Document:

Exhibit 10.3

                               [FORM OF WARRANT]

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B)
AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY THE SECURITIES.

                           HEMISPHERX BIOPHARMA, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.:  [        ]                              Number of Shares:  253,551
Date of Issuance: July 10, 2003                      (subject to adjustment)

      HEMISPHERX BIOPHARMA, INC., a Delaware corporation (the "Company"), hereby
certifies that, for Ten United States Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, ____________, the registered holder hereof or its permitted
assigns, is entitled, subject to the terms and conditions set forth below, to
purchase from the Company upon surrender of this Warrant, at any time or times
on or after the date hereof, but not after 11:59 P.M., New York City Time, on
the Expiration Date (as defined herein) 253,551 fully paid nonassessable shares
of Common Stock (as defined herein) of the Company at the Warrant Exercise Price
per share provided in Section 1(b) below. This Warrant shall be exercisable for
a number of Warrant Shares equal to: (i) prior to the Second Payment Date (as
defined in the Securities Purchase Agreement), 66.67% of the maximum number of
Warrant Shares issuable upon exercise of this Warrant; and (ii) after the Second
Payment Date, 100% of the maximum number of Warrant Shares issuable upon
exercise of this Warrant. Notwithstanding the foregoing, the Company shall not
effect the exercise of this Warrant and no holder of this Warrant shall have the
right to exercise this Warrant to the extent that after giving effect to such
exercise, such Person (together with such Person's affiliates), would have
acquired, through exercise of this Warrant or otherwise, beneficial ownership of
a number of shares of Common Stock that, when added to the number of shares of
Common Stock beneficially owned by such Person (together with such Person's
affiliates), exceeds 4.99% of the number of shares of Common Stock outstanding
immediately after giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by
such Person and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude shares of Common
Stock which would be issuable upon (i) exercise of the remaining,

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unexercised portion of this Warrant beneficially owned by such Person and its
affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned by such Person
and its affiliates (including, without limitation, any convertible notes,
debentures or preferred stock) subject to a limitation on conversion or exercise
analogous to the limitation contained herein. Except as set forth in the
preceding sentence, for purposes of this paragraph, beneficial ownership shall
be calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended. Upon the written request of any holder, the Company shall
promptly, but in no event later than two (2) Business Days following the receipt
of such notice, confirm in writing to any such holder the number of shares of
Common Stock then outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the exercise of Warrants
(as defined below) by such holder and its affiliates since the date as of which
such number of outstanding shares of Common Stock was last reported.

      Section 1.

      a. SECURITIES PURCHASE AGREEMENT. This Warrant (as defined herein) is one
of a series of Warrants issued pursuant to Section 1 of that certain Securities
Purchase Agreement dated as of July 10, 2003, among the Company and the Persons
referred to therein, as such agreement may be amended from time to time as
provided in such agreement (the "Securities Purchase Agreement").

      b. DEFINITIONS. The location of definitions used in this Warrant is set
forth on the Index of Terms attached hereto and the following words and terms as
used in this Warrant shall have the following meanings:

            (i) "Approved Stock Plan" means any employee benefit plan, stock
incentive plan or other similar plan or arrangement which has been approved by
the Board of Directors of the Company or a duly authorized committee thereof,
pursuant to which the Company's securities may be issued to any employee,
consultant, officer or director for services provided to the Company.

            (ii) "Bloomberg" means Bloomberg Financial Markets or any other
similar financial reporting service as may be selected from time to time by the
Company and the holders of the Warrants representing not less than 60% of the
shares of Common Stock issuable upon exercise of all Warrants issued on the
Original Issuance Date then outstanding.

            (iii) "Business Day" means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

            (iv) "Closing Sale Price" means, for any security as of any date,
the last closing trade price for such security on the Principal Market as
reported by Bloomberg, or if the Principal Market begins to operate on an
extended hours basis, and does not designate the closing trade price, then the
last trade price at 4:00 p.m., New York City Time, as reported by Bloomberg, or
if the foregoing do not apply, the last closing trade price of such security in
the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no last closing trade price is reported for
such security by Bloomberg, the last closing ask price of such security as
reported by

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Bloomberg, or, if no last closing ask price is reported for such security by
Bloomberg, the average of the highest bid price and the lowest ask price of any
market makers for such security as reported in the "pink sheets" by the National
Quotation Bureau, Inc. If the Closing Sale Price cannot be calculated for such
security on such date on any of the foregoing bases, the Closing Sale Price of
such security on such date shall be the fair market value as mutually determined
by the Company and the holders of the Warrants representing at least 60% of the
shares of Common Stock obtainable upon exercise of all Warrants issued on the
Original Issuance Date then outstanding. If the Company and the holders of the
Warrants are unable to agree upon the fair market value of the Common Stock,
then such dispute shall be resolved pursuant to Section 2(a) below. All such
determinations shall be appropriately adjusted for any stock dividend, stock
split or other similar transaction during such period. All fees and expenses of
such determinations shall be borne solely by the Company.

            (v) "Common Stock" means (i) the Company's common stock, par value
$0.001 per share, and (ii) any capital stock into which such Common Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.

            (vi) "Common Stock Deemed Outstanding" means, at any given time, the
number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock deemed to be outstanding pursuant to Sections
8(b)(i) and 8(b)(ii) hereof regardless of whether the Options or Convertible
Securities are actually exercisable at such time, but excluding any shares of
Common Stock owned or held by or for the account of the Company or issuable upon
conversion of the Convertible Debentures or exercise of the Warrants.

            (vii) "Convertible Debentures" means all of the Company's 6% Senior
Secured Convertible Debentures Due July 31, 2005 issued pursuant to the
Securities Purchase Agreement.

            (viii) "Convertible Securities" means any stock or securities (other
than Options) directly or indirectly convertible into or exchangeable or
exercisable for Common Stock.

            (ix) "Expiration Date" means July 31, 2008 or, if such date does not
fall on a Business Day or on a day on which trading takes place on the Principal
Market, then the next Business Day.

            (x) "Initial Warrant Exercise Price" shall be equal to $2.46,
subject to further adjustment as provided in Section 8, Adjustment of Warrant
Exercise Price and Number of Shares.

            (xi) "Option" means any rights, warrants or options to subscribe for
or purchase or otherwise acquire Common Stock or Convertible Securities.

            (xii) "Original Issuance Date" means the first date on which any
Warrants have been issued pursuant to the Securities Purchase Agreement.

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            (xiii) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

            (xiv) "Principal Market" means The American Stock Exchange ("Amex")
or if the Common Stock is not traded on Amex then the principal securities
exchange or trading market for the Common Stock.

            (xv) "Registration Rights Agreement" means that registration rights
agreement dated July 10, 2003 by and among the Company and the Persons referred
to therein, as such agreement may be amended from time to time as provided in
such agreement.

            (xvi) "Reset Warrant Exercise Price" shall mean the greater of (x)
the arithmetic average of the Weighted Average Price of the Common Stock for
each trading date beginning on the first trading date immediately following the
Original Issuance Date and ending on the final trading date immediately prior to
the one-year anniversary of the Original Issuance Date (which Weighted Average
Price on each such trading date during such period shall be appropriately
adjusted for any stock dividend, stock split or other similar transaction during
such period) and (y) 70% of the Initial Warrant Exercise Price (appropriately
adjusted for any stock dividend, stock split or other similar transaction during
such period).

            (xvii) "Securities Act" means the Securities Act of 1933, as
amended.

            (xviii) "Strategic Financing" shall mean the issuance of Common
Stock or Options in connection with any acquisition by the Company, by whatever
means, of any business, assets or technologies, or to any strategic investor,
vendor, customer, lease or similar arrangement, the primary purpose of which is
not to raise equity capital, provided that the aggregate number of shares of
Common Stock which the Company may issue pursuant to this definition shall not
exceed (i) 25% of the total outstanding equity on the Closing Date (as defined
in the Securities Purchase Agreement) in connection with any one or more related
issuances to strategic investors, vendors, customers, lessors or similar parties
or (ii) 40% of the total outstanding equity on the Closing Date (as defined in
the Securities Purchase Agreement) in connection with all issuances to strategic
investors, vendors, customers, lessors or similar parties (in each case, subject
to adjustment for stock splits, stock dividends, stock combination and similar
transactions).

            (xix) "Warrant" means the warrants to purchase shares of Common
Stock issued pursuant to the Securities Purchase Agreement and all warrants
issued in exchange, transfer or replacement thereof.

            (xx) "Warrant Exercise Price" shall be equal to: (i) from the
Original Issuance Date until the date immediately prior to the one-year
anniversary of the Original Issuance Date, the Initial Warrant Exercise Price,
and (ii) from and after such one-year anniversary, the lesser of (x) the Initial
Warrant Exercise Price and (y) the Reset Warrant Exercise Price, in each case
appropriately adjusted for any stock dividend, stock split or other similar
transaction during such period. The Warrant Exercise Price shall be subject to
further

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adjustment as provided in Section 8, Adjustment of Warrant Exercise Price and
Number of Shares.

            (xxi) "Warrant Shares" means all shares of Common Stock issuable
upon exercise of the Warrants.

