**Exhibit 10.148**

 

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. 101003-26

 

 

**COMMONSTOCK PURCHASE WARRANT**

 

 

To Purchase 100,000 Shares of Common Stock of

 

**The ImmuneResponse Corporation**

 

THISCOMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received, CardinalSecurities, LLC (the “Holder”), is entitled, upon the terms and subjectto the 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 100,000 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 to compliance with applicablelaws and Section 7 of this Warrant, this Warrant and all rights hereunder aretransferable, in whole or in part.

 

2.  Authorization of Shares.  The Company covenants that all Warrant Shares which may be issuedupon the exercise of the purchase rights represented by this Warrant will, uponexercise of the purchase rights represented by this Warrant in accordance withthe terms and conditions hereof, be duly authorized, validly issued, fully paidand nonassessable and free from all taxes, liens and charges in respect of theissue thereof (other than taxes in respect of any transfer occurringcontemporaneously with such issue).

 

3.  Exercise of Warrant.

 

(a)  Exceptas provided in Section 3(c) herein, exercise of the purchase rights representedby this Warrant may be made at any time or times on or after the InitialExercise Date and on or before the Termination Date by the surrender of thisWarrant and the Notice of Exercise Form annexed hereto duly executed, at theoffice of the Company (or such other office or agency of the Company as it maydesignate by notice in writing to the registered Holder at the address of suchHolder appearing on the books of the Company) and upon payment of the ExercisePrice of 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 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 cash to theHolder the amount by which (x) the Holder’s total purchase price (includingbrokerage commissions, if any) for the shares of Common Stock so purchasedexceeds (y) the amount obtained by multiplying (A) the number of Warrant Sharesthat the Company was required to deliver to the Holder in connection with theexercise at issue times (B) the price at which the sell order giving rise to suchpurchase obligation was executed, and (2) at the option of the Holder, eitherreinstate the portion of the Warrant and equivalent number of Warrant Sharesfor which such exercise was not honored or deliver to the Holder the number ofshares of Common Stock that would have been issued had the

 

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Companytimely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases CommonStock having a total purchase price of $11,000 to cover a Buy-In with respectto an attempted exercise of shares of Common Stock with an aggregate sale pricegiving rise to such purchase obligation of $10,000, under clause (1) of theimmediately preceding sentence the Company shall be required to pay the Holder$1,000. The Holder shall provide the Company written notice indicating theamounts payable to the Holder in respect of the Buy-In, together withapplicable 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 timely delivercertificates representing shares of Common Stock upon exercise of the Warrantas required pursuant to the terms hereof.

 

(b)  If this Warrant shall have beenexercised in part, the Company shall, at the time of delivery of thecertificate or certificates representing Warrant Shares, deliver to Holder anew Warrant evidencing the rights of Holder to purchase the unpurchased WarrantShares called for by this Warrant, which new Warrant shall in all otherrespects be identical with this Warrant.

 

(c)  Notwithstandinganything herein to the contrary, in no event shall the Holder be permitted toexercise this Warrant for Warrant Shares to the extent that (i) the number ofshares of Common Stock beneficially owned by such Holder, together with anyaffiliate thereof (other than Warrant Shares issuable upon exercise of thisWarrant) plus (ii) the number of Warrant Shares issuable upon exercise of thisWarrant, would be equal to or exceed 4.999% of the number of shares of CommonStock then issued and outstanding, including shares issuable upon exercise ofthis Warrant held by such Holder after application of this Section 3(c).  As used herein, beneficial ownership shallbe determined in accordance with Section 13(d) of the Exchange Act and therules promulgated thereunder.  To theextent that the limitation contained in this Section 3(c) applies, thedetermination of whether this Warrant is exercisable (in relation to othersecurities owned by the Holder) and of which a portion of this Warrant isexercisable shall be in the sole discretion of such Holder, and the submissionof a Notice of Exercise shall be deemed to be such Holder’s determination ofwhether this Warrant is exercisable (in relation to other securities owned bysuch Holder) and of which portion of this Warrant is exercisable, in each casesubject to such aggregate percentage limitation, and the Company shall have noobligation to verify or confirm the accuracy of such determination.  Nothing contained herein shall be deemed torestrict the right of a Holder to exercise this Warrant into Warrant Shares atsuch time as such exercise will not violate the provisions of this Section3(c).  The provisions of this Section3(c) may be waived by the Holder upon, at the election of the Holder, not lessthan 61 days’ prior notice to the Company, and the provisions of this Section3(c) shall continue to apply until such 61st day (or such laterdate, as determined by the Holder, as may be specified in such notice ofwaiver).  No exercise of this Warrant inviolation of this Section 3(c) but otherwise in accordance with this Warrantshall affect the status of the Warrant Shares as validly issued, fully-paid andnonassessable.

