Document:

Exhibit 10.121

	EXHIBIT 10.121

	 	THE SECURITIES
REPRESENTED HEREBY HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED
OR PLEDGED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY THAT THE TRANSFER IS EXEMPT FROM REGISTRATION UNDER APPLICABLE FEDERAL AND
STATE SECURITIES LAWS.

	THE IMMUNE RESPONSE CORPORATION

8% CONVERTIBLE SECURED PROMISSORY NOTE

	$215,000 	New York, New York

      November 27, 2002

	          FOR
the receipt of $215,000, the undersigned, The Immune  Response Corporation, a Delaware
Corporation (the “Issuer”), hereby  unconditionally promises to pay on the Note
Maturity Date (as defined in that  certain Note Purchase Agreement, dated November 9,
2001, by and between Kevin  Kimberlin Partners, L.P. (“KKP”) and the Issuer,
and as amended by Amendment No.  1, dated as of February 14, 2002 and Amendment No. 2,
dated as of May 3, 2002,  each by and between the Issuer, KKP and Oshkim Limited
Partnership (“Oshkim”)  and as further amended by Amendment No. 3, dated as of
July 11, 2002, by and  between the Issuer, KKP, Oshkim and The Kimberlin Family 1998
Irrevocable Trust  (the “Note Purchase Agreement”)) to the order of Cheshire
Associates LLC (the  “Purchaser”), at the office of the Purchaser located at
535 Madison Avenue, 18th  Floor, New York, New York 10022, or such other address
designated by the  Purchaser, in lawful money of the United States of America and in
immediately  available funds, the principal amount of (a) $215,000.00 or (b) if less as a
result of any voluntary conversion(s) of this Note in part in accordance with  Section
3.4 of the Note Purchase Agreement, the aggregate unpaid principal  amount of this Note.
Subject to Section 3.4 of the Note Purchase Agreement, the  Issuer further agrees to pay
interest on the unpaid principal amount outstanding  hereunder from time to time, from
the date hereof, in like money, at the rate of  eight (8%) percent per annum, as and at
the dates specified in Section 3.3 of  the Note Purchase Agreement.

	          This
Note is one of the promissory notes referred to in the  Note Purchase Agreement, and is
entitled to the benefits thereof, is secured as  provided therein (and as provided in
that certain Intellectual Property Security  Agreement, dated November 9, 2001, by and
between the Issuer and KKP, as amended  by Amendment No. 1, dated February 26, 2002, by
and between the Issuer, KKP and  Oshkim, and as further amended by Amendment No. 2, dated
July 11, 2002, by and  between the Issuer, KKP, Oshkim and the Kimberlin Trust) and is
subject to  conversion as set forth therein. In the event of any conflict between the
Note  Purchase Agreement and this Note, the terms and provisions of the Note Purchase
Agreement shall govern.

 

 

	          Upon
the occurrence of any one or more of the Events of  Default specified in the Note
Purchase Agreement, all amounts then remaining  unpaid on this Note and all amounts then
remaining unpaid on any note issued by  the Issuer to the Purchaser or to any affiliate
and/or related party of the  Purchaser shall become, or may be declared to be,
immediately due and payable.

	          Subject
to the provisions of the legend above, this Note is  freely transferable, in whole or in
part, by the Purchaser, and such transferee  shall have the same rights hereunder as the
Purchaser. The Issuer may not assign  or delegate any of its obligations under this Note
without the prior written  consent of the Purchaser (or its successor, transferee or
assignee).

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

	          Subject
to Section 3.3 of the Note Purchase Agreement, the  Issuer agrees to pay all of the
Purchaser’s expenses, including reasonable  attorneys’ costs and fees, incurred in
collecting sums due under this Note.

	          This
Note shall be subject to prepayment only in accordance  with the terms of the Note
Purchase Agreement.

