Document:

COMMON
      STOCK PURCHASE

    

    WARRANT

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE, THE COMMON STOCK ISSUABLE UPON
      EXERCISE HEREOF, AND ANY INTEREST THEREIN MAY NOT BE OFFERED OR SOLD EXCEPT
      PURSUANT TO (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933,
      AS
      AMENDED, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.

    

    THE
      TRANSFER OF THIS WARRANT

    IS
      RESTRICTED AS DESCRIBED HEREIN

    

    VOID
      AFTER 5:00 P.M., NEW YORK TIME,

    ON
      JUNE
      19, 2007

    

    HEALTH-CHEM
      CORPORATION

    

    Warrant
      for the Purchase

    of

    50,000
      Shares of Common Stock

    

    No.
      

    

    THIS
      CERTIFIES that, for value received, Adam Epner (the "Holder") is entitled to
      subscribe for and purchase from Health-Chem Corporation, a Delaware corporation
      (the "Company"), upon the terms and subject to the conditions set forth herein,
      at any time or from time to time, on or after June 19, 2002, and before 5:00
      P.M., New York time, on June 19, 2007 (the "Exercise Period"), fifty thousand
      (50,000) shares of the Company's Common Stock, par value $.01 per share (the
      "Common Stock"), subject to adjustment as provided herein (the "Warrant
      Shares"), at a price of $ .125 per share, subject to adjustment as provided
      herein (the "Exercise Price").

    

    This
      Warrant may not be sold or otherwise disposed of without the Company's prior
      written consent. No transfer of this Warrant or the Warrant Shares will be
      permitted unless a registration statement under the Securities Act of 1933,
      as
      amended (the "Act"), is in effect as to that transfer or, in the opinion of
      counsel reasonably satisfactory to the Company, registration under the Act
      is
      not necessary for that transfer to comply with the Act. The Company has no
      obligation, and does not intend, to register this Warrant or any Warrant Shares
      under the Act. The term the "Holder" as used herein shall include any transferee
      to whom this Warrant has been transferred in accordance with the
      above.

    

    1. This
      Warrant may be exercised during the Exercise Period, as to the whole or any
      lesser number of whole Warrant Shares, by the surrender of this Warrant (with
      the Form of Election to Exercise at the end hereof duly completed and executed)
      to the Company at 101 Sinking Springs Lane, Emigsville, Pennsylvania 17318,
      Attn: Andy E. Yurowitz, Chairman, or at such other place as may be designated
      in
      writing by the Company, together with a certified or bank cashier's check
      payable to the order of the Company, or by the Holder’s causing the
      contemporaneous wire transfer of funds to an account designated by the Company,
      in an amount equal to the Exercise Price multiplied by the number of Warrant
      Shares for which this Warrant is being exercised. Notwithstanding the foregoing,
      at any time that there exists an established trading market for the Common
      Stock, the Holder may elect to cause the cashless exercise of this Warrant,
      in
      which case the Holder shall be entitled to receive a certificate for the number
      of Warrant Shares equal to the product of (I) the quotient obtained by dividing
      (A) (i) the closing price per share for the Common Stock on the principal market
      on which it trades on the trading day preceding the date of delivery of the
      Form
      of Election to Exercise the Warrant to the Company, or if no such closing price
      is available, the average of the closing bid and asked prices on such date,
      or,
      if no such prices are available for such date, on the next preceding trading
      date for which such a closing sale price or, failing that, closing bid and
      asked
      prices may be found (the “Market Price”) minus (ii) the Exercise Price then in
      effect, by (B) the Market Price, multiplied by (II) the number of Warrant Shares
      issuable upon exercise of the Warrant in accordance with its terms without
      regard to this sentence.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2. Upon
      each
      exercise of the Holder's rights to purchase Warrant Shares, the Holder shall
      be
      deemed to be the holder of record of the Warrant Shares issuable upon such
      exercise, notwithstanding that the transfer books of the Company shall then
      be
      closed or certificates representing such Warrant Shares shall not then have
      been
      actually delivered to the Holder. As soon as practicable after each such
      exercise of this Warrant, the Company shall issue and deliver to the Holder
      a
      certificate or certificates for the Warrant Shares issuable upon such exercise,
      registered in the name of the Holder. If this Warrant should be exercised in
      part only, the Company shall, upon surrender of this Warrant for cancellation,
      execute and deliver a new Warrant evidencing the right of the Holder to purchase
      the balance of the Warrant Shares (or portions thereof) subject to purchase
      hereunder.

