**Exhibit10.144**

 

**THE SECURITIES REPRESENTED BY THISCERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, ASAMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCEOF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR ANOPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THECOMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLDPURSUANT TO RULE 144(K) UNDER SAID ACT.**

 

**THE TRANSFER OR SALE OF THIS NOTE ISSUBJECT TO THE TERMS OF A PURCHASE AGREEMENT, INCLUDING SECTION 5(H) THEREOF,DATED AS OF JUNE 23, 2003, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THECOMPANY.**

 

**12%PROMISSORY NOTE**

 
| U.S.  $              | June 23, 2003 |
|---------------------------------------------------------------------------------------|---------------|

 

FOR VALUE RECEIVED, The Immune Response Corporation, aDelaware corporation (the “Company”), hereby promises to pay to the order of **[                     ]**(the “Lender”) the principal amount of                   ($        ) Dollars****(the “Principal Amount”), together withinterest on the Principal Amount under this promissory note (this “Note”) atthe per annum rate of twelve (12%) percent (calculated on actual calendar dayselapsed and a 360-day year basis). The Principal Amount on this Note shallbecome due and payable in one installment on the earlier of: (i) September 30, 2003****or (ii) upon the closing of a sale (or series ofrelated sales) by the Company of its equity securities or warrant exerciseresulting in net proceeds to the Company of not less than One Million ThreeHundred Thousand Dollars ($1,300,000) (“Maturity Date”).  Interest on this Note shall be due andpayable monthly (“Monthly Interest”), commencing on July 23, 2003.

 

Both the Principal Amount and Monthly Interest shallbe paid in lawful money of the United States of America to the Lender at                           , or at such other address as the Lender may designate by notice in writing tothe Company, in immediately available funds.

 

If any payment hereunder falls due on a Saturday,Sunday or legal holiday, it shall be payable on the next succeeding businessday and such additional time shall be included in the computation of interest.

 

This Note is one of a series of promissory notes oflike tenor and ranking (collectively, the “Notes”) made by the Company in favorof certain investors (the “Lenders”) dated of even date herewith which havebeen issued by the Company, and is issued pursuant to that certain PurchaseAgreement by and between the Company and the Lender of even date herewith (the“Purchase Agreement”).  Notwithstandingany provision to the contrary contained herein, this Note is subject andentitled to certain terms, conditions, covenants and agreements contained inthe Purchase Agreement.  Any transfereeor transferees of this Note, by their acceptance hereof, assume the obligationsof the Company in the Purchase Agreement with respect to the conditions

 

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and procedures for transfer of this Note.  Reference to the Purchase Agreement shall in no way impair theabsolute and unconditional obligation of the Company to pay both the PrincipalAmount and Monthly Interest hereon as provided herein.

 

The shares of the Company’s common stock, $ 0.0025 parvalue per share (the “Common Stock”) issuable upon Pre-Payment (as hereinafterdefined) and Default (as hereinafter defined), are referred to in, and entitledto the benefits of, that certain registration rights agreement between theCompany and the Lender of even date herewith (the “Registration Rights Agreement”).

 

## 1.                                       Prepayment.  This Note may be prepaid, at the option ofthe Company at any time on any date on or after the date of issuance and priorto the Maturity Date, at a redemption price equal to 100% of the PrincipalAmount that is being pre-paid, together with accrued and unpaid interestthrough the date of pre-payment (“Pre-Payment”); *provided*, *however*,in the event this Note is not pre-paid on or before July 31, 2003,         shares of Common Stock shallbe issued and delivered to the Lender (“Pre-Payment Penalty Shares”).

