Exhibit 10.5


    
      
        

      

      Exhibit
        10.5

      


      RESEARCH
        COLLABORATION AGREEMENT 

      ON
        RX-0201 CLINICAL DEVELOPMENT

      


      This
        RESEARCH
        COLLABORATION AGREEMENT ON RX-0201 CLINICAL DEVELOPMENT (the
        "Agreement") is entered into between Rexahn Corporation, a company based
        in the
        United States, carrying on business at 9700 Great Seneca Highway, Rockville
        MD
        20850 USA ("REXAHN ") and REXGENE Biotech Co., Ltd., located at 1330-13
        Seocho-Dong, Seocho-Gu, Seoul, Korea ("REXGENE"). REXAHN and REXGENE are
        collectively referred to as "Parties" and individually referred to as "Party"
        in
        this Agreement.

      


      WHEREAS,
        REXAHN
        has developed a certain proprietary therapeutic compound for the treatment
        of
        cancer denominated as RX-0201; 

      


      WHEREAS,
        REXGENE
        is engaged in the development of pharmaceutical products; and,

      


      WHEREAS,
        the
        Parties are interested in pursuing collaborative research and development
        efforts regarding RX-0201; 

      


      NOW
        THEREFORE,
        in
        consideration of the mutual promises contained herein, and for other good
        and
        valuable consideration, the receipt of which is hereby acknowledged, REXGENE
        and
        REXAHN agree as follows:


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      


      
        	
                1.

              	
                 

              	
                DEFINITIONS

              


      

      


      
        	 	
                1.1

              	
                Licensed
                  Technology
                  shall mean technology relating to REXAHN Product RX-0201, including
                  all
                  Improvements resulting from research and development efforts pursuant
                  to
                  this Agreement.

              


      

      


      
        	 	
                1.2

              	
                Licensed
                  Patents shall
                  mean all United States and foreign patents presently or in the
                  future
                  issued that cover Licensed Technology, including continuation,
                  divisional,
                  reexamined and reissued patents, issuing or claiming priority,
                  either
                  directly or indirectly, from pending United States Provisional
                  Application
                  No. 60/404010 filed August 16,
                  2002.

              


      

      


      
        	 	
                1.3

              	
                Licensed
                  Products shall
                  mean any and all drug products, including those incorporated in
                  combination products, which consist of, include or in anyway incorporate
                  the Licensed Technology.

              


      

      


      
        	 	
                1.4

              	
                Improvements
                  shall
                  mean all improvements, developments, discoveries and inventions
                  that
                  relate to the Licensed Products.

              


      

      


      
        	 	
                1.5

              	
                Net
                  Sales
                  shall mean all gross revenues, derived from sales, minus commissions,
                  sales taxes, shipping, and insurance
                  costs.

              


      

      


      
        	 	
                1.6

              	
                Territory
                  shall
                  mean all countries in Asia.

              


      

      


      
        	
                2.

              	
                COLLABORATIVE
                  RESEARCH & REGISTRATION
                  EFFORTS

              


      

      


      
        	 	
                2.1.

              	
                The
                  Parties shall cooperate fully to develop a research and development
                  plan
                  for the purpose of registering RX-0201 for sale and use in the
                  Republic of
                  Korea ("Korea") and in other countries within the Territory. The
                  research
                  and development plan shall include, at a minimum, clinical and
                  animal
                  trials to be conducted in the United States, clinical trials to
                  be
                  conducted in Korea and other Asian countries, and the exchange
                  of data
                  derived from such trials.

              


      


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      
        	 	
                2.2.

              	
                REXAHN
                  shall provide, as its initial contribution to the joint development
                  and
                  research, a License to the Licensed Technology for the purpose
                  of
                  permitting research and development by
                  REXGENE.

              


      

      


      
        	 	
                2.3.

              	
                REXGENE
                  shall provide, as its initial contribution to the joint development
                  and
                  research, One Million Five Hundred Thousand Dollars (US $1,500,000)
                  to be
                  used by REXAHN in the further development of RX-0201.
                  

