Document:

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                                                                   EXHIBIT 10.14

                         INSMED PHARMACEUTICALS, INC.

                            _______________________

                         REGISTRATION RIGHTS AGREEMENT

                            _______________________

                              ___________ __, 2000
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                         REGISTRATION RIGHTS AGREEMENT

          This REGISTRATION RIGHT AGREEMENT is made as of the ____ day of
_______________ 2000, by and among INSMED PHARMACEUTICALS, INC., a Virginia
corporation ("Insmed"), INSMED, INC., a Virginia corporation (the "Parent") and
the investors listed on Schedule A attached hereto (individually, an "Investor"
                        ----------
and collectively, the "Investors").

          WHEREAS, the Investors have agreed to purchase from Insmed, and Insmed
has agreed to sell to the Investors, shares of Insmed Common Stock, and the
Investors have agreed to purchase from Parent, and Parent has agreed to sell to
the Investors, warrants to purchase Parent Common Stock, as set forth in
Schedule A, pursuant to a Purchase Agreement dated as of January __, 2000
----------
between the Company and the Investors (the "Stock Purchase Agreement"); and

          WHEREAS, it is a condition precedent to the obligation of the
Investors to close the transactions contemplated by the Stock Purchase Agreement
that Insmed and the Parent execute this Registration Rights Agreement.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, Insmed, the Parent and the Investors
hereby agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

     Section 1.1.  Definitions.
                   -----------

     For purposes of this Agreement, the following terms shall have the meanings
set forth below:

             (a)   "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.

             (b)   "Common Stock" shall mean the Company's Common Stock, $0.01
par value.

             (c)   "Company" shall mean Insmed until shares of the Parent have
been issued to the shareholders of Insmed and Celtrix Pharmaceuticals, Inc.,
pursuant to the Reorganization Agreement at which time Company shall mean
Parent.

             (d)   "Conversion Shares" means the Common Stock issued or issuable
upon exercise of the Warrants.

             (e)   "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.

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             (f)   "Holder" or "Holders" shall mean any person or persons owning
or having the right to acquire Registrable Securities or any permitted
transferee or assignee thereof in accordance with Article II hereof, other than
                                                  ----------
a transferee to whom such securities have been transferred pursuant to a
registration statement under the Securities Act or Rule 144 or Regulation S
under the Securities Act.

             (g)   "Initiating Holders" shall mean Holders who in the aggregate
are Holders of not less than fifty percent (50%) of the Registrable Securities
outstanding at such time.

             (h)   "Parent Registration Statement" shall mean the registration
statement on Form S-4 to be filed by the Parent in connection with the
Reorganization Agreement.

             (i)   The terms "Register", "Registered" and "Registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement but shall specifically exclude the
Parent Registration Statement.

             (j)   "Registrable Securities" shall mean (i) the shares of Common
Stock issued pursuant to the Purchase Agreement, (ii) Conversion Shares and
(iii) any Common Stock issued in respect of, in exchange for or in replacement
of the Conversion Shares or any other securities issued pursuant to the exercise
of the Warrants upon any stock split, stock combination, stock dividend,
recapitalization, consolidation or similar event. Securities previously sold to
the public pursuant to a registered public offering shall cease to be
Registrable Securities and all shares of Common Stock included in the Parent
Registration Statement shall cease to be Registrable Securities upon closing of
the transactions contemplated by the Reorganization Agreement.

             (k)   "Registration Expenses" shall mean all expenses incurred in
complying with registrations, filings or qualifications under Sections 2.1 and
                                                              ----------------
2.2 hereof, including all registration, qualification and filing fees,
---
accounting fees, printing expenses, escrow fees, fees and disbursements of
counsel for the Company, blue sky fees and expenses, the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company and Selling Expenses), and the
fees of one special counsel for the Holders, as reasonably acceptable to the
Company ("Legal Fees").

             (l)   "Reorganization Agreement" shall mean the Agreement and Plan
of Reorganization, dated November 30, 1999, by and among Insmed, Parent, Celtrix
Pharmaceuticals, Inc. and Celtrix MergerSub, Inc.

             (m)   "Restricted Securities" shall mean the securities of the
Company required to bear the legend set forth in Section 5.7 of the Purchase
Agreement (or any similar legend).

             (n)   "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

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             (o)   "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale and all fees and disbursements of
counsel for any Holder (except for Legal Fees as provided in Section 1.1((k))).
                                                             -----------------

             (p)   "Warrants" shall mean warrants issued by Parent to purchase
shares of Common Stock at $2.25 per share issued to the Investors pursuant to
the Stock Purchase Agreement.

     Section 1.2.  Certain Words.
                   -------------

             Certain other words and phrases are defined or described elsewhere
in this Agreement and/or the Exhibit hereto.

                                  ARTICLE II
        RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; COMPLIANCE WITH
                                SECURITIES ACT

     Section 2.1.  Company Registration.
                   --------------------

             (a)   Registration. If at any time or from time to time, the
                   ------------
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders exercising their
respective demand registration rights, other than (i) a registration on Form S-8
(or a similar or successor form) relating solely to employee stock option, stock
purchase or other benefit plans, or (ii) a registration on Form S-4 (or similar
or successor form) relating solely to a Securities and Exchange Commission Rule
145 transaction, the Company will:

                   (i)   promptly give to each Holder written notice thereof
which shall describe in reasonable detail the proposed registration and method
of distribution; and

                   (ii)  include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within thirty (30) days after mailing of written notice by the
Company, by any Holder or Holders, except as set forth in Section 2.1((b))
                                                          ----------------
below. Such written request may specify inclusion of all or a part of a Holder's
Registrable Securities.

