2
    Commercialization Plans	15
	ARTICLE
    V DILIGENCE	15
	5.1
    Commercially Reasonable Efforts	15
	5.2
    Termination for Failure to Meet Diligence Obligations	15
	ARTICLE
    VI FINANCIAL PROVISIONS	16
	6.1
    Equity and Cash Upon Satisfying Condition Precedent	16
	6.2
    Demand Registration	16
	6.3
    Cessation of Demand Registration	16
	6.4
    Development and Regulatory Milestone Payments	17
	6.5
    Anti-Dilution from Reverse Split and Other Adjustments	17
	6.6
    Development and Commercialization Costs	18
	6.7
    Sales Milestone Payments	18
	6.8
    Product Royalties	18
	6.9
    Sublicense	19
	6.10
    Reports; Payments	20
	6.11
    Books and Records; Audit Rights	21
	6.12
    Tax Matters	21
	6.13
    Payment Method and Currency Conversion	22
	6.14
    Blocked Payments	22
	6.15
    Late Payments	22

 

    	 	-i-	 

     

    

 

Table
of Contents

(continued)

 

	 	Page
	 	 
	ARTICLE
    VII INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS	23
	7.1
    Ownership of Inventions	23
	7.2
    Prosecution and Maintenance of Patent Rights.	23
	7.3
    Third Party Infringement.	24
	7.4
    Patent Invalidity Claim	26
	7.5
    Claimed Infringement	26
	7.6
    Patent Term Extensions	27
	7.7
    Patent Marking	27
	7.8
    Certification under Drug Price Competition and Patent Restoration Act.	27
	7.9
    Privileged Communications	28
	7.10
    Settlement	28
	ARTICLE
    VIII CONFIDENTIAL INFORMATION	28
	8.1
    Treatment of Confidential Information	28
	8.2
    Confidential Information	29
	8.3
    Publications	29
	8.4
    Press Releases and Other Disclosures	30
	8.5
    Equitable Relief	30
	ARTICLE
    IX REPRESENTATIONS, WARRANTIES AND COVENANTS	31
	9.1
    Elion’s Representations	31
	9.2
    Processa’s Representations	33
	9.3
    Elion Covenants	33
	9.4
    Processa Covenant	34
	9.5
    No Warranty	34
	ARTICLE
    X INDEMNIFICATION	34
	10.1
    Indemnification in Favor of Elion	34
	10.2
    Indemnification in Favor of Processa	35
	10.3
    General Indemnification Procedures	36
	10.4
    Insurance	37

 

    	 	-ii-	 

     

    

 

Table
of Contents

(continued)

 

	 	Page
	 	 
	ARTICLE
    XI TERM AND TERMINATION	38
	11.1
    Term	38
	11.2
    Termination for Failure to Satisfy Condition Precedent	38
	11.3
    Termination for Convenience	38
	11.4
    Termination for Cause	38
	11.5
    Additional Termination by Elion	38
	11.6
    Termination for Insolvency	38
	11.7
    Termination for Challenge of Elion Patent Rights	39
	11.8
    Consequences of Termination	39
	11.9
    Effect of Termination or Expiration; Accrued Rights and Obligations	42
	11.10
    Survival	42
	ARTICLE
    XII MISCELLANEOUS	42
	12.1
    Governing Law; Jurisdiction	42
	12.2
    Dispute Resolution	42
	12.3
    Waiver	43
	12.4
    Notices	43
	12.5
    Entire Agreement	43
	12.6
    Severability	44
	12.7
    Assignment	44
	12.8
    Counterparts; Exchange by Facsimile	44
	12.9
    Force Majeure	44
	12.10
    Third-Party Beneficiaries	44
	12.11
    Relationship of the Parties	45
	12.12
    Performance by Affiliates	45
	12.13
    No Consequential or Punitive Damages	45

 

    	 	-iii-	 

     

    

 

LICENSE
AGREEMENT

 

THIS
LICENSE AGREEMENT is entered into as of this 23 day of August, 2020 (the “Effective Date”), by and between
Processa Pharmaceuticals, Inc. a corporation organized under the laws of Delaware, having a business address at 7380 Coca Cola
Drive, Suite 106, Hanover, MD 21076 (“Processa”), and Elion Oncology, Inc. a corporation organized under the
laws of Maryland whose principal place of business is at 4800 Hampden Lane, Bethesda, MD 20814 (“Elion”).

 

WHEREAS,
Elion has developed or obtained rights to Elion Know-How, Elion Patent Rights and the Elion Compound (each as defined below);
and

 

WHEREAS,
Processa desires to obtain a license of the Elion Patent Rights and the Elion Know-How to Develop and Commercialize Compounds
and Products (each as defined below), under the terms and conditions set forth herein, and Elion desires to grant such a license;

 

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the Parties agree as follows:

ARTICLE
I

DEFINITIONS

 

The
following terms, whether used in the singular or plural, shall have the following meanings:

 

1.1
“Affiliate”. Affiliate means any Person directly or indirectly controlled by, controlling or under common control
with, a Party, but only for so long as such control shall continue. For purposes of this definition, “control” (including,
with correlative meanings, “controlled by”, “controlling” and “under common control with”)
means, with respect to a Person, possession, direct or indirect, of (a) the power to direct or cause direction of the management
and policies of such Person (whether through ownership of securities or partnership or other ownership interests, by contract
or otherwise), or (b) at least 50% of the voting securities (whether directly or pursuant to any vested and exercisable option,
warrant or other similar arrangement) or other comparable equity interests. For clarity, neither of the Parties shall be deemed
to be an “Affiliate” of the other.

 

1.2
“Bankruptcy Code”. Bankruptcy Code means Title 11 of the U.S. Code, as amended from time to time.

 

1.3
“Business Day”. Business Day means a day that is not a Saturday, Sunday or a day on which banking institutions
in New York City, New York are authorized by Law to remain closed.

 

1.4
“Calendar Quarter”. Calendar Quarter means each of the periods ending on March 31, June 30, September 30, and
December 31 of any Calendar Year; provided, however, that the first Calendar Quarter shall begin on the Effective
Date and end on the last day of the calendar quarter during which the Effective Date occurs; provided, that, the final Calendar
Quarter shall end on the last day of the Term.

 

    	 	1	 

     

    

 

1.5
“Calendar Year”. Calendar Year means each calendar year during the Term; provided, however, that
the first Calendar Year shall begin on the Effective Date and end on December 31 of the calendar year during which the Effective
Date occurs; provided, that, the final Calendar Year shall end on the last day of the Term.

 

1.6
“Combination Product”. Combination Product means (a) any pharmaceutical product that is a single formulation
consisting of a Compound and one or more other active compounds or active ingredients, which other active compounds or active
ingredients are not Compounds (“Other API”) or (b) any combination of a Compound sold together with any separately
formulated Other API for a single invoiced price.

 

1.7
“Commercialization” or “Commercialize”. Commercialization or Commercialize means activities
directed to obtaining pricing and reimbursement approvals, marketing, promoting, Manufacturing commercial supplies of, distributing,
importing, offering for sale, or selling a product.

 

1.8
“Commercially Reasonable Efforts”. Commercially Reasonable Efforts means, with respect to an objective, the
reasonable, diligent, good faith efforts of a Party (including the efforts of its Affiliates and Sublicensees) to accomplish such
objective that a biopharmaceutical company of comparable size and resources would normally use to accomplish a similar objective
under similar circumstances, and, specifically with respect to obligations hereunder relating to a Compound or Product, the carrying
out of such obligations with those efforts and resources that a biopharmaceutical company of comparable size and resources would
use were it Developing, Manufacturing or Commercializing its own pharmaceutical products that are at a similar stage of development
or product life cycle and of similar market potential as the Compound or Product, taking into account actual and potential issues
of safety, efficacy or stability, product profile (including product modality, category and mechanism of action), stage of development
or life cycle status, product labeling or anticipated labeling, the present and future market potential, past performance of the
Compound or Product, actual and projected Development, Regulatory Approval, pricing and reimbursement approval, Manufacturing
and Commercialization costs, existing or projected pricing, sales, reimbursement and financial return, medical and clinical considerations,
present and future regulatory environment, any issues regarding the ability to Manufacture the Compound or Product, the likelihood
and timing of obtaining Regulatory Approvals and pricing and reimbursement approvals, proprietary position, strength and duration
of patent protection and anticipated exclusivity, competitive Third Party products at the time and the likely competitive environment
at the time of projected entry into the market and thereafter, and any other relevant scientific, technical, operational and commercial
factors, all as measured by the facts and circumstances at the time such efforts are due. Commercially Reasonable Efforts will
be determined on a country-by-country and indication-by-indication basis for the Compound or Product, and the level of effort
is expected to change over time, reflecting changes in the status and value of the Compound or Product and the market conditions
and country(ies) involved.

 

    	 	2	 

     

    

 

1.9
“Compound”. Compound means Eniluracil together with all analogs, derivatives, metabolites, stereoisomers, polymorphs,
formulations, mixtures or compositions thereof, and any existing or future improved or modified versions of the foregoing developed
by or on behalf of Processa, its Affiliates or Sublicensees (or their respective Affiliates or assignees).

 

1.10
“Clinical Trial” shall mean any study in which human subjects are dosed with a drug, whether approved or investigational,
including any Phase 1, 2, 3 or 4 clinical study.

 

1.11
“Condition Precedent Period”. Condition Precedent Period means the period of time beginning on the Effective
Date and ending on October 30, 2020.

 

1.12
“Control” or “Controlled”. Control or Controlled means, with respect to any tangible property
or intellectual property right or other intangible property, the possession (whether by ownership or license (other than by grant
of a license to one Party by the other Party pursuant to this Agreement or by grant of a license or sublicense to a Sublicensee
by Processa pursuant to a license or sublicense agreement)) by a Person of the ability to grant to another Person access to such
tangible property or access to or a license or sublicense to such intellectual property right or other intangible property, as
provided herein without violating the terms of any agreement with any other Person. Notwithstanding the foregoing, for the purpose
of defining whether intellectual property, Patent Rights, Know-How or Confidential Information is Controlled by a Party, if such
intellectual property, Patent Rights, Know-How or Confidential Information is first acquired, licensed or otherwise made available
to such Party after the Effective Date and if the use, practice or exploitation thereof by or on behalf of the other Party, its
Affiliates or sublicensees would require the first Party to pay any amounts to the Third Party from which the first Party acquired,
licensed or otherwise obtained such intellectual property, Patents, Know-How or Confidential Information (“Additional
Amounts”), such intellectual property, Patent Rights, Know-How or Confidential Information shall be deemed to be Controlled
by the first Party only if the other Party agrees to pay (if necessary) and does in fact pay all Additional Amounts with respect
to such other Party’s use of or license to such intellectual property, Patent Rights, Know-How or Confidential Information
to the extent specified in this Agreement.

 

1.13
“Cover”, “Covering” or “Covered”. Cover, Covering or Covered means, with
respect to a compound, product, technology, process or method that, in the absence of ownership of or a license granted under
a Patent Right, the manufacture, use, offer for sale, sale or importation of such compound or product or the practice of such
technology, process or method would infringe such Patent Right (or, in the case of a Patent Right that has not yet issued, would
infringe such Patent Right if it were to issue).

 

1.14
“Development” or “Develop”. Development or Develop means pre-clinical, non-clinical and
clinical drug research, discovery and development activities, including IND-enabling toxicology and other IND-enabling pre-clinical
development efforts, stability testing, process development, compound property optimization, formulation development, delivery
system development, quality assurance and quality control development, statistical analysis, clinical pharmacology, Manufacturing
supplies of compounds and products for pre-clinical, non-clinical and clinical use, clinical studies (including pre- and post-approval
studies and investigator sponsored clinical studies), regulatory affairs, and Regulatory Approval and clinical study regulatory
activities (excluding regulatory activities directed to obtaining pricing and reimbursement approvals).

 

    	 	3	 

     

    

 

1.15
“Elion Intellectual Property”. Elion Intellectual Property means the Elion Know-How and the Elion Patent Rights.

 

1.16
“Elion Know-How”. Elion Know-How means all Know-How that is Controlled by Elion or any of its Affiliates as
of the Effective Date or thereafter during the Term (other than any Know-How included in Joint Intellectual Property) that is
necessary or useful to Develop, Manufacture or Commercialize any Compound or Product; provided, however, that, if
Elion is acquired by a Third Party, “Elion Know-How” shall exclude any Know-How that (a) is Controlled by such Third
Party or the Affiliates of such Third Party (other than Elion and the Persons that were Elion’s Affiliates immediately prior
to the closing of such acquisition transaction (such Affiliates, “Elion Pre-Existing Affiliates”)) (“Elion
Excluded Affiliates”) and (b) was not Controlled by Elion or any of the Elion Pre-Existing Affiliates immediately prior
to the closing of such acquisition transaction; provided further that, if, after the closing of such acquisition, any such
Elion Excluded Affiliate Develops or Commercializes any Compound or Product or otherwise performs any activities or obtains any
rights with respect to any Compound or Product, such Affiliate will cease to be an Elion Excluded Affiliate and applicable Know-How
that is Controlled by such Affiliate shall be included in Elion Know-How.

 

1.17
“Elion Patent Rights”. Elion Patent Rights means all Patent Rights in the Territory that are Controlled by
Elion or any of its Affiliates as of the Effective Date or thereafter during the Term (other than Joint Patent Rights) that Cover
any Compound or Product. The Elion Patent Rights existing as of the Effective Date are set forth on Schedule ‎1.16;
provided, however, that, if Elion is acquired by a Third Party, “Elion Patent Rights” shall exclude
any Patent Rights that (a) are Controlled by such Third Party or the Affiliates of such Third Party (other than Elion and Elion
Pre-Existing Affiliates) and (b) were not Controlled by Elion or any of the Elion Pre-Existing Affiliates immediately prior to
the closing of such acquisition transaction; provided further that, if, after the closing of such acquisition, any such
Elion Excluded Affiliate Develops or Commercializes any Compound or Product or otherwise performs any activities or obtains any
rights with respect to any Compound or Product, such Affiliate will cease to be an Elion Excluded Affiliate and applicable Patent
Rights that are Controlled by such Affiliate shall be included in Elion Patent Rights.

 

1.18
“EMA”. EMA means the European Medicines Agency and any successor agency.

 

1.19
“FDA”. FDA means the U.S. Food and Drug Administration and any successor agency.

 

1.20
“Field”. Field means all medical uses.

 

1.21
“First Commercial Sale”. First Commercial Sale means, with respect to a Product in a country, the first sale
of such Product in such country by Processa, any of its Affiliates or any Sublicensee to the first unrelated Third Party (unless
any such entity is an end-user of the Product) in such country for use or consumption of such Product in such country after receipt
of the first Regulatory Approval for such Product in such country. Sales for purposes of testing the Product and sample purposes
shall not be deemed a First Commercial Sale. For clarity, First Commercial Sale will be determined on a Product-by-Product and
country-by-country basis, as applicable.

 

    	 	4	 

     

    

 

1.22
“Governmental Authority”. Governmental Authority means any national, federal, state or local government, or
political subdivision thereof, or any multinational organization or authority or any authority, agency or commission entitled
to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or
tribunal (or any department, bureau or division thereof), or any governmental arbitrator or arbitral body.

 

1.23
“IND”. IND means an investigational new drug application filed with the FDA with respect to a Compound or Product,
or an equivalent application filed with the Regulatory Authority of a country or regulatory jurisdiction in the Territory other
than the U.S., and all amendments and supplements thereto.

 

1.24
“Joint Intellectual Property”. Joint Intellectual Property means the Joint Inventions and Joint Patent Rights.

 

1.25
“Know-How”. Know-How means all unpatented technical information, trade secrets, formulae, standards, knowledge,
directions, instructions, test protocols, procedures and results, studies, analyses, raw material sources, data, manufacturing
data, and any other confidential or proprietary interest in information.

 

1.26
“Law” or “Laws”. Law or Laws means all laws, statutes, rules, regulations, orders, judgments,
or ordinances of any Governmental Authority.

 

1.27
“Losses”. Losses means any and all (a) claims, losses, liabilities, damages, fines, royalties, governmental
penalties or punitive damages, deficiencies, interest, awards, judgments, and settlement amounts (including special, indirect,
incidental, and consequential damages, lost profits, and Third Party punitive and multiple damages), and (b) in connection with
all of the items referred to in clause (a) above, any and all costs and expenses (including reasonable counsel fees and all other
expenses reasonably incurred in investigating, preparing or defending any litigation or proceeding, commenced or threatened).

 

1.28
“Major Market”. Major Market means each of the United States, Canada, France, Germany, Italy, Spain, the United
Kingdom, the People’s Republic of China (including Hong Kong, Taiwan and Macau), Republic of Korea, Australia, New Zealand
and Japan.

 

1.29
“Manufacture” or “Manufacturing”. Manufacture or Manufacturing means activities directed
to producing, manufacturing, processing, filling, finishing, packaging, labeling, quality assurance testing and release, shipping
and storage of a product.

 

1.30
“MHLW”. MHLW means the Japanese Ministry of Health, Labour and Welfare, and any successor agency.

 

    	 	5	 

     

    

 

1.31
“NDA”. NDA means a New Drug Application, as defined in the Act, filed with the FDA with respect to a Compound
or Product, or an equivalent application filed with the Regulatory Authority of a country in the Territory other than the U.S.,
and all amendments and supplements thereto.

 

1.32
“Net Sales”. Net Sales means the gross amounts billed or invoiced by Processa, or any of its Affiliates or
Sublicensees or assignees, to any Third Party with respect to sales of Products in the Territory, calculated in the same manner
as reported in such Person’s audited financial statements, less the following:

 

(a)
Volume, cash or trade discounts, credits or allowances, including discounts in the form of inventory management fees paid to wholesalers
and distributors all to the extent such discounts are included in the invoices and actually granted;

 

(b)
Credits, refunds or allowances granted upon returns, rejections or recalls and for retroactive price reductions or billing errors;

 

(c)
Freight, postage, shipping and insurance costs incurred in transporting the applicable Products to the extent that such items
are applicable to such sale and are separately itemized and invoiced and actually paid as evidenced by invoices, receipts or other
appropriate documents;

 

(d)
Amounts paid (including rebates and chargeback payments or credits or other equivalents thereof) to formularies, government or
government agency programs, trade customers, managed health care organizations and pharmacy benefit managers (or equivalents thereof)
to obtain listing or purchase of the applicable Products not to exceed 25% of the originally billed or invoiced amount;

 

(e)
Bad debts, uncollectible amounts, and collection costs relating to the sale of Products that are actually written off, provided
that, if the debt is thereafter paid, the corresponding amount shall be added to the Net Sales of the period during which
it is paid; and

 

(f)
To the extent not reimbursed by a third party, taxes, tariffs, duties or other governmental charges (other than income taxes)
levied on, absorbed, or otherwise imposed on the sales, transportation, delivery, use, exportation, or importation of the applicable
Products.

 

Sales
of Products between Processa and its Affiliates or Sublicensees for resale shall be excluded from the computation of Net Sales,
provided that the subsequent resale of such Products to a Third Party are included in the computation of Net Sales. Disposal or
use of Products at or below cost for regulatory, development or charitable purposes, such as clinical trials, compassionate use,
named patient use, or indigent patient programs, shall not be deemed a sale hereunder.

 

With
respect to any sale of any Product in a given country for any substantive consideration other than monetary consideration on arm’s
length terms (which has the effect of reducing the invoiced amount below what it would have been in the absence of such non-monetary
consideration), for purposes of calculating the Net Sales under this Agreement, such Product shall be deemed to be sold exclusively
for cash at the average Net Sales price charged to Third Parties for cash sales in such country during the applicable reporting
period (or if there were only de minimis cash sales in such country, at the fair market value as determined in good faith
based on pricing in comparable markets).

 

    	 	6	 

     

    

 

For
purposes of calculating Net Sales for Combination Products in each applicable country:

 

(a)
If a Product is sold in any country as part of a Combination Product involving a co-formulation or co-packaging of the Compound
with an Other API for which Processa has not acquired (whether by acquisition or licensing) all of the exclusive rights to commercialize
such Other API in such country, then the Net Sales for such Combination Product in such country used to determine Net Sales Milestone
Payments, Net Sales Royalties, and any other use of Net Sales in this Agreement will be equal to the positive difference (if any)
between (x) Net Sales of such Combination Product calculated as above (with the deductions set forth in Section1.32 (a) –
(f)) minus (y) all of the direct costs incurred by Process to obtain, combine and manufacture the Other API into the Combination
Product in such country or to obtain, combine and manufacture the other pharmaceutical product which includes the Other API into
the Combination Product in such country.

 

(b)
If a Product is sold in any country as part of a Combination Product involving a co-formulation or co-packaging of the Compound
with an Other API for which (i) Processa has acquired (whether by acquisition or licensing) all of the exclusive rights to commercialize
such Other API in such country and (ii) such Other API has demonstrated through pre-clinical and/or clinical studies an effect
on cancer, then the Net Sales for such Combination Product in such country used to determine Net Sales Milestone Payments, Net
Sales Royalties, and any other use of Net Sales in this Agreement will be equal to 35% of the positive difference (if any) between
(x) Net Sales of such Combination Product calculated as above (with the deductions set forth in Section1.32 (a) – (f)) minus
(y) all of the direct costs incurred by Processa (including for clarity all royalties, milestones and other payments ) to obtain,
combine and manufacture the Other API in the Combination Product in such country or to obtain, combine and manufacture the other
pharmaceutical product which includes the Other API into the Combination Product in such country.

 

(c)
If a Product is sold in any country as part of a Combination Product involving a co-formulation or co-packaging of the Compound
with an Other API for which (i) Processa has acquired (whether by acquisition or licensing) all of the exclusive rights to commercialize
such Other API in such country and (ii) such Other API has demonstrated through pre-clinical and/or clinical studies no effect
on cancer, then the Net Sales for such Combination Product in such country used to determine Net Sales Milestone Payments, Net
Sales Royalties, and any other use of Net Sales in this Agreement will be equal to 50% of the positive difference (if any) between
(x) Net Sales of such Combination Product calculated as above (with the deductions set forth in Section1.32 (a) – (f)) minus
(y) all of the direct costs incurred by Process (including for clarity all royalties, milestones and other payments ) to obtain,
combine, and manufacture the Other API in the Combination Product in such country or to obtain, combine and manufacture the other
pharmaceutical product which includes the Other API into the Combination Product in such country.

 

    	 	7	 

     

    

 

1.33
“Party”. Party means either Elion or Processa; “Parties” means both Elion and Processa.

 

1.34
“Patent Rights”. Patent Rights means all patent applications, patents, certificates of invention, applications
for certificates of invention and priority patent filings, including any continuations, continuations-in-part, renewals, requests
for continued examination and divisions of any such patents and patent applications, any patents or certificates of invention
issuing from any of the foregoing, any extensions, reissues, reexaminations, substitutions, confirmations, registrations, revalidations,
revisions, additions or supplementary patent certificates thereto, and all foreign counterparts thereof.

 

1.35
“Payments”. Payments means royalties and other amounts payable by Processa to Elion pursuant to this Agreement.

 

1.36
“Person”. Person means any natural person or any corporation, company, partnership, joint venture, firm, Governmental
Authority, or other entity, including a Party. .

 

1.37
“Phase 1B”. Phase 1B means the clinical study to be conducted pursuant to Protocol ELC101-20 entitled a “Phase
1b Dose-escalation Study of the Safety and Pharmacokinetics of Fixed-dose Eniluracil with Escalating Doses of Capecitabine Administered
Orally in Patients with Advanced, Refractory Gastrointestinal (GI) Tract Tumors with Dose Confirmation at the Recommended Phase
2 Dose (RP2D),” as approved by the FDA pursuant to IND for the Product or, after prior notification and discussion with
Elion when commercially practicable, any FDA accepted modification of the Protocol that would still classify it as a Phase 1B
or Phase 2 study. As used herein, “Dose Confirmation” shall mean any dose confirmation in the Phase 1B or any dose
confirmation that facilitates a Phase 2.

 

1.38
“Phase 2”. Phase 2 means a human clinical trial of a product in any country that would satisfy the requirements
of U.S. 21 C.F.R. Part 312.21(b) and is intended to explore a variety of doses, dose response, and duration of effect, and to
generate evidence of clinical safety and effectiveness for a particular indication or indications in a target patient population,
or a similar clinical study prescribed by the relevant Regulatory Authorities in a country other than the United States.

 

1.39
“Phase 3”. Phase 3 means a human clinical trial of a product in any country that would satisfy the requirements
of 21 C.F.R. §312.21(c), as amended (or the non-United States equivalent thereof) and is intended to (a) establish that the
product is safe and efficacious for its intended use, (b) define contraindications, warnings, precautions and adverse reactions
that are associated with the product in the dosage range to be prescribed, and (c) support Regulatory Approval for such product.

 

1.40
“Phase 4”. Phase 4 means a human clinical trial of a product which is (a) conducted to satisfy a requirement
of a Regulatory Authority in order to maintain a Regulatory Approval or (b) conducted voluntarily after Regulatory Approval of
the product has been obtained from an appropriate Regulatory Authority for enhancing marketing or scientific knowledge of an approved
indication.

 

    	 	8	 

     

    

 

1.41
“Pivotal Clinical Trial” shall mean (a) a Phase 3 Clinical Trial that is intended by Company or its Affiliates
or Sublicensees to be submitted (together with any other registration trials that are prospectively planned when such Phase 3
Clinical Trial is Initiated) for Regulatory Approval in the U.S. or the EU, or (b) any other Clinical Trial that is intended by
Company or its Affiliates or Sublicensees to establish that a Product is safe and efficacious for its intended use, and to determine
warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range to be prescribed,
which Clinical Trial is a registration trial intended by Company or its Affiliates or Sublicensees to be sufficient for filing
an application for a Regulatory Approval for such product in the U.S. or another country or some or all of an extra-national territory,
solely as evidenced by the acceptance for filing for a Regulatory Approval for such Product after completion of such Clinical
Trial.

 

1.42
“Processa Intellectual Property” means, collectively, Processa Know-How and Processa Patent Rights.

