EXHIBIT
10.3


 


REGISTRATION
RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”) is made
and entered into as of April 29, 2004, by and among The Immune Response
Corporation, a Delaware corporation (the “Company”), and the investors
signatory hereto (each a “Purchaser” and collectively, the “Purchasers”).


 


This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the “Purchase
Agreement”).


 


The Company and the Purchasers hereby agree as follows:


 


1.                                       Definitions.  Capitalized terms used and not otherwise
defined herein that are defined in the Purchase Agreement shall have the
meanings given such terms in the Purchase Agreement.  As used in this Agreement, the following terms shall have the
following meanings:


 


“Effectiveness Date”  means, with respect to the Registration
Statement required to be filed hereunder, the earlier of (a) the 90th calendar
day following the Closing Date (120th calendar day in the event of a
full review by the Commission) and (b) the fifth Trading Day following the date
on which the Company is notified by the Commission that the Registration
Statement will not be reviewed or is no longer subject to further review and
comments.


 


“Effectiveness Period”  shall have the meaning set forth in
Section 2(a).


 


“Filing Date” means, with respect to
the Registration Statement required to be filed hereunder, the 20th
calendar day following the Closing Date; provided, however, that if any Holder
fails to provide the Company with any information that is required to be
provided in the Registration Statement with respect to such Holder (including
the information required by Section 3(i)) or if counsel to a Holder or to
the placement agent does not furnish comments to the Company with respect to
information that is required to be provided in the Registration Statement, then
the Filing Date shall be extended until three (3) Trading Days following the
date of receipt of such information by the Company.


 


“Holder” or “Holders” means the
holder or holders, as the case may be, from time to time of Registrable
Securities.


 


“Indemnified Party” shall have the meaning
set forth in Section 5(c).


 


“Indemnifying Party” shall have the meaning
set forth in Section 5(c).


 


“Losses” shall have the meaning set forth in
Section 5(a).


 


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“Proceeding”  means an action, claim, suit, investigation, or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.


 


“Prospectus”  means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.


 


“Registrable Securities”  means the Shares, the Warrant Shares, the
shares of Common Stock issuable upon exercise of the warrant issued to Rodman
& Renshaw, Inc. (unless it is necessary to exclude them from the Form S-3
in order to use such form) in connection with the transactions contemplated by
the Purchase Agreement and the shares of Common Stock issuable upon exercise of
the warrant issued to Cardinal, together with any shares of Common Stock issued
or issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing.


 


“Registration Statement”  means the registration statements required
to be filed hereunder, including (in each case) the Prospectus, amendments and
supplements to the registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in the registration
statement.


 


“Rule 415”  means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.


 


“Rule 424”  means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.


 


“Securities Act”  means the Securities Act of 1933, as
amended.


 


2.                                       Registration.


 


(a)                                  On or prior to the Filing Date, the Company
shall prepare and file with the Commission the Registration Statement covering
the resale of all of the Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement required
hereunder shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, in which case the
Registration Statement shall be on another appropriate form in accordance
herewith), any may include securities for the Company’s own account and/or the
account


 


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of other holders of the Company’s securities. The Registration
Statement required hereunder shall contain (except if otherwise directed by the
Holders) the “Plan of Distribution” attached hereto as Annex A.
The Company shall cause the Registration Statement to become effective and
remain effective as provided herein. The Company shall use its commercially
reasonable efforts to cause the Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but
in any event not later than the Effectiveness Date, and shall use its
commercially reasonable efforts to keep the Registration Statement continuously
effective under the Securities Act until the earlier of (a) twenty-four months
after the Effectiveness Date of the Registration Statement or (b) such time
when the Registrable Securities may be sold without volume restrictions
pursuant to Rule 144(k) under the Securities Act or any other rule of similar
effect as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company’s transfer
agent and the affected Holders (the “Effectiveness Period”).


