Document:

CC Filed by Filing Services Canada Inc. 403-717-3898

GUARANTY

GUARANTY, dated as of December ___, 2007 made by each of the undersigned (each a "Guarantor", and collectively, the "Guarantors"), in favor of the Collateral Agent and the "Noteholders" (as defined below) party to the Securities Purchase Agreement, dated as of even date herewith (as amended, restated or otherwise modified from time to time, the "Securities Purchase Agreement").

W I T N E S S E T H :

WHEREAS, China VoIP & Digital Telecom Inc., a Nevada corporation (the "Company"), and each party listed as a "Buyer" on the Schedule of Buyers attached to the Securities Purchase Agreement (each a "Buyer", and collectively, the "Buyers" and together with their successors and assigns and each other holder of a Note, each a "Noteholder" and collectively the "Noteholders") are parties to the Securities Purchase Agreement;

WHEREAS, the Securities Purchase Agreement requires that the Guarantors execute and deliver to the Collateral Agent, (i) a guaranty guaranteeing all of the obligations of the Company under the Securities Purchase Agreement, the Notes (as defined below) and the "Transaction Documents" (as defined in the Securities Purchase Agreement, the "Transaction Documents"); and (ii) a Security Agreement dated the date hereof granting to _________________________, in its capacity as collateral agent (in such capacity, the "Collateral Agent") a lien in all of their personal property (the "Security Agreement"); and

WHEREAS, each Guarantor has determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best interest of, such Guarantor;

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Guarantor hereby agrees with each Buyer as follows:

SECTION 1.     Definitions.  Reference is hereby made to the Securities Purchase Agreement and the "Notes" (as defined) in and issued pursuant to the Securities Purchase Agreement and (as such Notes may be amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof, collectively, the "Notes") for a statement of the terms thereof.  All terms used in this Guaranty, which are defined in the Securities Purchase Agreement or the Notes and not otherwise defined herein, shall have the same meanings herein as set forth therein. 

SECTION 2.     Guaranty.  The Guarantors, jointly and severally, hereby unconditionally and irrevocably, guaranty the punctual payment, as and when due and payable, by stated maturity or otherwise, of all Obligations (as defined in the Security Agreement) of the Company from time to time owing by it in respect of the Securities Purchase Agreement, the Notes and the other Transaction Documents, including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding (as defined in the Security Agreement) of the Company or any Guarantor, whether or not the payment of such interest is unenforceable or is not allowable due to the existence of such Insolvency Proceeding, and all fees, commissions, expense reimbursements, indemnifications and all other amounts due or to 

become due under any of the Transaction Documents (such obligations, to the extent not paid by the Company, being the "Guaranteed Obligations"), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) reasonably incurred by the Collateral Agent in enforcing any rights under this Guaranty.  Without limiting the generality of the foregoing, each Guarantor's liability hereunder shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Company to the Collateral Agent under the Securities Purchase Agreement and the Notes but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Guarantor or the Company (each, a "Transaction Party").

SECTION 3.     Guaranty Absolute; Continuing Guaranty; Assignments.

(a)   

The Guarantors, jointly and severally, guaranty that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Transaction Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Collateral Agent with respect thereto.  The obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against any Guarantor to enforce such obligations, irrespective of whether any action is brought against any Transaction Party or whether any Transaction Party is joined in any such action or actions.  The liability of any Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives, to the extent permitted by law, any defenses it may now or hereafter have in any way relating to, any or all of the following:

(i)

any lack of validity or enforceability of any Transaction Document or any agreement or instrument relating thereto;

(ii)

any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Transaction Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or otherwise;

(iii)

any taking, exchange, release or non-perfection of any Collateral (as defined in the Security Agreement), or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;

(iv)

any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Transaction Party; or

(v)

any other circumstance (including any statute of limitations) or any existence of or reliance on any representation by the Collateral Agent that might otherwise constitute a defense available to, or a discharge of, any Transaction Party or any other guarantor or surety.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by 

			
	 
	- 2 -

	 

the Collateral Agent or any other Person upon the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.

(b)   

This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until the indefeasible cash payment in full of the Guaranteed Obligations (other than inchoate indemnity obligations) and/or complete conversion of all of the Company's obligations under the Notes to equity securities of the Company and payment of all other amounts payable under this Guaranty (other than inchoate indemnity obligations) and shall not terminate for any reason prior to the Maturity Date of the Notes (other than payment in full of the Notes and/or complete conversion of all of the Company's obligations under the Notes to equity securities of the Company) and (ii) be binding upon each Guarantor and its respective successors and assigns.  This Guaranty shall inure to the benefit of and be enforceable by the Collateral Agent and its successors, and permitted pledgees, transferees and assigns.  Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge, assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of any Transaction Document to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Collateral Agent or Buyer herein or otherwise, in each case as provided in the Securities Purchase Agreement or such Transaction Document.  Notwithstanding the foregoing and for the avoidance of doubt, this Guaranty will expire and each Guarantor will be released from its obligation hereunder upon the earlier of payment in full and/or complete conversion of the Obligations to equity securities of the Company.

