CEL-SCI CORPORATION

                                  Common Stock

                       At Market Issuance Sales Agreement

                                                               December 10, 2010

McNicoll, Lewis & Vlak LLC
The Graybar Building
420  Lexington  Avenue
Suite 628
New York, NY  10170

Ladies and Gentlemen:

      CEL-SCI Corporation, a Delaware corporation (the "Company"), confirms its
agreement (this "Agreement") with McNicoll, Lewis & Vlak LLC (the "MLV"), as
follows:

   1.   Issuance and Sale of Shares.  The Company agrees that, from time to time
during the term of this  Agreement,  on the terms and subject to the  conditions
set forth  herein,  it may issue and sell  through MLV,  shares (the  "Placement
Shares") of the Company's common stock,  (the "Common Stock") provided  however,
that in no event  shall the  Company  issue or sell  through  MLV such number of
Shares that (a) exceeds the number of shares of Common Stock  registered  on the
effective  Registration  Statement  (as  defined  below)  pursuant  to which the
offering is being made,  or (b) exceeds the number of  authorized  but  unissued
shares of the  Company's  Common  Stock (the lesser of (a) and (b), the "Maximum
Amount"). Notwithstanding anything to the contrary contained herein, the parties
hereto agree that compliance with the limitations set forth in this Section 1 on
the amount of Placement Shares issued and sold under this Agreement shall be the
sole  responsibility  of the  Company and that MLV shall have no  obligation  in
connection  with such  compliance.  The issuance  and sale of  Placement  Shares
through MLV will be effected pursuant to the Registration  Statement (as defined
below)  filed by the  Company  and  declared  effective  by the  Securities  and
Exchange Commission (the "Commission"), although nothing in this Agreement shall
be construed as requiring the Company to use the Registration Statement to issue
Common Stock.

     The Company has filed,  in accordance with the provisions of the Securities
Act of 1933,  as amended (the  "Securities  Act") and the rules and  regulations
thereunder   (the   "Securities  Act   Regulations"),   with  the  Commission  a
registration  statement  on Form S-3 (File  No.  333-162792),  including  a base
prospectus, relating to certain securities, including the Placement Shares to be
issued from time to time by the  Company,  and which  incorporates  by reference
documents  that the  Company  has  filed  or will  file in  accordance  with the
provisions of the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"),   and  the  rules  and   regulations   thereunder   (the   "Exchange  Act
Regulations").  The Company has  prepared a prospectus  supplement  specifically
relating to the  Placement  Shares  (the  "Prospectus  Supplement")  to the base
prospectus  included as part of such  registration  statement.  The Company will
furnish to MLV,  for use by MLV,  copies of the  prospectus  included as part of
such  registration  statement,  as  supplemented  by the Prospectus  Supplement,
relating to the Placement Shares.  Except where the context otherwise  requires,
such  registration  statement,  including all documents filed as part thereof or
incorporated by reference therein, and including any information  contained in a
Prospectus (as defined below) subsequently filed with the Commission pursuant to
Rule 424(b) under the Securities Act  Regulations or deemed to be a part of such

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registration  statement pursuant to Rule 430B of the Securities Act Regulations,
is herein called the  "Registration  Statement." The base prospectus,  including
all documents  incorporated  therein by reference,  included in the Registration
Statement,  as it may be supplemented by the Prospectus Supplement,  in the form
in which such prospectus  and/or  Prospectus  Supplement have most recently been
filed by the Company  with the  Commission  pursuant  to Rule  424(b)  under the
Securities  Act  Regulations,  together with the then issued Issuer Free Writing
Prospectus(es),  is herein called the  "Prospectus." Any reference herein to the
Registration  Statement,  the Prospectus or any amendment or supplement  thereto
shall be deemed to refer to and include the documents  incorporated by reference
therein,  and  any  reference  herein  to  the  terms  "amend,"  "amendment"  or
"supplement" with respect to the Registration  Statement or the Prospectus shall
be deemed to refer to and include the filing after the  execution  hereof of any
document with the Commission deemed to be incorporated by reference therein.

      Any reference herein to the Registration Statement, any Prospectus
Supplement, Prospectus or any Issuer Free Writing Prospectus (defined below)
shall be deemed to refer to and include the documents, if any, incorporated by
reference therein (the "Incorporated Documents"), including, unless the context
otherwise requires, the documents, if any, filed as exhibits to such
Incorporated Documents. Any reference herein to the terms "amend," "amendment"
or "supplement" with respect to the Registration Statement, any Prospectus
Supplement, the Prospectus or any Issuer Free Writing Prospectus shall be deemed
to refer to and include the filing of any document under the Exchange Act on or
after the date hereof that is incorporated by reference into the Registration
Statement. For purposes of this Agreement, all references to the Registration
Statement, the Prospectus or to any amendment or supplement thereto shall be
deemed to include the most recent copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System, or if applicable, the
Interactive Data Electronic Application system when used by the Commission
(collectively, "EDGAR").

   2.    Placements.  Each  time  that the  Company  wishes  to  issue  and sell
Placement Shares  hereunder  (each, a "Placement"),  it will notify MLV by email
notice (or other  method  mutually  agreed to in writing by the  Parties) of the
number of Placement Shares,  the time period during which sales are requested to
be made,  any  limitation on the number of Placement  Shares that may be sold in
any  one  day  and  any  minimum  price  below  which  sales  may not be made (a
"Placement  Notice"),  the form of which is  attached  hereto as Schedule 1. The
Placement  Notice shall originate from any of the  individuals  from the Company
set forth on Schedule 3 (with a copy to each of the other  individuals  from the
Company  listed  on  such  schedule),  and  shall  be  addressed  to each of the
individuals  from MLV set forth on Schedule 3, as such Schedule 3 may be amended
from time to time. The Placement  Notice shall be effective unless and until (i)
MLV declines to accept the terms contained  therein for any reason,  in its sole
discretion,  (ii) the entire amount of the Placement Shares thereunder have been
sold,  (iii) the Company suspends or terminates the Placement Notice or (iv) the
Agreement has been terminated  under the provisions of Section 12. The amount of
any discount,  commission or other compensation to be paid by the Company to MLV
in  connection  with the sale of the  Placement  Shares shall be  calculated  in
accordance with the terms set forth in Schedule 2. It is expressly  acknowledged


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and agreed that neither the Company nor MLV will have any obligation  whatsoever
with respect to a Placement or any Placement Shares unless and until the Company
delivers  a  Placement  Notice to MLV and MLV does not  decline  such  Placement
Notice  pursuant  to the  terms set  forth  above,  and then only upon the terms
specified  therein and herein.  In the event of a conflict  between the terms of
this Agreement and the terms of a Placement  Notice,  the terms of the Placement
Notice will control.

   3.   Sale of Placement  Shares by MLV.  Subject to the  provisions of Section
5(a),  MLV,  for the period  specified  in the  Placement  Notice,  will use its
commercially  reasonable  efforts  consistent  with its normal trading and sales
practices and applicable  state and federal laws,  rules and regulations and the
rules of the NYSE Amex (the "Exchange"),  to sell the Placement Shares up to the
amount  specified,  and otherwise in accordance with the terms of such Placement
Notice.  MLV will provide written  confirmation to the Company no later than the
opening of the Trading Day (as defined below) immediately  following the Trading
Day on which it has made sales of Placement Shares  hereunder  setting forth the
number of  Placement  Shares sold on such day, the  compensation  payable by the
Company to MLV  pursuant to Section 2 with  respect to such  sales,  and the Net
Proceeds (as defined below)  payable to the Company,  with an itemization of the
deductions  made by MLV (as set forth in Section  5(b)) from the gross  proceeds
that it receives from such sales.  Subject to the terms of the Placement Notice,
MLV may sell Placement Shares by any method permitted by law deemed to be an "at
the market"  offering as defined in Rule 415 of the Securities Act  Regulations,
including without  limitation sales made directly on the Exchange,  on any other
existing  trading  market for the Common Stock or to or through a market  maker.
Subject to the terms of a Placement  Notice,  MLV may also sell Placement Shares
by any other method permitted by law,  including but not limited to in privately
negotiated  transactions.  "Trading Day" means any day on which Common Stock are
purchased and sold on the Exchange.

   4.    Suspension  of Sales.  The Company or MLV may, upon notice to the other
party in writing  (including by email  correspondence to each of the individuals
of the other Party set forth on Schedule 3, if receipt of such correspondence is
actually  acknowledged  by any of the  individuals  to whom the  notice is sent,
other than via auto-reply) or by telephone (confirmed  immediately by verifiable
facsimile transmission or email correspondence to each of the individuals of the
other Party set forth on Schedule  3),  suspend  any sale of  Placement  Shares;
provided,  however,  that such suspension shall not affect or impair any party's
obligations  with respect to any Placement  Shares sold  hereunder  prior to the
receipt of such  notice.  Each of the parties  agrees that no such notice  under
this Section 4 shall be  effective  against any other party unless it is made to
one of the  individuals  named on  Schedule 3 hereto,  as such  Schedule  may be
amended from time to time.

   5.   Sale and Delivery to MLV; Settlement.

     (a) Sale of  Placement  Shares.  On the  basis of the  representations  and
warranties  herein contained and subject to the terms and conditions  herein set
forth, upon MLV's acceptance of the terms of a Placement Notice,  and unless the
sale of the Placement Shares described therein has been declined,  suspended, or
otherwise  terminated in accordance with the terms of this  Agreement,  MLV, for
the  period  specified  in the  Placement  Notice,  will  use  its  commercially
reasonable  efforts  consistent  with its normal trading and sales  practices to


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<PAGE>

sell  such  Placement  Shares  up to the  amount  specified,  and  otherwise  in
accordance with the terms of such Placement Notice. The Company acknowledges and
agrees that (i) there can be no assurance that MLV will be successful in selling
Placement Shares,  (ii) MLV will incur no liability or obligation to the Company
or any  other  person or entity  if it does not sell  Placement  Shares  for any
reason other than a failure by MLV to use its  commercially  reasonable  efforts
consistent  with its normal  trading and sales  practices and applicable law and
regulations to sell such  Placement  Shares as required under this Agreement and
(iii)  MLV  shall be under no  obligation  to  purchase  Placement  Shares  on a
principal  basis pursuant to this Agreement,  except as otherwise  agreed by MLV
and the Company.

     (b)  Settlement  of Placement  Shares.  Unless  otherwise  specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Trading Day (or such earlier day as is industry  practice for
regular-way  trading)  following the date on which such sales are made (each,  a
"Settlement  Date").  The amount of proceeds to be delivered to the Company on a
Settlement  Date  against  receipt  of  the  Placement  Shares  sold  (the  "Net
Proceeds")  will be equal to the aggregate  sales price  received by MLV,  after
deduction  for (i) MLV's  commission,  discount or other  compensation  for such
sales  payable  by the  Company  pursuant  to  Section  2  hereof,  and (ii) any
transaction fees imposed by any governmental or self-regulatory  organization in
respect of such sales.

     (c) Delivery of Placement  Shares.  On or before each Settlement  Date, the
Company will, or will cause its transfer agent to,  electronically  transfer the
Placement  Shares  being  sold by  crediting  MLV's  or its  designee's  account
(provided MLV shall have given the Company written notice of such designee prior
to the Settlement  Date) at The Depository Trust Company through its Deposit and
Withdrawal  at  Custodian  System or by such other  means of  delivery as may be
mutually  agreed upon by the parties  hereto  which in all cases shall be freely
tradable,  transferable,  registered  shares in good  deliverable  form. On each
Settlement  Date, MLV will deliver the related Net Proceeds in same day funds to
an account  designated by the Company on, or prior to, the Settlement  Date. The
Company  agrees that if the  Company,  or its  transfer  agent (if  applicable),
defaults in its obligation to deliver Placement Shares on a Settlement Date, the
Company  agrees  that in  addition  to and in no way  limiting  the  rights  and
obligations  set forth in Section  10(a)  hereto,  it will (i) hold MLV harmless
against any loss, claim, damage, or expense (including reasonable legal fees and
expenses), as incurred, arising out of or in connection with such default by the
Company  or its  transfer  agent  (if  applicable)  and  (ii)  pay  to  MLV  any
commission,  discount,  or other  compensation  to which it would otherwise have
been entitled absent such default.

     (d) Denominations;  Registration. Certificates for the Placement Shares, if
any,  shall be in such  denominations  and  registered  in such names as MLV may
request in writing  at least one  Business  Day (as  defined  below)  before the
Settlement Date. The certificates for the Placement Shares, if any, will be made
available by the Company for examination and packaging by MLV in The City of New
York not  later  than  noon (New  York  time) on the  Business  Day prior to the
Settlement Date.

     (e) Limitations on Offering Size. Under no circumstances  shall the Company
cause or request  the offer or sale of any  Placement  Shares if,  after  giving
effect to the sale of such Placement Shares,  the aggregate gross sales proceeds
of Placement  Shares sold pursuant to this Agreement  would exceed the lesser of


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(A)  together  with all sales of  Placement  Shares  under this  Agreement,  the
Maximum Amount,  (B) the amount available for offer and sale under the currently
effective Registration Statement and (C) the amount authorized from time to time
to be issued and sold under this Agreement by the Company's  board of directors,
a duly authorized  committee thereof or a duly authorized  executive  committee,
and notified to MLV in writing.  Under no circumstances  shall the Company cause
or request the offer or sale of any Placement  Shares pursuant to this Agreement
at a price  lower than the  minimum  price  authorized  from time to time by the
Company's  board of directors,  a duly  authorized  committee  thereof or a duly
authorized executive committee,  and notified to MLV in writing.  Further, under
no circumstances shall the Company cause or permit the aggregate offering amount
of  Placement  Shares  sold  pursuant  to this  Agreement  to exceed the Maximum
Amount.

