**Exhibit 10.147**

** **

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY ISEXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION ORTHE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROMREGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO ANAVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATESECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TOSUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THECOMPANY.  THIS SECURITY AND THESECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTIONWITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES

 

WarrantNo. 101003-25

 

 

**COMMON STOCK PURCHASE WARRANT**

 

 

To Purchase 197,000 Sharesof Common Stock of

 

**The Immune Response Corporation**

 

THISCOMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received, Rodman andRenshaw, Inc. (the “Holder”), is entitled, upon the terms and subject tothe limitations on exercise and the conditions hereinafter set forth, at anytime on or after October 10, 2003 (the “Initial Exercise Date”) and onor prior to the close of business on October 10, 2008 (the “Termination Date”)but not thereafter, to subscribe for and purchase from The Immune ResponseCorporation, a corporation incorporated in the State of Delaware (the “Company”),up to 197,000 shares (the “Warrant Shares”) of Common Stock, of theCompany (the “Common Stock”). The purchase price of one share of Common Stock (the “Exercise Price”)under this Warrant shall be $3.32,subject to adjustment hereunder. The Exercise Price and the number of Warrant Shares for which theWarrant is exercisable shall be subject to adjustment as provided herein. Capitalized terms used and not otherwisedefined herein shall have the meanings set forth in that certain SecuritiesPurchase Agreement (the “Purchase Agreement”), dated October 10, 2003,between the Company and the purchasers signatory thereto.

 

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1.     Title to Warrant.  Prior to the Termination Date and subject tocompliance with applicable laws and Section 7 of this Warrant, this Warrant andall rights hereunder are transferable, in whole or in part.

 

2.     Authorization of Shares.  The Company covenants that all WarrantShares which may be issued upon the exercise of the purchase rights representedby this Warrant will, upon exercise of the purchase rights represented by thisWarrant in accordance with the terms and conditions hereof, be duly authorized,validly issued, fully paid and nonassessable and free from all taxes, liens andcharges in respect of the issue thereof (other than taxes in respect of anytransfer occurring contemporaneously with such issue).

 

3.     Exercise of Warrant.

 

(a)  Except as provided inSection 3(c) herein, exercise of the purchase rights represented by thisWarrant may be made at any time or times on or after the Initial Exercise Dateand on or before the Termination Date by the surrender of this Warrant and theNotice of Exercise Form annexed hereto duly executed, at the office of theCompany (or such other office or agency of the Company as it may designate bynotice in writing to the registered Holder at the address of such Holderappearing on the books of the Company) and upon payment of the Exercise Priceof the shares thereby purchased by wire transfer or cashier’s check ofimmediately available funds drawn on a United States bank or by means of acashless exercise pursuant to Section 3(d), the Holder shall be entitled toreceive a certificate for the number of Warrant Shares so purchased.  Certificates for shares purchased hereundershall be delivered to the Holder within five (5) Trading Days after the date onwhich this Warrant shall have been exercised as aforesaid. This Warrant shallbe deemed to have been exercised and such certificate or certificates shall bedeemed to have been issued, and the Holder or any other person so designated tobe named therein shall be deemed to have become a holder of record of suchshares for all purposes, as of the date the Warrant has been exercised bypayment to the Company of the Exercise Price and all taxes required to be paidby the Holder, if any, pursuant to Section 5 prior to the issuance of suchshares, have been paid.  If the Companyfails to deliver to the Holder a certificate or certificates representing theWarrant Shares pursuant to this Section 3(a) by the close of business on thefifth Trading Day after the date of exercise, then the Holder will have theright to rescind such exercise.  Inaddition to any other rights available to the Holder, if the Company fails todeliver to the Holder a certificate or certificates representing the WarrantShares pursuant to an exercise by the close of business on the fifth Trading Dayafter the date of exercise, and if after such fifth Trading Day the Holder isrequired by its broker to purchase (in an open market transaction or otherwise)shares of Common Stock to deliver in satisfaction of a sale by the Holder ofthe Warrant Shares which the Holder anticipated receiving upon such exercise (a“Buy-In”), then the Company shall (1) pay in cash to the Holder theamount by which (x) the Holder’s total purchase price (including brokeragecommissions, if any) for the shares of Common Stock so purchased exceeds (y)the amount obtained by multiplying (A) the number of Warrant Shares that theCompany was required to deliver to the Holder in connection with the exerciseat issue times (B) the price at which the sell order giving rise to such purchaseobligation was executed, and (2) at the option of the Holder, either reinstatethe portion of the Warrant and equivalent number of Warrant Shares for whichsuch exercise was not honored or deliver to the Holder the number of shares ofCommon Stock that would have been issued had the

 

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Company timely complied with its exercise and delivery obligationshereunder.  For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover aBuy-In with respect to an attempted exercise of shares of Common Stock with anaggregate sale price giving rise to such purchase obligation of $10,000, underclause (1) of the immediately preceding sentence the Company shall be requiredto pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the Buy-In, togetherwith applicable confirmations and other evidence reasonably requested by theCompany.  Nothing herein shall limit aHolder’s right to pursue any other remedies available to it hereunder, at lawor in equity including, without limitation, a decree of specific performanceand/or injunctive relief with respect to the Company’s failure to timelydeliver certificates representing shares of Common Stock upon exercise of theWarrant as required pursuant to the terms hereof.

 

(b)   If this Warrant shall have been exercised in part, the Companyshall, at the time of delivery of the certificate or certificates representingWarrant Shares, deliver to Holder a new Warrant evidencing the rights of Holderto purchase the unpurchased Warrant Shares called for by this Warrant, whichnew Warrant shall in all other respects be identical with this Warrant.

 

(c)   Notwithstanding anything herein to the contrary, in no event shallthe Holder be permitted to exercise this Warrant for Warrant Shares to theextent that (i) the number of shares of Common Stock beneficially owned by suchHolder, together with any affiliate thereof (other than Warrant Shares issuableupon exercise of this Warrant) plus (ii) the number of Warrant Shares issuableupon exercise of this Warrant, would be equal to or exceed 4.999% of the numberof shares of Common Stock then issued and outstanding, including sharesissuable upon exercise of this Warrant held by such Holder after application ofthis Section 3(c).  As used herein,beneficial ownership shall be determined in accordance with Section 13(d) ofthe Exchange Act and the rules promulgated thereunder.  To the extent that the limitation containedin this Section 3(c) applies, the determination of whether this Warrant isexercisable (in relation to other securities owned by the Holder) and of whicha portion of this Warrant is exercisable shall be in the sole discretion ofsuch Holder, and the submission of a Notice of Exercise shall be deemed to besuch Holder’s determination of whether this Warrant is exercisable (in relationto other securities owned by such Holder) and of which portion of this Warrantis exercisable, in each case subject to such aggregate percentage limitation,and the Company shall have no obligation to verify or confirm the accuracy ofsuch determination.  Nothing containedherein shall be deemed to restrict the right of a Holder to exercise thisWarrant into Warrant Shares at such time as such exercise will not violate theprovisions of this Section 3(c).  Theprovisions of this Section 3(c) may be waived by the Holder upon, at theelection of the Holder, not less than 61 days’ prior notice to the Company, andthe provisions of this Section 3(c) shall continue to apply until such 61stday (or such later date, as determined by the Holder, as may be specified insuch notice of waiver).  No exercise ofthis Warrant in violation of this Section 3(c) but otherwise in accordance withthis Warrant shall affect the status of the Warrant Shares as validly issued,fully-paid and nonassessable.