SECTION 4.     Waivers.  To the extent permitted by applicable law, each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Collateral Agent exhaust any right or take any action against any Transaction Party or any other Person or any Collateral.  Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 4 is knowingly made in contemplation of such benefits.  The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

SECTION 5.     Subrogation.  No Guarantor may exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that arise from the existence, payment, performance or enforcement of any Guarantor's obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the  Collateral Agent against any Transaction Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Transaction Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations (other than inchoate indemnity obligations) and all other amounts payable under this Guaranty (other than inchoate indemnity obligations) shall have indefeasibly been paid in full in cash.  If any amount shall be paid to a Guarantor in violation of the immediately preceding sentence at any time prior to the later of the payment in full in cash of the 

			
	 
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Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be held in trust for the benefit of the Collateral Agent and shall forthwith be paid to the Collateral Agent to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Transaction Document, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising.  If (a) any Guarantor shall make payment to the Collateral Agent of all or any part of the Guaranteed Obligations, and (b) all of the Guaranteed Obligations (other than inchoate indemnity obligations) and all other amounts payable under this Guaranty (other than inchoate indemnity obligations) shall indefeasibly be paid in full in cash, the Collateral Agent will, at such Guarantor's request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.

SECTION 6.     Representations, Warranties and Covenants.  

(a)   

Each Guarantor hereby represents and warrants as of the date first written above as follows:

(i)

The Guarantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization as set forth on the signature pages hereto, (B) has all requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and to execute and deliver this Guaranty and each other Transaction Document to which the Guarantor is a party, and to consummate the transactions contemplated hereby and thereby and (C) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except where the failure to be so qualified would not result in a Material Adverse Effect.

(ii)

The execution, delivery and performance by the Guarantor of this Guaranty and each other Transaction Document to which the Guarantor is a party (A) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (B) do not and will not contravene its charter or by-laws, its limited liability company or operating agreement or its certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on the Guarantor or its properties do not and will not result in or require the creation of any lien (other than pursuant to any Transaction Document) upon or with respect to any of its properties, and (C) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or its operations or any of its properties.

(iii)

No authorization or approval or other action by, and no notice to or filing with, any governmental authority is required in connection with the due execution, delivery and performance by the Guarantor of this Guaranty or any of the other Transaction 

			
	 
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Documents to which the Guarantor is a party (other than expressly provided for in any of the Transaction Documents).

(iv)

Each of this Guaranty and the other Transaction Documents to which the Guarantor is or will be a party, when delivered, will be, a legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).  

(v)

There is no pending or, to the best knowledge of the Guarantor, threatened action, suit or proceeding against the Guarantor or to which any of the properties of the Guarantor is subject, before any court or other governmental authority or any arbitrator that (A) if adversely determined, could reasonably be expected to have a Material Adverse Effect or (B) relates to this Guaranty or any of the other Transaction Documents to which the Guarantor is a party or any transaction contemplated hereby or thereby.  

(vi)

The Guarantor (A) has read and understands the terms and conditions of the Securities Purchase Agreement and the other Transaction Documents, and (B) now has and will continue to have independent means of obtaining information concerning the affairs, financial condition and business of the Company and the other Transaction Parties, and has no need of, or right to obtain from any Buyer, any credit or other information concerning the affairs, financial condition or business of the Company or the other Transaction Parties that may come under the control of any Buyer.

(b)   

The Guarantor covenants and agrees that until indefeasible full and final payment of the Guaranteed Obligations and/or complete conversion of all of the Company's obligations under the Notes to equity securities of the Company, it will comply with each of the covenants (except to the extent applicable only to a public company) which are set forth in Section 4 of the Securities Purchase Agreement as if the Guarantor were a party thereto.

SECTION 7.     Right of Set-off.  Upon the occurrence and during the continuance of any Event of Default, any Buyer may, and is hereby authorized to, at any time and from time to time, without notice to the Guarantors (any such notice being expressly waived by each Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by any Buyer to or for the credit or the account of any Guarantor against any and all obligations of the Guarantors now or hereafter existing under this Guaranty or any other Transaction Document, irrespective of whether or not any Buyer shall have made any demand under this Guaranty or any other Transaction Document and although such obligations may be contingent or unmatured.  Each Buyer agrees to notify the relevant Guarantor promptly after any such set-off and application made by such Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of any Buyer under this Section 7 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Buyer may have under this Guaranty or any other Transaction Document in law or otherwise.

			
	 
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SECTION 8.     Notices, Etc.  All notices and other communications provided for hereunder shall be in writing and shall be mailed, telecopied or delivered, if to any Guarantor that is a Foreign Subsidiary (as defined in the Security Agreement), to the address of the Company set forth on the signature page hereto, if to any Guarantor that is not a Foreign Subsidiary, to it at its address set forth on the signature page hereto, or if to the Collateral Agent or any Buyer, to it at its respective address set forth in the Securities Purchase Agreement; or as to any Person at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 8.  All such notices and other communications shall be effective (i) if mailed (by certified mail, postage prepaid and return receipt requested), when received or three Business Days after deposited in the mails, whichever occurs first; (ii) if telecopied, when transmitted and confirmation is received, provided same is on a Business Day and, if not, on the next Business Day; or (iii) if delivered by hand, upon delivery, provided same is on a Business Day and, if not, on the next Business Day.  For the avoidance of doubt, the Foreign Subsidiaries, as Guarantors, hereby appoint the Company as its agent for receipt of service of process and all notices and other communications in the United States at the address specified below.

