Document:

Exhibit 10.1

 

CONSENT AND FIRST LOAN MODIFICATION
AGREEMENT

 

                This Consent and First Loan Modification Agreement
(this “Loan Modification Agreement”) is entered into as of March 20, 2008,
by and among SILICON VALLEY BANK, a California
corporation, with its principal place of business at 3003 Tasman Drive,
Santa Clara, California 95054 and with a loan production office located at 8020
Tower Crescent Drive, Suite 475, Vienna, Virginia 22182 (“SVB”), as agent
(“Agent”), and the Lenders, SVB and OXFORD FINANCE CORPORATION
(“Oxford”), and PHARMATHENE U.S. CORPORATION (formerly known
as PHARMNTHENE, INC.), a Delaware corporation with its chief
executive office located at (“Borrower”).

 

1.             DESCRIPTION OF EXISTING
INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations
which may be owing by Borrower to Lenders, Borrower is indebted to Lenders
pursuant to a loan arrangement dated as of March 30, 2007, evidenced by,
among other documents, a certain Loan and Security Agreement dated as of March 30,
2007, between Borrower and Lenders (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise
defined herein shall have the same meaning as in the Loan Agreement. Currently
SVB and Oxford are the only Lenders.

 

2.             DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by
the Collateral as described in the Loan Agreement (together with any other
collateral security granted to Agent, for the ratable benefit of the Lenders,
the “Security Documents”).

 

Hereinafter, the Security
Documents, together with all other documents evidencing or securing the
Obligations shall be referred to as the “Existing Loan Documents”.

 

3.             DESCRIPTION OF CHANGE IN TERMS.

 

A.                                   Modifications
to Loan Agreement.

 

1                                          The
Loan Agreement shall be amended by inserting the following new provision to
appear as Section 6.11 thereof entitled “Minimum Cash
at SVB”:

 

                “6.11      Minimum Cash at SVB.
Borrower shall maintain, at all times, at a segregated account at either SVB or
SVB Securities, unrestricted and unencumbered cash or Cash Equivalents in the
amount of at least one and one-quarter (1.25) times all Obligations of Borrower
to the Lenders.”

 

2                                          The
Loan Agreement shall be amended by inserting the following new provision to
appear as Section 6.12 thereof entitled “Creation/Acquisition
of Subsidiaries”:

 

                                                “6.12      Creation/Acquisition of Subsidiaries.  In the event
Borrower, Affiliate, or any Subsidiary creates or acquires any Subsidiary,
Borrower and such Affiliate or Subsidiary shall promptly notify Agent of the
creation or acquisition of such new Subsidiary and take all such action as may
be reasonably required by Agent to cause each such domestic Subsidiary to
guarantee the Obligations of Borrower under the Loan Documents and grant a
continuing pledge and security interest in and to the assets of such Subsidiary
(substantially as described on Exhibit A hereto); and Borrower shall grant
and pledge to Agent, for the ratable benefit of Lenders a perfected security
interest in the stock, units or other evidence of ownership of each
 Subsidiary.”

 

3                                          Notwithstanding
Section 6.6(b), Borrower shall deliver to Agent a Control Agreement with
M&T Bank, granting Lenders a first perfected security interest in the
accounts held at M&T Bank, in form and substance acceptable to Lenders, on
the earlier of (x) the consummation of the Acquisition (defined herein), (y) payment
of any portion of the purchase price as set forth in Section B.2 below,
and (z) March 28, 2008.

 

 

 

 

4                                          The Loan Agreement shall be amended by
inserting  the following text at the end
of the definition of “Material Adverse Change”
appearing in Section 13.1 thereof:

 

                                                “(d) Agent
determines, based upon information available to it and in its reasonable judgment,
that there is a reasonable likelihood that Borrower shall fail to comply with one
or more of the financial covenants in Section 6 during the next succeeding
financial reporting period”.

 

B.                                     Consent
to Loan Agreement.

 

1.             Borrower has notified Lenders that
Borrower and its wholly owned Subsidiary, Pharmathene UK Limited (“UK
Subsidiary) intends to acquire certain assets of Avecia Biologics Limited and
Avecia Biologics Inc. (the Acquisition”). 
Borrower has requested that Lenders consent to the Acquisition.

 

2.                                       Pursuant
to Section 7.3 (relative to mergers and acquisitions), 7.4 (relative to Indebtedness)
of the Loan Agreement, and 7.7 (relative to Investments) the Lenders hereby
consent to the Acquisition (as defined above), provided that: (i) the
Borrower or UK Subsidiary is the surviving legal entity, (ii) the total
cash consideration (inclusive of the assumption of Indebtedness) for the
Acquisition does not exceed Eleven Million Dollars ($11,000,000) at the
consummation of the Acquisition and such other additional payments in
accordance with the Letter of Intent dated February 18, 2008, (iii) the
consummation of the Acquisition will not otherwise result in an Event of
Default, as defined in the Loan Agreement, after giving effect to such
Acquisition, and (iv) within thirty (30) days of the consummation of the
Acquisition, Borrower shall cause UK Subsidiary to become a co-borrower or a
secured guarantor under the Loan Agreement, pursuant to documentation
acceptable to Agent in it sole discretion, granting the Lenders a first
perfected lien in its assets including all assets which are the subject of the Acquisition.

