Exhibit 10.151.1
AMENDMENT NO. 5 TO RIGHTS AGREEMENT
     THIS AMENDMENT NO. 5 (this “Amendment”), dated as of March 28, 2006 (the
“Effective Date”), among The Immune Response Corporation, a Delaware corporation
(the “Company”), Computershare Trust Company, Inc. (“Computershare”), and
American Stock Transfer & Trust Company (“American Stock”), to the Rights
Agreement dated as of February 26, 1992, as amended by Amendment No. 1 dated as
of April 17, 1997, Amendment No. 2 dated as of December 20, 2001, Amendment
No. 3 dated as of February 20, 2002, and Amendment No. 4 dated as of April 1,
2003, between the Company and Computershare (successor agent to Harris Trust and
Savings Bank, which was successor agent to Mellon Investor Services, which was
successor agent to ChaseMellon Shareholder Services, L.L.C., which was successor
agent to First Interstate Bank Ltd.), as Rights Agent (the “Rights Agreement”).
     A. The Company and Computershare have heretofore entered into the Rights
Agreement pursuant to which the Computershare was appointed to serve as the
Rights Agent under the Rights Agreement. Pursuant to Section 27 of the Rights
Agreement, the Company and the Rights Agent may, from time to time, supplement
or amend the Rights Agreement in accordance with the provisions of such Section.
     B. The Company desires to appoint American Stock as successor Rights Agent
under the Rights Agreement, effective as of the Effective Date, and as of such
date, Computershare will be relieved of its duties as Rights Agent under the
Rights Agreement.
     C. In connection with the termination of Computershare as Rights Agent and
the appointment of American Stock as successor Rights Agent, the Company,
Computershare and American Stock desire to amend the Rights Agreement in certain
respects.
     D. The Board of Directors of the Company has approved, and the Company has
consummated or intends to consummate, the following transactions: (i) the
issuance to Qubit Holdings, LLC (“Qubit”) on February 9, 2006 of a $250,000 8%
senior secured convertible promissory note and 37,500,000 common stock warrants
(the “Qubit Transaction”), (ii) the issuance to Cheshire Associates LLC
(“Cheshire”) on February 9, 2006 of 53,425,204 shares of Common Stock, which
shares were issued upon conversion of $1,068,504.08 of principal and accrued
interest due under a convertible promissory note then due in May 2007, and the
reduction of the conversion price for the remaining principal and interest under
such note to $0.02 per share in exchange for a change in the maturity date of
such note to January 1, 2009 (the “Cheshire Transaction”), (iii) the offering
and sale of 80 Units to certain accredited investors, completed in February and
March 2006, with each full Unit comprising a $100,000 8% senior secured
convertible promissory note and a warrant to purchase 15,000,000 shares of
common stock (the “2006 Private Placement”), (iv) the issuance of a Secured
Convertible Debenture and Warrant to Cornell Capital Partners LP (“Cornell”)
under that certain Securities Purchase Agreement, dated August 4, 2005, between
the Company and Cornell (the “Cornell Transaction”), (v) the issuance to Spencer
Trask Ventures, Inc. or its designees (together, “Spencer Trask”) of common
stock warrants pursuant to that certain Placement Agency Agreement, dated
February 9, 2006, as supplemented, relating to the 2006 Private Placement (the
“Placement Agent Transaction”), and (vi) the issuance to Spencer Trask
Intellectual Capital Company LLC (“STIC”) of common stock warrants pursuant to
that certain Limited Recourse Interest Inducement Agreement, dated February 9,
2006, as amended (the “STIC Transaction”).
     E. The Company now desires to amend the Rights Agreement such that, with
respect to the consummation of the Qubit Transaction, Cheshire Transaction, 2006
Private Placement, the Cornell Transaction, the Placement Agent Transaction and
the STIC Transaction, and each of the transactions contemplated thereby
(collectively, the “Exempt Transactions”), none of Qubit, Cheshire, Cornell,
Spencer Trask, STIC, nor any investor participating in the 2006 Private
Placement, nor any of their Affiliates, (each, an “Exempt Person”) is or will
become an “Acquiring Person” and that no “Stock Acquisition Date” or
“Distribution Date” (as such terms are defined in the Rights Agreement) will
occur, in each case as a result of the Common Stock of which each such Exempt
Person may be deemed to be the Beneficial Owner due to the Exempt Transactions
(per se or in conjunction with any future increase in the authorized number of
shares of Common Stock of the Company).