 

(d) If, but only if, at any time after one year fromthe date of issuance of this Warrant there is no effective RegistrationStatement registering the resale of the Warrant Shares by the Holder, thisWarrant may also be exercised at such time by means of a “cashless exercise” inwhich the Holder shall be entitled to receive a certificate for the

 

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number of Warrant Sharesequal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = the VWAP on the Trading Day preceding the dateof such election;

 

(B) = the Exercise Price of the Warrants, as adjusted;and

 

(X) = the number of Warrant Shares issuable uponexercise of the Warrants in accordance with the terms of this Warrant.

 

Asused herein, “VWAP” means, for any date, the price determined by the first ofthe following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of theCommon Stock for such date (or the nearest preceding date) on the TradingMarket on which the Common Stock is then listed or quoted as reported by BloombergFinancial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m.Eastern Time); (b) if the Common Stock is not then listed or quoted on aTrading Market and if prices for the Common Stock are then quoted on the OTCBulletin Board, the volume weighted average price of the Common Stock for suchdate (or the nearest preceding date) on the OTC Bulletin Board; (c)  ifthe Common Stock is not then listed or quoted on the OTC Bulletin Board and ifprices for the Common Stock are then reported in the “Pink Sheets” published bythe National Quotation Bureau Incorporated (or a similar organization or agencysucceeding to its functions of reporting prices), the most recent bid price pershare of the Common Stock so reported; or (d) in all other cases, the fairmarket value of a share of Common Stock as determined by an independentappraiser selected in good faith by the holders of a majority of the Sharesthen outstanding and reasonably acceptable to the Company.

 

4.     No Fractional Shares orScrip.  No fractional shares orscrip representing fractional shares shall be issued upon the exercise of thisWarrant.  As to any fraction of a sharewhich Holder would otherwise be entitled to purchase upon such exercise, theCompany shall pay a cash adjustment in respect of such final fraction in anamount equal to such fraction multiplied by the Exercise Price.

 

5.     Charges,Taxes and Expenses.  Issuance ofcertificates for Warrant Shares shall be made without charge to the Holder forany issue or transfer tax or other incidental expense in respect of theissuance of such certificate, all of which taxes and expenses shall be paid bythe Company, and such certificates shall be issued in the name of the Holder orin such name or namesas may be directed by the Holder; provided, however, that in theevent certificates for Warrant Shares are to be issued in a name other than thename of the Holder, this Warrant when surrendered for exercise shall beaccompanied by the Assignment Form attached hereto duly executed by the Holder;and the Company may require, as a condition thereto, the payment of a sumsufficient to reimburse it for any transfer tax incidental thereto.

 

6.     Closing of Books.  The Company will not close its stockholderbooks or records in any manner which prevents the timely exercise of thisWarrant, pursuant to the terms hereof.

 

7.     Transfer, Division andCombination.

 

(a)   Subject to compliance with any applicable securities laws and theconditions set forth in Sections 1 and 7(e) hereof and to the provisions ofSection 4.1 of the

 

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PurchaseAgreement, this Warrant and all rights hereunder are transferable, in whole orin part, upon surrender of this Warrant, so long as the amount of WarrantShares transferred is equal to at least 25,000 shares (on an as exercisedbasis) at the principal office of the Company, together with a writtenassignment of this Warrant substantially in the form attached hereto dulyexecuted by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, suchpayment, the Company shall execute and deliver a new Warrant or Warrants in thename of the assignee or assignees and in the denomination or denominationsspecified in such instrument of assignment, and shall issue to the assignor anew Warrant evidencing the portion of this Warrant not so assigned, and thisWarrant shall promptly be cancelled.  AWarrant, if properly assigned, may be exercised by a new holder for thepurchase of Warrant Shares without having a new Warrant issued.

 

(b)   This Warrant may be divided or combined with other Warrants uponpresentation hereof at the aforesaid office of the Company, together with awritten notice specifying the names and denominations in which new Warrants areto be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 7(a), asto any transfer which may be involved in such division or combination, theCompany shall execute and deliver a new Warrant or Warrants in exchange for theWarrant or Warrants to be divided or combined in accordance with such notice.

 

(c)   The Company shall prepare, issue and deliver at its own expense(other than transfer taxes) the new Warrant or Warrants under this Section 7.

 

(d)   The Company agrees to maintain, at its aforesaid office, books forthe registration and the registration of transfer of the Warrants.

 

(e)   If, at the time of the surrender of thisWarrant in connection with any transfer of this Warrant, the transfer of thisWarrant shall not be registered pursuant to an effective registration statementunder the Securities Act and under applicable state securities or blue skylaws, the Company may require, as a condition of allowing such transfer (i)that the Holder or transferee of this Warrant, as the case may be, furnish tothe Company a written opinion of counsel (which opinion shall be in form,substance and scope customary for opinions of counsel in comparable transactions)to the effect that such transfer may be made without registration under theSecurities Act and under applicable state securities or blue sky laws, (ii)that the holder or transferee execute and deliver to the Company an investmentletter in form and substance acceptable to the Company and (iii) that thetransferee be an “accredited investor” as defined in Rule 501(a) promulgatedunder the Securities Act.

 

8.     No Rights as Shareholderuntil Exercise.  This Warrant doesnot entitle the Holder to any voting rights or other rights as a shareholder ofthe Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregateExercise Price (or by means of a cashless exercise), the Warrant Shares sopurchased shall be and be deemed to be issued to such Holder as the recordowner of such shares as of the close of business on the later of the date ofsuch surrender or payment.

 

9.     Loss, Theft, Destructionor Mutilation of Warrant.  TheCompany covenants that upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of thisWarrant or any stock certificate relating to the Warrant Shares, and in case of

 

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loss, theft or destruction,of indemnity or security reasonably satisfactory to it (which, in the case ofthe Warrant, shall not include the posting of any bond), and upon surrender andcancellation of such Warrant or stock certificate, if mutilated, the Companywill make and deliver a new Warrant or stock certificate of like tenor anddated as of such cancellation, in lieu of such Warrant or stock certificate.

 

10.   Saturdays, Sundays,Holidays, etc.  If the last orappointed day for the taking of any action or the expiration of any rightrequired or granted herein shall be a Saturday, Sunday or a legal holiday, thensuch action may be taken or such right may be exercised on the next succeedingday not a Saturday, Sunday or legal holiday.

 

11.   Adjustments of ExercisePrice and Number of Warrant Shares. The number and kind of securities purchasable upon the exercise of thisWarrant and the Exercise Price shall be subject to adjustment from time to timeupon the happening of any of the following. In case the Company shall (i) pay a dividend in shares of Common Stockor make a distribution in shares of Common Stock to holders of its outstandingCommon Stock, (ii) subdivide its outstanding shares of Common Stock into agreater number of shares, (iii) combine its outstanding shares of Common Stockinto a smaller number of shares of Common Stock, or (iv) issue any shares ofits capital stock in a reclassification of the Common Stock, then the number ofWarrant Shares purchasable upon exercise of this Warrant immediately prior theretoshall be adjusted so that the Holder shall be entitled to receive the kind andnumber of Warrant Shares or other securities of the Company which it would haveowned or have been entitled to receive had such Warrant been exercised inadvance thereof.  Upon each suchadjustment of the kind and number of Warrant Shares or other securities of theCompany which are purchasable hereunder, the Holder shall thereafter beentitled to purchase the number of Warrant Shares or other securities resultingfrom such adjustment at an Exercise Price per Warrant Share or other securityobtained by multiplying the Exercise Price in effect immediately prior to suchadjustment by the number of Warrant Shares purchasable pursuant heretoimmediately prior to such adjustment and dividing by the number of WarrantShares or other securities of the Company resulting from such adjustment.  An adjustment made pursuant to thisparagraph shall become effective immediately after the effective date of suchevent retroactive to the record date, if any, for such event.

