RESEARCH AND EXCLUSIVE LICENSE OPTION AGREEMENT

1.

Definitions and Interpretation

1.1.

The foregoing preamble and Annexes hereto form an integral part of this Agreement.

1.2.

In this Agreement the terms below shall bear the respective meanings assigned to them below and other capitalized terms shall bear the respective meanings assigned to them in their parenthetical definition, unless specifically stated otherwise:

1.2.1.

“ Affiliate ” shall mean, with respect to any Party, any person, organization or entity directly or indirectly controlling, controlled by or under common control with, such Party.  For purposes of this definition only, “control” of another person, organization or entity shall mean the ability, directly or indirectly, to direct the activities of the relevant entity, and shall include, without limitation (i) ownership or direct control of fifty percent (50%) or more of the outstanding voting stock or other ownership interest of the other organization or entity, or (ii) direct or indirect possession, of the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the organization or other entity.

1.2.2.

“ Combination Product ” shall mean a product which comprises (i) the Licensed Product, and (ii) at least one other active ingredient, which, if administered independently of the Licensed Product, would have a clinical effect.

1.2.3.

“ Confidential Information ” shall have the meaning ascribed to it in Section 15.1.

1.2.4.

[Intentionally Deleted.]

1.2.5.

“ Effective Date ” shall have the meaning ascribed to it at the beginning of this Agreement.

1.2.6.

“ Final Response ” shall have the meaning ascribed to it in Section 2.1.10.

1.2.7.

“ Final Trial Development Report ” shall have the meaning assigned to such term in Section 2.1.8.

1.2.8.

“ First Commercial Sale ” shall mean, with respect to the Licensed Product the first commercial sale to a third party, in exchange for cash or some equivalent to which value can be assigned, after the obtaining of all necessary regulatory and other approvals required in order to commercially sell and market the Licensed Product in the country in which the sale is made, other than the sale of the Licensed Product for experimental, testing, compassionate or promotional purposes.

1.2.9.

“ Further Sublicense ” and “ Further Sublicensee ” shall have the meanings ascribed to them in Section 4.4.

1.2.10.

“ Generic Product ” shall mean, on a country-by-country basis, and a Licensed Product by Licensed Product basis, a product independently developed by a third party (i) having the same composition of matter as the Licensed Product or which has a marketing approval as a generic product by the regulatory authorities, (ii) can reasonably be or is reasonably used for the same indication or indications for which the Licensed Product is approved and which could not have been sold or with respect to which a license would have been required to be obtained from Rexahn, if patent or other exclusivity rights covering the Licensed Product would have been in full force and effect, and (iii) that (a) following the First Commercial Sale of such Generic Product the annual Net Sales of the Licensed Product has declined in that year by greater than *** percent (***%) compared to the average annual Net Sales of the Licensed Product during the *** (***) *** preceding the First Commercial Sale of such Generic Product, or (b) within *** *** following the First Commercial Sale of such Generic Product, it attains a market share of more than *** percent (***%) of the relevant market for the Licensed Product, as determined by reference to IMS or a similar source commonly recognized in the industry.  However, a product shall not be considered as a Generic Product if Teva or anyone on its behalf was involved in its approval or commercialization.

1.2.11.

“Generic Royalty Payments” shall have the meaning ascribed to it in Section 6.4.

1.2.12.

“ Improvements ” shall mean all know-how, processes and methods embodying RX-3117, or which are utilized in the production or use thereof, owned by Rexahn or licensed to it as of the Effective Date or that shall be developed following the Effective Date in the course of the R&D Program, or otherwise, by or for Rexahn, at any time.

1.2.13.

“Incapacitated Party” shall have the meaning ascribed to it in Section 28.1.

1.2.14.

“ IND” means an investigational new drug application, as described in 21 C.F.R. Section 312.23, filed for purposes of conducting clinical trials in accordance with the requirements of the United States Food, Drug and Cosmetic Act of 1938, as amended, and the rules and regulations promulgated thereunder, including all supplements and amendments thereto relating to the use of the Licensed Product, ownership of which shall be transferred to Teva by Rexahn upon and subject to issuance of the License Notice.

1.2.15.

“Initial Response” shall have the meaning ascribed to it in Section 2.1.10.

1.2.16.

