SCHEDULE 14A
                                 (Rule 14a-101)
                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION
                    Proxy Statement Pursuant to Section 14(a)
                     of the Securities Exchange Act of 1934

Filed by the  Registrant  [ X ]
Filed by a Party other than the  Registrant  [ ]
Check the appropriate box:
[  X ]   Preliminary Proxy Statement
[    ]   Confidential,  for  Use  of the  Commission  Only  (as  Permitted  by
         Rule 14a-6(e)(2))
[    ]   Definitive Proxy Statement
[    ]   Definitive  Additional Materials
[    ]   Solicitation  Material  Pursuant to Rule 14a-11(c) or rule 14a-12

                           Hemispherx Biopharma, Inc.
                  ---------------------------------------------
                (Name of Registrant as Specified in its Charter)

    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[x]      No fee required.

[ ]      Fee computed on table below per Exchange Act Rules 14a-6(i)(1)and0-11.

1)       Title of each class of securities to which transaction applies:
                                                                      ---------
2)       Aggregate number of securities to which transaction applies:
                                                                      ---------
3)       Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11:

4)       Proposed maximum aggregate value of transaction:
                                                          ---------------------
5)       Total fee paid:
                        -------------------

[ ]      Fee paid previously with preliminary materials.

[        ] Check box if any part of the fee is offset as  provided  by  Exchange
         Act Rule  0-11(a)(2)  and identify the filing for which the  offsetting
         fee was paid  previously.  Identify the previous filing by registration
         statement number, or the Form or Schedule and the date of its filing.

         (1)      Amount Previously Paid:

         (2)      Form, Schedule or Registration Statement No.:
                                                             -----------------
         (3)      Filing Party:

         (4)      Date Filed:






                           HEMISPHERX BIOPHARMA, INC.
                               1617 JFK Boulevard
                        Philadelphia, Pennsylvania 19103
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON JUNE 24, 2009


To the Stockholders of Hemispherx Biopharma, Inc.:

         You are cordially  invited to attend the Annual Meeting of Stockholders
of Hemispherx Biopharma, Inc. ("Hemispherx"), a Delaware corporation, to be held
at the Embassy  Suites  Hotel,  1776  Benjamin  Franklin  Parkway,  Philadelphia
Pennsylvania  19103, on Wednesday,  June 24, 2009, at 10:00 a.m. local time, for
the following purposes:

1.   To elect five  members to the Board of  Directors  of  Hemispherx  to serve
     until their respective successors are elected and qualified;

2.   To ratify the  selection  by  Hemispherx's  audit  committee of McGladrey &
     Pullen,  LLP,  independent  registered  public  accountants,  to audit  the
     financial statements of Hemispherx for the year ending December 31, 2009;

3.   To amend  Hemispherx's  certificate of incorporation to increase the number
     of  authorized  shares of  Hemispherx  common  stock  from  200,000,000  to
     350,000,000;

4.   To adopt the Hemispherx 2009 Equity Incentive Plan; and

5.   To transact  such other  matters as may properly come before the meeting or
     any adjournment thereof.

         Only stockholders of record at the close of business on May 8, 2009 are
entitled to notice of and to vote at the meeting.

         A proxy  statement and proxy are enclosed.  If you are unable to attend
the meeting in person you are urged to sign,  date and return the enclosed proxy
promptly in the self  addressed  stamped  envelope  provided.  If you attend the
meeting in person,  you may withdraw  your proxy and vote your  shares.  We have
also enclosed our annual report for the fiscal year ended December 31, 2008.

                                              By Order of the Board of Directors

                                                 \s\ Thomas K. Equels, Secretary
Philadelphia, Pennsylvania
May __, 2009

          -----------------------------------------------------------
                             YOUR VOTE IS IMPORTANT

                    We urge you to promptly vote your shares
                  by completing, signing, dating and returning
                    your proxy card in the enclosed envelope.
          -----------------------------------------------------------




 1




                                 PROXY STATEMENT


                           HEMISPHERX BIOPHARMA, INC.
                               1617 JFK Boulevard
                        Philadelphia, Pennsylvania 19103


                                  INTRODUCTION


         This proxy statement is furnished in connection  with the  solicitation
of  proxies  for  use  at the  annual  meeting  of  stockholders  of  Hemispherx
Biopharma,  Inc.  ("Hemispherx" or the "Company") to be held on Wednesday,  June
24, 2009, and at any  adjournments.  The accompanying  proxy is solicited by the
Board  of  Directors  of  Hemispherx  and is  revocable  by the  stockholder  by
notifying Hemispherx's Corporate Secretary at any time before it is voted, or by
voting  in person at the  annual  meeting.  It is  anticipated  that this  proxy
statement and accompanying proxy are being distributed to stockholders beginning
on or about May 25, 2009.  The principal  executive  offices of  Hemispherx  are
located at 1617 JFK Boulevard, Philadelphia, Pennsylvania 19103, telephone (215)
988-0080.

       Important Notice Regarding the Availability of Proxy Materials for
       the 2009 Annual Meeting of Stockholders To Be Held on June 24, 2009

         This  proxy  statement  and our 2008  Annual  Report  on Form  10-K are
available electronically at
http://hemispherx.net/content/investor/annualmeeting.asp.



                      OUTSTANDING SHARES AND VOTING RIGHTS

RECORD DATE; OUTSTANDING SHARES

         Only  stockholders  of record at the close of  business on May 8, 2009,
the record  date,  are  entitled  to  receive  notice of, and vote at the annual
meeting.  As of the record date, the number and class of stock  outstanding  and
entitled to vote at the meeting was  _____________  shares of common stock,  par
value $.001 per share. Each share of common stock is entitled to one vote on all
matters.  No other class of securities  will be entitled to vote at the meeting.
There are no cumulative voting rights.

         The five  nominees  receiving  the highest  number of votes cast by the
holders of common stock represented and voting at the meeting will be elected as
Hemispherx's   Directors  and  constitute  the  entire  Board  of  Directors  of
Hemispherx.  The  affirmative  vote  of  at  least  a  majority  of  the  shares
represented  and  voting at the  annual  meeting at which a quorum is present is
necessary  for approval of Proposal  No. 2 and  Proposal No. 4. The  affirmative
vote of at least a majority of the  outstanding  shares  entitled to vote at the
annual  meeting  at which a quorum is  present  is  necessary  for  approval  of
Proposal No. 3.

ADMISSION TO THE MEETING

         Stockholders  (or their  authorized  representatives)  and our  invited
guest may attend the meeting.  Verification of stock ownership will be required.
If you own shares in your name or hold them  through a broker  (and can  provide
documentation  showing ownership as of the end of day on May 8, 2009, the record
date),  you will be  permitted to attend.  Stockholders  will be admitted to the
meeting beginning at 9:30 am EST. Seating is limited.
 2
REVOCABILITY OF PROXIES

         If you  attend  the  meeting,  you may vote in  person,  regardless  of
whether  you have  submitted  a  proxy.  Any  person  giving a proxy in the form
accompanying  this proxy statement has the power to revoke it at any time before
it is voted.  It may be revoked  by  filing,  with the  corporate  secretary  of
Hemispherx  at  its  principal   offices,   1617  JFK   Boulevard,   Suite  660,
Philadelphia,  PA 19103, a written notice of revocation or a duly executed proxy
bearing a later date,  or it may be revoked by attending  the meeting and voting
in person.

VOTING AND SOLICITATION

         Every  stockholder  of record is entitled,  for each share held, to one
vote on each  proposal  or item that  comes  before  the  meeting.  There are no
cumulative  voting rights.  By submitting your proxy,  you authorize  William A.
Carter and  Thomas K.  Equels  and each of them to  represent  you and vote your
shares at the meeting in accordance with your instructions.  Messrs.  Carter and
Equels and each of them may also vote your shares to adjourn  the  meeting  from
time to time and will be  authorized to vote your shares at any  adjournment  or
postponement of the meeting.

         Hemispherx has borne the cost of preparing, assembling and mailing this
proxy solicitation  material. The total cost estimated to be spent and the total
expenditures  to  date  for,  in  furtherance  of,  or in  connection  with  the
solicitation of stockholders is approximately $______.  Hemispherx may reimburse
brokerage firms and other persons  representing  beneficial owners of shares for
their expenses in forwarding soliciting materials to beneficial owners.  Proxies
may be solicited by certain of Hemispherx's  directors,  officers and employees,
without additional compensation, personally, by telephone or by facsimile.

         We have hired the firm of __________.  to assist in the solicitation of
proxies  on behalf of the Board of  Directors.  _________  has agreed to perform
this service for a proposed fee of $______ plus out-of-pocket expenses.

ADJOURNED MEETING

         The Chair of the meeting  may adjourn the meeting  from time to time to
reconvene  at the same or some other  time,  date and place.  Notice need not be
given of any such  adjournment  meeting if the time,  date and place thereof are
announced at the meeting at which the  adjournment is taken.  If the time,  date
and place of the adjournment  meeting are not announced at the meeting which the
adjournment  is taken,  then the  Secretary  of the Company  shall give  written
notice of the time, date and place of the adjournment  meeting not less than ten
(10)  days  prior  to  the  date  of  the  adjournment  meeting.  Notice  of the
adjournment  meeting also shall be given if the meeting is adjourned in a single
adjournment to a date more than 30 days or in successive  adjournments to a date
more than 120 days after the original date fixed for the meeting.

TABULATION OF VOTES

         The votes will be tabulated and certified by Continental Stock Transfer
& Trust Company our transfer agent.

VOTING BY STREET NAME HOLDERS

         If you are the  beneficial  owner of shares held in "street  name" by a
broker,  the broker,  as the record  holder of the  shares,  is required to vote
those  shares  in  accordance  with  your  instructions.  If  you  do  not  give
instructions to the broker, the broker will nevertheless be entitled to vote the
shares with respect to  "discretionary"  items but will not be permitted to vote
the shares with respect to "non-discretionary"  items (in which case, the shares
will be treated as "broker non-votes").

QUORUM; ABSTENTIONS; BROKER NON-VOTES

         The  required  quorum for the  transaction  of  business  at the annual
meeting normally is a majority of the shares of common stock entitled to vote at
the annual  meeting,  in person or by proxy.  However,  with a  majority  of our
shares being held by persons or  organizations  in Europe,  we had to repeatedly
reschedule  our 2008 Annual  Meeting in an attempt to attain a quorum of voters.
Finally,  the Board amended our By-Laws to reduce the quorum for that meeting to
44% in voting power of the outstanding shares of stock and the meeting was held.
 3
Facing the same issue for the 2009 Annual Meeting,  our Board of Directors again
amended our By-Laws to reduce the  quorum,  solely for the 2009 Annual  Meeting,
from a  majority  to 40% in  voting  power of the  outstanding  shares  of stock
entitled to vote.  With a reduced quorum it is possible that the meeting will be
held but  certain  resolutions,  such as the  amendment  to our  certificate  of
incorporation  to increase the number of our authorized  shares of common stock,
requiring the vote of a majority of the  outstanding  shares entitled to vote at
the annual  meeting may not pass,  even if all votes present at the meeting vote
for the proposal.  Shares that are voted "FOR,"  "AGAINST" or "WITHHELD  FROM" a
matter are treated as being present at the meeting for purposes of  establishing
a quorum and are also treated as shares represented and voting the votes cast at
the annual meeting with respect to such matter.

         While  there  is no  definitive  statutory  or case  law  authority  in
Delaware as to the proper  treatment of  abstentions,  Hemispherx  believes that
abstentions should be counted for purposes of determining both: (i) the presence
or absence  of a quorum  for the  transaction  of  business;  and (ii) the total
number of votes cast with  respect to a proposal  (other  than the  election  of
directors). In the absence of controlling precedent to the contrary,  Hemispherx
intends to treat abstentions in this manner. Accordingly,  abstentions will have
the same effect as a vote  against  the  proposal  (other  than the  election of
directors).

         Under current Delaware case law, while broker non-votes (see "Voting By
Street Name Holders"  above) should be counted for purposes of  determining  the
presence  or  absence  of a  quorum  for the  transaction  of  business,  broker
non-votes  should not be counted for purposes of determining the number of votes
cast with respect to the  particular  proposal on which the broker has expressly
not voted.  Hemispherx intends to treat broker non-votes in this manner. Thus, a
broker  non-vote  will make a quorum  more  readily  obtainable,  but the broker
non-vote will not otherwise affect the outcome of the voting on a proposal.

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

         Proposals of  stockholders  to be considered for inclusion in the Proxy
Statement  and proxy card for the 2010 Annual  Meeting of  Stockholders  must be
received by the Company's  Secretary,  at Hemispherx  Biopharma,  Inc., 1617 JFK
Boulevard, Philadelphia, PA 19103 no later than January 25, 2010.

         Pursuant to the Company's  Restated and Amended Bylaws, all stockholder
proposals  may be brought  before an annual  meeting of  stockholders  only upon
timely notice thereof in writing having been given the Secretary of the Company.
To be timely, a stockholder's  notice, for all stockholder  proposals other than
the nomination of candidates  for director,  shall be delivered to the Secretary
at the principal  executive  offices of the Company not less than sixty (60) nor
more than  ninety  (90) days prior to the  anniversary  date of the  immediately
preceding annual meeting of stockholders;  provided,  however, that in the event
that the annual meeting is called for a date that is not within thirty (30) days
before or after such anniversary date, the  stockholder's  notice in order to be
timely  must be so  received  not later than the close of  business on the tenth
(10th)  day  following  the day on which  such  notice of the date of the annual
meeting was mailed or public  disclosure  of the date of the annual  meeting was
made, whichever first occurs. To be timely, a stockholder's notice, with respect
to a stockholder  proposal for nomination of candidates  for director,  shall be
delivered to the Secretary at the principal executive offices of the Company not
less than ninety (90) nor more than one hundred  twenty  (120) days prior to the
anniversary  date of the immediately  preceding  annual meeting of stockholders;
provided,  however,  that in the event that the  annual  meeting is called for a
date that is not within thirty (30) days before or after such anniversary  date,
the  stockholder's  notice in order to be timely must be so  received  not later
than the close of business on the tenth  (10th) day  following  the day on which
such notice of the date of the annual meeting was mailed or public disclosure of
the date of the annual  meeting  was made,  whichever  first  occurs.  Provided,
however, in the event that the stockholder proposal relates to the nomination of
candidates  for  director and the number of directors to be elected to the Board
of  Directors of the Company at an annual  meeting is increased  and there is no
public  announcement  by the Company  naming all of the nominees for director or
specifying  the size of the  increased  Board of  Directors at least one hundred
days prior to the first  anniversary of the preceding  year's annual meeting,  a
stockholder's  notice shall also be considered  timely, but only with respect to
nominees  for  any new  positions  created  by such  increase,  if it  shall  be
delivered to the Secretary at the principal executive offices of the Company not
later than the close of  business  on the tenth day  following  the day on which
such public announcement is first made by the Company. All stockholder proposals
must contain all of the information  required under the Company's Bylaws, a copy
of which is available upon written  request,  at no charge,  from the Secretary.
The  Company  reserves  the right to  reject,  rule out of order,  or take other
appropriate  action with respect to any proposal that does not comply with these
and other applicable requirements.
 4
                      INFORMATION CONCERNING BOARD MEETINGS

         The Board of Directors is responsible  for the management and direction
of  Hemispherx  and  for  establishing  broad  corporate  policies.   A  primary
responsibility  of  the  Board  is to  provide  effective  governance  over  the
Company's affairs for the benefit of its  stockholders.  In all actions taken by
the Board,  the Directors are expected to exercise  their  business  judgment in
what  they  reasonably  believe  to be the best  interests  of the  Company.  In
discharging that obligation,  Directors may rely on the honesty and integrity of
the Company's senior executives and its outside advisors and auditors.

The Board of Directors  and various  committees  of the Board meet  periodically
throughout  the year to receive  and discuss  operating  and  financial  reports
presented by the Chief Executive  Officer and Chief Financial Officer as well as
reports  by experts  and other  advisors.  Corporate  review  sessions  are also
offered to Directors to help familiarize them with  Hemispherx's  technology and
operations.  Members of the Board are  encouraged  to attend  Board  meetings in
person,  unless  the  meeting  is held by  teleconference.  The Board  held four
meetings  in 2008  and  executed  fourteen  unanimous  consents.  All  Directors
attended  these  meetings.  Directors are expected to attend the Annual  Meeting
absent unusual  circumstances,  although we have no formal policy on the matter.
In 2008,  due to the  multiple  adjournments  of the  Annual  Meeting,  only the
Chairman of the Board was able to attend the meeting.

         In 2008,  the  non-employee  members of the Board of Directors  met one
time in  executive  session,  i.e.  with no  employee  Directors  or  management
personnel present.  Richard Piani is the Lead Director to preside over meetings.
Interested  persons may contact the Lead Director or the non-employee  Directors
by sending written  comments through the Office of the Secretary of the Company.
The Office will either  forward the  original  materials as addressed or provide
Directors with summaries of the  submissions,  with the originals  available for
review at the Directors' request.

                 INFORMATION CONCERNING COMMITTEES OF THE BOARD

         The Board of Directors maintains the following committees:

Executive Committee.

         The  Executive  Committee  is  composed  of  William A.  Carter,  Chief
Executive Officer and Chairman of the Board,  Richard Piani, Lead Director,  and
Thomas Equels,  Secretary and Director. The Executive Committee had two meetings
in 2008. All committee  members attended these meetings.  The Committee  assists
the Board by making  recommendations  to management  regarding  general business
matters of Hemispherx.

Compensation Committee.

         The  Compensation  Committee  is  composed  of  Dr.  William  Mitchell,
Director,  Richard C. Piani,  Director, and Dr. Iraj-Eqhbal Kiani, Director. The
Compensation   Committee   makes   recommendations   concerning   salaries   and
compensation for officers,  employees of and consultants to Hemispherx. The full
text of the  Compensation  Committee  Charter,  as  approved  by the  Board,  is
available on our website:  www.hemispherx.net.  This  committee  met one time in
2008 and all committee members were in attendance. ------------------

Corporate Governance and Nomination Committee.

         In 2008,  the Corporate  Governance  and  Nomination  Committee had two
meeting and all members were present.

         The  Corporate  Governance  and  Nomination  Committee  consists of Dr.
William Mitchell, Committee Chair, Richard Piani and Iraj E. Kiani, Ph.D. All of
the members of the Committee meet the  independence  standards  contained within
the NYSE Amex Company Guide and the Hemispherx Corporate Governance  Guidelines.
The full text of the Corporate  Governance and Nomination  Committee  Charter as
well as the  Corporate  Governance  Guidelines,  as approved  by the Board,  are
available on our website: www.hemispherx.net.
 5
         As discussed  below,  the  Committee is  responsible  for  recommending
candidates to be nominated by the Board for election by the  stockholders  or to
be appointed by the Board of Directors  to fill  vacancies  consistent  with the
criteria  approved  by the  Board.  It  also  is  responsible  for  periodically
assessing    Hemispherx's    Corporate   Governance    Guidelines   and   making
recommendations  to the  Board  for  amendments,  recommending  to the Board the
compensation  of  Directors,  taking  a  leadership  role in  shaping  corporate
governance, and overseeing an annual evaluation of the Board.