            (xxii) "Weighted Average Price" shall mean, for any security as of
any date, the dollar volume-weighted average price per share for such security
on the Principal Market during the period beginning at 9:30 a.m., New York City
Time, and ending at 4:00 p.m., New York City Time, as reported by Bloomberg
through its "Volume at Price" function or, if the foregoing does not apply, the
dollar volume-weighted average price per share of such security in the
over-the-counter market on the electronic bulletin board for such security
during the period beginning at 9:30 a.m., New York City Time, and ending at 4:00
p.m., New York City Time, as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported in the "pink
sheets" by the National Quotation Bureau, Inc. If the Weighted Average Price
cannot be calculated for such security on such date on any of the foregoing
bases, the Weighted Average Price of such security on such date shall be the
fair market value as mutually determined by the Company and the holders of the
Warrants representing at least 60% of the shares of Common Stock obtainable upon
exercise of the Warrants issued on the Original Issuance Date then outstanding.
If the Company and the holders of the Warrants are unable to agree upon the fair
market value of the Common Stock, then such dispute shall be resolved pursuant
to Section 2(a) below with the term "Weighted Average Price" being substituted
for the term "Closing Sale Price." All such determinations shall be
appropriately adjusted for any stock dividend, stock split or other similar
transaction during such period. All fees and expenses of such determinations
shall be borne solely by the Company.

            Section 2. EXERCISE OF WARRANT.

      a. Subject to the terms and conditions hereof, this Warrant may be
exercised by the holder hereof then registered on the books of the Company, in
whole or in part, at any time on any Business Day on or after the opening of
business on the date hereof and prior to 5:00 P.M., New York City Time, on the
Expiration Date by (i) delivery of a written notice, in the form of the
subscription notice attached as EXHIBIT A hereto or a reasonable facsimile
thereof (the "Exercise Notice"), to the Company and the Company's designated
transfer agent (the "Transfer Agent"), of such holder's election to exercise
this Warrant, which notice shall specify the number of Warrant Shares to be
purchased, (ii)(A) payment to the Company of an amount equal to the Warrant
Exercise Price multiplied by the number of Warrant Shares as to which this
Warrant is being exercised (the "Aggregate Exercise Price") in cash or delivery
of a certified check or bank draft payable to the order of the Company or wire
transfer of immediately available funds or (B) by notifying the Company that
this Warrant is being exercised pursuant to a Cashless Exercise (as defined in
Section 2(e)), and (iii) the surrender of this Warrant or a copy of this Warrant
(provided it is accompanied by an indemnification undertaking with respect to
this Warrant in the case of its loss, theft or destruction) to a common carrier
for overnight delivery to the Company or by delivery of a facsimile copy of this
Warrant to the Company as soon as practicable following such date; provided,
that if such Warrant Shares are to be issued in

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any name other than that of the registered holder of this Warrant, such issuance
shall be deemed a transfer and the provisions of Section 7 shall be applicable.
In the event of any exercise of the rights represented by this Warrant in
compliance with this Section 2(a), the Company shall on the second (2nd)
Business Day (the "Warrant Share Delivery Date") following the date of its
receipt of the Exercise Notice, the Aggregate Exercise Price (or notice of
Cashless Exercise) and the original or a copy of this Warrant (provided it is
accompanied by an indemnification undertaking or other form of security
reasonably satisfactory to the Company with respect to this Warrant in the case
of its loss, theft or destruction) (collectively, the "Exercise Delivery
Documents"), (A) in the case of a public resale of such Warrant Shares in
accordance with the provisions of the Irrevocable Transfer Agent Instructions,
provided the Transfer Agent is participating in The Depository Trust Company
("DTC") Fast Automated Securities Transfer Program and, if required by DTC, the
holder provides a customary representation letter to DTC, at the holder's
request, credit such aggregate number of shares of Common Stock to which the
holder shall be entitled to the holder's or its designee's balance account with
DTC through its Deposit Withdrawal Agent Commission system or (B) issue and
deliver to the address as specified in the Exercise Notice, a certificate or
certificates in such denominations as may be requested by the holder in the
Exercise Notice, registered in the name of the holder or its designee, for the
number of shares of Common Stock to which the holder shall be entitled upon such
exercise. Upon delivery of the Exercise Delivery Documents, the holder of this
Warrant shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of this Warrant as required by
clause (iii) above or the certificates evidencing such Warrant Shares. In the
case of a dispute as to the determination of the Warrant Exercise Price, the
Closing Sale Price of a security or the arithmetic calculation of the number of
Warrant Shares, the Company shall promptly issue to the holder the number of
shares of Common Stock that is not disputed and shall submit the disputed
determinations or arithmetic calculations to the holder via facsimile within two
(2) Business Days of receipt of the holder's Exercise Notice. If the holder and
the Company are unable to agree upon the determination of the Warrant Exercise
Price, the Closing Sale Price or arithmetic calculation of the number of Warrant
Shares within one (1) Business Day of such disputed determination or arithmetic
calculation being submitted to the holder, then the Company shall immediately
submit via facsimile (i) the disputed determination of the Warrant Exercise
Price or the Closing Sale Price to an independent, reputable investment banking
firm selected jointly by the Company and the holder or (ii) the disputed
arithmetic calculation of the number of Warrant Shares to its independent,
outside accountant. The Company shall cause the investment banking firm or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the holder of the results no later than ten (10)
Business Days from the time it receives the disputed determinations or
calculations. Such investment banking firm's or accountant's determination or
calculation, as the case may be, shall be deemed conclusive absent manifest
error.

      b. Unless the rights represented by this Warrant shall have expired or
shall have been fully exercised (without regard to any limitation on exercise
hereunder), the Company shall, as soon as practicable using reasonable best
efforts and in no event later than five (5) Business Days after its receipt of
the Exercise Delivery Documents (the "Warrant Delivery Date") and at its own
expense, issue a new Warrant identical in all respects to this Warrant exercised
except it shall represent rights to purchase the number of Warrant Shares
purchasable (without regard to

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any limitation on exercise hereunder) immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to which such
Warrant is exercised.

      c. No fractional shares of Common Stock are to be issued upon the exercise
of this Warrant, but rather the number of shares of Common Stock issued upon
exercise of this Warrant shall be rounded up or down to the nearest whole
number.

      d. If the Company shall fail for any reason or for no reason to issue to
the holder within five (5) Business Days of receipt of the Exercise Delivery
Documents, a certificate for the number of shares of Common Stock to which the
holder is entitled or to credit the holder's designee's balance account with
DTC, in accordance with Section 2 hereof, for such number of shares of Common
Stock to which the holder is entitled upon the holder's exercise of this
Warrant, the Company shall, in addition to any other remedies under this Warrant
or the Securities Purchase Agreement or otherwise available to such holder,
including any indemnification under Section 8 of the Securities Purchase
Agreement, pay as additional damages in cash to such holder on each day after
the Warrant Share Delivery Date such exercise is not timely effected in an
amount equal to 0.05% multiplied by the product of (I) the sum of the number of
shares of Common Stock not issued to the holder on or prior to the Warrant Share
Delivery Date and to which such holder is entitled under the holder's Exercise
Notice and (II) the excess of the Closing Sale Price of the Common Stock on the
Warrant Share Delivery Date over the Warrant Exercise Price then in effect. The
foregoing notwithstanding, the damages set forth in this Section 2(d) shall be
stayed with respect to the number of shares of Common Stock for which there is a
good faith dispute being resolved pursuant to, and within the time periods
provided for in, Section 2(a), pending the resolution of such dispute.

      e. Notwithstanding anything contained herein to the contrary, if at any
time during the two (2) Business Day period immediately preceding the holder's
delivery of an Exercise Notice, a Registration Statement (as defined in the
Registration Rights Agreement) covering the Warrant Shares that are the subject
of the Exercise Notice (the "Unavailable Warrant Shares") is not available for
the resale of such Unavailable Warrant Shares, the holder of this Warrant may,
at its election exercised in its sole discretion, exercise this Warrant as to
any or all of such Unavailable Warrant Shares and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the "Net Number" of shares of Common Stock determined according to the
following formula (a "Cashless Exercise"):

                  Net Number = (A x B) - (A x C)
                               -----------------
                                       B

                  For purposes of the foregoing formula:

                        A = the total number of shares with respect to which
                        this Warrant is then being exercised.

                        B = the Closing Sale Price of the Common Stock on the
                        trading day immediately preceding the date of the
                        Exercise Notice.

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                        C = the Warrant Exercise Price then in effect for the
                        applicable Warrant Shares at the time of such
                        exercise.

      Section 3. COVENANTS AS TO COMMON STOCK. The Company hereby covenants and
agrees as follows:

      a. This Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized and validly
issued.

      b. All Warrant Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance and payment hereof in accordance
with the terms hereof, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges created by or through the Company with respect
to the issue thereof.

      c. During the period within which the rights represented by this Warrant
may be exercised, the Company will at all times have authorized and reserved at
least 135% of the number of shares of Common Stock needed to provide for the
exercise of the rights then represented by this Warrant (without regard to any
limitation on exercise hereunder)and the par value of said shares will at all
times be less than or equal to the applicable Warrant Exercise Price.

      d. The Company shall promptly secure the listing of the shares of Common
Stock issuable upon exercise of this Warrant (without regard to any limitation
on exercise hereunder) upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this Warrant) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all shares of Common Stock from time to time issuable upon the
exercise of this Warrant (without regard to any limitation on exercise
hereunder); and the Company shall so list on each national securities exchange
or automated quotation system, as the case may be, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon the
exercise of this Warrant (without regard to any limitation on exercise
hereunder) if and so long as any shares of the same class shall be listed on
such national securities exchange or automated quotation system.

      e. The Company will not, by amendment of its Articles of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder. Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Warrant
Exercise Price then in effect, (ii) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this
Warrant and (iii) will not take any action which results in any adjustment of
the Warrant Exercise Price if the total number of shares of Common Stock
issuable after the action upon the exercise of all of the Warrants would exceed
the total number of shares of Common Stock then authorized by the Company's
Articles of Incorporation and available for the purpose of issue upon such
exercise.