    

    3. Any
      Warrants issued upon the transfer or exercise in part of this Warrant shall
      be
      numbered and shall be registered in a warrant register (the "Warrant Register")
      as they are issued. The Company shall be entitled to treat the registered holder
      of any Warrant on the Warrant Register as the owner in fact thereof for all
      purposes and shall not be bound to recognize any equitable or other claim to
      or
      interest in such Warrant on the part of any other person, and shall not be
      liable for any registration or transfer of Warrants which are registered or
      to
      be registered in the name of a fiduciary or the nominee of a fiduciary unless
      made with the actual knowledge that a fiduciary or nominee is committing a
      breach of trust in requesting such registration or transfer, or with the
      knowledge of such facts that its participation therein amounts to bad faith.
      This Warrant shall be transferable on the books of the Company only upon
      delivery hereof with the Form of Assignment at the end hereof duly completed
      and
      executed by the Holder or by his or its duly authorized attorney or
      representative, or accompanied by proper evidence of succession, assignment,
      or
      authority to transfer. In all cases of transfer by an attorney, executor,
      administrator, guardian or other legal representative, duly authenticated
      evidence of his or its authority shall be produced. Upon any registration of
      transfer, the Company shall deliver a new Warrant or Warrants to the person
      entitled thereto. This Warrant may be exchanged, at the option of the Holder
      thereof, for another Warrant, or other Warrants of different denominations,
      of
      like tenor and representing in the aggregate the right to purchase a like number
      of Warrant Shares (or portions thereof), upon surrender to the Company or its
      duly authorized agent. Notwithstanding the foregoing, the Company shall have
      no
      obligation to cause this Warrant to be transferred on its books to any person
      if, in the opinion of counsel to the Company, such transfer does not comply
      with
      the provisions of the Act and the rules and regulations thereunder.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    4. The
      Company shall at all times during the Exercise Period reserve and keep available
      out of its authorized and unissued Common Stock, solely for the purpose of
      providing for the exercise of the Warrants, such number of shares of Common
      Stock as shall, from time to time, be sufficient therefor. The Company covenants
      that all Warrant Shares, upon receipt by the Company of the full payment
      therefor, shall be validly issued, fully paid, nonassessable, and free of
      preemptive rights.

    

    5. Subject
      to the provisions of this Section 5, the Exercise Price in effect from time
      to
      time shall be subject to adjustment, as follows:

    

    (a) In
      case
      the Company shall at any time after the date the Warrants were first issued
      1. declare a dividend on the outstanding Common Stock payable in shares of
      its capital stock, 2. subdivide the outstanding Common Stock, or
      3. combine the outstanding Common Stock into a smaller number of shares,
      then, in each case, the Exercise Price in effect, and the number of shares
      of
      Common Stock issuable upon exercise of the Warrants outstanding, at the time
      of
      the record date for such dividend or of the effective date of such subdivision
      or combination, shall be proportionately adjusted so that the holders of the
      Warrants after such time shall be entitled to receive the aggregate number
      and
      kind of shares, for the same aggregate Exercise Price as in effect immediately
      prior to such dividend, subdivision or combination, which, if such Warrants
      had
      been exercised immediately prior to such time, such holders would have owned
      upon such exercise and been entitled to receive by virtue of such dividend,
      subdivision, or combination. Such adjustment shall be made successively whenever
      any event listed above shall occur.

    

    (b) All
      calculations under this Section 5 shall be made to the nearest cent or to the
      nearest one-thousandth of a share, as the case may be; provided, however that,
      no adjustment in the Exercise Price shall be required if such adjustment is
      less
      than $.02; and provided, further, that any adjustments which by reason of this
      Section 5 are not required to be made shall be carried forward and taken into
      account in any subsequent adjustment. The Company shall not be required to
      issue
      fractions of shares of Common Stock or other capital stock of the Company upon
      the exercise of this Warrant. If any fraction of a share would be issuable
      on
      the exercise of this Warrant (or specified portions thereof), the Company shall
      purchase such fraction for an amount in cash equal to the same fraction of
      the
      fair market value of such share of Common Stock on the date of exercise of
      this
      Warrant.

    

    (c) In
      any
      case in which this Section 5 shall require that an adjustment in the Exercise
      Price be made effective as of a record date for a specified event (an "Event"),
      the Company may elect to defer, until the occurrence of such Event, issuing
      to
      the Holder, if the Holder exercised this Warrant after such record date, the
      shares of Common Stock, if any, issuable upon such exercise over and above
      the
      number of Warrant Shares, if any, issuable upon such exercise on the basis
      of
      the Exercise Price in effect prior to such adjustment; provided, however, that
      the Company shall deliver to the Holder a due bill or other appropriate
      instrument evidencing the Holder's right to receive such additional shares
      upon
      the occurrence of the Event requiring such adjustment.

    
      
         

      

      
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    (d) Whenever
      there shall be an adjustment as provided in this Section 5, the Company shall
      within 15 days thereafter cause written notice thereof to be sent by registered
      mail, postage prepaid, to the Holder, at its address as it shall appear in
      the
      Warrant Register, which notice shall be accompanied by an officer's certificate
      setting forth the number of Warrant Shares issuable hereunder and the Exercise
      Price after such adjustment and setting forth a brief statement of the facts
      requiring such adjustment and the computation thereof, which officer's
      certificate shall be conclusive evidence of the correctness of any such
      adjustment absent manifest error.

