FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2010.

OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _________ to __________.

Commission file number 1-11889

CEL-SCI CORPORATION
(Exact name of registrant as specified in its charter)

         COLORADO                                   84-0916344
 -----------------------------            ------------------------------------
(State or other jurisdiction             (I.R.S. Employer Identification No.)
 of incorporation or organization)

          8229 Boone Blvd., Suite 802
                Vienna, Virginia                             22182
         --------------------------------                -----------
     (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code: (703) 506-9460 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.01 par value
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [ ]

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  [ ]                    Accelerated filer          [X]

Non-accelerated filer    [ ]                    Smaller reporting company  [ ]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): [ ] Yes [X] No

The aggregate market value of the voting stock held by non-affiliates of the Registrant, based upon the closing sale price of the common stock on March 31, 2010, as quoted on the NYSE Amex, was $128,872,039.

As of November 30, 2010, the Registrant had 205,098,121 issued and outstanding shares of common stock.

Documents Incorporated by Reference: None


PART I

ITEM 1. BUSINESS

CEL-SCI Corporation (CEL-SCI) was formed as a Colorado corporation in 1983. CEL-SCI's principal office is located at 8229 Boone Boulevard, Suite 802, Vienna, VA 22182. CEL-SCI's telephone number is 703-506-9460 and its web site is www.cel-sci.com. CEL-SCI makes its electronic filings with the Securities and Exchange Commission (SEC), including its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports available on its website free of charge as soon as practicable after they are filed or furnished to the SEC.

OVERVIEW

CEL-SCI's business consists of the following:

1) Multikine(R) cancer therapy;
2) New "cold fill" manufacturing service to the pharmaceutical industry; and
3) LEAPS technology, with two products, H1N1 swine flu treatment for H1N1 hospitalized patients and CEL-2000, a rheumatoid arthritis treatment vaccine.

MULTIKINE

CEL-SCI's lead product, Multikine, is being developed for the treatment of cancer. It is the first of a new class of cancer immunotherapy drugs called Combination Immunotherapy because it combines active and passive immunity in one product. It simulates the activities of a healthy person's immune system, which battles cancer every day. Multikine is multi-targeted; it is the only cancer immunotherapy that both kills cancer cells in a targeted fashion and activates the general immune system to destroy the cancer. CEL-SCI believes Multikine is the first immunotherapeutic agent being developed as a first-line standard of care treatment for cancer and it is cleared for a global Phase III clinical trial in advanced primary (previously untreated) head and neck cancer patients.

Multikine is a new type of immunotherapy in that it is a combination immunotherapy, incorporating both active and passive immune activity. A combination immunotherapy most closely resembles the workings of the natural immune system in the sense that it works on multiple fronts in the battle against cancer. A combination immunotherapy causes a direct and targeted killing of the tumor cells and activates the immune system to produce a more robust and sustainable anti-tumor response.

Multikine is designed to target the tumor micro-metastases that are mostly responsible for treatment failure. The basic concept is to add Multikine to the current cancer treatments with the goal of making the overall cancer treatment more successful. Phase II data indicated that Multikine treatment resulted in a substantial increase in the survival of patients. The lead indication is

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advanced primary (previously untreated) head & neck cancer (about 600,000 new cases per annum). Since Multikine is not tumor specific, it may also be applicable in many other solid tumors.

The following results were seen in CEL-SCI's last Phase II study conducted with Multikine. This study used the same treatment protocol as will be used in CEL-SCI's Phase III study:

o 33% improvement in median overall survival: In the last Phase II study a 33% improvement in median overall survival, at a median of 3.5 years post surgery, was seen in patients with locally advanced disease treated with Multikine as first-line therapy (absolute survival rate 63%) as compared to the 3.5 year median overall survival rates of the same cancer patient population determined from a review of 55 clinical trials reported in the scientific literature that were conducted between 1987 and 2007. CEL-SCI's Phase III clinical trial will need to demonstrate a 10% improvement in overall survival for Multikine to be successful.

o Average of 50% reduction in tumor cells: The three week Multikine treatment regimen used in the last Phase II study killed, on average, approximately half of the cancer cells before the start of standard therapy such as surgery, radiation and chemotherapy (as determined by histopathology).

o 12% complete response: In 12% of patients the tumor was completely eliminated after only a three week treatment with Multikine (as determined by histopathology).

In January 2007, the US Food and Drug Administration (FDA) concurred with the initiation of a global Phase III clinical trial in head and neck cancer patients using Multikine. The Canadian regulatory agency, the Biologics and Genetic Therapies Directorate, had previously concurred with the initiation of a global Phase III clinical trial in head and neck cancer patients using Multikine.

The protocol is designed to develop conclusive evidence of the efficacy of Multikine in the treatment of advanced primary (previously untreated) squamous cell carcinoma of the oral cavity (head and neck cancer). A successful outcome from this trial should enable CEL-SCI to apply for a Biologics License to market Multikine for the treatment of this patient population.

The trial will test the hypothesis that Multikine treatment administered prior to the current standard therapy for head and neck cancer patients (surgical resection of the tumor and involved lymph nodes followed by radiotherapy or radiotherapy and concurrent chemotherapy) will extend the overall survival, enhance the local/regional control of the disease and reduce the rate of disease progression in patients with advanced oral squamous cell carcinoma.

However, before starting the Phase III trial, CEL-SCI needed to build a dedicated manufacturing facility to produce Multikine. CEL-SCI estimates the cost of the Phase III trial, with the exception of the parts that will be paid by its licensees, Teva Pharmaceuticals and Orient Europharma, to be approximately $25 - $26 million. Since CEL-SCI has obtained substantial financing, CEL-SCI is moving forward rapidly to launch its global Phase III clinical trial.

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CEL-SCI, together with its development partners Teva Pharmaceutical Industries and Orient Europharma, has plans to run the study in about 48 medical centers in 9 countries.

Multikine is the first immunotherapeutic agent being developed as a first-line treatment for cancer. It is administered prior to any other cancer therapy because that is the period when the anti-tumor immune response can still be fully activated. Once the patient has had surgery or has received radiation and/or chemotherapy, the immune system is severely weakened and is less able to mount an effective anti-tumor immune response. To date, other immunotherapies have been administered later in cancer therapy (i.e., after radiation, chemotherapy, surgery).

Clinical trials in over 200 patients have been completed with Multikine with the following results:

1. It has been demonstrated to be safe and non-toxic.

2. It has been shown to render cancer cells much more susceptible to radiation therapy (The Laryngoscope, December 2003, Vol.113 Issue 12).

3. A publication in the Journal of Clinical Oncology (Timar et al, JCO, 23(15): May 2005), revealed the following:

(i) Multikine induced anti-tumor immune responses through the combined activity of the different cytokines present in Multikine following local administration of Multikine for only three weeks.

(ii) The combination of the different cytokines caused the induction, recruitment into the tumor bed, and proliferation of anti-tumor T-cells and other anti-tumor inflammatory cells, leading to a massive anti-tumor immune response.

(iii) Multikine induced a reversal of the CD4/CD8 ratio in the tumor infiltrating cells, leading to a marked increase of CD4 T-cells in the tumor, which resulted in the prolongation of the anti-tumor immune response and tumor cell destruction.

(iv) The anti-tumor immune-mediated processes continued long after the cessation of Multikine administration.

(v) A three-week Multikine treatment of patients with advanced primary oral squamous cell carcinoma resulted in an overall response rate of 42% prior to standard therapy, with 12% of the patients having a complete response.

(vi) A histopathology study showed that the tumor load in Multikine treated patients was reduced by nearly 50% as compared to tumors from control patients in the same pathology study.

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(vii) The tumors of all of the patients in this Phase II trial who responded to Multikine treatment were devoid of the cell surface marker for HLA Class II. This finding, if confirmed in this global Phase III clinical trial, may lead to the establishment of a marker for selecting the patient population best suited for treatment with Multikine.

(viii) In a Phase II study, using the same drug regimen as will be used in the Phase III study, the addition of Multikine as first-line treatment prior to the standard of care treatment resulted in a 33% improvement in the median overall survival at 3 1/2 years post-surgery, when compared to the results of 55 OSCC clinical trials published in the scientific literature between 1987 and 2007.

Multikine works in a comprehensive way to marshal an effective killing of the tumor:

1. Multikine attacks multiple antigens on the cancer cells.

2. Multikine directly kills cancer cells:

o The various cytokines present in Multikine, such as TNF, IL-1, along with other cytokines, are responsible for this activity.

3. Multikine signals the immune system to mount an effective and sustainable anti-tumor immune response:

o Multikine changes the type of cells that infiltrate and attack the tumor from the `usual' CD-8 cells to CD-4 cells. These CD-4 cells bring about a more robust anti-tumor response.

- This is extremely important because the tumor is able to shut down the infiltrating CD-8 cells, but is unable to shut down the CD-4 cell attack. In addition, CD-4 cells help break "tumor tolerance," thereby allowing the immune system to recognize, attack, and destroy the tumor. The normal immune system is `blind' to tumor cells because the tumor cells are derived from the body's own cells, and thus the body `thinks' of the tumor as `self', a phenomenon also known as `tumor tolerance'.

4. Multikine renders the remaining cancer cells potentially much more susceptible to radiation and chemotherapy treatment, thereby making these treatments much more effective.

Multikine is currently being developed as an adjunct (additive) therapy to the existing treatment of previously untreated head and neck cancer patients with the goal of killing cancer cells and activating the general immune system to destroy the cancer. CEL-SCI scientists believe that patients with previously untreated disease would most likely benefit more from Multikine treatment as

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their immune systems are still capable of proper immune response. Head and neck cancer represents a clear unmet medical need. The recurrence rate is high and about one out of every two patients die within three years. Currently used therapies (surgery followed by radiation, chemotherapy or radio-chemotherapy) fail to completely arrest the disease because they are unable to completely remove or kill all of the cancer cells. The persistence of these residual cells is responsible for the cancer's recurrence or metastasis. Multikine is injected five times a week for three weeks around the tumor (peri-tumorally) as well as in the vicinity of the local lymph nodes (peri-lymphatically) prior to the patient's tumor being removed surgically and the patient receiving any other therapy because these are the areas in which most of the cancer will recur and from which metastases will develop. Multikine unleashes and then harnesses and enhances the immune system's ability to target and kill those tumor cells before they can cause recurrence or metastasize. Since Multikine may be potentially useful in treating many tumor types, it is expected that multiple indications will be pursued over time since it is the same principle for different cancers.

Proof of efficacy for anti-cancer drugs is a lengthy and complex process. At this stage of clinical investigation, it remains to be proven that Multikine will be effective against any form of cancer. Even if some form of Multikine is found to be effective in the treatment of cancer, commercial use of Multikine may be several years away due to extensive safety and effectiveness tests that would be necessary before required government approvals are obtained. It should be noted that other companies and research teams are actively involved in developing treatments and/or cures for cancer, and accordingly, there can be no assurance that CEL-SCI's research efforts, even if successful from a medical standpoint, can be completed before those of its competitors.

Development, Supply and Distribution Agreements

CEL-SCI has a development, supply and distribution agreement with Orient Europharma of Taiwan. The agreement gave Orient Europharma the exclusive marketing rights to Multikine for all cancer indications in Taiwan, Singapore, Hong Kong and Malaysia. On November 3, 2008, CEL-SCI expanded its exclusive licensing agreement for Multikine with Orient Europharma. The new agreement extends the Multikine collaboration to also cover South Korea, the Philippines, Australia and New Zealand. As part of this new agreement, Orient Europharma invested an additional $500,000 in CEL-SCI. The agreement provides for Orient Europharma to fund the clinical trials needed to obtain marketing approvals in these countries for head and neck cancer, naso-pharyngeal cancer and potentially cervical cancer, which are very prevalent in Far East Asia. CEL-SCI may use the clinical data generated in these trials to support applications for marketing approvals for Multikine in other parts of the world. Orient Europharma will participate in and pay for part of CEL-SCI's head and neck Phase III clinical trial.

Under the agreement, CEL-SCI will manufacture and supply Multikine to Orient Europharma for distribution in the territory. Both parties will share in the revenue from the sale of Multikine. Orient Europharma will participate in the upcoming Phase III clinical trial by enrolling and paying for a substantial number of patients in its territory. Orient Europharma will also purchase Multikine for the Phase III trial from CEL-SCI for these patients at a rate established in the November 2000 agreement.

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Pursuant to an agreement dated May 2003, Eastern Biotech is due a royalty equal to 2% of CEL-SCI's net sales worldwide of Multikine and CEL-1000 prior to May 30, 2033.

On August 19, 2008, CEL-SCI entered into an agreement with Teva Pharmaceutical Industries Ltd. (Teva), a leading global pharmaceutical company, under which CEL-SCI granted Teva an exclusive license to market and distribute CEL-SCI's cancer drug Multikine in Israel and Turkey (the "Territory"). Although the licensing agreement is initially restricted to the areas of head and neck cancer, Teva has the right, subject to certain conditions, to include other cancers during the term of the agreement.

Pursuant to the agreement, Teva will participate in CEL-SCI's upcoming global Phase III clinical trial. Teva will fund a portion of the Phase III clinical study and Teva's clinical group will conduct part of the clinical study in Israel under the auspices of CEL-SCI and its Clinical Research Organization. Teva will also be responsible for registering Multikine in the Territory. If Multikine is approved, CEL-SCI will be responsible for manufacturing the product, while Teva will be responsible for sales in the Territory. Revenues will be divided equally between CEL-SCI and Teva.

Effective March 6, 2009, CEL-SCI entered into a licensing agreement with Byron Biopharma LLC ("Byron") under which CEL-SCI granted Byron an exclusive license to market and distribute Multikine in the Republic of South Africa.

Pursuant to the agreement, Byron will be responsible for registering the product in South Africa. Once Multikine has been approved for sale, CEL-SCI will be responsible for manufacturing the product, while Byron will be responsible for sales in South Africa. Revenues will be divided equally between CEL-SCI and Byron. To maintain the license Byron, among other requirements, made a payment to CEL-SCI in the amount of $125,000 on March 8, 2010.

As of November 30, 2010, neither Orient Europharma nor Teva had started any clinical trials.

New Manufacturing Facility

CEL-SCI's new, state-of-the-art manufacturing facility will be used to manufacture Multikine for CEL-SCI's Phase III clinical trial. Located near Baltimore, MD, it was designed over several years, and was built out to CEL-SCI's specifications. CEL-SCI leased this specially designed and built out facility, rather than having Multikine produced by a third party on a contract basis, since regulatory agencies prefer that the same facility be used to manufacture Multikine for both the Phase III trials and commercial sales, assuming the Phase III trial is successful. As is customary with large, complex construction projects, the manufacturing facility required a number of construction, utility and equipment adjustments as well as "punch list" items that required additional time to complete. This resulted in a gap between the time when CEL-SCI took over the facility and the time when validations and other CEL-SCI specific activities could commence. In addition to using this facility to manufacture Multikine, CEL-SCI will offer the use of the facility as a service to pharmaceutical companies and others, particularly those that need to

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"fill and finish" their drugs in a cold environment (4 degrees Celsius, or approximately 39 degrees Fahrenheit). Fill and finish is the process of filling injectable drugs in a sterile manner and is a key part of the manufacturing process for many medicines. However, this service will only be offered when CEL-SCI has the time and resources available, with priority always given to Multikine.

The fastest area of growth in the biopharmaceutical and pharmaceutical markets is biologics, and most recently stem cell products. These compounds and therapies are derived from or mimic human cells or proteins and other molecules (e.g., hormones, etc.). Nearly all of the major drugs developed for unmet medical needs (e.g., Avastin(R), Erbitux(R), Rituxan(R), Herceptin(R), Copaxon(R), etc.) are biologics. Biologics are usually very sensitive to heat and quickly lose their biological activity if exposed to room or elevated temperature. Room or elevated temperatures may also affect the shelf-life of a biologic with the result that the product cannot be stored for as long as desired. However, these products do not generally lose activity when kept at 4 degrees Celsius.

The FDA and other regulatory agencies require a drug developer to demonstrate the safety, purity and potency of a drug being produced for use in humans. When filling a product at 4 degrees Celsius, minimal to no biological losses occur and therefore the potency of the drug is maintained throughout the final critical step of the drug's manufacturing process. If the same temperature sensitive drug is instead aseptically filled at room temperature, expensive and time-consuming validation studies must be conducted, first, to be able to obtain a complete understanding of the product's potency loss during the room temperature fill process, and second, to create solutions to the drug's potency losses, which require further testing and validation.

CEL-SCI's unique, cold aseptic filling suite can be operated at temperatures between 2 degrees Celsius and room temperatures, and at various humidity levels. CEL-SCI's aseptic filling suites are maintained at FDA and EU ISO classifications of 5/6. CEL-SCI also has the capability to formulate, inspect, label and package biologic products at cold temperatures.

See Item 2 of this report for information concerning the terms of the lease on the manufacturing facility.

LEAPS

CEL-SCI's patented T-cell Modulation Process uses "heteroconjugates" to direct the body to choose a specific immune response. The heteroconjugate technology, referred to as LEAPS (Ligand Epitope Antigen Presentation System), is intended to selectively stimulate the human immune system to more effectively fight bacterial, viral and parasitic infections as well as autoimmune, allergies, transplantation rejection and cancer, when it cannot do so on its own. Administered like vaccines, LEAPS combines T-cell binding ligands with small, disease associated, peptide antigens and may provide a new method to treat and prevent certain diseases.

The ability to generate a specific immune response is important because many diseases are often not combated effectively due to the body's selection of the "inappropriate" immune response. The capability to specifically reprogram an immune response may offer a more effective approach than existing vaccines and drugs in attacking an underlying disease.

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Using the LEAPS technology, CEL-SCI has created a potential peptide treatment for H1N1 (swine flu) hospitalized patients. This LEAPS flu treatment is designed to focus on the conserved, non-changing epitopes of the different strains of Type A Influenza viruses (H1N1, H5N1, H3N1, etc.), including "swine", "avian or bird", and "Spanish Influenza", in order to minimize the chance of viral "escape by mutations" from immune recognition. CEL-SCI's LEAPS flu treatment contains epitopes known to be associated with immune protection against influenza in animal models.

On September 16, 2009, the U.S. Food and Drug Administration advised CEL-SCI that it could proceed with its first clinical trial to evaluate the effect of LEAPS-H1N1 treatment on the white blood cells of hospitalized H1N1 patients. This followed an expedited initial review of CEL-SCI's regulatory submission for this study proposal.

On November 6, 2009, CEL-SCI announced that The Johns Hopkins University School of Medicine had given clearance for CEL-SCI's first clinical study to proceed using LEAPS-H1N1. This study started one week later. Since the disease disappeared about one month later, the study has been unable to enroll many patients.

To fully consider a next-stage clinical trial to evaluate LEAPS-H1N1 treatment of hospitalized patients with laboratory-confirmed H1N1 Pandemic Flu under an Exploratory IND, the FDA has asked CEL-SCI to submit a detailed follow-up regulatory filing with extensive additional data. Thus, in parallel with preparing for this first study, CEL-SCI is proceeding on an expedited basis to complete this next submission. Recognizing that it cannot proceed with its next-stage clinical trial without the FDA's concurrence, CEL-SCI anticipates engaging in a detailed dialogue with the FDA regarding the proposed LEAPS-H1N1 clinical-development program following this future filing.

With its LEAPS technology, CEL-SCI also discovered a second peptide named CEL-2000, a potential rheumatoid arthritis vaccine. The data from animal studies of rheumatoid arthritis using the CEL-2000 treatment vaccine demonstrated that CEL-2000 is an effective treatment against arthritis with fewer administrations than those required by other anti-rheumatoid arthritis treatments, including Enbrel(R). CEL-2000 is also potentially a more disease type-specific therapy, is calculated to be significantly less expensive and may be useful in patients unable to tolerate or who may not be responsive to existing anti-arthritis therapies.

In February 2010 CEL-SCI announced that its CEL-2000 vaccine demonstrated that it was able to block the progression of rheumatoid arthritis in a mouse model. The results were published in the scientific peer-reviewed Journal of International Immunopharmacology (online edition) in an article titled "CEL-2000: A Therapeutic Vaccine for Rheumatoid Arthritis Arrests Disease Development and Alters Serum Cytokine/Chemokine Patterns in the Bovine Collagen Type II Induced Arthritis in the DBA Mouse Model" with lead author Dr. Daniel Zimmerman. The study was co-authored by scientists from CEL-SCI, Washington Biotech, Northeastern Ohio Universities Colleges of Medicine and Pharmacy and Boulder BioPath.

None of the products or vaccines which are in development using the LEAPS technology have been approved by the FDA or any other government agency. Before

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obtaining marketing approval from the FDA in the United States, and by comparable agencies in most foreign countries, these product candidates must undergo rigorous preclinical and clinical testing which is costly and time consuming and subject to unanticipated delays. There can be no assurance that these approvals will be granted.

PATENTS

CEL-SCI currently has six patents issued in the United States and twenty-two patent applications pending in Europe, Japan, China, India, Hong Kong, Canada and the United States. One patent covers certain aspects of Multikine and will expire in 2023. The remaining five patents cover CEL-SCI's LEAPS technology and will expire between December 2014 and April 2022. CEL-SCI believes that the greatest level of protection for Multikine is not based on patents but from the confidential and proprietary process relating to the manufacture of Multikine.

RESEARCH AND DEVELOPMENT

Since 1983, and through September 30, 2010, approximately $77,243,000 has been spent on CEL-SCI-sponsored research and development, including $11,911,600, $6,011,800, and $4,101,600 respectively during the years ended September 30, 2010, 2009 and 2008.

The costs associated with the clinical trials relating to CEL-SCI's technologies, research expenditures and CEL-SCI's administrative expenses have been funded with the public and private sales of CEL-SCI's securities and borrowings from third parties, including affiliates of CEL-SCI. The extent of CEL-SCI's clinical trials and research programs is primarily based upon the amount of capital available to CEL-SCI and the extent to which CEL-SCI has received regulatory approvals for clinical trials.

GOVERNMENT REGULATION

New drug development and approval process

Regulation by governmental authorities in the United States and other countries is a significant factor in the manufacture and marketing of biological and other drug products and in ongoing research and product development activities. CEL-SCI's products will require regulatory approval by governmental agencies prior to commercialization. In particular, these products are subject to rigorous preclinical and clinical testing and other premarket approval requirements by the FDA and regulatory authorities in other countries. In the United States, various statutes and regulations also govern or influence the manufacturing, safety, labeling, storage, record keeping and marketing of pharmaceutical and biological drug products. The lengthy process of seeking these approvals, and the subsequent compliance with applicable statutes and regulations, require the expenditure of substantial resources. CEL-SCI believes that it is currently in compliance with applicable statutes and regulations that are relevant to its operations. CEL-SCI has no control, however, over the compliance of its partners.

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The FDA's statutes, regulations, or policies may change and additional statutes or government regulations may be enacted which could prevent or delay regulatory approvals of biological or other drug products. CEL-SCI cannot predict the likelihood, nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the U.S. or abroad.

Regulatory approval, when and if obtained, may be limited in scope. In particular, regulatory approvals will restrict the marketing of a product to specific uses. Further, approved biological and other drugs, as well as their manufacturers, are subject to ongoing review. Discovery of previously unknown problems with these products may result in restrictions on their manufacture, sale or use or in their withdrawal from the market. Failure to comply with regulatory requirements may result in criminal prosecution, civil penalties, recall or seizure of products, total or partial suspension of production or injunction, as well as other actions affecting CEL-SCI. Any failure by CEL-SCI or its partners to obtain and maintain, or any delay in obtaining, regulatory approvals could materially adversely affect CEL-SCI's business.

The process for new drug approval has many steps, including:

Preclinical testing

Once a biological or other drug candidate is identified for development, the drug candidate enters the preclinical testing stage. During preclinical studies, laboratory and animal studies are conducted to show biological activity of the drug candidate in animals, both healthy and with the targeted disease. Also, preclinical tests evaluate the safety of drug candidates. These tests typically take approximately two years to complete. Preclinical tests must be conducted in compliance with good laboratory practice regulations. In some cases, long-term preclinical studies are conducted while clinical studies are ongoing.

Investigational new drug application

When the preclinical testing is considered adequate by the sponsor to demonstrate the safety and the scientific rationale for initial human studies, an investigational new drug application (IND) is filed with the FDA to seek authorization to begin human testing of the biological or other drug candidate. The IND becomes effective if not rejected by the FDA within 30 days after filing. The IND must provide data on previous experiments, how, where and by whom the new studies will be conducted, the chemical structure of the compound, the method by which it is believed to work in the human body, any toxic effects of the compound found in the animal studies and how the compound is manufactured. All clinical trials must be conducted under the supervision of a qualified investigator in accordance with good clinical practice regulations. These regulations include the requirement that all subjects provide informed consent. In addition, an institutional review board (IRB), comprised primarily of physicians and other qualified experts at the hospital or clinic where the proposed studies will be conducted, must review and approve each human study. The IRB also continues to monitor the study and must be kept aware of the study's progress, particularly as to adverse events and changes in the research. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if adverse events occur. In

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addition, the FDA may, at any time during the 30-day period after filing an IND or at any future time, impose a clinical hold on proposed or ongoing clinical trials. If the FDA imposes a clinical hold, clinical trials cannot commence or recommence without FDA authorization, and then only under terms authorized by the FDA. In some instances, the IND process can result in substantial delay and expense.

Some limited human clinical testing may also be done under a physician's IND that allows a single individual to receive the drug, particularly where the individual has not responded to other available therapies. A physician's IND does not replace the more formal IND process, but can provide a preliminary indication as to whether further clinical trials are warranted, and can, on occasion, facilitate the more formal IND process.

Clinical trials are typically conducted in three sequential phases, but the phases may overlap.

Phase I clinical trials

Phase I human clinical trials usually involve between 20 and 80 healthy volunteers or patients and typically take one to two years to complete. The tests study a biological or other drug's safety profile, and may seek to establish the safe dosage range. The Phase I clinical trials also determine how a drug candidate is absorbed, distributed, metabolized and excreted by the body, and the duration of its action.

Phase II clinical trials

In Phase II clinical trials, controlled studies are conducted on an expanded population of patients with the targeted disease. The primary purpose of these tests is to evaluate the effectiveness of the drug candidate on the volunteer patients as well as to determine if there are any side effects or other risks associated with the drug. These studies generally take several years and may be conducted concurrently with Phase I clinical trials. In addition, Phase I/II clinical trials may be conducted to evaluate not only the efficacy of the drug candidate on the patient population, but also its safety.

Phase III clinical trials

This phase typically lasts several years and involves an even larger patient population, often with several hundred or even several thousand patients depending on the use for which the drug is being studied. Phase III trials are intended to establish the overall risk-benefit ratio of the drug and provide, if appropriate, an adequate basis for product labeling. During the Phase III clinical trials, physicians monitor the patients to determine efficacy and to observe and report any reactions or other safety risks that may result from use of the drug candidate.

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Chemical and formulation development

Concurrent with clinical trials and preclinical studies, companies also must develop information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in accordance with current good manufacturing practice requirements (cGMPs). The manufacturing process must be capable of consistently producing quality batches of the product and the manufacturer must develop methods for testing the quality, purity, and potency of the final drugs. Additionally, appropriate packaging must be selected and tested and chemistry stability studies must be conducted to demonstrate that the product does not undergo unacceptable deterioration over its shelf-life.

New drug application or biological license application

After the completion of the clinical trial phases of development, if the sponsor concludes that there is substantial evidence that the biological or other drug candidate is effective and that the drug is safe for its intended use, a new drug application (NDA) or biologics license application (BLA) may be submitted to the FDA. The application must contain all of the information on the biological or other drug candidate gathered to that date, including data from the clinical trials.

The FDA reviews all NDAs and BLAs submitted before it accepts them for filing. It may request additional information rather than accepting an application for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth review of the application. The FDA may refer the application to an appropriate advisory committee, typically a panel of clinicians, for review, evaluation and a recommendation. The FDA is not bound by the recommendation of an advisory committee. If FDA evaluations of the NDA or BLA and the manufacturing facilities are favorable, the FDA may issue an approval letter authorizing commercial marketing of the drug or biological candidate for specified indications. The FDA could also issue an approvable letter, which usually contains a number of conditions that must be met in order to secure final approval of the NDA or BLA. When and if those conditions have been met to the FDA's satisfaction, the FDA will issue an approval letter. On the other hand, if the FDA's evaluation of the NDA or BLA or manufacturing facilities is not favorable, the FDA may refuse to approve the application or issue a non-approvable letter.

Among the conditions for NDA or BLA approval is the requirement that each prospective manufacturer's quality control and manufacturing procedures conform to current good manufacturing practice standards and requirements (cGMPs). Manufacturing establishments are subject to periodic inspections by the FDA and by other federal, state or local agencies.

Some of the clinical trials funded to date by CEL-SCI have not been approved by the FDA, but rather have been conducted pursuant to approvals obtained from certain states and foreign countries. Conducting clinical studies in foreign countries is normal industry practice since these studies can often be completed in less time and are less expensive than studies conducted in the U.S. Conducting clinical studies in foreign countries is also beneficial since

13

CEL-SCI will need the approval from a foreign country prior to the time CEL-SCI can market any of its drugs in the foreign country. However, since the results of these clinical trials may not be accepted by the FDA, competitors conducting clinical trials approved by the FDA may have an advantage in that the products of such competitors are further advanced in the regulatory process than those of CEL-SCI. CEL-SCI is conducting its trials in compliance with internationally recognized standards. By following these standards, CEL-SCI anticipates obtaining acceptance from world regulatory bodies, including the FDA.

CEL-SCI has selected a Clinical Research Organization (CRO) for the Phase III trial with Multikine. The expected start date for the clinical trial is at the end of 2010 or early in 2011. The expected net cost of the clinical trial is approximately $25 - $26 million (excluding the costs that will be paid by CEL-SCI's partners).

COMPETITION AND MARKETING

Many companies, nonprofit organizations and governmental institutions are conducting research on cytokines. Competition in the development of therapeutic agents incorporating cytokines is intense. Large, well-established pharmaceutical companies are engaged in cytokine research and development and have considerably greater resources than CEL-SCI has to develop products. Licensing and other collaborative arrangements between governmental and other nonprofit institutions and commercial enterprises, as well as the seeking of patent protection of inventions by nonprofit institutions and researchers, could result in strong competition for CEL-SCI. Any new developments made by such organizations may render CEL-SCI's licensed technology and know-how obsolete.

Several biotechnology companies are producing compounds that utilize cytokines. However, CEL-SCI believes that its main advantage lies in two areas and that those two areas will allow it to be successful: 1) Multikine is given prior to surgery, radiation and/or chemotherapy, a time when the immune system can still be activated effectively. Other companies give their immunotherapy drugs after these cancer treatments. At that time the immune system is already so weakened that it can no longer mount a complete immune response. 2) Multikine simulates the activities of a healthy person's immune system, which battles cancer every day. Multikine is multi-targeted; it is a cancer immunotherapy that both kills cancer cells in a targeted fashion and activates the general immune system to destroy the cancer. In addition, since Multikine is a complex biologic, CEL-SCI believes that it will be extremely difficult for someone to copy Multikine and its manufacturing.

EMPLOYEES

As of November 30, 2010, CEL-SCI had 42 employees. Eight employees are involved in administration, 31 employees are involved in manufacturing and 3 employees are involved in general research and development with respect to CEL-SCI's products.

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ITEM 1A. RISK FACTORS

Investors should be aware that the risks described below could adversely affect the price of CEL-SCI's common stock.

Risks Related to CEL-SCI

Since CEL-SCI has earned only limited revenues and has a history of losses, CEL-SCI will require additional capital to remain in operation.

CEL-SCI has had only limited revenues since it was formed in 1983. Since the date of its formation and through September 30, 2010 CEL-SCI incurred net losses of approximately $161,800,000. CEL-SCI has relied principally upon the proceeds of public and private sales of its securities to finance its activities to date. All of CEL-SCI's potential products, with the exception of Multikine, are in the early stages of development, and any commercial sale of these products will be many years away. Even potential product sales from Multikine are many years away as cancer trials can be lengthy. Accordingly, CEL-SCI expects to incur substantial losses for the foreseeable future.

Since CEL-SCI does not intend to pay dividends on its common stock, any return to investors will come only from potential increases in the price of CEL-SCI's common stock.

At the present time, CEL-SCI intends to use available funds to finance CEL-SCI's operations. Accordingly, while payment of dividends rests within the discretion of the Board of Directors, no common stock dividends have been declared or paid by CEL-SCI and CEL-SCI has no intention of paying any common stock dividends.

If CEL-SCI cannot obtain additional capital, CEL-SCI may have to postpone development and research expenditures which will delay CEL-SCI's ability to produce a competitive product. Delays of this nature may depress the price of CEL-SCI's common stock.

Clinical and other studies necessary to obtain approval of a new drug can be time consuming and costly, especially in the United States, but also in foreign countries. CEL-SCI's estimates of the costs associated with future clinical trials and research may be substantially lower than the actual costs of these activities. The different steps necessary to obtain regulatory approval, especially that of the Food and Drug Administration, involve significant costs and may require several years to complete. CEL-SCI expects that it will need substantial additional financing over an extended period of time in order to fund the costs of future clinical trials, related research, and general and administrative expenses. This additional funding may come from the exercise of warrants and options currently outstanding, equity or debt financings or a partnering arrangement with a larger company.

The extent of CEL-SCI's clinical trials and research programs are primarily based upon the amount of capital available to CEL-SCI and the extent to which CEL-SCI has received regulatory approvals for clinical trials.

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In accordance with the terms of the manufacturing facility's lease, CEL-SCI must maintain a certain amount of cash. Should CEL-SCI's cash position fall below the amount stipulated in the lease CEL-SCI will be required to deposit with the landlord the equivalent of one year's base rent. CEL-SCI paid this additional amount of $1,575,000 in 2008 and, upon meeting the required cash level, received a refund of $1,575,000 from the landlord in February 2010.

The inability of CEL-SCI to conduct clinical trials or research, whether due to a lack of capital or regulatory approval, will prevent CEL-SCI from completing the studies and research required to obtain regulatory approval for any products which CEL-SCI is developing.

No definite plan for marketing of Multikine has been established.

CEL-SCI has not established a definitive plan for marketing nor has it established a price structure for CEL-SCI's saleable products. However, CEL-SCI intends, if CEL-SCI is in a position to begin commercialization of its products, to sell Multikine itself in certain markets and to enter into written marketing agreements with various major pharmaceutical firms with established sales forces. The sales forces in turn would probably target CEL-SCI's products to cancer centers, physicians and clinics involved in head and neck cancer.

CEL-SCI may encounter problems, delays and additional expenses in developing marketing plans with outside firms. In addition, even though Multikine should be very cost effective to use if proven to increase overall survival, CEL-SCI may experience other limitations involving the proposed sale of its products, such as uncertainty of third-party reimbursement. There is no assurance that CEL-SCI can successfully market any products which they may develop or market them at competitive prices.

Potential Future Dilution

To raise additional capital CEL-SCI may have to sell shares of its common stock or securities convertible into common stock at prices that may be below the prevailing market price of CEL-SCI's common stock at the time of sale. The issuance of additional shares will have a dilutive impact on other stockholders and could have a negative effect on the market price of CEL-SCI's common stock.

Multikine is made from components of human blood which involves inherent risks that may lead to product destruction or patient injury which could materially harm CEL-SCI's financial results, reputation and stock price.

Multikine is made, in part, from components of human blood. There are inherent risks associated with products that involve human blood such as possible contamination with viruses, including Hepatitis or HIV. Any possible contamination could require CEL-SCI to destroy batches of Multikine or cause injuries to patients who receive the product thereby subjecting CEL-SCI to possible financial losses and harm to its business.

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Although CEL-SCI has product liability insurance for Multikine, the successful prosecution of a product liability case against CEL-SCI could have a materially adverse effect upon its business if the amount of any judgment exceeds CEL-SCI's insurance coverage.

Although no claims have been brought to date, participants in CEL-SCI's clinical trials could bring civil actions against CEL-SCI for any unanticipated harmful effects arising from the use of Multikine or any drug or product that CEL-SCI may try to develop.

CEL-SCI's directors are allowed to issue shares of preferred stock with provisions that could be detrimental to the interests of the holders of CEL-SCI's common stock.

The provisions in CEL-SCI's Articles of Incorporation relating to CEL-SCI's preferred stock would allow CEL-SCI's directors to issue preferred stock with rights to multiple votes per share and dividend rights which would have priority over any dividends paid with respect to CEL-SCI's common stock. The issuance of preferred stock with such rights may make more difficult the removal of management even if such removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if such transactions are not favored by incumbent management.

Risks Related to Government Approvals

CEL-SCI's product candidates must undergo rigorous preclinical and clinical testing and regulatory approvals, which could be costly and time-consuming and subject CEL-SCI to unanticipated delays or prevent CEL-SCI from marketing any products.

Therapeutic agents, drugs and diagnostic products are subject to approval, prior to general marketing, from the FDA in the United States and by comparable agencies in most foreign countries. Before obtaining marketing approval, these product candidates must undergo rigorous preclinical and clinical testing which is costly and time consuming and subject to unanticipated delays. There can be no assurance that such approvals will be granted.

CEL-SCI cannot be certain when or under what conditions it will undertake further clinical trials, including the Phase III clinical trial for Multikine. The clinical trials of CEL-SCI's product candidates may not be completed on schedule, the FDA or foreign regulatory agencies may order CEL-SCI to stop or modify its research or these agencies may not ultimately approve any of CEL-SCI's product candidates for commercial sale. Varying interpretations of the data obtained from pre-clinical and clinical testing could delay, limit or prevent regulatory approval of CEL-SCI's product candidates. The data collected from CEL-SCI's clinical trials may not be sufficient to support regulatory approval of its various product candidates, including Multikine. CEL-SCI's failure to adequately demonstrate the safety and efficacy of any of its product candidates would delay or prevent regulatory approval of its product candidates in the United States, which could prevent CEL-SCI from achieving profitability.

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The requirements governing the conduct of clinical trials, manufacturing, and marketing of CEL-SCI's product candidates, including Multikine, outside the United States can vary from country to country. Foreign approvals may take longer to obtain than FDA approvals and can require, among other things, additional testing and different trial designs. Foreign regulatory approval processes include all of the risks associated with the FDA approval processes. Some of those agencies also must approve prices for products approved for marketing. Approval of a product by the FDA does not ensure approval of the same product by the health authorities of other countries. In addition, changes in regulatory policy in the US or in foreign countries for product approval during the period of product development and regulatory agency review of each submitted new application may cause delays or rejections.

CEL-SCI has only limited experience in filing and pursuing applications necessary to gain regulatory approvals, which may impede its ability to obtain timely approvals from the FDA or foreign regulatory agencies, if at all. CEL-SCI will not be able to commercialize Multikine and other product candidates until it has obtained regulatory approval, and any delay in obtaining, or inability to obtain, regulatory approval could harm its business. In addition, regulatory authorities may also limit the types of patients to which CEL-SCI or others may market Multikine or CEL-SCI's other products.

Any failure to obtain or any delay in obtaining required regulatory approvals may adversely affect the ability of CEL-SCI or potential licensees to successfully market any products they may develop.

Even if CEL-SCI obtains regulatory approval for its product candidates, CEL-SCI will be subject to stringent, ongoing government regulation.

If CEL-SCI's products receive regulatory approval, either in the United States or internationally, CEL-SCI will be subject to extensive regulatory requirements. These regulations are wide-ranging and govern, among other things:

o product design, development and manufacture;

o adverse drug experience;

o product advertising and promotion;

o product manufacturing, including good manufacturing practice requirements;

o record keeping requirements;

o registration and listing of CEL-SCI's establishments and products with the FDA and certain state agencies;

o product storage and shipping;

o drug sampling and distribution requirements;

o electronic record and signature requirements; and

o labeling changes or modifications.

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CEL-SCI and any suppliers must continually adhere to federal regulations setting forth requirements, known as current Good Manufacturing Practices, or cGMPs, and their foreign equivalents, which are enforced by the FDA and other national regulatory bodies through their facilities inspection programs. If CEL-SCI's facilities, or the facilities of its suppliers, cannot pass a pre-approval plant inspection, the FDA will not approve the marketing applications for CEL-SCI's product candidates. In complying with cGMP and foreign regulatory requirements, CEL-SCI and any of its suppliers will be obligated to expend time, money and effort in production, record-keeping and quality control to ensure that its products meet applicable specifications and other requirements. State regulatory agencies and the regulatory agencies of other countries have similar requirements.

If CEL-SCI does not comply with regulatory requirements at any stage, whether before or after marketing approval is obtained, it may be subject to license suspension or revocation, criminal prosecution, seizure, injunction, fines, or be forced to remove a product from the market or experience other adverse consequences, including restrictions or delays in obtaining regulatory marketing approval, which could materially harm CEL-SCI's financial results, reputation and stock price. Additionally, CEL-SCI may not be able to obtain the labeling claims necessary or desirable for product promotion. CEL-SCI may also be required to undertake post-marketing trials. In addition, if CEL-SCI or other parties identify adverse effects after any of CEL-SCI's products are on the market, or if manufacturing problems occur, regulatory approval may be withdrawn. CEL-SCI may be required to reformulate its products, conduct additional clinical trials, make changes in its product's labeling or indications of use, or submit additional marketing applications to support these changes. If CEL-SCI encounters any of the foregoing problems, its business and results of operations will be harmed and the market price of its common stock may decline.

Also, the extent of adverse government regulations which might arise from future legislative or administrative action cannot be predicted. Without government approval, CEL-SCI will be unable to sell any of its products.

Risks Related to Intellectual Property

CEL-SCI may not be able to achieve or maintain a competitive position and other technological developments may result in CEL-SCI's proprietary technologies becoming uneconomical or obsolete.

The biomedical field in which CEL-SCI is involved is undergoing rapid and significant technological change. The successful development of therapeutic agents from CEL-SCI's compounds, compositions and processes through CEL-SCI-financed research, or as a result of possible licensing arrangements with pharmaceutical or other companies, will depend on its ability to be in the technological forefront of this field.

Many companies are working on drugs designed to treat cancer and have substantial financial, research and development, and marketing resources and are capable of providing significant long-term competition either by establishing

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in-house research groups or by forming collaborative ventures with other entities. In addition, smaller companies and non-profit institutions are active in research relating to cancer and infectious diseases.

CEL-SCI's patents might not protect CEL-SCI's technology from competitors, in which case CEL-SCI may not have any advantage over competitors in selling any products which it may develop.

Certain aspects of CEL-SCI's technologies are covered by U.S. and foreign patents. In addition, CEL-SCI has a number of new patent applications pending. There is no assurance that the applications still pending or which may be filed in the future will result in the issuance of any patents. Furthermore, there is no assurance as to the breadth and degree of protection any issued patents might afford CEL-SCI. Disputes may arise between CEL-SCI and others as to the scope and validity of these or other patents. Any defense of the patents could prove costly and time consuming and there can be no assurance that CEL-SCI will be in a position, or will deem it advisable, to carry on such a defense. Other private and public concerns, including universities, may have filed applications for, or may have been issued, patents and are expected to obtain additional patents and other proprietary rights to technology potentially useful or necessary to CEL-SCI. The scope and validity of such patents, if any, the extent to which CEL-SCI may wish or need to acquire the rights to such patents, and the cost and availability of such rights are presently unknown. Also, as far as CEL-SCI relies upon unpatented proprietary technology, there is no assurance that others may not acquire or independently develop the same or similar technology.

Risks Related to CEL-SCI's Common Stock

Since the market price for CEL-SCI's common stock is volatile, investors may not be able to sell any of CEL-SCI's shares at a profit.

The market price of CEL-SCI's common stock, as well as the securities of other biopharmaceutical and biotechnology companies, have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. During the twelve months ended September 30, 2010, CEL-SCI's stock price has ranged from a low of $0.43 per share to a high of $1.79 per share. Factors such as fluctuations in CEL-SCI's operating results, announcements of technological innovations or new therapeutic products by CEL-SCI or its competitors, governmental regulation, developments in patent or other proprietary rights, public concern as to the safety of products developed by CEL-SCI or other biotechnology and pharmaceutical companies, and general market conditions may have a significant effect on the future market price of CEL-SCI's common stock.

Shares issuable upon the exercise of outstanding warrants and options may substantially increase the number of shares available for sale in the public market and may depress the price of CEL-SCI's common stock.

CEL-SCI had outstanding convertible notes, options and warrants which as of November 30, 2010 could potentially allow the holders to acquire approximately 83,340,300 additional shares of its common stock. Until the options and warrants

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expire, and the convertible note is repaid, the holders will have an opportunity to profit from any increase in the market price of CEL-SCI's common stock without assuming the risks of ownership. Holders of options and warrants exercise these securities at a time when CEL-SCI could obtain additional capital on terms more favorable than those provided by the options or warrants. The conversion of the notes or the exercise of the options and warrants will dilute the voting interest of the owners of presently outstanding shares by adding a substantial number of additional shares of CEL-SCI's common stock.

CEL-SCI has filed, or plans to file, registration statements with the Securities and Exchange Commission so that substantially all of the shares of common stock which are issuable upon the exercise of outstanding options and warrants may be sold in the public market. The sale of common stock issued or issuable upon the exercise of these options or warrants, or the perception that such sales could occur, may adversely affect the market price of CEL-SCI's common stock.

Claims by the former holders of CEL-SCI's Series K notes may potentially result in the issuance of additional shares of CEL-SCI's common stock and the payment of damages.

In August 2006, CEL-SCI sold Series K notes, plus Series K warrants, to a group of private investors. The notes were convertible into shares of CEL-SCI's common stock. One of the Series K note holders, Iroquois Master Fund Ltd., has indicated that it believes the conversion price of the Series K notes, as well as the exercise price of the Series K warrants, should be $0.20 as opposed to $0.40. It is CEL-SCI's position that the correct conversion price was $0.40 and the correct exercise price of the warrants is $0.40.

On October 21, 2009, Iroquois filed suit against CEL-SCI. In its complaint, alleging breach of contract, breach of fiduciary duty, conversion, and negligence, Iroquois seeks actual and punitive damages, the issuance by CEL-SCI of additional shares and warrants, and a ruling by the court that the conversion price of the notes and the exercise price of the warrants are both $0.20. See Item 3 of this report for more information.

ITEM 1B. UNRESOLVED SEC COMMENTS

None

ITEM 2. PROPERTIES

CEL-SCI leases office space at 8229 Boone Blvd., Suite 802, Vienna, Virginia at a monthly rental of approximately $9,100. The lease on the office space expires in June 2012. CEL-SCI believes this arrangement is adequate for the conduct of its present business.

CEL-SCI has a 17,900 square foot laboratory located at 4820 A-E Seton Drive, Baltimore, Maryland. The laboratory is leased by CEL-SCI at a cost of approximately $10,800 per month. The laboratory lease expires in February 2014.

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In August 2007, CEL-SCI leased a building near Baltimore, Maryland. The building, which consists of approximately 73,000 square feet, has been remodeled in accordance with CEL-SCI's specifications so that it can be used by CEL-SCI to manufacture Multikine for CEL-SCI's Phase III clinical trial and sales of the drug if approved by the FDA. The lease expires on October 31, 2028 and requires annual base rent payments of approximately $1,667,000 during the twelve months ending October 31, 2011, in accordance with the lease agreement. The annual base rent escalates each year thereafter at 3%. CEL-SCI is also required to pay all real and personal property taxes, insurance premiums, maintenance expenses, repair costs and utilities. The lease allows CEL-SCI, at its election, to extend the lease for two ten-year periods or to purchase the building at the end of the 20-year lease. The lease required CEL-SCI to pay $3,150,000 towards the remodeling costs, which will be recouped by reductions in the annual base rent of $303,228 beginning in 2014. In July 2008, CEL-SCI was required to deposit $1,575,000 since the amount of CEL-SCI's cash fell below the amount stipulated in the lease. This amount was refunded by the landlord in February 2010. The landlord has the right to declare CEL-SCI in default if CEL-SCI fails to pay any installment of the Base Annual Rent when such failure continues for five business days after CEL-SCI's receipt of written notice from the Landlord, provided that if CEL-SCI fails to pay any installment of the Base Annual Rent within five business days more than twice in any twelve month period, the Landlord will not be required to provide CEL-SCI with any further notice and CEL-SCI will be deemed to be in default. As of the date of this filing, CEL-SCI was not in default on the lease.

ITEM 3. LEGAL PROCEEDINGS

Pursuant to a Securities Purchase Agreement dated August 4, 2006, CEL-SCI sold Series K convertible notes, plus Series K warrants, to a group of private investors for $8,300,000. The notes were convertible into shares of CEL-SCI's common stock. On August 31, 2009, all of the Series K notes had either been repaid or had been converted into shares of CEL-SCI's common stock. At the holder's option, the Series K notes were convertible into shares of CEL-SCI's common stock equal in number to the amount determined by dividing each $1,000 of note principal to be converted by the conversion price. Initially, the conversion price was $0.86.

The Series K warrants allow the note holders to purchase shares of CEL-SCI's common stock, initially at a price of $0.95 per share, at any time on or prior to February 4, 2012.

If CEL-SCI sold any additional shares of common stock, or any securities convertible into common stock, at a price below the then applicable conversion price of the notes or the exercise price of the warrants, the conversion price of the notes and the exercise price of the warrants would be reduced to the price at which the shares were sold or the lowest price at which the securities were convertible, as the case may have been.

If the warrant exercise price was decreased, the number of shares of common stock issuable upon the exercise of the warrant would be increased proportionately.

However, the conversion price of the Series K notes, the exercise price of the Series K warrants, and the shares issuable upon the exercise of the warrants would not be adjusted as the result of shares issued in connection with a

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Permitted Financing, as that term was defined in the Securities Purchase Agreement. A Permitted Financing included shares of common stock issued or sold in connection with a bona fide licensing agreement, the primary purpose of which was not to raise cash.

In April 2007, the conversion price of the Series K notes and the exercise price of the Series K warrants were reduced to $0.75 per share as a result of shares sold by CEL-SCI below the original conversion price of the notes and the exercise price of the warrants.

On March 6, 2009, CEL-SCI entered into a licensing agreement with an unrelated third party. In connection with the licensing agreement, CEL-SCI sold shares of its common stock to the third party for $0.20 per share, a premium to CEL-SCI's share price at the time.

In June 2009, the conversion price of the Series K notes and the exercise price of the Series K warrants were reduced to $0.40 per share as a result of shares sold by CEL-SCI below the conversion price of the notes and the exercise price of the warrants.

As previously disclosed by CEL-SCI in its public filings, one of the Series K note holders, Iroquois Master Fund, Ltd. ("Iroquois") advised CEL-SCI that the conversion price of the Series K notes, as well as the exercise price of the Series K warrants, should be $0.20 since it did not believe that the sale of CEL-SCI's shares of its common stock on March 6, 2009 was a Permitted Financing.

It is CEL-SCI's position that the shares sold on March 6, 2009 were sold in connection with a Permitted Financing and did not cause a reduction in the conversion price of the Series K notes or the exercise price of the Series K warrants.

On October 21, 2009, Iroquois filed suit against CEL-SCI in the United States District Court for the Southern District of New York. In its complaint Iroquois alleges that CEL-SCI is liable for breach of contract, breach of fiduciary duty, conversion, and negligence.

Through its lawsuit Iroquois is seeking $30 million in actual damages, $90 million in punitive damages, the issuance of an additional 4,264,681 shares of CEL-SCI's common stock, the issuance of warrants to purchase an additional 6,460,757 shares of CEL-SCI's common stock, and a ruling by the court that the conversion price of the notes and the exercise price of the warrants are both $0.20.

CEL-SCI believes that Iroquois's claims are without merit and has filed a motion with the District Court seeking the dismissal of Iroquois's lawsuit.

If Iroquois prevails in its suit, CEL-SCI may be required to issue approximately 1,166,000 additional shares of common stock and issue approximately 9,616,000 warrants exercisable at $0.20 per share to the other holders of the Series K notes and warrants, assuming all of the warrants are exercised.

ITEM 4. (REMOVED AND RESERVED)

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ITEM 5. MARKET FOR CEL-SCI'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

As of November 30, 2010, there were approximately 1,100 record holders of CEL-SCI's common stock. CEL-SCI's common stock is traded on the NYSE Amex (formerly the American Stock Exchange) under the symbol "CVM". Set forth below are the range of high and low quotations for CEL-SCI's common stock for the periods indicated as reported on the NYSE Amex. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.

Quarter Ended          High             Low

12/31/08              $0.50             $0.18
 3/31/09              $0.40             $0.14
 6/30/09              $0.80             $0.20
 9/30/09              $2.10             $0.38

12/31/09              $1.79             $0.85
 3/31/10              $1.12             $0.50
 6/30/10              $0.76             $0.45
 9/30/10              $0.84             $0.43

Holders of common stock are entitled to receive dividends as may be declared by the Board of Directors out of legally available funds and, in the event of liquidation, to share pro rata in any distribution of CEL-SCI's assets after payment of liabilities. The Board of Directors is not obligated to declare a dividend. CEL-SCI has not paid any dividends on its common stock and CEL-SCI does not have any current plans to pay any common stock dividends.

The provisions in CEL-SCI's Articles of Incorporation relating to CEL-SCI's preferred stock would allow CEL-SCI's directors to issue preferred stock with rights to multiple votes per share and dividend rights which would have priority over any dividends paid with respect to CEL-SCI's common stock. The issuance of preferred stock with such rights may make more difficult the removal of management even if such removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if such transactions are not favored by incumbent management.

The market price of CEL-SCI's common stock, as well as the securities of other biopharmaceutical and biotechnology companies, have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. Factors such as fluctuations in CEL-SCI's operating results, announcements of technological innovations or new therapeutic products by CEL-SCI or its competitors, governmental regulation, developments in patent or other proprietary rights, public concern as to the safety of products developed by CEL-SCI or other biotechnology and pharmaceutical companies, and general market conditions may have a significant effect on the market price of CEL-SCI's common stock.

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The graph below matches the cumulative 5-year total return of holders of CEL-SCI Corporation's common stock with the cumulative total returns of the NYSE Amex Composite index and the RDG MicroCap Biotechnology index. The graph assumes that the value of the investment in the CEL-SCI's common stock and in each of the indexes (including reinvestment of dividends) was $100 on 9/30/2005 and tracks it through 9/30/2010. [GRAPHIC OMITTED]

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                               9/05     9/06    9/07    9/08     9/09    9/10
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CEL-SCI Corporation           100.00   131.91  133.02   85.11   365.96  137.02
NYSE Amex Composite           100.00   110.90  139.96  108.28   113.40  134.71
RDG MicroCap Biotechnology    100.00    70.80   60.46   32.97    32.69   21.73

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

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ITEM 6. SELECTED FINANCIAL DATA

The following selected historical consolidated financial data are qualified by reference to, and should be read in conjunction with the consolidated financial statements and the related notes thereto, appearing elsewhere in this report, as well as Item 7 of this report.

Statements of Operations      2010             2009        2008           2007         2006
------------------------      ----             ----        ----           ----         ----

Rent and grant revenue
   and other             $   153,300           80,093   $    5,065      $  57,043     $125,457
Operating expenses:
Research and development  11,911,626        6,011,750    4,101,563      2,528,528    1,896,976
Depreciation and
  amortization               516,117          417,205      215,060        176,186      170,903
General and
  administrative           6,285,810        5,671,595    5,200,735      6,704,538     3,406,774
Gain (loss) on
  derivative instruments  28,843,772      (28,491,650)   1,799,393        868,182     2,325,784

Other costs of financing           -                -             -             -    (4,791,548)
Interest income              362,236                -       483,252       562,973        92,487
Interest expense            (162,326)        (397,923)     (473,767)   (1,708,603)     (216,737)
                         -----------      -----------    ----------    ----------    ----------
Net income (loss)         10,483,429      (40,910,030)   (7,703,415)   (9,629,657)   (7,939,210)
                         -----------      -----------    ----------    ----------    ----------
Modification of warrants  (1,532,456)        (490,728)     (424,815)            -             -
                         -----------      -----------    ----------    ----------    ----------
Net income (loss)
  available to common
  shareholders           $ 8,950,973      (41,400,758)   (8,128,230)   (9,629,657)   (7,939,210)
                         -----------      -----------    ----------    ----------    ----------

Statements of Operations

Net income (loss) per
  common share
    Basic                $      0.04      $     (0.31)   $    $0.07)   $    $0.10)  $    ($0.10)
    Diluted              $      0.05      $     (0.31)   $    $0.07)   $    $0.10)  $    ($0.11)

Weighted average common
  shares outstanding
    Basic                202,102,859      133,535,050   117,060,866    97,310,488    78,971,290
    Diluted (1)          226,277,913      133,535,050   117,060,866    97,310,488    93,834,078
Balance Sheets           -----------      -----------    ----------    ----------    ----------



Statements of Operations      2010             2009        2008           2007         2006
------------------------      ----             ----        ----          ----         ----

Working capital           25,799,304      $34,339,772   $(2,492,555)   10,257,568    $7,109,879

Total assets             37,804,985        46,027,598    14,683,672    20,730,802     9,653,277
Derivative instruments -
   current (2)              424,286                 -     3,018,697       782,732     1,670,234
Derivative instruments -
   noncurrent (2)         6,521,765        35,113,970             -     4,831,252     8,645,796
Total liabilities         9,950,220        37,186,954     3,847,637     6,060,703    10,583,878
Stockholders' equity
   (deficit)             27,854,765         8,840,644    10,836,035    14,670,099      (930,601)

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(1) The calculation of diluted earnings per share for the years ended September 30, 2009, 2008 and 2007 excluded the potentially dilutive shares because their effect would have been anti-dilutive.

(2) Included in total liabilities.

No dividends have been declared on CEL-SCI's common stock. However, in December 2007, warrants held by third parties were extended, resulting in a $424,815 charge, which was treated as a deemed dividend and is shown as such in the consolidated financial statements. In the third and fourth quarters of the fiscal year ended September 30, 2009, additional shares were issued and others extended in accordance with previous financings, resulting in a $490,728 charge, which was treated as a deemed dividend and is shown as such in the consolidated financial statements. In March 2010, CEL-SCI temporarily reduced the exercise price of the Series M Warrants, increasing the value of the warrants by $1,432,456. In August 2010, CEL-SCI amended the Series M warrants held by an investor, increasing the value of those warrants by $100,000. For further discussion, see Note 10. No actual dividends were paid to shareholders.

CEL-SCI's net income (losses) available to common shareholders for each fiscal quarter during the two years ended September 30, 2010 were:

                                          Net income  (loss) per share
                     Net income           ----------------------------
Quarter                (loss)              Basic             Diluted
-------              ------------          -----             -------

12/31/2008         $ (2,173,513)           $(0.02)           $(0.02)
  3/31/2009        $ (2,117,280)           $(0.02)           $(0.02)
  6/30/2009        $ (6,705,731)           $(0.05)           $(0.05)
  9/30/2009        $(30,404,234)           $(0.19)           $(0.19)

12/31/2009         $ 19,159,517            $ 0.10            $ 0.02
  3/31/2010        $ (2,176,975)           $(0.01)           $(0.03)
  6/30/2010        $   (601,124)           $(0.00)           $(0.01)
  9/30/2010        $ (7,330,445)           $(0.04)           $(0.04)

First three quarters of fiscal year 2009 as adjusted.

CEL-SCI has experienced large swings in its quarterly gains and losses in 2010 and 2009. These swings are caused by the changes in the fair value of the convertible debt and warrants each quarter. These changes in the fair value of the convertible debt and warrants are recorded on the consolidated statements of operations. In addition, the cost of options granted to consultants, as discussed in the results of operations in this report, has affected the quarterly losses recorded by CEL-SCI.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated financial statements and the related notes thereto appearing elsewhere in this report.

CEL-SCI's most advanced product, Multikine, which is cleared for a Phase III clinical trial in the U.S. and in Canada, is being developed for the treatment of cancer.

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CEL-SCI also owns a pre-clinical technology called L.E.A.P.S. (Ligand Epitope Antigen Presentation System).

All of CEL-SCI's projects are under development. As a result, CEL-SCI cannot predict when it will be able to generate any revenue from the sale of any of its products.

Since inception, CEL-SCI has financed its operations through the issuance of equity securities, convertible notes, loans and certain research grants. CEL-SCI's expenses will likely exceed its revenues as it continues the development of Multikine and brings other drug candidates into clinical trials. Until such time as CEL-SCI becomes profitable, any or all of these financing vehicles or others may be utilized to assist CEL-SCI's capital requirements.

Results of Operations

Fiscal 2010

During the year ended September 30, 2010, research and development expenses increased by $5,899,876 compared to the year ended September 30, 2009. This increase was due to continuing expenses relating to the preparation for the Phase III clinical trial on Multikine.

During the year ended September 30, 2010, general and administrative expenses increased by $614,215 compared to the year ended September 30, 2009, primarily due to legal fees caused by the Iroquois lawsuit.

Interest income during the year ended September 30, 2010 increased by $362,236 compared to the year ended September 30, 2009. The increase was due to the greater amount of capital CEL-SCI had for investment in money market funds.

The gain on derivative instruments of $28,843,772 for the year ended September 30, 2010, was the result of the change in the fair value of the derivative liabilities on the balance sheet. The Series A-E warrants issued in conjunction with several financings during the fiscal year ended September 30, 2009, as well as others are considered derivative liabilities and must be valued at the end of each period. The fluctuation of the price of CEL-SCI's common stock is a major cause of derivative gains or losses.

The interest expense of $162,326 for the year ended September 30, 2010 was interest on the related party loan. Previous years included amortization of the Series K discount and the premium on the related party loan.

Fiscal 2009

During the year ended September 30, 2009, research and development expenses increased by $1,910,187 compared to the year ended September 30, 2008. This increase was due to continuing expenses relating to the preparation for the Phase III clinical trial on Multikine.

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During the year ended September 30, 2009, general and administrative expenses increased by $470,860 compared to the year ended September 30, 2008, primarily because of an increase in the Codification 718-10-30-3 "Share Based Payment" costs of approximately $1,138,062. The Codification 718-10-30-3 "Share Based Payment" cost is a non-cash charge. This increase was primarily offset by a reduction in travel costs ($51,349), shareholder costs ($82,983) and presentation costs ($242,497).

Interest income during the year ended September 30, 2009 decreased by $483,252 compared to the year ended September 30, 2008. The decrease was due to lower interest rates and a decline in the funds available to invest, until the later part of the year.

The loss on derivative instruments of $28,491,650 for the year ended September 30, 2009, was the result of the change in fair value of the Series A-E Warrants as well as the Series K Notes and Series K Warrants during the period. The Series A-E warrants issued in conjunction with several financings are considered derivative liabilities and must be valued at the end of each period. The fair value of these warrants was calculated to be $29,741,372 at September 30, 2009. In addition, the remaining Series K warrants were valued at $5,372,598 at September 30, 2009. This loss was due to three factors: 1) an increase in the Company's share price, and 2) the repricing of the Series K notes to $0.40 as a result of the June 2009 financing, and 3) the resulting increase in the number of shares and warrants owned by the Series K investors.

The interest expense of $397,923 for the year ended September 30, 2009 was composed of five elements: 1) amortization of the Series K discount and short term loan discount ($438,980), 2) interest paid and accrued on the Series K debt ($115,559), 3) other interest ($81,602), 4) interest on the short term loan ($279,158), and net of 5) amortization of loan premium $517,376. This represents a decrease of $75,844 from the year ended September 30, 2008 due to the cost of the warrants issued to the short term note holder, a noncash cost. The corresponding amounts for the year ended September 30, 2008 are: 1) $249,106, 2) $217,140, 3) $7,521, 4) $0, and 5) $0.

Research and Development Expenses

During the five years ended September 30, 2010 CEL-SCI's research and development efforts involved Multikine and LEAPS. The table below shows the research and development expenses associated with each project during this five-year period.

                   2010         2009         2008        2007          2006
                   ----         ----         ----        ----          ----

MULTIKINE      $10,868,046   $5,281,999   $3,765,258   $2,217,108   $1,656,362
LEAPS            1,043,580      729,751      336,305      311,420      240,614
               -----------   ----------   ----------   ----------   ----------

      TOTAL    $11,911,626   $6,011,750   $4,101,563   $2,528,528   $1,896,976
               ===========   ==========   ==========   ==========   ==========

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In January 2007, FDA gave the go-ahead for the Phase III clinical trial which had earlier been cleared by the Canadian regulatory agency, the Biologics and Genetic Therapies Directorate.

As explained in Item 1 of this report, as of September 30, 2010, CEL-SCI was involved in a number of pre-clinical studies with respect to its LEAPS technology. As with Multikine, CEL-SCI does not know what obstacles it will encounter in future pre-clinical and clinical studies involving its LEAPS technology. Consequently, CEL-SCI cannot predict with any certainty the funds required for future research and clinical trials and the timing of future research and development projects.

Clinical and other studies necessary to obtain regulatory approval of a new drug involve significant costs and require several years to complete. The extent of CEL-SCI's clinical trials and research programs are primarily based upon the amount of capital available to CEL-SCI and the extent to which CEL-SCI has received regulatory approvals for clinical trials. The inability of CEL-SCI to conduct clinical trials or research, whether due to a lack of capital or regulatory approval, will prevent CEL-SCI from completing the studies and research required to obtain regulatory approval for any products which CEL-SCI is developing. Without regulatory approval, CEL-SCI will be unable to sell any of its products.

Liquidity and Capital Resources

CEL-SCI has had only limited revenues from operations since its inception in March l983. CEL-SCI has relied primarily upon proceeds realized from the public and private sale of its common and preferred stock and convertible notes to meet its funding requirements. Funds raised by CEL-SCI have been expended primarily in connection with the acquisition of an exclusive worldwide license to, and later purchase of, certain patented and unpatented proprietary technology and know-how relating to the human immunological defense system, patent applications, the repayment of debt, the continuation of research and development sponsored by CEL-SCI, administrative costs and construction of laboratory facilities. Inasmuch as CEL-SCI does not anticipate realizing revenues until such time as it enters into licensing arrangements regarding the technology and know-how licensed to it (which could take a number of years), CEL-SCI is mostly dependent upon the proceeds from the sale of its securities to meet all of its liquidity and capital resource requirements.

In August 2007, CEL-SCI leased a building near Baltimore, Maryland. The building, which consists of approximately 73,000 square feet, has been remodeled in accordance with CEL-SCI's specifications so that it can be used by CEL-SCI to manufacture Multikine for CEL-SCI's Phase III clinical trials and sales of the drug if approved by the FDA. The lease expires on October 31, 2028, and requires annual base rent payments of approximately $1,667,000 during the twelve months ending October 31, 2011. See Item 2 of this report for more information concerning the terms of this lease.

In August 2006, CEL-SCI sold Series K convertible notes, plus Series K warrants, to independent private investors for $8,300,000. The notes were

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convertible into shares of CEL-SCI's common stock. On August 31, 2009, all of the Series K notes had either been repaid or had been converted into shares of CEL-SCI's common stock.

As of November 30, 2010, 9,208,642 Series K warrants had been exercised. The remaining Series K warrants allow the holders to purchase up to 2,638,163 shares of CEL-SCI's common stock at a price of $0.40 per share at any time prior to February 4, 2012. If CEL-SCI sells any additional shares of common stock, or any securities convertible into common stock at a price below the $0.40, the warrant exercise price will be lowered to the price at which the shares were sold or the lowest price at which the securities are convertible, as the case may be.

One of the Series K note holders, Iroquois Master Fund Ltd., has indicated that it believes the conversion price of the Series K notes, as well as the exercise price of the Series K warrants, should be $0.20 as opposed to $0.40. It is CEL-SCI's position that the correct conversion price was $0.40 and the correct exercise price of the warrants is $0.40.

On October 21, 2009, Iroquois filed suit against CEL-SCI. In its complaint, alleging breach of contract, breach of fiduciary duty, conversion, and negligence, Iroquois seeks actual and punitive damages, the issuance by CEL-SCI of additional shares and warrants, and a ruling by the court that the conversion price of the notes and the exercise price of the warrants are both $0.20. See Item 3 of this report for further information.

On August 18, 2008, CEL-SCI sold 1,383,389 shares of common stock and 2,075,084 warrants in a private financing for $1,037,500. The shares were sold at $0.75, a significant premium over the closing price of CEL-SCI's common stock. In June 2009, an additional 1,166,667 shares and 1,815,698 warrants were issued to the investors. Each warrant entitles the holder to purchase one share of CEL-SCI's common stock at a price of $0.40 per share at any time prior to August 18, 2014.

On March 6, 2009, CEL-SCI sold 3,750,000 Units as further consideration under a licensing agreement to Byron Biopharma at a price of $0.20 per Unit totaling $750,000. Each Unit consisted of one share of CEL-SCI's common stock and two warrants. Each warrant entitles the holder to purchase one share of CEL-SCI's common stock at a price of $0.25 per share. The warrants are exercisable at any time prior to March 6, 2016.

Between June 23 and July 8, 2009, CEL-SCI sold 15,349,346 shares of its common stock at a price of $0.40 per share totaling $6,139,739. The investors in this offering also received 10,284,060 Series A warrants. Each Series A warrant entitles the holder to purchase one share of CEL-SCI's common stock. The Series A warrants may be exercised at any time on or after December 24, 2009 and on or prior to December 24, 2014 at a price of $0.50 per share. As of November 30, 2010, 8,813,088 Series A warrants had been exercised. The remaining Series A warrants allow the holders to purchase up to 1,470,972 shares of CEL-SCI's common stock. As of September 30, 2010, the fair value of the warrants was determined to be $676,647.

On July 31, 2009, CEL-SCI borrowed $2,000,000 from two institutional investors. The loans were repaid on September 29, 2009. The Series B note holders also received Series B warrants which allow the holders to purchase up

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to 500,000 shares of CEL-SCI's common stock at a price of $0.68 per share. The Series B warrants may be exercised at any time on or after March 3, 2010 and on or prior to March 3, 2015. The fair value of these warrants was determined to be $245,000 at the time of issuance. This cost was expensed at the time the loan was repaid. As of September 30, 2010, the fair value of the warrants was determined to be $220,000.

On August 20, 2009, CEL-SCI sold 10,784,435 shares of its common stock to a group of private investors for $4,852,995 or $0.45 per share. The investors also received Series C warrants which entitle the investors to purchase 5,392,217 shares of CEL-SCI's common stock. The Series C warrants may be exercised at any time on or after February 20, 2010 and on or prior to February 20, 2015 at a price of $0.55 per share. As of September 30, 2010, the fair value of the warrants was determined to be $2,480,420.

On September 21, 2009, CEL-SCI Corporation sold 14,285,715 shares of its common stock to a group of private investors for $20,000,000 or $1.40 per share. The investors also received Series D warrants which entitle the investors to purchase up to 4,714,284 shares of CEL-SCI's common stock. The Series D warrants may be exercised at any time prior to September 21, 2011, at a price of $1.50 per share. As of September 30, 2010, the fair value of the Series D warrants was determined to be $424,286. In addition, the broker for the placement agent received 714,286 Series E warrants. The Series E warrants may be exercised at any time prior to August 12, 2014, at a price of $1.75. As of September 30, 2010, the fair value of the Series E warrants was determined to be $235,714.

On December 10, 2010 CEL-SCI entered into a sales agreement with McNicoll Lewis & Vlak LLC relating to the sale of shares of its common stock which have been registered by means of a shelf registration statement CEL-SCI filed with the Securities and Exchange Commission in July 2009. In accordance with the terms of the sales agreement, CEL-SCI may offer and sell shares of its common stock through McNicoll Lewis & Vlak acting as CEL-SCI's agent.

Under the terms of the sales agreement, CEL-SCI may also sell its common stock to McNicoll Lewis & Vlak, as principal for its own account, at a price negotiated at the time of sale.

Sales of CEL-SCI's common stock, if any, may be made in sales deemed to be "at-the-market" equity offerings as defined in Rule 415 of the Securities and Exchange Commission, including sales made directly on or through the NYSE Amex, the existing trading market for CEL-SCI's common stock, sales made to or through a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. CEL-SCI is not required to sell any shares to McNicoll Lewis & Vlak and McNicoll Lewis & Vlak is not required to sell any shares on CEL-SCI's behalf or purchase any of CEL-SCI's shares for its own account.

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McNicoll Lewis & Vlak will be entitled to a commission in an amount equal to the greater of 3% of the gross proceeds from each sale of the shares, or $0.025 for each share sold, provided, that, in no event will McNicoll Lewis & Vlak receive a commission greater than 8.0% of the gross proceeds from the sale of the shares. In connection with the sale of the common stock on CEL-SCI's behalf, McNicoll Lewis & Vlak may be deemed to be an "underwriter" within the meaning of the Securities Act of 1933, as amended, and the compensation of McNicoll Lewis & Vlak may be deemed to be underwriting commissions or discounts.

Between December 2008 and June 2009, Maximilian de Clara, CEL-SCI's President and a director, loaned CEL-SCI $1,104,057. The loan was initially payable at the end of March 2009, but was extended to the end of June 2009. At the time the loan was due, and in accordance with the loan agreement, CEL-SCI issued Mr. de Clara a warrant which entitles Mr. de Clara to purchase 1,648,244 shares of CEL-SCI's common stock at a price of $0.40 per share. The warrant is exercisable at any time prior to December 24, 2014. Although the loan was to be repaid from the proceeds of CEL-SCI's recent financing, CEL-SCI's Directors deemed it beneficial not to repay the loan and negotiated a second extension of the loan with Mr. de Clara on terms similar to the June 2009 financing. Pursuant to the terms of the second extension the note is now due on July 6, 2014, but, at Mr. de Clara's option, the loan can be converted into shares of CEL-SCI's common stock. The number of shares which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.40. As further consideration for the second extension, Mr. de Clara received warrants which allow Mr. de Clara to purchase 1,849,295 shares of CEL-SCI's common stock at a price of $0.50 per share at any time prior to January 6, 2015. The loan from Mr. de Clara bears interest at 15% per year and is secured by a lien on substantially all of CEL-SCI's assets. CEL-SCI does not have the right to prepay the loan without Mr. de Clara's consent.

Between July 29, 2009 and March 18, 2010, CEL-SCI received approximately $14,900,000 from the exercise of stock options and other warrants (including a number of CEL-SCI's Series A, J, K and L warrants) previously issued to private investors.

Inventory has increased significantly in the fiscal year ended September 30, 2010. CEL-SCI has been purchasing supplies for the manufacturing of Multikine in order to begin the Phase III trial. In addition, prepaids have increased with the purchase of insurance for the Phase III trials.

Future Capital Requirements

Other than funding operating losses, funding its research and development program, and paying its liabilities, CEL-SCI does not have any material capital commitments. Material future liabilities as of September 30, 2010 are as follows:

Contractual Obligations:

                                              Years  Ending September 30,
                                     ---------------------------------------------------------------------------
                         Total       2011        2012        2013        2014         2015     2015 & thereafter
                         -----       ----        ----        ----        ----         ----     -----------------
Operating Leases     $35,250,284  $1,903,471  $1,896,205  $1,855,889  $1,579,931  1,572,839      $26,441,949
Employment Contracts  $2,730,152   1,202,250     797,166     730,736          --         --               --

33

For additional information on employment contracts, see Item 11 of this report.

