<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>form8kitem101ex10sssmay-17.txt
<DESCRIPTION>EXHIBIT 10 (SSS) SECURITIES PURCHASE AGREEMENT
<TEXT>




                                 EXHIBIT 10(sss)




<PAGE>

                          SECURITIES PURCHASE AGREEMENT

     This Securities  Purchase Agreement (this "Agreement") is dated as of April
30, 2017, between CEL-SCI  Corporation,  a Colorado corporation (the "Company"),
and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a "Purchaser" and collectively the "Purchasers").

     WHEREAS,  subject to the terms and  conditions  set forth in this Agreement
and pursuant to (i) an effective registration statement under the Securities Act
of  1933,  as  amended  (the  "Securities  Act")  as to the  Shares  and (ii) an
exemption from the registration  requirements of Section 5 of the Securities Act
contained in Section  4(a)(2)  thereof and/or  Regulation D thereunder as to the
Warrants,  the  Company  desires to issue and sell to each  Purchaser,  and each
Purchaser,  severally  and not  jointly,  desires to purchase  from the Company,
securities of the Company as more fully described in this Agreement.

     NOW, THEREFORE,  IN CONSIDERATION of the mutual covenants contained in this
Agreement,  and for  other  good and  valuable  consideration  the  receipt  and
adequacy of which are hereby acknowledged,  the Company and each Purchaser agree
as follows:

                                   ARTICLE I.
                                   DEFINITIONS

     1.1  Definitions.  In  addition  to the  terms  defined  elsewhere  in this
Agreement,  for all purposes of this  Agreement,  the  following  terms have the
meanings set forth in this Section 1.1:


          "Acquiring  Person"  shall have the  meaning  ascribed to such term in
     Section 4.5.

          "Action"  shall  have the  meaning  ascribed  to such term in  Section
     3.1(j).

          "Affiliate" means any Person that,  directly or indirectly through one
     or more  intermediaries,  controls or is  controlled  by or is under common
     control  with a Person as such terms are used in and  construed  under Rule
     405 under the Securities Act.

          "Board of Directors" means the board of directors of the Company.

          "Business Day" means any day except any Saturday,  any Sunday, any day
     which is a federal  legal  holiday in the United States or any day on which
     banking institutions in the State of New York are authorized or required by
     law or other governmental action to close.

          "Closing" means the closing of the purchase and sale of the Securities
     pursuant to Section 2.1.

          "Closing  Date" means the Trading Day on which all of the  Transaction
     Documents  have been  executed  and  delivered  by the  applicable  parties
     thereto, and all conditions precedent to (i) the Purchasers' obligations to

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     pay the Subscription  Amount and (ii) the Company's  obligations to deliver
     the  Securities,  in each case,  have been  satisfied or waived,  but in no
     event later than the third Trading Day following the date hereof.

          "Commission"   means  the  United  States   Securities   and  Exchange
     Commission.

          "Common Stock" means the common stock of the Company,  par value $0.01
     per share, and any other class of securities into which such securities may
     hereafter be reclassified or changed.

          "Common Stock  Equivalents" means any securities of the Company or the
     Subsidiaries  which would entitle the holder thereof to acquire at any time
     Common Stock,  including,  without limitation,  any debt,  preferred stock,
     right, option,  warrant or other instrument that is at any time convertible
     into or exercisable or exchangeable  for, or otherwise  entitles the holder
     thereof to receive, Common Stock.

          "Company Counsel" means Hart & Hart, LLC.

          "Disclosure  Schedules" means the Disclosure  Schedules of the Company
     delivered concurrently herewith.

          "Evaluation  Date"  shall have the  meaning  ascribed  to such term in
     Section 3.1(s).

          "Exchange Act" means the Securities  Exchange Act of 1934, as amended,
     and the rules and regulations promulgated thereunder.

          "Exempt  Issuance" means the issuance of (a) shares of Common Stock or
     options to employees,  officers or directors of the Company pursuant to any
     stock or option plan duly  adopted for such  purpose,  by a majority of the
     non-employee members of the Board of Directors or a majority of the members
     of a committee of non-employee  directors  established for such purpose for
     services  rendered to the  Company,  (b)  securities  upon the  exercise or
     exchange of or conversion of any Securities  issued  hereunder and/or other
     securities  exercisable or exchangeable  for or convertible  into shares of
     Common Stock issued and outstanding on the date of this Agreement, provided
     that such securities have not been amended since the date of this Agreement
     to  increase  the number of such  securities  or to decrease  the  exercise
     price, exchange price or conversion price of such securities (other than in
     connection with stock splits or combinations) or to extend the term of such
     securities, and (c) securities issued pursuant to acquisitions or strategic
     transactions  approved by a majority of the disinterested  directors of the
     Company,  provided that any such issuance  shall only be to a Person (or to
     the   equityholders   of  a  Person)   which  is,  itself  or  through  its
     subsidiaries,  an  operating  company or an owner of an asset in a business
     synergistic  with the  business  of the  Company  and shall  provide to the
     Company  additional  benefits in addition to the  investment of funds,  but
     shall not include a transaction in which the Company is issuing  securities
     primarily for the purpose of raising  capital or to an entity whose primary
     business is investing in securities.

          "FCPA" means the Foreign Corrupt Practices Act of 1977, as amended.

          "FDA" shall have the meaning ascribed to such term in Section 3.1(hh).

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          "FDCA"  shall  have  the  meaning  ascribed  to such  term in  Section
     3.1(hh).

          "GAAP" shall have the meaning ascribed to such term in Section 3.1(h).

          "Indebtedness" shall have the meaning ascribed to such term in Section
     3.1(aa).

          "Intellectual Property Rights" shall have the meaning ascribed to such
     term in Section 3.1(p).

          "Legend Removal Date" shall have the meaning  ascribed to such term in
     Section 4.1(c).

          "Liens" means a lien, charge, pledge, security interest,  encumbrance,
     right of first refusal, preemptive right or other restriction.

          "Material Adverse Effect" shall have the meaning assigned to such term
     in Section 3.1(b).

          "Material  Permits"  shall have the  meaning  ascribed to such term in
     Section 3.1(n).

          "Per Share Purchase  Price" equals  $0.115,  subject to adjustment for
     reverse and forward stock splits,  stock dividends,  stock combinations and
     other similar transactions of the Common Stock that occur after the date of
     this Agreement.

          "Person"  means an  individual  or  corporation,  partnership,  trust,
     incorporated  or  unincorporated   association,   joint  venture,   limited
     liability  company,  joint  stock  company,  government  (or an  agency  or
     subdivision thereof) or other entity of any kind.

          "Pharmaceutical  Product" shall have the meaning ascribed to such term
     in Section 3.1(hh).

          "Placement Agent" means Rodman & Renshaw, a unit of H.C.  Wainwright &
     Co., LLC.

          "Proceeding" means an action, claim, suit, investigation or proceeding
     (including,  without  limitation,  an  informal  investigation  or  partial
     proceeding, such as a deposition), whether commenced or threatened.

          "Prospectus"  means the final  prospectus  filed for the  Registration
     Statement.

          "Prospectus   Supplement"  means  the  supplement  to  the  Prospectus
     complying  with Rule  424(b) of the  Securities  Act that is filed with the
     Commission and delivered by the Company to each Purchaser at the Closing.

          "Purchaser  Party"  shall have the  meaning  ascribed  to such term in
     Section 4.8.

          "Registration  Statement" means the effective  registration  statement
     with Commission file No.  333-205444 which registers the sale of the Shares
     to the Purchasers.

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          "Required  Approvals"  shall have the meaning ascribed to such term in
     Section 3.1(e).

          "Rule 144" means Rule 144  promulgated by the  Commission  pursuant to
     the Securities Act, as such Rule may be amended or interpreted from time to
     time, or any similar rule or regulation hereafter adopted by the Commission
     having substantially the same purpose and effect as such Rule.

          "Rule 424" means Rule 424  promulgated by the  Commission  pursuant to
     the Securities Act, as such Rule may be amended or interpreted from time to
     time, or any similar rule or regulation hereafter adopted by the Commission
     having substantially the same purpose and effect as such Rule.

          "SEC Reports" shall have the meaning  ascribed to such term in Section
     3.1(h).

          "Securities" means the Shares, the Warrants and the Warrant Shares.

          "Securities Act" means the Securities Act of 1933, as amended, and the
     rules and regulations promulgated thereunder.

          "Shares"  means the shares of Common  Stock issued or issuable to each
     Purchaser pursuant to this Agreement.

          "Short  Sales"  means  all  "short  sales" as  defined  in Rule 200 of
     Regulation  SHO under the  Exchange Act (but shall not be deemed to include
     the location and/or reservation of borrowable shares of Common Stock).

          "Subscription  Amount"  means,  as to each  Purchaser,  the  aggregate
     amount to be paid for Shares and Warrants purchased  hereunder as specified
     below such  Purchaser's  name on the signature  page of this  Agreement and
     next to the heading "Subscription  Amount," in United States dollars and in
     immediately available funds.

          "Subsidiary"  means any  subsidiary of the Company as set forth in the
     SEC  Reports,  and shall,  where  applicable,  also  include  any direct or
     indirect  subsidiary  of the  Company  formed  or  acquired  after the date
     hereof.

          "Trading  Day" means a day on which the  principal  Trading  Market is
     open for trading.

          "Trading  Market" means any of the  following  markets or exchanges on
     which the  Common  Stock is listed or  quoted  for  trading  on the date in
     question:  the NYSE MKT,  the Nasdaq  Capital  Market,  the  Nasdaq  Global
     Market,  the Nasdaq Global Select  Market,  the New York Stock Exchange (or
     any successors to any of the foregoing).

          "Transaction  Documents"  means this  Agreement,  the Warrants and any
     other documents or agreements  executed in connection with the transactions
     contemplated hereunder.

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          "Transfer  Agent"  means  Computershare  Trust  Company,  the  current
     transfer  agent of the Company,  and any  successor  transfer  agent of the
     Company.

          "Warrants"  means  collectively,  the Common Stock  purchase  warrants
     delivered  to the  Purchasers  at the Closing in  accordance  with  Section
     2.2(a) hereof,  which  Warrants shall be exercisable  commencing six months
     after the date of issuance and have a term of exercise  equal to 5.5 years,
     in the form of Exhibit A-1, attached hereto.

          "Warrant  Shares"  means  the  shares of Common  Stock  issuable  upon
     exercise of the Warrants.

                                  ARTICLE II.
                                PURCHASE AND SALE

     2.1  Closing.  On the  Closing  Date,  upon the  terms and  subject  to the
conditions  set forth herein,  substantially  concurrent  with the execution and
delivery of this  Agreement by the parties  hereto,  the Company agrees to sell,
and the  Purchasers,  severally  and not jointly,  agree to  purchase,  up to an
aggregate  of  approximately   $1.51  million  of  Shares  and  Warrants.   Each
Purchaser's  Subscription  Amount  as set  forth on the  signature  page  hereto
executed by such Purchaser shall be made available for "Delivery Versus Payment"
settlement  with the Company.  The Company shall  deliver to each  Purchaser its
respective  Shares and a Warrant as determined  pursuant to Section 2.2(a),  and
the  Company  and each  Purchaser  shall  deliver  the other  items set forth in
Section 2.2 deliverable at the Closing.  Upon  satisfaction of the covenants and
conditions  set forth in Sections  2.2 and 2.3,  the Closing  shall occur at the
offices of Company  Counsel or such other location as the parties shall mutually
agree.  Unless  otherwise  directed by the  Placement  Agent,  settlement of the
Shares shall occur via "Delivery  Versus Payment"  ("DVP") (i.e., on the Closing
Date, the Company shall issue the Shares registered in the Purchasers' names and
addresses and released by the Transfer  Agent  directly to the account(s) at the
Placement Agent identified by each Purchaser;  upon receipt of such Shares,  the
Placement  Agent  shall  promptly  electronically  deliver  such  Shares  to the
applicable Purchaser,  and payment therefor shall be made by the Placement Agent
(or its clearing firm) by wire transfer to the Company).

     2.2 Deliveries.

          (a) On or prior to the  Closing  Date,  the Company  shall  deliver or
     cause to be delivered to each Purchaser the following:

               (i) this Agreement duly executed by the Company;

               (ii) a legal  opinion  of  Company  Counsel,  including,  without
          limitation,  a negative  assurance  letter,  in the form and substance
          reasonably satisfactory to the Purchasers;

               (iii)  subject to the last sentence of Section 2.1, a copy of the
          irrevocable   instructions  to  the  Transfer  Agent  instructing  the
          Transfer  Agent to deliver on an  expedited  basis via The  Depository
          Trust  Company  Deposit or  Withdrawal  at Custodian  system  ("DWAC")

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          Shares equal to such  Purchaser's  Subscription  Amount divided by the
          Per Share Purchase Price, registered in the name of such Purchaser;

               (iv) a Series KK Warrant registered in the name of such Purchaser
          to purchase  up to a number of shares of Common  Stock equal to 75% of
          such  Purchaser's  Shares,  with an  exercise  price equal to $0.1214,
          subject to adjustment therein (such Series KK Warrant  certificate may
          be delivered within three Trading Days of the Closing Date); and

               (v)  the  Prospectus  and  Prospectus  Supplement  (which  may be
          delivered in accordance with Rule 172 under the Securities Act).

          (b) On or prior to the Closing Date,  each Purchaser  shall deliver or
     cause to be delivered to the Company, as applicable, the following:

               (i) this Agreement duly executed by such Purchaser; and

               (ii) such Purchaser's  Subscription  Amount,  which shall be made
          available for "Delivery Versus Payment" settlement with the Company.