   6.    Representations  and Warranties of the Company.  The Company represents
and warrants to, and agrees with MLV that as of the date of this  Agreement  and
as of each  Applicable  Time (as defined  below),  unless  such  representation,
warranty or agreement specifies a different time or time:

     (a) Registration Statement and Prospectus. The Company and, assuming no act
or  omission  on the part of MLV that  would  make such  statement  untrue,  the
transactions contemplated by this Agreement meet the requirements for and comply
with the  conditions  for the use of Form S-3  under  the  Securities  Act.  The
Registration  Statement has been filed with the Commission and has been declared
effective under the Securities  Act. The Prospectus  Supplement will name MLV as
the agent in the section  entitled "Plan of  Distribution."  The Company has not
received,  and has no notice  of,  any  order of the  Commission  preventing  or
suspending the use of the Registration  Statement, or threatening or instituting
proceedings for that purpose. The Registration  Statement and the offer and sale
of Placement  Shares as  contemplated  hereby meet the  requirements of Rule 415
under the Act and comply in all material  respects with said Rule. Any statutes,
regulations,  contracts or other  documents that are required to be described in
the  Registration  Statement or the Prospectus or to be filed as exhibits to the
Registration   Statement  have  been  so  described  or  filed.  Copies  of  the
Registration Statement,  the Prospectus,  and any such amendments or supplements
and all  documents  incorporated  by reference  therein that were filed with the
Commission on or prior to the date of this Agreement have been delivered, or are
available through EDGAR, to MLV and its counsel. The Company has not distributed
and, prior to the later to occur of each  Settlement  Date and completion of the
distribution of the Placement Shares,  will not distribute any offering material
in connection  with the offering or sale of the Placement  Shares other than the
Registration Statement and the Prospectus and any Issuer Free Writing Prospectus
(as defined  below) to which MLV has  consented.  The Common  Stock is currently
quoted on the Exchange  under the trading  symbol "CVM".  Except as disclosed in
the Registration Statement,  including the Incorporated  Documents,  the Company
has not, in the 12 months  preceding the date hereof,  received  notice from the
Exchange to the effect that the Company is not in compliance with the listing or
maintenance  requirements.  Except as disclosed in the  Registration  Statement,
including the  Incorporated  Documents,  or the  Prospectus,  the Company has no
reason to believe that it will not in the  foreseeable  future continue to be in
compliance with all such listing and maintenance requirements.

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<PAGE>

     (b) No Misstatement or Omission. The Registration Statement, when it became
effective,  and the Prospectus,  and any amendment or supplement thereto, on the
date of such  Prospectus or amendment or supplement,  conformed and will conform
in all material  respects with the  requirements  of the Securities Act. At each
Settlement Date, the Registration Statement and the Prospectus, as of such date,
will conform in all material  respects with the  requirements  of the Securities
Act. The Registration Statement,  when it became or becomes effective,  did not,
and will not,  contain an untrue statement of a material fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading. The Prospectus and any amendment and supplement thereto,
on the date thereof and at each Applicable Time (defined below), did not or will
not include an untrue  statement of a material  fact or omit to state a material
fact necessary to make the  statements  therein,  in light of the  circumstances
under  which they were made,  not  misleading.  The  documents  incorporated  by
reference  in the  Prospectus  or any  Prospectus  Supplement  did not,  and any
further  documents filed and  incorporated  by reference  therein will not, when
filed with the  Commission,  contain an untrue  statement of a material  fact or
omit to  state a  material  fact  required  to be  stated  in such  document  or
necessary to make the statements in such document, in light of the circumstances
under which they were made,  not  misleading.  The foregoing  shall not apply to
statements  in, or omissions  from, any such document made in reliance upon, and
in conformity with, information furnished to the Company by MLV specifically for
use in the preparation thereof.

     (c)  Conformity  with  Securities  Act and Exchange  Act. The  Registration
Statement,  the Prospectus,  any Issuer Free Writing Prospectus or any amendment
or  supplement  thereto,  and the  documents  incorporated  by  reference in the
Registration  Statement,  the Prospectus or any amendment or supplement thereto,
when such documents  were or are filed with the Commission  under the Securities
Act or the Exchange Act or became or become  effective under the Securities Act,
as the case may be, conformed or will conform in all material  respects with the
requirements of the Securities Act and the Exchange Act, as applicable.

     (d) Financial  Information.  The consolidated  financial  statements of the
Company included or incorporated by reference in the Registration Statement, the
Prospectus and the Issuer Free Writing  Prospectuses,  if any, together with the
related notes and  schedules,  present  fairly,  in all material  respects,  the
consolidated  financial  position of the Company and the  Subsidiaries as of the
dates  indicated  and the  consolidated  results of  operations,  cash flows and
changes in  stockholders'  equity of the Company for the periods  specified  and
have been prepared in compliance with the requirements of the Securities Act and
Exchange  Act, as  applicable,  and in conformity  with GAAP (as defined  below)
applied  on a  consistent  basis  (except  for such  adjustments  to  accounting
standards and practices as are noted therein) during the periods  involved;  the
other  financial  and  statistical  data with  respect  to the  Company  and the
Subsidiaries   contained  or  incorporated  by  reference  in  the  Registration
Statement, the Prospectus and the Issuer Free Writing Prospectuses,  if any, are
accurately  and fairly  presented  and prepared on a basis  consistent  with the
financial  statements  and  books  and  records  of the  Company;  there  are no
financial statements  (historical or pro forma) that are required to be included
or incorporated by reference in the  Registration  Statement,  or the Prospectus
that are not included or incorporated by reference as required;  the Company and
the  Subsidiaries  (as defined  below) do not have any material  liabilities  or
obligations, direct or contingent (including any off-balance sheet obligations),


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not described in the Registration  Statement (excluding the exhibits thereto and
Incorporated  Documents),  and the Prospectus which are required to be described
in the Registration  Statement or the Prospectus (including Exhibits thereto and
Incorporated  Documents);  and all  disclosures  contained  or  incorporated  by
reference in the  Registration  Statement,  the  Prospectus  and the Issuer Free
Writing  Prospectuses,  if any, regarding "non-GAAP financial measures" (as such
term is defined by the rules and  regulations  of the  Commission)  comply  with
Regulation  G of the  Exchange  Act and  Item 10 of  Regulation  S-K  under  the
Securities Act, to the extent applicable;

     (e) Conformity with EDGAR Filing.  The Prospectus  delivered to MLV for use
in connection  with the sale of the Placement  Shares pursuant to this Agreement
will  be  identical  to  the  versions  of  the  Prospectus  transmitted  to the
Commission  for filing via EDGAR,  except to the extent  permitted by Regulation
S-T.

     (f)  Organization.  The Company and each of its Subsidiaries  are, and will
be, duly organized, validly existing as a corporation and in good standing under
the laws of their respective jurisdictions of organization. The Company and each
of its  Subsidiaries  are, and will be, duly  licensed or qualified as a foreign
corporation  for  transaction of business and in good standing under the laws of
each other jurisdiction in which their respective ownership or lease of property
or  the  conduct  of  their  respective  businesses  requires  such  license  or
qualification,  and have all corporate  power and authority  necessary to own or
hold their respective  properties and to conduct their respective  businesses as
described in the  Registration  Statement and the  Prospectus,  except where the
failure to be so qualified  or in good  standing or have such power or authority
would not,  individually or in the aggregate,  have a material adverse effect or
would  reasonably be expected to have a material  adverse  effect on the assets,
business, operations,  earnings, properties, condition (financial or otherwise),
prospects,  stockholders' equity or results of operations of the Company and the
Subsidiaries  (as  defined  below)  taken as a whole,  or prevent or  materially
interfere with consummation of the transactions contemplated hereby (a "Material
Adverse Effect").

     (g)  Subsidiaries.  The subsidiaries set forth on Schedule 4 (collectively,
the  "Subsidiaries"),  are the Company's only significant  subsidiaries (as such
term is defined in Rule 1-02 of Regulation S-X  promulgated by the  Commission).
Except as set forth in the  Registration  Statement and in the  Prospectus,  the
Company  owns,  directly  or  indirectly,  all of the  equity  interests  of the
Subsidiaries free and clear of any lien, charge, security interest, encumbrance,
right of first refusal or other restriction, and all the equity interests of the
Subsidiaries  are validly issued and are fully paid,  nonassessable  and free of
preemptive and similar rights.

     (h)  No  Violation  or  Default.   Neither  the  Company  nor  any  of  its
Subsidiaries  is  (i)  in  violation  of  its  charter  or  by-laws  or  similar
organizational  documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both,  would  constitute  such a default,  in the due
performance  or observance of any term,  covenant or condition  contained in any
indenture,  mortgage,  deed of  trust,  loan  agreement  or other  agreement  or
instrument  to which the  Company  or any of its  Subsidiaries  is a party or by
which the  Company  or any of its  Subsidiaries  is bound or to which any of the
property or assets of the Company or any of its  Subsidiaries  are  subject;  or
(iii)  in  violation  of any law or  statute  or any  judgment,  order,  rule or
regulation of any court or arbitrator or governmental  or regulatory  authority,
except,  in the case of each of  clauses  (ii)  and  (iii)  above,  for any such
violation  or  default  that  would  not,  individually  or  in  the  aggregate,


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reasonably be expected to have a Material Adverse Effect. Except as described in
the Prospectus,  the Prospectus Supplement or the Incorporated Documents, to the
Company's  knowledge,  no other  party  under  any  material  contract  or other
agreement to which it or any of its Subsidiaries is a party is in default in any
respect  thereunder  where such default  would  reasonably be expected to have a
Material Adverse Effect.

     (i) No Material  Adverse Change.  Subsequent to the respective  dates as of
which information is given in the Registration Statement, the Prospectus and the
Free Writing Prospectuses, if any (including any document deemed incorporated by
reference  therein),  there has not been (i) any Material Adverse Effect, or any
development involving a prospective Material Adverse Effect, in or affecting the
business, properties, management, financial, condition (financial or otherwise),
results of operations, or prospects of the Company and the Subsidiaries taken as
a  whole,  (ii)  any  transaction  which  is  material  to the  Company  and the
Subsidiaries  taken as a whole,  (iii) any  obligation or  liability,  direct or
contingent  (including  any  off-balance  sheet  obligations),  incurred  by the
Company or any Subsidiary, which is material to the Company and the Subsidiaries
taken as a whole, (iv) any material change in the capital stock (other than as a
result of the sale of  Placement  Shares or other than as  described  in a proxy
statement  filed on Schedule  14A or a  Registration  Statement  on Form S-4 and
otherwise  publicly  announced) or  outstanding  long-term  indebtedness  of the
Company or any of its  Subsidiaries  or (v) any dividend or  distribution of any
kind  declared,  paid  or  made  on the  capital  stock  of the  Company  or any
Subsidiary,  other than in each case above in the ordinary course of business or
as otherwise  disclosed in the Registration  Statement or Prospectus  (including
any document deemed incorporated by reference therein);

     (j)  Capitalization.  The issued and outstanding shares of capital stock of
the Company  have been validly  issued,  are fully paid and  nonassessable  and,
other than as disclosed in the Registration Statement or the Prospectus, are not
subject to any preemptive rights, rights of first refusal or similar rights. The
Company has an authorized, issued and outstanding capitalization as set forth in
the  Registration  Statement  and the  Prospectus  as of the dates  referred  to
therein (other than the grant of additional options under the Company's existing
stock option plans, or changes in the number of outstanding  Common Stock of the
Company  due to the  issuance  of shares  upon the  exercise  or  conversion  of
securities exercisable for, or convertible into, Common Stock outstanding on the
date  hereof  or as a result  of the  issuance  of  Placement  Shares)  and such
authorized  capital stock conforms to the  description  thereof set forth in the
Registration  Statement and the Prospectus.  The description of the Common Stock
in the Registration Statement and the Prospectus is complete and accurate in all
material  respects.  Except as disclosed in or contemplated by the  Registration
Statement or the Prospectus, as of the date referred to therein, the Company did
not have  outstanding  any  options to  purchase,  or any rights or  warrants to
subscribe  for,  or  any  securities  or   obligations   convertible   into,  or
exchangeable  for, or any contracts or  commitments to issue or sell, any shares
of capital stock or other securities.

     (k) Authorization;  Enforceability. The Company has full legal right, power
and  authority  to enter  into  this  Agreement  and  perform  the  transactions
contemplated  hereby.  This  Agreement  has been duly  authorized,  executed and
delivered  by the Company and is a legal,  valid and  binding  agreement  of the
Company  enforceable in accordance with its terms, except to the extent that (i)
enforceability  may  be  limited  by  bankruptcy,  insolvency,   reorganization,


                                       8
<PAGE>

moratorium or similar laws affecting  creditors' rights generally and by general
equitable principles and (ii) the indemnification and contribution provisions of
Section 10 hereof may be limited by federal or state  securities laws and public
policy considerations in respect thereof.

     (l)  Authorization of Placement Shares.  The Placement Shares,  when issued
and  delivered  pursuant to the terms  approved by the board of directors of the
Company or a duly authorized  committee thereof, or a duly authorized  executive
committee, against payment therefor as provided herein, will be duly and validly
authorized  and issued and fully paid and  nonassessable,  free and clear of any
pledge,  lien,  encumbrance,  security  interest or other claim  (other than any
pledge, lien, encumbrance,  security interest or other claim arising from an act
or omission of MLV or a  purchaser),  including  any  statutory  or  contractual
preemptive  rights,  resale  rights,  rights of first  refusal or other  similar
rights,  and will be registered  pursuant to Section 12 of the Exchange Act. The
Placement  Shares,  when issued,  will  conform in all material  respects to the
description thereof set forth in or incorporated into the Prospectus.

     (m) No Consents  Required.  No  consent,  approval,  authorization,  order,
registration  or  qualification  of or  with  any  court  or  arbitrator  or any
governmental or regulatory authority is required for the execution, delivery and
performance by the Company of this  Agreement,  and the issuance and sale by the
Company  of the  Placement  Shares  as  contemplated  hereby,  except  for  such
consents, approvals, authorizations,  orders and registrations or qualifications
as may be required under  applicable state securities laws or by the by-laws and
rules of the Financial Industry  Regulatory  Authority ("FINRA") or the Exchange
in connection with the sale of the Placement Shares by MLV.

     (n) No  Preferential  Rights.  Except  as  set  forth  in the  Registration
Statement  and the  Prospectus,  (i) no person,  as such term is defined in Rule
1-02 of Regulation S-X promulgated  under the Securities Act (each, a "Person"),
has the right,  contractual or otherwise,  to cause the Company to issue or sell
to such Person any Common  Stock or shares of any other  capital  stock or other
securities  of the Company  (other than upon the exercise of options or warrants
to purchase  Common  Stock or upon the  exercise of options  that may be granted
from time to time under the Company's  stock option  plans),  (ii) no Person has
any preemptive  rights,  rights of first refusal,  or any other rights  (whether
pursuant to a "poison pill" provision or otherwise) to purchase any Common Stock
or shares of any other capital stock or other securities of the Company from the
Company   which  have  not  been  duly  waived  with  respect  to  the  offering
contemplated  hereby,  (iii) no Person has the right to act as an underwriter or
as a financial  advisor to the Company in connection  with the offer and sale of
the Common Stock, and (iv) except as disclosed in the Company's filings with the
Securities  and Exchange  Commission,  no Person has the right,  contractual  or
otherwise,  to require  the  Company to register  under the  Securities  Act any
Common Stock or shares of any other  capital  stock or other  securities  of the
Company,  or to include any such shares or other  securities in the Registration
Statement  or the  offering  contemplated  thereby,  whether  as a result of the
filing  or  effectiveness  of the  Registration  Statement  or the  sale  of the
Placement Shares as contemplated thereby or otherwise.