“ IP Rights ” shall mean all vested, contingent and future intellectual property rights including but not limited to: (i) all inventions, materials, compounds, compositions, substances, methods, processes, techniques, know-how, technology, data, information, discoveries and other results of whatsoever nature, and any patents, copyrights, proprietary intellectual or industrial rights directly or indirectly deriving therefrom, as well as provisionals, patent applications (whether pending or not), and patent disclosures together with all reissuances, continuations, continuations in part, revisions, extensions, and reexaminations thereof; (ii) all trade marks, service marks, copyrights, designs, trade styles, logos, trade dress, and corporate names, including all goodwill associated therewith; (iii) any work of authorship, regardless of copyrightability, all compilations, all copyrights and (iv) all trade secrets, confidential information and proprietary processes.

1.2.17.

“ License ” shall have the meaning ascribed to it in Section 2.2.1.

1.2.18.

“ License Notice ” shall have the meaning ascribed to it in Section 2.2.2.

1.2.19.

“ License Option ” shall have the meaning ascribed to it in Section 2.2.1.

1.2.20.

“ Licensed Information ” shall mean IP Rights in and to RX-3117, and its use, production and formulation.

1.2.21.

“ Licensed Product(s) ” shall have the meaning ascribed to it in Section 2.2.1.

1.2.22.

“ Liens ” shall have the meaning ascribed to it in Section 10.2.1.

1.2.23.

“ Milestone ” shall have the meaning ascribed to it in Section 6.1.

1.2.24.

“ Milestone Payments ” shall have the meaning ascribed to it in Section 6.1.

1.2.25.

“ Net Sales ” shall mean with respect to the Licensed Product, the total amounts received by Teva and/or its Affiliates, Sublicensees or Further Sublicensees in respect of the Licensed Product, as established in a bona fide arms-length transaction with an unrelated third party, less the following items (as they apply to the Licensed Product) (collectively, the “Deductions”): (i) quantity and/or cash discounts actually allowed or taken; (ii) customs, duties, sales, withholding and similar taxes, if any, imposed on the Licensed Product (in finished form), to the extent applicable to such sale and included in the invoice in respect of such sale; (iii) amounts actually allowed or credited by reason of rejections, return of goods (including as a result of recalls), any retroactive price reductions or allowances specifically identifiable as relating to the Licensed Product (including those resulting from inventory management or similar agreements with wholesalers); (iv) amounts incurred resulting from government mandated rebate programs (or any agency thereof); (v) third party (a) rebates, (b) freight, postage, shipping and applicable insurance charges, to the extent the same are separately itemized on invoices and actually paid as evidenced by invoices or other appropriate supporting documentation, and (c) chargebacks or similar price concessions related to the sale of the Licensed Product; (vi) reasonable royalties paid to third parties by Teva, its Affiliates or Sub-Licensees in respect of the use of third party’s IP Rights which are required to commercialize the Licensed Product; and (vii) the cost of reasonable quantities of samples, provided the quantity of Licensed Product actually utilized for purposes of such samples (to the extent actually borne by Teva and/or its affiliates, Sublicensees or Further Sublicesees) shall not exceed *** percent (***%) of the volume of annual Licensed Product sales during any given year during the term of this Agreement.  All of the foregoing shall be calculated in accordance with U.S. GAAP.  For the avoidance of doubt, specific Deductions shall only be taken into account once when calculating Net Sales.

1.2.26.

“ Option Period ” shall have the meaning ascribed to it in Section 2.2.1.

1.2.27.

“ Patents ” shall mean U.S. Patent 7,405,214B2 and all additional patent applications/patents that may be filed by or for Rexahn covering RX-3117 or any of the Improvements.  As of the Effective Date, the Patents include all patents and patent applications listed in Annex 2   attached hereto.

1.2.28.

“ Phase I Clinical Trial ” shall mean, as to a particular product for a particular indication, the initial controlled and lawful study in humans of the safety of such product for such indication, which is prospectively designed to generate data to support commencing a Phase II Clinical Trial of such product for such indication.

1.2.29.

“ Phase II Clinical Trial ” shall mean, as to a particular product for a particular indication, the initial controlled and lawful study in humans of the safety, dose ranging and efficacy of such product for such indication, which is prospectively designed to generate data to support commencing a Phase III Clinical Trial of such product for such indication.

1.2.30.

“ Phase III Clinical Trial ” shall mean, as to a particular product for a particular indication, the large scale human clinical trials conducted in humans of the safety and efficacy of such product for such indication, which is prospectively designed to demonstrate statistically whether such product is safe and effective for use in such indication in order to file an application for regulatory approval with respect to such product for such indication.