     2.3 Closing Conditions.


          (a) The  obligations of the Company  hereunder in connection  with the
     Closing are subject to the following conditions being met:

               (i) the  accuracy  in all  material  respects  (or, to the extent
          representations or warranties are qualified by materiality or Material
          Adverse Effect,  in all respects) when made and on the Closing Date of
          the representations and warranties of the Purchasers  contained herein
          (unless  as of a  specific  date  therein  in which case they shall be
          accurate as of such date);

               (ii) all obligations,  covenants and agreements of each Purchaser
          required to be  performed  at or prior to the Closing  Date shall have
          been performed; and

               (iii) the  delivery by each  Purchaser  of the items set forth in
          Section 2.2(b) of this Agreement.

          (b)  The  respective   obligations  of  the  Purchasers  hereunder  in
     connection with the Closing are subject to the following  conditions  being
     met:

               (i) the  accuracy  in all  material  respects  (or, to the extent
          representations or warranties are qualified by materiality or Material
          Adverse Effect,  in all respects) when made and on the Closing Date of
          the  representations  and warranties of the Company  contained  herein
          (unless  as of a  specific  date  therein  in which case they shall be
          accurate as of such date);

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               (ii) all  obligations,  covenants  and  agreements of the Company
          required to be  performed  at or prior to the Closing  Date shall have
          been performed;

               (iii)  the  delivery  by the  Company  of the  items set forth in
          Section 2.2(a) of this Agreement;

               (iv)  there  shall  have been no  Material  Adverse  Effect  with
          respect to the Company since the date hereof; and

               (v) from the date  hereof to the  Closing  Date,  trading  in the
          Common Stock shall not have been  suspended by the  Commission  or the
          Company's  principal  Trading  Market,  and,  at any time prior to the
          Closing Date, trading in securities generally as reported by Bloomberg
          L.P. shall not have been suspended or limited, or minimum prices shall
          not have been  established on securities  whose trades are reported by
          such service, or on any Trading Market, nor shall a banking moratorium
          have been  declared  either  by the  United  States or New York  State
          authorities  nor shall there have  occurred any  material  outbreak or
          escalation of hostilities or other national or international  calamity
          of such magnitude in its effect on, or any material adverse change in,
          any financial  market which, in each case, in the reasonable  judgment
          of such Purchaser,  makes it  impracticable or inadvisable to purchase
          the Securities at the Closing.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:

          (a) Subsidiaries.  All of the direct and indirect  subsidiaries of the
     Company are as disclosed in the SEC Reports. Except as set forth in the SEC
     Reports, the Company owns, directly or indirectly, all of the capital stock
     or other equity  interests of each  Subsidiary free and clear of any Liens,
     and all of the  issued  and  outstanding  shares of  capital  stock of each
     Subsidiary are validly issued and are fully paid,  non-assessable  and free
     of preemptive and similar rights to subscribe for or purchase securities.

          (b)  Organization  and  Qualification.  The  Company  and  each of the
     Subsidiaries is an entity duly incorporated or otherwise organized, validly
     existing and in good  standing  under the laws of the  jurisdiction  of its
     incorporation  or  organization,  with the requisite power and authority to
     own and use its  properties  and  assets  and to carry on its  business  as
     currently conducted. Neither the Company nor any Subsidiary is in violation
     nor  default of any of the  provisions  of its  respective  certificate  or
     articles  of  incorporation,  bylaws  or other  organizational  or  charter
     documents.  Each of the Company and the  Subsidiaries  is duly qualified to
     conduct business and is in good standing as a foreign  corporation or other
     entity in each  jurisdiction in which the nature of the business  conducted
     or property owned by it makes such  qualification  necessary,  except where

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     the failure to be so  qualified  or in good  standing,  as the case may be,
     could not have or  reasonably  be  expected  to result  in:  (i) a material
     adverse  effect  on  the  legality,   validity  or  enforceability  of  any
     Transaction  Document,  (ii) a material  adverse  effect on the  results of
     operations,   assets,  business,   prospects  or  condition  (financial  or
     otherwise) of the Company and the Subsidiaries,  taken as a whole, or (iii)
     a  material  adverse  effect on the  Company's  ability  to  perform in any
     material  respect on a timely basis its  obligations  under any Transaction
     Document (any of (i), (ii) or (iii),  a "Material  Adverse  Effect") and no
     Proceeding has been instituted in any such jurisdiction revoking,  limiting
     or  curtailing  or  seeking  to  revoke,  limit or  curtail  such power and
     authority or qualification.

          (c)  Authorization;   Enforcement.   The  Company  has  the  requisite
     corporate  power  and  authority  to  enter  into  and  to  consummate  the
     transactions   contemplated  by  this  Agreement  and  each  of  the  other
     Transaction  Documents and otherwise to carry out its obligations hereunder
     and  thereunder.  The execution and delivery of this  Agreement and each of
     the other  Transaction  Documents by the Company and the consummation by it
     of  the  transactions  contemplated  hereby  and  thereby  have  been  duly
     authorized  by all  necessary  action  on the  part of the  Company  and no
     further  action is required by the  Company,  the Board of Directors or the
     Company's  stockholders  in connection  herewith or therewith other than in
     connection  with the  Required  Approvals.  This  Agreement  and each other
     Transaction Document to which it is a party has been (or upon delivery will
     have been) duly executed by the Company and,  when  delivered in accordance
     with the terms hereof and thereof,  will  constitute  the valid and binding
     obligation  of the Company  enforceable  against the Company in  accordance
     with its terms,  except (i) as limited by general equitable  principles and
     applicable  bankruptcy,  insolvency,  reorganization,  moratorium and other
     laws of general  application  affecting  enforcement  of creditors'  rights
     generally, (ii) as limited by laws relating to the availability of specific
     performance,  injunctive  relief  or other  equitable  remedies  and  (iii)
     insofar as  indemnification  and contribution  provisions may be limited by
     applicable law.

          (d) No  Conflicts.  The  execution,  delivery and  performance  by the
     Company of this Agreement and the other  Transaction  Documents to which it
     is a party, the issuance and sale of the Securities and the consummation by
     it of the transactions  contemplated hereby and thereby do not and will not
     (i)  conflict  with  or  violate  any  provision  of the  Company's  or any
     Subsidiary's  certificate  or  articles of  incorporation,  bylaws or other
     organizational or charter documents, or (ii) conflict with, or constitute a
     default (or an event that with notice or lapse of time or both would become
     a  default)  under,  result  in the  creation  of any Lien  upon any of the
     properties  or assets of the Company or any  Subsidiary,  or give to others
     any rights of termination, amendment, acceleration or cancellation (with or
     without notice, lapse of time or both) of, any agreement,  credit facility,
     debt or other  instrument  (evidencing  a  Company  or  Subsidiary  debt or
     otherwise) or other understanding to which the Company or any Subsidiary is
     a party or by which any property or asset of the Company or any  Subsidiary
     is bound or affected, or (iii) subject to the Required Approvals,  conflict
     with  or  result  in a  violation  of any  law,  rule,  regulation,  order,
     judgment,   injunction,  decree  or  other  restriction  of  any  court  or
     governmental  authority  to which the  Company or a  Subsidiary  is subject
     (including federal and state securities laws and regulations),  or by which

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     any property or asset of the Company or a Subsidiary  is bound or affected;
     except in the case of each of  clauses  (ii) and  (iii),  such as could not
     have or reasonably be expected to result in a Material Adverse Effect.

          (e) Filings,  Consents and  Approvals.  The Company is not required to
     obtain any consent, waiver,  authorization or order of, give any notice to,
     or make any filing or registration with, any court or other federal, state,
     local or other  governmental  authority or other Person in connection  with
     the execution,  delivery and  performance by the Company of the Transaction
     Documents,  other than: (i) the filings required pursuant to Section 4.4 of
     this  Agreement,  (ii) the filing  with the  Commission  of the  Prospectus
     Supplement,  (iii) application(s) to each applicable Trading Market for the
     listing of the Shares and Warrant  Shares for  trading  thereon in the time
     and manner required thereby, (iv) the filing of Form D with the Commission,
     and (v) such  filings as are  required  to be made under  applicable  state
     securities    laws     (collectively,     the    "Required     Approvals").

          (f) Issuance of the Securities;  Registration. The Securities are duly
     authorized  and, when issued and paid for in accordance with the applicable
     Transaction  Documents,  will be duly and  validly  issued,  fully paid and
     nonassessable,  free and clear of all Liens  imposed  by the  Company.  The
     Warrant  Shares,  when issued in accordance with the terms of the Warrants,
     will be validly issued, fully paid and nonassessable, free and clear of all
     Liens  imposed by the  Company.  The  Company  has  reserved  from its duly
     authorized  capital  stock the  maximum  number  of shares of Common  Stock
     issuable  pursuant  to this  Agreement  and the  Warrants.  The Company has
     prepared  and filed  the  Registration  Statement  in  conformity  with the
     requirements of the Securities  Act, which became  effective on October 30,
     2015 (the "Effective Date"), including the Prospectus,  and such amendments
     and  supplements  thereto  as may have  been  required  to the date of this
     Agreement.  The Company  was at the time of the filing of the  Registration
     Statement eligible to use Form S-3. The Company is eligible to use Form S-3
     under the Securities  Act and it meets the  transaction  requirements  with
     respect to the aggregate  market value of securities being sold pursuant to
     this  offering  and the 12  month  calendrer  in  accordance  with  General
     Instruction  I.B.6 of Form S-3.  The  Registration  Statement  is effective
     under the  Securities  Act and no stop order  preventing or suspending  the
     effectiveness of the Registration Statement or suspending or preventing the
     use of the  Prospectus has been issued by the Commission and no proceedings
     for that purpose have been  instituted or, to the knowledge of the Company,
     are threatened by the Commission. The Company, if required by the rules and
     regulations  of  the  Commission,   shall  file  the  Prospectus  with  the
     Commission pursuant to Rule 424(b). At the time the Registration  Statement
     and any amendments thereto became effective,  at the date of this Agreement
     and at the Closing Date,  the  Registration  Statement  and any  amendments
     thereto  conformed  and  will  conform  in  all  material  respects  to the
     requirements  of the  Securities  Act and did not and will not  contain any
     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 the  Prospectus  and any  amendments  or  supplements
     thereto,  at time the Prospectus or any amendment or supplement thereto was
     issued and at the Closing Date,  conformed and will conform in all material
     respects to the requirements of the Securities Act and did not and will not

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     contain an untrue  statement of a material fact or omit to state a material
     fact  necessary in order to make the  statements  therein,  in light of the
     circumstances under which they were made, not misleading.

          (g) Capitalization.  The capitalization of the Company is disclosed in
     the  Company's  report on Form 10-K for the year ended  September 30, 2016,
     and the  Company's  report on Form 10-Q for the period  ended  December 31,
     2016.  Except as set forth on schedule  3.1(g),  the Company has not issued
     any capital stock since its most recently filed  periodic  report under the
     Exchange Act, other than pursuant to the exercise of employee stock options
     under the Company's  stock option  plans,  the issuance of shares of Common
     Stock to employees  pursuant to the Company's employee stock purchase plans
     and pursuant to the conversion  and/or exercise of Common Stock Equivalents
     outstanding as of the date of the most recently filed periodic report under
     the Exchange Act. Except as set forth on Schedule 3.1(g), no Person has any
     right of first refusal,  preemptive right,  right of participation,  or any
     similar  right  to  participate  in the  transactions  contemplated  by the
     Transaction  Documents.  Except as a result of the purchase and sale of the
     Securities  and as set forth on Schedule  3.1(g),  there are no outstanding
     options,  warrants,  scrip rights to subscribe to, calls or  commitments of
     any character whatsoever relating to, or securities,  rights or obligations
     convertible  into or exercisable or exchangeable  for, or giving any Person
     any right to  subscribe  for or acquire,  any shares of Common Stock or the
     capital stock of any Subsidiary, or contracts, commitments,  understandings
     or  arrangements  by which the Company or any  Subsidiary  is or may become
     bound  to  issue  additional   shares  of  Common  Stock  or  Common  Stock
     Equivalents  or capital  stock of any  Subsidiary.  Except as  disclosed in
     Schedule 3.1(g),  the issuance and sale of the Securities will not obligate
     the  Company or any  Subsidiary  to issue  shares of Common  Stock or other
     securities to any Person (other than the Purchasers) and will not result in
     a right of any  holder  of  Company  securities  to  adjust  the  exercise,
     conversion, exchange or reset price under any of such securities. There are
     no  outstanding  securities or instruments of the Company or any Subsidiary
     that  contain  any  redemption  or  similar  provisions,  and  there are no
     contracts, commitments, understandings or arrangements by which the Company
     or any  Subsidiary  is or may  become  bound to  redeem a  security  of the
     Company or such  Subsidiary.  Except as set forth in Schedule  3.1(g),  the
     Company  does not have any stock  appreciation  rights or  "phantom  stock"
     plans  or  agreements  or  any  similar  plan  or  agreement.  All  of  the
     outstanding  shares of capital  stock of the Company  are duly  authorized,
     validly  issued,  fully  paid  and  nonassessable,   have  been  issued  in
     compliance  with all federal and state  securities  laws,  and none of such
     outstanding  shares was issued in  violation  of any  preemptive  rights or
     similar rights to subscribe for or purchase securities. No further approval
     or authorization  of any  stockholder,  the Board of Directors or others is
     required for the issuance and sale of the  Securities.  Except as set forth
     in Schedule 3.1(g), there are no stockholders agreements, voting agreements
     or other similar  agreements with respect to the Company's capital stock to
     which the Company is a party or, to the  knowledge of the Company,  between
     or among any of the Company's stockholders.

