Exhibit 10.1


 


PROMISSORY NOTE


 


	
  Principal 

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  
	
  $

  	
  5,000,000.00

  	
   

  	
  09-16-2007

  	
   

  	
  09-16-2008

  	
   

  	
  17003864

  	
   

  	
  4A
  / 466

  	
   

  	
   

  	
   

  	
  SBV

  	
   

  	
   

  
																



 


References in the boxes above are for Lender’s use only and do not limit
the applicability of this document to any particular loan or item.  Any item above containing “***” has been
omitted due to text length limitations.


 


	
  Borrower:

  	
  TGC Industries, Inc.

  	
   

  	
  Lender:

  	
  Sovereign
  Bank

  
	
   

  	
  101 E.
  Park Blvd. Ste955

  	
   

  	
   

  	
  Preston
  Center

  
	
   

  	
  Plano, TX
  75074

  	
   

  	
   

  	
  6060
  Sherry Lane 

  Dallas, TX 75225

  



 


	
  Principal
  Amount: $5,000,000.00

  	
   

  	
  Initial
  Rate: 8.250%

  	
   

  	
  Date of
  Note: September 16, 2007

  



 


PROMISE TO PAY. TGC Industries, Inc. (“Borrower”) promises to pay to Sovereign Bank (“Lender”), or order, in lawful money of the
United States
of America, the principal
amount of Five Million & 00/100 Dollars ($5,000,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of
each
advance until
repayment of each advance or maturity, whichever occurs first.


 


CHOICE OF USURY CEILING AND INTEREST RATE. The interest rate on this Note has been
implemented under the “Weekly Ceiling” as referred to in Sections 303.002 and
303.003 of the Texas Finance Code. The terms, including the rate, or  index,
formula, or provision of law used to compute the rate on the Note, will be
subject to revision as to current and future balances, from time to time by
notice from Lender in compliance with Section 303.103 of the Texas Finance
Code.


 


PAYMENT. Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid
interest on September 16, 2008. In addition,
Borrower will pay regular monthly payments of all accrued unpaid interest due
as of each payment date, beginning October 16, 2007, with all subsequent
interest payments to be due on the same day of
each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first
to any
accrued unpaid
interest; and
then to principal. The
annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days
the principal balance
is outstanding, unless such calculation would result in a usurious rate, in which case interest shall be calculated on a per diem
basis of a year of 365 or 366 days, as the case may be. Borrower will pay Lender at Lender’s address shown above or at such
other place as Lender may designate in writing. Notwithstanding any other
provision of this Note, Lender will not charge interest on any undisbursed loan
proceeds. No scheduled payment, whether of principal or interest or both, will be due unless sufficient loan funds
have been disbursed by the scheduled payment date to justify the payment.


 


VARIABLE
INTEREST RATE. The
interest rate on this Note is subject to change from time to time based on
changes in an independent index which is the Wall Street Journal Prime as
quoted in the Southwestern Addition of Wall Street Journal the “Index”). The
Index is not necessarily the lowest rate charged by Lender on its loans. If the
Index becomes unavailable during the term of this loan, Lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the
current Index rate upon Borrower’s request. The interest rate change will not
occur more often than each day. Borrower understands that Lender may make loans
based on other rates as well. The Index currently  is 8.250% per
annum.  The interest rate to be applied prior
to maturity to the unpaid principal balance during this Note will be at a rate
equal to the Index, resulting in an initial rate of 8.250% per annum. NOTICE:
Under no circumstances will the interest rate on this Note be more  than
the maximum rate allowed by applicable law. For purposes of this Note, the “maximum
rate allowed by applicable law” means the greater of (A) the maximum rate of
interest permitted under federal or other law applicable to the indebtedness
evidenced by this Note, or (B) the “Weekly Ceiling” as referred to in Sections
303.002 and 303.003 of the Texas Finance Code.


 


PREPAYMENT. Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due. Prepayment in full shall
consist of payment of the remaining unpaid principal balance together with all
accrued and unpaid interest and all other amounts, costs and expenses for which
Borrower is responsible under this Note or any other agreement with Lender
pertaining to this loan, and in no event will Borrower ever be required to pay
any unearned interest. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower’s obligation to continue to make payments
of accrued unpaid interest. Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked “paid in full”,
“without recourse”, or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender’s rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or
other payment instrument that indicates that the payment constitutes “payment
in full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or
delivered to: Sovereign Bank, 17950 Preston Road, Suite 500 Dallas, TX 75252.


 


POST MATURITY RATE. The Post Maturity Rate on this Note is the lesser of (A) the maximum
rate allowed by law or (B) the interest rate under this Note. Borrower will pay
interest on all sums due after final maturity, whether by acceleration or
otherwise, at that rate.


 


DEFAULT. Each of the following shall constitute an event of default (“Event of
Default”) under this Note: 


 


Payment
Default. Borrower
fails to make any payment when due under this Note.


 


Other
Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or
condition contained in this Note or in any of the related documents or to
comply with or to perform any term, obligation, covenant or condition contained
in any other agreement between Lender and Borrower.


 


Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower’s property or Borrower’s ability to repay
this Note or perform Borrower’s obligations under this Note or any of the
related documents.


 


False
Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower
or on Borrower’s behalf under this Note or the related documents is false or
misleading in any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.


 


Insolvency. The dissolution or termination of Borrower’s
existence as a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower’s property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Borrower.


