Document:

ex10_2.htm

    
      

    

    Exhibit
      10.2

     

    
      NEITHER
        THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
        ACT")
        OR ANY STATE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
        UNDER THE SECURITIES ACT, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
        TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES
        ACT
        AND UNDER APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION
        FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
        THE
        SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES
        LAWS.  THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
        MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
        SECURED BY SUCH SECURITIES.  THE COMPANY MAY REQUIRE AN OPINION OF
        COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED
        OFFER, SALE, TRANSFER OR OTHER DISPOSITION IS IN COMPLIANCE WITH THIS WARRANT
        AND ANY APPLICABLE STATE SECURITIES LAWS.

      

      ANY
        TRANSFEREE OF THIS WARRANT SHOULD CAREFULLY REVIEW THE TERMS OF THE WARRANT,
        INCLUDING SECTION 4(b) HEREOF.  THE NUMBER OF COMMON SHARES UNDERLYING
        THIS WARRANT MAY BE LESS THAN THE NUMBER OF COMMON SHARES STATED ON THE FACE
        HEREOF PURSUANT TO SECTION 4 HEREOF.

      

      REXAHN
        PHARMACEUTICALS, INC.

      

      WARRANT

       

      
        	
                Warrant
                  No. [  ]

              	
                Dated:  [_________,
                  200__]

              

      

      

      REXAHN
        PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), hereby
        certifies that, for value received, KT&G Corporation or its registered
        assigns (the “Holder”), is entitled to purchase from the Company up to a
        total of 428,572 shares of the common stock, $0.0001 par value per share
        (the
“Common Stock”), of the Company (each such share, a “Warrant
        Share” and all such shares, the “Warrant Shares”) at an exercise
        price equal to $1.80 per share (as adjusted from time to time as provided
        in
Section 9, the “Exercise Price”), at any time and from time to
        time from and after the date hereof and through and including the date that
        is
        three years from the date of issuance hereof (the “Expiration Date”, as
        adjusted pursuant to Section 4(a)), and subject to the following terms
        and conditions.  This warrant (this “Warrant”) is issued
        pursuant to that certain Securities Purchase Agreement, dated as of November
        19,
        2007, by and between the Company and KT&G Corporation (the “Purchase
        Agreement”).

      

      1.  
                  Definitions.  In
        addition to the terms defined elsewhere in this Warrant, capitalized terms
        that
        are not otherwise defined herein have the meanings given to such terms in
        the
        Purchase Agreement.  As used herein, the term “Closing Price”
means, as of any date, the closing price of the Common Stock as reported
        on the
        primary Eligible Market for such date.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      2.       
             Registration of Warrant.  The Company
        shall register this Warrant, upon records to be maintained by the Company
        for
        that purpose (the “Warrant Register”), in the name of the record Holder
        hereof from time to time.  The Company may deem and treat the
        registered Holder of this Warrant as the absolute owner hereof for the purpose
        of any exercise hereof or any distribution to the Holder, and for all other
        purposes, absent actual notice to the contrary.

      

      3.         
           Registration of Transfers.  The Company shall
        register the transfer of any portion of this Warrant in the Warrant Register,
        upon surrender of this Warrant, with the Form of Assignment attached hereto
        on
Annex B duly completed and signed, to the Transfer Agent or to the
        Company at its address specified herein.  Upon any such registration
        or transfer, a new warrant to purchase Common Stock, in substantially the
        form
        of this Warrant (any such new warrant, a “New Warrant”), evidencing the
        portion of this Warrant so transferred shall be issued to the transferee
        and a
        New Warrant evidencing the remaining portion of this Warrant not so transferred,
        if any, shall be issued to the transferring Holder.  The acceptance of
        the New Warrant by the transferee thereof shall be deemed the acceptance
        by such
        transferee of all of the rights and obligations of a holder of a
        Warrant.

      

      4.            
        Exercise and Duration of Warrant.

      

      a)           This
        Warrant shall be exercisable by the registered Holder at any time and from
        time
        to time on or after the date hereof to and including the Expiration
        Date.  At 18:30 (New York City time) on the Expiration Date, the
        portion of this Warrant not exercised prior thereto shall be and become void
        and
        of no value; provided that, if the average of the Closing Prices for
        the five Trading Days immediately prior to (but not including) the Expiration
        Date exceeds the Exercise Price on the Expiration Date, then this Warrant
        shall
        be deemed to have been exercised in full (to the extent not previously
        exercised) on a “cashless exercise” basis at 18:30 (New York City time) on the
        Expiration Date if a “cashless exercise” may occur at such time pursuant to
Section 10 below.  Notwithstanding anything to the contrary
        herein, the Expiration Date shall be extended for each day following the
        Effective Date of the initial Registration Statement that such Registration
        Statement is not effective.

      

      b)           A
        Holder may exercise this Warrant by delivering to the Company (i) an exercise
        notice, in the form attached hereto on Annex A (the “Exercise
        Notice”), appropriately completed and duly signed, and (ii) payment of the
        Exercise Price for the number of Warrant Shares as to which this Warrant
        is
        being exercised (which may take the form of a “cashless exercise” if so
        indicated in the Exercise Notice and if a “cashless exercise” may occur at such
        time pursuant to Section 10 below), and the date such items are delivered
        to the Company (as determined in accordance with the notice provisions hereof)
        is an “Exercise Date.”  The Holder shall not be required to
        deliver the original Warrant in order to effect an exercise
        hereunder.  Execution and delivery of the Exercise Notice shall have
        the same effect as cancellation of the original Warrant and issuance of a
        New
        Warrant evidencing the right to purchase the remaining number of Warrant
        Shares.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      5.           
         Delivery of Warrant Shares.

      

      a)           Upon
        exercise of this Warrant, the Company shall promptly (but in no event later
        than
        three Trading Days after the Exercise Date) issue or cause to be issued and
        cause to be delivered to or upon the written order of the Holder and in such
        name or names as the Holder may designate, a certificate for the Warrant
        Shares
        issuable upon such exercise, free of restrictive legends unless a registration
        statement covering the resale of the Warrant Shares and naming the Holder
        as a
        selling stockholder thereunder is not then effective and the Warrant Shares
        are
        not freely transferable without volume restrictions pursuant to Rule 144
        under
        the 1933 Act.  The Holder, or any Person so designated by the Holder
        to receive Warrant Shares, shall be deemed to have become holder of record
        of
        such Warrant Shares as of the Exercise Date.  The Company shall, upon
        request of the Holder and provided a registration statement under the Securities
        Act providing for the resale of the Warrant Shares is then in effect, use
        its
        reasonable best efforts to deliver Warrant Shares hereunder electronically
        through the Depository Trust Corporation or another established clearing
        corporation performing similar functions.

      

      b)           This
        Warrant is exercisable, either in its entirety or, from time to time, for
        a
        portion of the number of Warrant Shares.  Upon surrender of this
        Warrant following one or more partial exercises, the Company shall issue
        or
        cause to be issued, at its expense, a New Warrant evidencing the right to
        purchase the remaining number of Warrant Shares.

      

      c)           The
        Company’s obligations to issue and deliver Warrant Shares in accordance with the
        terms hereof are absolute and unconditional, irrespective of any action or
        inaction by the Holder to enforce the same, any waiver or consent with respect
        to any provision hereof, any setoff, counterclaim, recoupment, limitation
        or
        termination, or any breach or alleged breach by the Holder or any other Person
        of any obligation to the Company or any violation or alleged violation of
        law by
        the Holder or any other Person, and irrespective of any other circumstance
        which
        might otherwise limit such obligation of the Company to the Holder in connection
        with the issuance of Warrant Shares.  Nothing herein shall limit a
        Holder’s right to pursue any other remedies available to it hereunder, at law or
        in equity including, without limitation, a decree of specific performance
        and/or
        injunctive relief with respect to the Company’s failure to timely deliver
        certificates representing shares of Common Stock upon exercise of the
        Warrant  as required pursuant to the terms hereof.

      

      6.        
            Charges, Taxes and
        Expenses.   Issuance and delivery of certificates for shares
        of Common Stock upon exercise of this Warrant shall be made without charge
        to
        the Holder for any issue or transfer tax, withholding tax, transfer agent
        fee or
        other incidental tax or expense in respect of the issuance of such certificates,
        all of which taxes and expenses shall be paid by the Company; provided,
        however, that the Company shall not be required to pay any tax which may be
        payable in respect of any transfer involved in the registration of any
        certificates for Warrant Shares or a Warrant in a name other than that of
        the
        Holder or an Affiliate thereof.  The Holder shall be responsible for
        all other tax liability that may arise as a result of holding or transferring
        this Warrant or receiving Warrant Shares upon exercise hereof.