     (o) Independent Public Accountant. BDO USA, LLP (the "Accountants"),  whose
report on the consolidated financial statements of the Company is filed with the
Commission as part of the Company's most recent Annual Report on Form 10-K filed
with the Commission and incorporated into the Registration Statement,


                                       9
<PAGE>

are and, during the periods  covered by their report,  were  independent  public
accountants  within the  meaning of the  Securities  Act and the Public  Company
Accounting  Oversight Board (United States). To the Company's  knowledge,  after
due inquiry,  the Accountants  are not in violation of the auditor  independence
requirements of the Sarbanes-Oxley Act of 2002 (the  "Sarbanes-Oxley  Act") with
respect to the Company.

     (p)  Enforceability of Agreements.  All agreements  between the Company and
third parties expressly referenced in the Prospectus, other than such agreements
that have expired by their terms or whose  termination is disclosed in documents
filed by the Company on EDGAR, are legal,  valid and binding  obligations of the
Company  enforceable in accordance with their  respective  terms,  except to the
extent  that  (i)  enforceability  may be  limited  by  bankruptcy,  insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general equitable  principles and (ii) the indemnification  provisions of
certain  agreements may be limited be federal or state securities laws or public
policy considerations in respect thereof,  except for any unenforceability that,
individually or in the aggregate,  would not  unreasonably be expected to have a
Material Adverse Effect.

     (q) No Litigation. Except as set forth in the Registration Statement or the
Prospectus,  there are no legal,  governmental or regulatory  actions,  suits or
proceedings pending, nor, to the Company's knowledge, any legal, governmental or
regulatory investigations, to which the Company or a Subsidiary is a party or to
which any  property  of the  Company or any of its  Subsidiaries  is the subject
that,  individually or in the aggregate,  if determined adversely to the Company
or any of its  Subsidiaries,  would  reasonably  be  expected to have a Material
Adverse Effect or materially and adversely  affect the ability of the Company to
perform its obligations  under this Agreement;  to the Company's  knowledge,  no
such  actions,  suits or  proceedings  are  threatened  or  contemplated  by any
governmental or regulatory authority or threatened by others that,  individually
or in the  aggregate,  if  determined  adversely  to the  Company  or any of its
Subsidiaries, would reasonably be expected to have a Material Adverse Effect; or
and (i) there are no  current  or  pending  legal,  governmental  or  regulatory
investigations, actions, suits or proceedings that are required under the Act to
be  described  in the  Prospectus  that  are  not  described  in the  Prospectus
including any  Incorporated  Document;  and (ii) there are no contracts or other
documents  that are required under the Securities Act to be filed as exhibits to
the Registration Statement that are not so filed.

     (r) Licenses and Permits. Except as set forth in the Registration Statement
or the  Prospectus,  the  Company and each of its  Subsidiaries  possess or have
obtained, all licenses,  certificates,  consents, orders, approvals, permits and
other authorizations issued by, and have made all declarations and filings with,
the  appropriate  federal,  state,  local or foreign  governmental or regulatory
authorities  that are necessary  for the ownership or lease of their  respective
properties  or the conduct of their  respective  businesses  as described in the
Registration  Statement and the  Prospectus  (the  "Permits"),  except where the
failure to possess,  obtain or make the same would not,  individually  or in the
aggregate,  reasonably be expected to have a Material Adverse Effect.  Except as
disclosed in the Registration  Statement or the Prospectus,  neither the Company
nor any of its  Subsidiaries  have  received  written  notice of any  proceeding
relating to revocation or  modification  of any such Permit or has any reason to


                                       10
<PAGE>

believe  that such Permit  will not be renewed in the  ordinary  course,  except
where the failure to obtain any such renewal would not,  individually  or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

     (s) No Material  Defaults.  Neither the Company nor any of the Subsidiaries
has defaulted on any  installment on  indebtedness  for borrowed money or on any
rental on one or more long-term leases,  which defaults,  individually or in the
aggregate,  could reasonably be expected to have a Material Adverse Effect.  The
Company  has not  filed a  report  pursuant  to  Section  13(a)  or 15(d) of the
Exchange Act since the filing of its last Annual Report on Form 10-K, indicating
that it (i) has  failed to pay any  dividend  or  sinking  fund  installment  on
preferred  stock or (ii) has defaulted on any  installment on  indebtedness  for
borrowed money or on any rental on one or more long-term leases, which defaults,
individually  or in the  aggregate,  could  reasonably  be  expected  to  have a
Material Adverse Effect.

     (t)  Certain  Market  Activities.  Neither  the  Company,  nor  any  of the
Subsidiaries,  nor any of their  respective  directors,  officers or controlling
persons has taken,  directly or  indirectly,  any action  designed,  or that has
constituted  or might  reasonably  be expected to cause or result in,  under the
Exchange Act or otherwise, the stabilization or manipulation of the price of any
security  of the  Company  to  facilitate  the sale or resale  of the  Placement
Shares.

     (u)  Broker/Dealer  Relationships.  Neither  the  Company  nor  any  of the
Subsidiaries  or any related  entities (i) is required to register as a "broker"
or  "dealer" in  accordance  with the  provisions  of the  Exchange  Act or (ii)
directly  or  indirectly  through one or more  intermediaries,  controls or is a
"person associated with a member" or "associated person of a member" (within the
meaning set forth in the FINRA Manual). No officer,  director or holder of 5% or
more of the Company's Common Stock is an associated person of a FINRA registered
broker-dealer firm.

     (v) No Reliance.  The Company has not relied upon MLV or legal  counsel for
MLV for any legal, tax or accounting  advice in connection with the offering and
sale of the Placement Shares.

     (w) Taxes. The Company and each of its Subsidiaries have filed all federal,
state,  local and foreign tax returns  which have been  required to be filed and
paid all taxes shown  thereon  through the date hereof,  to the extent that such
taxes have become due and are not being  contested  in good faith,  except where
the failure to do so would not reasonably be expected to have a Material Adverse
Effect.  Except as otherwise  disclosed in or contemplated  by the  Registration
Statement or the Prospectus,  no tax deficiency has been determined adversely to
the Company or any of its  Subsidiaries  which has had, or would  reasonably  be
expected to have,  individually or in the aggregate,  a Material Adverse Effect.
The Company has no  knowledge of any federal,  state or other  governmental  tax
deficiency,  penalty  or  assessment  which  has been or might  be  asserted  or
threatened against it which could have a Material Adverse Effect.

     (x)  Title  to Real  and  Personal  Property.  Except  as set  forth in the
Registration Statement or the Prospectus,  the Company and its Subsidiaries have
good and valid  title in fee simple to all items of real  property  and good and
valid title to all personal property described in the Registration  Statement or


                                       11
<PAGE>

Prospectus  as being owned by them that are  material to the  businesses  of the
Company  or  such  Subsidiary,  in  each  case  free  and  clear  of all  liens,
encumbrances and claims,  except those that (i) do not materially interfere with
the use made and proposed to be made of such  property by the Company and any of
its  Subsidiaries  or (ii) would not reasonably be expected,  individually or in
the aggregate, to have a Material Adverse Effect. Any real property described in
the Registration  Statement or Prospectus as being leased by the Company and any
of its  Subsidiaries  is held by them  under  valid,  existing  and  enforceable
leases,  except those that (A) do not materially  interfere with the use made or
proposed to be made of such  property by the Company or any of its  Subsidiaries
or (B) would not be reasonably  expected,  individually or in the aggregate,  to
have a Material Adverse Effect.

     (y)  Intellectual  Property.  Except  as  set  forth  in  the  Registration
Statement or the  Prospectus,  the Company and its  Subsidiaries  own or possess
adequate enforceable rights to use all patents, patent applications,  trademarks
(both  registered  and  unregistered),  service  marks,  trade names,  trademark
registrations,  service mark  registrations,  copyrights,  licenses and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential   information,    systems   or   procedures)   (collectively,   the
"Intellectual  Property"),   necessary  for  the  conduct  of  their  respective
businesses  as conducted  as of the date  hereof,  except to the extent that the
failure  to own or possess  adequate  rights to use such  Intellectual  Property
would not,  individually  or in the aggregate,  reasonably be expected to have a
Material Adverse Effect;  except as disclosed in writing to MLV, the Company and
any of its  Subsidiaries  have not received  any written  notice of any claim of
infringement or conflict which asserted  Intellectual Property rights of others,
which infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Effect;  there are no pending,  or to the Company's
knowledge,   threatened   judicial   proceedings  or  interference   proceedings
challenging the Company's or its  Subsidiaries'  rights in or to or the validity
of the  scope  of any of the  Company's  or its  Subsidiaries'  patents,  patent
applications or proprietary  information;  no other entity or individual has any
right or claim in any of the  Company's  or its  Subsidiaries'  patents,  patent
applications  or any patent to be issued  therefrom  by virtue of any  contract,
license or other  agreement  entered into between such entity or individual  and
the Company or a Subsidiary or by any non-contractual obligation,  other than by
written  licenses  granted by the Company or a  Subsidiary;  the Company and its
Subsidiaries  have not received any written notice of any claim  challenging the
rights of the Company or a Subsidiary in or to any Intellectual  Property owned,
licensed  or  optioned by the Company or such  Subsidiary  which  claim,  if the
subject of an unfavorable decision would result in a Material Adverse Effect.

     (z) Environmental  Laws. Except as set forth in the Registration  Statement
or the Prospectus,  the Company and its  Subsidiaries (i) are in compliance with
any  and  all  applicable  federal,   state,  local  and  foreign  laws,  rules,
regulations, decisions and orders relating to the protection of human health and
safety,  the environment or hazardous or toxic substances or wastes,  pollutants
or contaminants (collectively, "Environmental Laws"); (ii) have received and are
in compliance  with all permits,  licenses or other  approvals  required of them
under applicable  Environmental  Laws to conduct their respective  businesses as
described in the Registration  Statement and the Prospectus;  and (iii) have not
received notice of any actual or potential  liability for the  investigation  or
remediation  of any  disposal or release of  hazardous  or toxic  substances  or
wastes,  pollutants or contaminants,  except, in the case of any of clauses (i),
(ii) or (iii)  above,  for any such  failure  to comply or  failure  to  receive


                                       12
<PAGE>

required  permits,   licenses,  other  approvals  or  liability  as  would  not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse Effect.

     (aa) Disclosure Controls. The Company and each of its Subsidiaries maintain
systems of internal accounting controls designed to provide reasonable assurance
that (i)  transactions are executed in accordance with  management's  general or
specific  authorizations;  (ii) transactions are recorded as necessary to permit
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting  principles  and to maintain  asset  accountability;  (iii) access to
assets is permitted  only in accordance  with  management's  general or specific
authorization;  and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.  The Company is not aware of any material weaknesses
in its internal control over financial reporting (other than as set forth in the
Prospectus).  Since the date of the latest audited  financial  statements of the
Company  included in the  Prospectus,  there has been no change in the Company's
internal control over financial  reporting that has materially  affected,  or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting (other than as set forth in the Prospectus). The Company has
established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15 and 15d-15) for the Company and  designed  such  disclosure  controls and
procedures to ensure that material  information relating to the Company and each
of its  Subsidiaries  is made known to the certifying  officers by others within
those  entities,  particularly  during the period in which the Company's  Annual
Report on Form 10-K or  Quarterly  Report on Form  10-Q,  as the case may be, is
being   prepared.   The  Company's   certifying   officers  have  evaluated  the
effectiveness  of the Company's  controls and  procedures as of a date within 90
days prior to the filing date of the Form 10-K for the fiscal year most recently
ended (such date, the "Evaluation Date"). The Company presented in its Form 10-K
for the  fiscal  year most  recently  ended the  conclusions  of the  certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no  significant  changes in the Company's  internal  controls (as such
term is  defined  in Item  307(b)  of  Regulation  S-K under the Act) or, to the
Company's  knowledge,  in other  factors  that  could  significantly  affect the
Company's  internal  controls.  To the  knowledge of the Company,  the Company's
"internal  controls  over  financial  reporting"  and  "disclosure  controls and
procedures" are effective.

     (bb)  Sarbanes-Oxley.  There is and has been no  failure on the part of the
Company or, to the knowledge of the Company,  any of the Company's  directors or
officers,  in their capacities as such, to comply with any applicable provisions
of the Sarbanes-Oxley Act and the rules and regulations  promulgated thereunder.
Each of the principal  executive officer and the principal  financial officer of
the Company (or each former principal  executive officer of the Company and each
former  principal  financial  officer of the Company as applicable) has made all
certifications  required by Sections 302 and 906 of the  Sarbanes-Oxley Act with
respect  to all  reports,  schedules,  forms,  statements  and  other  documents
required to be filed by it or furnished by it to the Commission. For purposes of
the preceding sentence,  "principal  executive officer" and "principal financial
officer" shall have the meanings given to such terms in the Sarbanes-Oxley Act.

     (cc) Finder's  Fees.  Neither the Company nor any of the  Subsidiaries  has
incurred any liability for any finder's fees,  brokerage  commissions or similar

                                       13
<PAGE>

payments in connection with the transactions herein contemplated,  except as may
otherwise exist with respect to MLV pursuant to this Agreement.

     (dd) Labor Disputes.  No labor  disturbance by or dispute with employees of
the  Company  or any of its  Subsidiaries  exists  or, to the  knowledge  of the
Company,  is  threatened  which  would  reasonably  be  expected  to result in a
Material Adverse Effect

     (ee)  Investment   Company  Act.   Neither  the  Company  nor  any  of  the
Subsidiaries  is or,  after  giving  effect  to the  offering  and  sale  of the
Placement Shares,  will be an "investment  company" or an entity "controlled" by
an "investment company," as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act").

     (ff) Operations. The operations of the Company and its Subsidiaries are and
have been conducted at all times in compliance with applicable  financial record
keeping and  reporting  requirements  of the Currency  and Foreign  Transactions
Reporting  Act of  1970,  as  amended,  the  money  laundering  statutes  of all
jurisdictions to which the Company or its  Subsidiaries  are subject,  the rules
and  regulations  thereunder  and any related or similar  rules,  regulations or
guidelines,   issued,  administered  or  enforced  by  any  governmental  agency
(collectively,  the "Money Laundering Laws"),  except as would not reasonably be
expected  to  result  in a  Material  Adverse  Effect;  and no  action,  suit or
proceeding by or before any court or governmental  agency,  authority or body or
any arbitrator  involving the Company or any of its Subsidiaries with respect to
the Money  Laundering  Laws is  pending  or, to the  knowledge  of the  Company,
threatened.

