Document:

Exhibit
10.143

 

THE IMMUNE RESPONSE
CORPORATION

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is made as of the 23rd day of June 2003, by and between The Immune Response
Corporation, a corporation organized under the laws of the State of Delaware
(the “Company”), with its principal offices at 5931 Darwin Court,
Carlsbad, California 92008, and individuals and entities listed on Exhibit A
of that certain Purchase Agreement (as hereinafter defined) (the “Investors”).

 

WHEREAS, in
connection with that certain Purchase Agreement by and among the Company and
the Investors of even date herewith (the “Purchase Agreement”), the Company desires to sell to the Investors, and the
Investors desire to purchase from the Company, severally and not jointly, 12% promissory notes (“Note(s)”) and 166,665 shares of the Company’s common stock (“Common Stock”), par value
$0.0025 per share (“Shares”),
in the aggregate, for an aggregate purchase price of One Million Dollars
($1,000,000); and

 

WHEREAS, to induce
the Investors to purchase the Note and Shares, the Company has agreed to
register the Shares and Contingent Shares (as defined in the Purchase
Agreement) pursuant to the terms
of this Agreement;

 

NOW, THEREFORE, the
Company and the Investors hereby covenant and agree as follows:

 

1.                                       Certain Definitions. 
As used in this Agreement, the following terms shall have the following
respective meanings:

 

“Commission” shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act.

 

“Eligible Securities” shall mean all Registrable
Securities other than Excluded Securities.

 

“Exchange Act” shall mean the Securities Exchange Act
of 1934 and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.

 

“Excluded Securities” shall mean Registrable
Securities that are free of restriction on resale under the Securities Act (by
removal of all restrictive legends, instructions to transfer agent or otherwise)
pursuant to Rule 144(k).

 

“Register,” “registered” and “registration” each shall
refer to a registration effected by preparing and filing a registration
statement or statements or similar documents in compliance with the Securities
Act and the declaration or ordering of effectiveness of such registration
statement or document by the Commission.

 

“Registrable Securities” shall mean the Shares and
Contingent Shares held by the Investors, but excluding any Shares and
Contingent Shares held by the Investors which (x) are

 

 

eligible for resale under Rule 144(k) or (y) are sold by the Investors
in a transaction in which the Investors’ registration rights under this
Agreement have not been assigned.

 

“Securities Act” shall mean the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the applicable time.

 

Capitalized terms used but not defined herein shall
have the meanings set forth in the Purchase Agreement.

 

2.                                       Piggyback Registration.

 

(a)                                  If
the Company, at any time during the two (2) year period commencing on the date
hereof, proposes to register any of its securities under the Securities Act for
sale to the public, whether for its own account or for the account of other
security holders or both (except with respect to registration statements on
Forms S-4, S-8 and any successor forms thereto as well as registrations that do
not permit resales) (a “Piggyback Registration”), each such time it will give
written notice to such effect to all holders of outstanding Registrable
Securities at least thirty (30) days prior to such filing.  Upon the written request of any such holder
received by the Company within twenty (20) days after the giving of any such
notice by the Company to register any of its Eligible Securities, the Company
will cause the Eligible Securities as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent required to
permit the sale or other disposition by the holder of such Eligible Securities
so registered.

 

(b)                               If
the registration for which the Company gives notice pursuant to Section 2(a)
above is a registered public offering involving an underwriting, the Company
shall so advise the holders as a part of the written notice given pursuant to
Section 2(a) above.  In such event, (i)
the right of any holder to include its Registrable Shares in such registration
pursuant to this Section 2 shall be conditioned upon such holder’s
participation in such underwriting on the terms set forth herein and (ii) all
holders including Registrable Shares in such registration shall enter into an
underwriting agreement with the underwriter or underwriters selected for the
underwriting by the Company.  If any
holder who has requested inclusion of its Registrable Shares in such
registration as provided above disapproves of the terms of the underwriting,
such holder may elect, by written notice to the Company, to withdraw its shares
from such registration statement and underwriting.  If the managing underwriter advises the Company in writing that
in its good faith determination marketing factors require a limitation on the
number of shares to be underwritten, the shares to be included in the
underwriting shall be allocated, first to the Company, and second,
to each of the holders requesting inclusion of their Registrable Securities in
such registration statement;  provided,
however, that the right of
the underwriters to exclude the Registrable Shares from the registration and
underwriting as described above shall be restricted so that (i) the aggregate
number of Registrable Shares included in any such registration for all
Investors is not  reduced below
twenty-five percent (25%) of the shares included in the registration, from
which all Registrable Shares may be excluded and (ii) all shares that are not
Registrable Shares and are held by persons who are employees or directors of
the Company (or

 

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any subsidiary of the Company) shall first be excluded from such
registration and underwriting before any Registrable Shares are so excluded.
The number of shares that may be included in such registration statement and
underwriting shall be allocated among all holders requesting registration in
proportion, as nearly as practicable, to the respective number of shares of
Common Stock held by them on the date the Company gives the notice specified in
Section 2(a) above.  If any holder would
thus be entitled to include more shares than such holder requested to be
registered, the excess shall be allocated among other requesting holders pro
rata in the manner described in the preceding sentence.