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      f. This Warrant will be binding upon any entity succeeding to the Company
by merger, consolidation or acquisition of all or substantially all of the
Company's assets.

      Section 4. TAXES. a. The Company shall pay any and all documentary, stamp,
transfer and other similar taxes which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant; provided,
however, that the Company shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or delivery of Common
Stock or other securities or property in a name other than that of the
registered holder of this Warrant to be exercised and such holder shall pay such
amount, if any, to cover any applicable transfer or similar tax.

      b. The Company and the Company's transfer agent shall be permitted to
withhold from any amounts payable to a registered holder of this Warrant or any
holder of Warrant Shares any taxes required by law to be withheld from such
amounts.

      c. Notwithstanding any other provision of this Agreement or any other
Transaction Document, any assignee or transferee shall agree that the Company
and the Company's transfer agent shall be permitted to withhold from any amounts
payable to such assignee or transferee any taxes required by law to be withheld
from such amounts. Unless exempt from the obligation to do so, each assignee or
transferee shall execute and deliver to the Company or the Company's transfer
agent, as applicable, two properly completed and duly executed copies of either
(i) U.S. Internal Revenue Service Form W-8BEN, or any successor form, (ii) U.S.
Internal Revenue Service Form W-8ECI, or any successor form, (iii) U.S. Internal
Revenue Service Form W-9, or any successor form, or (iv) other applicable form,
certificate or document prescribed by the U.S. Internal Revenue Service, as
applicable, in each case, indicating that such assignee or transferee is not
subject to "back-up withholding" for U.S. Federal income tax purposes. Each
assignee or transferee that does not deliver such forms pursuant to the
preceding sentence shall have the burden of proving to the Company's reasonable
satisfaction that it is exempt from such requirement or the Company and the
Company's transfer agent shall be entitled to withhold as provided in the first
sentence hereof. In addition, each assignee or transferee that is organized
under the laws of a jurisdiction other than the United States, any State thereof
or the District of Columbia (each, a "Non-U.S. Assignee or Transferee") shall
deliver to the Company and the Company's transfer agent, to the extent legally
able to do so, with respect to payments of dividends by the Company for U.S.
Federal income tax purposes, if applicable, two properly completed and duly
executed copies of either (i) U.S. Internal Revenue Service Form W-8BEN
(claiming a reduction of U.S. Federal withholding tax under an applicable income
tax treaty, if any), or any successor form, (ii) U.S. Internal Revenue Service
Form W-8ECI (claiming complete exemption from U.S. Federal withholding tax
because the income is effectively connected with a U.S. trade or business), or
any successor form, or (iii) other applicable form, certificate or document
prescribed by the U.S. Internal Revenue Service certifying as to such assignee's
or transferee's entitlement to an exemption from, or a reduction of, U.S.
Federal withholding tax on payments of dividends by the Company for U.S. Federal
income tax purposes. Each Non-U.S. Assignee or Transferee that does not deliver
a form or other document claiming a complete exemption from U.S. Federal
withholding tax shall have the burden of proving to the Company's reasonable
satisfaction that it is completely exempt from such tax or the Company and the
Company's transfer agent shall be entitled to withhold as provided in the second
sentence of this Section 4(c). The forms and other documents required to

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be delivered pursuant to this Section 4 shall be properly completed and duly
executed and shall be delivered on or prior to the date of such assignment or
transfer, and from time to time thereafter if requested by the Company or the
Company's transfer agent. In addition, each assignee and transferee shall
deliver such forms and other documents promptly upon the obsolescence or
invalidity of any form or documents previously delivered by such assignee or
transferee. Each assignee and transferee shall promptly notify the Company and
the Company's transfer agent at any time it determines that it is no longer in a
position to provide any previously delivered form, document or certificate to
the Company and the Company's transfer agent (or any form of certification
adopted by the U.S. taxing authorities for such purpose).

      Section 5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, no holder, as such, of this Warrant shall be
entitled to vote or receive dividends or be deemed the holder of shares of the
Company for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the holder of this Warrant of the Warrant Shares which he, she, or
it is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on such holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.

      Section 6. REPRESENTATIONS OF HOLDER. The holder of this Warrant, by the
acceptance hereof, represents and warrants that it is acquiring this Warrant,
and the Warrant Shares for its own account for investment only and not with a
view towards, or for sale in connection with, the public sale or distribution of
this Warrant or the Warrant Shares, except pursuant to sales registered or
exempted under the Securities Act; provided, however, that by making the
representations herein, the holder does not agree to hold this Warrant or any of
the Warrant Shares for any minimum or other specific term and reserves the right
to dispose of this Warrant and the Warrant Shares at any time in accordance with
or pursuant to a registration statement or an exemption under the Securities
Act. The holder of this Warrant further represents, by acceptance hereof, that,
as of this date, such holder is an "accredited investor" as such term is defined
in Rule 501(a) of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act (an "Accredited Investor").

      Section 7. OWNERSHIP AND TRANSFER.

      a. The Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the person in whose name this Warrant has been issued,
as well as the name and address of each transferee. The Company may treat the
person in whose name any Warrant is registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events recognizing any transfers made in accordance with the terms of
this Warrant.

                                       10
<PAGE>

      b. This Warrant and all rights hereunder shall be assignable and
transferable by the holder hereof without the consent of the Company upon
surrender of this Warrant with a properly executed assignment (in the form of
Exhibit B hereto) at the principal executive offices of the Company (or such
other office or agency of the Company as it may designate in writing to the
holder hereof); provided, that (x) either (i) the Warrant shall have been
registered under the Securities Act or (ii) the Company first shall have been
furnished with an opinion of counsel, in a form reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Securities Act and (y) such transfer or
assignment of this Warrant does not result in more than ten (10) holders of all
outstanding Warrants and any such part or portion of this Warrant constitutes at
least 10% of the number of Warrant Shares issuable upon exercise of all
outstanding Warrants (subject to appropriate adjustment for stock splits, stock
dividends, combinations, recapitalizations and other similar transactions) or
such lesser number if such transfer involves all of the Warrant Shares
represented by the Warrants then held by such transferor.

      c. The Company is obligated to register the Warrant Shares for resale
under the Securities Act pursuant to the Registration Rights Agreement. The
shares of Common Stock issuable upon exercise of this Warrant shall constitute
Registrable Securities (as such term is defined in the Registration Rights
Agreement). Each holder of this Warrant shall be entitled to all of the benefits
afforded to a holder of any such Registrable Securities under the Registration
Rights Agreement and such holder, by its acceptance of this Warrant, agrees and
shall agree to be bound by and to comply with the terms and conditions of the
Registration Rights Agreement applicable to such holder as a holder of such
Registrable Securities.

      Section 8. ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES. The
Warrant Exercise Price and the number of shares of Common Stock issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:

      a. ADJUSTMENT OF WARRANT EXERCISE PRICE. If and whenever on or after the
Warrant Date and prior to the twelve (12) month anniversary of the Warrant Date,
the Company issues or sells, or is deemed to have issued or sold, any shares of
Common Stock (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company, but excluding shares of Common Stock
(i) issued or deemed to have been issued by the Company in connection with an
Approved Stock Plan, (ii) issued or deemed to have been issued upon exercise of
the Warrants or issued upon the issuance or conversion of the Convertible
Debentures; (iii) issued upon exercise of Options or Convertible Securities
which are outstanding on the date immediately preceding the Warrant Date,
provided that such issuance of shares of Common Stock upon exercise of such
Options or Convertible Securities is made pursuant to the terms of such Options
or Convertible Securities in effect on the date immediately preceding the
Warrant Date and such Options or Convertible Securities are not amended after
the date immediately preceding the Warrant Date other than with respect to
Options originally issued pursuant to an Approved Stock Plan, (iv) issued
pursuant to a Strategic Financing; or (v) issued to the public pursuant to an
underwritten offering registered pursuant to the Securities Act (but in all
events excluding offerings pursuant to "equity lines" or similar products) ((i)
through (v) collectively, "Excluded Issuances")) for a consideration per share
(the "New Issuance Price") less than the Warrant Exercise Price in effect
immediately prior to such issuance or sale (each such sale or issuance, a
"Dilutive Issuance"), then concurrent with such issue or sale, the Warrant