In addition, CEL-SCI has an additional contract with a consultant for a nine-month period ending in fiscal year 2011. This contract totals approximately $45,000.

Further, CEL-SCI has contingent obligations with vendors for work that will be completed in relation to the Phase III trial. The timing of these obligations cannot be determined at this time. The amount of these obligations for the Phase III trial is approximately $27 million with the net cost to CEL-SCI being between $25 - $26 million.

CEL-SCI believes that its capital will allow it to enroll the patients in the Phase III clinical trial. CEL-SCI will need to raise additional funds, either through its existing warrants/options, through a debt or equity financing or a partnering arrangement, to complete the Phase III trial and bring Multikine to market. CEL-SCI management believes that all of the above will be much easier than it used to be in the past since CEL-SCI will be involved in a very large Phase III clinical trial for an unmet medical need and should therefore be more attractive as an investment.

Clinical and other studies necessary to obtain regulatory approval of a new drug involve significant costs and require several years to complete. The extent of CEL-SCI's clinical trials and research programs are primarily based upon the amount of capital available to CEL-SCI and the extent to which CEL-SCI has received regulatory approvals for clinical trials. The inability of CEL-SCI to conduct clinical trials or research, whether due to a lack of capital or regulatory approval, will prevent CEL-SCI from completing the studies and research required to obtain regulatory approval for any products which CEL-SCI is developing. Without regulatory approval, CEL-SCI will be unable to sell any of its products.

In the absence of revenues, CEL-SCI will be required to raise additional funds through the sale of securities, debt financing or other arrangements in order to continue with its research efforts. However, there can be no assurance that such financing will be available or be available on favorable terms. Ultimately, CEL-SCI must complete the development of its products, obtain appropriate regulatory approvals and obtain sufficient revenues to support its cost structure.

Since all of CEL-SCI's projects are under development CEL-SCI cannot predict with any certainty the funds required for future research and clinical trials, the timing of future research and development projects, or when it will be able to generate any revenue from the sale of any of its products.

CEL-SCI's cash flow and earnings are subject to fluctuations due to changes in interest rates on its certificates of deposit, and, to an immaterial extent, foreign currency exchange rates.

Critical Accounting Policies

CEL-SCI's significant accounting policies are more fully described in Note 1 to the consolidated financial statements included as part of this report. However, certain accounting policies are particularly important to the portrayal of financial position and results of operations and require the application of

34

significant judgments by management. As a result, the consolidated financial statements are subject to an inherent degree of uncertainty. In applying those policies, management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. These estimates are based on CEL-SCI's historical experience, terms of existing contracts, observance of trends in the industry and information available from outside sources, as appropriate. CEL-SCI's significant accounting policies include:

Patents - Patent expenditures are capitalized and amortized using the straight-line method over 17 years. In the event changes in technology or other circumstances impair the value or life of the patent, appropriate adjustment in the asset value and period of amortization is made. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset, and from disposition, is less than the carrying value of the asset. The amount of the impairment loss is the difference between the estimated fair value of the asset and its carrying value.

Stock Options and Warrants - Codification 718-10-30-3 requires companies to recognize expense associated with share based compensation arrangements, including employee stock options, using a fair value-based option pricing model. Codification 718-10-30-3 applies to all transactions involving issuance of equity by a company in exchange for goods and services, including employees. Using the modified prospective transition method of adoption, CEL-SCI reflected compensation expense in its financial statements beginning October 1, 2005. The modified prospective transition method does not require restatement of prior periods to reflect the impact of Codification 718-10-30-3. As such, compensation expense is recognized for awards that were granted, modified, repurchased or cancelled on or after October 1, 2005.

Options to non-employees are accounted for in accordance with Codification 505-50-S99-1 Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. Accordingly, compensation is recognized when goods or services are received and is measured using the Black-Scholes valuation model. The Black-Scholes model requires CEL-SCI's management to make assumptions regarding the fair value of the options at the date of grant and the expected life of the options.

Asset Valuations and Review for Potential Impairments - CEL-SCI reviews its fixed assets, intangibles and deferred rent every fiscal quarter. This review requires that CEL-SCI make assumptions regarding the value of these assets and the changes in circumstances that would affect the carrying value of these assets. If such analysis indicates that a possible impairment may exist, CEL-SCI is then required to estimate the fair value of the asset and, as deemed appropriate, expense all or a portion of the asset. The determination of fair value includes numerous uncertainties, such as the impact of competition on future value. CEL-SCI believes that it has made reasonable estimates and judgments in determining whether its long-lived assets have been impaired; however, if there is a material change in the assumptions used in its determination of fair values or if there is a material change in economic

35

conditions or circumstances influencing fair value, CEL-SCI could be required to recognize certain impairment charges in the future. As a result of the reviews, no changes in asset values were required.

Prepaid Expenses and Inventory--Inventory consists of bulk purchases of laboratory supplies used on a daily basis in the lab and items that will be used for future production. The items in inventory are expensed when used in production or daily activity as Research and Development expenses. These items are disposables and consumables and can be used for both the manufacturing of Multikine for clinical studies and in the laboratory for quality control and bioassay use. They can be used in training, testing and daily laboratory activities. Prepaid expenses are payments for services over a long period and are expensed over the time period for which the service is rendered.

Derivative Instruments--CEL-SCI enters into financing arrangements that consist of freestanding derivative instruments or hybrid instruments that contain embedded derivative features. CEL-SCI accounts for these arrangement in accordance with Codification 815-10-50, "Accounting for Derivative Instruments and Hedging Activities", "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock", as well as related interpretations of these standards. In accordance with accounting principles generally accepted in the United States ("GAAP"), derivative instruments and hybrid instruments are recognized as either assets or liabilities in the statement of financial position and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative or hybrid instruments. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and recognized at fair value with changes in fair value recognized as either a gain or loss in earnings if they can be reliably measured. When the fair value of embedded derivative features cannot be reliably measured, CEL-SCI measures and reports the entire hybrid instrument at fair value with changes in fair value recognized as either a gain or loss in earnings. CEL-SCI determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument and precluding the use of "blockage" discounts or premiums in determining the fair value of a large block of financial instruments. Fair value under these conditions does not necessarily represent fair value determined using valuation standards that give consideration to blockage discounts and other factors that may be considered by market participants in establishing fair value.

Accounting Pronouncements

In March 2008, the FASB issued Codification 815-20-50-1, "Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133", which changes disclosure requirements for derivative instruments and hedging activities. The statement is effective for periods ending on or after November 15, 2008, with early application encouraged. CEL-SCI has adopted this statement with no effect on its consolidated financial statements.

In June 2008, the FASB finalized Codification 815-40-15-7, "Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity's Own Stock". The EITF lays out a procedure to determine if the debt instrument is indexed to its own common stock. The EITF is effective for fiscal years

36

beginning after December 15, 2008. CEL-SCI has adopted this codification and reviewed all outstanding options and warrants as of October 1, 2009. See Note 11 in the financial statements included as part of this report for a discussion.

In September 2008, the FASB staff issued Codification 815-10-50-1A, "Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161". The codification applies to credit derivatives within the scope of Statement 133 and hybrid instruments that have embedded credit derivatives. It deals with disclosures related to these derivatives and is effective for reporting periods ending after November 15, 2008. It also clarifies the effective date of Codification 815-20-50-1 as any reporting period beginning after November 15, 2008. CEL-SCI has adopted this codification and it had no impact on its consolidated financial statements.

In April 2009, the FASB issued Codification 825-10-65-1, "Interim Disclosures about Fair Value of Financial Instruments". The codification amends FASB Statement No. 107, "Disclosures about Fair Values of Financial Instruments", to require disclosures about fair values of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. The codification also amends APB Opinion No. 28, "Interim Financial Reporting", to require those disclosures in summarized financial information at interim reporting periods. This Codification topic became effective for interim and annual reporting periods ending after June 15, 2009. CEL-SCI adopted this codification in the quarter ended June 30, 2009. There was no significant impact from this adoption on CEL-SCI's consolidated financial statements.

In May 2009, the FASB issued Codification 855-10-50, "Subsequent Events", which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The codification establishes the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The codification became effective for CEL-SCI for the period ended June 30, 2009 and is to be applied prospectively. The impact of the adoption was not significant.

In January 2010, the FASB amended Codification 820-10, "Improving Disclosures about Fair Value Measurement", effective for interim periods beginning after December 15, 2009. This amendment changes disclosures required for interim and annual periods with respect to fair value measurements. CEL-SCI has adopted the change in the disclosure requirements and the effect was immaterial.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

Market risk is the potential change in an instrument's value caused by, for example, fluctuations in interest and currency exchange rates. CEL-SCI enters into financing arrangements that are or include freestanding derivative instruments or that are, or include, hybrid instruments that contain embedded derivative features. CEL-SCI does not enter into derivative instruments for trading purposes. Additional information is presented in the notes to consolidated financial statements. The fair value of these instruments is affected primarily by volatility of the trading prices of the CEL-SCI's common stock. For three years ended September 30, 2010, CEL-SCI recognized a gain or
(loss) of $28,843,772, $(28,491,650) and $1,799,393, respectively, resulting from changes in fair value of derivative instruments. CEL-SCI has no exposure to risks associated with foreign exchange rate changes because none of the operations of CEL-SCI are transacted in a foreign currency. The interest risk on investments on September 30, 2010 was considered immaterial due to the fact that the interest rates at that time were nominal at best and CEL-SCI keeps its cash and cash equivalents in short term maturities.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the consolidated financial statements included with this Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable

ITEM 9A. CONTROLS AND PROCEDURES

Under the direction and with the participation of CEL-SCI's management, including CEL-SCI's Chief Executive Officer and Chief Financial Officer, CEL-SCI carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of September 30, 2010. CEL-SCI maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and regulations, and that such information is accumulated and communicated to CEL-SCI's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. CEL-SCI's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Based on the evaluation, the Chief Executive and Principal Financial Officer has concluded that CEL-SCI's disclosure controls were effective as of September 30, 2010.

Management's Report on Internal Control Over Financial Reporting

CEL-SCI's management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the

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effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of CEL-SCI's principal executive officer and principal financial officer and implemented by CEL-SCI's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of CEL-SCI's financial statements in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Geert Kersten, CEL-SCI's Chief Executive and Principal Financial Officer, evaluated the effectiveness of CEL-SCI's internal control over financial reporting as of September 30, 2010 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO Framework. Management's assessment included an evaluation of the design of CEL-SCI's internal control over financial reporting and testing of the operational effectiveness of those controls.

Based on this evaluation, Mr. Kersten concluded that CEL-SCI's internal control over financial reporting was effective as of September 30, 2010.

There was no change in CEL-SCI's internal control over financial reporting that occurred during the quarter ended September 30, 2010 that has materially affected, or is reasonably likely to materially affect, CEL-SCI's internal control over financial reporting.

CEL-SCI's independent registered public accounting firm BDO USA, LLP has issued an attestation report on CEL-SCI's internal control over financial reporting.

ITEM 9B. SUBMISSION OF MATTTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of CEL-SCI's shareholders was held on July 16, 2010. At the meeting the following persons were elected as directors for the upcoming year:

    Name                      Votes For     Votes Withheld

Maximilian de Clara           32,097,084     11,280,445
Geert Kersten                 34,808,573       8,568,956
Alexander Esterhazy           34,664,725       8,712,804
C. Richard Kinsolving         35,236,897       8,140,632
Peter R. Young                35,223,756       8,153,773

At the meeting the following proposals were ratified by the shareholders.

(1) to approve the adoption of CEL-SCI's 2010 Incentive Stock Option Plan which provides that up to 2,000,000 shares of common stock may be issued upon the exercise of options granted pursuant to the Incentive Stock Option Plan;

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(2) to approve the adoption of CEL-SCI's 2010 Non-Qualified Stock Option Plan which provides that up to 5,000,000 shares of common stock may be issued upon the exercise of options granted pursuant to the Non-Qualified Stock Option Plan;

(3) to approve the adoption of CEL-SCI's 2010 Stock Bonus Plan which provides that up to 2,000,000 shares of common stock may be issued to persons granted stock bonuses pursuant to the Stock Bonus Plan;

(4) to approve an amendment to CEL-SCI's Stock Compensation Plan to provide for the issuance of up to 2,000,000 additional restricted shares of common stock to CEL-SCI's directors, officers, employees and consultants for services provided to the Company;

(5) to ratify the appointment of BDO USA, LLP as CEL-SCI's independent registered public accounting firm for the fiscal year ending September 30, 2010.

The following is a tabulation of votes cast with respect to these proposals:

                              Votes
                -----------------------------------         Broker
 Proposal          For        Against      Abstain         Non-Votes
---------          ---        ------       -------         ---------

      1.       29,741,736    13,177,965    457,828        113,983,024
      2.       27,610,822    14,884,483    882,224        113,983,024
      3.       28,725,699    13,840,290    811,540        113,983,024
      4.       27,898,687    14,166,249  1,312,593        113,983,024
      5.       150,860,671   4,347,654   2,152,228                  0

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Officers and Directors

Name                       Age    Position
-----                      ---    ---------

Maximilian de Clara         80    Director and President
Geert R. Kersten, Esq.      51    Director, Chief Executive Officer
                                   and Treasurer
Patricia B. Prichep         59    Senior Vice President of Operations and
                                   Secretary
Dr. Eyal Talor              54    Chief Scientific Officer
Dr. Daniel H. Zimmerman     69    Senior Vice  President  of Research,
Cellular Immunology
John Cipriano               68    Senior Vice President of Regulatory Affairs
Alexander G. Esterhazy      68       Director
Dr. C. Richard Kinsolving   73    Director
Dr. Peter R. Young          65    Director

The directors of CEL-SCI serve in such capacity until the next annual meeting of CEL-SCI's shareholders and until their successors have been duly elected and qualified. The officers of CEL-SCI serve at the discretion of CEL-SCI's directors.

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Mr. Maximilian de Clara, by virtue of his position as an officer and director of CEL-SCI, may be deemed to be the "parent" and "founder" of CEL-SCI as those terms are defined under applicable rules and regulations of the SEC.

All of CEL-SCI's directors have served as directors for a significant period of time. Consequently, their long-standing experience with CEL-SCI benefits both CEL-SCI and its shareholders.

The principal occupations of CEL-SCI's officers and directors, during the past several years, are as follows:

Maximilian de Clara has been a Director of CEL-SCI since its inception in March l983, and has been President of CEL-SCI since July l983. Prior to his affiliation with CEL-SCI, and since at least l978, Mr. de Clara was involved in the management of his personal investments and personally funding research in the fields of biotechnology and biomedicine. Mr. de Clara attended the medical school of the University of Munich from l949 to l955, but left before he received a medical degree. During the summers of l954 and l955, he worked as a research assistant at the University of Istanbul in the field of cancer research. For his efforts and dedication to research and development in the fight against cancer and AIDS, Mr. de Clara was awarded the "Pour le Merit" honorary medal of the Austrian Military Order "Merito Navale" as well as the honor cross of the Austrian Albert Schweitzer Society.

Geert Kersten has served in his current leadership role at CEL-SCI since 1995. Mr. Kersten has been with CEL-SCI since 1987. He has been involved in the pioneering field of cancer immunotherapy for almost two decades and has successfully steered CEL-SCI through many challenging cycles in the biotechnology industry. Mr. Kersten also provides CEL-SCI with significant expertise in the fields of finance and law and has a unique vision of how Multikine will change the way cancer is treated. Prior to his association with CEL-SCI, Mr. Kersten worked at the law firm of Finley & Kumble and worked at Source Capital, an investment banking firm located in McLean, VA. He is a native of Germany, and completed his studies in the U.S.
Mr. Kersten completed his Undergraduate Degree in Accounting, received an M.B.A. from George Washington University, and a law degree (J.D.) from American University in Washington, DC.

Patricia B. Prichep joined CEL-SCI in 1992 and has been CEL-SCI's Senior Vice President of Operations since March 1994. Between December 1992 and March 1994, Ms. Prichep was CEL-SCI's Director of Operations. Ms. Prichep became CEL-SCI's Corporate Secretary in May 2000. She is responsible for all day-to-day operations of CEL-SCI, including human resources and is the liaison with the auditing firm for financial reporting. Between June 1990 and December 1992, Ms. Prichep was the Manager of Quality and Productivity for the NASD's Management, Systems and Support Department where she was responsible for the internal auditing and work flow analysis of operations. Between 1982 and 1990, Ms. Prichep was Vice President and Operations Manager for Source Capital, Ltd. where she was responsible for all operations and compliance for the company and was licensed as a securities broker. Ms. Prichep received her B.A. from the University of Bridgeport in Connecticut.

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Eyal Talor, Ph.D. joined CEL-SCI in October 1993. In October 2009, Dr. Talor was promoted to Chief Scientific Officer. Prior to this promotion he was the Senior Vice president of Research and Manufacturing since March of 1994. He is a clinical immunologist with over 19 years of hands-on management of clinical research and drug development for immunotherapy application; pre-clinical to Phase III, in the biopharmaceutical industry. His expertise includes; biopharmaceutical R&D and Biologics product development, GMP (Good Manufacturing Practices), Quality Control testing, and the design and building of GMP manufacturing and testing facilities. He served as Director of Clinical Laboratories (certified by the State of Maryland) and has experience in the design of clinical trials (Phase I - III) and GCP (Good Clinical Practices) requirements. He also has broad experience in the different aspects of biological assay development, analytical methods validation, raw material specifications, and QC (Quality Control) tests development under FDA/GMP, USP, and ICH guidelines. He has extensive experience in the preparation of documentation for IND and other regulatory submissions. His scientific area of expertise encompasses immune response assessment. He is the author of over 25 publications and has published a number of reviews on immune regulations in relation to clinical immunology. Before coming to CEL-SCI, he was Director of R&D and Clinical Development at CBL, Inc., Principal Scientist - Project Director, and Clinical Laboratory Director at SRA Technologies, Inc. Prior to that he was a full time faculty member at The Johns Hopkins University, Medical Intuitions; School of Public Health. He holds two US patents; one on Multikine's composition of matter and method of use in cancer, and one on a platform Peptide technology (`Adapt') for the treatment of autoimmune diseases, asthma, allergy, and transplantation rejection. He also has numerous product and process inventions as well as a number of pending US and PCT patent applications. He received his Ph.D. in Microbiology and Immunology from the University of Ottawa, Ottawa, Ontario, Canada, and had post-doctoral training in clinical and cellular immunology at The John Hopkins University, Baltimore, Maryland, USA. He holds an Adjunct Associate teaching position at the Johns Hopkins University Medical Institutions.

Daniel H. Zimmerman, Ph.D., was CEL-SCI's Senior Vice President of Cellular Immunology between 1996 and December 2008 and again since November 2009. He joined CEL-SCI in January 1996 as the Vice President of Research, Cellular Immunology. Dr. Zimmerman founded CELL-MED, Inc. and was its president from 1987-1995. From 1973-1987, Dr. Zimmerman served in various positions at Electronucleonics, Inc. His positions included: Scientist, Senior Scientist, Technical Director and Program Manager. Dr Zimmerman held various teaching positions at Montgomery College between 1987 and 1995. Dr. Zimmerman holds over a dozen US patents as well as many foreign equivalent patents. He is the author of over 40 scientific publications in the area of immunology and infectious diseases. He has been awarded numerous grants from NIH and DOD. From 1969-1973, Dr. Zimmerman was a Senior Staff Fellow at NIH. For the following 25 years, he continued on at NIH as a guest worker. Dr Zimmerman received a Ph.D. in Biochemistry in 1969, a Masters in Zoology in 1966 from the University of Florida and a B.S. in Biology from Emory and Henry College in 1963.

John Cipriano, was CEL-SCI's Senior Vice President of Regulatory Affairs between March 2004 and December 2008 and again since October 2009. Mr. Cipriano brings to CEL-SCI over 30 years of experience in both biotech and pharmaceutical

42

companies. In addition, he held positions at the United States Food and Drug Administration (FDA) as Deputy Director, Division of Biologics Investigational New Drugs, Office of Biologics Research and Review and was the Deputy Director, IND Branch, Division of Biologics Evaluation, Office of Biologics. Mr. Cipriano completed his B.S. in Pharmacy from the Massachusetts College of Pharmacy in Boston, Massachusetts and his M.S. in Pharmaceutical Chemistry from Purdue University in West Lafayette, Indiana.

Alexander G. Esterhazy has been a Director of CEL-SCI since December 1999 and has been an independent financial advisor since November 1997. Between July 1991 and October 1997, Mr. Esterhazy was a senior partner of Corpofina S.A. Geneva, a firm engaged in mergers, acquisitions and portfolio management. Between January 1988 and July 1991, Mr. Esterhazy was a managing director of DG Bank in Switzerland. During this period Mr. Esterhazy was in charge of the Geneva, Switzerland branch of the DG Bank, founded and served as vice president of DG Finance (Paris) and was the President and Chief Executive officer of DG-Bourse, a securities brokerage firm.

C. Richard Kinsolving, Ph.D. has been a Director of CEL-SCI since April 2001. Since February 1999, Dr. Kinsolving has been the Chief Executive Officer of BioPharmacon, a pharmaceutical development company. Between December 1992 and February 1999, Dr. Kinsolving was the President of Immuno-Rx, Inc., a company engaged in immuno-pharmaceutical development. Between December 1991 and September 1995, Dr. Kinsolving was President of Bestechnology, Inc. a nonmedical research and development company producing bacterial preparations for industrial use. Dr. Kinsolving received his Ph.D. in Pharmacology from Emory University
(1970), his Masters degree in Physiology/Chemistry from Vanderbilt University
(1962), and his Bachelor's degree in Chemistry from Tennessee Tech. University (1957).

Peter R. Young, Ph.D. has been a Director of CEL-SCI since August 2002. Dr. Young has been a senior executive within the pharmaceutical industry in the United States and Canada for most of his career. Over the last 20 years he has primarily held positions of Chief Executive Officer or Chief Financial Officer and has extensive experience with acquisitions and equity financings. Since November 2001, Dr. Young has been the President of Agnus Dei, LLC, which acts as a partner in an organization managing immune system clinics which treat patients with diseases such as cancer, multiple sclerosis and hepatitis. Since January 2003, Dr. Young has been the President and Chief Executive Officer of SRL Technology, Inc., a company involved in the development of pharmaceutical (drug) delivery systems. Between 1998 and 2001, Dr. Young was the Chief Financial Officer of Adams Laboratories, Inc. Dr. Young received his Ph.D. in Organic Chemistry from the University of Bristol, England (1969), and his Bachelor's degree in Honors Chemistry, Mathematics and Economics also from the University of Bristol, England (1966).

All of CEL-SCI's officers devote substantially all of their time to CEL-SCI's business.

Alexander G. Esterhazy, Dr. C. Richard Kinsolving and Dr. Peter R. Young are independent directors as that term is defined in section 803 of the listing standards of the NYSE Amex.

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CEL-SCI has an audit committee and compensation committee. The members of the audit committee are Alexander G. Esterhazy, Dr. C. Richard Kinsolving and Dr. Peter Young. Dr. Peter Young serves as the audit committee's financial expert. The members of the compensation committee are Alexander Esterhazy, Dr. C. Richard Kinsolving and Dr. Peter Young.

CEL-SCI's Board of Directors does not have a "leadership structure", as such, since each director is entitled to introduce resolutions to be considered by the Board and each director is entitled to one vote on any resolution considered by the Board. CEL-SCI's Chief Executive Officer is not the Chairman of CEL-SCI's Board of Directors.

CEL-SCI's Board of Directors has the ultimate responsibility to evaluate and respond to risks facing CEL-SCI. CEL-SCI's Board of Directors fulfills its obligations in this regard by meeting on a regular basis and communicating, when necessary, with CEL-SCI's officers.

CEL-SCI has adopted a Code of Ethics which is applicable to CEL-SCI'S principal executive, financial, and accounting officers and persons performing similar functions. The Code of Ethics is available on CEL-SCI's website, located at www.cel-sci.com.

If a violation of this code of ethics act is discovered or suspected, the Senior Officer must (anonymously, if desired) send a detailed note, with relevant documents, to CEL-SCI's Audit Committee, c/o Dr. Peter Young, 5458 Beacon Hill Drive, Frisco, TX 75034.

For purposes of electing directors at its annual meeting CEL-SCI does not have a nominating committee or a committee performing similar functions. CEL-SCI's Board of Directors does not believe a nominating committee is necessary since CEL-SCI's Board of Directors is small and the Board of Directors as a whole performs this function. CEL-SCI's Directors have adopted a policy which provides that nominees to the Board of Directors are selected by a majority vote of CEL-SCI's independent directors.

CEL-SCI does not have any policy regarding the consideration of director candidates recommended by shareholders since a shareholder has never recommended a nominee to the Board of Directors. However, CEL-SCI's Board of Directors will consider candidates recommended by shareholders. To submit a candidate for the Board of Directors the shareholder should send the name, address and telephone number of the candidate, together with any relevant background or biographical information, to CEL-SCI's Chief Executive Officer, at the address shown on the cover page of this report. The Board has not established any specific qualifications or skills a nominee must meet to serve as a director. Although the Board does not have any process for identifying and evaluating director nominees, the Board does not believe there would be any differences in the manner in which the Board evaluates nominees submitted by shareholders as opposed to nominees submitted by any other person.

CEL-SCI does not have a policy with regard to Board member's attendance at annual meetings. All Board members, with the exception of Mr. de Clara and Mr. Esterhazy, attended the last annual shareholder's meeting held on July 16, 2010.

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Holders of CEL-SCI's common stock can send written communications to CEL-SCI's entire Board of Directors, or to one or more Board members, by addressing the communication to "the Board of Directors" or to one or more directors, specifying the director or directors by name, and sending the communication to CEL-SCI's offices in Vienna, Virginia. Communications addressed to the Board of Directors as whole will be delivered to each Board member. Communications addressed to a specific director (or directors) will be delivered to the director (or directors) specified.

Security holder communications not sent to the Board of Directors as a whole or to specified Board members are not relayed to Board members.

ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (CD&A) outlines CEL-SCI's compensation philosophy, objectives and process for its executive officers. This CD&A includes information on how compensation decisions are made, the overall objectives of CEL-SCI's compensation program, a description of the various components of compensation that are provided, and additional information pertinent to understanding CEL-SCI's executive officer compensation program.

The Compensation Committee determines the compensation of CEL-SCI's Chief Executive Officer and President and delegates to the Chief Executive Officer the responsibility to determine the base salaries of all officers other than himself under the constraints of an overall limitation on the total amount of compensation to be paid to them.

Compensation Philosophy

CEL-SCI's compensation philosophy extends to all employees, including executive officers, and is designed to align employee and shareholder interests. The philosophy's objective is to pay fairly based upon the employee's position, experience and individual performance. Employees may be rewarded through additional compensation when CEL-SCI meets or exceeds targeted business objectives. Generally, under CEL-SCI's compensation philosophy, as an employee's level of responsibility increases, a greater portion of his or her total potential compensation becomes contingent upon annual performance.

A substantial portion of an executive's compensation incorporates performance criteria that support and reward achievement of CEL-SCI's long term business goals.

The fundamental principles of CEL-SCI's compensation philosophy are described below:

o Market-driven. Compensation programs are structured to be competitive both in their design and in the total compensation that they offer.

o Performance-based. Certain officers have some portion of their incentive compensation linked to CEL-SCI's performance. The

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application of performance measures as well as the form of the reward may vary depending on the employee's position and responsibilities.

Based on a review of its compensation programs, CEL-SCI does not believe that such programs encourage any of its employees to take risks that would be likely to have a material adverse effect on CEL-SCI. CEL-SCI reached this conclusion based on the following:

o The salaries paid to employees are consistent with the employees' duties and responsibilities.

o Employees who have high impact relative to the expectations of their job duties and functions are rewarded.

o CEL-SCI retains employees who have skills critical to its long term success.

Review of Executive Officer Compensation

CEL-SCI's current policy is that the various elements of the compensation package are not interrelated in that gains or losses from past equity incentives are not factored into the determination of other compensation. For instance, if options that are granted in a previous year become underwater the next year, the Committee does not take that into consideration in determining the amount of the options or restricted stock to be granted the next year. Similarly, if the options or restricted shares granted in a previous year become extremely valuable, the Committee does not take that into consideration in determining the options or restricted stock to be awarded for the next year.

CEL-SCI does not have a policy with regard to the adjustment or recovery of awards or payments if our relevant performance measures upon which they are based are restated or otherwise adjusted in a manner that would reduce the size of an award or payment.

Components of Compensation--Executive Officers

CEL-SCI's executive officers are compensated through the following three components:

o Base Salary
o Long-Term Incentives (stock options and/or grants of stock)
o Benefits

These components provide a balanced mix of base compensation and compensation that is contingent upon each executive officer's individual performance. A goal of the compensation program is to provide executive officers with a reasonable level of security through base salary and benefits. CEL-SCI wants to ensure that the compensation programs are appropriately designed to encourage executive officer retention and motivation to create shareholder value. The Compensation Committee believes that CEL-SCI's stockholders are best served when CEL-SCI can attract and retain talented executives by providing compensation packages that are competitive but fair.

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In past years, base salaries, benefits and incentive compensation opportunities were generally targeted near the median of general survey market data derived from indices covering similar biotech/pharmaceutical companies. The companies included Achillion Pharmaceuticals, Inc., Acura Pharmaceutical, Inc., Alimera Sciences, Inc., Amorfix Life Sciences Ltd., Antigenics, Inc., ARCA biopharma (ARCA Discovery), ARYx Therapeutics, Inc., Avanir Pharmaceuticals, Bellus Health, Inc., Cadence Pharmaceuticals, Inc. ,Capstone Therapeutics, Chelsea Therapeutics, Inc., Cortex Pharmaceuticals, Inc., EpiCept Corp., EXACT Sciences Corp., Helix BioPharma, IGI Laboratories Inc., Inhibitex, Inc., Isotechnika Pharma Inc., Medicis Technologies Corp., NeurogesX, Inc., Novavax, Inc., Orbus Pharma Inc., Orexigen Therapeutics Inc., OXiGENE, Inc., Pharmacyclics, Inc., Quest PharmaTech Inc., Reata Pharmaceuticals, Inc., Resverlogix Corp., SCOLR Pharma, Inc., StemCells, Inc. and Threshold Pharmaceuticals, Inc. CEL-SCI has not used third party consultants to provide it with recommendations or reports.

Base Salaries

Base salaries generally have been targeted to be competitive when compared to the salary levels of persons holding similar positions in other pharmaceutical companies and other publicly traded companies of comparable size. Each executive officer's respective responsibilities, experience, expertise and individual performance are considered.

A further consideration in establishing compensation for the senior employees is their long term history with CEL-SCI. Taken into consideration are factors that have helped CEL-SCI survive in times when it was financially extremely weak, such as: willingness to accept salary cuts, willingness not to be paid at all for extended time periods, and in general an attitude that helped CEL-SCI survive during financially difficult times. For example, Geert Kersten, Maximilian de Clara and Patricia Prichep were without any salary between September 2008 and June 2009. Other senior members took substantial salary cuts, all geared towards helping CEL-SCI survive. In all of these cases the officers continued to work without any guarantee of payment.

Long-Term Incentives

Stock grants and option grants help to align the interests of CEL-SCI's employees with those of its shareholders. Options and stock grants are made under CEL-SCI's Stock Option, Stock Bonus and Stock Compensation Plans. Options are granted with exercise prices equal to the closing price of CEL-SCI's common stock on the day immediately preceding the date of grant, with pro rata vesting at the end of each of the following three years.

CEL-SCI believes that grants of equity-based compensation:

o Enhance the link between the creation of shareholder value and long-term executive incentive compensation;
o Provide focus, motivation and retention incentive; and
o Provide competitive levels of total compensation.

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CEL-SCI's management believes that the pricing for biotechnology stocks is highly inefficient until the time of product sales. As such any long term compensation tied to progress as measured by share price is not as efficient as it should be. However, CEL-SCI's Compensation Committee has not been able to substitute a better measurement and therefore continues to believe that stock grants and option grants best align the needs of the corporation and the employee with those of the shareholders.

Benefits

In addition to cash and equity compensation programs, executive officers participate in the health and welfare benefit programs available to other employees. In a few limited circumstances, CEL-SCI provides other benefits to certain executive officers, such as car allowances.

All executive officers are eligible to participate in CEL-SCI's 401(k) plan on the same basis as its other employees. CEL-SCI matches 100% of each employee's contribution up to the first 6% of his or her salary.

The following table sets forth in summary form the compensation received by (i) the Chief Executive Officer of CEL-SCI and (ii) by each other executive officer of CEL-SCI who received in excess of $100,000 during the three fiscal years ended September 30, 2010.

                                                                            All
                                                                           Other
                                                      Restric-             Annual
                                                     ted Stock   Option    Compen-
Name and Princi-         Fiscal   Salary     Bonus    Awards      Awards    sation
 pal Position             Year      (1)       (2)      (3)         (4)       (5)            Total
--------------------     ------   ------    ------    --------   -------   --------        ------

Maximilian de Clara,      2010   $363,000       --     $26,499   136,197    $102,219    $   627,882
President                 2009    334,720       --     267,000    380,121     83,274      1,065,114
                          2008    363,000       --     543,174    103,320     89,268      1,098,762

Geert R. Kersten,         2010    454,009  220,995      37,524    359,089     55,309      1,126,510
Chief Executive           2009    408,691       --      81,700    526,366     34,892      1,051,649
Officer and               2008    404,900       --     156,674    103,320     39,901        704,795
Treasurer

Patricia B. Prichep       2010    199,898       --      25,039    237,090      6,027        468,054
Senior Vice President     2009    174,913       --      41,603    235,467      4,225        456,208
of Operations and         2008    185,780       --      82,558     51,660      4,225        324,223
Secretary

Eyal Talor, Ph.D.         2010    239,868       --      28,872    237,090      6,027        511,857
Chief Scientific          2009    212,265       --      36,627    137,878      4,225        390,994
Officer                   2008    229,353       --      81,187     51,660      4,225        366,425


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Daniel Zimmerman, Ph.D.   2010    165,800       --      15,857     64,455      5,027        251,139
Senior Vice President     2009     47,124       --      16,892        --         875         64,890
of Research. Cellular     2008    175,988       --      46,186     38,745      4,225        265,144
Immunology (6)

John Cipriano             2010    175,952       --       6,625    240,711         27        423,315
Senior Vice President     2009     48,594       --      15,840         --         25         64,458
of Regulatory Affairs(7)  2008    171,028       --      45,893     38,745         25         55,691

(1) The dollar value of base salary (cash and non-cash) earned. During three years ended September 30, 2010, $0.00, $0.00 and $18,730, respectively, of the total salaries paid to the persons shown in the table were paid in restricted shares of CEL-SCI's common stock.

Information concerning the issuance of these restricted shares is shown in the following table:

Date Shares            Number of             Price
 Issued             Shares Issued           Per Share

 01/15/2008            36,020                $0.52

On January 15, 2008 the amount of compensation satisfied through the issuance of shares was determined by multiplying the number of shares issued by the price per share. The price per share was equal to the closing price of CEL-SCI's common stock on the date prior to the date the shares were issued.

(2) The dollar value of bonus (cash and non-cash) earned.

(3) During the periods covered by the table, the value of the shares of restricted stock issued as compensation for services to the persons listed in the table. In the case of Mr. de Clara, during the three years ended September 30, 2010, $0.00, $200,000 and $400,000, respectively, were paid in restricted shares of CEL-SCI's common stock which cannot be sold in the public market for a period of three years after the date of issuance. In the case of all other persons listed in the table, the shares were issued as CEL-SCI's contribution on behalf of the named officer to CEL-SCI's 401(k) retirement plan and restricted shares issued at the market price from the Stock Compensation Plan. The value of all stock awarded during the periods covered by the table are calculated in accordance with Codification 718-10-30-3 requirements.

(4) The greatest part of the value in FY 2009 was derived from options awarded to employees who did not collect a salary, or reduced or deferred their salary between September 15, 2008 and June 30, 2009. For example, Mr. de Clara, Mr. Kersten and Ms. Prichep did not collect any salary between September 30, 2008 and June 30, 2009. The fair value of all stock options granted during the periods covered by the table are calculated on the grant date in accordance with Codification 718-10-30-3 requirements.

49

(5) All other compensation received that CEL-SCI could not properly report in any other column of the table including annual contributions or other allocations to vested and unvested defined contribution plans, and the dollar value of any insurance premiums paid by, or on behalf of, CEL-SCI with respect to term life insurance for the benefit of the named executive officer, and the full dollar value of the remainder of the premiums paid by, or on behalf of, CEL-SCI. Includes board of directors fees for Mr. de Clara and Mr. Kersten.

(6) Dr. Zimmerman was CEL-SCI's Senior Vice President of Research, Cellular Immunology between January 1996 and December 2008 and since November 2009.

(7) Mr. Cipriano was CEL-SCI's Senior Vice President of Regulatory Affairs between March 2004 and December 2008 and since October 2009.

Long Term Incentive Plans - Awards in Last Fiscal Year

See footnote 6 to the financial statements included as part of this report.

Employee Pension, Profit Sharing or Other Retirement Plans

CEL-SCI has a defined contribution retirement plan, qualifying under
Section 401(k) of the Internal Revenue Code and covering substantially all CEL-SCI's employees. CEL-SCI's contribution to the plan is made in shares of CEL-SCI's common stock. Each participant's contribution is matched by CEL-SCI with shares of common stock which have a value equal to 100% of the participant's contribution, not to exceed the lesser of $1,000 or 6% of the participant's total compensation. CEL-SCI's contribution of common stock is valued each quarter based upon the closing price of its common stock. The fiscal 2010 expenses for this plan were $123,500. Other than the 401(k) Plan, CEL-SCI does not have a defined benefit, pension plan, profit sharing or other retirement plan.

Compensation of Directors During Year Ended September 30, 2010

                                       Stock         Option
Name                 Paid in Cash    Awards (1)     Awards (2)       Total
----                 ------------    ----------     ----------     ----------

Maximilian de Clara    $ 40,000             -       $ 136,197     $ 176,197
Geert Kersten          $ 40,000             -       $ 359,089     $ 399,089
Alexander Esterhazy    $ 41,000             -       $  64,455     $ 105,455
C. Richard Kinsolving  $ 41,000             -       $  64,455     $ 105,455
Peter R. Young         $ 41,000             -       $  64,455     $ 105,455

(1) The fair value of stock issued for services.

(2) The fair value of options granted computed in accordance with Codification 718-10-30-3 on the date of grant. Also includes the fair value of the milestone options expensed during fiscal year 2010 that were issued to Mr. de Clara and Mr. Kersten in 2009.

50

Directors' fees paid to Maximilian de Clara and Geert Kersten are included in the Executive Compensation table.

Employment Contracts.

Maximilian de Clara

In April 2005, CEL-SCI entered into a three-year employment agreement with Maximilian de Clara, CEL-SCI's President. The employment agreement provided that CEL-SCI would pay Mr. de Clara an annual salary of $363,000 during the term of the agreement. On September 8, 2006 Mr. de Clara's Employment Agreement was amended and extended to April 30, 2010. The terms of the amendment to Mr. de Clara's employment agreement are referenced in a report on Form 8-K filed with the Securities and Exchange Commission on September 8, 2006. On August 30, 2010, Mr. de Clara's employment agreement, as amended on September 8, 2006, was extended to August 30, 2013.

In the event that there is a material reduction in Mr. de Clara's authority, duties or activities, or in the event there is a change in the control of CEL-SCI, the agreement allows Mr. de Clara to resign from his position at CEL-SCI and receive a lump-sum payment from CEL-SCI equal to 18 months salary ($544,500) and the unvested portion of any stock options would vest immediately ($284,794). For purposes of the employment agreement, a change in the control of CEL-SCI means the sale of more than 50% of the outstanding shares of CEL-SCI's common stock, or a change in a majority of CEL-SCI's directors.

The employment agreement will also terminate upon the death of Mr. de Clara, Mr. de Clara's physical or mental disability, the conviction of Mr. de Clara for any crime involving fraud, moral turpitude, or CEL-SCI's property, or a breach of the employment agreement by Mr. de Clara. If the employment agreement is terminated for any of these reasons, Mr. de Clara, or his legal representatives, as the case may be, will be paid the salary provided by the employment agreement through the date of termination.

Geert Kersten

Effective September 1, 2003, CEL-SCI entered into a three-year employment agreement with Mr. Kersten. The employment agreement provides that during the term of the employment agreement CEL-SCI will pay Mr. Kersten an annual salary of $370,585 plus any increases approved by the Board of Directors during the period of the employment agreement. In the event there is a change in the control of CEL-SCI, the agreement allows Mr. Kersten to resign from his position at CEL-SCI and receive a lump-sum payment from CEL-SCI equal to 24 months salary ($883,818) and the unvested portion of any stock options would vest immediately ($1,172,265). For purposes of the employment agreement a change in the control of CEL-SCI means: (1) the merger of CEL-SCI with another entity if after such merger the shareholders of CEL-SCI do not own at least 50% of voting capital stock of the surviving corporation; (2) the sale of substantially all of the assets of CEL-SCI; (3) the acquisition by any person of more than 50% of CEL-SCI's common stock; or (4) a change in a majority of CEL-SCI's directors which has not been approved by the incumbent directors. Effective September 1, 2006, Mr. Kersten's employment agreement was extended to September 1, 2011.

51

The Employment Agreement will also terminate upon the death of Mr. Kersten, Mr. Kersten's physical or mental disability, willful misconduct, an act of fraud against CEL-SCI, or a breach of the Employment Agreement by Mr. Kersten. If the Employment Agreement is terminated for any of these reasons Mr. Kersten, or his legal representatives, as the case may be, will be paid the salary provided by the Employment Agreement through the date of termination.

Patricia B. Prichep / Eyal Talor, Ph.D.

On August 30, 2010, CEL-SCI entered into a three-year employment agreement with Patricia B. Prichep, CEL-SCI's Senior Vice President of Operations. The employment agreement with Ms. Prichep provides that during the term of the agreement CEL-SCI will pay Ms. Prichep an annual salary of $194,298 plus any increases approved by the Board of Directors during the period of the employment agreement.

On August 30, 2010, CEL-SCI also entered into a three-year employment agreement with Eyal Talor, Ph.D., CEL-SCI's Chief Scientific Officer. The employment agreement with Dr. Talor provides that during the term of the agreement CEL-SCI will pay Dr. Talor an annual salary of $239,868 plus any increases approved by the Board of Directors during the period of the employment agreement.

If Ms. Prichep or Dr. Talor resigns within ninety (90) days of the occurrence of any of the following events: (i) a relocation (or demand for relocation) of employee's place of employment to a location more than thirty-five (35) miles from the employee's current place of employment, (ii) a significant and material reduction in the employee's authority, job duties or level of responsibility or (iii) the imposition of significant and material limitations on the employee's autonomy in her or his position, the employment agreement will be terminated and the employee will be paid the salary provided by the employment agreement through the date of termination and the unvested portion of any stock options held by the employee will vest immediately.

In the event there is a change in the control of CEL-SCI, the employment agreements with Ms. Prichep and Dr. Talor allow Ms. Prichep and/or Dr. Talor (as the case may be) to resign from her or his position at CEL-SCI and receive a lump-sum payment from CEL-SCI equal to 18 months salary ($291,447 and $359,802 respectively). In addition, the unvested portion of any stock options held by the employee will vest immediately ($830,817 and $830,062 respectively). For purposes of the employment agreements, a change in the control of CEL-SCI means:
(1) the merger of CEL-SCI with another entity if after such merger the shareholders of CEL-SCI do not own at least 50% of voting capital stock of the surviving corporation; (2) the sale of substantially all of the assets of CEL-SCI; (3) the acquisition by any person of more than 50% of CEL-SCI's common stock; or (4) a change in a majority of CEL-SCI's directors which has not been approved by the incumbent directors.

The employment agreements with Ms. Prichep and Dr. Talor will also terminate upon the death of the employee, the employee's physical or mental

52

disability, willful misconduct, an act of fraud against CEL-SCI, or a breach of the employment agreement by the employee. If the employment agreement is terminated for any of these reasons the employee, or her or his legal representatives, as the case may be, will be paid the salary provided by the employment agreement through the date of termination.

Compensation Committee Interlocks and Insider Participation

CEL-SCI has a compensation committee comprised of Alexander Esterhazy, Dr. C. Richard Kinsolving and Dr. Peter Young, all of whom are outside directors.

During the year ended September 30, 2010, no director of CEL-SCI was also an executive officer of another entity, which had an executive officer of CEL-SCI serving as a director of such entity or as a member of the compensation committee of such entity.

Stock Options

The following tables show information concerning the options granted during the fiscal year ended September 30, 2010, to the persons named below.

                              Options Granted
                                                     Exercise
                           Grant        Options     Price Per   Expiration
 Name                      Date       Granted (#)     Share        Date

Maximilian de Clara       7/21/10       250,000      $ 0.48     7/20/20

Geert Kersten             7/21/10       300,000      $ 0.48     7/20/20

Patricia B. Prichep       7/21/10       150,000      $ 0.48     7/20/20

Eyal Talor, Ph.D.         7/21/10       150,000      $ 0.48     7/20/20

Daniel Zimmerman, Ph.D.   7/21/10       150,000      $ 0.48     7/20/20

John Cipriano             7/21/10       150,000      $ 0.48     7/20/20


                             Options Exercised

                                        Shares
                    Date of           Acquired On            Value
                   Exercise            Exercise            Realized

                      -                    -                   -

53

The following lists the outstanding options held by the persons named below:

Shares Underlying Unexercised Options Which are:


----------------------------- Exercise Expiration

 Name                   Exercisable     Unexercisable      Price        Date

 Maximilian de Clara      23,333                           2.87       07/31/13
                          95,000 (1)                       1.94       08/31/13
                          70,000                           1.05       09/25/12
                          56,666                           1.05       05/01/13
                          50,000                           1.05       05/01/13
                          50,000                           1.05       04/12/12
                          60,000                           1.05       04/19/13
                          60,000                           1.38       03/22/11
                          75,000                           0.54       03/14/12
                          50,000                           0.61       09/02/14
                          50,000                           0.48       09/21/15
                         100,000                           0.58       09/12/16
                         200,000                           0.63       09/13/17
                         133,334                           0.62       03/04/18
                       1,436,250 (2)                       0.25       04/23/19
                          83,334                           0.38       07/20/19
                       ---------
                       2,592,917

                                           66,666          0.62       03/04/18
                                          500,000 (3)      0.38       07/06/19
                                          166,666          0.38       07/20/19
                                          250,000          0.48       07/20/20
                                         -------
                                         983,332

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

 Geert R. Kersten         50,000                           1.05       11/01/13
                          14,000                           1.05       10/31/13
                          50,000                           1.05       07/31/13
                         224,000 (1)                       1.05       06/10/13
                          50,000                           1.05       09/25/12
                         150,000                           1.05       05/01/13
                          50,000                           1.05       05/01/13
                          50,000                           1.05       04/12/12
                          95,000 (1)                       1.94       08/31/13
                          60,000                           1.05       04/19/13
                          60,000                           1.38       03/22/11
                         560,000 (1)                       1.05       10/16/13
                         105,000                           0.54       03/14/12
                       1,890,000                           0.22       04/01/13
                          50,000                           0.61       09/02/14
                          50,000                           0.48       09/21/15
                         200,000                           0.58       09/12/16
                         200,000                           0.63       09/13/17
                         133,334                           0.62       03/04/18
                       1,838,609 (2)                       0.25       04/23/19

54

Shares Underlying Unexercised Options Which are:


----------------------------- Exercise Expiration

 Name                   Exercisable     Unexercisable      Price        Date

Geert R. Kersten (cont'd) 100,000                          0.38       07/20/19
                          -------
                        5,979,943

                                           66,666          0.62       03/04/18
                                        4,000,000 (3)      0.38       07/06/19
                                          200,000          0.38       07/20/19
                                          300,000          0.48       07/20/20
                                          -------
                                        4,566,666

-------------------------------------------------------------------------------
 Patricia B. Prichep                        6,000          1.05       12/01/13
                          10,000                           1.05       11/30/13
                           9,500                           1.05       07/31/13
                           3,000                           1.05       12/31/12
                          35,000                           1.05       03/01/13
                          17,000                           1.05       12/01/13
                          15,000                           1.05       04/12/12
                          47,500 (1)                       1.94       08/31/13
                          23,000                           1.05       02/02/13
                          25,000                           1.18       12/08/13
                          30,000                           1.00       12/03/11
                         200,000 (1)                       1.05       10/16/13
                          10,500                           0.54       03/14/12
                          50,000                           0.33       04/26/12
                         243,000                           0.22       04/01/13
                         337,000                           0.22       04/01/13
                          50,000                           0.61       09/02/14
                          30,000                           0.48       09/21/15
                          90,000                           0.58       09/12/16
                         100,000                           0.63       09/13/17
                          66,667                           0.62       03/04/18
                         717,096 (2)                       0.25       04/23/19
                          50,000                           0.38       07/20/19
                         ------
                      2,165,263

                                           33,333          0.62       03/04/18
                                        3,000,000 (3)      0.38       07/06/19
                                          100,000          0.38       07/20/19
                                          150,000          0.48       07/20/20
                                          -------
                                        3,283,333

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

 Eyal Talor, Ph.D.        15,500                           1.05       07/31/13
                          16,666                           1.05       03/16/13
                          15,000                           1.05       08/03/13
                          10,000 (1)                       1.94       08/31/13
                          20,000                           1.05       08/02/12

55

Shares Underlying Unexercised Options Which are:


----------------------------- Exercise Expiration

 Name                   Exercisable     Unexercisable      Price        Date

Eyal Talor, Ph.D.(cont'd) 25,000                           1.76       11/10/13
                          35,000                           1.00       12/03/11
                        160,000 (1)                        1.05       10/16/13
                          50,000                           0.33       04/26/12
                         374,166                           0.22       04/01/13
                          50,000                           0.61       09/02/14
                          30,000                           0.48       09/21/15
                          80,000                           0.58       09/12/16
                         100,000                           0.63       09/13/17
                          66,667                           0.62       03/04/18
                         240,820 (2)                       0.25       04/23/19
                          50,000                           0.38       07/20/19
                        -------
                      1,338,819

                                           33,333          0.62       03/04/18
                                        3,000,000 (3)      0.38       07/06/19
                                          100,000          0.38       07/20/19
                                          150,000          0.48       07/20/20
                                       ---------
                                       3,283,333
-------------------------------------------------------------------------------

Daniel Zimmerman, Ph.D.  12,000                            1.05       12/31/13

                          7,000                            1.05       06/19/13
                         15,000                            1.05       02/19/13
                         30,000 (1)                        1.94       08/31/13
                         20,000                            1.05       02/02/13
                         20,000                            1.85       01/26/11
                        120,000 (1)                        1.05       10/16/13
                         41,000                            0.54       03/14/12
                         50,000                            0.33       04/16/12
                        392,000                            0.22       04/01/13
                         50,000                            0.61       09/02/14
                         30,000                            0.48       09/21/15
                         60,000                            0.58       09/12/16
                         75,000                            0.63       09/13/17
                         75,000                            0.62       03/04/18
                        200,000 (4)                        0.38       07/15/14
                      ---------
                      1,197,000
                                          150,000          0.48       07/20/20
                                          -------
                                          150,000

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

 John Cipriano
                         20,000                            0.61       09/02/14
                         30,000                            0.48       09/21/15
                         60,000                            0.58       09/12/16

56

Shares Underlying Unexercised Options Which are:


----------------------------- Exercise Expiration

Name                   Exercisable     Unexercisable      Price        Date

John Cipriano (cont'd)                    75,000          0.63       09/13/17
                         75,000                           0.62       03/04/18
                         33,334                           1.93       09/30/19
                         ------
                        293,334
                                          66,666          1.93       09/30/19
                                         150,000          0.48       07/20/20
                                         -------
                                         216,666

(1) Options purchased by Employee through the Salary Reduction Plan.

(2) Options awarded to employees who did not collect a salary, or reduced or deferred their salary between September 15, 2008 and June 30, 2009. For example, Mr. de Clara, Mr. Kersten and Ms. Prichep did not collect any salary between September 30, 2008 and June 30, 2009.

(3) Long-term performance options: The Board of Directors has identified the successful Phase III clinical trial for Multikine to be the most important corporate event to create shareholder value. Therefore, one third of the options can be exercised when the first 400 patients are enrolled in CEL-SCI's Phase III head and neck cancer clinical trial. One third of the options can be exercised when all of the patients have been enrolled in the Phase III clinical trial. One third of the options can be exercised when the Phase III trial is completed.

(4) Options awarded to employee during the period that he was a consultant to CEL-SCI.

Stock Option, Bonus and Compensation Plans

CEL-SCI has Incentive Stock Option Plans, Non-Qualified Stock Option Plans, Stock Bonus Plans and a Stock Compensation Plan, all of which have been approved by CEL-SCI's stockholders. A summary description of these Plans follows. In some cases these Plans are collectively referred to as the "Plans".

Incentive Stock Option Plans. The Incentive Stock Option Plans authorize the issuance of shares of CEL-SCI's common stock to persons who exercise options granted pursuant to the Plans. Only CEL-SCI's employees may be granted options pursuant to the Incentive Stock Option Plans.

Options may not be exercised until one year following the date of grant. Options granted to an employee then owning more than 10% of the common stock of CEL-SCI may not be exercisable by its terms after five years from the date of grant. Any other option granted pursuant to the Plan may not be exercisable by its terms after ten years from the date of grant.

The purchase price per share of common stock purchasable under an option is determined by the Committee but cannot be less than the fair market value of

57

the common stock on the date of the grant of the option (or 110% of the fair market value in the case of a person owning more than 10% of CEL-SCI's outstanding shares).

Non-Qualified Stock Option Plans. The Non-Qualified Stock Option Plans authorize the issuance of shares of CEL-SCI's common stock to persons that exercise options granted pursuant to the Plans. CEL-SCI's employees, directors, officers, consultants and advisors are eligible to be granted options pursuant to the Plans, provided however that bona fide services must be rendered by such consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction. The option exercise price is determined by CEL-SCI's Board of Directors.

Stock Bonus Plans. Under the Stock Bonus Plans shares of CEL-SCI's common stock may be issued to CEL-SCI's employees, directors, officers, consultants and advisors, provided however that bona fide services must be rendered by consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction.

Stock Compensation Plan. Under the Stock Compensation Plan, shares of CEL-SCI's common stock may be issued to CEL-SCI's employees, directors, officers, consultants and advisors in payment of salaries, fees and other compensation owed to these persons. However, bona fide services must be rendered by consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction.

Other Information Regarding the Plans. The Plans are administered by CEL-SCI's Compensation Committee ("the Committee"), each member of which is a director of CEL-SCI. The members of the Committee were selected by CEL-SCI's Board of Directors and serve for a one-year tenure and until their successors are elected. A member of the Committee may be removed at any time by action of the Board of Directors. Any vacancies which may occur on the Committee will be filled by the Board of Directors. The Committee is vested with the authority to interpret the provisions of the Plans and supervise the administration of the Plans. In addition, the Committee is empowered to select those persons to whom shares or options are to be granted, to determine the number of shares subject to each grant of a stock bonus or an option and to determine when, and upon what conditions, shares or options granted under the Plans will vest or otherwise be subject to forfeiture and cancellation.

In the discretion of the Committee, any option granted pursuant to the Plans may include installment exercise terms such that the option becomes fully exercisable in a series of cumulating portions. The Committee may also accelerate the date upon which any option (or any part of any options) is first exercisable. Any shares issued pursuant to the Stock Bonus Plans and any options granted pursuant to the Incentive Stock Option Plans or the Non-Qualified Stock Option Plans will be forfeited if the "vesting" schedule established by the Committee administering the Plans at the time of the grant is not met. For this purpose, vesting means the period during which the employee must remain an employee of CEL-SCI or the period of time a non-employee must provide services to CEL-SCI. At the time an employee ceases working for CEL-SCI (or at the time a non-employee ceases to perform services for CEL-SCI), any shares or options not fully vested will be forfeited and cancelled. At the discretion of the Committee

58

payment for the shares of common stock underlying options may be paid through the delivery of shares of CEL-SCI's common stock having an aggregate fair market value equal to the option price, provided such shares have been owned by the option holder for at least one year prior to such exercise. A combination of cash and shares of common stock may also be permitted at the discretion of the Committee.

Options are generally non-transferable except upon death of the option holder. Shares issued pursuant to the Stock Bonus Plans will generally not be transferable until the person receiving the shares satisfies the vesting requirements imposed by the Committee when the shares were issued.

The Board of Directors of CEL-SCI may at any time, and from time to time, amend, terminate, or suspend one or more of the Plans in any manner they deem appropriate, provided that such amendment, termination or suspension will not adversely affect rights or obligations with respect to shares or options previously granted. The Board of Directors may not, without shareholder approval: make any amendment which would materially modify the eligibility requirements for the Plans; increase or decrease the total number of shares of common stock which may be issued pursuant to the Plans except in the case of a reclassification of CEL-SCI's capital stock or a consolidation or merger of CEL-SCI; reduce the minimum option price per share; extend the period for granting options; or materially increase in any other way the benefits accruing to employees who are eligible to participate in the Plans.

Summary. The following shows certain information as of November 30, 2010 concerning the stock options and stock bonuses granted by CEL-SCI. Each option represents the right to purchase one share of CEL-SCI's common stock.

                                Total       Shares
                               Shares     Reserved for   Shares     Remaining
                              Reserved    Outstanding   Issued as Options/Shares
Name of Plan                 Under Plans    Options   Stock Bonus   Under Plans
------------                 -----------  -----------  ----------  -------------

Incentive Stock Option Plans  17,100,000   10,593,041         N/A    5,920,225
Non-Qualified Stock
   Option Plans               33,760,000   21,691,146         N/A    8,468,436
Stock Bonus Plans             11,940,000          N/A   7,400,920    4,537,321
Stock Compensation Plan        9,500,000          N/A   5,386,531     2,113469

Of the shares issued pursuant to CEL-SCI's Stock Bonus Plans 1,454,543 shares were issued as part of CEL-SCI's contribution to its 401(k) plan.

The following table shows the weighted average exercise price of the outstanding options granted pursuant to CEL-SCI's Incentive and Non-Qualified Stock Option Plans as of September 30, 2010, CEL-SCI's most recent fiscal year end. CEL-SCI's Incentive and Non-Qualified Stock Option Plans have been approved by CEL-SCI's shareholders.

59

                                                                    Number of
                                                                   Securities
                                                                    Remaining
                                                                    Available
                                                                    For Future
                                                                     Issuance
                                                                   Under Equity
                                Number                            Compensation
                             of Securities                            Plans,
                             to be Issued    Weighted-Average       Excluding
                             Upon Exercise   Exercise Price of     Securities
                            of Outstanding   of Outstanding      Reflected in
Plan category                 Options (a)         Options           Column (a)
-------------                -------------   -----------------   --------------

Incentive Stock Option Plans   10,593,041        $ 0.40             5,920,225
Non-Qualified Stock
  Option Plans                 21,720,414        $ 0.50             8,468,436

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table shows, as of November 30, 2010, information with respect to the only persons owning beneficially 5% or more of CEL-SCI's outstanding common stock and the number and percentage of outstanding shares owned by each director and officer of CEL-SCI and by the officers and directors as a group. Unless otherwise indicated, each owner has sole voting and investment powers over his shares of common stock.

                                                              Percent of
Name and Address                   Number of Shares (1)        Class (3)
----------------                   ----------------           -----------


Maximilian de Clara                   6,441,690                   3.1%
Bergstrasse 79
6078 Lungern,
Obwalden, Switzerland

Geert R. Kersten                      9,355,855 (2)               4.4%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

Patricia B. Prichep                   2, 992,116                  1.4%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

Eyal Talor, Ph.D.                     1,787,122                   0.9%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

Daniel H. Zimmerman, Ph.D.            1,531,522                   0.7%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

60

John Cipriano                           480,027                   0.2%
8229 Boone Blvd., Suite 802
Vienna, VA  22182

Alexander G. Esterhazy                  808,156                   0.4%
20 Chemin du Pre-Poiset
CH- 1253 Vandoeuvres
Geneve, Switzerland

C. Richard Kinsolving, Ph.D.            983,914                   0.5%
P.O. Box 20193
Bradenton, FL 34204-0193

Peter R. Young, Ph.D.                   809,424                   0.4%
5458 Beacon Hill Drive
Frisco, TX  75034

All Officers and Directors           25,189,826                  11.2%
as a Group (9 persons)

(1) Includes shares issuable prior to February 28, 2011 upon the exercise of options or warrants granted to the following persons:

                                    Options or Warrants Exercisable
Name                                  Prior to February 28, 2011
-----                               --------------------------------

Maximilian de Clara                        6,090,456
Geert R. Kersten                           5,979,943
Patricia B. Prichep                        2,165,263
Eyal Talor, Ph.D.                          1,338,819
Daniel Zimmerman                           1,197,000
John Cipriano                                293,334
Alexander G. Esterhazy                       574,999
C. Richard Kinsolving, Ph.D.                 681,667
Peter R. Young, Ph.D.                        561,666

(2) Amount includes shares held in trust for the benefit of Mr. Kersten's minor children. Geert R. Kersten is the stepson of Maximilian de Clara.

(3) Amount includes shares referred to in (1) above but excludes shares which may be issued upon the exercise or conversion of other options, warrants and other convertible securities previously issued by CEL-SCI.

61

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

BDO USA, LLP served as CEL-SCI's independent registered public accountant for the two years ended September 30, 2010. The following table shows the aggregate fees billed to CEL-SCI for these years by BDO USA, LLP:

                                      Year Ended September 30,
                                      2010               2009
                                      ----               ----

Audit Fees                          $232,725          $219,675
Audit-Related Fees                        --                --
Tax Fees                                  --                --
All Other Fees                     $  44,126                --

Audit fees represent amounts billed for professional services rendered for the audit of the CEL-SCI's annual financial statements and the reviews of the financial statements included in CEL-SCI's 10-Q reports for the fiscal year and all regulatory filings. All other fees were for services in connection with the preparation of the application for the PPACA grant. See Note 15 to the financial statements included with this report for more information.

Before BDO USA, LLP was engaged by CEL-SCI to render audit or non-audit services, the engagement was approved by CEL-SCI's audit committee. CEL-SCI's Board of Directors is of the opinion that the Audit Related Fees charged by BDO USA, LLP are consistent with BDO USA, LLP maintaining its independence from CEL-SCI.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) See the Financial Statements attached to this Report.

Exhibits

3(a)Articles of Incorporation         Incorporated by reference to Exhibit 3(a)
                                      of CEL-SCI's combined Registration
                                      Statement on Form S-1 and Post-Effective
                                      Amendment ("Registration Statement"),
                                      Registration Nos. 2-85547-D and 33-7531.

3(b) Amended Articles                 Incorporated by reference to Exhibit 3(a)
                                      of CEL-SCI's Registration Statement on
                                      Form S-1, Registration Nos. 2-85547-D and
                                      33-7531.

62

3(c) Amended Articles                  Filed as Exhibit 3(c) to CEL-SCI's
     (Name change only)                Registration Statement on Form S-1
                                       Registration Statement (No. 33-34878).

3(d)Bylaws                             Incorporated by reference to Exhibit 3(b)
                                       of CEL-SCI's Registration Statement on
                                       Form S-1, Registration Nos.2-85547-D and
                                       33-7531.

4  Shareholders Rights Agreement       Incorporated by reference to Exhibit 4
                                       of CEL-SCI'S report on Form 8-K dated
                                       November 7, 2007.

5   Opinion of Counsel

10(d) Employment Agreement with        Incorporated by reference to Exhibit
      Maximilian de Clara              10(d) of CEL-SCI's report on Form 8-K
                                       (dated April 21, 2005) and Exhibit 10(d)
                                       to CEL-SCI's report on Form 8-K dated
                                       September 8, 2006.

10(e) Employment Agreement with        Incorporated by reference to Exhibit
       Geert Kersten                   10(e) of CEL-SCI's Registration Statement
                                       on Form S-3 (Commission File #106879)
                                       and Exhibit 10(c) to CEL-SCI's report on
                                       Form 8-K dated September 8, 2006.

10(f) Distribution and Royalty         Incorporated  by  reference to Exhibit
      Agreement with Eastern Biotech   10(x) to Amendment No. 2 to CEL-SCI's
                                       Registration  statement  on  Form  S-3
                                       (Commission File No. 333-106879).

10(g) Securities Purchase Agreement    Incorporated by reference to Exhibit 10
     (together with schedule required  to CEL-SCI's  report  on Form 8-K dated
     by Instruction 2 to Item 601 of   August 4, 2006.
     Regulation S-K) pertaining to
     Series K notes and warrants,
     together with The exhibits to the
     Securities Purchase Agreement.

10(h) Subscription Agreement (together  Incorporated by reference to Exhibit 10
      with Schedule required by         CEL-SCI's report on Form 8-K dated April
     Instruction 2 to Item 601 of       18, 2007.
     Regulation S-K) pertaining to
     April 2007 sale of 20,000,000
     shares of CEL-SCI's common stock,
     10,000,000 Series L warrants
     and 10,000,000 Series M Warrants.

10(i)Warrant Adjustment Agreement with  Incorporated by reference to Exhibit
     Laksya  Ventures                   10(i) of CEL-SCI's report on Form 8-K
                                        dated August 3, 2010.

                                       63

10(j) Employment Agreement with          Incorporated by reference to Exhibit
       Patricia Prichep                  10(j) of CEL-SCI's report on Form 8-K
                                         dated August 30, 2010.

10(k)Employment Agreement with Eyal      Incorporated by reference to Exhibit
      Taylor                             10(k) of CEL-SCI's report on Form 8-K
                                         dated August 30, 2010.

10(l) Amendment to Employment Agreement  Incorporated by reference to Exhibit
      with Maximilian de Clara           10(l) of CEL-SCI's  report  on Form 8-K
                                         dated August 30, 2010.

10(m) Amendment to Development Supply
      and Distribution Agreement with

Orient Europharma. (part of Exhibit 10(m) has been omitted pursuant to a request for confidential treatment).

10(n) Licensing Agreement with Teva Pharmaceutical Industries Ltd. (parts of Exhibit 10(n) have been omitted pursuant to a request for confidential treatment.)

10(o) Lease Agreement (parts of Exhibit 10(o) have been omitted pursuant to a request for confidential treatment).

10(p) Loan Agreements with Maximilian de
      Clara

10(q) Licensing Agreement with Byron      Incorporated  by  reference   to
      Biopharma                           Exhibit 10(i) of CEL-SCI's report on
                                          Form 8-K dated March 27, 2009.

10(r) At Market Issuance Sales Agreement
      with McNicoll, Lewis & Vlak LLC

10(z) Development, Supply and             Incorporated by reference to Exhibit
      Distribution Agreement with         Exhibit 10(z) filed with the
     Orient Europharma                    Company's report on  Form 10-K for the
                                          year ended September 30, 2003.

23.1  Consent of BDO USA, LLP

23.2  Consent of Hart & Trinen, LLP

31    Rule 13a-14(a) Certifications

32    Section 1350 Certifications

64

CEL-SCI CORPORATION

Consolidated Financial Statements for the Years Ended September 30, 2010, 2009, and 2008, and Report of Independent Registered Public Accounting Firm


CEL-SCI CORPORATION

TABLE OF CONTENTS

Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F-2

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
SEPTEMBER 30, 2010, 2009, AND 2008:

    Consolidated Balance Sheets                                          F-3

    Consolidated Statements of Operations                                F-5

    Consolidated Statements of Stockholders' Equity                      F-6

    Consolidated Statements of Cash Flows                                F-8

    Notes to Consolidated Financial Statements                           F-12


Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
CEL-SCI Corporation
Reston, VA

We have audited the accompanying consolidated balance sheets of CEL-SCI Corporation as of September 30, 2010 and 2009 and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended September 30, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CEL-SCI Corporation at September 30, 2010 and 2009, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2010, in conformity with accounting principles generally accepted in the United States of America.

As described in Note 10, effective October 1, 2009, the Company adopted ASC 815-40, "Determining Whether an Instrument (or Embedded Feature) Is Indexed to a Company's Own Stock".

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CEL-SCI Corporation's internal control over financial reporting as of September 30, 2010, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated December 10, 2010 expressed an unqualified opinion thereon.

/s/ BDO USA, LLP
----------------

Bethesda, Maryland

December 10, 2010


Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
CEL-SCI Corporation
Vienna, VA

We have audited CEL-SCI Corporation's internal control over financial reporting as of September 30, 2010, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). CEL-SCI Corporation's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, CEL-SCI Corporation maintained, in all material respects, effective internal control over financial reporting as of September 30, 2010, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of CEL-SCI Corporation as of September 30, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended September 30, 2010 and our report dated December 10, 2010 expressed an unqualified opinion thereon.

/s/ BDO USA, LLP
----------------

Bethesda, Maryland

December 10, 2010


                               CEL-SCI CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2010 AND 2009

ASSETS                                             2010              2009
                                                  ------            ------
CURRENT ASSETS:
     Cash and cash equivalents                  $26,568,243       $33,567,516
     Prepaid expenses                               298,719            39,972
     Inventory used for R&D and manufacturing     1,476,234           399,474
     Deferred rent - current portion                751,338           806,425
     Deposits                                             -         1,585,064
                                                -----------       -----------
            Total current assets                 29,094,534        36,398,451

RESEARCH AND OFFICE EQUIPMENT AND
  LEASEHOLD IMPROVEMENTS-- less accumulated
  depreciation of $2,626,759 and $2,259,237       1,264,831         1,200,611
PATENT COSTS--less accumulated
  amortization of $1,205,690 and $1,132,612         356,079           423,104
RESTRICTED CASH                                      21,357            68,552
DEFERRED RENT - net of current portion            7,068,184         7,936,880
                                                -----------       -----------
TOTAL ASSETS                                    $37,804,985       $46,027,598
                                                ===========       ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable                              $ 1,497,383        $  793,148
Accrued expenses                                  223,696            98,665
Due to employees                                   45,808            49,527
Related party loan                              1,104,057         1,107,339
Deposits held                                           -            10,000
Derivative instruments  - current portion         424,286                 -
                                               ----------       -----------
          Total current liabilities             3,295,230         2,058,679

Derivative instruments - net of
  current portion                               6,521,765        35,113,970
Deferred revenue                                  125,000                 -
Deferred rent                                       8,225            14,305
                                              -----------       -----------
          Total liabilities                     9,950,220        37,186,954
                                              -----------       -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

 Preferred stock, $.01 par value--authorized
  100,000 shares, issued and outstanding, -0-             -                 -
 Common stock, $.01 par value--authorized
  450,000,000 shares; issued and outstanding,
  204,868,853 and 191,972,021 shares at
  September 30, 2010 and 2009, respectively       2,048,689         1,919,720
 Additional paid-in capital                     187,606,044       173,017,978
 Accumulated deficit                           (161,799,968)     (166,097,054)
                                                -----------       -----------
            Total stockholders' equity           27,854,765         8,840,644
                                                -----------       -----------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                         $ 37,804,985       $46,027,598
                                               ============       ===========

See notes to consolidated financial statements

F-3

CEL-SCI CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2010, 2009 AND 2008

                                             2010           2009        2008
                                          -----------    ----------   ---------

RENT INCOME AND OTHER                  $   153,300    $    80,093   $     5,065

OPERATING EXPENSES:
 Research and development (excluding
  R&D depreciation of $434,030, $329,866
  and $91,292 respectively, included
  below)                                 11,911,626     6,011,750     4,101,563
  Depreciation and amortization             516,117       417,205       215,060
  General & administrative                6,285,810     5,671,595     5,200,735
                                        -----------   -----------    ----------
            Total operating expenses     18,713,553    12,100,550     9,517,358
                                        -----------   -----------    ----------

OPERATING LOSS                          (18,560,253)  (12,020,457)   (9,512,293)
GAIN (LOSS) ON DERIVATIVE INSTRUMENTS    28,843,772   (28,491,650)    1,799,393
INTEREST INCOME                             362,236             -       483,252
INTEREST EXPENSE                           (162,326)     (397,923)     (473,767)
                                        -----------   -----------    ----------
NET INCOME (LOSS)                        10,483,429   (40,910,030)   (7,703,415)
MODIFICATIONS OF WARRANTS                (1,532,456)     (490,728)     (424,815)
                                        -----------   -----------    ----------
NET INCOME (LOSS) AVAILABLE TO COMMON
SHAREHOLDERS                            $ 8,950,973  $(41,400,758   $(8,128,230)
                                        ===========  ============   ===========
NET INCOME (LOSS) PER COMMON SHARE
      BASIC                             $      0.04  $      (0.31)  $     (0.07)
      DILUTED                           $     (0.05) $      (0.31)  $     (0.07)
WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING
      BASIC                             202,102,859   133,535,050   117,060,866
      DILUTED                           226,277,913   133,535,050   117,060,866

See notes to consolidated financial statements.