 

3.                                       Registration Procedures. 
If and whenever the Company is required by the provisions of Section 2
hereof to use its reasonable commercial efforts to effect the registration of
any Registrable Securities under the Securities Act, the Company will, as
promptly as practicable:

 

(a)                                  prepare
and file with the Commission a registration statement with respect to such
securities and use its reasonable commercial efforts to cause such registration
statement to become effective not later than 60 days from the date of its
filing;

 

(b)                                 prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement in accordance
with the intended method of disposition set forth in such registration
statement for such period;

 

(c)                                  furnish
to each seller of Registrable Securities and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons reasonably may request
in order to facilitate the intended disposition of the Registrable Securities
covered by such registration statement;

 

(d)                                 use
its reasonable commercial efforts (i) to register or qualify the Registrable
Securities covered by such registration statement under the securities or “blue
sky” laws of such jurisdictions as the sellers of Registrable Securities or, in
the case of an underwritten public offering, the managing underwriter,
reasonably shall request, (ii) to prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements, and take such
other actions, as may be reasonably necessary to maintain such registration and
qualification in effect at all times for the period of distribution
contemplated thereby and (iii) to take such further action as may be reasonably
necessary or advisable to enable the disposition of the Registrable Securities
in such jurisdictions, provided,
that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;

 

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(e)                                  use
its reasonable commercial efforts to list the Registrable Securities covered by
such registration statement with any securities exchange on which the Common
Stock of the Company is then listed;

 

(f)                                    notify,
as promptly as practicable, each seller of Registrable Securities and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing and promptly amend
or supplement such registration statement to correct any such untrue statement
or omission;

 

(g)                                 notify
each seller of Registrable Securities of the issuance by the Commission of any
stop order suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose and make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible time;

 

(h)                                 if
the offering is an underwritten offering, enter into a written agreement with
the managing underwriter selected in the manner herein provided in such form
and containing such provisions as are usual and customary in the securities
business for such an arrangement between such underwriter and companies of the
Company’s size and investment stature, including, without limitation, customary
indemnification and contribution provisions;

 

(i)                                     if
the offering is an underwritten offering, at the request of any seller of
Registrable Securities, use its reasonable commercial efforts to furnish to
such seller on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration: (i) a copy of an opinion
dated such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters, stating that such registration
statement has become effective under the Securities Act and that (A) to the
best knowledge of such counsel, no stop order suspending the effectiveness
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements or other financial or statistical information contained
therein) and (C) to such other effects as reasonably may be requested by
counsel for the underwriters; and (ii) a copy of a letter dated such date from
the independent public accountants retained by the Company, addressed to the
underwriters, stating that they are independent public accountants within the
meaning of the Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereof, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other financial
matters (including information as to the period ending no more than five
business days prior to the date of such letter) with respect to such
registration as such underwriters reasonably may request;

 

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(j)                                     take
all actions reasonably necessary to facilitate the timely preparation and
delivery of certificates (not bearing any legend restricting the sale or
transfer of such securities) representing the Registrable Securities to be sold
pursuant to the Registration Statement and to enable such certificates to be in
such denominations and registered in such names as the Investors or any
underwriters may reasonably request; and

 

(k)                                  take
all other reasonable actions necessary to expedite and facilitate the
registration of the Registrable Securities pursuant to the Registration
Statement.

 

4.                                       Obligations
of Holders.

 

Each holder of Registrable Securities shall furnish to
the Company such information regarding such holder, the number of Registrable
Securities owned and proposed to be sold by it, the intended method of
disposition of such securities and any other information as shall be required
to effect the registration of the Registrable Securities, and cooperate with
the Company in preparing the registration statement and in complying with the
requirements of the Securities Act.

 

5.                                       Expenses.                                           All
expenses incurred by the Company in complying with Sections 2 and 3 including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel and independent public accountants for the
Company, fees and expenses (including counsel fees) incurred in connection with
complying with state securities or “blue sky” laws, fees of the NASD, Inc.,
fees of transfer agents and registrars and fees and disbursements of one
counsel for the sellers of Registrable Securities, but excluding any Selling
Expenses, are called “Registration Expenses.” 
All underwriting discounts and selling commissions applicable to the
sale of Registrable Securities are called “Selling Expenses.”

 

The Company will pay all Registration Expenses in
connection with any registration statement filed hereunder, and the Selling
Expenses in connection with each such registration statement shall be borne by
the participating sellers in proportion to the number of Registrable Securities
sold by each or as they may otherwise agree.