     

    6. (1) In
      case
      of any consolidation with or merger of the Company with or into another
      corporation (other than a merger or consolidation in which the Company is the
      surviving or continuing corporation), or in case of any sale, lease, or
      conveyance to another corporation of the property and assets of any nature
      of
      the Company as an entirety or substantially as an entirety (such actions being
      hereinafter collectively referred to as "Reorganizations"), there shall
      thereafter be deliverable upon exercise of this Warrant (in lieu of the number
      of shares of Common Stock theretofore deliverable) the kind and amount of shares
      of stock or other securities or property receivable upon such Reorganization
      by
      a holder of the number of shares of Common Stock, for which this Warrant might
      have been exercised immediately prior to such Reorganization. In case of any
      Reorganization, appropriate adjustment, as determined in good faith by the
      Board
      of Directors of the Company, shall be made in the application of the provisions
      herein set forth with respect to the rights and interests of the Holder so
      that
      the provisions set forth herein shall thereafter be applicable, as nearly as
      possible, in relation to any shares or other property thereafter deliverable
      upon exercise of this Warrant. Any such adjustment shall be made by and set
      forth in a supplemental agreement between the Company, or any successor thereto,
      and the Holder and shall for all purposes hereof conclusively be deemed to
      be an
      appropriate adjustment. The Company shall not effect any such Reorganization
      unless upon or prior to the consummation thereof the successor corporation,
      or
      if the Company shall be the surviving corporation in any such Reorganization
      and
      is not the issuer of the shares of stock or other securities or property to
      be
      delivered to holders of shares of the Common Stock outstanding at the effective
      time thereof, then such issuer, shall assume by written instrument the
      obligation to deliver to the Holder such shares of stock, securities, cash
      or
      other property as the Holder shall be entitled to purchase in accordance with
      the foregoing provisions, and, if such shares or other securities, if any,
      are
      not eligible for immediate sale under the Securities Act of 1933, as amended
      (the “Securities Act”), because they are not registered under the Securities Act
      and no exemption from the registration requirements thereof is available, such
      successor or surviving corporation shall also agree to assume registration
      obligations that are equivalent to those pursuant to any registration rights
      or
      similar agreement between the Holder and the Company.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (a) In
      case
      of any reclassification or change of the shares of Common Stock issuable upon
      exercise of this Warrant (other than a change in par value or from no par value
      to a specified par value, or as a result of a subdivision or combination of
      the
      outstanding shares of Common Stock, but including any change of the shares
      of
      Common Stock into two or more classes or series of shares), or in case of any
      consolidation or merger of another corporation into the Company in which the
      Company is the continuing corporation and in which there is a reclassification
      or change ('including a change to the right to receive cash or other property)
      of the shares of Common Stock (other than a change in par value, or from no
      par
      value to a specified par value, or as a result of a subdivision or combination
      of the outstanding shares of Common Stock, but including any change of the
      shares into two or more classes or series of shares), the Holder shall have
      the
      right thereafter to receive upon exercise of this Warrant solely the kind and
      amount of shares of stock and other securities, property, cash, or any
      combination thereof receivable upon such reclassification, change,
      consolidation, or merger by a holder of the number of shares of Common Stock
      for
      which this Warrant might have been exercised immediately prior to such
      reclassification, change, consolidation, or merger. Thereafter, appropriate
      provision shall be made for adjustments which shall be as nearly equivalent
      as
      practicable to the adjustments in Section 5.

    

    (b) The
      above
      provisions of this Section 6 shall similarly apply to successive
      reclassifications and changes of shares of Common Stock and to successive
      consolidations, mergers, sales, leases, or conveyances.

    

    7. In
      case
      at any time the Company shall propose:

    

    (a) to
      pay
      any dividend or make any distribution on shares of Common Stock in shares of
      Common Stock or make any other distribution (other than regularly scheduled
      cash
      dividends which are not in a greater amount per share than the most recent
      such
      cash dividend) to all holders of Common Stock; or

    

    (b) to
      issue
      any rights, warrants or other securities to all holders of Common Stock
      entitling them to purchase any additional shares of Common Stock or any other
      rights, warrants or other securities; or

    

    (c) to
      effect
      any reclassification or change of outstanding shares of Common Stock, or any
      consolidation, merger, sale, lease, or conveyance of property, described in
      Section 6; or

    

    (d) to
      effect
      any liquidation, dissolution or winding-up of the Company;

    

    
      
         

      

      
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    then,
      and
      in any one or more of such cases, the Company shall give written notice thereof,
      by registered mail, postage prepaid, to the Holder at the Holder's address
      as it
      shall appear in the Warrant Register, mailed at least 10 days prior to
      1. the date as of which the holders of record of shares of Common Stock to
      be entitled to receive any such dividend, distribution, rights, warrants, or
      other securities are to be determined or 2. the date on which any such
      reclassification, change of outstanding shares of Common Stock, consolidation,
      merger, sale, lease, conveyance of property, liquidation, dissolution, or
      winding-up is expected to become effective, and the date as of which it is
      expected that holders of record of shares of Common Stock shall be entitled
      to
      exchange their shares for securities or other property, if any, deliverable
      upon
      such reclassification, change of outstanding shards, consolidation, merger,
      sale, lease, conveyance of property, liquidation, dissolution, or
      winding-up.