1.2.31.

“ Pre-Clinical Activities ” shall mean those activities required to be undertaken in order to file an IND application with the United States Food and Drug Administration (“FDA”) or an equivalent application to a similar foreign regulatory agency in another jurisdiction, which may include, inter alia, managing animal studies, as well as toxicology studies.  Pre-Clinical Activities shall not include testing, experimentation or other use in human patients.

1.2.32.

“Primary EU Markets” shall mean the United Kingdom, Germany, France, Italy and Spain.

1.2.33.

“ R&D Budget ” shall have the meaning ascribed to it in Section 2.1.4.

1.2.34.

“ R&D Committee ” shall have the meaning ascribed to it in Section 3.1.

1.2.35.

“ R&D Program ” shall have the meaning ascribed to it in Section 2.1.1.

1.2.36.

“ Rexahn IP ” shall mean all the IP Rights in and to RX-3117 and the Improvements through the date of provision of the License Notice by Teva to Rexahn, and the Patents.

1.2.37.

“ Royalty Payments ” shall have the meaning ascribed to it in Section 6.3.

1.2.38.

“ Royalty Term ” shall mean in relation to the Licensed Product on a country by country basis the period commencing upon the First Commercial Sale of the Licensed Product in the relevant country and expiring on the later of: (i) *** (***) years after that date, or (ii) the expiry of a Valid Patent Claim covering the main active ingredients of the Licensed Product.

1.2.39.

“ RX-3117 ” shall mean the compound as described by claim 4 of U.S. Patent No. 7,405,214B2.

1.2.40.

“ Sales Milestone ” shall have the meaning ascribed to it in Section 6.2.

1.2.41.

“Sales Milestone Payments” shall have the meaning ascribed to it in Section 6.2.

1.2.42.

“ Sublicense ” shall mean any right granted, license given, or agreement entered into, by Teva and/or its Affiliates and/or Sublicensees to or with any other person or entity (whether or not such grant of rights, license given or agreement entered into is described as a sublicense or otherwise), permitting any use of the Licensed Information (or any part thereof) or any right to research, develop, make, have made, register, import, manufacture, use, sell, offer for sale, produce, sublicense, commercialize and/or distribute the Licensed Product for any indication; and the term “ Sublicensee ” shall be construed accordingly.

1.2.43.

“ Teva IP ” shall have the meaning ascribed to it in Section 8.3.

1.2.44.

“ Valid Patent Claim ” shall mean a claim of an issued and unexpired patent which has not been revoked and held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been disclaimed, denied or admitted to be invalid or unenforceable through reexamination, reissue, disclaimer or otherwise.

1.3.

In this Agreement, words importing the singular shall include the plural and vice-versa and words importing any gender shall include all other genders and references to persons shall include partnerships, corporations and unincorporated associations.

1.4.

The words “including” and “includes” mean including, without limiting the generality of any description preceding such terms.

1.5.

In the event of any discrepancy between the terms of this Agreement and any of the Annexes hereto, the terms of this Agreement shall prevail.

1.6.

Section, paragraph and annex headings shall not affect the interpretation of this Agreement.

2.

The R&D Program

2.1.

The R&D Program – Pre-Clinical Activities

2.1.1.

Rexahn shall carry out a development program covering the Pre-Clinical Activities, which program shall include all of the Pre-Clinical Requirements (as such term is defined in the Securities Purchase Agreement) and be in accordance with the general outline of activities and time schedule agreed between the Parties prior to the Initial Closing under the Securities Purchase Agreement (the “R&D Program”). The R&D Program shall be supplemented by more detailed programs per each stage of development and shall be updated from time to time during the performance of such R&D Program by the R&D Committee (as such term is defined in Section 3.1 below).  The R&D Program and each such update thereto shall form a part of this Agreement and shall be appended to the signature copies for the sake of good order.

2.1.2.

For the avoidance of doubt, any amendment to the R&D Program involving a change to the R&D Budget of the lower of at least (i) US$***  (*** US dollars), in the aggregate, or (ii) *** percent (***%) of the R&D Budget for the applicable year shall require the prior written approval of the R&D Committee.

2.1.3.

Rexahn shall begin performing the R&D Program immediately following the Initial Closing under the Securities Purchase Agreement.