SECTION 9.     CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER TRANSACTION DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH GUARANTOR HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT ITS ADDRESS FOR NOTICES AS SET FORTH ON THE SIGNATURE PAGE HERETO AND TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH GUARANTOR IN ANY OTHER JURISDICTION.  ANY GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF 

			
	 
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OR ITS PROPERTY, EACH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER TRANSACTION DOCUMENTS.

SECTION 10.    WAIVER OF JURY TRIAL, ETC.  EACH GUARANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  EACH GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE COLLATERAL AGENT OR ANY BUYER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY BUYER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.  EACH GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT ENTERING INTO THIS AGREEMENT.

SECTION 11.    Taxes. 

(a)   

All payments made by any Guarantor hereunder or under any other Transaction Document shall be made in accordance with the terms of the respective Transaction Document and shall be made without set-off, counterclaim, deduction or other defense.  All such payments shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on the net income of any Buyer by the jurisdiction in which such Buyer is organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities, collectively or individually, "Taxes").  If any Guarantor shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Transaction Document:

(i)

the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings (including Taxes on amounts payable to any Buyer pursuant to this sentence) each Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made, 

(ii)

such Guarantor shall make such deduction or withholding,

(iii)

such Guarantor shall pay the full amount deducted or withheld to the relevant taxation authority in accordance with applicable law, and 

(iv)

as promptly as possible thereafter, such Guarantor shall send the Buyers an official receipt (or, if an official receipt is not available, such other documentation as 

			
	 
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shall be satisfactory to the Collateral Agent, as the case may be) showing payment.  In addition, each Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document (collectively, "Other Taxes").

(b)   

Each Guarantor hereby indemnifies and agrees to hold the Collateral Agent and each Buyer (each an "Indemnified Party") harmless from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 11) paid by any Indemnified Party  as a result of any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document, and any liability (including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be paid within 30 days from the date on which the Collateral Agent or such Buyer makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other Taxes.

(c)   

If any Guarantor fails to perform any of its obligations under this Section 11, such Guarantor shall indemnify the Collateral Agent and each Buyer for any taxes, interest or penalties that may become payable as a result of any such failure.  The obligations of the Guarantors under this Section 11 shall survive the termination of this Guaranty and the payment of the Obligations and all other amounts payable hereunder.

SECTION 12.    Miscellaneous. 

(a)   

Each Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to each Buyer, at such address specified by such Buyer from time to time by notice to the Guarantors.

(b)   

No amendment or waiver of any provision of this Guaranty and no consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by each Guarantor and each Buyer, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(c)   

No failure on the part of any Buyer to exercise, and no delay in exercising, any right hereunder or under any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder or under any Transaction Document preclude any other or further exercise thereof or the exercise of any other right.  The rights and remedies of the Collateral Agent and the Buyers provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.  The rights of the Collateral Agent and the Buyers under any Transaction Document against any party thereto are not conditional or contingent on any attempt by the Collateral Agent or any Buyer to exercise any of their respective rights under any other Transaction Document against such party or against any other Person.

			
	 
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(d)   

Any provision of this Guaranty that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

(e)   

This Guaranty shall (i) be binding on each Guarantor and its respective successors and assigns, and (ii) inure, together with all rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the Buyers and their respective successors, transferees and assigns.  Without limiting the generality of clause (ii) of the immediately preceding sentence, the Collateral Agent and any Buyer may assign or otherwise transfer its rights and obligations under the Securities Purchase Agreement or any other Transaction Document to any other Person in accordance with the terms thereof, and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Collateral Agent or such Buyer, as the case may be, herein or otherwise.  None of the rights or obligations of any Guarantor hereunder may be assigned or otherwise transferred without the prior written consent of each Buyer.

(f)   

This Guaranty reflects the entire understanding of the transaction contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, entered into before the date hereof.

(g)   

Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

(H)   

THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

			
	 
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.

	
	CHINA VOIP & DIGITAL TELECOM INC., a Nevada corporation

By:

Name: 

         Title:  

JINAN YINQUAN TECHNOLOGY CO., LTD., a Chinese corporation

By:

Name: 

Title:ex10_6.htm

    
      

    

    Exhibit
      10.6

     

    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. A-1

            	
              Dated:  December
                24, 2007

            

    

    

    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

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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.

     

    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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (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.

     

    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.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    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:

     

    
      	 	
              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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    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.

     

    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:

            	/s/
              Chang H. Ahn
	 	
              Name: 
                

            	Chang
              H. Ahn
	 	
              Title:

            	Chairman
              and Chief Executive Officer

    

    

    [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:

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