 

2.                                       Eventsof Default.  Upon the occurrence ofany of the following events (herein called “Events of Default”) which shallhave occurred and be continuing:

 

(a)                                  TheCompany shall default in the payment of the Principal Amount or interest ofthis Note on or before the date such payment is due;

 

(b)                                 Failureby the Company to perform or observe, in any material respects, any othercovenant or agreement of the Company contained in this Note or any materialcovenant or material agreement contained in the Purchase Agreement and theRegistration Rights Agreement which remains uncured for the period and afterthe notice specified below and the Lender notifies the Company of the default,and the Company does not cure the default within 30 days after receipt of thewritten notice, which notice must specify the default, demand that it beremedied and the state that the written notice is a “Notice of Default;”

 

(c)                                  Failureby the Company to pay the principal on the maturity date (or otherwise when due),or interest on, or the occurrence and continuation of an event of default underany loan agreement, arrangement, mortgage, indenture or other instruments underwhich there is issued (other than the Notes) or by which there is secured orevidenced any indebtedness of the Company, whether such indebtedness exists onthe date of the issuance of this Note or is created thereafter;

 

(d)                                 Acustodian, receiver, liquidator or trustee of the Company, or of any of itsproperty, is appointed or takes possession of the Company or its property andsuch appointment or possession remains in effect for more than 30 days; or anorder for relief is entered under the Federal Bankruptcy Code against theCompany; or any of the property of the Company is sequestered by court orderand the order remains in effect for more than 30 days; or a petition or otherproceeding is filed against the Company under any bankruptcy, reorganization,arrangement, insolvency, readjustment of indebtedness, dissolution orliquidation law of any jurisdiction, whether now or hereafter in effect, and isnot dismissed within 60 days after filing;

 

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(e)                                  TheCompany files a petition in voluntary bankruptcy or seeking relief under anyprovision of any bankruptcy, reorganization, arrangement, insolvency,readjustment of indebtedness, dissolution or liquidation law of anyjurisdiction, whether now or hereafter in effect, or consents to the filing ofany petition against it under any such law;

 

(f)                                    TheCompany makes an assignment for the benefit of its creditors, or generallyfails to pay its obligations as they become due, or consents to the appointmentof or taking possession by a custodian, receiver, liquidator or trustee of theCompany or all or any part of its property;

 

(g)                                 Therendering of one or more final judgments, orders or decrees against the Company(including for seizure, forfeiture, garnishment or abatement) in an aggregateamount equal to or in excess of **$250,000**which are not vacated, satisfied, discharged or execution thereof stayed withina period of 30 days from the entry thereof;

 

(h)                                 Theviolation by the Company of any law or regulation, whether with respect to theconduct of its business or otherwise, which has a Material Adverse Effect (asdefined in the Purchase Agreement);

 

(i)                                     Ifthe Company shall suspend its operations and such suspension would reasonablybe expected to have a Material Adverse Effect on the Company;

 

(j)                                     Anyrepresentation or warranty made by the Company to the Holder under the PurchaseAgreement or the Registration Rights Agreement was, when made, untrue ormisleading and such breach has a Material Adverse Effect on the Company; or

 

(k)                                  Thefailure of the Company to timely deliver the information required by Section 7.04of the Purchase Agreement,

 

then, and in any such event, a rate (the “Late Rate”) equal to eighteenpercent (18%) per annum shall immediately and automatically thereafter begin toaccrue on the then Principal Amount and, the lender may then, by written noticeto the Company, declare the entire unpaid principal amount of this Noteoutstanding, together with accrued and unpaid interest thereon at the Late Rateand the same shall, unless such default be cured within three (3) days aftersuch notice, forthwith be immediately due and payable upon the expiration ofsuch three (3) day period, without presentment, demand, protest or other noticeof any kind, all of which are expressly waived.  Notwithstanding anything to the contrary herein, if at any timethe Late Rate exceeds interest payable under the highest rate of interestpermissible under applicable law (the “Maximum Lawful Rate”), then in suchevent, the Late Rate will be reduced to the Maximum Lawful Rate.  Additionally, the Lender shall have allrights and remedies available under the Purchase Agreement and the RegistrationRights Agreement, as well as all rights and remedies available at law or inequity.

 

In the case of an Event of Default described inparagraph (a) above occurs (“Default”),          shares (in addition tothe Pre-Payment Penalty Shares) of Common Stock shall be

 

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issued and delivered to the Lender on the date of Default (“DefaultShares,” and together with the Pre-Payment Penalty Shares, sometimeshereinafter referred to as “Contingent Shares”).