2.1.4.

Rexahn hereby reconfirms its agreement to utilize that portion of Teva’s investments under the Securities Purchase Agreement that is intended to cover the R&D Budget solely for the purpose of carrying out the R&D Program (directly and through contractors) strictly in accordance with the budget (including updates) to be proposed by Rexahn and approved in writing by Teva (the “R&D Budget”).  Each update of the R&D Budget shall form a part of this Agreement and shall be appended to the signature copies for the sake of good order.

2.1.5.

Rexahn shall keep separate records of the expenses which it incurs in undertaking the R&D Program and shall provide Teva and the R&D Committee with detailed reports of Rexahn’s expenditures not less often than on a calendar quarter basis.

2.1.6.

For the avoidance of doubt, (i) any in-licensing of third party technology by Rexahn for the purposes of the performance of the R&D Program and/or (ii) any use of third party technology by Rexahn for the purposes of the performance of the R&D Program, shall require the prior written agreement of Teva.

2.1.7.

At the end of each calendar quarter during the course of the R&D Program, Rexahn shall provide Teva with periodic progress reports regarding the progress of the R&D Program, in a form and containing the substance to be agreed in advance by the R&D Committee.

2.1.8.

Not later than thirty days (30) after the completion of each of the Pre-Clinical Activities, unless otherwise agreed by the R&D Committee in writing, Rexahn shall provide Teva with a report summarizing said Pre-Clinical Activities in the context of the R&D Program, and the results of same, in a form and containing the substance to be agreed by the R&D Committee (each a “Final Trial Development Report”).

2.1.9.

Teva’s representative(s) on the R&D Committee may, from time to time, request updates regarding the progress of the R&D Program, in addition to the periodic progress reports, and Rexahn shall provide any additional update that Teva’s representative(s) on the R&D Committee may reasonably request.

2.1.10.

After receipt by Teva of each Final Trial Development Report, if Teva wishes to receive further information from Rexahn it shall so advise Rexahn by written notice specifying the additional information requested (the “First Notice”).  Teva agrees to deliver any such First Notice to Rexahn no later than thirty (30) days after Teva’s receipt of the relevant Final Trial Development Report.  Rexahn will provide such additional information within a reasonable time, but not later than thirty (30) days following receipt of the First Notice (the “Initial Response”).  If following receipt of the Initial Response Teva wishes to receive further information from Rexahn, it shall so advise Rexahn by written notice specifying such additional information requested (the “Second Notice”).  Teva agrees to deliver any such Second Notice to Rexahn no later than thirty (30) days after Teva’s receipt of the Initial Response.  Rexahn will provide such additional information within a reasonable time but not later than thirty (30) days following receipt of the Second Notice (the “Final Response”).  If the Initial Response, together with the Final Response provide the full and complete information reasonably requested by Teva, then following submission of the Final Response Rexahn shall not be required to provide any additional information to Teva in connection with the Final Trial Development Report.

2.1.11.

Rexahn shall perform its obligations under the R&D Program in accordance with all applicable laws, rules and regulations, and shall procure the receipt of all approvals and consents necessary for the performance of its obligations under the R&D Program.

2.1.12.

Rexahn shall not be entitled to subcontract its obligations to perform any Material Task (as term is defined below) under the R&D Program to any third party without the prior written approval of Teva, which approval shall not be unreasonably withheld or delayed.  For the purposes of this Section 2.1.12 a “Material Task” shall mean any task in respect of which the subcontract expenses equal or exceed the lower of (i) US$100,000 (one-hundred thousand US dollars), in the aggregate, or (ii) ten percent (10%) of the R&D Budget for the applicable year(s) in which the relevant obligations are performed by a subcontractor.  Without derogating from the preceding sentence, if Rexahn wishes to subcontract a Material Task or any part thereof, Rexahn shall notify the R&D Committee and Teva in writing, and Teva shall have the right of first option, at its sole discretion (but shall not be obligated), to perform such tasks as Rexahn’s subcontractor, at a cost mutually agreed upon by Teva and Rexahn.  The performance of any part of the R&D Program by any subcontractor shall not relieve Rexahn of or reduce its obligations under this Agreement.

2.2.

Teva’s Option

2.2.1.