             (b)   Underwriting. If the registration of which the Company gives
                   ------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.1((a))((i)). In such event, the right of any Holder to
            ---------------------
registration pursuant to Section 2.1 shall be conditioned upon such Holder's
                         -----------
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder with respect to
such participation and inclusion) to the extent provided herein. The Company
shall use reasonable efforts to cause the managing underwriter or underwriters
of a proposed underwritten offering to permit the Holders who have requested in

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writing to participate in the registration for such offering to include such
Registrable Securities in such offering on the same terms and conditions as the
securities of the Company included therein.

          All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the representatives of the underwriter or underwriters
(the "Underwriter's Representative") selected for such underwriting by the
Company and reasonably acceptable to a majority in interest of such Holders.
Notwithstanding any other provision of this Section 2.1, if the Underwriter's
                                            -----------
Representative determines that marketing factors require a limitation of the
number of shares to be underwritten, the Underwriter's Representative may limit
the number of Registrable Securities to be included in the registration and
underwriting, first by excluding the securities of the Company held by
employees, officers, directors and consultants of the Company (other than
Registrable Securities) and if a limitation on the number of shares is still
required, the Holders of Registrable Securities who have requested registration
together with other holders of the Company's common stock who have been granted
registration rights comparable to the rights provided to the Holders pursuant to
this Agreement ("Participating Shareholders") shall participate in the
underwriting pro rata based upon their total ownership of the Registrable
Securities and of the Common Stock owned by the Participating Shareholders. If
any Holder would thus be entitled to include more shares than such holder
requested to be registered, the excess shall be allocated among other requesting
Holders and Participating Shareholders pro rata based upon their total ownership
of Registrable Securities and Common Stock, in the case of Participating
Shareholders. The number of securities includable by any Holder or other person
may, in the discretion of the Underwriter's Representative, be rounded to the
nearest one hundred (100) shares. No securities excluded from the underwriting
by reason of the Underwriter's Representative's marketing limitation shall be
included in such registration.

          If any Holder disapproves of the terms of any such underwriting, he
may elect to withdraw therefrom by written notice to the Company and the
Underwriter's Representative. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.

          If the Underwriter's Representative has not limited the number of
shares to be underwritten for the Company's account and the account of the
Holders, the Company may include securities for the account of employees,
officers, directors and consultants.

     Section 2.2.  S-3 Registrations.
                   -----------------

          (a)      If at any time the Company qualifies under applicable SEC
rules to file a registration statement on Form S-3 (or any successor form) or
equivalent short-form registration, regardless of its designation, the
Initiating Holders may make a written request for registration of Registrable
Securities under the Securities Act, and under the securities or "blue sky" laws
of a reasonable number of jurisdictions designated by such holder or holders (a
"Demand Registration") provided that such offering is estimated to result in
aggregate offering proceeds of

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at least Three Million dollars ($3,000,000), net of allowances, discounts, and
underwriting expenses. Upon a request for a Demand Registration, the Company
shall promptly give notice of such proposed registration to all Holders of
Registrable Securities and the Company shall, as expeditiously as possible, use
its best efforts to effect the registration on Form S-3 of the Registrable
Securities which the Company has been requested to register (i) in each request
and (ii) in any response given within thirty (30) days to a notice from the
Company pursuant to this Section 2.2.
                         -----------

          Upon a request for a Demand Registration, the Company shall promptly
take such steps as are necessary or appropriate to prepare for the registration
of the Registrable Securities to be registered.

          (b)  Effective Demand Registration.  The Company shall use
               -----------------------------
commercially reasonable efforts to cause any such Demand Registration to become
effective not later than sixty (60) days after it receives a request under
Section 2.2((a)) hereof.
----------------

          (c)  Underwriting Procedures. If the Initiating Holders holding a
               -----------------------
majority of the Registrable Securities held by all of the Initiating Holders to
which the requested Demand Registration relates so elect, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of a firm commitment underwritten offering and the managing underwriter or
underwriters selected for such offering shall be the Approved Underwriter (as
hereinafter defined) selected as follows: the Initiating Holders holding a
majority of the Registrable Securities held by all such Initiating Holders shall
select and obtain an investment banking firm of national reputation to act as
the managing underwriter of the offering (the "Approved Underwriter"); provided,
                                                                       --------
however, that the Approved Underwriter shall, in any case, be approved by the
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Company in its reasonable discretion.

          (d)  The Company may include in the registration under this Section
                                                                      -------
2.2 any other shares of Common Stock (including issued and outstanding shares of
---
Common Stock as to which the holders thereof have contracted with the Company
for "piggyback" registration rights) so long as the inclusion in such
registration of such shares will not, in the opinion of the Approved Underwriter
(or in the reasonable opinion of the Company in the event that the offering is
not underwritten), interfere with the successful marketing in accordance with
the intended method of sale or other disposition of all the shares of
Registrable Securities sought to be registered by the Holder or Holders of
Registrable Securities pursuant to this Section 2.2. If it is determined, as
                                        -----------
provided above, that there will be such interference, the other shares of Common
Stock sought to be included by the Company shall be excluded to the extent
deemed necessary by the Underwriter's Representative (or the Company if the
offering is not underwritten), and all other shares of Common Stock held by
other parties shall be excluded before the exclusion of any shares of
Registrable Securities held by the Holders requesting the Demand Registration.
If, as contemplated above, and after excluding all other shares of Common Stock
held by other parties, shares of the Common Stock of the Holders requesting the
Demand Registration are to be excluded, the number of shares of Common Stock of
each participating Holder which are to be excluded shall be proportionate to the
number of shares which such party is seeking to register.