              


      

      


      
        	 	
                2.4.

              	
                The
                  Parties will each contribute those efforts necessary to perform
                  the agreed
                  upon research and development tasks. Specifically, REXGENE will
                  conduct
                  the clinical trials necessary for registration of Licensed Products
                  in
                  Korea and other countries in the Territory. REXGENE will bear its
                  own
                  expenses and costs in connection with these activities. REXAHN
                  will
                  conduct those animal and clinical trials in the United States or
                  otherwise
                  outside the Territory on RX-0201.

              


      

      


      
        	 	
                2.5.

              	
                The
                  Parties will share data derived from any research and trials without
                  further fees.

              


      

      


      
        	 	
                2.6.

              	
                REXGENE
                  will be responsible for, and bear the expense for, all registration
                  and
                  other approvals in connection with the use or sale of Licensed
                  Products in
                  Korea and other countries in the
                  Territory.

              


      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      
        	 	
                2.7.

              	
                REXAHN
                  will prosecute all patent applications and bear all costs outside
                  of the
                  Territory. REXGENE will prosecute all patent applications and bear
                  all
                  costs within the Territory, but, REXAHN will undertake to prosecute
                  patent
                  applications for the Licensed Technology in Korea, Japan, China
                  and
                  India.

              


      

      


      
        	 	
                2.8.

              	
                Both
                  Parties agree to share any Improvements and to provide all assistance
                  necessary to pursue additional patent rights arising from such
                  Improvements.

              


      

      


      
        	 	
                2.9.

              	
                REXGENE
                  and REXAHN will have the License Rights described in Section 2
                  of this
                  Agreement.

              


      

      


      
        	
                3

              	
                GRANT
                  OF LICENSE

              


      

      


      
        	 	
                3.1

              	
                REXAHN
                  agrees to grant and does hereby grant to REXGENE an exclusive license
                  within the Territory, with right to sublicense, to employ the Licensed
                  Technology to make, have made, use, sell, and import Licensed Products.
                  

              


      

      


      
        	 	
                3.2

              	
                REXGENE
                  agrees to grant and does hereby grant to REXAHN an exclusive license
                  everywhere outside the Territory, with right to sublicense, to
                  employ the
                  Licensed Technology to make, have made, use, sell, and import Licensed
                  Products.

              


      

      


      
        	
                4.

              	
                ROYALTIES

              


      

      


      
        	 	
                4.1

              	
                REXGENE
                  agrees to pay REXAHN a royalty of three percent (3%) of Net Sales
                  of
                  Licensed Products in each country in the Territory by REXGENE or
                  any
                  Sublicensee of REXGENE.

              


      


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      
        	 	
                4.2

              	
                Royalties
                  shall be payable by REXGENE quarterly, due thirty (30) days following
                  the
                  last day of each calendar quarter, and shall be accompanied by
                  a statement
                  explaining the basis for the amount of each
                  payment.

              


      

      


      
        	
                5.

              	
                THIRD
                  PARTY INFRINGEMENT

              


      

      


      
        	 	
                5.1

              	
                Should
                  either Party become aware that any Licensed Patent is being or
                  has been
                  infringed by a third party within the Territory, such Party shall
                  promptly
                  notify the other Party in writing. REXGENE shall have the right
                  to take
                  appropriate action, including the right to bring a suit for infringement
                  of the Licensed Patent, against such third party infringer. The
                  cost of
                  any such action taken by REXGENE, including attorney's fees, shall
                  be
                  borne by REXGENE and any settlement, damages or other recovery
                  shall be
                  the sole property of REXGENE.