F-4

CEL-SCI CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 2010, 2009 AND 2008

                                                            Additional
                                Common          Stock         Paid-In       Accumulated
                                Shares          Amount        Capital         Deficit            Total
                              ----------       ---------    ------------    ------------       ---------

BALANCE, SEPTEMBER 30, 2007  115,678,662      $1,156,787   $130,081,378    $(116,568,066)     $14,670,099

Sale of common stock           1,383,389          13,834      1,023,708                         1,037,542
401(k) contributions paid
  in common stock                205,125           2,051        106,539                           108,590
Issuance of common stock
  to employees                 1,789,451          17,894      1,306,580                         1,324,474

Exercise of stock options         50,467             505         13,898                            14,403
Correction of stock
  overpayment pricing                                             1,471                             1,471
Stock issued to
  nonemployees for service     1,689,000          16,890        251,858                           268,748
Issuance of stock options
  to nonemployees                                                12,342                            12,342
Employee option cost                                            561,387                           561,387
Modification of stock options                                   564,189                           564,189
Financing costs                                                 (23,795)                          (23,795)
Dividends                                                       424,815         (424,815)               -

Net loss                                                                      (7,703,415)      (7,703,415)
                              ----------        ---------    -----------     -----------        ---------

BALANCE, SEPTEMBER 30,
2008                         120,796,094       $1,207,961   $134,324,370   $(124,696,296)     $10,836,035

(continued)

F-5

CEL-SCI CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (cont'd)
YEARS ENDED SEPTEMBER 30, 2010, 2009 AND 2008

Additional

                                                            Additional
                                Common          Stock         Paid-In       Accumulated
                                Shares          Amount        Capital         Deficit            Total
                              ----------       ---------    ------------    ------------       ---------

Sale of common stock          45,451,547       $ 454,515    $31,788,201                       $32,242,716
401(k) contributions paid
  in common stock                 91,766             917         56,912                            57,829
Exercise of stock options     15,659,116         156,591      8,524,663                         8,681,254
Stock issued to
  nonemployees for service     3,316,438          33,164      1,528,179                         1,561,343

Stock issued to employees      1,324,385          13,244        672,614                           685,858
Stock issued for
  principal payments on
  Series K notes                 972,753           9,728        275,272                           285,000
Stock issued for interest
  on Series K Notes              177,403           1,774         41,111                            42,885
Issuance of stock options
  and warrants to
  nonemployees                                                  449,641                           449,641
Loss on conversion of
  convertible debt                                            2,145,754                         2,145,754
Issuance of warrants for
  short term loan                                                65,796                            65,796
Modification of options                                           6,142                             6,142
Employee option cost                                          1,699,448                         1,699,448
Premium on loan from
  shareholder                                                   489,776                           489,776
Conversion of convertible debt                                                                          -
  into common stock            3,015,852           30,159      1,176,182                         1,206,341
Cost of derivative
  liabilities                                                (8,632,217)                       (8,632,217)
Financing costs                                              (2,072,927)                       (2,072,927)
Dividends                      1,166,667           11,667        479,061        (490,728)               -
Net loss                                                                     (40,910,030)     (40,910,030)
                              ----------        ---------    -----------     -----------      -----------
BALANCE, SEPTEMBER 30,
2009                         191,972,021        1,919,720    173,017,978    (166,097,054)       8,840,644

401(k) contributions paid
  in common stock                182,233            1,822        110,503                          112,325
Exercise of warrants and
  stock options               12,249,441          122,495      6,186,379                        6,308,874
Stock issued to employees and
  nonemployees for service       465,158            4,652      1,236,374                        1,241,026
Exercise of derivative
  liabilities                                                  5,510,490                        5,510,490
Modification of stock
  options and warrants                                           227,921                          227,921

Employee option cost                                           1,316,399                        1,316,399

Adoption of ASC 815-40                                                        (6,186,343)      (6,186,343)

Net income                                                                    10,483,429       10,483,429
                              ----------        ---------    -----------     -----------        ---------

BALANCE, SEPTEMBER 30,
2010                         204,868,853       $2,048,689   $187,606,044   $(161,799,968)     $27,854,765
                             ===========       ==========   ============   =============      ===========

See notes to consolidated financial statements

F-6

CEL-SCI CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2010, 2009 AND 2008

                                          2010          2009            2008
                                       ----------    ----------     -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                   $10,483,429   $(40,910,030)  $(7,703,415)
  Adjustments to reconcile net
    income (loss) to net cash
    used for operating activities:

  Depreciation and amortization           516,117        417,205       215,060
    Issuance of stock options and
      warrants to nonemployees for
      services                                 -         449,641        12,342
    Issuance of common stock for
      services                         1,241,026       1,561,343       268,748
    Correction of stock overpayment
       pricing                                 -               -         1,471
      Premium on loan                          -         341,454             -
      Loan premium adjustment                  -         489,776             -
      Amortization of loan premium        (3,282)       (338,172)            -
      Modification of stock options
        and warrants                     227,921           6,142       564,189

      Issuance of stock to employees           -         685,858     1,324,474
      Loss on conversion of
        convertible notes                      -       2,145,754             -
      Employee option cost             1,316,399       1,699,448       561,387
      Common stock contributed to
        401(k) plan                      112,325          57,829       108,590
      Warrants issued in
        consideration for loan                 -          65,796             -
      Impairment loss on abandonment
        of patents                        13,877         138,525         8,114
      Loss on retired equipment            2,323             270           595
      Deferred rent                       (6,080)          7,688         5,151
      Amortization of discount on
        convertible note                       -         193,980       249,106
      (Gain)/loss on derivative
        instruments                  (28,843,772)     25,514,667    (1,799,393)
 Change in assets and
  liabilities:
    Decrease/(increase) in deposits    1,585,064           4,764    (1,575,000)
    Decrease/(increase) in deferred
      rent                               955,842         622,350      (142,117)
    (Increase)/decrease in prepaid
      expenses                          (258,747)        (12,763)        7,369
    Increase in inventory used in
      R&D and manufacturing           (1,076,760)         (4,304)       (9,520)
    Increase/(decrease) in
      accounts payable                   693,799         343,208       (36,622)
    Increase/(decrease) in
      accrued expenses                   125,031         (14,514)       14,576
    Decrease in accrued interest on
      convertible debt                         -          (2,674)      (23,237)
    Increase in deferred revenue         125,000               -             -
    (Decrease)/increase in due to
      employees                           (3,719)         13,450         9,342
    (Decrease)/increase in
      deposits held                      (10,000)         10,000        (3,000)
                                    ------------    ------------   -----------

Net cash used in operating
  activities                         (12,804,207)     (6,513,309)   (7,941,790)
                                    ------------    ------------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Additional investment in
   manufacturing facility                (32,059)       (505,225)   (2,359,473)
 Decrease in restricted cash              47,195         919,100     1,180,977
 Investment in available-for-sale
   securities                                  -               -    (6,000,000)
 Sale of investments in
   available-for-sale securities               -         200,000     5,800,000
 Purchases of equipment                 (493,736)       (191,868)   (1,023,011)
 Expenditures for patent costs           (25,340)        (53,290)     (121,616)
                                    ------------    ------------   -----------
     Net cash (used in) provided by
       investing activities             (503,940)        368,717    (2,523,123)
                                    ------------    ------------   -----------


                                                                     (continued)

See notes to consolidated financial statements.

F-7

CEL-SCI CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (cont'd)
YEARS ENDED SEPTEMBER 30, 2010, 2009 AND 2008

                                          2010          2009            2008
                                       ----------    ----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common
    stock                             $         -   $ 32,242,716   $ 1,037,542
  Proceeds from exercise of warrants
    and stock options                   6,308,874      8,681,254        14,403
  Proceeds from short-term loan                 -      3,104,057     1,956,803
  Repayment of short-term loan                  -     (2,200,000)   (1,756,803)
  Principal payments on convertible
    debt                                        -       (754,250)   (1,045,000)
  Costs for equity related transactions         -     (2,072,927)      (23,795)
                                     ------------   ------------   -----------
     Net cash provided by financing
           activities                   6,308,874     39,000,850       183,150
                                     ------------   ------------   -----------
NET (DECREASE) INCREASE
  IN CASH AND CASH EQUIVALENTS         (6,999,273)    32,856,258   (10,281,763)

CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR                                33,567,516        711,258    10,993,021
                                     ------------   ------------   -----------
CASH AND CASH EQUIVALENTS,
  END OF YEAR                        $ 26,568,243   $ 33,567,516   $   711,258
                                     ============   ============   ==========

CONVERSION OF CONVERTIBLE DEBT
  INTO COMMON STOCK:
    Decrease in convertible debt     $          -   $  1,206,341   $         -
    Increase in common stock                    -        (30,159)            -
    Increase in additional paid-in
      capital                                   -     (1,176,182)            -
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========
CONVERSION OF INTEREST ON
  CONVERTIBLE DEBT INTO COMMON STOCK:
    Decrease in accrued liabilities  $          -   $     42,885   $         -
    Increase in common stock                    -         (1,774)            -
    Increase in additional paid-in
      capital                                   -        (41,111)            -
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========

PAYMENT OF CONVERTIBLE DEBT PRINCIPAL
WITH
COMMON STOCK:

     Decrease in convertible debt    $          -   $    285,000   $         -
     Increase in common stock                   -         (9,728)            -
     Increase in additional paid-in
       capital                                  -       (275,272)            -
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========
ISSUANCE OF WARRANTS:
  Increase in derivative
    liabilities                      $          -   $ (8,877,217)  $  (891,336)
  Increase in discount on notes
    payable                                     -        245,000             -
  Decrease in additional paid-in
    capital                                     -      8,632,217       891,336
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========
EXERCISE OF DERIVATIVE LIABILITIES:
  Decrease in derivative liabilities $  5,510,490   $          -   $         -
  Increase in additional paid-in
    capital                            (5,510,490)             -             -
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========
MODIFICATION OF WARRANTS:
  Increase in additional paid-in
    capital                          $ (1,532,456)  $    (24,061)  $  (173,187)
  Decrease in additional paid-in
    capital                             1,532,456         24,061       173,187
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========

See notes to consolidated financial statements.


(continued)

F-8

CEL-SCI CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (cont'd)
YEARS ENDED SEPTEMBER 30, 2010, 2009 AND 2008

                                          2010          2009            2008
                                       ----------    ----------     -----------
  ACCOUNTS PAYABLE:
    Increase in patent costs         $          -   $      7,285   $    14,013
    Increase in accounts payable                -         (7,285)      (14,013)
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========
EQUIPMENT COSTS INCLUDED IN
  ACCOUNTS PAYABLE:
    Increase in research and office
      equipment                      $     10,436   $    15,147    $   201,998
    Increase in accounts payable          (10,436)      (15,147)      (201,998)
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========
WARRANTS ISSUED FOR LOAN:
     Increase in debt discount       $          -   $     65,796   $         -
     Increase in additional paid-in
       capital                                  -        (65,796)            -
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========
STOCK MODIFICATION RECORDED AS
DIVIDEND
     Increase in common stock        $          -   $    (11,667)  $         -
     Increase additional paid-in
       capital                                  -       (479,061)     (424,815)
     Increase accumulated deficit               -        490,728       424,815
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========
ADOPTION OF ASC 815-40
     Increase in derivative
       liabilities                   $ (6,186,343)  $          -   $         -
     Increase in accumulated deficit    6,186,343              -             -
                                     ------------   ------------   -----------
                                     $          -   $          -   $         -
                                     ============   ============   ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
    INFORMATION:

Cash expenditure for interest
  expense                            $   162,326    $    115,559   $   224,662

See notes to consolidated financial statements.

F-9

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CEL-SCI Corporation (the "Company") was incorporated on March 22, 1983, in the state of Colorado, to finance research and development in biomedical science and ultimately to engage in marketing and selling products.

The Company's lead product, Multikine(R), is being developed for the treatment of cancer. Multikine is a patented immunotherapeutic agent consisting of a mixture of naturally occurring cytokines, including interleukins, interferons, chemokines and colony-stimulating factors, currently being developed for the treatment of cancer. Multikine is designed to target the tumor micro-metastases that are mostly responsible for treatment failure. The basic concept is to add Multikine to the current cancer treatments with the goal of making the overall cancer treatment more successful. Phase II data indicated that Multikine treatment resulted in a substantial increase in the survival of patients. The lead indication is advanced primary head & neck cancer. Since Multikine is not tumor specific, it may also be applicable in many other solid tumors.

Significant accounting policies are as follows:

a. Principles of Consolidation--The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Viral Technologies, Inc. (VTI). All significant intercompany transactions have been eliminated upon consolidation. Certain amounts from 2009 consolidated financial statements have been reclassified to conform to 2010 consolidated financial statement presentation. One such reclassification is the reclassification of derivative instruments of $35,113,970 from current liabilities to long-term liabilities on the September 30, 2009 consolidated balance sheet.

b. Cash and Cash Equivalents--For purposes of the statements of cash flows, cash and cash equivalents consists principally of unrestricted cash on deposit and short-term money market funds. The Company considers all highly liquid investments with a maturity when purchased of less than three months, as cash and cash equivalents.

c. Restricted Cash--The restricted cash is money held in escrow pursuant to the lease agreement for the manufacturing facility.

d. Prepaid Expenses and Inventory--Prepaid expenses consist of expenses which benefit a substantial period of time. Inventory consists of manufacturing production advances and bulk purchases of laboratory supplies to be consumed in the manufacturing of the Company's product for clinical studies.

e. Deposits--The deposit on September 30, 2009 was for the manufacturing facility ($1,575,000) required by the lease agreement, but was refunded in February 2010, after the Company met the cash requirements of the lease.

F-10

f. Research and Office Equipment and Leasehold Improvements--Research and office equipment is recorded at cost and depreciated using the straight-line method over estimated useful lives of five to seven years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the terms of the lease. Repairs and maintenance which do not extend the life of the asset are expensed when incurred. The fixed assets are reviewed on a quarterly basis to determine if any of the assets are impaired. Depreciation expense for the years ended September 30, 2010, 2009 and 2008 totaled $437,629, $330,820, and $133,604, respectively. During the years ended September 30, 2010, 2009 and 2008, equipment with a net book value of $2,323, $270 and $595 was retired.

g. Patents--Patent expenditures are capitalized and amortized using the straight-line method over the shorter of the expected useful life or the legal life of the patent (17 years). In the event changes in technology or other circumstances impair the value or life of the patent, appropriate adjustment in the asset value and period of amortization is made. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset, and from disposition, is less than the carrying value of the asset. The amount of the impairment loss is the difference between the estimated fair value of the asset and its carrying value. During the years ended September 30, 2010, 2009 and 2008, the Company recorded patent impairment charges of $13,877, $138,525, and $8,114, respectively, for the net book value of patents abandoned during the year. These amounts are included in general and administrative expenses. Amortization expense for the years ended September 30, 2010, 2009 and 2008 totaled $78,488, $86,385, and $81,456, respectively. The Company estimates that amortization expense will be approximately $71,200 for each of the next five years, totalling $356,000.

h. Deferred Rent-- Interest on the deferred rent is calculated at 3% on the funds deposited on the manufacturing facility and for September 30, 2010, is included in the deferred rent. This interest income will be used to offset future rent. On September 30, 2010, the Company has included in deferred rent the following: 1) deposit on the manufacturing facility ($3,150,000); 2) the fair value of the warrants issued to lessor ($1,481,040); 3) additional investment ($2,889,409); 4) deposit on the cost of the leasehold improvements for the manufacturing facility ($1,786,591), 5) amortization of deferred rent ($(1,682,053)); and 6) accrued interest on deposit ($194,535).

On September 30, 2009, the Company has included in deferred rent the following: 1) deposit on the manufacturing facility ($3,150,000); 2) the fair value of the warrants issued to lessor ($1,731,667); 3) additional investment ($2,864,698); 4) deposit on the cost of the leasehold improvements for the manufacturing facility ($1,786,591); 5) amortization of deferred rent ($(882,338)); and 6) accrued interest on deposit ($92,687).

i. Deferred Rent (liability)--The deferred rent (liability) is amortized on a straight-line basis over the term of the lease with the offset going against rent expense.

j. Derivative Instruments--The Company entered into financing arrangements that consisted of freestanding derivative instruments or were hybrid instruments that contained embedded derivative features. The Company accounted for these

F-11

arrangement in accordance with Codification 815-10-50, "Accounting for Derivative Instruments and Hedging Activities", "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock". In accordance with accounting principles generally accepted in the United States ("GAAP"), derivative instruments and hybrid instruments are recognized as either assets or liabilities in the statement of financial position and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative or hybrid instruments. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and recognized at fair value with changes in fair value recognized as either a gain or loss in earnings if they can be reliably measured. When the fair value of embedded derivative features cannot be reliably measured, the Company measures and reports the entire hybrid instrument at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determined the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument and precluding the use of "blockage" discounts or premiums in determining the fair value of a large block of financial instruments. Fair value under these conditions does not necessarily represent fair value determined using valuation standards that give consideration to blockage discounts and other factors that may be considered by market participants in establishing fair value. The convertible debt associated with the Series K convertible notes was all either repaid or converted into the Company's common stock before September 30, 2009. The remaining warrants associated with Series K are valued at $5,372,598 on September 30, 2009 and are shown in the balance sheet in long term liabilities. Warrants exercised during the year ended September 30, 2010 totaled $534,088 in funds received by the Company. In addition, the Company recognized a gain of $280,223 on the exercise of the Series K warrants. Outstanding warrants associated with Series K are valued at $1,002,502 at September 30, 2010. The Company recorded a gain of $2,856,355 on the remaining Series K for the year ending September 30, 2010.

The Company issued other warrants during the year ended September 30, 2009 that are accounted for as derivative liabilities. See Note 6. At September 30, 2009, the fair value of these derivative instruments totaled $29,741,372 and is shown on the balance sheet in long term liabilities. At September 30, 2010, the fair value of these derivative instruments totaled $4,037,067. There were 8,813,088 Series A warrants exercised during the year ended September 30, 2010, that brought in $4,406,544 in funds to the Company. In addition, the Company recognized a gain of $8,433,451 on the exercise of the Series A warrants. The fair value of these derivative liabilities will be adjusted at the end of each interim accounting period as well as at the end of each fiscal year as long as they are outstanding. The Company recorded a gain of $12,993,883 on the remaining Series A through E warrants for the year ending September 30, 2010.

Also included in derivative liabilities are warrants issued to investors in August 2008. These warrants were valued at $1,906,482 on September 30, 2010, which resulted in a gain of $4,279,860 for the year ended September 30, 2010.

F-12

k. Research and Development Grant Revenues--The Company's grant arrangements are handled on a reimbursement basis. Grant revenues under the arrangements are recognized as grant revenue when costs are incurred. The Company is currently not receiving funds from any grants.

l. Research and Development Costs--Research and development expenditures are expensed as incurred. Total research and development costs, excluding depreciation, were $11,911,626, $6,011,750, and $4,101,563 for the years ended September 30, 2010, 2009 and 2008.

m. Net Income (Loss) Per Common Share--Net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Potentially dilutive common stock equivalents, including convertible preferred stock, convertible debt and options to purchase common stock, are included in the calculation unless the result is antidilutive.

n. Concentration of Credit Risk--Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company maintains its cash and cash equivalents with high quality financial institutions. At times, these accounts may exceed federally insured limits. The Company has not experienced any losses in such bank accounts. The Company believes it is not exposed to significant credit risk related to cash and cash equivalents.

o. Income Taxes-- The Company has net operating loss carryforwards at September 30, 2010 of approximately $115 million. The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating and tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be recognized.

p. Use of Estimates--The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Accounting for derivatives is based upon valuations of derivative instruments determined using various valuation techniques including the Black-Scholes and binomial pricing methodologies. The Company considers such valuations to be significant estimates.

F-13

q. Recent Accounting Pronouncements--In March 2008, the FASB issued Codification 815-20-50-1, "Disclosures about Derivative Instruments and Hedging Activities
- an amendment of FASB Statement No. 133", which changes disclosure requirements for derivative instruments and hedging activities. The statement is effective for periods ending on or after November 15, 2008, with early application encouraged. The Company has adopted this topic with no impact on its consolidated financial statements.

In June 2008, the FASB issued EITF 07-5, "Determining Whether an Instrument (or Embedded Feature) Is Indexed to a Company's Own Stock". EITF 07-5 is now known as Codification 815-40-15-7 and it supersedes EITF 01-6 and provides revised guidance for, "...the determination of whether an instrument (or an embedded feature) is indexed to an entity's own stock, which is the first part of the scope exception in paragraph 11(a) of Statement 133, now known as Codification 815-10-50. If an instrument (or an embedded feature) that has the characteristics of a derivative instrument under Codification 815-10-50 is indexed to an entity's own stock, it is still necessary to evaluate whether it is classified in stockholders' equity (or would be classified in stockholders' equity if it were a freestanding instrument)." Specifically, Codification 815-40-15-7 provides a two-step process:

Step 1: Evaluate the instrument's contingent exercise provisions, if any. Step 2: Evaluate the instrument's settlement provisions.

Codification 815-40-15-7 was effective for the Company as of January 1, 2009 and was applied to outstanding instruments as of October 1, 2009.

Based on this analysis, the Company has determined that some of its warrants are subject to Codification 815-10-50 and must be revalued at the end of every reporting period, with changes to the fair value of the warrants to be accounted for as derivative gains or losses in the income statement. For further discussion, see Note 10.

In September 2008, the FASB issued Codification 815-10-50-1A, "Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161". This codification applies to credit derivatives within the scope of ASC 815 and hybrid instruments that have embedded credit derivatives. It deals with disclosures related to these derivatives and is effective for reporting periods ending after November 15, 2008. It also clarifies the effective date of Codification 815-20-50-1 as any reporting period beginning after November 15, 2008. The impact of the adoption of this codification did not have a material effect on the Company's consolidated financial statements.

In April 2009, the FASB issued Codification 825-10-65-1, "Interim Disclosures about Fair Value of Financial Instruments". This topic amends FASB Statement No. 107, "Disclosures about Fair Values of Financial Instruments", to require disclosures about fair values of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This topic became effective for interim and annual reporting periods ending after June 15, 2009. The Company

F-14

adopted this codification for the period ended June 30, 2009. There was no significant impact from this adoption on the Company's consolidated financial statement.

In May 2009, the FASB issued Codification 855-10-50, "Subsequent Events" which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. The Statement sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This topic became effective for the Company for the period ended June 30, 2009. The impact of the adoption was not significant.

In January 2010, the FASB amended Codification 820-10, "Improving Disclosures about Fair Value Measurement", effective for interim periods beginning after December 15, 2009. This amendment changes disclosures required for interim and annual periods with respect to fair value measurements. The Company has adopted the change in the disclosure requirements and the effect was immaterial.

r. Stock-Based Compensation-- The Company recognized expense of $1,316,399 for options issued or vested during the fiscal year ended September 30, 2010, expense of $1,699,448 for options issued or vested during the fiscal year ended September 30, 2009 and expense of $561,387 for options issued or vested during the fiscal year ending September 30, 2008. This expense was recorded as general and administrative expense. The Company received a total of $36,330 and $282,841 from the exercise of options during the year ended September 30, 2010 and 2009, respectively. The following table summarizes stock option activity for the year ended September 30, 2010.

Non-Qualified Stock Option Plan
-------------------------------
                                       Outstanding                                           Exercisable
                       ----------------------------------------------     -----------------------------------------------

                                                                                                  Weighted
                                               Weighted                                           Average
                                   Weighted     Average                              Weighted    Remaining
                        Number      Average    Remaining     Aggregate     Number     Average     Contractual     Aggregate
                         of        Exercise   Contractual    Intrinsic       of       Exercise      Term         Intrinsic
                        Shares      Price     Term (Years)     Value       Shares      Price       (Years)         Value
                      ---------   ----------  -----------    ---------    --------   -----------  -----------    -----------

Outstanding at        19,578,091     $ 0.48      7.70       23,979,937    7,400,431    $ 0.61         4.18         7,676,815
  October 1, 2009

Vested                                                                      812,669    $ 0.53
Granted                1,453,450     $ 0.57      9.74          106,592                                9.74           106,592
Exercised                (18,625)    $ 0.31      8.31            6,224      (18,625)    $ 0.31        8.31             6,224
Forfeited                 (4,500)    $ 0.77
Expired                  (30,502)    $ 1.05                                 (30,502)    $ 1.05

Outstanding at
 September 30, 2010   20,977,914     $ 0.49      7.18        4,209,476    8,163,973     $ 0.62        4.47         1,135,673

F-15

Incentive Stock Option Plan
---------------------------
                                       Outstanding                                           Exercisable
                       ----------------------------------------------     -----------------------------------------------

                                                                                                  Weighted
                                               Weighted                                           Average
                                   Weighted     Average                              Weighted    Remaining
                        Number      Average    Remaining     Aggregate     Number     Average     Contractual     Aggregate
                         of        Exercise   Contractual    Intrinsic       of       Exercise      Term         Intrinsic
                        Shares      Price     Term (Years)     Value       Shares      Price       (Years)         Value
                      ---------   ----------  -----------    ---------    --------   -----------  -----------    -----------

Outstanding at         9,598,874     $ 0.39       7.03      12,859,317    8,548,876    $ 0.38        6.99         11,525,319
 October 1, 2009

Vested                                                                      449,999    $ 0.49
Granted                1,100,000     $ 0.61       9.76          31,000                 $ 0.61        9.76             31,000
Exercised                (71,333)    $ 0.43       1.74          22,400      (71,333)   $ 0.43        1.74             22,400
Expired                  (34,500)    $ 2.25                                 (34,500)   $ 2.25

Outstanding at
 September 30, 2010   10,593,041     $ 0.40       6.65       3,101,582    8,893,042    $ 0.38         6.02         2,794,276

The total intrinsic value of options exercised during the fiscal years 2010, 2009 and 2008 was $32,999, $242,634 and $5,784, respectively.

The weighted average fair value at the date of grant for options granted during fiscal years 2010, 2009 and 2008 was $0.52, $0.28 and $0.51, respectively.

A summary of the status of the Company's non-vested options as of September 30, 2010 is presented below:

Non-qualified Stock Option Plan:
                                             Weighted
                                             Number of             Average
                                              Shares                Price
                                            ----------            ---------

      Nonvested at October 1, 2007           1,439,986             $0.51
         Vested                               (616,328)
         Granted                             1,039,000
         Forfeited                              (9,332)
                                           -----------

      Nonvested at September 30, 2008        1,853,326             $0.61
         Vested                             (1,566,280)
         Granted                            11,895,614             $0.31
         Forfeited                              (5,000)
                                           -----------

F-16

      Nonvested at September 30, 2009       12,177,660             $0.40
         Vested                               (812,669)
         Granted                             1,453,450             $0.50
         Forfeited                              (4,500)
                                           -----------

      Nonvested at September 30, 2010       12,813,941             $0.40
                                            ==========


Incentive Stock Option Plan:
                                             Weighted
                                             Number of             Average
                                              Shares                Price
                                            ----------            ---------

      Nonvested at October 1, 2007             603,332             $0.49
         Vested                               (280,001)
         Granted                               300,000
         Forfeited                                   -
                                           -----------
      Nonvested at September 30, 2008          623,331            $ 0.62
         Vested                             (4,556,108)
         Granted                             4,982,775             $0.22
         Forfeited                                   -
                                           -----------
      Nonvested at September 30, 2009        1,049,998             $0.45
         Vested                               (449,999)
         Granted                             1,100,000             $0.55
         Forfeited                                   -
                                           -----------
      Nonvested at September 30, 2010        1,699,999             $0.54
                                             =========

In fiscal year 2010, the Company issued 2,553,450 stock options to employees and directors at a fair value of $1,333,831, ($0.52 fair value per option), at a weighted average exercise price of $0.59 per share. In fiscal year 2009, the Company issued 16,878,389 stock options to employees and directors at a fair value of $4,725,949, ($0.28 fair value per option), at a weighted average exercise price of $0.343 per share. In fiscal year 2008, the Company issued 1,339,000 stock options to employees and directors at a fair value of $677,661, at a weighted average exercise price of $0.51 per share. On September 30, 2010, the Company had 14,513,940 options that were unvested at a fair value of $5,333,797, which is a weighted average fair value of $0.37 per share with a weighted average remaining vesting life of 1.87 years. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

                                        2010         2009         2008
                                        ----         ----         ----

Expected stock price volatility      98.6-104.5%   79.5-80.2%      79-81%
Risk-free interest rate               2.54-4.01%   2.82-3.72%  3.68-4.53%
Expected life of options           9.63-10 Years     10 Years    10 Years
Expected dividend yield                        -            -           -

F-17

The Company's stock options are not transferable, and the actual value of the stock options that an employee may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. The Company has based its assumption for stock price volatility on the variance of daily closing prices of the Company's stock. The risk-free rate of return used for fiscal years 2010, 2009 and 2008 equals the yield on ten-year zero-coupon U.S. Treasury issues on the grant date. Historical data was used to estimate option exercise and employee termination within the valuation model. The expected term of options represents the period of time that options granted are expected to be outstanding and has been determined based on an analysis of historical exercise behavior. No discount was applied to the value of the grants for non-transferability or risk of forfeiture.

2. SERIES K CONVERTIBLE DEBT

In August 2006, the Company issued $8,300,000 million in aggregate principal amount of convertible notes (the "Series K Notes") together with warrants to purchase 4,825,581 shares of the Company's common stock (the "Series K Warrants"). Additionally, in connection with issuance of the Series K Notes and Series K Warrants, the placement agent received a fee of $498,000 and 386,047 fully vested warrants (the "Placement Agent Warrants") to purchase shares of the Company's common stock. Net proceeds were $7,731,290, net of $568,710 in direct transaction costs, including the placement agent fee. The Series K convertible debt has all either been repaid or converted into shares of the Company's common stock as of September 2009.

Features of the Convertible Debt Instrument and Warrants

The Series K Notes were convertible into 9,651,163 shares of the Company's common stock at the option of the holder at any time prior to maturity at a conversion price of $0.86 per share, subject to adjustment for certain events described below. The Series K Warrants were exercisable over a five-year period from February 4, 2007 through February 4, 2012 at $0.95 per share.

The Series K Notes bore interest at the greater of 8% or LIBOR plus 300 basis points, and were required to be repaid in thirty equal monthly installments of $95,000 beginning on March 4, 2007 and continuing through September 4, 2010. The remaining principal balance of $950,000 was required to be repaid on August 4, 2011; however, holders of the Series K Notes were allowed to require the repayment of the entire remaining principal balance at any time after August 4, 2009. Interest had been payable quarterly beginning in September 30, 2006. Each payment of principal and accrued interest could be settled in cash or in shares of common stock at the option of the Company. The number of shares deliverable under the share-settlement option was determined based on the lower of (a) $0.86 per share, as adjusted pursuant to the terms of the Series K Notes or (b) 90% applied to the arithmetic average of the volume-weighted-average trading prices for the twenty day period immediately preceding each share settlement.

F-18

The conversion price of the Series K Notes and exercise price of the Series K Warrants were each subject to certain anti-dilution protections, including for stock splits, stock dividends, change in control events and dilutive issuances of common stock or common stock equivalents, such as stock options, at an effective price per share that is lower than the then conversion price. In the event of a dilutive issuance of common stock or common stock equivalents, the conversion price and exercise price would be reduced to equal the lower per share price of the subsequent transaction.

Accounting for the Convertible Debt Instrument and Warrants

The Company accounted for the Series K Warrants as derivative liabilities in accordance with Codification 815-10. The Company determined that the Series K Notes constituted a hybrid instrument that had the characteristics of a debt host contract containing several embedded derivative features that would require bifurcation and separate accounting as a derivative instrument pursuant to the provisions of the topic. The Company determined that certain of these features cannot be reliably measured and, in accordance with the requirements of the topic, measured the entire hybrid instrument at fair value with changes in fair value recognized as either a gain or loss.

Upon issuance of the Series K Notes and Series K Warrants, the Company allocated proceeds received to the Series K Notes and the Series K Warrants on a relative fair value basis. As a result of such allocation, the Company determined the initial carrying value of the Series K Notes to be $6,565,528. The Series K Notes were immediately marked to fair value resulting in a derivative liability in the amount of $9,728,793 and the Company recognized a charge of $3,163,265, which was recorded as costs associated with convertible debt. As of September 30, 2008, the fair value of the Series K Notes was $1,943,240, and the Company recognized a total gain of $1,799,393 on the convertible debt and associated warrants during the year ended September 30, 2008. A debt discount in the amount of $1,734,472 was amortized to interest expense using the effective interest method over the expected term of the Series K Notes. During the year ended September 30, 2009, the Company recorded interest expense of $193,980 in related amortization of the debt discount. During the year ended September 30, 2008, the Company recorded interest expense of $249,106 in related amortization of the debt discount over the term of the Series K Notes.

Upon issuance, the Series K Warrants and Placement Agent Warrants did not meet the requirements for equity classification set forth in Codification 815-10-50, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock," because such warrants (a) must be settled in registered shares and (b) are subject to substantial liquidated damages if the Company is unable to maintain the effectiveness of the resale registration of the shares. Therefore such warrants were accounted for as freestanding derivative instruments pursuant to the provisions of Codification 815-10. Accordingly, the Company allocated $2,570,138 of the initial proceeds to the Series K Warrants and immediately marked them to fair value resulting in a derivative liability of $2,570,138 and recognized a charge of $835,666, which was recorded as costs associated with convertible debt. As of September 30, 2008, the fair value of the Series K Warrants was $995,793. The Company paid $568,710 in cash transaction costs and incurred another $223,907 in costs based upon the fair value of the Placement Agent Warrants, which was recorded as costs associated with convertible debt. Such costs were expensed immediately as

F-19

part of fair value adjustments required in connection with the convertible debt instrument and the Company's irrevocable election to initially and subsequently measure the Series K Notes at fair value. As of September 30, 2008, the fair value of the Placement Agent Warrants was $79,664. In connection with the June 2009 financing, the Series K notes and warrants were repriced to $0.40. As of September 30, 2009, the fair value of the remaining investor and broker warrants was $5,372,598. During the fiscal year ended September 30, 2010, 1,335,221 Series K warrants were exercised, on which the Company recognized a gain on conversion of $280,223. When the warrants were exercised, $1,233,518 of the Series K warrants was converted from derivative liabilities to equity. At September 30, 2010, the fair value of the remaining investor and broker warrants was $1,002,502.

During the year ended September 30, 2009, all remaining convertible debt was converted into common stock or was repaid in accordance with the terms of the agreement. $24,375 was repaid at 120% and $1,206,341 in convertible debt was converted into 3,015,852 shares of common stock during the year ended September 30, 2009.

3. OPERATIONS AND FINANCING

The Company has incurred significant costs since its inception in connection with the acquisition of certain patented and unpatented proprietary technology and know-how relating to the human immunological defense system, patent applications, research and development, administrative costs, construction of laboratory facilities, and clinical trials. The Company has funded such costs with proceeds from the public and private sale of its common and preferred stock. The Company will be required to raise additional capital or find additional long-term financing in order to continue with its research efforts. To date, the Company has not generated any revenue from product sales. The ability of the Company to complete the necessary clinical trials and obtain Federal Drug Administration (FDA) approval for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure.

The Company has two partners who have agreed to participate in and pay for part of the Phase III clinical trial for Multikine. Since the Company was able to raise substantial capital during 2009, the Company is currently preparing the Phase III trial for Multikine. The net cost of the clinical trial is currently being negotiated, but is assumed to be about $25 - $26 million. The Company believes that its capital will allow it to enroll the patients in the Phase III clinical trial. The Company will need to raise additional funds, either through its existing warrants/options, through a debt or equity financing or a partnering arrangement, to complete the Phase III trial and bring Multikine to market. There can be no assurances the Company will be successful in raising additional funds.

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4. RESEARCH AND OFFICE EQUIPMENT

Research and office equipment at September 30, 2010 and 2009, consists of the following:

                                                  2010          2009
                                                  ----          ----

Research equipment                           $3,647,684     $3,292,472
Furniture and equipment                         116,996        122,957
Leasehold improvements                          126,910         44,419
                                            ------------       -------
                                              3,891,590      3,459,848

Less:  Accumulated depreciation
  and amortization                           (2,626,759)    (2,259,237)
                                            -----------     ----------
Net research and office equipment            $1,264,831     $1,200,611
                                             ==========     ==========

5. INCOME TAXES

At September 30, 2010, the Company had a federal net operating loss carryforward of approximately $115 million expiring from 2011 through 2030. In addition, the Company has a general business credit as a result of the credit for increasing research activities of approximately $2,341,000 at September 30, 2010 and 2009. These tax credits begin expiring after twenty years from the year in which the credit was generated. The components of the deferred taxes at September 30, 2010 and 2009 are comprised of the following:

                                                  2010           2009
                                                  ----           ----

Net operating loss                             $45,940,445   $39,491,048

R&D credit                                       2,340,614     2,340,614
Amortization of debt discount                           --       658,406
Codification 718-10-30-3                         1,243,647       683,245
Derivative loss                                         --     8,919,951
Vacation and other                                  83,593         9,127
Deferred rent                                      970,224             -
                                               -----------    ----------
Total deferred tax assets                       50,578,523    52,102,392

Derivative gain                                 (2,133,259)            -
Depreciation                                       (80,026)            -
                                               -----------    ----------

Total deferred tax liability                    (2,213,285)            -
Valuation allowance                            (48,365,238)  (52,102,392)
                                               -----------    ----------
Net deferred tax asset                         $         -   $         -
                                               ===========   ===========

In assessing the realization of the deferred tax assets, management considered whether it was more likely than not that some portion or all of the deferred tax asset will be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable

F-21

income. Management has considered the history of the Company's operating losses and believes that the realization of the benefit of the deferred tax assets cannot be determined. In addition, under the Internal Revenue Code
Section 382, the Company's ability to utilize these net operating loss carryforwards may be limited or eliminated in the event of a change in ownership in the future. Internal Revenue Code Section 382 generally defines a change in ownership as the situation where there has been a more than 50 percent change in ownership of the value of the Company within the last three years.

The Company's effective tax rate is different from the applicable federal statutory tax rate. The reconciliation of these rates for the years ended September 30 is as follows:

                                          2010       2009       2008
                                          ----       ----       ----

Federal Rate                              34.0%      34.0%      34.0%
State tax rate, net of federal benefit    5.91%      3.96%      3.96%
R&D credit                                   0%      2.01%      5.06%
RT&D credit true-up                          0%     (0.40%)        0%
Nondeductible expenses                    0.02%        (0%)    (0.04%)

Valuation allowance                     (39.93%)   (39.57%)   (42.98%)
                                        -------    -------    -------
Effective tax rate                         0.0%       0.0%       0.0%
                                        =======    =======    =======

The Company adopted the provisions of Codification 740-10, "Accounting for Uncertainty in Income Taxes" on October 1, 2007 which requires financial statement benefits be recognized for positions taken for tax return purposes, when it is more likely than not that the position will be sustained. The Company has concluded that it has properly filed its tax returns and does not believe that any of the positions it has taken would result in a disallowance of any of these tax positions. Therefore, the Company has concluded that adoption of ASC 740-10 had no impact on its financial positions. No interest or penalties have been accrued as a result of adoption of this requirement. In the United States, the Company is still open to examination from 2006 forward.

6. STOCK OPTIONS, BONUS PLAN AND WARRANTS

Non-Qualified Stock Option Plans --At September 30, 2010, the Company has collectively authorized the issuance of 33,760,000 shares of common stock under its Non-Qualified Stock Option Plans. Options typically vest over a three-year period and expire no later than ten years after the grant date. Terms of the options are to be determined by the Company's Compensation Committee, which administers the plans. The Company's employees, directors, officers, and consultants or advisors are eligible to be granted options under the Non-Qualified Stock Option Plans.

Information regarding the Company's Non-Qualified Stock Option Plans is summarized as follows:

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                               Outstanding                 Exercisable
                           ------------------          ----------------------
                                     Weighted                       Weighted
                                     Average                        Average
                                     Exercise                       Exercise
                            Shares    Price            Shares        Price
                            ------   --------          ------       --------

Options outstanding,
  October 1, 2007         7,462,698    $0.69          5,972,712      $0.67

   Options granted        1,039,000    $0.60
   Options exercised        (50,467)   $0.29
   Options forfeited        (43,966)   $0.96
                          ---------

Options outstanding,
  September 30, 2008      8,407,265    $0.68          6,553,939     $ 0.64

   Options granted       12,538,114    $0.38
   Options exercised       (162,253)   $0.38
   Options forfeited       (462,535)   $0.82
                          ---------

Options outstanding,
  September 30,2009      20,320,591    $0.49          8,142,931      $0.64
                          ---------
   Options granted        1,453,450    $0.56
   Options exercised        (18,625)   $0.31
   Options forfeited        (35,002)   $0.97
                          ---------

Options outstanding,
  September 30,2010      21,720,414    $0.50          8,906,473      $0.65
                         =========

In December 2007, the Company extended the expiration date on 1,680,533 options from the Nonqualified Stock Option Plans with exercise prices ranging from $1.05 to $1.94. The options originally would have expired between February 2008 and October 2008 and were extended for five years to expiration dates ranging from February 2013 to October 2013. This extension was considered a new measurement date with respect to the modified options. At the date of modification, the additional cost of the options was $410,471. As of September 30, 2010, all of these options remain outstanding.

In April 2009, the Company extended the expiration date on 147,000 options from the Nonqualified Stock Option Plans with the exercise prices ranging from $1.05 to $1.87. The options originally would have expired between May 2009 and September 2009 and were extended for three years to expiration dates ranging from May 2012 to September 2012. This extension was considered a new measurement date with respect to the modified options. At the date of modification, the additional cost of the options was $2,904. As of September 30, 2010, all of these options remain outstanding.

In January 2010, the Company extended the expiration date on 181,666 options from the Nonqualified Stock Option Plans with the exercise prices ranging from $1.05 to $1.76. The options originally would have expired between February 2010 and November 2010 and were extended for three years to expiration dates ranging from February 2013 to November 2013. This extension was considered a new measurement date with respect to the modified options. At the date of modification, the additional cost of the options was $72,632. As of September 30, 2010, all of these options remain outstanding.

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Incentive Stock Option Plan--At September 30, 2010, the Company has collectively authorized the issuance of 17,100,000 shares of common stock under its Incentive Stock Option Plans. Options vest over a one-year to three-year period and expire no later than ten years after the grant date. Terms of the options are to be determined by the Company's Compensation Committee, which administers the plans. Only the Company's employees and directors are eligible to be granted options under the Incentive Stock Option Plans.

Information regarding the Company's Incentive Stock Option Plans is summarized as follows:

                               Outstanding                 Exercisable
                           ------------------          ----------------------
                                     Weighted                       Weighted
                                     Average                        Average
                                     Exercise                       Exercise
                            Shares    Price            Shares        Price
                            ------   --------          ------       --------
Options outstanding,
  October 1, 2007         4,601,933    $0.64          3,998,601      $0.63

   Options granted          300,000   $0.62
   Options exercised              -
   Options forfeited       (156,667)  $3.83
                          ---------

 Options outstanding,
   September 30, 2008     4,745,266   $0.53           4,121,935      $0.52

   Options granted        4,982,775   $0.27
   Options exercised       (100,000)  $1.13
   Options forfeited        (29,167)  $1.70
                          ---------

 Options outstanding,
   September 30, 2009     9,598,874   $0.39           8,548,876      $0.38
                          =========

   Options granted        1,100,000   $0.61
   Options exercised        (71,333)  $0.43
   Options forfeited        (34,500)  $2.25
                            -------

 Options outstanding,
    September 30,2010     10,593,041  $0.50           8,893,042      $0.65
                          =========

In December 2007, the Company extended the expiration date on 225,100 options from the Incentive Stock Option Plans with exercise prices ranging from $1.05 to $1.94. The options originally would have expired between February 2008 and December 2008 and were extended for five years to expiration dates ranging from February 2013 to December 2013. This extension was considered a new measurement date with respect to the modified options. At the date of modification, the additional cost of the options was $54,537. As of September 30, 2010, all of these options remain outstanding.

In April 2009, the Company extended the expiration date on 153,000 options from the Incentive Stock Option Plans with the exercise price of $1.05. The options originally would have expired between April 2009 and December 2009 and were extended for three years to expiration dates ranging from April 2012

F-24

to December 2012. This extension was considered a new measurement date with respect to the modified options. At the date of modification, the additional cost of the options was $3,238. As of September 30, 2010, all of these options remain outstanding.

In January 2010, the Company extended the expiration date on 337,166 options from the Incentive Stock Option Plans with the exercise prices ranging from $1.05 to $1.18. The options originally would have expired between February 2010 and December 2010 and were extended for three years to expiration dates ranging from February 2013 to December 2013. This extension was considered a new measurement date with respect to the modified options. At the date of modification, the additional cost of the options was $139,812. As of September 30, 2010, all of these options remain outstanding

Other Options and Warrants

The Company accounts for options to non-employees in accordance with Codification 505-50-05-5, "Equity Based Payments to Non-Employees". The warrants are valued using the Black-Scholes methodology and are either expensed as the warrants are vested or as a debit and a credit to additional paid-in capital if an equity transaction. If the warrants are expensed, they are revalued each quarter before they are fully vested and the difference in the value of the warrants is recorded in the consolidated statement of operations. Warrants issued in connection with some financings are classified as derivative liabilities due to their terms. See Note 10 for further discussion of the derivative liabilities. Details of the other transactions follow.

In November and December 2007, the Company extended the expiration date of 2,016,176 investor and consultant warrants. The options and warrants were due to expire from December 1, 2007 through December 31, 2008. All options and warrants were extended for an additional five years from the original expiration date. The cost of the extension of investor warrants of $424,815 was recorded as a debit to accumulated deficit (dividend) and a credit to additional paid-in capital. The cost of the extension of the consultant warrants of $99,181 was recorded as a debit to general and administrative expense and a credit to additional paid-in capital. The additional cost of the extension of investor and consultant warrants was determined using the Black Scholes method.

Expected stock risk volatility                    72%
Risk-free interest rate                         3.67%
Expected life of warrant                    5.17-5.5 Years

In January 2009, as part of an amended lease agreement on the manufacturing facility, the Company repriced 3,000,000 warrants issued to the lessor in July 2007 at $1.25 per share and which were to expire on July 12, 2013. These warrants were repriced at $0.75 per share and expire on January 26, 2014. The cost of this repricing and extension of the warrants was $70,515 and was accounted for as a debit to the deferred rent asset and a credit to additional paid-in capital. In addition, 787,500 additional warrants were given to the lessor of the manufacturing facility on the same date, exercisable at a price of $0.75 per share, and will expire on January 26, 2014. The cost of these warrants was $45,207 and was accounted for as a debit to the deferred rent asset and a credit to additional paid-in capital. The cost of the warrant extension and the new warrants was determined using the Black Scholes method using the following assumptions.

F-25

Expected stock risk volatility                    61.63%
Risk-free interest rate                            1.52%
Expected life of warrant                         5 Years

In March 2009, as further consideration for its rights under the licensing agreement, Byron Biopharma purchased 3,750,000 Units from the Company at a price of $0.20 per Unit. Each Unit consisted of one share of the Company's common stock and two warrants. Each warrant entitles the holder to purchase one share of the Company's common stock at a price of $0.25 per share. The warrants are exercisable at any time prior to March 6, 2016. The fair value of the warrants was calculated to be $1,015,771 using the Black Scholes method with the following assumptions and was recorded as both a debit and a credit to additional paid-in capital.

Expected stock risk volatility                    83.12%
Risk-free interest rate                            2.30%
Expected life of warrant                         7 Years

Between March 31 and June 30, 2009, 2,296,875 new warrants were issued to the leaseholder on the manufacturing facility in consideration for the deferment of rent payments. The cost of these new warrants of $251,172 was recorded as a debit to research and development and a credit to additional paid in capital. The cost the new warrants was determined using the Black Scholes method using the following assumptions.

Expected stock risk volatility                63.03 - 64.46%
Risk-free interest rate                        1.82 - 2.13%
Expected life of warrant                         5 Years

In June 2009, 2,075,084 warrants issued to two investors in connection with a financing in August 2008 were reset from $0.75 to $0.40. The additional cost of the warrants of $123,013 was recorded as a debit and a credit to additional paid in capital. In addition, the investors were issued 1,815,698 warrants exercisable at $0.40 per share at a cost of $404,460. The additional cost of the warrants was recorded as a debit and a credit to paid in capital. The costs were determined using the Black Scholes method using the following assumptions.

Expected stock risk volatility                    63.75%
Risk-free interest rate                            2.13%
Expected life of warrant                      5.17 Years

In June 2009, the Company issued 10,284,060 warrants exercisable at $0.50 per share in connection with the June financing. The cost of the warrants of $2,775,021 was recorded as a debit and a credit to additional paid in capital. See Note 11.

F-26

Expected stock risk volatility                    62.59%
Risk-free interest rate                       2.13-2.71%
Expected life of warrant                         5 Years

In connection with the reset of the conversion price of the Series K notes and the exercise price of the warrants from $0.75 to $0.40 after the June 2009 financing, the Series K note holders received 5,348,357 additional warrants. The cost of these additional warrants is included in the fair value of the remaining warrants at September 30, 2010. See Note 2.

In June 2009, the Company issued 1,648,244 warrants exercisable at $0.40 per share to the holder of a note from the Company. These warrants were valued at $65,796 using the Black Scholes method. In July 2009, the Company issued 1,849,295 warrants exercisable at $0.50 per share to the holder of the note that was amended for the second time. These warrants were valued at $341,454 using the Black Scholes method. The first warrants were recorded as a discount to the loan and a credit to additional paid-in capital. The second warrants were recorded as a debit to derivative loss of $831,230, a premium of $341,454 on the loan and a credit to additional paid in capital of $489,776. The first warrants were amortized as interest expense at the time of the second amendment. On the second amendment, $338,172 of the premium was amortized as a reduction to interest expense as of September 30, 2009. The balance of the premium of $3,282 was amortized as a reduction to interest expense in October 2009. The following assumptions were used to value these warrants:

                                         June 2009      July 2009

Expected stock risk volatility               90%            90%
Risk-free interest rate                     2.4%           2.4%
Expected life of warrant                 5 Years        5 Years

In July 2009, 375,000 warrants held by an investor were extended for two years. The additional value of the warrants of $24,061 was calculated using the Black Scholes method using the following assumptions. This cost was accounted for as a debit and a credit to additional paid in capital.

                                        Original      Extended
                                        Warrants      Warrants

Expected stock risk volatility            57.14%        57.14%
Risk-free interest rate                    1.76%         1.76%
Expected life of warrant              0.08 Year     2.08 Years

In July 2009, 192,500 options were issued with exercise prices between $0.40 and $0.60 per share to three consultants, for past services, at a cost of $35,911 using the Black Scholes method. The options were accounted for as a debit to general and administrative expense and a credit to additional paid

F-27

in capital. Also in July 2009, the Company issued 200,000 options to a consultant with an exercise price of $0.38 per share. The cost of these options, $43,702, was calculated using the Black Scholes method using the following assumptions and accounted for as a debit to research and development and a credit to additional paid in capital.

Expected stock risk volatility                  66.74%
Risk-free interest rate                          2.71%
Expected life of warrant                       5 Years

In July 2009, the Company issued warrants to a private investor. The 167,500 warrants were issued with an exercise price of $0.50 per share and valued at $43,550 using the Black Scholes method using the following assumptions. The cost of the warrants was accounted for as a debit to additional paid in capital and a credit to derivative liabilities.

Expected stock risk volatility                    90%
Risk-free interest rate                         2.90%
Expected life of warrant                    5.5 Years

In July 2009, 100,000 warrants were extended for one year. The cost of the extension of $3,134 was calculated using the Black Scholes method using the following assumptions. The cost was accounted for as a debit to general and administrative expenses and a credit to additional paid in capital.

                                         Original      Extended
                                         Warrants      Warrants

Expected stock risk volatility            57.14%        57.14%
Risk-free interest rate                    1.76%         1.76%
Expected life of warrant               0.17 Year    1.17 Years

In August 2009, the Company received additional financing. In connection with the financing, the Company issued 4,850,501 warrants exercisable at $0.55 per share. The cost of the warrants of $1,455,150 was calculated using the Black Scholes method using the following assumptions and was recorded as a debit to additional paid in capital and a credit to derivative liabilities. See Note 11.

Expected stock risk volatility                  90%
Risk-free interest rate                       2.59%
Expected life of warrant                 5.51 Years

Also in August 2009, the Company completed an offering to the original Series K investors. Issued with an exercise price of $0.55 per share, the 541,717 warrants were valued at $249,190 using the Black Scholes method using the following assumptions. The warrants were accounted for as a debit to additional paid in capital and a credit to derivative liabilities.

Expected stock risk volatility                  90 %
Risk-free interest rate                        2.61%
Expected life of warrant                   5.5 Years

F-28

In September 2009, the Company received a $2,000,000 loan. In connection with the loan, the Company issued 500,000 warrants with an exercise price of $0.68 per share. The cost of the warrants of $245,000 was recorded as a debit to discount on note payable and a credit to additional paid in capital. This cost was amortized to interest expense when the loan was repaid. See Note 11.

Expected stock risk volatility                  90%
Risk-free interest rate                       2.54%
Expected life of warrant                  5.5 Years

In September 2009, the Company issued 4,714,284 warrants with an exercise price of $1.50 per share in connection with a financing. The cost of the warrants of $3,488,570 was calculated using the Black Scholes method using the following assumptions and was recorded as a debit and a credit to additional paid in capital. See Note 11. In addition, 714,286 warrants were issued with an exercise price of $1.75 per share to the placement agent on the transaction. The cost of $664,286 was calculated using the Black Scholes method using the following assumptions and was accounted for as a debit to additional paid in capital and a credit to derivative liabilities.

                                    Financing      Placement Agent
                                    Warrants          Warrants

Expected stock risk volatility         110%              110%
Risk-free interest rate               1.01%             2.42%
Expected life of warrant            2 Years        4.91 Years

In accordance with Codification 815-40-15-7, derivative liabilities must be revalued at the end of each interim period and at the end of the fiscal year, as long as they remain outstanding. As of September 30, 2009, the fair value of these new derivative liabilities totaled $29,741,372. As of September 30, 2010, the value of the remaining derivative liabilities totaled $5,943,549.

In August 2010, 70,000 options owned by an investor were extended for two years at a cost of $15,477. This cost was calculated using the Black Scholes method and was accounted for as a credit to additional paid in capital and a debit to general and administrative expense. The calculation used the following assumptions.

                                     Prior to          After
                                     Extension       Extension

Expected stock risk volatility         102%             102%
Risk-free interest rate               0.15%            0.49%
Expected life of warrant            0 Years          2 Years

F-29

Stock Bonus Plans -- At September 30, 2010, the Company had been authorized to issue up to 11,940,000 shares of common stock under its Stock Bonus Plans. All employees, directors, officers, consultants, and advisors are eligible to be granted shares. During the year ended September 30, 2008, 205,125 shares were issued to the Company's 401(k) plan for a cost of $108,590. During the year ended September 30, 2009, 91,766 shares were issued to the Company's 401(k) plan for a cost of $57,829. During the year ended September 30, 2010, 182,233 shares were issued to the Company's 401(k) plan for a cost of $112,325.

Stock Compensation Plan-- At September 30, 2010, 9,500,000 shares were authorized for use in the Company's stock compensation plan. During the year ended September 30, 2008, 1,789,451 shares were issued at the weighted average $0.62 per share for a total cost of $1,324,474. During the year ended September 30, 2009, 1,324,385 shares were issued at the weighted average of $0.24 per share for a total cost of $312,016. During the year ended September 30, 2010, no shares were issued from the Stock Compensation Plan.

7. EMPLOYEE BENEFIT PLAN

The Company maintains a defined contribution retirement plan, qualifying under Section 401(k) of the Internal Revenue Code, subject to the Employee Retirement Income Security Act of 1974, as amended, and covering substantially all Company employees. Each participant's contribution is matched by the Company with shares of common stock that have a value equal to 100% of the participant's contribution, not to exceed the lesser of $10,000 or 6% of the participant's total compensation. The Company's contribution of common stock is valued each quarter based upon the closing bid price of the Company's common stock. The expense for the years ended September 30, 2010, 2009, and 2008, in connection with this Plan was $123,500, $61,517, and $110,670, respectively.

8. COMMITMENTS AND CONTINGENCIES

Operating Leases-The future minimum annual rental payments due under noncancelable operating leases for office and laboratory space are as follows:

Year Ending September 30,

     2011                            1,903,471
     2012                            1,896,205
     2013                            1,855,889
     2014                            1,579,931
     2015                            1,572,839
     2016 and thereafter            26,441,949
                                   -----------
     Total minimum lease payments:  $35,250,284
                                   ============

Rent expense for the years ended September 30, 2010, 2009, and 2008, was $3,308,102, $2,759,332, and $253,526, respectively. Rent increased substantially during the fiscal year ended September 30, 2009 because the

F-30

Company took delivery of the new building in October of 2008; see discussion below. These leases expire between June 2012 and August 2028.

In August 2007 the Company leased a building near Baltimore, Maryland. The building was be remodeled in accordance with the Company's specifications so that it can be used by the Company to manufacture Multikine for the Company's Phase III clinical trial and sales of the drug if approved by the FDA. The Company took possession of the building in October 2008.

The lease is for a term of twenty years and required annual base rent payments of $1,575,000 during the first year of the lease. The annual base rent escalates each year at 3%. The Company is also required to pay all real and personal property taxes, insurance premiums, maintenance expenses, repair costs and utilities. The lease allows the Company, at its election, to extend the lease for two ten-year periods or to purchase the building at the end of the 20-year lease. The lease required the Company to pay $3,150,000 towards the remodeling costs, which will be recouped by reductions in the annual base rent of $303,228 in years six through twenty of the lease, subject to the Company maintaining compliance with the lease covenants. Included on the consolidated balance sheet is an asset of $7,819,522 shown as deferred rent. $7,068,184 of this asset is long term and the balance of $751,338 is in current assets. Included in deferred rent are the following: 1) deposit on the manufacturing facility ($3,150,000); 2) warrants issued to lessor ($1,481,040); 3) additional investment ($2,889,409); 4) deposit on the cost of the leasehold improvements for the manufacturing facility ($1,786,591); 5) amortization of deferred rent ($(1,682,053)); and 6) accrued interest on deposit ($194,535). Also included on the consolidated balance sheet is restricted cash of $21,357. In July 2008, the Company was required to deposit the equivalent of one year of base rent in accordance with the contract. The $1,575,000 included in current assets on September 30, 2009 was required to be deposited when the amount of cash the Company had dropped below the amount stipulated in the lease. The Company received a refund of the deposit in February 2010, when the Company was again in compliance with the contract.

Employment Contracts--In April 2005, the Company entered into a three-year employment agreement with Maximilian de Clara, the Company's President. The employment agreement provided that the Company would pay Mr. de Clara an annual salary of $363,000 during the term of the agreement. On September 8, 2006 Mr. de Clara's Employment Agreement was amended and extended to April 30, 2010. On August 30, 2010, Mr. de Clara's employment agreement, as amended on September 8, 2006, was extended to August 30, 2013.

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The employment agreement, as amended, also provided that on September 8, 2006, March 8, 2007, September 8, 2007, March 8, 2008, September 8, 2008 and March 8, 2009, each date being a "Payment Date", the Company issued Mr. de Clara shares of its common stock equal in number to the amount determined by dividing $200,000 by the average closing price of the Company's common stock for the twenty trading days preceding the Payment Date. A total of 2,610,649 shares were issued to Mr. de Clara under this agreement.

The employment agreement provides that the Company will pay Mr. de Clara an annual salary of $363,000 during the term of the agreement. In the event that there is a material reduction in his authority, duties or activities, or in the event there is a change in the control of the Company, then the agreement allows him to resign from his position at the Company and receive a lump-sum payment from the Company equal to 18 months salary. For purposes of the employment agreement, a change in the control of the Company means the sale of more than 50% of the outstanding shares of the Company's Common Stock, or a change in a majority of the Company's directors.

In September 2006, the Company agreed to extend its employment agreement with Geert R. Kersten, the Company's Chief Executive Officer, to September 2011. The employment agreement, which is essentially the same as Mr. Kersten's prior employment agreement, provides that during the term of the agreement the Company will pay Mr. Kersten an annual salary of $370,585 plus any increases approved by the Board of Directors during the period of the employment agreement. In the event there is a change in the control of the Company, the agreement allows him to resign from his position at the Company and receive a lump-sum payment from the Company equal to 24 months of salary. For purposes of the employment agreement a change in the control of the Company means: (1) the merger of the Company with another entity if after such merger the shareholders of the Company do not own at least 50% of voting capital stock of the surviving corporation; (2) the sale of substantially all of the assets of the Company; (3) the acquisition by any person of more than 50% of the Company's common stock; or (4) a change in a majority of the Company's directors which has not been approved by the incumbent directors.

On August 30, 2010, the Company entered into a three-year employment agreement with Patricia B. Prichep, the Company's Senior Vice President of Operations. The employment agreement with Ms. Prichep provides that during the term of the agreement the Company will pay Ms. Prichep an annual salary of $194,298 plus any increases approved by the Board of Directors during the period of the employment agreement.

On August 30, 2010, the Company also entered into a three-year employment agreement with Eyal Talor, Ph.D., the Company's Chief Scientific Officer. The employment agreement with Dr. Talor provides that during the term of the agreement the Company will pay Dr. Talor an annual salary of $239,868 plus any increases approved by the Board of Directors during the period of the employment agreement.

In the event there is a change in the control of the Company, the employment agreements with Ms. Prichep and Dr. Talor allow Ms. Prichep and/or Dr. Talor (as the case may be) to resign from her or his position at the Company and receive a lump-sum payment from the Company equal to 18 months salary. For purposes of the employment agreements, a change in the control of the Company means: (1) the merger of the Company with another entity if after such merger the shareholders of the Company do not own at least 50% of voting capital stock of the surviving corporation; (2) the sale of substantially all of the assets of the Company; (3) the acquisition by any person of more than 50% of the Company's common stock; or (4) a change in a majority of the Company's directors which has not been approved by the incumbent directors. The employment agreements with Ms. Prichep and Dr. Talor will also terminate upon the death of the employee, the employee's physical or mental disability, willful misconduct, an act of fraud against the Company, or a breach of the employment agreement by the employee. If the employment agreement is terminated for any of these reasons the employee, or her or his legal representatives, as the case may be, will be paid the salary provided by the employment agreement through the date of termination.

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The Company has an additional contract with a consultant for a nine month period ending in fiscal year 2011. This contract totals approximately $45,000. Further, the Company has contingent obligations with other vendors for work that will be completed in relation to the Phase III trial. The timing of these obligations cannot be determined at this time. The amount of these obligations for the Phase III trial are approximately $27 million with the net cost to the Company being between $25 - $26 million.

Iroquois Lawsuit - On October 21, 2009, Iroquois filed suit against the Company in the United States District Court for the Southern District of New York. In its lawsuit, Iroquois is seeking $30 million in actual damages, $90 million in punitive damages, the issuance of an additional 4,264,681 shares of the Company's common stock, the issuance of warrants to purchase an additional 6,460,757 shares of the Company's stock and a ruling by the court that the conversion price of the notes and the exercise price of the warrants are both $0.20.

The Company believes that Iroquois's claims are without merit and has filed a motion with the District Court seeking the dismissal of Iroquois's lawsuit.

9. LOANS FROM OFFICER AND INVESTOR

Between December 2008 and June 2009, Maximilian de Clara, the Company's President and a director, loaned the Company $1,104,057. The loan was initially payable at the end of March, 2009, but was extended to the end of June 2009. At the time the loan was due, and in accordance with the loan agreement, the Company issued Mr. de Clara warrants which entitle Mr. de Clara to purchase 1,648,244 shares of the Company's common stock at a price of $0.40 per share. The warrant is exercisable at any time prior to December 24, 2014. Pursuant to Codification paragraph 470-50-40-17, the fair value of the warrants issuable under the first amendment was recorded as a discount on the note payable with a credit recorded to additional paid-in capital. The discount was amortized from April 30, 2009 through June 27, 2009. Although the loan was to be repaid from the proceeds of the Company's then recent financing, the Company's Directors deemed it beneficial not to repay the loan and negotiated a second extension of the loan with Mr. de Clara on terms similar to the June 2009 financing. Pursuant to the terms of the second extension the note is now due on July 6, 2014, but, at Mr. de Clara's option, the loan can be converted into shares of the Company's common stock. The number of shares which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.40. As further consideration for the second extension, Mr. de Clara received warrants which allow Mr. de Clara to purchase 1,849,295 shares of the Company's common stock at a price of $0.50 per share at any time prior to January 6, 2015.

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The loan from Mr. de Clara bears interest at 15% per year and is secured by a second lien on substantially all of the Company's assets. The Company does not have the right to prepay the loan without Mr. de Clara's consent.

In accordance with Codification Subtopic 470-50, the second amendment to the loan was accounted for as an extinguishment of the first amendment debt. The extinguishment of the loan requires that the new loan be recorded at fair value and a gain or loss must be recognized. This resulted in a premium of $341,454, which was amortized over the period from July 6, 2009, the date of the second amendment, to October 1, 2009. The loan holder may request repayment in full or in part at any time after October 1, 2009 on ten days notice. In October 2009, the balance of the remaining premium of $3,282, was amortized to interest expense. Amortization of the premium was $338,172 for the year ended September 30, 2009.

In early September 2009, the Company received a short term loan of $2,000,000, with associated costs of $73,880, from two investors. The Company repaid the loan at the end of September 2009, along with $200,000 in interest. In addition, the Company issued 500,000 warrants at $0.68 at a cost of $245,000 in connection with the loan. This cost was recorded as a debit to discount on note payable and a credit to derivative liabilities. When the loan was repaid, this discount was written off as interest expense. On September 30, 2009, the fair value of the warrants was $735,000. On September 30, 2010, the fair value of the warrants was $220,000, and all of the warrants remain outstanding.

10. STOCKHOLDERS' EQUITY

On April 18, 2007, the Company completed a $15 million private financing. Shares were sold at $0.75, a premium over the closing price of the previous two weeks. The financing was accompanied by 10 million warrants with an exercise price of $0.75 and 10 million warrants with an exercise price of $2.00. The warrants are known as Series L and Series M warrants, respectively. The shares were registered in May 2007.

The financing resulted in the issuance of 19,999,998 shares of common stock to the investors. The warrants issued with the financing qualified for equity treatment. The Series L warrants were recorded as a debit and a credit to additional paid-in capital at a value of $5,164,355 and the Series M warrants were recorded as a debit and a credit to additional paid-in capital at a fair value of $434,300.

In September 2008, 2,250,000 of the original Series L warrants were repriced at $0.56 and extended for one year to April 17, 2013. The increase in the value of the warrants of $173,187 was recorded as a debit and a credit to additional paid-in capital in accordance with the original accounting for the Series L warrants.

As a result of the financing, and in accordance with the original Series K agreement, the Series K conversion price of the notes was repriced to $0.75 from the original $0.86 and the exercise price of the warrants were adjusted to $0.75 from the original $0.95. The Series K convertible debt and warrants were revalued with the new conversion price and were adjusted to their new fair value.

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On August 18, 2008, the Company sold 1,383,389 shares of common stock and 2,075,084 warrants in a private financing for $1,037,542. The shares were sold at $0.75, a significant premium over the closing price of the Company's common stock. The warrants were valued at $891,336 and recorded as a debit and a credit to additional paid-in capital. Each warrant entitles the holder to purchase one share of the Company's common stock at a price of $0.75 per share at any time prior to August 18, 2014. The shares have no registration rights.

On February 26, 2008, the Company issued a total of 258,000 shares of restricted common stock to two consultants at $0.53 per share for a total cost of $136,740 of which $70,312 had been expensed at September 30, 2008. This stock was expensed over the period of the contracts with the consultants. In April 2008, an additional 258,000 shares of restricted common stock to two consultants were issued at $0.69 for a total cost of $178,020, of which $86,984 had been expensed at September 30, 2008. The value of the stock was expensed over the remaining period of the contracts with the consultants.

During the fourth quarter of fiscal year 2008, an additional 1,173,000 shares were issued to consultants at prices ranging from $0.55 to $0.578. The total cost of $649,994 was expensed to general and administrative expense. At September 30, 2008, $111,452 had been expensed to general and administrative expense.

During the year ended September 30, 2009, the Company issued 3,316,438 shares of common stock in payment of invoices totaling $1,561,343. Common stock was also issued to pay interest and principal on the convertible debt. See Note
2. In addition, the balance of the shares issued to the Company's president in September 2008 were expensed at a cost of $200,000. An additional 1,030,928 shares were issued to the president in March 2009 at a cost of $200,000. An additional 12,672 shares were issued to an employee for expenses. The shares were expensed at a cost of $3,168.

In November 2008, the Company extended its licensing agreement for Multikine with Orient Europharma. The new agreement extends the Multikine collaboration to also cover South Korea, the Philippines, Australia and New Zealand. The licensing agreement initially focuses on the areas of head and neck cancer, nasopharyngeal cancer and potentially cervical cancer. The agreement expires 15 years after the commencement date which is defined as the date of the first commercial sale of Multikine in any country within the territory. In connection with the agreement, Orient Europharma purchased 1,282,051 shares of common stock at a cost of $0.39 per share, for a total to the Company, after expenses, of $499,982.

On December 30, 2008, the Company entered into an Equity Line of Credit agreement as a source of funding for the Company. For a two-year period, the agreement allows the Company, at its discretion, to sell up to $5 million of the Company's common stock at the volume weighted average price of the day minus 9%. The Company may request a drawdown once every ten trading days, although the Company is under no obligation to request any draw-downs under the equity line of credit. The equity line of credit expires on January 6, 2011. There were no draw-downs during the years ended September 30, 2010 or 2009.

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On March 6, 2009, the Company entered into a licensing agreement with Byron Biopharma LLC ("Byron") under which the Company granted Byron an exclusive license to market and distribute the Company's cancer drug Multikine in the Republic of South Africa. The Company has existing licensing agreements for Multikine with Teva Pharmaceuticals and Orient Europharma. Pursuant to the agreement, Byron will be responsible for registering the product in South Africa. Once Multikine has been approved for sale, the Company will be responsible for manufacturing the product, while Byron will be responsible for sales in South Africa. Revenues will be divided equally between the Company and Byron. To maintain the license Byron, among other requirements, must make milestone payments to the Company totaling $125,000 on or before March 15, 2010. This payment was received in March 2010. On March 30, 2009, and as further consideration for its rights under the licensing agreement, Byron purchased 3,750,000 Units from the Company at a price of $0.20 per Unit. Each Unit consisted of one share of the Company's common stock and two warrants. Each warrant entitles the holder to purchase one share of the Company's common stock at a price of $0.25 per share. The warrants are exercisable at any time prior to March 6, 2016. The shares of common stock included as a component of the Units were registered by the Company under the Securities Act of 1933. The Units were accounted for as an equity transaction using the Black Scholes method to value the warrants. The fair value of the warrants was calculated to be $1,015,771 and was recorded as both a debit and a credit to additional paid-in capital.

In late June and early July of 2009, the Company raised $6,139,739, less associated costs of $296,576. The Company issued 15,349,346 shares at $0.40 per share to the investors. The Company also issued 10,284,060 warrants, exercisable at $0.50 per share to the investors at a fair value of $2,775,021 and this cost is shown on the balance sheet as a derivative liability. As of September 30, 2009, the fair value of the warrants was $15,223,759. During the year ended September 30, 2010, 8,813,088 warrants were exercised. As of September 30, 2010, the fair value of the 1,470,972 remaining warrants was $676,647.

As a result of the June 2009 financing, the conversion price of the Series K notes and the exercise price of the Series K warrants were reduced to $0.40 per share because the shares sold by the Company were below the conversion price of the notes and the exercise price of the warrants. Also in conjunction with the June 2009 financing, the exercise price of warrants issued in a prior financing was reset to $0.40 per share, resulting in the issuance of an additional 1,166,667 shares of common stock. The issuance of these shares was accounted for as a dividend of $466,667 for the year ended September 30, 2009.

On July 27, 2009, 215,000 shares were issued to employees at $0.39. These shares will vest at specified milestones; 20% of them had vested by September 30, 2009. During the year ended September 30, 2009, $16,770 of the cost was expensed. There was no additional vesting for these shares for the year ended September 30, 2010. In addition, on August 5, 2009, 65,785 shares were issued at $0.38 to the Board of Directors. The cost of $24,998 was expensed during the year ended September 30, 2009.

In late August of 2009, the Company raised an additional $4,852,995, less associated costs of $248,037. The Company issued 10,784,435 shares at $0.45 per share to the investors. The Company also issued 5,392,217 warrants at $0.55 per share to the investors at a fair value of $1,704,340 and this cost

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is shown on the balance sheet as a derivative liability on September 30, 2009. As of September 30, 2009, the fair value of these warrants was $8,088,328. On September 30, 2010, these warrants are shown as a derivative liability of $2,480,420. No warrants were exercised during the year ended September 30, 2010.

In September of 2009, the Company raised an additional $20,000,000, less associated costs of $1,423,743. The Company issued 14,285,715 shares at $1.40 per share to the investors. The Company also issued 4,714,284 warrants, exercisable at $1.50 per share to the investors at a fair value of $3,488,570. The Company also issued 714,286 warrants, exercisable at $1.75 per share to the placement agent at a fair value of $642,857. The cost of the warrants is shown on the balance sheet as a derivative liability. As of September 30, 2009, the fair value of these warrants was $5,694,285. As of September 30, 2010, the fair value of these warrants is shown as a derivative liability of $660,000. No warrants were exercised during the year ended September 30, 2010.

During the year ended September 30, 2010, there were an additional 2,011,174 warrants and options exercised for 2,011,174 shares of common stock at prices ranging from $0.56 to $0.75. The Company received a total of $1,413,307 from the exercise of warrants and options during the year ended September 30, 2010.

During the year ended September 30, 2009, 3,316,438 shares of common stock were issued in payment of invoices totaling $1,561,343. During the year ended September 30, 2010, 465,158 shares of common stock were issued in payment of invoices totaling $1,241,026.

In accordance with Codification 815-40-15-7, derivative liabilities must be revalued at the end of each interim period and at the end of the fiscal year, as long as they remain outstanding. Series A through E warrants that do not qualify for equity accounting must be accounted for as a derivative liability since the warrant agreements provide the holders with the right, at their option, to require the Company to a cash settlement of the warrant at Black-Scholes value in the event of a Fundamental Transaction, as defined in the warrant agreements. Since the occurrence of a Fundamental Transaction is not entirely within the Company's control, there exist circumstances that would require net-cash settlement of the warrants while holders of shares would not receive a cash settlement. As of September 30, 2009, the fair value of these derivative liabilities was $29,741,372. As of September 30, 2010, and after the exercise of warrants discussed above, the fair value of these derivative liabilities was $4,037,067.

During the fiscal year ended September 30, 2010, 8,813,088 of Series A warrants were exercised, resulting on a gain on derivative instruments of $8,433,451. When the warrants were exercised, the value of these warrants was converted from derivative liabilities to equity, and the Series A warrants transferred to equity totaled $4,276,972.

On October 1, 2009, the Company reviewed all outstanding warrants in accordance with the requirements of Codification 815-40, "Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity's Own Stock". This topic provides that an entity should use a two-step approach to evaluate

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whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. Two warrant agreements provide for adjustments to the purchase price for certain dilutive events, which includes an adjustment to the warrant exercise price in the event that the Company makes certain equity offerings in the future at a price lower than the exercise price of the warrants. Under the provisions of Codification 815-40, the warrants are not considered indexed to the Company's stock because future equity offerings or sales of the Company's stock are not an input to the fair value of a "fixed-for-fixed" option on equity shares, and equity classification is therefore precluded. Accordingly, effective October 1, 2009, 3,890,782 warrants issued in August 2008 were determined to be subject to the requirements of this topic and were valued using the Black-Scholes formula as of October 1, 2009 at $6,186,343. Effective October 1, 2009, the warrants are recognized as a liability in the Company's condensed consolidated balance sheet at fair value with a corresponding adjustment to accumulated deficit and will be marked-to-market each reporting period during which they are exercisable. The warrants were revalued on September 30, 2010, at $1,906,482. The assumptions used in the fair value calculation for the warrants as of October 1, 2009 and September 30, 2010 are as follows:

                                 October 1, 2009   September 30, 2010
                                ----------------   ------------------

Expected stock price volatility         95%               100%
Risk-free interest rate              2.151%             0.919%
Expected life of warrant         4.88 years         3.88 years

On March 12, 2010, the Company temporarily reduced the exercise price of the Series M warrants, originally issued on April 18, 2007. The exercise price was reduced from $2.00 to $0.75. At any time prior to June 16, 2010, investors could have exercised the Series M warrants at a price of $0.75 per share. For every two Series M warrants exercised prior to June 16, 2010, the investor would have received one Series F warrant. Each Series F warrant would have allowed the holder to purchase one share of the Company's common stock at a price of $2.50 per share at any time on or before June 15, 2014. After June 15, 2010 the exercise price of the Series M warrants reverted back to the $2.00 per share. Any person exercising a Series M warrant after June 15, 2010 would not receive any Series F warrants. The Series M warrants expire on April 17, 2012. An analysis of the modification to the warrants determined that the modification increased the value of the warrants by $1,432,456. The adjustment was recorded as a debit and a credit to additional paid-in capital. There were no exercises of the Series M warrants at the reduced price and the exercise price of the Series M warrants reverted back to $2.00 on June 16, 2010.