 

(d)  If, butonly if, at any time after one year from the date of issuance of this Warrantthere is no effective Registration Statement registering the resale of theWarrant Shares by the Holder, this Warrant may also be exercised at such timeby means of a “cashless exercise” in which the Holder shall be entitled toreceive 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) =   the VWAP onthe Trading Day preceding the date of such election;

 

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

 

(X) =   the numberof Warrant Shares issuable upon exercise of the Warrants in accordance with theterms 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 byBloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to4:02 p.m. Eastern Time); (b) if the Common Stock is not then listed orquoted on a Trading Market and if prices for the Common Stock are then quotedon the OTC Bulletin Board, the volume weighted average price of the CommonStock for such date (or the nearest preceding date) on the OTC Bulletin Board;(c)  if the Common Stock is not then listed or quoted on the OTC BulletinBoard and if prices for the Common Stock are then reported in the “Pink Sheets”published by the National Quotation Bureau Incorporated (or a similarorganization or agency succeeding to its functions of reporting prices), themost recent bid price per share of the Common Stock so reported; or (d) inall other cases, the fair market value of a share of Common Stock as determinedby an independent appraiser selected in good faith by the holders of a majorityof the Shares then outstanding and reasonably acceptable to the Company.

 

4.  No Fractional Shares or Scrip.  No fractional shares or scrip representingfractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which Holderwould otherwise be entitled to purchase upon such exercise, the Company shallpay a cash adjustment in respect of such final fraction in an amount equal tosuch fraction multiplied by the Exercise Price.

5.  Charges, Taxes and Expenses.  Issuance of certificates for Warrant Sharesshall be made without charge to the Holder for any issue or transfer tax orother incidental expense in respect of the issuance of such certificate, all ofwhich taxes and expenses shall be paid by the Company, and such certificatesshall be issued in the name of the Holder or in such name or names as may be directedby the Holder; provided, however, that in the event certificatesfor Warrant Shares are to be issued in a name other than the name of theHolder, this Warrant when surrendered for exercise shall be accompanied by theAssignment Form attached hereto duly executed by the Holder; and the Companymay require, as a condition thereto, the payment of a sum sufficient toreimburse it for any transfer tax incidental thereto.

 

6.  Closing of Books. The Company will not close its stockholder books or records in anymanner which prevents the timely exercise of this Warrant, pursuant to theterms hereof.

 

7.  Transfer, Division and Combination.

 

(a)  Subjectto compliance with any applicable securities laws and the conditions set forthin Sections 1 and 7(e) hereof and to the provisions of Section 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)  ThisWarrant may be divided or combined with other Warrants upon presentation hereofat the aforesaid office of the Company, together with a written noticespecifying the names and denominations in which new Warrants are to be issued,signed by the Holder or its agent or attorney. Subject to compliance with Section 7(a), as to any transfer which may beinvolved in such division or combination, the Company shall execute and delivera new Warrant or Warrants in exchange for the Warrant or Warrants to be dividedor combined in accordance with such notice.

 

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

 

(d)  TheCompany agrees to maintain, at its aforesaid office, books for the registrationand the registration of transfer of the Warrants.

 

(e) If, at the time of the surrender of this Warrant in connection with anytransfer of this Warrant, the transfer of this Warrant shall not be registeredpursuant to an effective registration statement under the Securities Act andunder applicable state securities or blue sky laws, the Company may require, asa condition of allowing such transfer (i) that the Holder or transferee of thisWarrant, as the case may be, furnish to the Company a written opinion ofcounsel (which opinion shall be in form, substance and scope customary foropinions of counsel in comparable transactions) to the effect that suchtransfer may be made without registration under the Securities Act and underapplicable 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 Shareholder until Exercise.  This Warrant does not entitle the Holder toany voting rights or other rights as a shareholder of the Company prior to theexercise hereof.  Upon the surrender ofthis Warrant and the payment of the aggregate Exercise Price (or by means of a cashlessexercise), the Warrant Shares so purchased shall be and be deemed to be issuedto such Holder as the record owner of such shares as of the close of businesson the later of the date of such surrender or payment.

