Document:

<PAGE>   1
                                                                   EXHIBIT 10.22

                       PREFERRED STOCK PURCHASE AGREEMENT

                                  by and among

                              CISCO SYSTEMS, INC.,

                                    KPMG LLP

                                       and

                              KPMG CONSULTING, INC.

                         Dated as of September 15, 2000

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                                TABLE OF CONTENTS
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ARTICLE I  PURCHASE AND SALE......................................................................................1

         1.1  Purchase and Sale...................................................................................1
         1.2  The Closing.........................................................................................1
         1.3  Deliveries..........................................................................................1

ARTICLE II  REPRESENTATIONS AND WARRANTIES OF KPMG................................................................2

         2.1  Organization........................................................................................2
         2.2  Authorization, Validity and Enforceability..........................................................2
         2.3  No Conflicts........................................................................................2
         2.4  Consents and Approvals..............................................................................3

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF the company........................................................3

         3.1  Organization........................................................................................3
         3.2  Authorization, Validity and Enforceability..........................................................3
         3.3  No Conflicts........................................................................................3
         3.4  Consents and Approvals..............................................................................4

ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF THE INVESTOR........................................................4

         4.1  Organization of the Investor........................................................................4
         4.2  Authorization, Validity and Enforceability..........................................................4
         4.3  No Conflicts........................................................................................5
         4.4  Consents and Approvals..............................................................................5
         4.5  Ownership...........................................................................................5

ARTICLE V  COVENANTS..............................................................................................5

         5.1  Agreement To Convert................................................................................5
         5.2  Obligation to Repurchase............................................................................6
         5.3  Public Announcements................................................................................6

ARTICLE VI  DEFINITIONS...........................................................................................6

         6.1  Definitions.........................................................................................6

ARTICLE VII  MISCELLANEOUS........................................................................................8

         7.1  Notices.............................................................................................8
         7.2  Fees and Expenses..................................................................................10
         7.3  Specific Performance...............................................................................10
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                                TABLE OF CONTENTS
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         7.4  Entire Agreement; Waivers and Amendments...........................................................10
         7.5  Assignment; Binding Effect.........................................................................10
         7.6  Severability.......................................................................................10
         7.7  No Third Party Beneficiaries.......................................................................10
         7.8  Governing Law......................................................................................11
         7.9  Interpretation.....................................................................................11
         7.10  Termination.......................................................................................11
         7.11  Captions..........................................................................................11
         7.12  Counterparts......................................................................................11
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                                    EXHIBITS

Exhibit A         Hypothetical Illustration

<PAGE>   5

                       PREFERRED STOCK PURCHASE AGREEMENT

                  THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of September 15, 2000, by and among CISCO SYSTEMS,
INC., a California corporation (the "Investor"), KPMG LLP, a registered Delaware
limited liability partnership ("KPMG"), and KPMG CONSULTING, INC., a Delaware
corporation (the "Company"). Certain capitalized terms used herein shall have
the meanings set forth in Article VI.

                                 R E C I T A L S

                  WHEREAS, the Investor purchased from the Company, and the
Company sold to the Investor, 5,000,000 shares of Series A Mandatorily
Redeemable Convertible Preferred Stock, par value $0.01 per share, of the
Company (the "Series A Preferred Stock"), having an aggregate liquidation
preference of $1,050,000,000 and the other rights, preferences and terms set
forth in the Certificate of Designation of Series A Mandatorily Redeemable
Convertible Preferred Stock of the Company filed with the Secretary of State of
the State of Delaware (the "Certificate of Designation"), all upon the terms and
subject to the conditions set forth in that certain Stock Purchase Agreement,
dated as of December 29, 1999 by and among the Investor, KPMG and the Company
(the "Stock Purchase Agreement"); and

                  WHEREAS, the Investor now desires to sell 2,500,000 of its
shares of Series A Preferred Stock to KPMG for $525,000,000.

                  NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

                                   ARTICLE I

                               PURCHASE AND SALE

                  1.1 Purchase and Sale. Upon the terms and subject to the
conditions set forth in this Agreement, the Investor hereby agrees to sell, and
KPMG hereby agrees to purchase, 2,500,000 shares of Series A Preferred Stock
held by the Investor (the "Transferred Shares") for a purchase price of
$525,000,000 in cash (the "Purchase Price").

                  1.2 The Closing. The closing (the "Closing") of the sale of
the Transferred Shares hereunder shall take place at the offices of Sidley &
Austin, 875 Third Avenue, New York, New York. The Closing shall occur
concurrently with, or immediately prior to, the closing of the IPO. The date on
which the Closing occurs is referred to herein as the "Closing Date."

                  1.3 Deliveries. (a) At the Closing, the Investor shall deliver
to KPMG (i) a certificate representing 2,500,000 shares of the Series A
Preferred Stock; (ii) duly executed stock

<PAGE>   6

powers in favor of KPMG in respect of such certificate; and (iii) all other
documents required hereunder to be delivered by the Investor to KPMG at the
Closing.

                  (b) Within five Business Days after the Closing, KPMG shall
pay to Investor the Purchase Price by wire transfer of immediately available
funds to an account designated by the Investor in a written notice delivered to
KPMG at the Closing.

                                   ARTICLE II

                     REPRESENTATIONS AND WARRANTIES OF KPMG

                  KPMG hereby represents and warrants to the Investor, as of the
date of this Agreement, as follows:

                  2.1 Organization. KPMG is a limited liability partnership, is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has full partnership power and authority
to execute and deliver this Agreement and to perform its obligations hereunder
and to consummate the transactions contemplated hereby.

                  2.2 Authorization, Validity and Enforceability. The execution
and delivery and performance by KPMG of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary partnership action on the part of KPMG and no other partnership
proceeding on the part of KPMG is necessary to authorize the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by KPMG
and (assuming the due authorization, execution and delivery by the Investor)
constitutes the legal, valid and binding obligation of KPMG, enforceable against
KPMG in accordance with its terms, except to the extent such enforceability may
be limited by the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally and
general principles of equity or public policy (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

                  2.3 No Conflicts. Assuming all Consents described Section 2.4
are obtained, made or given (as the case may be), the execution and delivery by
KPMG of this Agreement does not, and the performance by KPMG of its obligations
hereunder and the consummation of the transactions contemplated hereby will not,
conflict with, result in any breach or violation of, constitute a default under
(or an event which with the giving of notice or the lapse of time or both would
constitute a default under), (a) the partnership agreement of KPMG or
organizational documents of any of its Subsidiaries, (b) any Contract to which
KPMG or any of its Subsidiaries is a party or by or to which any of its assets
or Properties may be bound or subject, or (c) any applicable order, writ,
judgment, injunction, award, decree, Permit, law, statute, ordinance, rule or
regulation, other than any such conflict, breach, violation, default,
termination, acceleration, Lien or Encumbrance or consequence which in the case
of clauses (b) and (c) only, would not, individually or in the aggregate
together with all such other conflicts, breaches, violations, defaults,
terminations, accelerations, Liens or Encumbrances or consequences have a
material

                                       2
<PAGE>   7

adverse effect on the ability of KPMG to execute and deliver this Agreement,
perform its obligations hereunder or consummate the transactions contemplated
hereby.

                  2.4 Consents and Approvals. Except in connection with the IPO
and except where the failure to obtain, make or give such Consent would not,
individually or in the aggregate, have a material adverse effect on, or a
material adverse change in, the ability of KPMG to execute and deliver this
Agreement, perform its obligations hereunder or consummate the transactions
contemplated hereby, no consent, approval, authorization, license or order of,
registration or filing with, or notice to, any federal, state, local, foreign or
other Governmental Entity or any other Person (collectively, "Consents") is
necessary to be obtained, made or given by KPMG or any of its Subsidiaries in
connection with the execution and delivery by KPMG of this Agreement, the
performance by KPMG of its obligations hereunder, and the consummation of the
transactions contemplated hereby.

                                  ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

                  The Company hereby represents and warrants to the Investor, as
of the date of this Agreement, as follows:

                  3.1 Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, and has full corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby.

                  3.2 Authorization, Validity and Enforceability. The execution
and delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceeding on the part of the Company is necessary to authorize
the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and (assuming the due authorization, execution and
delivery by the Investor) constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except to the extent such enforceability may be limited by the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and general principles of equity or public
policy (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

                  3.3 No Conflicts. Assuming all Consents described Section 3.4
are obtained, made or given (as the case may be), the execution and delivery by
the Company of this Agreement does not, and the performance by the Company of
its obligations hereunder and the consummation of the transactions contemplated
hereby will not, conflict with, result in any breach or violation of, constitute
a default under (or an event which with the giving of notice or the lapse of
time or both would constitute a default under), (a) the certificate of
incorporation or bylaws of the Company or any of its Subsidiaries, (b) any
Contract to which the Company or any

                                       3
<PAGE>   8

of its Subsidiaries is a party or by or to which any of its assets or Properties
may be bound or subject, or (c) any applicable order, writ, judgment,
injunction, award, decree, Permit, law, statute, ordinance, rule or regulation,
other than any such conflict, breach, violation, default, termination,
acceleration, Lien or Encumbrance or consequence which in the case of clauses
(b) and (c) only, would not, individually or in the aggregate together with all
such other conflicts, breaches, violations, defaults, terminations,
accelerations, Liens or Encumbrances or consequences have a material adverse
effect on the ability of the Company to execute and deliver this Agreement,
perform its obligations hereunder or consummate the transactions contemplated
hereby.

                  3.4 Consents and Approvals. Except in connection with the IPO
and except where the failure to obtain, make or give such Consent would not,
individually or in the aggregate, have a material adverse effect on, or a
material adverse change in, the ability of the Company to execute and deliver
this Agreement, perform its obligations hereunder or consummate the transactions
contemplated hereby, no Consent of any Governmental Entity or other Person is
necessary to be obtained, made or given by the Company or any of its
Subsidiaries in connection with the execution and delivery by the Company of
this Agreement, the performance by the Company of its obligations hereunder, and
the consummation of the transactions contemplated hereby.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES
                                 OF THE INVESTOR

                  The Investor hereby represents and warrants to KPMG and the
Company, as of the date of this Agreement, as follows:

                  4.1 Organization of the Investor. The Investor is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction and has full corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby.

                  4.2 Authorization, Validity and Enforceability. The execution,
delivery and performance by the Investor of this Agreement and the consummation
of the transactions contemplated hereby by the Investor have been duly and
validly authorized by all necessary corporate action on the part of the Investor
and no other corporate proceeding on the part of the Investor is necessary to
authorize the execution, delivery and performance of this Agreement or the
consummation of any of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Investor and (assuming the due
authorization, execution and delivery by KPMG and the Company) constitutes the
legal, valid and binding obligation of the Investor, enforceable against the
Investor in accordance with its terms, except to the extent such enforceability
may be limited by the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally and
general principles of equity or public policy (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

                                       4
<PAGE>   9

                  4.3 No Conflicts. Assuming all Consents described in Section
4.4 are obtained, made or given (as the case may be), the execution and delivery
by the Investor of this Agreement do not, and the performance by the Investor of
its obligations hereunder and the consummation of the transactions contemplated
hereby will not, conflict with, result in any breach or violation of, constitute
a default under (or an event which with the giving of notice or the lapse of
time or both would constitute a default under), (a) the certificate of
incorporation, by-laws or other charter or organizational documents of the
Investor, (b) any Contract to which the Investor is a party or by or to which it
or its assets or Properties may be bound or subject, or (c) any applicable
order, writ, judgment, injunction, award, decree, Permit, law, statute,
ordinance, rule or regulation, other than any conflict, breach, violation or
default which in the case of clauses (b) and (c) only, would not, individually
or in the aggregate together with all such other conflicts, breaches, violations
or defaults, have a material adverse effect on the ability of the Investor to
execute and deliver this Agreement, perform its obligations hereunder or
consummate the transactions contemplated hereby.

                  4.4 Consents and Approvals. Except where the failure to
obtain, make or give such Consent would not, individually or in the aggregate,
have a material adverse effect on, or a material adverse change in, the ability
of the Investor to execute and deliver this Agreement, perform its obligations
hereunder, or consummate the transactions contemplated hereby, no Consent of any
Governmental Entity or other Person is necessary to be obtained, made or given
by the Investor in connection with the execution and delivery by the Investor of
this Agreement, the performance by the Investor of its obligations hereunder,
and the consummation of the transactions contemplated hereby.

                  4.5 Ownership. The shares of Series A Preferred Stock are
owned by the Investor, free and clear of any Liens or Encumbrances (except for
those expressly set forth in this Agreement, the Certificate of Designation, the
Investor Rights Agreement and applicable federal and state securities laws and
regulations). Except as may be provided in the Transaction Documents (as defined
in the Stock Purchase Agreement), the sale of the Transferred Shares to KPMG as
contemplated by this Agreement is not subject to any preemptive right or right
of first refusal. Upon the consummation of the sale of the Transferred Shares to
KPMG, KPMG will acquire good and marketable title to each of the Transferred
Shares, free and clear of any Lien or Encumbrance, and will be entitled to all
the rights and benefits of a holder of such securities.

                                   ARTICLE V

                                   COVENANTS

                  5.1 Agreement To Convert. Immediately following the Closing,
each of the Investor and KPMG hereby irrevocably agrees to convert all of the
shares of Series A Preferred Stock held by it after any repurchase pursuant to
Section 5.2 into shares of Common Stock in accordance with the Certificate of
Designation. The conversion of all of the outstanding shares of Series A
Preferred Stock not repurchased pursuant to Section 5.2 into Common Stock shall
occur immediately prior to the closing of the IPO.

                                       5
<PAGE>   10

                  5.2 Obligation to Repurchase. (a) The Investor and the Company
agree that, to the extent that the conversion by the Investor of its remaining
2,500,000 shares of Series A Preferred Stock at the time of the IPO would result
in the Investor holding more than 9.9% of the outstanding shares of Common Stock
on such date (assuming the conversion of all outstanding shares of Series A
Preferred Stock), then the Company will, immediately prior to the conversion of
Series A Preferred Stock by the Investor, repurchase enough shares of Series A
Preferred Stock from the Investor so that the Investor would hold no more than
9.9% of the outstanding shares of Common Stock immediately following the closing
of the IPO. The repurchase price shall be calculated in the same manner as set
forth in Section 4.a of the Certificate of Designation. The Investor agrees not
to exercise any rights set forth in Section 4.a of the Certificate of
Designation. The Company shall pay the repurchase price to the Investor within
five (5) Business Days after the Closing, by wire transfer of immediately
available funds to an account designated by the Investor in a written notice
delivered to the Company at the Closing.

                  (b) Exhibit A hereto contains a hypothetical illustration of
the conversion and the repurchase described in this Section 5.2. It is
understood and agreed among the parties that the example contained in Exhibit A
is solely for the purpose of illustrating and agreeing to the mathematical
calculation of the conversion of the Series A Preferred Stock held by the
Investor and the repurchase contemplated by this Section 5.2, and that the
numbers are not representations of actual prices that would be achieved in the
IPO.

                  5.3 Public Announcements. Each party hereto shall notify the
other parties prior to issuing any press release or making any public statement
pertaining to this Agreement or the transactions contemplated hereby, and shall
not issue any such press release or make any such public statement without
obtaining the reasonable approval of the other parties prior thereto, except
that the Company shall be permitted to disclose the existence and content of
this Agreement and the transactions contemplated herein in its Registration
Statement and Prospectus and in connection with the IPO and each party will in
any event have the right to issue any such press release or statement upon
advice of its counsel that such issuance is required in order to comply with any
applicable law or any listing agreement with, or rules of, a national securities
exchange to which such party is a party or subject.

                                   ARTICLE VI

                                   DEFINITIONS

                  6.1 Definitions. The following terms when used in this
Agreement shall have the following respective meanings:

                  "Agreement" has the meaning set forth in the first paragraph
of this Agreement.

                  "Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in California or New York are required or
authorized by law to be closed.

                  "Certificate of Designation" has the meaning set forth in the
recitals of this Agreement.

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<PAGE>   11

                  "Closing" has the meaning set forth in Section 1.2.

                  "Closing Date" has the meaning set forth in Section 1.2.

                  "Common Stock" means the Company's common stock, par value
$.01 per share.

                  "Company" has the meaning set forth in the first paragraph of
this Agreement.

                  "Consents" has the meaning set forth in Section 2.4.

                  "Contracts" means all written or binding oral contracts,
agreements, undertakings, indentures, notes, debentures, bonds, loans,
instruments, leases, mortgages, franchise, license, commitments or other binding
arrangements.

                  "Governmental Entity" means any federal, state, local or
foreign government, political subdivision, legislature, court, agency,
department, bureau, commission or other governmental or regulatory authority,
body or instrumentality, including any industry or other non-governmental
self-regulatory organizations.

                  "Investor" has the meaning set forth in the first paragraph of
this Agreement.

                  "Investor Rights Agreement" means the Investor Rights
Agreement dated as of January 31, 2000 by and among the Investor, KPMG and the
Company.

                  "IPO" means the proposed initial public offering of Common
Stock by the Company.

                  "KPMG" has the meaning set forth in the first paragraph of
this Agreement.

                  "Lien or Encumbrance" means any lien, pledge, mortgage,
security interest, claim, lease, charge, option, right, easement, servitude,
transfer limit, restriction, title defect or other encumbrance.

                  "Permits" means all licenses, certificates of authority,
permits, orders, consents, approvals, registrations, authorizations,
qualifications and filings under any federal, state, local or foreign laws or
with any Governmental Entities.

                  "Person" means any individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint stock
company, trust, unincorporated organization, Governmental Entity or other entity
or organization.

                  "Property" means any real, personal or mixed property, whether
tangible or intangible.

                  "Prospectus" means the form of prospectus included in the
Registration Statement, as the same may be amended or supplemented from time to
time.

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<PAGE>   12

                  "Registration Statement" means the registration statement on
Form S-1 of the Company filed under the Securities Act in connection with its
proposed IPO, as the same may be amended from time to time.

                  "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder.

                  "Series A Preferred Stock" has the meaning set forth in the
recitals of this Agreement.

                  "Stock Purchase Agreement" has the meaning set forth in the
recitals of this Agreement.

                  "Subsidiary" means, with respect to any Person, any entity
controlled by such Person.

                                  ARTICLE VII

                                 MISCELLANEOUS

                  7.1 Notices. Any notices and other communications required to
be given pursuant to this Agreement shall be in writing and shall be effective
upon delivery by hand (against written receipt) or upon receipt if sent by
certified or registered mail (postage prepaid and return receipt requested) or
by a nationally recognized overnight courier service (appropriately marked for
overnight delivery) or upon transmission if sent by telex or facsimile (with
request for immediate confirmation of receipt in a manner customary for
communications of such respective type and with physical delivery of the
communication being made by one of the other means specified in this Section 7.1
as promptly as practicable thereafter). Notices are to be addressed as follows:

                   If to KPMG to:

                           KPMG LLP
                           345 Park Avenue
                           New York, New York 10154
                           Attention: Chairman
                           Telecopy No.: (212) 758-9819

                           With a copy to:

                           KPMG LLP
                           280 Park Avenue
                           New York, New York 10017
                           Attention: Claudia L. Taft, Esq.
                           Telecopy No.: (212) 909-5485

                           and

                                       8
<PAGE>   13

                           Sidley & Austin
                           Bank One Plaza
                           10 South Dearborn Street
                           Chicago, Illinois 60603
                           Attention: Paul L. Choi, Esq.
                           Telecopy No.: (312) 853-7036

                   If to the Company to:

                           KPMG Consulting, Inc.
                           1676 International Drive
                           McLean, Virginia 22102
                           Attention: David W. Black, Esq.
                           Telecopy No.: (703) 747-3847

                           with a copy to:

                           Sidley & Austin
                           Bank One Plaza
                           10 South Dearborn Street
                           Chicago, Illinois 60603
                           Attention:  Paul L. Choi, Esq.
                           Telecopy No.: (312) 853-7036

                   If to the Investor to:

                           Cisco Systems, Inc.
                           170 West Tasman Drive
                           San Jose, California 95134
                           Attention:  Larry Carter
                           Telecopy No.: (408) 526-4545

                           with a copy to:

                           Brobeck, Phleger & Harrison LLP
                           Two Embarcadero Place
                           2200 Geng Road
                           Palo Alto, California 94303
                           Attention: Curtis L. Mo, Esq.
                           Telecopy No.: (650) 496-2885

or to such other respective addresses as any of the parties hereto shall
designate to the others by like notice, provided that notice of a change of
address shall be effective only upon receipt thereof.

                                       9
<PAGE>   14

                  7.2 Fees and Expenses. Each of the parties hereto shall pay
its own respective fees and expenses (including, without limitation, the fees
and disbursements of any attorneys, accountants, investment bankers, consultants
or other Representatives) incurred in connection with this Agreement and the
transactions contemplated hereby, whether or not such transactions are
consummated.

                  7.3 Specific Performance. Each party hereto acknowledges and
agrees that in the event of any breach or default by the other parties under
this Agreement, the non-defaulting parties hereto would be irreparably and
immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that in such case (i) each defaulting party hereto will
waive, in any action, suit or proceeding for specific performance or other
relief referred to in this paragraph, the defense of adequacy of money damages
or a remedy at law, and (ii) the other non-defaulting parties shall be entitled,
in addition to any other remedy to which it may be entitled at law or in equity
or otherwise, to compel specific performance of this Agreement or to obtain a
temporary restraining order, preliminary and permanent injunction or other
equitable relief or remedy, in any action, suit or proceeding instituted in any
state or federal court.

                  7.4 Entire Agreement; Waivers and Amendments. This Agreement
(including the Exhibit hereto and the Transaction Documents as defined in the
Stock Purchase Agreement) contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes all prior
written or oral agreements, representations and understandings with respect
thereto. This Agreement may only be amended or modified, and the terms hereof
may only be waived, by a writing signed by all parties hereto or, in the case of
a waiver, by the party entitled to the benefit of the terms being waived.

                  7.5 Assignment; Binding Effect. This Agreement may not be
assigned or delegated, in whole or in part, by any party hereto without the
prior written consent of the other parties hereto.

                  7.6 Severability. In the event that any provision of this
Agreement shall be declared invalid or unenforceable by a court of competent
jurisdiction in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent declared invalid or unenforceable without affecting
the validity or enforceability of the other provisions of this Agreement, and
the remainder of this Agreement shall remain binding on the parties hereto (so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner adverse to any party). Upon such determination,
the parties shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.

                  7.7 No Third Party Beneficiaries. This Agreement is for the
benefit of the parties hereto and is not intended to confer upon any other
Person any rights or remedies hereunder. Notwithstanding anything herein to the
contrary, the only Persons entitled to assert any rights or claims hereunder are
KPMG, the Company, and the Investor.

                                       10
<PAGE>   15

                  7.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California,
without giving effect to the principles of conflicts of law thereof.

                  7.9 Interpretation. This Agreement is the result of
arms-length negotiations between the parties hereto and has been prepared
jointly by the parties. In applying and interpreting the provisions of this
Agreement, there shall be no presumption that the Agreement was prepared by any
one party or that the Agreement shall be construed in favor of or against any
one party.

                  7.10 Termination. This Agreement shall terminate upon the
earliest to occur of (i) the failure to close a Qualified IPO (as defined in the
Certificate of Designation) by March 15, 2001, (ii) the formal withdrawal by the
Company of its Registration Statement from the Securities and Exchange
Commission, (iii) the public announcement by the Company that it intends to make
such formal withdrawal or to terminate or abandon the IPO by March 15, 2001 or
(iv) the public announcement by the Company that it intends to delay the IPO
beyond March 15, 2001 or a public announcement by the Company that it will not
proceed with the IPO until after March 15, 2001.

                  7.11 Captions. The Article and Section Headings in this
Agreement are inserted for convenience of reference only, and shall not affect
the interpretation of this Agreement.

                  7.12 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.

                           [SIGNATURE PAGE TO FOLLOW]

                                       11
<PAGE>   16
                  IN WITNESS WHEREOF, each of the parties has executed this
Agreement as of the date first written above.

                             CISCO SYSTEMS, INC.

                             By:        /s/ David A. Rogan
                                 -----------------------------------------------
                             Name:      David A. Rogan
                             Title:     Vice President, Treasurer

                             KPMG LLP

                             By:        /s/ Robert W. Alspaugh
                                 -----------------------------------------------
                             Name:      Robert W. Alspaugh
                             Title:     Deputy Chairman

                             KPMG CONSULTING, INC.

                             By:        /s/ Randolph C. Blazer
                                 -----------------------------------------------
                             Name:      Randolph C. Blazer
                             Title:     Chief Executive Officer

             [SIGNATURE PAGES TO PREFERRED STOCK PURCHASE AGREEMENT]

<PAGE>   17

                                                                       EXHIBIT A

                            Hypothetical Illustration

Assumptions

     1.   Initial public offering price in the IPO of $7.75 per share of Common
          Stock

     2.   591.5 million shares of Common Stock outstanding after the IPO.

     3.   Investor owns 2.5 million shares of Series A Preferred Stock
          immediately prior to the IPO.

Calculations

     1.   If converted on the date of the closing of the IPO, the 2.5 million
          shares of Series A Preferred Stock held by the Investor would convert
          into 84.7 million shares of Common Stock.

     2.   Since 9.9% of the outstanding shares of Common Stock equals 58.6
          million shares of Common Stock, the Company would need to repurchase
          the equivalent of 26.1 million shares of Common Stock from the
          Investor.

     3.   Therefore, immediately prior to the conversion, the Company would
          repurchase from the Investor such number of shares of Series A
          Preferred Stock that would convert into 26.1 million shares of Common
          Stock. The repurchase price would equal 26.1 million shares x $7.75,
          or approximately $202.0 million.

     4.   The remaining shares of Series A Preferred Stock held by the Investor
          would convert into 58.6 million shares of Common Stock.<PAGE>   1
                                                                    Exhibit 4.28

                             FORM OF CLASS A 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 HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                          ADVANCED VIRAL RESEARCH CORP.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.:                                         Number of Shares: 5,000,000
             -----------------------
Date of Issuance: September __, 2000

Advanced Viral Research Corp., 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, May Davis Group, Inc., the registered holder hereof or its
permitted assigns, is entitled, subject to the terms 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. Eastern Time on the
Expiration Date (as defined herein) Five Million 5,000,000) fully paid and
nonassessable shares of Common Stock (as defined herein) of the Company (the
"WARRANT Shares") at the Warrant Exercise Price per share provided in Section
1(b) below; provided, however, that in no event shall the holder be entitled to
exercise this Warrant for a number of Warrant Shares in excess of that number of
Warrant Shares which, upon giving effect to such exercise, would cause the
aggregate number of shares of Common Stock beneficially owned by the holder and
its affiliates to exceed 4.99% of the outstanding shares of the Common Stock
following such exercise, except within 60 days of the Expiration Date. For
purposes of the foregoing proviso, the aggregate number of shares of Common
Stock beneficially owned by the holder 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 proviso is being made, but shall
exclude shares of Common Stock which would be issuable upon (i) exercise of the
remaining, unexercised Warrants beneficially owned by the holder and its
affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the

<PAGE>   2

Company beneficially owned by the holder and its affiliates (including, without
limitation, any convertible notes 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. For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock a holder may rely on the number
of outstanding shares of Common Stock as reflected in (1) the Company's most
recent Form 10-Q or Form 10-K, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or its
transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written request of any holder, the Company shall promptly, but in no
event later than one (1) Business Day 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 reported.

                                       2
<PAGE>   3
         Section 1.

                  (a) PLACEMENT AGENT AGREEMENT. This Warrant is one of the
common stock purchase warrants (the "WARRANTS") issued pursuant to the Placement
Agent Agreement dated as of September __, 2000 between the Company and May Davis
Group, Inc. (the "PLACEMENT AGENT AGREEMENT").

                  (b) DEFINITIONS. The following words and terms as used in this
Warrant shall have the following meanings:

                           (i) "APPROVED STOCK PLAN" means any employee benefit
plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company's securities may be issued to any employee, officer or
director for services provided to the Company.

                           (ii) "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.

                           (iii) "CLOSING BID PRICE" means the closing bid price
of Common Stock as quoted on the Principal Market (as reported by Bloomberg
Financial Markets ("BLOOMBERG") through its "Volume at Price" function).

                           (iv) "COMMON STOCK" means (i) the Company's common
stock, par value $0.01 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.

                           (v) "CREDIT AGREEMENT" means the Equity Line of
Credit Agreement dated as of September __, 2000 between the Company and the
Investor named therein for the purchase of Common Stock by the Investor.

                           (vi) "EXCLUDED SECURITIES" means, provided such
security is issued at a price which is greater than or equal to the arithmetic
average of the Closing Bid Prices of the Common Stock for the ten (10)
consecutive trading days immediately preceding the date of issuance, any of the
following: (a) any issuance by the Company of securities in connection with a
strategic partnership or a joint venture (the primary purpose of which is not to
raise equity capital), (b) any issuance by the Company of securities as
consideration for a merger or consolidation or the acquisition of a business,
product, license, or other assets of another person or entity, (c) the
securities described in Schedule 2.7 of the Credit Agreement and (d) options to
purchase shares of Common Stock, provided (I) such options are issued after the
date of this Warrant to employees of the Company within 30 days of such
employee's starting his employment with the Company, and (II) the exercise price
of such options is not less than the CLOSING BID PRICE of the Common Stock on
the date of issuance of such option.

                           (vii) "EXPIRATION DATE" means the date five (5) years
from the Issuance Date of this Warrant or, if such date falls on a Saturday,
Sunday or other day on which banks are required or authorized to be closed in
the City of New York or the State of New York or on which trading does not take
place on the Principal Exchange or automated quotation

                                       3
<PAGE>   4

system on which the Common Stock is traded (a "HOLIDAY"), the next date that is
not a Holiday.

                           (viii) "ISSUANCE DATE" means the date hereof.

                           (ix) "OPTIONS" means any rights, warrants or options
to subscribe for or purchase Common Stock or Convertible Securities.

                           (x) "OTHER SECURITIES" means (i) those options and
warrants of the Company issued prior to, and outstanding on, the Issuance Date
of this Warrant, (ii) the shares of Common Stock issuable on exercise of such
options and warrants, provided such options and warrants are not amended after
the Issuance Date of this Warrant and (iii) the shares of Common Stock issuable
upon exercise of this Warrants.

                           (xi) "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.

                           (xii) "PRINCIPAL MARKET" means the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market, the Nasdaq
SmallCap Market, whichever is at the time the principal trading exchange or
market for such security, or the over-the-counter market on the electronic
bulletin board for such security as reported by BLOOMBERG or, if no bid or sale
information is reported for such security by BLOOMBERG, then the average of the
bid prices of each of the market makers for such security as reported in the
"pink sheets" by the National Quotation Bureau, Inc.

                                       4
<PAGE>   5
                           (xiii) "REGISTRATION RIGHTS AGREEMENT" means the
Registration Rights Agreement dated as of September __, 2000 between the Company
and May Davis with respect to the registration rights pertaining to the Common
Stock issuable upon exercise of this Warrant.

                           (xiv) "SECURITIES ACT" means the Securities Act of
1933, as amended.

                           (xv) "WARRANT" means this Warrant and all Warrants
issued in exchange, transfer or replacement thereof.

                           (xvi) "WARRANT EXERCISE PRICE" shall be equal to
[110%of the Closing Bid Price of the Common Stock on the date of the execution
of the Credit Agreement or $1.00, whichever is higher].

                           (xvii) "WARRANT SHARES" means the shares of Common
Stock issuable at any time upon exercise of this Warrant.

                  (c) OTHER DEFINITIONAL PROVISIONS.

                           (i) Except as otherwise specified herein, all
references herein (A) to the Company shall be deemed to include the Company's
successors and (B) to any applicable law defined or referred to herein shall be
deemed references to such applicable law as the same may have been or may be
amended or supplemented from time to time.

                           (ii) When used in this Warrant, the words "HEREIN,"
"HEREOF," and "HEREUNDER," and words of similar import, shall refer to this
Warrant as a whole and not to any provision of this Warrant, and the words
"SECTION," "SCHEDULE," and "EXHIBIT" shall refer to Sections of, and Schedules
and Exhibits to, this Warrant unless otherwise specified.

                           (iii) Whenever the context so requires, the neuter
gender includes the masculine or feminine, and the singular number includes the
plural, and vice versa.

         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, pro rata as hereinafter provided, at any time on any Business Day on or
after the opening of business on such Business Day, commencing with the first
Advance Date, and prior to 11:59 P.M. Eastern Time on the Expiration Date, by
(i) delivery of a written notice, in the form of the subscription notice
attached as EXHIBIT A hereto (the "EXERCISE NOTICE"), 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(s) applicable to the Warrant Shares being purchased,
multiplied by the number of Warrant Shares (at the applicable Warrant Exercise
Price) as to which this Warrant is being exercised (plus any applicable issue or
transfer taxes) (the "AGGREGATE EXERCISE PRICE") in cash or wire transfer of
immediately available

                                       5
<PAGE>   6

funds or (B) notification to the Company that this Warrant is being exercised
pursuant to a Cashless Exercise (as defined in Section 2(f)) and (iii) the
surrender of this Warrant (or 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 as soon as practicable following such
date. 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 Business Day
following the date of receipt of the Exercise Notice, the Aggregate Exercise
Price (or notice of a Cashless Exercise) and this Warrant (or an indemnification
undertaking with respect to this Warrant in the case of its loss, theft or
destruction) (the "EXERCISE DELIVERY DOCUMENTS"), 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 The Depository Trust Company; provided,
however, if the holder who submitted the Exercise Notice requested physical
delivery of any or all of the Warrant Shares, then the Company shall, on or
before the second Business Day following receipt of the Exercise Delivery
Documents, issue and surrender to a common carrier for overnight delivery to the
address specified in the Exercise Notice, a certificate, registered in the name
of the holder, for the number of shares of Common Stock to which the holder
shall be entitled pursuant to such request. Upon delivery of the Exercise Notice
and Aggregate Exercise Price referred to in clause (ii)(A) above or notification
to the Company of a Cashless Exercise referred to in Section 2(e), 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 Bid Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the holder the number of Warrant Shares that is
not disputed and shall submit the disputed determinations or arithmetic
calculations to the holder via facsimile within one (1) Business Day 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 or arithmetic
calculation of the Warrant Shares within one (1) 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 Bid Price to an independent, reputable
investment banking firm or (ii) the disputed arithmetic calculation of the
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 forty-eight (48) hours 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, the Company shall, as soon as
practicable and in no event later than five (5) Business Days after any exercise
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 immediately prior to such exercise under this Warrant
exercised, less the number of Warrant Shares with respect to which such Warrant
is exercised.

                  (c) No fractional Warrant Shares are to be issued upon any pro
rata exercise of this Warrant, but rather the number of Warrant Shares issued
upon such exercise of this Warrant shall be rounded up or down to the nearest
whole number.

                                       6
<PAGE>   7

                  (d) If the Company shall fail for any reason or for no reason
to issue to the holder within three (3) Business Days of receipt of the Exercise
Delivery Documents, a certificate for the number of Warrant Shares to which the
holder is entitled or to credit the holder's balance account with The Depository
Trust Company for such number of Warrant Shares 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 Placement Agent Agreement or
otherwise available to such holder, pay as additional damages in cash to such
holder on each day the issuance of such certificate for Warrant Shares is not
timely effected an amount equal to 0.5% of the product of (A) the sum of the
number of Warrant Shares not issued to the holder on a timely basis and to which
the holder is entitled, and (B) the Closing Bid Price of the Common Stock for
the trading day immediately preceding the last possible date which the Company
could have issued such Common Stock to the holder without violating this Section
2.

                  (e) If within seven (7) Business Days after the Company's
receipt of the Exercise Delivery Documents, the Company fails to deliver a new
Warrant to the holder for the number of Warrant Shares to which such holder is
entitled pursuant to Section 2(b) hereof, then, in addition to any other
available remedies under this Warrant or the Placement Agent Agreement, or
otherwise available to such holder, the Company shall pay as additional damages
in cash to such holder on each day after such seventh (7th) Business Day that
such delivery of such new Warrant is not timely effected in an amount equal to
0.5% of the product of (A) the number of Warrant Shares represented by the
portion of this Warrant which is not being exercised and (B) the Closing Bid
Price of the Common Stock for the trading day immediately preceding the last
possible date which the Company could have issued such Warrant to the holder
without violating this Section 2.

                  (f) If the Warrant Shares are not covered by an effective
registration statement for the resale of the Warrant Shares, the holder of this
Warrant may, at its election exercised in its sole discretion, exercise this
Warrant to the extent then exercisable, in lieu of making payment of the
Aggregate Exercise Price in cash, 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 Warrant Shares with respect to
                           which this Warrant is then being exercised.

                           B= the Closing Bid Price of the Common Stock on the
                           date of exercise of the Warrant.

                           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:

                                       7
<PAGE>   8

                  (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, be validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
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 100% of the number of shares of Common Stock needed to provide
for the exercise of the rights then represented by this Warrant 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 file a registration statement
with the Securities and Exchange Commission to secure the listing of the Warrant
Shares on the Principal Market in accordance with the terms and conditions
regarding the registration rights of holders of Warrants set forth in the
Registration Rights Agreement and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all Warrant Shares from time to
time issuable upon the exercise of this Warrant; 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 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 Certificate 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, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. The Company 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, and (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.

                  (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. The Company shall pay any and all taxes which may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.

         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,

                                       8
<PAGE>   9

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 or she 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. Notwithstanding this Section 5, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

         Section 6. REPRESENTATIONS OF HOLDER. The holder of this Warrant, by
the acceptance hereof, represents 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 resale 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)(1) of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act (an "ACCREDITED INVESTOR"). Upon exercise of
this Warrant, other than pursuant to a Cashless Exercise, the holder shall, if
requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the Warrant Shares so purchased are being acquired solely for the
holder's own account and not as a nominee for any other party, for investment,
and not with a view toward distribution or resale and that such holder is an
Accredited Investor. If such holder cannot make such representations because
they would be factually incorrect, it shall be a condition to such holder's
exercise of this Warrant, other than pursuant to a Cashless Exercise, that the
Company receive such other representations as the Company considers reasonably
necessary to assure the Company that the issuance of its securities upon
exercise of this Warrant shall not violate any United States or state securities
laws.

         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.

                  (b) The Company is obligated to register the Warrant Shares
for resale under the Securities Act pursuant to the Registration Rights
Agreement and the initial holder of this Warrant (and certain assignees thereof)
is entitled to the registration rights in respect of the Warrant Shares as set
forth in the Registration Rights Agreement.

                                       9
<PAGE>   10

         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 AND NUMBER OF SHARES
UPON ISSUANCE OF COMMON STOCK. If and whenever on or after the Issuance Date of
this Warrant, the Company issues or sells, or is deemed to have issued or sold,
any shares of Common Stock (other than (i) Excluded Securities and (ii) shares
of Common Stock which are issued or deemed to have been issued by the Company in
connection with an Approved Stock Plan or upon exercise or conversion of the
Other Securities) for a consideration per share less than a price (the
"APPLICABLE PRICE") equal to the lower of the Warrant Exercise Price in effect
immediately prior to such issuance or sale or the Closing Bid Price, then
immediately after such issue or sale the Warrant Exercise Price then in effect
shall be reduced to an amount equal to the price determined by multiplying the
Warrant Exercise Price in effect immediately prior thereto by a fraction, of
which the numerator shall be the total number of shares of Common Stock
outstanding immediately prior to the issuance of such additional shares plus the
number of shares of Common Stock which the aggregate consideration received
(determined as provided in Section 8(c) for the issuance of such additional
shares would purchase at the current Warrant Exercise Price, and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares. Such adjustment shall
be made successively whenever such an issuance is made. Upon each such
adjustment of the Warrant Exercise Price hereunder, the number of Warrant Shares
issuable upon exercise of this Warrant shall be adjusted to the number of shares
determined by multiplying the Warrant Exercise Price in effect immediately prior
to such adjustment by the number of Warrant Shares issuable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product
thereof by the Warrant Exercise Price resulting from such adjustment.

                  (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 or
exchange of any Convertible Securities issuable upon exercise of any such Option
is less than the Applicable Price, 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 such Options or upon
conversion or exchange of such Convertible Securities" 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 or upon conversion or exchange 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 or
exchange of such Convertible Securities.

                                       10
<PAGE>   11

                           (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 the
conversion or exchange thereof is less than the Applicable Price, 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 or exchange" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale of the Convertible Security and
upon conversion or exchange 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 or exchange 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 price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into
or exchangeable 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 Warrant Shares issuable upon
exercise of this Warrant 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 Issuance Date 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 exercise,
conversion or exchange thereof shall be deemed to have been issued as of the
date of such change. No adjustment pursuant to this Section 8(b) shall be made
if such adjustment would result in an increase of the Warrant Exercise Price
then in effect.

                  (c) 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:

                           (i) CALCULATION OF CONSIDERATION RECEIVED. 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 net 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 Market 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

                                       11
<PAGE>   12

Convertible Securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined jointly by the Company and the
holders of Warrants representing at least two-thirds (b) of the Warrant Shares
issuable upon exercise of the Warrants 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 Warrants representing at
least two-thirds (b) of the Warrant Shares issuable upon exercise of the
Warrants then outstanding. The determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such appraiser shall
be borne jointly by the Company and the holders of Warrants.

                           (ii) INTEGRATED TRANSACTIONS. 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, the Options
will be deemed to have been issued for a consideration of $.01.

                           (iii) TREASURY SHARES. The number of shares of Common
Stock outstanding at any given time does not include shares owned or held by or
for the account of the Company, and the disposition of any shares so owned or
held will be considered an issue or sale of Common Stock.

                           (iv) 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.

                  (d) ADJUSTMENT OF WARRANT EXERCISE PRICE 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, any Warrant Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of shares of Common 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, any Warrant Exercise Price in effect immediately prior
to such combination will be proportionately increased and the number of Warrant
Shares issuable upon exercise of this Warrant will be proportionately decreased.
Any adjustment under this Section 8(d) shall become effective at the close of
business on the date the subdivision or combination becomes effective.

                  (e) DISTRIBUTION OF ASSETS. If the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction) (a
"Distribution"), at

                                       12
<PAGE>   13

any time after the issuance of this Warrant, then, in each such case: either (x)
the number of Warrant Shares obtainable upon exercise of this Warrant shall be
increased to a number of shares equal to the number of shares of Common Stock
obtainable immediately prior to the close of business on the record date fixed
for the determination of holders of Common Stock entitled to receive the
Distribution multiplied by a fraction of which (A) the numerator shall be the
Closing Sale Price of the Common Stock on the trading day immediately preceding
such record date, and (B) the denominator shall be the Closing Sale Price of the
Common Stock on the trading day immediately preceding such record date minus the
value of the Distribution (as determined in good faith by the Company's Board of
Directors) applicable to one share of Common Stock; or (y) in the event that the
Distribution is of common stock of a company whose common stock is traded on a
national securities exchange or a national automated quotation system, then the
holder of this Warrant shall receive an additional warrant to purchase Common
Stock, the terms of which shall be identical to those of this Warrant, except
that such warrant shall be exercisable into the amount of the assets that would
have been payable to the holder of this Warrant pursuant to the Distribution had
the holder exercised this Warrant immediately prior to such record date and with
an exercise price equal to the amount by which the exercise price of this
Warrant was decreased with respect to the Distribution pursuant to the terms of
the immediately preceding clause (i).

                  (f) CERTAIN EVENTS. If any event occurs of the type
contemplated by the provisions of this Section 8 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),
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 pursuant to this Section 8(f) 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) Immediately upon 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.

                           (ii) The Company will give written notice to the
holder of this Warrant at least ten (10) 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, including an event described in Section
8(e), (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 such information
shall be made known to the public prior to or in conjunction with such notice
being provided to such holder, which notice shall set forth the effect on such
holder if the holder fails to exercise the Warrant prior to such event.

                           (iii) The Company will also give written notice to
the holder of this Warrant at least ten (10) days prior to the date on which any
Organic Change, dissolution or liquidation will take place, provided that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to such holder.

                                       13
<PAGE>   14

         Section 9. PURCHASE RIGHTS; REORGANIZATION, RECLASSIFICATION,
CONSOLIDATION, MERGER OR SALE.

                  (a) In addition to any adjustments pursuant to Section 8
above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
"PURCHASE RIGHTS"), then upon the exercise of this Warrant the holder of this
Warrant will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such holder could have acquired if
such holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.

                   (b) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction in each case which is effected in such a
way that holders of Common Stock are entitled to receive (either directly or
upon subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "ORGANIC CHANGE." In the
case of any Organic Change, the holder of this Warrant shall thereafter have the
right upon exercise to purchase the kind and amount of shares of stock and other
securities and property receivable upon such Organic Change which the holder of
this Warrant would have received had all Warrant Shares issuable upon exercise
of this Warrant been issued immediately prior to such Organic Change at a price
equal to the Warrant Exercise Price then in effect pertaining to this Warrant
(the kind, amount and price of such stock and other securities to be subject to
adjustment as herein provided).

         Section 10. REDEMPTION. The Company may redeem, in cash, the Warrants
at any time at a redemption price of $.01 per Warrant, upon thirty (30) days
prior written notice, provided that within three days of the date of the
redemption notice the Closing Bid Price is not less than $4.00 per share for ten
(10) consecutive trading days. The holder of the Warrant shall be entitled to
exercise this Warrant after receipt of the redemption notice, but prior to the
redemption of this Warrant by the Company.

         Section 11. 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, 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.

         Section 12. 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 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:

                                       14
<PAGE>   15

         If to the Holder:
                  May Davis Group, Inc.
                  1 World Trade Center, Suite 8735
                  New York, NY 10048
                  Telephone: (212) 775-7400
                  Facsimile: (212) 775-8166

         with a copy to:
                  Silverman, Collura & Chernis, P.C.
                  381 Park Avenue South, Suite 1601
                  New York, New York 10016
                  Telephone:        (212) 779-8600
                  Facsimile:        (212) 779-8858
                  Attention:        Martin C. Licht, Esq.

                                       15
<PAGE>   16
         If to the Company:
                  Advanced Viral Research Corp.
                  200 Corporate Boulevard South, Suite 1601
                  Yonkers, New York 10701
                  Telephone:        (914) 376-7383
                  Facsimile:        (914) 376-7368
                  Attention:        Shalom Hirschman, M.D.

         with a copy to:
                  Wolf, Block, Schorr & Solis-Cohen, LLP
                  250 Park Avenue, 10th floor
                  New York, NY 10177
                  Telephone:        (212) 883-4901
                  Facsimile:        (212) 986-0604
                  Attention:        Robert Fischer, Esq.

If to a holder of this Warrant, to it at the address and facsimile number set
forth in the Credit Agreement, with copies to such holder's representatives as
set forth in such Credit Agreement, 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 13. DATE. The date of this Warrant is September __, 2000. This
Warrant, in all events, shall be wholly void and of no effect after the close of
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 14. AMENDMENT AND WAIVER. Except as otherwise provided herein,
the provisions of the Warrants may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holders of Warrants representing at least two-thirds (b) of the Warrant Shares
issuable upon exercise of the Warrants then outstanding; provided that no such
action may increase the Warrant Exercise Price or decrease the number of shares
or class of stock obtainable upon exercise of any Warrant without the written
consent of the holder of such Warrant.

         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 Delaware 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.

                  [SIGNATURE PAGE FOLLOWS]

                                       16
<PAGE>   17

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
_________________, its ___________________, as of the ______ day September,
2000.

                                     ADVANCED VIRAL RESEARCH CORP.

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

                                       17
<PAGE>   18
                              EXHIBIT A TO WARRANT

                                SUBSCRIPTION FORM

        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                          ADVANCED VIRAL RESEARCH CORP.

         The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of Advanced
Viral Research Corp., 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:

            ____________    a "CASH EXERCISE" with respect to _________________
                            Warrant Shares; and/or

            ____________    a "CASHLESS EXERCISE" with respect to _____________
                            Warrant  Shares (to the extent permitted by the
                            terms of the Warrant).

         2. 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.

         3. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

   Name of Registered Holder

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

<PAGE>   19

                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER

         FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of Advanced Viral Research Corp., 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:  _________, ____

                                            ------------------------------------

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

Its:
     ---------------------------------

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