On August 3, 2010, the Company's Board of Directors approved an amendment to the terms of the Series M warrants held by an investor. The investor is the owner of 8,800,000 warrants priced at $2.00 per share. The investor may now purchase 6,000,000 shares of the Company's common stock (reduced from 8,800,000) at a price of $0.60 per share. In approving the amendment, the Company's Directors determined that reducing the number of outstanding warrants would be beneficial. An analysis of the modification to the warrants determined that the modification increased the value of the warrants by $100,000. The adjustment was recorded as a debit and a credit to additional paid-in capital. As of September 30, 2010, all of these warrants remained outstanding.

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11. FAIR VALUE MEASUREMENTS

Effective October 1, 2008, the Company adopted the provisions of Codification 820-10, "Fair Value Measurements", which defines fair value, establishes a framework for measuring fair value and expands disclosures about such measurements that are permitted or required under other accounting pronouncements. While topic 820-10 may change the method of calculating fair value, it does not require any new fair value measurements. The adoption of Codification 820-10 did not have a material impact on the Company's results of operations, financial position or cash flows.

In accordance with the topic, the Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company generally applies the income approach to determine fair value. This method uses valuation techniques to convert future amounts to a single present amount. The measurement is based on the value indicated by current market expectations about those future amounts.

Codification 820-10 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

o Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities.

o Level 2 - Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and amounts derived from valuation models where all significant inputs are observable in active markets.

o Level 3 - Unobservable inputs that reflect management's assumptions.

For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed consolidated balance sheet at September 30, 2010:

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                             Quoted Prices in          Significant
                            Active Markets for            Other          Significant
                           Identical Assets or          Observable        Unobservable
                          Liabilities (Level 1)      Inputs (Level 2)   Inputs (Level 3)       Total
                          ---------------------     -----------------   ----------------     ----------

Derivative Instruments       $         -                $         -       $ 6,946,051       $6,946,051
                             ===========                ===========       ===========       ==========

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed consolidated balance sheet at September 30, 2009:

                             Quoted Prices in          Significant
                            Active Markets for            Other          Significant
                           Identical Assets or          Observable        Unobservable
                          Liabilities (Level 1)      Inputs (Level 2)   Inputs (Level 3)       Total
                          ---------------------     -----------------   ----------------     ----------

Derivative Instruments       $         -                $         -        $35,113,970       $35,113,970
                             ===========                ===========        ===========       ===========

The following sets forth the reconciliation of beginning and ending balances related to fair value measurements using significant unobservable inputs (Level 3), as of September 30, 2010 and 2009:

                                                 2010          2009
                                                 ----          ----

Beginning balance                            $35,113,970     $3,018,697
  Transfers in                                 6,186,343      8,877,217
  Transfers out                               (5,510,490)    (5,273,594)
  Realized and unrealized gains/losses
   recorded in Earnings                      (28,843,772)    28,491,650

Ending balance                               $ 6,946,051    $35,113,970
                                             ===========    ===========

The fair values of the Company's derivative instruments disclosed above are primarily derived from valuation models where significant inputs such as historical price and volatility of the Company's stock as well as U.S. Treasury Bill rates are observable in active markets.

12. NET INCOME (LOSS) PER COMMON SHARE

Basic earnings per share (EPS) excludes dilution and is computed by dividing net income by the weighted average of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other common stock equivalents (convertible preferred stock, convertible debt, warrants to purchase common stock and common stock options) were exercised or converted into common stock. The following table provides a reconciliation of the numerators and denominators of the basic and diluted per-share computations:

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                                            2010         2009          2008
                                            ----         ----          ----
Net income (loss) - available to
 common shareholders-basic              $ 8,950,973   $(41,400,758) $(8,128,230)

  Add: Conversion of note payable           162,326              -            -
  Less: Conversion of derivative
          instruments                   (20,130,098)             -            -
                                        -----------   ------------  -----------

Net income (loss) - diluted            $(11,016,799)  $(31,830,304) $(8,128,230)

Weighted average number of
  shares - basic                        202,102,859    133,535,050  117,060,866

Incremental shares from:
  Potentially dilutive shares            21,414,912              -            -
     Conversion of note payable           2,760,142              -            -
                                        -----------   ------------  -----------
Weighted average number of
  shares - diluted                      226,277,913    133,535,050  117,060,866
                                       ============   ============  ===========

Earnings per share - basic             $       0.04   $      (0.31) $     (0.07)
                                       ============   ============  ===========

Earnings per share - diluted           $      (0.05)  $      (0.31) $     (0.07)
                                       ============   ============  ===========

Included in the above computations of weighted-average shares for diluted net loss per share were options and warrants to purchase 21,414,912 shares of common stock as of September 30, 2010. Excluded from the above computations of weighted-average shares for diluted net loss per share were options and warrants to purchase 23,384,797, and 14,488,124 shares of common stock as of September 30, 2009 and 2008, respectively. These securities were excluded because their inclusion would have an anti-dilutive effect on net loss per share.

13. SEGMENT REPORTING

Codification 280-10, "Disclosure about Segments of an Enterprise and Related Information" establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. This topic also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The Company's chief decision maker, as defined under this topic, is the Chief Executive Officer. To date, the Company has viewed its operations as principally one segment, the research and development of certain drugs and vaccines. As a result, the financial information disclosed herein materially represents all of the financial information related to the Company's principal operating segment.

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14. QUARTERLY INFORMATION (UNAUDITED)

The following quarterly data are derived from the Company's consolidated statements of operations.

Financial Data

Fiscal 2010

                           Three           Three          Three         Three
                           months          months         months        months
                           ended           ended          ended          ended          Year Ended
                         December 31,     March 31,      June 30,     September 30,    September 30
                            2009            2010           2010           2010             2010
                         -----------      ---------    -----------    -------------    --------------

Revenue                   $  30,000       $  30,600    $     30,900     $     61,800    $    153,300

Operating expenses        4,282,849       5,350,958       3,424,959        5,654,787      18,713,553
Non operating expenses
  (income)                  (72,099)        (56,167)        (38,423)         (33,221)       (199,910)
Gain/loss on derivative
instruments              23,340,267       4,519,672       2,754,512       (1,770,679)     28,843,772

Modification of warrants          -      (1,432,456)              -         (100,000)     (1,532,456)
                         ----------      ----------    ------------      -----------     -----------
Net loss available to
 common shareholders    $19,159,517     $(2,176,975)   $   (601,124)     $(7,430,445)    $ 8,950,973
                        ===========     ===========    ============      ===========     ===========
Net loss per
   share-basic          $      0.10     $     (0.01)   $       0.00      $     (0.04)    $      0.04
                        ===========     ===========    ============      ===========     ===========
Weighted average
  shares-basic          194,959,814     204,173,750     204,592,051      204,757,898     202,102,859
Net loss per
   share-diluted        $      0.02     $     (0.03)   $      (0.01)     $    (0.04)     $     (0.05)
                        ===========     ===========    ============      ===========     ===========

Weighted average
  shares-diluted        256,198,162     258,251,010     231,827,525      228,932,952      226,277,913

Fiscal 2009

                           Three           Three          Three         Three
                           months          months         months        months
                           ended           ended          ended          ended          Year Ended
                         December 31,     March 31,      June 30,     September 30,    September 30
                            2008            2009           2009           2009             2009
                         -----------      ---------    -----------    -------------    --------------

Revenue                   $       -       $  19,643    $     30,450     $     30,000    $     80,093

Operating expenses        2,551,823       2,384,760       3,243,576        3,920,391      12,100,550
Non operating expenses
 (income)                   (13,379)         16,717         376,445           18,140         397,923
Gain/loss on derivative
  instruments               391,689         264,554      (2,649,493)     (26,498,400)    (28,491,650)
                         ----------      ----------    ------------     ------------     ------------
Net loss                 (2,173,513)     (2,117,280)     (6,239,064)     (30,380,173)    (40,910,030)
Modification of
  warrants                        -               -        (466,667)         (24,061)       (490,728)
                         ----------      ----------    ------------      -----------     -----------
Net loss available to
   common shareholders   (2,173,513)     (2,117,280)   $ (6,705,731)    $(30,404,234)   $(41,400,758)
                        ===========     ===========    ============      ===========     ===========
Net loss per
  share-basic           $     (0.02)    $     (0.02)   $      (0.05)    $      (0.19)   $      (0.31)
                        ===========     ===========    ============      ===========     ===========
Net loss per
  share-diluted         $     (0.02)    $     (0.02)   $      (0.05)    $      (0.19)   $      (0.31)
                        ===========     ===========    ============      ===========     ===========
Weighted average
  shares-basic and
  diluted               122,215,334     124,701,667     130,076,656      156,916,920     133,535,050

F-42

The Company has experienced large swings in its quarterly gains and losses in 2010 and 2009. These swings are caused by the changes in the fair value of the convertible debt each quarter. These changes in the fair value of the debt are recorded on the consolidated statements of operations. In addition, the cost of options granted to consultants has affected the quarterly losses recorded by the Company.

15. SUBSEQUENT EVENTS

In accordance with Codification 855-50, "Subsequent Events", the Company has reviewed subsequent events through the date of the filing. The Company received a $733,437 grant under The Patient Protection and Affordable Care Act of 2010 (PPACA). The grant was related to three of the Company's projects, including the Phase III trial of Multikine. The PPACA provides small and mid-sized biotech, pharmaceutical and medical device companies with up to a 50% tax credit for investments in qualified therapeutic discoveries for tax years 2009 and 2010, or a grant for the same amount tax-free. The tax credit/grant program covers research and development costs from 2009 and 2010 for all qualified "therapeutic discovery projects."

On December 10, 2010, the Company entered into a sales agreement with McNicoll Lewis & Vlak LLC (MLV) relating to shares of common stock which have been registered by means of a shelf registration statement filed in July 2009. The Company may offer and sell shares of its common stock, having an aggregate offering price of up to $30 million, from time to time through MLV acting as agent and/or principal.

Sales of the Company's common stock, if any, may be made in sales deemed to be "at-the-market" equity offerings as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including sales made directly on or through the NYSE Amex, the existing trading market for the Company's common stock, sales made to or through a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. MLV will act as sales agent on a best efforts basis. The Company is not required to sell any shares to McNicoll Lewis & Vlak and McNicoll Lewis & Vlak is not required to sell any shares on the Company's behalf or purchase any of its shares for its own account.

McNicoll Lewis & Vlak will be entitled to a commission in an amount equal to the greater of 3% of the gross proceeds from each sale of the shares, or $0.025 for each share sold, provided, that, in no event will McNicoll Lewis & Vlak receive a commission greater than 8.0% of the gross proceeds from the sale of the shares. In connection with the sale of the common stock on behalf of the Company, McNicoll Lewis & Vlak may be deemed to be an "underwriter" within the meaning of the Securities Act of 1933, as amended, and the compensation of McNicoll Lewis & Vlak may be deemed to be underwriting commissions or discounts.

F-43

SIGNATURES

In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the 10th day of December 2010.

CEL-SCI CORPORATION

By:  /s/ Maximilian de Clara
     ------------------------------
    Maximilian de Clara, President

Pursuant to the requirements of the Securities Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature                        Title                            Date


 /s/ Maximilian de Clara       Director                     December 10, 2010
----------------------
Maximilian de Clara


/s/ Geert R. Kersten           Chief Executive, Principal
----------------------         Accounting, Principal Financial
Geert R. Kersten               Officer and a Director       December 10, 2010


/s/ Alexander G. Esterhazy     Director                     December 10, 2010
-------------------------
Alexander G. Esterhazy


/s/ C, Richard Kinsolving      Director                    December 10, 2010
-------------------------
Dr. C. Richard Kinsolving


/s/ Peter R. Young              Director                   December 10, 2010
-------------------------
Dr. Peter R. Young


CEL-SCI CORPORATION

FORM 10-K

EXHIBITS


EXHIBIT 5


HART & TRINEN, LLP
ATTORNEYS AT LAW

                             1624 Washington Street
                                Denver, CO 80203
William T. Hart, P.C.              ________          Email:  harttrinen@aol.com
Donald T. Trinen                                     Facsimile:  (303) 839-5414
                                 (303) 839-0061
--

Will Hart
                                December 10, 2010


CEL-SCI Corporation
8229 Boone Boulevard, Suite 802
Vienna, Virginia  22182

This letter will constitute an opinion upon the legality of the sale by CEL-SCI Corporation, a Colorado corporation ("CEL-SCI"), of shares of its common stock at initial offering prices not to exceed $34,000,000, all as referred to in a prospectus supplement filed as part of a Registration Statement on Form S-3 (File No. 333-160794) filed by CEL-SCI with the Securities and Exchange Commission.

We have examined the Articles of Incorporation, the Bylaws, the minutes of the Board of Directors of CEL-SCI, the applicable laws of the State of Colorado and a copy of the Registration Statement. In our opinion, CEL-SCI is authorized to issue the shares of common stock mentioned above and such shares, when issued, will be lawfully issued and will represent fully paid and non-assessable shares of CEL-SCI's common stock.

Very truly yours,

HART & TRINEN

/s/ William T. Hart

William T. Hart


EXHIBIT 10(m)


FIRST AMENDMENT TO DEVELOPMENT,
SUPPLY AND DISTRIBUTION AGREEMENT

THIS FIRST AMENDMENT TO DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT ("First Amendment"), is made and dated as of October 31, 2008 (the Effective Date), between CEL-SCI Corporation, a Colorado, USA, company ("CEL-SCI"), and Orient Europharma Co. Ltd., a corporation organized and existing under the laws of Taiwan, R.O.C., ("Orient Europharma"), with reference to the following facts:

A. CEL-SCI and Orient Europharma entered into that certain Development, Supply and Distribution Agreement, dated November 10, 2000 ("DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT"). Except as otherwise modified in this First Amendment, defined terms used herein shall have the same meanings given to them in the Development, Supply and Distribution Agreement.

B. CEL-SCI and Orient Europharma now desire to amend the Development, Supply and Distribution Agreement as set forth in this First Amendment.

THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, CEL-SCI and Orient Europharma hereby agree to amend the Development, Supply and Distribution Agreement as follows:

1. Modifications to Development, Supply and Distribution Agreement.

(a) Definitions. Section 1. m. relating to the definition of the territories covered in the Development, Supply and Distribution Agreement is deleted and the following language is substituted therefore:

1. m. "Territory shall mean Taiwan, Singapore, Malaysia, Hong Kong, The Philippines, South Korea, Australia and New Zealand. CEL-SCI grants to Orient Europharma the first right of negotiation with respect to country-regionThailand and placecountry-regionChina."

2. As valuable consideration for this amendment Orient Europharma agrees to purchase $500,000 worth of CEL-SCI common stock directly from CEL-SCI within one week of signing this First Amendment. The price of the stock to be paid by Orient Europharma will be the average of the CEL-SCI common stock closing prices listed on Yahoo Finance of the 30 trading days preceding the Effective Date of this First Amendment.

3. CEL-SCI and Orient Europharma confirm that Orient Europharma will be responsible for * of the costs of CEL-SCI's advanced primary head and neck cancer Phase III trial with Multikine approved by the FDA.

* Confidential treatment requested. Confidential portion has been omitted and filed separately with the Securities and Exchange Commission.


4. Neither party shall publish financial details related to revenue sharing and Orient Europharma's participation in the Phase III clinical trial covered in the First Amendment to the Development, Supply and Distribution Agreement and, as far as possible, the November 10, 2000 Agreement. Notwithstanding the foregoing, each party may disclose the existence and terms of this Agreement as necessary for filings with the U.S. Securities Exchange Commission or a nationally recognized securities exchange; provided, that such party informs the other party prior to publication.

5. Conflicts. If any conflict between this First Amendment and the Development, Supply and Distribution Agreement should arise, the terms of this First Amendment shall control.

6. Successor and Assigns. This First Amendment shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto.

7. Counterparts. This First Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall together constitute a single instrument.

The parties have executed this First Amendment as of the date first written above.

CEL-SCI:                                ORIENT EUROPHARMA:

CEL-SCI Corporation,                     Orient Europharma Co. Ltd.,
a Colorado, USA, company                 a Taiwanese corporation

By:    /s/ Geert R. Kersten             By:    /s/ H.T. Stiftl
       ------------------------------          -------------------------------

Name:  Geert R. Kersten                 Name:  H.T. Stiftl
       ------------------------------          -------------------------------

Title: Chief Executive Officer          Title: Managing Director
       ---------------------------             -------------------------------

3

EXHIBIT 10(n)


EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT

between

CEL-SCI CORPORATION

a corporation incorporated under the laws of the State of Colorado, of 8229 Boone Boulevard, Suite 802, Vienna, VA 22182, USA


("Supplier")

and

TEVA PHARMACEUTICAL INDUSTRIES LTD

a limited liability company incorporated under the laws of Israel, of 5 Basel Street, Petah Tiqva 49131, Israel


("Teva")

WHEREAS Supplier is developing the Product defined below for approval in the placecountry-regionU.S. and other countries in the world; and

WHEREAS Teva has the facilities, personnel and technical expertise and capability to assist in the clinical trials done with the Product, obtain regulatory approval for the Product, and market and distribute the Product in the Territory and desires to undertake such activities in accordance with the terms and conditions of this Agreement; and

WHEREAS Supplier has the know-how and facilities to manufacture or procure the manufacture the Product and is prepared to supply the Product and to grant to Teva the right and license to exclusively distribute the Product in the Territory subject to the terms and conditions set out below.

NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:

1. INTERPRETATION AND DEFINITIONS

1.1. The preamble to this Agreement forms an integral part hereof.

1.2. Clause headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the interpretation of this Agreement.

1.3. All appendices to this Agreement, whether attached at the time of signature hereof or signed by the parties at any time thereafter, shall be construed as an integral part of this Agreement.

1.4. In this Agreement, the following expressions shall bear the meanings assigned to them below and cognate expressions shall bear corresponding meanings.

1.4.1. "Affiliate" - with respect to either party, means any person, corporation, company, partnership or other entity controlling, controlled by or under common control with such party. For such

* Confidential treatment requested. Confidential portion has been omitted and filed separately with the Securities and Exchange Commission.

1

purpose the term "control" means the holding of 50% or more of the common voting stock or ordinary shares in, or the right to appoint 50% or more of the directors of, the said corporation, company, partnership or entity.

1.4.2. "the Territory" - collectively placecountry-regionIsrael (including the adjacent territories under its administration and/or the administration of the Palestinian Authority) and placecountry-regionTurkey.

1.4.3. "a Country" - individually, any one of the countries forming part of the Territory.

1.4.4. "the Effective Date" - the date of signature of this Agreement.

1.4.5. "the Regulatory Approval" - the approval by the respective regulatory authorities, in the Territory, of the marketing, distribution and sale of the Product, in the Territory.

1.4.6. "the Approval Dates" - with regard to a particular Country, the date on which the regulatory authorities and all other relevant authorities in such Country, grant the Regulatory Approvals and all other relevant authorizations necessary for the importation, promotion, marketing, distribution and sale of the Product in such Country.

1.4.7. "the Launch Date" - with regard to a particular Country, the date on which a Product is first commercially sold in such Country.

1.4.8. "the Product" - the finished form pharmaceutical compositions manufactured in accordance with the Specifications (as defined below) and described in Appendix A, including any dosage forms and strengths, drug delivery forms, modifications and/or improvements of such compositions. Supplier will update Appendix A from time to time during the term of this Agreement to reflect the addition of any dosage forms and strengths, drug delivery forms, modifications and/or improvements of the composition described on Exhibit A as of the date hereof.

1.4.9. "the Substance" - the bulk active ingredient used in the manufacture of the Product.

1.4.10. "the Field" - the treatment of head and neck cancer in humans.

1.4.11. "Formulation" - the manufacture of the Product utilising, inter alia, the Substance, on the basis of the Formulation Technology.

1.4.12. "the Formulation Technology" - all of the technological know-how and expertise required for the Formulation of the Product including without limitation analytical methodology and controls, the precise composition of the Formulation of the Product, the working procedure for the Formulation and all documentation with regard to the foregoing, as specified in the relevant dossier.

2

1.4.13. "the Specifications" - the specifications identified in Appendix B with regard to the Product, as may be amended from time to time by Supplier (with written notice to Teva), prior to regulatory approval in a Country in Supplier's discretion, and following regulatory approval in a Country, with the agreement of Teva and Supplier which shall not be unreasonably withheld or delayed. For clarity, any changes to the Specifications under this Agreement shall not modify Teva's obligations under the Clinical Trial Agreement.

1.4.14. "Quarter" means a complete period consisting of the months of January to March, April to June, July to September, and October to December, all inclusive.

1.4.15. "Information" - any and all information acquired in the course of the negotiation and performance of this Agreement disclosed by either party herein, or which either party acquires relating to the business, finance or trade secrets of the other party.

1.4.16. "GMP" - standards of current Good Manufacturing Practice as laid down and as accepted from time to time by the United States Food and Drug Administration and the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH).

1.4.17. "Material Events" events (not within the reasonable control of either party) which have a significant direct adverse or significant beneficial impact on the position and/or marketability and/or sales of the Product in the Territory during a given period or on the parties' economic interests under this Agreement, such as, for example - but without limitation:

1.4.17.1. the entry into the market of significant new competing products or significant therapeutic concepts including significant generic competition, and/or the cessation of significant competing products in the market in any Country;

1.4.17.2. the loss of or increase in a significant reimbursive allowance by a medical insurance fund;

1.4.17.3. significant changes in the social security system in any Country which affect the upper limit on medical practitioners' budgets for patient's medication;

1.4.17.4. a change in the specifications of any Substance and/or Product, resulting in an adverse impact on Supplier's cost of Formulation of the Product;

     1.4.17.5. a significant  increase in Supplier's cost of Formulation of
          the  Product.

1.4.18. "the  Material  Event  Procedure" - the procedure  outlined,  to be

followed on the occurrence of a Material Event.

3

1.4.19. "Net Sales" - the total amount actually received by Teva or its Affiliates from the arms length sale of the Product, provided that as to sales other than at arms length, the term "Net Sales" shall mean the total amount that would have been due in an arms length sale, according to the then current conditions for such sale or - in the absence of such current conditions - according to reasonable conditions for such sale, in all cases after deduction of:

1.4.19.1. sales taxes (including value added taxes) to the extent applicable to sales of the Product and not collected separately from the counter-party to such sales; and

1.4.19.2. credits or allowances, if any, actually granted, and approved by Supplier, on account of price adjustments, recalls, rejections or return of the Product previously sold; and

1.4.19.3. all shipment, storage, transportation and other direct administrative expenses required for the distribution of the Product.

and provided further that as to sales by Teva to its Affiliates, or between Affiliates of Teva, the terms "Net Sales" shall mean the higher of (i) "Net Sales" as defined above, with respect to sales other than at arms length; and (ii) the total amount actually received by Teva or the Affiliate, on resale to an independent third party purchaser after the deductions specified in Clauses 1.4.19.1, 1.4.19.2 and 1.4.19.3 above, to the extent applicable.

1.4.20. "Manufacturing Cost" means the actual costs of manufacturing and supplying Product to Teva under this Agreement, which shall be the sum of the following costs, all of which shall be calculated on a per-unit basis and in accordance with placecountry-regionU.S. generally accepted accounting principles consistently applied:

1.4.20.1. The amounts paid by Supplier to a third party for (i) providing raw materials and packaging materials for producing the Product, (ii) storing, transporting, and insuring the Product (but excluding any transportation or insurance costs for which Teva is responsible), (iii) release testing of the Product, and
(iv) taxes (other than income taxes) and customs duty charges imposed by governmental authorities with respect to the manufacture or supply of the Product, in each case to the extent paid by Supplier and not reimbursed or refunded or credited to Supplier, and net of any discounts or other benefits received by Supplier from third party manufacturers that provide goods or services to Supplier with respect to Product; and

1.4.20.2. The direct costs and charges incurred by Supplier in connection with the manufacture, filling, finishing, testing, labeling, packaging, storage, release, shipping and transportation of the Product (but excluding any shipping, transportation or insurance costs for which Teva is responsible).

4

Notwithstanding the foregoing, no cost, charge, or expense will be included in more than one of Clauses 1.4.20.1 and 1.4.20.2.

1.4.21. "Supplier House Mark" means any trademark, trade name, domain name, or other name or mark used or registered by Supplier or its Affiliate to identify itself at any time during the term of this Agreement.

1.4.22. "Product Trademark" means any trademark, trade dress (including packaging design), logo, slogan, domain name and design, whether or not registered in a country or territory, selected in writing and owned by Supplier and used to identify or promote the Product.

2. APPOINTMENT OF DISTRIBUTOR, DURATION

2.1. Subject to the terms of this Agreement, Supplier hereby grants Teva the sole and exclusive right and license to market, distribute and sell the Product for the Field in the Territory and in accordance with the terms of this Agreement, and Teva accepts such right and licence. Teva may not sublicense or delegate such right except in accordance with the terms of Clause 24 below.

2.2. This Agreement shall commence on the date hereof and unless terminated earlier in accordance with Clause 11 below, shall continue in each Country comprising the Territory, on a Product-by-Product basis, for an initial fixed term of ten (10) years from the Launch Date of each Product in the Country respectively. Without derogating from Clause 11, such initial term shall be renewed automatically, for additional successive terms of two (2) years each, unless either party provides the other with written notice, by not later than six (6) months before the scheduled commencement of any such renewal term, not to renew this Agreement in the relevant Country, either as a whole or with regard to any particular form or composition of the Products.

2.3. Following the Launch Date of a Product, Teva shall be entitled at any time in its reasonable discretion to cease selling such Product in the Territory or in any one or more Countries comprising the Territory, for reasons of (i) medical safety, (ii) on legal or regulatory grounds or
(iii) in the event that the Product, in any dosage form thereof, cannot be sold at a price which will facilitate Teva being able to show a profit (section 2.3(iii) shall be referred to as "Commercial Reasons"); provided that, Teva has notified Supplier in writing six (6) months in advance of its intention to cease sales of the Product in any specific Country for Commercial Reasons or has notified Supplier in writing as soon as practical for all other reasons. Promptly following such cessation, the parties shall meet and in good faith discuss the reasons for such cessation and the modifications, if any, to this Agreement to address the cause of such cessation. If such cessation due to Commercial Reasons continues for at least six (6) months in a Country, then Supplier shall have the right to terminate this Agreement solely with respect to the affected Country upon sixty (60) days' prior written notice to Teva.

3. REGISTRATION

3.1. Teva shall file applications for, obtain, and maintain the Regulatory Approvals with regard to each Product by the regulatory authorities in the Territory; provided, that to the extent permitted by applicable laws in

5

the Territory, Supplier will provide any chemistry, manufacturing and control information and clinical results necessary to obtain such Regulatory Approvals directly to the relevant authorities. Such applications shall be filed by Teva as soon as possible after the US/EU Launch Date (as defined below), and by not later than six (6) months after compliance by Supplier with Clauses 3.2 and 3.3 below; provided, that if Teva can show that the preparation of registration dossiers of an acceptable standard, on the basis of the documentation and information to be received by it pursuant to this Agreement will require more than six
(6) months of preparation, then such period will be extended for such time as reasonably necessary to prepare such dossiers. All Regulatory Approvals shall be held by Teva in its name or the name of its nominee, and Teva shall be the owner thereof, subject to the terms and conditions of this Agreement. Teva shall fund the cost of procurement of the Regulatory Approvals. Teva agrees to comply in all respects with all applicable laws, legislation and/or regulations in the Territory in force from time to time. "US/EU Launch Date" means, with respect to a Product, the earlier of: (i) the date on which Supplier has first sold such Product in the placecountry-regionU.S.A. following the receipt of marketing approval of the regulatory authorities in the U.S.A and, (ii) the date on which Supplier has first sold such Product in the European Union following the receipt of marketing approval of the regulatory authorities in the European Union (either through the centralized EMEA approval procedure or through the national approval procedures of any of the following countries: placecountry-regionFrance, placecountry-regionGermany, placecountry-regionItaly, placecountry-regionSpain, or the placecountry-regionUnited Kingdom).
3.2. Within thirty (30) days of the US/EU Launch Date for a Product, Supplier will provide Teva with such documentation as may be required by Teva for the purposes described in Clause 3.1 above, including without limitation the product registration dossier/s with regard to such Product.

3.3. Within thirty (30) days of the US/EU Launch Date for a Product, Supplier shall make available to Teva, and Teva shall have the right to utilise for the purposes described in Clause 3.1 above, within the Territory only, all clinical data in Supplier's possession or control with regard to such Product, and any regulatory submissions for the Product; provided, that Supplier shall not be obligated to provide such data or submissions to Teva if such action would violate any obligations of confidentiality and non-use that may be imposed on Supplier by its third party collaborators with respect to data or submissions generated by such third parties. Supplier shall use its reasonable efforts to cause such third party collaborators to agree to the open exchange of such data and submissions among Supplier and its various collaborators throughout the world for the purposes of obtaining Regulatory Approval of the Product. For clarity, clinical data and regulatory submissions generated by Supplier itself shall be made available to Teva pursuant to this Clause 3.3 in any event.

4. TEVA'S UNDERTAKINGS

Teva undertakes and agrees with effect from the Effective Date and at all subsequent times during the term of this Agreement:

4.1. to use all reasonable endeavours to seek regulatory approval for, market and sell the Product in the Territory at its own cost and expense and subject to the terms and conditions of this Agreement, subject to the conditions set out in Clause 10, except where expressly agreed otherwise in writing;

6

4.2. to maintain adequate facilities at all times, including competent and experienced personnel and officers, and where required, storage and distribution facilities, to enable Teva to perform its obligations under this Agreement, including the management of all customer relationships, complaints, and returns;

4.3. to purchase (and cause its Affiliates to purchase) the Product only from Supplier for the Territory;

4.4. to inform Supplier from time to time of any matter in the Territory likely to affect, significantly, the Formulation and/or promotion, marketing and sale of the Product, including any alleged infringement of third party intellectual property rights;

4.5. to use reasonable endeavors to prevent any sale, supply and/or export of the Product to customers outside the Territory by Teva or its customers;

4.6. to inform Supplier of any complaints or information relating to the use or quality of the Substance or the Product or of any matter that may give rise to a product recall (as described in greater detail in the Pharmacovigilance Agreement referenced in Clause 13), but subject to the requirements of law or the regulatory authorities in the Territory, not to take any action with regard thereto without obtaining Supplier's prior written consent, such consent to be provided promptly and not unreasonably withheld by Supplier; and

4.7. not to make any promise or guarantee or representation whatsoever with reference to the Product beyond those contained in the material supplied by, or approved in writing by, Supplier without Supplier's prior written consent.

5. SUPPLIER'S UNDERTAKINGS

Supplier undertakes and agrees with Teva with effect from the Effective Date and at all subsequent times during the term of this Agreement:

5.1. to maintain the timely supply of the Product (as may be decided by the parties during the terms of this Agreement) for sale by Teva according to the forecasts provided by Teva and agreed by Supplier;

5.2. to supply Teva with the Product in finished form, labeled and packed in accordance with the Specifications, GMP, the requirements of the regulatory authorities of the placecountry-regionU.S.A. and European Union, as applicable, and the terms and conditions of this Agreement. In addition, the Product's labeling for the Territory shall be prepared in accordance with Teva's written requirements for compliance with Teva's requirements (subject to Supplier's consent which shall not be unreasonably withheld or delayed) and the regulatory requirements in the Territory;

5.3. to use reasonable endeavors to manufacture Product in accordance with any special regulatory requirements for the Territory as may be identified by Teva in writing from time to time;

7

5.4. to use reasonable endeavors to prevent parallel import and to prevent any sale, supply and/or import of the Product to the Territory by third parties;

5.5. to provide Teva with any and all reasonable assistance required for the marketing and distribution of the Product (in each case, to the extent available to the Supplier), including without limitation, information, publications, marketing materials (as described in greater detail in Clause 17.2 below) and new developments regarding the Product, commercial activities and any other information which might be relevant for the marketing and distribution of the Product; and

5.6. to bear all costs associated with product recalls, other than recalls initiated as a result of actions directly attributable to Teva's gross negligence or willful misconduct; and

5.7. to inform Teva as soon as is practical of any changes in Supplier's organization or method of doing business which might affect the carrying out by Supplier of its duties hereunder.

6. FORECASTS AND ORDERS; AUDITS

6.1. As soon as practicable after execution of this Agreement and in any event by not later than the date one hundred and twenty (120) days prior to the anticipated Approval Date for either Country in the Territory, Teva shall submit to Supplier a forecast of its requirements of the Product for the first four Quarters immediately following the then anticipated Launch Date. At least one hundred and twenty (120) days before the commencement of each subsequent Quarter, Teva shall submit to Supplier an updated forecast of its requirements of the Product for the next four Quarters. Such forecasts shall be Teva's best estimate but shall not be binding, save as set out in Clause 6.2. Supplier may review and accept or modify any such forecasts submitted by Teva within ten (10) days of such submission and will inform Teva if the forecasted amounts of Product are likely to exceed Supplier's available capacity and inventory for the forecasted period. After the initial forecast, for each subsequent forecast the second quarter in such forecast (i.e., the quarter which is now binding but was in the most recent prior forecast considered to be non-binding) may not vary (either up or down) by more than fifty percent (50%) from the amounts forecasted to be ordered for such period in the most recent prior forecast submitted by Teva, except with the consent of Supplier.
6.2. The forecast for the first Quarter referred to in Clause 6.1 and the first Quarter of each updated estimate submitted pursuant to Clause 6.1 above shall constitute a binding order by Teva. Teva may order amounts of Product in excess of the amounts forecast for such Quarter, and Supplier shall use commercially reasonable efforts to supply any such additional amounts ordered; provided, that Supplier shall be under no obligation to accept purchase orders for amounts exceeding one hundred twenty percent (120%) of the amount forecast for such Quarter. The quantities indicated for the remaining months of each rolling forecast will be treated as a forecast only and will not create any obligations for either Party.

6.3. All Product ordered under this Agreement shall be pursuant to written purchase orders, each of which shall specify the quantity of clinical and/or commercial Product ordered and the requested delivery date. Teva

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shall submit each such purchase order to Supplier no later than one hundred and twenty (120) days prior to the delivery date indicated in such purchase order. Any purchase orders for Product submitted by Teva shall reference this Agreement and shall be governed exclusively by the terms contained herein, and shall be consistent with the terms of this Agreement, including this Article 6. Any term or condition in any order, confirmation or other document furnished by Teva or Supplier that is in any way inconsistent with the terms and conditions of this Agreement is hereby expressly rejected. Orders placed by Teva shall be subject to acceptance by Supplier. Supplier will provide Teva with written notice of acceptance of all orders, within ten (10) business days of the placement thereof (for those binding forecasts accepted as described in Clause 6.1 above), save in the case of any excess orders (as described in Clause 6.2 above) or Supplier being unable, for objective good cause which is not due to the Supplier's act and/or omission (and not due to a lack of capacity), to fulfill any order in whole or in part.

6.4. Risk and title to the Product shall pass to Teva when such Product is tendered to the carrier at the designated point for shipment by air transport from the placecountry-regionUnited States of America (FCA, Incoterms 2000). In addition, Supplier shall be in charge of arranging for the shipment and insurance (and paying for such amounts) of the Products to Teva's designated customs point in Israel. Teva shall reimburse Supplier for such amounts promptly upon submission of an invoice for such payments and shall be entitled to deduct such amounts paid from the Net Sales.

6.5. In the event that Supplier is unable to supply all orders on time, Supplier agrees to provide Teva with order status reports at least once a week in a format to be agreed. Such reports shall document the manufacturing capacity of Supplier at the date of each respective report, the stages which Supplier is taking to return to timely deliveries, and the anticipated date of delivery of all outstanding orders, as well as any other information which Teva may reasonably require at such time.

6.6. Upon written request to Supplier, Teva shall have the right no more than once per calendar year to have representatives visit the manufacturing facilities of Supplier during normal business hours to review manufacturing operations, to assess its compliance with GMP and quality control procedures, and to discuss any related issues with Supplier's manufacturing and management personnel. During the term of this Agreement, Supplier shall permit any regulatory authority from the placecountry-regionU.S.A., European Union or Territory which wishes to audit such facilities to do so, in order to ensure compliance by Supplier with the quality standards referred to above.

6.7. If Supplier's output of Product is reduced or if Supplier is otherwise unable to satisfy its outstanding orders of Product (e.g., due to unanticipated demand), Supplier shall satisfy any of Teva's outstanding binding purchase orders by allocating its available supply among Teva, Supplier's other customers, and Supplier's own requirements for sale in territories retained by Supplier in a fair and equitable manner as reasonably determined by Supplier, and in accordance with each such recipient's pro rata share of Product sales during the previous four (4) Quarters. The allocation mechanism described in this Clause 6.7 will not derogate from Teva's rights or remedies under this Agreement with respect to ordered quantities of Product that are not delivered by Supplier in accordance with the terms of this Agreement.

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7. PRICE AND TERMS OF PAYMENT

7.1. Participation in clinical trials: Teva shall take upon itself, at its cost, the performance of certain activities related to the conduct of a clinical trial in placecountry-regionIsrael, as part of a global Phase 3 trial for the Product, as described in further detail in the clinical trial agreement attached to this Agreement as Appendix D (the "Clinical Trial Agreement"). For the avoidance of doubt, any obligation of a party under the Clinical Trial Agreement shall be treated as an obligation under this Agreement.

7.2. Price: The amounts to be paid by Teva to Supplier in connection with the supply of Product shall be as follows:

(a) for supplies of Product to be used for the conduct of activities under the Clinical Trial Agreement, a service charge for providing the Product equal to **** ******* *** ***** ***** US Dollars per vial of Product (as described in the Specifications); and

(b) for all other supplies of Product, the greater of: (i) * percent of the Net Sales of such Product, and (ii) * percent (*%) of Supplier's Manufacturing Cost for such quantity of Product.

7.3. With every delivery of the Product to Teva, Supplier shall send Teva an invoice. For commercial supplies of Product, the initial transfer price for each unit of Product shall be based upon the average Net Sales per unit as described in the latest Sales Certificate (defined below). All payments shall be made within thirty (30) days from the last day of the month in which the invoice was issued, in a manner of a bank transfer to a bank account number, provided by Supplier to Teva sufficient time in advance of such bank transfer.

7.4. Within thirty (30) days of the end of each Quarter, Teva shall prepare and deliver to Supplier a certificate ("the Sales Certificate") setting out details of the Net Sales of the Product by Teva during the relevant Quarter, including the gross sales price and any deductions described in the definition of Net Sales. Notwithstanding the foregoing, Teva shall prepare and deliver the first placeCitySales Certificate together with its first order of Products for non-clinical use. All Sales Certificates for periods prior to the Launch Date will include Teva's reasonable non binding estimate of the anticipated sales price and relevant deductions.

7.5. At the end of each calendar year, Teva will prepare a summary of the previous year's Net Sales and will calculate the payments already paid by Teva and a true-up payment will be made by the applicable party in order to reconcile the amounts paid with the purchase prices described in Clause 7.2.

7.6. To the extent that sales are effected by Teva, other than in United States Dollars, Teva shall convert the sum of such sales into US Dollars in accordance with the selling rate for such currency quoted in the Wall Street Journal last published on the business day on which Teva remits payment to Supplier.

7.7. Teva shall keep full and true books of account and other records in accordance with generally accepted accounting practice in Israel so that details of sales of the Product, and

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Teva's payment obligations in respect thereof, may be properly ascertained. Teva shall preserve such books and records for three (3) years after the calendar year to which they pertain. Such books and records shall be open to inspection by an independent certified public accountant selected by Supplier, and subject to confidentiality obligations as strict as in this Agreement, at Supplier's expense, during normal business hours upon ten (10) business days' prior written notice, for the purpose of verifying the accuracy of the reports and computations rendered by Teva. In the event Teva underpaid the amounts due to Supplier with respect to the audited period by more than five percent (5%), Teva shall pay the reasonable cost of such examination, together with the deficiency not previously paid, within thirty (30) days of the last day of the month of the date of receipt of notice from Supplier.

7.8. Other than V.A.T. and comparable taxes, all payments by Teva are inclusive of all taxes and/or duties, of whatsoever nature, which are now or may hereafter be imposed with regard to any such payments, including without limitation withholding taxes.

8. WARRANTY AND INSPECTION

8.1. Supplier warrants that at the time of delivery, the Product shall meet the Specifications.

8.2. At the time of delivery of each consignment of the Product, Supplier shall deliver a Certificate of Analysis showing that the relevant Product conforms to the Specifications.

8.3. Teva may elect to inspect each consignment of the Product within forty five (45) days of receipt of the Certificate of Analysis from Supplier.

8.4. In the event that the Product is shown by Teva to be not in accordance with Specifications on receipt, or if there is a shortfall in the number of the Product contained in the delivered consignment, then Teva shall notify Supplier to this effect no later than sixty (60) days after receipt of the Product in question. If no such notice of rejection is received by Supplier within such sixty (60) day period, Teva shall be deemed to have accepted such shipment of Product, except with respect to any Latent Defect, as defined below. Once Teva accepts, or is deemed to have accepted, a shipment of Product, Teva shall have no recourse against Supplier under this Clause 8 if the Product is subsequently deemed unsuitable for use for any reason, except with respect to any Latent Defect. If Supplier disagrees with Teva's determination that certain Product does not meet the Specifications, such Product shall be submitted to a mutually acceptable third party laboratory. Such laboratory shall determine whether such Product meets the Specifications, and the Parties agree that such laboratory's determination shall be final and determinative. The Party against whom the third party laboratory rules shall bear all costs of the testing. If such laboratory determines or the Parties agree that such shipment meets the Specifications, then such shipment shall automatically be deemed to have been accepted by Teva, and Teva shall pay the purchase price for the quantities of Product initially rejected by Teva. As used in this Clause 8.4, "Latent Defect" means any Product defect, including without limitations, non-conformity with the Specifications that could not have been revealed by Teva's visual inspection of Product or upon inspection of the corresponding Certificate of Analysis.

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8.5. In the event that Supplier agrees, or the third party laboratory determines, that a shipment of Product contains non-conforming goods or a shortfall, then Supplier shall replace, at its own cost and expense, the defective quantity, or make up the shortfall as the case may be or, at its option, allow Teva credit for the defective quantity or shortfall, whichever is appropriate.

8.6. Supplier hereby represents and warrants that, to its actual knowledge as of the Effective Date the manufacture, use or sale of the Product in the Territory as contemplated in this Agreement and Teva's activities in connection with this Agreement will not constitute an infringement of the intellectual property rights of any third party. In the event that either party is made aware of any infringement, as mentioned above, it will notify the other party of such fact immediately.

8.7. THE EXPRESS WARRANTIES IN THIS CLAUSE 8 ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES WITH RESPECT TO THE PRODUCT.

9. NO REPRESENTATIONS BY TEVA REGARDING THE PRODUCT

Teva shall make no statement, representation or warranty, oral or written, concerning the Product beyond, inconsistent with or contrary to the Product labelling, promotional materials or other information or representation made by Supplier to Teva or any other third party. From time to time, Teva shall provide Supplier with copies of such promotional materials to enable Supplier to verify Teva's compliance with the terms of this Clause 9.

10. MATERIAL EVENTS

10.1. In the event that either of the parties is of the opinion that a Material Event has occurred such party shall be entitled to provide the other party with written notice ("Material Event Notice") setting out: 10.1.1. that such Material Event has occurred;

10.1.2. a reasonable description of the nature of such Material Event and the potential consequences thereof;

10.1.3. proposals as to how to react and possible need for modifications to the contractual obligations of the parties as a result of such Material Event.

10.2. As soon as reasonably possible after receipt of a Material Event Notice, but within not more than thirty (30) days of receipt thereof, the recipient of the Material Event Notice shall provide the sender of such notice with its written reaction to the Material Event Notice in which the said recipient shall set out any counter-proposals it may have to the proposals of the sender of the Material Event Notice.

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10.3. Within not more than sixty (60) days of delivery of the Material Event Notice, the parties shall meet in order to review, jointly, in good faith, the Material Event and the respective proposals of the parties, as well as in order to negotiate, in good faith, the possible modification, if any, of the parties' contractual obligations required by such Material Event.

10.4. Notwithstanding anything to the contrary in this Agreement, if the Material Event relates to a requirement by a regulatory authority for additional clinical trials or activities other than those included in Supplier's regulatory submissions for the Product in the U.S.A. and European Union, then Teva shall have the option to (i) have the parties meet in order to review, jointly, in good faith, the Material Event and the respective proposals of the parties, as well as in order to negotiate, in good faith, its possible solutions, or (ii) terminate this Agreement upon sixty (60) days' written notice with respect to the Countries affected by such Material Event. If the good faith negotiations described in clause (i) above do not result in a mutually agreeable solution to the Material Event within one hundred and twenty (120) days after the start of such negotiations, or such longer term as agreed upon by the parties in writing, then either party may terminate this Agreement upon thirty (30) days' written notice with respect to the countries affected by such Material Event. For clarity, until the parties reach mutual understanding, neither party will be obligated to perform the additional activities required by a regulatory authority for approval in the Territory.

11. TERMINATION

11.1. Without prejudice to any other rights to which it may be entitled, either party may give notice in writing to the other terminating this Agreement if:

11.1.1. the other party is in breach of any of the material terms hereof and (if such breach is remediable) fails to remedy such breach within sixty (60) days of that party being notified of such breach; or

11.1.2. the other party admits or is declared insolvent or voluntary or involuntary proceedings is instituted by or against it in bankruptcy, or receivership, or for a winding-up or for the dissolution or re-organisation of its assets; provided, in each case, that such proceedings are not dismissed within ninety (90) days.

11.2. Supplier may terminate this Agreement with respect to a particular Country as described in Clause 2.3 following Teva's cessation of Product sales in such Country.

11.3. Teva may terminate this Agreement as described in Clause 24 in the event of certain assignments of this Agreement by Supplier.

12. EFFECTS OF TERMINATION

12.1. Termination or expiration of this Agreement howsoever caused shall be without prejudice to any other rights or liabilities accrued at the date of termination or expiration (including without limitation Teva's obligation to pay to Supplier sums due in respect of firm orders of Product submitted prior to termination or expiration of this Agreement).

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12.2. Upon termination or expiration of this Agreement, Teva shall promptly notify Supplier of the quantities of the Product held by it in its inventory. Teva shall be permitted to sell and distribute the Product in its inventory for a period of six (6) months following such termination or expiration, on the basis that the rights and obligations of the parties under this Agreement shall continue to apply to such sales of Product.

12.3. Upon termination or expiration of this Agreement, subject to Teva's rights under Clause 12.2 above, Teva shall transfer to Supplier or its designee, at Supplier's expense, all materials, documentation, regulatory filings, marketing approvals, and other items as are reasonably necessary for Supplier to continue the development and sale of each Product in the Territory. The assignment to Supplier of any intellectual property generated during the course of Teva's performance of clinical activities pursuant to the clinical trial agreement shall be made pursuant to such agreement.

12.4. The provisions of Clauses 12, 13, 14, 16, 19, and 28 shall survive the termination or expiration of this Agreement. The Clinical Trial Agreement shall survive the expiration or termination of this Agreement in accordance with the terms thereof. For clarity, any termination of the Clinical Trial Agreement under Section 8.3 of the Clinical Trial Agreement shall not terminate this Agreement.

13. ADVERSE EFFECTS AND RECALLS

13.1. Each party shall execute the Pharmacovigilance Agreement attached hereto as Appendix C, which agreement shall take effect upon the recipient of first regulatory approval of the Product in a Country of the Territory.

14. LIABILITY AND CROSS-INDEMNIFICATIONS

14.1. Supplier shall indemnify and hold Teva, its Affiliates, and the officers, directors and employees of each of them, harmless from any and all liability, including liability for death or personal injury and reasonable attorney's fees, to the extent resulting from a third party claim of negligence or willful misconduct of Supplier with regard to the Substance and/or Product and/or Product Trademarks, including without limitation, the manufacture, packaging, delivery and/or supply of the Product.

14.2. Teva shall indemnify and hold Supplier, its Affiliates, and the officers, directors and employees of each of them, harmless from any and all liability, including liability for death or personal injury and reasonable attorneys fees, to the extent resulting from a third party claim of negligence or willful misconduct of Teva with regard to the promotion and marketing of the Product and the sale and distribution of the Product.

14.3. In the event that the negligence of Teva, on the one hand, and Supplier, on the other hand, contributes to any loss, cost, damages, claim or

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expense relating to the Substance and/or Product supplied and/or distributed or sold hereunder, then Teva, on the one hand, and Supplier, on the other hand, shall be responsible for that portion of the loss, cost, damages, claim or expense to which its negligence contributed.

14.4. Each party seeking indemnification hereunder (the "Indemnified Party") will inform the other party (the "Indemnifying Party") in writing immediately or as soon as possible of any claim which may be brought against the indemnified party as set out above; provided, the failure to provide such notice within a reasonable period of time shall not relieve the Indemnifying Party of any of its obligations hereunder except to the extent the Indemnifying Party is prejudiced by such failure. The Indemnified Party shall cooperate with the Indemnifying Party and its legal representatives, at the Indemnifying Party's expense, in the investigation, negotiation, compromise, settlement and defense of any action, claim or other matter covered by this indemnification. The Indemnifying Party shall be in charge of and control any such investigation, negotiation, compromise, settlement and defense and shall have the right to select counsel with respect thereto, provided that the Indemnifying Party shall promptly notify the Indemnified Party of all developments in the matter. In no event shall the Indemnifying Party or Indemnified Party compromise or settle any such matter without the prior written consent of the other Party, which shall not be bound by any such compromise or settlement absent its prior consent, which shall not be unreasonably withheld or delayed. The Indemnified Party shall have the right, but not the obligation, to be represented by counsel of its own selection and at its own expense.

14.5. Nothing herein contained shall require an Indemnifying Party to carry out any unlawful act or omission or which may lead to a judgment by default being entered or executed against the Indemnifying Party.

14.6. Following the earliest Approval Date, Supplier agrees to maintain at its expense sufficient product liability insurance in an amount not less than
* US dollars. Each party agrees to maintain all other insurances reasonably necessary to provide sufficient cover for its legal and statutory liabilities and any liabilities arising from this Agreement and all insurable risks following use of the Substance and/or the Product and to provide the other party with proof of such insurance upon written request.

14.7. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT FOR INCIDENTAL, SPECIAL, CONSEQUENTIAL, INDIRECT, OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, ANY CLAIM FOR DAMAGES BASED UPON LOST PROFITS; PROVIDED, HOWEVER, THAT THIS LIMITATION WILL NOT LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY FOR THIRD PARTY CLAIMS UNDER THIS CLAUSE 14 OR DAMAGES AVAILABLE FOR WILLFUL OR INTENTIONAL BREACH BY EITHER PARTY OF THE CONFIDENTIALITY OBLIGATIONS IN CLAUSE 16.

15. OTHER ACTIVITIES

15.1. Clinical Trial: As described in Clause 7.1 above, the parties agree and undertake to enter into a clinical trial agreement with regard to a global clinical trial of the Product, part of which will be conducted in placecountry-regionIsrael. The Clinical Trial Agreement shall be attached to this Agreement and, except as expressly described herein, shall be considered an irrevocable part of this Agreement.

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15.2. New Developments: Supplier shall inform Teva in writing if Supplier initiates the clinical development of the Product for oncology indications outside the Field (the "Development"). Teva shall have sixty (60) days following receipt of such notice to inform Supplier of Teva's desire to enter into an agreement to participate in the clinical trial and distribution of the Product in such indications. If Teva provides such notice, then the parties will begin discussions in good faith on the terms and conditions of such participation and distribution, based on this Agreement (including, without limitation, a section requiring Teva to fund certain clinical trial activities, similar in spirit to the Clinical Trial Agreement). The parties will agree to a number of patients as reasonable, as required by the trial design and in accordance with the expected market size and sales of the new Development.

16. CONFIDENTIALITY

16.1. Both parties agree and undertake that during the term of this Agreement and thereafter, they shall keep confidential any and all Information acquired in the course of the negotiation and performance and disclosed by the other party hereunder, or which they acquire relating to the business, finances or trade secrets of the other party and shall not disclose the same or any part thereof to any third party.

16.2. Teva shall only use the Information for the purpose of the registration, promotion, marketing and sale of the Product under this Agreement (including any related trademarks or trade names). Supplier shall only use Teva's Information for the purpose of performing its obligations under this Agreement.

16.3. Both parties shall ensure that the Information is made available only to the minimum number of its employees as reasonably necessary to perform its obligations under this Agreement, and those consultants who have undertaken in writing to preserve its confidentiality. The parties shall make the employees and consultants aware of its obligations of confidentiality under this Agreement and shall at all times procure compliance by such employees and consultants thereunder.

16.4. The restrictions on use and disclosure of the Information hereunder shall not apply to that part of the Information which either party is able to demonstrate to the other:

16.4.1. is lawfully in the possession of the party receiving such Information prior to the time of disclosure;

16.4.2. is, at the date of disclosure, public knowledge or becomes public knowledge other than by the action of the party receiving such

     information;

16.4.3. becomes  available to the party receiving such  Information  from a
     third  party  source  and,  to  the  best  of  the  receiving  party's

knowledge, was other than by reason of a breach by a party of its obligations hereunder or a breach by any third party of an obligation of confidentiality;

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16.4.4. the disclosure of which is necessary or desirable to enable either party to implement the provisions of this Agreement effectively, provided that either party must specify details of the Information it wishes to disclose and subject to third party's obligation to sign a confidentiality agreement with terms at least as restrictive as in this Agreement and obtain the other parties written consent to any such disclosure, such consent shall not be unreasonably withheld;

16.4.5. that the information disclosed or used was independently developed by the receiving party without reliance on the Information.

16.5. Notwithstanding the terms of Clauses 16.1 and 16.3, a party may disclose Information of the other party to the extent such disclosure is required under any law or regulation (including the regulation of any nationally recognized securities exchange in accordance with the terms of Section 16.7); provided, that the minimum amount of information required to be disclosed for the purposes of compliance with the said law or regulation, shall be disclosed; and provided, further, that the party subject to such requirement has, if legally permitted, informed the other party of such requirement and, to the extent reasonably possible, permitted such other party to seek confidential treatment or similar protection for such Information.

16.6. On or after the Effective Date of this Agreement, at a mutually agreed time, Supplier will issue a mutually agreed press release announcing the existence of this Agreement, in the form, substance and schedule to be mutually agreed upon by both parties in advance, and attached hereto as Appendix E.

16.7. Neither party shall (i) publish, in whole or in part, information regarding the existence or terms of this Agreement or (ii) use the other party's name in any publication, except as otherwise approved in writing by the other party. Notwithstanding the foregoing, each party may disclose the existence and terms of this Agreement as necessary for filings with the U.S. Securities Exchange Commission or a nationally recognized securities exchange; provided, that such party informs the other party prior to publication and receive the other parties approval (which shall not be unreasonably withheld or delayed) and such party uses its reasonable efforts to obtain confidential treatment for portions of this Agreement as available, consults with the other party in connection with such confidential treatment request, and permits the other party to participate, to the greatest extent practicable, in seeking a protective order or other confidential treatment. Teva shall use best efforts to approve any such submission by Supplier within one (1) business day. The publication of clinical data shall be subject to separate terms set forth in the Clinical Trial Agreement

16.8. The provisions of this Clause 16 shall survive the expiration or termination of this Agreement for any reason, for a period of ten (10) years after such expiration or termination for any other Information.

17. TRADEMARKS

17.1. Supplier will select all Product Trademarks for use on or in connection with Products, will be the sole owner of the Supplier House Marks and Product Trademarks, will be responsible for the filing, prosecution, maintenance and defense of all registrations of such trademarks, and will

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be responsible for the payment of any costs relating to filing, prosecution, maintenance and defense of such trademarks. Supplier shall grant Teva a license to use such Product Trademarks and Supplier House Marks solely for the marketing and distribution of the Products in the Territory under this Agreement.

17.2. In the performance of this Agreement, Teva shall display such of Supplier's trademarks and copyrighted material as approved by Supplier for the Product. Any such use shall be in conformity with Supplier's written instructions for the appearance and use of same. Teva shall provide Supplier with exemplars and/or representative samples of any promotional materials containing any Product Trademark or Supplier House Mark, prior to using or disseminating such materials. Supplier shall have the right to make reasonable objections to any such materials within ten (10) days of its receipt of such copies on the grounds that Supplier believes in good faith that the use of such materials will damage the reputation for quality associated with the marks. Teva shall modify such promotional materials in accordance with any such objections of Supplier. If no such objections are received within the ten (10) days timeframe, the material will be deemed accepted by Supplier. Teva's use of any Supplier House Marks or Product Trademarks shall not give Teva any right to such trademarks. Teva acknowledges and agrees that all use of such trademarks and the goodwill generated thereby will inure solely to the benefit of Supplier. Teva agrees not to use or file any application to register any trademark or trade name in the Territory that is confusingly similar to any Product Trademarks or Supplier House Mark, as interpreted by applicable law in the Territory.

18. FORCE MAJEURE

18.1. The obligations of each party under this Agreement shall be suspended during the period of this Agreement and to the extent that such party is prevented or hindered from complying herewith by any cause beyond its reasonable control including (insofar as they are beyond such control but without prejudice to the generality of the foregoing expression) strikes, lock-outs, labour disputes, act of god, war, riot, civil commotion, malicious damage, compliance with any law or governmental order, rule, regulation or direction, accident, breakdown of plant or machinery, fire, flood, storm, difficulty or increased expense in obtaining workmen, materials or transport or other circumstances affecting the supply of goods or of raw materials therefore.

18.2. In the event of either party being so hindered or prevented, such party shall give notice of suspension as soon as reasonably possible to the other party stating the date and extent of such suspension and the cause thereof. The failure to give such notice shall forfeit the rights of such party to relief under this Clause.

18.3. Any party whose obligations have been suspended as aforesaid shall resume the performance of such obligations as soon as reasonably possible after the removal of the cause and shall so notify the other party. In the event that such cause continues for more than six (6) consecutive months either party may terminate this Agreement on thirty (30) days notice to the other party.

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19. GOVERNING LAW AND ARBITRATION

This Agreement shall be governed solely and exclusively by the substantive law of the State of New York, U.S.A. Any dispute between the parties shall be referred to arbitration to be conducted in accordance with the rules of the International Chamber of Commerce, as amended from time to time. Such arbitration shall be held in placeCityNew York, country-regionU.S.A. unless otherwise agreed between the parties in writing. The parties agree that the arbitration as aforesaid shall be conducted before a single arbitrator to be agreed between the parties or failing agreement to be appointed in accordance with the provisions of the arbitration rules referred to above The parties further agree to exclude any right of application or appeal to any court arising on the course of such arbitration and/or with respect to any award made in such arbitration, which award shall be final and binding on the parties.

20. ENTIRE AGREEMENT; COUNTERPARTS

This Agreement constitutes the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, negotiations and discussions between the parties hereto relating thereto. This Agreement may be executed by facsimile and in two or more counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

21. EXECUTION AND DELIVERY OF THIS AGREEMENT

21.1. Supplier hereby represents and warrants that the execution and delivery by Supplier of this Agreement and the performance by Supplier of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Supplier, and do not conflict with the terms of any other contract, agreement, arrangement or understanding to which Supplier is a party.

21.2. Teva hereby represents and warrants the execution and delivery by Teva of this Agreement and the performance by Teva of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Teva, and do not conflict with the terms of any other contract, agreement, arrangement or understanding to which Teva is a party.

22. INDEPENDENT CONTRACTORS

The relationship of the parties is that of independent contractors. Except as set out in this Agreement nothing shall constitute the parties as joint ventures or co-owners or constitute either party as the agent, employee or representative of the other or empower either party to act for, bind or otherwise create or assume any obligation on behalf of the other.

23. AMENDMENTS

No amendment or variation of this Agreement shall be effective unless in writing and signed by duly authorised representatives of the parties.

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24. ASSIGNMENT

Neither party shall without the prior written consent of the other party, assign, sub-licence, sub-contract, delegate, charge or part with or otherwise dispose of this Agreement or the benefit thereof or any right or obligation hereunder or grant any sub-licence or sub-contract, save that (a) Teva shall be entitled to designate one or more of its Affiliates in the various countries comprising the Territory, to implement and carry out Teva's obligations in the countries, and (b) either party may assign or transfer this Agreement or any of its rights or obligations hereunder without such consent to (i) any Affiliate of such party, or (ii) to any third party with which it merges or consolidates, or to which it transfers all or substantially all of its assets to which this Agreement relates. The assigning party (except if it is not the surviving entity) will remain jointly and severally liable with the relevant Affiliate or third party assignee under this Agreement, and the relevant assignee or surviving entity will assume in writing all of the assigning party's obligations under this Agreement. Any party that desires to make an assignment described in clause (b) above will provide the other party with advance written notice of such assignment and will consider in good faith any comments provided by such other party. In the event of an assignment by Supplier, if Teva is barred by applicable laws from doing business with the assignee or if Teva otherwise demonstrates that such assignment presents a strategic or ethical conflict of interest that would materially affect Teva's ability to conduct its obligations under this Agreement, then within thirty (30) days following such assignment, Teva may terminate this Agreement upon written notice to Supplier.

25. SEVERABILITY

The invalidity or unenforceability of any term of or any right arising pursuant to this Agreement shall not in any way affect the remaining terms or rights and Supplier and Teva hereby each undertakes to use all reasonable endeavours to replace any legally unenforceable provision with (as far as practicable) provisions which will effect for the parties the same commercial results as were intended by the original provisions.

26. WAIVER

The failure of a party hereto to exercise or enforce any right under this Agreement shall not be deemed to be a waiver thereof nor operate so as to bar the exercise or enforcement thereof at any time or times thereafter.

27. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL placeCitySALE OF GOODS

To the extent that it may otherwise be applicable, the parties hereby expressly agree to exclude from the operation of this Agreement, the United Nations Convention on Contracts for the International Sale of Goods, concluded at placeCityVienna, on dateYear1980Day11Month4April 11th 1980, as amended and as may be amended further from time to time.

28. NOTICES All notices shall be in writing and shall be given by delivery by hand, air courier or transmission by fax to the address or fax number of the relevant party set out at the beginning of this Agreement or such other address or fax number as either party may notify to the other from time to time and shall be addressed to the representatives of the parties set out below;

20

If to Supplier:

CEL-SCI Corporation
8229 Boone Boulevard, Suite 802 Vienna, VA 22182, USA
Attention: Geert Kersten
Telephone: (703) 506-9460

Facsimile: (703) 506-9471

If to Teva:

Teva Pharmaceutical Industries Limited

Hatrufa St. 12, Kiryat Nordau
Sapir Industrial Zone, Natanya, PoB 8077 Israel
Attention: Efrat Klachevsky
Telephone: *
Facsimile: *

The parties shall inform the other within 7 days of any change in address or fax number. Any such notice given as aforesaid shall be deemed to have been given at the time of delivery (if delivered by hand or air courier) or completion of transmission (if sent by fax).

[Signature page follows.]

21

IN WITNESS WHEREOF, the parties have by duly authorized persons, executed this Agreement, as of the date first above written.

        TEVA PHARMACEUTICAL                  CEL -SCI CORPORATION
          INDUSTRIES LTD.

Name: Judith Vardi                           Name: Geert R. Kersten
     ------------------------------                ----------------------------
Title: Vice President, Israel,               Title: Chief Executive Officer
  Mediterranean, Africa and Turkey

Signature: /s/ Judith Vardi                  Signature: /s/ Geert R. Kersten
          -------------------------                    ------------------------


Name: Efrat Klachevsky                       Name:
     ------------------------------                ----------------------------
Title: Director, Business Development,       Title:
  Israel, Mediterranean, Africa and
  Turkey

Signature: /s/ Efrat Klachevsky              Signature:
          -------------------------                    ------------------------
Date: 07/08/08                               Date:
     ------------------------------                ----------------------------


List of Appendices:

Appendix A - Product Description
Appendix B - Specifications
Appendix C - Pharmacovigilance Agreement
Appendix D - Clinical Trial Agreement
Appendix E - Press Release Announcement

22

CONFIDENTIAL

CONFIDENTIAL

EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT

APPENDIX A

Description of: "the Product"


Product description:

*

The remainder of this page has been left blank intentionally


EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT

APPENDIX B

"the Specifications" (of the Product)


CEL-SCI CORPORATION
STANDARD SPECIFICATION NUMBER
*

*

*

STANDARD SPECIFICATION

LEUKOCYTE INTERLEUKIN, INJECTION

*
*
*

*


INTERIM
STANDARD SPECIFICATION

LEUKOCYTE INTERLEUKIN, INJECTION

ACCEPTANCE CRITERIA:

*                    *                            *

*                    *                            *
*                    *                            *
                     *                            *
                     *                            *
                     *                            *
                     *                            *
*                    *                            *
*                    *                            *
*                    *                            *

* *
*

INTERIM
STANDARD SPECIFICATION

LEUKOCYTE INTERLEUKIN, INJECTION

ACCEPTANCE CRITERIA (continued):

*               *                *
*               *                *
*               *                *
*               *                *
*               *                *
*               *                *
*               *                *
*               *                *
-------------------------------------------------------------------------------


APPENDIX C

A Phase III, Open-label, Randomized, Multi-center Study of the Effects of Leukocyte Interleukin, Injection [Multikine(R)] Plus Standard of Care (Surgery +Radiotherapy or Surgery + Concurrent Chemoradiotherapy)in Subjects with Advanced Primary Squamous Cell Carcinoma of the Oral Cavity Versus Standard of Care Only


A Phase III, Open-label, Randomized, Multi-center Study of the Effects of Leukocyte Interleukin, Injection [Multikine(R)] Plus Standard of Care


(Surgery + Radiotherapy or Surgery + Concurrent Chemoradiotherapy)

in Subjects with Advanced Primary Squamous Cell Carcinoma of the Oral Cavity Versus Standard of Care Only

Regulatory Sponsor:          CEL-SCI Corporation

                             8229 Boone Boulevard
                             Suite 802
                             Vienna, Virginia 22182 U.S.A.
                             Phone: 703-506-9460 Fax: 703-506-9471


                             CEL-SCI Corporation

Funding Sponsor:             8229 Boone Boulevard
                             Suite 802
                             Vienna, Virginia 22182 U.S.A.
                             Phone: 703-506-9460 Fax: 703-506-9471

Study Product:               Leukocyte Interleukin, Injection [Multikine(R)]
*                             *
*                            *
*
*

*                    *
*                    *

                                              *


*


Table 1 *

*


*

Figure 1

Figure 2. Cell cycle marker (Ki67) in Multikine(R) treated Oral Squamous Cell Carcinoma (OSCC)


A. Morphometry of Ki-67+ cells in OSCC.    B. Visualization of
   Data are means +/-SEM, *p<0.05             in OSCC by Ki-67+(Histopathology)
   0= Control Untreated Group


Figure 3. Histological appearance of necrosis in oral squamous cell carcinoma
(H&E staining)

Panel A Panel B

Panel A: Control - Lack of necrosis in the epithelial nests of Oral Squamous Cell Carcinoma.

Panel B: Multikine(R) treatment - Entire cancer nest is necrotic and filed with debris and leukocytes.

*


*


*


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(25) Taylor, G., Ely, L., Wolff, T., Davis, C., Ioffe O, O., Shah, K., Talor,
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(29) Jean, M; Inflammation and Cancer: The Link Grows Stronger. Research into a long-suspected association between chronic inflammation and cancer reveals how the immune system may be abetting tumors. Science 2004; Vol. 306, 5.
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evidence of paracrine immune effects of tumor necrosis factor against tumors. J. Immunol., 1991; 146: 3227-3234.
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(41) Dranoff, G. et. al., Vaccination with irradiated tumor cells engineered to secrete murine granuocyte macrophage colony stimulating factor stimulated potent, specific and long lasting anti-tumor immunity. Proc. Natl. Acad. Sci. USA, 1993, 90: 3539-3543. (42) Berd, D. et al. Potentialtion of human cell mediated and humoral immunity by low-dose cyclophosphamide. Cancer Res., 1984; 44:5439-5443.
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(46) Livingston, P.O., et.al., Inhibition of suppressor cell activity by cyclophosphamide in patients with malignant melanoma. J. Biol. Resp. Mod., 1987; 6:392-403. (47) Berd, D. et. al., Induction of cell mediated immunity to autologous melanoma cells and regression of metastasis after treatment with a melanoma cell vaccine preceded by cyclophosphamide. Cancer Res.; 1986; 46:
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(48) Chirigos, M.A, Talor E., Sidwell, R.W., Burger, R.A., Warren, R.P., Leukocyte Interleukin, Inj. (LI) Augmentation of Natural Killer Cells and Cytolytic T-Lymphocytes; Immunopharmacology and Immunotoxicology 1995; 17(2), 247-264.


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(57) Bjordal K, Kaasa S. Psychological distress in head and neck cancer patients 7-11 years after curative treatment. Br J Cancer 1995; 71:592-7. (58) De Boer MF, Pruyn JFA, Van den Borne HW, Knegt PP, Rijckman RM, C.D.A. V. Rehabilitation outcomes of long-term survivors treated for head and neck cancer. Head Neck 1995; 17:503-515.
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Appendix D- Clinical Trial Agreement
[See attched]

1

CLINICAL TRIAL MANAGEMENT SERVICES AGREEMENT

Between

TEVA PHARMACEUTICAL INDUSTRIES LIMITED
A limited liability company incorporated
under the laws of Israel, of 5 Basel
Street, Petah Tiqva 49131, Israel
("Teva")

And

CEL-SCI CORPORATION

a company incorporated under the laws of the USA, of 8229 Boone Boulevard, Suite 802, Vienna, VA 22182, USA


("the Company")

WHEREAS the Company has developed an Immunotherapy for cancer - Multikine (Leukocyte Interleukin) injection (the "Drug"), and is interested in evaluating the safety, tolerability and efficacy of the Drug in a Phase III Trial in patients with Squamous Cell carcinoma of the oral cavity; and

WHEREAS Teva and the Company have entered into an Exclusive License and Distribution Agreement dated of even date herewith (the "Distribution Agreement") in which Teva receives the right to market and distribute the Drug in certain territories; and

WHEREAS the Company wishes to engage Teva to manage and monitor one or more clinical trials involving the Drug in Israel as set forth and described in Appendix A hereto (the "Trial"), all in accordance with the terms and conditions set out herein and the relevant laws and regulations; and

WHEREAS Teva is experienced in managing and monitoring clinical trials and is willing to assist the Company by managing and monitoring the Trial, all in accordance with the terms and conditions set out herein.

THEREFORE THE PARTIES AGREE AS FOLLOWS:

1. INTERPRETATION

1.1. The preamble to this Agreement forms an integral part hereof.

1.2. Section headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the interpretation of this Agreement. All signed appendices to this Agreement, whether attached at the time of signature hereof or at any time thereafter, shall be construed as an integral part of this Agreement.

1.3. In this Agreement, the following expressions shall bear the meanings assigned to them below and cognate expression shall bear corresponding meanings.

1

1.3.1. "Commencement Date" shall mean the date on which both parties have signed this Agreement.

1.3.2. "Global CRO" shall mean the entity to be selected and retained by the Company following the date hereof to oversee the performance of the worldwide Phase III clinical trial of which the Trial to be conducted hereunder is a part. Upon signing the agreement between Company and Global CRO, a notice will be sent to Teva informing Teva of the Global CRO's name and contact details.

1.3.3. "Protocol" shall mean the protocol, as written and provided to Teva by the Company, attached as Appendix A to this Agreement.

1.3.4. "Trial Activities" shall mean the list of items agreed upon between the parties and to be paid by Teva, for the performance of the Trial Management Services, as defined below, set out in Appendix B to this Agreement.

1.3.5. "Study Team" shall mean the team that will supervise and monitor the performance of the Trial.

1.4. In this Agreement, "including" and "includes" means including, without limiting the generality of any description preceding such terms.

2. APPOINTMENT OF TEVA

For the portion of the Trial to take place in Israel, the Company hereby appoints Teva to provide the clinical management and supervision services of the Trial as set out in this Agreement and in Appendix C (the "Trial Management Services") subject to the Company fulfilling its obligations as set out in this Agreement and in Appendix C, whether to be performed by Teva directly or through a third party, in accordance with the terms and conditions of this Agreement, and the relevant laws and regulations, and Teva hereby accepts such appointment.

3. OBLIGATIONS OF TEVA

3.1. Teva shall ensure that the Trial Management Services shall be carried out in accordance with:

3.1.1. The provisions of the Protocol and the other terms of this Agreement; and

3.1.2. The reasonable written guidelines and instructions provided by the Company and the Global CRO (including any Global CRO standard operating procedures) for the conduct of the Trial (provided that Teva shall use its best efforts to comply with the Global CRO's guidelines and shall notify the Company immediately in the event

2

that it believes that any such written guideline or instruction is unreasonable and the parties shall promptly meet and discuss any such concern); and

3.1.3. The relevant laws, regulations, guidelines and ethical requirements prevailing in the country in which the Trial is carried out.

3.2. Teva undertakes to perform the Trial Management Services in a professional and workmanlike manner, and devote the necessary personnel and all other resources necessary to perform the Trial Management Services.

3.3. Teva shall make the Study Team aware of relevant provisions of this Agreement and shall ensure compliance therewith by the Study Team.

3.4. Teva shall keep appropriate records relating to the Trial in connection with the performance of the Trial Management Services in accordance with the Protocol and applicable laws, regulations and guidelines.

3.5. Teva shall keep the Global CRO informed of the progress of the Trial. Teva will provide the Company with written monthly progress reports that will include the status of and issues raised by any Trial site and a summary of any reported adverse events. Teva will provide to the Company reports of Teva's monitoring visits to any site or investigator on a timely basis as specified in Appendix C.

3.6. Teva shall permit representatives of the Company or, alternatively, the Global CRO, as applicable to examine relevant data, documents, and records of Teva pertaining to the Trial Management Services, in order to verify compliance by Teva with its obligations under this Agreement. Such audit activities shall be coordinated with Teva in advance and conducted during regular business hours. The Company will use reasonable efforts to coordinate with the Global CRO to minimize duplication of any such examinations and in no event should there be more than one (1) examination a month by the Company and the Global CRO, and the Company will cooperate with Teva to address any reasonable objections to the timing and frequency of inspections requested by both the Company and the Global CRO.

3.7. Teva shall perform its obligations in accordance with the list of responsibilities attached hereto as Appendix C.

3.8. In the event that the Israeli laws and regulations applicable to the manufacture, labeling or supply of Drug for use in the Trial differ substantially from the applicable laws and regulations of the United States of America or the European Union, and in the event that Teva is aware of such, then Teva shall inform the Company in writing of such differences.