              


      

      


      
        	 	
                5.2

              	
                Should
                  REXGENE elect not to proceed against any third party infringer
                  within the
                  Territory within thirty (30) days after being requested in writing
                  to do
                  so by REXAHN, REXAHN may take appropriate action, including bringing
                  suit
                  for infringement. The cost of any such action taken by REXAHN,
                  including
                  attorney's fees, shall be borne by REXAHN and any settlement, damages
                  or
                  other recovery shall be the sole property of REXAHN. Should REXAHN
                  bring
                  any suit against a third party for infringement of a Licensed patent
                  in
                  the Territory, REXGENE agrees to voluntarily join in such suit
                  and be
                  represented by REXAHN's
                  counsel.

              


      


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      


      
        	 	
                5.3

              	
                Should
                  REXGENE and REXAHN agree to jointly proceed against any third party
                  infringer, they shall equally divide the cost of any action taken
                  by them
                  and shall equally divide any settlement, damages or other recovery
                  realized by such action.

              


      

      


      
        	
                6.

              	
                INDEMNIFICATION

              


      

       

      
        	 	
                6.1

              	
                REXGENE
                  shall hold REXAHN free and harmless from any liability, loss, damage
                  or
                  expenses including attorney's fees, arising from a claim of personal
                  injury or property or commercial damages resulting from the manufacture,
                  use or sale of the Licensed Products by REXGENE or its Sublicensees.
                  

              


      

      


      
        	 	
                6.2

              	
                REXAHN
                  shall hold REXGENE free and harmless from any liability, loss,
                  damage or
                  expenses including attorney's fees, arising from a claim of infringement
                  of any third party's patent, trademark or other industrial property
                  rights, which may result from the manufacture, use, distribution
                  or sale
                  of the. Licensed Products by REXGENE or its
                  Sublicensees.

              


      

       

      
        	
                7.

              	
                TERMINATION

              


      

      


      
        	 	
                7.1

              	
                Unless
                  earlier terminated, this Agreement shall terminate upon the last
                  to expire
                  of the Licensed Patents, or if no Licensed Patent is granted, then
                  within
                  20 years from the date of this Agreement.


              


      

      


      
        	 	
                7.2

              	
                In
                  the event either Party breaches any of its obligations to be performed
                  under this Agreement, the other Party shall have the right to terminate
                  this Agreement upon ninety (90) days written notice of termination
                  specifying the obligations breached; provided, that, if within
                  said ninety
                  (90) days, the breaching party remedies the breaches specified
                  in the
                  notice, this Agreement shall not be
                  terminated.

              


      

       

      
        
          
          

        

        
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                8.

              	
                NOTICE

              


      

      


      
        	 	
                8.1

              	
                Written
                  Notice.
                  Any notice or other communication required under this Agreement
                  shall be
                  in writing and deemed to have been duly given if: the notice is
                  personally
                  delivered to the other Party; or the notice is mailed by certified
                  mail or
                  registered mail, return receipt requested, and delivery thereof
                  to the
                  address of the other Party is evidenced by a return
                  receipt.

              


      

      


      
        	 	
                8.2

              	
                Notice
                  Address.
                  Any notice or other communication required under this Agreement
                  shall be
                  addressed and delivered by one Party to the other Party at the
                  following
                  addresses:

              


      

      


      
        	 	
                REXGENE:
                  

              	
                Rexgene
                  Biotech Co., Ltd. 

              


      

      


      
        	 	 	
                1330-13
                  Seocho-Dong

              


      

      


      
        	 	 	
                Seocho-Gu,
                  Seoul, Korea 

              


      

      


      
        	 	 	
                Att'n:   
                  Suk Hyung Kwon, CEO

              


      

      


      
        	 	
                REXAHN
                  : 

              	
                Rexahn
                  Corporation

              


      

      


      
        	 	 	
                9700
                  Great Seneca Highway,

              


      

      


      
        	 	 	
                Rockville,
                  Maryland 20850

              


      

      


      
        	 	 	
                Att'n:   
                  Chang Ahn, CEO

              


      


      
        
          
          

        

        
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                9.