 

 

12.   Reorganization,Reclassification, Merger, Consolidation or Disposition of Assets.  In case the Company shall reorganize itscapital, reclassify its capital stock, consolidate or merge with or intoanother corporation (where the Company is not the surviving corporation orwhere there is a change in or distribution with respect to the Common Stock ofthe Company), or sell, transfer or otherwise dispose of all or substantiallyall its property, assets or business to another corporation (including by wayof a spin-off) and, pursuant to the terms of such reorganization,reclassification, merger, consolidation or disposition of assets, shares ofcommon stock of the successor or acquiring corporation, or any cash, shares ofstock or other securities or property of any nature whatsoever (includingwarrants or other subscription or purchase rights) in addition to or in lieu ofcommon stock of the successor or acquiring corporation (“Other Property”),are to be received by or distributed to the holders of Common Stock of theCompany, then the Holder shall have the right thereafter to receive uponexercise of this Warrant, the number of shares of Common Stock of the successoror acquiring corporation or of the Company, if it is the surviving corporation,and Other Property receivable upon or as a result of such reorganization,reclassification, merger, consolidation or disposition of assets by a Holder ofthe number of shares of Common Stock for which this Warrant is exercisable immediatelyprior to such event.  In case of anysuch reorganization,

 

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reclassification, merger,consolidation or disposition of assets, the successor or acquiring corporation(if other than the Company) shall expressly assume the due and punctualobservance and performance of each and every covenant and condition of thisWarrant to be performed and observed by the Company and all the obligations andliabilities hereunder, subject to such modifications as may be deemedappropriate (as determined in good faith by resolution of the Board ofDirectors of the Company) in order to provide for adjustments of Warrant Sharesfor which this Warrant is exercisable which shall be as nearly equivalent aspracticable to the adjustments provided for in this Section 12.  For purposes of this Section 12, “commonstock of the successor or acquiring corporation” shall include stock of suchcorporation of any class which is not preferred as to dividends or assets overany other class of stock of such corporation and which is not subject toredemption and shall also include any evidences of indebtedness, shares ofstock or other securities which are convertible into or exchangeable for anysuch stock, either immediately or upon the arrival of a specified date or thehappening of a specified event and any warrants or other rights to subscribefor or purchase any such stock.  Theforegoing provisions of this Section 12 shall similarly apply to successivereorganizations, reclassifications, mergers, consolidations or disposition ofassets.

 

13.   Voluntary Adjustment bythe Company.  The Company may at anytime during the term of this Warrant reduce the then current Exercise Price toany amount and for any period of time deemed appropriate by the Board ofDirectors of the Company.

 

14.   Notice of Adjustment.  Whenever the number of Warrant Shares ornumber or kind of securities or other property purchasable upon the exercise ofthis Warrant or the Exercise Price is adjusted, as herein provided, the Companyshall give notice thereof to the Holder, which notice shall state the number ofWarrant Shares (and other securities or property) purchasable upon the exerciseof this Warrant and the Exercise Price of such Warrant Shares (and other securitiesor property) after such adjustment, setting forth a brief statement of thefacts requiring such adjustment and setting forth the computation by which suchadjustment was made.

 

15.   Notice of CorporateAction.  If at any time:

 

(a)           theCompany shall take a record of the holders of its Common Stock for the purposeof entitling them to receive a dividend or other distribution, or any right tosubscribe for or purchase any evidences of its indebtedness, any shares ofstock of any class or any other securities or property, or to receive any otherright, or

 

(b)           thereshall be any capital reorganization of the Company, any reclassification orrecapitalization of the capital stock of the Company or any consolidation ormerger of the Company with, or any sale, transfer or other disposition of allor substantially all the property, assets or business of the Company to,another corporation or,

 

(c)           thereshall be a voluntary or involuntary dissolution, liquidation or winding up ofthe Company;

 

then,in any one or more of such cases, the Company shall give to Holder (i) at least20 days’ prior written notice of the date or expected date on which a recorddate shall be selected for such dividend, distribution or right or fordetermining rights to vote in respect of any such reorganization,reclassification, merger, consolidation, sale, transfer, disposition,liquidation or winding up, and (ii) in the case of any such reorganization,reclassification, merger, consolidation, sale, transfer, disposition,dissolution, liquidation or winding up, at least 20 days’ prior written noticeof the date

 

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whenthe same shall or is expected to take place. Such notice in accordance with the foregoing clause also shall specify(A) the date on which any such record is to be taken for the purpose of suchdividend, distribution or right, the date on which the holders of Common Stockshall be entitled to any such dividend, distribution or right, and the amountand character thereof, and (B) the date on which any such reorganization,reclassification, merger, consolidation, sale, transfer, disposition,dissolution, liquidation or winding up is expected to take place and the time,if any such time is to be fixed, as of which the holders of Common Stock shallbe entitled to exchange their Warrant Shares for securities or other propertydeliverable upon such disposition, dissolution, liquidation or winding up.  Each such written notice shall be sufficientlygiven if addressed to Holder at the last address of Holder appearing on thebooks of the Company and delivered in accordance with Section 18(d).  Failure to provide such notice shall notaffect the validity of any action taken in connection with such dividend,distribution, subscription or purchase rights, or proposed reorganization,reclassification, recapitalization, merger, consolidation, sale, transfer,disposition, conveyance, dissolution, liquidation or winding up.

 

16.   Authorized Shares.  The Company covenants that during the periodthe Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of theWarrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that itsissuance of this Warrant shall constitute full authority to its officers whoare charged with the duty of executing stock certificates to execute and issuethe necessary certificates for the Warrant Shares upon the exercise of thepurchase rights under this Warrant.  TheCompany will take all such reasonable action as may be necessary to assure thatsuch Warrant Shares may be issued as provided herein without violation of anyapplicable law or regulation, or of any requirements of the Trading Market uponwhich the Common Stock may be listed.

 

Except and to the extent aswaived or consented to by the Holder, the Company shall not by any action,including, without limitation, amending its certificate of incorporation orthrough any reorganization, transfer of assets, consolidation, merger,dissolution, issue or sale of securities or any other voluntary action, avoidor seek to avoid the observance or performance of any of the terms of thisWarrant, but will at all times in good faith assist in the carrying out of allsuch terms and in the taking of all such actions as may be necessary orappropriate to protect the rights of Holder as set forth in this Warrantagainst impairment.  Without limitingthe generality of the foregoing, the Company will (a) not increase the parvalue of any Warrant Shares above the amount payable therefor upon suchexercise immediately prior to such increase in par value, (b) take all suchaction as may be necessary or appropriate in order that the Company may validlyand legally issue fully paid and nonassessable Warrant Shares upon the exerciseof this Warrant, and (c) use commercially reasonable efforts to obtain all suchauthorizations, exemptions or consents from any public regulatory body havingjurisdiction thereof as may be necessary to enable the Company to perform itsobligations under this Warrant.