3

3.9. At its sole discretion,  the Company may amend the Protocol, and, upon
     the  Company's  request,  Teva will  assist the Company in making such
     modifications.   An  amended  Protocol  will  supersede  the  previous
     versions.  The  Company  will  notify  Teva of any  modification  of a

Protocol or the Trial. Within ten (10) business days from Teva's receipt of notice of such modification, Teva will provide the Company with its opinion as to the alterations consequences and an estimate of the reasonable alterations to the Trial timeline and Trial Activities (whether an increase or decrease) directly resulting from such modification. The Company will have ten (10) business days to approve such estimates. If the Company does not approve a modification estimate and has not terminated the Trial, but wants the Trial to be modified to include such modification, each party will use its good faith efforts to agree on modification estimates that are commercially reasonable and mutually acceptable. At the Company's request, Teva shall continue performing Trial Management Services for the Trial without implementing the proposed modifications unless and until the parties have reached agreement regarding a revised estimate of the timeline and budget based upon the proposed modifications. For the avoidance of doubt it is hereby clarified that the Company shall be responsible for any and all increased costs associated with any amendments to the Protocol or the Trial in existence on the date hereof, provided that any increased costs shall be offset, if applicable, by any cost savings or reductions for eliminated or reduced activities (with no refund right for costs already paid).

4. OBLIGATIONS OF THE COMPANY

4.1. The Company shall supply the Drug for the Trial, at Teva's expense, as agreed upon in section 7 of the Distribution Agreement and further detailed in section 5 below, and according to the timetables, quantities, and specifications as indicated in the Protocol.

4.2. The Company, either directly or through the Global CRO, shall provide Teva with all the relevant articles or information required for the performance of the Trial Management Services.

4.3. The Company shall perform its obligations in accordance with the list of responsibilities, attached hereto as Appendix C.

4.4. In addition to all other obligations set forth in this Agreement, the Company warrants that it shall act as a sponsor of the Trial, in the meaning ascribed to it in the Israeli Ministry of Health guidelines.

4.5. The Company shall hold and maintain, throughout the term of this Agreement, and for a sufficient time thereafter, sufficient insurance to cover all the requirements of the local laws and regulations, including without limitation, insurance to cover all patients taking part in the Trial, as per the requirements of the Ministry of Health in Israel.

4

5. PAYMENT

Teva shall fund, at its cost, the performance of certain activities related to the Trial to be conducted in Israel, * provided that Teva shall be obligated to use best efforts to enroll * patients in accordance with the list of activities comprising the Trial Activities for such patients.

6. STUDY TEAM

Teva shall establish the Study Team in consultation with the Company. The function of the Study Team shall be to manage and monitor the Trial in accordance with Appendix A and the terms of this Agreement.

7. WARRANTIES AND REPRESENTATIONS

7.1. Teva warrants and represents that it has the experience, capability, qualified personnel and resources to perform the Trial Management Services under this Agreement.

7.2. The Company warrants and represents that it is the sole and exclusive owner of the Drug and that Teva is not and will not, in any event, be liable for any claims, actions and suits arising as a result of the use, safety and quality of the Drug, subject to the indemnity obligations set forth in Section 11.

7.3. The Company warrants that, to the Company's knowledge as of the Commencement Date, applicable national and local laws do not prohibit the conduct of the Trial carried out in accordance with the Protocol.

7.4. In addition, each party warrants and represents, that it shall perform all of its obligations under this Agreement (including, in the case of the Company, the manufacture, labeling and supply of Drug for use in the Trial), in accordance with the applicable rules, regulations and guidelines in Israel. The Company, as sponsor of the Trial, warrants and represents that it shall perform all of its obligations under this Agreement according to the rules, regulations and guidelines set forth with respect to the sponsor of a clinical trial by the Ministry of Health in Israel.

7.5. Each party hereby warrants and represents that it has the power and authority and the legal right to enter into this Agreement to perform its obligations hereunder, and has taken all necessary action on its part to authorize the performance of such obligations.

7.6. Teva warrants that it has not, and shall not, employ, contract with, or retain any person directly to perform services under this Agreement if such a person is, to the best of Teva's Knowledge (with the use of reasonable efforts to investigate), debarred or disqualified by any applicable regulatory or governmental authority from performing the obligations requested by Teva.

5

7.7. For the avoidance of doubt it is hereby clarified and acknowledged by the Company that Teva does not make any warranty as to the results, conclusions or reports, including without limitation, the Results, as defined below, of the Trial Management Services and/or the Trial to be: (i) useful to the Company, (ii) in compliance with the Company's expectations, and/or (iii) of any commercial value whatsoever.

7.8. The Company hereby represents and warrants that, to the best of its knowledge as of the date hereof, the conduct of the Trial in accordance with the Protocol and/or the Trial Management Services will not constitute an infringement of the intellectual property rights (that relate to the Product) of any third party.

7.9. Except as otherwise expressly set forth in this Agreement, neither the Company nor Teva makes any representations or extends any warranties of any kind, either express or implied, including any express or implied warranties of merchantability or fitness for a particular purpose.

8. TERM AND TERMINATION

8.1. All of the provisions of this Section 8, or any other right of the parties to terminate, shall be subject to the overriding consideration that this Agreement pertains to the carrying out of a clinical trial, and the interests and safety of the participants in the Trial shall take precedence over all of the rights of the parties to terminate.

8.2. This Agreement shall commence on the Commencement Date and, subject to prior termination in accordance with the other terms of this Agreement, shall terminate upon the completion of the Trial Management Services.

8.3. The Company shall be entitled to terminate this Agreement by providing Teva with sixty (60) days prior written notice, without penalty or liability therefore or the payment of any compensation.

8.4. Teva shall be entitled to terminate this Agreement by written notice to the Company, effective immediately, if in the reasonable opinion of Teva the continuation of the Trial represents an unacceptable risk to the participants or is contrary to accepted medical practice.

8.5. Either party shall be entitled to terminate this Agreement by giving thirty (30) days written notice to the other, effective immediately, upon any of the following events:

6

8.5.1. The other party commits a material breach of this Agreement which, in the case of a breach which is capable of remedy, shall not have been remedied within thirty (30) days of the receipt by the party in default of a notice identifying the breach requiring its remedy.

8.5.2. The other party is unable to pay its debts or enters into compulsory or voluntary liquidation (other than for the purpose of affecting a meeting of its creditors) or has an administrator appointed over all or any part of its assets; provided, in each case, that such proceedings are not dismissed within ninety (90) days.

8.6. Termination of this Agreement for any reason shall not affect any of the rights and obligations of the parties which shall have accrued prior to the effective date of termination.

8.7. This Agreement shall survive the termination of the Distribution Agreement, for any reason whatsoever, unless otherwise terminated in accordance with this Section 8.

8.8. Sections 4.4, 7.7, 7.8, 8.6, 8.7, 8.8, 9, 10, 11, 12, 18 and 20 shall survive termination or expiration of this Agreement for any reason.

9. CONFIDENTIALITY

9.1. Teva shall keep secret and confidential, during the term and for a duration of ten (10) years from the expiration or termination of this Agreement, all confidential and/or proprietary information supplied by the Company, whether in written, oral, electronic or any other form, including without limitation, all information relating to the Drug, the Trial, the Results (as defined in Section 10.1 below) and the Trial Management Services ("Information") and shall not disclose or use the Information other than for the purposes of exercising its rights or fulfilling its obligations pursuant to this Agreement or the Distribution Agreement, including the performance of Trial Management Services, which shall include: (i) disclosure to the relevant hospital authorities or ethical review committee, if such disclosure is necessary in order to obtain the required approvals for the conduct of the Trial and/or the performance of the Trial Management Services;
(ii) disclosure to those of Teva's directors, officers, employees, agents, and consultants who have a "need to know" such information for the performance of the Trial Management Services and/or in the fulfillment of its obligations hereunder, provided that the aforementioned are bound by obligations of confidentiality and non-use similar to those set out herein. Teva agrees that it shall take commercially reasonable steps to prevent the disclosure or use of the Company's Information by its directors, officers, employees, agents and consultants except as expressly provided in this Agreement.

7

9.2. The provisions of Section 9.1 shall not apply to:

9.2.1. Information which is known to the receiving party prior to disclosure by the disclosing party, as shown by written records;

9.2.2. Information which is or becomes public knowledge through no fault of the receiving party, or its employees, who have been exposed to the Information;

9.2.3. Information which is disclosed to the receiving party by a third party;

9.2.4. Information which is required by law, court or any competent authority to be disclosed, provided that, if legally permitted, the receiving party shall notify the disclosing party thereof, in order to enable the disclosing party to seek an appropriate protective order or other reliable assurance that confidential treatment shall be accorded to such Information (with the receiving party's assistance, if necessary), and such disclosure shall be made to the minimum extent required;

9.2.5. Information which is independently developed by the receiving party, or any of its employees, agents, consultants or other representatives, without the use of or reliance upon the Information.

9.3. The parties undertake to maintain the confidentiality of all details relating to the participants in the Trial in accordance with all applicable laws, regulations and guidelines governing the confidentiality and privacy of individually identifiable health information.

9.4. Upon termination of the Trial and/or the Trial Management Services, or upon the written demand of the other party, each of the parties shall return the other party's Information, and all copies or other manifestations thereof, keeping only one copy of such Information in a safe location as a record of its obligations hereunder.

9.5. Neither party shall use the other's name in any marketing, advertising, press release or other promotional literature or any other publicity without the other's prior written consent, with regard to the wording and timing of the release, all except for any mention in any applications to official authorities for regulatory approvals, or in the fulfillment of any duty owed to any competent authority (including a duty to make regulatory filings and/or reports). Notwithstanding anything to the contrary, Company may refer to Teva as its contract research organization in the Territory as required under applicable laws, regulations and Ministry of Health guidelines.

8

10. COPYRIGHT AND OWNERSHIP OF RESULTS

10.1. All inventions (patentable or not), discoveries, improvements, reports, data and other results developed or generated by or on behalf of Teva during and/or arising from the performance of the Trial Management Services (collectively "Results"), and all intellectual property directly related thereto, shall be the sole and exclusive property of the Company and the Company shall be free to use the Results as it sees fit. Teva agrees to assign, and does hereby assign to the Company, all of Teva's right, title and interest in and to the Results. For the removal of doubt the publication of any of the Results in any scientific or other publication or presentation shall be within the Company's sole discretion, provided that the Company shall not, in any such publication and/or in any event, mention Teva's name and/or the existence and/or the terms and conditions of this Agreement, without complying with the terms of Section 9.5.

10.2. If further documents or actions are necessary for the purpose of confirming or to vest in the Company's rights, title or interest in and to the Results pursuant to Section 10.1 above, Teva agrees to execute such documents and to take such reasonable actions as are necessary to confirm or to vest such rights, title or interest, at the Company's sole expense.

10.3. Notwithstanding the foregoing, both parties acknowledge that all computer programs, applications, databases, techniques, methods, models, processes and the like used by the Study Team in performance of the Trial Management Services under this Agreement remain the exclusive property of the party supplying the foregoing property.

10.4. Teva acknowledges that any and all quantities of the Drug shall remain the sole and exclusive property of the Company. Upon termination of this Agreement for any reason, all remaining quantities of the Drug in Teva's possession or control shall be returned to the Company at the Company's sole expense and the Company shall refund Teva for Teva's pro rata landed costs of the Drug not used in the Trial and/or Trial Management Services, except in the event that the remaining Drug is required according to any laws and/or regulations, including without limitation, of the Israeli Ministry of Health guidelines.

10.5. Nothing contained herein shall be deemed to grant Teva a licence to use the Drug or the Results for any purposes whatsoever, except for the performance of the Trial Management Services hereunder.

11. LIABILITY AND INDEMNITY

11.1. Teva shall indemnify and hold harmless the Company, and the Company's affiliates, officers, directors and employees (each a "The Company

9

Indemnified Party"), from any and all damages, losses, liabilities, claims including without limitation, claims for bodily injury or death, and reasonable attorney fees (collectively, "Liabilities") to the extent that such Liabilities arise from a third party claim based upon: (i) the gross negligence or willful misconduct of Teva or of any officers, directors or employees of Teva; (ii) any material breach of this Agreement by Teva or any other person for whose actions Teva is liable under applicable law; and/or (iii) the violation by Teva, or any of its directors, officers or employees, of the applicable law or other governmental requirement, which shall directly arise as a result of the Trial Management Services performed by Teva, according to this Agreement, provided; however, that the above indemnification obligations shall not apply to the extent that any Liabilities arise out of: (i) any breach of this Agreement, relating to the cause of the Liabilities, by the Company or any other person for whose actions the Company is liable under applicable law; (ii) any violation by any the Company Indemnified Party of applicable law or other governmental requirement, relating to the cause of the Liabilities; or (iii) the gross negligence or willful misconduct of any the Company Indemnified Party, relating to the cause of the Liabilities.

11.2. The Company shall indemnify and hold harmless Teva, and Teva's affiliates, officers, directors and employees (each a "Teva Indemnified Party"), from any and all Liabilities, to the extent that such Liabilities arise from a third party claim based upon: (a) the performance by Teva of the Trial Management Services in accordance with this Agreement and/or as a result of any instructions received by the Company; (b) any material breach of this Agreement by the Company or any other person for whose actions the Company is liable under applicable law; (c) the negligence or willful misconduct of the Company or of any directors, officers or employees of the Company; and
(d) the use of the Drug by Teva and/or the Study Team, during the performance of the Trial and/or the Trial Management Services and/or
(e) the use of the Drug by the hospitals and/or centers and/or the investigator, during the performance of the Trial; (f) the violation by the Company, its directors, officers or employees of the applicable law or other governmental requirement, provided; however, that the above indemnification obligations shall not apply to the extent that any Liabilities arise out of: (i) any breach of this Agreement, relating to the cause of the Liabilities, by Teva or any other person for whose actions Teva is liable under applicable law; (ii) any violation by a Teva Indemnified Party of applicable law or other governmental requirement, relating to the cause of the Liabilities; or
(iii) the gross negligence or willful misconduct of a Teva Indemnified Party, relating to the cause of the Liabilities.

11.3. If any the Company Indemnified Party or Teva Indemnified Party (such party an "Indemnified Party") receives notice of any claim or action for which indemnity may be sought from the relevant indemnifying party pursuant to this Section 11 above, such indemnifying party shall be, as soon as reasonably possible, notified thereof in writing. The indemnifying party shall have sole control over the defence and

10

settlement of such claim and the Indemnified Party shall not be entitled to settle or compromise such claim or action without the prior written consent of the indemnifying party and shall reasonably cooperate with the indemnifying party in the investigation and defence of such claim or action, provided that in any event the indemnifying party shall use its best efforts to ensure that the good name and reputation of the Indemnified Party remains intact . The Indemnified Party may employ its own counsel if it wishes to do so, at its sole expense.

11.4. IN NO CASE SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT; PROVIDED HOWEVER THAT THIS LIMITATION WILL NOT LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY FOR THIRD PARTY CLAIMS OR DAMAGES AVAILABLE FOR WILLFUL OR INTENTIONAL BREACH BY EITHER PARTY OF THE CONFIDENTIALITY OBLIGATIONS IN ARTICLE 9.

12. INSURANCE

12.1. The parties shall hold and maintain, throughout the term of this Agreement, and for a sufficient time thereafter, sufficient insurance to cover any and all of their liabilities pursuant to this Agreement, including without limitation, insurance as mentioned in Section 4.5.

12.2. The parties shall provide to one another certificates evidencing the holding and maintenance of such insurances upon the request of the other party. 13. APPROVALS

Teva shall obtain and maintain all authorizations and approvals (if any) required from the appropriate regulatory authorities and the relevant ethics committees and other scientific bodies for the performance of the Trial and the Trial Management Services.

14. ASSIGNMENT

Neither party shall without the prior written consent of the other party, assign, sub-license, sub-contract, charge or part with or otherwise dispose of this Agreement or the benefit thereof or any right or obligation hereunder or grant any sub-license or sub-contract, save that (a) Teva shall be entitled to designate one or more of its Affiliates in Israel, to implement and carry out Teva's obligations under this Agreement, and (b) either party may assign or transfer this Agreement or any of its rights or obligations hereunder without such consent to (i) any Affiliate of such party, or (ii) to any third party with which it merges or consolidates, or to which it transfers all or substantially all of its assets to which this Agreement relates. The assigning party (except if it is not the surviving

11

entity) will remain jointly and severally liable with the relevant Affiliate or third party assignee under this Agreement, and the relevant assignee or surviving entity will assume in writing all of the assigning party's obligations under this Agreement. Any party that desires to make an assignment described in clause (b) above will provide the other party with advance written notice of such assignment and will consider in good faith any comments provided by such other party. In the event of an assignment by the Company, if Teva is barred by applicable laws from doing business with the assignee or if Teva otherwise demonstrates that such assignment presents a strategic or ethical conflict of interest that would materially affect Teva's ability to conduct its obligations under this Agreement, then within thirty (30) days following such assignment, Teva may terminate this Agreement upon written notice to the Company.

15. SEVERABILITY

Should any part or provision of this Agreement be held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the invalid or unenforceable part or provision shall, provided that it does not go to the root of this Agreement, be replaced with a revision which accomplishes, to the extent possible, the original business purpose of such part or provision in a valid and enforceable manner, and the balance of this Agreement shall remain in full force and effect and binding upon the parties hereto.

16. ENTIRE AGREEMENT/AMENDMENT/WAIVER

16.1. This Agreement embodies and sets forth the entire agreement and understanding between the parties hereto and supersedes all prior oral and written agreements relating to the subject matter of this Agreement. Neither party shall be entitled to rely on any agreement, understanding or arrangement not expressly set forth in this Agreement.

16.2. This Agreement (including, for the removal of doubt, the Appendices hereto) shall not be amended, modified, varied or supplemented except in writing signed by duly authorized representatives of the parties hereto.

16.3. No failure or delay on the part of either party hereto to exercise any right or remedy under this Agreement shall be construed or operated as a waiver thereof nor shall any single or partial exercise of any right or remedy as the case may be. The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies provided by law.

17. RELATIONSHIP OF THE PARTIES

The relationship of the parties is that of independent contractors. Except as set out in this Agreement, nothing shall constitute the parties as joint ventures or co-owners or constitute either party as the agent, employee or representative of the other or empower either party to act for, bind or otherwise create or assume any obligation on behalf of the other.

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18. GOVERNING LAW

The agreement shall be governed by, and construed in accordance with, the laws of the State of New York, USA, without giving effect to its principles of conflicts of law. Each of the parties hereto hereby irrevocably submits to the jurisdiction of the courts of competent jurisdiction located in the State of New York, USA for the settlement of any dispute under or in connection with this agreement.

19. FORCE MAJEURE

Each of the parties hereto shall be excused from the performance of its obligations hereunder, in the event that such performance is prevented by Force Majeure (as defined below) provided that the party claiming Force Majeure shall: (i) give notice in writing to the other party without undue delay after such circumstance has occurred; and (ii) use its best efforts to avoid or remove such cause of non-performance and shall fulfill and continue performance hereunder with the utmost dispatch whenever and to the extent that such cause or causes are removed or cease to exist. For the purpose of this Agreement, "Force Majeure" is defined as follows: causes beyond the control of either of the parties, including but not limited to, acts of God, acts, regulations or laws of any government, war, civil commotion, destruction of production facilities or materials by fire, earthquake or storm, labour disturbances, epidemic and failure of public utilities or common carriers.

20. NOTICES

Any payment, notice and other written communications required or permitted to be made or given may be made or given by either party by facsimile with confirmed transmission; by first-class mail, postage prepaid; or by courier to the mailing address or facsimile numbers set as below:

If to Teva:

Teva Pharmaceutical Industries Limited

Hatrufa St. 12, Kiryat Nordau
Sapir Industrial Zone, Natanya, PoB 8077 Israel
Attention: Dr. Coby Mazliah
Telephone: *
Facsimile: *

13

If to the Company:

CEL-SCI Corporation
8229 Boone Boulevard, Suite 802 Vienna, VA 22182, USA
Attention: John Cipriano
Telephone: (703) 506-9460
Facsimile: (703) 506-9471

Or to such other addresses or facsimile numbers as either Party shall designate by notice, similarly given, to the other Party. Notices or written communications shall be deemed to have been sufficiently made or given: (i) if mailed, seven (7) days after being dispatched by mail, postage prepaid;
(ii) if by courier, when actually delivered by the courier company; or (iii) if by facsimile with confirmed transmission, three (3) days after transmission.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers:

 TEVA PHARMACEUTICAL INDUSTRIES LTD           CEL-SCI CORPORATION

Signature: /s/ Roni Shiloh                    Signature: /s/ Geert R. Kersten
          -----------------------------                  ---------------------
Name:     Roni Shiloh, M.D.                   Name:      Geert R. Kersten
          -----------------------------                  ---------------------
Title:    Medical Director                    Title:     Chief Executive Officer



Signature: /s/ Coby Mazliah                   Signature:
          -----------------------------                  ---------------------
Name:     Coby Mazliah, Ph.D.                 Name:
          -----------------------------                  ---------------------
Title:    Director Clinical Trials Unit/
          Teva/ Israel

Date:                2008                        Date:               2008
           ----------                                     -----------

14

APPENDIX A

THE PROTOCOL

[See Attached]

TEVA PHARMACEUTICAL INDUSTRIES LTD              CEL-SCI CORPORATION

Signature: /s/ Roni Shiloh                       Signature:
          -----------------------------                   ---------------------
Name:     Roni Shiloh, M.D.                      Name:
          -----------------------------                   ---------------------
Title:    Medical Director                       Title:



Signature: /s/ Coby Mazliah                      Signature:
          -----------------------------                   ---------------------
Name:     Coby Mazliah, Ph.D.                    Name:
          -----------------------------                   ---------------------
Title:    Director Clinical Trials Unit/
          Teva/ Israel

Date:                2008                        Date:               2008
           ----------                                     -----------
                                       15


APPENDIX B
TRIAL ACTIVITIES

The following activities and costs:

>> Monitoring services, as needed in accordance with the Protocol on the Commencement Date and for * patients

>> Payment to the physicians, the hospitals and testing laboratories involved in the Trial and associated follow up, as long as such payments are: (i) in the Territory (ii) in accordance with the Protocol on the Commencement Date and (iii) for * patients

>> Clinical supply of the Drug, in an amount not exceeding the sum agreed upon in the Distribution Agreement, for * patients, and for all other study drugs in accordance with the requirements of the Protocol on the Commencement Date

TEVA PHARMACEUTICAL INDUSTRIES LTD              CEL-SCI CORPORATION

Signature: /s/ Roni Shiloh                       Signature:
          -----------------------------                   ---------------------
Name:     Roni Shiloh, M.D.                      Name:
          -----------------------------                   ---------------------
Title:    Medical Director                       Title:



Signature: /s/ Coby Mazliah                      Signature:
          -----------------------------                   ---------------------
Name:     Coby Mazliah, Ph.D.                    Name:
          -----------------------------                   ---------------------
Title:    Director Clinical Trials Unit/
          Teva/ Israel

Date:                2008                        Date:               2008
           ----------                                     -----------

16

APPENDIX C

THE PARTIES OBLIGATIONS

Roles and Responsibilities
TEVA and SPONSOR/Global CRO


Time Schedule Study Code
SPONSOR

Global CRO

Contractor
Date

Part 1
Time Schedule


Planning Phase
Final protocol
Clinical Phase
Patient recruitment time     XXXXX
FPI                          XXXXX
LPI                          XXXXX
LPO                          XXXXX
Data Base Lock               XXXXX
Complete Stat                XXXXX
Clinical Study Report        XXXXX

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Roles & Responsibilities Study Code
SPONSOR

Global CRO

Contractor
Date

Part 2
Roles and Responsibilities


If required, add and/or delete according to study specific requirements. Tick relevant box SPONSOR and/or TEVA Site

*

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* * * * * *


*

*


TEVA PHARMACEUTICAL INDUSTRIES LTD              CEL-SCI CORPORATION

Signature: /s/ Roni Shiloh                       Signature:
          -----------------------------                   ---------------------
Name:     Roni Shiloh, M.D.                      Name:
          -----------------------------                   ---------------------
Title:    Medical Director                       Title:



Signature: /s/ Coby Mazliah                      Signature:
          -----------------------------                   ---------------------
Name:     Coby Mazliah, Ph.D.                    Name:
          -----------------------------                   ---------------------
Title:    Director Clinical Trials Unit/
          Teva/ Israel

Date:                2008                        Date:               2008
           ----------                                     -----------

20

Appendix E


PHARMACOVIGILANCE AND RECALL AGREEMENT

This Pharmacovigilance and Recall Agreement (the "Agreement") is made as of ____________, 2008 by and between CEL-SCI CORPORATION, a corporation incorporated under the laws of the State of Colorado, of 8229 Boone Boulevard, Suite 802, Vienna, VA 22182, USA ("Supplier") and TEVA PHARMACEUTICAL INDUSTRIES LTD, a limited liability company incorporated under the laws of Israel, of 5 Basel Street, Petah Tiqva 49131, Israel ("Teva").

1. Scope

This Agreement describes the procedures and defines the responsibilities of Supplier and Teva to ensure adequate Adverse Event (AE) data exchange such that regulatory reporting requirements can be met in a timely manner. This Agreement replaces any previous safety information agreements between the companies on the Product.

2. Definitions

Definitions used will conform to the current Volume 9A of the Notice to Applicants: Volume 9A - Guidelines on Pharmacovigilance for Medicinal Products for Human Use. Capitalized terms used in this Agreement and not defined herein will have the meaning set forth in the Exclusive Distribution Agreement between Supplier and Teva, dated ____________, 2008.

3. Global Safety Database

Supplier will maintain the global safety database for Post Marketing Spontaneous Adverse Event (AE) reports related to the Product.

4. Case Exchange

Both parties are responsible for distribution of the safety information in their own company safety network. The language of all exchanges will be English. Abbreviations must be spelled out.

4.1. Spontaneous reports

Teva agrees to provide Supplier with all Adverse Event reports related to Product. The format is not necessarily that of CIOMS I but should contain all data elements to be able to generate a CIOMS I report. Source documents should remain locally for inspection purposes and should be provided on request. Case exchange is preferably done by email

Each party agrees to provide the other party with copies of all Adverse Events reports within 3 business days of submission.

Both parties agree to answer in a reasonably exhaustive manner all questions that the other party might raise that affect case evaluation or regulatory reporting with regard to exchanged cases.

The date of receipt by the original  recipient of any Adverse  Event report must
be recorded on each report exchanged.

2

4.2. Follow up information

The party notified first on an adverse reaction is responsible for obtaining follow-up information required for proper assessment of the case. Questions regarding a specific case must be communicated to the initial party to request the information from the reporter. Follow-up data will be exchanged in the same manner as initial data, within the same timeframes. If site visits are requested, representatives from both parties will be allowed to participate.

4.3. Reports from literature

Supplier will have the primary responsibility for reviewing the literature outside the Territory. Reports of serious published ADRs will be provided as described above. Teva will be primarily responsible for checking the literature published in the Territory and sending cases to Supplier.

4.4. Reports on overdose, abuse and misuse, lack of efficacy, transmission of infectious agents, medication errors.

Reports on overdose, abuse and misuse as well as lack of efficacy should be reported to Supplier according to the timelines as mentioned in Clause 4.1 above. Any suspected transmission of a infectious agent via a medicinal product is also considered an adverse event as referred to in Clause 4.1. Cases of medication errors which are associated with adverse events should also be reported as referred to in Clause 4.1.

4.5. Reports from outcomes of use in pregnancy and lactation

All reports from health care professionals relating to pregnancies where the foetus may have been exposed should be followed up and reported to Supplier according to Clause 4.1. For reports from consumers reasonable attempts should be made to follow up with the physician.

5. Causality assessment

Generally the reporter's causality assessment will be accepted. Supplier and Teva may however express another opinion. The most conservative opinion will determine further reporting.

6. Expedited Reporting

Supplier is responsible for determining seriousness, expectedness per the package insert and the company's opinion of relatedness. Supplier is responsible for preparing any regulatory forms for submission in the Territory.

Teva will make the determination as to whether a report meets criteria for expedited reporting to regulatory authorities in the Territory.

Teva will be responsible for submission of expedited reports to the regulatory authorities in the Territory.

Both parties will submit the appropriate reports of individual case reports to the regulatory authorities of the countries in their territories within the time frames required by the current legislation in each ountry.

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7. Periodic Reporting

Supplier will be responsible for preparing and reporting of Periodic Safety Update Reports (PSUR) according to the current guidelines. The PSUR will be forwarded to Teva for submission to local authorities in the Territory.

8. Regulatory requests for additional information

8.1. Additional information on a specific case

The party who received the regulatory authority request for follow-up information will submit the response to the requesting regulatory authority. If necessary, the party who first received the case report will obtain the requested information from the reporter.

8.2. Additional information of a more general nature

Regulatory authority requests for safety information of a more general nature will be answered by the party who received the initial request. Teva will provide to the supplier a copy of the regulatory agency's request for general information and their proposed response to the request prior to its submission for review and comment.

9. Compliance

Teva is responsible for ensuring that local Pharmacovigilance and drug safety regulatory requirements are met in the Territory. Without limiting the foregoing, Teva will comply with local regulation's with all regulations and laws applicable to the Territory.

10. Signals/Actions

Each company will notify the other company as soon as possible of any regulatory actions or pending actions that might result in: (i) a change in labeling or market restriction, (ii) market authorization withdrawal or suspension, or (iii) change of local labeling which is thought to be important from a safety view point; in each case, to the extent such action is suggested by signals detected by the pharmacovigilance program, issue evaluation, liaison with regulatory authorities, or new requirements defined by the regulatory authorities.

11. Teva's response time to reports on Adverse Events:

Adverse Event (AE): within 5 days from awareness of the event to Teva or any of its subsidiaries or other license partners involved in marketing of the Product.

Serious Adverse Events (SAE): within 24 hours from awareness of the event for SAE resulting in death or life threatening events, and within 48 hours for all other SAE.

12. Contacts

It is the responsibility of each company to notify the other company in writing of any changes to the contact information as soon as possible.

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For CEL-SCI, all correspondence about this agreement should be sent to:

Name: John Cipriano
Address: CEL-SCI Corporation,
8229 Boone Boulevard, Suite 802
Vienna, VA, 22182 USA
Tel: (703) 506-9460
Fax: (703) 506-9471
Email: *

For CEL-SCI, all Adverse Event reports should be sent to:

Name: John Cipriano
Address: CEL-SCI Corporation
8229 Boone Boulevard, Suite 802
Vienna, VA, 22182 USA
Tel: (703)-606-9460
Fax: (703) 506-9471
Email: *

For Teva, all correspondence about this agreement should be sent to:

Name: Shelly Lavy
Address: Teva Israel, P.O.Box 8077 Netanya 42504, Israel Tel: *
Fax: *
Email: *

For Teva, all Adverse Event reports should be sent to:

Name: Shelly Lavy

      Address:   Teva Israel, P.O.Box 8077 Netanya 42504, Israel
      Tel: *
      Fax: *
      Email: *

13.  Recalls

Teva and the  Supplier  shall  comply with local  regulations  in the  Territory

regarding any case necessitating a recall of the Product from the market. In the event that a recall of the Product in the Territory is being contemplated for any reason, each party shall promptly consult with the other with the view to deciding the appropriate action to take with respect thereto.

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In any event, the final decision on a recall will comply with any resolution issued by the regulatory authorities for each affected Country in the Territory concerning the specific case in which a recall of the Product is being contemplated.

In the event a recall is due to the negligence or improper action of Teva, Teva shall bear the costs related to the recall. In any other event, Supplier shall bear the cost related to the recall.

14. Term

The term of this Agreement will commence upon signature hereof by both parties and will continue until expiration or termination of the Exclusive Distribution Agreement between Supplier and Teva, dated ____________, 2008 (including the expiration of any wind-down period related to the sale of Products, as described therein).


    CEL-SCI CORPORATION                    TEVA PHARMACEUTICAL INDUSTRIES LTD

Signature: /s/ Geert R. Kersten             Signature: /s/ Judith Vardi
          -----------------------------              ---------------------
Name:     Geert R. Kersten                  Name:    Judith Vardi
          -----------------------------            ---------------------
Title:    Chief Executive Officer           Title:   V.P.IMAT
          -----------------------------            ---------------------
Date:     August 18, 2008                   Date:    August 18, 2008
          -----------------------------            ---------------------

                                            Signature: /s/ Efrat Klachevsky
                                                     ---------------------
                                            Name:     Efrat Klachevsky
                                                  -----------------------------
                                            Title: Direct, Business Developement

                                            Date:  07/08/08
                                                  ------------------------


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EXHIBIT (o)


LEASE AGREEMENT
(*, Maryland)

This Lease Agreement (the "Lease") is made as of the 6th day of June, 2007 by and between VIF II CEL-SCI Partners, LLC, a Delaware limited liability company (the "Landlord") and CEL-SCI Corporation, a Colorado corporation (the "Tenant").

ARTICLE 1. DESCRIPTION OF PROPERTY

1.1 Property. Subject to Article 36, below, Landlord hereby leases to Tenant and Tenant leases from Landlord, pursuant to the terms, conditions and uses herein set forth, the Property. As used herein, the "Property" means the entire building commonly known as * (the "Building") and consisting of approximately 73,025 rentable square feet (the "Premises"), together with the Land upon which the Building is located as more particularly described in Exhibit A attached hereto (the "Land").

ARTICLE 2. TERM

2.1 Lease Term. The term of this Lease (the "Lease Term") will be for a period of two hundred forty (240) full calendar months (plus the applicable fraction of a calendar month in the event he Commencement Date falls on a date other than the first day of a calendar month), commencing on the earlier of the following dates (the "Commencement Date"): (i) the date on which the Tenant Improvements have been Mechanically/Electrically Complete or (ii) the date that is fourteen (14) months following the date on which settlement occurs and Landlord obtains fee title to the Property. The Lease Term shall end on the last day of the two hundred fortieth (240th) full calendar month following the Commencement Date. Tenant shall have two (2) options to extend the Lease Term for ten (10) years each pursuant to the terms and conditions of Section 34, below.

ARTICLE 3. RENT

3.1 Base Annual Rental. Beginning on the Commencement Date and payable in advance on the first day of each calendar month of the Lease Term thereafter, Tenant shall pay to Landlord, and Landlord shall accept, the Base Annual Rental as set forth in the Base Annual Rent Schedule attached as Exhibit "E" to this Lease, which Base Annual Rental shall be paid in equal monthly installments. The Base Annual Rental shall be paid by Tenant in lawful money of the United States at the address set forth in Section 34.10, or such other address as Landlord may advise Tenant in writing, without deduction, offset or prior notice or demand. Tenant has delivered to Landlord the first monthly installment of Base Annual Rental for the first month of the Lease Term hereof upon execution and delivery of this Lease. Notwithstanding the foregoing, if the actual Project Cost after completion of all Improvements (as those terms are defined in the Work Letter Agreement) is less than Fifteen Million and 00/100 Dollars ($15,000,000.00), Base Annual Rental shall be adjusted to equal the product of (i) actual Project Costs and (ii) ten and 50/100 percent (10.50%). The adjusted Base Annual Rental described in the immediately preceding sentence will be increased annually commencing on the first day of

* Confidential treatment requested. Confidential portion has been omitted and filed separately with the Securities and Exchange Commission.


the calendar month immediately following the first (1st) anniversary of the Commencement Date, and on each anniversary thereafter, by an amount equal to 3% of the Base Annual Rental for the preceding year. For purposes of this Lease, "Rent" will mean the Base Annual Rental plus the Additional Rent plus any other charges due Landlord by Tenant under this Lease.

3.2 Proration of Rent. Prior to the first day of the first full calendar month of occupancy, in lieu of the first monthly installment of Base Annual Rental, Tenant will pay Landlord an amount equal to the first monthly installment of Base Annual Rental multiplied by a factor having as its numerator the number of days remaining in the month from, after and including the Commencement Date and as its denominator the number thirty. Thereafter, Rent shall be payable in accordance with the terms of Section 3.1. The total consideration for the term of this Lease shall be increased by the amount of the installment required by this Section 3.2.

3.3 Additional Rent, Expenses and Costs. Commencing upon the Commencement Date, Tenant shall pay to Landlord (unless otherwise expressly required hereunder to pay directly to a third party), as additional rent ("Additional Rent"), all sums of money of any and every sort required to be paid by Tenant under this Lease, whether or not the same are designated as Additional Rent. If such amounts or charges are not paid at the time provided in this Lease, they shall nevertheless be collectible as Additional Rent with the next installment of the Base Annual Rental thereafter falling due, but nothing herein contained shall be deemed to suspend or delay the payment of any amount of money or charge at the time the same becomes due and payable hereunder, or limit any other remedy of Landlord. Tenant acknowledges that this is an absolute net lease to Landlord. As such, Tenant shall pay, as Additional Rent, all costs and expenses relating to the Property.

3.4 Late Fees. Tenant acknowledges that late payment by Tenant to Landlord of the Base Annual Rental or other charges incurred under this Lease will cause Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impracticable to fix. Such costs include, without limitation, processing, administrative and accounting charges. If any payment of Base Annual Rental, Additional Rent, or other charges due from Tenant is not received by Landlord within 5 days of when due, such unpaid amounts shall bear interest at a rate equal to the Prime Rate plus 200 basis points ("Default Rate") from the date due to the date of payment. As used herein, "Prime Rate" means the prime rate of interest defined by The Wall Street Journal as the base rate on corporate loans posted by at least 75% of the nation's 30 largest banks, as reported in the Wall Street Journal on the first day of the calendar month in which such late payment accrued. In addition to interest, Tenant shall pay a sum of the greater of (i) 5% of the overdue Rent or (ii) $15.00 as a late charge. Late charges shall constitute Additional Rent. The parties agree that the late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant's default with respect to the overdue amount, or prevent Landlord from exercising any of the other rights and remedies available to Landlord hereunder.

3.5 Tenant's TI Contribution. As additional consideration for this Lease, within two (2) business days after Tenant receives notice of financial partner investment committee approval of this Lease and the Property purchase, Tenant shall deliver to Landlord Three Million One Hundred Fifty Thousand and 00/100\

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Dollars ($3,150,000.00) ("Tenant's TI Contribution"), which sum represents Tenant's initial contribution towards the cost of the Improvements to be constructed on Tenant's behalf pursuant to the Work Letter Agreement. Provided Tenant is not then in default under this Lease and provided further that Tenant has not assigned this Lease, Tenant shall be reimbursed monthly for Tenant's TI Contribution, which monthly reimbursement shall be amortized over a 180-month period, together with interest rate at the rate of three percent (3%) per annum, and which monthly reimbursement shall be applied as follows: beginning on the first day of the sixty-first (61st) calendar month of the initial Term and continuing on the first day of each calendar month thereafter until the expiration of the initial Term (i.e., 240th calendar month), Base Monthly Rent shall be partially abated to reflect the monthly reimbursement for Tenant's TI Contribution as set forth in the Base Monthly Rent Schedule described in Section 3.1, above.

3.6 Springing Security Deposit. Within 15 days after the end of each calendar quarter, Tenant shall provide to Landlord an Officer's Certificate in the form of Exhibit C attached hereto to the effect that either (a) the value of Tenant's unrestricted cash and Cash Equivalents at the end of such calendar quarter are equal to or greater than the Cash Threshold (defined below), or (b) the value of the Tenant's unrestricted cash and Cash Equivalents at the end of such calendar quarter are less than the Cash Threshold. As used herein, "Cash Threshold" means the greater of the following: (1) $6,000,000.00 or (2) an amount equal to Tenant's current annual cash burn rate, which shall be evidenced by either (i) a cash flow analysis prepared by Tenant ("Tenant's Cash Flow Analysis") and delivered to Landlord within fifteen (15) days following the end of each calendar quarter showing Tenant's net cash in-flow and out-flow for the immediately preceding twelve (12) month period, or (ii) the Net Cash Used in Operating Activities for the immediately preceding twelve (12) month period as shown on Tenant's Consolidated Statements of Cash Flow. For purposes of calculating the Cash Threshold, Tenant's Cash Flow Analysis and/or Tenant's Consolidated Statements shall exclude one-time cash contributions made by Tenant relating to the acquisition of the Property and the initial build-out of the Improvements per the Work Letter Agreement (i.e., Tenant's TI Contribution, Excess Costs and Development Management Fees (as each of those terms are defined in the Work Letter Agreement)) and one-time cash payments made by Tenant associated with the pay-off or pay-down of its convertible debt. As used herein, "Tenant's Consolidated Statements of Cash Flow" means those consolidated statements of Tenant's cash flow as prepared by Tenant in accordance with GAAP and which are publicly filed with the SEC on a quarterly basis. If the value of Tenant's unrestricted cash and Cash Equivalents drops below the Cash Threshold, or if Tenant fails to deliver to Landlord the required Officer's Certificate within the above 15-day period, Tenant shall, within five (5) days after delivery of such Officer's Certificate (or failure to deliver such Officer's Certificate), deposit with Landlord an additional security deposit in an amount equal to One Million Five Hundred Seventy-Five Thousand and 00/100 Dollars ($1,575,000.00) (i.e., an amount equal to the aggregate sum of Base Annual Rental payable during the first twelve (12) months of the initial Lease Term, as the same may be adjusted pursuant to Section 3.1) (payable in cash or in the form of a letter of credit reasonably acceptable to Landlord in accordance with the provisions of Section 3.6.1) (the "Springing Security Deposit"); provided, however, in the event Tenant's unrestricted cash and Cash Equivalents once again exceeds the Cash Threshold for two consecutive calendar quarters, Landlord shall promptly return the Springing Security Deposit to Tenant. Failure to timely provide such Officer's Certificate or such Springing

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Security Deposit, if required, shall be a default under this Lease. Landlord shall invest the Springing Security Deposit in a Highly Diversified Money Market Fund or similar yielding investment. As used herein, a "Highly Diversified Money Market Fund" means a money market fund that is principally invested in corporate bonds and commercial paper, such as the Evergreen Institutional Money Market Fund.

For purposes of this Section 3.6.3, "Cash Equivalents" shall mean (a) marketable securities issued or directly and unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (b) marketable direct obligations issues by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from either S&P or Moody's; (c) commercial paper maturing no later than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody's; (d) certificates of deposit or banker's acceptances maturing within one year from the date of acquisition thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody's, issued by any commerical bank orgnanized under the laws of the United States of America or any state thereof; or (e) investment funds with a rating of a least AAA from S&P investing 95% of their assets in securities of the type described in clauses (a), (c) and (d) above.

3.6.1 In lieu of depositing cash as the Springing Security Deposit, Tenant shall have the right to deliver to Landlord an unconditional, irrevocable, standby letter of credit in the amount of the cash Springing Security Deposit otherwise required under Section 3.6, above, which letter of credit shall (i) be in a form reasonably acceptable to Landlord, (ii) be issued by a financial institution selected by Tenant and reasonably acceptable to Landlord, (iii) be for the benefit of Landlord, but shall be transferable at Tenant's sole cost and expense by Landlord to any subsequent purchaser or encumbrancer of the Building, (iv) be automatically renewable from year to year throughout the Lease Term, (v) be payable by draft sight in a location reasonably acceptable to Landlord upon presentation of a certification signed by an officer of Landlord which states that Tenant has failed to perform any of its monetary or non-monetary obligations, (v) allow for partial and multiple draws, up to the face value of the letter of credit and (vi) be payable in the event such letter of credit is not renewed on or before the date which is thirty (30) days prior to its expiration. Any amounts of cash drawn on a letter of credit will thereafter be treated as a cash security deposit hereunder.

3.6.2 If Tenant fails to pay Rent when required or fails to perform any other covenant contained herein, Landlord may use or retain all or any part of the Springing Security Deposit, if applicable, for the payment of any sum not so paid, or for the payment of any amount which Landlord may spend or become obligated to spend by reason of Tenant's default. If any portion of the Springing Security Deposit is so applied or used, then Tenant shall, within 5 business days after written notice thereof, deposit an additional amount with Landlord sufficient to restore each said Springing Security Deposit to the amount set forth above and Tenant's failure to do so shall constitute a breach of this Lease.

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3.6.3 If Tenant has performed all of its monetary and other obligations hereunder at the termination of this Lease, Landlord shall return the Springing Security Deposit, if applicable, to Tenant within 30 days after termination of this Lease and the vacation by Tenant of the Premises as required under this Lease, less any amounts required to restore the Premises to the condition required in Section 7.1, below, including repairing any damage resulting from the removal by Tenant of its trade fixtures or equipment.

3.6.4 Landlord's obligation with respect to the Springing Security Deposit are that of a debtor and not as a trustee. Notwithstanding anything to the contrary contained herein, Tenant expressly waives the benefits of any statute now or hereafter in effect which would prevent Landlord from applying all or any portion of the Springing Security Deposit to offset any future Rent owing to Landlord at the termination of this Lease prior to the expiration date of the Lease Term.

3.6.5 In the event of the sale of the Property, or the sale of the entity owning such Property, Landlord's successor in interest shall assume Landlord's obligations with respect to the sums held as security or advance rent and notify Tenant in writing setting forth the particularity of such transfer, including the successor's name and address. Upon such assumption and written notification, Tenant shall have no further claim against Landlord with respect to any such Springing Security Deposit and hereby waives all rights against Landlord in such regard. Notwithstanding the foregoing, Landlord will remain personally liable to the extent Landlord's successor in interest fails to assume the Landlord's obligations with respect to the Springing Security Deposit as specified above.

ARTICLE 4. POSSESSION

4.1 Possession. Landlord shall not be liable for damages to Tenant for failure to deliver possession of the Premises to Tenant, except that the commencement of the Lease Term shall be delayed until Landlord delivers possession of the Premises to Tenant (so long as Tenant is not responsible for such failure or delay). Landlord will use commercially reasonable efforts to deliver possession of the Premises to Tenant by the target date for Mechanical/Electrical Completion as set forth in the Project Schedule (defined in the Work Letter Agreement). However, to the extent Landlord's inability to tender possession of the Premises to Tenant in accordance with (or earlier than provided for in) the Project Schedule is caused by Tenant's negligence or breach of this Lease or of the Work Letter Agreement, or by other delays caused by Tenant or its agents or contractors (collectively, "Tenant Delays"), the commencement of the Term for all purposes under this Lease shall be accelerated by the number of days of those Tenant Delays.

4.2 NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT LANDLORD IS LEASING THE PROPERTY TO TENANT "AS IS" AND "WHERE IS," AND WITH ALL FAULTS AND THAT LANDLORD IS MAKING NO REPRESENTATIONS AND WARRANTIES WHETHER EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT TO THE QUALITY OR PHYSICAL CONDITION OF THE PROPERTY, THE INCOME OR EXPENSES FROM OR OF THE PROPERTY, OR THE COMPLIANCE WITH THE

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PROPERTY WITH APPLICABLE BUILDING OR FIRE CODES, ENVIRONMENTAL LAWS OR OTHER LAWS, RULES, ORDERS OR REGULATIONS. WITHOUT LIMITING THE FOREGOING, IT IS UNDERSTOOD AND AGREED THAT LANDLORD MAKES NO WARRANTY OF THE HABITABILITY, SUITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. TENANT AGREES THAT IT ASSUMES FULL RESPONSIBILITY FOR, AND THAT IT HAS PERFORMED EXAMINATIONS AND INVESTIGATIONS OF THE PROPERTY, INCLUDING SPECIFICALLY, WITHOUT LIMITATION, EXAMINATIONS AND INVESTIGATIONS FOR THE PRESENCE OF ASBESTOS, PCBS AND OTHER HAZARDOUS SUBSTANCES, MATERIALS AND WASTES (AS THOSE TERMS MAY BE DEFINED HEREIN OR BY APPLICABLE FEDERAL OR STATE LAWS, RULES OR REGULATIONS) ON OR IN THE PROPERTY. WITHOUT LIMITING THE FOREGOING, TENANT IRREVOCABLY WAIVES ALL CLAIMS AGAINST LANDLORD WITH RESPECT TO ANY ENVIRONMENTAL CONDITION, INCLUDING CONTRIBUTION AND INDEMNITY CLAIMS, WHETHER STATUTORY OR OTHERWISE. TENANT ASSUMES FULL RESPONSIBILITY FOR ALL COSTS AND EXPENSES REQUIRED TO CAUSE THE PROPERTY TO COMPLY WITH ALL APPLICABLE BUILDING AND FIRE CODES, MUNICIPAL ORDINANCES, ENVIRONMENTAL LAWS AND OTHER LAWS, RULES, ORDERS, AND REGULATIONS. FOR INFORMATIONAL PURPOSES ONLY, PRIOR TO THE SETTLEMENT DATE IN CONNECTION WITH LANDLORD'S PURCHASE OF THE PROPERTY, LANDLORD SHALL PROVIDE TENANT WITH COPIES OF ANY RELEVANT THIRD PARTY REPORTS RELATING TO THE EXPECTED CONDITION OF THE PROPERTY AT THE TIME OF SETTLEMENT.

4.3 Retail Delivery Sublease. Notwithstanding anything to the contrary contained in this Lease, Tenant confirms that a portion of the Premises consisting of approximately 23,600 square feet of space is currently leased and occupied by Home Delivery Enterprises, Inc., d/b/a Retail Delivery Service, Inc. ("Retail Delivery") pursuant to the terms of that certain Lease, dated September 22, 2006, between Landlord, as successor in interest to San Tomas Properties, LLC, and Retail Delivery (the "Retail Delivery Lease"). While Tenant will be leasing the entire Building (i.e., 73,025 rentable square feet) and will be responsible for paying Rent for the entire Building pursuant to the terms of this Lease, Tenant will initially only occupy approximately 49,425 rentable square feet of space. Accordingly, effective as of the Commencement Date, the Retail Delivery Lease shall be terminated and concurrently with such termination, Tenant shall enter into a sublease with Retail Delivery in a form reasonably acceptable to Landlord, Tenant and Retail Delivery pursuant to which Tenant shall sublease the Retail Delivery Space to Retail Delivery (the "Retail Delivery Sublease").

4.4 Future Subleasing. Landlord acknowledges that Tenant intends to sublease an additional portion of the Premises consisting of approximately 15,000 to 20,000 square feet of space. The foregoing is merely an acknowledgement by Landlord of Tenant's intent to sublease and the foregoing shall not be construed as Landlord's consent to any such subleasing of space within the Premises, it being understood by Tenant that any such future subleasing of space within the Premises shall be subject to the terms and conditions set forth in Article 15.

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ARTICLE 5. USE

5.1 Permitted Use of Premises. The Premises shall be used and occupied by Tenant solely for laboratory, administration, pharmaceutical, warehouse and related health care uses. Landlord acknowledges that in connection with the foregoing, Tenant will also be operating from the Premises under a radiological materials license to be obtained by Tenant. The Premises are to be used for no other purposes without first obtaining the consent of Landlord, which consent may be withheld in Landlord's sole, subjective discretion.

5.2 Compliance with Laws. Tenant, at Tenant's sole expense, shall promptly comply, or cause compliance, with all laws, ordinances, zoning restrictions, rules, regulations, orders and requirements of any duly constituted public authorities now or hereafter affecting the Premises, including the use, safety, cleanliness and occupation of the Premises.

5.3 Prohibited Uses. Tenant shall not do, bring or keep anything in or about the Property that will cause a cancellation of any insurance covering the Property that is carried by Landlord and in effect as of the date Landlord acquires fee title to the Property, provided that Tenant will not be deemed to be in violation of this Section 5.3 if Landlord subsequently modifies or otherwise obtains new insurance coverage for the Property and as a result of such modified or new insurance policies (as opposed to any change in use by Tenant), Tenant's use of the Property causes or will cause a cancellation of Landlord's modified or new insurance policies. Tenant shall not use the Property in any manner that will constitute waste, nuisance or unreasonable annoyance to owners or occupants of nearby properties. Tenant shall not do anything on the Property that will cause material damage to the Building. Tenant shall place no loads upon the floors, walls or ceiling of the Building in excess of the maximum designed load specified by Landlord or which may materially damage the Building. No machinery, apparatus, or other appliance shall be used or operated in or on the Property that will vibrate or shake the Property.

5.4 Rules and Regulations. Tenant shall comply with all reasonable nondiscriminatory rules and regulations (the "Rules and Regulations") from time to time adopted by Landlord with respect to the Property. Notwithstanding anything to the contrary contained in this Lease, if any rule or regulation is in conflict with any term, covenant or condition of this Lease, this Lease shall prevail. In addition, no such rule or regulation, or any subsequent amendment thereto adopted by Landlord, shall in any way materially alter, reduce or adversely affect any of Tenant's rights or enlarge Tenant's obligations under this Lease.

ARTICLE 6. ALTERATIONS AND ADDITIONS

6.1 Prohibited Alterations. Except for the Improvements specifically contemplated to be constructed pursuant to the Work Letter Agreement attached hereto as Exhibit D, Tenant shall not make any alterations, improvements or additions to the Property, without obtaining Landlord's prior written consent, except Tenant may make non-structural alterations to the interior of the Premises (excluding the roof) without such consent but upon notice to Landlord, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cost thereof does not exceed $50,000 per occurance or an aggregate amount of $250,000 in any

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12-month period. Landlord shall not unreasonably withhold such consent; provided, however, in the event such alterations affect the structure of the Premises or the electrical, plumbing, HVAC and/or life safety systems of the Premises (collectively, the "Building Systems"), or may be otherwise visible from the outside of the Premises, Landlord's consent may be granted or withheld in Landlord's sole and absolute discretion. Notwithstanding the foregoing, Landlord's consent shall not be unreasonably withheld with regard to any proposed alterations affecting the Building Systems within Tenant's cGMP suite to the extent such alterations are required to operate such cGMP suite for Tenant's proposed use. Any such improvements, excepting movable furniture and trade fixtures (as that term is limited in Section 6.3, below) but including, without limitation, any non-trade fixtures and Tenant Funded Improvements (defined below), shall become part of the realty and belong to Landlord upon the expiration of the Term unless Landlord notifies Tenant at least thirty (30) days prior to the expiration of the Term that Tenant must remove such improvements. If Landlord notifies Tenant of such requirement, Tenant shall cause all such improvements to be removed prior to the expiration of the Term and shall repair any and all damage caused to the Premises resulting from such removal and otherwise surrender the Premises in the condition required under Section 7.1 at Tenant's sole cost and expense. If Tenant fails to repair any such damage prior to the expiration of the Term, Landlord may, but shall not be obligated to, perform such repairs on Tenant's behalf, in which case, Tenant shall reimburse Landlord for all costs incurred by Landlord within five (5) days after receipt of written demand from Landlord. All alterations and improvements shall be properly permitted and installed at Tenant's sole cost, by a licensed contractor, in a good and workmanlike manner, and in conformity with the laws of all applicable duly constituted public authorities. Each such licensed contractor and any subcontractor that performs work with a cost greater than $50,000 or that will affect the electrical, plumbing, HVAC and/or life safety systems of the Premises, shall be acceptable to Landlord in its reasonable discretion. All contractors or subcontractors performing work at the Premises shall maintain the insurance required under Lease Rider No. 1 and shall provide Landlord with copies of insurance certificates or other evidence reasonably acceptable to Landlord evidencing the existence of such insurance coverage. Any alterations that Tenant shall desire to make and which require the consent of Landlord shall be presented to Landlord in written form with detailed plans, which plans shall be subject to Landlord's reasonable approval. Tenant shall:
(i) acquire all applicable governmental permits; (ii) furnish Landlord with copies of both the permits and the plans and specifications before the commencement of the work, and (iii) comply with all conditions of said permits in a prompt and expeditious manner. Any alterations shall be performed in a workmanlike manner with good and sufficient materials. Tenant shall promptly upon completion furnish Landlord with as-built plans and specifications, provided that Landlord shall treat such as-built plans and specifications as confidential and shall inform all parties to whom Landlord may provide copies thereof of the confidential nature of such documents.

6.2 Notice of Commencement. At least 20 days prior to commencing any work relating to any alterations, improvements or additions approved by Landlord, Tenant shall notify Landlord in writing of the expected date of commencement. Landlord shall have the right at any time thereafter to post and maintain on the Premises such notices as Landlord reasonably deems necessary to protect Landlord and the Premises from mechanics' liens, materialmen's liens or any other liens. Tenant shall pay, when due, all claims for labor or materials furnished to or for Tenant for use in improving the Premises. Tenant shall not permit any mechanics' or materialmen's liens to be levied against the Premises

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arising out of work performed, materials furnished, or obligations to have been performed on the Premises by or at the request of Tenant. Tenant hereby indemnifies and holds Landlord harmless against loss, damage, attorneys' fees and all other expenses on account of claims of lien of laborers or materialmen or others for work performed or materials or supplies furnished for Tenant or its contractors, agents or employees. If Tenant fails to remove or bond any lien(s) filed against the Premises in connection with any work performed or any work claimed to have been performed by or at the direction of Tenant within 10 days from the date of the lien(s) filing, Landlord may remove such lien(s) at Tenant's expense and Tenant shall reimburse Landlord for all costs incurred by Landlord in connection with the removal of the lien(s), which amount shall be deemed Additional Rent, and shall include, without limitation, all sums disbursed, incurred or deposited by Landlord, including Landlord's costs, expenses and actual attorneys' fees, with interest thereon, at the Default Rate from the date of expenditure. If Tenant shall contest the validity of any such lien, claim or demand, then Tenant shall, at its sole expense defend and protect itself, Landlord and the Premises against the same and shall pay and satisfy any such judgment that may be rendered thereon before the enforcement thereof. If Landlord shall require, Tenant shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Landlord against liability for the same. If Landlord elects to participate in any such action, Tenant shall pay Landlord's attorneys' fees and costs.

6.3 Trade Fixtures. Tenant may install trade fixtures, machinery or other trade equipment in conformance with the ordinances of all applicable duly constituted public authorities. Subject to the terms of this Section 6.3, Tenant may remove any of such trade fixtures or machinery upon the termination of this Lease. In the event that Tenant installs improvements, machinery or trade fixtures, or makes any alterations, Tenant shall, at Landlord's option, return the Premises on termination of this Lease to the condition required under
Section 7.1, below, including the removal of improvements or alterations approved by Landlord in Section 6.1 and not otherwise elected to be retained by Landlord. Tenant shall, in any event, repair any damage resulting from the removal of machinery or trade fixtures of Tenant. If Tenant fails to repair any such damage prior to the expiration of the Term, Landlord may, but shall not be obligated to, perform such repairs on Tenant's behalf, in which case, Tenant shall reimburse Landlord for all costs incurred by Landlord within five (5) days after receipt of written demand from Landlord. Notwithstanding anything to the contrary contained in this Lease, the terms "trade fixtures", "machinery" or "trade equipment" as used both in Article 6 and otherwise in this Lease shall mean Tenant's specific trade fixtures, business equipment and personal property which can be removed without substantial damage to the Premises (including, without limitation, the "Movable Equipment" listed on page 1 of Schedule 1 (Project Budget) attached to the Work Letter Agreement, which "Movable Equipment" shall remain the sole property of Tenant), and shall not include, without limitation and without regard to whether the following can be removed without substantial damage to the Premises, any fill-finish suites, autoclaves and other similar items, which items shall become part of the realty and belong to Landlord upon the expiration of the Term unless Landlord otherwise elects pursuant to Section 6.1, above.

6.4 Tenant Funded Improvements. Notwithstanding the foregoing, if Tenant funds 100% of the "phase 2" or "phase 3" improvements (i.e., improvements to the Premises to be constructed after the thirty-sixth (36th) full calendar month of the initial Lease Term) (collectively, "Tenant Funded Improvements"), Tenant

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confirms that such Tenant Funded Improvements shall not be included when calculating the fair market value of the Property in connection with the Purchase Option set forth in Articles 35 and 37, it being understood that such calculation shall be conducted as if the Tenant Funded Improvements had not been made to the Premises.

ARTICLE 7. SURRENDER OF PREMISES

7.1 Conditions upon Surrender. Upon the expiration or earlier termination of this Lease, Tenant shall surrender the Premises to Landlord in its condition existing as of the Commencement Date, normal wear and tear, casualty, condemnation and acts of God excepted, with all interior walls in good repair and repainted if marked, all carpets shampooed and cleaned, the HVAC equipment, plumbing, electrical and other mechanical installations in good operating order, and all floors cleaned and waxed, all to the reasonable satisfaction of Landlord. Tenant shall remove from Premises all of Tenant's alterations which Landlord requires Tenant to remove pursuant to Section 6.1 and all Tenant's personal property, and shall repair any damage and perform any restoration work caused by such removal. In addition, , Tenant shall, at Landlord's sole option and at Tenant's sole cost and expense, either (i) remove all cabling and wiring existing within the Premises and within the common ducts and shafts of the Building ("Building Cable"), using all necessary care in removing the Building Cable in order to avoid any damage to the Building, or (ii) not remove all or any portion of the Building Cable, provided that Tenant shall leave any Building Cable clearly labeled and in good working order with all connections intact. Tenant shall be solely liable for any damage or disruption of service caused by the removal or labeling of any Building Cable by Tenant. Landlord and Tenant shall each initial and attach a conceptual floor plan of the Premises to this Lease, to be incorporated herein as Exhibit B. Said floor plan shall describe, among other things, those interior improvements which are to remain in the Premises upon expiration, or earlier termination, of this Lease. It is the intent of the parties that the condition of the Premises, after Tenant's removal, shall be in the same condition as existed as of the Commencement Date, together with any alterations that Landlord has approved pursuant to Section 6.1 and which Landlord has elected to retain at the Premises. If Tenant fails to remove any alterations that Landlord requires Tenant to remove and Tenant's personal property which Tenant is authorized and obligated to remove pursuant to the above, and such failure continues after the termination of the Lease, Landlord may retain such property and all rights of Tenant with respect to it shall cease, or Landlord may place all or any portion of such property in public storage for Tenant's account. Tenant shall pay to Landlord upon demand costs of removal of such alterations and Tenant's personal property and storage and transportation costs of same, and the cost of repairing and restoring the Premises, together with attorneys' fees and interest at the Default Rate on said amounts, from the date of expenditure by Landlord. If the Premises are not so surrendered at the termination of this Lease, Landlord may, in its sole discretion, either (a) upon written notice to Tenant, treat Tenant as a month-to-month tenant at will, subject to all the terms, covenants and conditions of this Lease, or (b) proceed with an unlawful detainer action and pursue all other rights and remedies available to Landlord.

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ARTICLE 8. UTILITIES AND SERVICES

8.1 Utilities. Tenant shall make all arrangements for and pay for all water, sewer, gas, heat, light, power, telephone service and any other service or utility Tenant requires at the Premises. Landlord shall not be liable for any failure or interruption of any utility service being furnished to the Premises, and no such failure or interruption shall entitle Tenant to terminate this Lease.

8.2 Landlord Service. Tenant confirms that Landlord will not provide any of the utilities described in Section 8.1, above and that Tenant shall be solely responsible for such utilities. If, however, Tenant fails to arrange for the provisions of such utilities and Landlord, at its sole option, elects to furnish those utilities, Tenant shall pay to Landlord the cost thereof in the manner set forth in Section 12.9. Tenant's cost shall be the total cost shown on utility meters servicing the Premises and any extraordinary use which may be made by Tenant.

ARTICLE 9. INDEMNIFICATION

9.1 Indemnity of Landlord. Tenant hereby agrees to indemnify, defend (with attorneys approved by Landlord), protect, and hold Landlord and Landlord's agents, employees, directors, officers, managers, members, partners, affiliates, independent contracts and property managers ("Landlord's Agents"), harmless from any and all liabilities, costs, expenses and losses by reason of injury to person or property ("Losses"), caused by, arising out of, or related to, the condition of the Property or the use or occupancy of the Property by Tenant, its agents, directors, officers, managers, members, partners, affiliates, independent contracts and property managers, or invitees ("Tenant's Agents"), including without limitation, any liability for injury to the person or property of Tenant or Tenant's Agents, but excepting any Loss resulting from the willful breach of the Lease by Landlord or the gross negligence or willful misconduct of Landlord or Landlord's Agents. Tenant's obligation hereunder shall survive the termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such termination.

9.2 Waiver of Claims. Tenant, as a material part of the consideration rendered to Landlord in entering into this Lease, hereby waives all claims against Landlord for damages to goods, wares, machinery, trade fixtures, or other property of Tenant, Tenant's Agents or any other person in or about the Property, whether such damage or injury is caused by or results from Landlord's negligence, fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Property, or from other sources or places, but excepting any claims resulting from the gross negligence or willful misconduct of Landlord or Landlord's Agents. Notwithstanding Landlord's negligence or breach of this Lease, Landlord shall under no circumstances be liable for loss of profits or special, incidental or consequential damages arising therefrom.

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9.3 Landlord Indemnification. Landlord agrees to indemnify Tenant and hold it harmless from any and all loss, cost, damage, expense and liability
(including without limitation court costs and reasonable attorneys' fees) incurred in connection with or arising from any Losses, caused by the gross negligence or willful misconduct of Landlord and/or any of Landlord's Agents. The obligations of Landlord under this Section 9.3 shall survive the termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such termination.

9.4 Claims for Indemnification. If any indemnitee under Sections 9.2 or 9.3 above (an "Indemnitee") shall believe that such Indemnitee is entitled to indemnification pursuant to this Article 9 in respect of any Losses, such Indemnitee shall give the appropriate indemnifying party (each, as applicable, an "Indemnifying Party") prompt written notice thereof. Any such notice shall set forth in reasonable detail and to the extent then known the basis for such claim for indemnification. The failure of such Indemnitee to give notice of any claim for indemnification promptly shall not adversely affect such Indemnitee's right to indemnity hereunder except to the extent that such failure adversely affects the right of the Indemnifying Party to assert any reasonable defense to such claim.

9.5 Defense of Claims. In connection with any claim which may give rise to indemnity under this Article 9 resulting from or arising out of any claim or proceeding against an Indemnitee by a person that is not a party hereto, the Indemnifying Party shall (unless such Indemnitee elects not to seek indemnity hereunder for such claim), upon written notice to the relevant Indemnitee, assume the defense of any such claim or proceeding. The Indemnifying Party shall select counsel reasonably acceptable to such Indemnitee to conduct the defense of such claim or proceeding, shall take all steps necessary in the defense or settlement thereof and shall at all times diligently and promptly perform resolution thereof. Without the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld, the Indemnifying Party will not enter into any settlement of, or any claim or proceeding which would lead to liability or create any financial or other obligation on the part of the Indemnitee for which the Indemnitee is not entitled to indemnification hereunder. Without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, the Indemnitee will not enter into any settlement or any claim or proceeding which would lead to liability or create any financial or other obligation on the part of the Indemnifying Party unless the Indemnifying Party has failed or refused to acknowledge responsibility for or defend such claim or proceeding within a reasonable period of time after notice is provided pursuant to Section 9.4.

ARTICLE 10. INSURANCE

10.1 Landlord's Insurance. Landlord shall maintain, at Tenant's sole expense, which Tenant shall pay to Landlord as Additional Rent in the manner set forth in Section 12.9, a policy or policies of insurance protecting Landlord against the following:

10.1.1 Fire and other perils normally included within the classification of fire and extended coverage, together with insurance against vandalism and malicious mischief, to the extent of the full replacement cost of the Premises, including earthquake and flood coverage, exclusive of trade

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fixtures, equipment and improvements insured by Tenant, with agreed value, full replacement and other endorsements which Landlord may reasonably elect to maintain.

10.1.2 Eighteen (18) months of rental loss insurance and to the extent of 100% of the gross rentals from the Building of which the Premises constitute a part.

10.1.3 Public liability and property damage insurance with respect to common areas in amounts (i) not less than $1,000,000 for injury or death to any one person in any one accident or occurrence, (ii) not less than $2,000,000 for injury or death to more than one person in any one accident or occurrence,
(iii) not less than $4,000,000 of excess umbrella liability insurance, and, (iv) not less than $200,000 per occurrence for damage to Premises.

10.1.4 At Landlord's sole option, environmental liability or environmental clean-up/remediation insurance in such amounts and with such deductibles and other provisions as Landlord may determine in its reasonable discretion.

10.2 Payment. Tenant shall pay to Landlord in the manner set forth in
Section 12.9, the cost of insurance required in Section 10.1. To the extent that any such insurance is maintained pursuant to a blanket or similar policy of insurance, then the cost thereof shall be equitably allocated to the Property by Landlord.

10.3 Tenant's Insurance. Tenant shall maintain at its sole cost and expense, in force the policy or policies of insurance described in Lease Rider No. 1 attached hereto and incorporated herein by this reference.

10.4 Release of Subrogation Rights. Landlord and Tenant each hereby waive any and every claim for recovery from the other for any and all loss of or damage to the Building or Premises or to the contents thereof, which loss or damage is covered by valid and collectible property insurance policies. Landlord waives any and every claim against Tenant for any and all loss of or damage to the Building or the Premises or contents thereof, which would have been covered had the insurance policies required to be maintained by Landlord by this Lease been in force, to the extent that such loss or damage would have been recoverable under such insurance policies. Tenant waives any and every claim against Landlord for any and all loss of, or damage to, the Building or Premises or the contents thereof which would have been covered had tenant maintained the insurance policies required to be maintained by tenant under this Lease been in force, to the extent that such loss or damage would have been recoverable under such insurance policies. Inasmuch as this mutual waiver will preclude the assignment of any such claim by subrogation (or otherwise) to an insurance company (or any other person), Landlord and Tenant each agree to give to each insurance company which has issued, or in the future may issue, to it policies of property insurance, written notice of the terms of this mutual waiver, and to have said insurance policies properly endorsed, if necessary, to prevent the invalidation of said insurance coverage by reason of said waiver.

10.5 Failure to Provide Insurance. Tenant acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Landlord to risk and potentially cause Landlord to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain.

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Accordingly, for any month or portion thereof the Tenant does not maintain the required insurance and/or does not provide Landlord with the required binders or certificates evidencing the existence of the required insurance, the Base Annual Rental shall be automatically increased, without any requirement for notice to Tenant, by an amount equal to ten percent (10%) of the then existing Base Annual Rental; provided, however, that if Tenant thereafter provides Landlord with evidence of the insurance required by this Lease and such evidence is reasonably acceptable to Landlord, the Base Annual Rental shall be adjusted to the then required Base Annual Rental set forth in Section 3.1 of this Lease. The parties agree that such increase in the Base Annual Rental represents fair and reasonable compensation for the additional risk costs that Landlord will incur by reason of Tenant's failure to maintain the required insurance. Such increase in Base Annual Rental shall in no event constitute a waiver of Tenant's default or breach with respect of the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Tenant of it's obligations to maintain the insurance specified in this Lease.

ARTICLE 11. TAXES

11.1 Personal Property Taxes. Tenant shall pay prior to delinquency all taxes, assessments, license fees, and other public charges levied, assessed or imposed or which become payable during the term of this Lease upon any trade fixtures, furnishings, equipment and all other personal property of Tenant installed or located in the Premises. Whenever possible, Tenant shall cause said trade fixtures, furnishings, equipment and personal property to be separately assessed. If, however, any or all of said items shall be assessed and taxed with the real property, Tenant shall pay to Landlord such taxes as are attributable to Tenant's trade fixtures, furnishings, equipment and personal property within 15 days after receipt of an invoice from Landlord advising Tenant of the taxes applicable to Tenant's property.

11.2 Real Property Taxes. Tenant shall also pay at least 20 days before due any and all real estate taxes, as defined in Section 11.3, assessed or imposed, or which become a lien upon or become chargeable against or payable in connection with the Property. Within three business days of such payment, Tenant shall provide Landlord evidence of such payment in a form reasonably acceptable to Landlord. Notwithstanding the foregoing, Tenant shall have the right to contest the amount of any real estate taxes assessed against the Property at Tenant's sole cost and expense, provided that Tenant shall nevertheless timely pay the disputed amount as required in this Lease and shall otherwise indemnify, defend and hold Landlord harmless from any claims, losses and liabilities arising out of such contest. In the event that the Property is not separately assessed, Tenant shall pay an equitable proportion of the real estate taxes and assessments for all the land and improvements included within the tax parcel(s) assessed, such proportion shall be determined by Landlord from the respective valuations assigned in the assessor's worksheets and such other information as is reasonably available to Landlord, including the Building and any special improvements constructed for the benefit of Tenant. Real estate taxes for the last year of the term of this Lease shall be prorated between Landlord and Tenant as of the expiration date of the term. With respect to any assessments which may be levied against or upon the Property, or which under the laws then in force may be evidenced by improvement or other bonds and may be paid in annual installments, only the amount of such annual installment, with appropriate proration for any partial year, and interest thereon, shall be included within a computation of taxes and assessments levied against the

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Property. In the event that Tenant incurs a late charge on the payment of the Base Annual Rental or fails to pay the real property taxes within 20 days before due, in addition to Landlord's remedies set forth in Section 18.1, Landlord may estimate the current real property taxes, and require that such taxes be paid in advance to Landlord by Tenant monthly in advance with the payment of the Base Annual Rental. Such monthly payment shall be equal to the amount of the estimated installment of taxes divided by the number of months remaining before the month in which such installment becomes delinquent. When the actual amount of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable taxes. If the amount collected by Landlord is insufficient to pay such real estate taxes when due, Tenant shall pay Landlord, upon demand, such additional sum as is necessary. Advance payments may be intermingled with other moneys of Landlord and shall not bear interest. In the event of a breach by Tenant in the performance of its obligations under this Lease, then any such advance payments may be treated by Landlord as an additional security deposit.

11.3 Definition of Taxes. For purposes of this Lease, "taxes" shall also include each of the following:

11.3.1 Any form of assessment, license fee, license tax, bond or improvement bond, business license tax, commercial rental tax, levy, charge, penalty, or tax, imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, drainage or other improvement or special district thereof, as against any legal or equitable interest of Landlord in the Property;

11.3.2 Any tax on Landlord's right to Rent or other income from the Property or as against Landlord's business of leasing the Property;

11.3.3 Any assessment, tax, fee, levy or charge in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included with the definition of real property tax. It is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies and charges and all similar assessments, taxes, fees, levies and charges be included within the definition of real property tax for purposes of this Lease;

11.3.4 Any tax allocable to or measured by the area of the Property or the rental payable hereunder, including without limitation, any gross income tax or excise tax levied by the State, any political subdivision thereof, city, or federal government, with respect to the receipt of such rental, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use of occupancy by Tenant of the Property, or any portion thereof,

11.3.5 Any tax upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Property; and

11.3.6 Any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Property,

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and (ii) levied or assessed on machinery or equipment, if any, provided by Landlord to Tenant pursuant to this Lease.

11.3.7 "Real estate taxes" shall not include Landlord's federal or state income, franchise, inheritance or estate taxes.

ARTICLE 12. COMMON AREAS

12.1 Common Area. Common areas shall include all areas within the Property outside the exterior boundaries of the buildings situated thereon, including, but not limited to, streets, driveways, parking areas, truckways, delivery passages, loading doors, sidewalks, ramps, open and closed courts, landscaped and planted areas, exterior stairways, retaining and decorative walls and planters, and other areas provided for the for the common use of Landlord and Tenant, their employees and invitees.

12.2 Maintenance. Tenant shall maintain said common areas in a neat, clean and orderly condition, properly lighted and landscaped as Landlord shall determine, including, but not limited to, general maintenance, repairs, pest control, resurfacing, painting, restriping, cleaning, sweeping and trash removal; maintenance and repair of sidewalks and curbs; sprinkler systems, planting and landscaping; lighting, water, music and other utilities; directional signs and other markers and bumpers; maintenance and repair of any fire protection systems, automatic sprinkler systems, lighting systems, storm drainage systems and any other utility systems; personnel to implement such service and to police the common areas; and police and fire protection services.