          (h) SEC  Reports;  Financial  Statements.  The  Company  has filed all
     reports,  schedules,  forms,  statements and other documents required to be
     filed  by the  Company  under  the  Securities  Act and the  Exchange  Act,
     including  pursuant to Section  13(a) or 15(d)  thereof,  for the two years
     preceding  the date  hereof  (or such  shorter  period as the  Company  was

                                       10
<PAGE>

     required  by law or  regulation  to  file  such  material)  (the  foregoing
     materials,  including the exhibits  thereto and documents  incorporated  by
     reference  therein,   together  with  the  Prospectus  and  the  Prospectus
     Supplement,  being collectively referred to herein as the "SEC Reports") on
     a timely basis or has received a valid extension of such time of filing and
     has  filed  any  such  SEC  Reports  prior  to the  expiration  of any such
     extension.  As of their  respective  dates, the SEC Reports complied in all
     material  respects  with the  requirements  of the  Securities  Act and the
     Exchange  Act,  as  applicable,  and none of the SEC  Reports,  when filed,
     contained  any untrue  statement  of a material  fact or omitted to state a
     material fact  required to be stated  therein or necessary in order to make
     the statements  therein, in the light of the circumstances under which they
     were made, not misleading.  The Company has never been an issuer subject to
     Rule 144(i) under the  Securities  Act.  The  financial  statements  of the
     Company  included in the SEC Reports  comply in all material  respects with
     applicable  accounting  requirements  and the rules and  regulations of the
     Commission  with respect  thereto as in effect at the time of filing.  Such
     financial  statements  have been prepared in accordance  with United States
     generally  accepted  accounting  principles  applied on a consistent  basis
     during the periods involved ("GAAP"),  except as may be otherwise specified
     in such financial statements or the notes thereto and except that unaudited
     financial  statements  may not contain all footnotes  required by GAAP, and
     fairly  present in all  material  respects  the  financial  position of the
     Company and its  consolidated  Subsidiaries as of and for the dates thereof
     and the results of  operations  and cash flows for the periods  then ended,
     subject,  in the  case of  unaudited  statements,  to  normal,  immaterial,
     year-end audit adjustments.

          (i) Material Changes; Undisclosed Events, Liabilities or Developments.
     Since the date of the latest audited financial  statements  included within
     the SEC Reports,  except as  specifically  disclosed  in a  subsequent  SEC
     Report  filed  prior to the  date  hereof,  (i)  there  has been no  event,
     occurrence or development that has had or that could reasonably be expected
     to result in a Material  Adverse Effect,  (ii) the Company has not incurred
     any liabilities (contingent or otherwise) other than (A) trade payables and
     accrued  expenses  incurred in the ordinary  course of business  consistent
     with past practice and (B)  liabilities not required to be reflected in the
     Company's  financial  statements  pursuant to GAAP or  disclosed in filings
     made with the  Commission,  (iii) the Company has not altered its method of
     accounting,  (iv) the  Company  has not  declared  or made any  dividend or
     distribution  of cash or other property to its  stockholders  or purchased,
     redeemed  or made any  agreements  to  purchase or redeem any shares of its
     capital  stock and (v) the Company has not issued any equity  securities to
     any officer,  director or Affiliate,  except  pursuant to existing  Company
     stock option plans. The Company does not have pending before the Commission
     any request  for  confidential  treatment  of  information.  Except for the
     issuance  of the  Securities  contemplated  by this  Agreement,  no  event,
     liability,  fact,  circumstance,  occurrence or development has occurred or
     exists or is  reasonably  expected  to occur or exist  with  respect to the
     Company or its  Subsidiaries  or their  respective  businesses,  prospects,
     properties,  operations,  assets  or  financial  condition  that  would  be
     required to be disclosed by the Company under applicable securities laws at
     the time  this  representation  is made or  deemed  made  that has not been
     publicly disclosed at least 1 (one) Trading Day prior to the date that this
     representation is made.

                                       11
<PAGE>

          (j) Litigation.  Except as set forth on Schedule  3.1(j),  there is no
     action,  suit,  inquiry,  notice of violation,  proceeding or investigation
     pending  or,  to  the  knowledge  of the  Company,  threatened  against  or
     affecting the Company, any Subsidiary or any of their respective properties
     before or by any court,  arbitrator,  governmental or administrative agency
     or  regulatory  authority  (federal,   state,  county,  local  or  foreign)
     (collectively,  an "Action") which (i) adversely  affects or challenges the
     legality, validity or enforceability of any of the Transaction Documents or
     the Securities or (ii) could, if there were an unfavorable  decision,  have
     or reasonably be expected to result in a Material  Adverse Effect.  Neither
     the Company nor any Subsidiary,  nor any director or officer thereof, is or
     has been the  subject of any Action  involving a claim of  violation  of or
     liability  under federal or state  securities  laws or a claim of breach of
     fiduciary duty. Except as set forth in Schedule 3.1(j), there has not been,
     and to the knowledge of the Company,  there is not pending or contemplated,
     any investigation by the Commission involving the Company or any current or
     former  director or officer of the Company.  The  Commission has not issued
     any  stop  order  or  other  order  suspending  the  effectiveness  of  any
     registration  statement  filed by the Company or any  Subsidiary  under the
     Exchange Act or the Securities Act.

          (k) Labor  Relations.  No labor dispute exists or, to the knowledge of
     the  Company,  is  imminent  with  respect to any of the  employees  of the
     Company, which could reasonably be expected to result in a Material Adverse
     Effect. None of the Company's or its Subsidiaries' employees is a member of
     a union that relates to such  employee's  relationship  with the Company or
     such  Subsidiary,  and neither the Company nor any of its Subsidiaries is a
     party  to a  collective  bargaining  agreement,  and  the  Company  and its
     Subsidiaries  believe that their  relationships  with their  employees  are
     good. To the knowledge of the Company,  no executive officer of the Company
     or any  Subsidiary,  is,  or is now  expected  to be, in  violation  of any
     material term of any employment  contract,  confidentiality,  disclosure or
     proprietary  information  agreement or  non-competition  agreement,  or any
     other  contract or  agreement or any  restrictive  covenant in favor of any
     third party,  and the continued  employment of each such executive  officer
     does not subject the Company or any of its  Subsidiaries  to any  liability
     with  respect  to  any  of the  foregoing  matters.  The  Company  and  its
     Subsidiaries  are in compliance  with all U.S.  federal,  state,  local and
     foreign  laws  and  regulations   relating  to  employment  and  employment
     practices,  terms and conditions of employment and wages and hours,  except
     where the failure to be in  compliance  could not,  individually  or in the
     aggregate, reasonably be expected to have a Material Adverse Effect.

          (l)  Compliance.  Neither the Company  nor any  Subsidiary:  (i) is in
     default  under or in violation  of (and no event has occurred  that has not
     been waived that,  with notice or lapse of time or both,  would result in a
     default by the Company or any Subsidiary under), nor has the Company or any
     Subsidiary  received  notice of a claim that it is in default under or that
     it is in violation of, any indenture, loan or credit agreement or any other
     agreement or instrument to which it is a party or by which it or any of its
     properties  is bound  (whether or not such  default or  violation  has been
     waived),  (ii) is in  violation  of any  judgment,  decree  or order of any
     court,  arbitrator or other governmental  authority or (iii) is or has been
     in  violation  of  any  statute,  rule,  ordinance  or  regulation  of  any
     governmental authority,  including without limitation all foreign, federal,
     state  and  local  laws  relating  to  taxes,   environmental   protection,

                                       12
<PAGE>

     occupational  health and safety,  product quality and safety and employment
     and labor  matters,  except in each case as could not have or reasonably be
     expected to result in a Material Adverse Effect.

          (m)  Environmental  Laws. The Company and its  Subsidiaries (i) are in
     compliance  with all federal,  state,  local and foreign  laws  relating to
     pollution  or  protection  of human  health or the  environment  (including
     ambient  air,  surface  water,  groundwater,  land  surface  or  subsurface
     strata),  including  laws  relating to emissions,  discharges,  releases or
     threatened  releases of chemicals,  pollutants,  contaminants,  or toxic or
     hazardous substances or wastes (collectively,  "Hazardous "Materials") into
     the  environment,  or otherwise  relating to the  manufacture,  processing,
     distribution,  use, treatment,  storage, disposal, transport or handling of
     Hazardous  Materials,  as  well  as  all  authorizations,  codes,  decrees,
     demands, or demand letters,  injunctions,  judgments,  licenses, notices or
     notice letters,  orders,  permits, plans or regulations,  issued,  entered,
     promulgated  or  approved  thereunder  ("Environmental  Laws");  (ii)  have
     received  all permits  licenses or other  approvals  required of them under
     applicable  Environmental Laws to conduct their respective businesses;  and
     (iii) are in compliance  with all terms and  conditions of any such permit,
     license or approval  where in each clause (i), (ii) and (iii),  the failure
     to so comply could be reasonably  expected to have,  individually or in the
     aggregate, a Material Adverse Effect.

          (n) Regulatory Permits.  The Company and the Subsidiaries  possess all
     certificates, authorizations and permits issued by the appropriate federal,
     state, local or foreign regulatory  authorities  necessary to conduct their
     respective  businesses  as described  in the SEC Reports,  except where the
     failure to possess such permits could not  reasonably be expected to result
     in a Material Adverse Effect ("Material Permits"),  and neither the Company
     nor any Subsidiary  has received any notice of proceedings  relating to the
     revocation or modification of any Material Permit.

          (o) Title to Assets.  The Company and the  Subsidiaries  have good and
     marketable  title in fee simple to all real property owned by them and good
     and  marketable  title  in all  personal  property  owned  by them  that is
     material to the business of the Company and the Subsidiaries,  in each case
     free and clear of all  Liens,  except  for (i)  Liens as do not  materially
     affect the value of such property and do not materially  interfere with the
     use made and  proposed  to be made of such  property by the Company and the
     Subsidiaries  and (ii)  Liens for the  payment of  federal,  state or other
     taxes, for which appropriate reserves have been made therefor in accordance
     with GAAP and,  the payment of which is neither  delinquent  nor subject to
     penalties. Any real property and facilities held under lease by the Company
     and  the  Subsidiaries  are  held  by  them  under  valid,  subsisting  and
     enforceable  leases  with which the  Company  and the  Subsidiaries  are in
     compliance.

          (p) Intellectual  Property.  The Company and the Subsidiaries have, or
     have rights to use, all patents, patent applications, trademarks, trademark
     applications,  service  marks,  trade  names,  trade  secrets,  inventions,
     copyrights,  licenses and other  intellectual  property  rights and similar
     rights  necessary or required for use in connection  with their  respective
     businesses as described in the SEC Reports and which the failure to so have

                                       13
<PAGE>

     could have a  Material  Adverse  Effect  (collectively,  the  "Intellectual
     Property Rights").  None of, and neither the Company nor any Subsidiary has
     received a notice  (written  or  otherwise)  that any of, the  Intellectual
     Property Rights has expired,  terminated or been abandoned,  or is expected
     to expire or terminate or be abandoned,  within two (2) years from the date
     of this  Agreement.  Neither the Company nor any  Subsidiary  has received,
     since the date of the latest audited financial  statements  included within
     the SEC Reports, a written notice of a claim or otherwise has any knowledge
     that the  Intellectual  Property Rights violate or infringe upon the rights
     of any Person,  except as could not have or  reasonably  be expected to not
     have a Material Adverse Effect.  To the knowledge of the Company,  all such
     Intellectual  Property  Rights  are  enforceable  and there is no  existing
     infringement by another Person of any of the Intellectual  Property Rights.
     The Company and its Subsidiaries have taken reasonable security measures to
     protect the secrecy, confidentiality and value of all of their intellectual
     properties, except where failure to do so could not, individually or in the
     aggregate, reasonably be expected to have a Material Adverse Effect.

          (q)  Insurance.  The  Company  and the  Subsidiaries  are  insured  by
     insurers of  recognized  financial  responsibility  against such losses and
     risks and in such amounts as are prudent and customary in the businesses in
     which the Company and the  Subsidiaries  are  engaged,  including,  but not
     limited to, directors and officers insurance coverage at least equal to the
     aggregate  Subscription Amount.  Neither the Company nor any Subsidiary has
     any  reason  to  believe  that it will  not be able to renew  its  existing
     insurance  coverage as and when such coverage  expires or to obtain similar
     coverage from similar insurers as may be necessary to continue its business
     without a significant increase in cost.

          (r) Transactions With Affiliates and Employees. Except as set forth in
     the SEC  Reports,  none of the  officers or directors of the Company or any
     Subsidiary  and, to the knowledge of the Company,  none of the employees of
     the Company or any Subsidiary is presently a party to any transaction  with
     the  Company or any  Subsidiary  (other  than for  services  as  employees,
     officers  and  directors),  including  any  contract,  agreement  or  other
     arrangement  providing for the  furnishing of services to or by,  providing
     for  rental of real or  personal  property  to or from,  providing  for the
     borrowing  of money  from or  lending  of money to or  otherwise  requiring
     payments  to or from any  officer,  director  or such  employee  or, to the
     knowledge of the Company, any entity in which any officer, director, or any
     such  employee  has a  substantial  interest  or is an  officer,  director,
     trustee, stockholder, member or partner, in each case in excess of $120,000
     other  than for (i)  payment  of salary  or  consulting  fees for  services
     rendered, (ii) reimbursement for expenses incurred on behalf of the Company
     and (iii) other employee benefits,  including stock option agreements under
     any stock option plan of the Company.