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

	 	THE IMMUNE RESPONSE CORPORATION

	 	By:___________________________ 

            Name:______________________

            Title: _______________________

 
	 	
-2-Exhibit 10.122

	EXHIBIT 10.122

	WARRANT AGREEMENT

	          WARRANT
AGREEMENT (this “Agreement”), dated as of November 27, 2002, by and
between The Immune Response Corporation, a Delaware corporation (the
“Company”), and Cheshire Associates LLC, a Delaware limited liability
company (the “Warrant Holder”).

	W I T N E S S E T H

	          WHEREAS,
the parties have entered into that certain Note Purchase Agreement, dated as of
November 9, 2001, by and between the Company and Kevin Kimberlin Partners, L.P.
(“KKP”), as amended by Amendment No. 1 to the Note Purchase Agreement,
dated as of February 14, 2002 and Amendment No. 2 dated as of May 3, 2002, each
by and between the Company, KKP and Oshkim Limited Partnership
(“Oshkim”) and as further amended by Amendment No. 3 by and between
the Company, KKP, Oshkim and The Kimberlin Family 1998 Irrevocable Trust (the
“Note Purchase Agreement”); and

	          WHEREAS,
pursuant to the Note Purchase Agreement, the Warrant Holder has agreed to loan
to the Company $215,000 Dollars (the “Loan Amount”), subject to the
issuance by the Company of a convertible secured promissory note (the
“Note”), and the Company has agreed to issue to the Warrant Holder
warrants (the “Warrants”) to purchase 264,518 shares of the
Company’s common stock, par value $.0025 per share (the “Common
Stock”), which equals the Loan Amount divided by eighty (80%) percent of
the Exercise Price (as defined in Section 1 hereof), subject to the terms set
forth herein.

	          NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

	          1.
  Warrants. The Company hereby grants to the Warrant Holder, subject to the
terms set forth herein, the right to purchase from the Company at any time and
from time to time after the date hereof until 5:00 p.m., New York City local
time, on November 12, 2012 (the “Expiration Date”), up to 264,518
fully paid and non-assessable shares of Common Stock, subject to adjustment
pursuant to Section 3 hereof (the “Shares”), which number of Shares
equals the Loan Amount divided by eighty (80%) percent of the Exercise Price.
Notwithstanding the foregoing, the Warrants shall only be exercisable to the
extent that shares of Common Stock issuable on exercise of the Warrants, when
aggregated with (i) the Company’s outstanding shares of Common Stock as of
the date hereof and (ii) shares of Common Stock issuable on conversion or
exercise, as the case may be, of notes, warrants and stock options outstanding
as of the date hereof, would not exceed the number of shares authorized under
the Company’s Restated Certificate of Incorporation, as amended. The
Company shall promptly cause its Restated Certificate of Incorporation, as
amended, to be further amended to increase the number of shares of Common Stock
authorized thereunder as shall be sufficient for reserving and making available
shares of Common Stock issuable upon the exercise in full of the Warrants issued
to the Warrant holder hereunder. For purposes of this Agreement, the
“Exercise Price” shall initially be $1.0160, which is equal to the
average of the closing bid prices of the Common Stock for the ten (10)
consecutive trading days immediately preceding the date hereof, subject to any
adjustments pursuant to Section 3 hereof.

 

 