 


(b)                                 If: (i) a Registration Statement is not filed
on or prior to its Filing Date (if the Company files a Registration Statement
without affording the Holders for purposes of such review only, the opportunity
to review and comment on the same as required by Section 3(a), the Company
shall not be deemed to have satisfied this clause (i)); or (ii) the Company
fails to file with the Commission a request for acceleration in accordance with
Rule 461 promulgated under the Securities Act, within five Trading Days of the
date that the Company is notified (orally or in writing, whichever is earlier)
by the Commission that a Registration Statement will not be “reviewed,” or not
subject to further review, or (iii) prior to the date when such Registration
Statement is first declared effective by the Commission, the Company fails to
file a pre-effective amendment and otherwise respond in writing to comments
made by the Commission in respect of such Registration Statement within ten
Trading Days after the receipt of comments by or notice from the Commission
that such amendment is required in order for a Registration Statement to be
declared effective, or (iv) a Registration Statement filed or required to be filed
hereunder is not declared effective by the Commission on or before the
Effectiveness Date, or (v) after a Registration Statement is first declared
effective by the Commission, it ceases for any reason to remain continuously
effective as to all Registrable Securities for which it is required to be
effective, or the Holders are not permitted to utilize the Prospectus therein
to resell such Registrable Securities, for in any such cases twenty Trading
Days (which need not be consecutive days) in the aggregate during any 12-month
period (any such failure or breach being referred to as an “Event” and
for purposes of clause (i) or (iv) the date on which such Event occurs, or for
purposes of clause (ii) the date on which such five Trading Day period is
exceeded, or for purposes of clauses (iii) the date which such ten Trading Day
period is exceeded, or for purposes of clause (v) the date on which such twenty
Trading Day period is exceeded being referred to as “Event Date”), then
in addition to any other rights the Holders may have hereunder or under
applicable law on each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty, equal to 2% of the aggregate purchase
price paid by such Holder pursuant to the Purchase Agreement for any
Registrable Securities then held by such Holder. If the Company fails to pay
any liquidated damages pursuant to this Section in full within seven days
after receipt of


 


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written demand for such payment, the Company will pay interest thereon
at a rate of 18% per annum (or such lesser maximum amount that is permitted to
be paid by applicable law) to the Holder, accruing daily from the date such
liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The liquidated damages pursuant to the terms hereof shall
apply on a pro-rata basis for any portion of a month prior to the cure of an
Event.


 


(c)                                  If during the Effectiveness Period, the
number of Registrable Securities at any time exceeds 100% of the number of
shares of Common Stock then registered in a Registration Statement, then the
Company shall file as soon as reasonably practicable but in any case prior to
the 30th day following the date such number is exceeded, an
additional Registration Statement covering the resale of by the Holders of not
less than all of such Registrable Securities and the Company shall use
commercially reasonable efforts to cause such Registration Statement to be
declared effective as soon as reasonably practicable thereafter.


 


3.                                         Registration Procedures


 


In connection with the Company’s registration
obligations hereunder,  the Company
shall:


 


(a)                                  Not less than three Trading Days prior to the
filing of the Registration Statement or any related Prospectus or any amendment
or supplement thereto, the Company shall, (i) furnish to the Holders copies of
all such documents proposed to be filed (including documents incorporated or
deemed incorporated by reference to the extent requested by such Person) which
documents will be subject to the review of such Holders, and (ii) cause its
officers and directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel to conduct a reasonable investigation within the meaning of
the Securities Act.  The Company shall
not file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith; provided that the Company is
notified of such objection in writing no later than three Trading Days after
the Holders have been so furnished copies of such documents.


 


(b)                                 (i) Prepare and file with the Commission such
amendments, including post-effective amendments, to the Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the
Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible to any comments received from
the Commission with respect to the Registration Statement or any amendment
thereto and, as promptly as reasonably possible, upon request, provide the Holders
true and complete copies of all correspondence from and to the Commission
relating to the Registration


 


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Statement; and (iv) comply in all material respects with the provisions
of the Securities Act and the Exchange Act with respect to the disposition of
all Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in
such Prospectus as so supplemented.