    8. The
      issuance of any shares or other securities upon the exercise of this Warrant
      and
      the delivery of certificates or other instruments representing such shares
      or
      other securities shall be made without charge to the Holder for any tax or
      other
      charge in respect of such issuance. The Company shall not, however, be required
      to pay any tax which may be payable in respect of any transfer involved in
      the
      issue and delivery of any certificate in a name other than that of the Holder
      and the Company shall not be required to issue or deliver any such certificate
      unless and until the person or persons requesting the issue thereof shall have
      paid to the Company the amount of such tax or shall have established to the
      satisfaction of the Company that such tax has been paid.

    

    9. The
      Warrant Shares issued upon exercise of the Warrant shall be subject to a stop
      transfer order. The certificate or certificates evidencing such Warrant Shares
      shall bear the following legend unless the Warrant Shares are registered
      pursuant to the Act:

    

    "The
      shares represented by this certificate have not been registered under the
      Securities Act of 1933 ("Act") and may not be transferred unless a registration
      statement under the Act is in effect as to that transfer or, in the opinion
      of
      counsel reasonably satisfactory to the Company, registration under the Act
      is
      not necessary for that transfer to comply with the Act."

    

    10. Upon
      receipt of evidence satisfactory to the Company of the loss, theft, destruction
      or mutilation of any Warrant (and upon surrender of any Warrant if mutilated),
      and upon reimbursement of the Company's reasonable incidental expenses, the
      Company shall execute and deliver to the Holder thereof a new Warrant of like
      date, tenor and denomination.

    

    11. The
      Holder of any Warrant shall not have, solely on account of such status, any
      rights of a stockholder of the Company, either at law or in equity, or to any
      notice of meetings of stockholders or of any other proceedings of the Company,
      except as provided in this Warrant.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    12. This
      Warrant shall be governed by and construed in accordance with the law of the
      State of New York applicable to agreements made and to be performed in New
      York.

    

    Dated:
      _______________, 2002

     

    
      
        	 	
                HEALTH-CHEM
                  CORPORATION

              
	 	 
	 	 
	 	
                By:
                  ______________________________________

              
	 	
                Name:
                  Andy E. Yurowitz

              
	 	
                Title:   Chairman
                  

              

      

       

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    FORM
      OF
      ASSIGNMENT

    

    (To
      be
      executed by the registered holder if such holder desires to transfer the
      attached Warrant).

    

    FOR
      VALUE
      RECEIVED, Adam Epner hereby sells, assigns and transfers unto:

    
      
        

        Name:     
           _________________________________________

        

        Address: 
          _________________________________________

        

                       
            _________________________________________

        

                      
             _________________________________________

        

        Social
          Security or Tax Identification Number

        

        _________________________________________________

        

        

        a
          Warrant
          to purchase ______ shares of Common Stock, $.01 par value per share, of
          Health-Chem Corporation (the "Company"), together with all right, title,
          and
          interest therein, and does hereby irrevocably constitute and appoint
          _______________ attorney to transfer such Warrant on the books of the Company,
          with full power of substitution.

        

        Dated:
          ___________________

        
          	 	
                  Name:_____________________________________

                
	 	 
	 	
                  Address:___________________________________

                
	 	 
	 	__________________________________________
	 	 
	 	__________________________________________ 
	 	 
	 	
                  Social
                    Security or Tax Identification Number

                
	 	 
	 	__________________________________________
	 	 
	 	
                  Signature:__________________________________

                
	 	 
	 	
                  NOTE:
                    The above signature should correspond exactly with the name on
                    the first
                    page of this Warrant.

                

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        FORM
          OF
          ELECTION TO EXERCISE

         

        
          	
                  To:

                	
                  Health-Chem
                    Corporation

                
	 	
                  101
                    Sinking Springs Lane

                
	 	
                  Emigsville,
                    Pennsylvania 17318

                
	 	
                  Attn:
                    Andy E. Yurowitz, Chairman

                

        

        

        The
          undersigned hereby exercises his or its rights to purchase ________ Warrant
          Shares covered by the within Warrant and tenders payment herewith in the
          amount
          of $_______ (or /_/ elects to effect a cashless exercise of the Warrant)
          in
          accordance with the terms thereof, and requests that certificates for such
          securities be issued in the name of, and delivered to:

        
          

          Name:     
             _________________________________________

          

          Address: 
            _________________________________________

        

        Social
          Security or Tax Identification Number

         

         

        and,
          if
          such number of Warrant Shares shall not be all the Warrant Shares covered
          by the
          within Warrant, that a new Warrant for the balance of the Warrant Shares
          covered
          by the within Warrant be registered in the name of, and delivered to, the
          undersigned at the address stated below.