     (gg)   Off-Balance   Sheet   Arrangements.   There  are  no   transactions,
arrangements and other relationships  between and/or among the Company,  and/or,
to the knowledge of the Company,  any of its affiliates  and any  unconsolidated
entity,  including,  but not limited to, any structural finance, special purpose
or limited purpose entity (each, an "Off Balance Sheet  Transaction") that could
reasonably  be expected to affect  materially  the  Company's  liquidity  or the
availability of or requirements for its capital  resources,  including those Off
Balance  Sheet  Transactions  described  in  the  Commission's  Statement  about
Management's  Discussion  and  Analysis of Financial  Conditions  and Results of
Operations (Release Nos. 33-8056;  34-45321; FR-61), required to be described in
the Prospectus which have not been described as required.

     (hh) Underwriter  Agreements.  Except as disclosed in the Company's filings
with the  Securities  and Exchange  Commission the Company is not a party to any
agreement  with an  agent  or  underwriter  for  any  other  "at-the-market"  or
continuous equity transaction.

     (ii) ERISA. To the knowledge of the Company, each material employee benefit
plan,  within the  meaning of Section  3(3) of the  Employee  Retirement  Income
Security Act of 1974, as amended ("ERISA"), that is maintained,  administered or
contributed  to by the Company or any of its  affiliates for employees or former
employees  of the Company and any of its  Subsidiaries  has been  maintained  in
material  compliance  with its  terms  and the  requirements  of any  applicable
statutes, orders, rules and regulations,  including but not limited to ERISA and
the  Internal  Revenue  Code of 1986,  as amended (the  "Code");  no  prohibited
transaction,  within the meaning of Section 406 of ERISA or Section  4975 of the


                                       14
<PAGE>

Code,  has occurred  which would  result in a material  liability to the Company
with  respect to any such plan  excluding  transactions  effected  pursuant to a
statutory or administrative exemption; and for each such plan that is subject to
the  funding  rules of  Section  412 of the Code or  Section  302 of  ERISA,  no
"accumulated  funding deficiency" as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market value of the assets of each
such plan  (excluding  for these  purposes  accrued  but  unpaid  contributions)
exceeds the present  value of all benefits  accrued  under such plan  determined
using reasonable actuarial assumptions.

     (jj) Forward Looking Statements.  No forward-looking  statement (within the
meaning of Section 27A of the  Securities  Act and  Section 21E of the  Exchange
Act) (a "Forward Looking Statement") contained in the Registration Statement and
the  Prospectus  has been made or reaffirmed  without a reasonable  basis or has
been  disclosed  other  than in  good  faith.  The  Forward  Looking  Statements
incorporated by reference in the Registration  Statement and the Prospectus from
the Company's Annual Report on Form 10-K for the fiscal year most recently ended
(i)  except  for  any  Forward  Looking  Statement  included  in  any  financial
statements  and notes  thereto,  are within the  coverage of the safe harbor for
forward looking  statements set forth in Section 27A of the Securities Act, Rule
175(b)  under  the  Securities  Act or Rule  3b-6  under the  Exchange  Act,  as
applicable,  (ii) were made by the Company with a  reasonable  basis and in good
faith and reflect the Company's good faith commercially reasonable best estimate
of the matters  described  therein,  and (iii) have been  prepared in accordance
with Item 10 of Regulation S-K under the Act.

     (kk) Margin Rules. Neither the issuance, sale and delivery of the Placement
Shares nor the  application of the proceeds  thereof by the Company as described
in the Registration Statement and the Prospectus will violate Regulation T, U or
X of the  Board  of  Governors  of  the  Federal  Reserve  System  or any  other
regulation of such Board of Governors.

     (ll)  Insurance.  The Company and each of its  Subsidiaries  carry,  or are
covered by, insurance in such amounts and covering such risks as the Company and
each of its  Subsidiaries  reasonably  believe are  adequate  for the conduct of
their  properties  and as is customary  for companies of similar size engaged in
similar businesses in similar industries.

     (mm) No Improper  Practices.  (i) Neither the Company nor, to the Company's
knowledge,  the  Subsidiaries,  nor to the  Company's  knowledge,  any of  their
respective  executive  officers  has, in the past five years,  made any unlawful
contributions  to any  candidate  for any  political  office (or failed fully to
disclose any contribution in violation of law) or made any contribution or other
payment to any official of, or candidate for, any federal,  state, municipal, or
foreign office or other person charged with similar public or quasi-public  duty
in  violation  of any law or of the  character  required to be  disclosed in the
Prospectus;  (ii) no relationship,  direct or indirect,  exists between or among
the Company or, to the Company's  knowledge,  any Subsidiary or any affiliate of
any of them, on the one hand, and the directors,  officers and  stockholders  of
the Company or, to the Company's knowledge,  any Subsidiary,  on the other hand,
that is required  by the  Securities  Act to be  described  in the  Registration
Statement and the Prospectus  that is not so described;  (iii) no  relationship,
direct or indirect, exists between or among the Company or any Subsidiary or any
affiliate of them, on the one hand, and the directors, officers, stockholders or
directors of the Company or, to the Company's knowledge, any Subsidiary,  on the
other  hand,  that is  required  by the  rules of FINRA to be  described  in the


                                       15
<PAGE>

Registration Statement and the Prospectus that is not so described;  (iv) except
as  described  in the  Prospectus,  there are no material  outstanding  loans or
advances  or  material  guarantees  of  indebtedness  by the  Company or, to the
Company's  knowledge,  any  Subsidiary  to or for the  benefit  of any of  their
respective officers or directors or any of the members of the families of any of
them;  and (v) the Company has not  offered,  or caused any  placement  agent to
offer, Common Stock to any person with the intent to influence  unlawfully (A) a
customer or supplier of the Company or any Subsidiary to alter the customer's or
supplier's level or type of business with the Company or any Subsidiary or (B) a
trade journalist or publication to write or publish favorable  information about
the Company or any Subsidiary or any of their  respective  products or services,
and,  (vi)  neither  the  Company  nor  any  Subsidiary  nor,  to the  Company's
knowledge,  any employee or agent of the Company or any  Subsidiary has made any
payment of funds of the Company or any  Subsidiary  or received or retained  any
funds  in  violation  of  any  law,  rule  or  regulation  (including,   without
limitation,  the Foreign Corrupt Practices Act of 1977), which payment,  receipt
or  retention  of  funds  is of a  character  required  to be  disclosed  in the
Registration Statement or the Prospectus.

     (nn) Status  Under the  Securities  Act.  The Company was not and is not an
ineligible  issuer as defined in Rule 405 under the  Securities Act at the times
specified in Rules 164 and 433 under the Act in connection  with the offering of
the Placement Shares.

     (oo) No Misstatement or Omission in an Issuer Free Writing Prospectus. Each
Issuer Free Writing  Prospectus,  as of its issue date and as of each Applicable
Time (as  defined in Section 24 below),  did not,  does not and will not include
any information that conflicted, conflicts or will conflict with the information
contained  in the  Registration  Statement  or  the  Prospectus,  including  any
incorporated  document  deemed to be a part thereof that has not been superseded
or modified. The foregoing sentence does not apply to statements in or omissions
from any  Issuer  Free  Writing  Prospectus  based upon and in  conformity  with
written  information  furnished  to the  Company  by MLV  specifically  for  use
therein.

     (pp)  No  Conflicts.  Neither  the  execution  of this  Agreement,  nor the
issuance,  offering or sale of the Placement Shares, nor the consummation of any
of the transactions  contemplated herein and therein,  nor the compliance by the
Company with the terms and provisions  hereof and thereof will conflict with, or
will  result  in a  breach  of,  any of the  terms  and  provisions  of,  or has
constituted  or will  constitute  a default  under,  or has  resulted in or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of any contract or other
agreement  to which the Company may be bound or to which any of the  property or
assets of the  Company  is  subject,  except  (i) such  conflicts,  breaches  or
defaults as may have been waived and (ii) such conflicts,  breaches and defaults
that would not  reasonably be expected to have a Material  Adverse  Effect;  nor
will  such  action  result  (x)  in  any  violation  of  the  provisions  of the
organizational  or governing  documents  of the Company,  or (y) in any material
violation  of the  provisions  of any statute or any order,  rule or  regulation
applicable  to the  Company  or of any court or of any  federal,  state or other
regulatory  authority  or other  government  body having  jurisdiction  over the
Company,  except where such violation would not reasonably be expected to have a
Material Adverse Effect.


                                       16
<PAGE>

     (qq) Clinical  Studies.  The clinical,  pre-clinical  and other studies and
tests conducted by or, to the knowledge of the Company, on behalf of the Company
were, and, if still pending, are being,  conducted in accordance in all material
respects  with  all  statutes,  laws,  rules  and  regulations,   as  applicable
(including, without limitation, those administered by the FDA or by any foreign,
federal,   state  or  local  governmental  or  regulatory  authority  performing
functions  similar to those  performed  by the FDA).  Except as set forth in the
Registration Statement and Prospectus,  the Company has not received any written
notices  or other  written  correspondence  from the FDA or any  other  foreign,
federal,   state  or  local  governmental  or  regulatory  authority  performing
functions  similar  to those  performed  by the FDA  requiring  the  Company  to
terminate or suspend any ongoing clinical or pre-clinical studies or tests.

     (rr) Compliance Program.  Except as disclosed in the Registration Statement
and the  Prospectus,  the Company has  established  and administers a compliance
program  applicable  to the  Company,  to assist the Company and the  directors,
officers and employees of the Company in complying  with  applicable  regulatory
guidelines (including, without limitation, those administered by the FDA and any
other foreign,  federal,  state or local  governmental  or regulatory  authority
performing  functions  similar to those performed by the FDA); except where such
noncompliance  would not  reasonably  be  expected  to have a  Material  Adverse
Effect.

     (ss) OFAC. (i) The Company  represents that, neither the Company nor any of
its  Subsidiaries  (collectively,   the  "Entity")  or  any  director,  officer,
employee,  agent,  affiliate or  representative  of the Entity, is a government,
individual, or entity (in this paragraph (tt), "Person") that is, or is owned or
controlled by a Person that is:

               (A) the subject of any sanctions  administered or enforced by the
          U.S.  Department  of  Treasury's  Office  of  Foreign  Assets  Control
          ("OFAC"),  the United Nations Security Council ("UNSC"),  the European
          Union  ("EU"),  Her  Majesty's  Treasury  ("HMT"),  or other  relevant
          sanctions authority (collectively, "Sanctions"), nor

               (B) located, organized or resident in a country or territory that
          is  the  subject  of   Sanctions   (including,   without   limitation,
          Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria).

            (ii) The Entity represents and covenants that it will not, directly
  or indirectly, use the proceeds of the offering, or lend, contribute or
  otherwise make available such proceeds to any subsidiary, joint venture
  partner or other Person:

                  (A) to fund or facilitate any activities or business of or
            with any Person or in any country or territory that, at the time of
            such funding or facilitation, is the subject of Sanctions; or

                  (B) in any other manner that will result in a violation of
            Sanctions by any Person (including any Person participating in the
            offering, whether as underwriter, advisor, investor or otherwise).

            (iii) The Entity represents and covenants that, except as detailed
  in the Prospectus, for the past 5 years, it has not knowingly engaged in, is

                                       17
<PAGE>

  not now knowingly engaged in, and will not engage in, any dealings or
  transactions with any Person, or in any country or territory, that at the time
  of the dealing or transaction is or was the subject of Sanctions.

     (tt) Stock Transfer Taxes.  On each Settlement  Date, all stock transfer or
other  taxes  (other  than  income  taxes)  which  are  required  to be  paid in
connection  with  the sale  and  transfer  of the  Placement  Shares  to be sold
hereunder will be, or will have been,  fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been fully complied with.

      Any certificate signed by an officer of the Company and delivered to MLV
or to counsel for MLV pursuant to or in connection with this Agreement shall be
deemed to be a representation and warranty by the Company, as applicable, to MLV
as to the matters set forth therein.

   7.    Covenants of the  Company.  The Company  covenants  and agrees with MLV
that:

     (a) Registration Statement Amendments. After the date of this Agreement and
during any period in which a  Prospectus  relating  to any  Placement  Shares is
required  to be  delivered  by  MLV  under  the  Securities  Act  (including  in
circumstances where such requirement may be satisfied pursuant to Rule 172 under
the  Securities  Act), (i) the Company will notify MLV promptly of the time when
any subsequent  amendment to the  Registration  Statement,  other than documents
incorporated by reference,  has been filed with the Commission and/or has become
effective or any  subsequent  supplement to the Prospectus has been filed and of
any  request  by  the   Commission  for  any  amendment  or  supplement  to  the
Registration  Statement or Prospectus or for  additional  information,  (ii) the
Company will prepare and file with the Commission,  promptly upon MLV's request,
any amendments or supplements to the Registration  Statement or Prospectus that,
in MLV's  reasonable  opinion,  may be necessary or advisable in connection with
the  distribution of the Placement  Shares by MLV (provided,  however,  that the
failure  of MLV to make  such  request  shall not  relieve  the  Company  of any
obligation  or  liability  hereunder,  or  affect  MLV's  right  to  rely on the
representations  and  warranties  made  by the  Company  in this  Agreement  and
provided,  further,  that the only  remedy  MLV shall  have with  respect to the
failure to make such filing shall be to cease making sales under this  Agreement
until such  amendment or supplement  is filed);  (iii) the Company will not file
any amendment or supplement to the Registration Statement or Prospectus relating
to the Placement  Shares or a security  convertible  into the  Placement  Shares
unless a copy thereof has been  submitted  to MLV within a reasonable  period of
time before the filing and MLV has not objected thereto (provided, however, that
the failure of MLV to make such  objection  shall not relieve the Company of any
obligation  or  liability  hereunder,  or  affect  MLV's  right  to  rely on the
representations  and  warranties  made  by the  Company  in this  Agreement  and
provided,  further,  that the only  remedy  MLV shall  have with  respect to the
failure by the Company to obtain such  consent  shall be to cease  making  sales
under this  Agreement) and the Company will furnish to MLV at the time of filing
thereof a copy of any document that upon filing is deemed to be  incorporated by
reference  into the  Registration  Statement  or  Prospectus,  except  for those
documents available via EDGAR; and (iv) the Company will cause each amendment or
supplement  to the  Prospectus  to be filed  with  the  Commission  as  required
pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in
the case of any document to be  incorporated  therein by reference,  to be filed

                                       18
<PAGE>

with the  Commission as required  pursuant to the Exchange Act,  within the time
period  prescribed  (the  determination  to file or not  file any  amendment  or
supplement with the Commission  under this Section 7(a),  based on the Company's
reasonable  opinion or reasonable  objections,  shall be made exclusively by the
Company).