         The Corporate  Governance and Nomination  Committee is responsible  for
identifying  candidates who are eligible under the  qualification  standards set
forth in Hemispherx's Corporate Governance Guidelines to serve as members of the
Board.  The  Hemispherx  qualification  standards,  inter alia,  provide that no
member of the Board of  Directors  may  serve on more  than six  public  company
boards and that no member of the Board of  Directors  who also serves as a Chief
Executive  Officer  of a public  company  may  serve on more than  three  public
company  boards.  The  Committee is  authorized to retain search firms and other
consultants  to assist it in  identifying  candidates  and  fulfilling its other
duties.  The  Committee  is not limited to any specific  process in  identifying
candidates and will consider  candidates  suggested by stockholders.  Candidates
are recommended to the Board after  consultation with the Chairman of the Board.
In recommending  Board candidates,  the Committee  considers a candidate's:  (1)
general  understanding of elements  relevant to the success of a publicly traded
company in the current business  environment,  (2) understanding of Hemispherx's
business,  and (3) educational and professional  background.  The Committee also
gives  consideration  to  a  candidate's   judgment,   competence,   anticipated
participation in Board activities,  experience,  geographic location and special
talents or  personal  attributes.  Stockholders  who wish to  suggest  qualified
candidates should write to the Corporate Secretary,  Hemispherx Biopharma, Inc.,
1617 JKF  Blvd.,  Ste.  660,  Philadelphia,  PA 19103,  stating  in  detail  the
qualifications of such persons for consideration by the Committee.

         The  Company  aspires to the  highest  standards  of  ethical  conduct;
reporting  results  with  accuracy  and   transparency;   and  maintaining  full
compliance  with the laws,  rules and  regulations  that  govern  the  Company's
business.  Hemispherx's  Corporate  Governance  Guidelines  embody  many  of our
policies and  procedures  which are the  foundation  of our  commitment  to best
practices.  The  guidelines are reviewed  annually,  and revised as necessary to
continue to reflect best practices.

Audit Committee and Audit Committee Expert.

         Hemispherx's  Audit  Committee  of the Board of  Directors  consists of
Richard Piani,  Committee  Chairman,  William  Mitchell,  M.D and Iraj E. Kiani,
Ph.D. The Audit Committee operates under a written charter approved by the Board
of  Directors  and  available on our  website:  www.hemispherx.net.  Dr. Iraj E.
Kiani, Dr. Mitchell,  and Mr. Piani are all determined by the Board of Directors
to be  independent  directors as required  under Section  121B(2)(a) of the NYSE
Amex  Company  Guide.  We do not have a  financial  expert as defined in the SEC
rules on the committee in the true sense of the description.  However, Mr. Piani
has 40  years  experience  in  business  and has  served  in  senior  level  and
leadership positions for International Business. His working experience includes
reviewing  and  analyzing  financial   statements  and  dealing  with  financial
institutions. Hemispherx believes Dr. Iraj E. Kiani, Dr. Mitchell, and Mr. Piani
to be  independent  of  management  and  free  of any  relationship  that  would
interfere  with  their  exercise  of  independent  judgment  as  members of this
committee.  The principal functions of the Audit Committee are to (i) assist the
Board  in  fulfilling  its  oversight  responsibility  relating  to  the  annual
independent audit of Hemispherx's consolidated financial statements and internal
control over financial reporting,  the engagement of the independent  registered
public  accounting firm and the evaluation of the independent  registered public
accounting firm's qualifications, independence and performance; (ii) prepare the
reports or  statements as may be required by NYSE Amex or the  securities  laws;
(iii) assist the Board in fulfilling  its oversight  responsibility  relating to
the integrity of  Hemispherx's  financial  statements  and  financial  reporting
process and Hemispherx's  system of internal  accounting and financial controls;
(iv) discuss the financial statements and reports with management, including any
significant  adjustments,  management  judgments and  estimates,  new accounting
policies  and  disagreements  with  management;  and (v) review  disclosures  by
Hemispherx'   independent   registered   public   accounting   firm   concerning
relationships  with Hemispherx and the  performance of Hemispherx's  independent
registered public accounting firm.
 6
Audit Committee Report.

         The primary  responsibility of the Audit Committee (the "Committee") is
to assist the Board of Directors in discharging  its oversight  responsibilities
with respect to financial matters and compliance with laws and regulations.  The
primary methods used by the Committee to fulfill its responsibility with respect
to financial matters are:

o        To  appoint,  evaluate,  and as the  Committee  may  deem  appropriate,
         terminate  and  replace the  Company's  independent  registered  public
         accountants;

o        To monitor the  independence  of the Company's  independent  registered
         public accountants;

o        To determine the compensation of the Company's  independent  registered
         public accountants;

o        To pre-approve any audit services, and any non-audit services permitted
         under  applicable  law, to be  performed by the  Company's  independent
         registered public accountants;

o        To review  the  Company's  risk  exposures,  the  adequacy  of  related
         controls  and  policies  with  respect  to  risk  assessment  and  risk
         management;

o        To monitor the integrity of the Company's financial reporting processes
         and systems of control regarding finance,  accounting, legal compliance
         and information systems;

o        To facilitate  and maintain an open avenue of  communication  among the
         Board of Directors, management and the Company's independent registered
         public accountants.

         The Audit Committee is composed of three  Directors,  and the Board has
determined  that each of those  Directors is independent as that term is defined
in Sections 121(B)(2)(a) of the NYSE Amex Company Guide.

         The Committee met two times in 2008. All committee members were present
at the meetings. In addition, the Committee conducted four teleconference calls.
All  Committee  members  were  present,  except for one call when one  Committee
member was not available.

         In  discharging  its  responsibilities  relating to internal  controls,
accounting  and  financial  reporting  policies  and  auditing  practices,   the
Committee   discussed   with  the  Company's   independent   registered   public
accountants,  McGladrey & Pullen,  LLP,  the  overall  scope and process for its
audit.  The Committee  regularly  meets with  McGladrey & Pullen,  LLP, with and
without  management  present,  to discuss the results of its  examinations,  the
evaluations  of our internal  controls and the overall  quality of the Company's
financial reporting.

         The  Committee  also  discussed  with has  discussed  with  McGladrey &
Pullen,  LLP during the 2008 fiscal year the matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees), as
amended,  and other standards of the Public Company Accounting  Oversight Board,
rules of the SEC and other applicable regulations.

         The  Committee  received  from  McGladrey  &  Pullen,  LLP the  written
disclosures  and the letter  required by applicable  requirements  of the Public
Company  Accounting  Oversight  Board  regarding  McGladrey  &  Pullen,  LLP  's
communications  with the Audit Committee  concerning  independence and discussed
with McGladrey & Pullen, LLP the independence of their firm.

         The  Committee  has met  and  held  discussions  with  management.  The
Committee  has reviewed  and  discussed  with  management  Hemispherx's  audited
consolidated  financial  statements as of and for the fiscal year ended December
31, 2008, as well as the internal control requirements of the Sarbanes-Oxley Act
of 2002.

         Based on the reviews and discussions  referred to above,  the Committee
recommended  to the Board of  Directors  that the audited  financial  statements
referred to above be included in the Company's  Annual Report for the year ended
December 31, 2008.

         This  report is  respectfully  submitted  by the  members  of the Audit
Committee of the Board of Directors.
 7
                             Richard Piani, Chairman
                               William M. Mitchell
                                  Iraj E. Kiani

Strategic Planning Committee.

         The  Strategic  Planning  Committee  is composed of William A.  Carter,
William M. Mitchell,  and Thomas K. Equels.  The Committee met two times in 2008
and all committee members were in attendance.  The Strategic  Planning Committee
makes recommendations to the Board of Directors of priorities in the application
of Hemispherx's  financial assets and human resources in the fields of research,
marketing  and  manufacturing.  The Strategic  Planning  Committee has engaged a
number  of   leading   consultants   in   healthcare,   drug   development   and
pharmaeconomics  to assist in the analysis of various  products being  developed
and/or potential acquisitions being considered by Hemispherx.

Lead Director

Richard Piani is the lead director. Mr. Piani has been a Director of the Company
since 1995.  The lead  Director:  (i)  presides at all  meetings of the Board at
which  the  Chairman  is  not  present,  including  executive  sessions  of  the
independent  Directors;  (ii)  serves as liaison  between the  Chairman  and the
independent  Directors;  (iii)  approves  information  sent to the  Board;  (iv)
approves meeting agendas for the Board; (v) approves meeting schedules to assure
that there is sufficient  time for discussion of all agenda items;  (vi) has the
authority to call meetings of the independent Directors;  and (vii) if requested
by major stockholders,  ensures that he is available for consultation and direct
communication.

Code of Ethics and Business Conduct

Hemispherx's  Board of Directors  adopted a code of ethics and business  conduct
for officers,  directors  and  employees  that went into effect on May 19, 2003.
This  code has  been  presented  and  reviewed  by each  officer,  director  and
employee.  You may  obtain  a copy of this  code  by  visiting  our web  site at
www.hemispherx.net or by written request to our Office Administrator at 1617 JFK
Boulevard, Suite 660, Philadelphia, PA 19103. Our Board of Directors is required
to approve any waivers of the code of ethics and business  conduct for Directors
or  executive  officers  and we are  required to  disclose  any such waiver in a
Current Report on Form 8-K within four business days.

Stock Ownership Guidelines

         In April 2005, the Board of Directors  adopted a set of stock ownership
guidelines  for Directors and officers.  The Board  believes that  Directors and
officers more effectively represent the interest of Hemispherx's stockholders if
they  are  stockholders  themselves.  At this  time,  all of our  Directors  and
officers  are  stockholders  and this  guideline  was adopted to assure that the
present  Directors  and  officers  continue  to  participate  as well as  future
Directors  and officers.  The full text of the Stock  Ownership  Guidelines,  as
approved by the Board, are available on our website: www.hemispherx.net.

Communication with the Board of Directors

         Interested  parties  wishing to contact the Board of  Directors  of the
Company may do so by writing to the following address:  Board of Directors,  c/o
Thomas K. Equels, Corporate Secretary,  2601 S. Bayshore Dr., Suite #600, Miami,
FL  33133.  All  letters  received  will be  categorized  and  processed  by the
Corporate  Counsel or Secretary,  and then  forwarded to the Company's  Board or
Directors.

Director Attendance at Annual Meetings of Stockholders

         Directors  are  encouraged,  but not  required,  to attend  the  Annual
Meeting of Stockholders.  Due to the Company's need to repeatedly reschedule the
Annual Meeting in a attempt to attain a minimum quorum, only the Chairman of the
Board was in attendance at the November 11, 2008 meeting.
 8
                    INFORMATION CONCERNING EXECUTIVE OFFICERS

         The following sets forth  biographical  information about  Hemispherx's
executive officers and key personnel:

         Name               Age   Position

William A. Carter, M.D.     71    Chairman, Chief Executive Officer

Thomas K. Equels            58    Corporate Secretary

Charles T. Bernhardt, CPA   47    Chief Financial Officer

David R. Strayer, M.D.      63    Medical Director, Regulatory Affairs

Carol A. Smith, Ph.D.       57    Vice President of Manufacturing Quality and
                                  Process Development

Ransom W. Etheridge         69    General Counsel

Wayne Springate             38    Vice President of Operations

Katalin Ferencz-Biro        62    Senior Vice President of Regulatory Affairs

Russel Lander               58    Vice President of Quality Assurance



         For biographical information about William A. Carter, M.D and Thomas K.
Equels,  please see the discussion under the heading "Proposal No. 1 Election of
Directors".

         CHARLES T.  BERNHARDT  is a Certified  Public  Accountant  who also has
attained a  Masters'  Degree in  Business  Administration.  He is a graduate  of
Villanova University and West Chester University of Pennsylvania.  He has served
as our Chief  Financial  Officer since January 1, 2009. Most recently he was the
Director of Accounting for Healthcare  Division of Thomson  Reuters,  an overall
company with $12 billion annual revenues and 50,000 total world-wide  employees,
where he was responsible for their Healthcare Division's accounting  operations,
including  the  Physicians'  Desk  Reference  business,  as well  as the  shared
financial  services for the  Healthcare  and  Scientific  Divisions from 2006 to
2008. He was a Regional Controller for Comcast Cable from 1999 to 2002, Director
of Finance for TelAmerica  Media from 2003 to 2006 and, earlier in his career, a
member of the Internal Audit  management  teams American Stores  Corporation and
ICI Americas/Zenica (currently AstraZenica Pharmaceuticals).  In 1986, he became
a C.P.A.  licensed in Pennsylvania and New Jersey while with public accounting's
"Big Four" firm of KPMG.

         DAVID R.  STRAYER,  M.D.  who served as  Professor  of  Medicine at the
Medical  College of  Pennsylvania  and  Hahnemann  University,  has acted as our
Medical  Director  since 1986.  He is Board  Certified  in Medical  Oncology and
Internal  Medicine  with  research  interests in the fields of cancer and immune
system  disorders.  Dr. Strayer has served as principal  investigator in studies
funded by the Leukemia Society of America,  the American Cancer Society, and the
National  Institutes of Health.  Dr. Strayer  attended the School of Medicine at
the University of California at Los Angeles where he received his M.D. in 1972.
 9
         CAROL A. SMITH,  Ph.D. is Vice President of  Manufacturing  Quality and
Process  Development who has served as our Director of Manufacturing and Process
Development  from 1995 to 2003, as Director of Operations  from 1993 to 1995 and
as the Manager of Quality Control from 1991 to 1993, with responsibility for the
manufacture,  quality  control,  process  development,  technology  transfer  to
contract  manufacturers  and  the  chemistry  of  Ampligen(R).   Dr.  Smith  was
Scientist/Quality  Assurance Officer for Virotech International,  Inc. from 1989
to 1991 and Director of the Reverse  Transcriptase  and Interferon  Laboratories
and a Clinical  Monitor for Life Sciences,  Inc. from 1983 to 1989. She received
her  Ph.D.  in  Medical  Sciences  with a  concentration  on  Virology  from the
University  of  South  Florida,  College  of  Medicine  in  1980  and was an NIH
post-doctoral  fellow in the  Department  of  Microbiology  and  Virology at the
Pennsylvania State University College of Medicine from 1980 to 1983.

         RANSOM W. ETHERIDGE  presently serves as our General Counsel. He served
as a member of our Board of Directors  from October 1997 through  November  2008
and as our Secretary from October 1997 to April 2009. Mr. Etheridge first became
associated  with  us in 1980  when he  provided  consulting  services  to us and
participated  in  negotiations  with  respect to our initial  private  placement
through  Oppenheimer & Co., Inc. Mr.  Etheridge  has been  practicing  law since
1967,  specializing  in  transactional  law.  Mr.  Etheridge  is a member of the
Virginia  State  Bar,  a  Judicial  Remedies  Award  Scholar,  and has served as
President  of the  Tidewater  Arthritis  Foundation.  He is a  graduate  of Duke
University,  and received his Law degree from the University of Richmond  School
of Law.

         WAYNE  S.   SPRINGATE  is  Vice  President  of  Operations  and  joined
Hemispherx in 2002 as Vice President of Business Development. Mr. Springate came
on board when Hemispherx  acquired Alferon N Injection(R) and its New Brunswick,
NJ manufacturing  facilities. He led the consolidation of our Rockville facility
to our  New  Brunswick  location  as  well  as  coordinated  the  relocation  of
manufacturing  polymers  from South  Africa to our  production  facility  in New
Brunswick.  He is responsible  for preparing our  Manufacturing  plant for a Pre
Approval  Inspection by the FDA in connection with the filing of our Ampligen(R)
NDA. Previously, Mr. Springate acted as President for World Fashion Concepts. He
oversaw  operations at several locations in the United States and overseas.  Mr.
Springate  assisted  the CEO in details of  operations  on a daily basis and was
involved in all aspects of manufacturing, warehouse management, distribution and
logistics.

         KATALIN  FERENCZ-BIRO,  Ph.D.  has served as the Company's  Senior Vice
President of Regulatory Affairs and Quality Assurance  Departments since January
2007.  She served as the Director of  Regulatory  Affairs and Quality  Assurance
from 2006 to 2007.  Previously from 1987 to 2003, she served Interferon Sciences
Inc, in various  positions  including  Senior  Director of  Regulatory  Affairs,
Quality Control and Quality Assurance Departments,  and FDA official for our FDA
approved product, Alferon N Injection(R). Dr. Ferencz-Biro received her Ph.D. in
Chemistry/ Biochemistry in 1972 from the University of Eotvos Lorand,  Budapest,
Hungary,  and her M.S.,  in  Chemistry  and Biology in 1971 from  University  of
Eotvos Lorand,  Budapest,  Hungary. She was a postdoctoral fellow from 1981-1984
in Rutgers University,  Center for Alcohol Studies,  Piscataway, New Jersey. She
is an author and  co-author  of several  scientific  publications,  patents  and
presentations  on the  field  of  biochemistry.  Currently  she is a  member  of
Regulatory Affairs Professionals Society.

         RUSSEL J. LANDER, Ph.D. is Vice President Quality Assurance. Dr. Lander
joined Hemispherx in 2005,  assuming  responsibility for CMC writing for the NDA
filing of Ampligen(R).  He has subsequently  served at the New Brunswick site as
Director of Quality Control and has provided  guidance to the efforts to improve
and  validate  the  manufacturing  process  for  the  synthesis  of  Ampligen(R)
polynucleotide  raw  materials,  Poly I and Poly C12U.  Dr.  Lander was formerly
employed  at Merck and Co.,  Inc.  in the  process  development  groups for drug
development (1977-1991) and vaccines (1991-2005).  Dr. Lander received his Ph.D.
in Chemical/Biochemical  Engineering from the University of Pennsylvania. He has
authored numerous scientific publications and invention disclosures.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Review, Approval or Ratification of Transactions with Related Persons

         Our  policy is to require  that any  transaction  with a related  party
required to be reported  under  applicable  Securities  and Exchange  Commission
("SEC") rules,  other than compensation  related matters and waivers of our code
of  business  conduct  and ethics,  be  reviewed  and  approved or ratified by a
majority of independent, disinterested directors. We have not adopted procedures
for review of, or standards  for approval  of, these  transactions,  but instead
 10
review such  transactions on a case by case basis. Our policy is to require that
all  compensation  related  matters be  recommended  for Board  approval  by the
Compensation  Committee and that any waiver of our code of business  conduct and
ethics be reviewed  and  approved by the  Corporate  Governance  and  Nominating
Committee and be reported under applicable SEC rules.

         We have employment  agreements  with certain of our executive  officers
and have granted such  officers and  directors  options and warrants to purchase
our common  stock,  as  discussed  below  under the  heading,  "Compensation  of
Executive Officers and Directors".

