Document:

Exhibit
10.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002

 

 

I, David J. Gallagher,
President and Chief Executive Officer of QSound Labs, Inc., do hereby certify
that, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, the information contained in the Annual Report
on Form 20-F for the year ended December 31, 2002 of QSound Labs, Inc. and
filed with the Securities and Exchange Commission, fully complies with the
requirements of Section 13 (a) or 15 (d) of the Securities Act of 1934 and the
information contained in such report fairly presents, in all material respects,
the financial condition and results of operations on QSound Labs, Inc.

 

 

	
   

  	
  /s/ David J. Gallagher

  	
   

  
	
   

  	
   

  
	
   

  	
  David J. Gallagher

  
	
   

  	
  President, Chief
  Executive Officer and 

  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  May 20, 2003EXHIBIT
10.2

 

INDEPENDENT
AUDITORS’ REPORT AND CONSENT

 

 

The Board of Directors

QSound Labs, Inc.

 

We consent to
incorporation by reference in the registration statements (No. 333-09228 and
333-82844) on Form S-8 of QSound Labs, Inc. of our report dated March 21, 2003,
with respect to the consolidated balance sheets of QSound Labs, Inc. as at
December 31, 2002 and 2001, and the related consolidated statements of
operations and deficit and cash flows for each of the years in the three year
period ended December 31, 2002, which report appears in the Annual Report on
Form 20-F of QSound Labs, Inc. for the fiscal year ended December 31, 2002.

 

 

	
  /s/ KPMG LLP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Chartered Accountants

  	
   

  
	
  Calgary, Canada

  	
   

  
	
  May 14, 2003Exhibit

10.136

 

THE IMMUNE

RESPONSE CORPORATION

8% CONVERTIBLE SECURED PROMISSORY NOTE

	

  $2,000,000

  	

   

  	

  New York, New York

  
	

   

  	

   

  	

  March 28, 2003

  

 

In consideration of the

receipt of $2,000,000, the undersigned, The Immune Response Corporation, a

Delaware corporation (the “Issuer”), hereby unconditionally promises to pay 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, on March

28, 2004 (the “Note Maturity Date”) the principal amount of Two Million Dollars

($2,000,000) and accrued interest at the rate of eight (8%) percent per annum

based on a 365-day year (“Interest Rate”).

Interest (other than

interest accruing as a result of a failure by Issuer to pay any amount when due

as set forth below) in respect of the Note shall accrue until all amounts

remaining owed under such Note shall be fully repaid, and shall be due and

payable in full on the Note Maturity Date. 

If all or a portion of the principal amount of the Note or any interest

payable thereon shall not be repaid when due whether on the applicable

repayment date, by acceleration or otherwise, such overdue amounts on such Note

shall bear interest at a rate per annum that is three (3%) percent above the

Interest Rate (i.e., 11%) from the date of such non-payment until such

amount is paid in full (after as well as before judgment).  All payments to be made by Issuer hereunder

or pursuant to the Notes shall be made in lawful money of the United States by

certified check or wire transfer in immediately available funds. Any interest

accruing on overdue amounts shall be payable on demand.

The obligation to make

the payments provided for in this Note are absolute and unconditional, and are

not subject to any defense, set-off, counterclaim, rescission, recoupment or

adjustment whatsoever.

The obligations under

this Note shall be secured by that certain Intellectual Property Security

Agreement, dated November 9, 2001, by and between the Issuer and Kevin

Kimberlin Partners, L.P., a Delaware limited partnership (“KKP”), as amended by

Amendment No. 1, dated February 26, 2002, by and between the Issuer, KKP and

Oshkim Limited Partnership (“Oshkim”), and as further amended by Amendment No.

2, dated July 11, 2002, by and between the Issuer, KKP, Oshkim and The

Kimberlin Family 1998 Irrevocable Trust (the “Kimberlin Trust”).

In the event that the

Issuer shall, at any time after the date hereof but prior to June 28, 2003, (i)

issue securities in

connection with a private offering of securities through Spencer Trask

Ventures, Inc. (the “Next Issuer Offering”) and (ii) have obtained stockholder

approval of the Next Issuer Offering and the Purchaser’s participation therein in accordance with Rule 4350(i) of the National Association of

Securities Dealers, Inc., this Note (including

all accrued and unpaid interest) shall, concurrently with such issue, automatically

and immediately convert

 

 

into units of those

securities issued in the Next Issuer Offering. 

In the event that either or both of the conditions set forth in the

preceding sentence shall not have been satisfied prior to June 28, 2003, this Note

(including all accrued and unpaid interest) (x) shall be convertible, at the

sole option of the Purchaser, in whole or in part, into shares of the Issuer’s

common stock, par value $0.0025 per share (the “Common Stock”), at the closing

price of the Common Stock on the date immediately preceding the date hereof (i.e.,

$1.23) or (y) may be declared by the Purchaser to be immediately due and

payable; provided, that, notwithstanding anything in this Note to

the contrary, the Purchaser shall not be obligated at any time (A) after June

28, 2003 to convert this Note or (B) after the date hereof to declare this Note

immediately due and payable.