	          2.
  Exercise of Warrants.

	                    2.1
  Exercise. The Warrants may be exercised by the Warrant Holder, in whole or in
part, by delivering the Notice of Exercise purchase form, attached as Exhibit A
hereto, duly executed by the Warrant Holder to the Company at its principal office, or
at such other office as the Company may designate, accompanied by payment, in cash or
by wire transfer or check payable to the order of the Company, of the amount obtained
by multiplying the number of Shares designated in the Notice of Exercise by the Exercise
Price (the “Purchase Price”). The Purchase Price may also be paid, in whole
or in part, by delivery of such purchase form and of shares of Common Stock owned by the
Warrant Holder having a Fair Market Value (as defined in Section 2.3 hereof) on the
last trading day ending the day immediately preceding the Exercise Date (as defined
below) equal to the portion of the Purchase Price being paid in such shares. In
addition, the Warrants may be exercised, pursuant to a cashless exercise, except as
set forth in Section 3.3(4) below, by providing irrevocable instructions to the
Company, through delivery of the aforesaid purchase form with an appropriate reference
to this Section 2.1 to issue the number of shares of the Common Stock equal to the
product of (a) the number of shares as to which the Warrants are being exercised
multiplied by (b) a fraction, the numerator of which is the Fair Market Value of a
share of the Common Stock on the last business day preceding the Exercise Date less the
Exercise Price therefore and the denominator of which is such Fair Market Value.
For purposes hereof, “Exercise Date” shall mean the date on which all
deliveries required to be made to the Company upon exercise of Warrants pursuant to this
Section 2.1 shall have been made.

	                    2.2
  Issuance of Certificates. As soon as practicable after the exercise of the Warrants
(in whole or in part) in accordance with Section 2.1 hereof, the Company, at its
expense, shall cause to be issued in the name of and delivered to the Warrant Holder
(i) a certificate or certificates for the number of fully paid and non-assessable
Shares to which the Warrant Holder shall be entitled upon such exercise and (if
applicable) (ii) a new warrant agreement of like tenor to purchase all of the Shares
that may be purchased pursuant to the portion, if any, of the Warrants not exercised
by the Warrant Holder. The Warrant Holder shall for all purposes be deemed to have
become the holder of record of such Shares on the date on which the Notice of Exercise
and payment of the Purchase Price in accordance with Section 2.1 hereof were
delivered and made, respectively, irrespective of the date of delivery of such
certificate or certificates, except that if the date of such delivery, notice and
payment is a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of record of such Shares at the
close of business on the next succeeding date on which the stock transfer books are open.

	                    2.3
  Fair Market Value. The “Fair Market Value” of a share of
Common Stock on any  day means: (a) if the principal market for the Common Stock is The
Nasdaq National  Market or any other national securities exchange, the last sales price
of the Common  Stock on such day as reported by such exchange or market, or on a
consolidated  tape reflecting transactions on such exchange or market, or (b) if the
principal  market for the Common Stock is not a national securities exchange or The
Nasdaq  National Market and the Common Stock is quoted on the National Association of
Securities Dealers Automated Quotations System, the mean between the closing bid and  the
closing asked prices for the Common Stock on such day as quoted on such System,  or (c)
if the Common Stock is not quoted on the National Association of Securities  Dealers
Automated Quotations System, the mean between the highest bid and lowest

 
	 	
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	asked prices for the Common Stock on such day as
reported by Pink Sheets LLC; provided, however, that if none of (a), (b) or (c) above is
applicable, or if no trades have been made or no quotes are available for such day, the
Fair Market Value of the Common Stock shall be reasonably determined, in good faith, by
the Board of Directors of the Company (the “Board of Directors”).

	          3.
  Adjustments.

	                    3.1
  Stock Splits, Stock Dividends and Combinations. If the Company at any time
subdivides the outstanding shares of the Common Stock or issues a stock dividend
(in Common Stock) on the outstanding shares of the Common Stock, the Exercise Price
in effect immediately prior to such subdivision or the issuance of such stock dividend
shall be proportionately decreased, and the number of Shares subject hereto shall be
proportionately increased, and if the Company at any time combines (by reverse
stock split or otherwise) the outstanding shares of Common Stock, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased, and the number of Shares subject hereto shall be proportionately
decreased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.