         Ransom W. Etheridge,  our General Counsel and a former director,  is an
attorney in private  practice,  who renders  corporate legal services to us from
time to time, for which he has received fees totaling  approximately $105,400 in
2008. In addition, Mr. Etheridge served on the Board of Directors until November
2008.  For his service as a Director in 2008,  he  received  Director's  Fees of
$112,500 in cash and stock.

         We use the  property  acquired in late 2004 by Retreat  House,  LLC, an
entity in which the children of William A. Carter have a beneficial interest. We
paid Retreat House,  LLC $41,200 in 2008, for the use of the property at various
times.

         Thomas K.  Equels was elected to the Board of  Directors  at the Annual
Stockholders  Meeting on November 17, 2008. Mr. Equels has provided legal serves
to us for several  years.  In 2008,  we paid Mr.  Equel's law firm  $395,000 for
services rendered.  Mr. Equel's received $37,500 in our stock for his Board fees
in 2008.

         We have  continued  to utilize The Sage  Group,  Inc.,  a health  care,
technology  oriented,  strategy and  transaction  advisory firm, to assist us in
obtaining a strategic  alliance in Japan for the use of  Ampligen(R) in treating
Chronic  Fatigue   Syndrome  (CFS)  and  Avian  Flu.  We  paid  The  Sage  Group
approximately $167,000 in fees for the year ended December 31, 2008.

         Kati Kovari,  M.D. was paid $13,000 in 2008 for her part-time  services
to us as Assistant Medical Director. Dr. Kovari is the spouse of Dr. Carter, our
Chairman and CEO.

                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

         Section 16(a) of the Exchange Act requires our officers and  directors,
and  persons  who own more  than ten  percent  of a  registered  class of equity
securities,  to  file  reports  with  the  Securities  and  Exchange  Commission
reflecting  their  initial  position  of  ownership  on  Form 3 and  changes  in
ownership  on Form 4 or Form 5.  Based  solely on a review of the copies of such
Forms  received by us, we found that,  during the fiscal year ended December 31,
2008, certain of our officers and directors had not complied with all applicable
Section 16(a) filing  requirements on a timely basis with regard to transactions
occurring in 2008. Specifically, Dr. Carter filed one form 4 late concerning one
transaction;   Mr.   Etheridge  filed  three  Forms  4  late  concerning   three
transactions;  Mr. Kiani filed three Forms 4 late concerning three transactions;
Mr. Piani filed three Forms 4 late concerning three  transactions;  Dr. Mitchell
filed four Forms 4 late concerning four transactions;  and Dr. Strayer filed one
Form 4 late concerning one transaction.

                COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

Compensation Discussion and Analysis

Objectives and Philosophy of Executive Compensation

         The primary  objectives of the  compensation  committee of our board of
directors with respect to executive  compensation  are to attract and retain the
most talented and  dedicated  executives  possible,  to tie annual and long-term
cash and stock incentives to achievement of measurable  performance  objectives,
and to align executives'  incentives with stockholder value creation. To achieve
these objectives,  the compensation  committee expects to implement and maintain
compensation  plans  that  tie a  substantial  portion  of  executives'  overall
compensation  to key  strategic  financial  and  operational  goals  such as the
establishment and maintenance of key strategic relationships, the development of
our products,  the  identification and advancement of additional product and the
 11
performance  of our common stock price.  The  compensation  committee  evaluates
individual executive performance with the goal of setting compensation at levels
the committee  believes are  comparable  with  executives in other  companies of
similar size and stage of development  operating in the  biotechnology  industry
while taking into account our relative performance and our own strategic goals.

         Our compensation  plans are developed by utilizing  publicly  available
compensation  data and  subscription  compensation  survey data for national and
regional  companies  in the  biopharmaceutical  industry.  We  believe  that the
practices of this group of companies  provide us with  appropriate  compensation
benchmarks,  because these companies have similar organizational  structures and
tend to compete with us for executives  and other  employees.  For  benchmarking
executive  compensation,  we  typically  review  the  compensation  data we have
collected from the complete group of companies,  as well as a subset of the data
from those companies that have a similar number of employees as our company.  In
past years, we had engaged  independent  outside  consultants to help us analyze
this data and to compare our  compensation  programs  with the  practices of the
companies  represented  in the  compensation  data we review.  However given the
current harsh  economic  conditions and our efforts to conserve cash, we did not
undertake  an  analysis  of  any  compensation  nor  offer  any  incremental  or
performance salary increases for the year-end 2008. Additionally,  the Board did
not approve the award of any bonus for 2008.

Elements of Executive Compensation

Executive compensation consists of the following elements:

Base Salary

         Base salaries for our executives are established  based on the scope of
their responsibilities, taking into account competitive market compensation paid
by other companies for similar positions.  Generally,  we believe that executive
base  salaries  should be targeted  near the median of the range of salaries for
executives  in similar  positions  with similar  responsibilities  at comparable
companies, in line with our compensation philosophy.  Base salaries are reviewed
annually,  and adjusted from time to time to realign salaries with market levels
after  taking  into  account   individual   responsibilities,   performance  and
experience. This review normally occurs in the fourth quarter of each year.

Annual Bonus

         Our   compensation   program   includes   eligibility   for  an  annual
performance-based  cash bonus in the case of all executives and certain  senior,
non-executive  employees.  The amount of the cash bonus  depends on the level of
achievement of the stated  corporate,  department,  and  individual  performance
goals,  with a target bonus  generally  set as a percentage  of base salary.  As
provided in his employment  agreement,  our Chief Executive  Officer is eligible
for an annual performance-based bonus up to 25% of their salaries, the amount of
which,  if any, is determined  by the board of directors in its sole  discretion
based on the recommendation of the compensation committee.

         The  Compensation   Committee  utilizes  annual  incentive  bonuses  to
compensate  officers  for  achieving  financial  and  operational  goals and for
achieving individual annual performance  objectives.  These objectives will vary
depending on the individual  executive,  but will relate  generally to strategic
factors such as  establishment  and maintenance of key strategic  relationships,
development  of our product,  identification  and research  and  development  of
additional  products,  and to  financial  factors  such as raising  capital  and
improving our results of operations.

         The  Compensation  Committee  and the Board of  Directors  declined  to
awarded  bonuses  for 2008 to any of our  executives,  senior  or  non-executive
employees.

Long-Term Incentive Program

         We believe that long-term  performance is achieved through an ownership
culture that encourages such  performance by our executive  officers through the
use of stock and stock-based  awards.  Our stock plans have been  established to
provide our employees, including our executive officers, with incentives to help
align  those  employees'  interests  with the  interests  of  stockholders.  The
Compensation  Committee  believes that the use of stock and  stock-based  awards
 12
offers  the  best  approach  to  achieving  our  compensation   goals.  We  have
historically  elected  to use stock  options  as the  primary  long-term  equity
incentive  vehicle.  We have adopted stock  ownership  guidelines  and our stock
compensation plans have provided the principal method, other than through direct
investment  for our  executive  officers to acquire  equity in our  Company.  We
believe  that the  annual  aggregate  value of these  awards  should be set near
competitive median levels for comparable companies.  However, in the early stage
of our  business,  we provided a greater  portion of total  compensation  to our
executives   through  our  stock  compensation  plans  than  through  cash-based
compensation.

Stock Options

         Our stock plans  authorize  us to grant  options to purchase  shares of
common stock to our  employees,  directors  and  consultants.  Our  Compensation
Committee oversees the administration of our stock option plan. The Compensation
Committee  reviews and  recommends  approval by our Board of  Directors of stock
option  awards  to  executive  officers  based  upon  a  review  of  competitive
compensation  data, its assessment of individual  performance,  a review of each
executive's existing long-term incentives and retention considerations. Periodic
stock option grants are made at the  discretion  of the Board of Directors  upon
recommendation  of the  Compensation  Committee  to eligible  employees  and, in
appropriate   circumstances,    the   compensation   committee   considers   the
recommendations  of members of management.  In 2008, the Compensation  Committee
and the Board  authorized  the  renewal of expiring  options  for certain  named
executives in the amounts indicated in the section entitled "Stock Option Grants
to Executive  Officers."  Grants were made to certain of our employees  based on
past  performance,  particularly,  those who worked hard and  diligently  on the
preparation of our NDA. Stock options granted by us have an exercise price equal
to the fair market value of our common  stock on the day of grant and  typically
vest over a period of years  based  upon  continued  employment,  and  generally
expire ten years after the date of grant.  Incentive  stock options also include
certain other terms  necessary to assure  compliance  with the Internal  Revenue
Code of 1986, as amended, or Internal Revenue Code.

         We expect to  continue to use stock  options as a  long-term  incentive
vehicle because:  (1) Stock options align the interests of executives with those
of the  stockholders,  support a  pay-for-performance  culture,  foster employee
stock  ownership,  and focus the  management  team on  increasing  value for the
stockholders, (2) Stock options are performance based. All the value received by
the  recipient of a stock option is based on the growth of the stock price,  (3)
Stock  options help to provide a balance to the overall  executive  compensation
program as base  salary and our  discretionary  annual  bonus  program  focus on
short-term   compensation,   while  the  vesting  of  stock  options   increases
shareholder  value over the longer  term,  and (4) the  vesting  period of stock
options  encourages  executive  retention and the  preservation  of  shareholder
value.

         In determining the number of stock options to be granted to executives,
we take into account the individual's position, scope of responsibility, ability
to affect profits and shareholder value and the individual's historic and recent
performance  and the value of stock options in relation to other elements of the
individual executive's total compensation.

         Options  granted  under  the  2004  plan  include  1,345,742  in  2006,
3,232,870 in 2007 (including  2,970,000 issued for expiring options) and 687,000
in 2008 (302,000  issued for  unexercised  and expired  options).  Unless sooner
terminated, the Equity Incentive Plan will continue in effect for a period of 10
years from its effective date.

         Our 2004 Equity  Compensation  Plan  authorizes us to grant  restricted
stock  and  restricted  stock  units.  In 2008,  we  issued  755,829  shares  to
consultants and vendors for services rendered in lieu of cash.

         As of December  31, 2008 we had 18,081  shares for future use under the
2004 plan.

         On June 30, 2007 the  stockholders  adopted  the 2007 Equity  Incentive
Plan which  authorizes the issuance of up to 8,000,000  stock options to acquire
common stock pursuant to the terms of the plan.  This Plan also authorizes us to
grant restricted stock and restricted stock units.  1,450,000  options (all were
issued for expiring and unexercised  options) were granted  pursuant to the 2007
plan. In addition,  we issued 201,010 shares of unrestricted stock and 2,434,177
shares in  restricted  stock to  consultants  and  other  vendors  for  services
performed in lieu of cash.
 13
Other Compensation

         Our Chief  Executive  Officer,  Chief  Financial  Officer  and  General
Counsel have employment,  and/or engagement contracts that will remain in effect
until  they are  terminated,  expire,  or are  renegotiated.  Each  contract  is
different with respect to specific benefits or other compensation. We maintain a
broad-based  benefits  program  that  is  provided  to all  employees  including
vacation, sick leave and health insurance. Details of these agreements is are as
follows:

         Dr.  Carter's  employment  as our  Chief  Executive  Officer  and Chief
Scientific  Officer expires December 31, 2010 unless sooner terminated for cause
or  disability.  The  agreement  automatically  renews for  successive  one year
periods after the initial  termination date unless we or Dr. Carter give written
notice  otherwise  at least  ninety  days prior to the  termination  date or any
renewal period.  Dr. Carter has the right to terminate the agreement on 30 days'
prior written notice.  The base salary is subject to adjustments and the average
increase  or  decrease  in the  Consumer  Price  Index  for the prior  year.  In
addition,  Dr. Carter could receive an annual  performance bonus of up to 25% of
his base salary,  at the sole  discretion of the  Compensation  Committee of the
board of  directors,  based on his  performance  or our operating  results.  Dr.
Carter will not participate in any discussions  concerning the  determination of
his annual bonus.  Dr. Carter is also entitled to an incentive  bonus of 0.5% of
the gross proceeds received by us from any joint venture or corporate partnering
arrangement.  Dr. Carter's agreement also provides that he be paid a base salary
and  benefits  through the last day of the then term of the  agreement  if he is
terminated without "cause",  as that term is defined in agreement.  In addition,
should Dr. Carter  terminate the agreement or the agreement be terminated due to
his death or disability,  the agreement  provides that Dr. Carter be paid a base
salary and benefits  through the last day of the month in which the  termination
occurred and for an  additional  twelve month  period.  On January 1, 2009,  Dr.
Carter's  compensation as an employee was changed pursuant to our "Employee Wage
Or Hours  Reduction  Program"  (discussed  below)  consistent  with an  employee
earning over $200,000 per annum to receive 50% of his wages in Incentive  Rights
on a three-to-one conversion basis.

         Our  engagement  of  Dr.  Carter  as a  consultant  related  to  patent
development,  as one of our directors and as chairman of the Executive Committee
of our Board of Directors expires December 31, 2010 unless sooner terminated for
cause or disability.  The agreement automatically renews for successive one year
periods after the initial termination date or any renewal period. Dr. Carter has
the right to terminate the agreement on 30 days' prior written notice.  The base
fee is  subject  to  annual  adjustments  equal to the  percentage  increase  or
decrease of annual  dollar value of  directors'  fees  provided to our directors
during the prior year. The annual fee is further subject to adjustment  based on
the average increase or decrease in the Consumer Price Index for the prior year.
In addition,  Dr. Carter could receive an annual  performance bonus of up to 25%
of his base fee, at the sole  direction  of the  Compensation  Committee  of the
board of directors, based on his performance. Dr. Carter will not participate in
any discussions  concerning the determination of this annual bonus. Dr. Carter's
agreement also provides that he be paid his base fee through the last day of the
then term of the agreement if he is terminated without "cause",  as that term is
defined in the agreement. In addition, should Dr. Carter terminate the agreement
or the agreement be  terminated  due to his death or  disability,  the agreement
provides  that Dr. Carter be paid fees due him through the last day of the month
in which the termination  occurred and for an additional twelve month period. On
January 1, 2009, Dr. Carter's  compensation as a consultant was changed pursuant
to our "Employee Wage Or Hours  Reduction  Program"  consistent with an employee
earning over $200,000 per annum to receive 50% of his fee in Incentive Rights on
a three-to-one conversion basis.

         An  Engagement  Agreement  with  Charles  T.  Bernhardt,  CPA as  Chief
Financial  Officer  (interim)  was  finalized on December 1, 2008 and  effective
January 1, 2009. The agreement calls for an initial salary of $160,000 per annum
and eligibility for the Goal Achievement  Incentive Program.  Additionally,  the
agreement  is based on an  employment  "at will" basis in which either party may
cancel upon two weeks written notice.  Consistent  with the Company's  "Employee
Wage Or Hours Reduction  Program",  Mr.  Bernhardt has elected to receive 50% of
his wages in Incentive Rights on a three-to-one conversion basis.

         Our agreement  with Ransom W.  Etheridge  provides for Mr.  Etheridge's
engagement  as our  General  Counsel  until  December  31,  2009  unless  sooner
terminated  for cause or  disability.  The  agreement  automatically  renews for
successive one year periods after the initial  termination date unless we or Mr.
Etheridge  give  written  notice  otherwise  at least  ninety  days prior to the
termination date or any renewal period. Mr. Etheridge has the right to terminate
the  agreement  on 30 days' prior  written  notice.  The initial  annual fee for
services is $105,408 and is annually  subject to adjustment based on the average
 14
increase  or  decrease  in the  Consumer  Price  Index for the prior  year.  Mr.
Etheridge's  agreement  also  provides that he be paid all fees through the last
day of then current term of the agreement if he is terminated without "cause" as
that term is  defined  in the  agreement.  In  addition,  should  Mr.  Etheridge
terminate  the  agreement  or the  agreement be  terminated  due to his death or
disability,  the agreement  provides that Mr. Etheridge be paid the fees due him
through the last day of the month in which the  termination  occurred and for an
additional twelve month period.  Mr. Etheridge will devote  approximately 85% of
his business time to our business.  Effective  January 1, 2009,  one-half of the
monthly fee compensation to be paid to Ransom W. Etheridge pursuant to the terms
of his  Engagement  Agreement  with us as our  General  Counsel  will be paid in
shares of the  Company's  common stock  ("Etheridge  Share  Compensation").  The
number of shares  issued as Etheridge  Share  Compensation  shall be  calculated
based on a value equal to three times  one-half of the monthly fee  compensation
to be paid to Mr.  Etheridge  pursuant to the terms of his Engagement  Agreement
with us,  with the value of the shares  being  determined  by the average of the
closing share price of our common stock on the NYSE Amex for the month for which
compensation is due.

         On December 31, 2008, we entered into a severance/consulting  agreement
with retiring  Chief  Financial  Officer,  Robert E.  Peterson.  This  agreement
provide a monthly  fee of $4,000 plus  travel  expenses  and Options to purchase
20,000  shares  of the our  common  stock  at the end of each  calendar  quarter
through year-end 2011 in return for consulting  services.  The exercise price of
the Options is to be equal to 120% of the closing  price of the our stock on the
NYSE Amex on the last trading day of the calendar  quarter for which the Options
are being issued.  Mr. Peterson may terminate the Advisory  Services at any time
upon  giving us 60 days  notice in writing of the  intention  to  terminate  the
Advisory  Services.  Mr.  Peterson also is entitled to certain change of control
benefits and an incentive fee if and when we execute a financing transaction.

Goal Achievement Incentive Program

         On  November  17,  2008 the  Board  of  Directors  authorized  the Goal
Achievement Incentive Program. This program is designed to intensify the efforts
of the parties involved in securing strategic  partnering  agreements with third
parties.  Pursuant  to the Goal  Achievement  Program,  we will pay the  parties
participating  in the Program an incentive  bonus for each timely  agreement (as
defined  below)  entered  into by us with any and all third  parties in which we
receive  cash (as  defined  below)  from such  third  parties as a result of the
execution of such  agreements  ("Strategic  Partnering  Agreements"),  provided,
however,  Strategic  Partnering  Agreements do not include agreements whereby we
receive  cash as a result  of (i) only the sale of  Ampligen(R)  or other of our
products, (ii) we only being reimbursed for expenses, not including expenses for
prior research  conducted by us, incurred by us, (iii) an agreement in which the
only economic benefit to us is one or more loans,  and (iv) an agreement,  other
than an agreement  which  results in a change of control of the  Hemispherx,  in
which  the  only  economic  benefit  to us is the  sale of our  equity  or other
securities.  The incentive  bonus will be in an amount equal to one percent (1%)
of the  amount  of all cash  received  by us  pursuant  to each  such  Strategic
Partnering  Agreement  between the dates of the execution of each such Strategic
Partnering Agreement and the first commercial sale of Ampligen(R)  following the
full commercial  approval of the sale of Ampligen(R) in each  jurisdiction.  All
incentive  bonus payments will be payable in readily  available funds within ten
(10) days following  receipt by us of readily available funds as a result of our
receipt of such first cash. For purposes  hereof "timely  agreements"  means all
agreements  entered  into by us with any and all third  parties (a) on or before
June 30, 2009 and (b) on or before March 31, 2010 with third  parties with which
we had been in active  negotiations  on or before June 30, 2009. For purposes of
the Goal Achievement  Program "cash" means any asset which is either (a) readily
available funds or (b) capable of being  converted into readily  available funds
in value equal to the value  ascribed to such asset in the Strategic  Partnering
Agreement  within  six  months  of the  receipt  of such  asset by us.  The Goal
Achievement  Program  presently  includes Dr. William  Carter,  CEO, Dr. Chaunce
Bogard,  consultant and acting Senior Vice President, The Sage Group (one of our
strategic advisors) and Anthony Bonelli, our former President and COO, Dr. David
R. Strayer,  Medical  Director and all of our active  employees as of January 1,
2009.