 

(b)                                 Nocourse of dealing or delay or failure on the part of the Lender to exercise anyright under this Section 2 shall operate as a waiver of such right or otherwiseprejudice such Lender’s rights, powers and remedies.  The Company will pay or reimburse the Lender, to the extentpermitted by law, for all costs and expenses, including but not limited toreasonable attorneys’ fees, incurred by it in collecting any sums due on theNote or in otherwise enforcing any of its rights.

 

3.                                       Changeof Control.  In the event of (i) anytransaction or series of related transactions (including any reorganization,merger or consolidation) that results in the transfer of 50% or more of theoutstanding voting power of the Company, and (ii) a sale of all orsubstantially all of the assets of the Company to another person, this Noteshall be automatically due and payable. The Company will give the Lender not less than ten (10) business daysprior written notice of the occurrence of any events referred to in thisSection 3.

 

4.                                       CertainAdjustments.  The number and classor series of shares issuable upon Pre-Payment and/or Default under Sections 1and 2 hereof shall be subject to adjustment in accordance with the followingprovisions:

 

(a)                                  Adjustmentfor Reorganization or Recapitalization. If, while this Note remains outstanding there shall be a reorganizationor recapitalization (other than a combination, reclassification, exchange orsubdivision of shares otherwise provided for herein), all necessary orappropriate lawful provisions shall be made so that the Lender shall thereafterbe entitled to receive upon Pre-Payment or Default, that number of shares ofstock or other securities or property that a holder of the class of securitiesdeliverable upon Pre-Payment or Default, respectively, would have been entitledto receive in such reorganization or recapitalization if the Contingent Shareshad been issued immediately prior to such reorganization or recapitalization,all subject to further adjustment as provided in this Section 4.  If the per share consideration payable tothe Lender for such class of securities in connection with any such transactionis in a form other than cash or marketable securities, then the value of suchconsideration shall be determined in good faith by the Company’s Board ofDirectors.  The foregoing provisions ofthis paragraph shall similarly apply to successive reorganizations orrecapitalizations and to the stock or securities of any other corporation thatare at the time receivable upon the Pre-Payment or Default, respectively.  In all events, appropriate adjustment shallbe made in the application of the provisions of this Note with respect to therights and interests of the Lender after the transaction, to the end that theprovisions of this Note shall be applicable after that event, as near asreasonably may be, in relation to any shares or other property deliverable orissuable after such reorganization or recapitalization upon Pre-Payment orDefault, respectively.

 

(b)                                 Adjustmentsfor Split, Subdivision or Combination of Shares.  If the Company at any time while this Note remains outstanding,shall split or subdivide any class of securities issuable upon Pre-Payment orDefault, respectively, into a different number of securities of the same class,the number of shares of such class issuable upon Pre-Payment or Default,respectively, immediately prior to such split or subdivision shall beproportionately

 

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increased.  If the Company atany time while this Note, or any portion hereof, remains outstanding shallcombine any class of securities issuable upon Pre-Payment or Default,respectively, into a different number of securities of the same class, thenumber of shares of such class issuable immediately prior to such combinationshall be proportionately decreased.

 

(c)                                  Adjustmentsfor Dividends in Stock or Other Securities or Property.  If, while this Note remains outstanding, theLenders shall have received, or, on or after the record date fixed for thedetermination of eligible stockholders, shall have become entitled to receive,without payment therefor, other or additional stock or other securities orproperty (other than cash) of the Company by way of dividend, then and in eachcase, this Note shall represent the right to acquire, in addition to the numberof shares of such class of security receivable upon the Pre-Payment or Default,if any, and without payment of any additional consideration therefor, theamount of such other or additional stock or other securities or property (otherthan cash) of the Company that such holder would hold on the date ofPre-Payment or Default had it been the holder of record of the class ofsecurity receivable upon Pre-Payment or Default, retained such shares and/orall other additional stock available by it as aforesaid during said period,giving effect to all adjustments called for during such period by theprovisions of this Section 4.