From the Effective Date until forty-five (45) days following the issuance of the IND for RX-3117 (the “Option Period”), Teva shall have the exclusive right, but not the obligation (the “License Option”), exercisable at any time during the Option Period, to receive the sole and exclusive, royalty-bearing, worldwide license herein to use the Licensed Information to research, develop, make, have made, register, import, manufacture, use, sell, offer for sale, produce, commercialize and distribute products embodying, based on or using the Licensed Information for all indications (collectively the “Licensed Product”), and to sublicense any such activities (the “License”).

2.2.2.

If Teva elects to take the License, it shall provide written notice of its decision to Rexahn prior to the expiration of the Option Period (the “License Notice”), and as of the date of the provision of the License Notice, the grant of the License to Teva shall become effective.

2.2.3.

Prior to the expiration of the Option Period, Teva’s representatives shall have the right (at Teva’s sole expense) to visit Rexahn’s facilities for the purposes of conducting due diligence or audits in relation to Rexahn and the Rexahn IP and deciding whether or not to take the License, upon providing Rexahn with reasonable notice of such visits or audits.

2.2.4.

Prior to the expiration of the Option Period, Rexahn shall not discuss or negotiate or enter into any transaction with any third party regarding the Licensed Information without the prior written approval of Teva.

2.2.5.

If Teva does not serve the License Notice upon Rexahn within the Option Period, then this Agreement shall automatically expire at the end of the Option Period without any further actions by either Party.  In this event, other than the obligations set forth in Section 15 (Confidentiality), Section 11 (Term and Termination) and such other obligations intended to survive termination or expiry of this Agreement pursuant to Section 11.10, the Parties shall not be obligated in any manner towards each other with respect to the subject matter of this Agreement.

3.

Research and Development Committee

3.1.

The Parties will establish and maintain a Research and Development Committee (the “R&D Committee”) throughout the R&D Program.  The R&D Committee shall have the authority to approve, update and monitor the R&D Program and the R&D Budget and any material deviation therefrom, and generally monitor performance thereunder. The R&D Committee shall make decisions on issues that arise in respect of the R&D Program and its performance and shall establish and periodically review all draft protocols and draft reports, draft expert reports, draft summaries and final versions of same, and the commercial objectives and activities set forth as part of the R&D Program.  The R&D Committee shall be comprised of four members, having one vote each, of which two shall be appointed by each Party, including one co-chairperson appointed by each party.  The R&D Committee shall meet (either in person by video conference or by telephone) periodically (but in any event no less than quarterly) during the course of the R&D Program.

3.2.

At each R&D Committee meeting, at least one member appointed by each Party present in person or by telephone shall constitute a quorum.  Each Party shall have equal voting power, whether represented by one or two committee members, on all matters before the R&D Committee.

3.3.

If during the course of the R&D Program the members of the R&D Committee cannot agree on an issue under the scope of its authority within fourteen (14) days of the issue arising, then the members shall refer the issue to the VP of Innovative Ventures of Teva and the CEO of Rexahn for resolution. If no such resolution is achieved within fourteen (14) days, then Teva shall have the determining vote.

4.

License Grant

4.1.

Subject only to Teva serving the License Notice on Rexahn in accordance with Section 2.2.2, Rexahn hereby grants Teva the License.

4.2.

If Teva informs Rexahn that any additional IP Rights or knowhow either owned by or licensed to Rexahn which does not constitute part of the Rexahn IP and which is reasonably required to be licensed to Teva in order for Teva to commercialize any Licensed Product(s), then, subject to any third party restrictions, the relevant portion of the same shall be deemed as licensed to Teva on a non-exclusive basis, and shall otherwise be treated as the Licensed Information covered by the License hereunder, mutatis mutandis .

4.3.

From the Effective Date and until the expiration of the Option Period, Rexahn shall not, without Teva’s prior written consent, enter into any agreement, arrangement or commitment according to which a third party is granted any rights with respect to any portion of the Licensed Information or the Licensed Product.  Furthermore, from the Effective Date and until the expiration of the Option Period, Rexahn shall not without Teva’s prior written consent enter into any agreement, arrangement or commitment that would derogate from or conflict with the rights granted to Teva pursuant to Section 4.2.

4.4.