                                       11
<PAGE>

Exercise Price then in effect shall be reduced to a price (subject to Section
8(f)) equal to the New Issuance Price. If and whenever on or after the twelve
(12) month anniversary of the Warrant Date and prior to the Expiration Date, the
Company issues or sells, or is deemed to have issued or sold, any shares of
Common Stock (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company, but excluding shares of Common Stock
issued or deemed to be issued pursuant to any Excluded Issuance) in a Dilutive
Issuance, then concurrent with such issue or sale, the Warrant Exercise Price
then in effect shall be reduced to a price (rounded to the nearest cent) equal
to the product of (x) the Warrant Exercise Price in effect immediately prior to
such issuance or sale and (y) the quotient determined by dividing (1) the sum of
(I) the product derived by multiplying the Warrant Exercise Price in effect
immediately prior to such Dilutive Issuance by the number of shares of Common
Stock Deemed Outstanding immediately prior to such issue or sale, plus (II) the
consideration, if any, received by the Company upon such Dilutive Issuance, by
(2) the product derived by multiplying the (I) the Warrant Exercise Price in
effect immediately prior to such Dilutive Issuance by (II) the number of shares
of Common Stock Deemed Outstanding immediately after such Dilutive Issuance.

      b. EFFECT ON WARRANT EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Warrant Exercise Price under Section 8(a) above, the
following shall be applicable:

            (i) ISSUANCE OF OPTIONS. If the Company in any manner grants any
Options and the lowest price per share for which one share of Common Stock is
issuable upon the exercise of any such Option or upon conversion, exchange or
exercise of any Convertible Securities issuable upon exercise of any such Option
is less than the Warrant Exercise Price in effect immediately prior to such
Dilutive Issuance, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share. For purposes of this
Section 8(b)(i), the "lowest price per share for which one share of Common Stock
is issuable upon exercise of any such Option or upon conversion, exchange or
exercise of any Convertible Securities issuable upon exercise of any such
Option" shall be equal to the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one share of
Common Stock upon the granting or sale of the Option, upon exercise of the
Option and upon conversion, exchange or exercise of any Convertible Security
issuable upon exercise of such Option. No further adjustment of the Warrant
Exercise Price shall be made upon the actual issuance of such Common Stock or of
such Convertible Securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion, exchange or exercise of such
Convertible Securities.

            (ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in any
manner issues or sells any Convertible Securities and the lowest price per share
for which one share of Common Stock is issuable upon such conversion, exchange
or exercise thereof is less than the Warrant Exercise Price in effect
immediately prior to such Dilutive Issuance, then such share of Common Stock
shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for
such price per share. For the purposes of this Section 8(b)(ii), the "lowest
price per share for which one share of Common Stock is issuable upon such
conversion, exchange or exercise" shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the

                                       12
<PAGE>

Company with respect to one share of Common Stock upon the issuance or sale of
the Convertible Security and upon conversion, exchange or exercise of such
Convertible Security. No further adjustment of the Warrant Exercise Price shall
be made upon the actual issuance of such Common Stock upon conversion, exchange
or exercise of such Convertible Securities, and if any such issue or sale of
such Convertible Securities is made upon exercise of any Options for which
adjustment of the Warrant Exercise Price had been or are to be made pursuant to
other provisions of this Section 8(b), no further adjustment of the Warrant
Exercise Price shall be made by reason of such issue or sale.

            (iii) CHANGE IN OPTION PRICE OR RATE OF CONVERSION. If the purchase
or exercise price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exchange or exercise of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into
or exchangeable or exercisable for Common Stock changes at any time, the Warrant
Exercise Price in effect at the time of such change shall be adjusted to the
Warrant Exercise Price which would have been in effect at such time had such
Options or Convertible Securities provided for such changed purchase price,
additional consideration or changed conversion rate, as the case may be, at the
time initially granted, issued or sold and the number of shares of Common Stock
acquirable hereunder shall be correspondingly readjusted. For purposes of this
Section 8(b)(iii), if the terms of any Option or Convertible Security that was
outstanding as of the date of issuance of this Warrant are changed in the manner
described in the immediately preceding sentence, then such Option or Convertible
Security and the Common Stock deemed issuable upon conversion, exchange or
exercise thereof shall be deemed to have been issued as of the date of such
change. No adjustment shall be made if such adjustment would result in an
increase of the Warrant Exercise Price then in effect.

      c. HOLDER'S RIGHT OF ALTERNATIVE WARRANT EXERCISE PRICE FOLLOWING ISSUANCE
OF CONVERTIBLE SECURITIES. If the Company issues or sells any Options or
Convertible Securities after the Closing Date that are convertible into or
exchangeable or exercisable for Common Stock at a price which varies or may vary
with the market price of the Common Stock, including by way of one or more
reset(s) to a fixed price (each of the formulations for such variable price
being herein referred to as, the "Variable Price"), the Company shall provide
written notice thereof via facsimile and overnight courier to the holder of this
Warrant (the "Variable Notice") on the date of issuance of such Convertible
Securities or Options. From and after the date the Company issues any such
Convertible Securities or Options with a Variable Price, but only for so long as
such Convertible Securities or Options are outstanding, the holder shall have
the right, but not the obligation, in its sole discretion to substitute the
Variable Price for the Warrant Exercise Price upon exercise of this Warrant by
designating in the Exercise Notice delivered upon exercise of this Warrant that
solely for purposes of such exercise the holder is relying on the Variable Price
rather than the Warrant Exercise Price then in effect. The holder's election to
rely on a Variable Price for a particular exercise of this Warrant shall not
obligate the holder to rely on a Variable Price for any future exercises of this
Warrant.

      d. EFFECT ON WARRANT EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Warrant Exercise Price under Sections 8(a) and 8(b),
the following shall be applicable:

                                       13
<PAGE>

            (i) CALCULATION OF CONSIDERATION RECEIVED. In case any Option is
issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, then, solely
for the purposes of this Section 8, the Options will be deemed to have been
issued for a consideration of $0.01. If any Common Stock, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefor will be deemed to be the gross amount
received by the Company therefor. If any Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of
such consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the Closing Sale Price of such securities on the date of receipt of such
securities. If any Common Stock, Options or Convertible Securities are issued to
the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of consideration therefor will
be deemed to be the fair value of such portion of the net assets and business of
the non-surviving entity as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined by the Company and the holders
of Warrants representing at least 60% of the shares of Common Stock obtainable
upon exercise of all Warrants issued on the Original Issuance Date then
outstanding. If such parties are unable to reach agreement within ten (10) days
after the occurrence of an event requiring valuation (the "Valuation Event"),
the fair value of such consideration will be determined within five (5) Business
Days after the tenth (10th) day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the holders of the
Warrants representing at least 60% of the shares of Common Stock obtainable upon
exercise of all Warrants issued on the Original Issuance Date then outstanding.
The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne
by the Company.

            (ii) RECORD DATE. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (1) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (2) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be. If after the occurrence of such record date the transaction or event for
which such record date was set is abandoned or terminated, then any adjustments
resulting from this Section 8(d)(ii) as it relates to such terminated or
abandoned transaction or event shall be reversed as if such record date had
never occurred.

      e. ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES UPON
SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at any time after the
date of issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Warrant Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of shares of Common

                                       14
<PAGE>

Stock obtainable upon exercise of this Warrant will be proportionately
increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of shares, the
Warrant Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of shares of Common Stock obtainable
upon exercise of this Warrant will be proportionately decreased. Any adjustment
under this Section 8(e) shall become effective at the close of business on the
date the subdivision or combination becomes effective.

      f. CERTAIN EVENTS. If any event occurs of the type contemplated by the
provisions of this Section 8 in a private transaction (the primary purpose of
which is to raise equity capital) but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features other than
pursuant to an Excluded Issuance), then the Company's Board of Directors will
make an appropriate adjustment in the Warrant Exercise Price and the number of
shares of Common Stock obtainable upon exercise of this Warrant so as to protect
the rights of the holders of the Warrants; provided that no such adjustment will
increase the Warrant Exercise Price or decrease the number of shares of Common
Stock obtainable as otherwise determined pursuant to this Section 8.

      g. NOTICES.

            (i) Promptly following any adjustment of the Warrant Exercise Price,
the Company will give written notice thereof to the holder of this Warrant,
setting forth in reasonable detail, and certifying, the calculation of such
adjustment. The Company (at the Company's expense), if there shall be a
disagreement among the Company and holders of Warrants representing at least 60%
of the shares of Common Stock obtainable upon exercise of all Warrants issued on
the Original Issuance Date then outstanding, shall retain independent public
accountants of recognized national standing selected by the Board of Directors
of the Company to make any computation required in connection with adjustments
under this Warrant, and a certificate signed by such firm absent manifest error
shall be conclusive evidence of the correctness of such adjustment, which shall
be binding on the holder and the Company.

            (ii) The Company will give written notice to the holder of this
Warrant at least ten (10) Business Days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any Organic Change (as defined below), dissolution or
liquidation, provided that the Company need not in any case provide such notice
prior to the time such information is made known to the public.

            (iii) The Company will also give written notice to the holder of
this Warrant at least ten (10) Business Days prior to the date on which any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company, any consolidation or merger involving the
Company and any other Person, any transaction or series of transactions in which
more than 50% of the voting securities of the Company are transferred to another
Person, or any transfer, sale or other disposition of all or substantially all
the assets of

                                       15
<PAGE>

the Company to any other Person (each, an "Organic Change"), dissolution or
liquidation will take place, provided that the Company need not in any case
provide such notice prior to the time such information is made known to the
public.

      h. ADJUSTMENT. No adjustment in the Warrant Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least $.01 in such price; provided, however, that any adjustments which by
reason of this sentence are not required to be made shall be carried forward and
taken into account in any subsequent adjustment required to be made hereunder.