 

                C.            Waiver.

 

1                                          Bank
hereby waives Borrower’s existing defaults, as listed below, under the Loan
Agreement by virtue of Borrower’s failure to timely comply with the: (i) financial
reporting requirement set forth in Section 6.2(a)(i) thereof as of
the months ended September 30, 2007, October 31, 2007, November 30,
2007, December 31, 2007, and January 31, 2008, and (ii) Operating
Account covenant set forth in Section 6.6(b) with respect to M&T
Bank only (provided Borrower complies with the terms of Section A.3
herein).  Bank’s waiver of Borrower’s
compliance of said affirmative covenants shall apply only to the foregoing
specific periods.

 

4.             FEES.  Borrower shall reimburse Lenders for all
legal fees and expenses incurred in connection with this amendment to the
Existing Loan Documents.

 

5.             CONSISTENT CHANGES.  The Existing Loan Documents are hereby
amended wherever necessary to reflect the changes described above.

 

6.             RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Agent for the ratable benefit of the Lenders, and confirms that the
indebtedness secured thereby includes, without limitation, the Obligations.

 

 

 

 

 

7.             NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Lenders
with respect to the Obligations, or otherwise, and that if Borrower now has, or
ever did have, any offsets, defenses, claims, or counterclaims against Lenders,
whether known or unknown, at law or in equity, all of them are hereby expressly
WAIVED and Borrower hereby RELEASES Lenders from any liability thereunder.

 

8.             CONTINUING VALIDITY.  Borrower understands and agrees that in
modifying the existing Obligations, Lenders are relying upon Borrower’s
representations, warranties, and agreements, as set forth in the Existing Loan
Documents.  Except as expressly modified
pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect.  Lenders’ agreement to modifications to the
existing Obligations pursuant to this 
Loan Modification Agreement in no way shall obligate Lenders to make any
future modifications to the Obligations. 
Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Obligations.  It is
the intention of Lenders and Borrower to retain as liable parties all makers of
Existing Loan Documents, unless the party is expressly released by Lenders in
writing.  No maker will be released by
virtue of this Loan Modification Agreement.

 

9.             COUNTERSIGNATURE.  This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Lenders.

 

[The remainder of this page is
intentionally left blank]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                This Loan Modification Agreement is executed as a
sealed instrument under the laws of the Commonwealth of Massachusetts as of the
date first written above.

 

	
  BORROWER:

  	
   

  	
  AGENT:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PHARMATHENE,
  INC.

  	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /c/ Christopher C.
  Camut

  	
   

  	
  By:

  	
  /s/ Michael J. Hanewich

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Christopher C. Camut

  	
   

  	
  Name:

  	
  Michael J. Hanewich

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President, CFO

  	
   

  	
  Title:

  	
  Head of Life Sciences

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  LENDERS:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  OXFORD
  FINANCE CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ John G. Henderson

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John G. Henderson

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President and
  General Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Michael J. Hanewich

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael J. Hanewich

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Head of Life Sciencesex10_1.htm

    
      

    

    
      Exhibit
10.1

       

      SECURITIES PURCHASE
AGREEMENT

       

      This
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made
and entered into as of March 20, 2008, by and between Rexahn Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), and
Jungwoo Family Co., Ltd., a Korean corporation (the “Purchaser”).

       

      Recitals

       

      The
Company and the Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(2) under the Securities Act of 1933, as amended (the “1933 Act”), and the
provisions of Regulation D (“Regulation D”)
and/or Regulation S (“Regulation S”),
each as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the 1933
Act.

       

      The
Company and the Purchaser entered into a Securities Purchase Agreement dated as
of December 17, 2007 (the “Prior Agreement”),
pursuant to which on December 24, 2007 the Purchaser purchased 142,857 shares of
the Company’s common stock, par value US$0.0001 per share (the “Common
Stock”),  and a warrant to acquire up to 28,571 shares of
Common Stock for aggregate cash consideration of $199,999.80.

       

      The
Company and the Purchaser wish to terminate any and all continuing obligations
of the Purchaser pursuant to the Prior Agreement.

       

      The
Purchaser wishes to purchase, and the Company wishes to sell and issue to the
Purchaser, upon the terms and subject to the conditions stated in this
Agreement, (i) an additional  285,715 shares (the “Initial Shares”) of
Common Stock and (ii) a warrant, in substantially the form attached hereto
as Exhibit A (a
“Warrant”), to
acquire up to 57,143 shares of Common Stock (the “Warrant Shares”) at
an exercise price of US$1.80 per share, for aggregate cash consideration of
US$400,001.00 (the “Purchase
Price”).

       

      Agreement

       

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

       

      1.        
    DEFINITIONS.  In
addition to those terms defined above and elsewhere in this Agreement, for the
purposes of this Agreement, the following terms shall have the meanings here set
forth:

       

      1.1           “1934 Act” means the
Securities Exchange Act of 1934, as amended.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      1.2           “Affiliate” means,
with respect to any Person, any other Person that directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control
with, such Person, as such terms are used in and construed under Rule 144
under the 1933 Act.