      

      7.        
            Replacement of Warrant.  If this
        Warrant is mutilated, lost, stolen or destroyed, the Company shall issue
        or
        cause to be issued in exchange and substitution for and upon cancellation
        hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
        only
        upon receipt of evidence reasonably satisfactory to the Company of such loss,
        theft or destruction and customary and reasonable indemnity, if
        requested.  Applicants for a New Warrant under such circumstances
        shall also comply with such other reasonable regulations and procedures and
        pay
        such other reasonable third-party costs as the Company may
        prescribe.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      8.          
          Reservation of Warrant Shares.  The Company
        covenants that it will at all times reserve and keep available out of the
        aggregate of its authorized but unissued and otherwise unreserved Common
        Stock,
        solely for the purpose of enabling it to issue Warrant Shares upon exercise
        of
        this Warrant as herein provided, the number of Warrant Shares which are then
        issuable and deliverable upon the exercise of this entire Warrant, free from
        preemptive rights or any other contingent purchase rights of persons other
        than
        the Holder (taking into account the adjustments and restrictions of Section
        9). The Company covenants that all Warrant Shares so issuable and
        deliverable shall, upon issuance and the payment of the applicable Exercise
        Price in accordance with the terms hereof, be duly and validly authorized,
        issued and fully paid and nonassessable.  The Company will take all
        such action as may be necessary to assure that such shares of Common Stock
        may
        be issued as provided herein without violation of any applicable law or
        regulation, or of any requirements of any securities exchange or automated
        quotation system upon which the Common Stock may be listed.

      

      9.         
           Certain Adjustments.  The Exercise Price and
        number of Warrant Shares issuable upon exercise of this Warrant are subject
        to
        adjustment from time to time as set forth in this Section 9.

      

      a)           Stock
        Dividends and Splits.  If the Company, at any time while this
        Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
        otherwise makes a distribution on any class of capital stock that is payable
        in
        shares of Common Stock, (ii) subdivides outstanding shares of Common Stock
        into
        a larger number of shares or (iii) combines outstanding shares of Common
        Stock
        into a smaller number of shares, then in each such case the Exercise Price
        shall
        be adjusted to equal the product of (x) the existing Exercise Price multiplied
        by (y) a fraction of which the numerator shall be the number of shares of
        Common
        Stock outstanding immediately before such event and of which the denominator
        shall be the number of shares of Common Stock outstanding immediately after
        such
        event.  Any adjustment made pursuant to clause (i) of this paragraph
        shall become effective immediately after the record date for the determination
        of stockholders entitled to receive such dividend or distribution, and any
        adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
        effective immediately after the effective date of such subdivision or
        combination.

      

      b)           Pro
        Rata Distributions.  If the Company, at any time while this
        Warrant is outstanding, distributes to all of its holders of Common Stock
        (i)
        evidences of its indebtedness, (ii) any security (other than a distribution
        of
        Common Stock covered by the preceding paragraph), (iii) rights or warrants
        to
        subscribe for or purchase any security, or (iv) any other asset (in each
        case,
“Distributed Property”), then in each such case the Exercise Price in
        effect immediately prior to the record date fixed for determination of
        stockholders entitled to receive such distribution shall be adjusted (effective
        on such record date) to equal the product of (x) the existing Exercise Price
        multiplied by (y) a fraction of which the denominator shall be the average
        of
        the Closing Prices for the 30 Trading Days immediately prior to (but not
        including) such record date and of which the numerator shall be such average
        less the then fair market value of the Distributed Property distributed in
        respect of one outstanding share of Common Stock, as reasonably determined
        by
        Company.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      c)           Fundamental
        Transactions.  If at any time while this Warrant is outstanding,
        (i) the Company effects any merger or consolidation of the Company with or
        into
        another Person, (ii) the Company effects any sale of all or substantially
        all of
        its assets in one or a series of related transactions, (iii) any tender offer
        or
        exchange offer (whether by the Company or another Person) is completed pursuant
        to which holders of Common Stock are permitted to tender or exchange their
        shares for other securities, cash or property or (iv) the Company effects
        any
        reclassification of the Common Stock or any compulsory share exchange, pursuant
        to which the Common Stock is effectively converted into or exchanged for
        other
        securities, cash or property (other than as a result of a subdivision or
        combination of shares of Common Stock covered by Section 9(a) above) (in
        any such case, a “Fundamental Transaction”), then the Holder shall have
        the right thereafter to receive, upon exercise of this Warrant, the same
        amount
        and kind of securities, cash or property as it would have been entitled to
        receive upon the occurrence of such Fundamental Transaction if it had been,
        immediately prior to such Fundamental Transaction, the holder of the number
        of
        Warrant Shares then issuable upon exercise in full of this Warrant (the
“Alternate Consideration”).  The aggregate Exercise Price for
        this Warrant will not be affected by any such Fundamental Transaction, but
        the
        Company shall apportion such aggregate Exercise Price among the Alternate
        Consideration in a reasonable manner reflecting the relative value of any
        different components of the Alternate Consideration.  If holders of
        Common Stock are given any choice as to the securities, cash or property
        to be
        received in a Fundamental Transaction, then the Holder shall be given the
        same
        choice as to the Alternate Consideration it receives upon any exercise of
        this
        Warrant following such Fundamental Transaction.  In the event of a
        Fundamental Transaction, the Company or the successor or purchasing Person,
        as
        the case may be, shall execute with the Holder a written agreement providing
        that:

      

      (x)            this
        Warrant shall thereafter entitle the Holder to purchase the Alternate
        Consideration in accordance with this Section 9(c),

      

      (y)           in
        the case of any such successor or purchasing Person, upon such consolidation,
        merger, statutory exchange, combination, sale or conveyance such successor
        or
        purchasing Person shall be jointly and severally liable with the Company
        for the
        performance of all of the Company’s obligations under this Warrant and the
        Purchase Agreement, and

      

      (z)           if
        registration or qualification is required under the 1933 Act, the 1934 Act
        or
        applicable state law for the public resale by the Holder of shares of stock
        and
        other securities so issuable upon exercise of this Warrant, such registration
        or
        qualification shall be completed prior to such reclassification, change,
        consolidation, merger, statutory exchange, combination or sale.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      If,
        in
        the case of any Fundamental Transaction, the Alternate Consideration includes
        shares of stock, other securities, other property or assets of a Person other
        than the Company or any such successor or purchasing Person, as the case
        may be,
        in such Fundamental Transaction, then such written agreement shall also be
        executed by such other Person and shall contain such additional provisions
        to
        protect the interests of the Holder as the Board of Directors of the Company
        shall reasonably consider necessary by reason of the foregoing.  At
        the Holder’s request, any successor to the Company or surviving entity in such
        Fundamental Transaction shall issue to the Holder a new warrant consistent
        with
        the foregoing provisions and evidencing the Holder’s right to purchase the
        Alternate Consideration for the aggregate Exercise Price upon exercise
        thereof.  The terms of any agreement pursuant to which a Fundamental
        Transaction is effected shall include terms requiring any such successor
        or
        surviving entity to comply with the provisions of this paragraph (c) and
        insuring that the Warrant (or any such replacement security) will be similarly
        adjusted upon any subsequent transaction analogous to a Fundamental
        Transaction.  If any Fundamental Transaction constitutes or results in
        a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the 1934 Act with
        respect to the Company in which the consideration issued consists principally
        of
        cash or stock in a non-public company, then at the request of the Holder
        delivered before the 90th day after such Fundamental Transaction, the Company
        (or any such successor or surviving entity) will purchase the Warrant from
        the
        Holder for a purchase price, payable in cash within five Trading Days after
        such
        request (or, if later, on the effective date of the Fundamental Transaction),
        equal to the Black-Scholes value of the remaining unexercised portion of
        this
        Warrant on the date of such request.

      

      d)           Subsequent
        Equity Sales.

      

       i)          If,
        at any time while this Warrant is outstanding, the Company issues Additional
        Shares of Stock (as defined below) at an effective net price to the Company
        (the
“Diluted Price”) that is less than the Exercise Price as adjusted
        hereunder to such date, then and in each such case the then-effective Exercise
        Price shall be reduced, as of the close of business on the date of such issue
        or
        sale, to equal the Diluted Price.

      

      ii)          No
        adjustment shall be made under this Section 9(d) upon the issuance by the
        Company of warrants or options to purchase Common Stock or preferred stock,
        and
        any adjustment  in connection with such options or warrants shall be
        made at the time such options or warrants are exercised and the Company issues
        Common Stock or preferred stock, as applicable, to the holder
        thereof.

      

      iii)          For
        purposes of this Section 9(d), “Additional Shares of Stock” shall
        mean all shares of Common Stock and/or preferred stock issued by the Company,
        other than: (1) shares of Common Stock issued upon conversion of any shares
        of
        preferred stock of the Company; (2) shares of Common Stock and/or preferred
        stock and/or warrants and/or options (and the Common Stock or preferred stock
        issued upon the exercise of such warrants and/or options), issued before
        or
        after the Closing Date to directors, officers, employees, consultants and
        other
        advisors of the Company and which are approved by at least a majority of
        the
        Board of Directors of the Company; and  (3) shares of Common Stock or
        preferred stock or other rights issued in connection with any stock dividends,
        combinations, splits, recapitalizations and the like.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      e)           Number
        of Warrant Shares.  Simultaneously with any adjustment to the
        Exercise Price pursuant to paragraphs (a), (b) or (d) of this Section 9,
        the number of Warrant Shares that may be purchased upon exercise of this
        Warrant
        shall be increased or decreased proportionately, so that after such adjustment
        the aggregate Exercise Price payable hereunder for the increased or decreased
        number of Warrant Shares shall be the same as the aggregate Exercise Price
        in
        effect immediately prior to such adjustment.