 

1.43
“Processa Know-How”. Processa Know-How means all Know-How Controlled as of the Effective Date or thereafter
during the Term by Processa or any of its Affiliates (other than any Know-How included in Joint Intellectual Property) that is
used by Processa or any of its Affiliates in the Development, Manufacture or Commercialization of any Compound or Product; provided,
however, that, if Processa is acquired by a Third Party, “Processa Know-How” shall exclude any Know-How that
(a) is Controlled by such Third Party or the Affiliates of such Third Party (other than Processa and the Persons that were Processa’s
Affiliates immediately prior to the closing of such acquisition transaction (such Affiliates, “Processa Pre-Existing
Affiliates”)) (“Processa Excluded Affiliates”) and (b) was not Controlled by Processa or any of the
Processa Pre-Existing Affiliates immediately prior to the closing of such acquisition transaction; provided further that,
if, after the closing of such acquisition, any such Processa Excluded Affiliate Develops or Commercializes any Compound or Product
or otherwise performs any activities or obtains any rights with respect to any Compound or Product, such Affiliate will cease
to be a Processa Excluded Affiliate and applicable Know-How that is Controlled by such Affiliate shall be included in Processa
Know-How.

 

1.44
“Processa Patent Rights”. Processa Patent Rights means all Patent Rights in the Territory Controlled as of
the Effective Date or thereafter during the Term by Processa or any of its Affiliates (other than Joint Patent Rights) that Cover
any Compound or Product and are used by Processa or any of its Affiliates in the Development, Manufacture or Commercialization
of any Compound or Product; provided, however, that, if Processa is acquired by a Third Party, “Processa Patent
Rights” shall exclude any Patent Rights that (a) are Controlled by such Third Party or the Affiliates of such Third Party
(other than Processa and Processa Pre-Existing Affiliates) and (b) were not Controlled by Processa or any of the Processa Pre-Existing
Affiliates immediately prior to the closing of such acquisition transaction; provided further that, if, after the closing
of such acquisition, any such Processa Excluded Affiliate Develops or Commercializes any Compound or Product or otherwise performs
any activities or obtains any rights with respect to any Compound or Product, such Affiliate will cease to be a Processa Excluded
Affiliate and applicable Patent Rights that are Controlled by such Affiliate shall be included in Processa Patent Rights.

 

    	 	9	 

     

    

 

1.45
“Product”. Product means any pharmaceutical preparation containing one or more Compounds as its only active
ingredient(s) or a Combination Product with the active ingredient. For the avoidance of doubt, nothing in this Agreement grants
to Processa any right or license under any Patent Rights or Know-How Controlled by Elion with respect to any Other API.

 

1.46
“Regulatory Approval”. Regulatory Approval means an approval by the applicable Regulatory Authority of an NDA
and any other approval, license, registration, permit, notification or authorizations (or waiver) of the applicable Regulatory
Authority, which is necessary for the manufacture, use, storage, import, transport, promotion, marketing, distribution, offer
for sale, sale, or other commercialization of pharmaceutical products in a given country or regulatory jurisdiction, other than
any pricing or reimbursement approval.

 

1.47
“Regulatory Authority”. Regulatory Authority means any Governmental Authority with responsibility for granting
licenses or approvals necessary for the development, manufacture, use, storage, import, transport, promotion, marketing, distribution,
offer for sale, sale or other commercialization of pharmaceutical products in a country or regulatory jurisdiction, including
but limited to the FDA, EMA or MHLW.

 

1.48
“Regulatory Exclusivity”. Regulatory Exclusivity means exclusive marketing rights or data protection or other
exclusivity rights conferred by any Regulatory Authority with respect to a Product in a country or regulatory jurisdiction within
the Territory, other than a Patent Right, including orphan drug exclusivity, pediatric exclusivity and rights conferred in the
U.S. under the Hatch-Waxman Act.

 

1.49
“Satisfactory Public Offering”. Satisfactory Public Offering means the firm commitment underwritten public
offering of shares of common stock of Processa, par value $0.0001 per share (the “Common Stockk” pursuant to a Registration
Statement on Form S-1 filed and declared effective by the SEC, as more specifically described and satisfying all of the conditions
in Sections 2.

 

1.50
“Satisfactory Public Offering Securities”. Satisfactory Public Offering Securities means shares of Common Stock
issued to investors in the Satisfactory Public Offering.

 

1.51
“Senior Executive”. Senior Executive means, with respect to Elion, the CEO of Elion, or his or her designee,
and, with respect to Processa, the CEO of Processa, or his or her designee. “Senior Executives” means the applicable
officers of Elion and Processa.

 

1.52
“Sublicensee”. Sublicensee means a Third Party that has been granted a sublicense under the rights granted
to Processa pursuant to Section ‎2.2 of this Agreement, beyond the mere right to purchase Compound or Product from Processa
or its Affiliates.

 

1.53
“Territory”. Territory means all countries of the world.

 

1.54
“Third Party”. Third Party means any Person other than Elion or Processa or any of their respective Affiliates.

 

    	 	10	 

     

    

 

1.55
“U.S.”. U.S. means the United States of America, including its territories and possessions.

 

1.56
“Valid Claim”. Valid Claim means any claim of (a) an issued and unexpired patent within the Elion Patent Rights
that has not been revoked or held unenforceable or invalid by a final decision of a court or other Governmental Authority of competent
jurisdiction, or that has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer
or otherwise; or (b) a patent application within the Elion Patent Rights; provided that such a claim within a patent application
has not been canceled, withdrawn, or abandoned or been pending for more than seven (7) years from the date of its first priority
filing in the applicable country. For clarity, a claim of a patent that, pursuant to clause (b), had ceased to be a Valid Claim
before it issued but that subsequently issues and is otherwise described by clause (a), shall again be considered to be a Valid
Claim once it issues until it is no longer considered a Valid Claim in accordance with clause (a).

 

1.57
Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

 

	 	Definition:	Section:
	 	Abandoned
    Patents	Section
    ‎7.2(a)
	 	Agents	Section
    ‎8.1
	 	Commercialization
    Plan	Section
    ‎4.2
	 	Condition
    Precedent	Section
    2.1(a)
	 	Condition
    Precedent Satisfaction Date	Section
    2.1(a)
	 	Confidential
    Information	Section
    ‎8.2
	 	Courts	Section
    ‎12.1
	 	Demand
    Registration	Section
    6.2
	 	Effective
    Date	Preamble
	 	Elion	Preamble
	 	Elion
    Excluded Affiliates	Section
    ‎1.15
	 	Elion
    Parties	Section
    ‎10.1
	 	Elion
    Pre-Existing Affiliates	Section
    ‎1.15
	 	Elion
    Sole Inventions	Section
    ‎7.1(a)
	 	First
    Tranche Shares	Section
    6.1
	 	Indemnified
    Party	Section
    ‎10.3(a)
	 	Indemnifying
    Party	Section
    ‎10.3(a)
	 	Infringement
    Claim	Section
    ‎7.3(a)
	 	Joint
    Inventions	Section
    ‎7.1(b)
	 	Joint
    Patent Rights	Section
    ‎7.2(b)
	 	Late
    Payment Notice	Section
    6.15
	 	Litigation
    Conditions 	Section
    10.3(a)
	 	MRS	Section
    6.4
	 	Offering
    Price	Section
    2.1(a)
	 	Paragraph
    IV Claim	Section
    ‎7.8(a)
	 	Periodic
    Report	Section
    6.10
	 	Product
    Liability Claim	Section
    ‎10.1(b)
	 	Processa	Preamble
	 	Processa
    Excluded Affiliates	Section
    ‎1.42
	 	Processa
    Parties	Section
    ‎10.2
	 	Processa
    Pre-Existing Affiliates	Section
    ‎1.42
	 	Processa
    Sole Inventions	Section
    ‎7.1(a)
	 	Royalty
    Term	Section
    6.8(b)
	 	Second
    Tranche Shares	Section
    6.1
	 	Sole
    Inventions	Section
    ‎7.1(a)
	 	Sublicensee
    Intellectual Property	Section
    ‎2.2(b)
	 	Sublicense
    Materials	Section
    2.2(b)
	 	Taxes	Section
    6.12
	 	Term	Section
    ‎11.1
	 	Third
    Party Claims	Section
    10.1
	 	Third
    Party Patent Licenses	Section
    ‎6.8(c)

 

    	 	11	 

     

    

 

1.58
Captions; Certain Conventions; Construction. All headings and captions herein are for convenience only and shall not be
interpreted as having any substantive meaning. The Schedules to this Agreement are incorporated herein by reference and shall
be deemed a part of this Agreement. Unless otherwise expressly provided herein or the context of this Agreement otherwise requires:

 

(a)
words of any gender include each other gender;

 

(b)
words such as “herein”, “hereof” and “hereunder” refer to this Agreement as a whole and not
merely to the particular provision in which such words appear;

 

(c)
words using the singular shall include the plural, and vice versa;

 

(d)
the words “include,” “includes” and “including” shall be deemed to be followed by the phrase
“but not limited to”, “without limitation”, “inter alia” or words of similar import;

 

(e)
the word “or” shall be deemed to include the word “and” (i.e., shall mean “and/or”)

 

(f)
references to “Article,” “Section,” “subsection”, “paragraph”, “clause”
or other subdivision, or to a Schedule, without reference to a document, are to the specified provision or Schedule of this Agreement;
and

 

(g)
references to “$” or “dollars” shall be references to U.S. Dollars.

 

This
Agreement shall be construed as if the Parties drafted it jointly.

 

ARTICLE
II

GRANTS OF RIGHTS

 

2.1
Condition Precedent.

 

(a)
The grant of license rights is conditioned upon Prosessa’s closing of a Satisfactory Public Offering by October 30, 2020
pursuant to which (i) Processa has raised in excess of $15,000,000 in gross proceeds from the sale of shares of its Common Stock
pursuant to a firm commitment underwriting registered on a Registration Statement on Form S-1 filed and declared effective by
the SEC (such price per share set forth in the applicable Registration Statement on Form S-1 which has been declared effective,
the “Offering Price”), and (ii) Processa has listed its Common Stock for trading on the Nasdaq Capital Markets
(collectively, the “Condition Precedent”) during the Condition Precedent Period. The date on which Processa
and Elion satisfy the Condition Precedent, if any, shall be the “Condition Precedent Satisfaction Date.”

 

    	 	12	 

     

    

 

(b)
Expiration of the Agreement. If, for any reason (including a failure to meet the conditions in Sections 2.1 prior to the
end of the Condition Precedent Period) the Condition Precedent is not fully satisfied within the Condition Precedent Period, then
this Agreement shall terminate in accordance with Section ‎11.2.

 

2.2
Licenses.

 

(a)
License. Subject to the terms of this Agreement, upon Processa’s satisfaction of the Condition Precedent pursuant
to Section ‎2.1, Elion shall, and hereby does, grant to Processa an exclusive (even as to Elion and its Affiliates), royalty-bearing
right and license, including the right to sublicense in accordance with Section ‎2.2‎(b), under the Elion Intellectual
Property and Elion’s interest in the Joint Intellectual Property, to Develop, Manufacture, use and Commercialize, including
filing for, obtaining and maintaining Regulatory Approval for, Products in the Field in the Territory.

 

(b)
Sublicenses. From and after the Condition Precedent Satisfaction Date, Processa shall have the right to grant sublicenses
under the licenses to Elion Intellectual Property and Elion’s interest in the Joint Intellectual Property granted to Processa
under Section ‎2.2(a) to its Affiliates and to Third Parties subject to Elion’s prior written approval; provided,
however, that any such sublicense shall be subject to all applicable terms and conditions of this Agreement. Each agreement
with each Sublicensee must include grants of rights to Processa sufficient to enable Processa to grant substantially the rights
set forth in Sections ‎11.8(b) through ‎11.8(f) with respect to (i) all Know-How and Patent Rights (including all applicable
pre-clinical and clinical data, including pharmacology and biology data; Manufacturing documents and materials; and Manufacturing
technologies) Controlled by such Sublicensee during the Term and used by such Sublicensee in the Development, Manufacture or Commercialization
of any Compound or Product (collectively, “Sublicensee Intellectual Property”); (ii) all filings with Regulatory
Authorities in the Territory relating to Compounds and Products and Regulatory Approvals relating to Compounds and Products held
by such Sublicensee, including related correspondence with Regulatory Authorities; (iii) all Manufacturing agreements to which
such Sublicensee is a party that are related to Compounds or Products; (iv) all of such Sublicensee’s inventory of Compounds
and Products existing as of the applicable date; and (v) all trademarks owned by such Sublicensee and used solely in connection
with the Products, along with all associated goodwill ((i) – (v), collectively, “Sublicense Materials”).

 

2.3
Rights Retained by the Parties. Any rights of Elion or Processa, as the case may be, not expressly granted to the other
Party under the provisions of this Agreement shall be retained by such Party.

 

    	 	13	 

     

    

 

2.4
Section 365(n) of the Bankruptcy Code. All rights and licenses granted under or pursuant to any section of this Agreement,
including the licenses granted under Section ‎2.1, ‎2.2 or ‎11.8(e) to Patent Rights and Know-How (including any data
included in the Know-How), are and will otherwise be deemed to be for purposes of Section 365(n) of the Bankruptcy Code, licenses
of rights to “intellectual property” as defined in Section 101(35A) of the Bankruptcy Code. Each Party will retain
and may fully exercise all of its respective rights and elections under the Bankruptcy Code. The Parties agree that each Party,
as licensee of such rights under this Agreement, will retain and may fully exercise all of its rights and elections under the
Bankruptcy Code or any other provisions of applicable Law outside the United States that provide similar protection for “intellectual
property.”

 

2.5
Transfer of Elion Material and Know-How. During the period beginning on the Condition Precedent Satisfaction Date and ending
on the date that is thirty (30) days after the Condition Precedent Satisfaction Date, Elion shall transition Elion Know-How to
Processa and provide Processa with reasonable amounts of consultation regarding the transferred Elion Know-How. In addition, Elion,
will transfer all material to Processa related to Eniluracil including but not limited to i) documents including communications,
reports, white papers and supporting material, lab or study notes, manufacturing documents, and similar material, ii) drug substance,
iii) drug product, iv) know-how related to the development of Eniluracil, and v) regulatory approvals or clearances or submissions,
such as transferring the Eniluracil IND to Processa.

 

ARTICLE
III

DEVELOPMENT

 

3.1
General. From and after the Condition Precedent Satisfaction Date, and subject to the terms of this Agreement, including
the requirements of ‎ARTICLE V, Processa (together with its Affiliates or Sublicensees) shall control and be solely responsible
for the Development of and regulatory activities with respect to Compounds and Products in the Field in the Territory, including
all costs and expenses relating thereto; provided, however, that, prior to the Condition Precedent Satisfaction
Date, Elion will reasonably cooperate with Processa, as Processa may reasonably request and at Processa’s expense, to enable
Processa to interact with FDA in order to discuss the Development of and regulatory activities with respect to Compounds and Products
for the indications Processa desires to pursue with respect to such Compounds and Products. If Processa requests Elion’s
cooperation as described above, the Parties shall mutually agree in advance on a budget therefor, and Processa shall reimburse
Elion for any expenses incurred by Elion under this Section ‎3.1 within thirty (30) days after receiving an invoice therefor.

 

3.2
Exchange of Information Regarding Development. At least once each Calendar Year, beginning on the Effective Date and ending
on the date on which Processa obtains the first Regulatory Approval for a Product in a Major Market, Processa shall provide Elion
with a reasonably detailed report describing Processa’s Development activities and the summary results thereof with respect
to all Compounds and Products.

 

    	 	14	 

     

    

 

ARTICLE
IV

COMMERCIALIZATION

 

4.1
General. From and after the Condition Precedent Satisfaction Date, and subject to the terms of this Agreement, including
the requirements of ‎ARTICLE V, Processa (together with its Affiliates or Sublicensees) shall control and be solely responsible
for the Commercialization of Products in the Field in the Territory, including all costs and expenses relating thereto.

 

4.2
Commercialization Plans. During the Royalty Term with respect to each Product, at least thirty (30) days prior to the commencement
of each Calendar Year, Processa shall provide Elion, for information purposes only, a summary of the planned Commercialization
activities to be conducted by or on behalf of Processa and its Affiliates and Sublicensees with respect to such Product in each
country in the Territory during such Calendar Year (each such plan, a “Commercialization Plan”).

 

ARTICLE
V

DILIGENCE

 

5.1
Commercially Reasonable Efforts. From and after the Condition Precedent Satisfaction Date during the Term, Processa shall,
directly or through its Affiliates or Sublicensees, use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval
for one (1) Product in the Field in the U.S. Without limiting or derogating from the foregoing, Processa, by itself or through
its Affiliates or Sublicensees, shall meet each of the following milestones within the respective time periods set forth herein:

 

(a)
Dosing of a first patient in a Phase 1B trial for the Product within 12 months from the Condition Precedent Satisfaction Date;
and

 

(b)
Dosing of a first patient in a Phase 2 or Phase 3 trial for the Product within 48 months from the Condition Precedent Satisfaction
Date.

 

5.2
Termination for Failure to Meet Diligence Obligations. If, at any time during the Term, Processa fails to timely achieve
any of the foregoing milestones, or if Elion reasonably believes that Processa (itself and through its Affiliates and Sublicensees
or assignees) has not complied with its obligations under Section ‎5.1, Elion shall provide written notice to Processa specifying
the nature of such reasonable belief, and Elion may terminate this Agreement pursuant to Section ‎11.5.

 

    	 	15	 

     

    

 

ARTICLE
VI

FINANCIAL PROVISIONS

 

6.1
Equity and Cash Upon Satisfying Condition Precedent. In partial consideration for the rights granted to Processa hereunder,
if the Condition Precedent pursuant to Section 2.1 is satisfied, Processa: (a) shall pay to Elion, as Elion shall direct, $100,000
in immediately available funds within five (5) Business Days following the Condition Precedent Satisfaction Date; (b) shall issue
to Elion (which may include its designees who are Affiliates of Elion ), for no additional consideration, 100,000 shares of Common
Stock within twenty (20) Business Days following the Condition Precedent Satisfaction Date (the “First Tranche Shares”)
and (c) subject to the proviso to this sentence, shall for no additional consideration issue 400,000 shares of Common Stock (the
“Second Tranche Shares”) directly to a grantor trust at Elion’s sole cost (the “Trust”), which shares
shall be held by the trustee of such trust in a brokerage account held by Merrill Lynch or a similar brokerage firm if possible,
pursuant to a grantor trust arrangement that is consistent with the principles of IRS Rev. Proc. 92-64 and IRS Notice 2000-56;
provided that (x) the trustee of the grantor trust shall be required to release the Second Tranche Shares from the grantor trust
to Elion (or its designees who are Affiliates of Elion) on January 15, 2021, and (y) in the case that the Offering Price is less
than $8.34, then the number of Second Tranche Shares shall be increased (and therefore Processa shall cause additional Second
Tranche Shares to be issued to and held by such grantor trust) to equal the sum of 100,000 shares plus the quotient obtained by
dividing $2,500,000 by the Offering Price. By way of example, if the Offering Price equals $5 per share, then the number of
Second Tranche Shares issued by Processa and held by the grantor trust would equal 600,000 (which is the sum of 100,000 plus 500,000).
The First Tranche Shares and Second Tranche Shares will contain a restrictive legend that restricts the sale, transfer, or
disposition of these shares (“Lock-up”) as follows: 50% of the shares of Common Stock shall subject to the
Lock-up for six months following the Effective Date; 25% of the shares of Common Stock shall be subject to the Lock-up for nine
months following the Effective Date and the remaining 25% of the shares of Common Stock shall be subject to the Lock-up for one
year following the Effective Date. In addition, the shares of Common Stock received by Elion shall contain a customary restrictive
legend that specifies that such shares of Common Stock have not been registered with the Securities and Exchange Commission (“SEC”)
until such time as Processa shall receive a satisfactory opinion of legal counsel (which may be Processa’s legal counsel)
that specifies that such restrictive legend is no longer required by law; it being understood and agreed that Processa shall reimburse
Elion for the reasonable costs associated with such opinion if not delivered by Processa’s legal counsel.

 

6.2
Demand Registration. Notwithstanding the foregoing, unless a resale exemption from registration is available to Elion for
the shares proposed to be transferred (such as Rule 144 of the Securities Act of 1933, as amended) pursuant to Section 6.1, at
any time following the date that is one hundred and eighty (180) days following the Effective Date, Elion may request that the
shares of Common Stock issued to it pursuant to this Article VI be registered for resale with the SEC from time to time by Processa
(without an underwriter or placement agent) (the “Demand Registration”). Upon receipt of a Demand Registration,
Processa shall use commercially reasonable efforts to register such shares for resale by Elion and shall use its commercially
reasonable efforts to and keep such registration statement effective for at least 12 months (or such shorter period as will terminate
when all the shares covered by the registration statement have been sold or withdrawn).

 

6.3
Cessation of Demand Registration. The Demand Registration right shall cease and no longer be applicable once the shares
issued to Elion issued under Section 6.1 are sold or may be sold without volume limitation restrictions under Rule 144 of the
Securities Act of 1933, as amended, provided, however, that if a director, officer, employee or agent of Elion should become a
member of Processa’s Board of Directors or employed as an Officer in Processa after the Effective Date, the Demand Registration
right shall cease and no longer be applicable once the shares issued to Elion under Section 6.1 are sold or may be sold under
Rule 144 of the Securities Act of 1933, as amended, in compliance with the requirements for sales by Affiliates (as defined under
Rule 144). Processa agrees that the rights granted to Elion under this Article VI shall be assignable to the assignees of the
shares of Common Stock of Processa who are designated by Elion and who are Affiliates of Elion provided that the Rule 144 holding
period with respect to such shares is not extended as a result of such transfer (in which case, the Demand Registration right
shall immediately cease with respect to such shares).

 

    	 	16	 

     

    

 

6.4
Development and Regulatory Milestone Payments. The development and regulatory milestone payments shall be provided to Elion
in 2 forms: Milestone Restricted Shares which shall be identical to the shares of Common Stock which constitute the Satisfactory
Public Offering Securities (“MRSs”) or cash. The MRSs shall be issued within five (5) Business Days following
satisfaction of the applicable Milestone Event and shall be subject to a six month Lock-up following the date of satisfaction
of such applicable Milestone Event. All MRSs shall contain a customary restrictive legend that specifies that such shares of Common
Stock have not been registered with the SEC until such time as Processa shall receive a satisfactory opinion of legal counsel
(which may be Processa’s legal counsel) that specifies that such restrictive legend is no longer required by law; it being
understood and agreed that Processa shall reimburse Elion for the reasonable costs associated with such opinion if not delivered
by Processa’s legal counsel. Each milestone cash payment owed by Processa to Elion pursuant to this Section 6.4 shall be
payable by Processa within thirty (30) days following the first achievement of the corresponding milestone event. For the avoidance
of doubt each milestone payment, whether it be MRSs or cash, is only payable once, regardless of the number of times such milestone
may be achieved by Processa, its Affiliates, and Sublicensees. For purposes of this Section 6.4, if the Initiation of a clinical
trial of a Licensed Product satisfies more than one of the clinical milestone events below (e.g., if the first clinical
trial of a Licensed Product is a Pivotal Trial), then the milestone payments corresponding to both of such clinical milestone
events shall be made simultaneously upon the dosing of the first patient of such clinical trial. In addition, if a given milestone
event is achieved by a Licensed Product without one or more preceding milestone events having been achieved by such Licensed Product,
then the milestone payments corresponding to such skipped milestone events shall be made simultaneously upon achievement of such
milestone event by such Licensed Product.

 

	Milestone
    Event	 	Milestone
    Payment ($)
	1. 1st Year Anniversary
    of Effective Date	 	100,000 MRSs
	2. 2nd Year Anniversary
    of Effective Date	 	100,000 MRSs
	3. 1st Patient in
    Dose Confirmation Study	 	100,000 MRSs
	3. NDA Submission	 	300,000 MRSs
	4. 1st
    FDA Approval in US	 	$5,000,000
	5. 2nd FDA Approval
    in US	 	$3,000,000
	6. 1st Regulatory
    Approval Outside US	 	$2,000,000
	7. 2nd Regulatory
    Approval Outside US	 	$2,000,000

 

6.5
Anti-Dilution from Reverse Split and Other Adjustments. Processa hereby agrees that if the Common Stock (including the
First Tranche Shares and Second Tranche Shares) and MRSs issuable pursuant to this Article VI (or any securities to which such
shares are converted or otherwise exchanged into as a result of any merger, consolidation or other comparable business reorganization)
are the subject of any reverse stock split, stock dividend or other comparable adjustment, then Processa covenants and agrees
to cause and otherwise ensure that the Common Stock (including the First Tranche Shares and Second Tranche Shares) and MRSs (and
any conversion securities or other consideration) will be proportionately adjusted accordingly to achieve a result as if no such
reverse stock split, stock dividend or other comparable adjustment occurred.

 

    	 	17	 

     

    

 

 

6.6
Development and Commercialization Costs. For clarity, following the Effective Date, Processa shall be solely responsible
for all costs it incurs in Developing and Commercializing Compounds and Products, including all Manufacturing costs.

 

6.7
Sales Milestone Payments. Processa shall pay Elion the one-time, non-refundable, non-creditable sales milestone payments
set forth in the table below within thirty (30) days after the end of the first Calendar Quarter during which the Worldwide Annual
Net Sales first reach the values indicated below. For clarity, the milestone payment reached will apply once and only once when
the milestone is first achieved (and more than one payment may occur in each Calendar Year). Thereafter, the milestone will no
longer apply.

 

	Worldwide
    Annual Net Sales	 	Amount
	$50M	 	$2,000,000
	$100M	 	$4,000,000
	$250M	 	$10,000,000
	$500M	 	$20,000,000
	$1 Billion	 	$40,000,000

 

6.8
Product Royalties.

 

(a)
Royalty Rate. Processa shall pay to Elion royalties, on a Product-by-Product and country-by-country basis, equal to 9%
of Net Sales of Products in the Territory during each Calendar Quarter during the applicable Royalty Term for the aggregate Worldwide
Annual Net Sales in the Territory, subject to adjustment as provided in this Section 6.8. Upon the expiration of the Royalty Term
with respect to each Product in each country, Processa shall have a fully-paid up irrevocable license with respect to such Product
in such country. Notwithstanding anything to the contrary contained herein, in no event shall the royalty reductions described
in this Section 6.8, alone or together, reduce the royalties payable to Elion below 4.5% of Net Sales for a Product in a country
in any given Calendar Quarter; it being understood and agreed that Processa may carry over and apply any such royalty reductions,
which are incurred or accrued in a Calendar Quarter and are not deducted in such Calendar Quarter due to the limitation set forth
above in this 6.8(a), to any subsequent Calendar Quarter(s) and shall continue applying such reduction on a Calendar Quarter basis
thereafter until fully deducted, in all cases subject to the limitation set forth in this sentence.