Teva shall have the right to grant (whole or partial) Sublicenses to third parties (and such third parties shall be entitled to grant further Sublicenses (each, a “Further Sublicense” and the term “Further Sublicensee” shall be construed accordingly) under the License), on terms and conditions consistent with the terms of this Agreement and Teva shall be entitled to determine the commercial terms of any such Sublicense, provided that with respect to each Sublicense Teva notifies Rexahn upon signature thereof, and provides Rexahn with the name of the Sublicensee and the scope and territory of the Sublicense.  The grant of any Sublicenses and Further Sublicenses shall not relieve the Parties of or reduce their obligations to each other under this Agreement.  The term of any Sublicense shall be limited to the term of the License and will terminate upon the expiration or the termination of the License for any reason whatsoever, provided, however, that for each Sublicensee, upon termination of the License with Teva, if the Sublicensee is not then in breach of its Sublicensee agreement, and provided that such Sublicensee has substantially similar financial and marketing capabilities as Teva, Rexahn shall be obligated, at the joint request of the Sublicensee and Teva to enter into a new license agreement with such Sublicensee on substantially the same terms as this Agreement (with Teva having no obligations or liabilities thereunder).  Teva shall provide Rexahn with an executed copy of each Sublicense agreement (including any Further Sublicense agreements – to the extent available to Teva) provided that Teva may redact information or parts of any such agreement that is not material to Rexahn or that is subject to obligations of confidentiality, within thirty (30) days of execution of the relevant Sublicense Agreement, and shall require any Sublicensee to do the same.  None of the provisions of this Section 4.4 shall be construed to limit Teva’s obligation to share the financial terms of any Sublicense agreement as may be reasonably necessary for Rexahn to verify from time to time the accuracy of amounts payable by Teva to Rexahn hereunder.

4.5.

Without limiting the foregoing or any of Teva’s obligations under this Agreement relating to the grant of Sublicenses or Further Sublicenses, Teva shall be entitled to subcontract the conduct or performance of any activity concerning the Licensed Product to a third party, and such subcontract shall not be considered to be de facto a grant of a sublicense.

4.6.

Throughout the term of this License, Rexahn will not directly, or indirectly (through licensees or otherwise), distribute, promote, market or sell any product that embodies RX-3117 or any derivative thereof.   Further, from the Effective Date, until the *** year anniversary of the Initial Closing under the Securities Purchase Agreement, Rexahn agrees not to directly or indirectly license any third party to research, develop, make, register, import, manufacture, use, sell, offer for sale, produce, sublicense, distribute or otherwise commercialize an anti-metabolite product (an “Anti-metabolite License”).

4.7.

If at any time after the foregoing *** (***) year period Rexahn desires to directly or indirectly grant an Anti-metabolite License, then Rexahn shall comply with the provisions of this Section 4.7.  Rexahn shall first notify Teva in writing of Rexahn's intention to grant an Anti-metabolite License, which notice shall specify with particularity the anti-metabolite product to be licensed.  If within twenty-one (21) days of its receipt of such notice Teva informs Rexahn by a further notice that it wishes to negotiate the terms of an Anti-metabolite License in and to such anti-metabolite product, then Teva shall have the exclusive right, for a period of *** (***) days after issuance of its further notice to Rexahn, to negotiate the terms of such Anti-metabolite License with Rexahn.  During such *** (***) day period the parties shall negotiate in good faith and Rexahn shall not provide any information concerning such anti-metabolite product to, or engage in any discussions concerning the anti-metabolite product with any third party.  If at the conclusion of the *** (***) day period Teva and Rexahn  are unable to agree on the material terms of an Anti-metabolite License, then Rexahn may negotiate and enter into an Anti-metabolite License with a third party for the particular anti-metabolite product specified in Rexahn's notice to Teva; provided, however, that the value in the aggregate of any Anti-metabolite License entered into between Rexahn and a third party shall be equal to at least 110% of the aggregate value of the best offer made by Teva during the *** (***) day negotiating period; and further provided, that if Rexahn shall not have entered into an Anti-metabolite License with a third party relating to such anti-metabolite product within *** (***) days of the expiration of the foregoing *** (***) day negotiating period, then Rexahn shall first comply again with the provisions of this Section 4.7 before negotiating with or entering into an Anti-metabolite License with a third party for such anti-metabolite product.

5.

Development and Commercialization of the Licensed Product

5.1.

Subject to Teva serving the License Notice on Rexahn pursuant to Section 2.2.2, Teva undertakes at its own expense to make such commercially reasonable efforts to develop and commercialize the Licensed Product as are consistent with the commercial efforts which Teva ordinarily takes to develop and commercialize products of similar potential and at similar stages of development, taking into account the cost effectiveness of efforts or resources, the competitiveness of alternative compounds or products that are expected to be in the marketplace, the patent and other proprietary position of the Licensed Product, the profitability of the Licensed Product and alternative compounds or products and other relevant commercial factors.