 

6.                                       Indemnification and Contribution.

 

(a)                                  In
the event of a registration of any of the Registrable Securities under the
Securities Act pursuant to the terms of this Agreement, the Company will
indemnify and hold harmless and pay and reimburse, each seller of such
Registrable Securities thereunder, each underwriter of such Registrable
Securities thereunder and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any registration
statement under which such Registrable Securities were registered under the
Securities Act pursuant hereto or any preliminary prospectus or final
prospectus contained therein, or any amendment or

 

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supplement thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation or
alleged violation of the Securities Act or any state securities or “blue sky”
laws and will reimburse each such seller, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon the
Company’s reliance on an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished
by any such seller, any such underwriter or any such controlling person in
writing specifically for use in such registration statement or prospectus.

 

(b)                                 In
the event of a registration of any of the Registrable Securities under the
Securities Act pursuant hereto each seller of such Registrable Securities
thereunder, severally and not jointly, will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such officer, director, underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
reliance on any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Registrable
Securities were registered under the Securities Act pursuant hereto or any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
provided, that such seller will be liable hereunder in any such case if and
only to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus, and
provided, that the liability of each seller hereunder shall be limited to the
proceeds received by such seller from the sale of Registrable Securities
covered by such registration statement. Notwithstanding the foregoing, the
indemnity provided in this Section 6(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or expense if such
settlement is effected without the consent of such indemnified party and
provided further, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability (or action in respect
thereof) arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission in such registration statement, which untrue
statement or alleged untrue statement or omission or alleged omission is
completely corrected in an amendment or supplement to the registration
statement and the undersigned indemnitees thereafter fail to deliver or cause
to be delivered such registration statement as so amended or supplemented prior
to or concurrently with the sale of the Registrable Shares to the

 

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person asserting such loss, claim, damage or liability (or actions in
respect thereof) or expense after the Company has furnished the undersigned
with the same.

 

(c)                                  Promptly
after receipt by an indemnified party hereunder of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party hereunder, notify the indemnifying
party in writing thereof, but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to such indemnified
party other than under this Section 6 and shall only relieve it from any
liability which it may have to such indemnified party under this Section 6 if
and to the extent the indemnifying party is materially prejudiced by such
omission.  In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this Section 6 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected, provided,
that if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded based upon written advise of its counsel that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified
party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by
the indemnifying party as incurred.

 

(d)                                 In
order to provide for just and equitable contribution to joint liability under
the Securities Act in any case in which either (i) any holder of Registrable
Securities exercising rights under this Agreement, or any controlling person of
any such holder, makes a claim for indemnification pursuant to this Section 6
but it is judicially determined (by the entry of a final judgment or decree by
a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 6 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this
Section 6; then, and in each such case, the Company and such holder will
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so that
such holder is responsible for the portion represented by the percentage that
the public offering price of its Registrable Securities offered by the
registration statement bears to the public offering price of all securities
offered by such registration statement, and the Company is responsible for the
remaining portion; provided,
that, in any such case, (A) no such holder will be required to contribute any
amount in excess of the public offering price of all such Registrable
Securities offered by it pursuant to such registration statement and (B) no
person or entity guilty of fraudulent misrepresentation (within the meaning

 

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of Section 12(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.

 

7.                                       Changes in Capital Stock.       If,
and as often as, there is any change in the capital stock of the Company by way
of a stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that
the rights and privileges granted hereby shall continue as so changed.

 

8.                                       Representations and Warranties of the Company. The Company represents and warrants
to the Investor as follows:

 

(a)                                  The
execution, delivery and performance of this Agreement by the Company have been
duly authorized by all requisite corporate action and will not violate any
provision of law, any order of any court or other agency of government, the
Certificate of Incorporation or By-laws of the Company or any provision of any
indenture, agreement or other instrument to which it or any or its properties
or assets is bound, conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any such indenture, agreement
or other instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of
the Company or its subsidiaries.

 

(b)                                 This
Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, subject to any applicable bankruptcy, insolvency or
other laws affecting the rights of creditors generally and to general equitable
principles and the availability of specific performance.

 

9.                                       Miscellaneous.

 

(a)                                  All
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including without limitation
transferees of any Registrable Securities), whether so expressed or not.

 

(b)                                 All
notices, requests, consents and other communications hereunder shall be in
writing and shall be delivered in person, mailed by certified or registered
mail, return receipt requested, or sent by telecopier or telex, addressed (i)
if to the Company, to The Immune Response Corporation, at 5931 Darwin Court,
Carlsbad, California 92008, or (b) if to the Investors at addresses as set
forth at in the Purchase Agreement, or at such other address or addresses as
may have been furnished to the Company in writing; and (ii) if to any
subsequent holder of Registrable Securities, to it at such address as may have
been furnished to the Company in writing by such holder; or, in any case, at
such other address or addresses as shall have been furnished in writing to the
Company (in the case of a holder of Registrable Securities) or to the holders
of Registrable Securities (in the case of the Company) in accordance with the
provisions of this paragraph.