Employee Wage Or Hours Reduction Program

         In an effort to  conserve  Company  cash,  the  Employee  Wage Or Hours
Reduction Program (the "Program") was ratified by the Board effective January 1,
2009.  In a mandatory  program  that is  estimated to be in effect for up to six
months,  compensation  of all active  full-time  employees as of January 1, 2009
("Participants")  were reduced through a reduction in their wages for which they
would be eligible to receive  shares of our common  stock  ("Stock")  six months
 15
after the shares were earned.  While all employees  were also offered the option
to reduce their work hours with a  proportional  decease in wages,  none elected
this alternative.

         On  a  semi-monthly  basis,   Participants   receive  rights  to  Stock
("Incentive  Rights")  that  cannot be  traded.  Six  months  after the date the
Incentive  Rights are  awarded,  we will  undertake a process to have  Incentive
Rights  converted into Stock and issued to each  Participant on a monthly basis.
We will  establish  and  maintain a record for the  number of  Incentive  Rights
awarded to each  Participant.  At the end of each  semi-monthly  period, we will
determine  the  number of  Incentive  Rights  by  converting  the  proportionate
incentive  award to the value of the Stock by utilizing the closing price of the
Stock on the NYSE Amex based on the average daily closing price for the period.

The Plan is being administered for full-time employees as follows:

o        Twenty-three  employees earning $90,000 or less per year elected a wage
         reduction of 10% per annum and are  receiving an incentive of two times
         the value in Stock;

o        Four  employees  earning  $90,001 to $200,000  per year  elected a wage
         reduction of 25% per annum are  receiving an incentive of two times the
         value in Stock;

o        Two employees  earning over $200,000 per year elected a wage  reduction
         of 50% per annum and are  receiving  an  incentive  of three  times the
         value in Stock;

o        Any  employee  could elect a 50% per annum wage  reduction  which would
         allow them to be  eligible  for an  incentive  award of three times the
         value in Stock. This option was elected by three employees.

         Prior to the Stock being issued,  we will  establish a trading  account
with an independent  brokerage firm for each Participant.  Incentive Rights will
constitute income to the Participants and be subject to payroll taxes upon Stock
issuance.  At a brokerage firm selected by us, we will bear all expenses related
to selling the Stock (i.e.; broker fees, transaction costs,  commissions,  etc.)
for payroll withholding taxes purposes.  Thereafter, for each Participant during
the period that they remain an active  employee,  we will  continue to bear such
costs from this  designated  brokerage firm for the  maintenance of this account
and all  expenses  related to  selling  our  Stock.  Participants  leaving us or
voluntarily  separating from the Plan will receive the Stock earned upon the six
month  conversion of their Incentive  Rights.  The Plan benefits for individuals
that are no longer  Participants  will become  fixed and we will not continue to
bear such costs from the  designated  brokerage  firm for the  maintenance of an
account nor any  expenses  related to selling  the Stock  except for the initial
costs associated to the selling of Stock for payroll withholding taxes purposes.

Employee Bonus Pool Program

         An element of the  Employee  Wage Or Hours  Reduction  Program  was the
establishment  of a  Bonus  Pool  (the  "Pool")  in the  case  of  FDA  Approval
("Approval") of  Ampligen(R).  This bonus is to award to each employee of record
at January 1, 2009 a pretax  sum of 30% in wages,  calculated  on their base per
annum compensation at the time of the Approval,  and awarded within three months
of Approval.  Participants  who terminate their employment prior to the Approval
will not qualify for this bonus.

Key Employee Retention

         The Board of Directors,  deeming it essential to the best  interests of
our shareholders to foster the continuous engagement of key management personnel
and  recognizing  that, as is the case with many publicly held  corporations,  a
change of control might occur and that such possibility, and the uncertainty and
questions which it might raise among  management,  might result in the departure
or  distraction of management  personnel to our detriment and our  shareholders,
determined to reinforce and encourage the continued  attention and dedication of
members of our management to their engagement without distraction in the face of
potentially disturbing circumstances arising from the possibility of a change in
control of Hemispherx and entered into identical  agreements regarding change in
control with William A. Carter, our Chief Executive Officer and Chief Scientific
Officer,  and Ransom W. Etheridge,  our General Counsel.  Each of the agreements
regarding change in control became effective March 11, 2005 and continue through
December  31, 2008 and extend  automatically  to the third  anniversary  thereof
unless we give  notice to the other  party  prior to the date of such  extension
 16
that the agreement term will not be extended.  Notwithstanding the foregoing, if
a change in control  occurs during the term of the  agreements,  the term of the
agreements will continue through the second anniversary of the date on which the
change in control  occurred.  Each of the agreements  entitles William A. Carter
and Ransom W. Etheridge, respectively, to change of control benefits, as defined
in the agreements and summarized  below,  upon their  respective  termination of
employment/engagement  with us during a potential change in control,  as defined
in the  agreements or after a change in control,  as defined in the  agreements,
when their  respective  terminations  are caused (1) by us for any reason  other
than permanent  disability or cause,  as defined in the agreement (2) by William
A. Carter and/or Ransom W. Etheridge,  respectively,  for good reason as defined
in the  agreement  or,  (3) by  William  A.  Carter,  and  Ransom W.  Etheridge,
respectively  for any reason  during the 30 day period  commencing  on the first
date which is six months after the date of the change in control.

The benefits for each of the foregoing executives would be as follows:
o A lump sum cash  payment  of three  times his base  salary  and  annual  bonus
amounts; and o Outplacement benefits.

Each  agreement  also  provides  that the  executive is entitled to a "gross-up"
payment  to make him whole  for any  federal  excise  tax  imposed  on change of
control or severance payments received by him.

Dr. Carter's agreement also provides for the following benefits:
o Continued insurance coverage through the third anniversary of his termination;
and o Retirement  benefits computed as if he had continued to work for the above
period.

401(k) Plan

         In December 1995, we established a defined contribution plan, effective
January 1, 1995,  entitled the Hemispherx  Biopharma  employees  401(K) Plan and
Trust  Agreement.  All of our full time employees are eligible to participate in
the 401(K) plan following one year of employment. Subject to certain limitations
imposed by federal tax laws,  participants  are eligible to contribute up to 15%
of their salary (including bonuses and/or commissions) per annum.  Through March
14,  2008,  Participants'  contributions  to the  401(K)  plan were  matched  by
Hemispherx  at a rate  determined  annually  by the  board  of  directors.  Each
participant immediately vests in his or her deferred salary contributions, while
our contributions will vest over one year.

         Effective March 15, 2008, we ended our 100% matching of up to 6% of the
401(k) contributions provided to the account for each eligible participant.  Our
401(k) Plan  contribution  cost for the twelve months ended December 31, 2008 is
$20,421 and it is required  for  payment  prior to the final  filing of our 2008
Federal Corporate Tax filing. There has not been any additional Company matching
costs since March 15, 2008 and none is projected for calendar year 2009.

Severance

         Upon termination of employment, most executive officers are entitled to
receive severance payments under their employment and/or engagement  agreements.
In  determining  whether  to approve  and  setting  the terms of such  severance
arrangements, the compensation committee recognizes that executives,  especially
highly  ranked  executives,   often  face  challenges  securing  new  employment
following  termination.  The employment agreement with our CEO, which expires on
December 31, 2010, provides that we pay him an annual salary through the term of
the agreement if terminated without cause.

         We believe that our Executive  Officers' severance package is generally
in line with  severance  packages  offered to chief  executive  officers  of the
companies  of  similar  size  to us  represented  in the  compensation  data  we
reviewed.

Compensation of Directors

         Non-employee Board member  compensation  consists of an annual retainer
("Directors'  fees") of $150,000,  which in 2008 was paid two thirds in cash and
one third in our common stock. On September 9, 2003, the Directors approved a 10
 17
year plan which  authorizes up to 1,000,000  shares for use in  supporting  this
compensation  plan. The number of shares paid shall have a value of $12,500 with
the value of the shares  being  determined  by the  closing  price of our common
stock on the NYSE Amex on the last day of the calendar quarter.  Director's fees
are paid quarterly at the end of each calendar quarter.

         On November 28, 2009, Thomas K. Equels joined our Board of Directors as
a  non-employee  Board  member in which his  compensation  of  $150,000  for all
director fees were agreed to be paid in the form of our common stock.

         All Directors have been granted  options to purchase common stock under
our Stock Option Plans and/or Warrants to purchase common stock. We believe such
compensation  and payments  are  necessary in order for us to attract and retain
qualified outside directors.

         Commencing as of January 1, 2009, the ratio of stock to cash being paid
as Director's fees ("Annual  Compensation") was changed. The Annual Compensation
for each of the directors then serving,  other than Thomas  Equels,  consists of
$25,000  and  shares  of  common  stock  having  a  value  of  $125,000  ("Share
Compensation").  The Annual Compensation for Thomas Equels consists of shares of
common stock having a value of $150,000 ("Share Compensation").

         To the extent that Share  Compensation would exceed 1,000,000 shares in
the aggregate for the ten year period  commencing  January 1, 2003 as previously
approved  by  Resolution  of the Board of  September  9, 2003,  shares for Share
Compensation shall be issued under the our 2007 Equity Incentive Plan.

Conclusion

         Our  compensation  policies  are  designed to retain and  motivate  our
senior  executive  officers  and  to  ultimately  reward  them  for  outstanding
individual and corporate performance.








Summary Compensation Table - 2006 - 2008
                                                                                              
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
Name and Principal Position  Year Salary/Fees  Bonus   Option Award Non-Equity  Change in Pension All Other          Total
                                                        (1), (8)    Incentive   Value and         Compensation
                                                        & (14)      Plan        Nonqualified
                                                                    CompensationDeferred
                                                                    and Stock   Compensation
                                                                    Awards      Earnings
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
William. A. Carter,          2008  $664,624    $-       $316,571(4)  $-         $-                $106,094(2)      $1,087,289
Chief Executive Officer      2007  $637,496    $166,156 $1,688,079   $-         $-                $123,063(9)      $2,614,794
                             2006  $655,686    $166,624 $1,236,367   $-         $-                $118,087(15)(16) $2,176,764
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
Anthony A. Bonelli,          2008  $-          $-       $-           $-         $-                $-                $-
Chief Operating Officer      2007  $350,000(11)$87,500  $59,684      $-         $-                $33,375(10)       $530,559
                             2006  $35,000(17) $50,000  $122,601     $-         $-                $3,000(15)        $210,601
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
Robert. E. Peterson, Chief   2008  $259,164    $-       $-           $-         $-                $-                $259,164
Financial Officer (3)        2007  $259,164    $64,791  $153,055     $-         $-                $-                $477,010
                             2006  $259,164    $64,791  $373,043     $-         $-                $-                $696,998
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
David. R. Strayer, Medical   2008  $201,389    $-       $16,168(4)   $-         $-                $-                $217,557
Director                     2007  $240,348    $50,347  $79,810      $-         $-                $-                $370,505
                             2006  $225,144    $-       $19,200      $-         $-                $-                $244,344
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
Carol A. Smith, VP           2008   $147,695   $-       $600(4)      $-         $-                $23,072(5)        $171,367
of Manufacturing Quality &   2007   $147,695   $-       $34,235      $-         $-                $30,088(11)       $212,018
Process Dev..                2006   $143,136   $-       $9,600       $-         $-                $17,227(16)       $169,963
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
Mei-June Liao, VP of         2008   $-         $-       $-           $-         $-                $-                $-
Regulatory Affairs &         2007   $-         $-       $-           $-         $-                $-                $-
Quality Control              2006   $158,381   $-       $9,600       $-         $-                $18,246(16)       $186,227
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
Katalin Ferencz-Biro,        2008   $145,000   $-       $-           $-         $-                $11,461(6)        $156,461
Senior VP of Regulatory      2007   $145,000   $-       $11,744      $-         $-                $13,999(12)       $170,743
Affairs                      2006   $-         $-       $-           $-         $-                $-                $-
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
Wayne Springate, VP of       2008   $150,000   $-       $-           $-         $-                $7,354(6)         $157,354
Operations                   2007   $150,000   $37,500  $36,253      $-         $-                $13,429(12)       $237,182
                             2006   $-         $-       $-           $-         $-                $-                $-
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
Russel Lander,               2008   $178,000   $-       $-           $-         $-                $9,649(7)         $187,649
VP of Quality Assurance      2007   $178,000   $-       $11,744      $-         $-                $9,649(13)        $199,393
                             2006   $-         $-       $-           $-         $-                $-                $-
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- ------------- -  --------------
Robert Hansen, VP of         2008   $-         $-       $-           $-         $-                 $-               $-
Manufacturing                2007   $-         $-       $-           $-         $-                 $-               $-
                             2006   $140,311   $-       $9,600       $-         $-                 $17,006(16)      $166,917
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------
R. Douglas Hulse             2008   $-         $-       $-           $-         $-                 $-               $-
                             2007   $-         $-       $-           $-         $-                 $-               $-
                             2006   $105,000   $-       $-           $-         $-                 $-              $105,000
---------------------------- ---- ----------- -------- ------------ ----------  ----------------- -------------   ---------------

 19

2008 Notes:

(1)      Based on Black Scholes pricing model of valuing options.  Total fair of
         options granted to Officers in 2007 was $364,648.
(2)      Consists of a) Life Insurance premiums totaling $66,411;  b) Healthcare
         premiums of $28,586; and d) company car expenses of $11,097.
(3)      Mr. Peterson retired from Hemispherx effective December 31, 2008.
(4)      Issue  of  options  for  options   previously   granted   that  expired
         unexercised.
(5)      Consists of Healthcare premiums of $21,226, and 401-K matching funds of
         $1,846.
(6)      Healthcare premiums and 401-K matching funds.
(7)      Healthcare premiums.

2007 Notes:

(8)      Based on Black Scholes pricing model of valuing options.  Total fair of
         options granted to Officers in 2007 was $364,648.
(9)      Consists of a) Life Insurance premiums totaling $66,411;  b) Healthcare
         premiums of $28,586; and d) company car expenses of $11,097.
(10)     Mr. Peterson retired from Hemispherx effective December 31, 2008.
(11)     Issue  of  options  for  options   previously   granted   that  expired
         unexercised.
(12)     Consists of Healthcare premiums of $21,226, and 401-K matching funds of
         $1,846.
(13)     Healthcare premiums and 401-K matching funds.

2006 Notes:

(14)     Based on Black  Scholes  Pricing Model of valuing  options.  Total Fair
         Value of Option Awards granted to officers in 2006 was $1,780,011.
(15)     Consists  of  Healthcare  premiums,  life  insurance  premiums,   401-K
         matching funds,  qualifying insurance premium,  company car and parking
         cost.
(16)     Consists of healthcare premiums and 401-K matching funds.
(17)     Mr. Bonelli  joined  Hemispherx on November 27, 2006. His annual salary
         was $350,000.

 20



2008 Stock Option Grants to Executive Officers

The following table provides additional  information about option awards granted
to our Named  Executive  Officers  during the year ended  December 31, 2008. The
compensation  plan under which the grants in the following  tables were made are
described in the Compensation  Discussion and Analysis section headed "Long-Term
Equity Incentive Awards".



                                                                                            
----------------- ---------- ----------------- ------------------ --------------- -----------------  -----------------------
Name              Grant Date  No. of Options   Exercise Price per Expiration Date Closing Price on   Grant Date Fair Value
                                               Share                              Grant              of Option (2)
----------------- ---------- ----------------- ------------------ --------------- -----------------  -----------------------
----------------- ---------- ----------------- ------------------ --------------- -----------------  -----------------------
W.A. Carter, CEO  2/18/08       190,000(1)       $4.00              2/18/18        $ 0.89                      61,437
                  9/17/08     1,450,000(1)        2.20              9/17/18          0.52                     255,134
----------------- ---------- ----------------- ------------------ --------------- -----------------  -----------------------
----------------- ---------- ----------------- ------------------ --------------- -----------------  -----------------------
D. Strayer,       2/18/08        50,000(1)        4.00              2/18/18          0.89                      16,168
Medical Director
----------------- ---------- ----------------- ------------------ --------------- -----------------  -----------------------
----------------- ---------- ----------------- ------------------ --------------- -----------------  -----------------------
C. Smith, VP MFG. 2/18/08         5,000(1)        4.00              2/18/18          0.89                         600
----------------- ---------- ----------------- ------------------ --------------- -----------------  -----------------------


1)       Renewal of previously issued options that expired unexercised.
2)       These amounts shown represent the  approximate  amount we recognize for
         financial statement reporting purposes in fiscal year 2008 for the fair
         value of equity awards granted to the named  executive  officers.  As a
         result,  these  amounts  do not  reflect  the  amount  of  compensation
         actually  received  by the named  executive  officer  during the fiscal
         year. For a description of the assumptions used in calculating the fair
         value of equity  awards  under  SFAS No.  123(R),  see Note 2(m) of our
         financial statements.