      Section 9. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification undertaking or other form of security reasonably
acceptable to the Company (or in the case of a mutilated Warrant, the Warrant),
issue a new Warrant of like denomination and tenor as this Warrant so lost,
stolen, mutilated or destroyed. Notwithstanding the foregoing, if this Warrant
is lost by, stolen from or destroyed by the original holder hereof, the
affidavit of such original holder setting forth the circumstances of such loss,
theft or destruction shall be accepted as satisfactory evidence thereof, and no
indemnification bond or other security shall be required by the Company as a
condition to the execution and delivery by the Company of a new Warrant to such
original holder other than such original holder's unsecured written agreement to
indemnify the Company solely for losses actually incurred by the Company as a
direct consequence of the loss, theft or destruction of the Warrant.

      Section 10. NOTICE. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Warrant must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. If notice is to be sent to the
Company, the holder shall use its reasonable best efforts to provide additional
copies to the individuals listed below; provided, however, that the failure of
such holder to send such additional copies shall in no way limit the
effectiveness of any notice sent to the Company to the attention of Chief
Executive Officer as provided for below. The addresses and facsimile numbers for
such communications shall be:

                  If to the Company:

                        Hemispherx Biopharma, Inc.
                        One Penn Center
                        1617 JFK Boulevard, Suite 660
                        Philadelphia, PA  19103
                        Telephone:
                        Facsimile:
                        Attention: Chief Executive Officer

                                       16
<PAGE>

                  With a copy to:

                        Ransom W. Etheridge, Esq.
                        2610 Potters Road
                        Suite 200
                        Virginia Beach, VA  23452
                        Telephone: 757-486-0599
                        Facsimile: 757-486-0792

      If to the Transfer Agent:

                  Continental Stock Transfer & Trust Company

                        2 Broadway
                        New York, NY 10004
                        Telephone: (212) 509-4000
                        Facsimile: (212) 509-5150

      If to a holder of this Warrant, to it at the address and facsimile number
set forth on the Schedule of Buyers to the Securities Purchase Agreement, with
copies to such holder's representatives as set forth on such Schedule of Buyers,
or at such other address and facsimile as shall be delivered to the Company upon
the issuance or transfer of this Warrant. Each party shall provide five days'
prior written notice to the other party of any change in address or facsimile
number. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

      Section 11. AMENDMENTS. This Warrant and any term hereof may be amended,
changed, waived, discharged, or terminated only by an instrument in writing
signed by the party or holder hereof against which enforcement of such
amendment, change, waiver, discharge or termination is sought and shall be
binding on such party's or holder's assignees and transferees; provided,
however, that any such amendment, change, waiver, discharge or termination that
adversely impacts the holders of any of the Warrants other than this Warrant may
be made only if the Company has obtained the written consent of the holders of
Warrants representing at least 60% of the shares of Common Stock issuable upon
exercise of all of the Warrants issued on the Original Issuance Date then
outstanding; provided, further, that no such action may increase the Warrant
Exercise Price or decrease the number of shares or class of stock issuable upon
exercise of any Warrants without the written consent of the holder of such
Warrant. No waivers of any term, condition or provision of this Warrant in any
one or more instances shall be deemed to be or construed as a further or
continuing waiver of any such term, condition or provision.

      Section 12. DATE. The date of this Warrant is July 10, 2003 (the "Warrant
Date"). This Warrant, in all events, shall be wholly void and of no effect after
the close of

                                       17
<PAGE>

business on the Expiration Date, except that notwithstanding any other
provisions hereof, the provisions of Section 7(c) shall continue in full force
and effect after such date as to any Warrant Shares or other securities issued
upon the exercise of this Warrant.

      Section 13. LIMITATION ON NUMBER OF WARRANT SHARES. The Company shall not
be obligated to issue Warrant Shares upon exercise of this Warrant to the extent
that the issuance of such shares of Common Stock would cause the Company to
exceed that number of shares of Common Stock which the Company may issue upon
exercise of this Warrant (the "Exchange Cap") without breaching the Company's
obligations under the rules or regulations of the Principal Market, except that
such limitation shall not apply in the event that the Company obtains the
approval of its stockholders as required by the Principal Market (or any
successor rule or regulation) for issuances of Common Stock in excess of such
amount. Until such approval is obtained, the holder of this Warrant shall not be
issued, upon exercise of this Warrant, Warrant Shares in an amount, which if
added to the aggregate number of Defeasance Shares, Interest Shares and
Conversion Shares issued to the holder of this Warrant (and all predecessor
holders) under the Convertible Debentures held by the holder (and all
predecessor holders) as of the date of such exercise would exceed such holder's
Cap Allocation Amount (as such term is defined in the Convertible Debenture). If
at any time when the holder delivers an Exercise Notice pursuant to Section 2
hereof the Company shall be prohibited pursuant to the provisions of this
Section 13 from issuing any Warrant Shares, then the Company shall pay in
immediately available funds to the holder of this Warrant within two (2)
Business Days of the date of delivery of such Exercise Notice, an amount in cash
equal to the product of (X) the number of shares of Common Stock which could not
be issued by virtue of the limitations contained in this Section 13 multiplied
by (Y) the excess of (1) the average of the Closing Sale Prices of the Common
Stock on each of the five (5) trading days ending on the third trading day
immediately preceding the date such prohibition arises over (2) the Warrant
Exercise Price then in effect. The number of shares issuable upon exercise of
this Warrant shall be reduced for each share for which the Company makes a cash
payment pursuant to the preceding sentence.

      Section 14. Judicial Proceedings. Any legal action, suit or proceeding
brought against the Company with respect to this Warrant may be brought in any
federal court of the Southern District of New York or any state court located in
New York County, State of New York, and by execution and delivery of this
Warrant, the Company hereby irrevocably and unconditionally waives any claim (by
way of motion, as a defense or otherwise) of improper venue, that it is not
subject personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Warrant or the subject matter may not be
enforced in or by such court. The Company hereby irrevocably and unconditionally
consents to the service of process of any of the aforementioned courts in any
such action, suit or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, at its address set forth or provided for in
Section 10, such service to become effective 10 days after such mailing. Nothing
herein contained shall be deemed to affect the right of any party to serve
process in any manner permitted by law or commence legal proceedings or
otherwise proceed against any other party in any other jurisdiction to enforce
judgments obtained in any action, suit or proceeding brought pursuant to this
Section. The Company irrevocably submits to the exclusive jurisdiction of the
aforementioned courts in such action, suit or proceeding

                                       18
<PAGE>

      Section 15. DESCRIPTIVE HEADINGS; GOVERNING LAW. The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporate
laws of the State of New York shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York.

                                    [* * * *]

                                       19
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by as
of the 10th day of July, 2003.

                                                HEMISPHERX BIOPHARMA, INC.

                                                By:        /s/ William A. Carter
                                                           ---------------------
                                                Name:
                                                           ---------------------
                                                Title:
                                                           ---------------------

                                       20
<PAGE>

                              EXHIBIT A TO WARRANT

                                 EXERCISE NOTICE
        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
                           HEMISPHERX BIOPHARMA, INC.

The undersigned holder hereby exercises the right to purchase ______________ of
the shares of Common Stock ("Warrant Shares") of HEMISPHERX BIOPHARMA, INC., a
Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

      1. Form of Warrant Exercise Price. The Holder intends that payment of the
Warrant Exercise Price shall be made as:

            ______ "Cash Exercise" with respect to ________ Warrant Shares;
                   and/or

            ______ "Cashless Exercise" with respect to ______ Warrant Shares (to
                   the extent permitted by the terms of the Warrant).

      2. Variable Price. Is the Variable Price being relied on pursuant to
Section 8(c) of the Warrant? (check one) YES ____ No ____

      3. Payment of Warrant Exercise Price. In the event that the holder has
elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the holder shall pay the sum of $___________________ to
the Company in accordance with the terms of the Warrant.

      4. Delivery of Warrant Shares. The holder of this warrant has sold or will
sell the shares of common stock issuable pursuant to this Notice pursuant to a
registration statement or an exemption from registration under the Securities
Act of 1933, as amended.

      5. Private Placement Representations. The holder of this Warrant confirms
the continuing validity of, and reaffirms as of the date hereof, its
representations and warranties set forth in Section 6 of the Warrant.

Date: _______________ __, ____

----------------------------                    -------------------------------
Name of Registered Holder                       Tax ID of Registered Holder
                                                      (if applicable)

By:
   ------------------------------
Name:
     ----------------------------
Title:
      ---------------------------

                                       21
<PAGE>

                                 ACKNOWLEDGMENT

      The Company hereby acknowledges this Exercise Notice and hereby directs
Continental Stock Transfer & Trust Company to issue the above indicated number
of shares of Common Stock in accordance with the Irrevocable Transfer Agent
Instructions dated July 10, 2003 from the Company and acknowledged and agreed to
by Continental Stock Transfer & Trust Company.

                                                HEMISPHERX BIOPHARMA, INC.

