NOTE EXCHANGE AGREEMENT
Exhibit 10.188
This Note Exchange Agreement (this “Agreement”) is entered into between The Immune Response
Corporation, a Delaware corporation (the “Company”), and Cheshire Associates LLC, a Delaware
limited liability company (“Cheshire”), as of February 8, 2006 (the “Effective Date”).
Reference in this Agreement to the “2007 Mortgage Note” means the 8% Convertible Secured
Promissory Note, dated as of April 29, 2005, having a May 31, 2007 maturity date and an outstanding
principal amount of $5,740,928. The 2007 Mortgage Note was issued to Cheshire on April 29, 2005 in
exchange for the following 8% Convertible Secured Promissory Notes made by the Company to Cheshire
or to an affiliate or related party of Cheshire, each of which Notes was then beneficially owned
(by original issuance or by assignment) by Cheshire:
| Issuance (or | Then-Outstanding | |||
| Reissuance) Date | Principal Amount ($) | |||
December 10, 2002
|
278,320 | |||
November 12, 2002
|
4,847,608 | |||
November 15, 2002
|
200,000 | |||
November 20, 2002
|
200,000 | |||
November 27, 2002
|
215,000 | |||
Each such prior Note was issued pursuant to a Note Purchase Agreement dated November 9, 2001
between the Company and Xxxxx Xxxxxxxxx Partners, L.P. (“KKP”), as amended by:
| • | Amendment No. 1 dated February 14, 2002 among the Company, KKP and Oshkim Limited Partnership (“Oshkim”); | ||
| • | Amendment No. 2 dated May 3, 2002 among the Company, KKP and Oshkim; and | ||
| • | Amendment No. 3 dated July 11, 2002 among the Company, KKP, Oshkim and The Xxxxxxxxx Family 1998 Irrevocable Trust (the “Trust”); |
(as so amended, the “Note Purchase Agreement”).
The parties acknowledge that the closing sale price of the Company’s common stock, par
value $.0025 per share (the “Common Stock”), on February 8, 2006, as reported by the OTC Bulletin
Board, was $0.05.
1. Principal amount of $1,005,683.31 of, and $62,820.77 of accrued interest on such principal
amount of, the 2007 Mortgage Note shall on February 8, 2006 be exchanged, pursuant to Section
3(a)(9) of the Securities Act of 1933, as amended, for 53,425,204 shares of newly-issued Common
Stock of the Company (the “Common Shares”) and a new 8% Convertible Secured Promissory Note, dated
as of April 29, 2005, having a May 31, 2007 maturity date, in the principal amount of $4,735,244.69
and, except as set forth herein, otherwise with the same
terms, rights and conditions as the 2007 Mortgage Note, including, without limitation, the
same registration rights, if any, and as provided in the Note Purchase Agreement and in any other
agreement between the parties (the “Partial Note”). The Common Shares shall have the same
registration rights, if any, applicable to the shares of Common Stock underlying the 2007 Mortgage
Note. The Company agrees to promptly on or after February 8, 2006 deliver the Common Shares and
the Partial Note to Cheshire against return of the 2007 Mortgage Note to the Company for
cancellation. The Company agrees that the Common Shares and the Partial Note have been duly
authorized and will be validly issued and non-assessable. Each security document pertaining to the
2007 Mortgage Note remains unchanged and in full force and effect, and the Partial Note shall be
secured by the same security interests in the same collateral and with the same priority as those
of the 2007 Mortgage Note immediately before this Agreement.
2. This Agreement may not be amended or waived except in a writing signed by both parties.
Both parties agree to cooperate and to do all acts and sign all documents necessary or desirable in
order to more perfectly evidence or effectuate the intent of this Agreement. This Agreement shall
be governed by, and construed and interpreted in accordance with, the laws of the State of New
York. This Agreement and those documents expressly referred to herein embody the complete
agreement and understanding between the parties with regard to the subject matter hereof and
supersede and preempt any prior or contemporaneous understandings, agreements, or representations
by or between the parties, written or oral, which may have related to the subject matter hereof in
any way.
3. Cheshire represents that it is acquiring the Common Shares for its own account for
investment and not with a view to distribution.
| THE IMMUNE RESPONSE CORPORATION | ||||||
| By: | ||||||
| Chief Financial Officer | ||||||
| CHESHIRE ASSOCIATES LLC | ||||||
| By: | ||||||
| Nonmember Manager | ||||||
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