12.3 Care of Premises. Tenant shall, at its sole cost and expense keep the Premises and exterior and interior portions of windows, doors, and all other glass or plate glass fixtures in a working neat, clean, sanitary, safe and good condition and repair, and shall keep the Premises free from trash, rubbish and dirt. Tenant shall make all repairs or replacements thereon or thereto, whether ordinary or extraordinary.

12.4 Maintenance of Equipment. Tenant shall, at its sole cost and expense, keep and maintain all utilities, fixtures and mechanical equipment used, or available for use, by Tenant (wherever located) in good working order, condition and repair. Said items shall include, but are not limited to, all plumbing or sewage facilities in the Premises, doors, locks and closing devices, windows, including glass, lights, electric systems and equipment, heating and air conditioning systems and equipment, and all other appliances and equipment of every kind.

12.5 Roof, Walls, Foundation and Structural. At its cost and expense, Tenant will keep in good condition and repair the roof, foundation, load bearing walls and structural elements of the Premises to keep the Premises in the same condition and repair existing as of the Commencement Date, normal wear and tear, casualty and condemnation excepted.

12.6 Compliance with Governmental Regulations. Tenant shall, at its sole cost and expense, promptly and properly observe and comply with, including the making by Tenant of any alterations to the Premises, all present and future orders, regulations, directions, rules, laws ordinances, and requirements of all governmental authorities (including, without limitation, state, municipal, county and federal governments and their departments, bureaus, boards and officials) arising from the use or occupy of, applicable to, the Property.

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12.7 Service Contracts. Tenant shall, at Tenant's sole cost and expense, maintain in good condition and repair, the following equipment and improvements, if any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation system, (v) roof covering and drains, (vi) clarifiers, (vii) basic utility feed to the perimeter of the Building, and (viii) any other equipment, if reasonably required by Landlord. To the extent Tenant elects to maintain the foregoing items through specific service contracts, Tenant shall engage only those contractors specializing and experienced in the maintenance of the foregoing equipment and improvements and shall provide Landlord with copies of any and all such service contracts. If Landlord reasonably determines that the foregoing equipment and improvements are not being properly maintained, Landlord may, but shall not be obligated, upon ten (10) days prior written notice to Tenant, to maintain and if necessary, procure any and all service contracts to maintain the foregoing equipment and improvements, and if Landlord so elects, Tenant shall reimburse Landlord, upon demand, for the cost thereof.

12.8 Action by Landlord if Tenant Fails to Maintain. If Tenant refuses or neglects to repair or maintain the Premises as required by Sections 12.2, 12.3, 12.4, 12.5, 12.6 and 12.7 to the reasonable satisfaction of Landlord, Landlord, at any time following 10 days from the date on which Landlord shall make written demand on Tenant to affect such repair or maintenance (or immediately without notice in the event of an emergency), may, but shall not have the obligation to, make such repair and/or maintenance (without liability to Tenant for any loss or damage which may occur to Tenant's merchandise, fixtures or other personal property, or to Tenant's business by reason thereof) and upon completion thereof, Tenant shall pay to Landlord as Additional Rent Landlord's costs for making such repairs, plus interest at the Default Rate upon demand herefore. Moreover, Tenant's failure to pay any of the charges in connection with the performance of its maintenance and repair obligations under this Lease will constitute a material default under the Lease.

12.9 Tenant's Costs. Within 60 days after the Commencement Date (or as soon as reasonably practicable thereafter), and within 60 days after the beginning of each calendar year (or as soon as reasonably practicable thereafter), Landlord shall give Tenant a written estimate, for such calendar year, of Tenant's share of the cost of utilities, if not separately metered and paid by Tenant, insurance provided by Landlord and expenses in connection with maintenance of common areas and any other maintenance Landlord elects to perform pursuant to the terms of this Lease. Tenant shall pay such estimated amount to Landlord in equal monthly installments, in advance. Within 90 days after the end of each calendar year (or as soon as reasonably practicable thereafter), Landlord shall furnish to Tenant a statement showing in reasonable detail the costs incurred by Landlord for the operation and maintenance of the Premises during such year (the "Annual Statement"), and Tenant shall pay to Landlord Tenant's proportionate share of the cost incurred in excess of the payments made by Tenant within 10 days of receipt of such statement. In the event that the payments made by Tenant for the operation and maintenance of the Premises exceed Tenant's share of the cost of same, such amount shall be credited by Landlord to the Rent or other charges next due and owing, provided that, if the Lease term has expired, Landlord shall accompany said statement with the amount due Tenant. Notwithstanding the foregoing, Landlord's failure to deliver any statement under this Section 12.9, including any Annual Statement, shall not constitute a waiver of Landlord's right to collect any sums owed by Tenant pursuant to the terms of this Section 12.9.

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ARTICLE 13. SIGNS AND ADVERTISING

13.1 Signs. To the extent Tenant elects to place signage at the Premises, Landlord shall designate the location on the Premises for one or more exterior Tenant identification sign(s) and Tenant shall not display or erect any other signs, displays, or other advertising materials that are visible from the exterior of the building. The size, design, and other physical aspects of the permitted sign(s) shall be subject to the Landlord's written approval prior to installation, which approval will not unreasonably be withheld, any covenants, conditions, or restrictions encumbering the Premises, any applicable municipal or other governmental permits and approvals. The cost of the sign(s), including but not limited to the permitting, installation, maintenance and removal thereof shall be at Tenant's sole cost and expense. If Tenant fails to maintain its sign(s), or if Tenant fails to remove such sign(s) upon termination of the Lease, or fails to repair any damage caused by such removal (including without limitation, painting the building, if required by Landlord), Landlord may do so at Tenant's expense. Tenant shall on demand reimburse Landlord for all costs incurred by Landlord to effect such removal, which amounts shall be deemed Additional Rent and shall include without limitation, all sums disbursed, incurred or deposited by Landlord, including Landlord's costs, expenses and actual attorneys' fees with interest thereon. By executing this Lease, Landlord hereby approves the signage currently existing on the Premises. Tenant's signage rights set forth in this Section 13.1 are personal to the originally named Tenant under this Lease and shall not be transferred in the event Tenant assigns this Lease or subleases the Premises unless Landlord otherwise consents to the transfer of Tenant signage rights under this Section 13.1, which consent may be withheld in Landlord's sole, subjective discretion.

ARTICLE 14. ENTRY BY LANDLORD

14.1 Entry by Landlord. Tenant shall permit Landlord and Landlord's Agents, prospective purchasers, lenders, investors, contractors, and within eighteen (18) months prior to the expiration of this Lease, prospective tenants, to enter the Premises at all reasonable times, upon giving Tenant a 24 hour prior notice, except in the event of an emergency in which case the 24 hour prior notice is not required: (i) for the purpose of inspecting the same, (ii) for the purpose of maintenance, repairs, alterations, or additions to any portion of the Building, including the erection and maintenance of such scaffolding, canopies, fences, and props as may be required, (iii) for the purposes of performing any of Tenant's obligations under this Lease, or (iv) for the purpose of posting notices of non-responsibility for alterations, additions, or repairs. In connection with the foregoing, Landlord acknowledges that due to the proprietary and confidential nature of certain portions of the Premises, Landlord's access pursuant to this Section 14.1 to the cGMP classified space and other designated areas of the Premises (which Tenant shall designate in writing delivered to Landlord prior to the Commencement Date) (collectively, the "Classified Space") may be limited such that Landlord may only access the

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Classified Space when accompanied by certain specified representatives of Tenant and in accordance with Tenant's standard entry procedures for the Premises, provided that so long as Landlord complies with the foregoing with regard to the Classified Space, Tenant shall not otherwise unreasonably deny Landlord access to the Classified Space. Provided Landlord gives Tenant the above 24-hour prior notice, Tenant shall make available all necessary Tenant representatives so that Landlord may access the Classified Space as provided above.

14.2 No Liability. Subject to the provisions of Section 14.1, Landlord shall be permitted to enter the Premises for any of the purposes stated in and in accordance with Section 14.1 above without any liability to Tenant for any loss of occupation of quiet enjoyment of the Premises resulting therefrom.

ARTICLE 15. ASSIGNMENT AND SUBLETTING

15.1 Assignment and Subletting. Tenant shall neither voluntarily nor by operation of law, assign, sell, encumber, pledge or otherwise transfer all or any part of Tenant's leasehold estate hereunder, or permit the Premises to be occupied by anyone other than Tenant or Tenant's employees, or sublet the Premises or any portion thereof, without Landlord's prior written consent in each instance, which consent shall not be unreasonably withheld. Any purported assignment or subletting contrary to these provisions shall be void. It shall not be unreasonable for Landlord to base its determination as to whether consent will be granted in any specific instance on, without limitation, the following factors: (a) whether the assignee's or subtenant's use of the Premises will be compatible with the provisions of this Lease; (b) the financial capacity of the assignee or subtenant; (c) the business reputation of the assignee or subtenant;
(d) the quality and type of the business operations of the assignee or subtenant; (e) the business experience of the proposed assignee or subtenant; and (f) that each and every applicable covenant, condition or obligation imposed upon Tenant by this Lease is assumed by such assignee or subtenant and each and every right, remedy or benefit afforded Landlord by this Lease is not thereby impaired or diminished. This list of factors is not intended to be exclusive, and Landlord may rely on such other reasonable basis for judgment as may apply from time to time. Consent by Landlord to one or more assignments of this Lease or to one or more sublettings of the Premises shall not operate to exhaust Landlord's rights under this Section.

15.2 Notice to Landlord. If Tenant desires at any time to assign this Lease or to sublet the Premises or any portion thereof, it shall first notify Landlord of its desire to do so and shall submit in writing to Landlord (the "Transfer Notice"); (i) the size and location of the space Tenant proposes to assign or sublet; (ii) the name of the proposed assignee; (iii) the date on which the Tenant proposes that the transfer be effective, which shall not be earlier than the date which is forty-five (45) days after the Transfer Notice
(iv) the nature of the proposed assignee's business to be carried on in the Premises; (v) the terms and provisions of the proposed sublease or assignment;
(vi) such reasonable financial information as Landlord may request concerning the proposed assignee, and (vii) such other information as Landlord may reasonably require. Tenant agrees to reimburse Landlord for Landlord's actual costs and attorneys' fees incurred in conjunction with the processing and documentation of any such requested assignment, subletting, transfer, change or ownership or hypothecation of this Lease.

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15.3 Notwithstanding Section 15.1 and 15.2, Landlord agrees that Tenant may assign its interest in this Lease, without Landlord's prior written consent but with reasonable prior notice to Landlord, (i) to any successor by merger or sale of substantially all of Tenant's assets to which this Lease relates in a manner such that the assignee will become liable and responsible for the performance and observance of all Tenant's duties and obligations hereunder, or
(ii) in connection with any joint venture entered into by Tenant with an investment grade rated company (each such assignment, a "Specially Permitted Assignment"). As used herein, the term "investment grade rated" means a senior unsecured credit rating of "BBB" or higher (or the equivalent) as determined by Standard & Poor's (or an equivalent national credit rating service). In addition, Tenant may assign its interest in this Lease, without Landlord's prior written consent but with reasonable prior written notice to Landlord, to any corporation or other entity which controls, is controlled by, or is under common control with Tenant, a corporation or other entity will be regarded as in control of another corporation or entity if its owns or controls in excess of 50% of the voting stock or other ownership interest of the other corporation or entity), subject to the prerequisite condition that the corporation or other entity to which Tenant's interest in this Lease would be assigned must demonstrate to the satisfaction of Landlord that: (i) it has financial soundness and capability which is equal to or greater than that of Tenant, (ii) it's net worth is equal to or greater than that of Tenant's immediately preceding such assignment, (iii) the assignee's use of the Premises will be compatible with the provisions of the Lease, and (iv) each and every covenant, condition or obligation imposed upon Tenant by this Lease is assumed by such assignee and each and every right, remedy or benefit afforded Landlord by this Lease is not thereby impaired or diminished.

15.4 No Release of Liability. No subletting or assignment, even with the consent of Landlord, shall relieve Tenant of its obligation to pay the Rent and perform all the other obligations to be performed by Tenant hereunder. The acceptance of Rent by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any assignment or subletting.

15.5 Transfer Premiums. If Tenant assigns or sublets its rights under this Lease, Tenant shall pay to Landlord as Additional Rent, after Tenant has recovered any relevant leasing commissions, costs of tenant improvements and other expenses of the assignment or sublease, 50% of such excess consideration due and payable to Tenant from said assignment or sublease to the extent said consideration exceeds the Base Annual Rental or a pro rata portion of the Base Annual Rental, in the event only a portion of the Premises is sublet or assigned ("Profits"); provided, however, Landlord will not be entitled to any Profits derived in connection with a Specially Permitted Assignment.

15.6 Landlord's Option. If Tenant desires at any time to assign or sublet all or substantially all of the Premises, Landlord, within 15 days after Landlord's receipt of all of the information required in the Transfer Notice, may by written notice to Tenant elect to terminate this Lease as to the entire Premises. In the event the Landlord elects to terminate the Lease, the Lease shall terminate on the proposed date the transfer would be effective as specified in the Transfer Notice and Tenant shall have no furhter obligations with respect to the Premises other than to surrender and vacate the Premises on or before the effective date of termination. After any such election by Landlord, Landlord shall be entitled to re-lease the Premises in Landlord's sole and absolute discretion.

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ARTICLE 16. DISPOSSESSION

16.1 No Dispossession. If Tenant shall surrender the Premises, or be disposed by process of law, or otherwise, Landlord may terminate this Lease, retake possession of the Premises, pursue its remedies provided herein, and any personal property or trade fixtures belonging to Tenant and left on the Premises shall, at the option of Landlord, be deemed abandoned. In such case, Landlord may dispose of said personal property at Tenant's sole expense in any manner and is hereby relieved of all liability for doing so.

ARTICLE 17. BREACH BY TENANT

17.1 Events of Default. The occurrence of any of the following shall constitute a breach and material default of this Lease by Tenant:

17.1.1 The failure of Tenant to pay or cause to be paid when due any installment of Base Annual Rental, or any Additional Rent, Rent, taxes, monies, or charges required by this Lease to be paid by Tenant when such failure continues for a period of 5 business days after Tenant's receipt of written notice thereof from Landlord, provided that if Tenant fails to pay any of the foregoing within the above 5-business day period more than two (2) times in any twelve (12) month period during the Term, Landlord shall not be required to provide Tenant with any further notice and Tenant shall be deemed to be in default of this Section 17.1 if Tenant fails to pay any installment of Base Annual Rental, or any Additional Rent, Rent, taxes, monies or other charges required by this Lease to be paid by Tenant as and when due ;

17.1.2 The failure of Tenant to perform any term, covenant or condition, other than payment of Rent, taxes, monies or charges, required by this Lease and Tenant shall have failed to cure such failure within 30 days after written notice from Landlord; provided, however, that where such failure cannot reasonably be cured within the 30 day period, the Tenant shall not be in default if it has commenced such cure within the same 30 day period and diligently thereafter prosecutes the same to completion within thirty (30) days thereafter;

17.1.3 Subject to the notice and cure provisions of Section 17.1.2 above, Tenant causing, permitting, or suffering, without the prior written consent of Landlord, any act when this Lease requires Landlord's prior written consent or prohibits such act; or

17.1.4 To the extent permitted by applicable law, any act of bankruptcy cause, suffered or permitted by Tenant. For purposes of this Lease, "act of bankruptcy" shall include any of the following:

17.1.4.1. Any general assignment or general arrangement for the benefit of creditors;

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17.1.4.2. The filing of any petition by or against Tenant to have Tenant adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy, unless such petition is filed against Tenant and same is dismissed within 60 days;

17.1.4.3. The appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located in the Premises or of Tenant's interest in this Lease; or,
17.1.4.4. The attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease.

17.2 Three-Day Notice. In the event that Landlord issues a three-day notice, notice of abandonment or comparable document by reason of Tenant's breach, and Tenant cures such default, Tenant agrees to pay to Landlord, the reasonable cost of preparation and delivery of same.

17.3 No Waiver. The acceptance by Landlord of Rent due hereunder after breach by Tenant or the waiver by Landlord of any other breach or default by Tenant hereunder will not constitute a waiver of such breach, unless a written notice to that effect has been delivered to Tenant.

17.4 Replacement of Statutory Notice Requirements. When this Lease requires service of a notice, that notice shall replace rather than supplement any equivalent or similar statutory notice, including any notices required by applicable law. When a statute requires service of a notice in a particular manner, service of that notice (or a similar notice required by this Lease) in the manner required by Section 38.10 shall replace and satisfy the statutory service-of-notice procedures.

ARTICLE 18. REMEDIES UPON BREACH

18.1 Landlord's Remedies. If Tenant fails to perform any of its affirmative duties or obligations as and when required after expiration of any cure periods expressly provided in Article 17, above (or in the case of any facts or circumstances that create an imminent risk of damage to the Property or injury to, or death of, persons, without written notice), Landlord may, at its option, perform such duty or obligation on Tenant's behalf, including but not limited to the payment of property taxes, obtaining of reasonable required bonds, insurance policies, or governmental licenses, permits or approvals. Tenant shall pay to Landlord an amount equal to the costs and expenses incurred by Landlord in such performance upon receipt of an invoice, with interest thereon, at the Default Rate from the date of expenditure. In the event of any breach or material default by Tenant under Section 17.1, in addition to other rights or remedies of Landlord at law or in equity, Landlord shall have the following remedies:

18.1.1 Landlord shall have the remedy which provides that, when a tenant has the right to sublet or assign (subject only to reasonable limitations), the landlord may continue the lease in effect after the tenant's breach and abandonment and recover Rent as it become due. Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may enforce all of Landlord's rights and remedies under this Lease, including the right to recover all Rent as it becomes due; and

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18.1.2 Landlord, either as an alternative or subsequent to exercising the remedies set forth in Section 18.1.1, may terminate Tenant's right to possession of the Property without the delivery to Tenant of any additional written notice of termination. Landlord may then immediately reenter the Premises and take possession thereof pursuant to legal proceedings and remove all persons and property from the Premises; such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. No notice of termination shall be necessary in the event that Tenant has abandoned the Premises. In the event that Landlord elects to terminate Tenant's right of possession, Landlord may recover the following:

18.1.2.1. The worth at the time of the award of the unpaid Rent which had been earned at the time of termination. "Worth at the time of award" shall be computed by allowing interest at the Default Rate from the first day the breach occurs;

18.1.2.2. The worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the fair market rental value of the Premises, as determined by Landlord. "Worth at the time of award" shall be determined by allowing interest at the Default Rate from the first day a breach occurs;

18.1.2.3. The worth at the time of award of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the fair market rental value of the Premises, as determined by Landlord. "Worth at the time of award" shall be computed by discounting such amount at the discount rate at the Federal Reserve Bank of San Francisco at the time of award plus 1%; and

18.1.2.4. Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under the Lease or which in the ordinary course of things would be likely to result therefrom including, but not limited to, commissions and expenses of reletting, attorneys' fees, costs of alterations and repairs, recording fees, filing fees and any other expenses customarily resulting from obtaining possession of leased premises and re-leasing.

18.2 Landlord Default. Tenant shall have no right to terminate this Lease for any default by Landlord.

ARTICLE 19. DAMAGE OR DESTRUCTION

19.1 Landlord's Obligation to Rebuild. If the Property is damaged or destroyed, Tenant shall promptly notify Landlord in writing of the damage or destruction to the Property. Provided Landlord has been given notice of such damage or destruction, Landlord shall provide Tenant a good faith estimate of the time it will take to repair the Property and Landlord shall promptly and diligently repair the Property unless it has the right to terminate this Lease as provided in Section 19.2 below and it elects to so terminate.

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19.2 Landlord's Right to Terminate. Landlord shall have the right to terminate this Lease following damage to or destruction of the Property if any of the following occurs: (i) insurance proceeds together with additional amounts Tenant agrees to contribute are not confirmed to be available to Landlord, within 90 days following the date of damage, to pay 100% of the cost to fully repair the damaged Property, excluding the deductible for which Tenant shall also be responsible; (ii) the Property cannot, with reasonable diligence, be fully repaired by Landlord within 12 months after the date of the damage or destruction; (iii) the Property cannot be safely repaired because of the presence of hazardous factors, including, but not limited to, earthquake faults, radiation, chemical waste and other similar dangers; (iv) the Property are destroyed or damaged during the last 12 months of the Term; or (v) Tenant is in uncured material default under the terms of this Lease at the time of such damage or destruction.

19.3 Tenant's Right to Terminate. Tenant shall have the right to terminate this Lease following damage to or destruction of the Property if any of the following occurs: (i) the Property cannot, with reasonable diligence, be fully repaired by Landlord within twelve (12) months after the date of the damage or destruction; or (ii) the Property is destroyed or damaged during the last 12 months of the Term.

If a party elects to terminate this Lease and has the right to so terminate, such party will give the other party written notice of its election to terminate within 30 days after it has knowledge of such damage or destruction, and this Lease will terminate 15 days after receipt of such notice. If this Lease is terminated pursuant to Section 19.2, Landlord shall, subject to the rights of its lender(s), be entitled to receive and retain all the insurance proceeds resulting from such damage, except for those proceeds payable under policies obtained by Tenant which specifically insure Tenant's personal property, trade fixtures and machinery. If neither party elects to terminate the Lease, Landlord shall, promptly following the date of such damage or destruction and receipt of amounts required of Tenant pursuant to Section 19.2(i) above, commence the process of obtaining necessary permits and approvals, and shall diligently commence repair of the Property as soon as practicable and thereafter prosecute the same diligently to completion, in which event this Lease will continue in full force and effect.

19.4 Limited Obligation to Repair. Landlord's obligation, should it elect or be obligated to repair or rebuild, shall be limited to the Property, and Tenant shall, at its expense, replace or fully repair all Tenant's personal property and any alterations installed by Tenant existing at the time of such damage or destruction. If the Property is to be repaired in accordance with the foregoing, Landlord shall make available to Tenant any portion of insurance proceeds it receives which are allocable to the alterations constructed by Tenant pursuant to this Lease provided Tenant is not then in default.

19.5 Abatement of Rent. Rent shall be temporarily abated in proportion to the degree to which Tenant's use of the Property is impaired and only to the extent of any proceeds received by Landlord from the rental abatement insurance described in Section 10.1 hereof, during any period when, by reason of such damage or destruction, Landlord and Tenant reasonably determines that there is

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substantial interference with Tenant's use of the Property and Tenant actually ceases to use such portion of the Property impacted by such damage or destruction. Such abatement shall commence upon such damage or destruction and end upon the earlier of (i) substantial completion by Landlord of the repair or reconstruction which Landlord is obligated or undertakes to do or (ii) the date on which Tenant commences to use the damaged portion of the Property. Tenant shall not be entitled to any compensation or damages from Landlord for loss of the use of the Property, damage to Tenant's personal property or any inconvenience occasioned by such damage, repair or restoration.

19.6 Replacement Cost. The determination in good faith by Landlord of the estimated cost of repair of any damage, of the replacement cost, or of the time period required for repair shall be conclusive for purposes of this Section.

ARTICLE 20. CONDEMNATION

20.1 Total Taking - Termination. If title to all of the Property or so much thereof is taken for any public or quasi-public use under any statute or by right of eminent domain so that reconstruction of the Building will not result in the Property being reasonably suitable (as reasonably determined by Landlord and Tenant) for Tenant's continued occupancy for the uses and purposes permitted by this Lease, this Lease shall terminate as of the date possession of the Property or part thereof be taken.

20.2 Partial Taking. If any part of the Property is taken and Landlord and Tenant reasonably determine that the remaining portion of the Property will be reasonably suitable for Tenant's continued occupancy for the purposes and uses permitted by this Lease after Landlord makes repairs and alterations, this Lease shall, as to the part so taken terminate as of the date that possession of such part of the Property is taken and the Base Annual Rental shall be reduced in the same proportion that the floor area of the portion of the Premises so taken (less any addition thereto by reason of any reconstruction) bears to the original floor area of the Premises. Landlord shall, at its sole cost and expense, make all necessary repairs or alterations to the Property so as to make the portion of the Property not taken a complete architectural unit. Such work shall not, however, exceed the scope of the work done by Landlord in originally constructing the Property. Base Annual Rental due and payable hereunder shall be temporarily abated based on the percentage of the Property that Tenant is unable to use and actually does not use. Notwithstanding the foregoing, if more than twenty-five percent (25%) of the square footage of the Premises is taken or sold under such threat, Landlord may terminate this Lease as of the date that the condemning authority takes possession by delivery of written notice of such election within twenty (20) days after Landlord has been notified of the taking or, in the absence thereof, within twenty (20) days after the condemning authority shall have taken possession.

20.3 No Apportionment of Award. No award for any partial or entire taking shall be apportioned, it being agreed and understood that Landlord shall be entitled to the entire award for any partial or entire taking. Tenant assigns to Landlord its interest in any award which may be made in such taking or condemnation, together with any and all rights of Tenant arising in or to the same or any part thereof. Nothing contained herein shall be deemed to give

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Landlord any interest in or require Tenant to assign to Landlord any separate award made to Tenant for the taking of Tenant's personal property, trade fixtures or machinery for the interruption of Tenant's business, or its moving costs, or for the loss of its goodwill. In addition, Tenant will have the right to make a separate claim in the condemnation proceeding for (a) the taking of the unamortized or undepreciated value of any leasehold improvements that Tenant has the right to remove at the end of the Lease Term and that Tenant elects not to remove, (b) loss of goodwill, and (c) any other amount in addition to the foregoing, so long as any such claim does not reduce the amount of the award payable to Landlord.

20.4 Temporary Taking. No temporary taking of the Property shall terminate this Lease or give Tenant any right to any abatement of Rent, except to the extent covered by insurance proceeds payable to Landlord. Any award made to Tenant by reason of such temporary taking shall belong entirely to Tenant and Landlord shall not be entitled to share therein. Each party agrees to execute and deliver to the other all instruments that may be required to effectuate the provisions of this Section.

20.5 Sale Under Threat of Condemnation. A sale made in good faith by Landlord to any authority having the power of eminent domain, either under threat of condemnation or while condemnation proceedings are pending, shall be deemed a taking under the power of eminent domain for all purposes of this Section.

ARTICLE 21. SURRENDER OF LEASE

21.1 Surrender of Lease. The voluntary or other surrender of its interest in this Lease by Tenant or a mutual cancellation of this Lease shall not work a merger, and shall, at the election of Landlord, either terminate all or any existing subleases or subtenancies or operate as an assignment to Landlord of any or all of such subleases or subtenancies. Landlord shall exercise its election within 30 days of any such surrender or cancellation.

ARTICLE 22. ATTORNEYS' FEES

22.1 Attorneys' Fees. If either party institutes or is made a party to any action or proceeding to enforce or interpret this Lease, the prevailing party in such action or proceeding shall be entitled to recover all costs and attorneys' fees incurred in connection with such action or proceeding, or any appeal or enforcement of such action or proceeding. If Tenant is in default under this Lease, in addition to all other remedies available to Landlord as a result thereof, Landlord shall also be entitled to recover all costs and attorneys' fees incurred by Landlord in connection with such default, including, without limitation, any court costs and costs relating to the preparation of any default notices.

ARTICLE 23. SALE OF THE PROPERTY BY LANDLORD.

23.1 Sale of Property. Subject to Tenant's rights under Articles 35 and 37, notwithstanding any provisions of this Lease to the contrary, Landlord may assign, in whole or in part, Landlord's interest in this Lease and may sell all or part of either the Property or the entity owning the Property. Should Landlord elect to sell the entity owning the Property, or the Property, Landlord

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agrees to notify Tenant of its intent to do so. Landlord's willingness to notify Tenant is to be considered a courtesy notice only and not an offer to sell, or an obligation of any form on the part of Landlord to sell the Property to Tenant. This courtesy notice is not to be construed as an option, an offer to negotiate, a right of first refusal, or any other form of agreement that would obligate Landlord to pursue a sale of the Property to Tenant or in any manner prohibit Landlord from its rights to sell all or part of the Property as it chooses.

ARTICLE 24. QUIET ENJOYMENT

24.1. Quiet Enjoyment. If Tenant is not in breach under the covenants made in this Lease, Landlord covenants that Tenant shall have peaceful and quiet enjoyment of the Property without hindrance on the part of Landlord. Landlord will defend Tenant in the peaceful and quiet enjoyment of the Property against claims of all persons claiming through or under Landlord.

ARTICLE 25. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

25.1 Tenant Estoppel Certificate. Tenant shall at any time during the term of this Lease, within 5 business days of written notice from Landlord, execute and deliver to Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect or, if modified, stating the nature of such modification. Tenant's statement shall include other details requested by Landlord, such as the date to which Rent and other charges are paid, Tenant's knowledge concerning any uncured defaults with respect to Landlord's obligations under this Lease and the nature of such defaults if they are claimed, and such other matters as Landlord may reasonably request. Any such statement may be relied upon conclusively by any purchaser or lender having an interest in the Property. Tenant's failure to deliver such statements within such time shall be conclusive upon the Tenant that this Lease is in full force and effect, except as and to the extent any modification has been represented by Landlord, and that there are no uncured defaults in Landlord's performance, and that not more than 1 month's Rent has been paid in advance.

25.2 Tenant Financial Statements. Within 120 days after the end of each fiscal year, Tenant shall provide Landlord a copy of the audited financial statements that have been provided to the SEC or, in the event Tenant is no longer required to deliver such financial statements to the SEC, year-end financial statements, including balance sheets and income statements, reflecting Tenant's current financial condition for such fiscal year that have been audited by a nationally recognized firm of certified public accountants. Tenant represents and warrants that all financial statements, records and information furnished by Tenant to Landlord in connection with this Lease are true, correct and complete in all respects.

ARTICLE 26. SUBORDINATION AND ATTORNMENT

26.1 Subordination of Lease. This Lease and Tenant's rights under this Lease are subject and subordinate to any Mortgage, ground lease, and to all renewals, modifications, consolidations, replacements, or extensions thereof, now or hereafter affecting the Property. The provisions of this Section shall be self-operative, and no further instrument of subordination shall be required. In confirmation of such subordination, however, Tenant shall within five business

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days execute and deliver any instruments that Landlord, the holder of any Mortgage, or the Landlord of any ground lease may request to evidence such subordination. If Tenant fails to execute and deliver any such instruments, Tenant irrevocably constitutes and appoints Landlord as Tenant's special attorney-in-fact to execute and deliver such instruments. Landlord shall use commercially reasonable efforts to obtain a subordination, non-disturbance and attornment agreement ("SNDA") from Landlord's current lender ("Lender") with regard to any current mortgage or deed of trust recorded against the Property as of the date of this Lease, which SNDA shall be based on Lender's form of SNDA. The SNDA shall provide, among things, that in the event of any foreclosure, sale under a power of sale, ground or master lease termination, or transfer in lieu of any of the foregoing, or the exercise of any other remedy under any such encumbrance, but subject to such holder's form exceptions, or other reasonable exceptions: (i) Tenant's use, possession, and enjoyment of the Property will not be disturbed and this Lease will continue in full force and effect so long as Tenant is not in default; and (ii) this Lease will automatically become a lease directly between any successor to Landlord's interest, as landlord, and Tenant, as if that successor were the landlord originally named in the lease. The subordination of this Lease to the lien of any future mortgage or deed of trust (i.e., any mortgage or deed of trust that is recorded after the Commencement Date of this Lease) shall be contingent upon Tenant's receipt of an SNDA from the holder of any such mortgage or deed of trust recorded against the Property in substantially the same form as provided above.

26.2 Attornment to Lender. If the holder of any Mortgage, or the Landlord of any ground lease affecting the Property, shall hereafter succeed, by foreclosure or otherwise, to the rights of Landlord under this Lease, Tenant shall attorn to and recognize such successor as Tenant's Landlord under this Lease, and shall promptly execute and deliver any instruments that may be necessary to evidence such attornment, and Tenant hereby irrevocably appoints Landlord as Tenant's special attorney in fact to execute and deliver such instruments on behalf of Tenant should Tenant refuse or fail to do so. Upon such attornment, this Lease shall continue in effect as a direct lease between such successor Landlord and Tenant upon and subject to all of the provisions of this Lease.

ARTICLE 27. HOLDING OVER

27.1 Holding Over. If Tenant should remain in possession of the Property after the expiration of the term of this Lease without executing a new lease or after Landlord has declared a forfeiture by reason of a default by Tenant, the such holding over shall be construed as a tenancy from month to month, subject to all the conditions, provisions and obligations of this Lease insofar as they are applicable to a month to month tenancy, including the provisions of Article 3, except that the Base Annual Rental shall be increased to the greater of (i) one hundred fifty percent (150%) of the Base Annual Rental last due and (ii) the fair market rental rate for the Property as of the commencement of such holdover period, payable monthly in advance. Notwithstanding the foregoing, nothing contained in this Article 27 shall be construed as consent by Landlord to the holding over by Tenant, and Landlord expressly reserves the right to require Tenant to surrender possession of the Property to Landlord as provided in this Lease upon expiration or other termination of this Lease. Notwithstanding the foregoing, if Tenant fails to vacate the Property or Tenant fulfills less than all of its obligations hereunder at the end of the Lease Term, Tenant also shall be liable for all damages incurred by Landlord (including, without limitation, consequential damages) by reason of the latter's inability to deliver possession of the Property or any portion thereof to any other person.

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ARTICLE 28. MORTGAGEE PROTECTION

28.1 Mortgagee Protection. In the event of any default on the part of Landlord, Tenant agrees to give notice by registered or certified mail to any beneficiary of a deed of trust or mortgage covering the Property whose address shall have been furnished to the Tenant and shall offer such beneficiary or mortgagee a reasonable opportunity to cure such default (such cure period not to exceed 90 days after receipt of such notice) before Tenant shall attempt to exercise any other remedy.

ARTICLE 29. LIABILITY OF SUCCESSORS

29.1 Successor's Liability. The covenants and conditions herein contained shall, subject to the provisions as to assignment, apply to and bind the heir, successors, executors, administrators, and permitted assigns of all the parties hereto and all of the parties hereto shall be jointly and severally liable for the covenants contained herein.

ARTICLE 30. EASEMENTS

30.1. Easements. Landlord reserves the right, from time to time, to grant such easements, rights and dedications that Landlord deems necessary or desirable, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Property by Tenant. Tenant shall sign any documents or instruments to accomplish the foregoing upon request of Landlord, and failure to do so shall constitute a material breach of this Lease. Tenant irrevocably appoints Landlord as Tenant's special attorney in fact to execute and deliver such documents or instructions on behalf of Tenant should Tenant refuse or fail to do so.

ARTICLE 31. RESTRICTIONS

31.1 Compliance with Covenants, Conditions and Restrictions. In addition to requirements imposed by law, the care of the Property and conduct of business thereupon, among other things, may be restricted or subject to heightened requirements pursuant to one or more recorded Covenant, Conditions and Restrictions ("CC&R's"). The terms of all applicable CC&R's, if any, in their entirety, are incorporated herein by this reference. Tenant has received a copy of that certain Declaration of Covenants, Conditions and Restrictions for Route One Hundred Business Park, dated November 6, 1972 and recorded as Liber 613, Page 635 in the Official Records of Howard County, Maryland (the "Route One Hundred CC&Rs"). To the actual knowledge of Landlord, the Route One Hundred CC&Rs no longer encumber the Property.

31.2 Associations. Tenant shall faithfully observe and comply with the provisions of all applicable CC&R's, if any, and all modifications and additions which may from time to time be enacted pursuant to their terms. Tenant shall similarly observe and comply with all requests, demand and orders otherwise made

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by any governing associations created under the authority of the CC&R's (the "Associations"). Any violation by Tenant of the CC&R's or rightful orders of the Associations created thereby after written notice to Tenant shall be a default under this Lease, subject to the cure provisions of Section 17.1.2. However, Landlord will not be responsible to Tenant for the nonperformance of any provisions of such CC&R's by its tenants occupying neighboring properties, if any.

31.3 Association Fees. All payments, charge, dues, and assessments imposed under the authority of the CC&R's and the Associations ("Association Fees"), if any, shall be the sole responsibility of Tenant, who shall timely pay such Association Fees to Landlord as Additional Rent. Each payment shall be made promptly on demand throughout the term of this Lease and shall be paid without deduction or offset. To the actual knowledge of Landlord, there are no current Association Fees payable in connection with the Property.

ARTICLE 32. INTENTIONALLY OMITTED

ARTICLE 33. HAZARDOUS MATERIALS

33.1 Definitions:

33.1.1 Hazardous Materials Laws. "Hazardous Materials Laws" means any and all federal, state or local laws, ordinances, rules, decrees, orders, regulations or court decisions relating to hazardous substances, hazardous materials, hazardous waste, toxic substances, environmental conditions on, under or about the Property, or soil and ground water conditions, including, amendments to and any regulations promulgated pursuant to the foregoing, and any similar federal, state or local laws, ordinances, rules, decrees, orders or regulations.

33.1.2 Hazardous Materials. "Hazardous Materials" means any chemical, compound, substance or other material, including, without limitation, gasoline, diesel, aviation fuels, lubricating oils, solvents and chemicals, that: (i) is defined as a hazardous substance, hazardous material, hazardous waste or toxic substance under any Hazardous Material Law; (ii) is controlled or governed by any Hazardous Materials Law, or gives rise to any reporting, notice or publication requirements thereunder, or gives rise to any liability, responsibility or duty on the part of Tenant or County with respect to any third person thereunder; or (iii) is a flammable or explosive material, asbestos, radioactive material, nuclear medicine material, drug, vaccine, bacterial, virus, hazardous waste, toxic substance, or related injurious or potentially injurious material (by itself or in combination with other materials).

33.2 Tenant's Obligations

33.2.1 Compliance with Laws. Tenant shall strictly comply with, and shall maintain the Property in compliance with, all Hazardous Materials Laws. Tenant shall obtain and maintain in full force and effect all permits, licenses and other governmental approvals required for Tenant's operations on the Property under any Hazardous Materials Laws, including, without limitation, any radiological materials licenses and shall comply with all terms and conditions thereof. At Landlord's request, Tenant shall deliver copies of, or allow Landlord to inspect, all such permits, licenses and approvals. Tenant shall

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perform any monitoring, investigation, clean-up, removal, detoxification, preparation of closure or other required plans and any other remedial work (collectively, "Remedial Work") required as a result of any release or discharge of Hazardous Materials from the Property or any violation of Hazardous Materials Laws caused by Tenant or any subtenant of Tenant or their respective agents, contractors, employees, licensees or invitees (but not by Landlord or Landlord's Agents). Landlord shall have the right to intervene in any governmental action or proceeding involving any Remedial Work, and to approve performance of the work, in order to protect Landlord interests. Tenant shall be solely responsible for paying all fines, damages and penalties imposed by any governmental agency resulting from Tenant's violation of any Hazardous Materials Laws.

33.2.2 Compliance with Insurance Requirements. Tenant shall comply with the requirements of Tenant's and Landlord's insurers regarding Hazardous Materials and with such insurers' recommendations based upon prudent industry practices regarding management of Hazardous Materials.

33.2.3 Notice; Reporting. Tenant shall notify Landlord in writing immediately after any of the following: (a) Tenant has knowledge, or has reasonable cause to believe, that any Hazardous Material has been released or discharged under or about the Property, whether or not the Hazardous Material is in quantities that would require reporting to a public agency; (b) Tenant receives any order of a governmental agency requiring any Remedial Work pursuant to any Hazardous Materials Laws; (c) Tenant receives any warning, notice of inspection, notice of violation or alleged violation, or Tenant receives notice or knowledge of any proceeding, investigation of enforcement action, pursuant to any Hazardous Materials Laws; or (d) Tenant receives written notice of any claims made by any third party against Tenant or the Property relating to any loss or injury resulting from Hazardous Materials. Tenant shall deliver to Landlord copies of all test results, reports and business management plans required to be filed with any government agency pursuant to any Hazardous Materials Laws.

33.2.4 Entry and Inspection; Cure. Landlord and its agents, employees and contractors, shall have the right to enter the Property at all reasonable times to inspect the Property and Tenant's compliance with the terms and conditions of this Section 33, or to conduct investigations and tests. No prior notice to Tenant shall be required in the event of any emergency, or if Landlord has reasonable cause to believe that violations by Tenant of this
Section 33 have occurred, or if Tenant consents at the time of entry. In all other cases, Landlord shall give at least 24 hours' prior notice to Tenant. Notwithstanding the foregoing, Landlord may only access any Classified Space when accompanied by certain specified representatives of Tenant and in accordance with Tenant's standard entry procedures for the Premises, provided that so long as Landlord complies with the foregoing with regard to the Classified Space, Tenant shall not otherwise unreasonably deny Landlord access to the Classified Space. Provided Landlord gives Tenant the above 24-hour prior notice, Tenant shall make available all necessary Tenant representatives so that Landlord may access the Classified Space as provided above. Landlord shall have the right, but not the obligation, to remedy any violation by Tenant of the provisions of this Section 33, or to perform any Remedial Work necessitated as a result of any discharge by Tenant of Hazardous Materials on the Property. Tenant shall pay, upon demand, all costs incurred by Landlord in remedying such violations or performing all Remedial Work necessitated by the acts or omissions of Tenant and/or its agents or employees, plus interest thereon at the Default Rate from the date of demand until the date paid by the Tenant.

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33.2.5 Termination/Expiration. Upon termination or expiration of this Lease, Tenant shall, at Tenant's cost, remove any equipment, improvements or storage facilities utilized in connection with any Hazardous Materials and shall clean up, detoxify, repair and otherwise restore the Property to a condition in compliance with applicable laws governing Hazardous Materials, to the extent such condition is caused by Tenant or any subtenant of Tenant or their respective agents, contractors, employees, licensees or invitees. Upon termination or expiration of this Lease, Tenant shall, at Tenant's cost, permit Landlord and Landlord's Agents to enter the Property upon giving Tenant a 24 hour written notice for the purposes of inspecting the environmental condition of the Property, including an audit of any Hazardous Materials that are located on the Property, provided that Landlord may only access any Classified Space when accompanied by certain specified representatives of Tenant and in accordance with Tenant's standard entry procedures for the Premises, provided that so long as Landlord complies with the foregoing with regard to the Classified Space, Tenant shall not otherwise unreasonably deny Landlord access to the Classified Space.

33.2.6 Indemnification. Tenant shall indemnify, protect, defend and hold Landlord (and its employees and agents) harmless from and against any and all claims, costs, expenses, suits, judgments, actions, investigations, proceedings and liabilities arising out of or in connection with any breach of any provision of this Lease to the extent arising out of the use, generation, storage, release, disposal or transportation of Hazardous Materials by Tenant or any subtenant, or their respective agents, contractors or employees upon the Property (but not by Landlord or Landlord's Agents), on, under or about the Property during the Term, including, but not limited to, all foreseeable and unforeseeable consequential damages and the cost of any Remedial Work, but excepting any loss or injury resulting from the breach of the Lease by Landlord or the gross negligence or willful misconduct of Landlord or Landlord's Agents. Neither the consent by Landlord to the use, generation, storage, release, disposal or transportation of Hazardous Materials, nor strict compliance with all Hazardous Materials Laws, shall excuse Tenant from Tenant's indemnification obligations pursuant to this Section 33.2.6. The foregoing indemnity shall be in addition to and not a limitation of the indemnification provisions of Section 9 of this Lease. Tenant's obligations pursuant to this Section 33.2.6 shall survive the termination or expiration of the Lease. The procedures set forth in
Section 9.2 also will apply to this Section.

33.2.7 Default. The release or discharge of any Hazardous Material or violation of any Hazardous Materials Law by Tenant or any subtenant of Tenant shall be a material default by Tenant under the Lease, subject to the cure provisions set forth in 18.1.3. In addition to or in lieu of the remedies available under the Lease as a result of such default, Landlord shall have the right, without terminating the Lease, to require Tenant to suspend its operations and activities on the Property until Landlord is satisfied that appropriate Remedial Work has been or is being adequately performed; Landlord's election of this remedy shall not constitute a waiver of Landlord's right thereafter to declare a default and pursue other remedies set forth in the Lease.

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ARTICLE 34 Options.

34.1 Options To Extend. Tenant shall have the option to extend the term of this Lease for two (2) , ten (10) year periods, subject to the following provisions:

34.1.1 Exercise of Option. Tenant shall have no right to exercise an option: (i) during the period commencing with the giving of any notice of default and continuing until said default is cured, (ii) during the period of time any Rent is due and unpaid, (iii) in the event that Landlord has given three or more notices of separate monetary or material non-monetary defaults, whether or not the defaults are cured, during the 12 months immediately preceding the exercise of the option, or (iv) if Tenant has assigned this Lease or has subleased more than sixty percent (60%) of the Premises. The period of time within which an option may be exercised shall not be extended or enlarged by reason of Tenant's inability to exercise an option because of paragraph
34.1.1. Tenant shall exercise the option by delivery of written notice to Landlord not less than 12 months nor more than 15 months prior to the expiration of the initial term and, if exercised, the first option period, of this Lease. If said notice is not delivered within said time period(s), the options shall terminate. Notwithstanding anything to the contrary contained in this Lease, if Landlord assigns, in whole or in part, Landlord's interest in this Lease or sells, in whole or in part, either the Property or the entity owning the Property, Tenant's right to exercise the option(s) under this Section 34 shall not be terminated and shall remain in effect so long as Tenant complies with the terms and conditions set forth in this Section 34.

34.2 Rent -Option.

34.2.1 Rent--First Option . The Base Annual Rental payable by Tenant during the first option period shall be 100% of the fair market rent for the Premises at the commencement date of such option period. The Base Annual Rental payable by Tenant would continue to be increased as of the expiration of every year of the option period commencing on the anniversary of the commencement of such option period by an amount equal to 3.00% of the Base Annual Rental for the preceding year. Provided Tenant has exercised the first option to extend pursuant to this Article 34, Landlord and Tenant shall promptly enter into an amendment to this Lease, amending, among things, the expiration date of this Lease and the amount of Base Annual Rental to be paid during the option period.

34.2.2 Rent--Second Option . The Base Annual Rental payable by Tenant during the first year of the second option period shall be 100% of the fair market rent for the Premises at the commencement date of such option period. The Base Annual Rental payable by Tenant would continue to be increased as of the expiration of every year of the option period commencing on the anniversary of the commencement of such option period by an amount equal to 3.00% of the Base Annual Rental for the preceding year. Provided Tenant has exercised the second option to extend pursuant to this Article 34, Landlord and Tenant shall promptly enter into an amendment to this Lease, amending, among things, the expiration date of this Lease and the amount of Base Annual Rental to be paid during the option period.

34.2.3 Fair Market Rent . If Landlord and Tenant cannot agree on the fair market rent of the Premises for the extension period within 30 days after the Tenant has notified Landlord of Tenant's exercise of the option, Landlord

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and Tenant shall each select, within 15 days of such notification, an appraiser who must be a qualified MAI appraiser with at least 5 years experience appraising commercial properties in the Elkridge, Maryland area to determine said fair market rental value. If one party fails to so designate an appraiser within the time required, the determination of fair market rental value of the one appraiser who has been designated by the other party within the time required shall be binding on both parties. The appraisers shall submit their determinations of fair market rental value to both parties within 30 days after their selection. If the difference between the two determinations is 10% or less of the higher appraisal, then the average between the determinations shall be the fair market rental value of the Premises. If said difference is greater than 10%, then the two appraisers shall within 15 days of the date the second determination is submitted to the parties designate a third appraiser who must also be a qualified MAI appraiser. The sole responsibility of the third appraiser will be to determine which of the determinations made by the first two appraisers is most accurate. The third appraiser shall have no right to propose a middle ground or any modification of either of the determinations made by the first two appraisers. The third appraiser's choice shall be submitted to the parties within 20 days after his or her selection. Such determination shall bind both of the parties and shall establish the fair market rental value of the Premises. Each party shall pay the fees and expenses of its appraiser and shall pay equal shares of the fees and expenses of the third appraiser. Fair market rent for the purposes of this Lease shall mean the then prevailing rent for property comparable in size, quality and location to the demised Premises, leased on terms comparable to the terms contained in this Lease.

ARTICLE 35. Right to Purchase

35.1 Purchase Option. Landlord hereby grants to Tenant the exclusive option to purchase the Property for 110% of the fair market value of the Property (the "Purchase Option "), subject to the following provisions:

35.1.1 No Default. Tenant shall have no right to exercise the Purchase Option unless the following shall be true or otherwise satisfied as of the date Tenant exercises the Purchase Option: (i) Tenant has not assigned this Lease or subleased more than sixty percent (60%) of the Premises, (ii) there has been no prior Tenant default under this Lease and Tenant is not currently in default under this Lease, and (iii) Tenant provides Landlord with documentary evidence demonstrating that Tenant has sufficient financial resources available to be able to pay the Purchase Price and to close the purchase within the time frame described below.

35.1.2 Exercise Notice. Such Purchase Option must be exercised, if at all, by Tenant delivering to Landlord notice thereof (the "Exercise Notice ") no earlier than 12 months prior to the expiration or termination of the initial Lease Term, it being understood that Tenant shall not have the right to exercise the Purchase Option until the last year of the initial Term. If Tenant does not timely deliver the Exercise Notice, the option herein granted shall terminate; time being of the essence with respect to the delivering thereof. If Tenant timely delivers an Exercise Notice, then Landlord shall sell to Tenant, and Tenant shall purchase from Landlord, the Property for 110% of the fair market value of the Property (which fair market value shall be determined without the inclusion of any Tenant Funded Improvements, it being understood that any

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determination of the fair market value of the Property shall be made as if the Tenant Funded Improvements had not been constructed at the Property). Landlord shall provide Tenant with Landlord's form of purchase and sale agreement for the sale of the Property within five (5) business days after Landlord's receipt of the Exercise Notice (the "Option PSA"). The Option PSA may provide for the following: (i) sale of the Property on an "as is" basis, with all faults and defects and without any representations or warranties of any kind, whether express or implied; (ii) a fifteen (15)-day due diligence period (the "Inspection Period") following the date the Purchase and Sale Agreement is executed by both parties; (iii) a cash deposit equal to ten percent (10%) of the Purchase Price to be paid by Tenant to Landlord upon execution of the Purchase and Sale Agreement, which funds shall be held in escrow in an interest bearing account, shall be non-refundable to Tenant after the Inspection Period for any reason other than a material default by Landlord, and shall be applicable to the Purchase Price at the Close of Escrow; (iv) all cash consideration; (v) that the closing of the sale transaction shall occur upon the expiration of the initial Lease Term; (vi) that Tenant shall be responsible for all closing costs in connection with the purchase of the Property, including, without limitation, all deed stamps and other recording costs, escrow and title fees and transfer taxes; and (vii) such other terms and conditions as Landlord desires to include.

35.1.3 Termination of Purchase Option. Upon the termination of the Purchase Option herein granted, (a) Tenant shall execute and deliver such documents as Landlord may request to evidence the termination thereof, including, without limitation, a quitclaim deed in recordable form memorializing the termination of the Purchase Option and (b) Landlord may execute, file and record an instrument evidencing the termination of the Purchase Option herein granted. If Tenant fails to execute and deliver such documents, then Landlord may do so. Tenant hereby appoints Landlord its attorney in fact for such purpose, which appointment is coupled with an interest and is irrevocable.

35.1.4 Fair Market Value . If Landlord and Tenant cannot agree on the fair market value of the Property within 30 days after the Tenant has delivered the Exercise Notice to Landlord, Landlord and Tenant shall each select, within 15 days of such notification, an appraiser who must be a qualified MAI appraiser with at least 5 years experience appraising commercial properties in the Elkridge, Maryland area to determine said fair market value. If one party fails to so designate an appraiser within the time required, the determination of fair market value of the one appraiser who has been designated by the other party within the time required shall be binding on both parties. The appraisers shall submit their determinations of fair market value to both parties within 30 days after their selection. If the difference between the two determinations is 10% or less of the higher appraisal, then the average between the determinations shall be the fair market value of the Property. If said difference is greater than 10%, then the two appraisers shall within 15 days of the date the second determination is submitted to the parties designate a third appraiser who must also be a qualified MAI appraiser. The sole responsibility of the third appraiser will be to determine which of the determinations made by the first two appraisers is most accurate. The third appraiser shall have no right to propose a middle ground or any modification of either of the determinations made by the first two appraisers. The third appraiser's choice shall be submitted to the parties within 20 days after his or her selection. Such determination shall bind both of the parties and shall establish the fair market value of the Property. Each party shall pay equal shares of the fees and expenses of the third appraiser. Fair market value for the purposes of this Article 35 shall mean the then prevailing fair market value for Property comparable in size, quality and location to the demised Property, and shall be based on the assumption that Tenant has exercised both of its options to renew the Lease Term in accordance with Article 34 at the then fair market rental rate.

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35.1.5 No Recording. Tenant agrees it shall not record any memorandum referencing its rights with respect to the Purchase Option without the prior written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion.

ARTICLE 36. Property Purchase Condition; Alternate Property Option

Tenant confirms that the effectiveness of this Lease with regard to Tenant's leasing of the Property is conditioned upon Landlord acquiring fee title to the Property. If Landlord is unable to acquire fee title to the Property, then in addition to Tenant's obligations under Section 4.4(a) of the Work Letter, Landlord shall have the right, at Landlord's sole option (the "Alternate Property Option"), to be exercised by Landlord on or before November 15, 2007 (the "Alternate Property Period"), to identify and purchase an alternative property located within the same general geographic location as the Property for Tenant to lease in lieu of the Property (the "Alternate Property") by giving Tenant notice of Landlord's election to do so. Notwithstanding the foregoing, if Landlord enters into a purchase agreement to purchase an Alternate Property before the expiration of the Alternate Property Period pursuant to the terms of this Article 36 but Landlord elects not to purchase such Alternate Property due to the discovery of a particular condition with respect to the Alternate Property which makes the purchase of the Alternate Property not feasible, the Alternate Property Period may be extended by Landlord for up to an additional six (6) months by delivery of written notice to Tenant. Any Alternate Property shall contain approximately the same rentable square footage as the Building and shall have a layout sufficient to allow Landlord to build-out the Alternate Property in accordance with the terms and conditions of the Work Letter. If Landlord exercises the Alternate Property Option, this Lease and the obligations of Landlord and Tenant under this Lease shall continue in full effect during the Alternate Property Period, provided that the Commencement Date shall not occur until the date of Mechanical/Electrical Completion with respect to the Alternate Property. Notwithstanding the foregoing, if either (a) the total cost set forth in the estimated project budget for the Alternate Property exceeds the total cost set forth in the Project Budget attached to the Work Letter Agreement, or (b) the Alternate Property requires material deferred maintenance or other material rehabilitation or remediation work, Landlord shall give notice thereof to Tenant (the "Alternate Property Notice") and Tenant shall have the right to approve such Alternate Property within fifteen (15) business days after receipt of the Alternate Property Notice, which approval shall not be unreasonably withheld or delayed. If Tenant reasonably disapproves the Alternate Property within the above 15 business-day period, Landlord shall not purchase the Alternate Property disapproved by Tenant and Landlord shall either (i) seek a new Alternate Property to purchase or (ii) terminate this Lease. If Tenant fails to disapprove the Alternate Property within the above 15 business-day period, Tenant shall be deemed to have approved the Alternate Property. If Landlord has elected to not exercise the Alternate Property Option (or otherwise fails to exercise the Alternate Property Option on or before the expiration of the Alternate Property Period), or if Landlord exercises the Alternate Property Option but is unable to acquire fee title to an Alternate Property during the Alternate Property Period, or if Tenant disapproves of a particular Alternate Property described in an Alternate Property Notice as provided above, then Landlord shall have the right to terminate this Lease, in which case, the Tenant's TI Contribution shall be returned to Tenant (less any Pre-Development Costs Tenant has not otherwise paid to Landlord) and Landlord and Tenant shall have no further obligations or liabilities under this Lease except for those expressly intended to survive, including, without limitation, Tenant's obligations under Section 4.4(a) of the Work Letter. If Landlord exercises the Alternate Property Option and acquires fee title to an Alternate Property during the Alternate Property Period, Tenant shall be obligated to lease the Alternate Property and Landlord and Tenant shall enter into an amendment to this Lease (i) modifying the definition of Property, the Base Annual Rental and such other terms as are necessary to reflect that the Property have been replaced with the Alternate Property and (ii) otherwise reaffirming the terms and conditions of this Lease (including all exhibits attached thereto) and Landlord's and Tenant's obligations hereunder.

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ARTICLE 37. Right of First Offer to Purchase

37.1 Grant of Right of First Offer to Purchase. Subject to the terms and conditions of this Article 37, commencing on the first day of the one hundred twenty-first (121st) month of the initial Term and continuing until expiration of the initial Term (the "ROFO Period"), Tenant shall have the one-time right of first offer to purchase the Property if at the time Tenant accepts Landlord's Offer (i) Tenant has not assigned this Lease or subleased more than sixty percent (60%) of the Premises, (ii) there has been no prior Tenant default under this Lease and Tenant is not currently in default under this Lease, and (iii) Tenant provides Landlord with documentary evidence demonstrating that Tenant has sufficient financial resources available to be able to pay the Purchase Price and to close the purchase within the time frame described below.

37.2 Landlord's Offer. If Landlord desires to sell the Property during the ROFO Period, Landlord shall submit to Tenant a written offer ("Landlord's Offer") identifying the price (the "Purchase Price") and all other terms and conditions at which Landlord is willing to sell the Building Site. Within *( business days after receipt of Landlord's Offer, Tenant shall give Landlord written notice of Tenant's rejection or unqualified and unconditional acceptance of Landlord's Offer and all of the terms and conditions contained therein, accompanied by the documentary evidence described in Section 37.1 above. If Landlord's Offer consists of proposed Purchase and Sale Agreement, Tenant shall give such written notice by delivering an original of such Purchase and Sale Agreement executed by Tenant. If Tenant fails to deliver such written notice within such * business day period, Tenant shall be deemed to have rejected Landlord's Offer.

37.3 Acceptance by Tenant. At Landlord's sole, subjective discretion, Landlord's Offer (and any Purchase and Sale Agreement provided in connection therewith) may provide for the following: (i) sale of the Property on an "as is" basis without representations or warranties of any kind; (ii) a fifteen (15)-day inspection and due diligence period (the "Inspection Period") following the date the Purchase and Sale Agreement is executed by both parties; (iii) a cash deposit equal to ten percent (10%) of the Purchase Price to be paid by Tenant to Landlord upon execution of the Purchase and Sale Agreement, which funds shall be held in escrow in an interest bearing account, shall be non-refundable to Tenant after the Inspection Period for any reason other than a material default by Landlord, and shall be applicable to the Purchase Price at the Close of Escrow;
(iv) all cash consideration; (v) closing within forty (40) days after full execution of the Purchase and Sale Agreement; (vi) allocation of closing costs (including title and escrow fees) in accordance with Elkridge County custom, provided that all transfer taxes in connection with the sale of the Property shall be paid by Tenant; and (vii) such other terms and conditions as Landlord desires to include.

37.4 Rejection by Tenant. If Tenant rejects (or is deemed to have rejected) Landlord's Offer, then Landlord shall be free to sell the Property without regard to Tenant's right of first offer to purchase; provided, however, that before entering into any agreement to sell the Property after Tenant

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rejects (or is deemed to have rejected) Landlord's Offer for a price that is lower than 90% of the Purchase Price, Landlord shall offer to sell the Property to Tenant at the reduced price Landlord is willing to accept. In such event, Landlord's written offer to Tenant to sell at the reduced price shall be treated as a new Landlord's Offer subject to all of the provisions of this Exhibit, except that if Tenant again rejects (or is deemed to have rejected) Landlord's Offer (i.e., at the reduced price), then Landlord will have no further obligation for the remainder of the ROFO Period or otherwise to present a Landlord's Offer to Tenant with respect to the Property and Landlord shall thereafter have the right to sell the Property to any party on any terms and conditions that Landlord may thereafter negotiate without any obligation to Tenant. Once the Property is sold to a third party after compliance by Landlord with the terms of this Article 37, each of Tenant's Purchase Option (as described in Article 35) and Tenant's right of first offer to purchase the Property (as described in this Article 37) shall be null and void and of no further force or effect, and Tenant shall execute, acknowledge and deliver to Landlord a quitclaim deed in recordable form whereby Tenant quitclaims to Landlord all of its right, title and interest in and to such Purchase Option, such right of first offer or otherwise to purchase the Property or any portion thereof (a "Quitclaim Deed"). The failure of Tenant to deliver a Quitclaim Deed within ten (10) days of Landlord's request therefor shall constitute a material default under this Lease.

37.5 Effect on Lease. If Tenant purchases the Property, this Lease shall automatically terminate and be of no further force or effect and neither party shall have any further rights or obligations under this Lease.

37.6 Termination of Tenant's Right of First Offer. If Tenant rejects (or is deemed to have rejected) Landlord's Offer as provided above, or if Tenant accepts Landlord's Offer and a default occurs under this Lease and/or Tenant fails to close any transaction after accepting Landlord's Offer, then (in any of those events) the provisions of this Article 37 shall be null and void and Landlord shall then and at all times thereafter be free to sell the Building Site to any person or entity upon whatever terms Landlord may find acceptable; provided, however, that this Lease shall not be terminated as a result of any default by Tenant or by the termination of the right of first offer unless Landlord expressly elects to exercise any termination rights available to Landlord under this Lease as a result of such default.

37.7 Excluded Transactions. Tenant's right of first offer to purchase shall not apply with respect to any of the following transactions: (i) a sale at foreclosure (or a deed in lieu of foreclosure) or any sale by a Landlord's mortgagee following foreclosure (or a deed in lieu of foreclosure); (ii) an exchange transaction or a tax deferred exchange transaction where the property Landlord desires to receive in exchange for the property being relinquished by Landlord cannot for any reason be acquired by Tenant for the purpose of the exchange; (iii) a sale by one co-owner to another co-owner; (iv) a conveyance to a corporation, partnership, limited liability company, trust or other form of entity wholly or partially in exchange for stock, a partnership or membership interest or other form of beneficial equity interest in such entity; (v) a conveyance as part of a portfolio sale; or (vi) a conveyance to an affiliate of Landlord, provided that the right of first offer to purchase shall survive any transaction of the kind described in this clause (vi).

37.8 No Recording. Tenant agrees it shall not record any memorandum referencing its rights with respect to the right of first offer without the prior written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion.

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37.9 Right of First Offer Personal. The right of first offer herein granted to Tenant is personal to the original named Tenant and may not be exercised or assigned voluntarily or involuntarily by or to any person or entity other than the original named Tenant.

ARTICLE 38. Miscellaneous

38.1 Gender. Whenever the singular number is used in this Lease, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders, and the word "person" shall include corporation, firm, or association, when required by the context.

38.2 Headings. The headings or title to the paragraphs of this Lease are for convenience only and do not in any way define, limit or construe the contents of such paragraphs.

38.3 Integration. This instrument contains all of the agreements and conditions made between the parties with respect to the hiring of the Property and may not be modified orally or in any other manner other than by a written instrument signed by all the parties to this Lease.

38.4 Choice of Laws. The laws of the State of Maryland as applied to contracts entered into between citizens of the State of Maryland and to be performed within the State of Maryland shall govern the validity, performance and enforcement of this Lease.

38.5 Severability. If any provision of this Lease is determined to be void by any court of competent jurisdiction, such determination shall not affect any other provisions of this Lease and such other provisions shall remain in full force and effect. If any provision of this Lease is capable of two constructions, one which would render the provision void and one which would render the provision valid, the provision shall be interpreted in the manner which would render it valid.

38.6 Amendment for Financing. Upon written request of Landlord, Tenant agrees to execute any lease amendments not materially altering the terms of this Lease, if required by the first mortgagee or beneficiary of a deed of trust encumbering real property of which the Property constitute a part ("Mortgagee") incident to the financing of the real property of which the Property constitute a part. Any change affecting the amount or timing of the consideration to be paid by Tenant or modifying the term of this Lease shall be deemed as materially alter the terms hereof.

38.7 Payments. Except as may otherwise be expressly stated, each payment required to be made by Tenant shall be in addition to and not in substitution for other payments to be made by Tenant.

38.8 Time of Essence. Time is of the essence in this Lease.

38.9 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes thereof, governmental restrictions, regulations, or controls, enemy or hostile governmental action, civil commotion, fire or other casualty, and other causes beyond the reasonable control of the party obligated

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to perform, shall excuse the performance by such party for a period equal to that resulting from such prevention, delay or stoppage, except those obligations of Tenant to make payment for rental and other charges pursuant to the terms of this Lease and those obligations of tenant set forth in the Work Letter Agreement.

38.10. Notices. All notices to be given by one party to the other under this Lease shall be in writing, mailed or delivered to the other party at the following addresses:

To Landlord:                  VIF II CEL-SCI Partners, LLC
                              Attn: Stan Wendzel
                              9811 Irvine Center Drive
                              Irvine, California 92618
                              Phone: (949) 498-2391; Fax: (949) 498-2397

with a copy to:               VIF II CEL-SCI Partners, LLC
                              c/o AEW Capital Management
                              Attn:  Asset Manager
                              World Trade Center East
                              Two Seaport Lane
                              Boston, Massachusetts 02210-2021
                              Phone (617) 261-9000; Fax: (617) 261-9555

To Tenant:                    Cel-Sci Corporation
                              Attn: Geert Kersten
                              8229 Boone Boulevard, Suite 802
                              Vienna, Virginia 22182
                              Phone: (703) 506-9460; Fax: (703) 506-9471

Mailed notices shall be sent by United States Postal Service, certified or registered mail, postage prepaid, or via reputable overnight courier (e.g., Federal Express) and shall be deemed to have been given on the date of proof of delivery.

Either party may, with proper notice, at any time designate a different address to which notices shall be sent.

38.11. Brokers. Landlord and Tenant each represents to the other that it has had no dealings with any real estate broker or agent in connection with the negotiation and/or execution of this Lease and agree to indemnify and defend the other against all liability, costs, expenses and charges arising from any claims that may be made against them by any real estate broker, agent, finder, or other person, alleging to have acted on behalf of Landlord or Tenant.

38.12. Confidentiality. During the course of this Lease the parties may exchange certain financial statements, accounting records and other documents that are clearly stamped "confidential" ("Confidential Information"). Landlord and Tenant hereby acknowledge and agree that the Confidential Information of

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each party is to be kept strictly confidential. Accordingly, except as may be required by law or court order, neither Landlord nor Tenant will, without the prior written consent of the other party, release, publish or otherwise distribute (and shall not authorize or permit any other person or entity to release, publish or otherwise distribute) any of the other party's Confidential Information to any person or entity other than such party's prospective lenders and purchasers of the Real Property and legal and financial advisors, each of whom shall agree to hold such information strictly confidential as if such persons were bound by the provisions of this Section 38.12. The obligations of this Section 38.12 will not apply to information that the receiving party can establish by written records (a) was known by it prior to the receipt of the Confidential Information from the disclosing party; (b) was disclosed to the receiving party by a third party having the right to do so; (c) was, or subsequently became, in the public domain through no fault of the receiving party, its officers, directors, employees or agents; or (d) was disclosed by the receiving party pursuant to any judicial, governmental or stock exchange request, requirement or order, so long as the receiving party provides the disclosing party with sufficient prior notice in order to allow the disclosing party to contest such request, requirement or order.

38.13 Memorandum of Lease. Tenant shall neither execute nor record a memorandum of this Lease. Tenant shall execute, acknowledge and deliver at any time after the date of this Lease, at the request of Landlord, a "memorandum of lease" suitable for recording. Landlord may record such a memorandum of lease.

38.14 Absolute Net Lease. This Lease shall be deemed and construed to be an "absolute net lease" and, except as herein expressly provided, the Landlord shall receive all payments required to be made by Tenant, free from all charges, assessments, impositions, expenses, deductions of any and every kind or nature whatsoever. Landlord shall not be required to furnish any services or facilities or to make any repairs, replacements, or alterations of any kind in or on the Property. Tenant shall receive all invoices and bills relative to the Property and, except as otherwise provided herein, shall pay for all expenses directly to the person or company submitting a bill without first having to forward payment for the expenses to Landlord. Tenant shall at Tenant's sole cost and expense be responsible for the management of the Property, shall maintain the landscaping, parking lot and shall make all additional repairs and alterations as required to maintain the Property in the condition required under this Lease.

38.15 Waiver of Jury Trial. The parties hereby waive their respective rights to trial by jury in any action or proceeding involving the Property or arising out of this Lease.

38.16 Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) is dependent on Tenant's specific use of the Property, Landlord makes no warranty or representation as to whether or not the Property comply with the ADA or any similar legislation. In the event that Tenant's use of the Property requires modifications or additions to the Property in order to be in ADA compliance, Tenant agrees to make any such necessary modifications and/or additions at Tenant's expense.

38.17 Execution in Counterparts. This Lease may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of

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such counterparts shall constitute one agreement. To facilitate execution of this Lease, the parties may execute and exchange by telephone facsimile counterparts of the signature pages.

[Signature Page Follows]

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year set forth at the beginning hereof.

LANDLORD:                                TENANT:

VIF II CEL-SCI Partners, LLC,            CEL-SCI CORPORATION,
a Delaware limited liability company     a Colorado corporation

By:    /s/ Stan Wendzel                  By:    /s/ Geert R. Kersten
Name:  Stan Wendzel                      Name:  Geert R. Kersten
Title: Managing Member                   Title: Chief Executive Officer

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EXHIBIT A

DESCRIPTION OF PROPERTY

*


EXHIBIT B

CONCEPTUAL FLOOR PLAN

(See Schedule 7 to Work Letter Agreement)


EXHIBIT C

FORM OF OFFICER'S CERTIFICATE

[Date]

[___] LLC
Attn: Stan Wendzel
9811 Irvine Center Drive
Irvine, CA 92618

Re: Lease Agreement: Officer's Certificate

Ladies and Gentlemen:

This certificate is delivered pursuant to Section 3.6.3 of that certain Lease Agreement dated as of [ ] (the "Lease"), by and between [_____________] LLC, a [______] limited liability company ("Landlord") and [_____________], Inc., a [______] corporation ("Tenant"). Tenant hereby represents, warrants and certifies that:

(a) [Choose one:][(1): The value of Tenant's cash and Cash Equivalents during the calendar quarter ending [ ] is equal to or greater than the Cash Threshold as defined in Section 3.6 of the Lease: The value of Tenant's cash and Cash Equivalents during the calendar quarter ending [ ] is less than the Cash Threshold as defined in Section 3.6 of the Lease.]

(b) [If Applicable:][The value of Tenant's cash and Cash Equivalents has been equal to or greater than the Cash Threshold as defined in Section 3.6 of the Lease for the following two consecutive calendar quarters: [ ] and [ ].]

The Landlord is entitled to rely on each of these representations, warranties and certifications. Capitalized terms used in this certificate that are otherwise not defined shall have the meaning assigned in the Lease.

CEL-SCI CORPORATION,(1)
a Colorado corporation.

By:

Name:

Title:


EXHIBIT D

WORK LETTER

(See Following Pages)


WORK LETTER AGREEMENT

(Cel-Sci Manufacturing Facility/* Maryland)

THIS WORK LETTER AGREEMENT (this "Work Letter"), made between VIF II CEL-SCI PARTNERS, LLC, a Delaware limited liability company ("Landlord"), and CEL-SCI CORPORATION, a Colorado corporation ("Tenant"), as of June 6, 2007, forms part of the Lease of even date herewith between Landlord and Tenant (the "Lease"). The terms, conditions and covenants set forth herein shall have the same force and effect as if set forth verbatim in the body of the Lease. If there is any conflict between the Lease and this Work Letter with respect to the construction of the Improvements, this Work Letter shall control.

ARTICLE I
DEFINED TERMS

As used herein, all capitalized terms used in this Work Letter and not defined herein have the meanings assigned them in the Lease, and:

1.1 "Alternate Property" has the meaning specified in the Lease.

1.2 "Alternate Property Purchase Agreement" means the purchase agreement for the purchase of the Alternate Property in the event escrow fails to close under the Purchase Agreement and Landlord elects to purchase the Alternate Property.

1.3 "Architect" means Gaudreau Inc., or such other architectural firm reasonably acceptable to Landlord and Tenant.

1.4 "Aseptic Fill Suite" means the cGMP compliant fill/finish suite designed and manufactured by *.

1.5 "Baseline Documents" has the meaning specified in Paragraph 2.1(a) below.

1.6 "Budgeted Project Cost" means the total of Project Cost specified on the Project Cost Budget to be attached hereto as Schedule 1, adjusted hereafter only as follows: (A) increased by the aggregate net additions to Project Cost resulting from Value Engineering Changes, changes required to comply with applicable Requirements, Tenant Changes, Tenant Delays, Force Majeure or additional costs due to the Improvements being constructed at the Alternate Property, if applicable, and (B) decreased by the aggregate net reductions in Project Cost resulting from Value Engineering Changes, Tenant Changes and reductions in the "contingency" amount in the Project Budget.

1.7 "Building" means the approximately 73,025 square foot building located on the Property.

1.8 "Building Permits" means the non-discretionary governmental permits or approvals legally required to perform actual construction of the Improvements, expressly excluding (i) any permits or approvals Tenant is required to obtain pursuant to the Purchase Agreement, (ii) any other permits or approvals regarding environmental matters and (iii) any FDA validation of the manufacturing area within the Building.

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1.9 "Built-Out/Improved Space" means any space that has HVAC, drop ceilings, demising walls, lighting and flooring and which can be utilized as either office, lab, manufacturing (biologics), cafeteria or tech space. The total amount of Built-Out/Improved Space within the Premises shall in no event be less than 28,000 total square feet, of which, a maximum of (i) 15,000 square feet may consist of manufacturing (biologics) space and (ii) 4,000 square feet may consist of [utility/clean room] space.

1.10 "Business Days" means all Days, excepting Saturdays, Sundays and bank holidays.

1.11 "Commencement Date" means the date on which the Improvements have been Mechanically/Electrically Completed, as set forth in Section 2.1 of the Lease.

1.12 "Conditional Occupancy Permit" means a conditional occupancy permit, a temporary certificate of occupancy, or a substantial equivalent, issued by the applicable Governmental Authority within the jurisdiction in which the Property is located, legally permitting Tenant's occupancy of the Premises.

1.13 "Construction Contract" means a GMAX contract for construction of the Improvements between Landlord and the General Contractor or an Other Contractor as described in Section 3.1.

1.14 "Contractor" means any of the General Contractor, Other Contractors or Subcontractors.

1.15 "Cost Savings Incentive Fee" means the fee payable to Landlord if the final Project Cost is less than the amount set forth in the Project Budget (defined below), whether resulting from scope changes, Value Engineering Changes, negotiated decreases or otherwise (provided that no Cost Savings Incentive Fee shall be paid with regard to the "G.C. Contingency (within GMP)" line item set forth on page 1 of Schedule 1 (Project Budget) attached hereto), which fee shall be an amount equal to fifty percent (50%) of the difference between such Project Budget and the final Project Cost.