                                                By:
                                                    ----------------------------
                                                    Name:
                                                    Title:

                                       22
<PAGE>

                              EXHIBIT B TO WARRANT

                               FORM OF ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of HEMISPHERX BIOPHARMA, INC., a
Delaware corporation, represented by warrant certificate no. _____, standing in
the name of the undersigned on the books of said corporation. The undersigned
does hereby irrevocably constitute and appoint ______________, attorney to
transfer the warrants of said corporation, with full power of substitution in
the premises.

Dated:  _________, 200_

                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 ------------------------------Exhibit 10.4

                          REGISTRATION RIGHTS AGREEMENT

      REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of July 10,
2003, by and among Hemispherx Biopharma, Inc., a Delaware corporation, with
headquarters located at One Penn Center, 1617 JFK Boulevard, Suite 660,
Philadelphia, PA 19103 (the "Company"), and the undersigned buyers (each, a
"Buyer" and collectively, the "Buyers").

      WHEREAS:

      A. In connection with the Securities Purchase Agreement by and among the
parties hereto of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue and sell to the Buyers (i) an aggregate
of $5,426,000 of the Company's 6% Senior Secured Convertible Debentures due July
31, 2005 (such Senior Secured Convertible Debentures, as the same may be
amended, modified or supplemented from time to time in accordance with the terms
thereof, the "Convertible Debentures"), which will be convertible into shares of
the Company's common stock, par value $0.001 per share (the "Common Stock") (as
converted, the "Conversion Shares"), and (ii) warrants (the "Warrants") to
purchase shares of Common Stock (as exercised collectively, the "Warrant
Shares");

      B. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights to the
Buyers under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws; and

      C. The location of defined terms in this Agreement is set forth on the
Index of Terms attached hereto.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:

      1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:

            a. "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.

            b. "Investor" means a Buyer, any transferee or assignee thereof to
whom a Buyer assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 9 and any
transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.

<PAGE>

            c. "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and governmental or any department or agency thereof.

            d. "register" "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis ("Rule 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").

            e. "Registrable Securities" means (i) the Warrant Shares issued or
issuable upon exercise of all of the Warrants, (ii) the Conversion Shares issued
or issuable upon conversion of all of the Convertible Debentures, (iii) the
Interest Shares and the Repayment Shares (each, as defined in the Convertible
Debentures) issued or issuable on the Convertible Debentures and (iv) any shares
of capital stock issued or issuable with respect to the Warrant Shares, the
Conversion Shares, the Convertible Debentures, the Interest Shares, or the
Repayment Shares as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions of Convertible Debentures or the exercise of the
Warrants; provided, however, that shares of Common Stock which are Registrable
Securities shall cease to be Registrable Securities (A) upon any sale pursuant
to a Registration Statement, Rule 144 under the 1933 Act or upon any sale in any
manner to a person or entity which, by virtue of Section 9 of this Agreement, is
not entitled to the rights provided in this Agreement or (B) at such time as all
such shares may be sold under Rule 144(k).

            f. "Registration Statement" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.

      Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Securities Purchase Agreement.

      2. Registration.

            a. Mandatory Registration. The Company shall prepare and, as soon as
practicable but in no event later than August 7, 2003 (the "Filing Deadline"),
file with the SEC the Registration Statement on Form S-3 covering the resale of
all of the Registrable Securities. In the event that Form S-3 is unavailable for
such a registration, the Company shall use such other form as is available for
such a registration, subject to the provisions of Section 2(d), in which case
the "Filing Deadline" shall be sixty (60) days after the Closing Date. The
Registration Statement prepared pursuant hereto shall register for resale at
least 4,552,935 shares of Common Stock, subject to adjustment as provided in
Section 2(e). The Company shall use its best efforts to have the Registration
Statement declared effective by the SEC as soon as practicable, but in no event
later than the date which is seventy-five (75) days after the Closing Date.
Until such time as the Registration Statement is declared effective by the SEC,
the Company shall not file with the SEC any other registration statement under
the 1933 Act with respect to the resale or initial issuance of any Company
securities.

                                       2
<PAGE>

            b. Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and each increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC. Subject to Section 9, in the event that an Investor sells or otherwise
transfers any of such Investor's Registrable Securities, each transferee shall
be allocated the portion of the then remaining number of Registrable Securities
included in such Registration Statement allocable to the transferor. The Company
shall not include any securities other than Registrable Securities on any
Registration Statement without the prior written consent of Buyers holding at
least 60% of Registrable Securities.

            c. Legal Counsel. Subject to Section 5 hereof, the Buyers holding at
least 60% of the Registrable Securities shall have the right to select one legal
counsel to review and comment upon any registration pursuant to this Section 2
("Legal Counsel"), which shall be Schulte Roth & Zabel LLP or such other counsel
as thereafter designated in writing by the holders of at least 60% of the
Registrable Securities.

            d. Ineligibility for Form S-3. In the event that Form S-3 is not
available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the holders of
at least 60% of the Registrable Securities and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as such form is available, provided
that the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the SEC.

            e. Sufficient Number of Shares Registered. In the event the number
of shares available under a Registration Statement filed pursuant to Section
2(a) is insufficient to cover all of the Registrable Securities required to be
covered by such Registration Statement or an Investor's allocated portion of the
Registrable Securities pursuant to Section 2(b), the Company shall amend the
Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover at least 135% of the
number of such Registrable Securities as of the trading day immediately
preceding the date of the filing of such amendment or new Registration
Statement, in each case, as soon as practicable, but in any event not later than
fifteen (15) days after the necessity therefor arises. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. The calculation
of the number of shares sufficient to cover all of the Registrable Securities
shall be made without regard to any limitations on the conversion of the
Convertible Debentures or the exercise of the Warrants, and such calculation
shall assume that the Convertible Debentures and the Warrants are then
convertible into shares of Common Stock and the maximum number of Interest
Shares and Repayment Shares under the Convertible Debentures, assuming the
initial outstanding principal amount of the Convertible Debentures remains
outstanding through the scheduled maturity date and assuming no conversions or
redemptions of the Convertible Debentures prior to the scheduled maturity date,
are issuable at the then prevailing Conversion Rate (as defined in the
Convertible Debentures), Warrant Exercise Price (as defined in the Warrants),
Interest Share

                                       3
<PAGE>

Conversion Rate (as defined in the Convertible Debentures), or Equity Collateral
conversion Rate (as defined in the Convertible Debentures), as applicable.

            f. Effect of Failure to File and Obtain and Maintain Effectiveness
of Registration Statement. If (i) a Registration Statement covering all the
Registrable Securities required to be covered thereby and required to be filed
by the Company pursuant to this Agreement is (A) not filed with the SEC on or
before the Filing Deadline, or (B) not declared effective by the SEC on or
before the date that is ninety (90) days after the Closing Date (the
"Effectiveness Deadline") or (ii) on any day after such Registration Statement
has been declared effective by the SEC sales of all the Registrable Securities
required to be included on such Registration Statement cannot be made (other
than during an Allowable Grace Period (as defined in Section 3(p)) pursuant to
such Registration Statement (including, without limitation, because of a failure
to keep such Registration Statement effective, to disclose such information as
is necessary for sales to be made pursuant to such Registration Statement or to
register sufficient shares of Common Stock), then, as partial relief for the
damages to any holder by reason of any such delay in or reduction of its ability
to sell the underlying shares of Common Stock (which remedy shall not be
exclusive of any other remedies available at law or in equity), the Company
shall pay to each holder of Convertible Debentures relating to such Registration
Statement an amount in cash equal to the product of (i) the outstanding
principal amount of such Investor's Convertible Debentures to which the
Registration Statement relates multiplied by (ii) the product of (I) .00067
multiplied by (II) the sum of (x) the number of days after the applicable Filing
Deadline that the Registration Statement is not filed with the SEC, plus (y) the
number of days after the applicable Effectiveness Deadline that the Registration
Statement is not declared effective by the SEC, plus (z) the number of days, in
each instance, after the Registration Statement has been declared effective by
the SEC that such Registration Statement is not available (other than during an
Allowable Grace Period) for the sale of all the Registrable Securities required
to be included on such Registration Statement. The payments to which a holder
shall be entitled pursuant to this Section 2(f) are referred to herein as
"Registration Delay Payments." Registration Delay Payments shall be paid on the
earlier of (I) the last day of the calendar month during which such Registration
Delay Payments are incurred and (II) the third Business Day after the event or
failure giving rise to the Registration Delay Payments is cured. In the event
the Company fails to make Registration Delay Payments in a timely manner, such
Registration Delay Payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full.