 

Beforetaking any action which would result in an adjustment in the number of WarrantShares for which this Warrant is exercisable or in the Exercise Price, theCompany shall obtain all such authorizations or exemptions thereof, or consentsthereto, as may be necessary from any public regulatory body or bodies havingjurisdiction thereof.

 

17.   Call.  At any time and from time to time followingthe Effective Date, the Company shall have the right, upon 5 Business Days’prior written notice to the Holder (“Call Notice”), to call all or any portionof this Warrant at a price equal to $.05 per Warrant at any time,

 

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provided that (i) theWarrant Shares have been registered for resale pursuant to the Securities Actfor at least the 10-Trading Day period preceding the Call Notice, (ii) the VWAPof the Common Stock on a Trading Market is equal to or greater than $8.00 pershare (subject to adjustment to reflect forward or reverse stock splits, stockdividends, recapitalizations and the like)(the “Threshold Price”) for at least20 consecutive Trading Days over any 30 Trading Days, and (iii) the Call Noticeis delivered within 3 Business Days’ of the most recent day in the previousclause (ii) that the Common Stock reached the Threshold Price.  At any time prior to the effective date ofsuch call, the Holder shall have the right to exercise this Warrant inaccordance with its terms.

 

18.   Miscellaneous.

 

(a)   Jurisdiction.  ThisWarrant shall constitute a contract under the laws of New York, without regardto its conflict of law, principles or rules.

 

(b)   Restrictions.  TheHolder acknowledges that the Warrant Shares acquired upon the exercise of thisWarrant, if not registered, will have restrictions upon resale imposed by stateand federal securities laws.

 

(c)   Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any righthereunder on the part of Holder shall operate as a waiver of such right orotherwise prejudice Holder’s rights, powers or remedies, notwithstanding allrights hereunder terminate on the Termination Date.  If the Company willfully and knowingly fails to comply with anyprovision of this Warrant, which results in any material damages to the Holder,the Company shall pay to Holder such amounts as shall be sufficient to coverany costs and expenses including, but not limited to, reasonable attorneys’fees, including those of appellate proceedings, incurred by Holder incollecting any amounts due pursuant hereto or in otherwise enforcing any of itsrights, powers or remedies hereunder.

 

(d)   Notices.  Anynotice, request or other document required or permitted to be given ordelivered to the Holder by the Company shall be delivered in accordance withthe notice provisions of the Purchase Agreement; provided upon any permittedassignment of this Warrant, the assignee shall promptly provide the Companywith its contact information.

 

(e)   Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holderto exercise this Warrant or purchase Warrant Shares, and no enumeration hereinof the rights or privileges of Holder, shall give rise to any liability ofHolder for the purchase price of any Common Stock or as a stockholder of theCompany, whether such liability is asserted by the Company or by creditors ofthe Company.

 

(f)    Remedies.  Holder,in addition to being entitled to exercise all rights granted by law, includingrecovery of damages, will be entitled to specific performance of its rightsunder this Warrant.  The Company agreesthat monetary damages would not be adequate compensation for any loss incurredby reason of a breach by it of the provisions of this Warrant and hereby agreesto waive the defense in any action for specific performance that a remedy atlaw would be adequate.

 

(g)   Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights andobligations evidenced hereby shall inure to the benefit of and be binding uponthe successors of the Company and the successors and permitted assigns of

 

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Holder.  The provisions of this Warrant are intendedto be for the benefit of all Holders from time to time of this Warrant andshall be enforceable by any such Holder or holder of Warrant Shares.

 

(h)   Amendment.  ThisWarrant may be modified or amended or the provisions hereof waived with thewritten consent of the Company and the Holder.

 

(i)    Severability. Wherever possible, each provision of this Warrant shall be interpretedin such manner as to be effective and valid under applicable law, but if anyprovision of this Warrant shall be prohibited by or invalid under applicablelaw, such provision shall be ineffective to the extent of such prohibition orinvalidity, without invalidating the remainder of such provisions or theremaining provisions of this Warrant.

 

(j)    Headings.  Theheadings used in this Warrant are for the convenience of reference only andshall not, for any purpose, be deemed a part of this Warrant.

 

(k)   Entire Agreement. This Warrant, the Purchase Agreement andthe Registration Rights Agreement constitute the entire agreement between theCompany and the Holder with respect to this Warrant.

 

 

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INWITNESS WHEREOF, the Company has caused this Warrant to be executed by itsofficer thereunto duly authorized.

 

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Dated:  October 10, 2003

 
|   | **THE IMMUNE RESPONSE  CORPORATION** |
|--------|--------------------------------------|
|   |                                 |   |   |
|   |                                 |   |   |
|   | By:                                  |  /s/ John N. Bonfiglio |
|   |                                 | Name: | John N. Bonfiglio |
|   |                                 | Title: | Chief Executive Officer |
|        |                                      |  |  |  |

 

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**NOTICE OF EXERCISE**

 

To:          TheImmune Response Corporation

 

(1)   Theundersigned hereby elects to purchase                   Warrant Shares of The Immune Response Corporation pursuant to the terms of theattached Warrant (only if exercised in full), and tenders herewith payment ofthe exercise price in full, together with all applicable transfer taxes, ifany.

 

(2)   Paymentshall take the form of (check applicable box):

 

oin lawful money of the United States; or

 

othe cancellation of such number of Warrant Shares as is necessary, inaccordance with the formula set forth in subsection 3(d), to exercise thisWarrant with respect to the maximum number of Warrant Shares purchasablepursuant to the cashless exercise procedure set forth in subsection 3(d).

 

(3)   Pleaseissue a certificate or certificates representing said Warrant Shares in thename of the undersigned or in such other name as is specified below:

 

 

The Warrant Shares shall be delivered to the following:

 

 

 

 

(4)   AccreditedInvestor.  The undersigned is an“accredited investor” as defined in Regulation D promulgated under theSecurities Act of 1933, as amended.

 
|   | Rodman and Renshaw, Inc. |   |
|--------|--------------------------|--------|
|   |                     |   |
|   | By:                      |   |   |
|   | Name:                    |   |
|   | Title:                   |   |
|   |                     |
|   | Dated:                   |   |   |   |
|        |                          |        |  |  |  |  |

 

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**ASSIGNMENT FORM**

 

(To assign theforegoing warrant, executethis form and supply required information. Do not use this form to exercise the warrant.)

 

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidencedthereby are hereby assigned to

 

 

                                                                                                   whose address is

 

 

 

 
|   |   |   |                     | Dated:                          ,               |   |   |
|--------|--------|--------|--------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|   |   |   |                     |
|   |   |   | Holder’s Signature: |                                                                                                                                                                                                                                                    |   |   |
|   |   |   |                     |                                                                                                                                                                                                                                                    |   |   |
|   |   |   | Holder’s Address:   |                                                                                                                                                                                                                                                    |   |   |
|   |   |   |                     |                                                                                                                                                                                                                                                    |   |   |
|   |   |   |                     |                                                                                                                                                                                                                                                    |   |   |
|        |        |        |                          |                                                                                                                                                                                                                                                         |        |        |  |  |

 

 

 

Signature Guaranteed: ___________________________________________

 

 

NOTE:  The signature to thisAssignment Form must correspond with the name as it appears on the face of theWarrant, without alteration or enlargement or any change whatsoever, and mustbe guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representativecapacity should file proper evidence of authority to assign the foregoingWarrant.

