CONVERTIBLE NOTE

Exhibit 4.1

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR ANY U.S. OR FOREIGN FEDERAL OR STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED OR CONVERTED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT, OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE ACT SECURITIES AND APPLICABLE U.S. OR FOREIGN FEDERAL OR STATE SECURITIES LAWS.

THIS NOTE ONLY EVIDENCES AN INTEREST IN THE GLOBAL NOTE REPRESENTING US$1,500,000 AGGREGATE PRINCIPAL AMOUNT OF CONVERTIBLE NOTES OF REXAHN PHARMACEUTICALS, INC. DUE AUGUST 8, 2008 (THE “ CONVERTIBLE NOTES ”), WHICH INTEREST MAY NOT BE TRANSFERRED DURING THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD (AS DEFINED IN RULE 903 UNDER THE SECURITIES ACT). FOLLOWING THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE HOLDER OF THIS NOTE MAY EXCHANGE THIS NOTE FOR A DEFINITIVE NOTE REPRESENTING REXAHN, CORP’S OBLIGATIONS TO THE HOLDER UNDER THE CONVERTIBLE NOTES IN SUBSTANTIALLY THE SAME FORM AS THIS NOTE.

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CONVERTIBLE NOTE

No. B-[__]

FOR VALUE RECEIVED, the undersigned, REXAHN PHARMACEUTICALS, INC., a Delaware corporation (the “ Obligor ”), hereby promises to pay to the order of [_____________________] (and/or its registered assigns) (the “ Holder ”), on August 8, 2008 (the “ Maturity Date ”), the principal amount of [____________________] (US$[__________]) (the “ Principal Amount ”), in lawful money of the United States of America.

(a)          The Principal Amount shall be reduced as and to the extent this note (this “Note”) is converted into shares of Common Stock, repaid or redeemed, as provided in this Note. This Note shall not bear any interest.

(b)          Notwithstanding the foregoing provisions of this Paragraph 1, but subject to applicable law, any overdue principal of this Note due pursuant to Paragraph 5 of this Note shall bear interest, payable on demand in immediately available funds, for each day from the Maturity Date to the date of actual payment, at a rate equal to 5% per annum, or, if an Event of

Default has occurred and is continuing, this Note shall bear interest, from the date of the occurrence of such Event of Default until such Event of Default is cured or waived, payable on demand in immediately available funds, at a rate equal to 5% per annum.

(a)           Voluntary Conversion . Subject to and upon compliance with the provisions of this Paragraph 2, the Holder, at the Holder’s option, at any time from and after September 19, 2005 to the Maturity Date or upon the occurrence of an Event of Default hereunder, so long as any portion of the Principal Amount is outstanding, may convert all or any portion of the outstanding Principal Amount of this Note into that number of shares of the Common Stock, equal to the Principal Amount selected for conversion divided by the Conversion Price. In order to convert this Note, the Holder shall deliver written notice in substantially the form attached to this Note as Exhibit 1 and this Note to the Obligor during regular business hours at its address set forth in, or at such other address that the Obligor shall designate in writing in accordance with, Paragraph 6 hereof. The Conversion shall be deemed to have been effected on the date when such notice is delivered to the Obligor (each a “ Conversion Date ”).

(b)           Automatic Conversion . Subject to and upon compliance with the provisions of this Paragraph 2, (A) upon the closing of (i) a sale of all or substantially all of the assets of the Obligor, or (ii) any merger, consolidation or other business combination of the Obligor if the Obligor is not the surviving entity or if the stockholders of the Obligor hold less than a majority interest (on a fully-diluted basis) in the surviving entity (or its parent) following the merger, consolidation or other business combination, or (B) on the Maturity Date, the outstanding Principal Amount of this Note shall automatically be converted into shares of Common Stock at the Conversion Price.