 

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(c)                                  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts entered into and to be performed
wholly within said State.

 

(d)                                 All
controversies which may arise between the parties concerning this Agreement
shall be determined by arbitration pursuant to the rules then pertaining to the
American Arbitration Association in New York, New York.  Judgment on any award of any such
arbitration may be entered in the Supreme Court of the State of New York or in
any other court having jurisdiction of the Person or Persons against whom such award
is rendered.  Any notice of such arbitration
or for the confirmation of any award in any arbitration shall be sufficient if
given in accordance with the provisions of this Agreement.  The parties agree that the determination of
the arbitrators shall be binding and conclusive upon them.

 

(e)                                  This
Agreement may not be amended or modified without the written consent of the
Company and the holders of at least a majority of the Registrable Securities.

 

(f)                                    Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.  No waiver shall be
effective unless and until it is in writing and signed by the party granting
the waiver.

 

(g)                                 This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

(h)                                 If
any provision of this Agreement shall be held to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render illegal,
invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or unenforceable
provision were not contained herein.

 

(i)                                     This
Agreement constitutes the entire contract among the Company and the Purchasers
relative to the subject matter hereof and supersedes in its entirety any and
all prior agreements, understandings and discussions with respect thereto.

 

(j)                                   The
headings of the Sections of this Agreement are for convenience and shall not by
themselves determine the interpretation of this Agreement.

 

 

[Signature
Page to Follow]

 

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

 

 

	
   

  	
  THE IMMUNE RESPONSE CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
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  INVESTORS:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
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10Exhibit
10.144

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN
OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD
PURSUANT TO RULE 144(K) UNDER SAID ACT.

 

THE TRANSFER OR SALE OF THIS NOTE IS
SUBJECT TO THE TERMS OF A PURCHASE AGREEMENT, INCLUDING SECTION 5(H) THEREOF,
DATED AS OF JUNE 23, 2003, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE
COMPANY.

 

12%
PROMISSORY NOTE

 

	
  U.S.
  $             

  	
  June 23, 2003

  

 

FOR VALUE RECEIVED, The Immune Response Corporation, a
Delaware corporation (the “Company”), hereby promises to pay to the order of [                     ]
(the “Lender”) the principal amount of
                   
($        ) Dollars  (the “Principal Amount”), together with
interest on the Principal Amount under this promissory note (this “Note”) at
the per annum rate of twelve (12%) percent (calculated on actual calendar days
elapsed and a 360-day year basis). The Principal Amount on this Note shall
become due and payable in one installment on the earlier of: (i) September 30, 2003  or (ii) upon the closing of a sale (or series of
related sales) by the Company of its equity securities or warrant exercise
resulting in net proceeds to the Company of not less than One Million Three
Hundred Thousand Dollars ($1,300,000) (“Maturity Date”).  Interest on this Note shall be due and
payable monthly (“Monthly Interest”), commencing on July 23, 2003.

 

Both the Principal Amount and Monthly Interest shall
be paid in lawful money of the United States of America to the Lender at
                           
, or at such other address as the Lender may designate by notice in writing to
the Company, in immediately available funds.

 

If any payment hereunder falls due on a Saturday,
Sunday or legal holiday, it shall be payable on the next succeeding business
day and such additional time shall be included in the computation of interest.

 

This Note is one of a series of promissory notes of
like tenor and ranking (collectively, the “Notes”) made by the Company in favor
of certain investors (the “Lenders”) dated of even date herewith which have
been issued by the Company, and is issued pursuant to that certain Purchase
Agreement by and between the Company and the Lender of even date herewith (the
“Purchase Agreement”).  Notwithstanding
any provision to the contrary contained herein, this Note is subject and
entitled to certain terms, conditions, covenants and agreements contained in
the Purchase Agreement.  Any transferee
or transferees of this Note, by their acceptance hereof, assume the obligations
of the Company in the Purchase Agreement with respect to the conditions

 

1

 

and procedures for transfer of this Note.  Reference to the Purchase Agreement shall in no way impair the
absolute and unconditional obligation of the Company to pay both the Principal
Amount and Monthly Interest hereon as provided herein.

 

The shares of the Company’s common stock, $ 0.0025 par
value per share (the “Common Stock”) issuable upon Pre-Payment (as hereinafter
defined) and Default (as hereinafter defined), are referred to in, and entitled
to the benefits of, that certain registration rights agreement between the
Company and the Lender of even date herewith (the “Registration Rights Agreement”).