      

      f)           Calculations.  All
        calculations under this Section 9 shall be made to the nearest cent or
        the nearest 1/100th of a share, as applicable.  The number of shares
        of Common Stock outstanding at any given time shall not include shares owned
        or
        held by or for the account of the Company, and the disposition of any such
        shares shall be considered an issue or sale of Common Stock.

      

      g)           Notice
        of Adjustments.  Upon the occurrence of each adjustment pursuant
        to this Section 9, the Company at its expense will promptly, but in any
        event no later than ten Trading Days after such occurrence compute such
        adjustment in accordance with the terms of this Warrant and prepare a
        certificate setting forth such adjustment, including a statement of the adjusted
        Exercise Price and adjusted number or type of Warrant Shares or other securities
        issuable upon exercise of this Warrant (as applicable), describing the
        transactions giving rise to such adjustments and showing in detail the facts
        upon which such adjustment is based.  Upon written request, the
        Company will promptly deliver a copy of each such certificate to the Holder
        and
        to the Company’s Transfer Agent.

      

      h)           Notice
        of Corporate Events.  If the Company (i) declares a dividend or
        any other distribution of cash, securities or other property in respect of
        its
        Common Stock, including without limitation any granting of rights or warrants
        to
        subscribe for or purchase any capital stock of the Company or any Subsidiary,
        (ii) authorizes or approves, enters into any agreement contemplating or solicits
        stockholder approval for any Fundamental Transaction or (iii) authorizes
        the
        voluntary dissolution, liquidation or winding up of the affairs of the Company,
        then the Company shall deliver to the Holder a notice describing the material
        terms and conditions of such transaction, at least 20 calendar days prior
        to the
        applicable record or effective date on which a Person would need to hold
        Common
        Stock in order to participate in or vote with respect to such transaction,
        and
        the Company will take all steps reasonably necessary in order to insure that
        the
        Holder is given the practical opportunity to exercise this Warrant prior
        to such
        time so as to participate in or vote with respect to such transaction;
provided, however, that the failure to deliver such notice or any
        defect therein shall not affect the validity of the corporate action required
        to
        be described in such notice.

      

      10.           Payment
        of Exercise Price.  The Holder shall pay the Exercise Price in
        immediately available funds; provided, however, that if the
        Registration Statement did not become effective on or before the Required
        Effectiveness Date (as defined in the Registration Rights Agreement) and
        is not
        continuously effective through the Expiration Date, the Holder may satisfy
        its
        obligation to pay the Exercise Price through a “cashless exercise,” in which
        event the Company shall issue to the Holder the number of Warrant Shares
        determined as follows:

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	 	
                X
                  =
                  Y [(A-B)/A]

              	 
	 	 	 
	
                where:

              	 	 
	 	 	 
	 	
                X
                  =
                  the number of Warrant Shares to be issued to the Holder.

              	 
	 	 	 
	 	
                Y
                  =
                  the number of Warrant Shares with respect to which this Warrant
                  is being
                  exercised.

              	 
	 	 	 
	 	
                A
                  =
                  the arithmetic average of the Closing Prices for the 30 Trading
                  Days
                  immediately prior to (but not including) the Exercise
                  Date.

              	 
	 	 	 
	 	
                B
                  =
                  the Exercise Price.

              	 

      

      

      

      For
        purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
        and acknowledged that the Warrant Shares issued in a cashless exercise
        transaction shall be deemed to have been acquired by the Holder, and the
        holding
        period for the Warrant Shares shall be deemed to have commenced, on the date
        this Warrant was originally issued pursuant to the Purchase
        Agreement.

      

      11.           Fractional
        Shares.  The Company shall not be required to issue or cause to be
        issued fractional Warrant Shares on the exercise of this Warrant.  If
        any fraction of a Warrant Share would, except for the provisions of this
        Section 11, be issuable upon exercise of this Warrant, the number of
        Warrant Shares to be issued will be rounded up to the nearest whole
        share.

      

      12.           Notices.  Any
        and all notices or other communications or deliveries hereunder (including
        without limitation any Exercise Notice) shall be in writing and shall be
        deemed
        given and effective on the earliest of (i) the date of transmission, if such
        notice or communication is delivered via facsimile at the facsimile number
        specified in this Section 12 prior to 18:30 (New York City time) on a
        Trading Day, (ii) the next Trading Day after the date of transmission, if
        such
        notice or communication is delivered via facsimile at the facsimile number
        specified in this Section 12 on a day that is not a Trading Day or later
        than 18:30 (New York City time) and earlier than 24:00 (New York City time)
        on
        any Trading Day, (iii) the Trading Day following the date of mailing, if
        sent by
        nationally recognized overnight courier service, or (iv) upon actual receipt
        by
        the party to whom such notice is required to be given.  The address
        for such notices or communications shall be as set forth in the Purchase
        Agreement.

      

      13.           Warrant
        Agent.  The Company shall serve as warrant agent under this
        Warrant.  Upon 30 days’ notice to the Holder, the Company may appoint
        a new warrant agent.  Any corporation into which the Company or any
        new warrant agent may be merged or any corporation resulting from any
        consolidation to which the Company or any new warrant agent shall be a party
        or
        any corporation to which the Company or any new warrant agent transfers
        substantially all of its corporate trust or stockholders services business
        shall
        be a successor warrant agent under this Warrant without any further
        act.  Any such successor warrant agent shall promptly cause notice of
        its succession as warrant agent to be mailed (by first class mail, postage
        prepaid) to the Holder at the Holder’s last address as shown on the Warrant
        Register.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      14.           Miscellaneous.

      

      a)           Subject
        to the restrictions on transfer set forth on the first page hereof and provided
        that any transferee is an “accredited investor” as that term is defined in Rule
        501(a)(3) of Regulation D under the Securities Act of 1933, as amended, and
        (i)
        agrees to all the terms herein and the terms in the Purchase Agreement, with
        respect to the Warrant and the Warrant Shares, that apply to the Purchasers,
        (ii) provides investment purposes representations with respect to this Warrant
        and the Warrant Shares comparable to Section 4 of the Purchase Agreement
        and
        (iii) at least 100,000 Warrant Shares (appropriately adjusted for any stock
        dividend, split or combination of Common Stock) may be acquired under the
        assigned Warrant, this Warrant may be assigned by the Holder.  This
        Warrant may not be assigned by the Company except to a successor in the event
        of
        a Fundamental Transaction.  This Warrant shall be binding on and inure
        to the benefit of the parties hereto and their respective successors and
        assigns.  Subject to the preceding sentence, nothing in this Warrant
        shall be construed to give to any Person other than the Company and the Holder
        any legal or equitable right, remedy or cause of action under this
        Warrant.  This Warrant may be amended only in writing signed by the
        Company and the Holder and their successors and assigns.

      

      b)           The
        Company will not, by amendment of its governing documents or through any
        reorganization, transfer of assets, consolidation, merger, dissolution, issue
        or
        sale of securities or any other voluntary action, avoid or seek to avoid
        the
        observance or performance of any of the terms of this Warrant, but will at
        all
        times in good faith assist in the carrying out of all such terms and in the
        taking of all such action as may be necessary or appropriate in order to
        protect
        the rights of the Holder against impairment.  Without limiting the
        generality of the foregoing, the Company (i) will not increase the par value
        of
        any Warrant Shares above the amount payable therefor on such exercise, (ii)
        will
        take all such action as may be reasonably necessary or appropriate in order
        that
        the Company may validly and legally issue fully paid and nonassessable Warrant
        Shares on the exercise of this Warrant, and (iii) will not close its stockholder
        books or records in any manner which unreasonably interferes with the timely
        exercise of this Warrant.

      

      c)           GOVERNING
        LAW; VENUE; WAIVER OF JURY TRIAL.  ALL QUESTIONS CONCERNING THE
        CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL
        BE
        GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
        REPUBLIC OF KOREA  WITHOUT REGARD TO CONFLICTS OF LAW
        PRINCIPLES.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
        THE EXCLUSIVE JURISDICTION OF THE SEOUL CENTRAL DISTRICT COURT OF THE
        REPUBLIC OF KOREA, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
        CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
        HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
        DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
        SUIT,
        ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
        JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS
        IMPROPER.  EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF
        PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
        PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
        OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS
        IN
        EFFECT FOR NOTICES TO IT UNDER THIS WARRANT AND AGREES THAT SUCH SERVICE
        SHALL
        CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
        CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS
        IN ANY MANNER PERMITTED BY LAW.  THE COMPANY AND THE HOLDER HEREBY
        WAIVE ALL RIGHTS TO A TRIAL BY JURY.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      d)           The
        headings herein are for convenience only, do not constitute a part of this
        Warrant and shall not be deemed to limit or affect any of the provisions
        hereof.

      

      e)           In
        case any one or more of the provisions of this Warrant shall be invalid or
        unenforceable in any respect, the validity and enforceability of the remaining
        terms and provisions of this Warrant shall not in any way be affected or
        impaired thereby and the parties will attempt in good faith to agree upon
        a
        valid and enforceable provision which shall be a commercially reasonable
        substitute therefor, and upon so agreeing, shall incorporate such substitute
        provision in this Warrant.

      

      [Signature
        Page Follows]

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
        by its
        authorized officer as of the date first indicated above.

      

      

      
        	 	
                REXAHN
                  PHARMACEUTICALS, INC.  