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     Section 2.3.  Expenses of Registration.
                   ------------------------

          All Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to this Article II shall be
                                                           ----------
borne by the Company; and, unless otherwise stated, all Selling Expenses
relating to securities registered by the Holders shall be borne by the Holders
of such securities pro rata on the basis of the number of shares so registered.

     Section 2.4.  Registration Procedures.
                   -----------------------

          In the case of each registration, qualification or compliance effected
by the Company pursuant to this Article II, the Company will keep each Holder
                                ----------
advised in writing as to the initiation of each registration, qualification and
compliance and as to the completion thereof. At its expense the Company will:

          (a) before filing a registration statement or prospectus or any
amendments or supplements thereto pursuant to this Article II, provide counsel
                                                   ----------
selected by the Holders holding a majority of the Registrable Securities being
registered in such registration ("Holders' Counsel") and any other Inspector (as
hereinafter defined) with an adequate and appropriate opportunity to review and
comment on such registration statement and each prospectus included therein (and
each amendment or supplement thereto) to be filed with the SEC;

          (b) notify the Holders' Counsel and each seller of Registrable
Securities of any stop order issued or threatened by the SEC and take all
reasonable action required to prevent the entry of such stop order or to remove
it if entered;

          (c) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for the lesser of
(x) 180 days and (y) such shorter period which will terminate when all
Registrable Securities covered by such registration statement have been sold,
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;

          (d) as soon as reasonably possible, furnish to each seller of
Registrable Securities, prior to filing a registration statement, copies of such
registration statement as is proposed to be filed, and thereafter such number of
copies of such registration statement, each amendment and supplement thereto (in
each case including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as each such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;

          (e) use its best efforts to register or qualify such Registrable
Securities under such other securities or "blue sky" laws of such jurisdictions
as any seller of Registrable Securities may reasonably request, and to continue
such qualification in effect in such

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jurisdiction for the lesser of (x) 180 days and (y) such shorter period as all
of such Registrable Securities are sold, and do any and all other acts and
things which may be reasonably necessary or advisable to enable any such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided, however, that the Company shall not
                                 --------  -------
be required to (x) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 2.2((c)), (y)
                                                        ----------------
subject itself to taxation in any such jurisdiction or (z) consent to general
service of process in any such jurisdiction;

          (f) use its best efforts to cause the Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the seller or sellers of
Registrable Securities to consummate the disposition of such Registrable
Securities;

          (g) notify each seller of Registrable Securities, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, and the Company shall
promptly prepare a supplement or amendment to such prospectus and furnish to
each seller a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, after delivery to the purchasers of
such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made;

          (h) enter into and perform customary agreements (including an
underwriting agreement in customary form with the Approved Underwriter in the
case of a Demand Registration as provided in Section 2.2) and take such other
                                             -----------
actions as are prudent and reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities.  Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement;

          (i) make available for inspection by any seller of Registrable
Securities, any managing underwriter participating in any disposition pursuant
to such registration statement, Holders' Counsel and any attorney, accountant or
other agent retained by any such seller or any managing underwriter (each, an
"Inspector" and collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries (collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's and its subsidiaries' officers, directors and employees, and the
independent public accountants of the Company, to supply all information
reasonably requested by any such Inspector in connection with such registration
statement.  Records that the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (x) the disclosure of

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such Records is necessary to avoid or correct a misstatement or omission in the
registration statement, (y) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or is requested
by any regulatory body or (z) the information in such Records was known to the
Inspectors on a non-confidential basis prior to its disclosure by the Company or
has been made generally available to the public. Each seller of Registrable
Securities agrees that it shall, upon learning that disclosure of such Records
is sought in a court of competent jurisdiction, give notice to the Company and
allow the Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential;

          (j) if such sale is pursuant to an underwritten offering, use its best
efforts to obtain a "cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by "cold comfort" letters as Holders' Counsel or the managing
underwriter reasonably request;

          (k) use its best efforts to furnish, at the request of any seller of
Registrable Securities on the date such securities are delivered to the
underwriters for sale pursuant to such registration or, if such securities are
not being sold through underwriters, on the date the registration statement with
respect to such securities becomes effective, an opinion, dated such date, of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the seller making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as such seller may reasonably request and are
customarily included in such opinions;

          (l) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as soon
as reasonably practicable but no later than fifteen (15) months after the
effective date of the registration statement, an earnings statement covering a
period of twelve (12) months beginning after the effective date of the
registration statement, in a manner which satisfies the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;

          (m) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, provided, that the applicable listing requirements are satisfied;
        --------

          (n) keep Holders' Counsel advised in writing as to the initiation of
any registration under Section 2.1 or 2.2 hereunder and provide Holders' Counsel
                       ------------------
with copies of any SEC filings made in connection therewith;

          (o) cooperate with each seller of Registrable Securities and each
underwriter participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc. (the "NASD"); and

          (p) use commercially reasonable efforts to take all other steps
necessary to effect the registration of the Registrable Securities contemplated
hereby.

