ENGAGEMENT AGREEMENT



AGREEMENT made as of the 23rd day of June, 2004 between Hemispherx Biopharma,

Inc., a Delaware Corporation having an office at One Penn Center, 1617 JFK

Boulevard, Philadelphia, Pennsylvania 19103 (hereinafter referred to as the

"CORPORATION"), and Robert E. Peterson, an individual residing at 3232 West 72nd

Street, Tulsa, Oklahoma 74132 (hereinafter referred to as "PETERSON").



IN CONSIDERATION of the premises and mutual covenants and conditions herein

contained, the CORPORATION and PETERSON hereby agree as follows:



1. ENGAGEMENT The CORPORATION agrees to engage PETERSON, and PETERSON agrees to

serve the CORPORATION as a Chief Financial Officer for the CORPORATION upon the

terms and conditions hereafter set forth. The duties of PETERSON shall be

consistent with his position as an executive, and shall be those duties

customarily performed by an executive of his experience. The CORPORATION

originally engaged PETERSON in this capacity on April 15, 1993. This Agreement

basically incorporates and revises those terms outlined in the prior Engagement

Agreements.



2. TERM This Agreement becomes effective on July 1, 2004 and shall expire on

June 30, 2006 subject to provisions of Article 7 herein provided.



3. COMPENSATION AND OTHER BENEFITS



      (a) For his services to the CORPORATION during the TERM, the CORPORATION

shall pay PETERSON a fee ("Fee") at the annual base rate of One Hundred Ninety

Eight Thousand ($198,000) Dollars. This annual base rate will be increased each

year to reflect the increase in the cost of inflation index for the preceding

year.



      (b) Upon the CORPORATION receiving FDA approval for commercial application

of "Ampligen" (the CORPORATION'S primary product being developed), the

CORPORATION will pay PETERSON an additional bonus compensation in the sum of One

Hundred Thousand Dollars ($1000.000.00).



      (c) The CORPORATION shall issue to PETERSON Options to purchase fifty

thousand (50,000) shares of Common Stock of Hemispherx Biopharma, Inc. with an

exercise price equal to the closing price of Hemispherx Biopharma's Common Stock

as traded on the American Stock Exchange on June 23, 2004 and expiring ten (10)

years from date of issue.



      (d) The CORPORATION shall grant Peterson a bonus in each year that the

Chief Executive Officer is granted a bonus. Each bonus granted shall be a

percentage of Peterson's annual base compensation, with the percentage being

equal to that percentage of the Chief Executive Officer's annual base

compensation granted to the Chief Executive Officer as a bonus.





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      (e) During the term of this Agreement, the CORPORATION shall grant

additional stock options to PETERSON at the same time and on the same terms and

conditions as those granted to other employees and/or executives.



      (f) As an independent contractor, PETERSON will not participate in the

CORPORATION'S Group Medical program or 401K pension program.



4. SERVICES PETERSON agrees to serve the CORPORATION faithfully and to the best

of his ability, and shall devote eighty-five percent (85%) of his business time,

attention and energies to the business of the CORPORATION during the regular

business hours and at any other time during the week as reasonably requested by

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