 


(c)                                  Notify the Holders of Registrable Securities,
as promptly as reasonably possible (and, in the case of (i)(A) below, not less
than two Trading Days prior to such filing) and (if requested by any such
Person) confirm such notice in writing promptly following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a “review” of the Registration
Statement and whenever the Commission comments in writing on the Registration
Statement (the Company shall upon request provide true and complete copies
thereof and all written responses thereto to each of the Holders); and (C) with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any other
Federal or state governmental authority during the period of effectiveness of
the Registration Statement for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii) of the issuance by
the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement covering any
or all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threat in writing of any Proceeding for such purpose; and (v) of
the occurrence of any event or passage of time that makes the financial
statements included in the Registration Statement ineligible for inclusion
therein or any statement made in the Registration Statement or Prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.  Each Holder hereby covenants to comply with
the covenants set forth in the Purchase Agreement.


 


(d)                                 Use its commercially reasonable efforts to
avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order
suspending the effectiveness of the Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.


 


(e)                                  Furnish to each Holder, without charge, at
least one conformed copy of the Registration Statement and each amendment
thereto, including, to the extent requested by such Holder, financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (including those previously


 


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furnished or incorporated by reference) promptly after the filing of
such documents with the Commission, in each case only if such document is not
available on-line on the Company’s or EDGAR’s website.


 


(f)                                    Promptly deliver to each Holder, without
charge, as many copies of the Prospectus or Prospectuses (including each form
of prospectus) and each amendment or supplement thereto as such Holder may
reasonably request in connection with resales by the Holder of Registrable
Securities.  The Company hereby consents
to the use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or supplement
thereto, except after the giving on any notice pursuant to Section 3(c).


 


(g)                                 Prior to any resale of Registrable Securities
by a Holder, use its commercially reasonable efforts to register or qualify or
cooperate with the selling Holders in connection with the registration or
qualification (or exemption from the registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or
Blue Sky laws of such jurisdictions within the United States as any Holder reasonably
requests in writing, to keep each the registration or qualification (or
exemption therefrom) effective during the Effectiveness Period and to do any
and all other acts or things reasonably necessary to enable the disposition in
such jurisdictions of the Registrable Securities covered by the Registration
Statement; provided, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified,
subject the Company to any material tax in any such jurisdiction where it is
not then so subject or file a general consent to service of process in any such
jurisdiction.


 


(h)                                 If requested by the Holders, cooperate with
the Holders to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee pursuant to
the Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase Agreement, of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and registered in such
names as any such Holders may request.


 


(i)                                     Upon the occurrence of any event contemplated
by Section 3(c)(v), as promptly as reasonably possible, prepare a
supplement or amendment, including a post-effective amendment, to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Company notifies the Holders
in. accordance with clauses (ii) through (v) of Section 3(c) above to
suspend the use of any Prospectus until the requisite changes to such
Prospectus have been made, then the Holders shall suspend use of such
Prospectus. The Company will use commercially reasonable efforts to ensure that
the use of the Prospectus may be resumed as promptly as is practicable. The
Company shall be


 


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entitled to exercise its right under this Section 3(i) to suspend
the availability of a Registration Statement and Prospectus, subject to the
payment of liquidated damages pursuant to Section 2(b), for a period not
to exceed 90 days (which need not be consecutive days) in any 12 month period.


 


(j)                                     Comply with all applicable rules and
regulations of the Commission.


 


(k)                                  The Company may require each Holder to
furnish to the Company a certified statement as to the number of shares of
Common Stock beneficially owned by such Holder and, if required by the
Commission, the person thereof that has voting and dispositive control over the
Shares. During any periods that the Company is unable to meet its obligations
hereunder with respect to the registration of the Registrable Securities solely
because any Holder fails to furnish such information within three Trading Days
of the Company’s request, any liquidated damages that are accruing at such time
as to such Holder only shall be tolled and any Event that may otherwise occur
solely because of such delay shall be suspended as to such Holder only, until
such information is delivered to the Company.


 


4.                                         Registration Expenses.  All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The
fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Trading Market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii)
messenger, telephone and delivery expenses incurred by the Company, (iv) fees
and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder. Notwithstanding the foregoing, all underwriting discounts, brokerage
fees and commission incurred by the Holders shall be borne by the Holders.