          (s) Sarbanes-Oxley;  Internal Accounting Controls. The Company and the
     Subsidiaries are in compliance with any and all applicable  requirements of
     the  Sarbanes-Oxley  Act of 2002 that are  effective as of the date hereof,
     and  any  and all  applicable  rules  and  regulations  promulgated  by the
     Commission  thereunder  that are  effective as of the date hereof and as of
     the Closing  Date.  The Company and the  Subsidiaries  maintain a system of

                                       14
<PAGE>

     internal  accounting  controls  sufficient 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 GAAP 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 and the Subsidiaries have established  disclosure
     controls and  procedures  (as defined in Exchange Act Rules  13a-15(e)  and
     15d-15(e))  for  the  Company  and  the   Subsidiaries  and  designed  such
     disclosure  controls and procedures to ensure that information  required to
     be  disclosed  by the Company in the reports 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. The Company's
     certifying  officers have  evaluated the  effectiveness  of the  disclosure
     controls and procedures of the Company and the  Subsidiaries  as of the end
     of the period covered by the most recently filed periodic  report under the
     Exchange Act (such date, the "Evaluation  Date").  The Company presented in
     its  most  recently  filed  periodic  report  under  the  Exchange  Act 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 changes in
     the internal  control over financial  reporting (as such term is defined in
     the Exchange Act) of the Company and its Subsidiaries  that have materially
     affected,  or is  reasonably  likely to  materially  affect,  the  internal
     control over financial reporting of the Company and its Subsidiaries.

          (t) Certain Fees. Except as set forth in the Prospectus Supplement, no
     brokerage  or finder's  fees or  commissions  are or will be payable by the
     Company or any Subsidiary to any broker,  financial  advisor or consultant,
     finder,  placement  agent,  investment  banker,  bank or other  Person with
     respect to the transactions  contemplated by the Transaction Documents. The
     Purchasers  shall  have no  obligation  with  respect  to any  fees or with
     respect to any claims  made by or on behalf of other  Persons for fees of a
     type  contemplated  in this Section that may be due in connection  with the
     transactions contemplated by the Transaction Documents.

          (u)  Investment  Company.  The Company is not, and is not an Affiliate
     of, and immediately  after receipt of payment for the Securities,  will not
     be or be an Affiliate of, an "investment company" within the meaning of the
     Investment  Company Act of 1940, as amended.  The Company shall conduct its
     business  in a manner so that it will not  become an  "investment  company"
     subject  to  registration  under the  Investment  Company  Act of 1940,  as
     amended.

          (v) Registration  Rights. No Person has any right to cause the Company
     or any  Subsidiary to effect the  registration  under the Securities Act of
     any securities of the Company or any Subsidiary.

          (w)  Listing  and  Maintenance  Requirements.   The  Common  Stock  is
     registered  pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
     Company  has taken no action  designed  to,  or which to its  knowledge  is
     likely to have the effect of,  terminating  the  registration of the Common
     Stock under the Exchange Act nor has the Company  received any notification
     that the Commission is contemplating terminating such registration.  Except

                                       15
<PAGE>

     as set forth in  Schedule  3.1(w),  the  Company  has not, in the 12 months
     preceding the date hereof, received notice from any Trading Market on which
     the Common  Stock is or has been  listed or quoted to the  effect  that the
     Company is not in compliance  with the listing or maintenance  requirements
     of such Trading  Market.  The Company is, and 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.  The  Common  Stock  is
     currently  eligible for electronic  transfer  through the Depository  Trust
     Company or another  established  clearing  corporation  and the  Company is
     current in payment of the fees to the  Depository  Trust  Company  (or such
     other established clearing  corporation) in connection with such electronic
     transfer.

          (x) Application of Takeover Protections.  The Company and the Board of
     Directors  have  taken all  necessary  action,  if any,  in order to render
     inapplicable any control share acquisition,  business  combination,  poison
     pill (including any distribution under a rights agreement) or other similar
     anti-takeover  provision under the Company's  certificate of  incorporation
     (or similar  charter  documents) or the laws of its state of  incorporation
     that is or could become  applicable  to the  Purchasers  as a result of the
     Purchasers and the Company fulfilling their obligations or exercising their
     rights under the Transaction  Documents,  including without limitation as a
     result of the  Company's  issuance of the  Securities  and the  Purchasers'
     ownership of the Securities.

          (y)  Disclosure.  Except  with  respect  to  the  material  terms  and
     conditions of the transactions  contemplated by the Transaction  Documents,
     the Company  confirms  that neither it nor any other  Person  acting on its
     behalf has provided any of the  Purchasers  or their agents or counsel with
     any information that it believes  constitutes or might constitute material,
     non-public  information which is not otherwise  disclosed in the Prospectus
     Supplement.  The Company  understands and confirms that the Purchasers will
     rely  on  the  foregoing   representation  in  effecting   transactions  in
     securities of the Company.  All of the disclosure furnished by or on behalf
     of  the  Company  to  the   Purchasers   regarding   the  Company  and  its
     Subsidiaries, their respective businesses and the transactions contemplated
     hereby,  including the Disclosure Schedules to this Agreement,  is true and
     correct  and does not contain any untrue  statement  of a material  fact or
     omit to state any material fact  necessary in order to make the  statements
     made therein, in light of the circumstances under which they were made, not
     misleading.  The press  releases  disseminated  by the  Company  during the
     twelve months  preceding the date of this Agreement taken as a whole do 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,  in light of the  circumstances  under which they were
     made and when made, not  misleading.  The Company  acknowledges  and agrees
     that no Purchaser makes or has made any  representations or warranties with
     respect  to  the   transactions   contemplated   hereby  other  than  those
     specifically set forth in Section 3.2 hereof.

          (z) No Integrated  Offering.  Assuming the accuracy of the Purchasers'
     representations  and  warranties  set forth in  Section  3.2,  neither  the
     Company,  nor any of its Affiliates,  nor any Person acting on its or their
     behalf  has,  directly  or  indirectly,  made  any  offers  or sales of any
     security or solicited any offers to buy any security,  under  circumstances
     that would cause this  offering of the  Securities  to be  integrated  with

                                       16
<PAGE>

     prior offerings by the Company for purposes of (i) the Securities Act which
     would require the  registration of the Warrants or Warrant Shares under the
     Securities Act, or (ii) any applicable  shareholder  approval provisions of
     any Trading Market on which any of the securities of the Company are listed
     or designated.

          (aa) Solvency.  Based on the consolidated  financial  condition of the
     Company as of the Closing  Date,  after giving effect to the receipt by the
     Company of the proceeds from the sale of the Securities hereunder,  (i) the
     fair saleable value of the Company's assets exceeds the amount that will be
     required to be paid on or in respect of the  Company's  existing  debts and
     other liabilities (including known contingent  liabilities) as they mature,
     (ii) the Company's assets do not constitute  unreasonably  small capital to
     carry on its  business as now  conducted  and as  proposed to be  conducted
     including  its capital  needs  taking into account the  particular  capital
     requirements  of the business  conducted by the Company,  consolidated  and
     projected capital requirements and capital availability  thereof, and (iii)
     the  current  cash flow of the  Company,  together  with the  proceeds  the
     Company would receive, were it to liquidate all of its assets, after taking
     into account all anticipated  uses of the cash,  would be sufficient to pay
     all  amounts on or in  respect of its  liabilities  when such  amounts  are
     required to be paid.  The Company does not intend to incur debts beyond its
     ability to pay such debts as they mature  (taking  into  account the timing
     and  amounts of cash to be  payable  on or in  respect  of its  debt).  The
     Company has no  knowledge  of any facts or  circumstances  which lead it to
     believe  that it will  file for  reorganization  or  liquidation  under the
     bankruptcy or reorganization  laws of any jurisdiction within one year from
     the Closing  Date.  Schedule  3.1(aa)  sets forth as of the date hereof all
     outstanding  secured  and  unsecured  Indebtedness  of the  Company  or any
     Subsidiary, or for which the Company or any Subsidiary has commitments. For
     the purposes of this  Agreement,  "Indebtedness"  means (x) any liabilities
     for borrowed  money or amounts owed in excess of $50,000  (other than trade
     accounts  payable  incurred in the ordinary  course of  business),  (y) all
     guaranties,  endorsements  and other  contingent  obligations in respect of
     indebtedness of others,  whether or not the same are or should be reflected
     in the Company's consolidated balance sheet (or the notes thereto),  except
     guaranties  by  endorsement  of  negotiable   instruments  for  deposit  or
     collection or similar transactions in the ordinary course of business;  and
     (z) the present value of any lease  payments in excess of $50,000 due under
     leases  required to be  capitalized  in accordance  with GAAP.  Neither the
     Company nor any Subsidiary is in default with respect to any Indebtedness.

          (bb) Tax Status. Except for matters that would not, individually or in
     the  aggregate,  have or  reasonably  be  expected  to result in a Material
     Adverse Effect, the Company and its Subsidiaries each (i) has made or filed
     all United States  federal,  state and local income and all foreign  income
     and  franchise  tax  returns,  reports  and  declarations  required  by any
     jurisdiction  to which it is  subject,  (ii) has paid all  taxes  and other
     governmental  assessments and charges that are material in amount, shown or
     determined to be due on such returns,  reports and  declarations  and (iii)
     has set aside on its books provision reasonably adequate for the payment of
     all  material  taxes for  periods  subsequent  to the periods to which such

                                       17
<PAGE>

     returns,  reports or declarations  apply.  There are no unpaid taxes in any
     material  amount  claimed  to  be  due  by  the  taxing  authority  of  any
     jurisdiction,  and the officers of the Company or of any Subsidiary know of
     no basis for any such claim.

          (cc)  Foreign   Corrupt   Practices.   Neither  the  Company  nor  any
     Subsidiary,  nor to the  knowledge  of the Company or any  Subsidiary,  any
     agent or other  person  acting on behalf of the Company or any  Subsidiary,
     has (i) directly or indirectly,  used any funds for unlawful contributions,
     gifts,  entertainment  or other  unlawful  expenses  related  to foreign or
     domestic political  activity,  (ii) made any unlawful payment to foreign or
     domestic  government  officials  or employees or to any foreign or domestic
     political  parties or  campaigns  from  corporate  funds,  (iii)  failed to
     disclose fully any  contribution  made by the Company or any Subsidiary (or
     made by any  person  acting on its  behalf of which the  Company  is aware)
     which is in violation of law, or (iv) violated in any material  respect any
     provision of FCPA.

          (dd)  Accountants.  The Company's  accounting firm is BDO USA, LLP. To
     the  knowledge  and belief of the Company,  such  accounting  firm (i) is a
     registered  public accounting firm as required by the Exchange Act and (ii)
     shall  express its opinion with respect to the  financial  statements to be
     included  in the  Company's  Annual  Report  for  the  fiscal  year  ending
     September 30, 2017.

          (ee) Acknowledgment Regarding Purchasers' Purchase of Securities.  The
     Company  acknowledges  and  agrees  that each of the  Purchasers  is acting
     solely in the  capacity of an arm's  length  purchaser  with respect to the
     Transaction  Documents  and  the  transactions  contemplated  thereby.  The
     Company  further  acknowledges  that no  Purchaser is acting as a financial
     advisor or  fiduciary  of the  Company (or in any  similar  capacity)  with
     respect to the  Transaction  Documents  and the  transactions  contemplated
     thereby and any advice given by any  Purchaser  or any of their  respective
     representatives or agents in connection with the Transaction  Documents and
     the  transactions   contemplated   thereby  is  merely  incidental  to  the
     Purchasers'  purchase of the Securities.  The Company further represents to
     each Purchaser that the Company's decision to enter into this Agreement and
     the other  Transaction  Documents has been based solely on the  independent
     evaluation of the transactions  contemplated  hereby by the Company and its
     representatives.

          (ff) Acknowledgement Regarding Purchaser's Trading Activity.  Anything
     in this  Agreement  or  elsewhere  herein to the  contrary  notwithstanding
     (except  for  Sections  3.2(e)  and  4.14  hereof),  it is  understood  and
     acknowledged by the Company that: (i) none of the Purchasers has been asked
     by the  Company to agree,  nor has any  Purchaser  agreed,  to desist  from
     purchasing  or selling,  long and/or short,  securities of the Company,  or
     "derivative"  securities  based on  securities  issued by the Company or to
     hold the Securities for any specified term; (ii) past or future open market
     or other  transactions by any Purchaser,  specifically  including,  without
     limitation,  Short Sales or "derivative" transactions,  before or after the
     closing of this or future private  placement  transactions,  may negatively
     impact the market price of the Company's publicly-traded securities;  (iii)
     any Purchaser,  and  counter-parties in "derivative"  transactions to which
     any such Purchaser is a party, directly or indirectly, presently may have a
     "short"  position in the Common Stock, and (iv) each Purchaser shall not be
     deemed  to have any  affiliation  with or  control  over any  arm's  length

                                       18
<PAGE>

     counter-party  in  any  "derivative"   transaction.   The  Company  further
     understands and acknowledges  that (y) one or more Purchasers may engage in
     hedging  activities at various times during the period that the  Securities
     are outstanding, including, without limitation, during the periods that the
     value of the Warrant  Shares  deliverable  with respect to  Securities  are
     being determined, and (z) such hedging activities (if any) could reduce the
     value of the existing  stockholders' equity interests in the Company at and
     after the time that the hedging activities are being conducted. The Company
     acknowledges that such aforementioned  hedging activities do not constitute
     a breach of any of the Transaction Documents.

          (gg)  Regulation  M  Compliance.  The  Company  has  not,  and  to its
     knowledge  no  one  acting  on its  behalf  has,  (i)  taken,  directly  or
     indirectly,  any action designed to cause or to result in the stabilization
     or  manipulation  of the price of any security of the Company to facilitate
     the sale or resale of any of the Securities, (ii) sold, bid for, purchased,
     or,  paid  any  compensation  for  soliciting  purchases  of,  any  of  the
     Securities,  or (iii) paid or agreed to pay to any Person any  compensation
     for  soliciting  another to purchase any other  securities  of the Company,
     other than, in the case of clauses (ii) and (iii), compensation paid to the
     Company's   placement  agent  in  connection  with  the  placement  of  the
     Securities.