 

9.  Loss, Theft, Destruction or Mutilation of Warrant.  The Company covenants that upon receipt bythe Company of evidence reasonably satisfactory to it of the loss, theft,destruction or mutilation of this Warrant or any stock certificate relating tothe Warrant Shares, and in case of

 

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loss, theft or destruction, of indemnity orsecurity reasonably satisfactory to it (which, in the case of the Warrant,shall not include the posting of any bond), and upon surrender and cancellationof such Warrant or stock certificate, if mutilated, the Company will make anddeliver a new Warrant or stock certificate of like tenor and dated as of suchcancellation, in lieu of such Warrant or stock certificate.

 

10.  Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the takingof any action or the expiration of any right required or granted herein shallbe a Saturday, Sunday or a legal holiday, then such action may be taken or suchright may be exercised on the next succeeding day not a Saturday, Sunday orlegal holiday.

 

11.  Adjustments of Exercise Price and Number of WarrantShares.  The number and kind ofsecurities purchasable upon the exercise of this Warrant and the Exercise Priceshall be subject to adjustment from time to time upon the happening of any ofthe following.  In case the Companyshall (i) pay a dividend in shares of Common Stock or make a distribution inshares of Common Stock to holders of its outstanding Common Stock, (ii)subdivide its outstanding shares of Common Stock into a greater number ofshares, (iii) combine its outstanding shares of Common Stock into a smallernumber of shares of Common Stock, or (iv) issue any shares of its capital stockin a reclassification of the Common Stock, then the number of Warrant Sharespurchasable upon exercise of this Warrant immediately prior thereto shall beadjusted so that the Holder shall be entitled to receive the kind and number ofWarrant Shares or other securities of the Company which it would have owned orhave been entitled to receive had such Warrant been exercised in advancethereof.  Upon each such adjustment ofthe kind and number of Warrant Shares or other securities of the Company whichare purchasable hereunder, the Holder shall thereafter be entitled to purchasethe number of Warrant Shares or other securities resulting from such adjustmentat an Exercise Price per Warrant Share or other security obtained bymultiplying the Exercise Price in effect immediately prior to such adjustmentby the number of Warrant Shares purchasable pursuant hereto immediately priorto such adjustment and dividing by the number of Warrant Shares or othersecurities 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 its capital, reclassify its capitalstock, consolidate or merge with or into another corporation (where the Companyis not the surviving corporation or where there is a change in or distributionwith respect to the Common Stock of the Company), or sell, transfer orotherwise dispose of all or substantially all its property, assets or businessto another corporation (including by way of a spin-off) and, pursuant to theterms of such reorganization, reclassification, merger, consolidation ordisposition of assets, shares of common stock of the successor or acquiringcorporation, or any cash, shares of stock or other securities or property ofany nature whatsoever (including warrants or other subscription or purchaserights) in addition to or in lieu of common stock of the successor or acquiringcorporation (“Other Property”), are to be received by or distributed tothe holders of Common Stock of the Company, then the Holder shall have theright thereafter to receive upon exercise of this Warrant, the number of sharesof Common Stock of the successor or acquiring corporation or of the Company, ifit is the surviving corporation, and Other Property receivable upon or as aresult of such reorganization, reclassification, merger, consolidation ordisposition of assets by a Holder of the number of shares of Common Stock forwhich this Warrant is exercisable immediately prior to such event.  In case of any such reorganization,

 

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reclassification, merger, consolidation ordisposition of assets, the successor or acquiring corporation (if other thanthe Company) shall expressly assume the due and punctual observance andperformance of each and every covenant and condition of this Warrant to beperformed and observed by the Company and all the obligations and liabilitieshereunder, subject to such modifications as may be deemed appropriate (asdetermined in good faith by resolution of the Board of Directors of theCompany) in order to provide for adjustments of Warrant Shares for which thisWarrant is exercisable which shall be as nearly equivalent as practicable tothe adjustments provided for in this Section 12.  For purposes of this Section 12, “common stock of the successoror acquiring corporation” shall include stock of such corporation of any classwhich is not preferred as to dividends or assets over any other class of stockof such corporation and which is not subject to redemption and shall alsoinclude any evidences of indebtedness, shares of stock or other securitieswhich are convertible into or exchangeable for any such stock, eitherimmediately or upon the arrival of a specified date or the happening of aspecified event and any warrants or other rights to subscribe for or purchaseany such stock.  The foregoingprovisions of this Section 12 shall similarly apply to successive reorganizations,reclassifications, mergers, consolidations or disposition of assets.