       

      1.3           “Business Day” means
any day other than Saturday, Sunday or any other day on which commercial banks
in the City of New York are authorized or required by law to remain
closed.

       

      1.4           “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section 2.3.

       

      1.5           “Closing Date” means
the date and time of the Closing.

       

      1.6           “Eligible Market”
means any of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or the NASD Over-the-Counter Bulletin Board.

       

      1.7           “Lien” means any lien,
charge, claim, security interest, encumbrance, right of first refusal or other
restriction.

       

      1.8           “Material Adverse
Effect” means a material adverse effect on (i) the condition (financial
or otherwise), business, assets or results of operations of the
Company,  (ii) the Company’s ability to perform any of its
obligations under the terms of the Transaction Documents in any material respect
or (iii) the rights and remedies of the Purchaser under the Transaction
Documents.

       

      1.9           “Person” means an
individual, corporation, partnership, limited liability company, trust, business
trust, association, joint stock company, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, governmental authority or any other
form of entity not specifically listed herein.

       

      1.10         “Securities” means the
Common Stock, the Warrant and the Warrant Shares issued or issuable pursuant to
the Transaction Documents.

       

      1.11         “Subsidiary” means any
Person in which the Company, directly or indirectly, owns capital stock or holds
an equity or similar interest.

       

      1.12         “Trading Market” means
the NASD Over-the-Counter Bulletin Board or any other Eligible Market, or any
other national securities exchange, market or trading or quotation facility on
which the Common Stock is then listed or quoted.

       

      1.13         “Transaction
Documents” means this Agreement, the Warrant and any other agreement
entered into, now or in the future, by the Company in connection with this
Agreement or any of the other Transaction Documents (but excluding the Prior
Agreement and any other agreement entered into, now or in the future, by the
Company in connection with the Prior Agreement).

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      1.14           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

              
	
                Action

              	
                3.8

              
	
                Additional
      Shares of Stock

              	
                5.7(b)

              
	
                Adjusted
      Initial Shares

              	
                5.7(b)

              
	
                Adjusted
      Purchase Price

              	
                5.7(b)

              
	
                Aggregate
      Consideration

              	
                5.7(b)

              
	
                Agreement

              	
                Preamble

              
	
                Common
      Stock

              	
                Recitals

              
	
                Company

              	
                Preamble

              
	
                Diluted
      Price

              	
                5.7(a)

              
	
                Initial
      Shares

              	
                Recitals

              
	
                Make-Whole
      Number

              	
                5.7(b)

              
	
                Prior
      Agreement

              	
                Recitals

              
	
                Purchase
      Price

              	
                Recitals

              
	
                Purchaser

              	
                Preamble

              
	
                Regulation
      D

              	
                Recitals

              
	
                Regulation
      S

              	
                Recitals

              
	
                SEC

              	
                Recitals

              
	
                U.S.
      Person

              	
                4.2

              
	
                Warrant

              	
                Recitals

              
	
                Warrant
      Shares

              	
                Recitals

              
	
                1933
      Act

              	
                Preamble

              

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      2.           
 PURCHASE AND
SALE OF SECURITIES.

       

      2.1           Purchase of the Initial
Shares and Warrant.  Subject to the terms and conditions of
this Agreement and on the basis of the representations and warranties made
herein, the Company hereby agrees to sell and issue to the Purchaser, and the
Purchaser hereby agrees to purchase from the Company, the Initial Shares and the
Warrant for cash in an amount equal to the Purchase Price.

       

      2.2           Time and Place of
Closing.  The Closing shall take place at the offices of
Chadbourne & Parke LLP, 1200 New Hampshire Avenue, N.W., Washington,
DC  20036 on March 28, 2008.

       

      2.3           Closing
Deliveries.

       

      (a)           At
the Closing, the Company shall deliver or cause to be delivered to the Purchaser
the following:

       

      (i)           a
stock certificate, free and clear of all restrictive legends (except as
expressly provided in Section 6.1(b)),
evidencing 285,715 shares of Common Stock, registered in the name of the
Purchaser;

       

      (ii)          a
Warrant, issued in the name of the Purchaser, exercisable for up to 57,143
Warrant Shares; and

       

      (iii)         any
other documents reasonably requested by the Purchaser or its counsel in
connection with the Closing, including, without limitation, certified copies of
the Company’s certificate of incorporation, certificates of good standing and
customary officers’ and secretary’s certificates.

       

      (b)           At
the Closing, the Purchaser shall deliver or cause to be delivered to the Company
cash in an amount equal to the Purchase Price of US$400,001.00 by wire transfer
of immediately available federal funds to the account of the
Company.

       

      2.4           Use of
Proceeds.  The Company will use the net proceeds of the
issuance and sale of Initial Shares and the Warrant for its general working
capital and other corporate purposes.

       

      3.          
  REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.  The Company hereby represents and
warrants to the Purchaser as follows:

       

      3.1      
    Subsidiaries.  The
Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1.  Except
as disclosed in Schedule 3.1,
the Company owns, directly or indirectly, all of the capital stock or comparable
equity interests of each Subsidiary free and clear of any Lien, and all the
issued and outstanding shares of capital stock or comparable equity interests of
each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      3.2      
    Organization and Good
Standing.  Each of the Company and each Subsidiary is a
corporation validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with all
requisite power and authority to carry on its business as presently conducted
and own and use its properties and assets.  Each of the Company and
each Subsidiary is authorized to conduct business as a foreign corporation and
is in good standing in each jurisdiction where the conduct of its business or
the ownership of its property requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or in
the aggregate, reasonably be expected to have or result in a Material Adverse
Effect.