 


5.                                       Indemnification


 


(a)                                   Indemnification by the Company.  The
Company shall, notwithstanding any termination of this Agreement, indemnify and
hold harmless each Holder, the officers, directors, agents and employees of
each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling


 


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Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”),
as incurred, to the extent arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement,
any Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus or
form of prospectus or supplement thereto, in light of the circumstances under
which they were made) not misleading, except to the extent, but only to the
extent, that (1) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in the Registration Statement, such Prospectus or
such form of Prospectus or in any amendment or supplement thereto (it being
understood that the Holder has approved Annex A hereto for this purpose) or (2)
in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(d). 
The Company shall notify the Holders promptly of the institution, threat
or assertion of any Proceeding of which the Company is aware in connection with
the transactions contemplated by this Agreement.


 


(b) Indemnification by Holders. Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who
controls the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers,
agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based upon: (x) such Holder’s failure to comply with
the prospectus delivery requirements of the Securities Act or (y) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material Fact required to be
stated therein or necessary to make the statements therein not misleading (i)
to the extent, but only to the extent, that such untrue statement or omission
is contained in any information so furnished in writing by such Holder to the
Company specifically for inclusion in the Registration Statement or such
Prospectus or (ii) to the extent that (1) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, or to the extent that
such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement thereto
or (2) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), the use by such Holder


 


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of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior
to the receipt by such Holder of the Advice contemplated in Section 6(d).
In no event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation.


 


(c)                                  Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have prejudiced the Indemnifying Party.


 


An Indemnified Party shall have the right to
employ separate counsel in any such Proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party or Parties unless: (1) the Indemnifying Party has
agreed in writing to pay such fees and expenses; (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and the reasonable
fees and expenses of one separate counsel shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.


 


All reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party; provided, that the Indemnified Party
shall promptly reimburse the Indemnifying Party for that portion of such fees
and expenses applicable to such


 


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actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the
parties.


 


(d)                                 Contribution. If a claim for indemnification under
Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission of a material fact, has been taken or made
by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in
Section 5(c), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party
in accordance with its terms.


 


The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 5(d), no Holder shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the proceeds actually received by
such Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, except in the case of fraud by such Holder, The
indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.


 


6.                                       Miscellaneous


 


(a)                                  Remedies.  In the event of a breach by the
Company or by a Holder, of any of their obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach by
it of any of the provisions of this Agreement and hereby further agrees that,
in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate.


 


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(b)                                 No Piggyback on Registrations. 
Except as set forth on Schedule 6(b) attached hereto, neither the
Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in a Registration
Statement other than the Registrable Securities.  No Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.  The Company shall not file any other
registration statement until after the Effective Date.


 


(c)                                  Compliance.  Each Holder covenants and
agrees that it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with sales of Registrable
Securities pursuant to the Registration Statement.


 


(d)                                 Discontinued Disposition. 
Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c), such Holder will forthwith
discontinue disposition of such Registrable Securities under the Registration
Statement until such Holder’s receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement or until it is advised in
writing (the “Advice”) by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement.  The Company may provide appropriate stop
orders to enforce the provisions of this paragraph.


 


(e)                                  Piggy-back Registrations.  If
at any time during the Effectiveness Period there is not an effective
Registration Statement covering all of the Registrable Securities and the Company
shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form
S-4 or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination and,
if within fifteen days after the date of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement
all or any part of such Registrable Securities such Holder requests to be
registered, subject to customary underwriter cutbacks applicable to all holders
of registration rights.


 


(f)                                    Amendments and Waivers.  The
provisions of this Agreement, including the provisions of this sentence, may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and each Holder of the then outstanding
Registrable Securities.


 


(g)                                 Notices.  Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of
(a) the date of transmission, if such notice or


 


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communication is delivered via facsimile at the facsimile number in the
Purchase Agreement specified on the signature pages attached thereto prior to
6:30 p.m. (New York City time) on a Trading Day and electronic confirmation of
successful transmission is received, (b) the next Trading Day after the dale of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number on the signature pages attached thereto on a day that is not a
Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day,
(c) the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and
communications shall be as set forth in the Purchase Agreement


 


(h)                                 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder, Each Holder may assign
their respective rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.


 


(i)                                     Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof,


 


(j)                                     Governing Law.  All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York, New York. Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, New York for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of this Agreement), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by delivering a copy thereof via overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated


 


12

















 


hereby. If either party shall commence an action or proceeding to
enforce any provisions of this Agreement, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.