 

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NEITHERTHIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVEBEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIESCOMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDERTHE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVEREGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLEEXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATESECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TOSUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THECOMPANY.  THIS SECURITY AND THESECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTIONWITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES

 

WarrantNo. 101003-27

 

 

**COMMON STOCK PURCHASE WARRANT**

 

 

To Purchase 297,059 Sharesof Common Stock of

 

**The Immune Response Corporation**

 

THISCOMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received, Rodman andRenshaw, Inc. (the “Holder”), is entitled, upon the terms and subject tothe limitations on exercise and the conditions hereinafter set forth, at anytime on or after October 10, 2003 (the “Initial Exercise Date”) and onor prior to the close of business on October 10, 2008 (the “Termination Date”)but not thereafter, to subscribe for and purchase from The Immune ResponseCorporation, a corporation incorporated in the State of Delaware (the “Company”),up to 297,059 shares (the “Warrant Shares”) of Common Stock, of theCompany (the “Common Stock”). The purchase price of one share of Common Stock (the “Exercise Price”)under this Warrant shall be $3.32,subject to adjustment hereunder. The Exercise Price and the number of Warrant Shares for which theWarrant is exercisable shall be subject to adjustment as provided herein. Capitalized terms used and not otherwisedefined herein shall have the meanings set forth in that certain SecuritiesPurchase Agreement (the “Purchase Agreement”), dated October 10, 2003,between the Company and the purchasers signatory thereto.

 

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1.     Title to Warrant.  Prior to the Termination Date and subject tocompliance with applicable laws and Section 7 of this Warrant, this Warrant andall rights hereunder are transferable, in whole or in part.

 

2.     Authorization of Shares.  The Company covenants that all WarrantShares which may be issued upon the exercise of the purchase rights representedby this Warrant will, upon exercise of the purchase rights represented by thisWarrant in accordance with the terms and conditions hereof, be duly authorized,validly issued, fully paid and nonassessable and free from all taxes, liens andcharges in respect of the issue thereof (other than taxes in respect of anytransfer occurring contemporaneously with such issue).

 

3.     Exercise of Warrant.  

 

(a)  Except as provided inSection 3(c) herein, exercise of the purchase rights represented by thisWarrant may be made at any time or times on or after the Initial Exercise Dateand on or before the Termination Date by the surrender of this Warrant and theNotice of Exercise Form annexed hereto duly executed, at the office of theCompany (or such other office or agency of the Company as it may designate bynotice in writing to the registered Holder at the address of such Holderappearing on the books of the Company) and upon payment of the Exercise Priceof the shares thereby purchased by wire transfer or cashier’s check of immediatelyavailable funds drawn on a United States bank or by means of a cashlessexercise pursuant to Section 3(d), the Holder shall be entitled to receive acertificate for the number of Warrant Shares so purchased.  Certificates for shares purchased hereundershall be delivered to the Holder within five (5) Trading Days after the date onwhich this Warrant shall have been exercised as aforesaid. This Warrant shallbe deemed to have been exercised and such certificate or certificates shall bedeemed to have been issued, and the Holder or any other person so designated tobe named therein shall be deemed to have become a holder of record of suchshares for all purposes, as of the date the Warrant has been exercised bypayment to the Company of the Exercise Price and all taxes required to be paidby the Holder, if any, pursuant to Section 5 prior to the issuance of suchshares, have been paid.  If the Companyfails to deliver to the Holder a certificate or certificates representing theWarrant Shares pursuant to this Section 3(a) by the close of business on thefifth Trading Day after the date of exercise, then the Holder will have theright to rescind such exercise.  Inaddition to any other rights available to the Holder, if the Company fails todeliver to the Holder a certificate or certificates representing the WarrantShares pursuant to an exercise by the close of business on the fifth TradingDay after the date of exercise, and if after such fifth Trading Day the Holderis required by its broker to purchase (in an open market transaction orotherwise) shares of Common Stock to deliver in satisfaction of a sale by theHolder of the Warrant Shares which the Holder anticipated receiving upon suchexercise (a "Buy-In"), then the Company shall (1) pay in cashto the Holder the amount by which (x) the Holder's total purchase price(including brokerage commissions, if any) for the shares of Common Stock sopurchased exceeds (y) the amount obtained by multiplying (A) the number ofWarrant Shares that the Company was required to deliver to the Holder inconnection with the exercise at issue times (B) the price at which the sellorder giving rise to such purchase obligation was executed, and (2) at theoption of the Holder, either reinstate the portion of the Warrant andequivalent number of Warrant Shares for which such exercise was not honored ordeliver to the Holder the number of shares of Common Stock that would have beenissued had the 

 

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Company timely complied with its exercise and delivery obligationshereunder.  For example, if the Holderpurchases Common Stock having a total purchase price of $11,000 to cover aBuy-In with respect to an attempted exercise of shares of Common Stock with anaggregate sale price giving rise to such purchase obligation of $10,000, underclause (1) of the immediately preceding sentence the Company shall be requiredto pay the Holder $1,000. The Holder shall provide the Company written noticeindicating the amounts payable to the Holder in respect of the Buy-In, togetherwith applicable confirmations and other evidence reasonably requested by theCompany.  Nothing herein shall limit aHolder's right to pursue any other remedies available to it hereunder, at lawor in equity including, without limitation, a decree of specific performanceand/or injunctive relief with respect to the Company's failure to timelydeliver certificates representing shares of Common Stock upon exercise of theWarrant as required pursuant to the terms hereof.

 

(b)   If this Warrant shall have been exercised in part, the Companyshall, at the time of delivery of the certificate or certificates representingWarrant Shares, deliver to Holder a new Warrant evidencing the rights of Holderto purchase the unpurchased Warrant Shares called for by this Warrant, whichnew Warrant shall in all other respects be identical with this Warrant. 

 

(c)   Notwithstanding anything herein to the contrary, in no event shallthe Holder be permitted to exercise this Warrant for Warrant Shares to theextent that (i) the number of shares of Common Stock beneficially owned by suchHolder, together with any affiliate thereof (other than Warrant Shares issuableupon exercise of this Warrant) plus (ii) the number of Warrant Shares issuableupon exercise of this Warrant, would be equal to or exceed 4.999% of the numberof shares of Common Stock then issued and outstanding, including sharesissuable upon exercise of this Warrant held by such Holder after application ofthis Section 3(c).  As used herein,beneficial ownership shall be determined in accordance with Section 13(d) ofthe Exchange Act and the rules promulgated thereunder.  To the extent that the limitation containedin this Section 3(c) applies, the determination of whether this Warrant isexercisable (in relation to other securities owned by the Holder) and of whicha portion of this Warrant is exercisable shall be in the sole discretion ofsuch Holder, and the submission of a Notice of Exercise shall be deemed to besuch Holder’s determination of whether this Warrant is exercisable (in relationto other securities owned by such Holder) and of which portion of this Warrantis exercisable, in each case subject to such aggregate percentage limitation,and the Company shall have no obligation to verify or confirm the accuracy ofsuch determination.  Nothing containedherein shall be deemed to restrict the right of a Holder to exercise thisWarrant into Warrant Shares at such time as such exercise will not violate theprovisions of this Section 3(c).  Theprovisions of this Section 3(c) may be waived by the Holder upon, at theelection of the Holder, not less than 61 days’ prior notice to the Company, andthe provisions of this Section 3(c) shall continue to apply until such 61stday (or such later date, as determined by the Holder, as may be specified insuch notice of waiver).  No exercise ofthis Warrant in violation of this Section 3(c) but otherwise in accordance withthis Warrant shall affect the status of the Warrant Shares as validly issued,fully-paid and nonassessable.