       

      3.3          Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereunder and thereunder have been duly authorized by
all necessary action on the part of the Company and no further action is
required by the Company in connection therewith.  Each Transaction
Document has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms.

       

      3.4       
   No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not
(a) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (b) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (c) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is
subject (assuming the accuracy of the Purchaser’s representations and warranties
and compliance by the Purchaser with its respective covenants as set forth in
this Agreement), including federal and state securities laws and regulations and
the rules and regulations of any self-regulatory organization to which the
Company or its securities are subject, or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (b) and (c), such as would not, individually or in the aggregate,
reasonably be expected to have or result in a Material Adverse
Effect.

       

      3.5     
     Issuance of the
Securities.  The Securities have been duly
authorized.  The Initial Shares and Warrant, when issued and paid for
in accordance with the terms of this Agreement, and the Warrant Shares issuable
upon exercise of the Warrant when so issued and paid for in accordance with the
terms of the Warrant, will be validly issued, fully paid and nonassessable, and
free and clear of all Liens and charges and shall not be subject to preemptive
or similar rights.  The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock to be issued to the
Purchaser upon exercise of the Securities.  Assuming the continued
validity of the Purchaser’s representations and warranties contained in Section 4, the
offer, issuance and sale of the Securities to the Purchaser pursuant to this
Agreement and upon exercise of the Warrant are exempt from registration
requirements of the 1933 Act.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      3.6        
  Capitalization.  The
aggregate number of shares and type of all authorized, issued and outstanding
capital stock, options and other securities of the Company (whether or not
presently convertible into or exercisable or exchangeable for shares of capital
stock of the Company) as of the date hereof is set forth in Schedule 3.6.  All
outstanding shares of capital stock are duly authorized, validly issued, fully
paid and nonassessable and have been issued in compliance with all applicable
securities laws.  Except as set forth in Schedule 3.6 and
except for customary adjustments as a result of stock dividends, stock splits,
combinations of shares, reorganizations, recapitalizations, reclassifications or
other similar events, as of the date hereof there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any
agreement providing rights to security holders).  The issuance and
sale of the Securities will not obligate the Company to issue shares of Common
Stock or other securities to any Person (other than the Purchasers) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.

       

      3.7          
Answer to all
Inquires.  The Company has answered all inquiries that the
Purchaser has made of it concerning the Company, its business and financial
condition, or any other matter relating to the operation of the Company and the
offering and sale of the Initial Shares and Warrant. No written statement or
inducement that is contrary to the information conveyed to the Purchaser that if
untrue would have a material effect on the Company’s business taken as a whole
has been made by or on behalf of the Company to the Purchaser.

       

      3.8        
  Absence of
Litigation.  Except as set forth in Schedule 3.8,
there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary, any of the Company’s officers or
directors in their capacities as such and any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”)
which (a) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or
(b) could, if there were an unfavorable decision, individually or in the
aggregate, have or result in a Material Adverse Effect.  To the
knowledge of the Company, no judgment, injunction, writ, award, decree or order
has been issued by any court or other governmental authority against the
Company.

       

      3.9        
   Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company is imminent, with respect to any of the employees of
the Company.

       

      3.10          Compliance.  Neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not,
individually or in the aggregate, reasonably be expected to have or result in a
Material Adverse Effect.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      3.11          Transactions with Affiliates
and Employees.  Except as set forth in Schedule 3.11, none
of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or
partner.

       

      3.12         
Title to
Assets.  The Company and its Subsidiaries have valid title to
or leasehold rights for all real property that is material to the business of
the Company and the Subsidiaries and good and marketable title in all personal
property owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for Liens
disclosed in Schedule
3.12 or as do not, individually or in the aggregate, materially interfere
with the use made and proposed to be made of such property by the Company and
the Subsidiaries.  Any real property and facilities held under lease
by the Company and its Subsidiaries are held by them under valid, subsisting and
enforceable leases of which the Company and the Subsidiaries are in compliance;
except as would not, individually or in the aggregate, reasonably be expected to
have or result in a Material Adverse Effect.

       

      3.13          Registration
Rights.  Except as described in Schedule 3.13,
as of the date hereof the Company has not granted or agreed to grant to any
Person any rights (including “piggy-back” registration rights) to have any
securities of the Company registered with the SEC or any other governmental
authority that have not been satisfied or waived.

       

      3.14         
Form S-1
Eligibility.  The Company is eligible to register the resale of
its Common Stock for resale by the Purchasers under Form S-1 promulgated
under the 1933 Act.