 

(b)
Royalty Term and Adjustments. Processa’s royalty obligations to Elion under this Section 6.8 shall commence on a
country-by-country and Product-by-Product basis on the Effective Date and shall expire on a country-by-country basis and Product-by-Product
basis on the latest of (i) expiration or invalidation of the last Valid Claim Covering such Product in such country and (ii) the
tenth (10th) anniversary of the date of the First Commercial Sale by Processa or any of its Affiliates or Sublicensees
to a non-Sublicensee Third Party of such Product in such country and (iii) the expiration of the last Regulatory Exclusivity relating
to such Product in such country (the “Royalty Term”); provided that, during any period within the Royalty
Term remaining after the expiration of all Valid Claims Covering such Product in such country and all Regulatory Exclusivity as
to such Product in such country, the royalties payable as to such Product in such country under this Section 6.8 shall be reduced
to 4.5% of Net Sales for such Product in such country pursuant to Section 6.8.

 

    	 	18	 

     

    

 

(c)
Third Party Payments. If, in the opinion of patent counsel mutually acceptable to both Processa and Elion, in order to
Develop, Manufacture, use or Commercialize a Product in the Field in a country of the Territory without infringing any third party
intellectual property rights relating to the Elion Intellectual Property, Processa or its Affiliate or Sublicensee is obligated
to obtain a license or comparable grant of rights (e.g., a covenant not to sue) under any Patent Rights from a Third Party
(“Third Party Patent Licenses”) and pay a royalty under such Third Party Patent License with respect to such
Product in such country, then, subject to Section 6.8, forty percent (40%) of such royalties actually paid by Processa, its Affiliates
or Sublicensees shall be creditable against royalties payable to Elion hereunder with respect to such Product in such country;
provided that, if Processa is obligated to enter into any Third Party Patent License, Processa shall use Commercially Reasonable
Efforts to minimize the royalties owed by Processa under such Third Party Patent License.

 

6.9
Sublicense. Subject to the examples provided below, if (a) Processa sub-licenses all rights to the Product in any country
in the Territory to a Third Party, Elion shall receive thirty-three percent (33%) of any Sublicense Consideration including Development
and Regulatory Milestones (Section 6.4 and 6.5), Sales Milestones (Section 6.7) and Product Royalties (Section 6.8); and (b) notwithstanding
the foregoing, in the event that Processa receives Sublicense Consideration on account of a specific Product, then in such case
Processa shall be required to pay Elion thirty-three percent (33%) of all Sublicense Consideration within thirty (30) days of
receipt, but shall not be required to pay Development and Regulatory Milestone Payment (Section 6.4 and 6.5) or Sales Milestone
Payment (Section 6.7) or Product Royalties (Section 6.8) on account of such specific Product in addition to the Sublicense Payments.
To clarify, three example scenarios are presented:

 

Example
1: If Processa Develops the Product and receives Regulatory Approval in multiple countries in the Territory and licenses out the
commercial sales to Sublicensee in these multiple countries in the Territory such that Processa no longer retains any rights to
commercialize the Product in these multiple countries in the Territory, then the financial terms of this ARTICLE VI would then
be the following: Sections 6.4 - 6.5 would apply, Sections 6.7 - 6.8 would no longer apply, and this Section 6.9 would apply such
that Processa shall pay Elion thirty-three percent (33%) of all Sublicense Consideration.

 

Example
2: If Processa Develops and Commercializes the Product in US while Sublicensing the Product for Development and Commercialization
in other territories, then the financial terms of ARTICLE VI would then be the following: Sections 6.4 - 6.5 would apply, Sections
6.7 - 6.8 would only apply to the countries in the Territory in which Processa Commercializes the Product, and this Section 6.9
would apply such that Processa shall pay Elion thirty-three percent (33%) of all Sublicense Consideration.

 

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Example
3: If Processa sublicenses the Product prior to Phase 3 trial prior to any Regulatory Approval of the Product and Sublicensee
completes Development, obtains Regulatory Approval, and Commercializes the Product, then the financial terms of ARTICLE VI would
then be the following: for Sections 6.4 – 6.5 Processa would pay for milestones that it has completed, the remaining milestones
of Section 6.4 – 6.5 not completed by Processa would no longer apply, Sections 6.7 – 6.8 would not apply, and this
Section 6.9 would apply such that Processa shall pay Elion thirty-three percent (33%) of all Sublicense Consideration.

 

“Sublicense
Considerations” shall mean any payments or other consideration that Processa or its Affiliates receive as a direct result
of the grant of a sublicense or an option to obtain such sublicense, including without limitation license fees, license option
fees, milestone payments, license maintenance fees and equity and other securities (including earnouts and contingent value rights
and other comparable deferred payment mechanisms), provided that in the event that Processa or its Affiliates receive non-monetary
consideration in connection with a sublicense, Sublicense Considerations shall be calculated based on the fair market value of
such consideration or transaction, assuming an arm’s length transaction made in the ordinary course of business. Notwithstanding
the foregoing, “Sublicense Considerations” shall not include: (a) Net Sales or (b) amounts expressly dedicated to,
and actually expended upon to reimburse Processa and its Affiliates, following any such sublicense, for, the Development of Products,
up to the actual costs incurred by Processa and its Affiliates for such activities. Processa shall pay Elion the sublicense fee
within thirty (30) days after the receipt of the Sublicense Consideration.

 

6.10
Reports; Payments. Within thirty (30) days after the end of each Calendar Quarter commencing from the earlier of (a) the First
Commercial Sale of a Product; or (b) the grant of a sublicense or receipt of Sublicense Consideration, Processa shall furnish
Elion with a quarterly report (“Periodic Report”) detailing, at a minimum, the following information for the
applicable Calendar Quarter, each listed by Product and by country of sale: (i) the total number of units of Product sold by Company,
its Affiliates and Sublicensees for which royalties are owned to Elion hereunder, including a breakdown of the number and type
of Products sold, (ii) gross amounts received for all such sales, (iii) deductions by type taken from Net Sales as specified herein,
(iv) Net Sales, (v) Royalties and milestone payments owed to Elion, listed by category, (vi) Sublicense Consideration received
during the preceding Calendar Quarter and sublicense fees due to Elion, (vii) the currency in which the sales were made, including
the computations for any applicable currency conversions, (viii) invoice dates and all other data enabling the royalties and sublicense
fees payable to be calculated accurately and (ix) a detailed summary of progress against each development and commercial milestone,
and an estimate of the timing of the achievement of the next development and commercial milestone. Once the events set forth in
sub-section (a) or (b), above, have occurred, Periodic Reports shall be provided to Elion whether or not royalties, milestone
payments or sublicense fees are payable for a particular Calendar Quarter. In addition to the foregoing, upon Elion’s reasonable
request, Processa will provide to Elion such other information as may be reasonably requested by Elion, and will otherwise cooperate
with Elion as reasonably necessary, to enable Elion to verify Processa’s compliance with the payment and related obligations
under this Agreement, including verification of the calculation of amounts due to Elion under this Agreement and of all financial
information provided or required to be provided in the Periodic Reports. Concurrently with each such report, Processa shall pay
to Elion all amounts payable by it under Sections 6.4, 6.7, 6.8 and 6.9.

 

    	 	20	 

     

    

 

6.11
Books and Records; Audit Rights. Processa shall keep complete and accurate records of the underlying revenue and expense
data relating to the calculations of Net Sales and payments required by 6.4, 6.7, 6.8 and 6.9. Elion shall have the right, once
annually at its own expense, to have an independent, certified public accounting firm, selected by Elion and reasonably acceptable
to Processa, review any such records of Processa in the location(s) where such records are maintained by Processa upon reasonable
notice (which shall be no less than fourteen (14) days prior notice) and during regular business hours and under obligations of
strict confidence, for the sole purpose of verifying the basis and accuracy of payments made under 6.4, 6.7, 6.8 and 6.9 within
the thirty-six (36) month period preceding the date of the request for review. The report of such accounting firm shall be limited
to a certificate stating whether any report made or payment submitted by Processa during such period is accurate or inaccurate
and the actual amounts of Net Sales, milestone payments, Sublicense Consideration and royalties due, for such period. Processa
shall receive a copy of each such report concurrently with receipt by Elion. Should such inspection lead to the discovery of a
discrepancy to Elion’s detriment, Processa shall pay within five (5) Business Days after its receipt from the accounting
firm of the certificate the amount of the discrepancy plus interest calculated in accordance with Section ‎6.15. Elion shall
pay the full cost of the review unless the underpayment of royalties is greater than five percent (5%) of the amount due for any
applicable Calendar Year, in which case Processa shall pay the reasonable cost charged by such accounting firm for such review.
Any overpayment by Processa revealed by an examination shall be fully creditable against future Payments.

 

6.12
Tax Matters. All payments to be made to Elion by Processa hereunder shall be reduced by or on account of any taxes, levies,
imposts, duties, charges, value added taxes (“VAT”), assessments or fees (collectively, “Taxes”)
that are required by any applicable Law (with due regard to any relief to which Elion may be entitled) that Taxes be deducted
and withheld from any payment made to Elion by Processa under this Agreement. If any such applicable Law requires (with due regard
to any relief to which Elion may be entitled) that Taxes be deducted and withheld from any payment made to Elion by Processa under
this Agreement, Processa shall (a) deduct those Taxes, together with any interest and penalties properly assessed thereon, from
such payment or from any other payment owed by Processa hereunder; (b) transmit the amounts so deducted to the proper Governmental
Authority; (c) send evidence of the requirement together with proof of due transmission of the amounts described in clause (b)
to Elion promptly following such payment; and (d) remit to Elion the net amount of such payment remaining after the payment of
such Taxes. In determining whether to deduct any amount hereunder and prior to making such deduction, Processa shall contact Elion
and reasonably consider the documentation supplied by Elion, and of other facts known to Processa, supporting a reduction in any
Tax otherwise required to be deducted, or a credit therefor or refund thereof. Processa will reasonably cooperate with Elion in
respect of Tax matters relating to payments made by Processa to Elion under this Agreement and any disputes with a Governmental
Authority regarding such matters (at Elion’s sole cost and expense), including without limitation: (y) complying with reasonable
requests from Elion to change the form, place or other circumstances of payments to be made to Elion by Processa under this Agreement
so as to reduce the incidence of Taxes on such payments or recover any Taxes imposed on such payments (any such recovery to be
for the benefit of Elion); and (z) in connection with any official or unofficial audit or contest relating to such payments. Notwithstanding
anything in this Agreement to the contrary, if any failure to comply with applicable Laws or filing or record retention requirements
by a Party leads to the imposition of withholding Tax liability or VAT on the other Party that would not have been imposed in
the absence of such action or in an increase in such liability above the liability that would have been imposed in the absence
of such action, then (i) the sum payable by that Party (in respect of which such deduction or withholding is required to be made)
shall be increased to the extent necessary to ensure that the other Party receives a sum equal to the sum which it would have
received had no such action occurred, and (ii) otherwise, the sum payable by that Party (in respect of which such deduction or
withholding is required to be made) shall be made to the other Party after deduction of the amount required to be so deducted
or withheld, which deducted or withheld amount shall be remitted in accordance with applicable Law.

 

    	 	21	 

     

    

 

6.13
Payment Method and Currency Conversion. All Payments shall be made in U.S. dollars in immediately available funds via either
a bank wire transfer, an ACH (automated clearing house) mechanism, or any other means of electronic funds transfer, at Processa’s
election, to Elion’s bank account, or to such other bank account as Elion shall designate in a notice at least ten (10)
days before the payment is due. For the purposes of determining the amount of any royalties or other payments due for the relevant
Calendar Quarter under this Agreement, the amount of Net Sales in any foreign currency shall be converted into U.S. dollars in
accordance with the prevailing rates of exchange for the relevant month for converting such first currency into such other currency
used by Processa’s (or its Sublicensee’s) internal accounting systems, which are independently audited on an annual
basis. Upon request by Elion, Processa shall disclose the bases for the rates of exchange used for purposes of assuring that such
rates reflect prevailing rates of exchange.

 

6.14
Blocked Payments. If by reason of applicable Laws in any country in the Territory, it becomes impossible or illegal for
Processa or its Affiliates or Sublicensees to transfer, or have transferred on its behalf royalties or other payments to Elion
or to Processa or its Affiliates or Sublicensees, Processa shall promptly notify Elion of the conditions preventing such transfer.
To the extent any payments to Elion cannot be transferred pursuant to the preceding sentence, such amounts shall be deposited
in local currency in the relevant country to the credit of Elion in a recognized banking institution designated by Elion or, if
none is designated by Elion within a period of thirty (30) days, in a recognized banking institution selected by Processa or its
Affiliate or Sublicensee, as the case may be, and identified in a notice given to Elion. If so deposited in a foreign country,
Processa shall provide, or cause its Affiliate or Sublicensee to provide, reasonable cooperation to Elion so as to allow Elion
to assume control over such deposit as promptly as practicable.

 

6.15
Late Payments. If a Party shall fail to make a timely payment pursuant to the terms of this Agreement, the other Party
shall provide written notice of such failure to the non-paying Party (a “Late Payment Notice”), and interest
shall accrue on the past due amount starting on the date of the Late Payment Notice at an annual rate equal to the “prime
rate”, as reported by The Wall Street Journal, plus five percent (5%).

 

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ARTICLE
VII

INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION

AND RELATED MATTERS

 

7.1
Ownership of Inventions.

 

(a)
Sole Inventions. Each Party shall exclusively own all inventions relating to any Compound or Product or its manufacture
or use made solely by such Party, its employees, agents, and consultants (“Sole Inventions”). Sole Inventions
made solely by Processa, its employees, agents and consultants are referred to herein as “Processa Sole Inventions”.
Sole Inventions made solely by Elion, its employees, agents and consultants are referred to herein as “Elion Sole Inventions”.
For clarity, products Covered by Processa Sole Inventions shall be deemed Products for the purpose of this Agreement.

 

(b)
Joint Inventions. The Parties shall jointly own all inventions relating to any Compound or Product or its manufacture or
use made jointly by employees, agents and consultants of Processa, on the one hand, and employees, agents and consultants of Elion,
on the other hand, on the basis of each Party having an undivided interest in the whole (“Joint Inventions”).
Joint Inventions may only be used in accordance with and subject to the terms and conditions of this Agreement.

 

(c)
Inventorship. For purposes of determining whether an invention is a Processa Sole Invention, an Elion Sole Invention or
a Joint Invention, questions of inventorship shall be resolved in accordance with United States patent Laws.

 

7.2
Prosecution and Maintenance of Patent Rights.

 

(a)
Prosecution of Elion Patent Rights. With respect to Elion Patent Rights, Elion and Processa shall cooperate in good faith
in connection with the continued prosecution and maintenance by Elion of such Elion Patent Rights. If Processa satisfies the Condition
Precedent pursuant to Section ‎2.1, the out-of-pocket costs and expenses incurred by Elion after the Condition Precedent Satisfaction
Date to obtain, prosecute and maintain Elion Patent Rights shall be borne one hundred percent (100%) by Processa. Elion shall
notify Processa at least ninety (90) days prior to the deadline for entering into national phase with respect to any PCT application
included in Elion Patent Rights. No later than sixty (60) days prior to entry into national phase, Processa shall provide Elion
with a list of any countries in which Processa would like Elion to file. Elion shall file international patent applications, or
designate for national filing and file, in all countries requested by Processa. Elion shall promptly deliver to Processa copies
of all official correspondence with the applicable patent and trademark offices in the Territory relating to the Elion Patent
Rights and, after the Condition Precedent Satisfaction Date shall promptly provide Processa drafts of all proposed material filings
and correspondence to any patent authority with respect to the Elion Patent Rights for Processa’s review and comment prior
to the submission of such proposed filings and correspondences. Elion shall keep Processa informed of the status of all pending
patent applications that pertain to any Compound or Product. Elion, its agents and attorneys shall not unreasonably decline to
implement or incorporate any comments of Processa regarding any aspect of such patent prosecutions. Elion shall not abandon any
Elion Patent Rights (the “Abandoned Patents”) without at least ninety (90) days’ prior notice to Processa.
If Elion decides to abandon any Elion Patent Rights, Processa shall have the option to continue to prosecute and maintain the
Abandoned Patents in Elion’s name.

 

    	 	23	 

     

    

 

(b)
Prosecution of Joint Patent Rights. Processa shall be responsible for obtaining, prosecuting, and/or maintaining patents
and patent applications, in any countries in the Territory, Covering Joint Inventions (“Joint Patent Rights”).
The out-of-pocket costs and expenses incurred to obtain, prosecute and maintain Joint Patent Rights shall be borne one-hundred
percent (100%) by Processa. Processa shall keep Elion informed of the status of all pending Joint Patent Rights. Processa, its
agents and attorneys shall not unreasonably decline to implement or incorporate any comments of Elion regarding any aspect of
such patent prosecutions. Processa shall not abandon any Joint Patent Right without at least ninety (90) days’ prior notice
to Elion. If Processa decides to abandon any Joint Patent Right, Elion shall have the option to continue to prosecute and maintain
such Joint Patent Right jointly in both Parties’ names, at Elion’s sole expense.

 

(c)
Prosecution of Processa Patent Rights. Processa has the sole right, but not the responsibility, to obtain, prosecute, and/or
maintain the Processa Patent Rights. Processa shall keep Elion informed of the status of all pending Processa Patent Rights. Processa,
its agents and attorneys shall not unreasonably decline to implement or incorporate any comments of Elion regarding any aspect
of such patent prosecutions. Processa shall not abandon any Processa Patent Right without at least ninety (90) days’ prior
notice to Elion. If Processa decides to abandon any Processa Patent Right, Elion shall have the option to continue to prosecute
and maintain such Processa Patent Right jointly in both Parties’ names, at Elion’s sole expense.

 

(d)
Cooperation. Each Party agrees to cooperate fully in the preparation, filing, prosecution, and maintenance of Elion Patent
Rights, Joint Patent Rights, and Processa Patent Rights, pursuant to this Section ‎7.2 and in the obtaining and maintenance
of any patent term extensions, supplementary protection certificates, pediatric extensions, and their equivalent with respect
thereto. Such cooperation includes: (i) executing all papers and instruments, or requiring its employees or contractors, to execute
such papers and instruments, so as enable the other Party to apply for and to prosecute patent applications in any country as
permitted by this Section ‎7.2; and (ii) promptly informing the other Party of any matters coming to such Party’s attention
that may affect the preparation, filing, prosecution, or maintenance of any such patent applications.

 

7.3
Third Party Infringement.

 

(a)
Notice. Each Party shall promptly report in writing to the other Party during the Term any known or suspected (i) infringement
of any of the Elion Patent Rights, Processa Patent Rights or Joint Patent Rights, or (ii) unauthorized use or misappropriation
of any of the Elion Know-How, Processa Sole Invention or Joint Inventions, in the case of either clause (i) or clause (ii), that
would reasonably be expected to adversely impact the (A) Development, Manufacture, use or Commercialization of a Compound or Product
in the Field in the Territory, or (B) the valid scope of the rights licensed to Processa under ‎ARTICLE II (an “Infringement
Claim”), of which such Party becomes aware, and shall provide the other Party with all available evidence supporting
such Infringement Claim.

 

    	 	24	 

     

    

 

(b)
Initial Right to Enforce. Subject to Section ‎7.3(c), Processa (itself or through its Affiliate or Sublicensee) shall
have the first right, but not the obligation, to initiate a suit, or take other appropriate action that it believes is reasonably
required to protect (i.e., prevent or abate actual or threatened infringement or misappropriation of) or otherwise enforce
the Processa Intellectual Property, Elion Intellectual Property and Joint Intellectual Property with respect to an Infringement
Claim; provided, however, that Processa shall (i) consult with Elion in good faith with respect to any claim that
any Elion Patent Right, Processa Patent Right or Joint Patent Right is invalid or unenforceable and (ii) implement any reasonable
comment from Elion regarding any aspect of defending against any such claim described in clause (i). Any such suit by Processa
shall be brought either in the name of Elion or its Affiliate, the name of Processa or its Affiliate, or the names of Processa,
Elion and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Elion shall execute such
legal papers and cooperate in the prosecution of such suit, including providing full access to documents, information and witnesses
as reasonably requested by Processa in connection with such suit, as may be reasonably requested by Processa; provided
that Processa shall promptly reimburse all out-of-pocket expenses (including reasonable counsel fees and expenses) actually incurred
by Elion in connection with such cooperation. For clarity, as between Elion and Processa, (A) Elion shall have the sole right,
but not the obligation, to protect Elion Intellectual Property against any suspected misappropriation or infringement that does
not constitute an Infringement Claim and (B) the Parties shall jointly determine by mutual agreement whether and how to protect
Joint Intellectual Property against any suspected misappropriation or infringement that does not constitute an Infringement Claim,
and the provisions of this ‎ARTICLE VII shall not apply with respect thereto.

 

(c)
Step-In Right. If Processa does not initiate a suit or take other appropriate action that it has the initial right to initiate
or take with respect to an Infringement Claim pursuant to Section ‎7.3(b), then Elion may, in its discretion, provide Processa
with notice of Elion’s intent to initiate a suit or take other appropriate action. If Elion provides such notice and Processa
does not initiate a suit or take such other appropriate action within thirty (30) days after receipt of such notice from Elion,
then Elion shall have the right to initiate a suit or take other appropriate action that it believes is reasonably required to
protect the Processa Intellectual Property, Elion Intellectual Property and Joint Intellectual Property. Any suit by Elion shall
be either in the name of Elion or its Affiliate, the name of Processa or its Affiliate, or the names of Processa, Elion, and their
respective Affiliates, as may be required by the Law of the forum. For this purpose, Processa shall execute such legal papers
and cooperate in the prosecution of such suit, including providing full access to documents, information and witnesses as reasonably
requested by Elion in connection with such suit, as may be reasonably requested by Elion; provided that Elion shall promptly
reimburse all out-of-pocket expenses (including reasonable counsel fees and expenses) actually incurred by Processa in connection
with such cooperation.

 

(d)
Conduct of Certain Actions; Costs. The Party initiating suit or taking other action with respect to an Infringement Claim
shall have the sole and exclusive right to select counsel for, and otherwise control, any suit or action initiated by it pursuant
to Section ‎7.3(b) or ‎7.3(c). The initiating Party shall assume and pay all of its own out-of-pocket costs incurred in
connection with any litigation or proceedings initiated by it pursuant to Sections ‎7.3(b) and ‎7.3(c), including the
fees and expenses of the counsel selected by it. The other Party shall have the right to participate, but not control, and be
represented in, any such suit by its own counsel at its own expense.

 

    	 	25	 

     

    

 

(e)
Recoveries. Except as otherwise agreed by the Parties as part of a cost-sharing arrangement, any damages, settlements,
accounts of profits, or other financial compensation recovered from a Third Party by the Party that assumes control over enforcing
any Infringement Claim shall be allocated between the Parties as follows:

 

(i)
first, to reimburse the Parties’ actual out-of-pocket expenses (including reasonable counsel fees and expenses) incurred
in pursuing such Infringement Claim; and

 

(ii)
second, if Processa controlled the defense of the Infringement Claim any remaining amount shall be shared by the Parties, with
Processa retaining 75% of such remaining amount and Elion retaining 25% of such remaining amount. If Elion controlled the defense
of the Infringement Claim any remaining amount following reimbursement of expenses under clause (i) shall be retained by Elion.

 

7.4
Patent Invalidity Claim. Each of the Parties shall promptly notify the other in the event of any legal or administrative
action by any Third Party against an Elion Patent Right, Processa Patent Right or Joint Patent Right of which it becomes aware,
including any nullity, revocation, reexamination or compulsory license proceeding. Elion shall have the first right, but not the
obligation, to defend against any such action involving an Elion Patent Right, and the costs of any such defense shall be at Elion’s
expense; provided, however, that, in the case of any inter partes review or similar post-grant matter before
the Patent Trial and Appeal Board or similar administrative body that is based on the same subject matter as any claim or counterclaim
in any Infringement Claim or Paragraph IV Claim, Processa shall have the first right, but not the obligation, to defend against
any such action involving an Elion Patent Right, and the costs of any such defense shall be at Processa’s expense. Processa
shall have the first right, but not the obligation, to defend against any such action involving a Processa Patent Right or Joint
Patent Right, and the costs of any such defense shall be at Processa’s expense. If the Party that has the first right to
defend against any such action involving such Elion Patent Right, Processa Patent Right or Joint Patent Right does not do so,
then the other Party shall have the right, but not the obligation, to defend such action and any such defense shall be at such
other Party’s expense. Upon request of the Party that defends against any such action involving an Elion Patent Rights,
Processa Patent Right or Joint Patent Right, the other Party agrees to join in any such action and to cooperate reasonably with
the defending Party, including providing full access to documents, information and witnesses as reasonably requested by the defending
Party in connection with such action, provided that the defending Party shall promptly reimburse all out-of-pocket expenses
(including reasonable counsel fees and expenses) actually incurred by the other Party in connection with such cooperation.

 

7.5
Claimed Infringement. Each of the Parties shall promptly notify the other in the event a Party becomes aware that the practice
by either Party of the Elion Patent Rights infringes, or is suspected or alleged to infringe, the intellectual property rights
of any Third Party in the Territory, and shall promptly provide the other Party with any notice it receives or has received from
a Third Party related to such suspected, alleged or actual infringement.

 

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7.6
Patent Term Extensions. Processa shall have the exclusive right and obligation to seek patent term extensions or supplemental
patent protection, including supplementary protection certificates, in each country in the Territory in relation to the Products
at Processa’s expense. Elion and Processa shall cooperate in connection with all such activities, and Processa, its agents
and attorneys will give due consideration to all timely suggestions and comments of Elion regarding any such activities; provided
that all final decisions shall be made by Processa.

 

7.7
Patent Marking. Processa shall comply with the patent marking statutes in each country in the Territory in which any Product
is sold by Processa, its Affiliates, or its Sublicensees.

 

7.8
Certification under Drug Price Competition and Patent Restoration Act.

 

(a)
Notice. If a Party becomes aware of any certification filed pursuant to 21 U.S.C. § 355(b)(2)(A) or 355(j)(2)(A)(vii)(IV)
or its successor provisions, or any similar provision in any country in the Territory other than the U.S., claiming that any Elion
Patent Rights, Processa Patent Rights or Joint Patent Rights are invalid or otherwise unenforceable, or that infringement will
not arise from the manufacture, use, import or sale of a product by a Third Party (a “Paragraph IV Claim”),
such Party shall promptly notify the other Party in writing within five (5) Business Days after its receipt thereof.