              
	 	   
	 	   
	 	   
	 	
                By:

              	 	 
	 	
                Name:

              	 	 
	 	
                Title:

              	 	 

      

      

      

      [Signature
        Page to Warrant]

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      Annex
        A

      

      FORM
        OF
        EXERCISE NOTICE

      

      (To
        be
        executed by the Holder to exercise the right to purchase shares of Common
        Stock
        under the foregoing Warrant)

      

      To:  REXAHN
        PHARMACEUTICALS, INC.

      

      The
        undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued
        by Rexahn Pharmaceuticals, Inc., a Delaware corporation (the
“Company”).  Capitalized terms used herein and not otherwise
        defined have the respective meanings set forth in the Warrant.

       

      
        
          	
                	
                  (a)

                	
                  The
                    Warrant is currently exercisable to purchase a total of ________
                    Warrant
                    Shares.

                

        

        

        
          	
                	
                  (b)

                	
                  The
                    undersigned Holder hereby exercises its right to purchase ____________
                    Warrant Shares pursuant to the
                    Warrant.

                

        

        

        
          	
                	
                  (c)

                	
                  The
                    Holder intends that payment of the Exercise Price shall be made
                    as (check
                    one):

                

        

        

        _______   “Cash
          Exercise” under Section 10

        

        _______   “Cashless
          Exercise” under Section 10 (if permitted)

        

        
          	
                	
                  (d)

                	
                  If
                    the holder has elected a Cash Exercise, the holder shall pay
                    the sum of
                    $____________ to the Company in accordance with the terms of
                    the
                    Warrant.

                

        

        

        
          	
                	
                  (e)

                	
                  Pursuant
                    to this exercise, the Company shall deliver to the holder _______________
                    Warrant Shares in accordance with the terms of the
                    Warrant.

                

        

        

        
          	
                	
                  (f)

                	
                  Following
                    this exercise, the Warrant shall be exercisable to purchase a
                    total of
                    ______________ Warrant
                    Shares.

                

        

      

      
 

      
        	
                Dated:

              	 	 	
                Name
                  of Holder:  

              
	 	 	 	   
	 	 	 	
                (Print)

              	 	 
	 	 	 	   
	 	 	 	   
	 	 	 	   
	
                 

              	 	 	By:	 	 
	 	 	 	
                Name:

              	 	 
	 	 	 	
                Title:

              	 	 
	 	 	 	   
	 	 	 	   
	 	 	 	
                (Signature
                  must conform in all respects to name of holder as specified on
                  the face of
                  the Warrant)  

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Annex
        B

      

      FORM
        OF
        ASSIGNMENT

      

      [To
        be
        completed and signed only upon transfer of Warrant]

      

      FOR
        VALUE
        RECEIVED, the undersigned hereby sells, assigns and transfers unto
        ________________________________ the right represented by the within Warrant
        to
        purchase  ____________ shares of Common Stock of Rexahn
        Pharmaceuticals, Inc. to which the within Warrant relates and appoints
        ________________ attorney to transfer said right on the books of Rexahn
        Pharmaceuticals, Inc. with full power of substitution in the
        premises.

      

      
        	
                Dated:

              	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                (Signature
                  must conform in all respects to name of holder as specified on
                  the face of
                  the Warrant)

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                Address
                  of Transferee

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

      

      
        	
                In
                  the presence of:ex10_3.htm

    
      

    

    Exhibit
      10.3

     

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
      as of __________, __, 200__, by and between Rexahn Pharmaceuticals, Inc., a
      Delaware corporation (the “Company”), and KT&G Corporation, a Korean
      corporation (the “Purchaser”).

    

    Recital

    

    The
      parties have agreed to enter into this Agreement in connection with, and as
      a
      condition to the Closing under, the Securities Purchase Agreement, dated as
      of
      November 19, 2007, by and between the Company and the Purchaser (the
“Purchase Agreement”).

    

    Agreement

    

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and the Purchaser agree as
      follows:

    

    1.          
        Definitions.  In addition to the terms defined
      elsewhere in this Agreement, (a) capitalized terms that are not otherwise
      defined herein have the meanings given to such terms in the Purchase Agreement,
      and (b) the following terms have the meanings indicated:

    

    “Actual
      Minimum” means, as of any date, the maximum aggregate number of shares of
      Common Stock then issued or potentially issuable in the future pursuant to
      the
      Transaction Documents, including Warrant Shares issuable upon exercise in full
      of all Warrants.

    

    “Effective
      Date” means the date on which the Registration Statement is first declared
      effective by the SEC.

    

    “Filing
      Date” means, with respect to the Registration Statement required to be filed
      pursuant to Section 2, the 60th day following the date on which the
      Common Stock is listed for trading on the American Stock Exchange.

    

    “Holder”
      means any holder, from time to time, of Registrable Securities.

    

    “Post-Effective
      Amendment” means a post-effective amendment to the Registration
      Statement.

    

    “Post-Effective
      Amendment Filing Deadline” means the 10th Trading Day after the Registration
      Statement ceases to be effective pursuant to the applicable securities laws
      due
      to the passage of time or the occurrence of an event requiring the Company
      to
      file a Post-Effective Amendment.

    

    “Prospectus”
      means the prospectus included in the Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the 1933 Act), as amended or supplemented by any
      prospectus supplement, with respect to the terms of the offering of any portion
      of the Registrable Securities covered by the Registration Statement, and all
      other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    “Registrable
      Securities” means any Common Stock (including Warrant Shares) issued or
      issuable pursuant to the Transaction Documents, together with any securities
      issued or issuable upon any stock split, dividend or other distribution,
      recapitalization or similar event with respect to the foregoing; provided,
      however, that any Common Stock will cease to be a Registrable Security when
      (i) it has been sold under the Registration Statement, or (ii) it may be
      transferred pursuant to Rule 144 under the 1933 Act.

    

    “Registration
      Statement” means the registration statement required to be filed hereunder,
      including the Prospectus, amendments and supplements to such registration
      statement or Prospectus, including pre- and post-effective amendments, all
      exhibits thereto, and all material incorporated by reference or deemed to be
      incorporated by reference in such registration statement.

    

    “Required
      Effectiveness Date” means, with respect to the Registration Statement
      required to be filed hereunder, the 90th day (or the 120th day in the event
      the
      Company receives comments to the Registration Statement from the SEC) following
      the Filing Date.

    

    “Required
      Holders” means the Holders of a majority of the Registrable
      Securities.

    

    “Rule
      415,” “Rule 424” and “Rule 461” means Rule 415, Rule 424 and
      Rule 461, respectively, promulgated by the SEC pursuant to the 1933 Act, as
      such
      Rules may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the SEC having substantially the same effect as such
      Rule.

    

    List
      of Additional Definitions.  The following is a list of additional
      terms used in this Agreement and a reference to the Section hereof in which
      such
      term is defined:

     

    
      	
              Term

            	
              Section

            
	
              Advice

            	
              6

            
	
              Effectiveness
                Period

            	
              2(a)

            
	
              Event

            	
              2(c)

            
	
              Event
                Date

            	
              2(c)

            
	
              Indemnified
                Party

            	
              5(c)

            
	
              Indemnifying
                Party

            	
              5(c)

            
	
              Losses

            	
              5(a)

            
	
              Purchaser
                Counsel

            	
              3(a)

            

    

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    2.        
          Shelf Registration.

    

    (a)           On
      or prior to the Filing Date, the Company shall prepare and file with the SEC
      a
“Shelf” Registration Statement covering the resale of all Registrable Securities
      eligible to be registered under the 1933 Act and rules and practices of the
      SEC
      for an offering to be made on a continuous basis pursuant to Rule
      415.  The Registration Statement shall be on Form SB-2 (or Form S-3 if
      the Company is then eligible to use such Form) and shall contain (except if
      otherwise directed by the Holders) the “Plan of Distribution” attached hereto as
Annex A.  The Company shall use its best efforts to cause the
      Registration Statement to be declared effective under the 1933 Act as promptly
      as possible after the filing thereof, but in any event prior to the Required
      Effectiveness Date, and shall use its best efforts to keep such Registration
      Statement continuously effective under the 1933 Act until the earliest of (i)
      the fifth anniversary of the Effective Date, (ii) when all Registrable
      Securities are eligible for resale pursuant to subsection (k) of Rule 144 under
      the 1933 Act, and (iii) when all Registrable Securities covered by such
      Registration Statement have been sold (the “Effectiveness
      Period”).  The Company shall notify each Holder in writing
      promptly (and in any event within one Business Day) after receiving notification
      from the SEC that a Registration Statement has been declared
      effective.

    

    (b)           The
      Registration Statement to be filed hereunder shall cover the sale by the Holders
      of 120% of the Actual Minimum number of shares of Common Stock issuable under
      the Transaction Documents.  As promptly as possible, and in any event
      no later than the Post-Effective Amendment Filing Deadline, the Company shall
      prepare and file with the SEC a Post-Effective Amendment, if required under
      this
      Agreement.  The Company shall use its best efforts to cause the
      Post-Effective Amendment to be declared effective by the SEC as promptly as
      possible after the filing thereof, but in any event prior to the 15th Trading
      Day after the Post-Effective Amendment Filing Deadline.  The Company
      shall notify the Purchaser in writing promptly (and in any event within one
      Business Day) after receiving notification from the SEC that the Post-Effective
      Amendment has been declared effective.