      3. Related Obligations.

      At such time as the Company is obligated to file a Registration Statement
with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its
best efforts to effect the registration of the Registrable Securities in
accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations:

            a. The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities (but in no
event later than the applicable Filing Deadline) and use its best efforts to
cause such Registration Statement relating to the Registrable Securities
required to be covered thereby to become effective as soon as practicable after
such filing (but in no event later than the date which is ninety (90) days after
the

                                       4
<PAGE>

Closing Date). The Company shall, subject to the terms of this Agreement, keep
each Registration Statement effective pursuant to Rule 415 at all times until
the earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the
1933 Act or (ii) the date on which the Investors shall have sold all the
Registrable Securities covered by such Registration Statement (the "Registration
Period"), which Registration Statement, as of its filing date, (including any
amendments or supplements thereto and prospectuses contained therein, as of
their respective filing dates) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. The term "best efforts" shall mean, among other
things, that the Company shall submit to the SEC, within five (5) Business Days
after the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff has no further comments
on the Registration Statement, as the case may be, and the approval of Legal
Counsel pursuant to Section 3(c), a request for acceleration of effectiveness of
such Registration Statement to a time and date not later than 48 hours after the
submission of such request.

            b. Subject to Section 3(p), the Company shall prepare and file with
the SEC such amendments (including post-effective amendments) and supplements to
the Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act applicable to the
Company with respect to the disposition of all Registrable Securities covered by
such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the seller or sellers thereof as set forth in such
Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall
have incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.

            c. The Company shall permit Legal Counsel to review and comment upon
(i) a Registration Statement at least three (3) Business Days prior to its
filing with the SEC and (ii) all other Registration Statements and all
amendments and supplements thereto (except for Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar
or successor reports or other documents incorporated by reference therein)
within a reasonable number of days prior to their filing with the SEC. The
Company shall furnish to Legal Counsel, without charge, (i) copies of any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (ii) promptly after the
same is prepared and filed with the SEC, one copy of any Registration Statement
and any amendment(s) thereto, including financial statements (but excluding all
schedules, all documents incorporated therein by reference, and all exhibits,
unless requested in writing by Legal Counsel) and (iii) upon the effectiveness
of any Registration Statement, one

                                       5
<PAGE>

copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto. The Company agrees that it will, and it will
cause its counsel to, consider in good faith any comments or objections from
Legal Counsel as to the form or content of any Registration Statement or
amendments or supplements thereto or any request for acceleration of the
effectiveness of any Registration Statement or any amendment or supplement
thereto.

            d. The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (i)
promptly after the same is prepared and filed with the SEC, at least one copy of
such Registration Statement and any amendment(s) thereto, including financial
statements (but excluding all schedules, all documents incorporated therein by
reference and all exhibits, unless requested in writing by Legal Counsel) and
each preliminary prospectus, (ii) upon the effectiveness of any Registration
Statement, ten (10) copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number of
copies as such Investor may reasonably request) and (iii) such other documents,
including copies of any preliminary or final prospectus, as such Investor may
reasonably request from time to time in order to facilitate the disposition of
the Registrable Securities owned by such Investor.

            e. Subject to Section 3(p), the Company shall use its best efforts
to (i) register and qualify, unless an exemption from registration and
qualification applies, the resale by Investors of the Registrable Securities
covered by the Registration Statement under such other securities or "blue sky"
laws of all applicable jurisdictions in the United States as any holder of
Registrable Shares reasonably requests in writing, (ii) prepare and file in
those jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.

            f. Notwithstanding anything to the contrary set forth herein, as
promptly as practicable after becoming aware of such event, the Company shall
notify Legal Counsel and each Investor in writing of the happening of any event,
of which the Company has knowledge, as a result of which the prospectus included
in a Registration Statement, as then in effect, includes an untrue statement of
a material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (provided that in no
event shall such notice contain any material, nonpublic information), and,
subject to Section 3(p), promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and

                                       6
<PAGE>

deliver ten (10) copies of such supplement or amendment to Legal Counsel and
each Investor (or such other number of copies as Legal Counsel or such Investor
may reasonably request). The Company shall also promptly notify Legal Counsel
and each Investor in writing (i) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel and each Investor by facsimile
on the same day of such effectiveness and by overnight mail), (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or
related prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.

            g. Subject to Section 3(p), the Company shall use its best efforts
to (i) prevent the issuance of any stop order or other suspension of
effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
and, (ii) if such an order or suspension is issued, to obtain the withdrawal of
such order or suspension at the earliest practicable moment and to notify Legal
Counsel and each Investor who holds Registrable Securities being sold of the
issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.

            h. Notwithstanding the provisions of Section 4(h) of the Securities
Purchase Agreement, the Company shall make available for inspection by (i) any
Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents
retained by the Investors at the Investors' expense (collectively, the
"Inspectors"), at the offices where normally kept and during reasonable business
hours, all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree in
writing to hold in strict confidence and shall not make any disclosure (except
to an Investor) or use of any Record or other information that the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or order from a
court or government body of competent jurisdiction, or (c) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
has knowledge. Each Investor agrees that it shall, upon learning that disclosure
of such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
the Company and any Investor) shall be deemed to limit the Investors' ability to
sell Registrable Securities in a manner that is otherwise consistent with
applicable laws and regulations and the terms and provisions of this Agreement.

            i. The Company shall hold in confidence and not make any disclosure
of information concerning an Investor provided to the Company unless (i)
disclosure of such

                                       7
<PAGE>

information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

            j. The Company shall use its best efforts either to (i) cause all
the Registrable Securities covered by a Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all the Registrable Securities covered by a
Registration Statement on The American Stock Exchange or The Nasdaq National
Market, or (iii) if, despite the Company's best efforts to satisfy the preceding
clause (i) or (ii), the Company is unsuccessful in satisfying the preceding
clause (i) or (ii), to secure the inclusion for quotation on the The Nasdaq
SmallCap Market for such Registrable Securities and, without limiting the
generality of the foregoing, to use its best efforts to arrange for at least two
market makers to register with the National Association of Securities Dealers,
Inc. ("NASD") as such with respect to such Registrable Securities. The Company
shall pay all fees and expenses in connection with satisfying its obligation
under this Section 3(j).

            k. In connection with any sale or transfer of Registrable Securities
pursuant to a Registration Statement, the Company shall cooperate with the
Investors who hold Registrable Securities being offered and, to the extent
applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be
in such denominations or amounts, as the case may be, as the Investors may
reasonably request and, subject to compliance with applicable securities laws,
registered in such names as the Investors may request and if such certificates
are to be issued in the name of a Person other than the registered holder of
such Registrable Securities, then the Investor shall give the Company notice at
least two Business Days prior to any sale of the Registrable Securities.

            l. If requested by an Investor, the Company shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
to the Registration Statement such information as an Investor reasonably
requests to be included therein relating to the sale and distribution of
Registrable Securities to which the Company does not reasonably object,
including, without limitation, information with respect to the number of
Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering; (ii) as soon as practicable make all required filings of
such prospectus supplement or post-effective amendment after being notified of
the matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) as soon as practicable, supplement or make amendments to
any

                                       8
<PAGE>

Registration Statement if reasonably requested by an Investor holding any
Registrable Securities and to which the Company does not reasonably object.

            m. The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying
with, and in the manner provided by, the provisions of Rule 158 under the 1933
Act) covering a twelve-month period beginning not later than the first day of
the Company's fiscal quarter next following the effective date of a Registration
Statement.

            n. The Company shall otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder.

            o. Within two (2) Business Days after a Registration Statement which
covers Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

            p. Notwithstanding anything to the contrary herein, at any time
after the Registration Statement has been declared effective by the SEC, the
Company may delay the disclosure of material non-public information concerning
the Company the disclosure of which at the time is not, in the good faith
judgment of the Board of Directors of the Company, in the best interest of the
Company (a "Grace Period"); provided, that the Company shall promptly (i) notify
the Investors in writing of the existence of material non-public information
giving rise to a Grace Period (provided that in each notice the Company will not
disclose the content of such material non-public information to the Investors)
and the date on which the Grace Period will begin, and (ii) notify the Investors
in writing of the date on which the Grace Period ends; and, provided further,
that no Grace Period shall exceed twenty (20) days and during any three hundred
sixty five (365) day period such Grace Periods shall not exceed an aggregate of
forty-five (45) days and the first day of any Grace Period must be at least two
(2) Business Days after the last day of any prior Grace Period (an "Allowable
Grace Period"). For purposes of determining the length of a Grace Period above,
the Grace Period shall begin on and include the date the Investors receive the
notice referred to in clause (i) and shall end on and include the later of the
date the Investors receive the notice referred to in clause (ii) and the date
referred to in such notice. The provisions of Section 3(g) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon expiration of
the Grace Period, the Company shall again be bound by the first sentence of
Section 3(f).

      4. Obligations Of The Investors.

            a. At least seven (7) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each Investor
in writing of the information the Company requires from each such Investor if
such Investor elects to have any of such Investor's Registrable Securities
included in such Registration Statement. It shall be a condition precedent to
the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such

                                       9
<PAGE>

Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request. Each Investor shall promptly notify the Company of any
material change with respect to such information previously provided to the
Company by such Investor.

            b. Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from such Registration Statement.

            c. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(g),
Section 3(p) or the first sentence of 3(f), such Investor will immediately
discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor's receipt
of the copies of the supplemented or amended prospectus contemplated by Section
3(g) or the first sentence of 3(f) or receipt of notice that no supplement or
amendment is required and, if so directed by the Company, such Investor shall
deliver to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies (other than a single
file copy, which such Investor may keep) in such Investor's possession of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. Notwithstanding anything to the contrary, subject to compliance
with applicable securities laws, the Company shall cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of an Investor in
accordance with the terms of the Securities Purchase Agreement, the Convertible
Debenture and/or the Warrant, as applicable, in connection with any sale of
Registrable Securities with respect to which an Investor has entered into a
contract for sale prior to the Investor's receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f) and for which the Investor has not yet settled.