       

      3.15          Disclosure.  All
disclosures provided to the Purchaser regarding the Company, its business and
the transactions contemplated hereby, including the Schedules to this Agreement,
furnished by or on behalf of the Company are true and correct in all material
respects and do not contain any untrue statement of a material fact to the
extent of the Company’s knowledge.  Except for the transactions
contemplated by this Agreement, no event or circumstance has occurred or
information exists with respect to the Company or any of its Subsidiaries or its
or their business, properties, prospects, operations or financial conditions,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      4.         
   REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER.  The Purchaser hereby represents
and warrants to the Company as follows as of the date hereof and the Closing
Date:

       

      4.1           Organization;
Authority.  The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the Republic of
Korea.  The Purchaser has the requisite corporate power and authority
to enter into and to consummate the transactions contemplated by the Transaction
Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder.  The execution, delivery and performance by
the Purchaser of the Transaction Documents to which it is a party have been duly
authorized by all necessary action on the part of the Purchaser.  Each
Transaction Document to which the Purchaser is a party has been (or upon
delivery will have been) duly executed by the Purchaser and, when delivered by
the Purchaser in accordance with terms hereof, will constitute the valid and
legally binding obligations of the Purchaser, enforceable against it in
accordance with its terms.

       

      4.2           The Purchaser’s
Status.  At the time the Purchaser was offered the Securities,
it was, and at the date hereof it is, an “accredited investor” as defined in
Rule 501(a) under the 1933 Act.  The Purchaser is not a
broker-dealer, or required to be registered as a broker-dealer, under
Section 15 of the 1934 Act.  The Purchaser is not a U.S. person
within the meaning of Rule 902(k) of Regulation S under the 1933 Act
(“U.S.
Person”), which term includes: (i) a natural person resident in the
United States; (ii) a partnership or corporation organized or incorporated
under the laws of the United States; (iii) an estate of which any executor
or administrator is a U.S. Person; (iv) a trust of which any trustee is a
U.S. Person (other than a trust of which any professional fiduciary duty acting
as trustee is a U.S. Person, if a trustee who is not a U.S. Person has sole or
shared investment discretion with respect to the trust assets, and no
beneficiary of the trust (and no settler if the trust is revocable) is a U.S.
Person); (v) an agency or branch of a foreign entity located in the United
States; (vi) a non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. Person; (vii) a discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary organized,
incorporated or (if an individual) resident in the United States; and
(viii) a partnership or corporation (A) organized or incorporated
under the laws of any foreign jurisdiction and (B) formed by a U.S. Person
principally for the purpose of investing in securities not registered under the
1933 Act, unless it is organized or incorporated, and owned, by accredited
investors (as defined in Rule 501(a) under the 1933 Act) who are not
natural persons, estates or trusts.

       

      4.3           Experience of the Purchaser;
Substantial Risk of Loss.  The Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment, and the Purchaser has had
available such information with respect to the Company as the Purchaser deems
necessary or appropriate to make such evaluation and an informed investment
decision with respect thereto. The Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a
complete loss of such investment.   The Purchaser has discussed
with its professional legal, tax and financial advisors, to the extent it deemed
appropriate, the suitability of the investment in the Securities for its
particular tax and financial situation.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      4.4           Manner and Place of
Solicitation.  The Purchaser is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement. The Purchaser has not been
offered the Securities in the United States and at the time of execution of this
Agreement is physically outside the United States.

       

      4.5           No Public Sale or
Distribution; Investment Intent.  The Purchaser is acquiring
the Securities in the ordinary course of business for its own account for
investment purposes only and not on behalf or for the benefit of any U.S. Person
or with a view towards, or for resale in connection with, the public sale or
distribution thereof, and the Purchaser does not have a present intention nor a
present arrangement to effect any distribution of the Securities to or through
any person or entity.  Except as expressly contemplated by the
Transaction Documents, the sale and resale of the Securities has not been
pre-arranged with any U.S. Person or buyer in the United States, and the
Purchaser has no present plans to enter into any contract, undertaking,
agreement or arrangement for the distribution, resale, subdivision or
fractionalization of the Securities. In order to induce the Company to issue and
sell the Securities subscribed for hereby, the Purchaser agrees that the Company
will have no obligation to recognize the ownership, beneficial or otherwise, of
the Securities by anyone but the Purchaser.  Notwithstanding the
foregoing, by making the representations herein, the Purchaser does not agree to
hold any of the Securities for any minimum or other specific term and reserves
the right to dispose of the Securities at any time in accordance with or
pursuant to an effective registration statement or an exemption under the 1933
Act.

       

      4.6           Information Regarding the
Company.  The Purchaser has been furnished with or has had
access to all publicly available documents and records of the Company so as to
allow the Purchaser to understand and evaluate such records and documents
fully.  In addition, the Purchaser has received from the Company such
other information concerning its operations, financial condition and other
matters as the Purchaser has requested and considered all factors the Purchaser
deems material in deciding on the advisability of investing in the
Securities.  In evaluating the suitability of an investment in the
Company, the Purchaser has not been furnished and has not relied upon any
representations or other information (whether oral or written) other than as set
forth herein or in the publicly available documents and records of the
Company.  The Purchaser has not relied on any projections in making an
investment decision with respect to the Securities.