1.16 "Days" means calendar days.

1.17 "Design Development Plans" means the stage at which the Plans are approximately sixty percent (60%) complete.

1.18 "Development Management Fees" means an aggregate amount equal to 3.00% of the total Project Cost payable to Landlord as provided herein, provided that for purposes of determining the Development Management Fees, total Project Costs shall not include any Development Management Fees.

1.19 "Direct Costs" means the costs of constructing the Improvements, including, without limitation, any and all (i) costs of all on-site and off-site preparation work, (ii) costs of labor and materials, (iii) contractors' and subcontractors' fees and general conditions, (iv) contractor insurance and bond

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premiums, (v) sales, use and other taxes on any of the foregoing and (vi) until allocated or eliminated from the Project Budget, contingency allowances.

1.20 "Engineer" means *.

1.21 "Excess Cost" means the amount, if any, by which the Budgeted Project Cost (including any revised Budgeted Project Cost) exceeds the sum of Landlord's Share of Project Cost plus Tenant's TI Contribution (as defined in the Lease).

1.22 "Final Plans" means the construction plans and specifications for the Improvements (or any part thereof) as certified by the Engineer and stamped by the relevant Governmental Authority in conjunction with the issuance of the Building Permits for the Improvements. For confidentiality purposes, any information provided in the Final Plans for purposes of obtaining the Building Permits shall be limited to only such information as is necessary to obtain the Building Permits and shall not require the disclosure of specific room names, equipment placement or other Tenant business-specific items.

1.23 "Financing Costs" means the following amounts to cover Landlord's cost of funds: (A) any fees, points, commissions or other compensation payable by Landlord in connection with any financing secured by Landlord for the Project Cost, and (B) the 3 month LIBOR rate plus 2.75% per year on each monthly advance of Landlord's Share of Project Cost, computed and accrued each month on the basis of a 360-day year comprised of 12 months of 30 days each, from the date such advance is made until the Commencement Date.

1.24 "Force Majeure" means any cause beyond Landlord's reasonable ability to avoid or control, including, without limitation: (A) fire, explosion and other sudden force where due to natural or unknown causes or the fault of others; (B) earthquake and other earth movement; (C) flood, storm, and other natural disasters; (D) unusually inclement weather (when compared with the 30 year normal precipitation figures for Elkridge, Maryland, as compiled by the National Oceanographic and Atmospheric Administration); (E) hurricanes, tornadoes and other unusually violent storms; (F) war and civil disturbance; (G) vandalism, theft and other criminal acts of third parties; and (H) to the extent not preventable by commercially reasonable measures on the part of Landlord or Tenant, as applicable, (i) labor unrest or disputes including strikes and slow-downs, (ii) unavailability of needed equipment, materials, supplies or services, (iii) interruption of transportation or utilities, (iv) undisclosed field conditions, and (v) acts or failure to act on the part of Governmental Authorities (including, without limitation, moratoria on or other delays not due to the fault of Landlord or its agents in the processing or issuance of any required license, permit or approval). Without limiting the generality of the foregoing, for purposes of this Work Letter, "Force Majeure" shall also include undisclosed field conditions and previously unannounced changes by Governmental Authorities (such as inspectors) in the interpretation or application of Requirements, whether formal or informal, written or oral.

1.25 "General Contractor" means BE&K Building Group, Inc., 8000 Towers Crescent Drive, Vienna, Virgina, or such other firm as Landlord in accordance with Paragraph 3.1 may engage as the general contractor for Landlord's Work with the prior reasonable approval of Tenant; provided, however, that Landlord shall not be required to obtain Tenant's approval of any general contractor or subcontractor performing exterior improvements to the Property, it being understood that Landlord may select such general contractor or subcontractor in Landlord's sole, subjective discretion.

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1.26 "General Contractor's Estimated Budget" means the estimated budget attached hereto as Schedule 3 which sets forth the estimated Project Cost based on major facility components.

1.27 "Governmental Authority" means any governmental or quasi-governmental agency having jurisdiction over the Land or any portion of the Improvements and/or exercising approval rights with respect to the issuance of a Building Permit.

1.28 "Improvements" means the work required to complete construction of a clinical bio-manufacturing facility in accordance with the Final Plans.

1.29 "Indirect Costs" means the (i) fees and expenses of any engineers and other design professionals or consultants, (ii) permitting and inspection fees, (iii) Landlord insurance costs during the period of design and construction of the Improvements, (iv) legal fees and expenses incurred in connection with the legal documentation and financing of the Project, and (v) other items identified as Indirect Costs in the Project Budget to be attached as Schedule 1.

1.30 "Landlord's Representative" means the individual from time to time designated to act as such by Landlord, in a written notice to Tenant. Initially, Landlord's Representative shall be Stan Wendzel.

1.31 "Landlord's Share of Project Cost" means the amount contributed by Landlord to fund the Project Cost, which amount shall not exceed [$11,850,000.00] plus the amount of fees, points, commissions or other compensation payable by Landlord in connection with any financing secured by Landlord for the Project Cost.

1.32 "Landlord's Work" means the construction of the Improvements.

1.33 "Mechanical/Electrical Completion" and variants (such as "Mechanically/ Electrically Complete") means completion of Landlord's Work to the point where
(i) construction is sufficiently complete, in accordance with the Final Plans, so that Tenant can occupy the Premises and use the Premises for the permitted use set forth in the Lease, (ii) commissioning (as defined in Tenant's commissioning plan) and acceptance testing has been completed in order to satisfy the Installation Qualification (IQ) requirements contained in the Validation Master Plan and the manufacturers' specifications, and (ii) Landlord has obtained a Conditional Occupancy Permit for the Improvements and the General Contractor has certified that the Improvements are ready for start-up, with all of the foregoing subject only to (A) Punchlist Items and (B) Tenant's completing its own fitting out and equipping of such space (with improvements, equipment and installations that are not specifically covered by the Final Plans and thus are not part of the Improvements).

1.34 "Other Contractor" means any contractor, other than the General Contractor, engaged directly by Landlord to perform any exterior work to the Building, which Other Contractors may be selected by Landlord in Landlord's sole, subjective discretion.

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1.35 "Outside Date" means the date which is designated as the Outside Date in the Project Schedule, as extended by Force Majeure but without extension for Tenant Delays.

1.36 "Plans" means, as of any given time, the current stage of the plans, drawings, specifications and/or construction documents prepared by the Engineer and its consultants, or other design specialists engaged by Landlord, for the Improvements.

1.37 "Pre-Development Costs" means costs incurred by Landlord with respect to the Improvements prior to acquisition of the Property (or Alternate Property) by Landlord, including, without limitation, costs for zoning and other entitlement work, preliminary design and engineering work and related legal work.

1.38 "Preliminary Plans" means the stage at which the Plans are approximately fifty percent (50%) complete.

1.39 "Project Budget" means the Project Budget to be attached to this Work Letter as Schedule 1, as adjusted in accordance with this Work Letter.

1.40 "Project Cost" means all of the Property Acquisition Costs, and all costs of preparing the Premises, Building and Property for the Improvements and designing, constructing and fixturing the Improvements, as described in the Project Budget, including, but not limited to, Pre-Development Costs, Direct Costs, Indirect Costs and Financing Costs.

1.41 "Project Schedule" means the Project Schedule to be attached to this Work Letter as Schedule 2, as adjusted in accordance with this Work Letter.

1.42 "Property" means the property on which the Premises and Building are located and which is to be purchased by Landlord under the Purchase Agreement.

1.43 "Property Acquisition Costs" means the actual cost to Landlord of acquiring the Property, including, without limitation, (i) the Purchase Price, (ii) legal fees and other expenses of negotiating, documenting and closing under the Purchase Agreement, (iii) costs of pre-acquisition due diligence with respect to the Property, (iv) title insurance premiums, survey costs, transfer taxes, recording fees, escrow charges and other customary closing costs, to the extent paid by Landlord, (v) to the extent the Property is part of a larger parcel of land, costs of legally severing the Property from the larger tract of land of which it is part, including fees and expenses incurred in preparing, filing, and prosecuting any applications for a lot split, parcel or subdivision map and the costs of complying with the terms and conditions of any governmental approval therefor and (vi) the costs of testing for, monitoring and remediating any existing contamination of the Property by Hazardous Substances.

1.44 "Punch List Items" has the meaning specified in Paragraph 3.6 below.

1.45 "Purchase Agreement" means that certain Purchase and Sale Agreement, dated March 21, 2007, between San Tomas Properties, LLC and BioProperties, Inc.].

1.46 "Purchase Price" means the purchase price to be paid by Landlord for the Property under the Purchase Agreement, or if Landlord elects to purchase the Alternate Property, then the purchase price to be paid by Landlord for the Alternate Property under the Alternate Property Purchase Agreement.

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1.47 "Site Plan" means the preliminary site plan attached to this Work Letter as Schedule 5 for the Building to be located on the Land.

1.48 "Stage of the Plans" means each stage of development of the Plans; namely, the Preliminary Plans, Design Development Plans and Final Plans.

1.49 "Start of Construction" means the date on which Landlord has obtained the Building Permits and has actually commenced construction of the Improvements pursuant to such Building Permits.

1.50 "Subcontract" means a contract between the General Contractor, an Other Contractor, or a higher-tier Subcontractor, on the one hand, and a Subcontractor, on the other hand, for the provision of labor, materials and/or equipment for some portion of the Improvements.

1.51 "Subcontractor" means any firm engaged (but not by Landlord) to provide labor, materials and/or equipment for some portion of Landlord's Work.

1.52 "Target Completion Date" means the date which is designated as the targeted date for Mechanical/Electrical Completion in the Project Schedule, as extended by Force Majeure and Tenant Delays.

1.53 "Tenant Change" means any change in the Plans initiated by Tenant (to the extent permitted under this Work Letter) and shall include, without limitation, any (A) change in scope of work, (B) addition or deletion of specified elements of the Improvements, and/or (C) change in the specified grade or quality, manufacturer or supplier of materials, fixtures or equipment; but shall not include (i) Value Engineering Changes, (ii) changes required to comply with applicable Requirements (unless resulting from a change in Tenant's proposed use of the Improvements) or (iii) changes required to correct or clarify design, engineering or construction errors.

1.54 "Tenant Delay" means any delay in the acquisition of the Property or the design and construction of the Improvements caused by an act or wrongful failure or delay in acting on the part of Tenant or any of Tenant's employees, agents or contractors, including, but not limited to, (A) any failure of Tenant to provide notice of approval or objection within specified time periods, even if such failure is deemed to be approval, (B) any delays resulting from Tenant's failure properly to coordinate the work of Tenant's contractors and consultants with Landlord's Work, (C) Tenant Changes, (D) any interference by Tenant or any of Tenant's employees, agents or contractors with the construction of the Improvements, including, without limitation, any interference during the exercise of any inspection rights pursuant to Paragraphs 3.4, 6.1, 6.2 and/or 6.3, below, and/or (D) any act or failure identified as an occasion of Tenant Delay in this Work Letter or any provision of the Lease, but excluding the exercise of Tenant's rights of review, approval and objection with respect to the Baseline Documents so long as timely and properly exercised hereunder. In the event of any Tenant Delay(s), the Commencement Date under the Lease shall be accelerated by the number of days of those Tenant Delays.

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1.55 "Tenant's Representative" means the individual from time to time designated to act as such by Tenant, in a written notice to Landlord. Initially, Tenant's Representative shall be William Brooke Jones.

1.56 "Validation Master Plan" means that certain specific plan prepared by a third party designated by Tenant and reasonably approved by Landlord setting forth the minimum Installation Qualification (IQ) and Operational Qualification (OQ) requirements required to achieve Mechanical/Electrical Completion, which plan, once finalized and approved, shall be attached to this Work Letter by way of amendment.

1.57 "Value Engineering Changes" shall mean cost-savings changes proposed by Landlord or Project Manager (or any of the consultants or contractors engaged by Landlord or Tenant), excluding material reductions in the size of any of the Buildings or other material reductions in the scope of Landlord's Work as set forth in the approved Baseline Documents, except as may be required by Landlord pursuant to Paragraph 4.2(a) below. In particular, in no event shall any changes be made to any Tenant specified equipment, utilities or aseptic core design (e.g., autoclaves, fill machines). Tenant shall approve any proposed Value Engineering Changes within three (3) days after receipt of such proposed changes from Landlord, provided that if Tenant reasonably determines that the proposed Value Engineering Change will require review by an additional engineer or other consultant, Tenant shall give Landlord written notice of the need for such additional review within the above 3-day period, in which case, Tenant shall have an additional ten (10) days from delivery of such notice to Landlord to approve the proposed Value Engineering Change. If Tenant fails to disapprove the proposed Value Engineering Changes within the above 3-day period (or additional 10-day period, if applicable), Tenant shall be conclusively deemed to have approved the proposed Value Engineering Changes. If Tenant disapproves the proposed Value Engineering Change within the above 3-day period (or additional 10-day period, if applicable), Landlord shall not implement the Value Engineering Change.

ARTICLE II
DESIGN DEVELOPMENT AND APPROVAL

Landlord and Tenant hereby acknowledge their mutual intent that Landlord cause the Improvements to be constructed within the Premises and Mechanically/Electrically Completed by the Target Completion Date, substantially as contemplated in the Preliminary Plans and more or less in the locations indicated on the Site Plan attached hereto as Schedule 5, subject to the Requirements of Governmental Authorities (including, but not limited to, all applicable local code requirements) and by unanticipated field conditions (including, but not limited, to conditions requiring remediation or other corrective or prophylactic measures) or otherwise made in accordance with this Work Letter. Subject to Force Majeure and Tenant Delay, Landlord shall use all commercially reasonable efforts to complete Landlord's Work in accordance with the Final Plans and within the limits of the Project Budget and the Project Schedule. The Parties shall develop the design of the Improvements in accordance with the following procedures:

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2.1 Baseline Documents; Preliminary Plans.

(a) Landlord and Tenant hereby approve the Project Budget, Project Schedule, and General Contractor's Estimated Budget attached hereto as Schedules 1, 2 and 3, respectively. As soon as reasonably practicable and, in any event, within
[**sixty (60) days**--subject to verification with consultants and engineers] after the Landlord has obtained financial partner investment committee approval of the Lease and the Property purchase ("Committee Approval"), Landlord shall have the Preliminary Plans prepared and submitted to Tenant for approval pursuant to the procedure set forth below in this Section 2.1, which together with the Project Budget, Project Schedule and General Contractor's Estimated Budget, collectively constitute the "Baseline Documents". Notwithstanding the foregoing, if Landlord exercises the Alternate Property Option (as defined in the Lease), the Baseline Documents (i.e., Project Budget, Project Schedule, General Contractor's Estimated Budget and Preliminary Plans) shall be revised to reflect the build-out for the Alternate Property (the "Alternate Baseline Documents") and shall be submitted to Tenant for approval pursuant to the following procedure:

(b) Within fifteen (15) Business Days after the Preliminary Plans (or Alternate Baseline Documents, as applicable) are initially submitted to Tenant for approval, Tenant shall give Landlord's Representative and the Engineer written notice (in reasonable detail) of each change that Tenant reasonably requires in such proposed Preliminary Plans (or Alternate Baseline Documents, as applicable) (an "Objection Notice"). All changes so required by Tenant shall constitute Tenant Changes.

(c) Upon receiving a timely and proper Objection Notice from Tenant with respect to the proposed Preliminary Plans (or Alternate Baseline Documents) and subject to Paragraph 2.1(c), below, Landlord shall cause the Engineer, as promptly as practicable but in all events within ten (10) business days after receipt of a timely and proper Objection Notice from Tenant, to have such proposed Preliminary Plans (or Alternate Baseline Documents) revised to incorporate each of the changes reasonably required by Tenant and resubmitted to Tenant for approval. Tenant shall have five (5) Business Days after receiving such revised Preliminary Plans (or Alternate Baseline Documents) to give Landlord's Representative and the Engineer any Objection Notice, and Tenant's right to object to such revised Preliminary Plans (or Alternate Baseline Documents) shall be limited to changes required to correct any failure of the revised Preliminary Plans (or Alternate Baseline Documents) properly to reflect the changes in Tenant's initial Objection Notice to such proposed Preliminary Plans (or Alternate Baseline Documents). If necessary, this process shall be repeated (subject to the same five (5) Business Day period in which Tenant may give an Objection Notice) until the Preliminary Plans (or Alternate Baseline Documents) have been approved by Tenant.

(d) Notwithstanding the foregoing, if Landlord and/or Engineer reasonably determine that the changes set forth in any Objection Notice are not consistent with the overall design of the Improvements or would otherwise impair or interfere with the functionality of the Improvements or Building or Landlord's ability to develop the remainder of the Building and Property, Landlord and/or engineer may notify Tenant in writing thereof, describing in reasonable detail the basis for Landlord's and/or Engineer's determination (the "Response Notice"). Tenant shall have five (5) Business Days after receiving such Response Notice to give Landlord's Representative and the Engineer either (i) a revised Objection Notice reflecting the comments set forth in the Response Notice, or
(ii) written notice confirming Tenant's withdrawal of the Objection Notice and

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that Tenant has approved the Preliminary Plans (or Alternate Baseline Documents). Landlord and Tenant agree to work reasonably with each other to reach agreement on any Objection Notices delivered by Tenant.

(e) Unless and except to the extent that Tenant gives a timely and proper Objection Notice to the proposed Preliminary Plans (or Alternate Baseline Documents) submitted to Tenant for approval (or a revised Objection Notice to the extent a Response Notice has been given), Tenant shall be deemed to have approved the same (and all of the elements and details therein).

(f) Once the Preliminary Plans (or Alternate Baseline Documents) have been approved (or deemed approved) by Tenant in accordance with this Paragraph 2.1, Landlord and Tenant shall promptly prepare and execute an amendment to this Work Letter in order to incorporate the components of the approved Baseline Documents (or Alternate Baseline Documents) herein as follows: (i) the Preliminary Plans shall be attached and incorporated as a new Schedule 6 to this Work Letter, or
(ii) if the Alternate Property Option has been exercised, the revised Project Budget, Project Schedule and General Contractor's Estimated Budget comprising the Alternate Baseline Documents shall be attached and replace the existing Schedule 1, Schedule 2 and Schedule 3 attached to this Work Letter.

2.2 Subsequent Development of Plans.

(a) Following approval of the Baseline Documents (or Alternate Baseline Documents), Landlord shall cause the Plans to be further developed consistent with the Baseline Documents (or Alternate Baseline Documents) (subject to such changes as any Governmental Authority may require as a condition to the timely issuance of a Building Permit) until production of the Final Plans, and Tenant shall have no further approval rights with respect thereto except for any changes required by any Governmental Authority (which approval for Governmental Authority required changes shall not be unreasonably withheld or delayed); however, upon completion of the Design Development Plans, Landlord shall provide Tenant with a copy of the Design Development Plans and Landlord and Tenant (and their respective representatives and consultants, as applicable) shall, no sooner than three (3) business days after Tenant receives a copy of the Design Development Plans, meet to review and discuss the Design Development Plans for the limited purposes of confirming that they conform to the approved Baseline Documents and of keeping Tenant informed with respect to the further development of the Plans.

(b) Tenant acknowledges that Landlord shall have no obligation to make any changes to the Baseline Documents or Alternate Baseline Documents (or any subsequent Stage of the Plans) requested by Tenant following approval of the Baseline Documents (or Alternate Baseline Documents) other than those changes correcting any mistakes or omissions of design elements previously agreed to by Landlord and Tenant; provided, however, that if Landlord agrees to make any such changes, such changes shall constitute Tenant Changes and all additional costs related thereto shall constitute increases in the Project Cost, including, without limitation, costs for re-design work or the incremental cost of the changed elements, costs for possible delay, and costs for labor and any materials already ordered on the basis of the approved Baseline Documents.

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2.3 Revisions to Project Budget and Project Schedule.

(a) After completion of each of the Design Development Plans and the Final Plans, Landlord shall, as promptly as practicable, prepare and deliver to Tenant for Tenant's information only a revised Project Budget and revised Project Schedule, reflecting Landlord's reasonable estimation of the total Project Cost and the critical path timeline for Mechanical/Electrical Completion of Landlord's Work, based on each such Stage of the Plans. With such revised Project Budget and Project Schedule, Landlord shall provide a schedule detailing, with respect to any Tenant Changes incorporated in such Stage of the Plans, the increase in cost and/or time (if any) estimated to result from such change, provided that Tenant shall have no approval rights with respect thereto.

(b) Also, at any other time that Landlord reasonably determines that the Project Budget or the Project Schedule has been adversely impacted by any Force Majeure events, Landlord shall, as promptly as practicable, prepare and deliver to Tenant for Tenant's information a revised Project Budget and revised Project Schedule, reflecting Landlord's reasonable estimation of the total Project Cost and the critical path timeline for Mechanical/Electrical Completion of Landlord's Work as affected by such event(s).

(c) If a revised Project Budget shows an increase in Project Cost (A) over and above the amount of the Project Cost set forth in the Project Budget initially approved as part of the Baseline Documents, including any further increase in the excess of Project Cost over said amount, or (B ) resulting in (or increasing) Excess Costs, or if a revised Project Schedule shows a delay (including any further delay) in the scheduled date of Mechanical/Electrical Completion beyond the Target Completion Date, then Landlord shall, at Tenant's written request, use reasonable efforts to propose additional Value Engineering Changes or time-saving changes to eliminate or reduce such increase.

(d) Landlord shall notify Tenant (for Tenant's information only, without any approval rights) from time to time promptly after Landlord determines that any Tenant Change or any other unforeseen change not resulting from the negligence or willful misconduct of Landlord will cause an increase in the Budgeted Project Cost of more than one hundred thousand dollars ($100,000.00).

2.4 Record Drawings. As soon as practicable following Mechanical/Electrical Completion, Landlord shall deliver to Tenant two (2) paper copies and one (1) electronic copy of the record drawings for the electrical and control systems of the Improvements (and of any other record drawings Landlord may obtain for the Improvements from the Engineer and/or the General Contractor) for the purpose of facilitating safe and efficient operation and maintenance of such systems by Tenant and its contractors or consultants.

ARTICLE III
CONSTRUCTION OF LANDLORD'S WORK

3.1 Selection of Contractors. At such time as Landlord deems appropriate (estimated to be approximately upon completion of the Design Development Documents), Landlord shall engage the General Contractor under the Construction

10

Contract (which shall be a guaranteed maximum price ("GMAX") contract consistent with the Project Budget and Project Schedule as then approved), shall deliver to Tenant written notification of the amount of the GMAX, and shall cause the General Contractor, in consultation with Landlord, to select the primary Subcontractors, for performance of Landlord's Work. Before entering into the Construction Contract, Landlord shall provide Tenant with a copy of the proposed final Construction Contract for Tenant's approval, which approval shall not be unreasonably withheld or delayed. If Tenant fails to disapprove the proposed Construction Contract within three (3) business days after receipt, Tenant shall be conclusively deemed to have approved the Construction Contract. If Tenant timely disapproves the Construction Contract within the above 3-business day period, Landlord shall attempt to negotiate the changes requested by Tenant with the General Contractor and shall deliver any revised Construction Contract to Tenant for review. The above-process shall continue until the Construction Contract has been approved by Landlord, Tenant and General Contractor. Also, at such time as Landlord deems appropriate, Landlord shall select and engage any Other Contractor(s) required for completion of any exterior portion of Landlord's Work. In selecting the Contractors for Landlord's Work, Landlord shall be free to employ such methods (and to direct the General Contractor, in the selection of Subcontractors, to employ such methods), including (but not limited to) competitive bidding and negotiation of contract price, competitive bidding and negotiation of fees and general conditions or negotiated contract, as Landlord deems appropriate in its reasonable judgment.

3.2 Permits. Landlord shall be responsible for obtaining, on a timely basis, any Building Permits required in connection with Landlord's Work. Fees and other charges for any such Building Permits (and other costs incurred in obtaining any such Building Permits) shall be part of Project Cost. Tenant shall be responsible, at Tenant's sole cost and expense and not as part of Project Cost, for obtaining any other permits and approvals required in connection with the Land, the project and/or Tenant's intended use and operation thereof, including, without limitation, any radiological permits and/or licenses, any permits or approvals Tenant is required to obtain pursuant to the Purchase Agreement and any other permits or approvals regarding environmental matters and/or air clearance.

3.3 Completion of Landlord's Work. Subject to Force Majeure and Tenant Delays, Landlord shall (A) cause Landlord's Work to be completed in accordance with the Final Plans subject to all applicable Requirements, and (B) use its commercially reasonable efforts to cause Landlord's Work to be Mechanically/Electrically Completed by the Target Completion Date, provided, however, that if Landlord's Work is not Mechanically/Electrically Completed by the Target Completion Date, or by the Outside Date, the Lease shall not be void or voidable and Landlord shall have no liability to Tenant with respect thereto. Landlord shall give Tenant prompt written notice of Mechanical/Electrical Completion and shall also give Tenant written notice of the anticipated date of Mechanical/Electrical Completion at least thirty (30) days in advance of such anticipated date.

3.4 Inspection Rights. Subject to coordination with Landlord's Representative and Tenant's access rights under Section 6.2, below, upon a minimum twenty-four
(24) hours prior notice, Tenant's Representative shall be permitted access to the Premises during the construction of Landlord's Work to inspect the progress of such work and Tenant's Representative may be accompanied by a reasonable number of Tenant's employees and consultants, not to exceed five (5) without the express consent of Landlord. Tenant shall cause Tenant's Representative and any

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other individuals accompanying Tenant's Representative to comply with all applicable terms and conditions of the Lease and all reasonable rules of the General Contractor or Landlord regarding access to and activities on the Premises during construction of Landlord's Work, including, without limitation, the maintenance by Tenant and its contractors and subcontractors of workers' compensation and public liability and property damage insurance in amounts and with companies and on forms satisfactory to Landlord, with certificates of such insurance being furnished to Landlord prior to their entry onto the Premises and all other applicable terms and conditions of the Lease.

3.5 Project Meetings; Reports. During construction of Landlord's Work, Landlord shall conduct meetings every week (or as frequently as Landlord and Tenant may otherwise elect) with the Tenant Representative (and such other representatives as Tenant may designate) to discuss the performance and progress of such work. Further, Tenant's Representative shall be given reasonable advance notice of, and have the right to attend, weekly (or other regularly scheduled) construction site meetings between Landlord, the General Contractor and other members of the design/construction team for the project, and Tenant's Representative shall timely receive copies of all of the minutes of such meetings. Landlord shall prepare and submit to Tenant's Representative monthly reports showing the progress of Landlord's Work to date as compared to the Project Budget and the Project Schedule. From time to time, Landlord shall also make such formal presentations to Tenant regarding the project as Tenant may reasonably request.

3.6 Punch List Items. Within fifteen (15) business days following Mechanical/ Electrical Completion, Tenant shall be entitled to inspect the Improvements and provide Landlord with a written "punch list" setting forth all items not constructed in substantial accordance with the Final Plans (the "Punch List Items"). Any items other than the Punch List Items specifically set forth on such written punch list shall be deemed to be waived by Tenant and not a part of the Punch List Items. Landlord shall repair (or cause its Contractors to repair) all Punch List Items, as part of Landlord's Work, within thirty (30) days after receipt of the punch list, or if repair would take longer than thirty (30) days, Landlord shall start the repair within this thirty (30) day period and diligently prosecute the repair to completion. Landlord shall, however, be under no obligation to repair any items other than the Punch List Items. Landlord shall also be under no obligation to repair any damage caused by, through or under Tenant or any of its employees, agents or contractors (excluding Landlord or its Contractors), and all such damage shall be promptly repaired by Tenant at Tenant's sole cost and expense. Without limiting the generality of the foregoing, except for such Punch List Items (a) Landlord shall have no responsibility for any design, material or construction defects (patent, latent or otherwise) in the Improvements, and Tenant shall look solely to the applicable Warranties with respect to such defects, and (b) Landlord shall have no responsibility with respect to the performance and/or production capacity of the Improvements, subject, however to the completion of the commissioning and acceptance testing described in Section 1.33(ii), above.

3.7 Construction and Material Supplier Warranties. Landlord shall require that each Construction Contract, as well as each material Subcontract, contain customary warranties wherein the applicable Contractor warrants to Landlord and Tenant, for a period of at least one (1) year following Mechanical/Electrical Completion, that (i) all materials and equipment furnished under such Construction Contract will be of good quality and new, (ii) the Work covered by such Construction Contract will be free from defects, and (iii) such Work will

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be consistent with the Final Plans (collectively, the "Warranties"). Duties and obligations imposed by the Warranties and rights and remedies available thereunder shall be in addition to and not in limitation of duties, obligations, rights and remedies otherwise imposed or available by law or in equity or any other agreement.

ARTICLE IV
PAYMENT OF PROJECT COSTS

4.1 Landlord's Share of Project Cost. So long as Tenant is not in default of any of its obligations under this Work Letter or the Lease, Landlord shall pay all Project Costs, as such costs are incurred and become due and payable; provided that in no event shall Landlord have any obligation to pay any amounts other than Landlord's Share of Project Costs, including, without limitation, all or any portion of any Excess Costs.

4.2 Excess Costs. Tenant shall be solely responsible for all Excess Costs. Initially, the amount of Excess Costs shall be estimated using the Budgeted Project Cost established as of Committee Approval and Tenant shall deliver one hundred percent (100%) of such estimated Excess Costs to Landlord within fifteen
(15) days after settlement under the Purchase Agreement (or under any Alternate Property Purchase Agreement to the extent applicable) has occurred and Landlord has obtained fee title to the Property (or an Alternate Property to the extent applicable). At any time thereafter that Landlord reasonably determines that the Excess Costs will exceed the previously estimated amount of Excess Costs, Landlord may, in its sole discretion, condition the commencement or continuation of Landlord's Work on Tenant's either (1) depositing with Landlord some or all of the additional estimated amount of Excess Costs, or (2) posting a bond or giving Landlord other assurances or security satisfactory to Landlord for Tenant's payment of Excess Costs (including, without limitation, an irrevocable standby letter of credit in form and substance reasonably satisfactory to Landlord and issued by a bank that is reasonably satisfactory to Landlord), and
(3) paying Tenant's proportionate share (based on the ratio of the estimated Excess Costs to total Project Cost) of each monthly or other disbursement of Project Cost, concurrently with Landlord's payment of Landlord's Share of Project Cost of such disbursement. If Tenant fails to satisfy any of the conditions set forth in clauses (1), (2) or (3) above within thirty (30) Days of Landlord's written demand, without limiting any other rights or remedies available to Landlord at law or in equity, Landlord shall have the following rights and remedies:

(a) To introduce any Value Engineering Changes which Landlord determines, in Landlord's sole and absolute discretion, are necessary to eliminate or reduce such Excess Costs;

(b) To increase the annual Fixed Rent under the Lease based on a rent factor of eighteen percent (18%) of the amount of such Excess Costs; and/or

(c) To treat such failure as a default under the Lease and proceed under Paragraph 18 thereof.

4.3 Payments to Landlord. The following fees shall be paid to Landlord as part of Project Cost:

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(a) Development Management Fees: Development Management Fees shall be payable monthly, on the same date as the regular monthly disbursement of Project Cost, (A) at the rate of $20,000 per month prior to the first full month after Start of Construction and (B) thereafter, in an amount equal to 3.00% of the prior month's Project Cost disbursements, until paid in full. The Development Management Fees shall not exceed in the aggregate 3.00% of total Project Cost (excluding the Development Management Fees) at final completion.

(b) Cost Savings Incentive Fee: The Cost Savings Incentive Fee, if applicable, shall be paid to Landlord on or before the first day of the twelfth (12th) month of the Term of the Lease.

4.4 Reimbursement of Pre-Development Costs; Alternate Property.

(a) Pre-Development Costs. Tenant acknowledges that the Lease and Landlord's obligations hereunder are conditioned upon Landlord acquiring fee title to the Property pursuant to the Purchase Agreement. Tenant further acknowledges that in order to expedite the build-out of the Premises and the construction of the Improvements, Landlord has incurred, and may incur additional, Pre-Development Costs. Accordingly and notwithstanding anything to the contrary contained in this Work Letter, if for any reason other than due to a default by Landlord under the Purchase Agreement, Landlord is unable to acquire fee title to the Property, Landlord shall have the right, in Landlord's sole, subjective discretion to terminate the Lease, subject, however, to the provisions in Paragraph 4.4(b), below. In such case (and regardless if Landlord elects to exercise the Alternate Property Option, Tenant shall reimburse Landlord for all Pre-Development Costs incurred by Landlord within ten (10) Business Days after receipt of written notice from Landlord together with documentation reasonably evidencing such Pre-Development Costs. Tenant's obligations under this Paragraph 4.4 shall survive the termination of the Lease and this Work Letter.

(b) Alternate Property. If Landlord is unable to acquire fee title to the Property, Landlord shall have the right to exercise the Alternate Property Option (as defined in the Lease) and purchase the Alternate Property pursuant to the terms set forth in Article 36 of the Lease. If Landlord exercises the Alternate Property Option, Landlord and Tenant shall enter into an amendment modifying the definition of the Premises and such other terms as necessary to reflect the purchase of the Alternate Property and otherwise reaffirming the terms and conditions of the Lease and this Work Letter, as amended by such amendment.

4.5 Contingency and Movable Equipment Escrow. Each of the amounts set forth in the line items of the Project Budget attached hereto as Schedule 1 and titled "G.C. Contingency (within GMP)" and "Movable Equipment" shall be placed into separate escrow accounts held with an escrow company reasonably acceptable to Landlord and Tenant. All amounts held in the escrow accounts for the G.C. Contingency line item (the "Contingency Escrow") and the Movable Equipment line item (the "Movable Equipment Escrow") shall be invested in a Highly Diversified Money Market Fund or similar yielding investment and all interest accrued thereon shall be payable to Tenant. As used herein, a "Highly Diversified Money Market Fund" means a money market fund that is principally invested in corporate bonds and commercial paper, such as the Evergreen Institutional Money Market Fund. After completion of all Improvements as contemplated under this Work Letter and the reasonable determination by Landlord that no further amounts from either the Contingency Escrow or the Movable Equipment Escrow are necessary to

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complete the Improvements, all unused amounts remaining in the Contingency Escrow and/or the Movable Equipment Escrow, together with all interest accrued thereon, shall be returned to Tenant.

ARTICLE V___

INSURANCE

5.1 Construction Insurance. Throughout the prosecution of Landlord's Work and of any Deferred Tenant Improvement Work, Landlord, at its expense and as part of Project Cost, shall carry:

(a) Workers, Compensation Insurance with coverage applicable in the State of Maryland with limits in accordance with the statutory requirements of the State of Maryland.

(b) Broad Form Comprehensive General Liability Insurance (including Contractor's Protective Liability) with a minimum combined aggregate total limit of liability of Five Million Dollars ($5,000,000.00). The Comprehensive General Liability Insurance shall provide for explosion, collapse and underground coverage.

(c) Complete Value Builder's Risk Material Damage Insurance Coverage. Landlord shall provide an "All Physical Loss" Builder's Risk Insurance policy with regard to construction of the Improvements. The policy shall include as named insureds Landlord, Tenant, Landlord's Contractors, and Landlord's lender (if any), agents, engineers, representatives, management agents and contractors, as their interests may appear. The amount of insurance to be provided shall be 100% of the replacement cost of the Improvements.

(d) Such other liability and hazard insurance as Landlord shall deem advisable (including, without limitation, errors and omission insurance, which Landlord may obtain in the form of so-called "project coverage" insuring any or all of the design and construction team for Landlord's Work).

All such liability and hazard insurance shall name Tenant as an additional insured and shall insure against any and all claims for bodily injury, including death resulting therefrom, and damage to or destruction of property of any kind whatsoever and to whomsoever belonging, and arising from its operations under this Work Letter whether such operations are performed by Landlord, a Contractor or anyone directly or indirectly employed or engaged by any of them. Landlord shall require the Project Manager, the General Contractor, and any or all of the Other Contractors and Subcontractors, to carry the coverage described in Paragraph 5.1(a) and, subject to Landlord's right to waive or reduce the required amount of coverage if in Landlord's reasonable judgment such waiver or reduction does not materially increase Tenant's exposure to liability, the coverage described in Paragraph 5.1(b).

ARTICLE VI
TENANT ACCESS FOR FITTING OUT IMPROVEMENTS

6.1 Access Rights. Landlord shall permit Tenant and its contractors access to each major facility component at the Premises upon completion thereof and, in any event, at least forty-five (45) days prior to the anticipated date for

15

Mechanical/Electrical Completion of the Improvements, to perform installation and other fitting out work not specifically included in the Improvements pursuant to the Final Plans (such as installation of furniture, fixtures, equipment, computers and network systems), subject to Landlord's reasonable prior written approval, subject to all of the terms and conditions of the Lease (excepting payment of Base Annual Rental), subject to any rules and regulations promulgated by General Contractor, and otherwise in a manner and upon such additional terms and conditions and at times reasonably satisfactory to Landlord. Subject to Landlord's approval, which it shall not unreasonably withhold, condition or delay, upon Tenant's request Landlord will also permit Tenant's employees and contractors access to the Premises prior to such forty-five (45)-day period as may be necessary to coordinate and implement such installation by Tenant; provided, however, that Landlord may withhold or condition such approval as Landlord determines, in good faith, is required to avoid delay, material expense or any material risk to safety of Persons on-site or damage to property. The foregoing license to enter the Premises prior to the Commencement Date is conditioned upon Tenant's contractors and their subcontractors and employees working in harmony and not interfering with Landlord's Work and compliance by Tenant's contractors with all rules and requirements imposed by Landlord on third party contractors, including, without limitation, the maintenance by Tenant and its contractors and subcontractors of workers' compensation and public liability and property damage insurance in amounts and with companies and on forms satisfactory to Landlord, with certificates of such insurance being furnished to Landlord prior to their entry onto the Premises and all other applicable terms and conditions of the Lease. Landlord shall have the right to revoke the access rights granted under this Paragraph 6.1 as to any of Tenant's contractors whose presence causes disharmony or otherwise interferes with Landlord's Work unless, within 24 hours after Landlord notifies Tenant's Representative of such problem, it is corrected to the satisfaction of Landlord.

6.2 Specific Access Rights. Notwithstanding the provisions of Paragraph 6.1, above (other than the last two sentences of Paragraph 6.1), the following individuals only shall have the right to access the Premises throughout the build-out process: Geert R. Kersten, Dr. Eyal Talor, Patty Prichep, Todd Burkhart, and William Brooke Jones (the "Permitted Parties"). Any access by the Permitted Parties shall be subject to the provisions of the last two sentences of Paragraph 6.1 and all of the provisions of Paragraph 6.4, below, and any interference by the Permitted Parties with the construction of the Improvements shall constitute a Tenant Delay.

6.3 Early Occupancy of Office. William Brooke Jones, the current Tenant Representative ("Jones") and Todd Burkhart ("Burkhart") (Jones and Burkhart are collectively referred to herein as the "Early Occupants"), shall have the sole right to occupy the existing office space in the Premises (the "Office Space"), which Office Space is depicted on Schedule 7 attached hereto, provided that such early occupancy shall be subject to the last two sentences of Paragraph 6.1 and all of the provisions of Paragraph 6.4. In particular and as a condition to any entry onto the Premises, the Early Occupants (i.e., Jones or Tenant on behalf of Jones, and Burkhart separately) shall provide Landlord with evidence of insurance reasonably acceptable to Landlord. Any interference by the Early Occupants with the construction of the Improvements shall constitute a Tenant Delay.

6.4 Tenant's Risk. The access rights granted under Paragraphs 3.4, 6.1 and 6.2 shall be exercised solely at Tenant's risk and expense, and neither Landlord nor any Contractor shall be liable for any injury, loss or damage which may occur to work being performed by Tenant's contractors or damage to any equipment,

16

materials or other property of Tenant or such contractors brought onto the Premises except to the extent such injury, loss or damage is caused by such Person's own gross negligence or willful misconduct. Tenant shall be responsible for coordinating the access or activities of Tenant's contractors with Landlord and any interruption, interference or delay in Landlord's Work resulting from such access and activities shall be a Tenant Delay. Tenant shall indemnify, defend and hold Landlord harmless from and against any and all claims, losses, liabilities or damages arising out of the exercise of Tenant's access rights under Paragraphs 3.4, 6.1 and 6.2, or early occupancy right under Paragraph 6.3, including, without limitation, any damages arising out of any Tenant Delays.

ARTICLE VII
MISCELLANEOUS

7.1 Landlord and Tenant Representatives. Each of Landlord's Representative and Tenant's Representative shall have full authority to act on behalf of their respective Party with respect to the performance of such Party's obligations and the exercise of such Party's rights under this Work Letter and each Party shall be entitled to rely upon any approval, consent or other written communication given by the other's representative with respect to such performance or exercise. Either Party may, at any time and from time to time, change its representative or name one or more alternate representatives (each of whom shall have such full authority, as if the sole representative of such Party) by giving the other Party at least five (5) Business Days' prior written notice of such change (except that such a change may be made effective immediately upon written notice where required by the death, disability or sudden termination of employment of the prior representative).

7.2 Notices. All notices, demands, consents, approvals and other written communications from one Party to the other, with respect to this Work Letter shall be delivered (and deemed received) as provided in Section 34.10 of the Lease, except that, where pertaining only to the administration of the design and construction of Landlord's Work, such communications may be delivered only by fax (with a telephone call to confirm receipt) to Landlord's Representative or Tenant's Representative, as applicable, to the following address:

If to Landlord's Representative:         Attention: Stan Wendzel
-------------------------------
                                         VIF II CEL-SCI Partners, LLC
                                         9811 Irvine Center Drive
                                         Irvine, California 92618
                                         Fax:  949-498-2397
                                         Tel:   949-498-2391
                                         email: *


If to Tenant's Representative:           Attention:  William Brooke Jones
-----------------------------
                                         c/o Cel-Sci Corporation
                                         4820-C Seton Drive
                                         Baltimore, Maryland 21215
                                         Fax:  (410) 358-1647
                                         Tel:   (410) 358-6866
                                         email: *

17

or to such other address as the recipient Party representative may have last designated by written notice to the other Party representative.

7.3 Schedule. The following Schedules are attached to and incorporated into this Work Letter:

Schedule 1            Project Budget
Schedule 2            Project Schedule
Schedule 3            General Contractor's Estimated Budget
Schedule 4            Conceptual Floor Plan
Schedule 5            Site and Parking Plan
Schedule 6            [Reserved]
Schedule 7            Depiction of 2-Story Office Space

7.4 Counterparts; Execution and Delivery by Fax. This Work Letter may be executed by each Party on a separate counterpart or counterparts (each of which shall constitute an original, but all of which taken together shall constitute a single instrument) and may be delivered by electronic facsimile transmission (but each Party shall also, subsequent to such facsimile transmission, deliver a true original executed counterpart to the other).

7.5 Other Miscellaneous Provisions. The provisions of Section 34 of the Lease, to the extent applicable, are hereby incorporated in this Work Letter.

[SIGNATURES ON FOLLOWING PAGE]

18

IN WITNESS WHEREOF, Landlord and Tenant have caused this Work Letter to be duly executed under seal as of the day and year first above written.

LANDLORD                                 VIF II CEL-SCI PARTNERS, LLC,
                                         a Delaware limited liability
                                         company


                                         By: /s/ Stan Wendzel
                                             --------------------------
                                         Name:  Stan Wendzel
                                         Title: Managing Member


TENANT:                                  CEL-SCI CORPORATION,
                                         a Colorado corporation


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

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SCHEDULE 1

Project Budget

*

20

SCHEDULE 2

Project Schedule

*

21

SCHEDULE 3

General Contractor's Estimated Budge

*

22

SCHEDULE 4

Conceptual Floor Plan

*

23

SCHEDULE 5

Site and Parking Plan

*

24

SCHEDULE 6

[Reserved]

*

25

SCHEDULE 7

Depiction of 2-Story Office Space

*

26

FIRST AMENDMENT TO LEASE AGREEMENT
AND WORK LETTER AGREEMENT

THIS FIRST AMENDMENT TO LEASE AGREEMENT AND WORK LETTER AGREEMENT ("First Amendment"), is made and dated for reference purposes only as of August 7, 2007, between VIF II CEL-SCI PARTNERS, LLC, a Delaware limited liability company ("Landlord"), and CEL-SCI CORPORATION, a Colorado corporation ("Tenant"), with reference to the following facts:

A. Landlord and Tenant entered into that certain Lease Agreement, dated June 6, 2007 ("Lease"), together with that certain Work Letter Agreement dated June 6, 2007 (the "Work Letter"), for premises located at * ("Premises"). Except as otherwise modified in this First Amendment, defined terms used herein shall have the same meanings given to them in the Lease.

B. Landlord and Tenant now desire to amend the Lease and Work Letter as set forth in this First Amendment.

THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree to amend the Lease as follows:

1. Modifications to Lease.

a. Notices. The following part of Section 38.10 to the Lease is deleted:

" with a copy to:             VIF II CEL-SCI Partners, LLC
                              c/o AEW Capital Management
                              Attn:  Asset Manager
                              World Trade Center East
                              Two Seaport Lane
                              Boston, Massachusetts 02210-2021
                              Phone (617) 261-9000; Fax: (617) 261-9555"

b. Landlord's Insurance. In addition to the insurance to be carried by Landlord under Section 10.1 of the Lease, Landlord shall also maintain, as a requirement of Landlord's lender and at Tenant's sole expense, the insurance described in Schedule 2 attached hereto. In the event of any conflict between the provisions set forth in Section 10.1 of the Lease and Schedule 2 attached hereto, the provisions and requirements of Schedule 2 shall control.

c. Tenant's Insurance. The following provisions of Lease Rider No. 1 attached to the Lease are hereby modified as follows:

(i) Rating. Notwithstanding the provisions of Section I(a) of Lease Rider No. 1, Tenant shall maintain the insurance required under the Lease and Lease Rider No. 1 with insurers having a minimum
A.M. Best rating of A-X.

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(ii) Employer Liability. Section I(a)(iii) of Lease Rider No.1 is hereby deleted and replaced in its entirety with the following:

"(iii) Workers' Compensation Insurance with statutory benefits and Employers' Liability Insurance with the following amounts: Each Accident: $1,000,000; Disease-Policy Limit:
$1,000,000; Disease - Each Employee: $1,000,000."

(iii) Automobile Liability. The following paragraph is hereby added as Section I(a)(iv) of Lease Rider No. 1:

"(iv) Commercial Automobile Liability Insurance, including the ownership, maintenance and operation of any automotive equipment owned, hired and non-owned in the following minimum amounts: Bodily Injury and Property Damage, each occurrence, combined single limit of One Million Dollars ($1,000,000)."

(iv) Contractor's and Subcontractor's Insurance - Employer's Liability. Section III(a) of Lease Rider No. 1 is hereby deleted and replaced in its entirety with the following:

"(b) Employer's Liability Insurance with the following amounts: Each Accident: $1,000,000; Disease-Policy Limit:
$1,000,000; Disease - Each Employee: $1,000,000"

(v) Contractor's and Subcontractor's Insurance - Rating. Notwithstanding the provisions of Section III of Lease Rider No. 1, all contractors and subcontractors performing work on behalf of Tenant shall maintain the insurance required under the Lease and Lease Rider No. 1 with insurers having a minimum A.M. Best rating of A-X.

2. Modifications to Work Letter.

a. Preliminary Plans. The second sentence of Section 2.1(a) of the Work Letter is hereby deleted and replaced in its entirety with the following:

"As soon as reasonably practicable and, in any event, no later than thirty (30) days after signing the design build contract with Contractor, Landlord shall have the Preliminary Plans prepared and submitted to Tenant for approval pursuant to the procedure set forth below in this Section 2.1, which together with the Project Budget, Project Schedule and General Contractor's Estimated Budget, collectively constitute the "Baseline Documents".

2

b. Project Budget. Schedule 1 of the Work Letter is hereby deleted and replaced in its entirety with Schedule 1 attached hereto and incorporated herein by reference.

c. Roof Work. As part of the Improvements to be constructed at the Premises pursuant to the Work Letter, Landlord and Tenant confirm that a new roof or roof overlay shall be installed on the Building (the "New Roof"). The New Roof shall be installed based on the following specifications:

(i) a minimum 15-year, written, non-prorated warranty will be obtained from a major roof membrane manufacturer (e.g., Firestone, Carlisle), which warranty shall be transferable to subsequent owners of the Building;

(ii) the New Roof will include one (1) layer of 1/4 inch thick densdeck mechanically fastened through the existing, built up roof system and into the metal deck; and

(iii) the New Roof will include 0.060 inch thick EPDM, TPO or PVC single-ply membrane specified at minimum 10 foot widths installed in accordance with manufacturer's and FM Global specifications.

Contractor (as defined in the Work Letter) has obtained one or more bids relating to the New Roof and such amount has been included in the revised Schedule 1 attached hereto.

3. Environmental Indemnity. Tenant confirms that Landlord is currently in the process of obtaining financing for the purchase and redevelopment of the Premises from Nett Funding, LLC, a Delaware limited liability company ("Lender"). In connection with such financing, Lender has required that * and * enter into an Environmental Indemnity Agreement, a copy of which is attached hereto as Schedule 3 (the "Environmental Indemnity"). Notwithstanding anything to the contrary contained in the Lease or Work Letter and except to the extent caused by the gross negligence or willful misconduct of Landlord, *, Tenant hereby agrees to be solely responsible for, and shall otherwise indemnify, defend and hold * harmless from and against, any and all claims, liabilities, Losses (as that term is defined in the Environmental Indemnity) and the costs of any Remediation (as that term is defined in the Environmental Indemnity) that may arise under the Environmental Indemnity for which * may be liable. In connection therewith, Tenant further agrees to be responsible for all costs relating to any inspections, testing, or appraisals that Lender may require or otherwise undertake at the Premises pursuant to its rights under the Environmental Indemnity. Tenant shall pay such costs within twenty (20) days after receipt of written demand and copies of invoices evidencing such costs.

4. Broker Representation. Landlord and Tenant represent to one another that neither party has dealt with any broker nor is any other fee or commission payable in connection with this First Amendment. Landlord and Tenant shall indemnify, defend and hold one another harmless from and against any and all claims, losses and liabilities arising out of, or relating to, a breach by the indemnifying party of such representation.

3

5. No Other Amendments. The Lease referred to hereinabove and this First Amendment constitute the entire agreement by and between Landlord and Tenant and supercede any other agreement or representation, written or oral, that either party may hereinafter assert or allege exist, and the Lease, as hereby modified, remains in full force, except as amended by this First Amendment, and is hereby ratified and reaffirmed as amended by this First Amendment. From and after the date hereof, all references to the "Lease" shall refer to the Lease as amended by this First Amendment.

6. Conflicts. If any conflict between this First Amendment and the Lease should arise, the terms of this First Amendment shall control.

7. Successor and Assigns. This First Amendment shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto.

8. Counterparts. This First Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall together constitute a single instrument.

[SIGNATURES ON FOLLOWING PAGE]

4

The parties have executed this First Amendment as of the date first written above.

LANDLORD:                            TENANT:

VIF II CEL-SCI Partners, LLC,            CEL-SCI CORPORATION,
a Delaware limited liability company     a Colorado corporation

By: /s/ Stan Wendzel                     By:  /s/ Geert R. Kersten
     ---------------------------------        -------------------------------
Name:  Stan Wendzel                       Name: Geert R. Kersten
     ---------------------------------        -------------------------------
Title: Manager                           Title: Chief Executive Officer
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SCHEDULE 1

Project Budget

[SEE ATTACHED]

*

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SCHEDULE 2

Additional Landlord Insurance Requirements

I. General Requirements (all policies)

A. Company Rating/Qualification. The insurance company or companies issuing the policies described below each must be a U.S. domestic insurance standard stock company or non-participating mutual company which is a primary insurer and has
(i) an investment grade rating or claims paying ability assigned by one or more credit rating agencies approved by Nett Funding, LLC, a Delaware limited liability company ("Lender"), and (ii) a general policy rating of A or better and a financial class of X or better by A.M. Best Company, Inc. (or if a rating of A.M. Best Company Inc. is no longer available, a similar rating from a similar or successor service). Foreign insurance companies with a U.S. branch are not acceptable unless approved in writing by Lender's insurance department. All insurers must be licensed, registered and in good standing in the state or states where the property or properties are located.

B. Additional Insured, Mortgagee Endorsements, etc. Each of the insurance policies must name Lender as an additional named insured. Each of the insurance policies must also contain: (i) with respect to those policies referred to in paragraph II below, a primary standard "non-contributory mortgagee" endorsement or its equivalent relating, inter alia, to recovery by Lender notwithstanding the negligent or willful acts or omission of Lender; (ii) with respect to those policies referred to in paragraphs II and III below, a waiver of subrogation endorsement as to Lender; (iii) with respect to those policies referred to in paragraphs II and III below, an endorsement providing for a deductible per loss of an amount not more than that which is customarily maintained by prudent owners of similar properties in the general vicinity of the subject property, but in no event in excess of $10,000, and (iv) with respect to those policies referred to in paragraph II below, coverage shall be provided on an agreed amount basis with no coinsurance clause. The insurance policy referred to in paragraph II.A. below must provide coverage for contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of Construction.

C. Borrower's/Property Owner's Failure to Maintain Insurance. If VIF II CEL-SCI Partners, LLC, a Delaware limited liability company ("Borrower/Property Owner") fails to maintain such insurance or fails to deliver to Lender the certificates of insurance required by Lender as set forth herein, upon twenty-four (24) hours' prior notice to Borrowers/Property Owner, Lender may procure such insurance at Borrowers'/Property Owner's sole cost and expense.

D. Certificates of Renewals, etc. Except in the case of Workmen's Compensation or Flood insurance, certificates of insurance issued by state or federal agencies for the required coverage shall not be acceptable for purposes hereof. Certificates evidencing renewal and replacement insurance policies shall be delivered to Lender not less than five (5) days after the expiration date of the applicable insurance policy or policies required to be maintained hereunder.

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E. Notice of Cancellation. All insurance policies shall contain (i) a provision that such policies shall not be cancelled (whether for non-payment or otherwise) or terminated, nor shall they expire, without at least thirty (30) days' prior written notice to Lender in each instance.

II. Property Insurance Requirements

A. All Risk Property Coverage. Borrower/Property Owner shall maintain property insurance with respect to the improvements and building equipment insuring against any peril now or hereafter included within the classification "All Risks of Physical Loss", including, without limitation, losses from fire, lightning, debris removal, windstorm, hail, explosion, smoke; aircraft and vehicle damage, terrorism, riot, vandalism and malicious mischief, falling objects, weight of snow, ice or sleet; collapse, water damage and sprinkler leakage. In any event such insurance shall be maintained in an amount which, after application of deductible, shall be equal to the full insurable value of the improvements and building equipment, but in no event less than the coverage required pursuant to the terms of any lease affecting the subject property. The term "full insurable value" shall mean the actual replacement cost of the improvements and building equipment (without taking into account any depreciation, and exclusive of excavations, footings and foundations, landscaping and paving) determined annually and approved by Lender.

B. Boiler Coverage. Borrower/Property Owner shall maintain broad form boiler and machinery insurance (without exclusion for explosion) covering all boilers or other pressure vessels, machinery, equipment and air conditioning or heating units located in, on or about the subject property and insurance against loss of occupancy or use arising from any breakdown in such amounts as are generally required by institutional lenders for properties comparable to the subject property.

C. Rent Loss/Business Interruption. Borrower/Property Owner shall maintain business interruption and/or loss of "rental income" insurance in an amount sufficient to provide proceeds which will cover a period of not less than twelve
(12) months from the date of casualty or loss, the term "rental income" to mean the sum of (A) the total ascertainable rents then payable under the leases affecting the subject property and (B) the total ascertainable amount of all other amounts to be received by Borrower/Property Owner from third parties which are the legal obligation of the tenants, reduced to the extent such amounts would not be received because of operating expenses not incurred during a period of non-occupancy of that portion of the subject property then not being occupied.

D. Special Coverages. Borrower/Property Owner shall maintain special coverages such as Flood, Earthquake, Earth Movement, etc., if the subject property is located in an area prone to these perils.

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1. Flood Insurance. Flood coverage is required; Borrower/Property Owner to approve level of coverage and deductible.

2. Earthquake Insurance. Earthquake coverage shall be in broad form and acceptable to Lender; provided, however, that such coverage shall at minimum cover the probable maximum loss based on a five hundred year period. California Quake shall have a deductible of not over five percent (5%) and follow the form of the property policy including Lender enhancements, and in all other states, the quake deductible will be 2% or less or as approved by Lender.

3. Windstorm Insurance. With respect to property located in a Tier I zone, Borrower/Property Owner shall maintain windstorm coverage with a deductible not to exceed 5% and at full replacement cost.

E. Intentionally Omitted.

III. Liability Insurance Requirements

A. General Liability Insurance. Borrower/Property Owner shall maintain comprehensive general liability insurance, including bodily injury, death and property damage liability, insurance against any and all claims, including all legal liability to the extent insurable and imposed upon Lender and all court costs and attorneys' fees and expenses, arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the subject property in such amounts as are generally available at commercially reasonable premiums and are generally required by institutional lenders for properties comparable to the subject property but in any event for a combined single limit of at least $10,000,000. At least $1,000,000 of such liability coverage shall be primary, and the balance may be maintained as excess or umbrella coverage. Such liability insurance must be occurrence based coverage, rather than claims made coverage. This insurance must stand on its own with no participation or proration. In the event that the Lender's loan agreement requires a higher limit, the higher limit shall prevail.

B. Intentionally Omitted.

C. Liquor Liability/Dram Shop. If liquor is sold or served at the Property, Borrower/Property Owner shall maintain dram shop, host liquor liability or liquor liability coverage of at least $10,000,000 single and aggregate.

C. Motor Vehicles. Borrower/Property Owner shall maintain auto liability insurance. The combination of the primary auto liability and excess liability or umbrella must equal $10,000,000.

D. Worker's Compensation Insurance. Borrower/Property Owner shall maintain workers' compensation insurance with respect to any work on or about the subject property.

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IV. Additional Coverages

Borrower/Property Owner shall maintain such other insurance with respect to Borrower/Property Owner and the subject property against loss or damage of the kinds from time to time required by Lender to the extent such additional insurance is for perils and in amounts customarily required by institutional lenders for properties comparable to the subject property and to the extent such other insurance is available at commercially reasonable rates.

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{10124806.1}
SCHEDULE 3

Environmental Indemnity Agreement
[See Attached]


ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (the "Agreement") is made as of August __, 2007 by VIF II CEL-SCI PARTNERS, LLC, a Delaware limited liability company ("Property Owner"), STANLEY WENDZEL, an individual ("Guarantor"; together with Property Owner, "Indemnitor" or "Indemnitors", as applicable), in favor of NETT FUNDING, LLC, a Delaware limited liability company ("Lender"), and the other Indemnified Parties (defined below).
RECITALS

A. SAN TOMAS PARTNERS, LLC, a Delaware limited liability company (the "Borrower") owns, or will own on the Closing Date, the fee interest in certain real property located in the County of *, State of Maryland, and more particularly described in Exhibit A attached hereto (said real property being referred to as the "Land"; the Land, together with all structures, buildings and improvements now or hereafter located on the Land, being collectively referred to as the "Property").

B. Lender is making a loan (the "Loan") to Borrower in connection with the financing of the Property by Property Owner, pursuant to that certain Mezzanine Loan Agreement ("Loan Agreement"), dated of even date herewith, and which is evidenced by, among other things, one or more promissory notes of even date herewith (collectively, the "Note"). Borrower's obligations under the Loan will be guaranteed by Property Owner pursuant to an indemnity guaranty, dated of even date herewith (the "Indemnity Guaranty"). The Loan and the Indemnity Guaranty will be secured by, among other things (i) the Pledge Agreement (as defined in the Loan Agreement) and (ii) the Indemnity Deed of Trust (as defined in the Loan Agreement). The Loan Agreement, the Note, the Pledge Agreement, the Indemnity Guaranty, the Indemnity Deed of Trust, this Agreement and the other documents evidencing, or securing the Loan, or entered into in connection therewith and any modifications, renewals and extensions thereof are sometimes referred to herein collectively as the "Loan Documents".

C. Guarantor has an indirect ownership interest in Borrower, and as a result will receive benefits from Lender's making the Loan to Borrower.

D. Lender is unwilling to make the Loan unless Indemnitor agrees to provide the indemnification, representations, warranties, and covenants and other matters described in this Agreement for the benefit of Indemnified Parties.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Indemnitors jointly and severally hereby agrees and covenants as follows:


Article 1 Definitions

1.1 Unassigned Definitions: Capitalized terms used herein and not specifically defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement.

1.2 Definitions: As used in this Agreement, the following terms shall have the following meanings:

1.2.1 The term "Environmental Law" means any present and future federal, state and local laws, statutes, ordinances, rules, regulations, standards, and other governmental directives or requirements, as well as common law, relating to protection of human health or the environment, relating to Hazardous Materials that apply to Borrower, Property Owner, or the Property and relate to Hazardous Materials.

1.2.2 The term "Hazardous Materials" shall mean petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives, flammable materials; radioactive materials; polychlorinated biphenyls ("PCBs") and compounds containing them; lead and Lead Based Paint (as defined below); asbestos or asbestos-containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any pathogen and airborne pathogen (naturally occurring or otherwise), toxin or other biological agent or condition, including, but not limited to, any fungus, mold, mycotoxins and microbial matter ("Pathogens"); any substance the presence of which on the Property is prohibited by any federal, state or local authority (excepting, however, materials used in the ordinary course of construction, use or management of a life science R&D manufacturing facility in accordance with all applicable Environmental Law); and any other material or substance now or in the future defined as a "hazardous substance," "hazardous material", hazardous waste", toxic substance", "toxic pollutant", "contaminant", or pollutant" within the meaning of any Environmental Law. In addition, Lender acknowledges that the Tenant under the Cel-Sci Lease may use certain radioactive materials and/or biohazardous materials in connection with the operation of its business from the Property. Lender consents to the use of such radioactive materials and/or biohazardous materials so long as Cel-Sci uses such materials in accordance with all required licenses and otherwise in accordance with applicable Environmental Law and confirms that the use of such materials by Cel-Sci shall not constitute a breach under this Agreement so long as such materials are used in accordance with applicable Environmental Law.

1.2.3 The term "Indemnified Parties" means Lender, any person or entity who is or will have been involved in the origination of the Loan, any person or entity who is or will have been involved in the servicing of the Loan, persons and entities who may hold or acquire or will have held a full or partial interest in the Loan, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, members, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing (including but not limited to any other person or entity who holds or acquires or will have held a participation or other full or partial interest in the Loan, the collateral for the Loan or the Property,

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whether during the term of the Loan or as a part of or following a foreclosure of the Loan and including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of Lender's assets and business).

1.2.4 The term "Legal Action" means any claim, suit or proceeding, whether administrative or judicial in nature.

1.2.5 The term "Losses" includes any and all losses, damages (excluding, however, consequential damages), costs, fees, expenses, claims, suits, judgments, awards, liabilities (including, without limitation, strict liabilities), obligations, debts, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, litigation costs, attorneys' fees, engineers' fees, reasonable environmental consultants' fees, and investigation costs (including, without limitation, costs for sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claim, suits, judgments or awards.

1.2.6 The term "Release" with respect to any Hazardous Materials means any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Materials.

1.2.7 The term "Remediation" includes, but is not limited to, any response, remedial removal, or corrective action, any activity to cleanup, abate, detoxify, decontaminate, contain or otherwise remediate any Hazardous Material which in its then-present state and concentration would be required to be remediated pursuant to any applicable Environmental Law.

1.2.8 The term "Threatened" or "Threat" means that there is a substantial likelihood of a Release which requires action to prevent or otherwise mitigate damage to the environment that may result from such Release.

Article 2 Indemnification

2.1 Indemnification. Borrower and Guarantor covenant and agree at their sole cost and expense, to protect, defend, indemnify, release and hold Indemnified Parties harmless from and against any and all Losses and costs of Remediation (whether or not performed voluntarily) imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following:

(a) any presence of any Hazardous Materials in, on, above, or under the Property;

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(b) any past, present or threatened Release of Hazardous Materials in, on, above, under or from the Property;

(c) any activity by Property Owner, Borrower, any person or entity affiliated with Borrower, and any tenant or other user of the Property in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from the Property of any Hazardous Materials at any time located in, under, on or above the Property or any actual or proposed remediation of any Hazardous Materials at any time located in, under, on or above the Property, whether or not such remediation is voluntary or pursuant to court or administrative order, including but not limited to any removal, remedial or corrective action;

(d) any past or present non-compliance or violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the Property or operations thereon, including but not limited to any failure by Property Owner, Borrower or any person or entity affiliated with Borrower and any tenant or other user of the Property to comply with any order of any governmental authority in connection with any Environmental Laws;

(e) the imposition, recording or filing of any environmental lien encumbering the Property;

(f) any acts of Property Owner, Borrower, any person or entity affiliated with Borrower, and any tenant or other user of the Property in (i) arranging for disposal or treatment, or arranging with a transporter for transport for disposal or treatment, of Hazardous Materials from the Property at any facility or incineration vessel containing such or similar Hazardous Materials or (ii) accepting any Hazardous Materials from the Property for transport to disposal or treatment facilities, incineration vessels or sites from which there is a Release, or a threatened Release of any Hazardous Material which causes the incurrence of costs for remediation;

(g) any misrepresentation or inaccuracy in any representation or warranty or material breach or failure to perform any covenants or other obligations pursuant to this Agreement or the Loan Agreement relating to environmental matters;

(h) the failure by any Indemnitor to comply fully with the terms and conditions of this Agreement;

(i) the enforcement of this Agreement;

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(j) any environmental investigation, assessment, audit or review conducted in connection with the Property or the operations conducted at any time thereon pursuant to Lender's rights under this Agreement or any of the Loan Documents, including, without limitation, the cost of assessment, investigation, containment, removal and/or Remediation of any and all Hazardous Materials from all or any portion of the Property, the cost of any actions taken in response to the presence, release or threat of release of any Hazardous Materials on, in under or affecting any portion of the Property to prevent or minimize such release or threat of release so that it does not migrate or otherwise cause or threaten danger to present or future public health, safety, welfare or the environment, and cost incurred to comply with Environmental Laws in connection with all or any portion of the Property;

(k) any administrative processes or proceedings or judicial proceedings in any way connected with any matter addressed in this Agreement;

(l) any past, present or threatened injury to, destruction of or loss of natural resources in any way connected with the Property, including, without limitation, costs to investigate and assess such injury, destruction or loss; or

(m) any personal injury, wrongful death, or property or other damage arising under any statutory or common law or tort law theory, including, without limitation, damages assessed for a private or public nuisance or for the conducting of an abnormally dangerous activity on, at or under the Property in connection with Hazardous Materials.

Except if attributable to the acts or omissions of Property Owner or Borrower, the foregoing indemnity shall not apply to, and Indemnitors shall have no responsibility hereunder in connection with, any Hazardous Materials (including any costs relating thereto, including, without limitation, any Losses or costs f Remediation) which are initially placed on, in or under the Property after a UCC sale, foreclosure (or transfer-in-lieu of foreclosure), judicial or non-judicial sale or other taking of title to the shares in Property Owner or to the Property by Lender or its successor or assigns, or with respect to any acts of gross negligence or misconduct by the Lender or its successors or assigns resulting in the release or placement of Hazardous Materials on or under the Property.

2.2 Subrogation. Each Indemnitor shall, or shall cause Property Owner to, take any and all reasonable actions, including institution of legal action against third-parties, necessary or appropriate to obtain reimbursement, payment or compensation from such persons responsible for the presence of any Hazardous Materials at, in, on, under or near the Property or otherwise obligated by law to bear the cost. Indemnified Parties shall be and hereby are subrogated to all of each Indemnitor's rights now or hereafter in such claims.

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Article 3 Representations and Warranties and Covenants

3.1 General Representations and Warranties. Each Indemnitor represents and warrants as follows:

3.1.1 Each Indemnitor that is a corporation, partnership or limited liability company represents and warrants that (i) it has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; the execution, delivery and performance of this Agreement by such Indemnitor has been duly and validly authorized by all requisite organizational action and (ii) this Agreement is in the ordinary course of business of each Indemnitor and will not result in the breach of any term or provision of the charter, by-laws, partnership or trust agreement, articles of organization, operating agreement or other governing instrument of such Indemnitor;

3.1.2 Compliance with this Agreement will not result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under any agreement, indenture or loan or credit agreement or other instrument to which each Indemnitor or the Property is subject, or, to the best of such Indemnitor's knowledge, result in the violation of any law, rule, regulation, order, judgment or decree to which such Indemnitor or the Property is subject; other than, in each case such conflicts, defaults or violations that would not result in a material adverse change in the business, operations, financial condition, properties or assets of such Indemnitor, or in any material impairment of the right or ability of such Indemnitor to carry on its business substantially as now conducted, or in any material liability on the part of such Indemnitor, or draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of such Indemnitor contemplated herein, or be likely to impair materially the ability of such Indemnitor to perform under the terms of this Agreement;

3.1.3 There is no action, suit, proceeding or investigation pending or, to the best of such Indemnitor's knowledge, threatened against it which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of Property Owner or any Indemnitor, or in any material impairment of the right or ability of Property Owner or any Indemnitor to carry on its business substantially as now conducted, or in any material liability on the part of Property Owner or any Indemnitor, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of each Indemnitor contemplated herein, or which would be likely to impair materially the ability of any Indemnitor to perform under the terms of this Agreement;

3.1.4 No approval, authorization, order, license or consent of, or registration or filing with, any governmental authority or other person, and no approval, authorization or consent of any other party is required in connection with this Agreement; and

3.1.5 This Agreement constitutes a valid, legal and binding obligation of each Indemnitor, enforceable against it in accordance with the terms hereof

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subject, as to enforcement, to bankruptcy, insolvency,  reorganization and other
laws of general  applicability  relating or affecting  creditors'  rights and to
general equity principals.

3.2 Environmental Representations and Warranties. Each Indemnitor represents and warrants, based upon their review of the written report(s) resulting from the environmental assessment (s) of the Property previously delivered to Lender (collectively, the "Environmental Reports") and information that any Indemnitor has actual knowledge of, that:

3.2.1 There are no Hazardous Materials or underground storage tanks in, on, or under the Property, except those that are both (i) in compliance with Environmental Laws and, if required, with permits issued pursuant thereto and
(ii) either fully disclosed to Lender in the Environmental Reports or are used by Borrower or tenants of the Property in the ordinary course of their business, provided that as disclosed in the Environmental Reports, Lender acknowledges that (i) underground storage tanks have been previously removed from the Property and (ii) an above-ground storage tank exists on the Property (which is scheduled to be removed prior to the occupancy of the Tenant under the Cel-Sci Lease;

3.2.2 There are no past, present or threatened Releases of Hazardous Materials in, on, under or from the Property except as described in the Environmental Reports;

3.2.3 There is no threat of any Release of Hazardous Materials migrating to the Property except as described in the Environmental Reports;

3.2.4 There are no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property except as described in the Environmental Reports;

3.2.5 No Indemnitor knows of, or has received, any written notice from any Person (including, without limitation, a governmental entity) in connection with the Property relating to Hazardous Materials or Remediation thereof, or any actual or threatened administrative or judicial proceedings in connection with any of the foregoing; and

3.2.6 Each Indemnitor has truthfully and fully provided to Lender, in writing, any and all information relating to conditions in, on, under or from the Property that is known to any Indemnitor and that is contained in the files and records of any Indemnitor, including, without limitation, any reports relating to Hazardous Materials in, on, under or from the Property and/or to the environmental condition of the Property.

3.3 Environmental Covenants. Each Indemnitor covenants and agrees as follows:

3.3.1 All uses and operations on or of the Property, whether by Borrower or any other Person, shall be in compliance in all material respects with all Environmental Laws and permits issued pursuant thereto;

3.3.2 There shall be no Releases of Hazardous Materials in, on, under or from the Property, other than in compliance with applicable Environmental Laws;

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3.3.3 There shall be no Hazardous Materials in, on, or under the Property except those that are both (i) in compliance with all Environmental Laws and, if required, with permits issued pursuant thereto, and (ii) fully disclosed to Lender in writing or are used by Borrower or tenants of the Property in the ordinary course of their business;

3.3.4 Each Indemnitor shall keep, or cause to be kept, the Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of any Indemnitor or any other Person (the "Environmental Liens");

3.3.5 Subject to Section 4, each Indemnitor shall, at their sole cost and expense, perform an environmental site assessment or other investigation of environmental conditions in connection with the Property as reasonably determined by Indemnitor, pursuant to any reasonable written request of Lender if Lender has reason to suspect that (i) a Release of a Hazardous Material has occurred in violation of Environmental Laws (including, without limitation, sampling, testing and analysis of soil, water, air, building materials and other materials and substances whether solid, liquid or gas) or (ii) such investigation or assessment is required by any applicable law or governmental authority in connection with any demolition and or construction activity at the Property. Indemnitors agree to share with Lender the reports and other results thereof, and Lender and other Indemnified Parties shall be entitled to rely on such reports and other results thereof;

3.3.6 Each Indemnitor shall, at their sole cost and expense, comply or cause Borrower to comply with all reasonable written requests of Lender to (i) reasonably effectuate Remediation of any condition (including, without limitation, a Release of a Hazardous Material) in, on, under or from the Property; (ii) comply with any Environmental Law with respect to the Property;
(iii) comply with any directive from any governmental authority with respect to the Property; and (iv) take any other reasonable action with respect to the Property necessary or appropriate for protection of human health or the environment;

3.3.7 Each Indemnitor, promptly upon becoming aware of the same shall notify Lender in writing of (i) any presence or Release or threatened Release of Hazardous Materials in, on, under, from or migrating towards the Property, in violation of applicable Environmental Laws; (ii) any non-compliance in any material respect with any applicable Environmental Laws related in any way to the Property; (iii) any actual or potential Environmental Lien; (iv) any required or proposed Remediation of environmental conditions relating to the Property; (v) any Legal Action brought against such party or related to the Property, with respect to which Indemnitors may have liability under this Agreement; and (vi) any written notice of which any Indemnitor receives relating to any violation of any applicable Environmental Law with respect to the Property, other environmental conditions in connection with the Property that are in violation of applicable Environmental Law, or any actual or threatened administrative or judicial proceedings relating to any environmental condition of the Property.

3.3.8 If, at any time hereafter, Lender reasonably suspects any lead-based paint in its present state and concentration on the Property is in an amount and/or state in excess of the concentration permitted under applicable Environmental Laws ("Lead Based Paint"), Indemnitors agree, at their sole cost and expense and within thirty (30) days thereafter, to cause to be prepared an assessment report describing the location and condition of the Lead Based Paint

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(a "Lead Based Paint Report"), prepared by an expert, and in form and scope acceptable to Lender. If at any time hereafter, Lender reasonably (i) suspects that the Property contains any asbestos or asbestos containing materials ("Asbestos") in its present state and concentration as would be in violation of any applicable Environmental Laws or (ii) determines, that pursuant to any proposed demolition or construction of any improvements at the Property, that any governmental entity would require an assessment report describing the location and condition of the Asbestos (the "Asbestos Report"), Indemnitors agree, at their sole cost and expense and within thirty (30) days thereafter, to cause to be prepared the Asbestos Report, prepared by an expert, and in form and scope acceptable to Lender. If at any time hereafter, Lender has reason to believe that Pathogens in their present state and concentration would be in violation of applicable Environmental Laws are present on the Property, Indemnitors agree, at their sole cost and expense, and within thirty (30) days thereafter, to cause to be prepared an assessment report describing the location and condition of the Pathogens ("Pathogens Report"), prepared by an expert, and in form and scope acceptable to Lender.