(c)           Certificate for Shares of Common Stock; Note for Balance of Principal Amount . Without limiting the effects of Paragraphs 2(a) and (b) hereof, as promptly after the Conversion Date as practicable, the Obligor shall issue and deliver to the Holder at the address of the Holder set forth in, or at such other address that the Holder shall designate in writing in accordance with Paragraph 6 hereof, without any charge to the Holder (i) a certificate or certificates (issued in the name of the Holder or, subject to compliance with applicable securities laws, in such other name as the Holder may designate) for the number of shares of Common Stock issuable upon the Conversion and (ii) if less than the full Principal Amount of this Note is converted, a new Note for the remaining Principal Amount not so converted. No fractional shares of Common Stock shall be issued upon the conversion pursuant to this Paragraph 2. Instead of any fractional shares of Common Stock that would otherwise be issuable upon conversion of any Principal Amount of this Note, the Obligor shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fractional interest of a share multiplied by the then Current Market Price per share of Common Stock.

(d)           Holder deemed Stockholder of Record on Conversion Date . Upon the Conversion Date, the Holder shall be deemed to have become the stockholder of record on the Conversion Date of the number of shares of Common Stock issuable upon such Conversion. All rights of the Holder to the Principal Amount then converted shall cease upon such Conversion.

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(e)           Conversion Price . The Conversion Price shall be subject to adjustments as follows:

(i)          Adjustment Upon Occurrence of Certain Events . If the Obligor shall issue any Additional Stock after the date of the issuance of this Note, without consideration or for a consideration per share less than the Current Market Price per share of Additional Stock as of the time of such issuance, the Conversion Price in effect immediately prior to any such issuance, shall be adjusted by multiplying such Conversion Price by a fraction, (A) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of shares of Common Stock that the aggregate consideration received by the Obligor for such issuance would purchase at the Conversion Price in effect immediately prior to the issuance of such Additional Stock and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of shares of such Additional Stock so issued. No adjustment of the Conversion Price pursuant to this Paragraph 2(e)(i) shall have the effect of increasing the Conversion Price above the Conversion Price in effect immediately prior to such adjustment. Upon each such adjustment of the Conversion Price hereunder, the number of shares of Common Stock acquirable upon Conversion at the Conversion Price shall equal the outstanding Principal Amount, divided by the Conversion Price resulting from such adjustment. For the purposes of any adjustment of the Conversion Price pursuant to this Paragraph 2(e)(i), the following provisions shall be applicable:

(A)          Cash . In the case of the issuance of Common Stock for cash, the amount of the consideration received by the Obligor shall be deemed to be the amount of the cash proceeds received by the Obligor for such Common Stock before deducting therefrom any discounts, commissions, taxes or other expenses allowed, paid or incurred by the Obligor for any underwriting or otherwise in connection with the issuance and sale thereof.

(B)          Consideration Other Than Cash . In the case of the issuance of Common Stock (otherwise than upon the conversion of shares of Capital Stock or other securities of the Obligor) for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value of such consideration as determined in good faith by the Board of Directors, except where such consideration consists of securities, in which case the amount of consideration received or to be received, respectively, by the Obligor will be the Current Market Price thereof as of the date of receipt of such securities.

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(C)          Options and Convertible Securities . In the case of the issuance of (x) options, warrants or other rights to purchase or acquire Common Stock (whether or not at the time exercisable), (y) securities by their terms convertible into or exchangeable for Common Stock (whether or not at the time so convertible or exchangeable), or (z) options, warrants or rights to purchase such convertible or exchangeable securities (whether or not at the time exercisable):

(1)          the shares of Common Stock deliverable upon exercise of such options, warrants or other rights to purchase or acquire Common Stock shall be deemed to have been issued for a consideration equal to the consideration (determined in the manner provided in subclauses (A) and (B) above), if any, received by the Obligor upon the issuance of such options, warrants or rights plus the exercise price provided in such options, warrants or right for the issuance of the shares of Common Stock covered thereby;

(2)          if the Conversion Price shall have been adjusted upon the issuance of any such options, warrants, rights or convertible or exchangeable securities, no further adjustment of the Conversion Price shall be made for the actual issuance of Common Stock upon the exercise, conversion or exchange thereof; and

(3)          on the expiration or termination of any such options, warrants or other rights, the Conversion Price shall forthwith be readjusted to such Conversion Price as would have been obtained had the adjustment made upon the issuance of such options, warrants or other rights had not been made.