	                    3.2
  Merger or Consolidation. In the case of any consolidation of the Company with, or
merger of the Company with or into another entity (other than a consolidation
or merger which does not result in any reclassification or change of the
outstanding capital stock of the Company), the entity formed by such consolidation or
merger shall execute and deliver to the Warrant Holder a supplemental warrant agreement
providing that the Warrant Holder of the Warrants then outstanding or to be
outstanding shall have the right thereafter (until the expiration of such Warrants)
to receive, upon exercise of such Warrants, the kind and amount of shares of capital
stock and other securities and property receivable upon such consolidation or
merger by a holder of the number of Shares for which such Warrants might have been
exercised immediately prior to such consolidation or merger. Such supplemental
warrant agreement shall contain provisions which shall be identical to the
adjustments provided in Section 3.1 hereof and to the provisions of Section 10 hereof.
This Section 3.2 shall similarly apply to successive consolidations or mergers.

	                   3.3
      The Exercise Price shall also be subject to adjustment as follows:

	                          (1)
        Special Definitions. For purposes of this Section 3.3,
      the following definitions shall apply:

	                                  (A)
      “Options” shall mean rights, options or warrants to subscribe
      for, purchase or otherwise acquire Common Stock or Convertible Securities.

	                                  (B)
      “Original Issue Date” shall mean the date of this Agreement.

	                                  (C)
      “Convertible Securities” shall mean any evidence of indebtedness,
      shares of capital stock (other than Common Stock) or other securities convertible
      into or exchangeable for Common Stock.

 
	 	
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	                                  (D)
      “Additional Shares of Common Stock” shall mean all shares of Common
      Stock issued by the Company on or after the Original Issue Date, other than
      shares of Common Stock issued at any time:

	                                         (i)
      pursuant to the exercise of options, warrants or other Common Stock purchase
      rights issued (or to be issued) to employees, officers or directors of,
      or consultants or advisors to, or any strategic ally of, the Company pursuant
      to any stock purchase or stock option plan or other arrangement approved
      by the Board of Directors;

	                                         (ii)
      pursuant to the exercise of options, warrants or Convertible Securities
      outstanding as of the Original Issue Date; or

	                                   
          (iii) in connection with the acquisition of all
      or part of another entity by stock acquisition, merger, consolidation or
      other reorganization, or by the purchase of all or part of the assets of
      such other entity (including securities issued to persons formerly employed
      by such other entity and subsequently hired by the Company and to any brokers
      or finders in connection therewith) where the Company or its stockholders
      own more than fifty (50%) percent of the voting power of the acquired, surviving,
      combined or successor company.

	                    (2)
  Issuance of Options and Convertible Securities. In the event the Company at any time
or from time to time after the Original Issue Date shall issue any Options (other than
any additional warrants issued to the Warrant Holder or any affiliate thereof in
accordance with the terms and provisions of the Note Purchase Agreement) or
Convertible Securities without consideration or for a consideration per share less than
the then-applicable Exercise Price, then and in such event, such Exercise Price shall
be reduced, concurrently with such issue, to a price (calculated to the nearest cent)
determined by multiplying the then-applicable Exercise Price by a fraction, (i) the
numerator of which shall be the number of shares of Common Stock issued and outstanding
(on a fully-diluted basis) immediately prior to such issuance plus the quotient
obtained by dividing (x) the aggregate consideration received or to be received by the
Company for the total number of Additional Shares of Common Stock issuable upon the
exercise, conversion or exchange of such Options or Convertible Securities by (y) the
Exercise Price, and (ii) the denominator of which shall be the number of shares of
Common Stock issued and outstanding (on a fully-diluted basis) immediately prior to
such issuance plus the number of Additional Shares of Common Stock issuable upon
the exercise, conversion or exchange of such Options or Convertible Securities.
Upon each such adjustment of the then-applicable Exercise Price pursuant to the
provisions of this Section 3.3(2), the number of Warrant Shares purchasable upon the
exercise of each Warrant shall be adjusted to the nearest full amount by multiplying a
number equal to the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable upon the exercise of each Warrant
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.