 

(d) If, but only if, at any time after one year fromthe date of issuance of this Warrant there is no effective RegistrationStatement registering the resale of the Warrant Shares by the Holder, thisWarrant may also be exercised at such time by means of a “cashless exercise” inwhich the Holder shall be entitled to receive a certificate for the 

 

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numberof Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by(A), where:

 

(A) =   theVWAP on the Trading Day preceding the date of such election;

 

(B) =   theExercise Price of the Warrants, as adjusted; and 

 

(X) =   thenumber of Warrant Shares issuable upon exercise of the Warrants in accordancewith the terms of this Warrant.

 

Asused herein, “VWAP” means, for any date, the price determined by the first ofthe following clauses that applies: (a) if the Common Stock is then listed orquoted on a Trading Market, the daily volume weighted average price of the CommonStock for such date (or the nearest preceding date) on the Trading Market onwhich the Common Stock is then listed or quoted as reported by BloombergFinancial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m.Eastern Time); (b) if the Common Stock is not then listed or quoted on aTrading Market and if prices for the Common Stock are then quoted on the OTCBulletin Board, the volume weighted average price of the Common Stock for suchdate (or the nearest preceding date) on the OTC Bulletin Board; (c)  ifthe Common Stock is not then listed or quoted on the OTC Bulletin Board and ifprices for the Common Stock are then reported in the “Pink Sheets” published bythe National Quotation Bureau Incorporated (or a similar organization or agencysucceeding to its functions of reporting prices), the most recent bid price pershare of the Common Stock so reported; or (d) in all other cases, the fairmarket value of a share of Common Stock as determined by an independentappraiser selected in good faith by the holders of a majority of the Sharesthen outstanding and reasonably acceptable to the Company.

 

4.     No Fractional Shares orScrip.  No fractional shares orscrip representing fractional shares shall be issued upon the exercise of thisWarrant.  As to any fraction of a sharewhich Holder would otherwise be entitled to purchase upon such exercise, theCompany shall pay a cash adjustment in respect of such final fraction in anamount equal to such fraction multiplied by the Exercise Price.

 

5.     Charges, Taxes andExpenses.  Issuance of certificatesfor Warrant Shares shall be made without charge to the Holder for any issue ortransfer tax or other incidental expense in respect of the issuance of suchcertificate, all of which taxes and expenses shall be paid by the Company, andsuch certificates shall be issued in the name of the Holder or in such name ornames as may be directed by the Holder; provided, however, thatin the event certificates for Warrant Shares are to be issued in a name otherthan the name of the Holder, this Warrant when surrendered for exercise shallbe accompanied by the Assignment Form attached hereto duly executed by theHolder; and the Company may require, as a condition thereto, the payment of asum sufficient to reimburse it for any transfer tax incidental thereto.

 

6.     Closing of Books.  The Company will not close its stockholderbooks or records in any manner which prevents the timely exercise of thisWarrant, pursuant to the terms hereof.

 

7.     Transfer, Division andCombination.  

 

(a)   Subject to compliance with any applicable securities laws and theconditions set forth in Sections 1 and 7(e) hereof and to the provisions ofSection 4.1 of the

 

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Purchase Agreement, this Warrant and all rights hereunder aretransferable, in whole or in part, upon surrender of this Warrant, so long asthe amount of Warrant Shares transferred is equal to at least 25,000 shares (onan as exercised basis) at the principal office of the Company, together with awritten assignment of this Warrant substantially in the form attached heretoduly executed by the Holder or its agent or attorney and funds sufficient topay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, suchpayment, the Company shall execute and deliver a new Warrant or Warrants in thename of the assignee or assignees and in the denomination or denominationsspecified in such instrument of assignment, and shall issue to the assignor a newWarrant evidencing the portion of this Warrant not so assigned, and thisWarrant shall promptly be cancelled.  AWarrant, if properly assigned, may be exercised by a new holder for thepurchase of Warrant Shares without having a new Warrant issued.  

 

(b)   This Warrant may be divided or combined with other Warrants uponpresentation hereof at the aforesaid office of the Company, together with awritten notice specifying the names and denominations in which new Warrants areto be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 7(a), asto any transfer which may be involved in such division or combination, theCompany shall execute and deliver a new Warrant or Warrants in exchange for theWarrant or Warrants to be divided or combined in accordance with such notice.

 

(c)   The Company shall prepare, issue and deliver at its own expense(other than transfer taxes) the new Warrant or Warrants under this Section 7.

 

(d)   The Company agrees to maintain, at its aforesaid office, books forthe registration and the registration of transfer of the Warrants.

 

(e)   If, at the time of the surrender of this Warrant in connectionwith any transfer of this Warrant, the transfer of this Warrant shall not beregistered pursuant to an effective registration statement under the SecuritiesAct and under applicable state securities or blue sky laws, the Company mayrequire, as a condition of allowing such transfer (i) that the Holder ortransferee of this Warrant, as the case may be, furnish to the Company awritten opinion of counsel (which opinion shall be in form, substance and scopecustomary for opinions of counsel in comparable transactions) to the effectthat such transfer may be made without registration under the Securities Actand under applicable state securities or blue sky laws, (ii) that the holder ortransferee execute and deliver to the Company an investment letter in form andsubstance acceptable to the Company and (iii) that the transferee be an"accredited investor" as defined in Rule 501(a) promulgated under theSecurities Act.

 

8.     No Rights as Shareholderuntil Exercise.  This Warrant doesnot entitle the Holder to any voting rights or other rights as a shareholder ofthe Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregateExercise Price (or by means of a cashless exercise), the Warrant Shares sopurchased shall be and be deemed to be issued to such Holder as the recordowner of such shares as of the close of business on the later of the date ofsuch surrender or payment. 

 

9.     Loss, Theft, Destructionor Mutilation of Warrant.  TheCompany covenants that upon receipt by the Company of evidence reasonablysatisfactory to it of the loss, theft, destruction or mutilation of thisWarrant or any stock certificate relating to the Warrant Shares, and in case of

 

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loss, theft or destruction,of indemnity or security reasonably satisfactory to it (which, in the case ofthe Warrant, shall not include the posting of any bond), and upon surrender andcancellation of such Warrant or stock certificate, if mutilated, the Companywill make and deliver a new Warrant or stock certificate of like tenor anddated as of such cancellation, in lieu of such Warrant or stock certificate.

 

10.   Saturdays, Sundays,Holidays, etc.  If the last orappointed day for the taking of any action or the expiration of any rightrequired or granted herein shall be a Saturday, Sunday or a legal holiday, thensuch action may be taken or such right may be exercised on the next succeedingday not a Saturday, Sunday or legal holiday.