         

        
          Dated:
            ___________________

          
            	 	
                    Name:_____________________________________

                  
	 	 
	 	
                    Address:___________________________________

                  
	 	 
	 	__________________________________________
	 	 
	 	__________________________________________ 
	 	 
	 	
                    Social
                      Security or Tax Identification Number

                  
	 	 
	 	__________________________________________
	 	 
	 	
                    Signature:__________________________________

                  
	 	 
	 	
                    
                      NOTE:
                        The above signature should correspond exactly with the name
                        on the first
                        page of this Warrant or with the name of the assignee appearing
                        in the
                        Form of AssignmentTHIS
        AGREEMENT (the “Agreement”) is dated as of December __,
        2003,
        and is by HEALTH-CHEM CORPORATION, a Delaware corporation (the “Company”), for
        the benefit of LAZAR & COMPANY, a New York [sole proprietorship] (the
“Holder”).

      

      WITNESSETH:

      

      WHEREAS,
        the Holder has been granted a warrant (the “Warrant”) to purchase 1,000,000
        shares of common stock, par value $.01 per share (the “Common Stock”), of the
        Company; and

      

      WHEREAS,
        the Company has agreed to grant the Holder certain registration rights with
        respect to the Common Stock issuable upon the exercise of the
        Warrant;

      

      NOW
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, the parties hereto hereby agree as
        follows.

      

      1.
         Registrable
        Securities.

      

      As
        used
        herein, the term “Registrable Securities” shall mean without duplication, any
        shares of Common Stock issued pursuant to an exercise of the Warrant or issued
        in respect thereof as a result of a stock dividend or stock split or a
        recapitalization, merger or other reorganization of the Company in which
        the
        Company is the surviving entity.

      

      2. Demand
        Registration.

      

      (a) At
        any
        one time (and not more than one time) after the Company has filed its Annual
        Report on Form 10-K for the year ended December 31, 2003, upon the written
        request of the Holder (the “Demand Registration Request”) requesting that the
        Company effect the registration under the Securities Act of 1933, as amended
        (the “Securities Act”), of at least 50% of the Registrable Securities then held
        by or available for issuance to the Holder or any transferees directly from
        the
        Holder of the Warrant or the shares of Common Stock issuable upon exercise
        thereof and having a value of at least $5 million, the Company shall, as
        expeditiously as may be practicable, use reasonable efforts to effect such
        registration under the Securities Act (a “Demand Registration”).

      

      (b)
         (i)
         The
        Company may postpone for up to six months the filing or the effectiveness
        of a
        registration statement for a Demand Registration if the Company and the Holder
        agree that such Demand Registration would reasonably be expected to have
        an
        adverse effect on any proposal or plan by the Company or any of its subsidiaries
        to engage in any acquisition of assets (other than in the ordinary course
        of
        business) or any merger, consolidation, tender offer or similar transaction;
        provided that in each such event, the Holder will be entitled to withdraw
        any
        request and, if such request is withdrawn, such Demand Registration will
        not
        count as the one permitted Demand Registration hereunder and the Company
        will
        pay all expenses incurred by the Holder in connection with such
        registration.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (ii)
         If
        the
        Holder makes a Demand Registration Request within three months of the Company’s
        fiscal year end, the Company may postpone for up to six months the filing
        or the
        effectiveness of a registration statement for a Demand
        Registration.

      

      3. Piggyback
        Registrations.

      

      (a) Right
        to Piggyback. Whenever
        the Company proposes to either (i) register any share of Common Stock under
        the
        Securities Act on its own behalf (other than any registration on Form S-4
        or S-8
        or any successor form thereto or a form of registration statement not available
        for the general registration of securities) (a “Company Registration”), or (ii)
        register any Registrable Securities pursuant to a Demand Registration (other
        than any registration on a form of registration statement not available for
        general registration of securities) and the registration form to be used
        may be
        used for the registration of Registrable Securities (a “Piggyback
        Registration”), the Company will, not less than 30 days prior to the filing of
        the registration statement to be used for such Piggyback Registration, give
        written notice (the “Registration Notice”) to the Holder of its intention to
        effect such a registration and will, subject to the provisions set forth
        below,
        include in such registration all Registrable Securities with respect to which
        the Company has received, within 15 days after the date on which the Holder
        has
        received the Registration Notice, a written request from the Holder for
        inclusion therein (which request shall specify the Registrable Securities
        intended to be included therein and the holders thereof).

      