 

1.                                       Prepayment.  This Note may be prepaid, at the option of
the Company at any time on any date on or after the date of issuance and prior
to the Maturity Date, at a redemption price equal to 100% of the Principal
Amount that is being pre-paid, together with accrued and unpaid interest
through the date of pre-payment (“Pre-Payment”); provided, however,
in the event this Note is not pre-paid on or before July 31, 2003,
         shares of Common Stock shall
be issued and delivered to the Lender (“Pre-Payment Penalty Shares”).

 

2.                                       Events
of Default.  Upon the occurrence of
any of the following events (herein called “Events of Default”) which shall
have occurred and be continuing:

 

(a)                                  The
Company shall default in the payment of the Principal Amount or interest of
this Note on or before the date such payment is due;

 

(b)                                 Failure
by the Company to perform or observe, in any material respects, any other
covenant or agreement of the Company contained in this Note or any material
covenant or material agreement contained in the Purchase Agreement and the
Registration Rights Agreement which remains uncured for the period and after
the notice specified below and the Lender notifies the Company of the default,
and the Company does not cure the default within 30 days after receipt of the
written notice, which notice must specify the default, demand that it be
remedied and the state that the written notice is a “Notice of Default;”

 

(c)                                  Failure
by the Company to pay the principal on the maturity date (or otherwise when due),
or interest on, or the occurrence and continuation of an event of default under
any loan agreement, arrangement, mortgage, indenture or other instruments under
which there is issued (other than the Notes) or by which there is secured or
evidenced any indebtedness of the Company, whether such indebtedness exists on
the date of the issuance of this Note or is created thereafter;

 

(d)                                 A
custodian, receiver, liquidator or trustee of the Company, or of any of its
property, is appointed or takes possession of the Company or its property and
such appointment or possession remains in effect for more than 30 days; or an
order for relief is entered under the Federal Bankruptcy Code against the
Company; or any of the property of the Company is sequestered by court order
and the order remains in effect for more than 30 days; or a petition or other
proceeding is filed against the Company under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of indebtedness, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, and is
not dismissed within 60 days after filing;

 

2

 

(e)                                  The
Company files a petition in voluntary bankruptcy or seeking relief under any
provision of any bankruptcy, reorganization, arrangement, insolvency,
readjustment of indebtedness, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or consents to the filing of
any petition against it under any such law;

 

(f)                                    The
Company makes an assignment for the benefit of its creditors, or generally
fails to pay its obligations as they become due, or consents to the appointment
of or taking possession by a custodian, receiver, liquidator or trustee of the
Company or all or any part of its property;

 

(g)                                 The
rendering of one or more final judgments, orders or decrees against the Company
(including for seizure, forfeiture, garnishment or abatement) in an aggregate
amount equal to or in excess of $250,000
which are not vacated, satisfied, discharged or execution thereof stayed within
a period of 30 days from the entry thereof;

 

(h)                                 The
violation by the Company of any law or regulation, whether with respect to the
conduct of its business or otherwise, which has a Material Adverse Effect (as
defined in the Purchase Agreement);

 

(i)                                     If
the Company shall suspend its operations and such suspension would reasonably
be expected to have a Material Adverse Effect on the Company;

 

(j)                                     Any
representation or warranty made by the Company to the Holder under the Purchase
Agreement or the Registration Rights Agreement was, when made, untrue or
misleading and such breach has a Material Adverse Effect on the Company; or

 

(k)                                  The
failure of the Company to timely deliver the information required by Section 7.04
of the Purchase Agreement,

 

then, and in any such event, a rate (the “Late Rate”) equal to eighteen
percent (18%) per annum shall immediately and automatically thereafter begin to
accrue on the then Principal Amount and, the lender may then, by written notice
to the Company, declare the entire unpaid principal amount of this Note
outstanding, together with accrued and unpaid interest thereon at the Late Rate
and the same shall, unless such default be cured within three (3) days after
such notice, forthwith be immediately due and payable upon the expiration of
such three (3) day period, without presentment, demand, protest or other notice
of any kind, all of which are expressly waived.  Notwithstanding anything to the contrary herein, if at any time
the Late Rate exceeds interest payable under the highest rate of interest
permissible under applicable law (the “Maximum Lawful Rate”), then in such
event, the Late Rate will be reduced to the Maximum Lawful Rate.  Additionally, the Lender shall have all
rights and remedies available under the Purchase Agreement and the Registration
Rights Agreement, as well as all rights and remedies available at law or in
equity.

 

In the case of an Event of Default described in
paragraph (a) above occurs (“Default”),
          shares (in addition to
the Pre-Payment Penalty Shares) of Common Stock shall be

 

3

 

issued and delivered to the Lender on the date of Default (“Default
Shares,” and together with the Pre-Payment Penalty Shares, sometimes
hereinafter referred to as “Contingent Shares”).