 

5.                                       FurtherAdjustments.  In case at any timeor, from time to time, the Company shall take any action that affects the classof securities issuable upon Pre-Payment or Default, other than an actiondescribed herein, then, unless such action will not have a materially adverseeffect upon the rights of the Lender, the number of shares of such class ofsecurities (or other securities) issuable upon Pre-Payment or Default shall beadjusted in such a manner and at such time as shall be equitable in thecircumstances.

 

6.                                       Certificateas to Adjustments.  Upon theoccurrence of each adjustment or readjustment pursuant to Section 4 or Section5, the Company at its sole expense shall promptly compute such adjustment orreadjustment in accordance with the terms hereof and furnish to the Lender acertificate setting forth such adjustment or readjustment and showing in detailthe facts upon which such adjustment or readjustment is based.  The Company shall, upon the written requestat any time of the Lender, furnish or cause to be furnished to Lender a likecertificate setting forth (i) such adjustments and readjustments, and (ii) thenumber and class of securities and the amount, if any, of other property whichat the time would be received upon Pre-Payment or Default, respectively, underSection 1 or Section 2 hereof, respectively.

 

7.                                   AffirmativeCovenants.  The Company covenantsand agrees that, while any amounts under this Note are outstanding, it shall:

 

(a)                              Perform,within all required time periods (after giving effect to any applicable graceperiods), all of its obligations and enforce all of its rights under eachmaterial agreement to which it is a party. The Company shall not terminate or modify in any manner materiallyadverse to the Company any provision of any such material agreement to which itis a party except in the ordinary course of business, consistent with pastpractice;

 

(b) Use reasonable commercial efforts to preserve andkeep in full force and effect its corporate existence, including, withoutlimitation, all licenses or similar qualifications

 

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required by it to engage in its business in all jurisdictions in whichit is at the time so engaged at all times maintain, preserve and protect all ofits trademarks and tradenames (if any), and preserve all the remainder of itsmaterial property, in use or useful in the conduct of its business and keep thesame in good repair, working order and condition (taking into considerationordinary wear and tear);

 

(c)  Pay and dischargepromptly when due all taxes, assessments and governmental charges or leviesimposed upon it or upon its income or profits or in respect of its propertybefore the same shall become delinquent or in default, which, if unpaid, mightreasonably be expected to give rise to liens or charges upon such properties orany part thereof, unless, in each case, the validity or amount thereof is beingcontested in good faith by appropriate proceedings and the Company hasmaintained adequate reserves with respect thereto in accordance with generallyaccepted accounting principals (“GAAP”);

 

(d)  Comply inall material respects with all federal, state and local laws and regulations,orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,authorizations and requirements applicable to it (collectively, “Requirements”)of all governmental bodies, departments, commissions, boards, companies orassociations insuring the premises, courts, authorities, officials or officerswhich are applicable to the Company or any of its properties, except where thefailure to so comply would not have Material Adverse Effect; provided, however,that nothing provided herein shall prevent the Company from contesting thevalidity or the application of any Requirements;

 

(e)  Keepproper records and books of account with respect to its business activities, inwhich proper entries, reflecting all of their financial transactions, are madein accordance with GAAP; and

 

(f)  Notify theLender in writing, promptly upon learning thereof, of any material litigationor administrative proceeding commenced or threatened, in writing, against theCompany.