 

11.   Adjustments of ExercisePrice and Number of Warrant Shares. The number and kind of securities purchasable upon the exercise of thisWarrant and the Exercise Price shall be subject to adjustment from time to timeupon the happening of any of the following. In case the Company shall (i) pay a dividend in shares of Common Stockor make a distribution in shares of Common Stock to holders of its outstandingCommon Stock, (ii) subdivide its outstanding shares of Common Stock into agreater number of shares, (iii) combine its outstanding shares of Common Stockinto a smaller number of shares of Common Stock, or (iv) issue any shares ofits capital stock in a reclassification of the Common Stock, then the number ofWarrant Shares purchasable upon exercise of this Warrant immediately priorthereto shall be adjusted so that the Holder shall be entitled to receive thekind and number of Warrant Shares or other securities of the Company which itwould have owned or have been entitled to receive had such Warrant beenexercised in advance thereof.  Upon eachsuch adjustment of the kind and number of Warrant Shares or other securities ofthe Company which are purchasable hereunder, the Holder shall thereafter beentitled to purchase the number of Warrant Shares or other securities resultingfrom such adjustment at an Exercise Price per Warrant Share or other securityobtained by multiplying the Exercise Price in effect immediately prior to suchadjustment by the number of Warrant Shares purchasable pursuant heretoimmediately prior to such adjustment and dividing by the number of WarrantShares or other securities of the Company resulting from such adjustment.  An adjustment made pursuant to thisparagraph shall become effective immediately after the effective date of suchevent retroactive to the record date, if any, for such event.

 

12.   Reorganization,Reclassification, Merger, Consolidation or Disposition of Assets.  In case the Company shall reorganize itscapital, reclassify its capital stock, consolidate or merge with or intoanother corporation (where the Company is not the surviving corporation orwhere there is a change in or distribution with respect to the Common Stock ofthe Company), or sell, transfer or otherwise dispose of all or substantiallyall its property, assets or business to another corporation (including by wayof a spin-off) and, pursuant to the terms of such reorganization, reclassification,merger, consolidation or disposition of assets, shares of common stock of thesuccessor or acquiring corporation, or any cash, shares of stock or othersecurities or property of any nature whatsoever (including warrants or othersubscription or purchase rights) in addition to or in lieu of common stock ofthe successor or acquiring corporation (“Other Property”), are to bereceived by or distributed to the holders of Common Stock of the Company, thenthe Holder shall have the right thereafter to receive upon exercise of thisWarrant, the number of shares of Common Stock of the successor or acquiringcorporation or of the Company, if it is the surviving corporation, and OtherProperty receivable upon or as a result of such reorganization, reclassification,merger, consolidation or disposition of assets by a Holder of the number ofshares of Common Stock for which this Warrant is exercisable immediately priorto such event.  In case of any suchreorganization,

 

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reclassification, merger,consolidation or disposition of assets, the successor or acquiring corporation(if other than the Company) shall expressly assume the due and punctualobservance and performance of each and every covenant and condition of thisWarrant to be performed and observed by the Company and all the obligations andliabilities hereunder, subject to such modifications as may be deemedappropriate (as determined in good faith by resolution of the Board ofDirectors of the Company) in order to provide for adjustments of Warrant Sharesfor which this Warrant is exercisable which shall be as nearly equivalent aspracticable to the adjustments provided for in this Section 12.  For purposes of this Section 12, “commonstock of the successor or acquiring corporation” shall include stock of suchcorporation of any class which is not preferred as to dividends or assets overany other class of stock of such corporation and which is not subject toredemption and shall also include any evidences of indebtedness, shares ofstock or other securities which are convertible into or exchangeable for anysuch stock, either immediately or upon the arrival of a specified date or thehappening of a specified event and any warrants or other rights to subscribefor or purchase any such stock.  Theforegoing provisions of this Section 12 shall similarly apply to successivereorganizations, reclassifications, mergers, consolidations or disposition ofassets. 

 

13.   Voluntary Adjustment bythe Company.  The Company may at anytime during the term of this Warrant reduce the then current Exercise Price toany amount and for any period of time deemed appropriate by the Board ofDirectors of the Company.

 

14.   Notice of Adjustment.  Whenever the number of Warrant Shares ornumber or kind of securities or other property purchasable upon the exercise ofthis Warrant or the Exercise Price is adjusted, as herein provided, the Companyshall give notice thereof to the Holder, which notice shall state the number ofWarrant Shares (and other securities or property) purchasable upon the exerciseof this Warrant and the Exercise Price of such Warrant Shares (and othersecurities or property) after such adjustment, setting forth a brief statementof the facts requiring such adjustment and setting forth the computation bywhich such adjustment was made.

 

15.   Notice of CorporateAction.  If at any time:

 

(a)           theCompany shall take a record of the holders of its Common Stock for the purposeof entitling them to receive a dividend or other distribution, or any right tosubscribe for or purchase any evidences of its indebtedness, any shares ofstock of any class or any other securities or property, or to receive any otherright, or

 

(b)           thereshall be any capital reorganization of the Company, any reclassification orrecapitalization of the capital stock of the Company or any consolidation ormerger of the Company with, or any sale, transfer or other disposition of allor substantially all the property, assets or business of the Company to,another corporation or,

 

(c)           thereshall be a voluntary or involuntary dissolution, liquidation or winding up ofthe Company;

 

then,in any one or more of such cases, the Company shall give to Holder (i) at least20 days’ prior written notice of the date or expected date on which a recorddate shall be selected for such dividend, distribution or right or fordetermining rights to vote in respect of any such reorganization,reclassification, merger, consolidation, sale, transfer, disposition,liquidation or winding up, and (ii) in the case of any such reorganization,reclassification, merger, consolidation, sale, transfer, disposition,dissolution, liquidation or winding up, at least 20 days’ prior written noticeof the date

 

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whenthe same shall or is expected to take place. Such notice in accordance with the foregoing clause also shall specify(A) the date on which any such record is to be taken for the purpose of suchdividend, distribution or right, the date on which the holders of Common Stockshall be entitled to any such dividend, distribution or right, and the amountand character thereof, and (B) the date on which any such reorganization,reclassification, merger, consolidation, sale, transfer, disposition,dissolution, liquidation or winding up is expected to take place and the time,if any such time is to be fixed, as of which the holders of Common Stock shallbe entitled to exchange their Warrant Shares for securities or other propertydeliverable upon such disposition, dissolution, liquidation or winding up.  Each such written notice shall besufficiently given if addressed to Holder at the last address of Holderappearing on the books of the Company and delivered in accordance with Section18(d).  Failure to provide such noticeshall not affect the validity of any action taken in connection with suchdividend, distribution, subscription or purchase rights, or proposedreorganization, reclassification, recapitalization, merger, consolidation, sale,transfer, disposition, conveyance, dissolution, liquidation or winding up.

 

16.   Authorized Shares.  The Company covenants that during the periodthe Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of theWarrant Shares upon the exercise of any purchase rights under thisWarrant.  The Company further covenantsthat its issuance of this Warrant shall constitute full authority to itsofficers who are charged with the duty of executing stock certificates toexecute and issue the necessary certificates for the Warrant Shares upon theexercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may benecessary to assure that such Warrant Shares may be issued as provided hereinwithout violation of any applicable law or regulation, or of any requirementsof the Trading Market upon which the Common Stock may be listed. 

 

Exceptand to the extent as waived or consented to by the Holder, the Company shallnot by any action, including, without limitation, amending its certificate ofincorporation or through any reorganization, transfer of assets, consolidation,merger, dissolution, issue or sale of securities or any other voluntary action,avoid or seek to avoid the observance or performance of any of the terms ofthis Warrant, but will at all times in good faith assist in the carrying out ofall such terms and in the taking of all such actions as may be necessary orappropriate to protect the rights of Holder as set forth in this Warrantagainst impairment.  Without limitingthe generality of the foregoing, the Company will (a) not increase the parvalue of any Warrant Shares above the amount payable therefor upon suchexercise immediately prior to such increase in par value, (b) take all suchaction as may be necessary or appropriate in order that the Company may validlyand legally issue fully paid and nonassessable Warrant Shares upon the exerciseof this Warrant, and (c) use commercially reasonable efforts to obtain all suchauthorizations, exemptions or consents from any public regulatory body havingjurisdiction thereof as may be necessary to enable the Company to perform itsobligations under this Warrant.