     (b) Notice of Commission Stop Orders. The Company will advise MLV, promptly
after it  receives  notice or obtains  knowledge  thereof,  of the  issuance  or
threatened  issuance  by  the  Commission  of  any  stop  order  suspending  the
effectiveness  of  the  Registration   Statement,   of  the  suspension  of  the
qualification of the Placement Shares for offering or sale in any  jurisdiction,
or of the initiation or threatening of any proceeding for any such purpose;  and
it will promptly use its commercially reasonable efforts to prevent the issuance
of any stop order or to obtain  its  withdrawal  if such a stop order  should be
issued.  The Company will advise MLV  promptly  after it receives any request by
the Commission for any amendments to the Registration Statement or any amendment
or supplements  to the  Prospectus or any Issuer Free Writing  Prospectus or for
additional  information  related to the offering of the Placement  Shares or for
additional information related to the Registration Statement,  the Prospectus or
any Issuer Free Writing Prospectus.

     (c) Delivery of Prospectus;  Subsequent Changes. During any period in which
a Prospectus relating to the Placement Shares is required to be delivered by MLV
under the  Securities  Act with  respect to the offer and sale of the  Placement
Shares,  (including in  circumstances  where such  requirement  may be satisfied
pursuant to Rule 172 under the Securities Act), the Company will comply with all
requirements  imposed  upon it by the  Securities  Act,  as from time to time in
force,  and to file on or before their  respective due dates all reports and any
definitive proxy or information  statements  required to be filed by the Company
with the Commission  pursuant to Sections 13(a),  13(c),  14, 15(d) or any other
provision  of or  under  the  Exchange  Act.  If the  Company  has  omitted  any
information from the Registration Statement pursuant to Rule 430A under the Act,
it will use its best  efforts  to  comply  with the  provisions  of and make all
requisite  filings with the Commission  pursuant to said Rule 430A and to notify
MLV  promptly of all such  filings.  If during such period any event occurs as a
result of which the Prospectus as then amended or supplemented  would include an
untrue  statement of a material fact or omit to state a material fact  necessary
to make the statements therein, in the light of the circumstances then existing,
not misleading,  or if during such period it is necessary to amend or supplement
the Registration  Statement or Prospectus to comply with the Securities Act, the
Company will  promptly  notify MLV to suspend the  offering of Placement  Shares
during  such  period and the  Company  will  promptly  amend or  supplement  the
Registration  Statement or  Prospectus  (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.

     (d) Listing of Placement Shares.  During any period in which the Prospectus
relating to the  Placement  Shares is required to be  delivered by MLV under the
Securities Act with respect to the offer and sale of the Placement  Shares,  the
Company will use its reasonable best efforts to cause the Placement Shares to be
listed on the  Exchange and to qualify the  Placement  Shares for sale under the
securities  laws of  such  jurisdictions  as MLV  reasonably  designates  and to
continue such  qualifications in effect so long as required for the distribution
of the  Placement  Shares;  provided,  however,  that the  Company  shall not be

                                       19
<PAGE>

required in connection  therewith to qualify as a foreign  corporation or dealer
in  securities  or  file  a  general  consent  to  service  of  process  in  any
jurisdiction.

     (e) Delivery of  Registration  Statement and  Prospectus.  The Company will
furnish to MLV and its  counsel (at the  expense of the  Company)  copies of the
Registration Statement,  the Prospectus (including all documents incorporated by
reference  therein)  and all  amendments  and  supplements  to the  Registration
Statement or Prospectus that are filed with the Commission  during any period in
which a Prospectus  relating to the Placement Shares is required to be delivered
under the  Securities  Act  (including  all documents  filed with the Commission
during such period that are deemed to be incorporated by reference therein),  in
each case as soon as reasonably  practicable  and in such  quantities as MLV may
from time to time  reasonably  request and, at MLV's request,  will also furnish
copies of the  Prospectus  to each  exchange  or  market  on which  sales of the
Placement Shares may be made; provided,  however,  that the Company shall not be
required  to furnish any  document  (other  than the  Prospectus)  to MLV to the
extent such document is available on EDGAR.

     (f) Earnings  Statement.  The Company will make generally  available to its
security  holders  as soon as  practicable,  but in any event not later  than 15
months  after the end of the  Company's  current  fiscal  quarter,  an  earnings
statement  covering a 12-month  period that  satisfies the provisions of Section
11(a) and Rule 158 of the Securities Act.

     (g) Use of Proceeds.  The Company will use the Net Proceeds as described in
the Prospectus in the section entitled "Use of Proceeds."

     (h) Notice of Other Sales.  Without the prior  written  consent of MLV, the
Company will not, directly or indirectly, offer to sell, sell, contract to sell,
grant any option to sell or  otherwise  dispose of any Common  Stock (other than
the  Placement   Shares  offered  pursuant  to  this  Agreement)  or  securities
convertible  into or  exchangeable  for Common Stock,  warrants or any rights to
purchase or acquire, Common Stock during the period beginning on the fifth (5th)
Trading  Day  immediately  prior to the date on which  any  Placement  Notice is
delivered to MLV hereunder and ending on the fifth (5th) Trading Day immediately
following  the final  Settlement  Date with  respect to  Placement  Shares  sold
pursuant  to such  Placement  Notice  (or,  if the  Placement  Notice  has  been
terminated or suspended  prior to the sale of all Placement  Shares covered by a
Placement  Notice,  the  date  of such  suspension  or  termination);  provided,
however,  that such  restrictions  will not be required in  connection  with the
Company's issuance or sale of (i) Common Stock, options to purchase Common Stock
or Common Stock issuable upon the exercise of options,  pursuant to any employee
or director  stock option or benefits  plan,  stock  ownership  plan or dividend
reinvestment  plan (but not  Common  Stock  subject  to a waiver to exceed  plan
limits in its dividend  reinvestment  plan) of the Company whether now in effect
or  hereafter  implemented;  (ii)  Common  Stock  issuable  upon  conversion  of
securities  or the  exercise of  warrants,  options or other rights in effect or
outstanding,  and  disclosed  in filings by the  Company  available  on EDGAR or
otherwise in writing to MLV and (iii) Common Stock,  or  securities  convertible
into or exercisable for Common Stock, offered and sold in a privately negotiated
transaction to vendors,  customers,  strategic  partners or potential  strategic
partners who are qualified  institutional buyers and not more than three persons


                                       20
<PAGE>

that are "accredited  investors" within the meaning of such term under paragraph
(a)(1),  (a)(2),  (a)(3),  (a)(7) or (a)(8) of Rule 501 under the Securities Act
and otherwise conducted in a manner so as not to be integrated with the offering
of Common Stock hereby.

     (i) Change of  Circumstances.  The  Company  will,  at any time  during the
pendency of a Placement  Notice advise MLV promptly after it shall have received
notice or obtained  knowledge  thereof,  of any  information  or fact that would
alter or affect in any  material  respect any  opinion,  certificate,  letter or
other document required to be provided to MLV pursuant to this Agreement.

     (j)  Due  Diligence  Cooperation.  The  Company  will  cooperate  with  any
reasonable  due  diligence  review  conducted by MLV or its  representatives  in
connection  with  the  transactions  contemplated  hereby,  including,   without
limitation,  providing  information  and making  available  documents and senior
corporate officers, during regular business hours and at the Company's principal
offices, as MLV may reasonably request.

     (k) Required Filings Relating to Placement of Placement Shares. The Company
agrees that on such dates as the Securities Act shall require,  the Company will
(i) file a  prospectus  supplement  with the  Commission  under  the  applicable
paragraph of Rule 424(b) under the  Securities  Act (each and every filing under
Rule 424(b),  a "Filing  Date"),  which  prospectus  supplement  will set forth,
within the relevant period, the amount of Placement Shares sold through MLV, the
Net Proceeds to the Company and the  compensation  payable by the Company to MLV
with respect to such Placement Shares, and (ii) deliver such number of copies of
each such  prospectus  supplement to each exchange or market on which such sales
were effected as may be required by the rules or regulations of such exchange or
market.

     (l) Representation  Dates;  Certificate.  On the date of this Agreement and
each time the Company:

      (i) files the Prospectus relating to the Placement Shares or amends or
      supplements (other than a prospectus supplement relating solely to an
      offering of securities other than the Placement Shares) the Registration
      Statement or the Prospectus relating to the Placement Shares by means of a
      post-effective amendment, sticker, or supplement but not by means of
      incorporation of documents by reference into the Registration Statement or
      the Prospectus relating to the Placement Shares;

      (ii) files an annual report on Form 10-K under the Exchange Act (including
      any Form 10-K/A containing amended financial information or a material
      amendment to the previously filed Form 10-K);

      (iii) files its quarterly reports on Form 10-Q under the Exchange Act; or

      (iv) files a current report on Form 8-K containing amended financial
      information (other than information "furnished" pursuant to Items 2.02 or
      7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form
      8-K relating to the reclassification of certain properties as discontinued
      operations in accordance with Statement of Financial Accounting Standards
      No. 144) under the Exchange Act;

                                       21
<PAGE>

      (Each date of filing of one or more of the documents referred to in
      clauses (i) through (iv) shall be a "Representation Date.")

the Company shall furnish MLV (but in the case of clause (iv) above only if MLV
reasonably determines that the information contained in such Form 8-K is
material) with a certificate, in the form attached hereto as Exhibit 7(l). The
requirement to provide a certificate under this Section 7(l) shall be waived for
any Representation Date occurring at a time at which no Placement Notice is
pending, which waiver shall continue until the earlier to occur of the date the
Company delivers a Placement Notice hereunder (which for such calendar quarter
shall be considered a Representation Date) and the next occurring Representation
Date; provided, however, that such waiver shall not apply for any Representation
Date on which the Company files its annual report on Form 10-K. Notwithstanding
the foregoing, if the Company subsequently decides to sell Placement Shares
following a Representation Date when the Company relied on such waiver and did
not provide MLV with a certificate under this Section 7(l), then before the
Company delivers the Placement Notice or MLV sells any Placement Shares, the
Company shall provide MLV with a certificate, in the form attached hereto as
Exhibit 7(l), dated the date of the Placement Notice.

     (m) Legal  Opinion.  No later than (1) ten (10) Trading Days after the date
of this Agreement and (2) five (5) Trading Days after each  Representation  Date
following  the date of this  Agreement  with  respect  to which the  Company  is
obligated to deliver a certificate  in the form attached  hereto as Exhibit 7(l)
for which no waiver is  applicable,  the Company  shall cause to be furnished to
MLV written opinions of Hart & Trinen LLP ("Company Counsel"),  or other counsel
satisfactory to MLV, in form and substance  satisfactory to MLV and its counsel,
which  collectively  address the legal opinions and negative  assurance requests
set forth in Exhibit 7(m), modified, as necessary, to relate to the Registration
Statement and the Prospectus as then amended or supplemented, and with customary
assumptions and exceptions;  provided, however, the Company shall be required to
furnish  to MLV no  more  than  one  opinion  hereunder  per  calendar  quarter;
provided, further, that in lieu of such opinions for subsequent periodic filings
under the  Exchange  Act,  counsel may  furnish  MLV with a letter (a  "Reliance
Letter") to the effect that MLV may rely on a prior opinion delivered under this
Section  7(m) to the same  extent as if it were  dated  the date of such  letter
(except that  statements  in such prior opinion shall be deemed to relate to the
Registration  Statement and the Prospectus as amended or  supplemented as of the
date of the Reliance Letter).

     (n) Comfort Letter.  No later than (1) ten (10) Trading Days after the date
of this Agreement and (2) five (5) Trading Days after each  Representation  Date
following the date of this Agreement,  other than pursuant to Section 7(l)(iii),
with respect to which the Company is obligated to deliver a  certificate  in the
form  attached  hereto as Exhibit  7(l) for which no waiver is  applicable,  the
Company  shall cause its  independent  accountants  to furnish MLV letters  (the
"Comfort Letters"),  dated the date the Comfort Letter is delivered, which shall
meet  the  requirements  set  forth  in this  Section  7(n);  provided,  that if
requested  by MLV, the Company  shall cause a Comfort  Letter to be furnished to
MLV within  ten (10)  Trading  Days of the date of  occurrence  of any  material
transaction  or event,  including the  restatement  of the  Company's  financial
statements.  The Comfort Letter from the Company's independent accountants shall


                                       22
<PAGE>

be in a form and substance  satisfactory to MLV, (i) confirming that they are an
independent  public accounting firm within the meaning of the Securities Act and
the PCAOB,  (ii) stating,  as of such date, the conclusions and findings of such
firm with respect to the  financial  information  and other  matters  ordinarily
covered by  accountants'  "comfort  letters" to  underwriters in connection with
registered  public  offerings  (the  first such  letter,  the  "Initial  Comfort
Letter") and (iii) updating the Initial Comfort Letter with any information that
would have been included in the Initial Comfort Letter had it been given on such
date and modified as necessary to relate to the  Registration  Statement and the
Prospectus, as amended and supplemented to the date of such letter.

     (o) Market  Activities.  The Company will not, directly or indirectly,  (i)
take any action  designed  to cause or result in, or that  constitutes  or might
reasonably be expected to constitute,  the  stabilization or manipulation of the
price of any security of the Company to facilitate  the sale or resale of Common
Stock or (ii) sell, bid for, or purchase Common Stock in violation of Regulation
M, or pay anyone any  compensation  for  soliciting  purchases of the  Placement
Shares  other than MLV.  Further,  the  Company  shall not request or accept any
drawdown under its equity line of credit.

     (p) Investment  Company Act. The Company will conduct its affairs in such a
manner so as to  reasonably  ensure that neither it nor any of its  Subsidiaries
will be or become,  at any time prior to the termination of this  Agreement,  an
"investment company," as such term is defined in the Investment Company Act.

     (q) No Offer to Sell. Other than any Prospectus  approved in advance by the
Company and MLV in its capacity as agent hereunder,  neither MLV nor the Company
(including its agents and  representatives,  other than MLV in their capacity as
such) will  make,  use,  prepare,  authorize,  approve  or refer to any  written
communication (as defined in Rule 405 under the Act),  required to be filed with
the Commission, that constitutes an offer to sell or solicitation of an offer to
buy Placement Shares hereunder.

     (r) Sarbanes-Oxley  Act. The Company and the Subsidiaries will maintain and
keep accurate books and records  reflecting  their assets and maintain  internal
accounting  controls  in a  manner  designed  to  provide  reasonable  assurance
regarding  the  reliability  of  financial  reporting  and  the  preparation  of
financial statements for external purposes in accordance with generally accepted
accounting  principles  and including  those  policies and  procedures  that (i)
pertain to the maintenance of records that in reasonable  detail  accurately and
fairly reflect the  transactions  and dispositions of the assets of the Company,
(ii) provide reasonable assurance that transactions are recorded as necessary to
permit the  preparation of the Company's  consolidated  financial  statements in
accordance with generally accepted  accounting  principals,  (iii) that receipts
and  expenditures  of the  Company  are  being  made  only  in  accordance  with
management's  and the  Company's  directors'  authorization,  and  (iv)  provide
reasonable  assurance  regarding  prevention or timely detection of unauthorized
acquisition,  use or  disposition  of the  Company's  assets  that  could have a
material effect on its financial  statements.  The Company and the  Subsidiaries
will maintain such controls and other procedures, including, without limitation,
those  required  by  Sections  302 and 906 of the  Sarbanes-Oxley  Act,  and the
applicable  regulations  thereunder that are designed to ensure that information
required to be  disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded,  processed,  summarized and reported, within
the time  periods  specified  in the  Commission's  rules and forms,  including,


                                       23
<PAGE>

without limitation,  controls and procedures designed to ensure that information
required to be  disclosed by the Company in the reports that it files or submits
under  the  Exchange  Act is  accumulated  and  communicated  to  the  Company's
management,  including its principal  executive officer and principal  financial
officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure and to ensure that material  information
relating  to the  Company  or the  Subsidiaries  is made known to them by others
within those  entities,  particularly  during the period in which such  periodic
reports are being prepared.