 

8.                                       NegativeCovenants.  The Company covenantsand agrees that while any amount of this Note is outstanding it will notdirectly or indirectly:

 

(a)                              Declareor pay, directly and indirectly, any dividends or make any distributions,whether in cash, property, securities or a combination thereof, with respect to(whether by reduction of capital or otherwise) any shares of its capital stock(including without limitation any preferred stock) or directly or indirectlyredeem, purchase, retire or otherwise acquire for value any shares of any classof its capital stock or set aside any amount for any such purpose;

 

(b)                                 Consolidatewith or merge into any other person, or sell, lease, transfer or assign to anypersons or otherwise dispose of (whether in one transaction or a related seriesof transactions) 15% or more of its consolidated properties or assets (whethernow owned or hereafter acquired), or permit another person to merge into it,except as contemplated herein;

 

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(c)                                  Own,purchase or acquire any stock, obligations, assets or securities of, or anyinterest in, or make any capital contribution or loan or advance of money,credit or property to, any other person, or make any other investments, exceptthat the Company may own, purchase or acquire (i) existing subsidiaries orsubsidiaries formed for the purposes of facilitating acquisitions or carryingout the ordinary business of the Company; (ii) certificates of deposits of anycommercial banks registered to do business in any state of the United Stateshaving capital and surplus in excess of $**50,000,000**;(iii) readily marketable, direct obligations of the United States government orany agency thereof which are backed by the full faith and credit of the UnitedStates; and (iv) investments in prime commercial paper; provided, however,that in each case mentioned in (ii), (iii) or (iv) above, such obligationsshall mature not more than **180**days from the date of acquisition thereof;

 

(d)  Sell,transfer, discount or otherwise dispose of any claim or debt owing to it,including, without limitation, any notes, accounts receivable or other rightsto receive payment, except for reasonable consideration and in the ordinarycourse of business;

 

(e) (i) Engage in any transaction in connection withwhich the Company could be subject to either a material civil penalty assessedpursuant to the provisions of Section 502 of ERISA or a material tax imposedunder the provisions of Section 4975 of the Tax Code; (ii) terminate anypension plan in a “distress termination” under Section 4041 of ERISA; or (iii)fail to make payment when due of all amounts which, under the provisions of anyemployee or pension plan, the Company or any ERISA affiliate are required topay as contributions thereto, or, with respect to any pension plan, permit toexist any material “accumulated funding deficiency” (within the meaning ofSection 302 of ERISA and Section 412 of the Tax Code), whether or not waived,with respect thereto;

 

9.                                       Representationsand Warranties of the Lender.  TheLender represents and warrants to the Company as follows:

 

(i)                                     SuchLender can bear the economic risk of this investment and can afford a completeloss thereof.  Such Lender (A) hassufficient liquid assets to pay the full Principal Amount of this Note, (B) hasadequate means of providing for such Lender’s current and presently foreseeablefuture needs, and (C) has no present need for liquidity of the investment inthis Note;

 

(ii)                                  SuchLender has full power and authority to enter into and to perform this Note inaccordance with its terms.  Any Lenderthat is a corporation, partnership or trust represents that it has not beenorganized, reorganized or recapitalized specifically for the purpose ofinvesting in the Company;

 

(iii)                               Such Lender qualifies asan “accredited investor” as defined in Rule 501 of Regulation D, promulgatedunder the Securities Act of 1933, as amended (the “Act”);

 

(iv)                              SuchLender has reviewed or has had an opportunity to ask questions of, and toreceive answers from, the Company and its representatives, with respect to theCompany and the terms and conditions of this transaction.  All materials and information requested bysuch

 

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Lender and such Lender’s representatives, if any, including anyinformation requested to verify any information furnished, have been madeavailable;

 

(v)                                 SuchLender understands that the Note has not been registered under the Act, norpursuant to the provisions of the securities or other laws of any otherapplicable jurisdiction, and as such, the certificates representing such Notemay contain applicable restrictive legends;

 

(vi)                              SuchLender is making the investment hereunder for such Lender’s own account and notfor the account of others and for investment purposes only and not with apresent view to the distribution or resale thereof; and

 

(vii)                         Such Lender is unaware of, isno way relying on, and did not become aware of the investment contemplated bythe Note or the Purchase Agreement through or as a result of, any form ofgeneral solicitation or general advertising including, without limitation, anyarticle, notice, advertisement or other communication published in anynewspaper, magazine or similar media or broadcast over television or radio, inconnection with the investment contemplated by the Note or the PurchaseAgreement and is not purchasing the Note, and did not become aware of theinvestment contemplated by the Note or the Purchase Agreement, through or as aresult of any seminar or meeting to which the Lender was invited by, or anysolicitation of a subscription by, a person not previously known to the Lenderin connection with investments in securities generally.