          (hh) FDA. As to each product  subject to the  jurisdiction of the U.S.
     Food and Drug  Administration  ("FDA")  under the  Federal  Food,  Drug and
     Cosmetic Act, as amended,  and the regulations  thereunder ("FDCA") that is
     manufactured, packaged, labeled, tested, distributed, sold, and/or marketed
     by  the  Company  or  any  of  its  Subsidiaries   (each  such  product,  a
     "Pharmaceutical   Product"),   such   Pharmaceutical   Product   is   being
     manufactured,  packaged, labeled, tested, distributed, sold and/or marketed
     by the Company in compliance  with all applicable  requirements  under FDCA
     and  similar  laws,   rules  and  regulations   relating  to  registration,
     investigational  use,  premarket  clearance,   licensure,   or  application
     approval,  good manufacturing  practices,  good laboratory practices,  good
     clinical practices, product listing, quotas, labeling,  advertising, record
     keeping and filing of reports, except where the failure to be in compliance
     would not have a Material  Adverse Effect.  Except as disclosed in Schedule
     3.1(hh),  there is no pending,  completed or, to the  Company's  knowledge,
     threatened,  action  (including  any  lawsuit,  arbitration,  or  legal  or
     administrative   or   regulatory   proceeding,    charge,   complaint,   or
     investigation) against the Company or any of its Subsidiaries,  and none of
     the Company or any of its  Subsidiaries  has received  any notice,  warning
     letter  or  other  communication  from  the FDA or any  other  governmental
     entity,   which  (i)   contests   the   premarket   clearance,   licensure,
     registration,  or  approval  of,  the uses of,  the  distribution  of,  the
     manufacturing or packaging of, the testing of, the sale of, or the labeling
     and promotion of any  Pharmaceutical  Product,  (ii) withdraws its approval
     of, requests the recall,  suspension, or seizure of, or withdraws or orders
     the withdrawal of advertising or sales promotional  materials  relating to,
     any Pharmaceutical  Product,  (iii) imposes a clinical hold on any clinical
     investigation  by the  Company  or any of its  Subsidiaries,  (iv)  enjoins
     production at any facility of the Company or any of its  Subsidiaries,  (v)
     enters or proposes to enter into a consent  decree of permanent  injunction
     with the Company or any of its Subsidiaries,  or (vi) otherwise alleges any
     violation of any laws,  rules or  regulations  by the Company or any of its
     Subsidiaries,  and which,  either  individually or in the aggregate,  would
     have a Material Adverse Effect. The properties,  business and operations of

                                       19
<PAGE>

     the Company have been and are being  conducted in all material  respects in
     accordance with all applicable  laws, rules and regulations of the FDA. The
     Company  has not been  informed by the FDA that the FDA will  prohibit  the
     marketing,  sale,  license  or use  in the  United  States  of any  product
     proposed to be  developed,  produced or marketed by the Company nor has the
     FDA  expressed  any concern as to approving or clearing for  marketing  any
     product being developed or proposed to be developed by the Company.

          (ii)  Office of Foreign  Assets  Control.  Neither the Company nor any
     Subsidiary nor, to the Company's knowledge,  any director,  officer, agent,
     employee or affiliate of the Company or any Subsidiary is currently subject
     to any U.S. sanctions  administered by the Office of Foreign Assets Control
     of the U.S. Treasury Department ("OFAC").

          (jj) U.S. Real Property  Holding  Corporation.  The Company is not and
     has never been a U.S. real property holding  corporation within the meaning
     of Section 897 of the Internal  Revenue Code of 1986,  as amended,  and the
     Company shall so certify upon Purchaser's request.

          (kk) Bank  Holding  Company  Act.  Neither  the Company nor any of its
     Subsidiaries  or Affiliates  is subject to the Bank Holding  Company Act of
     1956,  as amended (the "BHCA") and to  regulation by the Board of Governors
     of the Federal Reserve System (the "Federal Reserve").  Neither the Company
     nor any of its  Subsidiaries  or Affiliates  owns or controls,  directly or
     indirectly,  five  percent  (5%) or more of the  outstanding  shares of any
     class of voting  securities  or  twenty-five  percent  or more of the total
     equity  of a bank  or any  entity  that  is  subject  to  the  BHCA  and to
     regulation  by the  Federal  Reserve.  Neither  the  Company nor any of its
     Subsidiaries  or  Affiliates  exercises a  controlling  influence  over the
     management  or policies of a bank or any entity that is subject to the BHCA
     and to regulation by the Federal Reserve.

          (ll)  Money  Laundering.   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,
     applicable money  laundering  statutes and applicable rules and regulations
     thereunder  (collectively,  the "Money Laundering  Laws"), and no Action or
     Proceeding by or before any court or governmental agency, authority or body
     or any arbitrator  involving the Company or any Subsidiary  with respect to
     the Money Laundering Laws is pending or, to the knowledge of the Company or
     any Subsidiary, threatened.

          (mm)  Private  Placement.  Assuming  the  accuracy of the  Purchasers'
     representations  and warranties  set forth in Section 3.2, no  registration
     under the Securities Act is required for the offer and sale of the Warrants
     or the Warrant  Shares by the  Company to the  Purchasers  as  contemplated
     hereby.

          (nn) No  General  Solicitation.  Neither  the  Company  nor any Person
     acting on behalf of the  Company  has offered or sold any of the Warrant or
     Warrant Shares by any form of general  solicitation or general advertising.
     The Company has offered the  Warrants  and Warrant  Shares for sale only to

                                       20
<PAGE>

     the Purchasers and certain other "accredited  investors" within the meaning
     of Rule 501 under the Securities Act.

          (oo) No  Disqualification  Events.  With  respect to the  Warrant  and
     Warrant  Shares to be offered  and sold  hereunder  in reliance on Rule 506
     under the Securities Act, none of the Company, any of its predecessors, any
     affiliated  issuer, any director,  executive officer,  other officer of the
     Company  participating in the offering  hereunder,  any beneficial owner of
     20%  or  more  of  the  Company's  outstanding  voting  equity  securities,
     calculated on the basis of voting power,  nor any promoter (as that term is
     defined in Rule 405 under the Securities Act) connected with the Company in
     any  capacity at the time of sale  (each,  an "Issuer  Covered  Person") is
     subject  to any of the  "Bad  Actor"  disqualifications  described  in Rule
     506(d)(1)(i)  to  (viii)  under  the  Securities  Act (a  "Disqualification
     Event"),  except for a Disqualification  Event covered by Rule 506(d)(2) or
     (d)(3). The Company has exercised  reasonable care to determine whether any
     Issuer Covered Person is subject to a  Disqualification  Event. The Company
     has complied,  to the extent  applicable,  with its disclosure  obligations
     under  Rule  506(e),  and has  furnished  to the  Purchasers  a copy of any
     disclosures provided thereunder.

          (pp) Other  Covered  Persons.  Other  than the  Placement  Agent,  the
     Company is not aware of any person (other than any Issuer  Covered  Person)
     that has been or will be paid  (directly or  indirectly)  remuneration  for
     solicitation of purchasers in connection with the sale of any Securities.

          (qq) Notice of  Disqualification  Events.  The Company will notify the
     Purchasers   in   writing,   prior   to  the   Closing   Date  of  (i)  any
     Disqualification  Event  relating to any Issuer Covered Person and (ii) any
     event that  would,  with the  passage of time,  reasonably  be  expected to
     become a  Disqualification  Event relating to any Issuer Covered Person, in
     each case of which it is aware.

     3.2 Representations and Warranties of the Purchasers.  Each Purchaser,  for
itself and for no other Purchaser, hereby represents and warrants as of the date
hereof and as of the  Closing  Date to the  Company  as follows  (unless as of a
specific date therein, in which case they shall be accurate as of such date):

          (a) Organization; Authority. Such Purchaser is either an individual or
     an  entity  duly  incorporated  or  formed,  validly  existing  and in good
     standing  under  the  laws  of the  jurisdiction  of its  incorporation  or
     formation  with  full  right,  corporate,  partnership,  limited  liability
     company or similar power and authority to enter into and to consummate  the
     transactions   contemplated  by  this  Agreement  and  each  of  the  other
     Transaction  Documents and otherwise to carry out its obligations hereunder
     and thereunder. The execution and delivery of the Transaction Documents and
     performance  by such  Purchaser  of the  transactions  contemplated  by the
     Transaction Documents have been duly authorized by all necessary corporate,
     partnership, limited liability company or similar action, as applicable, on
     the part of such  Purchaser.  Each  Transaction  Document  to which it is a
     party has been duly executed by such Purchaser,  and when delivered by such
     Purchaser in accordance  with the terms hereof,  will  constitute the valid
     and legally binding obligation of such Purchaser, enforceable against it in

                                       21
<PAGE>

     accordance  with its terms,  except:  (i) as  limited by general  equitable
     principles   and   applicable   bankruptcy,   insolvency,   reorganization,
     moratorium and other laws of general application  affecting  enforcement of
     creditors'  rights  generally,  (ii) as  limited  by laws  relating  to the
     availability of specific performance,  injunctive relief or other equitable
     remedies and (iii) insofar as indemnification  and contribution  provisions
     may be limited by applicable law.

          (b)  Understandings  or Arrangements.  Such Purchaser is acquiring the
     Securities  as principal  for his, her or its own account and has no direct
     or  indirect  arrangement  or  understandings  with any  other  persons  to
     distribute  or  regarding  the   distribution  of  such  Securities   (this
     representation and warranty not limiting such Purchaser's right to sell the
     Securities   pursuant  to  the  Registration   Statement  or  otherwise  in
     compliance  with  applicable  federal  and  state  securities  laws).  Such
     Purchaser is acquiring the Securities  hereunder in the ordinary  course of
     its business.  Such Purchaser understands that the Warrants and the Warrant
     Shares are "restricted  securities" and have not been registered  under the
     Securities Act or any applicable state securities law and is acquiring such
     Securities as principal for his, her or its own account and not with a view
     to or for  distributing or reselling such Securities or any part thereof in
     violation of the Securities Act or any applicable state securities law, has
     no present intention of distributing any of such Securities in violation of
     the Securities Act or any applicable state securities law and has no direct
     or  indirect  arrangement  or  understandings  with any  other  persons  to
     distribute or regarding the distribution of such Securities in violation of
     the  Securities  Act  or  any   applicable   state   securities  law  (this
     representation  and warranty not limiting  such  Purchaser's  right to sell
     such  Securities  pursuant to a  registration  statement  or  otherwise  in
     compliance with applicable federal and state securities laws).

          (c)  Purchaser  Status.  At the time such  Purchaser  was  offered the
     Securities,  it was,  and as of the date  hereof it is, and on each date on
     which it exercises  any  Warrants,  it will be either:  (i) an  "accredited
     investor" as defined in Rule 501(a)(1),  (a)(2),  (a)(3),  (a)(7) or (a)(8)
     under  the  Securities  Act or (ii) a  "qualified  institutional  buyer" as
     defined in Rule 144A(a) under the Securities Act.

          (d)  Experience of Such  Purchaser.  Such  Purchaser,  either alone or
     together with its representatives,  has such knowledge,  sophistication and
     experience  in  business  and  financial  matters  so as to be  capable  of
     evaluating  the  merits  and  risks of the  prospective  investment  in the
     Securities,  and has so evaluated the merits and risks of such  investment.
     Such  Purchaser is able to bear the economic  risk of an  investment in the
     Securities  and, at the present  time, is able to afford a complete loss of
     such investment.

          (e) Access to Information. Such Purchaser acknowledges that it has had
     the opportunity to review the Transaction Documents (including all exhibits
     and schedules  thereto) and the SEC Reports and has been afforded,  (i) the
     opportunity  to ask such  questions as it has deemed  necessary  of, and to
     receive answers from,  representatives  of the Company concerning the terms
     and  conditions of the offering of the  Securities and the merits and risks
     of  investing  in the  Securities;  (ii)  access to  information  about the
     Company  and its  financial  condition,  results of  operations,  business,
     properties,  management  and prospects  sufficient to enable it to evaluate

                                       22
<PAGE>

     its  investment;  and  (iii) the  opportunity  to  obtain  such  additional
     information that the Company possesses or can acquire without  unreasonable
     effort or expense that is necessary to make an informed investment decision
     with respect to the investment. Such Purchaser acknowledges and agrees that
     neither the Placement  Agent nor any  Affiliate of the Placement  Agent has
     provided such Purchaser with any  information or advice with respect to the
     Securities nor is such information or advice necessary or desired.  Neither
     the Placement Agent nor any Affiliate has made or makes any  representation
     as to the Company or the quality of the Securities and the Placement  Agent
     and any Affiliate may have acquired non-public  information with respect to
     the  Company  which such  Purchaser  agrees  need not be provided to it. In
     connection with the issuance of the Securities to such  Purchaser,  neither
     the  Placement  Agent nor any of its  Affiliates  has acted as a  financial
     advisor or fiduciary to such Purchaser.