 21




Outstanding Equity Awards at Year End - 2008

----------------- -------------------------------------------------------------- -------------------------------------------------
                      Option/Warrants Awards                                                          Stock Awards
----------------- -------------------------------------------------------------- -------------------------------------------------
                                                                                               
----------------- ------------ -------------- --------------- -------- --------- --------- ---------  -------------- -------------
Name              Number of     Number of     Equity          Option   Option     Number of  Market    Equity         Equity
                  Securities    Securities    Incentive Plan  Exercise Expiration Shares or  Value of  Incentive Plan Incentive
                  Underlying    Underlying    Awards Number   Price    Date       Units of   Shares or Awards: Number Plan Awards:
                  Unexercised   Unexercised   of Securities                       Stock That Unit That of Unearned    Market or
                  Options (#)   Options (#)   Underlying                          Have Not   Have Not  Shares, Units  Payout Value
                  Exercisable   Unexercisable Unexercised                         Vested (#) Vested    or Other       of Unearned
                                              Unearned                                                 Rights That    Shares, Units
                                              Options (#)                                              Have Not       or Other
                                                                                                       Vested (#)     Rights That
                                                                                                                      Have Not
                                                                                                                      Vested
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
W.A. Carter, CEO  1,450,000           0              0        $2.20      9/17/18      -         -            -               -
                  1,000,000           0              0         2.00      9/9/17       -         -            -               -
                    190,000           0              0         4.00      2/18/18      -         -            -               -
                     73,728           0              0         2.71     12/31/10      -         -            -               -
                     10,000           0              0         4.03      1/3/11       -         -            -               -
                    167,000           0              0         2.60      9/7/14       -         -            -               -
                    153,000           0              0         2.60      12/7/14      -         -            -               -
                    100,000           0              0         1.75      4/26/15      -         -            -               -
                    465,000           0              0         1.86      6/30/15      -         -            -               -
                     70,000           0              0         2.87      12/9/15      -         -            -               -
                    300,000           0              0         2.38      1/1/16       -         -            -               -
                     10,000           0              0         2.61      12/9/15      -         -            -               -
                    376,650           0              0         3.78      2/22/16      -         -            -               -
                  1,400,000           0              0         3.50      9/30/17      -         -            -               -
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
C. Bogard,  S VP    100,000           0              0         0.68      6/5/13       -         -            -               -
                     50,000           0              0         2.07      2/27/17      -         -            -               -
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
R. Peterson, CFO    200,000           0              0         2.00      9/9/17       -         -            -               -
                     50,000           0              0         3.44      6/22/14      -         -            -               -
                     13,824           0              0         2.60      9/7/14       -         -            -               -
                     55,000           0              0         1.75      4/26/15      -         -            -               -
                     10,000           0              0         2.61      12/8/15      -         -            -               -
                     50,000           0              0         3.85      2/28/16      -         -            -               -
                    100,000           0              0         3.48      4/14/16      -         -            -               -
                     30,000           0              0         3.55      4/30/16      -         -            -               -
                     13,750           0              0         2.37      1/22/17      -         -            -               --
                     10,000           0              0         4.03      1/3/11       -         -            -               --
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
 22
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
D. Strayer,          50,000           0              0         2.00      9/9/17       -         -            -               -
Medical Director     50,000           0              0         4.00      2/28/18      -         -            -               -
                     10,000           0              0         4.03      1/3/11       -         -            -               -
                      5,000        15,000            0         3.50      2/23/07      -         -            -               -
                     10,000           0              0         1.90     12/14/14      -         -            -               -
                     10,000           0              0         2.61      12/8/15      -         -            -               -
                     15,000           0              0         2.20     11/20/16      -         -            -               -
                     16,667         8,333            0         1.30      12/6/17      -         -            -               -
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
C. Smith, VP of      20,000           0               0        2.00      9/9/17       -         -            -               -
MFG                   5,000           0               0        4.00      9/17/18      -         -            -               -
                     10,000           0               0        4.03      1/3/11       -         -            -               -
                     10,000           0               0        2.61      12/8/15      -         -            -               -
                      6,791           0               0        2.37      1/23/17      -         -            -               -
                     10,000           0               0        1.90      12/7/14      -         -            -               -
                      7,500           0               0        2.20     11/20/16      -         -            -               -
                     10,000         5,000             0        1.30      12/6/17      -         -            -               -
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
W. Springate, VP      1,812           0               0        1.90      12/7/14      -         -            -               -
of Operations         2,088           0               0        2.61      12/8/15      -         -            -               -
                      5,000           0               0        2.20     11/20/16      -         -            -               -
                     20,000           0               0        1.78      4/30/17      -         -            -               -
                     13,333         6,667             0        1.30      12/6/17      -         -            -               -
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
R. Lander, VP of
Quality Assurance    10,000         5,000             0        1.30      12/6/17      -         -            -               -
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
K. Ferencz-Biro,
VP of Reg. Affairs   10,000         5,000             0        1.30      12/6/17      -         -            -               -
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------
----------------- ------------ -------------- --------------- -------- ---------- --------- ---------  -------------- -------------



 23




Options Exercised / Stock Vested - 2008

--------------------------- ------------------------------------------- ----------------------------------------------
                                          Option Awards                                 Stock Awards
--------------------------- ------------------------------------------- ----------------------------------------------
                                                                                           
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
           Name               Number of Shares      Value Realized on     Number of Shares      Value of Realized on
                            Acquired on Exercise      Exercise ($)       Acquired on Vesting        Vesting ($)
                                     (#)                                         (#)
                                     (b)                   (c)                   (d)                    (e)
           (a)
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
W.A. Carter, CEO
                                    none
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
W.C. Bogard,
S VP                                none
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
R. Peterson, CFO
                                    none
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
D. Strayer, Medical
Director
                                    none
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
C. Smith,
VP MFG.                             none
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
W. Springate, VP of
Operations                          none
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
R. Lander,
VP of Quality Assurance             none
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
--------------------------- ---------------------- -------------------- ---------------------- -----------------------
K. Ferencz-Biro,
VP of Reg. Affairs
                                    none
--------------------------- ---------------------- -------------------- ---------------------- -----------------------


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         Our  Compensation  Committee of the Board of  Directors,  consisting of
Richard Piani, the Committee  Chairman,  William Mitchell,  M.D. and Dr. Iraj E.
Kiani, are all independent directors. There are no interlocking relationships.

COMPENSATION COMMITTEE REPORT

         Our Compensation  Committee has reviewed and discussed the Compensation
Discussion and Analysis  contained in this Annual Report with management.  Based
on our  Compensation  Committee's  review of and the discussions with management
with respect to the  Compensation  Discussion  and  Analysis,  our  Compensation
Committee recommended to the board of directors that the Compensation Discussion
and  Analysis be included in our Annual  Report on Form 10-K for the fiscal year
ended December 31, 2008 for filing with the SEC.

                                    COMPENSATION COMMITTEE
                                    Richard Piani, Committee Chairman
                                    William Mitchell, M.D.
                                    Dr. Iraj E. Kiani

         The  foregoing  Compensation  Committee  report  shall  not  be  deemed
incorporated  by reference  into any filing under the  Securities Act of 1933 or
the  Securities  Exchange Act of 1934,  and shall not  otherwise be deemed filed
under these acts,  except to the extent we  incorporate  by reference  into such
filings.
 24



Director Compensation - 2008
                                                                                             
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
      Name            Fees      Stock          Option     Non-Equity    Change in Pension      All Other      Total ($)
                    Earned or   Awards ($)   Awards ($)   Incentive         Value and       Compensation ($)
                     Paid in                    (2)          Plan          Nonqualified
                    Cash ($)                             Compensation        Deferred
                                                             ($)           Compensation
                                                                             Earnings
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
T. Equels, Director    -0-      37,500          0             0                 0                395,369 (1)     433,869
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
W. Mitchell,       100,000      50,000          0             0                 0                  0             150,000
Director
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
R. Piani,          100,000      50,000          0             0                 0                  0             150,000
Director
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------
I. Kiani,          100,000      50,000          0             0                 0                  0             150,000
Director
------------------ ------------ ----------- ----------- --------------- ------------------- ----------------- -----------


(1)      General Counsel fees as per Engagement Agreement.
(2)      No options were awarded in 2008.


Compliance With Internal Revenue Code Section 162(m).

         One of the factors the Compensation  Committee  considers in connection
with compensation  matters is the anticipated tax treatment to Hemispherx and to
the executives of the compensation  arrangements.  The  deductibility of certain
types of compensation  depends upon the timing of an executive's  vesting in, or
exercise of, previously granted rights. Moreover, interpretation of, and changes
in, the tax laws and other factors beyond the Compensation  Committee's  control
also affect the  deductibility  of compensation.  Accordingly,  the Compensation
Committee will not necessarily  limit executive  compensation to that deductible
under  Section  162(m) of the Code.  The  Compensation  Committee  will consider
various  alternatives to preserving the  deductibility of compensation  payments
and benefits to the extent consistent with its other compensation objectives.




 25


                             PRINCIPAL STOCKHOLDERS

         The  following  table sets forth as of April 29,  2009,  the number and
percentage of outstanding  shares of common stock  beneficially owned by: o Each
person,  individually  or as a group,  known to us to be deemed  the  beneficial
owners of five percent or more of our
                issued and outstanding common stock;
o        each of our directors and the Named Executives; and
o        all of our officers and directors as a group.



         As of April 29, 2009, there were no other persons, individually or as a
group, known to us to be deemed the beneficial owners of five percent or more of
our issued and outstanding common stock
                                                                                       
--------------------------------------------- ------------------------------------ -------------------------------
Name and Address of                                Shares Beneficially Owned                % Of Shares
Beneficial Owner                                                                         Beneficially Owned
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
William A. Carter, M.D.                                   6,732,064 (1)                         8.1%
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
Ransom W. Etheridge                                         722,633 (2)                          *
1565-1 Old Virginia Beach Rd.
Virginia Beach, VA 23454
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
Richard C. Piani                                            631,935 (3)                          *
97 Rue Jeans-Jaures ,
Levaillois-Perret
France 92300
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
Warren C. Bogard, Ph.D.                                     242,815 (4)                          *
332 Long Ridge Lane
Exton, PA 19341
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
William M. Mitchell, M.D.                                   559,207 (5)                          *
Vanderbilt University
Department of Pathology
Medical Center North, 21st and Garland
Nashville, TN 37232
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
Thomas K. Equels                                         1,279,788 (11)                          1.5%
2601 S. Bayshore Dr., Suite #600, Miami,
FL  33133
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
David R. Strayer, M.D.                                      229,246 (6)                          *
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
Carol A. Smith, Ph.D.                                        64,291 (7)                          *
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
Iraj-Eqhbal Kiani, Ph.D.                                    266,453 (8)                          *
Orange County Immune Institute
18800 Delaware Street
Huntingdon Beach, CA 92648
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
W. Springate                                                 48,900 (9)                          *
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
R. Lander, Ph.D.                                            15,000 (10)                          *
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
K. Ferencz-Biro, Ph.D.                                      15,000 (10)                          *
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
Charles T. Bernhardt CPA                                       65,079                            *
--------------------------------------------- ------------------------------------ -------------------------------
--------------------------------------------- ------------------------------------ -------------------------------
All directors and executive officers as a
group                                                      10,686,868                          12.8%
(11 persons)
--------------------------------------------- ------------------------------------ -------------------------------

* Less than 1%
 26
(1)      Includes shares  issuable upon the exercise of (i) replacement  options
         issued in 2006 to purchase  376,650 shares of common stock  exercisable
         at $3.78 per share  expiring on February 22, 2016;  (ii) stock  options
         issued in 2001 to purchase  10,000  shares of common stock at $4.03 per
         share  expiring  January  3,  2011;  (iii)  options  issued  in 2007 to
         purchase  1,000,000  shares of common  stock  exercisable  at $2.00 per
         share expiring on September 9, 2017, these options replaced  previously
         issued  options  that  expired  unexercised  on August 13,  2007;  (iv)
         warrants  issued in 2003 to purchase  1,450,000  shares of common stock
         exercisable  at $2.20 per share  expiring on September 17, 2018,  these
         options replaced previously issued options that expired unexcercised on
         September 8, 2008; (v) stock options issued in 2004 to purchase 320,000
         shares of common  stock at $2.60 per share  expiring  on  September  7,
         2014;  (vi) Stock Options issued in 2005 to purchase  100,000 shares of
         common stock at $1.75 per share expiring on April 26, 2015; (vii) Stock
         options  issued in 2005 to purchase  465,000  shares of common stock at
         $1.86 per share expiring June 30, 2015; and (viii) stock options issued
         in 2005 to purchase  70,000  shares of Common  Stock at $2.87 per share
         expiring  December  9,  2015;  (ix)  stock  options  issued  in 2005 to
         purchase  10,000  shares  of Common  Stock at $2.61 per share  expiring
         December 8, 2015; (x) 300,000 options issued in 2006 to purchase common
         stock at $2.38 per share and expiring on January 1, 2016;  (xi) 476,490
         shares of Common Stock;  and (xii) 490,196  warrants to purchase common
         stock issued on February 1, 2009 for the Stand-by Financing  Agreement.
         Also  includes  1,663,728  warrants  and options  originally  issued to
         William A. Carter and subsequently transferred to Carter Investments of
         which Dr. Carter is the beneficial owner.  These securities  consist of
         (a) warrants issued in 2008 to purchase  190,000 shares of common stock
         at $4.00 per share expiring on February 17, 2018, these options replace
         previously  issued  warrants that expired  unexercised  on February 18,
         2007, (b) stock options granted in 1991 and extended to purchase 73,728
         shares of common  stock  exercisable  at $2.71  per share  expiring  on
         December 31, 2019 and (c)options  issued in 2007 to purchase  1,400,000
         shares of common  stock at $3.50 per share  expiring on  September  30,
         2017,  these options  replaced  previously  issued options that expired
         unexercised on September 30, 2007.

(2)      Includes  shares issuable upon exercise of (i) 20,000 options issued in
         to purchase  common  stock at $4.00 per share  expiring on February 17,
         2018,  these options  replace  previously  issued warrants that expired
         unexercised on February 18, 2007;  (ii) 100,000  options issued in 2002
         exercisable  $2.00 per share expiring on August 17, 2017, these options
         replaced  previously issued options that expired  unexercised on August
         13, 2007; (iii) stock options issued in 2005 to purchase 100,000 shares
         of common stock  exercisable  at $1.75 per share  expiring on April 26,
         2015; and(iv) stock options issued in 2004 to purchase 50,000 shares of
         common stock  exercisable  at $2.60 per share  expiring on September 7,
         2014;  (and (vi)  252,633  shares of common  stock of which  40,900 are
         subject to security  interest.  Also  includes  200,000  stock  options
         originally granted to Ransom Etheridge in 2003 and 50,000 stock options
         originally  granted  to Ransom  Etheridge  in 2006,  all of which  were
         subsequently  transferred  to relatives and family  trusts.  200,000 of
         these stock  options are  exercisable  at $2.75 per share and expire on
         November 3, 2013.  37,500 of these options were transferred to Julianne
         Inglima;  37,500 of these options were  transferred to Thomas  Inglima;
         37,500 of these options were  transferred  to R.  Etheridge-BMI  Trust;
         37,500 options were transferred to R. Etheridge-TCI Trust and 50,000 of
         these options were transferred to the Etheridge Family Trust. 50,000 of
         these stock  options are  exercisable  at $3.86 per share and expire on
         February 24, 2016.  12,500 of these shares were transferred to Julianne
         Inglima;  12,500 of these options were  transferred to Thomas  Inglima;
         12,500 of these options were  transferred  to R. Etheridge - BMI Trust;
         and 12,500 of these options were transferred to R. Etheridge-TCI Trust.
         Julianne and Thomas are Mr. Etheridge's daughter and son-in-law.

(3)      Includes shares issuable upon exercise of (i) 20,000 warrants issued in
         1998 to purchase  common stock at $4.00 per share  expiring on February
         17, 2018, these options replace previously issued warrants that expired
         unexercised on February 18, 2007; (ii) 100,000  warrants issued in 2007
         exercisable  at $2.00 per share  expiring on September 17, 2017,  these
         options replaced  previously issued options that expired unexercised on
         August 13, 2007; (iii)options granted in 2004 to purchase 54,608 shares
         of common stock  exercisable  at $2.60 per share  expiring on September
         17, 2014;  (iv) options  granted in 2005 to purchase  100,000 shares of
         common stock exercisable at $1.75 per share expiring on April 26, 2015;
         (v) stock  options  issued in 2006 to purchase  50,000 shares of common
  27
         stock  exercisable at $3.86 per share expiring  February 24, 2016; (vi)
         230,177 shares of common stock owned by Mr. Piani;  (vii) 40,900 shares
         of common stock owned jointly by Mr. and Mrs.  Piani;  (viii) and 5,000
         shares of common stock owned by Mrs.  Piani;  and (ix) 32,250 shares of
         common stock issued to Mr. Piani for Board of Director fees.

(4)      Consists of (i) 100,000 options exercisable at $0.68 per share expiring
         June 5, 2013 and (ii)  142,815  shares of  common  stock  issued to Mr.
         Bogard for services rendered.

(5)      Includes  shares  issuable  upon  exercise of (i) options  issued in to
         purchase 12,000 shares of common stock at $6.00 per share; (ii) 100,000
         warrants  issued in 2007  exercisable  at $2.00 per share  expiring  on
         September  9,  2017;   (iii)  50,000  stock  options   issued  in  2004
         exercisable  at $2.60 per share  expiring on  September  7, 2014;  (iv)
         100,000 stock  options  issued in 2005  exercisable  at $1.75 per share
         expiring  on April  26,  2015;  (v)  stock  options  issued  in 2006 to
         purchase  50,000 shares of common stock  exercisable at $3.86 per share
         expiring February 24, 2016; and (vi) 247,207 shares of common stock.

(6)      (i) stock  options  issued in 2007 to purchase  20,000 shares of common
         stock at $2.37 per share  expiring on February 22, 2017;  (ii) warrants
         issued in 1998 to purchase 50,000 shares of common stock exercisable at
         $4.00 per share  expiring on February 17, 2018.  These options  replace
         previously  issued  warrants that expired  unexercised  on February 18,
         2007;  (iii) stock options granted in 2001 to purchase 10,000 shares of
         common  stock  exercisable  at $4.03 per share  expiring  on January 3,
         2011;  (iv) warrants issued in 2007 to purchase 50,000 shares of common
         stock  exercisable  at $2.00 per share  expiring on September 17, 2017,
         these  options   replaced   previously   issued  options  that  expired
         unexercised  on August 13, 2007;  (v) stock  options  issued in 2004 to
         purchase  10,000 shares of common stock  exercisable at $1.90 per share
         expiring  on  December 7, 2014;  (vi) stock  options  issued in 2005 to
         purchase  10,000  shares  of Common  Stock at $2.61 per share  expiring
         December 8, 2015;  (vii) stock  options to  purchase  15,000  shares of
         common stock at $2.20 per share expiring November 20, 2016; (viii)stock
         options  issued in 2007 to purchase  25,000  shares of common  stock at
         $1.30 per share  expiring  December 6, 2017 and (ix)  39,246  shares of
         common stock.

(7)      Consists of shares  issuable upon exercise  of(i) 20,000 options issued
         in 2007  exercisable at $2.00 per share expiring in September 17, 2017,
         these  options   replaced   previously   issued  options  that  expired
         unexercised on August 13, 2007; (ii) 6,791 stock options issued in 1997
         exercisable  at $2.37  expiring  January 22,  2017;  (iii) 10,000 stock
         options issued in 2001  exercisable at $4.03 per share expiring January
         3, 2011; (iv) 10,000 stock options issued in 2004  exercisable at $1.90
         expiring on December 7, 2014;  (v) 10,000 stock options  issued in 2005
         to purchase  Common Stock at $2.61 per share expiring  December 8, 2015
         and (vi) 7,500 stock options issued in 1996 to purchase common stock at
         $2.20 per share expiring November 20, 2016.