5.2.

Subject to Section 5.1, Teva shall have responsibility for undertaking clinical development of the Licensed Product and preparing, submitting, seeking approval of, maintaining and updating marketing approval applications, marketing approvals and other regulatory approvals and applications for regulatory approvals in respect of the Licensed Product.  Teva will solely own, apply for and be the holder or owner of record for all applications and approvals relating to the Licensed Product. Without limiting the generality of the immediately preceding sentence, Rexahn shall transfer and assign to Teva all regulatory filings, approvals and applications relating to the Licensed Product, including all INDs granted by the FDA, and all related documentation and information.  Subject to Section 5.5, Teva will be solely responsible for commercializing the Licensed Product during the term of this Agreement, including, without limitation, manufacture, marketing, promotion, patient assistance programs, medical education, price negotiation and setting, reimbursement negotiation, customer relations, sales, order processing, invoicing and collection, preparation of sales records and reports, warehousing, inventory management, logistics and distribution (including, without limitation, the handling of returns, market withdrawals, field corrections and recalls).

5.3.

Teva shall provide Rexahn with a written report summarizing the progress, status, and results of the material activities described in Section 5.2 for the preceding six (6) month period, on a semi-annual basis with respect to the Licensed Product.  Each such report shall be prepared in a manner consistent with reports issued by Teva in the ordinary course of business.  In addition, no more than once each  calendar year, Rexahn may request a meeting with Teva to discuss such report(s) on a date and at a location as shall be mutually agreed by the parties hereto.

5.4.

For the avoidance of doubt, nothing contained in this Agreement shall be construed as a warranty by Teva that any efforts to be made by Teva pursuant to this Agreement, including without limitation any development or any commercialization to be carried out by Teva pursuant to this Agreement, will actually achieve their aims or any other results or succeed, and Teva makes no warranties whatsoever as to any results to be achieved in consequence of the carrying out of any such development, commercialization, efforts or activities.  Furthermore, Teva makes no representation to the effect that the commercialization of the Licensed Product will succeed, or that Teva will be able to sell a particular quantity of the Licensed Product.

5.5.

If Rexahn has the necessary capabilities and infrastructure to adequately co-promote the Licensed Product in ***, the determination of which shall be made by the mutual agreement of Rexahn and Teva (or if Rexahn and Teva cannot come to a mutual agreement, then the parties shall select a mutually agreeable third party to make such determination, which determination shall be binding on the parties) following the written request of Rexahn, then within sixty (60) days of such determination, the Parties shall in good faith negotiate the grant to Rexahn of such limited co-promotion rights for ***.  The grant of such rights shall, however, also be subject to the Parties mutually agreeing upon the fee and royalty structure as well as pricing for the Licensed Product payable to Teva by Rexahn.

6.

Milestones, Royalty Payments, Generic Royalty Payments and Sublicense Fees

6.1.

In consideration for the grant of the License upon the issuance by Teva of the License Notice, Teva shall make the following payments (the “Milestone Payments”) to Rexahn upon achievement of the relevant milestones (each, a “Milestone”):

6.1.1.

upon the first indication of the Licensed Product reaching any of the following Milestones:

(a)

Upon the later of (i) receipt of the IND for the Licensed Product and (ii) the issuance by Teva of the License Notice — a payment of $*** (*** US dollars);

(b)

Upon the first actual delivery/administration of the Licensed Product to the first patient participating in the Phase I Clinical Trials in respect of the Licensed Product — a payment of $*** (*** US dollars);

(c)

Upon the first actual delivery/administration of the Licensed Product to the first patient participating in the Phase II Clinical Trials in respect of the Licensed Product — a payment of $*** (*** US dollars);

(d)

Upon the first actual delivery/administration of the Licensed Product to the first patient participating in the Phase III Clinical Trials in respect of the Licensed Product — a payment of $*** (*** US dollars);

(e)

Upon the FDA granting approval of the New Drug Application for the Licensed Product — $*** (*** US dollars);

(f)

Upon marketing approval being granted by the EMEA for the Licensed Product — a payment of $*** (*** US dollars);

(g)

Upon the