Exhibit 4
LOAN AGREEMENT
THIS AGREEMENT, effective as of April 15, 1997 is made
by and between Xxxxx X. Xxxxxxxxx ("Lender") and Xxxxxx X.
Xxxxx ("Borrower").
RECITALS
A. Lender has agreed to loan to Borrower the
principal sum of ONE MILLION NINE HUNDRED NINETY-NINE
THOUSAND NINE HUNDRED NINETY-EIGHT DOLLARS ($1,999,998) (the
"Loan") for the purpose of purchasing UP TO 256,410 units of
common stock and warrants issued by The Immune Response
Corporation, a Delaware corporation (the "Company") pursuant
to that certain Unit Purchase Agreement, dated as of even
date hereof, between Borrower and the Company (the "Unit
Purchase Agreement"). Each unit is comprised of one share
of common stock and a warrant to purchase one share of
common stock ("Units").
B. In connection with its purchase of the Company's
Units, at the Initial Closing (as defined in the Unit
Purchase Agreement), Borrower shall pay the Company
$494,744.25 cash and execute a promissory note for the
benefit of the Company in the principal amount of
$1,484,232.75, due September 30, 1997. At the NASD Approval
Closing (as defined in the Unit Purchase Agreement),
Borrower shall pay the Company $21,021.00 cash; and
C. After the Initial Closing, Borrower will own
253,715 shares of the Company's common stock (the "Stock");
after the NASD Approval Closing, in the event such closing
occurs, Borrower will acquire an additional 2,695 shares of
the Company's common stock, for an aggregate number of
256,410 shares of Stock.
NOW, THEREFORE, in consideration of the premises set
forth above and the mutual promises and covenants contained
herein, the parties agree as follows:
I. BORROWING AND REPAYMENT IN CASH.
A. The Lender and Borrower acknowledge that the
principal sum of the Loan shall be delivered to Borrower in
the following manner: (i) $494,744.25 on the date hereof,
(ii) $1,484,232.75 on September 30, 1997; and
(iii) $21,021.00 on the NASD Approval Closing date, in the
event such closing occurs. All outstanding principal and
interest accrued in connection with the Loan is due three
(3) years from the date hereof payable by wire transfer of
immediately available funds to Lender.
B. The Loan shall be evidenced by a Promissory Note
(the "Note") in substantially the form attached hereto as
Exhibit A and incorporated herein, and the terms of the Loan
shall be specified in the Note.
II. BORROWER'S REPRESENTATIONS AND
WARRANTIES.
A. Borrower represents and warrants that:
1. The proceeds of the Loan will be used for the
purpose set forth above and for no other purpose.
2. There are no pending or threatened claims,
investigations or suits which may adversely affect
Borrower's financial condition.
3. There are no other instruments existing that will
require Borrower's obligations under this Agreement or the
Note to be subordinated to other obligations Borrower now
has, nor will Borrower become bound by such instruments
while this Agreement is in effect, or while amounts remain
outstanding under the Note, without Lender's prior written
approval.
4. The execution, delivery and performance of this
Agreement and the Note and the use of the proceeds of the
Loan by the Borrower as set forth herein does not, and will
not, conflict with or result in a breach by Borrower of any
of the terms or provisions of, or constitute a default
under, any mortgage, deed of trust or other material
agreement or instrument to which Borrower is a party or by
which Borrower or any of his properties or assets are bound
or any existing applicable law, rule or regulation of the
United States or any state thereof or any applicable decree,
judgment or order of any federal or state court, regulatory
body, administrative agency or other governmental body
having jurisdiction over the Borrower or any of his assets
or properties.
III. BORROWER'S COVENANTS.
A. So long as any of the principal balance or accrued
unpaid interest, if any, under the Note remains outstanding,
Borrower shall, unless the Lender consents otherwise in
writing, punctually pay all principal and interest amounts
due under the Note, as described in this Agreement and the
Note.
IV. REPURCHASE RIGHT.
In the event that Borrower's employment with the
Company is terminated for any reason other than by the
Company without Cause, (as defined under applicable Delaware
law), Borrower shall provide prompt written notice of such
termination to Lender (a "Termination Notice"), and Lender
shall be entitled to purchase from Borrower a number of
Units equal to (a) the aggregate number of Units purchased
by Borrower, multiplied by (b) a fraction, the numerator of
which is the difference between (x) twelve (12) and (y) the
number of full three-month periods that have elapsed between
the date of this Agreement and the date of the termination
of Borrower's employment, and the denominator of which is
twelve (12), at a purchase price of $7 per Unit, by
delivering to Borrower written notice thereof, accompanied
by payment for the number of Units to be purchased as
calculated in accordance with this Section IV, within ten
(10) days following the date of Lender's receipt of a
Termination Notice.
V. TERMINATION.
This Agreement shall remain in full force and effect so
long as any sums remain owing by Borrower to the Lender
under the Note.
VI. GENERAL PROVISIONS.
A. Notices. All notices permitted or required to be
given under this Agreement shall be in writing and shall be
deemed delivered upon personal delivery, or twenty-four (24)
hours following: (1) electronically confirmed facsimile
transmission; or (2) deposit for overnight delivery with a
bonded courier holding itself out to the public as providing
such service; or forty-eight (48) hours following deposit in
the United States mail, certified mail, postage prepaid, in
any such case addressed as follows:
If to the Lender:
Xxxxx X. Xxxxxxxxx
Xxxxxxx Xxxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to Borrower:
Xxxxxx X. Xxxxx
The Immune Response Corporation
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
B. Parties' Relationship; Indemnity. This Agreement
is intended to create a relationship of debtor-creditor only
and is not intended to be, and shall not be construed as, an
agreement of joint venture, partnership or agency, or other
similar business relationship.
C. No Continuing Waiver. No delay or failure of the
Lender to exercise any right or remedy it may have under
this Agreement or the Note shall operate as a continuing
waiver of such right or remedy, nor prejudice the Lender's
right to insist upon full compliance by Borrower of the
terms of this Agreement or the Note.
D. Governing Law. This Agreement shall be construed
in accordance with and governed by the laws of the State of
Delaware. In any action brought or arising out of this
Agreement, Lender and Borrower hereby consent to the
jurisdiction of any federal or state court having proper
venue within the State of New York and also consent to
service of process by any means authorized by New York or
federal law.
E. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and
the same instrument.
F. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective legal representatives,
successors and assigns; provided, however, that the
obligations of Borrower under this Agreement are personal
and shall not be assigned or delegated without the prior
written consent of the Lender.
G. Severability. Should any provision of this
Agreement be found void or unenforceable by a court of
competent jurisdiction, the remainder of this Agreement
shall not be affected thereby, but shall remain in full
force and effect.
H. Further Assurance. Each party shall take such
further action and shall execute such further documentation
as may be necessary or convenient to effectuate the
transactions contemplated in this Agreement.
I. Integration; Interpretation. This Agreement and
the Note contain or expressly incorporate by reference the
entire agreement of the parties with respect to the matters
contemplated herein and supersede all prior negotiations and
agreements. This Agreement and the Note shall not be
modified except by written instrument executed by all
parties.
J. Expenses. Each party hereto shall pay all costs
and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement. If
any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to
which such party may be entitled.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
LENDER
____________________________
Xxxxx X. Xxxxxxxxx
BORROWER
_____________________________
Xxxxxx X. Xxxxx