   8.    Representations  and Covenants of MLV. MLV  represents,  warrants,  and
covenants that:

     (a) It is duly registered as a broker-dealer  under FINRA, the Exchange Act
and the applicable statutes and regulations of each state in which the Placement
Shares will be offered and sold,  except such states in which MLV is exempt from
registration or such registration is not otherwise required. MLV shall continue,
for the term of this Agreement,  to be duly registered as a broker-dealer  under
FINRA,  the Exchange Act and the  applicable  statutes and  regulations  of each
state in which the Placement Shares will be offered and sold, except such states
in which MLV is exempt from  registration or such  registration is not otherwise
required, during the term of this Agreement.

     (b) Neither it, nor any of its affiliates or subsidiaries,  shall engage in
(i) any  short  sale of any  security  of the  Company  or (ii)  any sale of any
security of the Company  that MLV does not own or any sale which is  consummated
by the delivery of a security of the Company borrowed by, or for the account of,
MLV.

     (c) Neither it, nor any of its affiliates or  subsidiaries,  engages in any
proprietary  trading or trading for MLV's (or its affiliates' or  subsidiaries')
own account.

   9.   Payment of Expenses.

     (a) The Company will pay all expenses  incident to the  performance  of its
obligations  under  this  Agreement,  including  (i)  the  preparation,  filing,
including any fees required by the Commission,  and printing of the Registration
Statement  (including financial statements and exhibits) as originally filed and
of each amendment and supplement  thereto and each Free Writing  Prospectus,  in
such number as MLV shall deem  necessary,  (ii) the printing and delivery to MLV
of this Agreement and such other documents as may be required in connection with
the offering,  purchase,  sale,  issuance or delivery of the  Placement  Shares,
(iii) the preparation,  issuance and delivery of the  certificates,  if any, for
the Placement Shares to MLV, including any stock or other transfer taxes and any
capital  duties,  stamp duties or other  duties or taxes  payable upon the sale,
issuance  or  delivery  of the  Placement  Shares  to MLV,  (iv)  the  fees  and
disbursements of the counsel, accountants and other advisors to the Company, (v)
the fees and expenses of the transfer  agent and registrar for the Common Stock,
(vi) the filing fees incident to any review by FINRA of the terms of the sale of
the  Placement  Shares,  and (vii) the fees and expenses  incurred in connection
with the listing of the Placement Shares on the Exchange.

     (b) If Placement  Shares  having  aggregate  proceeds of 1/2 of the Maximum
Amount or more have not been offered and sold under this Agreement by January 1,
2012 (or such earlier date at which the Company terminates this Agreement),  and

                                       24
<PAGE>

provided this Agreement has not been terminated  pursuant to Section 13(c),  the
Company shall reimburse MLV for its reasonable out-of-pocket expenses, including
the  reasonable  fees and  disbursements  of a counsel for MLV incurred by it in
connection with the transactions  contemplated by this Agreement.  The amount of
expenses reimbursable shall be calculated by multiplying a fraction, whereby the
numerator is one-half of the Maximum Amount less the number of Placement  Shares
sold by January 1, 2012, and the  denominator is one-half of the Maximum Amount,
times the total amount of out-of-pocket expenses.

     (c)  If  this  Agreement  is  terminated  by  MLV in  accordance  with  the
provisions of Section 13(a)(1)  hereof,  the Company shall reimburse MLV for all
of its out-of-pocket  expenses,  including the reasonable fees and disbursements
of counsel for MLV (less any amounts paid under clause (b) above).

   10.   Conditions to MLV's Obligations.  The obligations of MLV hereunder with
respect  to  a  Placement  will  be  subject  to  the  continuing  accuracy  and
completeness of the  representations  and warranties made by the Company herein,
to the due  performance  by the  Company of its  obligations  hereunder,  to the
completion by MLV of a due diligence review satisfactory to it in its reasonable
judgment,  and to the  continuing  satisfaction  (or  waiver  by MLV in its sole
discretion) of the following additional conditions:

     (a) Registration Statement Effective. The Registration Statement shall have
become  effective  and shall be  available  for the (i) resale of all  Placement
Shares  issued  to MLV and not yet  sold by MLV and (ii)  sale of all  Placement
Shares contemplated to be issued by any Placement Notice.

     (b) No Material  Notices.  None of the following events shall have occurred
and be  continuing:  (i) receipt by the  Company of any  request for  additional
information  from the  Commission  or any other  federal  or state  governmental
authority during the period of effectiveness of the Registration Statement,  the
response to which would require any post-effective  amendments or supplements to
the  Registration  Statement  or  the  Prospectus;  (ii)  the  issuance  by  the
Commission  or any other  federal or state  governmental  authority  of any stop
order  suspending  the  effectiveness  of  the  Registration  Statement  or  the
initiation of any proceedings for that purpose;  (iii) receipt by the Company of
any  notification  with  respect  to  the  suspension  of the  qualification  or
exemption  from  qualification  of any of the  Placement  Shares for sale in any
jurisdiction  or the  initiation  or  threatening  of any  proceeding  for  such
purpose;  or (iv) the occurrence of any event that makes any material  statement
made in the  Registration  Statement or the Prospectus or any material  document
incorporated  or deemed to be  incorporated  therein by reference  untrue in any
material  respect or that requires the making of any changes in the Registration
Statement,  the Prospectus or documents so that, in the case of the Registration
Statement,  it will not contain any  materially  untrue  statement of a material
fact or omit to state  any  material  fact  required  to be  stated  therein  or
necessary to make the statements therein not misleading and, that in the case of
the  Prospectus,  it will not  contain  any  materially  untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made, not misleading.

                                       25
<PAGE>

     (c) No  Misstatement or Material  Omission.  MLV shall not have advised the
Company that the  Registration  Statement  or  Prospectus,  or any  amendment or
supplement  thereto,  contains  an  untrue  statement  of  fact  that  in  MLV's
reasonable  opinion is material,  or omits to state a fact that in MLV's opinion
is material  and is required to be stated  therein or is  necessary  to make the
statements therein not misleading.

     (d)  Material  Changes.  Except  as  contemplated  in  the  Prospectus,  or
disclosed in the Company's  reports filed with the  Commission,  there shall not
have  been  any  material  adverse  change,  on a  consolidated  basis,  in  the
authorized  capital stock of the Company or any Material Adverse Effect,  or any
development  that could  reasonably  be  expected  to cause a  Material  Adverse
Effect,  or a downgrading in or withdrawal of the rating  assigned to any of the
Company's  securities  (other  than  asset  backed  securities)  by  any  rating
organization  or a public  announcement by any rating  organization  that it has
under  surveillance  or review  its  rating of any of the  Company's  securities
(other than asset backed  securities),  the effect of which,  in the case of any
such action by a rating organization described above, in the reasonable judgment
of MLV  (without  relieving  the Company of any  obligation  or liability it may
otherwise  have), is so material as to make it  impracticable  or inadvisable to
proceed with the offering of the Placement Shares on the terms and in the manner
contemplated in the Prospectus.

     (e) Legal Opinion.  MLV shall have received the opinions of Company Counsel
required to be  delivered  pursuant  Section 7(m) on or before the date on which
such delivery of such opinions are required pursuant to Section 7(m).

     (f) Comfort Letter.  MLV shall have received the Comfort Letter required to
be delivered  pursuant Section 7(n) on or before the date on which such delivery
of such letter is required pursuant to Section 7(n).

     (g)  Representation  Certificate.  MLV shall have received the  certificate
required to be delivered pursuant to Section 7(l) on or before the date on which
delivery of such certificate is required pursuant to Section 7(l).

     (h) No  Suspension.  Trading  in the  Common  Stock  shall  not  have  been
suspended on the Exchange and the Common Stock shall not have been delisted from
the Exchange.

     (i) Other  Materials.  On each date on which the  Company  is  required  to
deliver a certificate pursuant to Section 7(l), the Company shall have furnished
to MLV such appropriate further  information,  certificates and documents as MLV
may  reasonably  request.  All such  opinions,  certificates,  letters and other
documents  will be in compliance  with the provisions  hereof.  The Company will
furnish MLV with such conformed copies of such opinions,  certificates,  letters
and other documents as MLV shall reasonably request.

     (j) Securities  Act Filings Made. All filings with the Commission  required
by Rule 424 under the Securities Act to have been filed prior to the issuance of
any Placement  Notice  hereunder shall have been made within the applicable time
period prescribed for such filing by Rule 424.

                                       26
<PAGE>

     (k)  Approval  for  Listing.  The  Placement  Shares shall either have been
approved for listing on the Exchange, subject only to notice of issuance, or the
Company shall have filed an application  for listing of the Placement  Shares on
the Exchange at, or prior to, the issuance of any Placement Notice.

     (l) No  Termination  Event.  There shall not have  occurred  any event that
would permit MLV to terminate this Agreement pursuant to Section 13(a).

   11.   Indemnification and Contribution.

     (a) Company  Indemnification.  The  Company  agrees to  indemnify  and hold
harmless MLV, its partners, members, directors,  officers,  employees and agents
and each  person,  if any,  who controls MLV within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act as follows:

          (i) against  any and all loss,  liability,  claim,  damage and expense
     whatsoever, as incurred, joint or several, arising out of or based upon any
     untrue  statement or alleged untrue  statement of a material fact contained
     in the Registration  Statement (or any amendment thereto),  or the omission
     or alleged  omission  therefrom  of a material  fact  required to be stated
     therein or  necessary to make the  statements  therein not  misleading,  or
     arising  out of any untrue  statement  or  alleged  untrue  statement  of a
     material fact included in any related Issuer Free Writing Prospectus or the
     Prospectus  (or any  amendment or supplement  thereto),  or the omission or
     alleged  omission  therefrom of a material fact  necessary in order to make
     the statements  therein, in the light of the circumstances under which they
     were made, not misleading;

          (ii) against any and all loss,  liability,  claim,  damage and expense
     whatsoever,  as incurred,  joint or several, to the extent of the aggregate
     amount  paid in  settlement  of any  litigation,  or any  investigation  or
     proceeding by any governmental agency or body,  commenced or threatened (or
     of any claim  whatsoever) based upon any such untrue statement or omission,
     or any such alleged untrue statement or omission; provided that (subject to
     Section  11(d)  below) any such  settlement  is  effected  with the written
     consent of the Company,  which consent shall not unreasonably be delayed or
     withheld; and

          (iii) against any and all expense  whatsoever,  as incurred (including
     the  fees  and   disbursements   of   counsel),   reasonably   incurred  in
     investigating,  preparing  or  defending  against  any  litigation,  or any
     investigation or proceeding by any governmental  agency or body,  commenced
     or  threatened,  (or any  claim  whatsoever)  based  upon any  such  untrue
     statement or omission, or any such alleged untrue statement or omission, to
     the extent that any such expense is not paid under (i) or (ii) above,

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made solely in
reliance upon and in conformity with written information furnished to the
Company by MLV expressly for use in the Registration Statement (or any amendment
thereto), or in any related Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto).

                                       27
<PAGE>

     (b) MLV  Indemnification.  MLV agrees to  indemnify  and hold  harmless the
Company  and its  directors  and each  officer  of the  Company  who  signed the
Registration  Statement,  and each person,  if any, who (i) controls the Company
within the  meaning of  Section  15 of the  Securities  Act or Section 20 of the
Exchange  Act or (ii) is  controlled  by or is  under  common  control  with the
Company against any and all loss, liability, claim, damage and expense described
in the indemnity contained in Section 11(c), as incurred,  but only with respect
to untrue  statements or omissions,  or alleged untrue  statements or omissions,
made in the Registration Statement (or any amendments thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
information  relating  to MLV and  furnished  to the  Company  in writing by MLV
expressly for use therein.

     (c)  Procedure.  Any  party  that  proposes  to  assert  the  right  to  be
indemnified  under this  Section 11 will,  promptly  after  receipt of notice of
commencement  of any action against such party in respect of which a claim is to
be made against an  indemnifying  party or parties under this Section 11, notify
each such  indemnifying  party of the  commencement of such action,  enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the  indemnifying  party from (i) any  liability  that it might
have to any indemnified  party otherwise than under this Section 11 and (ii) any
liability  that  it may  have  to any  indemnified  party  under  the  foregoing
provision of this Section 11 unless,  and only to the extent that, such omission
results in the forfeiture of substantive  rights or defenses by the indemnifying
party.  If any such  action is  brought  against  any  indemnified  party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to  participate  in and, to the extent that it elects by  delivering
written notice to the indemnified  party promptly after receiving  notice of the
commencement  of the action from the indemnified  party,  jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably  satisfactory to the indemnified party, and after notice from
the  indemnifying  party to the indemnified  party of its election to assume the
defense,  the indemnifying party will not be liable to the indemnified party for
any  legal or other  expenses  except  as  provided  below  and  except  for the
reasonable  costs  of  investigation   incurred  by  the  indemnified  party  in
connection with the defense. The indemnified party will have the right to employ
its own counsel in any such action, but the fees,  expenses and other charges of
such  counsel  will be at the expense of such  indemnified  party unless (1) the
employment of counsel by the indemnified party has been authorized in writing by
the  indemnifying  party,  (2) the  indemnified  party has reasonably  concluded
(based on advice of counsel) that there may be legal defenses available to it or
other  indemnified  parties  that are  different  from or in  addition  to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based on advice of counsel to the  indemnified  party) between the  indemnified
party and the indemnifying  party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying  party has not in fact employed counsel to assume
the defense of such action within a reasonable  time after  receiving  notice of
the  commencement  of the action,  in each of which cases the  reasonable  fees,
disbursements  and  other  charges  of  counsel  will be at the  expense  of the
indemnifying  party or parties.  It is understood that the indemnifying party or
parties shall not, in connection  with any proceeding or related  proceedings in
the same  jurisdiction,  be liable for the reasonable  fees,  disbursements  and
other  charges of more than one  separate  firm  admitted  to  practice  in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees,  disbursements  and other charges will be  reimbursed by the  indemnifying

                                       28
<PAGE>

party promptly after the indemnifying  party receives a written invoice relating
to fees,  disbursements and other charges in reasonable  detail. An indemnifying
party will not,  in any event,  be liable  for any  settlement  of any action or
claim effected without its written consent. No indemnifying party shall, without
the prior written  consent of each  indemnified  party,  settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,  action
or proceeding  relating to the matters  contemplated by this Section 11 (whether
or not any  indemnified  party  is a party  thereto),  unless  such  settlement,
compromise or consent (1) includes an unconditional  release of each indemnified
party  from  all  liability  arising  out  of  such  litigation,  investigation,
proceeding  or claim and (2) does not include a statement  as to or an admission
of fault,  culpability  or a failure  to act by or on behalf of any  indemnified
party.

