**Exhibit10.140**

 

THE IMMUNE RESPONSECORPORATION8% CONVERTIBLE SECURED PROMISSORY NOTE

 
| $1,000,000 |   | New York, New York |
|------------|--------|--------------------|
|       |   | May 15, 2003       |

 

In consideration of the receipt of $1,000,000, TheImmune Response Corporation, a Delaware corporation (the “Issuer”), herebyunconditionally promises to pay to the order of Cheshire Associates LLC (the“Purchaser”), at the office of the Purchaser located at 535 Madison Avenue, 18thFloor, New York, New York 10022, or such other address designated by thePurchaser, in lawful money of the United States of America and in immediatelyavailable funds, on September 15, 2003 (the “Note Maturity Date”) the principalamount of One Million Dollars ($1,000,000) and all accrued interest at the rateof eight (8%) percent per annum based on a 365-day year (“Interest Rate”).

 

Interest (other than interest accruing as a result ofa failure by Issuer to pay any amount when due as set forth below) in respectof this Note shall accrue until all amounts remaining owed under such Noteshall be fully repaid, and shall be due and payable in full on the NoteMaturity Date.  If all or a portion ofthe principal amount of the Note or any interest payable thereon shall not berepaid when due whether on the applicable repayment date, by acceleration orotherwise, such overdue amounts on such Note shall bear interest at a rate perannum that is three (3%) percent above the Interest Rate (i.e., 11%)from the date of such non-payment until such amount is paid in full (after aswell as before judgment).  All paymentsto be made by the Issuer hereunder or pursuant to the Notes shall be made inlawful money of the United States by certified check or wire transfer inimmediately available funds. Any interest owing on overdue amounts shall bepayable on demand.

 

The obligation to make the payments provided for inthis Note is absolute and unconditional, and is not subject to any defense,set-off, counterclaim, rescission, recoupment or adjustment whatsoever.

 

The obligations under this Note shall be secured by thatcertain Intellectual Property Security Agreement, dated November 9, 2001 (the“Security Agreement”), by and between the Issuer and Kevin Kimberlin Partners,L.P., a Delaware limited partnership (“KKP”), as amended by Amendment No. 1,dated February 26, 2002, by and between the Issuer, KKP and Oshkim LimitedPartnership (“Oshkim”), and as further amended by Amendment No. 2, dated July11, 2002, by and between the Issuer, KKP, Oshkim and The Kimberlin Family 1998Irrevocable Trust.

 

This Note (including all accrued and unpaid interest)shall become convertible on the terms to be reasonably negotiated in good faithby the Purchaser and the Issuer.

 

Upon the occurrence of any one or more of the Eventsof Default specified on Exhibit A attached hereto, all amounts thenremaining unpaid on this Note may be declared by the Purchaser to beimmediately due and payable.

 

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This Note is freely transferable and assignable, inwhole or in part, by the Purchaser, and such transferee or assignee shall havethe same rights hereunder as the Purchaser. The Issuer may not assign or delegate any of its obligations under thisNote without the prior written consent of the Purchaser (or its successor,transferee or assignee).

 

All parties now and hereafter liable with respect tothis Note, whether maker, principal, surety, guarantor, endorser or otherwise,hereby waive presentment, demand, protest and all other notices of any kind.

 

The Issuer agrees to pay all of the Purchaser’sexpenses, including reasonable attorneys’ costs and fees, incurred incollecting sums due under this Note.

 

All or part of the Note may be prepaid by Issuer uponat least five (5) days’ prior written notice to the Purchaser thereof; provided,however, that any such prepayment on such Note shall be first applied toaccrued and unpaid interest of the outstanding Note and then against itsoutstanding principal.

 

This Note shall be governed by, and construed andinterpreted in accordance with, the laws of the State of New York.

 
|   | THE IMMUNE RESPONSE CORPORATION |
|--------|---------------------------------|
|   |                            |
|   |                            |   |
|   | By:                             |   |   |
|   |                            | Name: |   |   |
|   |                            | Title: |   |   |
|        |                                 |  |  |  |  |

 

2

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**ExhibitA**

 

**Eventsof Default**.

 

If any of the following events (each, an “Event ofDefault”) shall occur:

 

(i)                                     Issuershall fail to pay any principal or interest on the Note within three (3)business days after such payment becomes due in accordance with the termsthereof or hereof;

 

(ii)                                  Issuershall default, in any material respect, in the observance or performance of anyother agreement contained in the Security Agreement and such default shallcontinue unremedied for a period of ten (10) days after written notice toIssuer of such default; or

 

(iii)                               (a)  Issuer shall commence any case, proceedingor other action (x) under any existing or future law of any jurisdiction,domestic or foreign, relating to bankruptcy, insolvency, reorganization,conservatorship or relief of debtors, seeking to have an order for reliefentered with respect to it, or seeking to adjudicate it bankrupt or insolvent,or seeking reorganization, arrangement, adjustment, winding-up, liquidation,dissolution, composition or other relief with respect to it or its debts or (y)seeking appointment of a receiver, trustee, custodian, conservator or othersimilar official for it or for all or any substantial part of its assets, orIssuer shall make a general assignment for the benefit of its creditors; or (b)there shall be commenced against Issuer any case, proceeding or other action ofa nature referred to in clause (a) above that (A) results in the entry of anorder for relief of any such adjudication or appointment or (B) remainsundismissed, undischarged or unbonded for a period of sixty (60) days; or (c)there shall be commenced against Issuer any case, proceeding or other actionseeking issuance of a warrant of attachment, execution, distrait or similarprocess against all or any substantial part of its assets that results in theentry of an order for any such relief that shall not have been vacated,discharged, or stayed or bonded pending appeal within sixty (60) days from theentry thereof; or (d) Issuer shall take any action in furtherance of, orindicating its consent to, approval of, or acquiescence in, any of the acts setforth in clauses (a), (b) or (c) above; or (e) Issuer shall generally not, orshall be unable to, or shall admit in writing its inability to, pay its debtsas they become due;

 

then, and in any such event, (x) if such event is anEvent of Default specified in clause (iii) above of with respect to Issuer, theNote (with all accrued and unpaid interest thereon) and all other amounts owingunder any of the promissory notes issued by the Issuer to the Purchaser or anyrelated party of the Purchaser shall automatically and immediately become dueand payable and (y) if such event is any other Event of Default, Purchaser may,by written notice to Issuer, immediately declare the Note (with all accrued andunpaid interest thereon) to be due and payable forthwith, whereupon the sameshall immediately become due and payable. Except as expressly provided above, presentation, demand, protest andall other notices of any kind are hereby expressly waived by Issuer.

 

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