    

    (c)           If:  (i)
      the Registration Statement is not filed on or prior to the Filing Date (if
      the
      Company files such Registration Statement without affording the Purchaser the
      opportunity to review and comment on the same as required by Section 3(a)
      hereof, the Company shall not be deemed to have satisfied this clause (i)),
      or
      (ii) the Company fails to file with the SEC a request for acceleration in
      accordance with Rule 461 promulgated under the 1933 Act, within five Trading
      Days after the date that the Company is notified (orally or in writing,
      whichever is earlier) by the SEC that a Registration Statement will not be
      “reviewed,” or will not be subject to further review, or (iii) the Registration
      Statement filed hereunder is not declared effective by the SEC by the Required
      Effectiveness Date, or (iv) a Post-Effective Amendment is not filed on or prior
      to the Post-Effective Amendment Filing Deadline or is not declared effective
      on
      or prior to the 15th Trading Day after the Post-Effective Amendment Filing
      Deadline, or (v) the Common Stock is not listed or quoted, or is suspended
      from
      trading on an Eligible Market for a period of five consecutive Trading Days,
      or
      (vi) the Company fails for any reason to deliver a certificate evidencing any
      Securities to the Purchaser within five Trading Days after delivery of such
      certificate is required pursuant to any Transaction Document or the exercise
      rights of the Purchaser pursuant to the Transaction Documents are otherwise
      suspended for any reason (any such failure or breach being referred to as an
      “Event,” and for purposes of clause (i), (iii) or (iv) the date on which
      such Event occurs, or for purposes of clause (ii) and (vi) the date on which
      such five Trading Day period is exceeded, or for purposes of clause (v) the
      date
      on which such three Trading Day period is exceeded, being referred to as
“Event Date”), then: (x) on each such Event Date the Company shall pay to
      the Purchaser an amount in cash, as partial liquidated damages and not as a
      penalty, equal to 2% of the aggregate purchase price paid by the Purchaser
      pursuant to the Purchase Agreement; and (y) on each monthly anniversary of
      each
      such Event Date thereof (if the applicable Event shall not have been cured
      by
      such date) until the applicable Event is cured, the Company shall pay to the
      Purchaser an amount in cash, as partial liquidated damages and not as a penalty,
      equal to 2% of the aggregate purchase price paid by the Purchaser pursuant
      to
      the Purchase Agreement; provided, however, that the maximum amount of
      such liquidated damages shall not exceed a total equal to 10% of the aggregate
      purchase price paid by the Purchaser under the Purchase
      Agreement.  Such payments shall be in partial compensation to the
      Purchaser and shall not constitute the Purchaser’s exclusive remedy for such
      events.  If the Company fails to pay any liquidated damages pursuant
      to this Section 2 in full within seven days after the date payable, the
      Company will pay interest thereon at a rate of 18% per annum (or such lesser
      maximum amount that is permitted to be paid by applicable law) to the Purchaser,
      accruing daily from the date such liquidated damages are due until such amounts,
      plus all such interest thereon, are paid in full.

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    (d)           During
      the period subsequent to the Filing Date and prior to the Effective Date, the
      Company shall not prepare and file with the SEC a registration statement
      relating to an offering for its own account or the account of others under
      the
      1933 Act of any of its equity securities.

    

    (e)           Notwithstanding
      anything in this Agreement to the contrary, after 60 consecutive Trading Days
      of
      continuous effectiveness of the Registration Statement filed and declared
      effective pursuant to this Agreement, the Company may, by written notice to
      the
      Purchaser, suspend sales under a Registration Statement after the Effective
      Date
      thereof and/or require that the Purchaser immediately cease the sale of shares
      of Common Stock pursuant thereto and/or defer the filing of any subsequent
      Registration Statement if the Company is engaged in a material merger,
      acquisition or sale and the Board of Directors determines in good faith, by
      appropriate resolutions, that, as a result of such activity, (A) it would be
      materially detrimental to the Company (other than as relating solely to the
      price of the Common Stock) to file a Registration Statement at such time and
      (B)
      it is in the best interests of the Company to defer proceeding with such
      registration at such time.  Upon receipt of such notice, the Purchaser
      shall immediately discontinue any sales of Registrable Securities pursuant
      to
      such registration until the Purchaser has received copies of a supplemented
      or
      amended Prospectus or until the Purchaser is advised in writing by the Company
      that the then-current Prospectus may be used and has received copies of any
      additional or supplemental filings that are incorporated or deemed incorporated
      by reference in such Prospectus.  In no event, however, shall this
      right be exercised to suspend sales beyond the period during which (in the
      good
      faith determination of the Company’s Board of Directors) the failure to require
      such suspension would be materially detrimental to the Company.  The
      Company’s rights, under this Section 2(e) may be exercised for a period
      of no more than 45 days in the aggregate in any 12-moth period, of which no
      more
      than 20 days may be consecutive.  Immediately after the end of any
      suspension period under this Section 2(e), the Company shall take all
      necessary actions (including filing any required supplemental prospectus) to
      restore the effectiveness of the applicable Registration Statement and the
      ability of the Purchaser to publicly resell their Registrable Securities
      pursuant to such effective Registration Statement.  The provisions of
Sections 3(b) and 3(d) hereof shall not be applicable during the
      pendency of any suspension period under this Section 2(e).

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    

    (f)           Rule
      415 Limitations.  Notwithstanding  anything in this
      Agreement to the contrary, if the SEC refuses to declare a registration
      statement filed pursuant to this Agreement effective as a valid secondary
      offering under Rule 415 promulgated under the 1933 Act due to the number of
      Registrable Securities sought to be included in such registration statement
      relative to the number of shares of Acquirer Common Stock outstanding or the
      number of outstanding shares of Acquirer Common Stock held by non-affiliates
      or
      for any other reason, then, without any liability under this Agreement or any
      further obligation to register such excess Registrable Securities, the Company
      shall be permitted to reduce  the  number
      of  Registrable  Securities included in such
      registration  statement  to an amount  that does
      not  exceed an amount  that the SEC allows for the offering
      thereunder to qualify as a valid secondary offering under Rule
      415.  The Company shall not be liable for damages under this Agreement
      as to any Registrable Securities that are not
      permitted  by  the  SEC  to
      be  included  in a
      registration  statement  due to SEC guidance relating to
      Rule 415.

    

    3.         
         Registration Procedures.

    

    (a)           Not
      less than three days prior to the filing of a Registration Statement or any
      related Prospectus or any amendment or supplement thereto, the Company shall
      (i)
      furnish to any counsel designated by the Purchaser (“Purchaser Counsel”)
      copies of all such documents proposed to be filed, which documents (other than
      those incorporated or deemed to be incorporated by reference) will be subject
      to
      the review of the Purchaser and Purchaser Counsel and (ii) cause its officers
      and directors, counsel and independent certified public accountants to respond
      to such inquiries as shall be necessary to conduct a reasonable investigation
      within the meaning of the 1933 Act.  The Company shall not file a
      Registration Statement or any such Prospectus or any amendments or supplements
      thereto to which the Required Holders shall reasonably object in writing in
      their good faith within three days of receipt.

    

    (b)           (i)  The
      Company shall prepare and file with the SEC such amendments, including
      post-effective amendments, to each Registration Statement and the Prospectus
      used in connection therewith as may be necessary to keep the Registration
      Statement continuously effective as to the applicable Registrable Securities
      for
      the Effectiveness Period and prepare and file with the SEC such additional
      Registration Statements in order to register for resale under the 1933 Act
      all
      of the Registrable Securities; (ii) cause the related Prospectus to be amended
      or supplemented by any required Prospectus supplement, and as so supplemented
      or
      amended to be filed pursuant to Rule 424; (iii) respond as promptly as
      reasonably possible, and in any event within ten business days to comments
      received from the SEC with respect to the Registration Statement or any
      amendment thereto and, as promptly as reasonably possible, upon request, provide
      the Purchaser with true and complete copies of all correspondence from and
      to
      the SEC relating to the Registration Statement; and (iv) comply in all material
      respects, to the extent applicable to the Company, with the provisions of the
      1933 Act and the 1934 Act with respect to the disposition of all Registrable
      Securities covered by the Registration Statement during the applicable period
      in
      accordance with the intended methods of disposition by the Purchaser thereof
      set
      forth in the Registration Statement as so amended or in such Prospectus as
      so
      supplemented.

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

    (c)           The
      Company shall notify Purchaser Counsel as promptly as reasonably possible,
      and
      (if requested by any such Person) confirm such notice in writing no later than
      one Trading Day thereafter, of any of the following events: (i) the SEC notifies
      the Company whether there will be a “review” of any Registration Statement; (ii)
      the SEC comments in writing on any Registration Statement; (iii) any
      Registration Statement or any Post-Effective Amendment is declared effective;
      (iv) the SEC or any other Federal or state governmental authority requests
      any
      amendment or supplement to any Registration Statement or Prospectus or requests
      additional information related thereto; (v) the SEC issues any stop order
      suspending the effectiveness of any Registration Statement or initiates any
      proceedings for that purpose; (vi) the Company receives notice of any suspension
      of the qualification or exemption from qualification of any Registrable
      Securities for sale in any jurisdiction, or the initiation or threat of any
      proceeding for such purpose; or (vii) an event has occurred which requires
      a
      post-effective amendment to the Registration Statement or a supplement to the
      prospectus included therein.