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     Section 2.5.  Indemnification.
                   ---------------

          (a) The Company will, and does hereby undertake, to indemnify and hold
harmless each Holder, each of its officers, directors, members, trustees,
employees, advisors, agents and partners, and each person controlling such
Holder within the meaning of Section 15 of the Securities Act, with respect to
which registration, qualification or compliance has been effected pursuant to
this Article II, and each underwriter, if any, and each person who controls any
     ----------
underwriter within the meaning of Section 15 of the Securities Act against all
expenses, claims, losses, damages and liabilities (or actions in respect thereof
to which they may become subject), including settlement of any litigation,
commenced or threatened, to which they may become subject under the Securities
Act, the Exchange Act, or other federal or state law, arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any registration statement, prospectus, offering circular or other document
or amendments thereto, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, or any violation by the Company of any federal, state or common law
rule or regulation applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and will reimburse each such Holder, each of its officers,
directors, members, trustees, employees, advisors, agents and partners, and each
person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company expressly for use
in connection with such registration by an instrument executed by such Holder or
underwriter.

          (b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify and hold harmless (severally, but not
jointly) the Company, each of its directors and officers, agents and employees,
each underwriter, if any, of the Company's securities covered by such
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof to which
they may become subject) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or amendments
thereto, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and will
reimburse the Company, such other Holders, such directors, officers, persons,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue

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statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company expressly for
use in connection with such registration by an instrument executed by such
Holder; provided, however, that the obligations of such Holders hereunder shall
be limited to an amount equal to the proceeds to each such Holder of Registrable
Securities from the sale of such Registrable Securities as contemplated herein.

          (c) Each party entitled to indemnification under this Section 2.5 (the
                                                                -----------
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
deliver written notice to the Indemnifying Party of commencement thereof. The
Indemnifying Party, at its sole option, may participate in or assume the defense
of any such claim or any litigation resulting therefrom with counsel reasonably
satisfactory to the Indemnified Party and the Indemnified Party may participate
in such defense at such party's expense. The failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2.5 except to the extent that such failure to
                       -----------
give notice shall materially adversely affect the Indemnifying Party in the
defense of any such litigation.

          The Indemnified Party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be paid by the Indemnified Party unless (i) the
Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to
assume the defense of such action with counsel satisfactory to the Indemnified
Party in its reasonable judgment or (iii) the named parties to any such action
(including any impleaded parties) have been advised by such counsel that
representation of such Indemnified Party and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional
conduct, in which case the Indemnifying Party shall not have the right to assume
the defense of such action on behalf of such Indemnified Party.

          (d) Contribution.  If the indemnification provided for in this Section
              ------------                                               -------
2.5 from the Indemnifying Party is unavailable to an Indemnified Party hereunder
---
in respect of any expenses, claims, losses, damages and liabilities referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such expenses, claims, losses, damages and liabilities in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.  The relative faults of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action.  The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Sections 2.5((a)), 2.5((b)) and 2.5((c)), any
                                ----------------------------------------
reasonable legal or other fees, charges or

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expenses reasonably incurred by such party in connection with any investigation
or proceeding; provided that the total amount to be indemnified by such Holder
               --------
shall be limited to the net proceeds received by such Holder in the offering.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.5((d)) were determined by pro rata
                              ----------------
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person.

          No Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party, consent to the entry
of any judgment or enter into any settlement which does not include as an
unconditional term the delivery of a release from all liability with respect to
such claim or litigation by the claimant or plaintiff to such Indemnified Party.
No Indemnifying Party shall be liable for any settlement entered into without
its written consent, which consent shall not be unreasonably withheld.

     Section 2.6.  Information by Holder.
                   ---------------------

          Each Holder of Registrable Securities included in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Article II.
                                                ----------

     Section 2.7.  Rule 144 Reporting.
                   ------------------

          With a view toward making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of the
Restricted Securities to the public without registration, the Company agrees:

          (a) To register its Common Stock under Section 12(g) of the Exchange
Act, as amended, as soon as practicable, but in any event not later than ninety
(90) days after the close of the Company's first fiscal year following the
earlier of effective date of the Parent Registration Statement and the first
registration statement filed by the Company relating to a public offering, other
than to employees of the Company under an employee option plan or employee stock
purchase plan;

          (b) To make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the earlier of the effective date of the Parent Registration Statement and of
the first registration under the Securities Act filed by the Company for an
offering of its securities to the general public;

          (c) To use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and

                                      11
<PAGE>

          (d)      To furnish to each Holder, so long as such Holder owns any
Restricted Securities, written notice of the Company's qualification as a
registrant, as soon as practicable after such qualification; the Company further
shall furnish forthwith upon request a written statement as to its compliance
with the reporting requirements of said Rule 144 (at any time after ninety (90)
days after the earlier of the effective date of the Parent Registration
Statement and the first registration statement filed by the Company for an
offering of its securities to the general public), and of its compliance with
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements); the Company shall provide forthwith upon
written request a copy of the most recent annual or quarterly report of the
Company, and take such further action and provide such other reports and
documents of the Company as a Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing a Holder to sell any such
securities without registration under the Securities Act.

