LIMITED RECOURSE INTEREST
INDUCEMENT AGREEMENT
This
LIMITED RECOURSE INTEREST INDUCEMENT AGREEMENT (this
“Agreement”), dated as of February 9, 2006, is by and
between The Immune Response Corporation, a Delaware corporation
(the “Company”), and Spencer Trask Intellectual Capital
Company, LLC (“STIC”).
WHEREAS, the
Company proposes to raise gross proceeds of up to $5,000,000 by
issuing 8% Senior Secured Convertible Promissory Notes (the
“Investor Notes”) to certain investors (the
“Investors”) pursuant to the terms of a certain
Confidential Private Placement Memorandum (the
“Memorandum”) of even date herewith;
WHEREAS, in
connection with the issuance of the Investor Notes to the
Investors, the Company has executed a certain Security Agreement,
dated of even date herewith (the “Security Agreement”),
in favor of Hudson Asset Partners, LLC, a Delaware limited
liability company (the “Agent”), acting in its capacity
as agent for the Investors;
WHEREAS, in the
event that the assets of the Company subject to the Security
Agreement are insufficient to satisfy in full the obligations of
the Company to the Investors upon an event of default under the
Notes, STIC will provide an additional interest to support the
obligations of the Company to the Investors upon an event of
default under the Notes pursuant to a certain Limited Recourse
Interest Agreement, dated of even date herewith (the “Limited
Recourse Interest Agreement”), executed by STIC in favor of
the Agent, acting in its capacity as agent for the
Investors;
WHEREAS, the
Company is willing to enter into this Agreement in order to induce
STIC to enter into the Limited Recourse Interest Agreement and STIC
is willing to enter into this Agreement in consideration of the
Company’s agreement herein to issue a formula-determined
number of 7-year Company common stock warrants (the
“Warrants”) to STIC and further 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,