       

      4.7           No
Distribution.  The Purchaser has not distributed the records
and documents the Company provided to the Purchaser under or in connection with
this Agreement to any other Person.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      4.8           Information Regarding the
Purchaser.  All information which the Purchaser has provided to
the Company concerning itself, its financial position, and the knowledge of
financial and business matters of the person making the investment decision on
behalf of the  Purchaser, including all information contained herein,
is true and complete as of the date of this Agreement and will be true and
complete as of the Closing Date. If in any respect the representations and
warranties of the Purchaser contained herein and all other information that the
Purchaser has provided to the Company shall not be true and accurate at any time
prior to the Closing Date, the Purchaser agrees to give prompt written notice of
such fact to the Company, specifying which representations, warranties or
information are not true and accurate and the reasons therefor.  The
Purchaser understands that the offering and sale of the Securities is intended
to be exempt from registration under the 1933 Act, by virtue of Regulation D
and/or Regulation S of the 1933 Act, and from applicable U.S. or foreign
federal or state securities laws based, in part, upon the representations,
warranties and agreements contained in this Agreement and that the Company may
rely on such representations, warranties and agreements in connection
therewith.

       

      4.9           Regulation S
Compliance.  The address set forth in Section 7.2 of this
Agreement is the Purchaser’s true and correct residence or principal place of
business and the Purchaser has no present intention of becoming a resident of
any state or other jurisdiction of the United States or moving its principal
place of business within the United States. The Purchaser acknowledges and
agrees that until the expiration of the one-year distribution compliance period
within the meaning of Rule 902(f) of Regulation S under the 1933 Act,
the Purchaser will only resell the Securities in compliance with the provisions
of Regulation S, pursuant to registration under the 1933 Act or pursuant to
an exemption from registration.  The Purchaser agrees not to engage in
hedging transactions with regard to the Securities unless in compliance with the
1933 Act.

       

      5.      
      COVENANTS AND
AGREEMENTS.

       

      5.1           Transfer
Restrictions.

       

      (a)           The
Purchaser covenants that the Securities will only be disposed of pursuant to an
effective registration statement under the 1933 Act or pursuant to an available
exemption from the registration requirements of the 1933 Act, and in compliance
with any applicable state securities laws.  In connection with any
transfer of Securities other than pursuant to an effective registration
statement or to the Company, the Company may require the transferor to provide
to the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration under the 1933 Act.  Notwithstanding the
foregoing, the Company hereby consents to and agrees to register on the books of
the Company without any such legal opinion, any transfer of Securities by the
Purchaser to an Affiliate of the Purchaser, provided that the transferee
certifies to the Company that it is an “accredited investor” as defined in
Rule 501(a) promulgated under the 1933 Act.

       

      (b)           The
Purchaser agrees to the imprinting, except as otherwise permitted by Section 5.1(c),
of a legend in substantially the following form on any certificate evidencing
Securities:

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE [AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY OTHER U.S. OR FOREIGN SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, HYPOTHECATED OTHERWISE TRANSFERRED
UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE U.S. AND FOREIGN
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 U.S. AND FOREIGN SECURITIES LAWS.  THE
COMPANY MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
TO THE EFFECT THAT ANY PROPOSED OFFER, SALE, HYPOTHECATION OR OTHER TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY
THIS CERTIFICATE [AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF] MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

       

      (c)           Certificates
evidencing Securities shall not be required to contain the legend set forth in
Section 5.1(b)
or any other legend if such legend is not required under applicable
requirements of the 1933 Act (including judicial interpretations and
pronouncements issued by the Staff of the SEC).  Following such time
as a legend is no longer required for certain Securities, the Company will, no
later than ten Business Days following the delivery by the Purchaser to the
Company of a legended certificate representing such Securities, deliver or cause
to be delivered to the Purchaser a certificate representing such Securities that
is free from all restrictive and other legends.

       

      (d)           The
Purchaser agrees that stop transfer instructions have been or will be placed
with respect to the Securities so as to restrict the resale, pledge,
hypothecation or other transfer thereof and that the Company’s stock transfer
agent will not be required to accept for registration of transfer any
Securities, except upon presentation of evidence satisfactory to the Company and
the transfer agent that the restrictions set forth in this Agreement have been
complied with.  The Purchaser also agrees that stop transfer
instructions described in the preceding sentence will be placed with respect to
any new certificate representing the Securities upon presentment by the
Purchaser of a certificate for transfer.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      5.2           Reservation and Listing of
Securities.

       

      (a)           The
Company shall maintain a reserve from its duly authorized shares of Common Stock
for issuance pursuant to the Transaction Documents in such amount as may be
required to fulfill its obligations in full under the Transaction
Documents.

       

      (b)           The
Company shall (i) in the time and manner required by each Trading Market,
prepare and file with such Trading Market an additional shares listing
application covering all of the shares of Common Stock issued or issuable under
the Transaction Documents, (ii) take all steps necessary to cause such
shares of Common Stock to be approved for listing on each Trading Market as soon
as possible thereafter, (iii) provide to the Purchasers evidence of such
listing, and (iv) maintain the listing of such Common Stock on each such
Trading Market.

       

      5.3           Reports and
Filing.  Upon execution of this Agreement, the Company shall
fully cooperate with the Purchaser in preparing, drafting and filing the reports
the Purchaser must file with the relevant government authorities, agencies,
offices and other institutions in connection with the acquisition of foreign
securities by the Purchaser. The Purchaser shall fully cooperate with the
Company in preparing, drafting and filing any reports and documents pursuant to
the relevant securities laws and regulations.