          (f) Certain Transactions and Confidentiality.  Other than consummating
     the transactions  contemplated  hereunder,  such Purchaser has not, nor has
     any Person acting on behalf of or pursuant to any  understanding  with such
     Purchaser,   directly  or  indirectly  executed  any  purchases  or  sales,
     including  Short Sales,  of the securities of the Company during the period
     commencing as of the time that such  Purchaser  first received a term sheet
     (written or oral) from the  Company or any other  Person  representing  the
     Company  setting  forth  the  material  pricing  terms of the  transactions
     contemplated  hereunder  and  ending  immediately  prior  to the  execution
     hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a
     multi-managed investment vehicle whereby separate portfolio managers manage
     separate  portions of such  Purchaser's  assets and the portfolio  managers
     have no direct knowledge of the investment  decisions made by the portfolio
     managers   managing  other  portions  of  such  Purchaser's   assets,   the
     representation set forth above shall only apply with respect to the portion
     of  assets  managed  by the  portfolio  manager  that  made the  investment
     decision to purchase the Securities  covered by this Agreement.  Other than
     to  other  Persons  party  to  this   Agreement  or  to  such   Purchaser's
     representatives,  including,  without limitation, its officers,  directors,
     partners, legal and other advisors,  employees, agents and Affiliates, such
     Purchaser has maintained the  confidentiality of all disclosures made to it
     in connection with this  transaction  (including the existence and terms of
     this  transaction).  Notwithstanding  the  foregoing,  for the avoidance of
     doubt,  nothing  contained  herein  shall  constitute a  representation  or
     warranty  against,  or a  prohibition  of, any actions  with respect to the
     borrowing of, arrangement to borrow, identification of the availability of,
     and/or  securing of,  securities of the Company in order for such Buyer (or
     its broker or other  financial  representative)  to effect  Short  Sales or
     similar transactions in the future.

          (g)  General  Solicitation.  Such  Purchaser  is  not  purchasing  the
     Securities  as a result  of any  advertisement,  article,  notice  or other
     communication regarding the Securities published in any newspaper, magazine
     or similar media or broadcast over  television or radio or presented at any
     seminar or any other general solicitation or general advertisement


The Company  acknowledges and agrees that the representations  contained in this
Section 3.2 shall not modify,  amend or affect such Purchaser's right to rely on
the Company's  representations and warranties contained in this Agreement or any
representations  and warranties  contained in any other Transaction  Document or
any other document or instrument  executed  and/or  delivered in connection with
this Agreement or the consummation of the transactions contemplated hereby.

                                       23
<PAGE>

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

     4.1 Removal of Legends.

          (a) The  Warrants  and  Warrant  Shares  may  only be  disposed  of in
     compliance with state and federal  securities  laws. In connection with any
     transfer of Warrants or Warrant  Shares other than pursuant to an effective
     registration  statement or Rule 144, to the Company or to an Affiliate of a
     Purchaser or in connection with a pledge as contemplated in Section 4.1(b),
     the Company may require the transferor thereof to provide to the Company an
     opinion of counsel selected by the transferor and reasonably  acceptable to
     the Company,  the form and  substance of which  opinion shall be reasonably
     satisfactory  to the  Company,  to the effect that such  transfer  does not
     require registration of such transferred Warrant under the Securities Act.

          (b) The Purchasers agree to the imprinting,  so long as is required by
     this Section  4.1, of a legend on any of the Warrants or Warrant  Shares in
     the following form:

          (c) NEITHER THIS SECURITY NOR THE SECURITIES  INTO WHICH THIS SECURITY
     IS  EXERCISABLE  HAS BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE
     COMMISSION  OR THE  SECURITIES  COMMISSION OF ANY STATE IN RELIANCE UPON AN
     EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
     (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
     PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
     PURSUANT TO AN AVAILABLE  EXEMPTION  FROM, OR IN A TRANSACTION  NOT SUBJECT
     TO, THE  REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
     WITH  APPLICABLE  STATE  SECURITIES  LAWS. THIS SECURITY AND THE SECURITIES
     ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
     BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH
     A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
     501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

          (d) The Company acknowledges and agrees that a Purchaser may from time
     to time pledge  pursuant to a bona fide margin  agreement with a registered
     broker-dealer  or grant a security  interest in some or all of the Warrants
     or  Warrant  Shares  to a  financial  institution  that  is an  "accredited
     investor"  as defined  in Rule  501(a)  under the  Securities  Act and,  if
     required under the terms of such  arrangement,  such Purchaser may transfer
     pledged or secured  Warrants or Warrant  Shares to the  pledgees or secured
     parties.  Such a pledge or transfer would not be subject to approval of the
     Company and no legal opinion of legal counsel of the pledgee, secured party
     or pledgor shall be required in connection  therewith.  Further,  no notice
     shall be required of such pledge. At the appropriate  Purchaser's  expense,

                                       24
<PAGE>

     the Company  will execute and deliver such  reasonable  documentation  as a
     pledgee or secured  party of  Warrants  and Warrant  Shares may  reasonably
     request in connection  with a pledge or transfer of the Warrants or Warrant
     Shares.

          (e)  Certificates  evidencing the Warrant Shares shall not contain any
     legend (including the legend set forth in Section 4.1(b) hereof): (i) while
     a registration  statement covering the resale of such security is effective
     under the Securities Act, or (ii) following any sale of such Warrant Shares
     pursuant to Rule 144, or (iii) if such Warrant Shares are eligible for sale
     under Rule 144, or (iv) if such  legend is not  required  under  applicable
     requirements of the Securities Act (including judicial  interpretations and
     pronouncements  issued by the staff of the  Commission).  The Company shall
     cause its counsel to issue a legal opinion to the Transfer  Agent  promptly
     if  required  by the  Transfer  Agent to effect  the  removal of the legend
     hereunder.  If all or any portion of a Warrant is  exercised at a time when
     there is an  effective  registration  statement  to cover the resale of the
     Warrant Shares,  or if such Warrant Shares may be sold under Rule 144 or if
     such legend is not otherwise required under applicable  requirements of the
     Securities  Act  (including  judicial  interpretations  and  pronouncements
     issued by the staff of the  Commission)  then such Warrant  Shares shall be
     issued free of all legends.  The Company agrees that following such time as
     such legend is no longer  required under this Section  4.1(c),  the Company
     will,  no later  than the  earlier of (i) three  Trading  Days and (ii) the
     number of  Trading  Days  comprising  the  Standard  Settlement  Period (as
     defined below)  following the delivery by a Purchaser to the Company or the
     Transfer Agent of a certificate representing Warrant Shares, as applicable,
     issued with a  restrictive  legend  (such third  Trading  Day,  the "Legend
     Removal  Date"),  deliver  or cause to be  delivered  to such  Purchaser  a
     certificate  representing such shares that is free from all restrictive and
     other legends. The Company may not make any notation on its records or give
     instructions  to the  Transfer  Agent  that  enlarge  the  restrictions  on
     transfer  set forth in this  Section 4.  Certificates  for  Warrant  Shares
     subject to legend  removal  hereunder  shall be transmitted by the Transfer
     Agent to the  Purchaser by crediting the account of the  Purchaser's  prime
     broker  with the  Depository  Trust  Company  System  as  directed  by such
     Purchaser. As used herein,  "Standard Settlement Period" means the standard
     settlement period,  expressed in a number of Trading Days, on the Company's
     primary Trading Market with respect to the Common Stock as in effect on the
     date of delivery of a certificate representing Warrant Shares issued with a
     restrictive legend.

          (f) In addition to such  Purchaser's  other  available  remedies,  the
     Company  shall  pay to a  Purchaser,  in cash,  (i) as  partial  liquidated
     damages and not as a penalty,  for each $1,000 of Warrant  Shares (based on
     the VWAP of the Common Stock on the date such  Securities  are submitted to
     the Transfer  Agent)  delivered for removal of the  restrictive  legend and
     subject to Section  4.1(c),  $10 per  Trading  Day  (increasing  to $20 per
     Trading Day five (5) Trading  Days after such damages have begun to accrue)
     for each Trading Day after the Legend  Removal Date until such  certificate
     is  delivered  without a legend and (ii) if the Company  fails to (a) issue
     and deliver (or cause to be delivered) to a Purchaser by the Legend Removal
     Date a certificate  representing the Securities so delivered to the Company
     by such Purchaser that is free from all  restrictive  and other legends and
     (b) if after the Legend Removal Date such  Purchaser  purchases (in an open
     market  transaction  or  otherwise)  shares of Common  Stock to  deliver in
     satisfaction  of a sale  by such  Purchaser  of all or any  portion  of the
     number of shares of Common Stock, or a sale of a number of shares of Common

                                       25
<PAGE>

     Stock equal to all or any portion of the number of shares of Common  Stock,
     that such  Purchaser  anticipated  receiving  from the Company  without any
     restrictive  legend, then an amount equal to the excess of such Purchaser's
     total   purchase  price   (including   brokerage   commissions   and  other
     out-of-pocket expenses, if any) for the shares of Common Stock so purchased
     (including brokerage commissions and other out-of-pocket  expenses, if any)
     (the "Buy-In  Price") over the product of (A) such number of Warrant Shares
     that the Company was  required to deliver to such  Purchaser  by the Legend
     Removal Date  multiplied by (B) the lowest closing sale price of the Common
     Stock on any  Trading Day during the period  commencing  on the date of the
     delivery by such Purchaser to the Company of the applicable  Warrant Shares
     (as the case may be) and ending on the date of such  delivery  and  payment
     under this Section 4.1(d).

          (g) The Shares shall be issued free of legends..

     4.2 Furnishing of Information.

          (a)  Until  the  earliest  of the  time  that  (i) no  Purchaser  owns
     Securities  or (ii) the Warrants  have  expired,  the Company  covenants to
     timely file (or obtain  extensions  in respect  thereof and file within the
     applicable  grace  period) all reports  required to be filed by the Company
     after the date hereof  pursuant to the  Exchange Act even if the Company is
     not then subject to the reporting requirements of the Exchange Act.

          (b) At any time  during the period  commencing  from the six (6) month
     anniversary  of the date  hereof  and  ending  at such time that all of the
     Warrant  Shares  (assuming  cashless  exercise)  may be  sold  without  the
     requirement  for the Company to be in  compliance  with Rule  144(c)(1) and
     otherwise  without  restriction or limitation  pursuant to Rule 144, if the
     Company  (i)  shall  fail for any  reason to  satisfy  the  current  public
     information  requirement  under Rule 144(c) or (ii) has ever been an issuer
     described in Rule 144(i)(1)(i) or becomes an issuer in the future,  and the
     Company shall fail to satisfy any condition set forth in Rule  144(i)(2) (a
     "Public  Information  Failure") then, in addition to such Purchaser's other
     available  remedies,  the Company  shall pay to a  Purchaser,  in cash,  as
     partial  liquidated  damages  and not as a  penalty,  by reason of any such
     delay in or reduction of its ability to sell the Warrant Shares,  an amount
     in cash equal to two percent (2.0%) of the aggregate Exercise Price of such
     Purchaser's  Warrants  on the day of a Public  Information  Failure  and on
     every thirtieth (30th) day (pro rated for periods totaling less than thirty
     days) thereafter until the earlier of (a) the date such Public  Information
     Failure  is cured  and (b) such time that  such  public  information  is no
     longer  required for the Purchasers to transfer the Warrant Shares pursuant
     to Rule 144. The payments to which a Purchaser  shall be entitled  pursuant
     to this  Section  4.2(b)  are  referred  to herein as  "Public  Information
     Failure Payments." Public Information Failure Payments shall be paid on the
     earlier of (i) the last day of the calendar  month during which such Public
     Information Failure Payments are incurred and (ii) the third (3rd) Business
     Day  after the  event or  failure  giving  rise to the  Public  Information
     Failure  Payments is cured.  In the event the Company  fails to make Public
     Information  Failure Payments in a timely manner,  such Public  Information

                                       26
<PAGE>

     Failure  Payments  shall  bear  interest  at the  rate  of 1.5%  per  month
     (prorated  for partial  months)  until paid in full.  Nothing  herein shall
     limit  such  Purchaser's  right to pursue  actual  damages  for the  Public
     Information  Failure, and such Purchaser shall have the right to pursue all
     remedies available to it at law or in equity including, without limitation,
     a decree of specific performance and/or injunctive relief.

     4.3  Integration.  The  Company  shall not sell,  offer for sale or solicit
offers to buy or  otherwise  negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the  Securities  in a manner that would  require the  registration  under the
Securities  Act of the sale of the  Warrants or Warrant  Shares or that would be
integrated  with the offer or sale of the  Securities  for purposes of the rules
and  regulations  of any Trading  Market such that it would require  shareholder
approval  prior to the  closing of such  other  transaction  unless  shareholder
approval is obtained before the closing of such subsequent transaction.

     4.4 Securities Laws  Disclosure;  Publicity.  The Company shall (a) by 9:00
a.m.  (New York City time) on the Trading  Day  immediately  following  the date
hereof,  issue a press release disclosing the material terms of the transactions
contemplated  hereby,  and (b) file a Current Report on Form 8-K,  including the
Transaction  Documents as exhibits thereto,  with the Commission within the time
required by the Exchange Act. From and after the issuance of such press release,
the Company  represents to the Purchasers that it shall have publicly  disclosed
all material,  non-public  information delivered to any of the Purchasers by the
Company  or any of its  Subsidiaries,  or  any  of  their  respective  officers,
directors,  employees or agents in connection with the transactions contemplated
by the Transaction Documents.  In addition,  effective upon the issuance of such
press  release,   the  Company   acknowledges   and  agrees  that  any  and  all
confidentiality or similar  obligations under any agreement,  whether written or
oral,  between the Company,  any of its  Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates on the one hand, and any of
the Purchasers or any of their  Affiliates on the other hand,  shall  terminate.
The  Company and each  Purchaser  shall  consult  with each other in issuing any
other press releases with respect to the transactions  contemplated  hereby, and
neither  the Company nor any  Purchaser  shall issue any such press  release nor
otherwise  make any such  public  statement  without  the prior  consent  of the
Company,  with  respect to any press  release of any  Purchaser,  or without the
prior  consent  of each  Purchaser,  with  respect  to any press  release of the
Company, which consent shall not unreasonably be withheld or delayed,  except if
such  disclosure  is required by law, in which case the  disclosing  party shall
promptly  provide the other party with prior notice of such public  statement or
communication.  Notwithstanding  the  foregoing,  the Company shall not publicly
disclose the name of any Purchaser,  or include the name of any Purchaser in any
filing with the Commission or any regulatory  agency or Trading Market,  without
the prior written consent of such  Purchaser,  except (a) as required by federal
securities law in connection with the filing of final Transaction Documents with
the  Commission  and (b) to the extent  such  disclosure  is  required by law or
Trading  Market  regulations,  in  which  case the  Company  shall  provide  the
Purchasers with prior notice of such disclosure permitted under this clause (b).