3.3.9 Each Indemnitor agrees that if it has been, or if at any time hereafter it is, determined that the Property contains Lead Based Paint/Asbestos/Pathogens, in their present state and concentration, would be in violation of any applicable Environmental Laws as noted in 3.3.8, on or before thirty (30) days following (i) the date hereof, if such determination was made prior to the date hereof or (ii) such determination, if such determination is hereafter made, as applicable, Indemnitors shall, at their sole cost and expense, develop and implement, and thereafter diligently and continuously carry out (or cause to be developed, implemented and thereafter diligently carried out), an operations, abatement and maintenance plan for the Lead Based Paint/Asbestos/Pathogens on the Property, which plan shall be prepared by an expert, and be in form, scope and substance reasonably acceptable to Lender (the "O&M Plan"). Indemnitors agree to diligently and continuously carry out (or cause to be carried out) the provisions thereof. Compliance with the O&M Plan shall require or be deemed to require, without limitation, the proper preparation and maintenance all records, papers, and forms required under the Environmental Laws.

Article 4 Inspection and Testing

Lender may require Borrower (or Borrower shall cause Property Owner to do so, as appropriate), at its sole cost and expense, from time to time to perform or cause to be performed, such studies or assessments of the Property, as Lender may reasonably deem necessary, appropriate or desirable, to determine the status of environmental conditions on, under and about the Property, which studies and assessments shall be for the benefit of Lender and shall be prepared in accordance with the specifications established by Lender. Borrower hereby confirms the right of Lender (or a receiver appointed by Lender) to enter upon and inspect all or any portion of the Property for the purpose of determining the existence, location, nature and magnitude of any past or present release or threatened release of any hazardous substance into, onto, beneath, or from the Property in accordance with applicable law. All reasonable costs and expenses incurred by Lender pursuant to this provision or applicable law, including, without limitation, costs of consultants and contractors, costs of repair of any physical injury to the Property normal and customary to the tests and studies, court costs and attorneys' fees, costs and expenses, whether incurred in

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litigation or not and whether before or after judgment, shall be payable by Borrower and, to the extent advanced or incurred by Lender, shall be reimbursed to Lender by Borrower upon demand. This provision is separate and several, and shall survive merger into any judgment. Notwithstanding the foregoing, Borrower shall not be responsible for the cost and expense of any environmental study or assessment unless one of the following has occurred: (1) an Event of Default,
(2) if required by a federal, state or local regulatory agency, or (3) if Lender has a reasonable belief that a violation of Environmental Law exists with respect to the Property.

Article 5 General

5.1 Unimpaired Liability. The liability of Indemnitor under this Agreement shall in no way be limited or impaired by (i) any extensions of time for performance required by any of the Loan Documents, (ii) any sale or transfer of all or part of the Property, (iii) except as provided herein, any exculpatory provision in any of Loan Documents limiting Lender's recourse to the Property or to any other security for the Loan, or limiting Lender's rights to a deficiency judgment against Borrower, (iv) the accuracy or inaccuracy of the representations and warranties made by or each Indemnitor herein or under any of the Loan Documents,
(v) the release of Borrower or any other Person from performance or observance of any of the agreements, covenants, terms or condition contained in any of the other Loan Documents by operation of law, Lender's voluntary act, or otherwise,
(vi) the release or substitution in whole or in part of any security for the Loan, or (vii) Lender's failure to file any UCC financing statements (or Lender's improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Loan; and, in any such case, whether with or without notice to Borrower and with or without consideration.

5.2 Indemnification Procedures. If any action shall be brought against Lender based upon any of the matters for which Lender is indemnified hereunder, Lender shall promptly notify Borrower in writing thereof and Borrower shall promptly assume the defense thereof, including, without limitation, the employment of counsel reasonably acceptable to Lender and the negotiation of any settlement; provided, however, that any failure of Lender to notify Borrower of such matter shall not impair or reduce the obligations of Borrower hereunder. Lender shall have the right, at its own expense, to participate in the defense of any such action using counsel selected by Lender and reasonably approved by Borrower; provided, however, that Borrower shall pay the expenses of such counsel if the named parties to any such action include both Borrower and Lender and representation of both Borrower and Lender by the same counsel would be inappropriate under applicable standards of professional conduct due to conflicting interests between them (in which case, such expenses shall be included in Losses). In the event Borrower shall fail to discharge or undertake to defend Lender against any claim, Losses or liability for which Lender is indemnified hereunder and for which Borrower has received written notice from Lender, Lender may, at its sole option and election, defend or settle such claim, Losses or liability. The liability of Borrower to Lender hereunder shall be conclusively established by such settlement, provided such settlement is made in good faith, the amount of such liability to include both the settlement consideration and the costs and expenses, including, without limitation

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reasonable attorney's fees and disbursements, incurred by Lender in effecting such settlement. In such event, such settlement consideration, costs and expenses shall be included in Losses and Borrower shall pay the same as hereinafter provided. Lender's good faith in any such settlement shall be conclusively established if the settlement is made on the advice of independent legal counsel for Lender.

5.2.1 Borrower shall not, without the prior written consent of Lender: (i) settle or compromise or cause to settled or compromised any action, suit, proceeding or claim or consent to the entry of any judgment that does not include as an unconditional term thereof the delivery by the claimant or plaintiff to Lender of a full and complete written release of Lender (in form, scope and substance satisfactory to Lender in its sole discretion) from all liability in respect of such action, suit, proceeding or claim and a dismissal with prejudice of such action, suit, proceeding or claim; or (ii) settle or compromise any action, suit, proceeding or claim in any manner that may adversely affect Lender or obligate Lender to pay any sum or perform any obligation as determined by Lender in its sole discretion.

5.2.2 All Losses shall be immediately reimbursable to Lender when and as incurred and, in the event of any litigation, claim or other proceeding, without any requirement of waiting for the ultimate outcome of such litigation, claim or other proceeding, and Borrower shall pay to Lender any and all Losses within thirty (30) days after written notice from Lender itemizing the amounts thereof incurred to the date of such notice. In addition to any other remedy available for the failure of Borrower to periodically pay such Losses, such Losses, if not paid within said thirty (30) day period, shall bear interest at the Default Rate (as defined in the Loan Agreement).

5.2.3 If Borrower or Property Owner obtains any environmental risk insurance policy or policies in connection with the Property, Lender agrees to give its reasonable cooperation to the insurance company in connection with its defense of any third party claims against Property Owner, Borrower or Lender with respect to Hazardous Materials and to not unreasonably withhold its approval of the counsel selected to defend Property Owner, Borrower and Lender against such claims by such insurance company.

5.3 Enforcement. Indemnified Parties may enforce the obligations of Indemnitor without first resorting to or exhausting any security or collateral or without first having recourse to the any of the Collateral or the Property, through foreclosure proceedings, UCC sale or otherwise, provided, however, that nothing herein shall inhibit or prevent Lender from suing on the Loan Documents, foreclosing, or exercising any power of sale or UCC sale rights under, the Loan Documents, or exercising any other rights and remedies thereunder, to the extent permitted thereunder. This Agreement is not collateral or security for the debt of Borrower pursuant to the Loan, unless Lender expressly elects in writing to make this Agreement additional collateral or security for the debt of Borrower pursuant to the Loan, which Lender is entitled to do in its sole discretion. Except as otherwise expressly provided under this Agreement, it is not necessary for an event of default to have occurred pursuant to any Loan Document for Indemnified Parties to exercise their rights pursuant to this Agreement. Notwithstanding any provision of the Loan Documents to the contrary, the obligations pursuant to this Agreement are exceptions to any non-recourse or exculpation provision of the Loan Documents; Borrower and Guarantor are fully and personally liable for such obligations, and Borrower's liability is not limited to the original or amortized principal balance of the Loan or the value of the Property.

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5.4 Reinstatement of Obligations. If at any time all or any part of any payment made by any Indemnitor or received by Lender from such Indemnitor under or with respect to this Agreement is or must be rescinded or returned for any reason whatsoever (including, but not limited to, the insolvency, bankruptcy or reorganization of such Indemnitor), then the obligations of Indemnitors hereunder shall, to the extent of the payment rescinded or returned, be deemed to have continued in existence, notwithstanding such previous payment made by any such Indemnitor, or receipt of payment by Lender, and the obligations of Indemnitors hereunder shall continue to be effective or be reinstated, as the case may be, as to such payment, all as though such previous payment by such Indemnitor had never been made.

Article 6 Waivers

6.1 Waivers by Guarantor. To the extent permitted by law, Guarantor hereby waives and agrees not to assert or take advantage of the following: (a) any right to require an Indemnified Party (i) to proceed against Borrower or any other Person, (ii) to proceed against or exhaust any security held by any Indemnified Party at any time or (iii) to pursue any other remedy in such Indemnified Party's power or under any other agreement, in any case, before proceeding against Guarantor hereunder; (b) any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other Person of the failure of an Indemnified Party to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other Person; (c) any demand, presentment for payment, protest and notice of protest, demand, dishonor and nonpayment and all other notices, except as expressly required by the Loan Documents, including, without limitation, notice of new or additional indebtedness or obligations or of any action or non-action on the part of Borrower, Lender, any endorser or creditor of Borrower or of Guarantor or of any other Person whomsoever under this Agreement or any other Loan Document; (d) any defense based upon an election of remedies, splitting a cause of action or merger of judgments by any Indemnified Party; (e) any right or claim of right to cause a marshalling of the assets of Guarantor; (f) {reserved]; (g) any duty on the part of any Indemnified Party to disclose to Guarantor any facts such Indemnified Party may now or hereafter know about Borrower or the Property, regardless of whether such Indemnified Party (i) has reason to believe that any such facts materially increase the risk beyond that which Guarantor intends to assume, (ii) has reason to believe that such facts are unknown to Guarantor or (iii) has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being informed of the financial condition of Borrower, the condition of the Property and of all other circumstances bearing on the risk that liability may be incurred by Guarantor hereunder; (h) any invalidity, irregularity or unenforceability, in whole or in part, of any one or more of the Loan Documents; (i) any lack of commercial reasonableness in dealing with the Collateral for the Loan; (j) any deficiencies in the Collateral for the Loan or any deficiency in the ability of Lender to collect or to obtain performance from any Persons now or hereafter liable for the payment and performance of any obligation hereby guaranteed; (k) an assertion or claim that the automatic stay provided by 11 U.S.C. ss.362 (arising upon the voluntary or involuntary

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bankruptcy proceeding of Borrower or Guarantor) or any other stay provided under any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any of its rights, whether now existing or hereafter acquired, which Lender may have against Guarantor, Borrower or the Collateral for the Loan; and (l) any modifications of any of the Loan Documents or any obligation of Borrower or Guarantor relating to the Loan by operation of law or by action of any court, whether pursuant to the Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, or otherwise.

Borrower and Guarantor covenant and agree that upon the commencement of a voluntary or involuntary bankruptcy proceeding by or against Borrower or Guarantor, neither Borrower nor Guarantor shall seek a supplemental stay or otherwise pursuant to 11 U.S.C. ss.105 or any other provision of the Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory, common law, case law, or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights of Lender against Borrower or Guarantor by virtue of this Agreement or otherwise.

6.2 Waivers by Each Indemnitor. Each Indemnitor hereby waives and agrees to not assert or take advantage of the following: (a) any right or claim of right to cause a marshaling of Borrower's assets or to cause Lender or other Indemnified Parties to proceed against any of the security for the Loan before proceeding under this Agreement against each Indemnitor; (b) all rights and remedies accorded by applicable law to each Indemnitor that might constitute a legal discharge of such Indemnitor as a surety or guarantor, except any rights of subrogation which such Indemnitor may have, provided that the indemnity provided for hereunder shall neither be contingent upon the existence of any such rights of subrogation nor subject to any claims or defenses whatsoever which may be asserted in connection with the enforcement or attempted enforcement of such subrogation rights including, without limitation, any claim that such subrogation rights were abrogated by any acts of Lender or other Indemnified Parties; (c) the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against or by Lender or other Indemnified Party; (d) notice of acceptance hereof and of any action taken or omitted in reliance hereon; (e) presentment for payment, demand of payment, protest or notice of nonpayment or failure to perform or observe, or other proof, or notice or demand unless specifically required to be made upon or delivered to any Indemnitor by this Agreement or the other Loan Documents; and
(f) the benefits of any statutes of limitations.

Notwithstanding anything to the contrary contained herein, each Indemnitor agrees to postpone the exercise of any rights of subrogation with respect to any Collateral securing the Loan until the Loan shall have been indefeasibly paid in full. No delay by any Indemnified Party in exercising any right, power or privilege under this Agreement shall operate as a waiver of such right, power or privilege.

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Article 7 Miscellaneous

7.1 Notices. All notices and other written communication which are required or called for under any provision of this Agreement shall be effective only if they are in writing, addressed to the proper party at the applicable address for notice indicated on the signature page of this Agreement and sent in one of the following ways: (i) by U.S. Mail; (ii) by a recognized overnight carrier, such as Federal Express, marked for next day delivery; or (iii) by facsimile transmission; in each case with delivery charges (if any) prepaid and addressed to each party at its address for notices. Any party may change its address for notice by giving notice to the other parties in the manner provided herein. Such a notice or other communication shall be deemed delivered at the following times: if sent by U.S. Mail, then upon receipt or refusal to accept delivery; if sent by a recognized overnight carrier, then one (1) Business Day after the acceptance by the carrier for next day delivery; and if by facsimile, on the Business Day it is sent if the sender verifies that the notice was received at the recipient's facsimile machine during regular business hours on the day sent
- otherwise, on the next Business Day; provided that any notice or other communication sent by facsimile must be reasonably legible when received by a properly operating facsimile receiver.

7.2 Duplicate Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

7.3 No Oral Change. This Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Indemnitor or any Indemnified Party, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

7.4 Headings, etc. The headings and captions of various paragraphs of this Agreement are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.

7.5 Number and Gender/Successors and Assigns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require. Without limiting the effect of specific references in any provision of this Agreement, the term "Borrower" shall be deemed to refer to each and every person or entity comprising Borrower from time to time, as the sense of a particular provision may require, and to include the successors and assigns of Borrower, all of whom shall be bound by the provisions of this Agreement, provided that no obligation of Borrower may be assigned except with the written consent of Lender. Without limiting the effect of specific references in any provision of this Agreement, the term "Guarantor" shall be deemed to refer to each and every person or entity

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comprising each such Guarantor from time to time, as the sense of a particular provision may require, and to include the successors and assigns of such Guarantor, all of whom shall be bound by the provisions of this Agreement, provided that no obligation of such Guarantor may be assigned except with the written consent of Lender. Each reference herein to Lender shall be deemed to include its successors and assigns. This Agreement shall inure to the benefit of Indemnified Parties and their respective successors and assigns.

7.6 Joint and Several Liability. The obligations and liabilities of each Indemnitor hereunder are joint and several.

7.7 Release of Liability. Any one or more parties liable upon or in respect of this Agreement may be released without affecting the liability of any party not so released.

7.8 Rights Cumulative. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies which Lender has under the other Loan Documents or would otherwise have at law or in equity.

7.9 Inapplicable Provisions. If any term, condition or covenant of this Agreement shall be held to be invalid, illegal or unenforceable in any respect, this Agreement shall be construed without such provision.

7.10 Governing Law. This Agreement and the obligations arising hereunder shall be governed by, and construed in accordance with, the laws of the State of Maryland applicable to contracts made and intended to be performed in such state, without giving effect to principles of conflicts of laws, and any applicable law of the United States of America.

7.11 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY RELATING TO THE LOAN OR THE PROPERTY (INCLUDING ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN.

7.12 Approvals. Wherever pursuant to this Agreement (i) Indemnified Parties exercise any right given to it to approve or disapprove, (ii) any arrangement or term is to be satisfactory to Indemnified Parties, or (iii) any other decision or determination is to be made by Indemnified Parties, the decision of Indemnified Parties to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory and all other decisions and determinations made by Indemnified Parties, shall be in the reasonable discretion of Indemnified Parties, except as may be otherwise expressly and specifically provided herein.

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7.13 Legal Fees. Wherever pursuant to this Agreement it is provided that Indemnitor pay any costs and expenses, such costs and expenses shall include, but not be limited to, legal fees and disbursements of Indemnified Parties. Indemnitor shall reimburse Lender for all reasonable attorneys' fees, costs and expenses incurred by Lender in connection with the enforcement of Lender's rights under this Agreement, including, without limitation reasonable attorneys' fees, costs and expenses for trial, appellate proceedings, out-of-court negotiations, workouts and settlements, or for enforcement of rights under any state or federal statute, including without limitation reasonable attorneys' fees, costs and expenses incurred in bankruptcy and insolvency proceedings, such as (but not limited to) seeking relief from stay in a bankruptcy proceeding. The term "expenses" means any expenses incurred by Lender in connection with any of the out-of-court, or state, federal or bankruptcy proceedings referred to above, including without limitation the fees and expenses of any appraisers, consultants and expert witnesses retained or consulted by Lender in connection with any such proceeding. Lender shall also be entitled to its reasonable attorneys' fees, costs and expenses incurred in any post-judgment proceedings to collect and enforce the judgment. This provision is separate and several, shall survive the termination of this Agreement, and shall survive the merger of this Agreement into any judgment on this Agreement.

7.14 Loan Amount No Limitation. The amount of Indemnitor's liability under this Agreement is unrelated to and independent of, the amount of any Losses that Lender may suffer by reason of the failure of the Loan to be repaid in full, and shall not be determined by reference to the amount of any Loan loss. The enforcement of this Agreement by any Indemnified Party shall not be construed as an indirect attempt to recover any such Loan loss. Indemnitor acknowledges that they may have liability under this Agreement even if the Loan is repaid in full by reason of a full credit bid at any foreclosure sale UCC sale, judicial sale or non-judicial sale under or release of the Pledge Agreement, and that the amount of Indemnitor's liability hereunder could exceed the entire amount paid by Property Owner for the Property.

7.15 Survival. The obligations and liabilities of Indemnitor under this Agreement shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, UCC sale or delivery of an assignment of ownership interests in Borrower or Property Owner in lieu of foreclosure, UCC sale, judicial sale or non-judicial sale under the Pledge Agreement or the Deed of Trust, as applicable, subject to the final sentence of Section 2.1.

7.16 Time. Time is of the essence in this Agreement and all its provisions.

(Signature page follows)

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This Agreement has been executed by Indemnitor and is effective as of the day and year first above written.

GUARANTOR:

/s/ Stanley Wendzel
------------------------------
STANLEY WENDZEL

Address for Notices:

c/o BioRealty, Inc.
9811 Irvine Center Drive
Irvine, California 92618
Attention: Stan Wendzel
Fax: *

[signatures continue on next page]

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PROPERTY OWNER:

VIF II CEL-SCI PARTNERS, LLC,
a Delaware limited liability company

By:  /s/ Stan Wendzel
Name: Stan Wendzel
Title:  Manager

Address for Notices:

c/o BioRealty, Inc.
9811 Irvine Center Drive
Irvine, California 92618
Attention: Stan Wendzel
Fax: *

Lender's Address for Notices:

c/o American Realty Advisors
801 N. Brand Blvd., Suite 800
Glendale, CA 91203
Attention: Stan Wendzel
Telephone: *
Facsimile: *

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EXHIBIT A
LEGAL DESCRIPTION

*

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SECOND AMENDMENT TO LEASE AGREEMENT
AND WORK LETTER AGREEMENT

THIS SECOND AMENDMENT TO LEASE AGREEMENT AND WORK LETTER AGREEMENT ("Second Amendment"), is made and dated for reference purposes only as of January 9, 2008, between VIF II CEL-SCI PARTNERS, LLC, a Delaware limited liability company ("Landlord"), and CEL-SCI CORPORATION, a Colorado corporation ("Tenant"), with reference to the following facts:

A. Landlord and Tenant entered into that certain Lease Agreement, dated June 6, 2007 ("Original Lease"), together with that certain Work Letter Agreement dated June 6, 2007 (the "Work Letter"), as amended by that certain First Amendment to Lease Agreement and Work Letter Agreement dated August 7, 2007 (the "First Amendment"), for premises located at * ("Premises"). The Original Lease, Work Letter and First Amendment are sometimes collectively referred to herein as the "Lease". Except as otherwise modified in this Second Amendment, defined terms used herein shall have the same meanings given to them in the Lease.

B. Pursuant to Section 3.5 of the Lease, Tenant has delivered to Landlord Tenant's TI Contribution in the amount of $3,150,000.

C. Pursuant to Section 4.2 of the Work Letter, Tenant has delivered to Landlord the initial estimated Excess Costs in the amount of $3,954,860. Tenant's TI Contribution and the initial estimated Excess Costs are collectively referred to herein as the "Initial Contribution" and equal, in the aggregate, $7,104,860.

D. In order to facilitate the build-out of the Premises, Landlord has agreed to move forward with certain tenant improvement work at the Premises while the building permit for Landlord's Work is being processed (the "Permit"), subject, however, to the terms and conditions of this Second Amendment.

E. Landlord and Tenant now desire to amend the Lease and Work Letter as set forth in this Second Amendment.

THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree to amend the Lease and Work Letter as follows:

1. Pre-Permit Work; Tenant Indemnity. As soon as reasonably practicable after the full execution of this Second Amendment, Landlord hereby agrees to perform certain portions of Landlord's Work (the "Pre-Permit Work") that do not require the issuance of the Permit from Howard County, Maryland (the "County"), subject to the following:

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a. Subject to the provisions of Section 4.2 of the Work Letter, Landlord shall have the right to use funds from the Initial Contribution to pay for all costs incurred by Landlord in performing the Pre-Permit Work.

b. If the County or any other governmental agency with jurisdiction over the Property requires Landlord to cease the Pre-Permit Work for any reason, including, without limitation, the failure to obtain the Permit, Landlord shall have the right to immediately cease such Pre-Permit Work until such time as the Permit is issued and Landlord shall not be deemed to be in default under the terms of the Lease or this Second Amendment or otherwise be subject to any liability as a result thereof. Tenant shall be responsible for, and shall otherwise indemnify, defend and hold Landlord harmless from and against any and all claims, losses or liabilities arising out of the performance of the Pre-Permit Work by Landlord, including, without limitation, the payment of any fines, penalties or other fees that may be charged by the County in connection with Landlord's performance of the Pre-Permit Work. Notwithstanding anything to the contrary contained in this Second Amendment, Tenant's obligations under
Section 4.2 of the Work Letter shall continue to be applicable and enforceable in the event Landlord is required to cease the Pre-Permit Work.

c. If despite good-faith efforts, Landlord is unable to obtain the Permit by June 30, 2009 for any reason, Landlord may elect, in Landlord's sole and absolute discretion, to restore all or any portion of the Premises to the condition existing prior to the Pre-Permit Work. All costs relating to such restoration (which costs may include, without limitation, architects', attorneys' and other consultants' fees and construction and materials fees) (collectively, the "Restoration Costs") shall be paid by Tenant. In connection with the foregoing, Landlord may apply any remaining balance of the Initial Contribution towards the Restoration Costs. To the extent the amount of the Restoration Costs exceed the remaining balance of the Initial Contribution as reasonably determined by Landlord, Tenant shall, within twenty (20) days after receipt of written demand from Landlord (which demand shall include a breakdown of the remaining costs to restore the Premises or any portion thereof), deliver to Landlord the total amount of the Restoration Costs. For the purposes hereof, all invoices, receipts or statements furnished by Landlord's architects, engineers, contractors, sub-contractors, and agents shall suffice as documentation establishing any such Restoration Costs. If Tenant fails to deliver the Restoration Costs to Landlord within such 20-day period, the Restoration Costs shall accrue interest at the rate of ten percent (10%) per annum until the Restoration Costs, plus all accrued interest, are paid in full.

2. Landlord's Work; Improvements. Tenant acknowledges that notwithstanding the terms and conditions set forth in the Work Letter, Tenant has been actively involved in the pre-construction phase of the Improvements (i.e., the design) and that Landlord has implemented such design elements as Tenant has directed or requested (the "Pre-Construction Elements"), and will continue to implement, in Landlord's reasonable discretion, such Pre-Construction Elements as Tenant may request in the future from time to time. Accordingly, Tenant hereby assumes all risk in connection with any Tenant-based design elements that have been incorporated into the Pre-Construction Elements

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and agrees to waive any and all claims that Tenant may have against Landlord in connection with the implementation of the same. In connection with the foregoing, Tenant shall indemnify, defend and hold Landlord harmless from and against any and all claims, losses or liabilities (collectively, "Claims") that may arise out of the Pre-Construction Elements, including, without limitation, any Claims relating to design defects arising out of the implementation of any Pre-Construction Elements. Notwithstanding the foregoing provisions of this
Section 2, Landlord's obligations under Section 3.3 of the Work Letter (Completion of Landlord's Work) will remain unchanged.

3. Environmental Indemnity. Tenant confirms that Landlord is currently in the process of negotiating a construction contract with BE&K Building Group, Inc. ("BE&K"), for the construction of Landlord's Work (the "Construction Contract"). In connection with such Construction Contract, BE&K is requiring that Landlord indemnify BE&K from certain claims, losses and liabilities arising out of the existence of any hazardous materials (including, without limitation, the existence of any asbestos containing materials ("ACMs") and polychlorinated biphenyls ("PCBs")) at the Property. Notwithstanding anything to the contrary contained in the Lease or Work Letter and except to the extent caused by the gross negligence or willful misconduct of Landlord, Wendzel or Kornich, Tenant hereby agrees to be solely responsible for, and shall otherwise indemnify, defend and hold Wendzel or Kornich harmless from and against, any and all claims, liabilities, losses and the costs of any remediation required that may arise under the environmental indemnity set forth in the Construction Contract for which Landlord, Wendzel/Kornich may be liable. In connection therewith, Tenant further agrees to be responsible for all costs relating to any inspections, testing, or appraisals that may be required as a result of the presence of any such hazardous materials, ACMs or PCBs. Tenant shall pay any costs required to be paid by Tenant under this Section 2 within twenty (20) days after receipt of written demand and copies of invoices evidencing such costs.

4. Meetings with BE&K. Provided Tenant is not in default under the Lease or Work Letter beyond any applicable notice and cure periods, Landlord shall use reasonable efforts to provide Jones and Burkhart (as defined in the Work Letter) with reasonable prior notice of any relevant meetings regarding the Property between Landlord and BE&K Building Group, Inc. ("BE&K") so that Jones and/or Burkhart may attend and participate in such meetings.

5. Termination of Construction Contract for Convenience. Tenant acknowledges that the Construction Contract by and between Landlord and BE&K contains a termination for convenience clause giving Landlord the right to terminate the Construction Contract. Landlord hereby agrees not to exercise such termination for convenience unless (i) Tenant is in default under the Lease or Work Letter beyond any applicable notice and cure periods, or (ii) Tenant has delivered a written request to Landlord to terminate the Construction Contract for convenience and Landlord otherwise determines in its sole, subjective discretion that it is appropriate to terminate the Construction Contract.

6. Construction Contract Line Item Reallocation. Tenant acknowledges that the Construction Contract by and between Landlord and BE&K requires Landlord's approval (not to be unreasonably withheld) prior to BE&K reallocating General Conditions, Corporate Services and Movable Equipment budget line items. Landlord hereby agrees to authorize any such line item reallocations requested by Tenant in writing, so long as (i) Tenant is not in default under the Lease or

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Work Letter beyond any applicable notice and cure periods, (ii) there exists no unfunded Excess Costs and (iii) the requested reallocation is necessary to account for an agreed upon line item deficit.

7. Quality Control Supervisor. Without altering Tenant's access rights contained in Article VI of the Work Letter, Landlord agrees to grant Jones a temporary, revocable license to enter the Premises and serve as an on-site quality control inspector (the "QC Inspector") to inspect the delivery of equipment and materials and inform Landlord of any issues with regard to the quality of Landlord's Work so long as the QC Inspector's efforts do not interfere with or otherwise impede the performance of Landlord's Work. The QC Inspector will communicate any related quality concerns to Landlord by electronic mail to the attention of Pete McCawley with a copy to Landlord's Representative (i.e., Stan Wendzel) and Doug Kornich. In the event of any interference by QC Inspector with the performance of Landlord's Work (e.g., disturbance of GC Means and Methods, directing subcontractor(s) to perform work, causing Project delays), Landlord may immediately terminate QC Inspector's rights under this Section 7 and such interference may constitute a Tenant Delay under the Lease and Work Letter.

8. Cost Segregation. Notwithstanding anything to the contrary contained in the Lease or the Work Letter, with the exception of the Movable Equipment identified in Schedule 1 of the Lease (as amended by the First Amendment), Landlord's Share of Project Cost is deemed to have, or will otherwise be used to pay for the components of the Improvements at the Property that qualify as Internal Revenue Code Section 1245 Property (the "1245 Property"), which 1245 Property has been previously outlined in the cost segregation study prepared for the Property.

9. Cost-Savings Incentive Fee. The definition of "Cost Savings Incentive Fee" as defined in Section 1.15 of the Work Letter is hereby deleted and replaced in its entirety with the following:

"1.15 "Cost Savings Incentive Fee" means the fee payable to Landlord and shall be an amount equal to fifty percent (50%) of the difference between $14,500,000 and the actual Project Cost (but only if the actual Project Cost is less than $14,500,000) paid to the General Contractor, excluding additive Change Orders. In no event will the Cost Savings Incentive Fee be less than zero.

10. Excess Costs. To the extent Tenant is required to pay any additional Excess Costs based on the revised Project Budget attached hereto or otherwise during the course of construction of the Improvements, Tenant shall deliver such Excess Costs to Landlord within ten (10) days after receipt of written notice from Landlord that such Excess Costs are due and payable. Excess Costs paid by Tenant will be based on the amended Project Budget attached hereto as Schedule 1, which amended Project Budget is based on the interim GMAX Construction Contract dated as of December 21, 2007 (the "Interim GMAX"). On or before February 15, 2008, the Project Budget will be amended based on a final GMAX Construction Contract (the "Final GMAX") and Landlord shall promptly refund to Tenant any overage in Excess Costs funded by Tenant (including any excess Contingency currently held in Escrow), which overage shall be the difference between the amount of Excess Costs to be funded by Tenant based on the Interim GMAX and the amount of Excess Costs to be funded by Tenant based on the Final GMAX.

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11. Baseline Documents; Design Development Plans.

a. Landlord and Tenant hereby approve those certain Design Development Plans, delivered to Tenant on December 21, 2007, prepared by BE&K Engineering, Inc., and dated November 27, 2007 and December 6, 2007, as amended on December 14, 2007 by Tenant and its representative Todd Burkhart (the "DD Plans"). Landlord acknowledges that the proposed changes to the Drawings and Specifications delivered by Todd Burkhart (on behalf of Tenant) to BE&K Engineering, Inc. on December 14, 2007 (the "December 14 Changes") have not yet been incorporated into the DD Plans. Landlord agrees that the December 14 Changes will be incorporated into the next set of DD Plans to be issued by BE&K Engineering, Inc., provided that Tenant reserves the right to inspect the next set of DD Plans to ensure that the December 14 Changes have been properly incorporated into the DD Plans. Landlord and Tenant confirm that the DD Plans and the Preliminary Plans (as defined in the Work Letter) are the same set of plans and accordingly, all references to Preliminary Plans in the Work Letter shall mean and refer to the DD Plans.

b. In connection with the foregoing, Tenant hereby acknowledges that its approval of the DD Plans constitutes approval of the Preliminary Plans and that Tenant further confirms that it has approved the revised Project Budget, Project Schedule and General Contractor's Estimated Budget (as each of those terms are defined in the Work Letter). Accordingly, Schedule
1 (Project Budget), Schedule 2 (Project Schedule) and Schedule 3 (General Contractor's Estimated Budget) of the Work Letter are hereby deleted and replaced in their entirety with the revised Schedules attached to this Second Amendment as Exhibits "A", "B", and "C". Notwithstanding the provisions of Section 2.1(f) of the Work Letter, Schedule 6 (Reserved) of the Work Letter is hereby deleted in its entirety. Notwithstanding the foregoing, Landlord and Tenant agree that the final Project Budget and the final Project Schedule will be prepared on or about February 15, 2008, and once finalized, the Work Letter will be amended to incorporate the final, approved Project Budget and Project Schedule as revised Schedules 1 and 2, respectively, and to otherwise reflect the Final GMAX.

13. Broker Representation. Landlord and Tenant represent to one another that neither party has dealt with any broker nor is any other fee or commission payable in connection with this Second Amendment. Landlord and Tenant shall indemnify, defend and hold one another harmless from and against any and all claims, losses and liabilities arising out of, or relating to, a breach by the indemnifying party of such representation.

14. No Other Amendments. The Lease referred to hereinabove and this Second Amendment constitute the entire agreement by and between Landlord and Tenant and supercede any other agreement or representation, written or oral, that either party may hereinafter assert or allege exist, and the Lease, as hereby modified, remains in full force, except as amended by this Second Amendment, and is hereby ratified and reaffirmed as amended by this Second Amendment. From and after the date hereof, all references to the "Lease" shall refer to the Lease as amended by t his Second Amendment.

5

15. Conflicts. If any conflict between this Second Amendment and the Lease should arise, the terms of this Second Amendment shall control.

16. Successor and Assigns. This Second Amendment shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto.

17. Counterparts. This Second Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall together constitute a single instrument.

18. Time of the Essence. Time shall be the essence with respect to all matters under this Second Amendment.

[SIGNATURES ON FOLLOWING PAGE]

6

The parties have executed this Second Amendment as of the date first written above.

LANDLORD:                            TENANT:

VIF II CEL-SCI Partners, LLC,            CEL-SCI CORPORATION,
a Delaware limited liability company     a Colorado corporation

By: /s/ Stan Wendzel                     By:   /s/ Geert R. Kersten
    --------------------------                 ---------------------------
Name: Stan Wendzel                       Name:  Geert R. Kersten
     --------------------------                 ---------------------------
Title: Manager                           Title: Chief Executive Officer
     --------------------------                 ---------------------------

7

EXHIBIT "A"
Schedule 1
[Project Budget]
[See Attached]

***


EXHIBIT "B"
Schedule 2
[Project Schedule]
[See Attached]

***


EXHIBIT "C"
Schedule 3
[General Contractor's Estimated Budget]
[See Attached]

***


THIRD AMENDMENT TO LEASE AGREEMENT
AND WORK LETTER AGREEMENT

THIS THIRD AMENDMENT TO LEASE AGREEMENT AND WORK LETTER AGREEMENT ("Third Amendment"), is made and dated for reference purposes only as of April __, 2008, between VIF II CEL-SCI PARTNERS, LLC, a Delaware limited liability company ("Landlord"), and CEL-SCI CORPORATION, a Colorado corporation ("Tenant"), with reference to the following facts:

A. Landlord and Tenant entered into that certain Lease Agreement, dated June 6, 2007 ("Original Lease"), together with that certain Work Letter Agreement dated June 6, 2007 (the "Work Letter"), as amended by (i) that certain First Amendment to Lease Agreement and Work Letter Agreement dated August 7, 2007 (the "First Amendment") and (ii) that certain Second Amendment to Lease Agreement and Work Letter Agreement dated January 24, 2008 (the "Second Amendment"), for premises located at * ("Premises"). The Original Lease, Work Letter, First Amendment and Second Amendment are sometimes collectively referred to herein as the "Lease". Except as otherwise modified in this Third Amendment, defined terms used herein shall have the same meanings given to them in the Lease.

B. Landlord and Tenant now desire to amend the Lease and Work Letter as set forth in this Third Amendment.

THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree to amend the Lease and Work Letter as follows:

1. Final Project Budget; Project Schedule; General Contractor's Estimated Budget.

a. Final Project Budget. Landlord and Tenant hereby confirm that the final Project Budget, which is based on the Final GMAX, has been approved by Landlord and Tenant and accordingly, Schedule 1 (Project Budget) of the Work Letter, as amended by the Second Amendment, is hereby deleted and replaced in its entirety with Exhibit "A" attached hereto and incorporated herein by this reference.

b. Project Schedule and General Contractor's Estimated Budget. Schedule "2" (Project Schedule) and Schedule "3" (General Contractor's Estimated Budget) of the Work Letter, as amended by the Second Amendment, are hereby deleted and replaced in their entirety with Exhibits "B" and "C" attached hereto and incorporated herein by this reference.

2. Excess Costs. Tenant hereby confirms that pursuant to Section 10 of the Second Amendment, Tenant shall pay any additional Excess Costs based on the Project Budget (as amended by this Amendment), or otherwise during the course of construction of the Improvements, within ten (10) days after receipt of written notice from Landlord that such Excess Costs are due and payable.

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3. Broker Representation. Landlord and Tenant represent to one another that neither party has dealt with any broker nor is any other fee or commission payable in connection with this Third Amendment. Landlord and Tenant shall indemnify, defend and hold one another harmless from and against any and all claims, losses and liabilities arising out of, or relating to, a breach by the indemnifying party of such representation.

4. No Other Amendments. The Lease referred to hereinabove and this Third Amendment constitute the entire agreement by and between Landlord and Tenant and supercede any other agreement or representation, written or oral, that either party may hereinafter assert or allege exist, and the Lease, as hereby modified, remains in full force, except as amended by this Third Amendment, and is hereby ratified and reaffirmed as amended by this Third Amendment. From and after the date hereof, all references to the "Lease" shall refer to the Lease as amended by this Third Amendment.

5. Conflicts. If any conflict between this Third Amendment and the Lease should arise, the terms of this Third Amendment shall control.

6. Successor and Assigns. This Third Amendment shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto.

7. Counterparts. This Third Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall together constitute a single instrument.

8. Time of the Essence. Time shall be the essence with respect to all matters under this Third Amendment.

[SIGNATURES ON FOLLOWING PAGE]

2

The parties have executed this Third Amendment as of the date first written above.

LANDLORD:                            TENANT:

VIF II CEL-SCI Partners, LLC,            CEL-SCI CORPORATION,
a Delaware limited liability company     a Colorado corporation

By: /s/ Stan Wendzel                     By: /s/ Geert R. Kersten
    ---------------------------              ----------------------------
Name: Stan Wendzel                       Name:  Geert R. Kersten
      ---------------------------              ----------------------------
Title: Manager                           Title: Chief Executive Officer
      ---------------------------              ----------------------------

3

EXHIBIT "A"
Schedule 1
[Project Budget]
[See Attached]

***


EXHIBIT "B"
Schedule 2
[Project Schedule]
[See Attached]

***


EXHIBIT "C"
Schedule 3
[General Contractor's Estimated Budget]
[See Attached]

***


FOURTH AMENDMENT TO LEASE AGREEMENT

THIS FOURTH AMENDMENT TO LEASE AGREEMENT ("Fourth Amendment"), is made and dated for reference purposes only as of January 27, 2009, between VIF II CEL-SCI PARTNERS, LLC, a Delaware limited liability company ("Landlord"), and CEL-SCI CORPORATION, a Colorado corporation ("Tenant"), with reference to the following facts:

A. Landlord and Tenant entered into that certain Lease Agreement, dated June 6, 2007 ("Original Lease"), together with that certain Work Letter Agreement dated June 6, 2007 (the "Work Letter"), as amended by (i) that certain First Amendment to Lease Agreement and Work Letter Agreement dated August 7, 2007 (the "First Amendment"), (ii) that certain Second Amendment to Lease Agreement and Work Letter Agreement dated January 24, 2008 (the "Second Amendment"), and (iii) that certain Third Amendment to Lease Agreement and Work Letter Agreement dated December 5, 2008 (the "Third Amendment"), for premises located at * ("Premises"). The Original Lease, Work Letter, First Amendment, Second Amendment and Third Amendment are sometimes collectively referred to herein as the "Lease". Except as otherwise modified in this Fourth Amendment, defined terms used herein shall have the same meanings given to them in the Lease.

B. Landlord and Tenant now desire to amend the Lease as set forth in this Fourth Amendment.

THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree to amend the Lease as follows:

1. Base Annual Rent.

a. Deferred Base Annual Rent. Subject to the provisions of Sections
1.b, 1.c and 1.d, below, (i) Tenant's obligation to pay Base Annual Rent for December 2008 shall be temporarily deferred ("December Deferred Rent"), (ii) the monthly installments of Base Annual Rent payable by Tenant for January 2009 and February 2009 shall be temporarily reduced to Thirty-Five Thousand and 00/100 Dollars ($35,000.00) per month (collectively, "January/February Reduced Rent"), and (iii) the difference between Tenant's obligation to pay Base Annual Rent for January and February 2009 and the amount actually paid by Tenant under Section
1.a. (ii), above, shall be temporarily deferred (collectively, "January/February Deferred Rent"). December Deferred Rent and January/February Deferred Rent (which collectively equal $393,750.00 less the amount of Base Annual Rent actually paid by Tenant for January and February 2009) shall collectively be referred to herein as the "Deferred Rent". As partial consideration for Landlord's agreement to the temporary reduction in monthly Base Annual Rent for January 2009 and February 2009, Tenant shall deliver to Landlord, via wire transfer, a sum equal to January/February Reduced Rent (i.e., a total of $70,000.00) within one (1) business day after Tenant has received the funding from its next round of financing (which closing is estimated to occur by February 28, 2009), which sum shall be applied to Deferred Rent or any other sum due under the Lease, as amended hereby. As used in this Amendment, the term "financing" means any capital or monies raised or otherwise obtained through (i) equity financing (including, without limitation, the sale of common or preferred stock), (ii) convertible debt, (iii) cash payments or distributions made to

1

Tenant in connection with licensing, partnership or other similar agreements,
(iv) the sale of all or any portion of Tenant and/or any affiliated company of Tenant, (v) a merger or like-kind transaction, (vi) equipment financing, (vii) state or federal income tax refunds, or (viii) any other equity or convertible debt financing instrument that provides capital to Tenant.

b. Resumption of Base Annual Rent. Beginning with the monthly installment of Base Annual Rent for March 2009 and continuing for the remainder of the Lease Term, Tenant shall pay the full monthly installment of Base Annual Rent as required under Section 3.1 of the Lease. Tenant's failure to pay the entire monthly installment of Basic Annual Rent for March 2009 and each subsequent month during the Lease Term thereafter as and when required under the Lease shall constitute a material default under this Lease and shall entitle Landlord to pursue any and all remedies available to Landlord under the Lease, at law or in equity.

c. Deferred Rent Payback. Within one (1) business day after Tenant has received the funding from its next round of Qualified Financing (defined below) and within one (1) business day after Tenant has received the funding from each subsequent round of Qualified Financing, Tenant shall deliver to Landlord an amount equal to ten percent (10%) of the Qualified Financing Margin (defined below) to be applied to Deferred Rent until such time as the Deferred Rent has been repaid to Landlord in full. As used herein, the term "Qualified Financing" means any financing (as such term is defined in Section 1.a., above), which occurs subsequent to the date of this Fourth Amendment. As used herein, the term "Qualified Financing Margin" means the difference between (i) the total amount of capital raised under a Qualified Financing or multiple Qualified Financings less the actual, out-of-pocket expenses incurred by Tenant in connection with such financing(s) and (ii) $2,000,000.00. By way of example only, if Tenant's next round of financing results in a Qualified Financing equal to $2,300,000.00 (net of actual, out-of-pocket expenses), the Qualified Financing Margin would be $300,000.00 and Tenant would deliver to Landlord an amount equal to ten percent
(10%) of the Qualified Financing Margin (i.e., $30,000.00) within one (1) business day after the Tenant has received the funding from each Qualified Financing.

d. No Waiver. Provided Tenant pays the entire March 2009 installment of Base Annual Rent and each subsequent monthly installment of Base Annual Rent as and when required under the Lease thereafter, and no other default by Tenant occurs under the Lease, as amended hereby, Landlord shall not declare Tenant to be in default with regard to the Deferred Rent, provided that such Deferred Rent (including all applicable interest and late charges) shall immediately become due and payable upon the occurrence of a default by Tenant under the Lease, as amended hereby. Notwithstanding anything to the contrary contained in this Fourth Amendment, Landlord's agreement to temporarily defer portions of Base Annual Rent payable by Tenant under the Lease shall not constitute Landlord's waiver of any rights Landlord may have under the Lease, at law or in equity, including, without limitation, Landlord's right to charge interest and late charges on the December Deferred Rent and/or the January/February Deferred Rent pursuant to Section 3.4 of the Lease, and Landlord hereby reserves the right to enforce any such rights at any time in the event Tenant fails to perform its obligations under the Lease or this Fourth Amendment.

2

2. Financial Condition Certification. Together with Tenant's delivery of its signed counterpart of this Fourth Amendment and continuing on the sixteenth
(16th) day of each subsequent calendar month during the Lease Term, Tenant shall deliver to Landlord a current cash position setting forth the current value of Tenant's unrestricted cash and cash equivalents, together with a certificate signed by Geert Kersten, the chief executive officer of Tenant ("Kersten"), in substantially the same form as the Officer's Certificate attached as Exhibit "C" to the Lease, certifying that the information and calculations set forth in the cash flow analysis are true and accurate in all respects. Tenant's failure to deliver the required cash flow analysis and related certificate pursuant to this
Section 2 shall constitute a material default under the Lease and shall entitle Landlord to pursue any and all remedies available to Landlord under the Lease, at law or in equity.

3. Salary Certification. Together with Tenant's delivery of its signed counterpart of this Fourth Amendment, Tenant shall deliver to Landlord a certificate signed by Kersten, setting forth the salaries of those employees and officers of Tenant that have been either reduced or eliminated by Tenant as of the date of this Fourth Amendment. In addition, until such time as the entire balance of Deferred Rent has been repaid in full to Landlord, Tenant shall not increase the salaries, compensation, and/or distributions (does not include reimbursements to personnel of reasonable business expenses) made to its current employees and officers without first obtaining the written consent of Landlord, which consent may be withheld in Landlord's sole and absolute discretion; provided, however, that Landlord shall not unreasonably withhold its consent to any requests reasonably made by Tenant to adjust salaries, compensation and/or distributions of key personnel of Tenant for purposes of maintaining the core of Tenant's operating team. In addition and notwithstanding the foregoing, in no event shall Tenant be required to obtain Landlord's consent to any increases in salary, compensation and/or distributions to Patti Prichep ("Prichep") so long as the total monthly salary, compensation and/or distributions do not exceed $8,000/month in the aggregate. Tenant's failure to abide by the terms of this
Section 3 shall constitute a material default under the Lease and shall entitle Landlord to pursue any and all remedies available to Landlord under the Lease, at law or in equity.

4. Construction Rent. Section 1.23(B) of the Work Letter is hereby amended as follows: the term "(`Construction Rent')" shall be added to the end of the final sentence to Section 1.23(B) of the Work Letter.

5. Exterior Improvements (Allowance). Landlord and Tenant hereby agree that Landlord shall not be required to commence any improvements relating to the Exterior Improvement (Allowance) line item set forth in the final Project Budget attached as Schedule 1 to the Work Letter (as amended by the Third Amendment), until the later of (i) January 1, 2010, or (ii) the date on which the Deferred Rent and all other past due Rent payments, if any, due and payable under the Lease, have been repaid to Landlord in full.

6. Landlord's Property. Tenant hereby confirms that consistent with the terms, conditions and intent of the Lease and excepting only the property associated with the Movable Equipment line item set forth in the Project Budget attached as Schedule 1 to the Work Letter (as amended by the Third Amendment)(the "Moveable Equipment"), all of the equipment and property listed on such Project Budget is, and shall continue to be, the sole and exclusive property of Landlord (collectively, "Landlord's Property"), and Tenant shall have no right to assign, hypothecate or otherwise transfer any interests in Landlord's Property or otherwise encumber or cause any liens to be attached to Landlord's Property.

3

7. Sublease Rental. Notwithstanding anything to the contrary contained in the Lease, as amended hereby, including, without limitation, Section 15.5 of the Original Lease, until such time as all Deferred Rent has been repaid in full to Landlord, one hundred percent (100%) of all rents and other sums paid to Tenant under any approved sublease (less any leasing commissions, tenant improvements and other expenses actually incurred by Tenant and that are directly related to a subtenant's occupancy of all or any portion of the Premises) shall be immediately delivered to Landlord and applied to Deferred Rent. It is understood that 1/3 of the utilities are related to occupancy by the sub tenant. Upon the repayment to Landlord of all Deferred Rent and provided Tenant is not otherwise in default under the Lease, as amended hereby, Tenant shall be entitled to retain fifty percent (50%) of any Profits (as defined in Section 15.5 of the Original Lease) in connection with any approved sublease pursuant to the terms and conditions of Section 15.5 of the Original Lease.

8. Lease Authorization. Tenant hereby represents and warrants that (i) each individual that executed the Lease on behalf of Tenant, and (ii) each individual executing this Fourth Amendment on behalf of Tenant, was and is duly authorized to execute and deliver the Lease and this Fourth Amendment on behalf of Tenant in accordance with a duly adopted resolution of the board of directors of Tenant. Upon Landlord's written request, Tenant will provide to Landlord a copy of such resolution authorizing the execution of the Lease and this Fourth Amendment on behalf of Tenant, which copy of resolution will be duly certified by the secretary or an assistant secretary of Tenant to be a true copy of a resolution duly adopted by the board of directors of Tenant, and will otherwise be in a form reasonably acceptable to Landlord.

9. Broker Representation. Landlord and Tenant represent to one another that neither party has dealt with any broker nor is any other fee or commission payable in connection with this Fourth Amendment. Landlord and Tenant shall indemnify, defend and hold one another harmless from and against any and all claims, losses and liabilities arising out of, or relating to, a breach by the indemnifying party of such representation.

10. No Other Amendments. The Lease referred to hereinabove and this Fourth Amendment constitute the entire agreement by and between Landlord and Tenant and supercede any other agreement or representation, written or oral, that either party may hereinafter assert or allege exist, and the Lease, as hereby modified, remains in full force, except as amended by this Fourth Amendment, and is hereby ratified and reaffirmed as amended by this Fourth Amendment. From and after the date hereof, all references to the "Lease" shall refer to the Lease as amended by this Fourth Amendment.

11. Conflicts. If any conflict between this Fourth Amendment and the Lease should arise, the terms of this Fourth Amendment shall control.

12. Successor and Assigns. This Fourth Amendment shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto.

4

13. Counterparts. This Fourth Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall together constitute a single instrument.

14. Time of the Essence. Time shall be the essence with respect to all matters under this Fourth Amendment.

[SIGNATURES ON FOLLOWING PAGE]

5

The parties have executed this Fourth Amendment as of the date first written above.

LANDLORD:                            TENANT:

VIF II CEL-SCI Partners, LLC,            CEL-SCI CORPORATION,
a Delaware limited liability company     a Colorado corporation

By: /s/ Stan Wendzel                     By: /s/ Geert R. Kersten
    ---------------------------              ---------------------------------
Name: Stan Wendzel                       Name:  Geert R. Kersten
    ---------------------------                -------------------------------
Title: Manager                           Title: Chief Executive Officer
    ---------------------------                ---------------------------------

6

EXHIBIT E

SCHEDULE OF BASE ANNUAL RENTAL

                     Reimbursement
         Base             of Tenant       Net Base            %
         Rent          Contribution         Rent          Increase
         ----        --------------       --------        --------
 1.  1,575,000                           1,575,000         3.0%
 2.  1,622,250                           1,622,250         3.0%
 3.  1,670,918                           1,670,918         3.0%
 4.  1,721,045                           1,721,045         3.0%
 5.  1,772,676                           1,772,676         3.0%
 6.  1,825,857         (303,228)         1,522,628       (14.1%)
 7.  1,880,621         (303,228)         1,577,404         3.6%
 8.  1,937,051         (303,228)         1,622,823         3.6%
 9.  1,995,163         (303,228)         1,691,935         3.6%
10.  2,055,018         (303,228)         1,751,789         3.5%
11.  2,116,668         (303,228)         1,813,440         3.5%
12.  2,180,168         (303,228)         1,876,940         3.5%
13.  2,245,573         (303,228)         1,942,345         3.5%
14.  2,312,941         (303,228)         2,009,712         3.5%
15.  2,382,329         (303,228)         2,079,101         3.5%
16.  2,453,799         (303,228)         2,150,570         3.4%
17.  2,527,413         (303,228)         2,224,184         3.4%
18.  2,603,235         (303,228)         2,300,007         3.4%
19.  2,681,332         (303,228)         2,378,104         3.4%
20.  2,761,772         (303,228)         2,458,544         3.4%


Initial Rent
------------
   Basis                 $15,000,000
   Cap Rate                    10.5%
   Escalation %                 3.0%

Reimbursement of Tenant Contribution

Basis                   3,150,000
Interest Rate                3.0%
FV at end of year 5     3,659,093
Monthly Reimbursement    (25,269)
Check                          --


LEASE RIDER NO. 1

TENANT INSURANCE RIDER

This Rider to Lease is made as of the 6th day of June, 2007 by and between VIF II CEL-SCI PARTNERS, LLC, a Delaware limited liability company (hereafter "Landlord") and CEL-SCI CORPORATION, a Colorado corporation (hereafter "Tenant"), and forms a part of the Lease Agreement dated the 6th day of June, 2007 between the parties, as well as any and all subsequent amendments, riders or addenda to that lease, hereafter collectively referred to as the "Lease."

The contents of this Rider to Lease are meant to be incorporated into the Lease, and where terms of this Rider conflict with these terms within the Lease, the terms of this Rider shall prevail and govern the Lease.

I. INSURANCE

(a)Coverage. Tenant shall purchase and maintain insurance during the entire Term of the Lease for the benefit of the Tenant and Landlord (as their interest may appear) with terms and coverages reasonably satisfactory to Landlord, and with insurers having a minimum A.M. Best rating of A-/VII, and with such increases in limits as Landlord may from time to time reasonably request, but initially Tenant shall maintain the following coverages in the following amounts:

(i) Commercial General Liability Insurance naming Landlord, Landlord's management, leasing and development agents and any mortgagees designated by landlord as additional insureds, with coverage for Property/operations, personal and advertising injury, products/completed operations and contractual Liability with combined single limits of liability of not less than $5,000,000 for bodily injury and property damage per occurrence.

(ii) Property Insurance covering property damage and business interruption. Covered property shall include tenant improvements in the Property, office furniture, trade fixtures, office equipment, merchandise and all other items of Tenant's property on the Property. Such insurance shall, with respect only to tenant improvements, name Landlord, and any mortgagees designated by Landlord, as additional loss payees as their interests may appear. Such insurance shall be written on an "all risk" of physical loss or damage basis including but not limited to the perils of fire, extended coverage, windstorm, vandalism, malicious mischief, sprinkler leakage, flood and earthquake, for the full replacement cost value of the covered items and in amounts that meet any co-insurance clause of the policies of insurance with a deductible amount not to exceed $5,000.

(iii) Workers' Compensation Insurance with statutory benefits and Employers Liability Insurance with the following amounts: Each Accident - $500,000; Disease - Policy Limit - $500,000; Disease - Each Employee - $500,000.


Tenant shall, prior to the commencement of the Lease Term and on each anniversary of the Commencement Date and/or renewal date thereof, furnish to Landlord certificate(s) evidencing such coverage, which certificate(s) shall state that such insurance coverage may not be changed or canceled without at least thirty (30) days prior written notice to Landlord and Tenant. The insurance maintained by Tenant shall be deemed to be primary insurance and any insurance maintained by Landlord shall be deemed secondary thereto.

(b)Avoid Action Increasing Rates. Tenant shall comply with all applicable laws and ordinances, all orders and decrees of court and all requirements of other governmental authorities, and shall not, directly or indirectly, make any use of the Premise which may thereby be prohibited or be dangerous to person or property or which may jeopardize any insurance coverage or may increase the cost of insurance or require additional insurance coverage. If tenant fails to comply with the provisions of this
Section Ib and: (i) any insurance coverage is jeopardized and Tenant fails to correct such dangerous or prohibited use following notice within the applicable cure period set forth within the Lease hereof; or (ii) insurance premiums are increased and Tenant fails, following notice, to cease such use within the applicable cure period set forth within the Lease, then in each event such failure shall constitute a Default by Tenant hereunder and Landlord shall have all of its remedies as set forth in the Lease.

II. FIRE OR CASUALTY

(a)If the Property or the Building (including machinery or equipment used in its operation) shall be damaged by fire or other casualty and if such damage does not cause a termination of this Lease as described in the following sentences, then Landlord shall repair and restore the damage with reasonable promptness, subject to reasonable delays for insurance adjustments and delays caused by matters beyond Landlord's reasonable control, but Landlord shall not be obligated to expend for repairing or restoring the damage an amount in excess of the proceeds of insurance recovered with respect to the damage. If in Landlord's estimate the Property cannot be restored within three hundred sixty-five (365) days from the date of such fire or casualty, then Landlord shall give notice to Tenant of such estimate within one hundred twenty (120) days after such fire or casualty. Tenant may elect in writing sixty (60) days following the date of such notice from Landlord to terminate this Lease effective as of the date of Tenant's notice. If any such damage: (i) renders 25% of the building untenantable; or (ii) renders general Building systems inoperable and such systems cannot be repaired in Landlord's reasonable estimate within three hundred sixty five (365) days from the date of such damage, or (iii) occurs within the last two (2) Lease years, Landlord shall have the right to terminate this Lease as of the date of such damage upon giving written notice to the Tenant at any time within one hundred twenty
(120) days after the date of such damage. Landlord shall have no liability to Tenant, and Tenant shall not be entitled to terminate this Lease, by virtue of any delays in completion of such repairs and restoration. Rent, however, shall abate on those portions of the Property as are, from time to time, untenantable as a result of such damage.


(b)Notwithstanding anything to the contrary herein set forth, Landlord shall have no duty pursuant to this Section II to repair or restore any portion of any alterations, additions, installation or improvements in the Property or the decorations thereto except to the extent that the proceeds of the insurance carried by Tenant are timely received by Landlord. If Tenant desires any other additional repairs or restoration, and if Landlord consents thereto, it shall be done at Tenant's sole cost and expense subject to all of the applicable provisions of the Lease. Tenant acknowledges that Landlord shall be entitled to the full proceeds of any insurance coverage whether carried by Landlord or Tenant, for damage to any alterations, addition, installation, improvements or decorations which would become the Landlord's property upon the termination of the Lease.

III. CONTRACTOR'S AND SUBCONTRACTOR'S INSURANCE

Tenant will require that all parties performing work on or with respect to the Property, including, without limitation, contractors, subcontractors and service vendors, maintain insurance coverage at such parties' expense, in the following minimum amounts:

(a) Workers' Compensation - Statutory amount.

(b) Employer's Liability - $500,000 each accident; $500,000 disease-policy limit; $500,000 disease - each employee.

(c) Automobile Liability - $1,000,000 covering losses due to the insurer's liability for bodily injury or property damage.

Medical Expenses - $5,000 per person per accident.

Uninsured/Underinsured Motorists' Coverage - $1,000,000.

(d) Commercial General Liability: Bodily injury and property damage - Per Schedule 1 (construction contractors) or per Schedule 2 (service contractors).

(e) Excess Liability Coverage - Per Schedule 1 (construction contractors) or per Schedule 2 (service contractors) or such greater amount as is needed for the specific job.

(f) Transit Coverage - As needed for the specific job.

The minimum A.M. Best's rating of each insurer is A-/VII. Tenant must obtain Landlord's written permission to waive any of the above requirements. Higher amounts may be required by Landlord if the work to be performed is deemed by Landlord to be hazardous. Tenant will obtain and keep on file a certificate of insurance which shows that each such party is so insured. Landlord will be named as an additional insured with respect to Contractors' and Subcontractors' Auto Liability, Commercial General Liability and Excess Liability policies. Landlord must obtain indemnification and hold harmless provisions in favor of Landlord, Property Manager and Tenant.


  LANDLORD:                            TENANT:

VIF II CEL-SCI Partners, LLC,            CEL-SCI CORPORATION,
a Delaware limited liability company     a Colorado corporation

By: /s/ Stan Wendzel                     By:  /s/ Geert R. Kersten
     ---------------------------------        -------------------------------
Name:  Stan Wendzel                      Name:  Geert R. Kersten
     ---------------------------------        -------------------------------
Title: Manager                           Title: Chief Executive Officer
     ---------------------------------        -------------------------------


SCHEDULE 1 TO LEASE RIDER NO. 1

CONTRACTOR AND SUBCONTRACTOR INSURANCE LIMIT REQUIREMENTS

     Division           Trade Description        Trade Number for Limits
                                                 Required (See Attached)

1. Sitework              Earthwork                          3
                         Excavation                         5
                         Grading                            2
                         Paving                             2
                         Piling/Caisson                     3
                         Retention                          4

2. Concrete              Formwork                           5
                         Precasts                           5
                         Structural                         5

3. Masonry               Masonry                            5

4. Metal And             Metal Deck                         4
   Structural            Misc. Metals                       2
                         Structural Steel                   5

5. Carpentry             Millwork                           2
                         Rough Carpentry                    2
                         Wood Doors                         2

6. Moisture              Caulking                           3
  Protection             Dampproofing                       3
                         Roofing/Sheet Metal                5
                         Waterproofing                      3

7. Doors, Windows        Curtainwall                        5
   And Glass             Glass, Glazing &                   3
                         Aluminum
                         Hardware                           1
                         Hollow Metal Work                  1

8.  Finishes             Acoustic                           2
                         Ceramic & Quarry                   2
                         Covering                           2
                         Lathe, Plaster &                   2
                         Drywall                            2
                         Resilient Floor                    2
                         Paint & Vinyl Wall


SCHEDULE 1 TO LEASE RIDER NO. 1 (CONT'D)

      Division           Trade Description         Trade Number for Limits
                                                   Required (See Attached)

9.  Specialties          Access Flooring                    1
                         Partitions                         1
                         Toilet Accessories                 1

10. Equipment            Crane Operations                   4

11. Furnishings          Suppliers                          1

12. Special              Asbestos Abatement                 5
   Construction          Blasting                           5

13. Conveying            Elevators                          5
   Systems               Escalators                         5
                         Conveyers                          3
                         Dumbwaiters                        3

14. Mechanical           Fire Protection                    4
                          System
                         Plumbing                           4

15. HVAC                                                    5

16. Electrical           Electrical                         5

17.                      Demolition More Than 3 Stories     10
                         3 Stories or Less                  5


General Contractor       Performing Following              10

Work:

New construction Under 4 Stories and Less Than
150,000 Sq. Ft.
Construction Contract Up to $15,000,000
Renovation Less Than 15% of Existing Structure

General Contractor Major Project 50

Any unusual or specialized renovation or repair work undertaken by the General Contractor under this contract may require other limits of liability than those listed above. Owner will make any determination of revised liability limits in consultation with its risk management staff.


SCHEDULE 1 TO LEASE RIDER NO. 1 (CONT'D)

CONTRACTOR AND SUBCONTRACTOR INSURANCE LIMIT REQUIREMENTS

The following are Limits of Liability required depending on the trade number of the Contractor:

1. $1,000,000 Each Occurrence $1,000,000 General Aggregate $1,000,000 Products & Completed Operations Aggregate

2. $1,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate

3. $2,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate $1,000,000 Umbrella Each Occurrence/Aggregate

OR
$1,000,000 Each Occurrence
$2,000,000 General Aggregate
$2,000,000 Products & Completed Operations Aggregate $2,000,000 Umbrella Each Occurrence/Aggregate

4. $2,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate $2,000,000 Umbrella Each Occurrence/Aggregate

OR

$1,000,000 Each Occurrence
$2,000,000 General Aggregate
$2,000,000 Products & Completed Operations Aggregate $3,000,000 Umbrella Each Occurrence/Aggregate


SCHEDULE 1 TO LEASE RIDER NO. 1 (CONT'D)

5. $2,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate $3,000,000 Umbrella Each Occurrence/Aggregate

OR

$1,000,000 Each Occurrence
$2,000,000 General Aggregate
$2,000,000 Products & Completed Operations Aggregate $4,000,000 Umbrella Each Occurrence/Aggregate

10. $2,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate $8,000,000 Umbrella Each Occurrence/Aggregate
OR

$1,000,000 Each Occurrence
$2,000,000 General Aggregate
$2,000,000 Products & Completed Operations Aggregate $9,000,000 Umbrella Each Occurrence/Aggregate

50. $ 2,000,000 Each Occurrence $ 2,000,000 General Aggregate $ 2,000,000 Products & Completed Operations Aggregate $49,000,000 Umbrella Each Occurrence/Aggregate

OR
$ 1,000,000 Each Occurrence
$ 2,000,000 General Aggregate
$ 2,000,000 Products & Completed Operations Aggregate $50,000,000 Umbrella Each Occurrence/Aggregate


SCHEDULE 2 TO LEASE RIDER NO. 1

SERVICE CONTRACTOR INSURANCE LIMITS REQUIREMENTS

                   TYPE OF SERVICE                    NUMBER FOR LIMITS REQUIRED
                   ---------------                    --------------------------
Garbage Removal and Disposal including dumpster                   2
 maintained on Property.

Telephone and T.V. Equipment and Master Wiring and          10 (exterior)
 Antennas Service                                            5 (interior)

Snow Removal Service                                              2

Sprinkler System Service and Repair                               3

Alarm Systems Service and Repair                                  3

Signage and Light Post Maintenance                                2

Landscaping and Lawn Maintenance                                  1

Electrical Maintenance                                            1

Parking Surface Maintenance and Striping                          1

Asbestos Abatement and Hazardous Material Removal                 5

Overhead and Revolving Door Services                              2

Interior & Exterior Cleaning and Janitorial                       2

Fire Extinguishing in Restaurants                                 2

Elevator/Escalator Service & Maintenance                          5

Window Washing and Swing Station Equipment Services               3

Security & Guard Services                                         2


SCHEDULE 2 TO LEASE RIDER NO. 1 (CONT'D)

                                NUMBER FOR LIMITS
      TYPE OF SERVICE               REQUIRED
      ---------------           -----------------
Special Events and            Call Risk Mgmt. Dept.
 Exhibition

Heating, Ventilation and               2
 Air Conditioning Service

Plumbing Service                       2

Metal Cleaners and                     3
 Refinishers

Roofers                               10

Office Equipment Service               1


SCHEDULE 2 TO LEASE RIDER NO. 1 (CONT'D)

SERVICE CONTRACTOR INSURANCE LIMITS REQUIREMENTS

The following are limits of liability required depending on the trade number of the Contractor:

1. $1,000,000 Each Occurrence $1,000,000 General Aggregate

2. $1,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate

3. $2,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate $1,000,000 Umbrella Each Occurrence/Aggregate

OR

$1,000,000 Each Occurrence
$2,000,000 General Aggregate
$2,000,000 Products & Completed Operations Aggregate $2,000,000 Umbrella Each Occurrence/Aggregate

4. $2,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate $2,000,000 Umbrella Each Occurrence/Aggregate

OR

$1,000,000 Each Occurrence
$2,000,000 General Aggregate
$2,000,000 Products & Completed Operations Aggregate $3,000,000 Umbrella Each Occurrence/Aggregate


SCHEDULE 2 TO LEASE RIDER NO. 1 (CONT'D)

5. $2,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate $3,000,000 Umbrella Each Occurrence/Aggregate

OR

$1,000,000 Each Occurrence
$2,000,000 General Aggregate
$2,000,000 Products & Completed Operations Aggregate $4,000,000 Umbrella Each Occurrence/Aggregate

10. $2,000,000 Each Occurrence $2,000,000 General Aggregate $2,000,000 Products & Completed Operations Aggregate $8,000,000 Umbrella Each Occurrence/Aggregate

OR

$1,000,000 Each Occurrence
$2,000,000 General Aggregate
22,000,000 Products & Completed Operations Aggregate $9,000,000 Umbrella Each Occurrence/Aggregate


EXHIBIT 10(p)


PROMISSORY NOTE

December 29, 2008

FOR VALUE RECEIVED, CEL-SCI Corporation (Borrower) promises to pay to Maximilian de Clara or order (Note Holder) all amounts which from time to time may be advanced by the note holder to the borrower, up to a maximum of $1 million, together with interest on the unpaid principal balance from the date of this note until paid, at the rate of 15% per annum.

This Note, together with all accrued but unpaid interest, shall be due and payable on the first to occur of the following:

o March 27, 2009; or

o the date the Borrower obtains funding (weather by means of convertible debt or equity) of at least $2,000,000 net of fees, exclusive of any funding obtained by means of this Note or any notes which are the same series as this Note.

Principal and interest shall be payable at the following address, or such other place as the Note Holder may designate:

Maximilian de Clara
6078 Lungern (OV)
Bergstrasse 79
Switzerland

On March 27, 2009 CEL-SCI will issue to Maximilian de Clara one warrant for each dollar loaned to the Company by Maximilian de Clara. This warrant will allow the investor to purchase CEL-SCI common stock at a price that is equal to the closing market price on March 26, 2009. The warrants will have a life of 5 years and will be registered with the next registration statement.

Payments received for application to this Note shall be applied first to the payment of costs and expense of collection and/or suit, if any, second to the payment of accrued interest specified above, and the balance applied in reduction of the principal amount hereof.

If this Note is not paid when due, the Note Holder shall be entitled to collect all reasonable costs and expense of collection and/or suit, including, but not limited to reasonable attorneys' fees.

Borrower may prepay the principal amount outstanding under this note, in whole or in part, at any time without penalty.

2

Borrower and all other makers, sureties, guarantors, and endorsers hereby waive presentment, notice of dishonor and protest, and they hereby agree to any extensions of time of payment and partial payments before, at, or after maturity.

Any notice to Borrower provided for this Note shall be in writing and shall be given and be effective upon (1) delivery to Borrower, (2) by e-mail as long as the e-mail receipt was acknowledged or (3) mailing such notice by mail or couriers such as FedEx, addressed to Borrower at the Borrower's address states below, or to such other address as Borrower may designate by notice to the Note Holder. Any notice to the Note Holder shall be in writing and shall be given and be effective upon (1) delivery to Borrower, (2) by e-mail as long as the e-mail receipt was acknowledged or (3) mailing such notice by mail or couriers such as FedEx, to the Note Holder at the address stated above, or to such other address as Note Holder may designate by notice to Borrower.

CEL-SCI CORPORATION

By /s/ Geert Kersten
  ---------------------------------
  Geert R. Kersten, Chief Executive Officer

ADDRESS OF BORROWER

8229 Boone Boulevard, Suite 802
Vienna, VA 22182, USA
703-506-9460

3

1st Amendment to PROMISSORY NOTE

April 30, 2009

On December 29, 2008, CEL-SCI Corporation (Borrower) signed a promissory note to Maximilian de Clara or order (the Note Holder). Pursuant to this note CEL-SCI was to have repaid the note by March 27, 2009 and was to have issued warrants on CEL-SCI stock to Maximilian de Clara. This note is now being amended as follows:

All terms of the note will stay the same except for:

1) The note is now due on June 27, 2009;

2) On June 27, 2009 CEL-SCI will issue to Maximilian de Clara 1.5 warrants for each dollar loaned to the Company by Maximilian de Clara. This warrant will allow the investor to purchase CEL-SCI common stock at a price that is equal to the closing market price on June 26, 2009. The warrants will have a life of 5 years and will be registered with the next registration statement.

3) If there is an earlier financing that triggers a reset under the convertible debentures, CEL-SCI will issue the warrants to be issued to Mr. de Clara pursuant to No. 2 at such earlier time at the same price as the reset price.

4) If there is no earlier financing that triggers a reset under the convertible debentures, CEL-SCI will also offer a right of participation to Maximilian de Clara for the whole amount due under the promissory note.

CEL-SCI CORPORATION

By: /s/ Geert R. Kersten
    ------------------------------
   Geert R. Kersten, Chief Executive Officer

ADDRESS OF BORROWER

8229 Boone Boulevard, Suite 802
Vienna, VA 22182, USA
703-506-9460

Countersigned by:
Maximilian de Clara

/s/ Maximilian de Clara
-------------------------------

4

2nd Amendment to PROMISSORY NOTE

June 25, 2009

On December 28, 2008, CEL-SCI Corporation (Borrower) signed a promissory note to Maximilian de Clara or order (the Note Holder). On April 30, 2009 Borrower signed a 1st Amendment to this Promissory Note due to CEL-SCI's inability to repay the funds. Today Borrower and Note Holder agree to a 2nd Amendment to the Promissory Note. The note is being amended as follows:

All terms of the note will stay the same except for:

1) The amount payable under the note is now $1,099,265.07.

2) The note will continue to be secured by the Company's assets (UCC lien filed December 2008).

3) Interest at an annual rate of 15% will be payable monthly.

4) The note will become a 5 year note. CEL-SCI will not have the right to prepay the note at an earlier time, but the Holder may request repayment in full or in part at any time after October 1, 2009 on 10 days notice.

5) The note, in whole or in smaller increments, will be convertible at the holder's option into CEL-SCI common stock at a price of $0.40 per CEL-SCI common share, subject to the customary adjustments. CEL-SCI agrees to deliver the shares within 3 trading days of conversion notice.

6) CEL-SCI will immediately award Holder 1,648,898 warrants to purchase CEL-SCI common stock at $0.50. These warrants have a life of 5 years from the date of grant.

7) The shares underlying the convertible note and the warrants, as well as the warrants issued pursuant to the 1st Amendment to the promissory Note, will be added to the next registration statement by CEL-SCI. CEL-SCI will make every effort to have these shares registered within 4 months.

All other terms and conditions of said Note shall remain in full force and effect. This amendment shall be subject to said terms and conditions.

IN WITNESS WHEREOF, the Borrower has executed and delivered said Promissory Note Amendment as of the day and year first above written.

WITNESS:                                 BORROWER:
                                         CEL-SCI CORPORTION


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

IN WITNESS WHEREOF, the Lender hereby acknowledges and accepts said Promissory Note Amendment as of the day and year first above written.

WITNESS:                                 LENDER:
                                         MAXIMILIAN DE CLARA


                                         By:/s/ Maximilian De Clara
                                            -------------------------------

5

EXHIBIT 31


EXHIBIT 32


CEL-SCI CORPORATION

Common Stock

At Market Issuance Sales Agreement

December 10, 2010

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

Ladies and Gentlemen:

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

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

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

1

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

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

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

2

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

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

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

5. Sale and Delivery to MLV; Settlement.

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

3

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

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

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

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

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

4

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

10

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

14

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(m) Legal Opinion. No later than (1) ten (10) Trading Days after the date of this Agreement and (2) five (5) Trading Days after each Representation Date following the date of this Agreement with respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(l) for which no waiver is applicable, the Company shall cause to be furnished to MLV written opinions of Hart & Trinen LLP ("Company Counsel"), or other counsel satisfactory to MLV, in form and substance satisfactory to MLV and its counsel, which collectively address the legal opin