      (b) Priority
        on Company Registrations.
        If a
        Piggyback Registration is an underwritten primary Company Registration, and
        the
        managing underwriters advise the Company in writing that in their opinion
        the
        aggregate of the number of securities proposed to be sold by the Company
        and the
        number of Registrable Securities and other securities held by persons with
        piggyback registration rights requested to be included in such registration
        exceeds the number which can be sold in such offering without adversely
        affecting the marketability of the offering, the Company will include in
        such
        registration the following securities in the following order of priority:
        (i)
        first, all of the securities the Company proposes to sell and (ii) second,
        the
        Registrable Securities and all other securities held by persons with piggyback
        registration rights requested to be included in such registration, pro rata
        among the holders of such Registrable Securities and other securities on
        the
        basis of the number of shares of Registrable Securities or other securities
        owned by each such holder. Notwithstanding the foregoing or any other provision
        contained herein, the Company shall have the right, at any time prior to
        the
        effective date thereof, to postpone, withdraw or abandon any Company
        Registration without any obligation to any holder of Registrable
        Securities.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c) Priority
        on Demand Registrations.
        If a
        Piggyback Registration is an underwritten primary Demand Registration, and
        the
        managing underwriters advise the Company in writing that in their opinion
        the
        aggregate of the number of securities proposed to be sold pursuant to the
        Demand
        Registration Request and the number of other Registrable Securities and other
        securities held by persons with piggyback registration rights requested to
        be
        included in such registration exceed the number which can be sold in such
        offering without adversely effecting the marketability of the offering, the
        Company will include in such registration the following securities in the
        following order of priority: (i) first, all of the securities requested to
        be
        included in such registration pursuant to a Demand Registration Request,
        pro
        rata among the holders of such securities on the basis of the number of shares
        of Registrable Securities or other securities owned by each such holder,
        and
        (ii) any other securities requested to be included in such registration by
        any
        other person having a right thereto. Notwithstanding the foregoing or any
        other
        provision contained herein, the party who delivered the Demand Registration
        Request shall have the right, at any time prior to the effective date thereof,
        to direct the Company to postpone, withdraw or abandon any Demand Registration
        without any obligation to any holder of Registrable Securities.

      

      4. Registration
        Procedures.

      

      Whenever
        the holders of Registrable Securities have requested that any Registrable
        Securities be registered pursuant to this Agreement, the Company will, subject
        to the provisions set forth above, including without limitation, the right
        of
        the Company to postpone, withdraw or abandon any Company Registration and
        the
        right of the Holder to postpone, withdraw or abandon any Demand Registration,
        use its reasonable efforts to effect the registration of such Registrable
        Securities in accordance with the intended method of disposition thereof,
        and
        pursuant thereto the Company will as expeditiously as possible:

      

      (a) prepare
        and file with the Securities and Exchange Commission a registration statement
        with respect to such Registrable Securities and use its reasonable efforts
        to
        cause such registration statement to become effective; provided that before
        filing a registration statement or prospectus or any amendments or supplements
        thereto, the Company will furnish to counsel selected by the reasonable
        opportunity to review and comment on such documents;

      

      (b) prepare
        and file with the Securities and Exchange Commission such amendments and
        supplements to such registration statement and the prospectus used in connection
        therewith as may be necessary to keep such registration statement effective
        for
        a period of not less than 90 days (without taking into account any period
        during
        which a stop order may be in effect) and comply with the provisions of the
        Securities Act with respect to the disposition of all securities covered
        by such
        registration statement during such period in accordance with the tended methods
        of disposition by the sellers thereof set forth in such registration
        statement;

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c) furnish
        to each seller of Registrable Securities such number of copies of such
        registration statement, each amendment and supplement thereto, the prospectus
        included in such registration statement (including each preliminary prospectus)
        and such other documents as such seller may reasonably request in order to
        facilitate the disposition of the Registrable Securities owned by such
        seller;

      

      (d) use
        its
        best efforts to register or qualify such Registrable Securities under such
        other
        securities or blue sky laws of such U.S. jurisdictions as any seller reasonably
        requests and do any and all other acts and things which may be reasonably
        necessary or advisable to enable such seller to consummate the disposition
        in
        such jurisdictions of the Registrable Securities owned by such seller, provided
        that the Company will not be required to (i) qualify generally to do business
        in
        any jurisdiction where it would not otherwise be required to qualify but
        for
        this subparagraph, (ii) subject itself to taxation in any such jurisdiction
        or
        (iii) consent to general service of process in any such
        jurisdiction;

      

      (e) notify
        each seller of such Registrable Securities, at any time when a prospectus
        relating thereto is required to be delivered under the Securities Act, of
        the
        happening any event which causes the prospectus included in such registration
        statement to contain an true statement of a material fact or omits any fact
        necessary to make the statements therein not misleading, and, at the request
        of
        any such seller, the Company will prepare a supplement or amendment to such
        prospectus so that, as thereafter delivered to the purchasers of such
        Registrable Securities, such prospectus will not contain an untrue statement
        of
        a material fact or omit to state any fact necessary to make the statements
        therein not misleading, it being hereby acknowledged and agreed that each
        holder
        of Registrable Securities shall be deemed to have agreed by acquisition of
        such
        Registrable Securities that upon the receipt of any notice from the Company
        of
        the occurrence of any event of the kind described in this paragraph, such
        holder
        shall thereupon discontinue such holder’s offer and disposition of Registrable
        Securities until such holder’s receipt of the copies of the “stickered,”
supplemented or amended prospectus and/or registration statement contemplated
        hereby and, if so directed by the Company, shall deliver to the Company (at
        the
        Company’s expense) all copies, other than permanent file copies, of the
        prospectus covering such Registrable Securities then in such holder’s
        possession;

      