     Section 2.8.  Transfer or Assignment of Registration Rights.
                   ---------------------------------------------

          The rights to cause the Company to register securities and related
rights granted the Investors under this Article II may be transferred or
                                        ----------
assigned by any Investor to any transferee or assignee of any shares of Common
Stock, Warrants or Conversion Shares, or any combination thereof if (x) the
transferee is a direct or indirect wholly-owned subsidiary of the transferring
Investor, or is a partnership or limited liability company controlled by, or
under common control, with such Investor and such Investor remains liable for
all of the transferee's obligations hereof or (y) the transferee acquires not
less than 114,250 Registrable Securities or Warrants exercisable into
Registrable Securities, and the Company receives written notice of such transfer
or assignment.  For purposes of this Section 2.8, "control" includes the ability
                                     -----------
to have investment discretion through contractual means or otherwise.

     Section 2.9.  "Market Stand-Off" Agreement.
                    ---------------------------

          (a)       Any Holder of more than one percent (1%) of the outstanding
Common Stock of the Company (after giving effect to the conversion of all
outstanding warrants and convertible securities), if required by the Company and
an underwriter of Common Stock (or other securities) of the Company, shall agree
not to sell or otherwise to transfer or dispose of any Common Stock (or other
securities) of the Company held by such Holder during the period not to exceed
one hundred and twenty (120) days as requested by the Underwriter's
Representative following the effective date of the first registration statement
(and only such first registration statement but specifically excluding the
Parent Registration Statement) of the Company filed under the Securities Act,
provided that all officers and directors of the Company and holders of one
percent (1%) or more of the Company's outstanding shares enter into similar
agreements. Such agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose a stop-transfer instruction
with respect to the shares (or other securities) subject to the foregoing
restriction until the end of such period.

          (b)      Restrictions on Public Sale by the Company.  The Company
                   ------------------------------------------
agrees not to effect any public sale or distribution of any of its securities
for its own account, or any securities convertible into or exchangeable or
exercisable for such securities (except pursuant to

                                      12
<PAGE>

registrations on Form S-4 or S-8 or any successor forms thereto), during the
period beginning on the effective date of any Demand Registration in which the
Holders of Registrable Securities are participating and ending on the earlier of
(i) the date on which all shares of Common Stock registered on such registration
statement are sold and (ii) the date thirty (30) days after the effective date
of such registration statement.

                                  ARTICLE III
                                 MISCELLANEOUS

      Section 3.1.  Governing Law.
                    -------------

          This Agreement shall be governed in all respects by the laws of the
Commonwealth of Virginia without giving effect to principles of conflicts of law
thereunder.

      Section 3.2.  Survival.
                    --------

          The representations, warranties, covenants and agreements made herein
shall survive any investigation made by the Investors and the closing of the
transactions contemplated hereby.

      Section 3.3.  Successors and Assigns Third Party Beneficiaries.
                    ------------------------------------------------

          Except as otherwise expressly provided in Section 2.8 or otherwise
                                                    -----------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto; provided, further, the Company may not assign its rights
                --------  -------
hereunder.  No person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of any of the rights granted
hereunder.

      Section 3.4.  Entire Agreement.
                    ----------------

          This Agreement and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof.

      Section 3.5.  Amendment; Waiver; Termination.
                    ------------------------------

          This Agreement may be amended, modified or terminated upon the written
consent of the Company and the holders in interest of not less than fifty
percent (50%) of the Warrants held by Holders (treated as if converted and
including any Conversion Shares that have not been sold) voting as a single
class; provided, however, that the effect of such amendment, modification or
       --------  -------
termination will be such that all of the Holder will be treated equally. Any
provision of this Agreement may be waived with respect to rights of any Holder
by a written instrument executed by the holders in the interest of not less than
fifty percent (50%) of the Warrants held by Holders (treated as if converted and
including any Conversion Shares that have not been sold) voting as a single
class; provided, however, that the effect of such waiver will be such that all
       --------  -------
of the Holders will be treated equally.

                                      13
<PAGE>

     Section 3.6.  Notices.
                   -------

          All notices and other communications required or permitted under this
Agreement shall be in writing and shall be deemed effectively given upon
personal delivery, upon delivery by a nationally recognized overnight courier
service or upon deposit with the United States Post Office, by registered or
certified mail, postage prepaid, addressed to the Company at 800 East Leigh
Street, Richmond, Virginia 23219 or telecopied to the Company at (804) 828-6894
and to the Investors at the addresses or telecopy numbers set forth on Schedule
                                                                       --------
A or at such other address or telecopy number as any party may designate by ten
-
days prior written notice to the other party.

     Section 3.7.  Delay or Omissions.
                   ------------------

          No delay or omission to exercise any right, power or remedy accruing
to any holder of any Restricted Securities upon any breach or default of the
Company under this Agreement, shall impair any such right, power or remedy of
such holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or in any similar breach or default
occurring thereafter; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, or by law or otherwise afforded to any holder, shall be cumulative
and not alternative.

     Section 3.8.  Miscellaneous.
                   -------------

          (a)      Recapitalizations, Exchanges, etc.  The provisions of this
                   ---------------------------------
Agreement shall apply, to the full extent set forth herein, with respect to any
and all equity securities of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in conversion of, in exchange for or in
substitution of, the Registrable Securities.