(8)      Consists of shares  issuable upon exercise of (i) 12,000 options issued
         in 2005  exercisable at $1.63 per share expiring on June 2, 2015;  (ii)
         15,000 options  issued in 2005  exercisable at $1.75 per share expiring
         on April 26,  2015;  (iii)  stock  options  issued in 2006 to  purchase
         50,000 shares of common stock  exercisable  at $3.86 per share expiring
         February 24, 2016 and (iv) 189,453 shares of common stock.

(9)      Consists of (i) stock  options to acquire  1,812 shares of common stock
         at $1.90 per share  expiring  December 7, 2014;  (ii) stock  options to
         acquire  2,088  shares  of common  stock at $2.61  per  share  expiring
         December 8, 2015; (iii) 5,000 stock options at $2.20 per share expiring
         November  20,  2016;  (iv) stock  options to acquire  20,000  shares of
         common stock at $1.78 per share  expiring  April 30, 2017 and (v) stock
         options to acquire 20,000 shares at $1.30 per share  expiring  December
         6, 2017.

(10)     Consists of stock options to purchase  15,000 shares of common stock at
         $1.30 per share expiring on December 6, 2017.

(11)     Consists of (i) 490,196  warrants to purchase  common stock on February
         1, 2009 for the Stand-by Financing Agreement and (ii) 789,592 shares of
         common stock.


 28

                            PROPOSALS TO STOCKHOLDERS

                                 PROPOSAL NO. 1
                              ELECTION OF DIRECTORS

         Each nominee to the Board of Directors will serve until the next annual
meeting of stockholders, or until his earlier resignation,  removal from office,
death or incapacity.

         Unless otherwise  specified,  the enclosed proxy will be voted in favor
of the election of William A. Carter,  Richard C. Piani, Tom Equels,  William M.
Mitchell and Iraj-Eqhbal  Kiani.  Information is furnished below with respect to
all nominees.

         Set forth below is the  biographical  information  of the  nominees and
Directors of Hemispherx:

         WILLIAM A. CARTER, M.D., 71, the co-inventor of Ampligen(R),  joined us
in 1978, and has served as: (a) our Chief Scientific Officer since May 1989; (b)
the  Chairman  of our  Board of  Directors  since  January  1992;  (c) our Chief
Executive Officer since July 1993; (d) our President from April 1995 to February
2005; and (e) a director since 1987. From 1987 to 1988, Dr. Carter served as our
Chairman.  Dr.  Carter  was a  leading  innovator  in the  development  of human
interferon  for a variety  of  treatment  indications  including  various  viral
diseases  and cancer.  Dr.  Carter  received  the first FDA approval to initiate
clinical trials on a beta interferon product  manufactured in the U.S. under his
supervision. From 1985 to October 1988, Dr. Carter served as our Chief Executive
Officer and Chief  Scientist.  He received his M.D.  degree from Duke University
and underwent his  post-doctoral  training at the National  Institutes of Health
and Johns Hopkins University.  Dr. Carter also served as Professor of Neoplastic
Diseases at Hahnemann Medical University,  a position he held from 1980 to 1998.
Dr.  Carter  served as Director  of  Clinical  Research  for  Hahnemann  Medical
University's  Institute  for Cancer and Blood  Diseases,  and as a professor  at
Johns  Hopkins  School  of  Medicine  and the  State  University  of New York at
Buffalo.  Dr. Carter is a Board certified  physician and author of more than 200
scientific  articles,  including the editing of various  textbooks on anti-viral
and immune therapy.

         RICHARD C. PIANI,  82, has been a Director  since 1995.  Mr.  Piani was
employed  as a  principal  delegate  for  Industry  to the City of  Science  and
Industry, Paris, France, a scientific and educational complex from 1985 to 2000.
Mr. Piani provided  consulting to us in 1993,  with respect to general  business
strategies for our European operations and markets. Mr. Piani served as Chairman
of Industrielle du Batiment-Morin,  a building materials corporation,  from 1986
to 1993. Previously Mr. Piani was a Professor of International Strategy at Paris
Dauphine  University  from 1984 to 1993.  From 1979 to 1985, Mr. Piani served as
Group  Director  in  Charge  of   International   and  Commercial   Affairs  for
Rhone-Poulenc  and from 1973 to 1979 he was Chairman and Chief Executive Officer
of Societe "La  Cellophane",  the French company which  invented  cellophane and
several  other  worldwide  products.  Mr. Piani has a Law degree from Faculte de
Droit, Paris Sorbonne and a Business Administration degree from Ecole des Hautes
Etudes Commerciales, Paris.

         THOMAS K. EQUELS,  57, has served as: (a) a Director since 2008 and (b)
as our  Corporate  Secretary  since April 2009.  Mr. Equels is the President and
Managing  Director of Equels Law Firm based in Miami  Florida.  Mr. Equels legal
practice  is  focused  on  litigation,   with   particular   emphasis  on  civil
racketeering  for about 25 years Mr. Equels has  represented  national and state
government and companies in the banking, insurance, aviation, pharmaceutical and
construction  industries.  Mr. Equels received his law degree from Florida State
University and he is a graduate of Troy State University.  He is a member of the
Florida  Bar,  the American  Bar  Association  and the Academy of Florida  Trial
Lawyers.  Along with  serving as a Board  member,  he  continues to serve as the
Company's litigation lawyer has successfully  represented Hemispherx in a number
of complex cases over the past ten years.

         WILLIAM M. MITCHELL,  M.D.,  Ph.D.,  74, has been a Director since July
1998. Dr. Mitchell is a Professor of Pathology at Vanderbilt  University  School
of Medicine.  Dr.  Mitchell earned a M.D. from Vanderbilt and a Ph.D. from Johns
Hopkins University,  where he served as an Intern in Internal Medicine, followed
by a Fellowship at its School of Medicine.  Dr.  Mitchell has published over 200
papers, reviews and abstracts dealing with viruses,  anti-viral drugs and immune
 29
responses  to  HIV  infection.  Dr.  Mitchell  has  worked  for  and  with  many
professional  societies,  including  the  International  Society  for  Antiviral
Research,  the American  Society of  Biochemistry  and  Molecular  Biology,  the
American Society of Microbiology and government  review  committees,  among them
the National  Institutes of Health,  AIDS and Related Research Review Group. Dr.
Mitchell previously served as one of our directors from 1987 to 1989.

         IRAJ EQHBAL  KIANI,  M.B.A.,  Ph.D.,  62, was appointed to the Board of
Directors  on May 1,  2002.  Dr.  Kiani is a citizen  of the  United  States and
England that resides in Newport,  California.  Dr. Kiani served in various local
government  positions  including  the Mayor and  Governor  of Yasoi,  Capital of
Boyerahmand, Iran. In 1980, Dr. Kiani moved to England, where he established and
managed several trading companies over a period of some 20 years. Dr. Kiani is a
planning  and  logistic  specialist  who  is  now  applying  his  knowledge  and
experience  to  build  a  worldwide  immunology  network,  which  will  use  our
proprietary technology.  Dr. Kiani received his Ph.D. degree from the University
of Ferdosi in Iran, ND from American University.


THE BOARD OF  DIRECTORS  DEEMS  PROPOSAL  NO. 1 TO BE IN THE BEST  INTERESTS  OF
HEMISPHERx  AND ITS  STOCKHOLDERS  AND  RECOMMENDS  A VOTE "FOR" ALL FIVE OF THE
ABOVE-NAMED NOMINEE DIRECTORS OF HEMISPHERX.


 30


                                 PROPOSAL NO. 2

     RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

         The Board of Directors, upon the recommendation of the Audit Committee,
has appointed the firm of McGladrey & Pullen,  LLP  ("McGladrey") as independent
registered public  accountants of Hemispherx for the fiscal year ending December
31, 2009 subject to  ratification by the  stockholders.  McGladrey has served as
Hemispherx's independent registered public accountant since November 2006.

         On  November 7, 2006,  the Audit  Committee  of our Board of  Directors
approved  the  appointment  of McGladrey as our  independent  registered  public
accounting firm,  effective  immediately.  McGladrey  replaced BDO Seidman,  LLP
("BDO") as our independent registered public accounting firm.



         All audit and  professional  services  are  approved  in advance by the
Audit Committee to assure such services do not impair the auditor's independence
from us. The total fees by McGladrey & Pullen,  LLP  ("McGladrey")  for 2007 and
2008 were $280,000 and  $315,000,  respectively.  The following  table shows the
aggregate fees for professional services rendered during the year ended December
31, 2008.
------------------------------------------ ----------------------------------------------
                                   Amount ($)
------------------------------------------ ----------------------------------------------
                                                                     
------------------------------------------ ----------------------- ----------------------
Description of Fees                                 2007                   2008
------------------------------------------ ----------------------- ----------------------
------------------------------------------ ----------------------- ----------------------
Audit Fees                                        $280,000               $315,000
------------------------------------------ ----------------------- ----------------------
------------------------------------------ ----------------------- ----------------------
Audit-Related Fees                                   -0-                     -0-
------------------------------------------ ----------------------- ----------------------
------------------------------------------ ----------------------- ----------------------
Tax Fees                                             -0-                     -0-
------------------------------------------ ----------------------- ----------------------
------------------------------------------ ----------------------- ----------------------
All Other Fees                                       -0-                     -0-
                                                     ---                     ---
------------------------------------------ ----------------------- ----------------------
------------------------------------------ ----------------------- ----------------------

------------------------------------------ ----------------------- ----------------------
------------------------------------------ ----------------------- ----------------------
Total                                             $280,000               $315,000
                                                  ========               ========
------------------------------------------ ----------------------- ----------------------


Audit Fees

         Represents fees for professional services provided for the audit of our
annual financial statements, audit of the effectiveness of internal control over
financial  reporting,  services  that are  performed  to comply  with  generally
accepted auditing standards,  and review of our financial statements included in
our quarterly  reports and services in connection  with statutory and regulatory
filings.

Audit-Related Fees

         Represents  the fees for  assurance  and  related  services  that  were
reasonably  related to the  performance  of the audit or review of our financial
statements.

         The Audit Committee has determined that McGladrey's  rendering of these
audit-related  services was compatible with maintaining auditor's  independence.
The Board of Directors considered McGladrey to be well qualified to serve as our
independent public accountants.  The committee also pre-approved the charges for
services performed in 2007 and 2008.

         The Audit Committee  pre-approves  all auditing  services and the terms
thereof  (which  may  include  providing  comfort  letters  in  connection  with
securities  underwriting) and non-audit  services (other than non-audit services
prohibited  under Section 10A(g) of the Exchange Act or the applicable  rules of
the SEC or the Public Company  Accounting  Oversight Board) to be provided to us
by the independent auditor;  provided,  however, the pre-approval requirement is
waived with respect to the  provisions  of non-audit  services for us if the "de
minimus"  provisions of Section 10A (i)(1)(B) of the Exchange Act are satisfied.
This authority to pre-approve non-audit services may be delegated to one or more
members of the Audit  Committee,  who shall present all decisions to pre-approve
an activity to the full Audit  Committee  at its first  meeting  following  such
decision.
 31
         Representative(s)  of  McGladrey  & Pullen,  LLP will be present at the
annual meeting,  will have the opportunity to make a statement if they desire to
do so and are expected to be available to respond to appropriate questions.


THE BOARD OF  DIRECTORS  DEEMS  PROPOSAL  NO. 2 TO BE IN THE BEST  INTERESTS  OF
HEMISPHERX AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.



 32


                                 PROPOSAL NO. 3

                      APPROVAL OF THE PROPOSAL TO AMEND OUR
               CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
                      OF AUTHORIZED SHARES OF COMMON STOCK

       Our Board of  Directors  is  proposing  the  approval  and adoption of an
amendment to our  Certificate of  Incorporation,  which  increases the number of
shares of  common  stock  authorized  for  issuance.  The  complete  text of the
proposed Amendment to the Certificate of Incorporation is attached as Appendix A
to this Proxy Statement.

       Our  Certificate of  Incorporation  currently  authorizes the issuance of
200,000,000  shares of common  stock,  $.001 par value and  5,000,000  shares of
preferred stock,  $0.01 par value per share. In May 2009, the Board of Directors
adopted a resolution  proposing that the Certificate of Incorporation be amended
to increase  the  authorized  number of shares of common  stock to  350,0000,000
subject to stockholder  approval of such  amendment.  The Board of Directors has
determined that adoption of the Amendment is in  Hemispherx's  best interest and
unanimously recommends approval by the stockholders.

       As of May 8, 2009, we had __________  shares of common stock  outstanding
and  __________  shares of common stock  reserved for future  issuance under our
existing  stock option  plans,  outstanding  options,  warrants and  convertible
debentures, and the Common Stock Purchase Agreement with Fusion Capital Fund II,
LLC leaving ___________ shares of common stock available for future grants.

       The Board of Directors  believes that the proposed increase in authorized
shares of common stock will benefit Hemispherx by providing flexibility to issue
shares of common stock for a variety of business and financial objectives in the
future without the necessity of delaying such activities for further stockholder
approval,  except  as  may be  required  in  particular  cases  by  our  charter
documents,  applicable  law or the  rules  of any  stock  exchange  or  national
securities  association  trading system on which our securities may be listed or
quoted.  In addition,  our Board of Directors could issue large blocks of shares
of common stock to fend off unwanted tender offers or hostile  takeovers without
further stockholder approval.

       At present and for the near  future,  we are issuing our shares of Common
Stock under our Employee Wage Or Hours Reduction Program, to certain vendors and
service  providers who agree to accept stock in lieu of cash for their services,
and to Fusion Capital Fund II, LLC under the Common Stock Purchase Agreement. We
believe  that we have a  sufficient  number  of  authorized,  but  unissued  and
unreserved shares of Common Stock for these purposes. We anticipate that, in the
future,  we most likely will (i)  attempt to raise  capital  through the sale of
shares of our common stock or securities  convertible  into or  exercisable  for
shares of our common  stock,  (ii)  acquire  additional  assets  with our common
stock,  and/or (iii) facilitate an agreement with a potential  partner regarding
the marketing,  distribution  or  manufacturing  of our products  Ampligen(R) or
Alfernon(R)  in part  through the issuance of our common  stock.  Aside from the
foregoing,  we have no current  plans to issue any of the  shares  that would be
authorized should this proposal no. 3 be approved by our stockholders.


THE BOARD OF  DIRECTORS  DEEMS  PROPOSAL  NO. 3 TO BE IN THE BEST  INTERESTS  OF
HEMISPHERX AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.



 33


                                 PROPOSAL NO. 4

              APPROVAL OF THE HEMISPHERx 2009 EQUITY INCENTIVE PLAN

         We are  submitting  the  Hemispherx  2009  Equity  Incentive  Plan (the
"Equity Incentive Plan") to our stockholders for approval at the annual meeting.
The Equity  Incentive  Plan is intended to conserve  cash as well as attract and
retain  individuals  of  experience  and  ability,  to provide  incentive to our
employees,  consultants,  non-employee  directors  and vendors of the Company to
obtain a  proprietary  interests in the Company,  and to encourage  employees to
remain  in the  our  employ.  The  Equity  Incentive  Plan is  conditioned  upon
stockholders'  approval.  The purposes of obtaining stockholder approval include
qualifying  the Equity  Incentive  Plan  under the  Internal  Revenue  Code (the
"Code") for the granting of incentive  stock options;  meeting the  requirements
for  tax-deductibility of certain compensation items under Section 162(m) of the
Code;  and meeting the  requirements  of the NYSE Amex  applicable to the Equity
Incentive Plan.

         The following  general  description  of certain  features of the Equity
Incentive Plan is qualified in its entirety by reference to the Equity Incentive
Plan, which is attached as Appendix B. Capitalized  terms not otherwise  defined
herein have the meanings ascribed to them in the Equity Incentive Plan.

         The Board of  Directors  adopted the Equity  Incentive  Plan  effective
April 29,  2009,  subject to the  approval of the  Company's  stockholders.  The
Equity Incentive Plan authorizes the grant of non-qualified  and incentive stock
options,  stock appreciation rights,  restricted stock and other stock awards. A
maximum of 15,000,000 shares of common stock is reserved for potential  issuance
pursuant to awards under the Equity  Incentive Plan.  Unless sooner  terminated,
the Equity  Incentive Plan will continue in effect for a period of 10 years from
its effective date.

         The Equity  Incentive Plan is  administered  by the Board of Directors.
The Equity  Incentive  Plan  provides  for  awards to be made to such  officers,
employees,  non-employee directors,  consultants and advisors of the Company and
its subsidiaries as the Board may select.  No awards have been granted under the
Equity Incentive Plan.

         Stock  options   awarded  under  the  Equity   Incentive  Plan  may  be
exercisable  at such times (not later than 10 years after the date of grant) and
at such  exercise  prices (not less than fair market value at the date of grant)
as the  Board  may  determine.  The  Board may  provide  for  options  to become
immediately  exercisable  upon a "change  in  control,"  which is defined in the
Equity  Incentive  Plan to  occur  upon  any of the  following  events:  (a) the
acquisition by any person or group,  as beneficial  owner, of 20% or more of our
outstanding shares or the voting power of our outstanding securities; (b) either
a  majority  of our  directors  at the  annual  stockholders  meeting  has  been
nominated  other than by or at the direction of the  incumbent  directors of the
Board,  or the incumbent  directors cease to constitute a majority of our Board;
(c) our stockholders  approve a merger or other business combination pursuant to
which our  outstanding  common stock no longer  represents  more than 50% of the
combined entity after the transaction;  (d) our  stockholders  approve a plan of
complete  liquidation  or an  agreement  for the sale or  disposition  of all or
substantially  all of our  assets;  or  (e)  any  other  event  or  circumstance
determined  by our Board to affect  control  of  Hemispherx  and  designated  by
resolution of the Board as a change of control.

         The exercise price of an option may be paid with cash, common stock, or
such other  consideration  as the Board may  specify.  No options may be granted
under the Equity  Incentive  Plan after the tenth  anniversary  of its effective
date. Unless the Board determines  otherwise,  options will be transferable only
by will or the laws of descent and distribution.

         Stock  appreciation  rights awarded under the Equity Incentive Plan may
be granted as related rights,  either in connection with and at the same time as
an option is granted, or by amendment of an outstanding  non-qualified option. A
related stock  appreciation  right may be granted with respect to all or some of
the shares  covered by the related  option.  Related stock  appreciation  rights
generally  become  exercisable  at the same times as the related  options become
exercisable,  but may be limited so as to become  exercisable  only upon certain
events,  such as a change in  control.  Upon  exercise of a related  right,  the
grantee would receive,  in lieu of purchasing stock,  either stock or cash equal
to the  difference  between the fair market value on the date of exercise of the
 34
underlying shares of common stock subject to the related option and the exercise
price of the option. Stock appreciation rights may also be granted independently
of any option,  to become  exercisable at such times as the Board may determine.
Upon exercise of such a right,  the grantee  would receive  either stock or cash
equal to the difference between the fair market value on the date of exercise of
the shares of common stock subject to the right and the fair market value of the
shares on the date of grant of the right.