    

    (d)           The
      Company shall use its best efforts to avoid the issuance of or, if issued,
      to
      obtain the withdrawal of (i) any order suspending the effectiveness of any
      Registration Statement, or (ii) any suspension of the qualification (or
      exemption from qualification) of any of the Registrable Securities for sale
      in
      any jurisdiction, as soon as possible.

    

    (e)           The
      Company shall promptly deliver to Purchaser Counsel, without charge, an
      electronic copy of the Prospectus or Prospectuses (including each form of
      prospectus) and each amendment or supplement thereto as such Persons may
      reasonably request.  The Company hereby consents to the use of such
      Prospectus and each amendment or supplement thereto by the Purchaser in
      connection with the offering and sale of the Registrable Securities covered
      by
      such Prospectus and any amendment or supplement thereto.

    

    (f)           The
      Company shall promptly deliver to the Purchaser and Purchaser Counsel, without
      charge, as many copies of the Prospectus or Prospectuses (including each form
      of
      prospectus) and each amendment or supplement thereto as such Persons may
      reasonably request.  The Company hereby consents to the use of such
      Prospectus and each amendment or supplement thereto by the Purchaser in
      connection with the offering and sale of the Registrable Securities covered
      by
      such Prospectus and any amendment or supplement thereto.

    

    (g)           (i)  In
      the time and manner required by each Trading Market, the Company shall prepare
      and file with such Trading Market an additional shares listing application
      covering all of the Registrable Securities; (ii) take all steps necessary to
      cause such Registrable Securities to be approved for listing on each Trading
      Market as soon as possible thereafter; (iii) provide to the Purchaser evidence
      of such listing; and (iv) maintain the listing of such Registrable Securities
      on
      each such Trading Market or another Eligible Market.

    

    (h)           Prior
      to any public offering of Registrable Securities, the Company shall use its
      best
      efforts to register or qualify or cooperate with the selling Purchaser and
      Purchaser Counsel in connection with the registration or qualification (or
      exemption from such registration or qualification) of such Registrable
      Securities for offer and sale under the securities or Blue Sky laws of such
      jurisdictions within the United States as the Purchaser reasonably requests
      in
      writing, to keep each such registration or qualification (or exemption
      therefrom) effective during the Effectiveness Period and to do any and all
      other
      acts or things necessary or advisable to enable the disposition in such
      jurisdictions of the Registrable Securities covered by a Registration
      Statement.

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    

    (i)           Subject
      to compliance by the Purchaser with Section 6 hereof, the Company shall
      cooperate with the Purchaser to facilitate the timely preparation and delivery
      of certificates representing Registrable Securities to be delivered to a
      transferee pursuant to a Registration Statement, which certificates shall be
      free, to the extent permitted by this Agreement, of all restrictive legends,
      and
      to enable such Registrable Securities to be in such denominations and registered
      in such names as the Purchaser may request.

    

    (j)           Upon
      the occurrence of any event described in Section 3(c)(vii), as promptly
      as reasonably possible, the Company shall prepare a supplement or amendment,
      including a post-effective amendment, to the Registration Statement or a
      supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file such supplement, amendment or
      any
      other document as may be required so that, as thereafter delivered, neither
      the
      Registration Statement nor such Prospectus shall contain an untrue statement
      of
      a material fact or omit to state a material fact required to be stated therein
      or necessary to make the statements therein, in light of the circumstances
      under
      which they were made, not misleading.

    

    (k)           If
      Holders of a majority of the Registrable Securities being offered pursuant
      to a
      Registration Statement select underwriters for the offering, the Company shall
      enter into and perform its obligations under an underwriting agreement, in
      usual
      and customary form, including, without limitation, by providing customary legal
      opinions, comfort letters and indemnification and contribution
      obligations.

    

    (l)           The
      Company shall comply with all applicable rules and regulations of the
      SEC.

    

    4.        
          Registration Expenses.  The Company
      shall pay all fees and expenses incident to the performance of or compliance
      with this Agreement by the Company, including without limitation (a) all
      registration and filing fees and expenses, including without limitation those
      related to filings with the SEC, any Trading Market and in connection with
      applicable state securities or Blue Sky laws, (b) printing expenses (including
      without limitation expenses of printing certificates for Registrable Securities
      and of printing prospectuses requested by the Purchaser), (c) messenger,
      telephone and delivery expenses, (d) fees and disbursements of counsel for
      the
      Company, (e) fees and expenses of all other Persons retained by the Company
      in
      connection with the consummation of the transactions contemplated by this
      Agreement and (f) all listing fees to be paid by the Company to the Trading
      Market.

    

    5.         
         Indemnification.

    

    (a)           Indemnification
      by the Company.  The Company shall, notwithstanding any
      termination of this Agreement, indemnify and hold harmless the Purchaser, and
      its officers, directors, partners, members, agents, investment advisors and
      employees, each Person who controls the Purchaser (within the meaning of Section
      15 of the 1933 Act or Section 20 of the 1934 Act) and the officers, directors,
      partners, members, agents and employees of each such controlling Person, to
      the
      fullest extent permitted by applicable law, from and against any and all losses,
      claims, damages, liabilities, settlement costs and expenses, including without
      limitation costs of preparation of legal action and reasonable attorneys’ fees
      (collectively, “Losses”), as incurred, arising out of or based upon any
      untrue or alleged untrue statement of a material fact contained in the
      Registration Statement, any Prospectus or any form of prospectus or in any
      amendment or supplement thereto or in any preliminary prospectus, or arising
      out
      of or based upon any omission or alleged omission of a material fact required
      to
      be stated therein or necessary to make the statements therein (in the case
      of
      any Prospectus or form of prospectus or supplement thereto, in the light of
      the
      circumstances under which they were made) not misleading, except to the extent,
      but only to the extent, that (i) such untrue statements, alleged untrue
      statements, omissions or alleged omissions are based solely upon information
      regarding the Purchaser furnished in writing to the Company by the Purchaser
      or
      its counsel or other Person acting on behalf of the Purchaser expressly for
      use
      therein, or to the extent that such information relates to the Purchaser or
      the
      Purchaser’s proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by the Purchaser or its counsel
      or
      other Person acting on behalf of the Purchaser expressly for use in the
      Registration Statement, such Prospectus or such form of Prospectus or in any
      amendment or supplement thereto or (ii) in the case of an occurrence of an
      event
      of the type specified in Section 3(c)(v)-(vii), the use by the Purchaser
      of an outdated or defective Prospectus after the Company has notified the
      Purchaser in writing that the Prospectus is outdated or defective and prior
      to
      the receipt by the Purchaser of the Advice contemplated in Section
      6.  The Company shall notify the Purchaser promptly of the
      institution, threat or assertion of any proceeding of which the Company is
      aware
      in connection with the transactions contemplated by this Agreement.

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    

    (b)           Indemnification
      by the Purchaser.  The Purchaser shall indemnify and hold harmless
      the Company, its directors, officers, agents and employees, each Person who
      controls the Company (within the meaning of Section 15 of the 1933 Act and
      Section 20 of the 1934 Act), and the directors, officers, agents or employees
      of
      such controlling Persons, to the fullest extent permitted by applicable law,
      from and against all Losses arising solely out of or based solely upon any
      untrue statement of a material fact contained in the Registration Statement,
      any
      Prospectus, or any form of prospectus, or in any amendment or supplement
      thereto, or arising solely out of or based solely upon any omission of a
      material fact required to be stated therein or necessary to make the statements
      therein (in the case of any Prospectus or form of prospectus or supplement
      thereto, in the light of the circumstances under which they were made) not
      misleading to the extent, but only to the extent, that such untrue statement
      or
      omission is contained in any information so furnished in writing by the
      Purchaser to the Company specifically for inclusion in such Registration
      Statement or such Prospectus or to the extent that (i) such untrue statements
      or
      omissions are based solely upon information regarding the Purchaser furnished
      in
      writing to the Company by the Purchaser expressly for use therein, or to the
      extent that such information relates to the Purchaser or the Purchaser’s
      proposed method of distribution of Registrable Securities and was reviewed
      and
      expressly approved in writing by the Purchaser or its counsel or other person
      acting on behalf of the Purchaser expressly for use in the Registration
      Statement, such Prospectus or such form of Prospectus or in any amendment or
      supplement thereto or (ii) in the case of an occurrence of an event of the
      type
      specified in Section 3(c)(v)-(vii), the use by the Purchaser of an
      outdated or defective Prospectus after the Company has notified the Purchaser
      in
      writing that the Prospectus is outdated or defective and prior to the receipt
      by
      the Purchaser of the Advice contemplated in Section 6.  In no
      event shall the liability of any selling Purchaser hereunder be greater in
      amount than the dollar amount of the net proceeds received by the Purchaser
      upon
      the sale of the Registrable Securities giving rise to such indemnification
      obligation.

    

    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    

    (c)           Conduct
      of Indemnification Proceedings.  (i)  If any proceeding
      shall be brought or asserted against any Person entitled to indemnity hereunder
      (an “Indemnified Party”), such Indemnified Party shall promptly notify
      the Person from whom indemnity is sought (the “Indemnifying Party”) in
      writing, and the Indemnifying Party shall be entitled to assume the defense
      thereof, including the employment of counsel reasonably satisfactory to the
      Indemnified Party and the payment of all fees and expenses incurred in
      connection with defense thereof; provided, however, that the failure of
      any Indemnified Party to give such notice shall not relieve the Indemnifying
      Party of its obligations or liabilities pursuant to this Agreement, except
      (and
      only) to the extent that it shall be finally determined by a court of competent
      jurisdiction (which determination is not subject to appeal or further review)
      that such failure shall have proximately and materially adversely prejudiced
      the
      Indemnifying Party.

    

     (ii)          An
      Indemnified Party shall have the right to employ separate counsel in any such
      proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless:  (i) the Indemnifying Party has agreed in writing to pay such
      fees and expenses; or (ii) the Indemnifying Party shall have failed promptly
      to
      assume the defense of such proceeding and to employ counsel reasonably
      satisfactory to such Indemnified Party in any such proceeding; or (iii) the
      named parties to any such proceeding (including any impleaded parties) include
      both such Indemnified Party and the Indemnifying Party, and a conflict of
      interest is likely to exist if the same counsel were to represent such
      Indemnified Party and the Indemnifying Party (in which case, if such Indemnified
      Party notifies the Indemnifying Party in writing that it elects to employ
      separate counsel at the expense of the Indemnifying Party, the Indemnifying
      Party shall not have the right to assume the defense thereof and such counsel
      shall be at the expense of the Indemnifying Party).  The Indemnifying
      Party shall not be liable for any settlement of any such proceeding effected
      without its written consent, which consent shall not be unreasonably
      withheld.  No Indemnifying Party shall, without the prior written
      consent of the Indemnified Party, effect any settlement of any pending
      proceeding in respect of which any Indemnified Party is a party, unless (i)
      a
      conflict of interest exists between the Indemnified Party and the Indemnifying
      Party or (ii) such settlement includes an unconditional release of such
      Indemnified Party from all liability on claims that are the subject matter
      of
      such proceeding.

    

    (iii)           All
      reasonable fees and expenses of the Indemnified Party (including reasonable
      fees
      and expenses to the extent incurred in connection with investigating or
      preparing to defend such proceeding in a manner not inconsistent with this
      Section 5) shall be paid to the Indemnified Party, as incurred, within
      ten Trading Days of written notice thereof to the Indemnifying Party (regardless
      of whether it is ultimately determined that an Indemnified Party is not entitled
      to indemnification hereunder; provided, however, that the Indemnifying
      Party shall reimburse all such fees and expenses to the extent it is finally
      judicially determined that such Indemnified Party is not entitled to
      indemnification hereunder).

    

    (d)           Contribution.  (i)  If
      a claim for indemnification under Section 5(a) or (b) is
      unavailable to an Indemnified Party (by reason of public policy or otherwise),
      then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
      shall contribute to the amount paid or payable by such Indemnified Party as
      a
      result of such Losses, in such proportion as is appropriate to reflect the
      relative fault of the Indemnifying Party and Indemnified Party in connection
      with the actions, statements or omissions that resulted in such Losses as well
      as any other relevant equitable considerations.  The relative fault of
      such Indemnifying Party and Indemnified Party shall be determined by reference
      to, among other things, whether any action in question, including any untrue
      or
      alleged untrue statement of a material fact or omission or alleged omission
      of a
      material fact, has been taken or made by, or relates to information supplied
      by,
      such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission.  The amount paid or payable by a party
      as a result of any Losses shall be deemed to include, subject to the limitations
      set forth in Section 5(c), any reasonable attorneys’ or other reasonable
      fees or expenses incurred by such party in connection with any proceeding to
      the
      extent such party would have been indemnified for such fees or expenses if
      the
      indemnification provided for in this Section 5 was available to such
      party in accordance with its terms.

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    (ii)           The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or
      by any other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding
      paragraph.  Notwithstanding the provisions of this Section
      5(d), the Purchaser shall not be required to contribute, in the aggregate,
      any amount in excess of the amount by which the net proceeds actually received
      by the Purchaser from the sale of the Registrable Securities subject to the
      proceeding exceeds the amount of any damages that the Purchaser has otherwise
      been required to pay by reason of such untrue or alleged untrue statement or
      omission or alleged omission.  No Person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
      be
      entitled to contribution from any Person who was not guilty of such fraudulent
      misrepresentation.

    

    6.         
         Dispositions.  The Purchaser agrees that it
      will comply with the prospectus delivery requirements of the 1933 Act as
      applicable to it in connection with sales of Registrable Securities pursuant
      to
      the Registration Statement.  The Purchaser further agrees that, upon
      receipt of a notice from the Company of the occurrence of any event of the
      kind
      described in Sections 2(f) or 3(c)(v), (vi) or
(vii), the Purchaser will discontinue disposition
      of such Registrable
      Securities under the Registration Statement until the Purchaser’s receipt of the
      copies of the supplemented Prospectus and/or amended Registration Statement
      contemplated by Section 3(j), or until it is advised in writing (the
“Advice”) by the Company that the use of the applicable Prospectus
      may be
      resumed, and, in either case, has received copies of any additional or
      supplemental filings that are incorporated or deemed to be incorporated by
      reference in such Prospectus or Registration Statement.  The Company
      may provide appropriate stop orders to enforce the provisions of this
      paragraph.

    

    7.        
          Miscellaneous.

    

    (a)           Remedies.  In
      the event of a breach by the Company or by a Holder of any of their obligations
      under this Agreement, each Holder or the Company, as the case may be, in
      addition to being entitled to exercise all rights granted by law and under
      this
      Agreement, including recovery of damages, will be entitled to specific
      performance of its rights under this Agreement.  The Company and each
      Holder agree that monetary damages would not provide adequate compensation
      for
      any losses incurred by reason of a breach by it of any of the provisions of
      this
      Agreement and hereby further agrees that, in the event of any action for
      specific performance in respect of such breach, it shall waive the defense
      that
      a remedy at law would be adequate.

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    

    (b)           Amendments
      and Waivers.  The provisions of this Agreement, including the
      provisions of this sentence, may not be amended, modified or supplemented,
      and
      waivers or consents to departures from the provisions hereof may not be given,
      unless the same shall be in writing and signed by the Company and the Required
      Holders.

    

    (c)           No
      Inconsistent Agreements.  Neither the Company nor any of its
      subsidiaries has entered, as of the date hereof, nor shall the Company or any
      of
      its subsidiaries, on or after the date of this Agreement, enter into any
      agreement with respect to its securities that is inconsistent with the rights
      granted to the Holders in this Agreement or otherwise conflicts with the
      provisions hereof.  Except as and to the extent specified in the
      applicable schedule to the Purchase Agreement, neither the Company nor any
      Subsidiary has previously entered into any agreement granting any registration
      rights with respect to any of its securities to any Person that have not been
      satisfied in full.

    

    (d)           No
      Piggyback on Registrations.  Neither the Company nor any of its
      security holders (other than the Holders in such capacity pursuant hereto)
      may
      include securities of the Company in the Registration Statement other than
      the
      Registrable Securities, and the Company shall not after the date hereof enter
      into any agreement providing any such right to any of its security holders
      other
      than upon written consent of the Required Holders, unless the rights so granted
      are subject in all respects to the prior rights in full of the Holders set
      forth
      herein and are not otherwise in conflict with the provisions of this
      Agreement.

    

    (e)           Shareholder
      Obligations.  The selling Holders shall furnish to the Company
      such information regarding themselves and the Registrable Securities held by
      them as shall be required to effect the registration of their Registrable
      Securities, and the Company may exclude from the registration statement the
      shares of any Holder that does not do so on a timely basis.

    

    (f)           Piggy-Back
      Registrations.  If at any time during the Effectiveness Period
      there is not an effective Registration Statement covering all of the Registrable
      Securities and the Company shall determine to prepare and file with the SEC
      a
      registration statement relating to an offering for its own account or the
      account of others under the 1933 Act of any of its equity securities, other
      than
      on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then
      equivalents relating to equity securities to be issued solely in connection
      with
      any acquisition of any entity or business or equity securities issuable in
      connection with stock option or other employee benefit plans, then the Company
      shall send to each Holder written notice of such determination and, if within
      fifteen days after receipt of such notice, any such Holder shall so request
      in
      writing, the Company shall include in such registration statement all or any
      part of such Registrable Securities such holder requests to be
      registered.  The selling Holders shall enter into and timely perform
      their obligations under the underwriting agreement, if any, and shall execute
      other customary agreements necessary or appropriate to facilitate the offering,
      including without limitation custody agreements and powers of
      attorney.

    

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    

    (g)           Notices.  Any
      and all notices or other communications or deliveries required or permitted
      to
      be provided hereunder shall be in writing and shall be deemed given and
      effective on the earliest of (a) the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile telephone number
      specified in this Section 7(g) prior to 18:30 (New York City time) on a
      Trading Day, (b) the next Trading Day after the date of transmission, if such
      notice or communication is delivered via facsimile at the facsimile telephone
      number specified in this Agreement on a day that is not a Trading Day or later
      than 18:30 (New York City time) and earlier than 24:00 (New York City time)
      on
      any Trading Day, (c) the Trading Day following the date of mailing, if sent
      by
      U.S. nationally recognized overnight courier service, or (d) upon actual receipt
      by the party to whom such notice is required to be given.  The address
      for such notices and communications shall be as set forth in the Purchase
      Agreement.