	                    (3)
  Adjustment of Exercise Price Upon Issuance of Additional Shares of Common
Stock. In  the event the Company, after the Original Issue Date, shall issue
Additional Shares of  Common Stock without consideration or for a consideration per share
less than the  then-applicable Exercise Price, then and in such event, such Exercise
Price shall  be reduced, concurrently with such issue, to a price (calculated to the
nearest  cent) determined by 

 
	 	
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	multiplying the then-applicable Exercise Price
by a fraction,  (i) the numerator of which shall be the number of shares of Common Stock
issued and  outstanding (on a fully-diluted basis) immediately prior to such issuance
plus the  quotient obtained by dividing (x) the aggregate consideration received by the
Company  for the total number of Additional Shares of Common Stock so issued by (y) the
Exercise Price, and (ii) the denominator of which shall be the number of shares of
Common Stock issued and outstanding (on a fully-diluted basis) immediately prior to  such
issuance plus the number of Additional Shares of Common Stock so issued. Upon  each such
adjustment of the then-applicable Exercise Price pursuant to the provisions  of this
Section 3.3(3), the number of Warrant Shares purchasable upon the exercise of  each
Warrant shall be adjusted to the nearest full amount by multiplying a number equal  to
the Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares purchasable upon the exercise of each Warrant immediately prior to  such
adjustment and dividing the product so obtained by the adjusted Exercise Price.

	                    (4)
  Adjustment of Exercise Price Upon Adverse Market Conditions. Notwithstanding anything
to the contrary contained herein, if at any time after the Original Issue Date, the
average of the closing bid prices of the Common Stock for any ten (10) consecutive
trading days (the “Ten-Day Average”) shall be less than the product
obtained by multiplying (x) seventy-five (75%) percent times (y) the Exercise
Price otherwise then in effect (the “Adverse Market Price”), then such
Ten-Day Average may, subject to the terms of this Section 3.3(4), become and constitute
the adjusted Exercise Price (the “Adjusted Exercise Price”), and the
Warrants may be exercised, in whole or in part, by the Warrant Holder at the Adjusted
Exercise Price. To exercise all or any portion of the Warrants at the Adjusted
Exercise Price, the Warrant Holder shall (i) deliver written notice (the “Adverse
Market Price Notice”) of such intent to the Company during such time as the
Ten-Day Average shall remain equal to or below the Adverse Market Price and (ii)
provide payment by cash or wire transfer of immediately available funds in respect
of such Warrants to be exercised to the Company within five (5) trading days after
delivery of the Adverse Market Price Notice. The Ten-Day Average based on the ten
(10) consecutive trading days ending on the date that the Adverse Market Price Notice
shall have been delivered by the Warrant Holder shall be the Adjusted Exercise
Price, unless (A) the Warrant Holder shall not deliver the applicable payment by
cash or wire transfer within the five (5) trading days following delivery of the
Adverse Market Price Notice or (B) the Warrant Holder shall have provided a new
Adverse Market Price Notice during such five (5) trading days period, in which case
the Adjusted Exercise Price shall be adjusted based on the Ten-Day Average preceding
such new Adverse Market Price Notice. The provisions of this Section 3.3(4) shall
continue until all of the Warrants shall have been exercised. The number of Warrant
Shares shall not be adjusted as a result of any adjustment of the then-applicable
Exercise Price pursuant to the provisions of this Section 3.3(4).

	                    (5)
  Determination of Consideration. For purposes of this Section 3, the consideration
received by the Company for the issue of any Additional Shares of Common Stock shall be
computed as follows:

	                           (A)
Cash and Property.  Such consideration shall:

	                                 (i)
      insofar as it consists of cash, be computed at the net amount of cash received
      by the Company excluding expenses, discounts and commissions 

 
	 	
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	payable by the Company in  connection  with such
issuance or sale and amounts paid or payable for accrued interest.