 

(b)                                 No
course of dealing or delay or failure on the part of the Lender to exercise any
right under this Section 2 shall operate as a waiver of such right or otherwise
prejudice such Lender’s rights, powers and remedies.  The Company will pay or reimburse the Lender, to the extent
permitted by law, for all costs and expenses, including but not limited to
reasonable attorneys’ fees, incurred by it in collecting any sums due on the
Note or in otherwise enforcing any of its rights.

 

3.                                       Change
of Control.  In the event of (i) any
transaction or series of related transactions (including any reorganization,
merger or consolidation) that results in the transfer of 50% or more of the
outstanding voting power of the Company, and (ii) a sale of all or
substantially all of the assets of the Company to another person, this Note
shall be automatically due and payable. 
The Company will give the Lender not less than ten (10) business days
prior written notice of the occurrence of any events referred to in this
Section 3.

 

4.                                       Certain
Adjustments.  The number and class
or series of shares issuable upon Pre-Payment and/or Default under Sections 1
and 2 hereof shall be subject to adjustment in accordance with the following
provisions:

 

(a)                                  Adjustment
for Reorganization or Recapitalization. 
If, while this Note remains outstanding there shall be a reorganization
or recapitalization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), all necessary or
appropriate lawful provisions shall be made so that the Lender shall thereafter
be entitled to receive upon Pre-Payment or Default, that number of shares of
stock or other securities or property that a holder of the class of securities
deliverable upon Pre-Payment or Default, respectively, would have been entitled
to receive in such reorganization or recapitalization if the Contingent Shares
had been issued immediately prior to such reorganization or recapitalization,
all subject to further adjustment as provided in this Section 4.  If the per share consideration payable to
the Lender for such class of securities in connection with any such transaction
is in a form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company’s Board of
Directors.  The foregoing provisions of
this paragraph shall similarly apply to successive reorganizations or
recapitalizations and to the stock or securities of any other corporation that
are at the time receivable upon the Pre-Payment or Default, respectively.  In all events, appropriate adjustment shall
be made in the application of the provisions of this Note with respect to the
rights and interests of the Lender after the transaction, to the end that the
provisions of this Note shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable or
issuable after such reorganization or recapitalization upon Pre-Payment or
Default, respectively.

 

(b)                                 Adjustments
for Split, Subdivision or Combination of Shares.  If the Company at any time while this Note remains outstanding,
shall split or subdivide any class of securities issuable upon Pre-Payment or
Default, respectively, into a different number of securities of the same class,
the number of shares of such class issuable upon Pre-Payment or Default,
respectively, immediately prior to such split or subdivision shall be
proportionately

 

4

 

increased.  If the Company at
any time while this Note, or any portion hereof, remains outstanding shall
combine any class of securities issuable upon Pre-Payment or Default,
respectively, into a different number of securities of the same class, the
number of shares of such class issuable immediately prior to such combination
shall be proportionately decreased.

 

(c)                                  Adjustments
for Dividends in Stock or Other Securities or Property.  If, while this Note remains outstanding, the
Lenders shall have received, or, on or after the record date fixed for the
determination of eligible stockholders, shall have become entitled to receive,
without payment therefor, other or additional stock or other securities or
property (other than cash) of the Company by way of dividend, then and in each
case, this Note shall represent the right to acquire, in addition to the number
of shares of such class of security receivable upon the Pre-Payment or Default,
if any, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company that such holder would hold on the date of
Pre-Payment or Default had it been the holder of record of the class of
security receivable upon Pre-Payment or Default, retained such shares and/or
all other additional stock available by it as aforesaid during said period,
giving effect to all adjustments called for during such period by the
provisions of this Section 4.

 

5.                                       Further
Adjustments.  In case at any time
or, from time to time, the Company shall take any action that affects the class
of securities issuable upon Pre-Payment or Default, other than an action
described herein, then, unless such action will not have a materially adverse
effect upon the rights of the Lender, the number of shares of such class of
securities (or other securities) issuable upon Pre-Payment or Default shall be
adjusted in such a manner and at such time as shall be equitable in the
circumstances.

 

6.                                       Certificate
as to Adjustments.  Upon the
occurrence of each adjustment or readjustment pursuant to Section 4 or Section
5, the Company at its sole expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to the Lender a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based.  The Company shall, upon the written request
at any time of the Lender, furnish or cause to be furnished to Lender a like
certificate setting forth (i) such adjustments and readjustments, and (ii) the
number and class of securities and the amount, if any, of other property which
at the time would be received upon Pre-Payment or Default, respectively, under
Section 1 or Section 2 hereof, respectively.