          (b)      No Inconsistent Agreements.  The Company shall not enter
                   --------------------------
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or grant any additional
registration rights to any Person or with respect to any securities which are
not Registrable Securities which are prior in right to or inconsistent with the
rights granted in this Agreement; provided, however, the foregoing shall not
                                  --------  -------
restrict the Company in any way from granting registration rights comparable to
the rights set forth herein provided such new registration rights include,
without limitation, the provisions of Section 2.1 hereof.
                                      ------------

          (c)      Remedies.  The Holders, in addition to being entitled to
                   --------
exercise all rights granted by law, including recovery of damages, shall be
entitled to specific performance of their rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this

                                      14
<PAGE>

Agreement and hereby agrees to waive in any action for specific performance the
defense that a remedy at law would be adequate.

     Section 3.9.  Separability.
                   ------------

          In the event any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

     Section 3.10. Expenses.
                   --------

          Except as provided in Article II, the Company and each Investor shall
                                ----------
bear its own expenses and legal fees incurred on its behalf with respect to this
Agreement and the transactions contemplated hereby.

     Section 3.11. Titles.
                   ------

          The titles of the Sections of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement.

     Section 3.12. Counterparts.
                   ------------

          This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.

     Section 3.13. Further Assurances.
                   ------------------

          Each of the parties shall execute such documents and perform such
further acts as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.

                                      15
<PAGE>

IN WITNESS WHEREOF, the parties have duly executed this Registration Rights
Agreement as of this ____ day of ___________, 2000.

                              INSMED PHARMACEUTICALS, INC.

                              By:______________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              INSMED, INC.

                              By:______________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              VERON INTERNATIONAL LTD.

                              By:______________________________
                                    Name
                                    Title:

                                      16
<PAGE>

                              INSMED PHARMACEUTICALS, INC.

                              By:________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              INSMED, INC.

                              By:________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              VECTOR LATER-STAGE EQUITY FUND II   (QP), L.P.

                              By: VECTOR FUND MANAGEMENT II, L.L.C.
                              Its:  General Partner

                              By:________________________________
                                    Name:  Barclay A. Phillips
                                    Its: Managing Director

                              VECTOR LATER-STAGE EQUITY FUND II,  L.P.

                              By: VECTOR FUND MANAGEMENT II, L.L.C.
                              Its:  General Partner

                              By:________________________________
                                    Name:  Barclay A. Phillips
                                    Its: Managing Director

                                      17
<PAGE>

                              INSMED PHARMACEUTICALS, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              INSMED, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              CADUCEUS CAPITAL TRUST

                              By:______________________________________
                                  Name
                                  Title:

                              CADUCEUS CAPITAL II, L.P.

                              By:______________________________________
                                  Name
                                  Title:

                              PAINE WEBBER EUCALYPTUS FUND

                              By:______________________________________
                                  Name
                                  Title:

                                      18
<PAGE>

                              INSMED PHARMACEUTICALS, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              INSMED, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              T. ROWE PRICE HEALTH SCIENCES FUND, INC.

                              By:______________________________________
                                  Name
                                  Title:

                              GREENLINE HEALTH SCIENCES FUND

                              By:______________________________________
                                  Name
                                  Title:

                                      19
<PAGE>

                              INSMED PHARMACEUTICALS, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              INSMED, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              CLSP, L.P.

                              By:  CASDIN CAPITAL PARTNERS, LLC
                              Its: General Partner

                              By:______________________________________
                                  Name
                                  Title:

                              CLSP-SBS I, L.P.

                              By:  CASDIN CAPITAL PARTNERS, LLC
                              Its: General Partner

                              By:______________________________________
                                  Name
                                  Title:

                              CLSP-SBS II, L.P.

                              By:  CASDIN CAPITAL PARTNERS, LLC
                              Its: General Partner

                              By:______________________________________
                                  Name
                                  Title:

                                      20
<PAGE>

                              INSMED PHARMACEUTICALS, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              INSMED, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              QUANTUM PARTNERS, LDC

                              By:______________________________________
                                  Name
                                  Title:

                                      21
<PAGE>

                              INSMED PHARMACEUTICALS, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              INSMED, INC.

                              By:______________________________________
                                  Geoffrey Allan, Ph.D.
                                  President and Chief Executive Officer

                              PEQUOT PARTNERS FUND, L.P.

                              By:  PEQUOT CAPITAL MANAGEMENT, INC.
                              Its: Investment Manager

                              By:______________________________________
                                  Name
                                  Title:

                              PEQUOT INTERNATIONAL FUND, INC.

                              By:  PEQUOT CAPITAL MANAGEMENT, INC.
                              Its: Investment Advisor

                              By:______________________________________
                                  Name
                                  Title:

                                      22
<PAGE>

Schedule A

   Name and Address and          Shares of Common Stock
Telecopy Number of Investor             Purchased           Warrants Purchased
---------------------------             ---------           ------------------

[To be Completed]<PAGE>

EXHIBIT 4.4

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR QUALIFIED OR REGISTERED
UNDER STATE SECURITIES OR BLUE SKY LAWS.  NEITHER THIS WARRANT NOR SUCH
SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933,
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND THE APPLICABLE RULES AND
REGULATIONS THEREUNDER.

                          STOCK PURCHASE "K" WARRANT

No. 3

                 To Purchase 500,000 Shares of Common Stock of

                       THE ASHTON TECHNOLOGY GROUP, INC.