         Restricted stock awarded under the Equity Incentive Plan may be granted
on such terms and  conditions as the Board may determine,  including  provisions
that govern the lapse of  restrictions  and voting  dividend,  distribution  and
other  stockholder  rights with respect to the restricted stock. If a grantee of
restricted  stock  terminates  service with us for any reason,  the grantee will
forfeit to us any restricted stock on which the restrictions  have not lapsed or
been removed on or before the date of termination of service.

         Other  stock  awards  under the Equity  Incentive  Plan may provide for
common stock to be issued to grantees in exchange for consideration specified by
the Board that is either the grantee's cash or other direct payment to us or the
grantee's past services rendered to us or a subsidiary on or before issuance. In
this regard,  we plan to issue shares to certain  vendors and service  providers
who agree to accept stock in lieu of cash for their services to us.

         The following is a brief summary of certain of the U.S.  federal income
tax consequences of certain  transactions  under the Equity Incentive Plan based
on federal income tax laws in effect on January 1, 2009. This summary applies to
the Equity Incentive Plan as normally operated and is not intended to provide or
supplement  tax advice to  eligible  employees.  The  summary  contains  general
statements  based on current U.S.  federal income tax statutes,  regulations and
currently available  interpretations thereof. This summary is not intended to be
exhaustive and does not describe state, local or foreign tax consequences or the
effect, if any, of gift, estate and inheritance taxes.

         Grants of options or stock  appreciation  rights are not taxable income
to the grantees or  deductible  for tax purposes by us at the time of the grant.
In the case of non-qualified  stock options, a grantee will be deemed to receive
ordinary income upon exercise of the stock option,  and we will be entitled to a
corresponding  deduction,  in an  amount  equal to the  amount by which the fair
market value of the common stock  purchased on the date of exercise  exceeds the
exercise price. The exercise of an incentive stock option will not be taxable to
the  grantee or  deductible  by us,  but the  amount of any income  deemed to be
received by a grantee due to premature disposition of common stock acquired upon
the  exercise  of an  incentive  stock  option will be a  deductible  expense of
Hemispherx for tax purposes. In the case of stock appreciation rights, a grantee
will be deemed to receive  ordinary  income upon  exercise of the right,  and we
will be entitled to a corresponding deduction, in an amount equal to the cash or
fair market value of shares payable to the grantee. Grantees of restricted stock
awards  generally will recognize  ordinary income in an amount equal to the fair
market value of the shares of common stock  granted to them at the time that the
restrictions  on the shares lapse and the shares  become  transferable.  At that
time,  we will be entitled  to a  corresponding  deduction  equal to the amounts
recognized  as  income by the  grantees  in the year in which  the  amounts  are
included in the  grantees'  income.  Grantees of stock issued  pursuant to other
stock awards will generally receive ordinary income,  and we will be entitled to
a  corresponding  deduction,  in an amount equal to the amount by which the fair
market value of the common stock on the date of issuance  exceeds the  grantee's
cash or other payment to us, if any.

         Section  162(m)  of  the  Code  generally  disallows  a  publicly  held
corporation's tax deduction for certain compensation in excess of $1 million per
year  paid to each of the  five  most  highly  compensated  executive  officers,
exclusive of  compensation  that is  "performance-based."  We have  designed the
Equity  Incentive  Plan in a manner  that is intended to qualify the options and
any stock  appreciation  rights  granted  under  the  Equity  Incentive  Plan as
performance-based  compensation  that  will  not be  subject  to  the  deduction
limitation of Section 162(m). Any grant of restricted stock or other stock award
could  (but  is not  required  to) be  designed  to  avoid  any  such  deduction
limitation.
 35
         The Board has the general power to amend the Equity  Incentive  Plan in
any  respect.  However,  if  the  Equity  Incentive  Plan  is  approved  by  the
stockholders at the annual meeting,  the Board may not, without further approval
of our  stockholders,  amend the Plan so as to increase the aggregate  number of
shares of common  stock  that may be issued  under the  Equity  Incentive  Plan,
modify the  requirements  as to  eligibility to receive  awards,  or to increase
materially  the benefits  accruing to  participants.  In addition,  the Board is
permitted  to  modify,  extend  or  renew  outstanding  stock  options  or stock
appreciation  rights,  and to  authorize  the  granting  of new options or stock
appreciation  rights in substitution for existing  options and rights.  However,
existing options or rights may not be repriced, directly or indirectly, so as to
provide for modified or new options or rights with an exercise  price lower than
the  exercise  price  provided  for the  outstanding  stock  options  and  stock
appreciation  rights.  The Board is also  authorized to accelerate  the lapse of
restrictions on restricted  stock awards or to remove any or all restrictions at
any time.

Because  Awards  under the 2009  Equity  Incentive  Plan will be  granted at the
discretion of the Board, the type, number,  recipients,  and other terms of such
Awards cannot be determined at this time. However, it is anticipated that Awards
will be made pursuant to our "Employee  Wage Or Hour Reduction  Program".  Under
this program, shares are to be issued six months after the Incentive Rights have
been issued.  It is anticipated that a portion of these shares may come from the
2009 Equity Incentive Plan.  Please see "Employee Or Hour Reduction  Program" in
"Other Compensation" under "Compensation Discussion And Analysis" above.

THE BOARD OF  DIRECTORS  DEEMS  PROPOSAL  NO. 4 TO BE IN THE BEST  INTERESTS  OF
HEMISPHERx  AND ITS  STOCKHOLDERS  AND RECOMMENDS A VOTE FOR THE APPROVAL OF THE
HEMISPHERx 2009 EQUITY INCENTIVE PLAN.



 36



                                     GENERAL

         Unless contrary instructions are indicated on the Proxy Statement,  all
shares of common stock  represented by valid proxies  received  pursuant to this
solicitation  (and not  revoked  before  they are  voted)  will be voted FOR the
election of all  Directors  nominated and FOR Proposal No. 2, Proposal No. 3 and
Proposal No.4.

         The Board of Directors  knows of no business  other than that set forth
above to be transacted at the meeting,  but if other matters requiring a vote of
the stockholders  arise, the persons  designated as proxies will vote the shares
of common stock  represented by the proxies in accordance with their judgment on
such matters. If a stockholder specifies a different choice on the proxy, his or
her shares of common stock will be voted in accordance with the specification so
made.

Annual Report on Form 10-K

         Copies of the Company's  Annual Report on Form 10-K for the fiscal year
ended  December  31,  2008,  including  financial  statements,  exhibits and any
amendments  thereto,  as filed with the SEC may be obtained  without charge upon
written request to: Corporate Secretary,  Hemispherx  Biopharma,  Inc., 1617 JFK
Boulevard,  Philadelphia,  Pennsylvania  19103.  You can also get  copies of our
filings made with the SEC, including the Annual Report on Form 10-K, by visiting
www.hemisperx.net or the SEC's web site at www.sec.gov.


IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.  WE URGE YOU TO FILL IN, SIGN
AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE PREPAID ENVELOPE  PROVIDED,  NO
MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.

                                             By Order of the Board of Directors,
                                                     Thomas K. Equels, Secretary



     Philadelphia, Pennsylvania
     May __, 2009



 1


                                                                    Appendix "A"

                            CERTIFICATE OF AMENDMENT
                                     OF THE
                          CERTIFICATE OF INCORPORATION
                                       OF
                                                    HEMISPHERX BIOPHARMA, INC.

                            Under Section 242 of the
                    Corporation Law of the State of Delaware


The above corporation  organized and existing under and by virtue of the General
Corporation Law of the State of Delaware does hereby certify:

FIRST:That the Board of Directors of said corporation,  by written consent filed
with the minutes of the Board, adopted the following  resolutions  proposing and
declaring  advisable the following amendment to the Certificate of Incorporation
of said corporation:

     "Article 'FOURTH' of the Certificate of Incorporation, which sets forth the
capitalization of the Company, is amended and, as amended, reads as follows:

'FOURTH.  The total  number of shares of all classes of capital  stock which the
Corporation  shall have authority to issue is  355,000,000 of which  350,000,000
shares  shall be Common  Stock of the par value of $0.001 and  5,000,000  shares
shall be  Preferred  Stock of the par  value of $0.01,  with such  designations,
rights and  preferences  as may be determined  from time to time by the Board of
Directors.'"

SECOND:That  the aforesaid  amendment  was duly adopted in  accordance  with the
applicable provisions of section 242 of the General Corporation Law of the State
of Delaware.

IN WITNESS WHEREOF, the Company has caused this certificate to be signed this __
day of ______, 2009.

                                                    ---------------------------
                                                    William A. Carter, President



 1


                                                                    Appendix "B"
                           HEMISPHERx BIOPHARMA, INC.
                           2009 EQUITY INCENTIVE PLAN


Hemispherx  Biopharma,  Inc.  hereby  establishes  the  Hemispherx  2009  Equity
Incentive Plan upon the terms and conditions set forth below.

1.   Definitions

In this Plan document,  except where the context otherwise  indicates,  words in
the  masculine  gender shall be deemed to include  males and  females,  singular
terms also shall refer to the plural, and the following definitions shall apply:

         1.1  "Agreement"  means a written  agreement  specifying  the terms and
conditions of an Award.

         1.2 "Award" means any Option,  Right,  Restricted  Stock or Other Stock
Award granted under the Plan

         1.3 "Board" means the Board of Directors of the Corporation.

         1.4 "Change in Control"  means the  occurrence of any of the following:
(i) the  acquisition  by any  "person"  or "group" (as defined in or pursuant to
Sections 13(d) and 14(d) of the Exchange Act) (other than the  Corporation,  any
Subsidiary or any Corporation or Subsidiary's  employee benefit plan),  directly
or  indirectly,  as  "beneficial  owner" (as  defined  in Rule  13d-3  under the
Exchange Act) of securities of the Corporation representing twenty percent (20%)
or more of either the then  outstanding  shares or the combined  voting power of
the then outstanding  securities of the  Corporation;  (ii) either a majority of
the  directors  of  the  Corporation   elected  at  the   Corporation's   annual
stockholders  meeting shall have been nominated for election other than by or at
the direction of the "incumbent directors" of the Corporation, or the "incumbent
directors"  shall  cease  to  constitute  a  majority  of the  directors  of the
Corporation.  The term  "incumbent  director"  shall mean any director who was a
director of the  Corporation  on June 24, 2009 and any  individual who becomes a
director of the  Corporation  subsequent  to June 24, 2009 and who is elected or
nominated by or at the direction of at least  two-thirds  of the then  incumbent
directors;  (iii) the  stockholders  of the  Corporation  approve  (a) a merger,
consolidation  or other business  combination of the Corporation  with any other
"person" or "group"  (as  defined in or pursuant to Sections  13(d) and 14(d) of
the 1934 Act) or affiliate  thereof,  other than a merger or consolidation  that
would  result in the  outstanding  common stock of the  Corporation  immediately
prior thereto  continuing to represent  (either by remaining  outstanding  or by
being  converted  into  common  stock of the  surviving  entity  or a parent  or
affiliate thereof) more than fifty percent (50%) of the outstanding common stock
of the  Corporation  or such surviving  entity or a parent or affiliate  thereof
outstanding  immediately  after such  merger,  consolidation  or other  business
combination,  or (b) a plan of complete  liquidation  of the  Corporation  or an
agreement for the sale or disposition by the Corporation of all or substantially
all of the Corporation's  assets; or (iv) any other event or circumstance  which
is not covered by the  foregoing  subsections  of this Section 1.4 but which the
Board of Directors  determines  to affect  control of the  Corporation  and with
respect to which the Board of Directors  adopts a  resolution  that the event or
circumstance  constitutes  a Change in Control for  purposes  of the Plan.  This
definition of "Change in Control"  shall not be amended after (i) the occurrence
of a Change  in  Control;  (ii) the  public  announcement  of a  proposal  for a
transaction that, if consummated, would constitute a Change in Control; or (iii)
the Board of Directors  learns of a specific  proposal  containing the essential
terms of a  transaction  that,  if  consummated,  would  constitute  a Change in
Control;  provided,  however, that in the case of a proposal under (ii) or (iii)
immediately  above,  if the proposal is finally  withdrawn or  terminated,  this
definition may be amended after the withdrawal or  termination.  For purposes of
the Plan and all related  Agreements,  if the  employment of any  Participant is
terminated by the Corporation and/or any Subsidiary (other than for cause) after
an event causing the  definition  of "Change in Control" to become  nonamendable
under  the  preceding  subsections  of  this  Section  1.4,  that  Participant's
termination of employment shall be considered to have occurred after a Change in
Control if a Change in Control  occurs with  respect to and within two (2) years
after  the event  causing  the  definition  of  "Change  in  Control"  to become
nonamendable:

         1.5  "Code" means the Internal Revenue Code of 1986, as amended.
 2
         1.6 "Common  Stock" means the common stock,  par value $.001 per share,
of the Corporation.

         1.7  "Corporation" means Hemispherx Biopharma, Inc.

         1.8 "Date of Exercise" means the date on which the Corporation receives
notice of the  exercise  of an Option or Right in  accordance  with the terms of
Article 8.

         1.9  "Date of  Grant"  means the date on which the grant of an Award is
authorized  under  the  Plan  or such  later  date  as may be  specified  in the
authorization.

         1.10  "Effective Date" means June 24, 2009.

         1.11  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
amended.

         1.12 "Fair  Market  Value" of a share of Common  Stock on any  relevant
date means the closing  selling  price per share of Common  Stock on the date in
question on the Principal Exchange. If there is no closing selling price for the
Common  Stock on the date in  question,  then the Fair Market Value shall be the
closing  selling price on the last  preceding  date for which a closing  selling
price exists on the Principal  Exchange.  If the Common Stock is not listed on a
Principal  Exchange,  the Fair Market  Value shall be  determined  pursuant to a
reasonable method adopted by the Board in good faith for that purpose.

         1.13 "Incentive Stock Option" means an Option granted as such under the
Plan that is  intended  at the Date of Grant to  qualify as an  incentive  stock
option under Section 422 of the Code.

         1.14 "Nonstatutory Stock Option" means an Option granted under the Plan
that is not an Incentive Stock Option.

         1.15 "Option" means an option to purchase Shares granted under the Plan
in accordance with the terms of Article 6.

         1.16  "Option  Period"  means the period  during which an Option may be
exercised.

         1.17 "Option Price" means the price per Share at which an Option may be
exercised.

         1.18 "Other  Stock Award"  means an award of Shares  granted  under the
Plan in accordance with the terms of Article 10.

         1.19  "Participant"  means  an  individual  to whom an  Award  has been
granted.

         1.20 "Permanent  Disability"  means disabled within the meaning of Code
Section 72(m)(7).

         1.21 "Plan" means the Hemispherx 2009 Equity Incentive Plan.

         1.22  "Principal  Exchange"  means the NYSE  Amex,  the New York  Stock
Exchange,  or such other stock  exchange as the Common  Stock is then listed for
trading.

         1.23  "Related  Option" means the Option  granted in connection  with a
specified Right.

         1.24  "Related  Right"  means the Right  granted in  connection  with a
specified Option.

         1.25  "Restricted  Stock" means Shares  granted in accordance  with the
terms of Article 9.
 3
         1.26 "Retirement" means retirement of an officer or other employee from
the  Corporation  or a  Subsidiary  at or  after  age  65,  or in the  case of a
non-employee  director,  retirement from the Board at or after age 65, or in the
case of a non-employee consultant or advisor, Termination of Service at or after
age 65.

         1.27 "Right" means a stock appreciation right granted under the plan in
accordance with the terms of Article 7.

         1.28  "Right  Period"  means  the  period  during  which a Right may be
exercised.

         1.29  "Share"  means a share of Common  Stock  that is  authorized  but
unissued pursuant to the Plan.

         1.30  "Subsidiary"  means  a  corporation  at  least  50% of the  total
combined  voting  power  of all  classes  of  stock  of  which  is  owned by the
Corporation, either directly or through one or more other Subsidiaries.

         1.31  "Termination  of Service"  means  termination  of an officer's or
other employee's employment with the Corporation or a Subsidiary, or in the case
of a non-employee director, termination from service as a director on the Board,
or in the  case  of a  non-employee  consultant  or  advisor,  cessation  of the
performance of services to the Corporation or a Subsidiary.

2.   Purpose

The Plan is intended to assist the  Corporation  in attracting,  retaining,  and
motivating directors, officers, other key employees, consultants and advisors of
outstanding  ability and to promote the  identification  of their interests with
those of the  stockholders  of the  Corporation.  The Plan is also intended as a
means of cash conservation by utilizing  Corporation stock as a means of payment
for  directors,  consultants,  agents and vendors as well as an  alternative  to
salary of officers and employees  through the Employee  Wages Or Hour  Reduction
Program.

3.   Administration

3.1 The Board shall have the power to determine in its discretion the directors,
officers,  other  key  employees,  consultants,  advisors  and  vendors  of  the
Corporation  or a  Subsidiary  to whom Awards  shall be  granted,  the number of
Shares to be subject to each Award,  and the terms and conditions of each Award.
Without  limiting the generality of the foregoing,  the Board may provide in its
discretion in an Agreement:

         (i) that Options or Rights will not become  exercisable  until a Change
in Control or other  specified  event(s) with respect to the  Corporation or the
Participant;


         (ii) for an  agreement  by the  Participant  to render  services to the
Corporation  or a Subsidiary  upon such terms and conditions as may be specified
in the Agreement;

         (iii) for  restrictions on the transfer,  sale or other  disposition of
shares of Common Stock issued to the Participant  under the Plan, in which case,
the Corporation may place a legend upon the applicable  certificates  noting the
restrictions on any Shares issued pursuant to an Award.

         (iv) for an agreement by the Participant to resell to the  Corporation,
under specified conditions, shares of Common Stock issued under the Plan; and

         (v)  for  the  payment  of all or part of the  Option  Price  upon  the
exercise  of an Option or purchase  of Common  Stock  pursuant to an Other Stock
Award, subject to Section 9 or Section 10 below, as applicable.

         3.2 The Plan shall be  administered  by the Board.  In  addition to any
other powers granted to the Board hereunder, it shall have the following powers,
subject to the express provisions of the Plan:
 4
         (i) to construe and interpret the Agreements and the Plan;

         (ii)  to  require,  whether  or  not  provided  for  in  the  pertinent
Agreement,  of any person to whom  Shares are to be issued  under the Plan,  the
making of any  representations  or agreements which the Board may deem necessary
or advisable in order to comply with the securities laws of the United States or
of any state, including Section 16(b) of the Exchange Act;

         (iii) to provide for  satisfaction of a  Participant's  tax liabilities
arising in connection with the Plan under such terms and conditions as the Board
deems  appropriate,  including  requirements  in the  event  of a  disqualifying
disposition  of shares of Common  Stock  acquired by a  Participant  pursuant to
exercise of an Incentive Stock Option; and

         (iv) to make  all  other  determinations  and take  all  other  actions
necessary or advisable for the administration of the Plan.