    

    (h)           Successors
      and Assigns.  This Agreement shall inure to the benefit of and be
      binding upon the successors and permitted assigns of each of the parties and
      shall inure to the benefit of each Holder.  The Company may not assign
      its rights or obligations hereunder without the prior written consent of each
      Holder.  The Purchaser may assign its rights and obligations hereunder
      to a transferee or assignee of Registrable Securities in the manner and to
      the
      extent permitted under the Purchase Agreement.

    

    (i)           Assignment
      of Registration Rights.  The rights of each Holder hereunder,
      including the right to have the Company register for resale Registrable
      Securities in accordance with the terms of this Agreement, shall be
      automatically assignable by each Holder to any Affiliate of such Holder or
      any
      other Holder or Affiliate of any other Holder of all or a portion of the
      Preferred Stock or the Registrable Securities if:  (i) the Holder
      agrees in writing with the transferee or assignee to assign such assignment,
      (ii) the Company is, within a reasonable time after such transfer or assignment,
      furnished with written notice of (a) the name and address of such transferee
      or
      assignee, and (b) the securities with respect to which such registration rights
      are being transferred or assigned, (iii) following such transfer or assignment
      the further disposition of such securities by the transferee or assignees is
      restricted under the 1933 Act and applicable state securities laws, (iv) at
      or
      before the time the Company receives the written notice contemplated by clause
      (ii) of this Section 7(i), the transferee or assignee agrees in writing
      with the Company to be bound by all of the provisions of this Agreement, (v)
      such transfer shall have been made in accordance with the applicable
      requirements of the Purchase Agreement, and (vi) at least 80,000 shares of
      Registrable Securities (appropriately adjusted for any stock dividend, split
      or
      combination of the Common Stock) are being transferred to such transferee or
      assignee in connection with such assignment of rights.  In addition,
      each Holder shall have the right to assign its rights hereunder to any other
      Person who is a transferee of Registrable Securities with the prior written
      consent of the Company, which consent shall not be unreasonably
      withheld.  The rights to assignment shall apply to the Holders (and to
      subsequent) successors and assigns.

    

    (j)           Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement.  In the event that any
      signature is delivered by facsimile transmission, such signature shall create
      a
      valid binding obligation of the party executing (or on whose behalf such
      signature is executed) the same with the same force and effect as if such
      facsimile signature were the original thereof.

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    

    (k)           GOVERNING
      LAW; VENUE; WAIVER OF JURY TRIAL.  ALL QUESTIONS CONCERNING THE
      CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
      BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
      REPUBLIC OF KOREA WITHOUT REGARD TO CONFLICTS OF LAWS
      PRINCIPLES.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
      THE EXCLUSIVE JURISDICTION OF THE SEOUL CENTRAL DISTRICT COURT OF THE
      REPUBLIC OF KOREA, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
      HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
      DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
      SUIT,
      ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
      JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS
      IMPROPER.  EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF
      PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
      PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
      OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS
      IN
      EFFECT FOR NOTICES TO IT UNDER THIS WARRANT AND AGREES THAT SUCH SERVICE SHALL
      CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
      CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS
      IN ANY MANNER PERMITTED BY LAW.  THE COMPANY AND THE PURCHASER HEREBY
      WAIVE ALL RIGHTS TO A TRIAL BY JURY.

    

    (l)           Cumulative
      Remedies.  The remedies provided herein are cumulative and not
      exclusive of any remedies provided by law.

    

    (m)           Severability.  If
      any term, provision, covenant or restriction of this Agreement is held by a
      court of competent jurisdiction to be invalid, illegal, void or unenforceable,
      the remainder of the terms, provisions, covenants and restrictions set forth
      herein shall remain in full force and effect and shall in no way be affected,
      impaired or invalidated, and the parties hereto shall use their reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction.  It is hereby stipulated and declared to be
      the intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

    

    (n)           Headings.  The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    

    [Signature
      page follows]

    

    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
      as
      of the date first written above.

    

    
      	 	
              REXAHN
                PHARMACEUTICALS, INC.  

            
	 	   
	 	   
	 	   
	 	
              By:

            	 	 
	 	
              Name:

            	 	 
	 	
              Title:

            	 	 
	 	   
	 	   
	 	
              KT&G
                CORPORATION  

            
	 	   
	 	   
	 	   
	 	
              By:

            	 	 
	 	
              Name:

            	 	 
	 	
              Title:

            	 	 

    

    

    

    

    [Signature
      page to Registration Rights Agreement]

    

    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

    

    Annex
      A

    

    Plan
      of Distribution

    

    The
      selling stockholders may, from time to time, sell any or all of their shares
      of
      common stock on any stock exchange, market or trading facility on which the
      shares are traded or in private transactions.  These sales may be at
      fixed or negotiated prices.  The selling stockholders may use any one
      or more of the following methods when selling shares:

    

    
      	
               

            	
              ·

            	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits Purchaser;

            

    

    

    
      	
               

            	
              ·

            	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            

    

    

    
      	
               

            	
              ·

            	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;

            

    

    

    
      	
               

            	
              ·

            	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

    

    

    
      	
               

            	
              ·

            	
              privately
                negotiated transactions;

            

    

    

    
      	
               

            	
              ·

            	
              short
                sales;

            

    

    

    
      	
               

            	
              ·

            	
              broker-dealers
                may agree with the selling stockholders to sell a specified number
                of such
                shares at a stipulated price per
                share;

            

    

    

    
      	
               

            	
              ·

            	
              a
                combination of any such methods of sale;
                and

            

    

    

    
      	
               

            	
              ·

            	
              any
                other method permitted pursuant to applicable
                law.

            

    

    

    The
      selling stockholders may also sell shares under Rule 144 under the 1933 Act,
      if
      available, rather than under this prospectus.

    

    The
      selling stockholders may also engage in short sales against the box, puts and
      calls and other transactions in our securities or derivatives of our securities
      and may sell or deliver shares in connection with these trades.

    

    Broker-dealers
      engaged by the selling stockholders may arrange for other brokers-dealers to
      participate in sales.  Broker-dealers may receive commissions or
      discounts from the selling stockholders (or, if any broker-dealer acts as agent
      for the purchaser of shares, from the purchaser) in amounts to be
      negotiated.  The selling stockholders do not expect these commissions
      and discounts to exceed what is customary in the types of transactions
      involved.  Any profits on the resale of shares of common stock by a
      broker-dealer acting as principal might be deemed to be underwriting discounts
      or commissions under the 1933 Act.  Discounts, concessions,
      commissions and similar selling expenses, if any, attributable to the sale
      of
      shares will be borne by a selling stockholder.  The selling
      stockholders may agree to indemnify any agent, dealer or broker-dealer that
      participates in transactions involving sales of the shares if liabilities are
      imposed on that person under the 1933 Act.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    The
      selling stockholders may from time to time pledge or grant a security interest
      in some or all of the shares of common stock owned by them and, if they default
      in the performance of their secured obligations, the pledgees or secured parties
      may offer and sell the shares of common stock from time to time under this
      prospectus after we have filed an amendment to this prospectus under Rule
      424(b)(3) or other applicable provision of the 1933 Act amending the list of
      selling stockholders to include the pledgee, transferee or other successors
      in
      interest as selling stockholders under this prospectus.

    

    The
      selling stockholders also may transfer the shares of common stock in other
      circumstances, in which case the transferees, pledgees or other successors
      in
      interest will be the selling beneficial owners for purposes of this prospectus
      and may sell the shares of common stock from time to time under this prospectus
      after we have filed an amendment to this prospectus under Rule 424(b)(3) or
      other applicable provision of the 1933 Act amending the list of selling
      stockholders to include the pledgee, transferee or other successors in interest
      as selling stockholders under this prospectus.

    

    The
      selling stockholders and any broker-dealers or agents that are involved in
      selling the shares of common stock may be deemed to be “underwriters” within the
      meaning of the 1933 Act in connection with such sales.  In such event,
      any commissions received by such broker-dealers or agents and any profit on
      the
      resale of the shares of common stock purchased by them may be deemed to be
      underwriting commissions or discounts under the 1933 Act.

    

    We
      are
      required to pay all fees and expenses incident to the registration of the shares
      of common stock, including the fees and disbursements of counsel to the selling
      stockholders.  We have agreed to indemnify the selling stockholders
      against certain losses, claims, damages and liabilities, including liabilities
      under the 1933 Act.

    

    The
      selling stockholders have advised us that they have not entered into any
      agreements, understandings or arrangements with any underwriters or
      broker-dealers regarding the sale of their shares of common stock, nor is there
      an underwriter or coordinating broker acting in connection with a proposed
      sale
      of shares of common stock by any selling stockholder.  If we are
      notified by any selling stockholder that any material arrangement has been
      entered into with a broker-dealer for the sale of shares of common stock, if
      required, we will file a supplement to this prospectus.  We have
      advised each Selling Stockholder that it may not use shares registered on this
      Registration Statement to cover short sales made prior to the date on which
      this
      Registration Statement shall have been declared effective by the
      Commission.  If the selling stockholders use this prospectus for any
      sale of the shares of common stock, they will be subject to the prospectus
      delivery requirements of the 1933 Act.

    

    The
      anti-manipulation rules of Regulation M under the 1934 Act may apply to sales
      of
      our common stock and activities of the selling stockholders.

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