	                                  (ii)
insofar as it  consists of  property  other than cash,  be computed at  the fair value
thereof at the time of such issue,  as reasonably  determined in good faith by the Board
of Directors net of  expenses as set forth in clause (i) above; and

	                                  (iii)
in the event  Additional  Shares of Common  Stock are issued  together  with other shares
or securities or other assets of the Company for  consideration  that covers both cash
and property other  than cash, the proportion of such  consideration so received,
computed as provided in clauses (i) and (ii) above, shall be  as reasonably determined in
good faith by the Board of Directors.

	                           (B)
Options and Convertible  Securities.  The  consideration  per share received by  the
Company for the  issuance of Options or  Convertible  Securities  pursuant to Section
3.3(2)  shall be  determined  by  dividing:

	                                  (i)
the total  amount,  received by the Company as  consideration  for the  issuance of such
Options or Convertible Securities,  plus the minimum aggregate amount of additional
consideration payable  to the Company upon the exercise of such Options or the conversion
or exchange of such  Convertible  Securities,  or in the  case of Options for Convertible
Securities,  the exercise of such Options for Convertible Securities and the conversion
or  exchange of such Convertible Securities (subject to any adjustments in the exercise
price thereof), by

	                                  (ii)
the number of shares of Common  Stock  issuable  upon the  exercise of  such  Options or
the  conversion  or exchange of such  Convertible  Securities  or, in the case of Options
for  Convertible  Securities,  the exercise of such Options for  Convertible  Securities
and the  conversion or exchange of such  Convertible  Securities.

	                    3.4
  Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment
of the Exercise Price pursuant to this Section 3, the Company, at its expense,
shall promptly compute such adjustment or readjustment of the Exercise Price in
accordance with the terms hereof and furnish to each Holder of Warrants a
certificate setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based, including a statement of
(i) the consideration received or deemed to be received by the Company for any
Additional Shares of Common Stock issued or deemed to have been issued, (ii) the
Exercise Price in effect immediately prior to such adjustment or readjustment,
(iii) the number of Additional Shares of Common Stock issued or deemed to have been
issued and (iv) the number of shares of Common Stock and the amount, if any, of other
securities or property that at the time would be received upon the exercise of the
Warrants. The Company shall, upon the written request at any time of any Holder of
Warrants, furnish or cause to be furnished to such Holder a like certificate setting
forth (x) all adjustments and readjustments of the Exercise Price since the
Original Issue Date and (y) the Exercise Price then in effect.

	                    3.5
  Assurances With Respect to Exercise Rights. The Company shall not, by amendment
of its Certificate of Incorporation or By-laws 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 to be observed or performed hereunder by the
Company, but shall at all times, in good faith, assist in the carrying out of all
the provisions of this Agreement and in taking of all such actions as may be
necessary or appropriate in order to protect the exercise rights of the Warrant Holder
against impairment or dilution.

 
	 	
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	          4.
      Transfers. 

	                    4.1
  Unregistered Securities. The Warrant Holder hereby acknowledges and agrees that the
Warrants and the Shares have not been registered under the Securities Act of 1933,
as amended (the “Securities Act”), and are “restricted
securities” under the Securities Act inasmuch as they are being acquired in a
transaction not involving a public offering, and the Warrant Holder agrees not to
sell, pledge, distribute, offer for sale, transfer or otherwise dispose of the
Warrants or any Shares issued upon exercise of the Warrants in the absence of
(a) an effective registration statement under the Act as to the Warrants or such
Shares and registration and/or qualification of the Warrants or such Shares under
any applicable Federal or state securities law then in effect or (b) an opinion of
counsel, reasonably satisfactory to the Company, that such registration and
qualification are not required.

	                    4.2
  Transferability. Subject to the provisions of Section 4.1 hereof, the rights
under this Agreement are freely transferable, in whole or in part, by the Warrant
Holder, and such transferee shall have the same rights hereunder as the Warrant
Holder.

