ENGAGEMENT AGREEMENT



Agreement  made and  entered  into as of  January  1,  2004  between  Hemispherx

Biopharma,  Inc. a Delaware  Corporation  (the "Company") and William A. Carter,

M.D., of Tavernier, Florida ("Carter").



In consideration of the premises and the mutual covenants and conditions  herein

contained the Company and Carter hereby agree as follows:



         1.  Engagement.  The Company  engages Carter and Carter agrees to serve

the Company as a consultant relating to patent development. Additionally, Carter

shall serve, so long as he is elected by the  shareholders of the Company,  as a

Director of the Company,  and shall serve, so long as he is elected by the Board

of Directors of the Company, as chairman of the Executive Committee of the Board

of Directors of the Company.  It is expressly  understood and agreed that all of

Carter's services hereunder are being provided as an independent  contractor and

not as an employee for federal tax purposes.



         2. Term.  This Agreement shall commence as of January 1, 2004 and shall

terminate  on May  8,  2008  (the  "Initial  Termination  Date")  unless  sooner

terminated in accordance  with Section 5 hereof or unless renewed as hereinafter

provided (such period of service together with any extension thereto hereinafter

being  called the  "Service  Period").  This  Agreement  shall be  automatically

renewed for successive one (1) year periods after the original  Termination Date

unless  written notice of refusal to renew is given by one party to the other at

least ninety days prior to the initial Termination Date or the expiration of any

renewal period.



         3.       Fees.

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                  (a) For his  services to the  Company  the  Company  shall pay

                  Carter a fee (the  "Base  Fee") of  $201,725.20  per year (the

                  "Original Base Fee"), which shall be subject to adjustments as

                  provided in succeeding subsections (b) and (c).



                  (b) On January 1, 2005,  and on January 1, of each  succeeding

                  calendar year during the Service Period, the Base Fee shall be

                  increased  or  decreased by the amount of increase or decrease

                  in the annual dollar value of Directors fees being provided to

                  the  individual  Directors of the Company from the December of

                  the  preceding  year to the  December of the second  preceding

                  year.



                  (c) On January 1,  2005,  and on January 1 of each  succeeding

                  calendar  year  during  the  Service   Period  and  after  the

                  adjustment  provided for in subsection (b) above, the Base Fee

                  shall be increased  or decreased by a percentage  equal to the

                  percentage average increase or decrease in the Bureau of Labor

                  Statistics  "Consumer  Price Index - U.S.  City  Average - All

                  Items" from December of the second preceding year.



                  (d) For each calendar year (or part thereof) during which this

                  Agreement is in effect,  Carter shall be eligible to be paid a

                  performance bonus in an amount up to twenty-five percent (25%)

                  of his Base Fee then in effect,  in the sole discretion of the

                  Compensation  Committee  of the  Board of  Directors  based on

                  Carter's performance for such year.



         4.       Expenses.

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     During the Service Period, Carter, upon presentation of payment vouchers or

receipts,  will be reimbursed for the reasonable and necessary expenses incurred

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