 

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     F. The Board of Directors of the Company has approved, and the Company has
consummated, from time to time, several agreements and transactions with Kevin
B. Kimberlin, an individual, and his Affiliates. The Company now desires to
amend the Rights Agreement such that, with respect to all agreements and
transactions before March 28, 2006 with Kevin B. Kimberlin and/or his
Affiliates, including any exercise or conversion by him or them thereafter of
derivative securities which had been issued before March 28, 2006 (collectively,
the “Kimberlin Exempt Transactions” and, together with the Exempt Transactions,
the “Total Exempt Transactions”), none of Kevin B. Kimberlin or his Affiliates
(each, a “Kimberlin Exempt Person” and, together with the Exempt Persons, the
“Total Exempt Persons”) is or will become an “Acquiring Person” and that no
“Stock Acquisition Date” or “Distribution Date” (as such terms are defined in
the Rights Agreement) will occur, in each case as a result of the Common Stock
of which each such Kimberlin Exempt Person may be deemed to be the Beneficial
Owner due to the Kimberlin Exempt Transactions (per se or in conjunction with
any future increase in the authorized number of shares of Common Stock of the
Company).
     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, the parties hereto agree as follows:
     1. Termination of Rights Agent. Computershare is hereby terminated as
Rights Agent under the Rights Agreement, effective as of the Effective Date.
     2. Appointment of the Successor Rights Agent. The Company hereby appoints
American Stock as successor Rights Agent under the Rights Agreement, effective
as of the Effective Date, and American Stock hereby accepts such appointment.
     3. Amendment of Rights Agreement as to Successor Rights Agent. Effective as
of immediately before the date of appointment of American Stock as successor
Rights Agent, the Rights Agreement shall be amended as follows:
     (a) Section 22 of the Rights Agreement is hereby amended by changing the
$50,000,000 figure therein to “25,000,000”.
     (b) Section 26 of the Rights Agreement is hereby amended by deleting the
address for notice or demand to be given to the Rights Agent therein and
substituting in lieu thereof the following:
“American Stock Transfer & Trust Company
59 Maiden Lane, Plaza Level
New York, NY 10038”
     (c) All references in the Rights Agreement to “Computershare Trust Company,
Inc.”, “Harris Trust and Savings Bank,” “ChaseMellon Shareholder Services,
L.L.C.,” “Mellon Investor Services” or to “First Interstate Bank, Ltd.” as
Rights Agent shall for all purposes be deemed to refer to “American Stock
Transfer & Trust Company.”
     4. Definition of Acquiring Person. The definition of “Acquiring Person” set
forth in Section 1(a) of the Rights Agreement, as amended, is hereby further
amended in its sub-section (ii) to read as follows:
     “(ii) the term Acquiring Person shall not mean (A) the Company, (B) any
subsidiary of the Company (as such term is hereinafter defined), (C) any
employee benefit plan of the Company or any of its subsidiaries, (D) any entity
holding securities of the Company organized, appointed or established by the
Company or any of its subsidiaries for or pursuant to the terms of any such plan
or (E) any Total Exempt Person, or any Affiliate of any Total Exempt Person, who
may otherwise become an Acquiring Person as a result of any of the Total Exempt
Transactions; and”
     5. Exclusion of Total Exempt Transaction Securities. The following new
clause (iv) shall be added to Section 1(a) of the Rights Agreement, as amended:
“; and (iv) notwithstanding the foregoing, in no event shall any Common Stock
held by any Beneficial Owner who is a Total Exempt Person or an Affiliate of a
Total Exempt Person be deemed to include shares of Common Stock that were
acquired, or that may be acquired, as a result of or in connection with any
Total Exempt Transaction.”

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     6. Amendment of Distribution Date. The last clause of the first sentence of
Section 3(a) of the Rights Agreement, as amended, is hereby further amended to
read as follows:
“; provided, however, that in no event shall a Distribution Date be deemed to
occur as a result of any of the Total Exempt Transactions.”
     7. No Stock Acquisition Date. No “Stock Acquisition Date” shall be deemed
to occur under the Rights Agreement as a result of any of the Total Exempt
Transactions.
     8. Effect of Amendments. All amendments made to the Rights Agreement in
this Amendment shall be deemed to apply retroactively as well as prospectively.
     9. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with all laws of such State applicable
to contracts to be made and performed entirely within such State.
     10. Counterparts. This Amendment may be executed in counterparts, each of
which shall be an original, but such counterparts shall together constitute one
and the same instrument.
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and attested, all as of the date and year first above written.

                 
 
                Attest:   THE IMMUNE RESPONSE CORPORATION
 
               
By:
  /s/ Karen Mollo   By:   /s/ Michael Green    
 
               
 
               
Title:
  Executive Assistant   Title:   COO & CFO    
 
                Attest:   AMERICAN STOCK TRANSFER & TRUST COMPANY
 
               
By:
  /s/ Joseph Wolf   By:   /s/ Herbert J. Lemmer    
 
               
 
               
Title:
  Vice President   Title:   Vice President    
 
                Attest:   COMPUTERSHARE TRUST COMPANY, INC.
 
               
By:
  /s/ John M. Wahl   By:   /s/ Kellie Gwinn    
 
               
 
               
Title:
  Corporate Trust Officer   Title:   Vice President    

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