      (f) cause
        all
        such Registrable Securities to be listed on each securities exchange on which
        similar securities issued by the Company are then listed and, if not so listed,
        use its best efforts in connection with any Company Registration (but not
        any
        Demand Registration) to cause all such Registrable Securities to be listed
        on
        the NASD automated quotation system;

      

      (g) provide
        a
        transfer agent and registrar for all such Registrable Securities not later
        than
        the effective date of such registration statement;

      

      (h) make
        available for inspection by any seller of Registrable Securities or any
        underwriter participating in any disposition pursuant to such registration
        statement and any attorney, accountant or other agent retained by any such
        seller or underwriter, all financial and other records, pertinent corporate
        documents and properties of the Company, and cause the Company’s officers,
        directors, employees and independent accountants to supply all information
        reasonably requested by any such seller, underwriter, attorney, accountant
        or
        agent in connection with such registration statement;

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (i) otherwise
        use its reasonable efforts to comply with all applicable rules and regulations
        of the Securities and Exchange Commission, and make available to its security
        holders, as soon as reasonably practicable, an earnings statement covering
        the
        period of at least twelve months (but not more than eighteen months) beginning
        with the first day of the Company’s first full fiscal quarter after the
        effective date of the registration statement, which earnings statement shall
        satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
        thereunder;

      

      (j) permit
        any holder of Registrable Securities, which holder, in its sole and exclusive
        judgment, might be deemed to be an underwriter or a controlling person of
        the
        Company, to participate in the preparation of such registration statement
        and to
        require the insertion therein of material, furnished to the Company in writing,
        which in the reasonable judgment of such holder and its counsel should be
        included (subject to the consent of the Company which shall not be unreasonably
        withheld);

      

      (k) in
        the
        event of the issuance of any stop order suspending the effectiveness of a
        registration statement, or of any order suspending or preventing the use
        of any
        related prospectus or suspending the qualification of any Common Stock included
        in such registration statement for sale in any jurisdiction, the Company
        will
        notify each holder of Registrable Securities and use its reasonable efforts
        promptly to obtain the withdrawal of such order;

      

      (1) use
        its
        reasonable efforts to cause such Registrable Securities covered by such
        registration statement to be registered with or approved by such other United
        States (or any state or territory thereof) governmental agencies or authorities
        as may be necessary to enable the sellers thereof to consummate the disposition
        of such Registrable Securities; and

      

      (m) obtain
        a
        cold comfort letter from the Company’s independent public accountants in
        customary form and covering such matters of the type customarily covered
        by cold
        comfort letters as the Holders may reasonably request.

      

      
        
          5.
            Registration
            Expenses.

        

      

      

      All
        expenses incident to the Company’s performance of or compliance with the
        foregoing, including without limitation all registration and filing fees,
        fees
        and expenses compliance with securities or blue sky laws, printing expenses,
        messenger and delivery expenses and fees and disbursements of counsel for
        the
        Company and all independent certified public accountants (excluding discounts
        and commissions) and other persons retained by the Company shall be borne
        by the
        Company. All fees and expenses incurred by the holders of Registrable Securities
        requesting registration, including fees and disbursements of counsel, shall
        be
        borne by auch holders, pro rata, based upon the number of shares of Registrable
        Securities held by each such holder.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        
          6.
            Indemnification.

        

      

      

      (a) The
        Company agrees to indemnify, to the extent permitted by law, each holder
        of
        Registrable Securities, its officers and directors and each person who controls
        such holder (within the meaning of the Securities Act) against all losses,
        claims, damages, liabilities and expenses caused by any untrue or alleged
        untrue
        statement of material fact contained in any registration statement, prospectus
        or preliminary prospectus or any amendment thereof or supplement thereto
        or any
        omission or alleged omission of a material fact required to be stated therein
        or
        necessary to make the statements therein not misleading, except insofar as
        the
        same is caused by or contained in any information furnished in writing to
        the
        Company by such holder expressly for use therein or by such holder’s failure to
        deliver a copy of the registration statement or prospectus or any amendments
        or
        supplements thereto after the Company has furnished such holder with a
        sufficient number of copies of the same in a timely manner. In connection
        with
        an underwritten offering, the Company will indemnify such underwriters, their
        officers and directors and each person who controls such underwriters (within
        the meaning of the Securities Act) to the same extent as provided above with
        respect to the indemnification of the holders of Registrable
        Securities.

      

      (b) In
        connection with any registration statement in which a holder of Registrable
        Securities is participating, each such holder will furnish to the Company
        in
        writing such information and affidavits as the Company reasonably requests
        for
        use in connection with any such registration statement or prospectus and,
        to the
        extent permitted by law, will indemnify the Company, its directors and officers
        and each person who controls the Company (within the meaning of the Securities
        Act) against any losses, claims, damages, liabilities and expenses resulting
        from any untrue or alleged untrue statement of material fact contained in
        the
        registration statement, prospectus or preliminary prospectus or any amendment
        thereof or supplement thereto or any omission or alleged omission of a material
        fact required to be stated therein or necessary to make the statements therein
        not misleading, but only to the extent that such untrue statement or omission
        is
        contained in, or omitted from, any information or affidavit so furnished
        in
        writing by such holder; provided that the obligation to indemnify will be
        limited to the net amount of proceeds received by such holder from the sale
        of
        Registrable Securities pursuant to such registration statement.