     THIS CERTIFIES that, for value received, TK Holdings, Inc. (the
"Investor"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after June 4, 2000 and on or prior to
June 4, 2002 (the "Termination Date") but not thereafter, to subscribe for and
purchase from THE ASHTON TECHNOLOGY GROUP, INC., a Delaware corporation (the
"Company") five hundred thousand (500,000) shares of Common Stock (the "Warrant
Shares").  The purchase price of one share of Common Stock (the "Exercise
Price") under this Warrant shall be equal to two dollars and fifty cents
($2.50).  The Exercise Price and the number of shares for which the Warrant is
exercisable shall be subject to adjustment as provided herein.  This Warrant is
being issued in connection with that certain Joint Venture Agreement of even
date herewith (the "Agreement") by and among the Investor, TK Holdings, Inc.
In the event of any conflict between the terms of this Warrant and the
Agreement, the Agreement shall control.

          1.  Title of Warrant.  Prior to the expiration hereof and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed.

          2.  Authorization of Shares.  The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).
<PAGE>

          3.  Vesting of Shares Underlying Warrant.  The right to purchase the
Warrant Shares shall vest in quarterly installments of one hunderd and twenty-
five thousand (125,000) shares beginning on the first anniversary of the Closing
Date (as defined in the Agreement) and on the last business day of each complete
calendar quarter thereafter.

          4.  Exercise of Warrant.  Exercise of the purchase rights represented
by this Warrant may be made at any time or times, in whole, before the close of
business on the Termination Date, or such earlier date on which this Warrant may
terminate as provided in paragraph 13 below, by the surrender of this Warrant
and the Subscription Form annexed hereto duly executed, at the office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the registered holder hereof at the address of such holder
appearing on the books of the Company) and upon payment of the Exercise Price of
the shares thereby purchased; whereupon the holder of this Warrant shall be
entitled to receive a certificate for the number of shares of Common Stock so
purchased.  Certificates for shares purchased hereunder shall be delivered to
the holder hereof within five business days after the date on which this Warrant
shall have been exercised as aforesaid.  Payment of the Exercise Price of the
shares may be by certified check or cashier's check or by wire transfer to an
account designated by the Company in an amount equal to the Exercise Price
multiplied by the number of shares being purchased.

          5.  Mandatory Exercise.  At the written demand of the Company, at the
Company's sole discretion, the Investor shall exercise any remaining portion of
the Warrant on the first business day following the twentieth (20th) consecutive
business day on which the closing stock price of the Common Stock of the Company
on the Nasdaq Small Cap Market, or each other securities market on which such
shares are listed for trading, shall exceed $15 per share.  Any unvested portion
of the Warrant shall vest immediately upon such written demand by the Company.
If the Investor shall fail to exercise this Warrant within thirty (30) days of
the demand made by the Company pursuant to this Section 5, this Warrant shall
terminate.

          6.  No Fractional Shares or Scrip.  No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.

          7.  Charges, Taxes and Expenses.  Issuance of certificates for shares
of Common Stock upon the exercise of this Warrant shall be made without charge
to the holder hereof for any issue or transfer tax or other incidental expense
in respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the holder
hereof; and provided further, that upon any transfer involved in the issuance or
delivery of any certificates for shares of Common Stock, the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
<PAGE>

          8.  Closing of Books.  The Company will at no time close its
shareholder books or records in any manner which interferes with the timely
exercise of this Warrant.

          9.  No Rights as Shareholder until Exercise.  This Warrant does not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company prior to the exercise thereof.  If, however, at the time of the
surrender of this Warrant and purchase the holder hereof shall be entitled to
exercise this Warrant, the shares so purchased shall be and be deemed to be
issued to such holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been exercised.

          10.  Assignment and Transfer of Warrant.  This Warrant may be assigned
by the surrender of this Warrant and the Assignment Form annexed hereto duly
executed at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder hereof
at the address of such holder appearing on the books of the Company); provided,
however, that this Warrant may not be resold or otherwise transferred except (i)
in a transaction registered under the Securities Act of 1933, as amended, or
(ii) in a transaction pursuant to an exemption, if available, from such
registration and whereby, if requested by the Company, an opinion of counsel
reasonably satisfactory to the Company is obtained by the holder of this Warrant
to the effect that the transaction is so exempt.

          11.  Loss, Theft, Destruction or Mutilation of Warrant.  The Company
represents and warrants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any Warrant
or stock certificate, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and upon reimbursement to the Company of
all reasonable expenses incidental thereto, and upon surrender and cancellation
of such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of this Warrant or stock certificate.

          12.  Saturdays, Sundays, Holidays, etc.  If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a legal
holiday.

          13.  Effect of Certain Events.

               (a) If at any time the Company proposes (i) to sell or otherwise
convey all or substantially all of its assets or (ii) to effect a transaction
(by merger or otherwise) in which more than 50% of the voting power of the
Company is disposed of (collectively, a "Sale or Merger Transaction"), in which
the consideration to be received by the Company or its shareholders consists
solely of cash, the Company shall give the holder of this Warrant thirty (30)
days' notice of the proposed effective date of the transaction specifying that
the Warrant shall terminate if the Warrant has not been exercised by the
effective date of the transaction.