 


(k)                                  Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.


 


(1)                                  Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their commercially reasonable efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.


 


(m)                               Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.


 


(n)                                 Independent Nature of Purchasers’ Obligations
and Rights. The obligations
of each Purchaser hereunder is several and not joint with the obligations of
any other Purchaser hereunder, and no Purchaser shall be responsible in any way
for the performance of the obligations of any other Purchaser hereunder.
Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Purchaser pursuant hereto or thereto, shall
be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to such obligations or
the transactions contemplated by this Agreement. Each Purchaser shall be
entitled to protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.


 


(o)                                 Entire Agreement. The Transaction Documents, together with
the exhibits and schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits
and schedules.


 


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


 


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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.


 


	
   

  	
  THE
  IMMUNE RESPONSE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


 


[PURCHASER’S SIGNATURE PAGE TO IMNR RRA]


 


	
  Name
  of Investing Entity;

  	
   

  	
   

  
	
  Signature of Authorized Signatory of Investing entity:

  	
   

  	
   

  



 


14

















 


	
   

  	
   

  	
   

  
	
  Name
  of Authorized Signatory:

  	
   

  	
   

  
	
  Title
  of Authorized Signatory:

  	
   

  	
   

  
				



 


[SIGNATURE PAGES CONTINUE]


 


15

















 


ANNEX A


 


Plan of Distribution


 


The Selling Stockholders (the “Selling Stockholders”) of the
common stock (“Common Stock”) of The Immune Response Corporation (the “Company”)
and any of their pledgees, assignees and successors-in-interest may, from time
to time, sell any or all of their shares of Common Stock on any stock exchange,
market or trading facility on which the shares arc traded or in private
transactions. These sales may be at fixed or negotiated prices. The Selling
Stockholders may use any one or more of the following methods when selling
shares:


 


•                 ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;


 


•                 block
trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;


 


•                  purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;


 


•                     an exchange distribution in accordance with
the rules of the applicable exchange;


 


•                     privately negotiated transactions;


 


•                     settlement of short sales;


 


•                  broker-dealers
may agree with the Selling Stockholders to sell a specified number of such
shares at a stipulated price per share;


 


•                     a combination of any such methods of sale;


 


•                  through
the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise; or


 


•                     any other method permitted pursuant to
applicable law.


 


The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available,
rather than under this prospectus.


 


Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. Each Selling Stockholder does not expect these
commissions and discounts relating to its sales of shares to exceed what is
customary in the types of transactions involved.


 


16

















 


In
connection with the sale of our common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The Selling Stockholders
may also sell shares of our common stock short and deliver these securities to
close out their short positions, or loan or pledge the common stock to
broker-dealers that in turn may sell these securities. The Selling Stockholders
may also enter into option or other transactions with broker-dealers or other
financial institutions or the creation of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution
of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented
or amended to reflect such transaction).


 


The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  Each Selling Stockholder has informed the Company that it does
not have any agreement or understanding, directly or indirectly, with any person
to distribute the Common Stock.


 


The Company is required to pay certain fees and expenses incurred by
the Company incident to the registration of the shares. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.


 


Because Selling Stockholders may be deemed to be “underwriters” within
the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act. 
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than under this prospectus. Each Selling Stockholder has advised us that
they have not entered into any agreements, understandings or arrangements with
any underwriter or broker-dealer regarding the sale of the resale shares. There
is no underwriter or coordinating broker acting in connection with the proposed
sale of the resale shares by the Selling Stockholders.


 


We agreed to keep this prospectus effective until the earlier of (i)
the date on which the shares may be resold by the Selling Stockholders without
registration and without regard to any volume limitations by reason of Rule
144(e) under the Securities Act or any other rule of similar effect, (ii) all
of the shares have been sold pursuant to the prospectus or Rule 144 under the
Securities Act or any other rule of similar effect, or (iii) twenty-four months
after the date of this prospectus. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.


 


Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the resale shares may not simultaneously
engage in market making activities with respect to our common stock for a
period of two business days prior to the commencement


 


17

















 


of
the distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of our common stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale.


 


18