       

      5.4           General
Indemnity.  The Company agrees to indemnify and hold harmless
the Purchaser and its directors, officers, affiliates, agents, successors and
assigns from an against any and all losses, liabilities, deficiencies, costs,
damages and expenses (including, without limitation, reasonable attorneys’ fees,
charges and disbursements) incurred by the Purchaser as a result of any
inaccuracy in or breach of the representations, warranties or covenants made by
the Company herein.  The Purchaser agrees to indemnify and hold
harmless the Company and its directors, officers, affiliates, agents, successors
and assigns from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation, reasonable
attorneys’ fees, charges and disbursements) incurred by the Company as a result
of any inaccuracy in or breach of the representations, warranties or covenants
made by such the Purchaser herein.

       

      5.5           Compliance with
Laws.  So long as the Purchaser beneficially owns any
Securities, the Company will use reasonable efforts to comply with all
applicable laws, rules, regulations, orders and decrees of all governmental
authorities, except to the extent non-compliance (in one instance or in the
aggregate) would not have a Material Adverse Effect.

       

      5.6           Disbursement of
Funds.  At the Closing, the Purchaser shall transfer cash in an
amount equal to the Purchase Price to a separate account of the Company in the
manner specified in Section 2.3(b).

      

      5.7           Antidilution.

      

      (a)           If,
at any time prior to the second anniversary of the Closing Date, the Company
issues Additional Shares of Stock at an effective net price to the Company (the
“Diluted
Price”) that is less than the Adjusted Purchase Price, then within ten
Business Days of such issuance, the Company shall issue to the Purchaser an
additional number of shares of Common Stock equal to the Make-Whole
Number.  No shares shall be issued pursuant to this Section 5.7 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
(provided that such
exercise occurs prior to the second anniversary of the Closing
Date).  Notwithstanding the foregoing or any other provision hereof to
the contrary, the Company shall not be obligated to issue any Common Stock
pursuant to this Section 5.7 unless
the Purchaser purchases all of the Initial Shares as provided
herein.

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      (b)           For
purposes of this Section 5.7, the
following defined terms shall have the following meanings:

      

       “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.

       

      “Adjusted Initial
Shares” means the Initial Shares, as adjusted by the Company for any
stock dividend, combination, split, recapitalization and the like with respect
to the Initial Shares occurring after the Closing Date.

       

      “Adjusted Purchase
Price” means US$1.40 per share of Common Stock,  as adjusted by
the Company for any stock dividend, combination, split, recapitalization and the
like with respect to the Initial Shares occurring after the Closing
Date.

       

      “Aggregate
Consideration” shall mean: (1) to the extent it consists of cash, the net
amount of cash received by the Company after deduction of any underwriting or
similar commissions, compensation or concessions paid or allowed by the Company
in connection with such issue or sale; (2) to the extent it consists of property
other than cash, the fair value of such property as determined by the Board of
Directors of the Company; and (3) if shares of Common Stock or preferred stock
are issued or sold together with other stock or securities or other assets of
the Company for a consideration that covers both, the portion of the
consideration so received that may be determined by the Board of Directors of
the Company to be allocable to such shares of Common Stock or preferred
stock.

       

      “Make-Whole Number”
means (1) the quotient of the Purchase Price divided by the Diluted Purchase
Price minus (2) the Adjusted Initial Shares.

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      5.8           AMEX
Listing.  Following the Closing, the Company shall take
commercially reasonable efforts to cause the Common Stock to be listed for
trading on the American Stock Exchange within three years from the Closing
Date.

       

      6.          
  CONDITIONS.

       

      6.1           Conditions Precedent to the
Obligations of the Purchaser.  The obligation of the Purchaser
to acquire Securities at the Closing is subject to the satisfaction or waiver by
the Purchaser, at or before the Closing, of each of the following
conditions:

       

      (a)           Representations and
Warranties.  The representations and warranties of the Company
contained herein shall be true and correct in all material respects as of the
date when made and as of the Closing as though made on and as of such date
(except for those representations and warranties that speak only as of a
specified date, which shall be true and correct as of such specified
date);

       

      (b)           Performance.  The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the
Closing;

       

      (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

       

      (d)           Material Adverse
Changes.  Since the date of execution of this Agreement, no
event or series of events shall have occurred that reasonably would reasonably
be expected to have or result in a Material Adverse Effect; and

       

      (e)           Stockholder
Approval.  The issuance of the Initial Shares and the Warrant
shall have been approved by the holders of a majority of the shares of the
outstanding Common Stock in accordance with all applicable requirements of the
Delaware General Corporation Law and the 1934 Act.

       

      6.2           Conditions Precedent to the
Obligations of the Company.  The obligation of the Company to
sell Securities at the Closing is subject to the satisfaction or waiver by the
Company, at or before the Closing, of each of the following
conditions:

       

      (a)           Representations and
Warranties.  The representations and warranties of the
Purchaser contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date;

       

      (b)           Performance.  The
Purchaser shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Purchaser at or
prior to the Closing;

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

       

      (d)           No Material Adverse
Effect.  Since the date of execution of this Agreement, no
event or series of events shall have occurred that reasonably would reasonably
be expected to have or result in a Material Adverse Effect; and

       

      (e)           Stockholder
Approval.  The issuance of the Initial Shares and the Warrant
shall have been approved by the holders of a majority of the shares of the
outstanding Common Stock in accordance with all applicable requirements of the
Delaware General Corporation Law and the 1934 Act.