      5. Expenses Of Registration.

      All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.
The Company shall also reimburse the Investors for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement which amount shall be limited to $10,000
for the Registration Statement.

      6. Indemnification.

      In the event any Registrable Securities are included in a Registration
Statement under this Agreement:

                                       10
<PAGE>

            a. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the directors,
officers, members, partners, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the 1933 Act or
the 1934 Act (each, an "Indemnified Person"), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys' fees, amounts paid in settlement or expenses, joint or several,
(collectively, "Claims") incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto ("Indemnified Damages"),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any material violation
of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "Violations"). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation that occurs in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of such Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any such person from
whom the person asserting any such Claim purchased the Registrable Securities
that are the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by the Company
pursuant to Section 3(d); (iii) shall not be available to the extent such Claim
is based on a failure of the Investor to deliver or to cause to be delivered the
prospectus made available by the Company, including a corrected prospectus, if
such prospectus or corrected prospectus was timely made available by the Company
pursuant to Section 3(d) and, in connection with a corrected prospectus, the

                                       11
<PAGE>

Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a violation and such Indemnified
Person, notwithstanding such advice, used it or failed to deliver the correct
prospectus as required by the 1933 Act and such correct prospectus was timely
made available pursuant to Section 3(d); and (iv) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably withheld
or delayed. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9.

            b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees severally and not jointly
to indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, the directors, officers,
members, partners, employees, agents, representatives of and each Person, if
any, who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each, an "Indemnified Party"), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Investor expressly
for use in connection with such Registration Statement; and, subject to Section
6(c), such Investor will reimburse any legal or other expenses reasonably
incurred by an Indemnified Party in connection with investigating or defending
any such Claim; provided, however, that the indemnity agreement contained in
this Section 6(b) and the agreement with respect to contribution contained in
Section 7 shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld or delayed; provided, further,
however, that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.

            c. Promptly after an Indemnified Person or Indemnified Party under
this Section 6 has knowledge of any Claim as to which such Indemnified Person
reasonably believes indemnity may be sought or promptly after such Indemnified
Person or Indemnified Party receives notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of such Claim, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof

                                       12
<PAGE>

with counsel selected by the indemnifying party and subject to the reasonable
approval of the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses of not more than
one counsel for such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
or Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in
the immediately preceding sentence shall be selected by the Investors holding at
least 60% in interest of the Registrable Securities included in the Registration
Statement to which the Claim relates. The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person that relates to such action or
Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party as provided herein shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action.

            d. The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.

            e. The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

      7. Contribution.

      To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no contribution shall be made under

                                       13
<PAGE>

circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6, (ii) no person involved in the
sale of Registrable Securities which person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in
connection with such sale shall be entitled to contribution from any person
involved in such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (iii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.

      8. Reports Under The 1934 Act.

      With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration ("Rule 144"), the Company agrees to use its
best efforts to:

            a. make and keep public information available, as those terms are
understood and defined in Rule 144;

            b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and

            c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company, if true, that it has complied with the applicable reporting
requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and copies of such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.

      9. Assignment of Registration Rights.

      The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of such Investor's Registrable
Securities if: (i) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act and applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein; (v) such transfer
shall have been made in accordance with the applicable

                                       14
<PAGE>

requirements of the Securities Purchase Agreement, the Convertible Debentures
and the Warrants; (vi) such transfer shall have been conducted in accordance
with all applicable federal and state securities laws; and (vii) such transfer
or assignment does not result in more than ten (10) holders of Registrable
Securities and, after giving effect to such transfer or assignment, such
assignee or transferee holds at least 10% of the Registrable Securities (subject
to appropriate adjustment for stock splits, stock dividends, combinations,
recapitalizations and other similar transactions) or such lesser number if such
transfer involves all of the Registrable Securities then held by such
transferor.

      10. Amendment of Registration Rights.

      Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and Investors
who then hold at least 60% of the Registrable Securities. Any amendment or
waiver effected in accordance with this Section 10 shall be binding upon each
Investor and the Company. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.

      11. Miscellaneous.

            a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from such record owner of such Registrable Securities.

            b. Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one (1) Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:

             If to the Company:

                      Hemispherx Biopharma, Inc.
                      One Penn Center
                      1617 JFK Boulevard, Suite 660
                      Philadelphia, PA  19103
                      Telephone:
                      Facsimile:
                      Attention:       Chief Executive Officer

                                       15
<PAGE>

             With a copy to:

                      Ransom W. Etheridge, Esq.
                      2610 Potters Road

                      Suite 200        Virginia Beach, VA  23452
                      Telephone:  757-486-0599
                      Facsimile:  757-486-0792

             If to Legal Counsel:

                      Schulte Roth & Zabel LLP
                      919 Third Avenue
                      New York, New York 10022
                      Telephone:       (212) 756-2000
                      Facsimile        (212) 593-5955
                      Attention:       Eleazer Klein, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

            c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

            d. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, 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, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of 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 to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and

                                       16
<PAGE>

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. If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

            e. This Agreement, the Securities Purchase Agreement, the Warrants,
the Convertible Debentures, the Security Agreement, and the documents referenced
herein and therein constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement, the Securities Purchase Agreement, the
Warrants, the Security Agreement, and the Convertible Debentures supersede all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.

            f. Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.

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

            h. This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other parties hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

            i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

            j. All consents and other determinations required to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investors holding at least 60% of the Registrable
Securities, determined as if all of the Convertible Debentures held by Investors
then outstanding have been converted into Registrable Securities and all
Warrants then outstanding have been exercised for Registrable Securities without
regard to any limitations on conversion of the Convertible Debentures or on
exercise of the Warrants.

                                       17
<PAGE>

            k. 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.

            l. This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

                                   * * * * * *

                                       18
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.

COMPANY:

HEMISPHERX BIOPHARMA, INC.

By:    /s/ William A. Carter
       -------------------------------------
       Name:
       Its:

                    [Signatures of Buyers on Following Page]

                                       19
<PAGE>

                [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

                            BUYERS:

                            PORTSIDE GROWTH & OPPORTUNITY FUND

                            By:        /s/ Marran Ogilvie
                                       -----------------------------------------
                            Name:      Marran Ogilvie
                                       -----------------------------------------
                            Title:     General Counsel
                                       -----------------------------------------

                            LEONARDO, L.P. By: Leonardo Capital Management, Inc.

                            By:        /s/ Fred Berger
                                       -----------------------------------------
                            Name:      Fred Berger
                                       -----------------------------------------
                            Title:     Director
                                       -----------------------------------------

                                       20
<PAGE>

                               SCHEDULE OF BUYERS
<TABLE>
<CAPTION>
                                                           Investor's Representative's
                                  Investor Address                   Address
Investor                        and Facsimile Number           and Facsimile Number
--------                        --------------------       ---------------------------
<S>                   <C>                               <C>
Portside Growth &     c/o Ramius Capital Group, LLC     Schulte Roth & Zabel LLP
Opportunity Fund      666 Third Avenue, 26th Floor      919 Third Avenue
                      New York, NY 10017                New York, NY 10022
                      Attention:  Jeffrey Smith         Attn:  Eleazer Klein
                                  Andrew Strober        Telephone:  212-756-2000
                      Telephone:  (212) 845-7955        Facsimile:  (212) 593-5955
                      Facsimile:  (212) 845-7999

Leonardo, L.P.        c/o Angelo Gordon, LP             Paul, Weiss, Rifkind, Wharton &
                      245 Park Avenue                   Garrison LLP
                      New York, NY 10167                1285 Avenue of the Americas
                      Attention:  Fred Berger           New York, NY 10019
                                  Gary Wolf             Attention:  Jaideep P. Reddy, Esq.
                      Telephone:  (212) 692-2000        Telephone: (212) 373-3000
                      Facsimile:  (212) 867-6449        Facsimile: (212) 757-3990
</TABLE>

<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Transfer Agent]
[Address]

      Re: Hemispherx Biopharma, Inc.

Ladies and Gentlemen:

      We are counsel to Hemispherx Biopharma, Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with that certain
Securities Purchase Agreement (the "Purchase Agreement") entered into by and
among the Company and the buyers named therein (collectively, the "Holders")
pursuant to which the Company issued to the Holders its 6% Senior Secured
Debentures, (the "Convertible Debentures") convertible into shares of the
Company's Common Stock, par value $0.001 per share (the "Common Stock") and
warrants exercisable for shares of its Common Stock (the "Warrants"). Pursuant
to the Purchase Agreement, the Company also has entered into a Registration
Rights Agreement with the Holders (the "Registration Rights Agreement") pursuant
to which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the
shares of Common Stock issuable upon conversion of the Convertible Debentures
and exercise of the Warrants under the Securities Act of 1933, as amended (the
"1933 Act"). In connection with the Company's obligations under the Registration
Rights Agreement, on ____________ ___, 2003, the Company filed a Registration
Statement on Form S-3 (File No. 333-_____________) (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") relating to
the Registrable Securities, which names each of the Holders as a selling
stockholder thereunder.

      In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.

                                        Very truly yours,

                                        [ISSUER'S COUNSEL]

                                        By:
                                            ------------------------------------

CC: [LIST NAMES OF HOLDERS]

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