3.3 Agreements shall be executed on behalf of the Corporation by the Chairman of
the Board.

3.4 Any  determinations  or actions made or taken by the Board  pursuant to this
Article shall be binding and final.

4.   Eligibility

Awards  may be  granted  to those  directors,  officers,  other  key  employees,
consultants,  vendors and advisors of the  Corporation  or a Subsidiary  who are
selected  for Awards by the Board.  Only  individuals  who are  employees of the
Corporation or a Subsidiary  shall be eligible for the grant of Incentive  Stock
Options.

5.   Stock Subject to the Plan

5.1  15,000,000  Shares is (i) the  maximum  number of Shares that may be issued
under the Plan;  and (ii) 3,000,000 is the maximum number of Shares with respect
to which  Awards may be granted to any  Participant  during the period  that the
Plan is in effect.  The  limitation in clause (ii) of the preceding  sentence is
imposed  to  comply  with  the  requirements  for the  exception  for  qualified
performance-based  compensation  under  Section  162(m)  of  the  Code  and  any
applicable regulations.

5.2 If an Award expires or terminates for any reason (other than  termination by
virtue of the exercise of a Related Option or Related Right, as the case may be)
in whole or in part, the shares of Common Stock (or applicable  portion thereof)
which had been subject to the  Agreement  relating  thereto  shall become Shares
that are available for the grant of other Awards.

5.3 Shares of Common  Stock  issued upon the  exercise of a Right (or if cash is
payable in  connection  with the  exercise,  that number of Shares having a Fair
Market Value equal to the cash payable upon exercise)  shall be charged  against
the number of Shares issuable under the Plan and shall not become  available for
the grant of other Awards. If the Right referred to in the preceding sentence is
a Related  Right,  the Shares subject to the Related  Option,  to the extent not
charged against the number of Shares subject to the Plan in accordance with this
Section 5.3, shall become available for the grant of other Awards.

5.4 The  shares of Common  Stock  issued  under the Plan may be  authorized  but
unissued  shares,  treasury shares or shares purchased by the Corporation on the
open market or from private sources for use under the Plan.

6.   Options

6.1 All Agreements granting Options shall specify the extent to which the Option
is intended to be either (i) a  Nonstatutory  Stock  Option or (ii) an Incentive
Stock Option.
 5
6.2 The Option  Period shall be  determined  by the Board and  specifically  set
forth  in  the  Agreement,  provided  however,  that  an  Option  shall  not  be
exercisable  after ten years  from the Date of Grant.  6.3 All  Incentive  Stock
Options  granted  under the Plan shall  comply with the  provisions  of the Code
governing  incentive  stock  options  and with all  other  applicable  rules and
regulations.

6.4 No Option  shall be granted  with an Option Price that is less than the Fair
Market Value of the Shares covered by the Option on the Date of Grant.

6.5 Tax  obligations  of a Participant  resulting from the exercise of an Option
shall be withheld or provided for pursuant to any methods approved by the Board.
The amount of taxes paid pursuant to this Section at the time of the exercise of
the Option shall not be less than the statutory minimum withholding  obligations
that  result  from  the  exercise  of  the  Option  and  shall  not  exceed  the
Participant's total estimated federal,  state and any local tax obligations that
result from the exercise of the Option,  except that the  Corporation  shall not
retain shares of Common Stock otherwise  issuable  following the exercise of the
Option  in  excess  of  the  number  required  to  meet  the  statutory  minimum
withholding obligations.

6.6 All other terms of Options granted under the Plan shall be determined by the
Board in its sole discretion.

7.   Rights

7.1           A Right may be granted under the Plan:

         (i) in  connection  with,  and at the  same  time as,  the  grant of an
Option;

         (ii) by amendment of an outstanding  Nonstatutory  Stock Option granted
under the Plan; or

         (iii) independently of any Option granted under the Plan.

A Right granted under clause (i) or (ii) of the preceding  sentence is a Related
Right. A Related Right may, in the Board's discretion, apply to all or a portion
of the Shares subject to the Related Option.

7.2 A Right may be exercised  in whole or in part as provided in the  Agreement,
and subject to the  provisions of the  Agreement,  entitles its  Participant  to
receive,  without  any  payment to the  Corporation  (other  than  required  tax
withholding  amounts) either cash or that number of Shares (equal to the highest
whole number of Shares), or a combination thereof, in an amount or having a Fair
Market Value  determined  as of the Date of Exercise not to exceed the number of
Shares  subject to the portion of the Right  exercised  multiplied  by an amount
equal  to the  excess  of (i) the Fair  Market  Value  per  Share on the Date of
Exercise of the Right over (ii)  either (A) the Fair  Market  Value per Share on
the Date of Grant of the Right if it is not a Related  Right,  or (B) the Option
Price as provided in the Related Option if the Right is a Related Right.

7.3 The Right Period shall be determined by the Board and specifically set forth
in the Agreement, provided, however, that:

                  (i) a Right will  expire no later than the  earlier of (A) ten
years  from  the  Date of  Grant  or (B) in the  case of a  Related  Right,  the
expiration of the Related Option;

                  (ii) a Right may be exercised  only when the Fair Market Value
of a Share  exceeds  either (A) the Fair  Market  Value per Share on the Date of
Grant of the  Right if it is not a Related  Right,  or (B) the  Option  Price as
provided in the Related Option if the Right is a Related Right; and

                  (iii) a Right that is a Related  Right to an  Incentive  Stock
Option  may be  exercised  only when and to the  extent  the  Related  Option is
exercisable.
 6
7.4 The  exercise,  in whole or in part,  of a Related  Right  shall  reduce the
number of Shares  subject to the  Related  Option by the  number of Shares  with
respect to which the Related Right is  exercised.  Similarly,  the exercise,  in
whole or in part, of a Related  Option shall reduce the number of Shares subject
to the Related  Right by the number of Shares with  respect to which the Related
Option is exercised.

7.5 Tax  obligations  of a  Participant  resulting  from the exercise of a Right
shall be withheld or provided for pursuant to any methods approved by the Board.
The amount of taxes paid pursuant to this Section at the time of the exercise of
the Option shall not be less than the statutory minimum withholding  obligations
that  result  from  the  exercise  of  the  Option  and  shall  not  exceed  the
Participant's total estimated federal,  state and any local tax obligations that
result from the exercise of the Option,  except that the  Corporation  shall not
retain shares of Common Stock otherwise  issuable  following the exercise of the
Option  in  excess  of  the  number  required  to  meet  the  statutory  minimum
withholding obligations.

8.   Exercise

An Option or Right may,  subject to the provisions of the Agreement  under which
it was  granted,  be  exercised  in  whole  or in  part by the  delivery  to the
Corporation  of written  notice of the  exercise,  in such form as the Board may
prescribe, accompanied, in the case of an Option, by full payment for the Shares
with  respect  to which  the  Option is  exercised.  A  Participant  may pay the
purchase  price  either (i) in cash;  (ii) with  previously  acquired  shares of
Common Stock (valued at Fair Market Value on the Date of Exercise of the Option)
that have either been  purchased  in open market  transactions  or issued by the
Corporation  pursuant to a plan thereof or of a Subsidiary;  (iii) by payment of
such  other  consideration  as the  Board  may  specify;  or (iv) a  combination
thereof.

9.   Restricted Stock

9.1 The Board may cause the Corporation to issue  Restricted  Stock from time to
time.  Whenever the Board deems it  appropriate to grant  Restricted  Stock to a
Participant,  notice  shall be given to the  Participant  stating  the number of
Shares  granted as  Restricted  Stock and the terms and  conditions to which the
Restricted Stock is subject.  That notice shall become an Agreement upon written
acceptance by the  Participant,  and  certificates  representing  the Restricted
Stock shall be issued and delivered to the  Participant  as soon as  practicable
after  execution and return of the  Agreement.  Restricted  Stock may be granted
with or without cash consideration.

9.2  Restricted  Stock  issued  pursuant  to the Plan  shall be  subject  to the
following restrictions:

                   (i) No Restricted Stock may be sold,  assigned,  transferred,
pledged,  hypothecated,  or  otherwise  encumbered  or  disposed  of  until  the
restrictions  set forth in the applicable  Agreement have lapsed or been removed
pursuant to Section 9..3 or Section 9.4.

                   (ii) In the case of a  Participant's  Termination  of Service
for any reason (whether  voluntarily or  involuntarily,  with or without cause),
the Participant  shall forfeit to the Corporation any Restricted  Stock on which
the  restrictions  have not lapsed or been  removed  pursuant  to Section 9.3 or
Section 9.4 below on the date of the Termination of Service, and the Corporation
shall have no  obligation  to pay any amounts  with  respect to such  Restricted
Stock, unless the Board determines to the contrary.

9.3 The Board shall establish as to each Award of Restricted Stock (i) the terms
and conditions upon which the  restrictions set forth in Section 9.2 above shall
lapse,  and (ii) the  extent,  if any, to which the  Participant  shall have the
voting, dividend, distribution and other rights of a stockholder with respect to
the Restricted Stock.  Certificates  representing  Restricted Stock shall bear a
legend referring to the restrictions set forth in the Plan and the Participant's
Agreement.  Those terms and  conditions  may include,  without  limitation,  the
lapsing  of  restrictions  as a result of the  death,  Permanent  Disability  or
Retirement of the Participant or the occurrence of a Change in Control.

9.4  Notwithstanding  Section 9.2(i) and Section 9.2(ii) above, the Board may at
any  time,  in its sole  discretion,  accelerate  the  time at which  any or all
restrictions  on  Restricted  Stock  will  lapse  or  remove  any and  all  such
restrictions.
 7
9.5 Tax obligations of a Participant  resulting from the  Participant's  earning
Restricted  Stock  hereunder  shall be withheld or provided  for pursuant to any
methods  approved  by the Board and set forth in the  Agreement.  The  amount of
taxes  so  paid  shall  not be  less  than  the  statutory  minimum  withholding
obligations that result when the Restricted Stock is earned and shall not exceed
the Participant's  total estimated federal,  state and any local tax obligations
that result when the  Restricted  Stock is earned,  except that the  Corporation
shall not retain  shares of Common  Stock  otherwise  issuable  in excess of the
number required to meet the statutory minimum withholding requirements.

10.  Other Stock Awards

The Board may cause the  Corporation  to issue  Common  Stock  from time to time
pursuant  to an  Other  Stock  Award  in  exchange  for  consideration  from the
Participant  specified  by the Board  that is either the  Participant's  cash or
other direct  payment to the  Corporation  or the  Participant's  past  services
rendered to the  Corporation  or a Subsidiary on or before the date of issuance.
Whenever  the Board  deems it  appropriate  to grant an Other  Stock  Award to a
Participant,  notice  shall be given to the  Participant  stating  the number of
Shares to be issued  pursuant  to the Other  Stock Award and the other terms and
conditions of the Other Stock Award.  That notice shall become an Agreement upon
written  acceptance  by  the  Participant.  Tax  obligations  of  a  Participant
resulting from the Participant's Other Stock Award shall be withheld or provided
for  pursuant  to any  methods  approved  by the  Board  and  set  forth  in the
Agreement.  The  amount of taxes so paid  shall not be less than the  applicable
statutory minimum  withholding  obligations that result when the Common Stock is
earned and shall not exceed the Participant's total estimated federal, state and
any local tax obligations that relate to the Other Stock Award,  except that the
Corporation shall not retain shares of Common Stock otherwise issuable in excess
of the number required to meet the statutory minimum withholding requirements.

11.  Nontransferability of Options and Rights

Unless otherwise  determined by the Board,  Options and Rights granted under the
Plan shall not be  transferable  other  than by will or the laws of descent  and
distribution,  and an Option or Right may be exercised during the  Participant's
lifetime  only by him or in the  event of his  legal  disability,  by his  legal
representative.  A Related Right is transferable only when the Related Option is
transferable and only with the Related Option and under the same conditions.

12.  Capital Adjustments

The number and class of Shares  subject to each  outstanding  Award,  the Option
Price and the aggregate  number and class of Shares for which Awards  thereafter
may be made shall be adjusted by the Board,  as appropriate  and  equitable,  to
reflect such events as stock dividends,  dividends payable other than in cash or
other  extraordinary  dividends,  stock  splits,   recapitalizations,   mergers,
consolidations or reorganizations of or by the Corporation.

13.  Termination or Amendment

The  Board  shall  have the power to  terminate  the Plan and to amend it in any
respect,  provided that, after the Plan has been approved by the stockholders of
the Corporation,  the Board may not, without the approval of the stockholders of
the Corporation, amend the Plan so as to increase the aggregate number of Shares
that may be issued  under the Plan (except as provided in Article 12), to modify
the requirements as to eligibility to receive Awards, or to increase  materially
the benefits accruing to Participants.  Notwithstanding  the preceding sentence,
no  termination  or  amendment  of the Plan shall,  without his or her  consent,
adversely  affect the rights or obligations of a Participant with respect to any
Award previously granted except as reasonably  required for compliance with Rule
16b-3  under  the  Exchange  Act or with the  provisions  of the Code and  other
applicable rules and regulations thereunder governing incentive stock options.

14.  Modification, Extension and Renewal of Options and Rights

Subject to the terms and conditions and within the  limitations of the Plan, the
Board may modify, extend or renew outstanding Awards; provided, however, that no
Option or Right shall be repriced,  whether by the reduction of the Option Price
(or the Fair Market  Value per Share on the Date of Grant in the case of a Right
that is not a Related  Right) or by the  cancellation  of an Option or Right and
the issuance of a substitute Option or Right with a lower Exercise Price (or the
Fair Market  Value per Share on the Date of Grant in the case of a Right that is
not a Related Right).
 8
15.  Term of the Plan

Unless  sooner  terminated  by the Board  pursuant to Article 13, the Plan shall
terminate on the date ten years after its  adoption by the Board,  and no Awards
may be granted or awarded after  termination.  The termination  shall not affect
the validity of any Award outstanding on the date of termination.

16.  Indemnification of Board

In addition to any other indemnification rights they may have as directors,  the
members  of the  Board  shall be  indemnified  by the  Corporation  against  the
reasonable expenses,  including attorneys' fees, actually incurred in connection
with the defense of any action,  suit or proceeding,  or in connection  with any
appeal  therein,  to which  they or any of them may be a party by  reason of any
action taken or failure to act under or in connection with the Plan or any Award
granted hereunder, and against all amounts reasonably paid by them in settlement
thereof or paid by them in satisfaction  of a judgment in any such action,  suit
or  proceeding,  if such members  acted in good faith and in a manner which they
believed to be in, and not opposed to, the best interests of the Corporation.

17.  General Provisions

17.1 The establishment of the Plan shall not confer upon any director,  officer,
other  employee,  consultant,  vendor or advisor of the Corporation any legal or
equitable right against the Corporation,  any Subsidiary or the Board, except as
expressly provided in the Plan.

17.2 The Plan does not constitute inducement or consideration for the employment
of officer or other employee of the  Corporation,  nor is it a contract  between
the  Corporation or any Subsidiary and any director,  officer,  other  employee,
consultant or advisor of the  Corporation.  Participation  in the Plan shall not
give a director, officer, other employee,  consultant,  vendor or advisor of the
Corporation  any right to be retained in the service of the  Corporation  or any
Subsidiary.

17.3 The  interests  under  the Plan of any  Participant  under the Plan are not
subject  to the  claims  of  creditors  and may not,  in any way,  be  assigned,
alienated or encumbered.

17.4 The Plan shall be governed,  construed and  administered in accordance with
the laws of the state of Delaware  and the  intention  of the  Corporation  that
Incentive  Stock Options granted under the Plan qualify under Section 422 of the
Code.

IN  TESTIMONY  WHEREOF,  Hemispherx  Biopharma,  Inc. has caused this Plan to be
executed in its name by its duly  authorized  officer  effective the ____ day of
May, 2009.


                                            HEMISPHERX BIOPHARMA, INC.



                                            By:______________________________

                                            Its:____________________________





 1



                           HEMISPHERX BIOPHARMA, INC.
                         ANNUAL MEETING OF STOCKHOLDERS
                                  JUNE 24, 2009

           THIS  PROXY IS  SOLICTED  ON  BEHALF OF THE  BOARD OF  DIRECTORS  The
undersigned  hereby appoints  William A. Carter and Thomas K. Equals and each of
them, with full power of  substitution,  as proxies to represent the undersigned
at the Annual  Meeting of  Stockholders  to be held at the Embassy Suites Hotel,
1776 Benjamin Franklin Parkway, Philadelphia,  Pennsylvania 19103, on Wednesday,
June 24, 2009, at 10:00 a.m. local time and at any adjournment  thereof,  and to
vote all of the  shares  of  common  stock of  Hemispherx  Biopharma,  Inc.  the
undersigned would be entitled to vote if personally present,  upon the following
matters:

Please mark box in blue or black ink.

1.   Proposal No.1 - Election of Directors.
     Nominees: William A. Carter, Richard C. Piani, Tom K. Equels,
               William M. Mitchell and Iraj Eqhbal Kiani.

     //For all nominees (except as marked to the contrary below)

     //Authority Withheld as to all Nominees

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME)

William A. Carter      Richard C. Piani      Tom K. Equels
         William M. Mitchell        Iraj Eqhbal Kiani

2.           Proposal  No. 2 -  Ratification  of the  selection  of  McGladrey &
Pullen, LLP, as independent auditors of Hemispherx Biopharma,  Inc. for the year
ending December 31, 2009.

     // For                 // Against                     // Abstain

3.          Proposal No. 3 - To amend Hemispherx's  certificate of incorporation
to increase  the number of  authorized  shares of  Hemispherx  common stock from
200,000,000 to 350,000,000.

     // For                 // Against                     // Abstain

4.   Proposal No. 4 - To adopt the Hemispherx 2009 Incentive Plan of 15,000,000
shares.

     // For                 // Against                     // Abstain

 2

     In their  discretion,  the proxies are  authorized  to vote upon such other
business as may properly come before the meeting.

         THE SHARES  REPRESENTED  BY THIS PROXY WILL BE VOTED AS  DIRECTED.  THE
BOARD  RECOMMENDS A VOTE "FOR" ALL DIRECTORS AND "FOR" ITEMS NOS. 2, 3 AND 4. IF
NO CONTRARY  INSTRUCTION IS GIVEN,  THE SHARES WILL BE VOTED FOR THE ELECTION OF
WILLIAM A. CARTER, RICHARD C. PIANI, TOM K. EQUELS, WILLIAM A. MITCHELL AND IRAJ
EQHBAL KIANI AS DIRECTORS,  FOR PROPOSALS NO.S 2, 3 AND 4 AND, IN THE DISCRETION
OF THE PROXIES, ON ALL OTHER MATTERS PROPERLY BROUGHT BEFORE THE ANNUAL MEETING.


Please   date, sign as name appears at left, and return  promptly.  If the stock
         is  registered  in the name of two or more  persons,  each should sign.
         When signing as Corporate Officer,  Partner,  Executor,  Administrator,
         Trustee, or Guardian, please give full title. Please note any change in
         your address alongside the address as it appears in the Proxy.


                                             Dated:
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                                                        Signature


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                                                       (Print Name)


      SIGN, DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE