SMTP server response: 501 Syntax error in parameters or arguments

We transferred an application to a new server. All emailing operations now return the following error:

Warning: mail(): SMTP server response: 501 Syntax error in parameters or arguments in C:\SWB\immunetech\elab.immunetech.com\PEAR\Mail\mail.php on line 83

I did some debugging and these are the different parameters:

Recipients: nima@immunetech.com
Subject: test
Body: test
Text Headers: MIME-Version: 1.0 From: ImmuneTech Labs Content-Type: text/plain; charset="ISO-8859-1" Content-Transfer-Encoding: 7bit

This is the source code of the referenced file:

<?php
//
// +----------------------------------------------------------------------+
// | PHP Version 4                                                        |
// +----------------------------------------------------------------------+
// | Copyright (c) 1997-2002 The PHP Group                                |
// +----------------------------------------------------------------------+
// | This source file is subject to version 2.02 of the PHP license,      |
// | that is bundled with this package in the file LICENSE, and is        |
// | available at through the world-wide-web at                           |
// | http://www.php.net/license/2_02.txt.                                 |
// | If you did not receive a copy of the PHP license and are unable to   |
// | obtain it through the world-wide-web, please send a note to          |
// | license@php.net so we can mail you a copy immediately.               |
// +----------------------------------------------------------------------+
// | Author: Chuck Hagenbuch <chuck@horde.org>                            |
// +----------------------------------------------------------------------+
//
// $Id: mail.php,v 1.1 2003/03/19 02:30:23 Nikolai Exp $

require_once ('Mail.php');

/**
 * internal PHP-mail() implementation of the PEAR Mail:: interface.
 * @access public
 * @package Mail
 * @version $Revision: 1.1 $
 */
 
error_reporting("E_ALL");

 class Mail_mail extends Mail {
      /**
     * Implements Mail_mail::send() function using php's built-in mail()
     * command.
     *
     * @param mixed $recipients Either a comma-seperated list of recipients
     *              (RFC822 compliant), or an array of recipients,
     *              each RFC822 valid. This may contain recipients not
     *              specified in the headers, for Bcc:, resending
     *              messages, etc.
     *
     * @param array $headers The array of headers to send with the mail, in an
     *              associative array, where the array key is the
     *              header name (ie, 'Subject'), and the array value
     *              is the header value (ie, 'test'). The header
     *              produced from those values would be 'Subject:
     *              test'.
     *
     * @param string $body The full text of the message body, including any
     *               Mime parts, etc.
     *
     * @return mixed Returns true on success, or a PEAR_Error
     *               containing a descriptive error message on
     *               failure.
     * @access public
     */      
    function send($recipients, $headers, $body)
    {
        // if we're passed an array of recipients, implode it.
        if (is_array($recipients)) {
            $recipients = implode(', ', $recipients);
        }
       
        // get the Subject out of the headers array so that we can
        // pass it as a seperate argument to mail().
        $subject = '';
        if (isset($headers['Subject'])) {
            $subject = $headers['Subject'];
            unset($headers['Subject']);
        }
       
        // flatten the headers out.
        list(,$text_headers) = Mail::prepareHeaders($headers);
       
      //debug:
      echo
      "Recipients: ".$recipients."<br>".
      "Subject: ".$subject."<br>".
      "Body: ".$body."<br>".
      "Text Headers: ".$text_headers."<br>";
      
        return mail($recipients, $subject, $body, $text_headers);
    }
   
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