 

13.  Voluntary Adjustment by the Company.  The Company may at any time during the termof this Warrant reduce the then current Exercise Price to any amount and forany period of time deemed appropriate by the Board of Directors of the Company.

 

14.  Notice of Adjustment.  Whenever the number of Warrant Shares or number or kind ofsecurities or other property purchasable upon the exercise of this Warrant orthe Exercise Price is adjusted, as herein provided, the Company shall givenotice thereof to the Holder, which notice shall state the number of WarrantShares (and other securities or property) purchasable upon the exercise of thisWarrant and the Exercise Price of such Warrant Shares (and other securities orproperty) after such adjustment, setting forth a brief statement of the factsrequiring such adjustment and setting forth the computation by which suchadjustment was made.

15.  Notice of Corporate Action.  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 windingup.

 

16.  AuthorizedShares.  The Company covenants thatduring the period the Warrant is outstanding, it will reserve from itsauthorized and unissued Common Stock a sufficient number of shares to providefor the issuance of the Warrant Shares upon the exercise of any purchase rightsunder this Warrant.  The Company furthercovenants that its issuance of this Warrant shall constitute full authority toits officers 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) the Warrant Shares havebeen registered for resale pursuant to the Securities Act for at least the10-Trading Day period preceding the Call Notice, (ii) the VWAP of the CommonStock on a Trading Market is equal to or greater than $8.00 per share (subjectto adjustment to reflect forward or reverse stock splits, stock dividends,recapitalizations and the like)(the “Threshold Price”) for at least 20consecutive Trading Days over any 30 Trading Days, and (iii) the Call Notice isdelivered within 3 Business Days’ of the most recent day in the previous clause(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.  This Warrant shall constitute a contractunder the laws of New York, without regard to its conflict of law, principlesor rules.

 

(b)  Restrictions.  The Holder acknowledges that the WarrantShares acquired upon the exercise of this Warrant, if not registered, will haverestrictions upon resale imposed by state and federal securities laws.

 

(c)  Nonwaiverand Expenses.  No course of dealingor any delay or failure to exercise any right hereunder on the part of Holdershall operate as a waiver of such right or otherwise prejudice Holder’s rights,powers or remedies, notwithstanding all rights hereunder terminate on theTermination Date.  If the Companywillfully and knowingly fails to comply with any provision of this Warrant,which results in any material damages to the Holder, the Company shall pay toHolder such amounts as shall be sufficient to cover any costs and expensesincluding, but not limited to, reasonable attorneys’ fees, including those ofappellate proceedings, incurred by Holder in collecting any amounts duepursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.

 

(d)  Notices.  Any notice, request or other documentrequired or permitted to be given or delivered to the Holder by the Companyshall be delivered in accordance with the notice provisions of the PurchaseAgreement; provided upon any permitted assignment of this Warrant, the assigneeshall promptly provide the Company with its contact information.

 

(e)  Limitationof Liability.  No provision hereof,in the absence of any affirmative action by Holder to exercise this Warrant orpurchase Warrant Shares, and no enumeration herein of the rights or privilegesof Holder, shall give rise to any liability of Holder for the purchase price ofany Common Stock or as a stockholder of the Company, whether such liability isasserted by the Company or by creditors of the Company.

 

(f)  Remedies.  Holder, in addition to being entitled toexercise all rights granted by law, including recovery of damages, will beentitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damageswould not be adequate compensation for any loss incurred by reason of a breachby it of the provisions of this Warrant and hereby agrees to waive the defensein any action for specific performance that a remedy at law would be adequate.

 

(g)  Successorsand Assigns.  Subject to applicablesecurities laws, this Warrant and the rights and obligations evidenced herebyshall inure to the benefit of and be binding upon the successors of the Companyand 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.  This Warrant may be modified or amended orthe provisions hereof waived with the written consent of the Company and theHolder.

 

(i)  Severability.  Wherever possible, each provision of thisWarrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by orinvalid under applicable law, such provision shall be ineffective to the extentof such prohibition or invalidity, without invalidating the remainder of suchprovisions or the remaining provisions of this Warrant.

 

(j)  Headings.  The headings used in this Warrant are forthe convenience of reference only and shall not, for any purpose, be deemed apart of this Warrant.

 

(k)  EntireAgreement. This Warrant, the Purchase Agreement and the Registration RightsAgreement constitute the entire agreement between the Company and the Holderwith 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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**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.

 
|   | Cardinal Securities, LLC |
|--------|--------------------------|
|   |                     |
|   |                     |
|   | 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 evidencedthereby are 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.

 

13

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