	                    4.3
  Warrant Register. The Company will maintain a register containing the names and
addresses of the Warrant Holders of the Warrants. Until any transfer of Warrants in
accordance with this Agreement is reflected in the warrant register, the Company
may treat the Warrant Holder as the absolute owner hereof for all purposes. Any
Warrant Holder may change such Warrant Holder’s address as shown on the warrant
register by written notice to the Company requesting such change.

	          5.
  No Fractional Shares. Any adjustment in the number of Shares purchasable hereunder
shall be rounded to the nearest whole share.

	          6.
  Investment Representations. The Warrant Holder agrees and acknowledges
that it is acquiring the Warrants and will be acquiring the Shares for its own
account and not with a view to any resale or distribution other than in
accordance with Federal and state securities laws. The Warrant Holder is an
“accredited investor” within the meaning of Rule 501(a) of Regulation
D promulgated under the Securities Act.

	          7.
  Covenants as to the Shares. The Company covenants and agrees that, subject
to Sections 6.2(a) of the Note Purchase Agreement, the shares of Common Stock issuable
upon exercise of the Warrants, will, upon issuance in accordance with the terms hereof,
be duly and validly issued and outstanding, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof, and free from all taxes, liens
and charges with respect to the issuance thereof imposed by or through the Company;provided, however, that the Company shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of any
certificates in respect of such shares in a name other than that of the Warrant Holder
and the Company shall not be required to issue or deliver such certificates unless or
until 

 
	 	
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	the person(s) requesting the issuance thereof
shall have paid to the  Company the amount of such tax or it shall be established to the
satisfaction of  the Company that such tax has been paid. The Company further covenants
and  agrees that the Company will at all times have authorized and reserved, free  from
preemptive rights imposed by or through the Company, a sufficient number of  shares of
Common Stock to provide for the exercise of the rights represented  under this Agreement.

	          8.
  Legend. Any certificate evidencing the Shares issuable upon exercise
hereof will bear a legend indicating that such securities have not been
registered under the Securities Act or under any state securities laws and may
not be sold or offered for sale in the absence of an effective registration
statement as to the securities under the Securities Act and any applicable state
securities law or an opinion of counsel reasonably satisfactory to the Company
that such registration is not required.

	          9.
  Rights Applicable to the Warrant Shares. The parties hereby acknowledge
and agree that the Shares, when issued in accordance with the terms hereof,
shall be entitled to all of the same rights and privileges provided to the
Company’s capital stock issued upon conversion of the Note, as set forth in
the Note Purchase Agreement.

	          10.
  Dividends and Other Distributions. In the event that the Company shall,
at any time prior to the exercise of all Warrants, declare a dividend (other
than a dividend consisting solely of shares of Common Stock) or otherwise
distribute to its stockholders any assets, properties, rights, evidence of
indebtedness, securities (other than shares of Common Stock), whether issued by
the Company or by another, or any other thing of value, the Warrant Holder shall
thereafter be entitled, in addition to the shares of Common Stock or other
securities and property receivable upon the exercise thereof, to receive, upon
the exercise of such Warrants, the same property, assets, rights, evidences of
indebtedness, securities or any other thing of value that the Warrant Holder
would have been entitled to receive at the time of such dividend or distribution
as if the Warrants had been exercised immediately prior to such dividend or
distribution. At the time of any such dividend or distribution, the Company
shall make (and maintain) appropriate reserves to ensure the timely performance
of the provisions of this Section 10.

	          11.
  Miscellaneous.

	                    11.1
  Waivers and Amendments. This Agreement or any provisions hereof may be changed,
waived, discharged or terminated only by a statement in writing signed by the Company
and by the Warrant Holder.

	                    11.2
  Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York.