     4.5  Shareholder  Rights  Plan.  No claim will be made or  enforced  by the
Company  or,  with the  consent  of the  Company,  any  other  Person,  that any
Purchaser is an "Acquiring Person" under any control share acquisition, business
combination,  poison pill (including any distribution  under a rights agreement)
or similar  anti-takeover  plan or arrangement in effect or hereafter adopted by

                                       27
<PAGE>

the Company,  or that any Purchaser could be deemed to trigger the provisions of
any such  plan or  arrangement,  by  virtue of  receiving  Securities  under the
Transaction  Documents or under any other agreement  between the Company and the
Purchasers.

     4.6 Non-Public  Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents,  which
shall be disclosed  pursuant to Section 4.4,  the Company  covenants  and agrees
that  neither it, nor any other  Person  acting on its behalf  will  provide any
Purchaser or its agents or counsel with any information that constitutes, or the
Company reasonably believes constitutes, material non-public information, unless
prior  thereto  such  Purchaser  shall  have  consented  to the  receipt of such
information and agreed with the Company to keep such  information  confidential.
The Company understands and confirms that each Purchaser shall be relying on the
foregoing  covenant in effecting  transactions in securities of the Company.  To
the extent that the Company delivers any material,  non-public  information to a
Purchaser  without such  Purchaser's  consent,  the Company hereby covenants and
agrees that such  Purchaser  shall not have any duty of  confidentiality  to the
Company,  any  of  its  Subsidiaries,  or  any  of  their  respective  officers,
directors, agents, employees or Affiliates, or a duty to the Company, any of its
Subsidiaries or any of their respective officers,  directors,  agents, employees
or  Affiliates  not  to  trade  on  the  basis  of,  such  material,  non-public
information, provided that the Purchaser shall remain subject to applicable law.
To the extent  that any notice  provided  pursuant to any  Transaction  Document
constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries,  the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Company understands and
confirms  that each  Purchaser  shall be relying on the  foregoing  covenant  in
effecting transactions in securities of the Company.

     4.7 Use of Proceeds. Except as set forth in the Prospectus Supplement,  the
Company shall use the net proceeds from the sale of the Securities hereunder for
working  capital  purposes  and  shall  not  use  such  proceeds:  (a)  for  the
satisfaction  of any portion of the Company's  debt (other than payment of trade
payables in the ordinary course of the Company's  business and prior practices),
(b) for the redemption of any Common Stock or Common Stock Equivalents,  (c) for
the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC
regulations.

     4.8  Indemnification  of  Purchasers.  Subject  to the  provisions  of this
Section  4.8,  the  Company  will  indemnify  and hold  each  Purchaser  and its
directors, officers, shareholders,  members, partners, employees and agents (and
any other Persons with a functionally  equivalent  role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser  (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers,  shareholders,
agents,   members,   partners  or  employees  (and  any  other  Persons  with  a
functionally  equivalent role of a Person holding such titles  notwithstanding a
lack of such title or any other  title) of such  controlling  persons  (each,  a
"Purchaser Party") harmless from any and all losses,  liabilities,  obligations,
claims,  contingencies,  damages,  costs and expenses,  including all judgments,
amounts paid in  settlements,  court costs and  reasonable  attorneys'  fees and
costs of  investigation  that any such Purchaser  Party may suffer or incur as a
result  of or  relating  to (a)  any  breach  of  any  of  the  representations,
warranties,  covenants or agreements made by the Company in this Agreement or in
the  other  Transaction  Documents  or (b) any  action  instituted  against  the

                                       28
<PAGE>

Purchaser  Parties  in  any  capacity,  or  any  of  them  or  their  respective
Affiliates,  by any  stockholder  of the Company who is not an Affiliate of such
Purchaser  Party,  with respect to any of the  transactions  contemplated by the
Transaction  Documents  (unless  such  action  is based  upon a  breach  of such
Purchaser Party's representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with
any such  stockholder  or any  violations  by such  Purchaser  Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought  against any  Purchaser  Party in respect of which  indemnity  may be
sought  pursuant to this  Agreement,  such Purchaser Party shall promptly notify
the  Company  in  writing,  and the  Company  shall have the right to assume the
defense  thereof with counsel of its own choosing  reasonably  acceptable to the
Purchaser  Party.  Any Purchaser  Party shall have the right to employ  separate
counsel in any such action and participate in the defense thereof,  but the fees
and expenses of such  counsel  shall be at the expense of such  Purchaser  Party
except to the  extent  that (i) the  employment  thereof  has been  specifically
authorized  by the  Company in  writing,  (ii) the  Company  has failed  after a
reasonable  period of time to assume such defense and to employ counsel or (iii)
in such  action  there is, in the  reasonable  opinion  of  counsel,  a material
conflict  on any  material  issue  between  the  position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate  counsel.
The Company will not be liable to any Purchaser  Party under this  Agreement (y)
for any  settlement by a Purchaser  Party effected  without the Company's  prior
written consent,  which shall not be unreasonably withheld or delayed; or (z) to
the extent,  but only to the extent that a loss,  claim,  damage or liability is
attributable  to any  Purchaser  Party's  breach of any of the  representations,
warranties,  covenants  or  agreements  made by  such  Purchaser  Party  in this
Agreement or in the other Transaction Documents. The indemnification required by
this Section 4.8 shall be made by periodic payments of the amount thereof during
the course of the  investigation  or defense,  as and when bills are received or
are incurred.  The indemnity agreements contained herein shall be in addition to
any cause of action or similar right of any Purchaser  Party against the Company
or others and any liabilities the Company may be subject to pursuant to law.

     4.9  Reservation  of Common Stock.  As of the date hereof,  the Company has
reserved  and the Company  shall  continue to reserve and keep  available at all
times, free of preemptive  rights, a sufficient number of shares of Common Stock
for the  purpose of  enabling  the  Company  to issue  Shares  pursuant  to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.

     4.10 Listing of Common Stock. The Company hereby agrees to use best efforts
to maintain the listing or  quotation of the Common Stock on the Trading  Market
on which it is currently listed,  and prior to or concurrently with the Closing,
the Company shall apply to list or quote all of the Shares and Warrant Shares on
such  Trading  Market and  promptly  secure the listing of all of the Shares and
Warrant  Shares on such  Trading  Market.  The Company  further  agrees,  if the
Company applies to have the Common Stock traded on any other Trading Market,  it
will then include in such application all of the Shares and Warrant Shares,  and
will take such  other  action as is  necessary  to cause all of the  Shares  and
Warrant  Shares to be listed or quoted on such other Trading  Market as promptly
as  possible.  The Company  will then take all action  reasonably  necessary  to
continue  the listing and  trading of its Common  Stock on a Trading  Market and

                                       29
<PAGE>

will  comply in all  respects  with the  Company's  reporting,  filing and other
obligations under the bylaws or rules of the Trading Market.  The Company agrees
to maintain the eligibility of the Common Stock for electronic  transfer through
the  Depository  Trust  Company or  another  established  clearing  corporation,
including, without limitation, by timely payment of fees to the Depository Trust
Company or such other established  clearing  corporation in connection with such
electronic transfer.

     4.11 Subsequent Equity Sales.

          (a) From the date hereof until 30 days after the Closing Date, neither
     the Company nor any  Subsidiary  shall issue,  enter into any  agreement to
     issue or announce the issuance or proposed issuance of any shares of Common
     Stock or  Common  Stock  Equivalents,  except if the  closing  price of the
     shares of Common Stock of the  Company,  as reported by the NYSE MKT, is at
     or above $0.15 for each of three  consecutive  Trading  Days during such 30
     days period.

          (b) From the date hereof until the two-year anniversary of the Closing
     Date,  the Company shall be prohibited  from  effecting or entering into an
     agreement to effect any issuance by the Company or any of its  Subsidiaries
     of Common  Stock or Common Stock  Equivalents  (or a  combination  of units
     thereof) involving a Variable Rate Transaction. "Variable Rate Transaction"
     means a  transaction  in which the  Company (i) issues or sells any debt or
     equity  securities that are convertible  into,  exchangeable or exercisable
     for,  or include  the right to receive  additional  shares of Common  Stock
     either (A) at a conversion price,  exercise price or exchange rate or other
     price  that is based  upon  and/or  varies  with the  trading  prices of or
     quotations  for the shares of Common  Stock at any time  after the  initial
     issuance  of such  debt or  equity  securities,  or (B) with a  conversion,
     exercise  or  exchange  price that is subject to being reset at some future
     date after the initial issuance of such debt or equity security or upon the
     occurrence of specified or contingent events directly or indirectly related
     to the  business of the Company or the market for the Common  Stock or (ii)
     enters into, or effects a transaction under, any agreement,  including, but
     not  limited  to, an equity  line of credit,  whereby the Company may issue
     securities at a future determined price. Any Purchaser shall be entitled to
     obtain injunctive relief against the Company to preclude any such issuance,
     which remedy shall be in addition to any right to collect damages.

          (c) Notwithstanding  the foregoing,  this Section 4.11 shall not apply
     in respect of an Exempt Issuance,  except that no Variable Rate Transaction
     shall be an Exempt Issuance.

     4.12  Equal  Treatment  of  Purchasers.  No  consideration  (including  any
modification of any Transaction Document) shall be offered or paid to any Person
to  amend or  consent  to a  waiver  or  modification  of any  provision  of the
Transaction  Documents  unless the same  consideration is also offered to all of
the parties to the  Transaction  Documents.  For  clarification  purposes,  this
provision  constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser,  and is intended for the Company to
treat the  Purchasers  as a class and shall not in any way be  construed  as the
Purchasers  acting  in  concert  or as a group  with  respect  to the  purchase,
disposition or voting of Securities or otherwise.

                                       30
<PAGE>

     4.13 Certain  Transactions and Confidentiality.  Each Purchaser,  severally
and not jointly  with the other  Purchasers,  covenants  that neither it nor any
Affiliate  acting on its behalf or  pursuant to any  understanding  with it will
execute any  purchases or sales,  including  Short Sales of any of the Company's
securities during the period commencing with the execution of this Agreement and
ending at such time that the  transactions  contemplated  by this  Agreement are
first publicly  announced  pursuant to the initial press release as described in
Section  4.4.  Each  Purchaser,   severally  and  not  jointly  with  the  other
Purchasers,  covenants that until such time as the transactions  contemplated by
this  Agreement  are publicly  disclosed by the Company  pursuant to the initial
press  release as described in Section 4.4,  such  Purchaser  will  maintain the
confidentiality  of  the  existence  and  terms  of  this  transaction  and  the
information    included   in   the   Disclosure   Schedules   attached   hereto.
Notwithstanding  the foregoing and  notwithstanding  anything  contained in this
Agreement to the contrary,  the Company  expressly  acknowledges and agrees that
(i) no Purchaser makes any  representation,  warranty or covenant hereby that it
will not engage in effecting transactions in any securities of the Company after
the time that the transactions contemplated by this Agreement are first publicly
announced  pursuant to the initial  press  release as  described in Section 4.4,
(ii)  no  Purchaser  shall  be  restricted  or  prohibited  from  effecting  any
transactions  in any  securities  of the Company in accordance  with  applicable
securities  laws from and after the time that the  transactions  contemplated by
this  Agreement  are first  publicly  announced  pursuant to the  initial  press
release as described  in Section 4.4 and (iii) no Purchaser  shall have any duty
of  confidentiality or duty not to trade in the securities of the Company to the
Company or its  Subsidiaries  after the issuance of the initial press release as
described  in  Section  4.4.  Notwithstanding  the  foregoing,  in the case of a
Purchaser that is a multi-managed  investment vehicle whereby separate portfolio
managers manage separate  portions of such Purchaser's  assets and the portfolio
managers  have no  direct  knowledge  of the  investment  decisions  made by the
portfolio  managers  managing other  portions of such  Purchaser's  assets,  the
covenant  set forth above shall only apply with respect to the portion of assets
managed by the portfolio  manager that made the investment  decision to purchase
the Securities covered by this Agreement.

     4.14 Exercise  Procedures.  The form of Notice of Exercise  included in the
Warrants set forth the totality of the procedures  required of the Purchasers in
order to exercise the Warrants.  No additional legal opinion,  other information
or instructions  shall be required of the Purchasers to exercise their Warrants.
Without  limiting the preceding  sentences,  no ink-original  Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise form be required in order to exercise
the  Warrants.  The Company  shall honor  exercises  of the  Warrants  and shall
deliver Warrant Shares in accordance with the terms, conditions and time periods
set forth in the Transaction Documents.

     4.15 Capital  Changes.  Until the one year anniversary of the Closing Date,
the  Company   shall  not   undertake  a  reverse  or  forward  stock  split  or
reclassification  of the Common Stock without the prior  written  consent of the
Purchasers holding a majority in interest of the Shares; provided, however, that
such prior  written  consent  shall not be  required if such  capital  change is
required in  connection  with the  continued  listing or quotation of the Common
Stock on the Trading Market.