(ii)          Stock Dividends, Subdivisions, Reclassifications or Combinations . If the Obligor shall (A) declare a dividend or make a distribution on its Common Stock in shares of its Common Stock, (B) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares, or (C) combine or reclassify the outstanding Common Stock into a smaller number of shares, the Conversion Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any Principal Amount of this Note surrendered for conversion after such date shall be entitled to receive the number of shares of Common Stock that such holder would have owned or been entitled to receive had such Principal Amount of this Note been converted immediately prior to such date. Successive adjustments in the Conversion Price shall be made whenever any event specified above in this clause (ii) shall occur.

(iii)          Consolidation, Merger or Sale . In case of (A) a sale of all or substantially all of the assets of the Obligor, or (B) any merger, consolidation or other business combination of the Obligor whether or not the Obligor is the surviving entity or the stockholders of the Obligor hold a majority interest (on a fully-diluted basis) in the surviving entity (or its parent) following the merger, consolidation or other business combination, other than any such

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event upon which the Principal Amount of this Note is automatically converted into Common Stock pursuant to such Paragraph 2(b) hereof, the surviving entity (or its parent) shall assume the obligations of the Obligor under this Note and the Principal Amount of this Note shall, after the date of such event, be convertible into the kind and number of shares of stock or other securities or property (including cash) receivable upon such merger, consolidation or other business combination by a holder of a number of shares of Common Stock issuable upon conversion of such Principal Amount of this Note immediately prior to the time of such event; and in any such case, if necessary, the provisions set forth herein with respect to the rights and interests thereafter of the holders of the Principal Amount (including with respect to any subsequent adjustments to the Conversion Price) shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of stock or other securities or property thereafter deliverable on the conversion of the Principal Amount of this Note. Successive adjustments in the Conversion Price shall be made whenever any event specified above in this clause (iii) shall occur.

(iv)          Rounding of Calculations . All calculations under this Paragraph 2(e) shall be made to the nearest cent or to the nearest one thousandth of a share, as the case may be.

(vi)          Timing of Issuance of Additional Common Stock Upon Certain Adjustments . In any case in which the provisions of this Paragraph 2(e) shall require that an adjustment shall become effective immediately after a record date for an event, the Obligor may defer until the occurrence of such event (A) issuing to the Holder of any Principal Amount of this Note converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such conversion before giving effect to such adjustment and (B) paying to such holder any amount of cash in lieu of a fractional share of Common Stock pursuant to Paragraph 2(c).

(f)            Notice to Holders . In the event the Obligor shall take any action of the type described in clause (i), (ii) or (iii) of Paragraph 2(e) (but only if the action results in an adjustment in the Conversion Price), the Obligor shall, within 30 days following such action, give notice to each Holder, sent by mail, first class postage prepaid, to each Holder at its address appearing on the Obligor’s records, which notice shall specify the date of any such action and such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Conversion Price and the number, kind or class of shares or other securities or property which are or shall be deliverable upon conversion of the Principal Amount of this Note. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

(g)           Treasury Stock . For the purposes of this Paragraph 2, the sale or other disposition of any Common Stock theretofore held in the Obligor’s treasury shall be deemed to be an issuance thereof.

(h)           Costs . The Obligor shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of shares of Common Stock upon conversion of any Principal Amount of this Note; provided that the Obligor shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or

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delivery of any certificate for such shares in a name other than that of the Holder of the Principal Amount of this Note in respect of which such shares are being issued.

(i)            Reservation of Shares . The Obligor shall reserve at all times so long as any Principal Amount of this Note remain outstanding out of its treasury stock (if applicable) or its authorized but unissued shares, or both, solely for the purpose of effecting the conversion of the Principal Amount of this Note, sufficient shares of Common Stock to provide for the conversion of all outstanding Principal Amount of this Note.

3.             Representations and Warranties of the Obligor . The Obligor hereby represents and warrants to the Holder as of the date hereof that:

(a)           Organization; Standing and Power . The Obligor is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority required to own, lease and operate its properties and to carry on its business as currently being conducted. The Obligor is not required to be qualified or licensed as a foreign corporation in any other jurisdiction to conduct its business as currently conducted.

(b)           Authorization . The Obligor has all requisite corporate power and authority to execute and enter into this Note and consummate the transactions contemplated by this Note, including the issuance, sale and delivery of the shares of Common Stock issuable upon Conversion. All corporate action on the part of the Obligor neces