     (d) Settlement  Without Consent if Failure to Reimburse.  If an indemnified
party shall have requested an  indemnifying  party to reimburse the  indemnified
party for reasonable fees and expenses of counsel for which it is entitled to be
reimbursed under this Section 11, such  indemnifying  party agrees that it shall
be liable for any  settlement of the nature  contemplated  by Section  11(a)(ii)
effected without its written consent if (1) such settlement is entered into more
than 45 days after receipt by such indemnifying  party of the aforesaid request,
(2) such  indemnifying  party  shall have  received  notice of the terms of such
settlement at least 30 days prior to such settlement  being entered into and (3)
such  indemnifying  party shall not have  reimbursed such  indemnified  party in
accordance with such request prior to the date of such settlement.

     (e) Contribution.  In order to provide for just and equitable  contribution
in  circumstances  in which the  indemnification  provided for in the  foregoing
paragraphs of this Section 11 is applicable in accordance with its terms but for
any reason is held to be  unavailable  from the Company or MLV,  the Company and
MLV will  contribute  to the total  losses,  claims,  liabilities,  expenses and
damages  (including  any  investigative,  legal  and other  expenses  reasonably
incurred in connection  with,  and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted,  but after deducting any  contribution
received by the Company from persons other than MLV, such as persons who control
the Company  within the meaning of the Securities  Act,  officers of the Company
who signed the Registration Statement and directors of the Company, who also may
be liable for  contribution) to which the Company and MLV may be subject in such
proportion as shall be appropriate to reflect the relative  benefits received by
the Company on the one hand and MLV on the other  hand.  The  relative  benefits
received  by the  Company  on the one hand and MLV on the  other  hand  shall be
deemed to be in the same  proportion  as the total net proceeds from the sale of
the Placement Shares (before deducting expenses) received by the Company bear to
the total compensation received by MLV (before deducting expenses) from the sale
of Placement  Shares on behalf of the Company.  If, but only if, the  allocation
provided by the  foregoing  sentence is not  permitted  by  applicable  law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative  fault of the Company,  on the one hand, and MLV, on the other
hand,  with respect to the  statements  or omission  that resulted in such loss,
claim,  liability,  expense or damage, or action in respect thereof,  as well as
any other relevant equitable  considerations with respect to such offering. Such
relative fault shall be determined by reference to, among other things,  whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or MLV,  the  intent of the  parties  and their  relative  knowledge,  access to
information  and  opportunity  to correct or prevent such statement or omission.
The  Company  and  MLV  agree  that  it  would  not be  just  and  equitable  if
contributions  pursuant to this Section  11(e) were to be determined by pro rata
allocation or by any other method of allocation  that does not take into account
the equitable  considerations  referred to herein. The amount paid or payable by
an indemnified  party as a result of the loss,  claim,  liability,  expense,  or
damage,  or action in respect  thereof,  referred to above in this Section 11(e)
shall be deemed to include,  for the purpose of this Section 11(e), any legal or

                                       29
<PAGE>

other expenses  reasonably incurred by such indemnified party in connection with
investigating  or  defending  any such action or claim to the extent  consistent
with Section 11(c)  hereof.  Notwithstanding  the  foregoing  provisions of this
Section  11(e),  MLV shall not be required to contribute any amount in excess of
the  commissions  received by it under this Agreement and no person found guilty
of  fraudulent  misrepresentation  (within the  meaning of Section  11(f) of the
Securities  Act) will be  entitled to  contribution  from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 11(e),
any person  who  controls a party to this  Agreement  within the  meaning of the
Securities Act, and any officers,  directors,  partners,  employees or agents of
MLV, will have the same rights to contribution  as that party,  and each officer
and director of the Company who signed the Registration  Statement will have the
same  rights  to  contribution  as the  Company,  subject  in  each  case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of  commencement  of any action  against such party in respect of which a
claim for  contribution  may be made under this Section  11(e),  will notify any
such party or parties from whom contribution may be sought,  but the omission to
so notify will not relieve that party or parties from whom  contribution  may be
sought from any other  obligation  it or they may have under this Section  11(e)
except to the extent that the  failure to so notify such other party  materially
prejudiced  the   substantive   rights  or  defenses  of  the  party  from  whom
contribution  is sought.  Except for a settlement  entered into  pursuant to the
last sentence of Section 11(c) hereof,  no party will be liable for contribution
with respect to any action or claim settled  without its written consent if such
consent is required pursuant to Section 11(c) hereof.

   12.    Representations and Agreements to Survive Delivery.  The indemnity and
contribution  agreements  contained  in  Section  11 of this  Agreement  and all
representations  and warranties of the Company or MLV herein or in  certificates
delivered  pursuant  hereto  shall  survive,   as  of  their  respective  dates,
regardless of (i) any investigation made by or on behalf of MLV, any controlling
persons,  or the  Company (or any of their  respective  officers,  directors  or
controlling  persons),  (ii) delivery and acceptance of the Placement Shares and
payment therefor or (iii) any termination of this Agreement.

   13.   Termination.

     (a)  MLV may  terminate  this  Agreement,  by  notice  to the  Company,  as
hereinafter  specified  at any time (1) if there  has  been,  since  the time of
execution of this  Agreement or since the date as of which  information is given
in the  Prospectus,  any  change,  or  any  development  or  event  involving  a
prospective  change,  in  the  condition,  financial  or  otherwise,  or in  the
business,  properties,  earnings,  results of  operations  or  prospects  of the
Company  and its  Subsidiaries  considered  as one  enterprise,  whether  or not
arising  in the  ordinary  course  of  business,  which  individually  or in the
aggregate,  in the sole  judgment  of MLV is  material  and adverse and makes it
impractical  or  inadvisable  to  market  the  Placement  Shares  or to  enforce


                                       30
<PAGE>

contracts  for the sale of the Placement  Shares,  (2) if there has occurred any
material  adverse  change in the  financial  markets in the United States or the
international  financial  markets,  any outbreak of  hostilities  or  escalation
thereof or other  calamity  or crisis or any change or  development  involving a
prospective change in national or international political, financial or economic
conditions,  in each  case the  effect  of  which is such as to make it,  in the
judgment of MLV,  impracticable or inadvisable to market the Placement Shares or
to enforce contracts for the sale of the Placement Shares, (3) if trading in the
Common Stock has been suspended or limited by the Commission or the Exchange, or
if trading  generally on the Exchange has been suspended or limited,  or minimum
prices for trading have been fixed on the  Exchange,  (4) if any  suspension  of
trading  of  any   securities   of  the  Company  on  any  exchange  or  in  the
over-the-counter  market shall have occurred and be  continuing,  (5) if a major
disruption of securities  settlements or clearance services in the United States
shall have occurred and be continuing,  or (6) if a banking  moratorium has been
declared by either U.S.  Federal or New York  authorities.  Any such termination
shall be  without  liability  of any party to any other  party  except  that the
provisions of Section 9  (Expenses),  Section 11  (Indemnification),  Section 12
(Survival of Representations), Section 18 (Applicable Law; Waiver of Jury Trial)
and Section 19 (Consent to  Jurisdiction)  hereof shall remain in full force and
effect  notwithstanding  such  termination.  If MLV  elects  to  terminate  this
Agreement  as provided in this  Section  13(a),  MLV shall  provide the required
notice as specified in Section 14 (Notices).

     (b) The  Company  shall have the right,  by giving ten (10) days  notice as
hereinafter  specified to terminate this Agreement in its sole discretion at any
time after the date of this  Agreement.  Any such  termination  shall be without
liability of any party to any other party except (i) with respect to any pending
sale through MLV for the Company,  the obligations of the Company,  including in
respect  of  compensation  of  MLV,  shall  remain  in  full  force  and  effect
notwithstanding  such  termination  and (ii) that the  provisions  of Section 9,
Section 11,  Section 12,  Section 18 and Section 19 hereof  shall remain in full
force and effect notwithstanding such termination.

     (c) MLV shall have the right, by giving ten (10) days notice as hereinafter
specified,  to terminate this Agreement in its sole discretion at any time after
the date of this Agreement.  Any such termination  shall be without liability of
any party to any other  party  except,  (i) with  respect  to any  pending  sale
through MLV for the Company, the obligations of MLV, including the remittance of
any sale proceeds received by MLV to the Company, shall remain in full force and
effect notwithstanding such termination, and (ii) that the provisions of Section
9, Section 11, Section 12, Section 18 and Section 19 hereof shall remain in full
force and effect notwithstanding such termination.

     (d) Unless earlier  terminated  pursuant to this Section 13, this Agreement
shall automatically terminate upon the issuance and sale of all of the Placement
Shares  through MLV on the terms and subject to the  conditions set forth herein
except that the provisions of Section 9(a),  Section 11, Section 11, Section 12,
Section  18 and  Section  19  hereof  shall  remain  in full  force  and  effect
notwithstanding such termination.

     (e) This Agreement shall remain in full force and effect unless  terminated
pursuant to  Sections  13(a),  (b),  (c),  or (d) above or  otherwise  by mutual
agreement of the parties; provided, however, that any such termination by mutual
agreement shall in all cases be deemed to provide that Section 9(a), Section 11,
Section  12,  Section 18 and  Section 19 shall  remain in full force and effect.
Upon termination of this Agreement,  the Company shall not have any liability to
MLVs for any  discount,  commission  or other  compensation  with respect to any
Shares not otherwise sold by MLVs under this Agreement.

                                       31
<PAGE>

     (f) Any  termination  of this  Agreement  shall  be  effective  on the date
specified  in  such  notice  of  termination;   provided,   however,  that  such
termination  shall not be  effective  until the close of business on the date of
receipt  of such  notice  by MLV or the  Company,  as the case  may be.  If such
termination  shall occur prior to the Settlement  Date for any sale of Placement
Shares,  such Placement Shares shall settle in accordance with the provisions of
this Agreement.

   14.   Notices. All notices or other  communications  required or permitted to
be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing,  unless otherwise  specified,  and if sent to MLV, shall be
delivered to:

            McNicoll, Lewis & Vlak LLC
            420 Lexington Avenue
            New York, NY  10017
            Attention:  General Counsel
            Telephone:  (212) 542-5870
            Facsimile:    (212) 317-1515

with a copy to:

            LeClairRyan LLP
            830 Third Avenue
            New York, New York 10022
            Attention:  James T. Seery
            Telephone: (973) 491-3315
            Facsimile: (973) 491-3415

and if to the Company, shall be delivered to:

            CEL-SCI Corporation
            8229 Boone Blvd. #802
                  Vienna, Virginia 22182
            Attention: Geert Kersten
            Telephone:  (703) 506-9460
            Facsimile:  (703) 506-9471

with a copy to:

            Hart & Trinen, LLP
            1624 Washington St.
            Denver, CO 80203
            Attention:  William T. Hart
            Telephone:  (303)839-0061
            Facsimile:  (303) 839-5414

     Each party to this Agreement may change such address for notices by sending
to the  parties  to this  Agreement  written  notice of a new  address  for such
purpose.  Each such notice or other communication shall be deemed given (i) when


                                       32
<PAGE>

delivered personally or by verifiable  facsimile  transmission (with an original
to follow) on or before 4:30 p.m.,  New York City time, on a Business Day or, if
such day is not a Business Day, on the next succeeding Business Day, (ii) on the
next  Business Day after timely  delivery to a  nationally-recognized  overnight
courier and (iii) on the Business Day actually received if deposited in the U.S.
mail (certified or registered mail, return receipt requested,  postage prepaid).
For purposes of this  Agreement,  "Business Day" shall mean any day on which the
Exchange and commercial banks in the City of New York are open for business.

      An electronic communication ("Electronic Notice") shall be deemed written
notice for purposes of this Section 14 if sent to the electronic mail address
specified by the receiving party under separate cover. Electronic Notice shall
be deemed received at the time the party sending Electronic Notice receives
confirmation of receipt by the receiving party. Any party receiving Electronic
Notice may request and shall be entitled to receive the notice on paper, in a
nonelectronic form ("Nonelectronic Notice") which shall be sent to the
requesting party within ten (10) days of receipt of the written request for
Nonelectronic Notice.

   15.    Successors and Assigns.  This Agreement  shall inure to the benefit of
and be binding upon the Company and MLV and their respective  successors and the
affiliates,  controlling persons,  officers and directors referred to in Section
11 hereof. References to any of the parties contained in this Agreement shall be
deemed to include the successors and permitted assigns of such party. Nothing in
this Agreement,  express or implied,  is intended to confer upon any party other
than the parties hereto or their respective successors and permitted assigns any
rights,  remedies,  obligations  or  liabilities  under  or by  reason  of  this
Agreement,  except as expressly  provided in this  Agreement.  Neither party may
assign its rights or obligations  under this Agreement without the prior written
consent of the other party.

   16.    Adjustments for Stock Splits.  The parties  acknowledge and agree that
all share-related  numbers contained in this Agreement shall be adjusted to take
into account any share  consolidation,  stock split,  stock dividend,  corporate
domestication or similar event effected with respect to the Placement Shares.

   17.   Entire Agreement;  Amendment;  Severability.  This Agreement (including
all schedules and exhibits attached hereto and Placement Notices issued pursuant
hereto)  constitutes  the entire  agreement and  supersedes  all other prior and
contemporaneous  agreements and  undertakings,  both written and oral, among the
parties hereto with regard to the subject matter hereof.  Neither this Agreement
nor any term  hereof  may be amended  except  pursuant  to a written  instrument
executed  by the  Company  and  MLV.  In the  event  that any one or more of the
provisions contained herein, or the application thereof in any circumstance,  is
held  invalid,  illegal or  unenforceable  as  written  by a court of  competent
jurisdiction,  then such  provision  shall be given full force and effect to the
fullest  possible  extent  that it is  valid,  legal  and  enforceable,  and the
remainder  of the terms and  provisions  herein  shall be  construed  as if such
invalid,  illegal or unenforceable  term or provision was not contained  herein,
but only to the extent that giving effect to such provision and the remainder of
the terms and  provisions  hereof shall be in accordance  with the intent of the
parties as reflected in this Agreement.