 

(b)
Control of Response; Recoveries. Processa shall have the first right, but not the obligation, to initiate and control patent
infringement litigation for any Paragraph IV Claim; provided, however, that Processa shall (i) consult with Elion
in good faith with respect to any claim that any Elion Patent Right, Processa Patent Right or Joint Patent Right is invalid or
unenforceable and (ii) implement any comment from Elion regarding any aspect of defending against any such claim. Any suit by
Processa shall be brought either in the name of Elion or its Affiliate, the name of Processa or its Affiliate, or the names of
Processa, Elion, and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Elion shall execute
such legal papers and cooperate in the prosecution of such suit, including providing full access to documents, information and
witnesses, as may be reasonably requested by Processa; provided that Processa shall promptly reimburse all out-of-pocket
expenses (including reasonable counsel fees and expenses) actually incurred by Elion in connection with such cooperation. If Processa
elects not to assume control over litigating any Paragraph IV Claim, Processa shall notify Elion as soon as practicable but in
any event not later than ten (10) days before the first action required to litigate such Paragraph IV Claim so that Elion may,
but shall not be required to, assume sole control over litigating such Paragraph IV Claim using counsel of its own choice. Any
suit by Elion shall be either in the name of Elion or its Affiliate, the name of Processa or its Affiliate, or the names of Processa,
Elion, and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Processa shall execute such
legal papers and cooperate in the prosecution of such suit, including providing full access to documents, information and witnesses,
as may be reasonably requested by Elion; provided that Elion shall promptly reimburse all out-of-pocket expenses (including
reasonable counsel fees and expenses) actually incurred by Processa in connection with such cooperation. Any compensation recovered
as a result of such litigation shall be allocated as set forth in Section ‎7.3(e) above.

 

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7.9
Privileged Communications. In furtherance of this Agreement, it is expected that Processa and Elion will, from time to
time, disclose to one another privileged communications with counsel, including opinions, memoranda, letters, and other written,
electronic and verbal communications. Such disclosures are made with the understanding that they shall remain confidential, that
they will not be deemed to waive any applicable attorney-client or attorney work product or other privilege and that they are
made in connection with the shared community of legal interests existing between Elion and Processa, including the community of
legal interests in avoiding infringement of any valid, enforceable patents of Third Parties and maintaining the validity of Elion
Patent Rights, Processa Patent Rights and Joint Patent Rights.

 

7.10
Settlement. Neither Party shall unilaterally enter into any settlement or compromise of any suit, action or proceeding
under this ‎ARTICLE VII that would in any manner alter, diminish, or be in derogation of the other Party’s rights under
this Agreement without the prior written consent of such other Party, which shall not be unreasonably withheld.

 

ARTICLE
VIII

CONFIDENTIAL INFORMATION

 

8.1
Treatment of Confidential Information. During the Term and for five (5) years thereafter, each Party shall maintain Confidential
Information (as defined in Section ‎8.2) of the other Party in confidence, and shall not disclose, divulge or otherwise communicate
such Confidential Information to others (except for agents, directors, officers, employees, consultants, subcontractors, licensees,
sublicensees, partners, Affiliates and advisors who have a need to know such information to perform obligations or exercise rights
on behalf of such Party (collectively, “Agents”) under obligations of confidentiality no less stringent than
those set forth in this ‎ARTICLE VIII) or use it for any purpose other than in connection with the Development, Manufacture,
use or Commercialization of Compounds or Products pursuant to this Agreement or otherwise to accomplish the purposes of this Agreement,
including exercising its rights or performing its obligations hereunder, and each Party shall exercise Commercially Reasonable
Efforts to prevent and restrain the unauthorized disclosure of such Confidential Information by any of its Agents, which efforts
shall be at least as diligent as those generally used by such Party in protecting its own confidential and proprietary information,
and in any event no less than reasonable efforts. Each Party will be responsible for any breach of this ‎ARTICLE VIII by its
Agents. Either receiving Party may disclose Confidential Information of the disclosing Party (a) to Governmental Authorities in
order to comply with applicable Laws, respond to inquiries, requests or investigations by Governmental Authorities, including
filing, prosecuting or maintaining Patent Rights as permitted by this Agreement; (b) to comply with the regulations or requirements
of any stock exchange; (c) to the extent useful to Develop, Manufacture, use or Commercialize any Compound or Product, including
making regulatory filings for any Compound or Product, in accordance with this Agreement; (d) to the extent necessary or useful
in order to defend or prosecute litigation; and (e) to potential and actual bona fide investors, acquirors and other financial
or commercial partners solely for the purpose of evaluating or carrying out an actual or potential investment, acquisition or
collaboration; provided that (x) with respect to any disclosure in accordance with Section ‎8.1(a), (b) or (d), the
receiving Party shall promptly provide prior notice of such disclosure to the disclosing Party and use Commercially Reasonable
Efforts to avoid or minimize the degree of such disclosure, (y) with respect to any disclosure in accordance with Section ‎8.1(a)
or (d), the receiving Party will use efforts to secure confidential treatment of such Confidential Information at least as diligent
as such Party would use to protect its own confidential information, but in no event less than reasonable efforts, and (z) with
respect to any disclosure in accordance with Section ‎8.1(e), the receiving Party shall obtain the same confidentiality obligations
from any Third Parties to which it discloses the Confidential Information of the disclosing Party as it obtains with respect to
its own similar types of confidential information, and in any event such obligations shall be no less stringent than those set
forth in this ‎ARTICLE VIII.

 

    	 	28	 

     

    

 

8.2
Confidential Information. “Confidential Information” means all trade secrets or other proprietary information,
including any proprietary data and materials (whether or not patentable or protectable as a trade secret), that is disclosed by
a Party to the other Party. Notwithstanding the foregoing, there shall be excluded from the foregoing definition of Confidential
Information any of the foregoing that:

 

(a)
either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by a Third
Party without any violation of any obligation to the other Party; or

 

(b)
either before or after the date of the disclosure to the receiving Party, becomes published or generally known to the public through
no fault or omission on the part of the receiving Party or its Agents; or

 

(c)
is independently developed by or for the receiving Party without reference to or reliance upon the disclosing Party’s Confidential
Information as demonstrated by contemporaneous written records of the receiving Party.

 

8.3
Publications. The Parties recognize the desirability of publishing and publicly disclosing the results of clinical trials
of pharmaceutical products. Accordingly, subject to coordination through designated representatives of each Party, Processa shall
be free to publicly disclose the results of clinical trials involving Compounds or Products, subject to prior review by Elion
for issues of patentability and protection of its Confidential Information, in a manner consistent with all Laws applicable to
Processa and best industry practices. In addition, if Processa intends to publish articles in scientific or medical journals or
to make presentations of the results of clinical trials involving Compounds or Products, Processa shall provide Elion through
the designated representatives of each Party at its earliest opportunity with any proposed abstracts, manuscripts or summaries
of presentations that cover the results of Development of any Compound or Product. Elion shall respond promptly through its designated
representative, and in any event no later than thirty (30) days after receipt of such proposed publication or presentation, or
such shorter period as may be required by the publication. If timely requested by Elion, Processa agrees to allow a reasonable
period (not to exceed sixty (60) days) to permit filings for patent protection and to otherwise address issues of Confidential
Information or related competitive harm to the reasonable satisfaction of Elion. In addition, Processa will consider in good faith
any comments furnished by Elion to Processa during such period. Processa shall be responsible to assure that its Affiliates and
licensees agree to, and comply with, equivalent undertakings in favor of Elion. Elion and its Affiliates may make any publication
or public disclosure of any data concerning the Compounds or Products that existed as of the Effective Date, provided that Elion
provides Processa at least thirty (30) days (or such shorter period as may be required by the publication) to review such publication
or public disclosure, allows a reasonable period (not to exceed sixty (60) days) to permit filings for patent protection and to
otherwise address issues of Confidential Information or related competitive harm to the reasonable satisfaction of Processa, and
reasonably considers any timely comments provided by Processa with respect to such publication or public disclosure. Elion shall
not, and shall cause each of its Affiliates, licensees, and sublicensees not to, make any other publications or public disclosures
regarding the Compounds or Products without Processa’s prior written consent. If Processa consents to Elion making such
publications, Elion shall provide Processa a reasonable opportunity to comment on any such publications and such comments shall
not be unreasonably rejected. All publications involving Compounds or Products shall include appropriate acknowledgement consistent
with standard scientific practice of any contributions of each Party to the results being publicly disclosed.

 

    	 	29	 

     

    

 

8.4
Press Releases and Other Disclosures. The Parties recognize that each Party may from time to time desire to issue press
releases and make other public statements or disclosures regarding the subject matter of this Agreement. In such event, the Party
desiring to issue a press release or make a public statement or disclosure shall provide the other Party with a copy of the proposed
press release, statement or disclosure for review and approval in advance (except that neither Party shall have any obligation
to disclose or approve the disclosure of Confidential Information except to the extent required or permitted pursuant to this
‎ARTICLE VIII). No other public statement or disclosure concerning the existence or terms of this Agreement shall be made,
either directly or indirectly, by either Party, without first obtaining the written approval of the other Party. Once any public
statement or disclosure has been approved in accordance with this Section ‎8.4, then either Party may appropriately communicate
information contained in such permitted statement or disclosure. Notwithstanding the foregoing provisions of this Section ‎8.4
this ‎ARTICLE VIII, a Party may (a) disclose the existence and terms of this Agreement where required, as reasonably determined
by the disclosing Party, by applicable Law, by applicable stock exchange regulation or by order or other ruling of a competent
court and (b) disclose the existence and terms of this Agreement under obligations of confidentiality no less stringent than those
set forth in this ‎ARTICLE VIII to agents, advisors, contractors, licensees, sublicensees, and bona fide investors,
acquirors and other financial or commercial partners, and to potential agents, advisors, contractors, licensees, sublicensees,
and bona fide investors, acquirors and other financial or commercial partners. To the extent a Party determines in good
faith that it is required by applicable Law to publicly file, register or notify this Agreement with a Governmental Authority,
including public filings pursuant to securities Laws, it shall provide a proposed redacted form of the Agreement to the other
Party a reasonable amount of time prior to filing for the other Party to review such draft and propose changes to such proposed
redactions. The Party making such filing, registration or notification shall incorporate any proposed changes timely requested
by the other Party, absent a reasonable basis for not making such changes, and shall use Commercially Reasonable Efforts to seek
confidential treatment for any terms that the other Party timely requests be kept confidential, to the extent such confidential
treatment is reasonably available consistent with applicable Law. Each Party shall be responsible for its own legal and other
external costs in connection with any such filing, registration, or notification.

 

8.5
Equitable Relief. Given the nature of the Confidential Information and the competitive damage that a Party would suffer
upon unauthorized disclosure, use, or transfer of its Confidential Information to any Third Party, the Parties agree that monetary
damages would not be a sufficient remedy for any breach of this ‎ARTICLE VIII. In addition to all other remedies, a Party
shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened
breach of this ‎ARTICLE VIII.

 

    	 	30	 

     

    

 

ARTICLE
IX

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

9.1
Elion’s Representations. Elion hereby represents and warrants as of the Effective Date as follows:

 

(a)
Elion has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The
execution, delivery, and performance of this Agreement has been duly and validly authorized and approved by all necessary corporate
action on the part of Elion. Elion has taken all other action required by Law, its certificate of incorporation or by-laws, or
any agreement to which it is a party or by which it or its assets are bound, to authorize such execution, delivery, and performance.
Assuming due authorization, execution, and delivery on the part of Processa, this Agreement constitutes a legal, valid, and binding
obligation of Elion, enforceable against Elion in accordance with its terms.

 

(b)
The execution and delivery of this Agreement by Elion do not require Elion to obtain any permit, authorization or consent from
any Governmental Authority or from any other Person which has not been obtained prior to the Effective Date, and such execution
and delivery by Elion will not result in the breach of or give rise to any termination of, rescission, renegotiation or acceleration
under or trigger any other rights under any agreement or contract to which Elion may be a party that relates to the Elion Patent
Rights or the Elion Know-How.

 

(c)
Schedule ‎1.16 is a complete and correct list of all Patent Rights owned by Elion as of the Effective Date that Cover
any Compound or Product. No Patent Right that covers any Compound or Product has been licensed to Elion.

 

(d)
Elion is the legal and beneficial owner of all the Patent Rights identified on Schedule ‎1.16, free and clear of any
liens, mortgages, security interests or other similar encumbrances. All assignments to Elion of ownership rights relating to such
Patent Rights are valid and enforceable. All of the Patent Rights listed identified on Schedule ‎1.16 that are issued
patents are in full force and effect, and all applicable filing, maintenance and other fees required to be paid to a patent office
with respect to the Patent Rights listed identified on Schedule ‎1.16 have been timely paid. Elion has the right to
grant the licenses granted by it in this Agreement and has not previously assigned, transferred, conveyed or otherwise encumbered
its right, title and interest in the Elion Intellectual Property in a manner that conflicts with any rights granted to Processa
hereunder.

 

(e)
There is no action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or investigation
of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or, to Elion’s knowledge, threatened
against Elion in connection with the Compounds or Products or any Elion Patent Rights, Elion Know-How or against or relating to
the transactions contemplated by this Agreement. Elion has not received any written notice from a Third Party that the Development
of any Compound or Product conducted by Elion has infringed, or that any Development or Commercialization of any Compound or Product
will infringe, any Patent Rights of any Third Party.

 

    	 	31	 

     

    

 

(f)
No claim or action has been brought or, to Elion’s knowledge, threatened by any Third Party alleging that the Elion Patent
Rights are invalid or unenforceable, and no Elion Patent Rights are the subject of any litigation, interference, post-grant review,
opposition, cancellation or other proceeding challenging the validity or enforceability of the Elion Patent Rights.

 

(g)
Neither Elion nor, to the knowledge of Elion, any of its directors, officers, employees, agents or subcontractors has been convicted
of any crime or engaged in any conduct that has resulted in, or would reasonably be expected to result, in debarment by the FDA
under 21 U.S.C. § 335a or any similar state or foreign Law.

 

(h)
The shares of Common Stock of Processa that may be issued under this Agreement shall be acquired for investment for Elion’s
own account (or that of its permitted designee), not as a nominee or agent, and not with a view to the resale or distribution
of any part thereof, and as of the date hereof, Elion (or, if applicable, its permitted designee) has no present intention of
selling, granting any participation or otherwise distributing the shares. Elion, either alone or together with its Affiliates
and representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the shares, and has so evaluated the merits and risks of such
investment. Elion (or, if applicable, its permitted designee) is able to bear the economic risk of an investment in the shares
and, at the present time, is able to afford a complete loss of such investment. Elion (or, if applicable, its permitted designee)
is not acquiring the shares as a result of (a) any advertisement, article, notice or other communication published in any newspaper,
magazine or similar media or broadcast over television, radio or the Internet, in each case, relating to Processa, or (b) any
seminar or meeting whose attendees, including Elion, have been invited by any general solicitation or general advertising related
to Processa.

 

(i)
Elion (or, if applicable, its permitted designee) is as of the date hereof, and as of the date any shares are issued under this
Agreement will be, an “accredited investor” as defined in Rule 501 under the Securities Act of 1933, as amended.

 

(j)
Elion (or, if applicable, its permitted designee) acknowledges that it has had the opportunity to review the reports filed by
Processa with the SEC and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of Processa concerning the terms and conditions of the offering of the shares of Common Stock hereby
and the merits and risks of investing in the shares; (ii) access to information about Processa and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that Processa possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the investment.

 

    	 	32	 

     

    

 

9.2
Processa’s Representations. Processa hereby represents and warrants as of the Effective Date as follows:

 

(a)
Processa has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.
The execution, delivery, and performance of this Agreement has been duly and validly authorized and approved by all necessary
corporate action on the part of Processa. Processa has taken all other action required by Law, its certificate of incorporation
or by-laws or any agreement to which it is a party or by which it or its assets are bound to authorize such execution, delivery
and (subject to obtaining all necessary governmental approvals with respect to the Development, Manufacture, use and Commercialization
of Compounds and Products) performance. Assuming due authorization, execution, and delivery on the part of Elion, this Agreement
constitutes a legal, valid, and binding obligation of Processa, enforceable against Processa in accordance with its terms.

 

(b)
The execution and delivery of this Agreement by Processa will not violate any U.S. Law or, to Processa’s knowledge, any
Law of any Governmental Authority outside the U.S.

 

(c)
There is no action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or investigation
of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or, to the knowledge of Processa, threatened
against Processa in connection with or relating to the transactions contemplated by this Agreement.

 

(d)
The execution and delivery of this Agreement do not require Processa to obtain any permit, authorization or consent from any Governmental
Authority or from any other Person, and such execution and delivery by Processa will not result in the breach of or give rise
to any termination of, rescission, renegotiation or acceleration under or trigger any other rights under any agreement or contract
to which Processa may be a party that relates to the Products, Processa Patent Rights or Processa Know-How.

 

(e)
Neither Processa nor, to the knowledge of Processa, any of its directors, officers, employees, agents or subcontractors has been
convicted of any crime or engaged in any conduct that has resulted in, or would reasonably be expected to result, in debarment
by the FDA under 21 U.S.C. § 335a or any similar state or foreign Law.

 

9.3
Elion Covenants. Elion covenants and agrees during the Term that, subject to Processa’s, its Affiliates’ and
Sublicensees’ performance of their obligations under this Agreement:

 

(a)
Elion shall not grant to any Third Party any rights that would be inconsistent or conflict with Processa’s rights hereunder.

 

(b)
Subject to Section ‎12.7, Elion shall not assign, transfer, convey, or otherwise encumber its right, title, and interest in
the Elion Intellectual Property in a manner that conflicts with any rights granted to Processa hereunder.

 

    	 	33	 

     

    

 

9.4
Processa Covenant.

 

(a)
Processa shall conduct, and shall use Commercially Reasonable Efforts to cause its contractors and consultants to conduct, all
of their activities contemplated under this Agreement in accordance with all applicable Laws of the country in which such activities
are conducted, including applicable requirements of “good laboratory practices”, “good clinical practices”
and “good manufacturing practices”, as applicable, as defined by the FDA.

 

(b)
Subject to Section ‎12.7, Processa shall not assign, transfer, convey, or otherwise encumber its right, title, and interest
in the Processa Intellectual Property in a manner that conflicts with any rights granted hereunder to Elion upon termination.

 

9.5
No Warranty. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS
ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED. IN PARTICULAR, BUT WITHOUT LIMITATION, EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY CONCERNING WHETHER ANY OF THE COMPOUNDS
OR PRODUCTS ARE FIT FOR ANY PARTICULAR PURPOSE OR SAFE FOR HUMAN CONSUMPTION.

 

ARTICLE
X

INDEMNIFICATION

 

10.1
Indemnification in Favor of Elion. Processa shall indemnify, defend and hold harmless the Elion Parties from and against
any and all Losses incurred, suffered or sustained by any of the Elion Parties or to which any of the Elion Parties becomes subject
as a result of any Third Party claim, action, suit, proceeding, liability or obligation (which in no event includes any claim
by any Processa Party or any Elion Party) (collectively, “Third Party Claims”) arising out of, relating to
or resulting from:

 

(a)
any misrepresentation or breach of any representation, warranty, covenant or agreement made by Processa in this Agreement; or

 

(b)
the Development Manufacture or Commercialization of Compounds or Products by Processa, its Affiliates or Sublicensees, including
all Third Party Claims involving death or bodily injury caused or allegedly caused by the use of such a Compound or Product, and
even if such a Compound or Product is altered for use for a purpose not intended (any and all such Third Party Claims “Product
Liability Claims”); or

 

(c)
any actual or alleged infringement of any trademark, Patent Right or other intellectual property right, or misappropriation of
any trade secret, of any Third Party as a result of the Development, Manufacture or Commercialization of Compounds or Products
by Processa, its Affiliates or Sublicensees; or

 

(d)
the gross negligence or willful misconduct of any of the Processa Parties (as hereinafter defined) in connection with Processa’s
performance of this Agreement.

 

For
purposes of this ‎ARTICLE X, “Elion Parties” means Elion, its Affiliates and their respective agents, directors,
officers, licensees, sublicensees and employees.

 

    	 	34	 

     

    

 

The
indemnification obligations set forth in this Section ‎10.1 shall not apply to the extent that any Loss is the result of (i)
a breach of any representation, warranty, covenant, or agreement made by Elion in this Agreement or (ii) the gross negligence
or willful misconduct of any applicable Elion Party.

 

10.2
Indemnification in Favor of Processa. Elion shall indemnify, defend and hold harmless the Processa Parties from and against
any and all Losses incurred, suffered or sustained by any of the Processa Parties or to which any of the Processa Parties becomes
subject as a result of any Third Party Claim arising out of, relating to or resulting from:

 

(a)
any misrepresentation or breach of any representation, warranty, covenant or agreement made by Elion in this Agreement; or

 

(b)
the Development, Manufacture or Commercialization of Compounds or Products by Elion, its Affiliates, licensees (excluding Processa)
or sublicensees prior to the execution of this Agreement and after any termination of this Agreement, including all Product Liability
Claims arising out of any such pre-Agreement, post-termination Development, Manufacture or Commercialization by Elion, its Affiliates,
licensees (excluding Processa) or sublicensees; or

 

(c)
any actual or alleged infringement of any trademark, Patent Right or other intellectual property right, or misappropriation of
any trade secret, of any Third Party as a result of the Development, Manufacture or Commercialization of Compounds or Products
by Elion, its Affiliates, licensees (excluding Processa) or sublicensees prior to the execution of this Agreement and after any
termination of this Agreement; or

 

(d)
the gross negligence or willful misconduct of any of the Elion Parties in connection with Elion’s performance of this Agreement;
or

 

(e)
the formation of the Trust, issuance of the shares of Common Stock to the Trust for the benefit of Elion as provided in Section
6.1 or as a result of the shares of Common Stock being held in such Trust.

 

For
purposes of this ‎ARTICLE X, “Processa Parties” means Processa, its Affiliates and their respective agents,
directors, officers, licensees, sublicensees and employees.

 

The
indemnification obligations set forth in this Section ‎10.2 shall not apply to the extent that any Loss is the result of (i)
a breach of any representation, warranty, covenant, or agreement made by Processa in this Agreement, or (ii) the gross negligence
or willful misconduct of any applicable Processa Party.

 

    	 	35	 

     

    

 

10.3
General Indemnification Procedures.

 

(a)
An Elion Party or Processa Party seeking indemnification pursuant to this ‎ARTICLE X (an “Indemnified Party”)
shall give prompt notice to the Party from whom such indemnification is sought (the “Indemnifying Party”) of
the commencement or assertion of any Third Party Claim in respect of which indemnity may be sought hereunder, shall give the Indemnifying
Party such information with respect to any indemnified matter as the Indemnifying Party may reasonably request, and shall not
make any admission concerning any Third Party Claim, unless such admission is required by applicable Law or legal process, including
in response to questions presented in depositions or interrogatories. Any admission made by the Indemnified Party or the failure
to give such notice shall relieve the Indemnifying Party of any liability hereunder only to the extent that the ability of the
Indemnifying Party to defend such Third Party Claim is prejudiced thereby (and no admission required by applicable Law or legal
process shall be deemed to result in prejudice). The Indemnifying Party will have the right, exercisable by notice to the Indemnified
Party within ten Business Days after receipt of notice from the Indemnified Party of the commencement of or assertion of any Third
Party Claim, to assume direction and control of the defense, litigation, settlement, appeal or other disposition of the Third
Party Claim (including the right to settle the claim solely for monetary consideration) with counsel selected by the Indemnifying
Party and reasonably acceptable to the Indemnified Party; provided that (a) the Indemnifying Party has sufficient financial resources,
in the reasonable judgment of the Indemnified Party, to satisfy the amount of any adverse monetary judgment that is sought, (b)
the Third Party Claim seeks solely monetary damages and (c) the Indemnifying Party expressly agrees in writing that as between
the Indemnifying Party and the Indemnified Party, the Indemnifying Party will be solely obligated to satisfy and discharge the
Third Party Claim in full (the conditions set forth in clauses (a), (b) and (c) above are collectively referred to as the “Litigation
Conditions”). Within ten Business Days after the Indemnifying Party has given notice to the Indemnified Party of its
exercise of its right to defend a Third Party Claim, the Indemnified Party will give notice to the Indemnifying Party of any objection
thereto based upon the Litigation Conditions. If the Indemnified Party reasonably so objects, the Indemnified Party will continue
to defend the Third Party Claim, at the expense of the Indemnifying Party, until such time as such objection is withdrawn. If
no such notice is given, or if any such objection is withdrawn, the Indemnifying Party will be entitled, at its sole cost and
expense, to assume direction and control of such defense, with counsel selected by the Indemnifying Party and reasonably acceptable
to the Indemnified Party. During such time as the Indemnifying Party is controlling the defense of such Third Party Claim, the
Indemnified Party will cooperate, and will cause its Affiliates and agents to cooperate upon request of the Indemnifying Party,
in the defense or prosecution of the Third Party Claim, including by furnishing such records, information and testimony and attending
such conferences, discovery proceedings, hearings, trials or appeals as may reasonably be requested by the Indemnifying Party.
In the event that the Indemnifying Party does not satisfy the Litigation Conditions or does not notify the Indemnified Party of
the Indemnifying Party’s intent to defend any Third Party Claim within ten Business Days after notice thereof, the Indemnified
Party may (without further notice to the Indemnifying Party) undertake the defense thereof with counsel of its choice and at the
Indemnifying Party’s expense (including reasonable, out-of-pocket attorneys’ fees and costs and expenses of enforcement
or defense). The Indemnifying Party or the Indemnified Party, as the case may be, will have the right to join in (including the
right to conduct discovery, interview and examine witnesses and participate in all settlement conferences), but not control, at
its own expense, the defense of any Third Party Claim that the other party is defending as provided in this Agreement.

 

(b)
Any Indemnified Party or Indemnifying Party not managing the defense of a Third Party Claim shall have the right to participate
in (but not control), at its own expense (subject to the immediately succeeding sentence), the defense. The Indemnifying Party
managing the defense shall not be liable for any litigation cost or expense incurred, without its consent, by the Indemnified
Party where the action or proceeding is under the control of such Indemnifying Party; provided, however, that, if
the Indemnifying Party managing the defense fails to take reasonable steps necessary to defend such Third Party Claim, the Indemnified
Party may assume its own defense, and the Indemnifying Party managing the defense will be liable for all reasonable costs or expenses
paid or incurred in connection therewith.

 

    	 	36	 

     

    

 

(c)
The Indemnifying Party shall not, except with the consent of the Indemnified Party, consent to a settlement of, or the entry of
any judgment against, an Indemnified Party arising from any Third Party Claim to the extent such settlement or judgment involves
equitable or other non-monetary relief from the Indemnified Party. No Party shall, without the prior written consent of the other
Party or the Indemnified Party, enter into any compromise or settlement that commits the other Party or the Indemnified Party
to take, or to forbear to take, any action.

 

(d)
The Parties shall cooperate in the defense or prosecution of any Third Party Claim and shall furnish such records, information
and testimony, and attend such conferences, discovery proceedings, hearings, trials and appeals, as may be reasonably requested
in connection therewith; provided, however, that the Indemnifying Party shall reimburse the Indemnified Party for
any out-of-pocket expenses actually and reasonably incurred in connection with any such cooperation.

 

(e)
Any indemnification hereunder shall be made net of any insurance proceeds actually recovered by the Indemnified Party from unaffiliated
Third Parties; provided, however, that if, following the payment to the Indemnified Party of any amount under this
‎ARTICLE X, such Indemnified Party recovers any such insurance proceeds in respect of the claim for which such indemnification
payment was made, the Indemnified Party shall promptly pay an amount equal to the amount of such proceeds (but not exceeding the
amount of such net indemnification payment) to the Indemnifying Party.

 

(f)
The Parties agree and acknowledge that the provisions of this ‎ARTICLE X represent the Indemnified Party’s exclusive
recourse with respect to any Losses for Third Party Claims for which indemnification is provided to the Indemnified Party under
this ‎ARTICLE X.

 

10.4
Insurance. During the Term, if the Condition Precedent is satisfied, and thereafter for so long as a Third Party Claim
may be brought for which Processa must indemnify Elion pursuant to Section ‎10.1, Processa shall obtain and maintain, at its
sole cost and expense, product liability insurance in amounts that are reasonable and customary in the pharmaceutical industry,
but in no event less than $5 million per occurrence or claim, and $10 million in the aggregate, or a comparable program of self-insurance.
Such product liability insurance shall insure against all liability, including product liability and property damage arising out
of the Development, use or Commercialization of Compounds and Products by Processa, its Affiliates, or Sublicensees in the Territory.
Without limiting the generality of the foregoing, Processa shall maintain comprehensive general liability insurance, including
product liability insurance, to cover its activities and, unless its Affiliates and Sublicensees maintain comparable coverage,
the activities of its Affiliates and Sublicensees, with respect to Compounds and Products. Processa shall provide satisfactory
evidence of adequate insurance coverage to Elion upon the request of Elion prior to the Condition Precedent Satisfaction Date
and, upon the written request of Elion, concurrent with any renewal or replacement of such coverage.

 

    	 	37	 

     

    

 

ARTICLE
XI

TERM AND TERMINATION

 

11.1
Term. The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless earlier
terminated as provided in this ‎ARTICLE XI, shall continue in full force and effect until the expiration of the last Royalty
Term. On a country-by-country and Product-by-Product basis, upon the expiration of the Royalty Term in such country with respect
to such Product, Processa shall have a fully paid-up, perpetual, irrevocable license under the Elion Intellectual Property and
Elion’s interest in the Joint Intellectual Property with respect to such Product in such country.

 

11.2
Termination for Failure to Satisfy Condition Precedent. If, for any reason (including a failure to meet the conditions
in Section 2.1 prior to end of the Condition Precedent Period), the Condition Precedent is not fully satisfied within the Condition
Precedent Period, then this Agreement shall automatically terminate in its entirety on the day after the last day of the Condition
Precedent Period.

 

11.3
Termination for Convenience. Processa shall have the right upon sixty (60) days prior written notice to Elion to terminate
this Agreement in its entirety for any reason.

 

11.4
Termination for Cause. In the event of a material breach of this Agreement by a Party, the other Party may give the Party
in default notice requiring it to cure such default, which notice shall specify the nature of the breach. If such material breach
is not cured within ninety (90) days after receipt of such notice (or within fifteen (15) days in the case of a payment breach),
the notifying Party shall be entitled (without prejudice to any other rights conferred on it by this Agreement or under applicable
Law) to terminate this Agreement by giving written notice to the defaulting Party. The right of either Party to terminate this
Agreement as set forth in this Section ‎11.4 shall not be affected in any way by its waiver of, or failure to take action
with respect to, any previous default.

 

11.5
Additional Termination by Elion. In the event that Elion has provided written notice to Processa pursuant to Section ‎5.2,
if (a) Processa does not respond to Elion in writing within sixty (60) days of receipt of such notice from Elion and reasonably
demonstrate in such response compliance with Processa’s obligations under Section ‎5.1, or (b) Processa has failed to
comply with Section 5.1 (a) or Section 5.1(b), Elion shall be entitled (without prejudice to any other rights conferred on it
by this Agreement or under applicable Law) to terminate this Agreement with immediate effect by giving written notice to Processa.

 

    	 	38	 

     

    

 

11.6
Termination for Insolvency. This Agreement may be terminated by a Party upon written notice to the other Party if (a) the
other Party shall make a general assignment for the benefit of its creditors, file a petition in bankruptcy, petition or apply
to any tribunal for the appointment of a custodian, receiver or trustee for it or a substantial part of its assets, or shall commence
any proceeding under any bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or (b) if there shall have been filed against the other Party any such bona fide petition
or application, or any such proceeding shall have been commenced against it, in which an order for relief is entered or that remains
undismissed or unstayed for a period of ninety (90) days or more; or (c) if the other Party by any act or omission shall consent
to, approve of or acquiesce in any such petition, application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for it or any substantial part of its assets, or shall suffer any such custodianship, receivership or trusteeship
to continue undischarged or unstayed for a period of ninety (90) days or more. Termination shall be effective upon the date specified
in such notice.

 

11.7
Termination for Challenge of Elion Patent Rights. If Processa or any of Processa’s Affiliates or Sublicensees commences
an action in any court or tribunal of competent jurisdiction that challenges, opposes or disputes the validity, enforceability
or patentability of any Elion Patent Rights, or any of the claims thereof, or supports or assists any Third Party that commences
such an action in any such court or tribunal, Elion shall have the right to terminate this Agreement upon notice to Processa;
provided, however, that Elion shall not have a right to terminate if the challenge is brought by a Sublicensee,
either directly or indirectly through any Third Party, and Processa or the Affiliate, as the case may be, terminates such Sublicensee’s
sublicense rights hereunder within thirty (30) days after becoming aware of such challenge.

 

11.8
Consequences of Termination. If this Agreement (w) terminates automatically pursuant to Section ‎11.2, (x) is terminated
by Elion under Section ‎11.4, ‎11.5, ‎11.6 or ‎11.7, (y) is terminated by Processa under Section ‎11.3, or
(z) is terminated by Processa under Section ‎11.4 or ‎11.6, then the licenses granted to Processa in Section ‎2.2
and, except as provided in this Section ‎11.8 and Sections ‎11.9 and ‎11.10 (and any Articles and Sections referenced
therein), all other rights and obligations of the Parties under this Agreement shall terminate. Upon a termination described in
clause (x) (but not clause (w), (y) or (z)) of this Section ‎11.8, clause (a) shall apply, and, upon a termination described
in clause (w), (x) or (y) (but not clause (z)), Processa shall grant, and shall cause any applicable Affiliate to grant, Elion
any combination of the following clauses (b) through (f) elected by Elion, provided that (i) upon a termination described in clause
(w), only clause (c) and, to the extent that any Processa Intellectual Property, Sublicensee Intellectual Property or Joint Intellectual
Property exists as of such termination, clause (e) shall apply, and (ii) Processa shall only be required to grant Elion rights
to Sublicensee Materials under the applicable sublicense agreement(s) with Sublicensee(s) to whom Elion has not granted a direct
license pursuant to Section l1.8(a):

 

(a)
Sublicenses. Elion hereby grants, effective automatically upon any termination of this Agreement by Elion pursuant to Section
‎11.4, ‎11.5, ‎11.6 or ‎11.7, a direct license to each then-existing Sublicensee, provided that (i) such Sublicensee
is not in breach under the applicable sublicense, (ii) such Sublicensee’s failure to comply with the terms of its sublicense
or other actions or omissions were not a basis for such termination, and (iii) such Sublicensee continues to satisfy all obligations
under this Agreement applicable to such sublicense, including the diligence obligations set forth in ‎ARTICLE V and all payments
to Elion required under Section 6, from and after the date that such direct license becomes effective.

 

    	 	39	 

     

    

 

(b)
Regulatory Matters. Ownership of all filings with Regulatory Authorities in the Territory relating to Compounds and Products
and Regulatory Approvals relating to Compounds and Products held Processa or its Affiliates or applicable Sublicensees, including
related correspondence with Regulatory Authorities, and Processa shall provide copies thereof to Elion;

 

(c)
Pre-clinical and Clinical Matters. Possession of all pre-clinical and clinical data, including pharmacology and biology
data, within the Processa Know-How and applicable Sublicensee Intellectual Property;

 

(d)
Manufacturing Matters. At Elion’s option, to be exercised no later than the later of (x) thirty (30) days after the
effective date of termination or (y) thirty (30) days after Elion’s receipt of the applicable Manufacturing agreements,

 

(i)
use of Commercially Reasonable Efforts by Processa and its Affiliates and applicable Sublicensees to effect the assignment of
each Manufacturing agreement specific and exclusive to Compounds or Products to Elion, if such agreement is then in effect and
such assignment is permitted under such agreement or by the applicable Third Party; provided that Processa and its applicable
Affiliates and applicable Sublicensees shall be released to the extent the applicable Third Party will permit from any obligation
arising out of such agreement following such assignment and Elion shall execute such documentation reasonably satisfactory to
Processa to effectuate such agreement; provided further that if any such agreement is specific but not exclusive to Compounds
or Products, or is not assigned to Elion for any reason, Processa will discuss in good faith with Elion terms upon which Processa
and its Affiliates and applicable Sublicensees shall use Commercially Reasonable Efforts to provide Elion with the benefits of
such agreement to the extent it relates to Compounds or Products for a limited period of time (not to exceed six (6) months) and
upon payment of a reasonably acceptable fee to Processa;

 

(ii)
for a period of up to six (6) months following the effective date of termination, (A) cooperation with Elion in reasonable respects
to transfer Manufacturing documents and materials within the Processa Know-How and applicable Sublicensee Intellectual Property
that are used (at the time of the termination) by Processa or its Affiliates or applicable Sublicensees exclusively in the Manufacture
of Compounds and Products to the extent such Manufacturing documents and materials are not obtained by Elion pursuant to the assignment
of agreements pursuant to paragraph (i) above, and (B) cooperation with Elion to provide Elion with reasonable access to and right
to use such Manufacturing documents and materials in Processa’s or its Affiliates’ or applicable Sublicensees’
possession or Control to the extent they relate to, but are not used exclusively in, the Manufacture of Compounds and Products,
subject to appropriate confidentiality and limitation on use protections applicable to for Manufacturing documents and materials;

 

(iii)
for a period of up to six (6) months following the effective date of termination, (A) cooperation with Elion in reasonable respects
to transfer Manufacturing technologies within the Processa Intellectual Property and applicable Sublicensee Intellectual Property
that are used (at the time of the termination) by Processa or its Affiliates or applicable Sublicensees exclusively in the Manufacture
of Compounds and Products, and (B) cooperation with Elion to provide Elion with reasonable access to and right to use such Manufacturing
technologies Controlled by Processa or its Affiliates (other than Processa Excluded Affiliates) or applicable Sublicensees to
the extent they relate to, but are not used exclusively in, the Manufacture of Compounds and Products and that Processa or such
Affiliates or Sublicensees are permitted to provide such access to Elion; provided that Elion shall reimburse Processa
for Processa’s reasonable out-of-pocket expenses to provide such requested assistance, to the extent such Manufacturing
technologies are not obtained by Elion pursuant to the assignment of agreements pursuant to paragraph (i) above; and

 

    	 	40	 

     

    

 

(iv)
sale of Processa’s or its Affiliates’ or applicable Sublicensees’ then-existing inventory of Compounds and Products
to Elion, at Processa’s or its applicable Affiliates’ or applicable Sublicensees’ cost of Manufacture, but only
if the following conditions have been met: (A) such Compounds and Products meet the applicable release specifications; and (B)
Processa does not reasonably believe the continued use of such Compounds and Products causes safety concerns;

 

(e)
License Grant. At Elion’s option, to be exercised by written notice to Processa no later than thirty (30) days after
the effective date of termination, a worldwide license, with the right to sublicense, under the Processa Patent Rights, Processa
Know-How, Processa’s interest in the Joint Intellectual Property, and applicable Sublicensee Intellectual Property, solely
to make, have made, use, sell, offer for sale and import Compounds and Products in the Field that were Developed or Commercialized
prior to the effective date of termination, which license would be, at Elion’s election, either (i) non-exclusive, fully
paid-up, non-royalty-bearing, irrevocable and perpetual or (ii) exclusive and royalty-bearing subject to mutual agreement by Elion
and Processa on commercially reasonable terms; provided that, notwithstanding the foregoing, with respect to any Processa
Patent Rights or Processa Know-How that Processa acquired from a Third Party (by license or otherwise), or any applicable Sublicensee
Intellectual Property that the applicable Sublicensee(s) acquired from a Third Party (by license or otherwise), Processa or the
applicable Sublicensee(s) shall only be required to grant to Elion a license to such Processa Patent Rights, Processa Know-How
or Sublicensee Intellectual Property to the extent permitted under the applicable agreement with such Third Party, and Elion shall
pay Processa or such Sublicensee or such Third Party, as determined by Processa, any payment due to such Third Party relating
to the Compounds and Products; provided further that Elion shall execute such documentation reasonably satisfactory to
Processa to effectuate such agreement; and if the license granted to Elion is exclusive, Elion shall have the same enforcement
rights with respect to any Processa Patent Rights and Patent Rights within the Sublicensee Intellectual Property that exclusively
Cover Products that are licensed to Elion pursuant to this Section ‎11.8‎(e) as Processa has with respect to Infringement
Claims pursuant to Section 7.3 (to the extent that Processa or the applicable Sublicensee(s) have such rights with respect to
such Processa Patent Rights or Patent Rights within the Sublicensee Intellectual Property, as applicable), provided that
any enforcement of Processa Patent Rights, Joint Patent Rights or Patent Rights within the Sublicensee Intellectual Property that
Cover subject matter other than such Products shall be performed by Elion only with the consultation and prior agreement of Processa
or the applicable Sublicensee, which such agreement shall not unreasonably withheld, delayed or conditioned.

 

(f)
Assignment of Trademarks. Assign to Elion all of Processa’s or its applicable Sublicensees’ right, title and
interest in any trademark owned by Processa or its Affiliates or applicable Sublicensees and used solely in connection with the
Products, along with all associated goodwill.

 

    	 	41	 

     

    

 

11.9
Effect of Termination or Expiration; Accrued Rights and Obligations. Termination or expiration of this Agreement for any
reason shall not release either Party from any liability that, at the time of such termination or expiration, has already accrued
or that is attributable to a period prior to such termination (including payment obligations accrued prior to the effective date
of termination or expiration pursuant to ‎ARTICLE VI) nor preclude either Party from pursuing any right or remedy it may have
hereunder or at Law or in equity with respect to any breach of this Agreement.

 

11.10
Survival. The rights and obligations set forth in this Agreement shall extend beyond the Term or termination or expiration
of this Agreement only to the extent expressly provided for in this Agreement or to the extent required to give effect to a termination
or expiration of this Agreement or the consequences of a termination or expiration of this Agreement as expressly provided for
in this Agreement. Without limiting the generality of the foregoing, it is agreed that the provisions of ‎ARTICLE I, Sections
‎2.3, ‎2.4, ‎6.11 (only for thirty-six (36) months after expiration or termination), ‎6.121, ‎6.132, ‎6.143,
‎6.15, ‎7.1, ‎7.9, ‎8.1, ‎8.2, ‎8.5, ‎9.5, ‎ARTICLE X, and Sections ‎11.1 (last sentence as
to any such license that became perpetual and irrevocable prior to expiration or termination), ‎11.8, ‎11.9, ‎11.10
and ‎ARTICLE XII shall survive expiration or termination of this Agreement for any reason.

 

ARTICLE
XII

MISCELLANEOUS

 

12.1
Governing Law; Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State
of New York, without regard to its conflicts of laws rules. Each Party (a) irrevocably submits to the exclusive jurisdiction in
the state court sitting in New York City, New York (collectively, the “Courts”), for purposes of any action,
suit or other proceeding arising out of this Agreement, and (b) agrees not to raise any objection at any time to the laying or
maintaining of the venue of any such action, suit or proceeding in any of the Courts, irrevocably waives any claim that such action,
suit or other proceeding has been brought in an inconvenient forum and further irrevocably waives the right to object, with respect
to such action, suit or other proceeding, that such Court does not have any jurisdiction over such Party. Either Party may serve
any process required by such Courts by way of notice under this Agreement. Notwithstanding anything to the contrary in this Section
‎12.1, each Party shall have the right to institute judicial proceedings against the other Party or anyone acting by, through,
or under such other Party, in any court of competent jurisdiction, in order to enforce the instituting Party’s rights hereunder
through reformation of contract, specific performance, injunction, or similar equitable relief.

 

12.2
Dispute Resolution. In the event of a dispute arising out of or relating to this Agreement, either Party shall provide
written notice of the dispute to the other, in which event the dispute shall be referred to the Senior Executives of each Party,
for attempted resolution by good faith negotiations within twenty (20) days after such notice is received. In the event the Senior
Executives do not resolve such dispute within the allotted twenty (20) days, either Party may, after the expiration of the twenty
(20) day period, seek to resolve the dispute in accordance with Section ‎12.1.

 

    	 	42	 

     

    

 

12.3
Waiver. Waiver by a Party of a breach hereunder by the other Party shall not be construed as a waiver of any succeeding
breach of the same or any other provision. No delay or omission by a Party to exercise or avail itself of any right, power, or
privilege that it has or may have hereunder shall operate as a waiver of any right, power, or privilege by such Party. No waiver
shall be effective unless made in writing with specific reference to the relevant provision(s) of this Agreement and signed by
a duly authorized representative of the Party granting the waiver.

 

12.4
Notices. All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall
be sent to the address specified in this Section ‎12.4 and shall be: (a) delivered personally; (b) sent by registered or certified
mail, return receipt requested, postage prepaid; (c) sent via a reputable nationwide overnight courier service; or (d) sent by
facsimile or other electronic transmission. Any such notice, instruction or communication shall be deemed to have been delivered
upon receipt if delivered by hand, three (3) Business Days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, one (1) Business Day after it is sent via a reputable nationwide overnight courier service, or when transmitted
with confirmation of receipt, if transmitted by facsimile or other electronic transmission (if such transmission is on a Business
Day; otherwise, on the next Business Day following such transmission).

 

Notices
to Processa shall be addressed to:

 

Processa
Pharmaceuticals, Inc.

7380 Coca Cola Drive, Suite 106

Hanover, MD 21076

Attn: Wendy Guy, Chief Administrative Officer

Email: wguy@processapharmaceuticals.com

 

Notices
to Elion shall be addressed to:

 

Elion
Oncology, Inc.

4800 Hampden Lane

Bethesda, MD 20814

Attn: Chief Executive Offer

 

With
a copy to:

 

Dechert
LLP

1900 K Street, NW

Washington, DC 20006

Attn: David E. Schulman

 

Either
Party may change its address by giving notice to the other Party in the manner provided above.

 

    	 	43	 

     

    

 

12.5
Entire Agreement. This Agreement (including Schedules) contains the complete understanding of the Parties with respect
to the subject matter of this Agreement and supersedes all prior understandings and writings between the Parties relating to such
subject matter.

 

12.6
Severability. If any provision of this Agreement is held unenforceable by a court or tribunal of competent jurisdiction
because it is invalid or conflicts with any Law of any relevant jurisdiction, the validity of the remaining provisions shall not
be affected. In such event, the Parties shall negotiate a substitute provision that, to the extent possible, accomplishes the
original business purpose.

 

12.7
Assignment. Neither this Agreement nor any right or obligation hereunder may be assigned or otherwise transferred by any
Party without the consent of the other Party; provided, however, that any Party may, without such consent, assign
this Agreement, in whole or in part: (a) to any of its respective Affiliates, provided that such Affiliate has acknowledged
and confirmed in writing that effective as of such assignment, such Affiliate shall be bound by this Agreement to the identical
extent applicable to the assigning Party and the assignor confirms to the non-assigning party that it shall remain liable as if
no such liability had occurred; or (b) to any successor in interest by way of merger, acquisition or sale of all or substantially
all of its business or assets relating to the subject matter of this Agreement, provided that such successor (if the applicable
Party is not the surviving entity in such transaction) agrees in writing to be bound by the terms of this Agreement to the identical
extent applicable to the assigning Party. Any purported assignment in violation of this Section ‎12.7 shall be void. Subject
to this Section 12.7, any permitted assignee shall assume all obligations of its assignor under this Agreement.

 

12.8
Counterparts; Exchange by Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and that together shall constitute one and the same instrument. Such counterparts may be exchanged by facsimile
or PDF (provided that each executed counterpart is transmitted in one complete transmission or electronic mail message).
Where there is an exchange of executed counterparts by facsimile or PDF, each Party shall be bound by the Agreement notwithstanding
that original copies of the Agreement may not be exchanged immediately. The Parties shall cooperate after execution of the Agreement
and exchange by facsimile or PDF to ensure that each Party obtains an original executed copy of this Agreement with reasonable
promptness.

 

12.9
Force Majeure. No Party shall be liable for failure of or delay in performing obligations set forth in this Agreement,
and no Party shall be deemed in breach of its obligations, if such failure or delay is due to a natural disaster, explosion, fire,
flood, tornadoes, pandemic, quarantine, thunderstorms, earthquake, war, terrorism, riots, embargo, losses or shortages of power,
labor stoppage, substance or material shortages, damage to or loss of product in transit not due to a failure by such Party or
its Affiliates to exercise reasonable care, events caused by reason of Laws of any Governmental Authority, events caused by acts
or omissions of a Third Party not induced or solicited by such Party or its Affiliates, or any other cause reasonably beyond the
control of such Party or its Affiliates; provided that such Party uses Commercially Reasonable Efforts to overcome the
difficulties created by such force majeure event and to resume performance of its obligations as soon as practicable.

 

    	 	44	 

     

    

 

12.10
Third-Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third
Party other than an Elion Party or a Processa Party, as applicable, that is an Indemnified Party under ‎ARTICLE X, and no
Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim
in respect of any debt, liability or obligation (or otherwise) against either Party.

 

12.11
Relationship of the Parties. Each Party shall bear its own costs incurred in the performance of its obligations hereunder
without charge or expense to the other, except as expressly provided in this Agreement. Neither Party shall have any responsibility
for the hiring, termination or compensation of the other Party’s employees or for any employee compensation or benefits
of the other Party’s employees. No employee or representative of a Party shall have any authority to bind or obligate the
other Party for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party
without said other Party’s approval. For all purposes and notwithstanding any other provision of this Agreement to the contrary,
the legal relationship under this Agreement of each Party to the other Party shall be that of independent contractor. Nothing
in this Agreement shall be construed to establish a relationship of partners or joint venturers between the Parties.

 

12.12
Performance by Affiliates. To the extent that this Agreement imposes obligations on Affiliates of a Party, such Party agrees
to cause its Affiliates to perform such obligations.

 

12.13
No Consequential or Punitive Damages. NEITHER PARTY WILL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY,
OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, ARISING FROM OR RELATING TO THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.
NOTHING IN THIS SECTION ‎12.13 IS INTENDED TO LIMIT OR RESTRICT (A) THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY
UNDER THIS AGREEMENT WITH RESPECT TO THIRD PARTY CLAIMS, OR (B) DAMAGES TO WHICH A PARTY MAY BE ENTITLED FOR BREACH OF CONFIDENTIALITY
AND LIMITATION ON USE OBLIGATIONS SET FORTH IN THIS AGREEMENT, OR (C) DAMAGES TO WHICH A PARTY MAY BE ENTITLED FOR THE WILLFUL
MISCONDUCT, INTENTIONAL BREACH OR FRAUD OF THE OTHER PARTY.

 

[Signature
page follows]

 

    	 	45	 

     

    

 

IN
WITNESS WHEREOF, the Parties have signed this Agreement as of the Effective Date.

 

	PROCESSA
    PHARMACEUTICALS, INC.	 	ELION
    ONCOLOGY, INC.
			 		
	By:		 	By:	
	Name:	David
    Young	 	Name:	R.
    Michael Floyd
	Title:	CEO	 	Title:	Chief
    Executive Officer

 

    	 	46	 

     

    

 

	Schedule
    1.12	 	Current
    as of August 23, 2020

 

Issued:

 

	●	U.S.
    Patent - 8,658,618; Granted 2014: Methods for preventing or reducing neurotoxicity associated with administering DPD inhibitors
    in  combination with 5-FU and 5-FU prodrugs. 
	 	 
	●	US
    Patent - 8,318,756; Granted 2012: Methods for administering DPD inhibitors in combination with 5-FU and 5-FU prodrugs. 
	 	 
	●	Orphan
    Drug Designation for Eniluracil in Hepatocelluar Carcinomas; Granted in 2005: ADH300004 (ENILURACIL) IN COMBINATION WITH FLUOROPYRIMIDINES
    FOR THE TREATMENT OF  PATIENTS WITH HEPATOCELLULAR CARCINOMA

 

Filed:

 

	●	Formulation
    patents on formulation of Extended Release Colon Targeted delivery of drugs (May 2018) and ERCT5-FU and Use with Eniluracil
    (July 2018) 

 

To
Be Filed Patents:

 

	●	Draftsm
    pending patents of all other Eniluarcil and DPD related patents. 

 

    	1EX-4.1

 Exhibit 4.1 

BBX CAPITAL FLORIDA LLC 
 and 

                    , as Rights Agent 

RIGHTS AGREEMENT 
 Dated as of
            , 2020 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	 Page
	 
	Section 1.	  	Certain Definitions	  	 	1	 
	Section 2.	  	Appointment of Rights Agent	  	 	8	 
	Section 3.	  	Issue of Right Certificates	  	 	8	 
	Section 4.	  	Form of Right Certificates	  	 	10	 
	Section 5.	  	Countersignature and Registration	  	 	10	 
	Section 6.	  	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated Rights	  	 	10	 
	Section 7.	  	Exercise of Rights, Purchase Price; Expiration Date of Rights	  	 	11	 
	Section 8.	  	Cancellation and Destruction of Right Certificates	  	 	12	 
	Section 9.	  	Availability of Shares of Preferred Stock	  	 	12	 
	Section 10.	  	Preferred Stock Record Date	  	 	13	 
	Section 11.	  	Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights	  	 	14	 
	Section 12.	  	Certificate of Adjusted Purchase Price or Number of Shares	  	 	19	 
	Section 13.	  	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	  	 	20	 
	Section 14.	  	Fractional Rights and Fractional Shares	  	 	23	 
	Section 15.	  	[Intentionally Left Blank]	  	 	23	 
	Section 16.	  	Agreement of Right Holders	  	 	24	 
	Section 17.	  	Right Certificate Holder Not Deemed a Shareholder	  	 	24	 
	Section 18.	  	Concerning the Rights Agent	  	 	24	 
	Section 19.	  	Merger or Consolidation or Change of Name of Rights Agent	  	 	25	 
	Section 20.	  	Duties of Rights Agent	  	 	25	 
	Section 21.	  	Change of Rights Agent	  	 	27	 
	Section 22.	  	Issuance of New Right Certificates	  	 	28	 
	Section 23.	  	Redemption	  	 	28	 
	Section 24.	  	Exchange	  	 	28	 
	Section 25.	  	Notice of Certain Events	  	 	29	 
	Section 26.	  	Notices	  	 	30	 
	Section 27.	  	Supplements and Amendments	  	 	31	 
	Section 28.	  	Successors	  	 	32	 
	Section 29.	  	Benefits of this Agreement	  	 	32	 

							
	Section 30.	  	Determinations and Actions by the Board	  	 	32	 
	Section 31.	  	Severability	  	 	32	 
	Section 32.	  	Governing Law	  	 	32	 
	Section 33.	  	Counterparts	  	 	32	 
	Section 34.	  	Descriptive Headings; Interpretation	  	 	32	 

 RIGHTS AGREEMENT 

Rights Agreement, dated as of             , 2020 (“Agreement”), between
BBX Capital Florida LLC, a Florida limited liability company, and             , as Rights Agent (the “Rights Agent”). 

The Company’s Board has adopted resolutions authorizing and directing, subject to the consummation of the
Spin-Off, the issuance of one preferred share purchase right (a “Right”) for (i) each share of the Company’s Class A Common Stock, par value $0.01 per share (the “Class A
Common Stock), and (ii) each share of the Company’s Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, collectively, the “Common
Stock”), distributed in connection with the Spin-Off in respect of shares of Parent Class A Common Stock and Parent Class B Common Stock, respectively, outstanding as of the Spin-Off Record Date; each Right initially representing the right to purchase one one-hundredth (subject to adjustment) of a share of Preferred Stock, upon the terms and
subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share of Common Stock that shall become outstanding following the Spin-Off
Distribution Date until the earlier of the Rights Distribution Date and the Expiration Date; provided, however, that Rights may be issued with respect to shares of Common Stock that shall become outstanding after the Rights
Distribution Date and prior to the Expiration Date in accordance with Section 22. 
 Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree as follows: 
 Section 1.    Certain
Definitions. For purposes of this Agreement, the following terms have the meanings indicated: 

(a)    “Acquiring Person” shall mean any Person, other than an Exempt Person, who or which, together with all
Related Persons of such Person, shall be the Beneficial Owner of 5% or more of (1) the shares of Class A Common Stock then outstanding, (2) the shares of Class B Common Stock then outstanding, or (3) the total number of
shares of Common Stock then outstanding; provided, however, that: 
 (i)    if the Company’s Board
determines that a Person who would otherwise be an “Acquiring Person” became the Beneficial Owner of a number of shares of Class A Common Stock or Class B Common Stock such that the Person would otherwise qualify as an
“Acquiring Person” inadvertently (including, without limitation, because (A) such Person was unaware that it Beneficially Owned that number of shares of Class A Common Stock or Class B Common Stock that would otherwise cause
such Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its Beneficial Ownership of Class A Common Stock or Class B Common Stock, but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement) and without any intention of obtaining, changing or influencing control of the Company, then such Person shall not be deemed to be or to have become an “Acquiring Person” in such case unless and
until such Person shall have failed to divest itself, as soon as practicable (as determined by the Company’s Board), of Beneficial Ownership of a sufficient number of shares of Class A Common Stock or Class B Common Stock (as
determined by the Company’s Board) so that such Person would no longer otherwise qualify as an “Acquiring Person”; 

(ii)    if, as of immediately prior to the first public announcement of the adoption of this Agreement, any Person
(together with its Affiliates and Associates) is the Beneficial Owner of 5% or more of (1) the shares of Class A Common Stock then outstanding, (2) the shares of Class B Common Stock then outstanding, or (3) the total number
of shares of Common Stock then outstanding, such Person shall not be 

  
 1 

 
deemed to be or to become an “Acquiring Person” unless and until such time as such Person shall become the Beneficial Owner of any additional shares of Common Stock (other than pursuant
to a dividend or distribution paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) that would cause such Person’s Beneficial Ownership to equal or exceed any of the
thresholds set forth in the foregoing clauses (1), (2) or (3); 
 (iii)    no Person shall become an “Acquiring
Person” solely as a result of (1) any unilateral grant of any security by the Company, including, without limitation, any stock awards, restricted stock awards, restricted stock units, options, warrants, rights or similar interests granted
by the Company to its directors, officers or employees, nor the vesting (including acceleration of vesting) or exercise of any of the foregoing, or (2) any other acquisition approved in advance by the Company’s Board, it being acknowledged
that in granting such approval under this clause (2) the Board may consider among other factors it deems relevant, the relationship between the Company and its Affiliates, including Parent, and the Person acquiring the shares and the Related
Persons of such Person, evidence of their long term interest in the Company, and their short and long term intentions with respect to the investment, including consideration of speculative short term acquisitions in view of adverse market conditions
to the potential detriment of the Company and its shareholders; 
 (iv)    no Person shall become an “Acquiring
Person” solely as the result of an acquisition of shares of Common Stock by the Company which, by reducing the number of shares of Common Stock outstanding, increases the proportion of the shares of Common Stock Beneficially Owned by such
Person to 5% or more of the Class A Common Stock, Class B Common Stock or total combined Common Stock then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 5% or more of the shares of
Class A Common Stock, Class B Common Stock or total combined Common Stock then outstanding by reason of any such share acquisition by the Company and shall thereafter become the Beneficial Owner of any additional shares of Common Stock
(other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), then such Person shall be deemed to be an “Acquiring
Person” unless, upon becoming the Beneficial Owner of such additional shares of Common Stock, such Person does not Beneficially Own 5% or more of the shares of Class A Common Stock, Class B Common Stock or total combined Common Stock
then outstanding; and 
 (v)    no Person shall become an “Acquiring Person” solely as the result of the
acquisition by such Person of Beneficial Ownership of shares of Common Stock from an individual who, as of immediately prior to the first public announcement of this Agreement, is the Beneficial Owner of 5% or more of the shares of Class A
Common Stock, Class B Common Stock or total combined Common Stock then outstanding if such shares of Common Stock are received by such Person upon such individual’s death pursuant to such individual’s will or pursuant to a charitable
trust created by such individual for estate planning purposes unless and until such time as such Person shall become the Beneficial Owner of any additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock), and, upon becoming the Beneficial Owner of such additional shares of Common Stock, such Person Beneficially Owns 5% or more of the shares
of Class A Common Stock, Class B Common Stock or total combined Common Stock then outstanding. 
 With respect to any Person, for all purposes of
this Agreement, any calculation of the number of shares of Class A Common Stock, Class B Common Stock or total combined Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of the
outstanding shares of Class A Common Stock, Class B Common Stock or total combined Common Stock of which any such Person is the Beneficial Owner, shall include the number of shares of Class A Common Stock and/or Class B Common
Stock, as applicable, not outstanding at the time of such calculation that such Person is 

  
 2 

 
otherwise deemed to Beneficially Own for purposes of this Agreement, but the number of shares of Class A Common Stock and Class B Common Stock not outstanding that such Person is
otherwise deemed to Beneficially Own for purposes of this Agreement shall not be included for the purpose of computing the percentage of the outstanding shares of Class A Common Stock, Class B Common Stock or total combined Common Stock
Beneficially Owned by any other Person (unless such other Person is also deemed to Beneficially Own such shares of Class A Common Stock or Class B Common Stock in accordance with the terms of this Agreement). 

(b)    A Person shall be deemed to be “Acting in Concert” with another Person if such Person knowingly acts
(whether or not pursuant to an express agreement, arrangement or understanding) at any time after the first public announcement of the adoption of this Agreement, in concert or in parallel with such other Person, or towards a common goal with such
other Person, relating to changing or influencing the control of the Company or in connection with or as a participant in any transaction having that purpose or effect, where (i) each Person is conscious of the other Person’s conduct and
this awareness is an element in their respective decision-making processes and (ii) at least one additional factor supports a determination by the Board that such Persons intended to act in concert or in parallel, which additional factors may
include, without limitation, exchanging information, attending meetings, conducting discussions, or making or soliciting invitations to act in concert or in parallel; provided that the additional factor required shall not include actions by an
officer or director of the Company acting in such capacities. A Person who is Acting in Concert with another Person shall also be deemed to be Acting in Concert with any third party who is also Acting in Concert with such other Person. No Person
shall be deemed to be Acting in Concert with another Person solely as a result of (i) making or receiving a solicitation of, or granting or receiving, revocable proxies or consents given in response to a public proxy or consent solicitation
made to more than 10 holders of shares of a class of stock of the Company registered under Section 12 of the Exchange Act, or (ii) soliciting or being solicited for tenders of, or tendering or receiving tenders of, securities in a public
tender or exchange offer made pursuant to, and in accordance with, Section 14(d) of the Exchange Act by means of a tender offer statement filed on Schedule TO. 

(c)    “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. 

(d)    “Articles of Incorporation” shall mean the Articles of Incorporation of the Company, to be filed with the
Florida Department of State, in substantially the form attached hereto as Exhibit A, as the same may be amended and/or restated from time to time. 

(e)    A Person shall be deemed the “Beneficial Owner” of, shall be deemed to have “Beneficial
Ownership” of, and shall be deemed to “Beneficially Own” any securities: 
 (i)    which such Person or
any Related Person of such Person is deemed to Beneficially Own, directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act, or would be deemed to be
the Beneficial Owner of pursuant to Rule 13d-5 of the General Rules and Regulations under the Exchange Act; 

(ii)    which such Person or any Related Person of such Person has, directly or indirectly: (A) the right or
obligation to acquire (whether such right is exercisable, or such obligation is required to be performed, immediately or only after the passage of time, upon compliance with regulatory requirements, upon the satisfaction of conditions (whether or
not within the control of such Person) or otherwise) pursuant to any agreement, arrangement or understanding (whether or not in writing) (other than customary agreements with and between underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the

  
 3 

 
Beneficial Owner of, or to Beneficially Own, (w) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any Related Person of such Person until
such tendered securities are accepted for purchase or exchange, (x) securities which such Person has a right to acquire upon the exercise of Rights at any time prior to the time that any Person becomes an Acquiring Person, (y) securities
issuable upon the exercise of Rights from and after the time that any Person becomes an Acquiring Person if such Rights were acquired by such first Person or any Related Person of such Person prior to the Rights Distribution Date or pursuant to
Section 3(a) or Section 22 hereof (“Original Rights”) or pursuant to Section 11(i) or Section 11(n) with respect to an adjustment to Original Rights, or (z) securities which such Person or any Related Person of
such Person may acquire, does or do acquire or may be deemed to have the right to acquire, pursuant to any merger or other acquisition agreement between the Company and such Person (or one or more Related Persons of such Person) if such agreement
has been approved by the Company’s Board prior to such Person’s becoming an Acquiring Person; or (B) the right to vote pursuant to any agreement, arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any security by reason of such agreement, arrangement or understanding if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); 

(iii)    which are Beneficially Owned, directly or indirectly, by any other Person (or any Related Person of such Person)
and with respect to which such first Person or any of such first Person’s Affiliates or Associates (A) is Acting in Concert or (B) has (x) any agreement, arrangement or understanding (whether or not in writing) (other than customary
agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(e)(ii)(B)
above) or disposing of such securities or (y) any agreement, arrangement or understanding (whether or not in writing) to cooperate in obtaining, changing or influencing control of the issuer of such securities; 

(iv)    which are Beneficially Owned, directly or indirectly, by a Counterparty (or any of such Counterparty’s
Affiliates or Associates) under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which such Person or any of such Person’s Affiliates or Associates is a Receiving
Party; provided, however, that the number of shares of Common Stock that a Person is deemed to Beneficially Own pursuant to this clause (iv) in connection with a particular Derivatives Contract shall not exceed the number of
Notional Common Shares with respect to such Derivatives Contract; provided further that the number of securities Beneficially Owned by each Counterparty (including its Affiliates and Associates) under a Derivatives Contract shall for purposes of
this clause (iv) be deemed to include all securities that are Beneficially Owned, directly or indirectly, by any other Counterparty (or any of such other Counterparty’s Affiliates or Associates) under any Derivatives Contract to which such
first Counterparty (or any of such first Counterparty’s Affiliates or Associates) is a Receiving Party, with this proviso being applied to successive Counterparties as appropriate. 

In addition, a Person will be deemed to be the be the “Beneficial Owner” of, to have “Beneficial Ownership” of and to “Beneficially
Own” shares of Class A Common Stock, Class B Common Stock and Common Stock of the Company by virtue of (1) their Beneficial Ownership (determined as provided in this Section 1(e)) of shares of Parent Class A Common
Stock and/or Class B Common Stock, as the case may be, with respect to which there is an entitlement to a distribution of Class A Common Stock or Class B Common Stock of the Company in connection with the Spin-Off or (2) their acquisition of shares representing Class A Common Stock or Class B Common Stock of the Company in the when-issued trading market, if any, with respect to such shares prior to the
Spin-Off. Accordingly, and for the avoidance of doubt, acquisitions of “Beneficial Ownership” of shares of Parent Class A Common Stock or Parent Class B Common Stock

  
 4 

 
following the first public announcement of this Agreement and prior to the Spin-Off Distribution Date (if such shares have associated therewith an
entitlement to shares of Class A Common Stock or Class B Common Stock of the Company in the Spin-Off) or acquisitions of shares representing Class A Common Stock or Class B Common Stock of
the Company in the when-issued trading market, if any, with respect to such shares prior to the Spin-Off could in each case result in the Person acquiring such shares and the Related Persons of such Person
being deemed an Acquiring Person under the terms of this Agreement simultaneously with the receipt of shares in the Spin-Off. 

For the avoidance of doubt, a Person who or which is deemed to be the “Beneficial Owner” of, to have “Beneficial Ownership” of and to
“Beneficially Own” shares of Class B Common Stock of Parent or the Company shall also be deemed to be the “Beneficial Owner” of, to have “Beneficial Ownership” of and to “Beneficially Own” the shares of
Class A Common Stock of Parent or the Company, respectively, issuable upon conversion of such shares Beneficially Owned by such Person. 

Notwithstanding the foregoing, no Person who is an officer, director or employee of an Exempt Person shall be deemed, solely by reason of such Person’s
status or authority as such, to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or to “Beneficially Own” any securities that are “Beneficially Owned”, including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an Exempt Person. 

(f)    “Board” means the Board of Managers of the Company prior to the Company’s conversion into a Florida
corporation and the Board of Directors of the Company following the Company’s conversion into a Florida corporation. 

(g)    “Book Entry” shall mean an uncertificated book entry for the Class A Common Stock or Class B
Common Stock. 
 (h)    “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which
banking institutions in the state in which the principal office of the Rights Agent is located are authorized or obligated by law or executive order to close. 

(i)    “Class A Common Stock” shall have the meaning set forth in the recitals hereto. 

(j)    “Class B Common Stock” shall have the meaning set forth in the recitals hereto. 

(k)    “Close of Business” on any given date shall mean 5:00 P.M., New York City time, on such date;
provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day. 

(l)    “Common Stock” when used with reference to the Company or without reference shall have the meaning set
forth in the recitals hereto. “Common Stock” when used with reference to any Person other than the Company shall mean the common stock (or, in the case of any entity other than a corporation, the equivalent equity interest) with the
greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first mentioned Person. 

(m)    “Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii) hereof. 

(n)    “Company” means BBX Capital Florida LLC, a Florida limited liability company, and its successors,
including the entity into which BBX Capital Florida LLC is converted in connection with the Spin-Off. 

  
 5 

 (o)    “Current Value” shall have the meaning set forth in
Section 11(a)(iii) hereof. 
 (p)    “Derivatives Contract” shall mean a contract between two parties
(the “Receiving Party” and the “Counterparty”) that is designed to produce economic benefits and risks to the Receiving Party that correspond substantially to the ownership by the Receiving Party of a number of shares of Common
Stock specified or referenced in such contract (the number of shares corresponding to such economic benefits and risks, the “Notional Common Shares”), regardless of whether (i) obligations under such contract are required or permitted
to be settled through the delivery of cash, shares of Common Stock or other property or (ii) such contract conveys any voting rights in shares of Common Stock, without regard to any short or similar position under the same or any other
Derivative Contract. For the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate federal governmental authority shall
not be deemed to be Derivatives Contracts. 
 (q)    “Equivalent Preferred Shares” shall have the meaning set
forth in Section 11(b) hereof. 
 (r)    “Exchange Act” shall mean the Securities Exchange Act of 1934,
as amended. 
 (s)    “Exchange Ratio” shall have the meaning set forth in Section 24 hereof. 

(t)    “Exempt Person” shall mean the Company or any Subsidiary of the Company, in each case including, without
limitation, in its fiduciary capacity, or any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity or trustee holding (or acting in a fiduciary capacity in respect of) Common Stock for or pursuant to the terms of
any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary of the Company. 

(u)    “Expiration Date” shall have the meaning set forth in Section 7 hereof. 

(v)    “Final Expiration Date” shall have the meaning set forth in Section 7 hereof. 

(w)    “Flip-In Event” shall have the meaning set forth in
Section 11(a)(ii) hereof. 
 (x)    “NASDAQ” shall mean The NASDAQ Stock Market LLC. 

(y)    “New York Stock Exchange” shall mean the New York Stock Exchange, Inc. 

(z)    “Parent” shall mean BBX Capital Corporation, a Florida corporation and the sole member of the Company as
of the date of this Agreement. 
 (aa)    “Parent Class A Common Stock” shall mean the Class A
Common Stock, par value $0.01 per share, of Parent. 
 (bb)    “Parent Class B Common Stock” shall mean
the Class B Common Stock, par value $0.01 per share, of Parent. 
 (cc)    “Person” shall mean any
individual, firm, corporation, partnership, limited liability company, trust or other entity, and shall include any successor (by merger or otherwise) to such entity. 

  
 6 

 (dd)    “Preferred Stock” shall mean Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company having the rights, preferences and privileges set forth in the Articles of Incorporation. 

(ee)    “Principal Party” shall have the meaning set forth in Section 13(b) hereof. 

(ff)    “Purchase Price” shall have the meaning set forth in Section 7(b) hereof. 

(gg)    “Redemption Date” shall have the meaning set forth in Section 7 hereof. 

(hh)    “Redemption Price” shall have the meaning set forth in Section 23 hereof. 

(ii)    “Registration Statement” means the Company’s Registration Statement on Form 10-12G filed with the Securities and Exchange Commission on June 17, 2020, as amended from time to time. 

(jj)    “Related Person” shall mean, as to any Person, each Affiliate and Associate of such Person, and any
other Person with whom such Person or such Person’s Affiliates or Associates is Acting in Concert (or any Affiliate or Associate of such other Person). 

(kk)    “Right” shall have the meaning set forth in the recitals hereto. 

(ll)    “Right Certificate” shall have the meaning set forth in Section 3 hereof. 

(mm)    “Rights Distribution Date” shall have the meaning set forth in Section 3 hereof. 

(nn)    “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii)
hereof. 
 (oo)    “Securities Act” shall mean the Securities Act of 1933, as amended. 

(pp)    “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof. 

(qq)    “Spin-Off” means Parent’s
spin-off of the Company pursuant to which the Company will become a separate publicly-traded company, as described in the Registration Statement. 

(rr)    “Spin-Off Distribution Date” shall mean the date referred to in
the Registration Statement as the “distribution date” with respect to the distribution of shares of Common Stock in connection with the Spin-Off. 

(ss)    “Spin-Off Record Date” shall mean the date and time referred to
in the Registration Statement as the “record date” with respect to the entitlement to the distribution of shares of Common Stock in connection with the Spin-Off. 

(tt)    “Stock Acquisition Date” shall mean the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or that discloses information which reveals the
existence of an Acquiring Person, or such earlier date as a majority of the Board of the Company shall become aware of the existence of an Acquiring Person. 

(uu)    “Subsidiary” of any Person shall mean any partnership, joint venture, limited liability company, firm,
corporation, unincorporated association, trust or other entity of which a majority of the voting power of the voting equity securities or equity interests is owned of record or Beneficially Owned, directly or indirectly, by such Person. 

  
 7 

 (vv)    “Substitution Period” shall have the meaning set forth
in Section 11(a)(iii) hereof. 
 (ww)    “Summary of Rights” shall have the meaning set forth in
Section 3(b) hereof. 
 (xx)    “Trading Day” shall have the meaning set forth in Section 11(d)(i)
hereof. 
 (yy)    “Trust” shall have the meaning set forth in Section 24(a) hereof. 

(zz)    “Trust Agreement” shall have the meaning set forth in Section 24(a) hereof. 

Section 2.    Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the express terms and conditions hereof (and no implied terms and conditions), and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable (the term “Rights Agent” being used herein to refer, collectively, to the Rights Agent together with any such
co-Rights Agents), upon ten (10) days’ prior written notice to the Rights Agent. In the event the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company reasonably determines, provided that such duties are consistent with the terms and conditions of this Agreement and that
contemporaneously with such appointment the Company shall notify, in writing, the Rights Agent and any co-Rights Agents of any such duties. The Rights Agent shall have no duty to supervise, and shall in no
event be liable for, the acts or omissions of any such co-Rights Agents. 

Section 3.    Issue of Right Certificates. 

(a)    Until the Close of Business on the earlier of (i) the tenth Business Day after the Stock Acquisition Date or
(ii) the tenth Business Day (or such later date as may be determined by action of the Company’s Board prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than an Exempt
Person) of, or of the first public announcement of the intention of any Person (other than an Exempt Person) to commence, a tender or exchange offer the consummation of which would result in any Person (other than an Exempt Person) having Beneficial
Ownership or becoming the Beneficial Owner of 5% or more of the shares of Class A Common Stock, Class B Common Stock or total combined Common Stock then outstanding (the earlier of such dates being herein referred to as the “Rights
Distribution Date”), (x) the Rights will be evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates representing the Common Stock registered in the names of the holders thereof or by Book Entry shares in
respect of such Common Stock (which certificates for Class A Common Stock, Class B Common Stock and Book Entry shares shall also be deemed to be Right Certificates) and not by separate Right Certificates, and (y) the Rights will be
transferable only in connection with the transfer of Common Stock. As soon as practicable after the Rights Distribution Date, the Company will prepare and execute, the Rights Agent will countersign and the Company will send or cause to be sent (and
the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Stock as of the Close of Business on the Rights Distribution Date (other than any Acquiring Person or any Related Person of an
Acquiring Person), at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B attached hereto (a “Right Certificate”), evidencing one Right (subject to adjustment
as provided herein) for each share of Common Stock so held. As of the Rights Distribution Date, the Rights will be evidenced solely by such Right Certificates. 

  
 8 

 (b)    On the Spin-Off
Distribution Date, or as soon as practicable thereafter, the Company will send, or cause to be sent, a copy of a Summary of Rights to Purchase Shares of Preferred Stock, in substantially the form of Exhibit C attached hereto (the
“Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of shares of Common Stock issued in connection with the Spin-Off (other than any Acquiring Person or any Related
Person of any Acquiring Person), at the address of such holder shown on the records of the Company. With respect to certificates representing shares of Common Stock (or Book Entry shares of Common Stock) outstanding until the Rights Distribution
Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof (or such Book Entry shares) together with the Summary of Rights. Until the Rights Distribution Date (or, if earlier, the Expiration Date), the
surrender for transfer of any certificate representing shares of Common Stock (or any Book Entry shares of Common Stock) outstanding, with or without a copy of the Summary of Rights, shall also constitute the transfer of the Rights associated with
the Common Stock represented thereby. 
 (c)    Rights shall, without any further action, be issued in respect of all
shares of Common Stock issued by the Company after the Spin-Off Distribution Date but prior to the earlier of the Rights Distribution Date and the Expiration Date, or in certain circumstances provided in
Section 22 hereof, after the Rights Distribution Date. Certificates, if any, issued for Common Stock prior to the earlier of the Rights Distribution Date and the Expiration Date, or in certain circumstances provided in Section 22 hereof,
after the Rights Distribution Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend: 
 This
certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between the Company and             , and any successor rights agent thereto,
as Rights Agent, dated as of             , 2020 and as amended from time to time (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights (as defined in the Rights Agreement) will be evidenced by separate certificates and will
no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, as set forth in the
Rights Agreement, Rights which are owned by or transferred to any Person who is or becomes an Acquiring Person (as defined in the Rights Agreement) or any Related Person (as defined in the Agreement) of any Person who is or becomes an Acquiring
Person and, in each case, certain transferees thereof will become null and void and will no longer be transferable. 
 With respect to any Book
Entry shares of Common Stock, such legend shall be included in a notice to the record holder of such shares in accordance with applicable law. With respect to such certificates containing the foregoing legend, or any notice of the foregoing legend
delivered to holders of Book Entry shares, until the Rights Distribution Date, the Rights associated with the Common Stock represented by such certificates or Book Entry shares shall be evidenced by such certificates or Book Entry shares alone, and
the surrender for transfer of any such certificate or Book Entry share, except as otherwise provided herein, shall also constitute the transfer of the Rights associated with the Common Stock represented thereby. In the event that the Company
purchases or otherwise acquires any Common Stock prior to the Rights Distribution Date, any Rights associated with such Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated
with the Common Stock which are no longer outstanding. 
 Notwithstanding this paragraph (c), neither the omission of a legend nor the
failure to deliver the notice of such legend required hereby shall affect the enforceability of any part of this Agreement or the rights of any holder of the Rights. 

  
 9 

 Section 4.    Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares and of assignment to be printed on the reverse thereof) shall be substantially in the form set forth in Exhibit B attached hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any stock exchange or interdealer quotation system on which the Rights may from time to time be listed or quoted, or to conform to usage. Subject to the provisions of this
Agreement, each Right Certificate shall entitle the holder thereof to purchase such number of one one-hundredths of a share of Preferred Stock as shall be set forth therein at the Purchase Price, but the
number of such one one-hundredths of a share of Preferred Stock and the Purchase Price shall be subject to adjustment as provided herein. 

Section 5.    Countersignature and Registration. 

(a)    The Right Certificates shall be executed on behalf of the Company by the Chairman, the President, the Chief
Executive Officer, the Chief Financial Officer, the Treasurer or the Secretary of the Company, either manually or by facsimile signature or other electronic signature, shall have affixed thereto the Company’s seal or a facsimile thereof and
shall be attested by the Secretary of the Company, either manually or by facsimile or other electronic signature. The Right Certificates shall be manually or by facsimile countersigned by the Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such
Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date
of the execution of this Agreement any such Person was not such an officer. 
 (b)    Following the Rights Distribution
Date, and receipt by the Rights Agent of written notice to that effect and all other relevant information referred to in this Agreement, the Rights Agent will keep or cause to be kept, at an office or agency designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates. 
 Section 6.    Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated Rights. 

(a)    Subject to the provisions of this Agreement, at any time after the Rights Distribution Date and prior to the
Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-hundredths of a share of Preferred Stock
as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the office or agency of the Rights Agent designated for such purpose accompanied by a
signature guarantee (a “Signature Guarantee”) from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association and such other documentation

  
 10 

 
as the Rights Agent may reasonably request. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company and the Rights Agent may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. The
Rights Agent shall not have any duty or obligation to take any action under any section of this Agreement that requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have been made. 

(b)    Subject to the provisions of this Agreement, at any time after the Rights Distribution Date and prior to the
Expiration Date, upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 

(c)    Notwithstanding any other provision hereof, the Company and the Rights Agent may amend this Agreement to provide
for uncertificated Rights in addition to or in place of Rights evidenced by Right Certificates, to the extent permitted by applicable law. 

Section 7.    Exercise of Rights, Purchase Price; Expiration Date of Rights. 

(a)    Except as otherwise provided herein, the Rights shall become exercisable on the Rights Distribution Date, and
thereafter the registered holder of any Right Certificate (other than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may, subject
to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the office or agency of the Rights Agent designated for such purpose accompanied by a Signature Guarantee and such other documentation as the Rights Agent may reasonably request, together with payment of the
aggregate Purchase Price with respect to the total number of one one-hundredths of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as to which the Rights are
exercised, at any time which is both after the Rights Distribution Date and prior to the time (the “Expiration Date”) that is the earliest of (i) the Close of Business on
             (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”), (iii) the
closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in Sections 1(e)(ii)(A)(z) and 13(f) at which time the Rights are terminated, or (iv) the time at which such Rights are
exchanged as provided in Section 24 hereof. 
 (b)    The purchase price for each one one-hundredth of a share of Preferred Stock purchasable upon the exercise of a Right (the “Purchase Price”) shall initially be $            .
Except as expressly set forth to the contrary above or elsewhere herein, the Purchase Price and the number of one one-hundredths of a share of Preferred Stock or other securities or property to be acquired
upon exercise of a Right shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) of this Section 7.

 (c)    Except as otherwise provided herein, upon receipt of a Right Certificate representing exercisable Rights, with
the form of election to purchase duly executed, accompanied by payment of the aggregate Purchase Price for the shares of Preferred Stock (or other securities, cash or other assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the 

  
 11 

 
holder of such Right Certificate in accordance with Section 9 hereof, in cash or by certified check, cashier’s check or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Stock, or make available if the Rights Agent is the transfer agent for the Preferred Stock, certificates for the number of one
one-hundredths of a share of Preferred Stock to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition from a depositary agent
appointed by the Company depositary receipts representing interests in such number of one one-hundredths of a share of Preferred Stock as are to be purchased (in which case certificates for the Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the depositary agent), and the Company hereby directs any such depositary agent to comply with such request, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof, (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right
Certificate. 
 (d)    Except as otherwise provided herein, in case the registered holder of any Right Certificate shall
exercise less than all of the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the exercisable Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of Section 14 hereof. 
 (e)    Notwithstanding anything in
this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder of Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to
Section 6 hereof or this Section 7 unless such registered holder shall have (i) properly completed and duly signed the certificate contained in the form of assignment or form of election to purchase set forth on the reverse side of
the Right Certificate surrendered for such transfer or exercise accompanied by a Signature Guarantee and such other documentation as the Rights Agent may reasonably request and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof as the Company shall reasonably request. 

Section 8.    Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be
canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent
shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request
and expense of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. 

Section 9.    Availability of Shares of Preferred Stock. 

(a)    The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock or any shares of Preferred Stock held in its treasury, the number of shares of Preferred Stock that will be sufficient to permit the exercise in full of all outstanding Rights. 

  
 12 

 (b)    So long as the shares of Preferred Stock issuable upon the
exercise of Rights may be listed or admitted to trading on any national securities exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be
listed or admitted to trading on such exchange upon official notice of issuance upon such exercise. 
 (c)    From and
after such time as the Rights become exercisable, the Company shall use its best efforts, if then necessary to permit the issuance of shares of Preferred Stock upon the exercise of Rights, to register and qualify such shares of Preferred Stock under
the Securities Act and any applicable state securities or “Blue Sky” laws (to the extent exemptions therefrom are not available), cause such registration statement and qualifications to become effective as soon as possible after such
filing and keep such registration and qualifications effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of the date as of which the Rights are no longer exercisable for such securities and the
Expiration Date. The Company may temporarily suspend, for a period of time not to exceed 120 days, the exercisability of the Rights in order to prepare and file a registration statement under the Securities Act and permit it to become effective.
Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained and until a registration statement under the
Securities Act shall have been declared effective, unless an exemption therefrom is available. 
 (d)    The Company
covenants and agrees that it will take all such action as may be necessary to ensure that all shares of Preferred Stock (or other securities of the Company) delivered upon exercise of Rights shall, at the time of delivery of the certificates
therefor (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares. 

(e)    The Company further covenants and agrees that it will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any shares of Preferred Stock (or other securities of the Company) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Stock (or other
securities of the Company) in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or deliver any certificates or depositary receipts for Preferred Stock (or other
securities of the Company) upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by that holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s
reasonable satisfaction that no such tax is due. 
 Section 10.    Preferred Stock Record Date. Each Person
in whose name any certificate for Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the shares of Preferred Stock (or other securities of the Company) represented thereby
on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the Preferred Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Stock
for which the Rights shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

  
 13 

 Section 11.    Adjustment of Purchase Price, Number and Kind of
Shares and Number of Rights. The Purchase Price, the number of shares of Preferred Stock or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11. 
 (a)    (i) In the event the Company shall at any time after the date of this
Agreement (A) declare and pay a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares of
Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the number and kind of shares of capital stock issuable upon exercise of a Right as of the record date for such dividend or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books of the Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification.

 (ii)    Subject to Section 24 of this Agreement, in the event any Person becomes an Acquiring Person (the first
occurrence of such event being referred to hereinafter as the “Flip-In Event”), then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect immediately prior to the Flip-In Event multiplied by the number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to such Flip-In Event, whether or not such Right was then exercisable, and (B) each holder of a Right, except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter
have the right to receive, upon exercise thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Class A Common Stock as
shall equal the result obtained by dividing the Purchase Price (as so adjusted) by 50% of the current per share market price of the Class A Common Stock (determined pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided, however, that the Purchase Price (as so adjusted) and the number of shares of Class A Common Stock so receivable upon exercise of a Right shall, following the Flip-In Event, be subject to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding anything in this Agreement to the contrary, however, from and after the Flip-In Event, any Rights that are Beneficially Owned by (x) any Acquiring Person (or any Related Person of any Acquiring Person), (y) a transferee of any Acquiring Person (or of any such Related Person) who
becomes a transferee after the Flip-In Event or (z) a transferee of any Acquiring Person (or of any such Related Person) who became a transferee prior to or concurrently with the Flip-In Event pursuant to either (I) a transfer (whether or not for consideration) from the Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the transferred Rights or (II) a transfer which the Company’s Board has determined is part of a plan, arrangement or understanding which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent transferees, either direct transferees or transferees through one or more intermediate transferees, of such Persons, shall be void without any further action and any holder of such Rights
shall thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement. The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have
no liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person, its Related Persons or its or their transferees hereunder. From and after the Flip-In Event, no Right Certificate shall be issued pursuant to Section 3 or Section 6 hereof that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any Right
Certificate delivered to the Rights Agent that represents Rights that are or have become void pursuant to the provisions 

  
 14 

 
of this paragraph shall be canceled. From and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not been exercised pursuant to this
Section 11(a)(ii) shall thereafter be exercisable only in accordance with Section 13 and not pursuant to this Section 11(a)(ii). 

(iii)    The Company may at its option substitute for a share of Class A Common Stock issuable upon the exercise of
Rights in accordance with the foregoing subparagraph (ii) a number of shares of Preferred Stock or fraction thereof such that the current per share market price of one share of Preferred Stock multiplied by such number or fraction is equal to
the current per share market price of one share of Class A Common Stock. In the event that there shall not be sufficient shares of Class A Common Stock issued but not outstanding or authorized but unissued to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Company’s Board shall, with respect to such deficiency, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party,
(A) determine the excess (such excess, the “Spread”) of (1) the value of the shares of Class A Common Stock issuable upon the exercise of a Right in accordance with the foregoing subparagraph (ii) (the “Current
Value”) over (2) the Purchase Price (as adjusted in accordance with the foregoing subparagraph (ii)), and (B) with respect to each Right (other than Rights which have become void pursuant to the foregoing subparagraph (ii)), make
adequate provision to substitute for the shares of Class A Common Stock issuable in accordance with the foregoing subparagraph (ii) upon exercise of the Right and payment of the Purchase Price (as adjusted in accordance therewith), (1)
cash, (2) a reduction in such Purchase Price, (3) shares of Preferred Stock or other equity securities of the Company (including, without limitation, shares or fractions of shares of preferred stock which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those of the shares of Class A Common Stock are determined by the Company’s Board to have substantially the same value as the shares of Class A Common Stock (such shares of
Preferred Stock and shares or fractions of shares of preferred stock are hereinafter referred to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing,
having a value which, when added to the value of the shares of Class A Common Stock issued upon exercise of such Right, shall have an aggregate value equal to the Current Value (less the amount of any reduction in such Purchase Price), where
such aggregate value has been determined by the Company’s Board; provided, however, that if the Company shall not make adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following
the Flip-In Event (the date of the Flip-In Event being the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver, to the
extent permitted by applicable law and any material agreements then in effect to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment of such Purchase Price, shares of Class A Common Stock (to
the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If, upon the
occurrence of the Flip-In Event, the Company’s Board shall determine that it is likely that sufficient additional shares of Class A Common Stock could be authorized for issuance upon exercise in full
of the Rights, then, if the Company’s Board so elects, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the “Substitution Period”). To the extent that the Company determines that
some action need be taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof, that
such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such second sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Class A Common Stock shall be the current per share market
price thereof (as determined pursuant to 

  
 15 

 
Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date, and any Common Stock Equivalent shall be deemed to have the same value as the Class A Common Stock on such date. The
Company’s Board may, but shall not be required to, establish procedures to allocate the right to receive shares of Class A Common Stock upon the exercise of the Rights among the holders of Rights pursuant to this Section 11(a)(iii).

 (b)    In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the Preferred Stock (“Equivalent
Preferred Shares”)) or securities convertible into Preferred Stock or Equivalent Preferred Shares at a price per share of Preferred Stock or Equivalent Preferred Shares (or having a conversion price per share, if a security convertible into
shares of Preferred Stock or Equivalent Preferred Shares) less than the then current per share market price of the Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock and Equivalent Preferred Shares outstanding on
such record date plus the number of shares of Preferred Stock and Equivalent Preferred Shares which the aggregate offering price of the total number of shares of Preferred Stock and/or Equivalent Preferred Shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall be the number of shares of Preferred Stock and Equivalent Preferred Shares outstanding
on such record date plus the number of additional shares of Preferred Stock and/or Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined by the Company’s Board, whose determination shall be described in a statement filed
with the Rights Agent. Shares of Preferred Stock and Equivalent Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 

(c)    In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Stock
(including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date, less the fair market value
(as determined by the Company’s Board whose determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the denominator of which shall be such current per share market price (determined pursuant to Section 11(d) hereof) of the Preferred Stock; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 

  
 16 

 (d)    (i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the “current per share market price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security, and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported by the principal consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or NASDAQ or, if the Security is not listed or admitted to trading on the New York Stock Exchange or NASDAQ, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed on a national securities exchange, the last quoted price or, if not so quoted, the average of
the high and low asked prices in the over-the-counter market as reported by any system then in use, or, if not so quoted, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Security selected by the Board of the Company. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Security is listed
or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. 

(ii)    For the purpose of any computation hereunder, if the Preferred Stock is publicly traded, the “current per
share market price” of the Preferred Stock shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Stock is not publicly traded but the Class A Common Stock is publicly traded, the
“current per share market price” of the Preferred Stock shall be conclusively deemed to be the current per share market price of the Class A Common Stock as determined pursuant to Section 11(d)(i) multiplied by one hundred (as
such number may be appropriately adjusted to reflect events such as stock splits, stock dividends, recapitalizations or similar transactions relating to the shares of Class A Common Stock occurring after the date of this Agreement, but, for the
avoidance of doubt, excluding the Spin-Off). If neither the Class A Common Stock nor the Preferred Stock is publicly traded, the “current per share market price” of the Preferred Stock shall
mean the fair value per share of Preferred Stock as determined by the Company’s Board, whose determination shall be described in a statement filed with the Rights Agent. The “current per share market price” of one one-hundredth of a share of Preferred Stock will be equal to the “current per share market price” of one share of Class A Common Stock divided by one hundred. 

(e)    No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a share of Preferred Stock or one one-hundredth of a
share of Class A Common Stock or other share or security as the case may be. 
 (f)    If as a result of an
adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than the Preferred Stock, thereafter the Purchase Price and the
number of such other shares so receivable upon exercise of a Right shall be subject to adjustment from time to time in a manner and on terms as nearly 

  
 17 

 
equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) hereof, as applicable, and the provisions
of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares. 

(g)    All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein. 
 (h)    Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and 11(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a share of Preferred Stock (calculated to the nearest one one-millionth of a share of
Preferred Stock) obtained by (i) multiplying (x) the number of one one-hundredths of a share purchasable upon the exercise of a Right immediately prior to such adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment. 

(i)    The Company may elect on or after the date of any adjustment of the Purchase Price pursuant to Sections 11(b) or
11(c) hereof to adjust the number of Rights, in substitution for any adjustment in the number of one one-hundredths of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one hundredth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. Such record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company may, as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such adjustment. Right Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public announcement. 
 (j)    Irrespective of any
adjustment or change in the Purchase Price or the number of one one-hundredths of a share of Preferred Stock issuable upon the exercise of a Right, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a share of Preferred Stock which were expressed in the initial Right Certificates issued hereunder. 

(k)    Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if
any, of the fraction of Preferred Stock or other shares of capital stock issuable upon exercise of a Right, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Preferred Stock or other such shares at such adjusted Purchase Price. 

  
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 (l)    In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the holder of any Right exercised after such record date the Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence
of the event requiring such adjustment. 
 (m)    Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that
any consolidation or subdivision of the Preferred Stock, issuance wholly for cash of any shares of Preferred Stock at less than the current market price, issuance wholly for cash of Preferred Stock or securities which by their terms are convertible
into or exchangeable for Preferred Stock, dividends on Preferred Stock payable in shares of Preferred Stock or issuance of rights, options or warrants referred to hereinabove in Section 11(b), hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such shareholders. 
 (n)    Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date hereof and prior to the Rights Distribution Date (i) declare or pay any dividend on any outstanding shares of Class A Common Stock or Class B Common Stock
payable in shares of Class A Common Stock or Class B Common Stock, as applicable, (ii) effect a subdivision or consolidation of any outstanding shares of Class A Common Stock or Class B Common Stock (by reclassification or
otherwise), or (iii) combine any outstanding shares of Class A Common Stock or Class B Common Stock into a greater or lesser number of shares of Class A Common Stock or Class B Common Stock, as applicable, then in any such
case, the number of Rights associated with each share of Class A Common Stock or Class B Common Stock, as applicable, then outstanding, or issued or delivered thereafter but prior to the Rights Distribution Date or in accordance with
Section 22 shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Class A Common Stock or Class B Common Stock, as applicable, following any such event shall equal the result obtained
by multiplying the number of Rights associated with each share of Class A Common Stock or Class B Common Stock, as applicable, immediately prior to such event by a fraction, the numerator of which shall be the total number of shares of
Class A Common Stock or Class B Common Stock, as applicable, outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Class A Common Stock or Class B Common
Stock, as applicable, outstanding immediately following the occurrence of such event. 
 (o)    The Company agrees that,
after the earlier of the Rights Distribution Date or the Stock Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or eliminate the benefits intended to be afforded by the Rights. 

Section 12.    Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as
provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief, but detailed statement of the facts accounting for such adjustment, (b) file with the Rights Agent
and with each transfer agent for the Common Stock and the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right 

  
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Certificate in accordance with Section 25 hereof (if so required under Section 25 hereof). Notwithstanding the foregoing sentence, the failure of the Company to make such certification
or give such notice shall not affect the validity of such adjustment or the force or effect of the requirement for such adjustment. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained
and shall have no duty or liability with respect thereto and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received such certificate. 

Section 13.    Consolidation, Merger or Sale or Transfer of Assets or Earning Power. 

(a)    In the event, directly or indirectly, at any time after the Flip-In Event
(i) the Company shall consolidate with or shall merge into any other Person, (ii) any Person shall merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or of the Company) or cash or any other property, or (iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person (other
than the Company or one or more wholly-owned Subsidiaries of the Company), then upon the first occurrence of such event, proper provision shall be made so that: (A) each holder of a Right (other than Rights which have become void pursuant to
Section 11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise thereof at the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof), in accordance with the terms of this Agreement and
in lieu of shares of Preferred Stock or Class A Common Stock of the Company, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall equal the result obtained by dividing the Purchase Price (as theretofore adjusted in accordance
with Section 11(a)(ii) hereof) by 50% of the current per share market price of the Common Stock of such Principal Party (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or
transfer; provided, however, that the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the number of shares of Common Stock of such Principal Party so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in accordance with Section 11(f) hereof to reflect any events occurring in respect of the Common Stock of such Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (C) the term
“Company” shall thereafter be deemed to refer to such Principal Party; and (D) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of its shares of Common Stock in
accordance with Section 9 hereof) in connection with such consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of
its Common Stock thereafter deliverable upon the exercise of the Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of such Principal Party,
each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this Section 13(a), such cash, shares, rights, warrants and other property which such holder would have
been entitled to receive had such holder, at the time of such transaction, owned the Common Stock of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property. 

  
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 (b)    “Principal Party” shall mean: 

(i)    in the case of any transaction described in clause (i) or (ii) of the first sentence of Section 13(a)
hereof: (A) the Person that is the issuer of the securities into which the shares of Common Stock are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer of the shares of Common Stock of which have
the greatest aggregate market value of shares outstanding, or (B) if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger, or, if there is more than one such Person, the
Person the shares of Common Stock of which have the greatest aggregate market value of shares outstanding or (y) if the Person that is the other party to the merger does not survive the merger, the Person that does survive the merger (including
the Company if it survives) or (z) the Person resulting from the consolidation; and 
 (ii)    in the case of any
transaction described in clause (iii) of the first sentence of Section 13(a) hereof, the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or,
if each Person that is a party to such transaction or transactions receives the same portion of the assets or earning power so transferred or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever
of such Persons is the issuer of Common Stock having the greatest aggregate market value of shares outstanding; 
 provided, however, that in
any such case described in the foregoing clause (b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, the term “Principal Party” shall refer to such other Person, or
(2) if such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stock of all of which is and has been so registered, the term “Principal Party” shall refer to whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding, or (3) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal
Party in each such case shall bear the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the total of such interests. 

(c)    The Company shall not consummate any consolidation, merger, sale or transfer referred to in Section 13(a)
hereof unless prior thereto the Company and the Principal Party involved therein shall have executed and delivered to the Rights Agent an agreement confirming that the requirements of Sections 13(a) and (b) hereof shall promptly be performed in
accordance with their terms and that such consolidation, merger, sale or transfer of assets shall not result in a default by the Principal Party under this Agreement as the same shall have been assumed by the Principal Party pursuant to Sections
13(a) and (b) hereof and providing that, as soon as practicable after executing such agreement pursuant to this Section 13, the Principal Party will: 

(i)    prepare and file a registration statement under the Securities Act, if necessary, with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable after such filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date and similarly comply with applicable state securities laws; 

  
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 (ii)    use its best efforts, if the Common Stock of the Principal Party
shall be listed or admitted to trading on NASDAQ, the New York Stock Exchange or on another national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights
on NASDAQ, the New York Stock Exchange or a national securities exchange, or, if the Common Stock of the Principal Party shall not be listed or admitted to trading on NASDAQ, the New York Stock Exchange or a national securities exchange, to cause
the Rights and the securities receivable upon exercise of the Rights to be authorized for quotation on any other system then in use; 

(iii)    deliver to holders of the Rights historical financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act; and 

(iv)    obtain waivers of any rights of first refusal or preemptive rights in respect of the Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights. 
 (d)    In case the Principal Party has a provision in
any of its authorized securities or in its certificate of incorporation or by-laws or other instrument governing its affairs, which provision would have the effect of (i) causing such Principal Party to
issue (other than to holders of Rights pursuant to this Section 13), in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Common Stock or Common Stock Equivalents of such
Principal Party at less than the then current market price per share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Stock or Common Stock Equivalents of such Principal Party at
less than such then current market price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Common Stock of such Principal Party pursuant to the provisions of Section 13, then, in
such event, the Company hereby agrees with each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with, or
as a consequence of, the consummation of the proposed transaction. 
 (e)    The Company covenants and agrees that it
shall not, at any time after the Flip-In Event, enter into any transaction of the type described in clauses (i) through (iii) of Section 13(a) hereof if (i) at the time of or immediately after
such consolidation, merger, sale, transfer or other transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such consolidation, merger, sale, transfer or other transaction, the shareholders of the Person who constitutes, or would constitute, the Principal Party for
purposes of Section 13(b) hereof shall have received a distribution of Rights previously owned by such Person or any of its Related Persons or (iii) the form or nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights. 
 (f)    Notwithstanding anything contained herein to the contrary, in the event of any
merger or other acquisition transaction of the type described in clause (i), (ii) or (iii) of Section 13(a) involving the Company pursuant to a merger or other acquisition agreement between the Company and any Person (or one or more of
such Person’s Affiliates or Associates), which agreement has been approved by the Board of Directors prior to any Person becoming an Acquiring Person, this Agreement and the rights of holders of Rights hereunder shall be terminated in
accordance with Section 7(a). 

  
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 Section 14.    Fractional Rights and Fractional Shares. 

(a)    The Company shall not be required to issue fractions of Rights (except prior to the Rights Distribution Date in
accordance with Section 11(n) hereof) or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange
or NASDAQ or, if the Rights are not listed or admitted to trading on the New York Stock Exchange or NASDAQ, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by any system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Company’s Board. If on any such date no such market maker is making a market in the Rights, the current market value of the
Rights on such date shall be the fair value of the Rights as determined in good faith by the Company’s Board. 

(b)    The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock) or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock) upon the exercise or exchange of Rights. Interests in fractions of shares of Preferred Stock in integral multiples of one
one-hundredth of a share of Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it;
provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-hundredth of a share of Preferred Stock, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction of the current market value of a whole share of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof)
for the Trading Day immediately prior to the date of such exercise or exchange. 
 (c)    The Company shall not be
required to issue fractions of shares of Class A Common Stock or to distribute certificates which evidence fractional shares of Class A Common Stock upon the exercise or exchange of Rights. In lieu of such fractional shares of Class A
Common Stock, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional shares of Class A Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the current
market value of a whole share of Class A Common Stock. For purposes of this Section 14(c), the current market value of one share of Class A Common Stock for which a Right is exercisable shall be deemed to be the closing price of one
share of Class A Common Stock (as determined in accordance with Section 11(d)(i) hereof), for the Trading Day immediately prior to the date of such exercise. 

(d)    The holder of a Right by the acceptance of the Right expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise or exchange of a Right (except as provided above). 

Section 15.    [Intentionally Left Blank] 

  
 23 

 Section 16.    Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 

(a)    prior to the Rights Distribution Date, the Rights will be transferable only in connection with the transfer of the
Common Stock; 
 (b)    after the Rights Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office or agency of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer with all required certifications completed; and 

(c)    the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to
the Rights Distribution Date, the Common Stock certificate (or Book Entry shares in respect of Common Stock)) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on
the Right Certificates or the Common Stock certificate (or notices provided to holders of Book Entry shares of Common Stock) made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to Section 7(e) hereof, shall be affected by any notice to the contrary. 

Section 17.    Right Certificate Holder Not Deemed a Shareholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise or exchange of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in this Agreement), or to receive dividends
or subscription rights, or otherwise, until the Rights evidenced by such Right Certificate shall have been exercised or exchanged in accordance with the provisions hereof. 

Section 18.    Concerning the Rights Agent. 

(a)    The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder in
accordance with a mutually agreed upon fee schedule and, from time to time, on demand of the Rights Agent, its reasonable expenses and reasonable counsel fees and other reasonable disbursements incurred in the preparation, delivery, negotiation,
amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any and all loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent for anything done or omitted by the Rights Agent in connection with the
execution, acceptance, administration or exercise of this Agreement, including the reasonable costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly (except, for the avoidance of doubt, in the case
of gross negligence, bad faith or willful misconduct on the part of the Rights Agent). 
 (b)    The Rights Agent shall
be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Agreement in reliance upon any Right Certificate or certificate representing the Preferred
Stock, the Common Stock or any other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document reasonably
believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20. 

  
 24 

 Section 19.    Merger or Consolidation or Change of Name of
Rights Agent. 
 (a)    Any entity into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any entity resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any entity succeeding to the stock transfer or corporate trust powers of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that such entity would be
eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement. 
 (b)    In case at any time the name of the
Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and
in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this Agreement. 
 Section 20.    Duties of Rights
Agent. The Rights Agent undertakes the duties and obligations expressly set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against the Rights Agent. The Rights Agent shall perform those duties and
obligations upon the following express terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: 

(a)    The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion or
advice of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in absence of bad faith and in accordance with such opinion or advice. 

(b)    Whenever in the performance of its duties under this Agreement, the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the Chairman, the President, the Chief Executive Officer, the Chief Financial Officer, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action taken, suffered or omitted to be taken by it under the provisions of this Agreement in reliance upon such certificate. 

(c)    The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct. 

  
 25 

 (d)    The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by
the Company only. 
 (e)    The Rights Agent shall not have any liability for or be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be liable or responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a certificate furnished pursuant to Section 12, describing such change or adjustment); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of any shares of Preferred Stock or other securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of Preferred Stock or other
securities will, when issued, be validly authorized and issued, fully paid and nonassessable. 
 (f)    The Company
agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this Agreement. 
 (g)    The Rights Agent is hereby
authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman, the President, the Chief Executive Officer, the Chief Financial Officer, the Treasurer or the Secretary of the Company, and to
apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while
waiting for those instructions. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken by, or omission of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified therein (which date shall not be less than five Business Days after the date any such officer of the Company actually receives such application, unless any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken or omitted.

 (h)    The Rights Agent and any shareholder, director, officer or employee of the Rights Agent may buy, sell or deal
in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person. 

(i)    The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents; provided the Rights Agent shall be liable and responsible for any action taken, or omission of, its attorneys or agents to the same extent as if the Rights Agent took the action, or
omitted from taking the applicable action, directly and the Rights Agent would be liable or responsible therefor pursuant to the terms hereof. 

  
 26 

 (j)    If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify the holder is not an Acquiring
Person (or Related Person thereof) or a transferee thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with and obtaining the approval of the Company. 

(k)    At any time and from time to time after the Rights Distribution Date, upon the request of the Company, the Rights
Agent shall promptly deliver to the Company a list, as of the most recent practicable date (or as of such earlier date as may be specified by the Company), of the holders of record of Rights. 

Section 21.    Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail, and, following the Rights Distribution
Date, to the holders of the Right Certificates by first-class mail. In the event any transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be
discharged from its duties under this Agreement as of the effective date of such termination, and the Company shall be responsible for sending any required notice. The Company may remove the Rights Agent or any successor Rights Agent upon 30
days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail, and, following the Rights Distribution Date,
to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or the laws of any state thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or
(b) an Affiliate of such Person. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose; provided that the
predecessor Rights Agent shall not be required to make any additional expenditure or assume any additional liability in connection with the foregoing. Not later than the effective date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common Stock or Preferred Stock, and, following the Rights Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

  
 27 

 Section 22.    Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such forms as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition, in connection with
the issuance or sale of Common Stock following the Rights Distribution Date and prior to the Expiration Date, the Company may with respect to shares of Common Stock so issued or sold (i) pursuant to the exercise of stock options,
(ii) under any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities, notes or debentures issued by the Company or (iv) pursuant to a contractual obligation of the Company, in each case existing
prior to the Rights Distribution Date, issue Right Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (a) no such Right Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Right Certificate would be issued and (b) no such Right Certificate
shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof. 

Section 23.    Redemption. 

(a)    The Board of the Company may, at any time prior to the Flip-In Event, redeem
all but not less than all the then outstanding Rights at a redemption price of $0.0001 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Common Stock after the date
hereof, but, for the avoidance of doubt, excluding the Spin-Off (the redemption price being hereinafter referred to as the “Redemption Price”). The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of the Company in its sole discretion may establish. The Redemption Price shall be payable, at the option of the Company, in cash, shares of Class A Common Stock (based on the
“current per share market price,” determined pursuant to Section 11(d)(i) of the Class A Common Stock at the time of redemption) or such other form of consideration as the Company’s Board shall determine. 

(b)    Immediately upon the action of the Board of the Company ordering the redemption of the Rights pursuant to paragraph
(a) of this Section 23 (or at such later time as the Company’s Board may establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Within 10 days after such action of the Company’s Board ordering the redemption of the Rights (or such later time as the Company’s Board may establish for the effectiveness of such
redemption), the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Rights Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption shall state the method by which
the payment of the Redemption Price will be made. 
 Section 24.    Exchange. 

(a)    The Board of the Company may, at its option, at any time after the Flip-In
Event, cause the Company to exchange all or part of the then outstanding Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for shares of Class A Common Stock at an exchange
ratio of one share of Class A Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Class A Common Stock or

  
 28 

 
Preferred Stock, as the case may be, after the date hereof, but, for the avoidance of doubt, excluding the Spin-Off (such amount per Right being
hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Company’s Board shall not be empowered to effect such exchange at any time after an Acquiring Person shall have become the Beneficial Owner of 50% or
more of the shares of the Class A Common Stock, Class B Common Stock or total combined Common Stock then outstanding. From and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not
been exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 24(a). The exchange of the Rights approved by the Company’s Board
pursuant to this Section 24(a) may be made effective at such time, on such basis and with such conditions as the Company’s Board in its sole discretion may establish. Prior to effecting an exchange pursuant to this Section 24(a), the
Company’s Board may direct the Company to enter into a Trust Agreement in such form and with such terms as the Company’s Board shall then approve (the “Trust Agreement”). If the Company’s Board so directs, the Company shall
enter into the Trust Agreement and shall issue to the trust created by such agreement (the “Trust”) all of the shares of Class A Common Stock issuable pursuant to the exchange, and all Persons entitled to receive shares pursuant to
the exchange shall be entitled to receive such shares (and any dividends or distributions made thereon after the date on which such shares are deposited in the Trust) only from the Trust and solely upon compliance with the relevant terms and
provisions of the Trust Agreement. 
 (b)    Immediately upon the effectiveness of the action of the Board of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of shares of Class A Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of the holders of the Rights so exchanged
at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Class A Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights. 

(c)    The Company may at its option substitute, and, in the event that there shall not be sufficient shares of
Class A Common Stock issued but not outstanding or authorized but unissued to permit an exchange of Rights for Class A Common Stock as contemplated in accordance with this Section 24, the Company shall substitute to the extent of such
insufficiency, for each share of Class A Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof (or Equivalent Preferred Shares) such that the current per share market
price (determined pursuant to Section 11(d) hereof) of one share of Preferred Stock (or Equivalent Preferred Share) multiplied by such number or fraction is equal to the current per share market price of one share of Class A Common Stock
(determined pursuant to Section 11(d) hereof) as of the date of such exchange. 
 Section 25.    Notice of
Certain Events. 
 (a)    In case the Company shall at any time after the earlier of the Rights Distribution Date or
the Stock Acquisition Date propose (i) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular periodic cash dividend), (ii)
to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, 

  
 29 

 
rights or options, (iii) to effect any reclassification of Preferred Stock (other than a reclassification involving only the subdivision or combination of outstanding Preferred Stock), (iv)
to effect any merger into or with, or to effect any interest exchange, division, sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person (other than pursuant to a merger or other acquisition agreement of the type excluded from the definition of “Beneficial Ownership” in
Section 1(e)), (v) to effect the liquidation, dissolution or winding up of the Company, or (vi) to pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock
(by reclassification or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such dividend or distribution or offering of rights or warrants, or the date on which such liquidation, dissolution, winding up, reclassification, subdivision, combination or consolidation is
to take place and the date of participation therein by the holders of the Common Stock and/or Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Stock and/or Preferred Stock, whichever shall be the earlier. The failure to give notice required by this Section 25 or any defect therein shall not affect the legality or validity of the
action taken by the Company or the vote upon any such action. 
 (b)    In case any event described in
Section 11(a)(ii) or Section 13 shall occur then the Company shall as soon as practicable thereafter give to each holder of a Right Certificate (or if occurring prior to the Rights Distribution Date, the holders of the Common Stock) in
accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) and Section 13, and all references in
the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities. 

Section 26.    Notices. Notices or demands authorized by this Agreement to be given or made by the Rights
Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class or express United States mail, FedEx or United Parcel Service or any other nationally recognized courier service, postage
prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: 
 BBX Capital, Inc. 

401 East Las Olas Blvd., Suite 800 

Fort Lauderdale, FL 33301 

Attention: Alan B. Levan, Chairman 
 With a copy
to: 
 Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. 

150 West Flagler Street, Suite 2200 

Miami, FL 33130 
 Attention:
Alison W. Miller, Esq. 

  
 30 

 Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be
given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company)
as follows: 
 [    ] 

With a copy to: 
 [    ]

 Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate (or, prior
to the Rights Distribution Date, to the holder of any certificate representing Common Stock or of any Book Entry shares) shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company or the transfer agent or registrar for the Common Stock; provided that prior to the Rights Distribution Date a filing by the Company with the Securities and Exchange Commission shall
constitute sufficient notice to the holders of securities of the Company, including the Rights, for purposes of this Agreement and no other notice need be given. 

Section 27.    Supplements and Amendments. For so long as the Rights are then redeemable, the Company may in
its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval of any holders of the Rights or Common Stock. From and after the time
that the Rights are no longer redeemable, except as provided in the penultimate sentence of this Section 27, the Company may, and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any
holders of Rights, provided that no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring Person, any Related Person of an Acquiring Person or any transferee of an
Acquiring Person or any Related Person of an Acquiring Person whose Rights have become void pursuant to Section 11(a)(ii)), (b) cause this Agreement again to become amendable other than in accordance with this sentence or (c) cause the
Rights again to become redeemable. Without limiting the generality of the foregoing, the Company may in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend this Agreement to extend the Final
Expiration Date. In addition, notwithstanding anything to the contrary contained herein, (i) the Board of Directors shall have the right in its sole and absolute discretion to extend the Rights Distribution Date, and any such extension shall
not require any amendment or supplement hereunder, and (ii) should a court of competent jurisdiction of other authority determine that the issuance of any instrument, security, right or property issued or distributed, or contemplated to be
issued or distributed, pursuant to this Agreement be invalid, void or unenforceable, then the Company may in its sole and absolute discretion, and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement
to address such matters without the approval of any holders of Rights or Common Stock. No supplement or amendment to this Agreement that adversely affects the Rights Agent’s own rights, duties, immunities or obligations under this Agreement
shall be effective unless duly executed by the Rights Agent and the Company. The Rights Agent shall duly execute and deliver any supplement or amendment hereto requested by the Company in writing, provided that the Company has delivered to the
Rights Agent a certificate from the Chief Executive Officer, President, Chief Financial Officer, Secretary or Treasurer of the Company that states that the proposed supplement or amendment complies with the terms of this Agreement, provided that any
supplement or amendment that does not amend any of the rights, duties, immunities or obligations of the Rights Agent under this Agreement in a manner adverse to the Rights Agent shall become effective immediately upon execution by the Company,
whether or not also executed by the Rights Agent. 

  
 31 

 Section 28.    Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 

Section 29.    Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Rights Distribution Date, the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Rights Distribution Date, the Common Stock). 

Section 30.    Determinations and Actions by the Board. Without limiting any of the rights and immunities of
the Rights Agent, the Company’s Board, or a duly authorized committee thereof, shall have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Company’s Board or
to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including, without limitation, a determination to redeem or not redeem the Rights or to amend or not amend this Agreement). In administering this Agreement and exercising the rights
and powers specifically granted to the Company’s Board and to the Company hereunder, and in interpreting this Agreement and making any determination hereunder, the Company’s Board, or a duly authorized committee thereof, may consider any
and all facts, circumstances or information it deems to be necessary, useful or appropriate. All such actions, calculations, interpretations and determinations that are done or made by the Company’s Board, or a duly authorized committee
thereof, in good faith shall be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other parties to the fullest extent permitted by applicable law.. The Rights Agent shall be always entitled
to assume that the Board acted in good faith and shall be fully protected and incur no liability in reliance thereon. 

Section 31.    Severability. If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated; provided, however, that nothing contained in this Section 31 will affect the ability of the Company under the provisions of Section 27 to supplement or amend this Agreement to replace such invalid,
void or unenforceable term, provision, covenant or restriction with a legal, valid and enforceable term, provision, covenant or restriction. 

Section 32.    Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be
a contract made under the laws of the State of Florida and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 

Section 33.    Counterparts. This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Delivery of an executed signature page of the Agreement by facsimile or other customary means of
electronic transmission (e.g., “pdf”) shall be as effective as delivery of a manually executed counterpart hereof. 

Section 34.    Descriptive Headings; Interpretation. Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. The words “include,” “includes” and “including” shall be

  
 32 

 
deemed to be followed by the phrase “without limitation.” Each reference in this Agreement to a period of time following or after a specified date or event shall be calculated without
including such specified date or the day on which such specified event occurs. 
 [Signature Page Follows] 

  
 33 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written. 
  

			
	BBX CAPITAL FLORIDA LLC

 
			
		
	By:	 	  

 
			
	
	 [            ]

as Rights Agent

 
			
		
	By:	 	  

  

  
 34 

 Exhibit A 

ARTICLES OF INCORPORATION 

OF 
 BBX CAPITAL, INC.

 [PROVIDED AS EXHIBIT 3.1 TO THE COMPANY’S 

REGISTRATION STATEMENT ON FORM 10] 
  

  
 A-1 

 Exhibit B 

Form of Right Certificate 
 Certificate No. R-             
 NOT EXERCISABLE AFTER
                     (UNLESS EXTENDED BY THE COMPANY) OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED
PURSUANT TO AN AGREEMENT OF THE TYPE DESCRIBED IN SECTION 13(f) OF THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.0001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY RELATED PERSON (AS DEFINED IN THE AGREEMENT) OF ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON AND, IN EACH CASE, CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE. 

RIGHT CERTIFICATE 
 BBX CAPITAL,
INC. 
 This certifies that
                                    , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of
            , 2020, as the same may be amended from time to time (the “Rights Agreement”), between the Company and
                                , as Rights Agent (the “Rights Agent”),
to purchase from the Company at any time after the Rights Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New York City time, on
                 (as such expiration date may be extended by the Company) at the office or agency of the Rights Agent designated for such purpose, or of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred
Stock”), of the Company at a purchase price of $         per one one-hundredth of a share of Preferred Stock (the “Purchase Price”), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a share of Preferred
Stock which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of September 30, 2020, based on the Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one one-hundredths of a share of Preferred Stock (or other securities or property) which may be purchased upon the exercise of the Rights and the number of
Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. 
 This Right
Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the office or agency of the Rights Agent. The Company will mail to the holder of this Right Certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. 

  
 B-1 

 This Right Certificate, with or without other Right Certificates, upon surrender at the
office or agency of the Rights Agent designated for such purpose, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of
Preferred Stock as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. 
 Subject to the provisions
of the Rights Agreement, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $0,0001 per Right or (ii) may be exchanged in whole or in part for shares of the Company’s Class A
Common Stock, par value $0.01 per share, or shares of Preferred Stock. 
 No fractional shares of Preferred Stock or Class A Common
Stock will be issued upon the exercise or exchange of any Right or Rights evidenced hereby (other than fractions of Preferred Stock which are integral multiples of one one-hundredth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by depository receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. 

No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the
Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the Rights Agreement) or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised or
exchanged as provided in the Rights Agreement. 
 This Right Certificate shall not be valid or obligatory for any purpose until it shall
have been countersigned by the Rights Agent. 

  
 B-2 

 WITNESS the facsimile signature of the proper officers of the Company. 

 

							
	Dated as of                     , 202    .	 		 		 	
			
		 		 	BBX CAPITAL, INC.
				
		 		 	By:	 	  

		 		 		 	 [Title]

	ATTEST:	 		 		 	
				
	  
	 		 		 	
	[Title]	 		 		 	
				
	Countersigned:	 		 		 	
				
	[    ], as Rights Agent	 		 		 	
				
	By:                                     
                                         
                             	 		 		 	
	 [Title]
	 		 		 	

  
 B-3 

 Form of Reverse Side of Right Certificate 

FORM OF ASSIGNMENT 
 (To be
executed by the registered holder if such 
 holder desires to transfer the Right Certificate) 

FOR VALUE RECEIVED
                                        
hereby sells, assigns and transfers unto 
  
  

(Please print name and address of transferee) 

                 Rights represented by this Right Certificate, together
with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                                        
Attorney, to transfer said Rights on the books of the within-named Company, with full power of substitution. 
 Dated:
                                         
                
  

	
	  

	Signature

 Signature Guaranteed: 

Signatures must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature
guarantee medallion program. 
  

                          
                                         
                                  

(To be completed) 
 The undersigned hereby
certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by, were not acquired by the undersigned from, and are not being assigned to an Acquiring Person or a Related Person thereof. 

 

	
	  

	Signature

  
 B-4 

 Form of Reverse Side of Right Certificate - continued 

FORM OF ELECTION TO PURCHASE 

(To be executed if holder desires to exercise 

Rights represented by the Right Certificate) 
 To
BBX Capital, Inc.: 
 The undersigned hereby irrevocably elects to exercise
                     Rights represented by this Right Certificate to purchase the shares of Preferred Stock (or other securities or property)
issuable upon the exercise of such Rights and requests that certificates for such shares of Preferred Stock (or such other securities) be issued in the name of: 
  

 
 (Please print name and
address) 
  
  

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to: 
 Please insert social security 

or other identifying
number:                                        
                                 

 
  

(Please print name and address) 
  

 

Dated:                         
                
  

	
	  

	Signature

 (Signature must conform to holder specified on Right Certificate) 

Signature Guaranteed: 
 Signature must be
guaranteed by a bank, trust company, broker, dealer or other eligible institution 
 participating in a recognized signature guarantee
medallion program. 

  
 B-5 

 Form of Reverse Side of Right Certificate - continued 

 
  

(To be completed) 
 The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by, and were not acquired by the undersigned from, an Acquiring Person or a Related Person thereof. 

 

	
	  

	Signature

  
  

NOTICE 
 The signature in
the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever. 

In the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored. 
  

  
 B-6 

 Exhibit C 

UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT) OR ANY RELATED PERSON (AS DEFINED IN THE AGREEMENT) OF ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON AND, IN EACH CASE, CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

 SUMMARY OF RIGHTS TO PURCHASE 

SHARES OF PREFERRED STOCK OF 
 BBX
CAPITAL, INC. 
 In accordance with the Rights Agreement, dated as of
                , 2020 (as the same may be amended from time to time, the “Rights Agreement”), between the Company and
                        , as Rights Agent (the “Rights Agent”), the Company’s Board authorized and directed the
issuance of one preferred share purchase right (a “Right”) for each share of (i) the Company’s Class A Common Stock, par value $0.01 per share (the “Class A Common Stock), and (ii) the Company’s
Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, collectively, the “Common Stock”) issued in connection with the spin-off of the Company (the “Spin-Off”) pursuant to which the Company became a separate, publicly-traded company. The
Spin-Off was consummated on September 30, 2020. As long as the Rights are attached to the Common Stock, the Company will issue one Right (subject to adjustment) with each new share of Common Stock so that
all such shares will have attached Rights. When exercisable in accordance with the terms of the Rights Agreement, each Right will entitle the registered holder to purchase from the Company one one-hundredth of
a share of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”) at a price of $50.00 per one one-hundredth of a share of Preferred Stock
(the “Purchase Price”), subject to adjustment in accordance with the Rights Agreement. The description and terms of the Rights are set forth in the Rights Agreement. 

Until the earlier to occur of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons
or person(s) acting in concert therewith (with certain exceptions, an “Acquiring Person”) has acquired, or obtained the right to acquire, beneficial ownership of 5% or more of the shares of the Class A Common Stock, Class B
Common Stock or total combined Common Stock then outstanding (ii) 10 business days (or such later date as may be determined by action of the Company’s Board prior to such time as any person or group of affiliated persons or persons acting in
concert therewith becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 5% or
more of the shares of the Class A Common Stock, Class B Common Stock or total combined Common Stock then outstanding (the earlier of such dates being called the “Rights Distribution Date”), each Right will be evidenced by the
certificate, if any, representing the Common Stock with respect to which the Right was issued or, with respect to any uncertificated shares of Common Stock registered in book entry form, by notation in book entry, in either case, together with this
Summary of Rights. 
 In addition to other limited exceptions set forth in the Rights Agreement, the Rights Agreement provides that any
person who, together with any affiliates and associates of that person, beneficially owned 5% or more of the outstanding shares of Class A Common Stock, Class B Common Stock or total combined Common Stock immediately prior to the first
public announcement of the adoption of the Rights Agreement, will not be deemed to be an “Acquiring Person” for purposes of the Rights Agreement unless such person becomes the beneficial owner of one or more additional shares of
Class A Common Stock or 

  
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Class B Common Stock (other than pursuant to certain limited exceptions expressly set forth in the Rights Agreement, including a dividend or distribution paid or made by the Company on its
Common Stock in shares of Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) which results in such person beneficially owning 5% or more of the outstanding shares of Class A Common Stock, Class B Common
Stock or total combined Common Stock. 
 The Rights Agreement provides that, until the Rights Distribution Date (or earlier redemption,
exchange, termination or expiration of the Rights), the Rights may be transferred with and only with the Common Stock and will be evidenced by notations on the book entry shares or certificates (if any) representing the Common Stock. Until the
Rights Distribution Date (or earlier redemption, exchange, termination or expiration of the Rights), the surrender for transfer of any shares of Common Stock, even without such notation or a copy of this Summary of Rights, will also constitute the
transfer of the Rights associated therewith. As soon as practicable following the Rights Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the Common Stock as of
the close of business on the Rights Distribution Date and such separate Right Certificates alone will evidence the Rights. 
 The Rights are
not exercisable until the Rights Distribution Date. The Rights will expire on                          (the “Final
Expiration Date”), unless the Final Expiration Date is advanced or extended or unless the Rights are earlier redeemed or exchanged by the Company, in each case, as described below, or upon the occurrence of certain transactions described in the
Rights Agreement which result in termination of the Rights pursuant to the Rights Agreement. 
 The Purchase Price payable, and the number
of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights is subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a
conversion price, less than the then-current market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends
payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). 
 The number of outstanding Rights
is subject to adjustment in the event of a stock dividend on the Common Stock payable in shares of Common Stock or subdivisions, consolidations or combinations of the Common Stock occurring, in any such case, prior to the Rights Distribution Date.

 The value of one one-hundredth of a share of Preferred Stock is intended to approximate the value
of one share of Class A Common Stock. Each one one-hundredth of a share of Preferred Stock, if issued, (i) will not be redeemable, (ii) will entitle the holder thereof to, when, as and if
declared by the Company’s Board of Directors, dividend payments of $0.01, or an amount equal to the dividend paid on one share of Class A Common Stock, whichever is greater, (iii) will entitle the holder thereof upon liquidation of
the Company either to receive $1.00 or an amount equal to the payment made on one share of Class A Common Stock, whichever is greater, (iv) will have the same voting power as one share of Class A Common Stock (with all outstanding
shares of Class A Common Stock and Preferred Stock representing, in the aggregate, 22% of the general voting power of the Company, subject to adjustment in accordance with the Company’s Articles of Incorporation, as amended and/or amended
and restated from time to time); and (v) will entitle the holder thereof to a payment equal to the payment made on one share of Class A Common Stock if shares of Class A Common Stock are exchanged via merger, consolidation, or a
similar transaction. These rights are protected by customary anti-dilution provisions. 

  
 C-2 

 In the event that any person becomes an Acquiring Person, each holder of a Right (other than
Rights Beneficially Owned by the Acquiring Person, Related Persons of the Acquiring Person and certain of their respective transferees as set forth in the Rights Agreement, all of which Rights will thereupon become void), will thereafter have the
right to receive upon exercise of a Right and payment of the Purchase Price, that number of shares of Class A Common Stock which have a market value equal to two times the Purchase Price. 

In the event that, after a person has become an Acquiring Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold, proper provisions will be made so that each holder of a Right (other than Rights Beneficially Owned by the Acquiring Person, Related Persons of the Acquiring Persons
and certain of their respective transferees as set forth in the Rights Agreement, all of which Rights will have become void) will thereafter have the right to receive upon the exercise of a Right that number of shares of common stock of the person
with whom the Company has engaged in the foregoing transaction (or its parent) that at the time of such transaction have a market value of two times the exercise price of the Right. 

At any time after any person becomes an Acquiring Person and prior to the earlier of one of the events described in the previous paragraph or
the acquisition by such Acquiring Person of 50% or more of the outstanding shares of Class A Common Stock, Class B Common Stock or total combined Common Stock, the Company’s Board may exchange the Rights (other than Rights
Beneficially Owned by the Acquiring Person, Related Persons of the Acquiring Persons and certain of their respective transferees as set forth in the Rights Agreement, all of which Rights will have become void), in whole or in part, for shares of
Class A Common Stock or Preferred Stock (or a series of the Company’s preferred stock having equivalent rights, preferences and privileges), at an exchange ratio of one share of Class A Common Stock, or a fractional share of Preferred
Stock (or other preferred stock) equivalent in value thereto, per Right. 
 With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares of Preferred Stock or Class A Common Stock will be issued (other than fractions of shares of Preferred Stock which
are integral multiples of one one-hundredth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be
made based on the current market price of the Preferred Stock or the Class A Common Stock. 
 At any time prior to the time an
Acquiring Person becomes such, the Company’s Board may redeem the Rights in whole, but not in part, at a price of $0.0001 per Right (the “Redemption Price”) payable, at the option of the Company, in cash, shares of Class A Common
Stock or such other form of consideration as the Company’s Board shall determine. The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Company’s Board in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and holders of Rights will only have the right, with respect to such Rights, to receive the Redemption Price. 

For so long as the Rights are redeemable, the Company may amend the Rights Agreement in any manner without the approval of any holders of
Rights or Common Stock. After such time as the Rights are no longer redeemable, the Company may amend the Rights Agreement in any manner without the consent of any holders of Rights, except that no such amendment may (i) adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person, any Related Person of an Acquiring Person and certain of their permitted transferees as set forth in the Rights Agreement), (ii) cause the Rights Agreement again to become
amendable other than in accordance with this sentence, or (iii) cause the Rights again to become redeemable. 

  
 C-3 

 Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. Upon exercise or exchange of a Right, the holder will become a shareholder of the Company, and have the rights of a shareholder of the Company,
with respect to the Class A Common Stock, Preferred Stock or other security of the Company received upon exercise of or in exchange for such Right. 

A copy of the Rights Agreement has been filed as an exhibit to the Company’s
                     filed with the Securities and Exchange Commission on
                    , 2020. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, as the same may be amended from time to time, which is hereby incorporated herein by reference. 

  
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