 

7.                                   Affirmative
Covenants.  The Company covenants
and agrees that, while any amounts under this Note are outstanding, it shall:

 

(a)                              Perform,
within all required time periods (after giving effect to any applicable grace
periods), all of its obligations and enforce all of its rights under each
material agreement to which it is a party. 
The Company shall not terminate or modify in any manner materially
adverse to the Company any provision of any such material agreement to which it
is a party except in the ordinary course of business, consistent with past
practice;

 

(b) Use reasonable commercial efforts to preserve and
keep in full force and effect its corporate existence, including, without
limitation, all licenses or similar qualifications

 

5

 

required by it to engage in its business in all jurisdictions in which
it is at the time so engaged at all times maintain, preserve and protect all of
its trademarks and tradenames (if any), and preserve all the remainder of its
material property, in use or useful in the conduct of its business and keep the
same in good repair, working order and condition (taking into consideration
ordinary wear and tear);

 

(c)  Pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property
before the same shall become delinquent or in default, which, if unpaid, might
reasonably be expected to give rise to liens or charges upon such properties or
any part thereof, unless, in each case, the validity or amount thereof is being
contested in good faith by appropriate proceedings and the Company has
maintained adequate reserves with respect thereto in accordance with generally
accepted accounting principals (“GAAP”);

 

(d)  Comply in
all material respects with all federal, state and local laws and regulations,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations and requirements applicable to it (collectively, “Requirements”)
of all governmental bodies, departments, commissions, boards, companies or
associations insuring the premises, courts, authorities, officials or officers
which are applicable to the Company or any of its properties, except where the
failure to so comply would not have Material Adverse Effect; provided, however,
that nothing provided herein shall prevent the Company from contesting the
validity or the application of any Requirements;

 

(e)  Keep
proper records and books of account with respect to its business activities, in
which proper entries, reflecting all of their financial transactions, are made
in accordance with GAAP; and

 

(f)  Notify the
Lender in writing, promptly upon learning thereof, of any material litigation
or administrative proceeding commenced or threatened, in writing, against the
Company.

 

8.                                       Negative
Covenants.  The Company covenants
and agrees that while any amount of this Note is outstanding it will not
directly or indirectly:

 

(a)                              Declare
or pay, directly and indirectly, any dividends or make any distributions,
whether in cash, property, securities or a combination thereof, with respect to
(whether by reduction of capital or otherwise) any shares of its capital stock
(including without limitation any preferred stock) or directly or indirectly
redeem, purchase, retire or otherwise acquire for value any shares of any class
of its capital stock or set aside any amount for any such purpose;

 

(b)                                 Consolidate
with or merge into any other person, or sell, lease, transfer or assign to any
persons or otherwise dispose of (whether in one transaction or a related series
of transactions) 15% or more of its consolidated properties or assets (whether
now owned or hereafter acquired), or permit another person to merge into it,
except as contemplated herein;

 

6

 

(c)                                  Own,
purchase or acquire any stock, obligations, assets or securities of, or any
interest in, or make any capital contribution or loan or advance of money,
credit or property to, any other person, or make any other investments, except
that the Company may own, purchase or acquire (i) existing subsidiaries or
subsidiaries formed for the purposes of facilitating acquisitions or carrying
out the ordinary business of the Company; (ii) certificates of deposits of any
commercial banks registered to do business in any state of the United States
having capital and surplus in excess of $50,000,000;
(iii) readily marketable, direct obligations of the United States government or
any agency thereof which are backed by the full faith and credit of the United
States; and (iv) investments in prime commercial paper; provided, however,
that in each case mentioned in (ii), (iii) or (iv) above, such obligations
shall mature not more than 180
days from the date of acquisition thereof;

 

(d)  Sell,
transfer, discount or otherwise dispose of any claim or debt owing to it,
including, without limitation, any notes, accounts receivable or other rights
to receive payment, except for reasonable consideration and in the ordinary
course of business;

 

(e) (i) Engage in any transaction in connection with
which the Company could be subject to either a material civil penalty assessed
pursuant to the provisions of Section 502 of ERISA or a material tax imposed
under the provisions of Section 4975 of the Tax Code; (ii) terminate any
pension plan in a “distress termination” under Section 4041 of ERISA; or (iii)
fail to make payment when due of all amounts which, under the provisions of any
employee or pension plan, the Company or any ERISA affiliate are required to
pay as contributions thereto, or, with respect to any pension plan, permit to
exist any material “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA and Section 412 of the Tax Code), whether or not waived,
with respect thereto;

 

9.                                       Representations
and Warranties of the Lender.  The
Lender represents and warrants to the Company as follows:

 

(i)                                     Such
Lender can bear the economic risk of this investment and can afford a complete
loss thereof.  Such Lender (A) has
sufficient liquid assets to pay the full Principal Amount of this Note, (B) has
adequate means of providing for such Lender’s current and presently foreseeable
future needs, and (C) has no present need for liquidity of the investment in
this Note;