      

      (c) Any
        person entitled to indemnification hereunder will (i) give prompt written
        notice
        to the indemnifying party of any claim with respect to which it seeks
        indemnification, provided that the failure to give such notice shall relieve
        the
        indemnifying party hereunder of liability hereunder only if and to the extent
        that the indemnifying party has been prejudiced in any material respect by
        such
        failure, and (ii) unless in such indemnified party’s reasonable judgment a
        conflict of interest between such indemnified and indemnifying parties may
        exist
        with respect to such claim, permit such indemnifying party to assume the
        defense
        of such claim with counsel reasonably satisfactory to the indemnified party.
        If
        such defense is assumed, the indemnifying party will not be subject to any
        liability for any settlement made by the indemnified party without its consent
        (but such consent will not be unreasonably withheld). An indemnifying party
        who
        is not entitled to, or elects not to, assume the defense of a claim will
        not be
        obligated to pay the fees and expenses of more than one counsel for all parties
        indemnified by such indemnifying party with respect to such claim, unless
        in the
        reasonable judgment of an indemnified party a conflict of interest may exist
        between such indemnified party and any other of such indemnified parties
        with
        respect to such claim. 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      7. Participation
        in Underwritten Registrations.
        

      

      No
        holder
        of Registrable Securities may participate in any registration hereunder which
        is
        underwritten unless such person (i) agrees to sell such Registrable Securities
        on the basis provided in any underwriting arrangements to be executed in
        connection with such offering and (ii) completes and executes all
        questionnaires, powers of attorney, indemnities, underwriting agreements
        and
        other document required under the terms of such underwriting arrangements;
        provided that no holder of Registrable Securities included in any underwritten
        registration shall be required to make any representations or warranties
        to the
        Company or the underwriters other than representations and warranties regarding
        such holder and such holder’s intended method of distribution, ownership of
        securities or other information required under federal or state securities
        laws.

      

      8. Termination
        of Registrable Securities.

      

      As
        to any
        particular Registrable Securitres, such securities will cease to be Registrable
        Securities when they have been distributed to the public pursuant to a public
        offering registered under the Securities Act or sold to the public through
        a
        broker, dealer or market maker in compliance with Rule 144 under the Securities
        Act (or any similar rule then in force) or if the Registrable Securities
        may, in
        the opinion of counsel reasonably acceptable to the holder of such Registrable
        Securities, be freely sold to the public without registration under the
        Securities Act.

       

       9. Amendments
        and Waivers

      

      Except
        as
        otherwise provided herein, the provisions of this Agreement may be amended
        or
        waived only upon the prior written consent of the Company and the
        Holder.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      10.
        Successors
        and Assigns.

      

      All
        covenants and agreements in this Agreement by or on behalf of any of the
        parties
        hereto will bind and inure to the benefit of the respective successors and
        assigns of the parties hereto (including, with respect to all Registrable
        Securities, all subsequent registered holders of such Registrable
        Securities).

      

       

      11. Severability.

      

      Whenever
        possible, each provision of this Agreement will be interpreted in such manner
        as
        to be effective and valid under applicable law, but if any provision of this
        Agreement is held to be prohibited by or invalid under applicable law, such
        provision will be ineffective only to the extent of such prohibition or
        invalidity, without invalidating the remainder of this Agreement.

      

      12 Counterparts.

      

      This
        Agreement may be executed in one or more cousnterparts, and all such
        counterparts taken together will constitute one and the same
        Agreement.

      

      13. Notices.
        

      

      All
        notices, demands or other communications to be given or delivered under or
        by
        reason of the provisions of this Agreement shall be in writing and shall
        be
        delivered personally to the recipient, sent to the recipient by reputable
        express courier service (charges prepaid) or mailed to the recipient by
        certified or registered mail, return receipt requested and postage prepaid
        and
        shall be deemed given when received. Such notices, demands and other
        communications may be sent to each party hereto (other than the Company)
        at the
        address set forth in the Company’s records for such party, and to the Company at
        the address of its chief executive office, or to such other address as the
        recipient party has specified by prior written notice to the sending
        party.

      

      14. Governing
        Law.
        

      

      This
        Agreement shall be governed by and
        construed in accordance with the laws of the State of New York applicable
        to
        contracts made and to be wholly performed within such State.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      IN
        WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
        as of the day and year first above written.

       

      
        	 	
                HEALTH-CHEM
                  CORPORATION

              
	 	 
	 	 
	 	 
	 	
                By:
                  ___________________________________

              
	 	
                Name:

              
	 	
                Title:

              
	 	 
	 	 
	 	
                LAZAR
                  & COMPANY

              
	 	 
	 	 
	 	 
	 	
                By:
                  ___________________________________

              
	 	
                Name:

              
	 	
                Title:

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