 

(viii)                        Such Lender is not an affiliate(as such term is defined in Rule 12(b)(ii) under the Exchange Act) of anydirector or officer of the Company for purposes of Rule 4350(i)(1)(A) of theNASD, Inc. Marketplace Rules.

 

10.                                 Amendmentsand Waivers.  Any term of this Notemay be amended and the observance of any term of this Note may be waived(either generally or in a particular instance and either retroactively orprospectively) with the written consent of the Company and the Lender.

 

11.                                 Notices.All notices, requests, consents, and other communications under this Note shallbe in writing and shall be deemed delivered (i) three (3) business days afterbeing sent by registered or certified mail, return receipt requested, postageprepaid or (ii) one (1) business day after being sent via a reputablenationwide overnight courier service guaranteeing next business day delivery,in each case to the intended recipient as set forth below:

 

If tothe Company:

 

The Immune ResponseCorporation5931 Darwin CourtCarlsbad, California 92008Attention: PresidentFacsimile: (760) 431-8636

 

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with a copy to:Pillsbury Winthrop LLP50 Fremont StreetSan Francisco, CA 94105-2228Attention: Thomas E. Sparks, Jr., Esq.Facsimile: (415) 983-1200

 

If to the Lender:

 

 

With a copy to:

 

 

(ii)                                  Anyparty may give any notice, request, consent or other communication under thisNote using any other means (including, without limitation, personal delivery,messenger service, telecopy, first class mail or electronic mail), but no suchnotice, request, consent or other communication shall be deemed to have beenduly given unless and until it is actually received by the party for whom it isintended.  Any party may change theaddress to which notices, requests, consents or other communications hereunderare to be delivered by giving the other parties notice in the manner set forthin this Section 11.

 

12.                                 ConflictingAgreements.  In the event of anyinconsistencies between the terms of this Note and the terms of any otherdocument related to the loan evidenced by this Note, the terms of this Noteshall prevail.

 

13.                                 Severability.  The unenforceability or invalidity of anyprovision or provisions of this Note as to any persons or circumstances shallnot render that provision or those provisions unenforceable or invalid as toany other provisions or circumstances, and all provisions hereof, in all otherrespects, shall remain valid and enforceable.

 

14.                                 GoverningLaw.  This Note shall be governed byand construed under the laws of the State of New York, without giving effect tothe principles of conflicts of laws.

 

15.                                 Waivers.  The nonexercise by either party of any ofits rights hereunder in any particular instance shall not constitute a waiverthereof in that or any subsequent instance.

 

16.                               LostDocuments.  Upon receipt by theCompany of evidence satisfactory to it of the loss, theft, destruction ormutilation of this Note or any Note exchanged for it, and (in the case of loss,theft or destruction) of indemnity satisfactory to it, and upon reimbursementto the Company of all reasonable expenses incidental thereto, and uponsurrender and cancellation of such Note, if mutilated, the Company will makeand deliver in lieu of such Note a new Note of like tenor and unpaid principalamount and dated as of the original date of this Note.

 

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IN WITNESS WHEREOF, the Company has caused its dulyauthorized officer to execute this Note as of the date first written above.

 

 
|                       | **THE IMMUNE RESPONSE CORPORATION** |
|----------------------------|-------------------------------------|
|                       |                                |
|                       |                                |
|                       | By                                  |   |   |
|                       |                                | Name: |   |
|                       |                                | Title: |   |
|                       |                                |
|                       |                                |
| Acknowledged and Accepted: |                                |
|                       |                                |
| **[LENDER]**               |                                |
|                       |                                |
|                       |                                |
| By                         |                                |   |   |
|                       | Name:                               |   |   |
|                       | Title:                              |   |   |

 

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