              	
                MERGER
                  AND INTEGRATION

              


      

      


      This
        Agreement, together with the attachments hereto, contains the entire
        understanding of the Parties relating to the subject matter hereof and shall
        only be amended by a written document, duly executed on behalf of the respective
        Parties. This Agreement supersedes all prior understandings, representations,
        negotiations and correspondence between the Parties, including all courses
        of
        performance, course of dealing, and usage of trade.

      


      
        	
                10.

              	
                GOVERNING
                  LAW

              


      

      


      This
        Agreement and the performance of the Parties hereunder shall be governed
        by,
        construed, and enforced under the laws of the state of Maryland and the Federal
        laws of the United States, with the exception of its conflict of law
        rules.

      


      
        	
                11.

              	
                RELATIONSHIPS

              


      

      


      Nothing
        contained in this Agreement shall constitute any Party a partner, joint
        venturer, agent or representative of any other Party or to create any
        relationship of trust or partnership. No Party shall have the authority to
        act
        for, or incur obligations on behalf of, any other Party except as provided
        specifically in this Agreement

      


      
        	
                12.

              	
                ASSIGNMENT

              


      

      


      This
        Agreement shall not be assignable in whole or in part by either party without
        the prior written consent of the other party, provided, however, that either
        party may assign this Agreement without consent to any purchaser of the business
        to which this Agreement pertains.


      
        
          
          

        

        
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                13.

              	
                BREACH
                  AND DISPUTE RESOLUTION

              


      

      


      
        	 	
                13.1

              	
                Good
                  Faith Negotiation.
                  In
                  the event of a dispute, the Parties agree to use their best efforts
                  to
                  negotiate in good faith between themselves for a period of thirty
                  (30)
                  days, or such longer period as may be mutually agreed, to resolve
                  all such
                  disputes in an amicable manner.

              


      

      


      
        	 	
                13.2

              	
                Breach.
                  Each breach of this Agreement shall be measured independently.
                  Any failure
                  by either Party to act in relation to any breach shall not constitute
                  acquiescence or a waiver of any right of that
                  Party.

              


      

      


      
        	 	
                13.3

              	
                Legal
                  Claims.
                  Any and all claims arising in connection with this Agreement shall
                  be
                  subject to the jurisdiction of the appropriate courts of the State
                  of
                  Maryland and the U.S. District Court for the District of Maryland.
                  The
                  Parties hereby waive any and all claims to lack of jurisdiction
                  (including
                  personal jurisdiction and venue) of such courts. A Party may enforce
                  a
                  judgment thus obtained in the courts of any jurisdiction. Nothing
                  in this
                  Agreement shall prevent either Party from obtaining preliminary
                  injunctive
                  relief.

              


      

      


      
        	
                14.

              	
                SEVERABILITY

              


      

      


      Any
        term
        or terms of this Agreement held to be void by a court of competent jurisdiction
        under the terms of this Agreement, shall be severed from this Agreement and
        replaced by a term or terms that results in equivalent economic and legal
        outcomes as the severed provision. The remainder of the Agreement, as amended,
        shall continue in full force and effect.


      
        
          
          

        

        
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                15.

              	
                COUNTERPARTS

              


      

      


      This
        Agreement shall be executed in two counterparts, each of which shall be deemed
        to be an original, and each of which shall constitute one and the same
        Agreement.

      


      The
        signatures below acknowledge the acceptance of the terms and conditions of
        this
        Agreement.

      


      
        	
                Rexgene
                  Biotech Co., Ltd

              	 	
                Rexahn
                  Corporation

              
	 	 	 	 	 
	
                By:

              	 
	
                /s/
                  S.H. Kwon

              	 	 	
                By:

              	 
	
                /s/
                  C.H. Ahn

              
	 	 	 	 	 
	
                Title:

              	
                Chief
                  Executive Officer

              	 	
                Title:

              	
                Chief
                  Executive Officer

              
	 	 	 	 	 
	
                Date:

              	
                February
                  6, 2003

              	 	
                Date:

              	
                February
                  6, 2003

              


      

      
         

         

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