	                    11.3
  Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been given when delivered by hand or by facsimile transmission,
when telexed, or upon receipt when mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice):

 
	 	
8	 

 

 

	 (i) 	 If
to the Company:

	
	 The Immune Response Corporation 

      5935 Darwin Court 

      Carlsbad, CA 92008 

      Attention: President 

      Facsimile: (760) 431-8636

	
	 With a
copy (which copy shall not constitute notice) to:

	
	Pillsbury Winthrop
LLP 
 50 Fremont Street  
San Francisco, CA  94105  
Attention:  Thomas E. Sparks, Esq.

Facsimile:  (415) 983-7396

	
(ii) 	 If
to the Warrant Holder:

	
 	Cheshire Associates
LLC  
535 Madison Avenue  
New York, NY  10022  
Attention:  Kevin Kimberlin and Bruno
Lerer, Esq. 
 Facsimile: (212) 486-7392

	
 	With a
copy (which copy shall not constitute notice) to:

	
 	Kirkpatrick & Lockhart
LLP  
1251 Avenue of the Americas, 45th Floor  
New York, NY  10020-1104 
 Attention:
Stephen R. Connoni, Esq./Sandip Kakar, Esq.  
Facsimile:  (212) 536-3901

	                    11.4
  Headings. The headings in this Agreement are for convenience of reference only, and
shall not limit or otherwise affect the terms hereof.

	                    11.5
  Closing of Books. The Company will at no time close its transfer books against the
transfer of any Shares issued or issuable upon the exercise of the Warrants in a manner
that interferes with the timely exercise of the Warrants.

	                    11.6
  No Rights or Liabilities as a Stockholder. Subject to Section 6.2(a) of the Note
Purchase Agreement, this Agreement shall not entitle the Warrant Holder hereof
to any voting rights or other rights as a stockholder of the Company with respect
to the Shares prior to the exercise of the Warrants. No provision of this
Agreement, in the absence of affirmative action by the Warrant Holder to purchase the
Shares, and no mere enumeration herein of the rights or privileges of the Warrant
Holder, shall give rise to any liability of such Holder for the Exercise Price or
as a stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

	                    11.7
  Successors. All the covenants and provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and
permitted assigns and transferees.

 
	 	
9	 

 

 

	                    11.8
  Severability. If any provision of this Agreement shall be held to be invalid
and unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.

	[SIGNATURE PAGE FOLLOWS]

 
	 	
10	 

 

 

	          IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of
the date first written above.

	 	THE IMMUNE RESPONSE CORPORATION

	 	By: ___________________________________

             Name: ______________________________

             Title: ___________________________

	 	CHESHIRE ASSOCIATES LLC

	 	By: ___________________________________

            Name: ______________________________

            Title: _______________________________

 
	 	
11	 

 

 

	EXHIBIT A

	NOTICE OF EXERCISE

	(To be signed only on exercise of
any of the Warrants)

	                    Dated:________________________

                    To:    The Immune Response Corporation

	                    The
undersigned,  pursuant  to the  provisions  set  forth in the  attached  Warrant
Agreement,  hereby  irrevocably elects to (check one of the following):

	                    [_] purchase
____________  shares of Common Stock  covered by such Warrant  Agreement  and herewith
makes a cash  payment  of  $_____________,  representing  the full  purchase  price for
such  shares at the price per share  provided for in such Warrant Agreement.

	                    [_] purchase
____________  shares of Common Stock  covered by such Warrant  Agreement  and herewith
delivers  ___________  shares of Common Stock having a Fair Market Value (as defined in
such Warrant  Agreement)  as of the  last trading day preceding the date hereof,  of
$______,  representing the full purchase price for such shares at the price  per share
provided for in such Warrant Agreement.

	                    [_] acquire
in a cashless  exercise  _____ shares of Common  Stock  pursuant to the terms of Section
2.1 of such Warrant Agreement.

	                    Please
issue a certificate or  certificates  representing  such shares of Common Stock in the
name of the  undersigned or in such other name as is specified below.

	Signature:___________________________

	Name (print):________________________

	Title (if applicable):____________________

	Company (if applicable):_________________

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