                                       33
<PAGE>

   18.   GOVERNING LAW AND TIME;  WAIVER OF JURY TRIAL.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT  REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.  SPECIFIED  TIMES OF DAY
REFER TO NEW YORK CITY TIME.  THE  COMPANY  HEREBY  IRREVOCABLY  WAIVES,  TO THE
FULLEST EXTENT  PERMITTED BY APPLICABLE  LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL  PROCEEDING  ARISING OUT OF OR RELATING  TO THIS  AGREEMENT  OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

   19.  CONSENT TO JURISDICTION.  EACH PARTY HEREBY IRREVOCABLY  SUBMITS TO THE
NON-EXCLUSIVE  JURISDICTION  OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR  IN  CONNECTION  WITH  ANY  TRANSACTION   CONTEMPLATED   HEREBY,  AND  HEREBY
IRREVOCABLY  WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING,
ANY CLAIM  THAT IT IS NOT  PERSONALLY  SUBJECT TO THE  JURISDICTION  OF ANY SUCH
COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT  FORUM
OR THAT THE VENUE OF SUCH SUIT,  ACTION OR  PROCEEDING  IS IMPROPER.  EACH PARTY
HEREBY  IRREVOCABLY  WAIVES PERSONAL  SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  BY MAILING A COPY THEREOF
(CERTIFIED OR REGISTERED  MAIL,  RETURN RECEIPT  REQUESTED) TO SUCH PARTY AT THE
ADDRESS IN EFFECT FOR  NOTICES TO IT UNDER THIS  AGREEMENT  AND AGREES THAT SUCH
SERVICE  SHALL  CONSTITUTE  GOOD AND  SUFFICIENT  SERVICE OF PROCESS  AND NOTICE
THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

   20.    Use of  Information.  MLV  may  not  use  any  information  gained  in
connection  with  this  Agreement  and  the  transactions  contemplated  by this
Agreement,  including  due  diligence,  to advise  any  party  with  respect  to
transactions not expressly approved by the Company.

   21.  Counterparts.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same  instrument.  Delivery of an executed
Agreement by one party to the other may be made by facsimile transmission.

   22.   Effect of Headings.

      The section and Exhibit headings herein are for convenience only and shall
not affect the construction hereof.

                                       34
<PAGE>

   23.   Permitted Free Writing Prospectuses.

      The Company represents, warrants and agrees that, unless it obtains the
prior consent of MLV, and MLV represents, warrants and agrees that, unless it
obtains the prior consent of the Company, it has not made and will not make any
offer relating to the Placement Shares that would constitute an Issuer Free
Writing Prospectus, or that would otherwise constitute a "free writing
prospectus," as defined in Rule 405, required to be filed with the Commission.
Any such free writing prospectus consented to by MLV or by the Company, as the
case may be, is hereinafter referred to as a "Permitted Free Writing
Prospectus." The Company represents and warrants that it has treated and agrees
that it will treat each Permitted Free Writing Prospectus as an "issuer free
writing prospectus," as defined in Rule 433, and has complied and will comply
with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record keeping.

   24.   Absence of Fiduciary Relationship.

     The Company acknowledges and agrees that:

     (a) MLV is acting solely as agent in connection with the public offering of
the Placement  Shares and in connection  with each  transaction  contemplated by
this Agreement and the process leading to such transactions, and no fiduciary or
advisory  relationship between the Company or any of its respective  affiliates,
stockholders  (or other  equity  holders),  creditors  or employees or any other
party,  on the one hand, and MLV, on the other hand, has been or will be created
in  respect  of  any  of  the  transactions   contemplated  by  this  Agreement,
irrespective  of whether or not MLV has  advised or is  advising  the Company on
other  matters,  and MLV has no  obligation  to the Company  with respect to the
transactions contemplated by this Agreement except the obligations expressly set
forth in this Agreement;

     (b) it is capable of evaluating  and  understanding,  and  understands  and
accepts,  the terms,  risks and conditions of the  transactions  contemplated by
this Agreement;

     (c) MLV has not provided any legal,  accounting,  regulatory  or tax advice
with  respect to the  transactions  contemplated  by this  Agreement  and it has
consulted its own legal,  accounting,  regulatory and tax advisors to the extent
it has deemed appropriate;

     (d) it is aware that MLV and its affiliates are engaged in a broad range of
transactions  which may involve  interests that differ from those of the Company
and MLV has no  obligation to disclose such  interests and  transactions  to the
Company  by  virtue  of  any  fiduciary,  advisory  or  agency  relationship  or
otherwise; and

     (e) it waives,  to the fullest  extent  permitted by law, any claims it may
have  against MLV for breach of  fiduciary  duty or alleged  breach of fiduciary
duty in connection  with the sale of Placement  Shares under this  Agreement and
agrees that MLV shall not have any  liability  (whether  direct or indirect,  in
contract,  tort or otherwise) to it in respect of such a fiduciary duty claim or
to any person  asserting a fiduciary  duty claim on its behalf or in right of it
or the Company,  employees  or  creditors  of Company,  other than in respect of
MLV's obligations  under this Agreement and to keep information  provided by the
Company  to MLV and MLV's  counsel  confidential  to the  extent  not  otherwise
publicly-available.

                                       35
<PAGE>

   25.   Definitions.

      As used in this Agreement, the following terms have the respective
meanings set forth below:

      "Applicable Time" means (i) each Representation Date and (ii) the time of
each sale of any Placement Shares pursuant to this Agreement.

      "Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433, relating to the Placement Shares that (1)
is required to be filed with the Commission by the Company, (2) is a "road show"
that is a "written communication" within the meaning of Rule 433(d)(8)(i)
whether or not required to be filed with the Commission, or (3) is exempt from
filing pursuant to Rule 433(d)(5)(i) because it contains a description of the
Placement Shares or of the offering that does not reflect the final terms, in
each case in the form filed or required to be filed with the Commission or, if
not required to be filed, in the form retained in the Company's records pursuant
to Rule 433(g) under the Securities Act Regulations.

      "Rule 163," "Rule 164," "Rule 172," "Rule 405," "Rule 415," "Rule 424,"
"Rule 424(b)," "Rule 430B," and "Rule 433" refer to such rules under the
Securities Act Regulations.

      All references in this Agreement to financial statements and schedules and
other information that is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information that is incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.

      All references in this Agreement to the Registration Statement, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to EDGAR; all
references in this Agreement to any Issuer Free Writing Prospectus (other than
any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not
required to be filed with the Commission) shall be deemed to include the copy
thereof filed with the Commission pursuant to EDGAR; and all references in this
Agreement to "supplements" to the Prospectus shall include, without limitation,
any supplements, "wrappers" or similar materials prepared in connection with any
offering, sale or private placement of any Placement Shares by MLV outside of
the United States.


                                       36
<PAGE>

      If the foregoing correctly sets forth the understanding between the
Company and MLV, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and MLV.

                                    Very truly yours,

                                    CEL-SCI CORPORATION



                                    By: /s/ Geert Kersten
                                        --------------------------------------
                                        Name:  Geert Kersten
                                        Title:    Chief Executive Officer




                                    ACCEPTED as of the date first-above
                                    written:

                                    MCNICOLL, LEWIS & VLAK LLC


                                    By: /s/ Patrice McNicoll
                                        ---------------------------------------
                                        Name:  Patrice McNicoll
                                        Title:    Chief Executive Officer






                                       37
<PAGE>


SCHEDULE 1



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

                            FORM OF PLACEMENT NOTICE

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



      From:       CEL-SCI Corporation

      To:         McNicoll, Lewis & Vlak LLC
                  Attention: Patrice McNicoll

      Subject:    At Market Issuance--Placement Notice

      Gentlemen:

     Pursuant to the terms and  subject to the  conditions  contained  in the At
Market  Issuance  Sales  Agreement  between  CEL-SCI  Corporation,   a  Delaware
corporation  (the  "Company")  and  McNicoll,  Lewis & Vlak LLC  ("MLV"),  dated
December 10, 2010, the Company hereby  requests that MLV sell up to ____________
of the Company's Common Stock, no par value per share, at a minimum market price
of $_______ per share,  during the time period beginning [month,  day, time] and
ending [month, day, time].







<PAGE>




SCHEDULE 2



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

                                  Compensation

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

      The Company shall pay to MLV in cash, upon each sale of Placement Shares
pursuant to this Agreement, an amount equal to the greater of (a) 3.0% of the
gross proceeds from each sale of Placement Shares or (b) $0.025 per Placement
Share sold hereunder; provided, that, in no event shall MLV receive greater than
8.0% of gross proceeds.







<PAGE>


SCHEDULE 3

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

                                 Notice Parties

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



      The Company

            Geert Kersten

            Patricia Prichep



      MLV

            Randy Billhardt

            Ryan Loforte

            Patrice McNicoll





<PAGE>


SCHEDULE 4



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

                                  Subsidiaries

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



                            Viral Technologies, Inc.



<PAGE>


                                  EXHIBIT 7(l)

                     Form of Representation Date Certificate


     This Officers Certificate (this "Certificate") is executed and delivered in
connection  with Section 7(l) of the At Market  Issuance  Sales  Agreement  (the
"Agreement"),  dated  December  10,  2010,  and  entered  into  between  CEL-SCI
Corporation  (the  "Company")  and McNicoll,  Lewis & Vlak LLC. All  capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Agreement.

      The undersigned, a duly appointed and authorized officer of the Company,
having made reasonable inquiries to establish the accuracy of the statements
below and having been authorized by the Company to execute this certificate on
behalf of the Company, hereby certifies as follows:

      1. As of the date of this Certificate, (i) the Registration Statement does
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading and (ii) neither the Registration Statement nor the
Prospectus contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (iii) no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading for (i) and (ii) to be true.

      2. Each of the representations and warranties of the Company contained in
the Agreement were, when originally made, and are, as of the date of this
Certificate, true and correct in all material respects.

      3. Except as waived by MLV in writing, each of the covenants required to
be performed by the Company in the Agreement on or prior to the date of the
Agreement, this Representation Date, and each such other date prior to the date
hereof as set forth in the Agreement, has been duly, timely and fully performed
in all material respects and each condition required to be complied with by the
Company on or prior to the date of the Agreement, this Representation Date, and
each such other date prior to the date hereof as set forth in the Agreement has
been duly, timely and fully complied with in all material respects.

      4. Subsequent to the date of the most recent financial statements in the
Prospectus, and except as described in the Prospectus, including Incorporated
Documents, there has been no material adverse change.

      5. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued, and no proceedings for that
purpose have been instituted or are pending or threatened by any securities or
other governmental authority (including, without limitation, the Commission).

                                       38
<PAGE>

      6. No order suspending the effectiveness of the Registration Statement or
the qualification or registration of the Placement Shares under the securities
or Blue Sky laws of any jurisdiction are in effect and no proceeding for such
purpose is pending before, or threatened, to the Company's knowledge or in
writing by, any securities or other governmental authority (including, without
limitation, the Commission).

      The undersigned has executed this Officer's Certificate as of the date
first written above.

                                        CEL-SCI CORPORATION

                                        By:

                                        Name:  _______________________________

                                        Title: _______________________________






<PAGE>


                                    EXHIBIT 7(m)

1. The Company is a corporation duly formed and validly existing in good
standing under the laws of the State of Colorado.

2. The Company has the corporate power to own its properties and engage in its
business as described in the Registration Statement and the Prospectus
Supplement.

3. The issuance and sale by the Company of the Placement Shares will not violate
the Company's articles of incorporation or by-laws.

4. The execution and delivery by the Company of, and the performance by the
Company of its obligations under the Sales Agreement has been duly authorized by
all necessary corporate action on the part of the Company.

5. No authorization or consent of or notice to any governmental authority is
required in connection with the issue and sale of the Placement Shares.

6. There are no pre-emptive or other rights to subscribe for or purchase, or any
restriction on the voting or transfer of, the common shares of the Company
pursuant to the Company's certificate and articles of incorporation or by-laws,
except for the provision in the Company's by-laws that provides that the Company
may refuse to register a transfer of all or part of the shares held by a
shareholder where that shareholder has defaulted in the payment of any interest
and/or principal due in respect of any indebtedness owing by such shareholder to
the Company when same becomes due and payable and continues in such default for
a period of 30 days after notice in writing thereof has been given by the
Company to such shareholder.

7. The Placement Shares have been validly created and allotted and, when issued
to the Purchasers in accordance with the terms of the Sales Agreement, will be
validly issued and outstanding as fully paid and non-assessable common shares of
the Company.

8. The Company is duly qualified to do business as a foreign corporation in each
jurisdiction in which the Company owns any material property or conducts any
material business or in which the failure to be qualified as a foreign
corporation would have a Material Adverse Effect.

                                       39
<PAGE>

9. The issuance and sale by the Company of the Placement Shares will not (i)
breach or result in a default by the Company under any agreement included as an
exhibit to the Registration Statement or as an exhibit to any report filed by
the Company with the Commission pursuant to the Securities and Exchange Act 1934
(the "Exchange Act") and expressly incorporated by reference into the
Registration Statement; or (ii) violate any applicable U.S. statute, law, rule
or regulation, or any decree, judgment or order specifically naming the Company
(other than state and foreign securities or blue sky laws of the various
jurisdictions in which the Placement Shares may be offered) except in the case
of clause (ii) for such violations that individually or in the aggregate could
not be reasonably expected to have a Material Adverse Effect.

10. To our knowledge, there is no indenture, contract, lease, mortgage, deed of
trust, note agreement, loan or other agreement or instrument of a character
required to be filed as an exhibit to the Registration Statement, which is not
filed as required by the Securities Act and the rules and regulations
thereunder.

11. No approval, authorization or other action by or filing with any
governmental authority is required on the part of the Company to permit the
Company to issue and sell the Placement Shares, except for such as have been
duly obtained or made or as may be required under the Securities Act, the
Exchange Act, blue sky laws of any state, the NYSE Amex rules, or the rules and
regulations of the Financial Industry Regulatory Authority ("FINRA").

12. To our knowledge, except as described in the Registration Statement, the
Prospectus Supplement or the Incorporated Documents, including the exhibits
filed in connection therewith, there are no persons with registration rights or
other similar rights to have any securities of the Company registered pursuant
to the Registration Statement.

13. The Registration Statement, Base Prospectus and the Prospectus Supplement
(other than the financial statements and schedules and other financial data
included or incorporated by reference therein, as to which we express no
opinion), as of their respective effective and issue dates, complied as to form
in all material respects with the requirements of the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder.

14. Each Transaction Document executed by the Company constitutes the valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms.

15. The Company is not subject to regulation as an "investment company" under
the Investment Company Act of 1940, as amended.

16. [Intellectual Property/FDA opinions - subject to due diligence review]

      The opinion of counsel will be accompanied by a negative assurances
letter.