                                       3
<PAGE>

               (b) In case the Company shall at any time effect a Sale or Merger
Transaction in which the consideration to be received by the Company or its
shareholders consists in part of consideration other than cash, the holder of
this Warrant shall have the right thereafter to purchase, by exercise of this
Warrant and payment of the aggregate Exercise Price in effect immediately prior
to such action, the kind and amount of shares and other securities and property
which it would have owned or have been entitled to receive after the happening
of such transaction had this Warrant been exercised immediately prior thereto.

               (c) "Piggy-Back" Registration. The holder of this Warrant shall
have the right to include all of the shares of Common Stock underlying this
Warrant (the "Registrable Securities") as part of any registration of securities
filed by the Company (other than in connection with a transaction contemplated
by Rule 145(a) promulgated under the Act or pursuant to Form S-8) and must be
notified in writing of such filing. Holder shall have five (5) business days to
notify the Company in writing as to whether the Company is to include holder or
not include holder as part of the registration; provided, however, that if any
registration pursuant to this Section shall be underwritten, in whole or in
part, the Company may require that the Registrable Securities requested for
inclusion pursuant to this paragraph 13(c) be included in the underwriting on
the same terms and conditions as the securities otherwise being sold through the
underwriters.  If in the good faith judgment of the underwriter evidenced in
writing of such offering only a limited number of Registrable Securities should
be included in such offering, or no such shares should be included, the holder,
and all other selling stockholders, shall be limited to registering such
proportion of their respective shares as shall equal the proportion that the
number of shares of selling stockholders permitted to be registered by the
underwriter in such offering bears to the total number of all shares then held
by all selling stockholders desiring to participate in such offering.  Those
Registrable Securities which are excluded from an underwritten offering pursuant
to the foregoing provisions of this paragraph 13(c) (and all other Registrable
Securities held by the selling stockholders) shall be withheld from the market
by the holders thereof for a period, not to exceed one hundred eighty (180)
days, which the underwriter may reasonably determine is necessary in order to
effect such underwritten offering.

          14.  Adjustments of Exercise Price and Number of Warrant Shares.  The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time in case the
Company shall (i) declare or pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issue any shares of its capital stock in a reclassification of the
Common Stock, the number of Warrant Shares purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that the holder of this
Warrant shall be entitled to receive the kind and number of Warrant Shares or
other securities of the Company which such holders would have owned or have been
entitled to receive had such Warrant been exercised in advance thereof.  An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.

                                       4
<PAGE>

          15.  Voluntary Adjustment by the Company.  The Company may at its
option, at any time during the term of this Warrant, reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.

          16.  Notice of Adjustment.  Whenever the number of Warrant shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the holder of this Warrant notice of such adjustment or adjustments setting
forth the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth computation by which such
adjustment was made.  Such notice, in absence of manifest error, shall be
conclusive evidence of the correctness of such adjustment.

          17.  Authorized Shares.  The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of Common
Stock upon the exercise of any purchase rights under this Warrant.  The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of the
Company's Common Stock upon the exercise of the purchase rights under this
Warrant.  The Company will take all such reasonable action as may be necessary
to assure that such shares of Common Stock may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the NASDAQ Small Cap Stock Market or any domestic securities exchange upon which
the Common Stock may be listed for trading.

          18.  Miscellaneous.

               (a) Issue Date; Jurisdiction. The provisions of this Warrant
shall be construed and shall be given effect in all respects as if it had been
issued and delivered by the Company on the date hereof. This Warrant shall be
binding upon any successors or assigns of the Company. This Warrant shall
constitute a contract under the laws and jurisdictions of New York and for all
purposes shall be construed in accordance with and governed by the laws of said
state without regard to its conflict of law, principles or rules and be subject
to the arbitration provisions as set forth in the Agreement.

               (b) Restrictions.  The holder hereof acknowledges that the Common
Stock acquired upon the exercise of this Warrant, if not registered, may have
restrictions upon its resale imposed by state and federal securities laws.

               (c) Modification and Waiver. This Warrant and any provisions
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.

                                       5
<PAGE>

               (d) Notices.  Any notice, request or other document required or
permitted to be given or delivered to the holders hereof of the Company shall be
delivered or shall be sent by certified or registered mail, postage prepaid, to
each such holder at its address as shown on the books of the Company or to the
Company at the address set forth in the Agreement.

          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.

Dated: June 4, 1999

                              THE ASHTON TECHNOLOGY GROUP, INC.

                              By: /s/ Arthur J. Bacci
                                  _________________________________________
                                  Name:  Arthur J. Bacci
                                  Title:  President

                                       6
<PAGE>

                              NOTICE OF EXERCISE

To:  THE ASHTON TECHNOLOGY GROUP, INC.

(1) The undersigned hereby elects to purchase ________ shares of Common Stock of
THE ASHTON TECHNOLOGY GROUP, INC. pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price in full, together with all
applicable transfer taxes, if any.

(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                    _______________________________(Name)
                    _______________________________(Address)____________________
                    ___________

Dated:
______________________________Signature

                                       1
<PAGE>

                                ASSIGNMENT FORM

                   (To assign the foregoing warrant, execute
                  this form and supply required information.
                Do not use this form to exercise the warrant.)

          FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                    Dated:  ___________________,

               Holder's Signature:  ___________________________

               Holder's Address:    ___________________________

                                    ___________________________

Signature Guaranteed:  ____________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.

                                       2

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