     4.16 Form D; Blue Sky Filings.  The Company  agrees to timely file a Form D
with respect to the Warrant and Warrant  Shares as required  under  Regulation D
and to provide a copy  thereof,  promptly  upon  request of any  Purchaser.  The

                                       31
<PAGE>

Company  shall take such action as the Company  shall  reasonably  determine  is
necessary  in order to obtain an  exemption  for,  or to qualify the Warrant and
Warrant  Shares for,  sale to the  Purchasers  at the Closing  under  applicable
securities  or "Blue  Sky" laws of the states of the  United  States,  and shall
provide evidence of such actions promptly upon request of any Purchaser.

     4.17 Extension of Participation Rights. The Company hereby agrees to extend
the participation rights in future financing provided under Section 4.16 of that
certain  Securities  Purchase  Agreement  dated May 17,  2016,  by and among the
Company and the purchasers thereof, until January 31, 2018.

                                   ARTICLE V.
                                  MISCELLANEOUS

     5.1 Termination.  This Agreement may be terminated by any Purchaser,  as to
such Purchaser's obligations hereunder only and without any effect whatsoever on
the obligations between the Company and the other Purchasers,  by written notice
to the other parties,  if the Closing has not been  consummated on or before May
4, 2017;  provided,  however,  that no such termination will affect the right of
any party to sue for any breach by any other party (or parties).

     5.2 Fees and  Expenses.  Except as expressly  set forth in the  Transaction
Documents  to the  contrary,  each party shall pay the fees and  expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party  incident  to the  negotiation,  preparation,  execution,
delivery and performance of this  Agreement.  The Company shall pay all Transfer
Agent fees  (including,  without  limitation,  any fees  required  for  same-day
processing of any instruction  letter  delivered by the Company and any exercise
notice delivered by a Purchaser),  stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchasers.

     5.3 Entire Agreement. The Transaction Documents, together with the exhibits
and schedules thereto, the Prospectus and the Prospectus Supplement, contain the
entire  understanding  of the parties with respect to the subject  matter hereof
and thereof and  supersede  all prior  agreements  and  understandings,  oral or
written,  with respect to such matters,  which the parties acknowledge have been
merged into such documents, exhibits and schedules.

     5.4  Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of transmission,  if
such notice or  communication  is delivered via facsimile or email attachment at
the  facsimile  number  or email  address  as set forth on the  signature  pages
attached  hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next  Trading  Day after  the date of  transmission,  if such  notice or
communication  is delivered via  facsimile or email  attachment at the facsimile
number or email address as set forth on the signature pages attached hereto on a
day that is not a Trading  Day or later  than 5:30 p.m.  (New York City time) on
any Trading Day, (c) the second (2nd) Trading Day following the date of mailing,
if sent by U.S.  nationally  recognized  overnight  courier  service or (d) upon
actual  receipt by the party to whom such notice is  required  to be given.  The

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<PAGE>

address  for  such  notices  and  communications  shall  be as set  forth on the
signature pages attached hereto. To the extent that any notice provided pursuant
to any  Transaction  Document  constitutes,  or contains,  material,  non-public
information  regarding  the  Company  or any  Subsidiaries,  the  Company  shall
simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K.

     5.5  Amendments;  Waivers.  No provision of this  Agreement  may be waived,
modified,  supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and Purchasers which purchased at least 67%
in interest of the Shares based on the initial  Subscription  Amounts  hereunder
or, in the case of a waiver,  by the party against whom  enforcement of any such
waived  provision is sought;  provided,  that if any amendment,  modification or
waiver  disproportionately  and  adversely  impacts  a  Purchaser  (or  group of
Purchasers), the consent of such disproportionately impacted Purchaser (or group
of Purchasers) shall also be required.  No waiver of any default with respect to
any provision,  condition or requirement of this Agreement shall be deemed to be
a  continuing  waiver in the future or a waiver of any  subsequent  default or a
waiver of any other provision,  condition or requirement  hereof,  nor shall any
delay or  omission of any party to exercise  any right  hereunder  in any manner
impair the  exercise of any such right.  Any  proposed  amendment or waiver that
disproportionately,  materially and adversely affects the rights and obligations
of any Purchaser  relative to the comparable rights and obligations of the other
Purchasers  shall require the prior written  consent of such adversely  affected
Purchaser,  Any  amendment  effected in  accordance  with  accordance  with this
Section 5.5 shall be binding upon each  Purchaser and holder of  Securities  and
the Company.

     5.6  Headings.  The  headings  herein  are  for  convenience  only,  do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof.

     5.7 Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties and their  successors and permitted  assigns.  The
Company may not assign this  Agreement  or any rights or  obligations  hereunder
without the prior written consent of each Purchaser (other than by merger).  Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser  assigns or transfers any Securities,  provided that such
transferee  agrees in  writing  to be bound,  with  respect  to the  transferred
Securities,  by the  provisions of the  Transaction  Documents that apply to the
"Purchasers."

     5.8 No Third-Party  Beneficiaries.  The Placement  Agent shall be the third
party  beneficiary  of the  representations  and  warranties  of the  Company in
Section 3.1 and the  representations and warranties of the Purchasers in Section
3.2. This  Agreement is intended for the benefit of the parties hereto and their
respective  successors and permitted  assigns and is not for the benefit of, nor
may any provision  hereof be enforced by, any other Person,  except as otherwise
set forth in Section 4.8 and this Section 5.8.

     5.9 Governing  Law. All questions  concerning the  construction,  validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance  with the internal laws of the State of
New York,  without  regard to the  principles of conflicts of law thereof.  Each
party  agrees  that  all  legal  Proceedings   concerning  the  interpretations,
enforcement and defense of the  transactions  contemplated by this Agreement and
any other Transaction  Documents  (whether brought against a party hereto or its
respective affiliates,  directors,  officers,  shareholders,  partners, members,
employees  or agents)  shall be commenced  exclusively  in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the 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

                                       33
<PAGE>

or in  connection  herewith  or with  any  transaction  contemplated  hereby  or
discussed  herein  (including  with  respect  to the  enforcement  of any of the
Transaction Documents),  and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding,  any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is
an inconvenient venue for such Proceeding.  Each party hereby irrevocably waives
personal  service of process and  consents to process  being  served in any such
Action or Proceeding by mailing a copy thereof via  registered or certified mail
or overnight  delivery  (with evidence of delivery) 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 other  manner  permitted  by law. If any party shall  commence an
Action or Proceeding to enforce any  provisions  of the  Transaction  Documents,
then,  in addition to the  obligations  of the Company  under  Section  4.8, the
prevailing  party  in such  Action  or  Proceeding  shall be  reimbursed  by the
non-prevailing  party for its  reasonable  attorneys'  fees and other  costs and
expenses  incurred with the  investigation,  preparation and prosecution of such
Action or Proceeding.

     5.10 Survival.  The representations  and warranties  contained herein shall
survive the Closing and the delivery of the Securities.

     5.11 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken  together shall be considered one and the same agreement
and shall become effective when  counterparts have been signed by each party and
delivered to each other  party,  it being  understood  that the parties need not
sign the same  counterpart.  In the event that any  signature  is  delivered  by
facsimile  transmission or by e-mail delivery of a ".pdf" format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or ".pdf" signature page were an original thereof.

     5.12 Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent  jurisdiction to be invalid,  illegal,
void or  unenforceable,  the remainder of the terms,  provisions,  covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected,  impaired or  invalidated,  and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially  the same result as that  contemplated by such
term, provision,  covenant or restriction.  It is hereby stipulated and declared
to be the  intention of the parties that they would have  executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

     5.13  Rescission  and  Withdrawal  Right.  Notwithstanding  anything to the
contrary  contained in (and without  limiting any similar  provisions of) any of
the other  Transaction  Documents,  whenever  any  Purchaser  exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time

                                       34
<PAGE>

upon written notice to the Company,  any relevant notice,  demand or election in
whole or in part without  prejudice to its future actions and rights;  provided,
however,  that in the case of a  rescission  of an  exercise  of a Warrant,  the
applicable  Purchaser  shall be  required  to return any shares of Common  Stock
subject to any such rescinded  exercise notice  concurrently  with the return to
such  Purchaser  of the  aggregate  exercise  price paid to the Company for such
shares and the  restoration  of such  Purchaser's  right to acquire  such shares
pursuant to such  Purchaser's  Warrant  (including,  issuance  of a  replacement
warrant certificate evidencing such restored right).

     5.14 Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated,  lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange  and  substitution  for and upon  cancellation
thereof (in the case of mutilation),  or in lieu of and substitution therefor, a
new  certificate  or  instrument,  but only upon receipt of evidence  reasonably
satisfactory to the Company of such loss,  theft or  destruction.  The applicant
for a new certificate or instrument under such circumstances  shall also pay any
reasonable third-party costs (including customary indemnity) associated with the
issuance of such replacement Securities.

     5.15  Remedies.  In  addition  to being  entitled  to  exercise  all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Purchasers  and the Company will be entitled to specific  performance  under the
Transaction  Documents.  The  parties  agree that  monetary  damages  may not be
adequate  compensation  for  any  loss  incurred  by  reason  of any  breach  of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any Action for specific  performance of any such obligation the
defense that a remedy at law would be adequate.

     5.16 Payment Set Aside.  To the extent that the Company  makes a payment or
payments to any Purchaser  pursuant to any  Transaction  Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such  enforcement  or exercise or any part thereof are  subsequently
invalidated,  declared to be fraudulent or  preferential,  set aside,  recovered
from, disgorged by or are required to be refunded,  repaid or otherwise restored
to the  Company,  a  trustee,  receiver  or  any  other  Person  under  any  law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     5.17  Independent  Nature  of  Purchasers'   Obligations  and  Rights.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document.  Nothing contained herein
or in any  other  Transaction  Document,  and no action  taken by any  Purchaser
pursuant  hereto or thereto,  shall be deemed to constitute  the Purchasers as a

                                       35
<PAGE>

partnership,  an  association,  a joint venture or any other kind of entity,  or
create a presumption  that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights including,  without limitation, the rights arising out of
this Agreement or out of the other  Transaction  Documents,  and it shall not be
necessary  for any other  Purchaser to be joined as an  additional  party in any
Proceeding  for such purpose.  Each  Purchaser has been  represented  by its own
separate  legal  counsel  in its  review  and  negotiation  of  the  Transaction
Documents.  The legal counsel of the  Placement  Agent does not represent any of
the Purchasers and only represents the Placement  Agent. The Company has elected
to provide all Purchasers with the same terms and Transaction  Documents for the
convenience of the Company and not because it was required or requested to do so
by any of the  Purchasers.  It is  expressly  understood  and  agreed  that each
provision contained in this Agreement and in each other Transaction  Document is
between the Company and a Purchaser, solely, and not between the Company and the
Purchasers collectively and not between and among the Purchasers.

     5.18  Liquidated  Damages.  The  Company's  obligations  to pay any partial
liquidated  damages or other amounts owing under the Transaction  Documents is a
continuing  obligation of the Company and shall not  terminate  until all unpaid
partial liquidated damages and other amounts have been paid  notwithstanding the
fact that the instrument or security  pursuant to which such partial  liquidated
damages or other amounts are due and payable shall have been canceled.

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

     5.20  Construction.  The  parties  agree  that  each of them  and/or  their
respective   counsel  have  reviewed  and  had  an  opportunity  to  revise  the
Transaction  Documents and,  therefore,  the normal rule of  construction to the
effect that any ambiguities are to be resolved  against the drafting party shall
not be  employed  in the  interpretation  of the  Transaction  Documents  or any
amendments  thereto.  In addition,  each and every reference to share prices and
shares  of  Common  Stock  in any  Transaction  Document  shall  be  subject  to
adjustment  for  reverse  and  forward  stock  splits,  stock  dividends,  stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

     5.21  WAIVER OF JURY TRIAL.  IN ANY  ACTION,  SUIT,  OR  PROCEEDING  IN ANY
JURISDICTION  BROUGHT BY ANY PARTY  AGAINST ANY OTHER  PARTY,  THE PARTIES  EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY  ABSOLUTELY,  UNCONDITIONALLY,  IRREVOCABLY AND EXPRESSLY  WAIVES FOREVER
TRIAL BY JURY.




                            (Signature Pages Follow)




                                       36
<PAGE>



     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective  authorized  signatories as of
the date first indicated above.



CEL-SCI CORPORATION                               Address for Notice:
                                                  -------------------


By: /s/ Geert R. Kersten
    ------------------------
    Name: Geert R. Kersten
    Title: CEO

With a copy to (which shall not constitute notice):

      William T. Hart
      Hart & Hart, LLC
      1624 Washington St.
      Denver, CO  80203
      (303) 839-0061
      harttrinen@aol.com













                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                      SIGNATURE PAGE FOR PURCHASER FOLLOWS]











                                       37
<PAGE>



        [PURCHASER SIGNATURE PAGES TO CVM SECURITIES PURCHASE AGREEMENT]



     IN WITNESS WHEREOF,  the undersigned  have caused this Securities  Purchase
Agreement to be duly executed by their respective  authorized  signatories as of
the date first indicated above.

Name of Purchaser: ________________________________________________________

Signature of Authorized Signatory of Purchaser: ___________________________

Name of Authorized Signatory: _____________________________________________

Title of Authorized Signatory: ____________________________________________

Email Address of Authorized Signatory:_____________________________________

Facsimile Number of Authorized Signatory: _________________________________

Address for Notice to Purchaser:



Address for  Delivery of  Securities  to  Purchaser  (if not same as address for
notice):




Subscription Amount: $_________________

Shares: _________________

Warrant Shares: __________________

EIN Number: _______________________



                           [SIGNATURE PAGES CONTINUE]




                                       38
<PAGE>
</TEXT>
</DOCUMENT>