Upon the occurrence of

any one or more of the Events of Default specified on Exhibit A,

attached hereto, all amounts then remaining unpaid on this Note and all other

promissory notes issued by the Issuer to Purchaser or to any related party of

the Purchaser shall become, or may be declared by the Purchaser to be,

immediately due and payable.

This Note is freely

transferable and assignable, in whole or in part, by the Purchaser, and such

transferee or assignee 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.

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.

All or part of the Note

may be prepaid by Issuer upon at least five (5) days’ prior written notice to

the Purchaser thereof; provided, however, that any such

prepayment on such Note shall be first applied to accrued and unpaid interest

of the outstanding Note and then against its outstanding principal.

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:

  	

   

  

 

 

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Exhibit

A

Events

of Default.

                If any of the following events (each, an “Event of

Default”) shall occur:

(i)            Issuer shall fail to pay any

principal or interest on the Note, or on any other promissory note issued by

the Issuer to the Purchaser or to any related party of the Purchaser, within

three (3) business days after such payment becomes due in accordance with the

terms thereof or hereof;

(ii)           Any representation or warranty made

or deemed made by Issuer herein or in any other agreement, certificate or

instrument contemplated by the Note Purchase Agreement, dated as of November 9,

2001, by and between the Issuer and KKP, 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 and as further amended by Amendment No.

3, dated as of July 11, 2002, by and between the Issuer, KKP, Oshkim and the

Kimberlin Trust (the “Agreement”) or that is contained in any certificate,

document or financial or other statement furnished by Issuer at any time under

or in connection with the Agreement shall have been incorrect in any material

respect on or as of the date made or deemed made;

(iii)          Issuer shall default, in any material

respect, in the observance or performance of any other agreement contained in

the Agreement or any other agreement or instrument contemplated by the

Agreement (including the Notes, Warrant Agreements, and the Intellectual

Property Security Agreement, each as defined in the Agreement), and such

default shall continue unremedied for a period of ten (10) days after written

notice to Issuer of such default;

(iv)          (a) 

Issuer shall commence any case, proceeding or other action (x) under any

existing or future law of any jurisdiction, domestic or foreign, relating to

bankruptcy, insolvency, reorganization, conservatorship or relief of debtors,

seeking to have an order for relief entered with respect to it, or seeking to

adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement,

adjustment, winding-up, liquidation, dissolution, composition or other relief

with respect to it or its debts or (y) seeking appointment of a receiver,

trustee, custodian, conservator or other similar official for it or for all or

any substantial part of its assets, or Issuer shall make a general assignment

for the benefit of its creditors; or (b) there shall be commenced against

Issuer any case, proceeding or other action of a nature referred to in clause

(a) above that (A) results in the entry of an order for relief of any such

adjudication or appointment or (B) remains undismissed, undischarged or

unbonded for a period of sixty (60) days; or (c) there shall be commenced

against Issuer any case, proceeding or other action seeking issuance of a

warrant of attachment, execution, distrait or similar process against all or

any substantial part of its assets that results in the entry of an order for

any such relief that shall not have been vacated, discharged, or stayed or

bonded pending appeal within sixty (60) days from the entry thereof; or (d)

Issuer shall take any action in furtherance of, or indicating its consent to,

approval of, or acquiescence in, any of the acts set forth in clauses (a), (b)

or (c) above; or (e) Issuer shall generally not, or shall be unable to, or

shall admit in writing its inability to, pay its debts as they become due;

 

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(v) Issuer shall default in

the payment of principal on any indebtedness (to any party other than

Purchaser) in excess of $200,000 beyond the period of grace, if any, provided

in the instrument or agreement under which such indebtedness was created; or

(vi) Issuer shall have been

unable to obtain by June 28, 2003 stockholder approval of the Next Issuer Offering and the

Purchaser’s participation therein in accordance

with Rule 4350(i) of the National Association of Securities Dealers, Inc.;

then,

and in any such event, (x) if such event is an Event of Default specified in

clause (iv) above of with respect to Issuer, the Note (with all accrued and

unpaid interest thereon) and all other amounts owing under the Agreement or

under any of the promissory notes issued by the Issuer to the Purchaser or any

related party of the Purchaser shall automatically and immediately become due

and payable and (y) if such event is any other Event of Default, Purchaser may,

by written notice to Issuer, immediately declare the Note (with all accrued and

unpaid interest thereon) and all other promissory notes (with all accrued and

unpaid interest thereon) issued by the Issuer to the Purchaser or any related

party of the Purchaser to be due and payable forthwith, whereupon the same

shall immediately become due and payable. 

Except as expressly provided above, presentation, demand, protest and

all other notices of any kind are hereby expressly waived by Issuer.

 

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