 

Beforetaking any action which would result in an adjustment in the number of WarrantShares for which this Warrant is exercisable or in the Exercise Price, theCompany shall obtain all such authorizations or exemptions thereof, or consentsthereto, as may be necessary from any public regulatory body or bodies havingjurisdiction thereof.

 

17.   Call.  At any time and from time to time followingthe Effective Date, the Company shall have the right, upon 5 Business Days’prior written notice to the Holder (“Call Notice”), to call all or any portionof this Warrant at a price equal to $.05 per Warrant at any time,

 

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provided that (i) theWarrant Shares have been registered for resale pursuant to the Securities Actfor at least the 10-Trading Day period preceding the Call Notice, (ii) the VWAPof the Common Stock on a Trading Market is equal to or greater than $8.00 pershare (subject to adjustment to reflect forward or reverse stock splits, stockdividends, recapitalizations and the like)(the “Threshold Price”) for at least20 consecutive Trading Days over any 30 Trading Days, and (iii) the Call Noticeis delivered within 3 Business Days’ of the most recent day in the previousclause (ii) that the Common Stock reached the Threshold Price.  At any time prior to the effective date ofsuch call, the Holder shall have the right to exercise this Warrant inaccordance with its terms.

 

18.   Miscellaneous.

 

(a)   Jurisdiction.  ThisWarrant shall constitute a contract under the laws of New York, without regardto its conflict of law, principles or rules.

 

(b)   Restrictions.  TheHolder acknowledges that the Warrant Shares acquired upon the exercise of thisWarrant, if not registered, will have restrictions upon resale imposed by stateand federal securities laws.

 

(c)   Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any righthereunder on the part of Holder shall operate as a waiver of such right orotherwise prejudice Holder’s rights, powers or remedies, notwithstanding allrights hereunder terminate on the Termination Date.  If the Company willfully and knowingly fails to comply with anyprovision of this Warrant, which results in any material damages to the Holder,the Company shall pay to Holder such amounts as shall be sufficient to coverany costs and expenses including, but not limited to, reasonable attorneys’fees, including those of appellate proceedings, incurred by Holder incollecting any amounts due pursuant hereto or in otherwise enforcing any of itsrights, powers or remedies hereunder.

 

(d)   Notices.  Anynotice, request or other document required or permitted to be given ordelivered to the Holder by the Company shall be delivered in accordance withthe notice provisions of the Purchase Agreement; provided upon any permittedassignment of this Warrant, the assignee shall promptly provide the Companywith its contact information.

 

(e)   Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holderto exercise this Warrant or purchase Warrant Shares, and no enumeration hereinof the rights or privileges of Holder, shall give rise to any liability ofHolder for the purchase price of any Common Stock or as a stockholder of theCompany, whether such liability is asserted by the Company or by creditors ofthe Company.

 

(f)    Remedies.  Holder,in addition to being entitled to exercise all rights granted by law, includingrecovery of damages, will be entitled to specific performance of its rightsunder this Warrant.  The Company agreesthat monetary damages would not be adequate compensation for any loss incurredby reason of a breach by it of the provisions of this Warrant and hereby agreesto waive the defense in any action for specific performance that a remedy atlaw would be adequate.

 

(g)   Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights andobligations evidenced hereby shall inure to the benefit of and be binding uponthe successors of the Company and the successors and permitted assigns of 

 

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Holder.  The provisions of thisWarrant are intended to be for the benefit of all Holders from time to time ofthis Warrant and shall be enforceable by any such Holder or holder of WarrantShares.

 

(h)   Amendment.  ThisWarrant may be modified or amended or the provisions hereof waived with thewritten consent of the Company and the Holder.

 

(i)    Severability. Wherever possible, each provision of this Warrant shall be interpretedin such manner as to be effective and valid under applicable law, but if anyprovision of this Warrant shall be prohibited by or invalid under applicablelaw, such provision shall be ineffective to the extent of such prohibition orinvalidity, without invalidating the remainder of such provisions or theremaining provisions of this Warrant.

 

(j)    Headings.  Theheadings used in this Warrant are for the convenience of reference only andshall not, for any purpose, be deemed a part of this Warrant.

 

(k)   Entire Agreement. This Warrant, the Purchase Agreement andthe Registration Rights Agreement constitute the entire agreement between theCompany and the Holder with respect to this Warrant.

 

********************

 

INWITNESS WHEREOF, the Company has caused this Warrant to be executed by itsofficer thereunto duly authorized.

 

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Dated:  October 10, 2003

 
|   | **THE IMMUNE RESPONSE  CORPORATION** |
|--------|--------------------------------------|
|   |                                 |   |
|   |                                 |   |
|   | By:                                  |  /s/ John N. Bonfiglio |   |
|   |                                 | Name: | John N. Bonfiglio |
|   |                                 | Title: | Chief Executive Officer |
|        |                                      |  |  |  |

 

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**NOTICEOF EXERCISE**

 

To:          TheImmune Response Corporation

 

(1)  The undersigned hereby elects to purchase           Warrant Shares ofThe Immune Response Corporation pursuant to the terms of the attached Warrant(only if exercised in full), and tenders herewith payment of the exercise pricein full, together with all applicable transfer taxes, if any.

 

(2)  Payment shall take the form of (check applicable box):

oin lawful money of the United States; or

othe cancellation of such number of Warrant Shares as is necessary, inaccordance with the formula set forth in subsection 3(d), to exercise thisWarrant with respect to the maximum number of Warrant Shares purchasablepursuant to the cashless exercise procedure set forth in subsection 3(d).

  

(3)  Please issue a certificate or certificates representingsaid Warrant Shares in the name of the undersigned or in such other name as isspecified below:

 

 

The Warrant Shares shall be delivered to the following:

 

 

 

 

(4)  Accredited Investor.  The undersigned is an “accredited investor” as defined inRegulation D promulgated under the Securities Act of 1933, as amended.

 
|   | Rodman and Renshaw, Inc. |
|--------|--------------------------|
|   |                     |
|   |                     |
|   | By:                      |   |   |
|   |                     | Name: |
|   |                     | Title: |
|   |                     |
|   | Dated:                   |   |   |
|        |                          |  |  |  |  |

 

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----

 

**ASSIGNMENTFORM**

 

(To assign the foregoing warrant, executethis form and supply required information. Do not use this form to exercise the warrant.)

 

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced therebyare hereby assigned to

 

 

                                                                                                  whoseaddress is

 

 

 

 
|                  |                     | Dated: |   | , |   |   |
|-----------------------|--------------------------|--------|--------|---|--------|--------|
|                  |                     |
|                  |                     |
|                  | Holder’s Signature: |   |   |
|                  |                     |   |   |
|                  | Holder’s Address:   |   |   |
|                  |                     |   |   |
|                  |                     |   |   |
|                  |                     |   |   |
| Signature Guaranteed: |                     |   |   |
|                       |                          |        |        |   |        |        |  |  |

 

NOTE:  The signature to thisAssignment Form must correspond with the name as it appears on the face of theWarrant, without alteration or enlargement or any change whatsoever, and mustbe guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or otherrepresentative capacity should file proper evidence of authority to assign theforegoing Warrant.

 

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