 

(ii)                                  Such
Lender has full power and authority to enter into and to perform this Note in
accordance with its terms.  Any Lender
that is a corporation, partnership or trust represents that it has not been
organized, reorganized or recapitalized specifically for the purpose of
investing in the Company;

 

(iii)                               Such Lender qualifies as
an “accredited investor” as defined in Rule 501 of Regulation D, promulgated
under the Securities Act of 1933, as amended (the “Act”);

 

(iv)                              Such
Lender has reviewed or has had an opportunity to ask questions of, and to
receive answers from, the Company and its representatives, with respect to the
Company and the terms and conditions of this transaction.  All materials and information requested by
such

 

7

 

Lender and such Lender’s representatives, if any, including any
information requested to verify any information furnished, have been made
available;

 

(v)                                 Such
Lender understands that the Note has not been registered under the Act, nor
pursuant to the provisions of the securities or other laws of any other
applicable jurisdiction, and as such, the certificates representing such Note
may contain applicable restrictive legends;

 

(vi)                              Such
Lender is making the investment hereunder for such Lender’s own account and not
for the account of others and for investment purposes only and not with a
present view to the distribution or resale thereof; and

 

(vii)                         Such Lender is unaware of, is
no way relying on, and did not become aware of the investment contemplated by
the Note or the Purchase Agreement through or as a result of, any form of
general solicitation or general advertising including, without limitation, any
article, notice, advertisement or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, in
connection with the investment contemplated by the Note or the Purchase
Agreement and is not purchasing the Note, and did not become aware of the
investment contemplated by the Note or the Purchase Agreement, through or as a
result of any seminar or meeting to which the Lender was invited by, or any
solicitation of a subscription by, a person not previously known to the Lender
in connection with investments in securities generally.

 

(viii)                        Such Lender is not an affiliate
(as such term is defined in Rule 12(b)(ii) under the Exchange Act) of any
director or officer of the Company for purposes of Rule 4350(i)(1)(A) of the
NASD, Inc. Marketplace Rules.

 

10.                                 Amendments
and Waivers.  Any term of this Note
may be amended and the observance of any term of this Note may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and the Lender.

 

11.                                 Notices.
All notices, requests, consents, and other communications under this Note shall
be in writing and shall be deemed delivered (i) three (3) business days after
being sent by registered or certified mail, return receipt requested, postage
prepaid or (ii) one (1) business day after being sent via a reputable
nationwide overnight courier service guaranteeing next business day delivery,
in each case to the intended recipient as set forth below:

 

If to
the Company:

 

The Immune Response
Corporation

5931 Darwin Court

Carlsbad, California 92008

Attention: President

Facsimile: (760) 431-8636

 

8

 

with a copy to:

Pillsbury Winthrop LLP

50 Fremont Street

San Francisco, CA 94105-2228

Attention: Thomas E. Sparks, Jr., Esq.

Facsimile: (415) 983-1200

 

If to the Lender:

 

 

With a copy to:

 

 

(ii)                                  Any
party may give any notice, request, consent or other communication under this
Note using any other means (including, without limitation, personal delivery,
messenger service, telecopy, first class mail or electronic mail), but no such
notice, request, consent or other communication shall be deemed to have been
duly given unless and until it is actually received by the party for whom it is
intended.  Any party may change the
address to which notices, requests, consents or other communications hereunder
are to be delivered by giving the other parties notice in the manner set forth
in this Section 11.

 

12.                                 Conflicting
Agreements.  In the event of any
inconsistencies between the terms of this Note and the terms of any other
document related to the loan evidenced by this Note, the terms of this Note
shall prevail.

 

13.                                 Severability.  The unenforceability or invalidity of any
provision or provisions of this Note as to any persons or circumstances shall
not render that provision or those provisions unenforceable or invalid as to
any other provisions or circumstances, and all provisions hereof, in all other
respects, shall remain valid and enforceable.

 

14.                                 Governing
Law.  This Note shall be governed by
and construed under the laws of the State of New York, without giving effect to
the principles of conflicts of laws.

 

15.                                 Waivers.  The nonexercise by either party of any of
its rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.

 

16.                               Lost
Documents.  Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Note or any Note exchanged for it, and (in the case of loss,
theft or destruction) of indemnity satisfactory to it, and upon reimbursement
to the Company of all reasonable expenses incidental thereto, and upon
surrender and cancellation of such Note, if mutilated, the Company will make
and deliver in lieu of such Note a new Note of like tenor and unpaid principal
amount and dated as of the original date of this Note.

 

9

 

IN WITNESS WHEREOF, the Company has caused its duly
authorized officer to execute this Note as of the date first written above.

 

 

	
   

  	
  THE IMMUNE RESPONSE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and Accepted:

  	
   

  
	
   

  	
   

  
	
  [LENDER]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

10

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