       

      7.          
  MISCELLANEOUS.

       

      7.1           Entire
Agreement.  The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

       

      7.2           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 or e-mail at the facsimile number or
e-mail address specified in this Section 7.2 prior to
18:30 (New York City time) on a Business Day, (b) the Business Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Agreement later than 18:30
(New York City time) on any date and earlier than 24:00 (New York City time) on
such date, (c) the Business Day following the date of mailing, if sent by
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 follows:

       

      
        	 
      	
                If
      to the Company:

              	 
      	
                Rexahn
      Pharmaceuticals, Inc.

              
	 
      	 
      	 
      	
                9620
      Medical Center Drive

              
	 
      	 
      	 
      	
                Rockville,
      MD 20850

              
	 
      	 
      	 
      	
                Attn:

              	
                Tae
      Heum Jeong

              
	 
      	 
      	 
      	
                Fax
      No.: 

              	
                (240)
      268-5310

              
	 
      	 
      	 
      	
                E-Mail:

              	
                ted@rexahn.com

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                With
      a copy to:

              	 
      	
                Chadbourne
      & Parke LLP

              
	 
      	 
      	 
      	
                1200
      New Hampshire Avenue, N.W.

              
	 
      	 
      	 
      	
                Washington,
      D.C.  20036

              
	 
      	 
      	 
      	
                Attn:

              	
                Hwan
      Kim

              
	 
      	 
      	 
      	
                Fax
      No.: 

              	
                (202)
      974-6790

              
	 
      	 
      	 
      	
                E-Mail:

              	
                hkim@chadbourne.com

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                If
      to the Purchaser:

              	 
      	
                Jungwoo
      Family Co., Ltd.

              
	 
      	 
      	 
      	
                6F
      Chosuk Bldg, 1550-10

              
	 
      	 
      	 
      	
                Seocho-dong,
      Seocho-gu

              
	 
      	 
      	 
      	
                Seoul,
      Korea

              
	 
      	 
      	 
      	
                Fax
      No.: 

              	
                82-2-553-4222

              
	 
      	 
      	 
      	
                Email:

              	
                skk1523@hanmail.net

              
	 
      	 
      	 
      	
                Attn:

              	
                Sung
      Gwan Kim, CEO

              

      

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

       

      7.3           Amendments;
Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument signed by the Company.  No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.

       

      7.4           Construction.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.

       

      7.5           Successors and
Assigns.  Except as otherwise expressly provided herein, the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their successors and permitted assigns.

       

      7.6           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except that each Indemnitee is an intended third-party beneficiary of
Section 5.4.

       

      7.7           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.

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      7.8           Survival.  The
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery and/or exercise of the Securities for a
period of one year; provided,
however, that if the Purchaser sells or transfers 50% or more the Initial
Shares to any third party, the representations, warranties and covenants made by
the parties under this Agreement immediately shall cease to be
effective.

       

      7.9           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

       

      7.10         Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

       

      7.11         Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.  The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.

       

      7.12         Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, the Purchaser and the Company will be
entitled to specific performance under the Transaction Documents.  The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be
adequate.

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      7.13         Adjustments in Share Numbers
and Prices.  In the event of any stock split, subdivision,
dividend or distribution payable in shares of Common Stock (or other securities
or rights convertible into, or entitling the holder thereof to receive directly
or indirectly shares of Common Stock), combination or other similar
recapitalization or event occurring after the date hereof, each reference in any
Transaction Document to a number of shares or a price per share shall be amended
to appropriately account for such event.

       

      7.14         Prior
Agreement.  The Company hereby releases and discharges the
Purchaser from any obligation to purchase any additional securities of the
Company pursuant to the Prior Agreement, and from any liability arising out of
or in connection any failure of the Purchaser to purchase any securities of the
Company in accordance with the requirements of the Prior
Agreement.  The Purchaser agrees that the Securities (as defined
herein) shall not constitute Registrable Securities under and as defined in the
Registration Rights Agreement (as defined in the Prior Agreement).

       

      [Signature
page follows]

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

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

       

      
        	 
      	
                The
      Company

              
	 
      	 
      	 
      	 
      
	 
      	
                REXAHN
      PHARMACEUTICALS, INC.

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Chang H. Ahn	 
      
	 
      	
                Name:

              	
                Chang
      H. Ahn

              	 
      
	 
      	
                Title:

              	
                CEO

              	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                The
      Purchaser

              
	 
      	 
      	 
      	 
      
	 
      	
                JUNGWOO
      FAMILY CO., LTD.

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Sung Gwan Kim	 
      
	 
      	
                Name:

              	
                Sung
      Gwan Kim

              	 
      
	 
      	
                Title:

              	
                CEO

              	 
      

      

      :

      [Signature
page to Securities Purchase Agreement]

       

       

      19

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