 


Creditor
or Forfeiture Proceedings.  Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any
creditor of Borrower or by any governmental agency against any collateral
securing the loan. This includes a garnishment of any of Borrower’s accounts,
including deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in its
sole discretion, as being an adequate


 

















 


reserve or bond for the
dispute.


 


Events
Affecting Guarantor. Any
of the preceding events occurs with respect to any guarantor, endorser, surety,
or accommodation party of any of the indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note.


 


Change
In Ownership. Any
change in ownership of twenty-five percent (25%) or more of the common stock of
Borrower.


 


Adverse
Change. A material
adverse change occurs in Borrower’s financial condition, or Lender believes the
prospect of payment or performance of this Note is impaired.


 


Insecurity. Lender in good faith believes itself
insecure.


 


LENDER’S RIGHTS. Upon default, Lender may declare the entire
indebtedness, including the unpaid principal balance under this Note, all
accrued unpaid interest, and all other amounts, costs and expenses for which
Borrower is responsible under this Note or
any other agreement with Lender pertaining to this loan, immediately
due, without notice, and then Borrower will pay that amount.


 


ATTORNEYS’
FEES; EXPENSES. Lender
may hire an attorney to help collect this Note if Borrower does not pay, and
Borrower will pay Lender’s reasonable attorneys’ fees. Borrower also will pay
Lender all other amounts Lender actually incurs as court costs, lawful fees for
filing, recording, releasing to any public office any instrument securing this
Note; the reasonable cost actually expended for repossessing, storing,
preparing for sale, and selling any security; and fees for noting a lien on or
transferring a certificate of title to any motor vehicle offered as security
for this Note, or premiums or identifiable charges received in
connection with the sale of authorized insurance.


 


GOVERNING
LAW. This Note will
be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the
State of Texas without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State
of Texas.


 


CHOICE OF VENUE. If there is a lawsuit, and if the transaction
evidenced by this Note occurred in Dallas County, Borrower agrees upon Lender’s
request to submit to the jurisdiction of the courts of Dallas County, State of Texas.


 


DISHONORED
CHECK CHARGE. Borrower
will pay a processing fee of $30.00 if any check given by Borrower to Lender as
a payment on this loan is dishonored.


 


RIGHT OF
SETOFF. To the extent
permitted by applicable law, Lender reserves a right of setoff in all Borrower’s
accounts with Lender (whether checking, savings, or some other account).  This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.


 


COLLATERAL. Borrower acknowledges this Note is secured by
the following collateral described in the security instrument listed herein:
accounts and general intangibles described in a Commercial Security Agreement
dated September 16, 2007.


 


LINE OF CREDIT. This Note evidences a revolving line of
credit. Advances under this Note, as well as directions for payment from
Borrower’s accounts, may be requested orally or in writing by Borrower or by an
authorized person. Lender may, but need not, require that all oral requests be
confirmed in writing. Borrower agrees to be liable for all sums either: (A)
advanced in accordance with the instructions of an authorized person or (B)
credited to any of Borrower’s accounts with Lender. The unpaid principal
balance owing on this Note at any time may be evidenced by endorsements on this
Note or  by Lender’s internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this
Note if: (A) Borrower or any guarantor is in default under the terms of this
Note or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (B) Borrower or
any guarantor ceases doing business or is insolvent; (C) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor’s
guarantee of this Note or any other loan with Lender; (D) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized
by Lender; or (E) Lender in good faith believes itself insecure. This revolving line of credit shall not be subject to Ch.
346 of the Texas Finance Code.


 


RENEWAL AND
EXTENSION. This Note
is given in renewal and extension and not in novation of the following
described indebtedness: The Promissory Note dated April 26, 2005 in the amount
of Five Hundred Thousand Dollars & 00/100 ($500,000.00), Renewed by the
Promissory Note dated September 16, 2005 in the amount of Three Million Five
Hundred Thousand Dollars & 00/100 ($3,500,000.00), Further renewed by the
Promissory Note dated September 16, 2006 in the amount of Five Million Dollars
& 00/100 ($5,000,000.00), from Borrower to Lender.


 


SUCCESSOR
INTERESTS. The terms
of this Note shall be binding upon Borrower, and upon Borrower’s heirs,
personal representatives, successors and assigns, and shall inure to the
benefit of Lender and its successors and assigns.


 


GENERAL
PROVISIONS. If any
part of this Note cannot be enforced, this fact will not affect the rest of the
Note. Borrower does not agree or intend to pay, and Lender does not agree or
intend to contract for, charge, collect, take, reserve or receive (collectively
referred to herein as “charge or collect”), any amount in the nature of
interest or in the nature of a fee for this loan, which would in any way or
event (including demand, prepayment, or acceleration) cause Lender to charge or
collect more for this loan than the maximum Lender would be permitted to charge
or collect by federal law or the law of the State of Texas (as applicable). Any
such excess interest or unauthorized fee shall, instead of anything stated to
the contrary, be applied first to reduce the principal balance of this loan,
and when the principal has been paid in full, be refunded to Borrower. The
right to accelerate maturity of sums due under this Note does not include the
right to accelerate any interest which has not otherwise accrued on the date of
such acceleration, and Lender does not intend to charge or collect any unearned
interest in the event of acceleration. All sums paid or agreed to be paid to
Lender for the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of the loan evidenced by this Note until
payment in full so that the rate or amount of interest on account of the loan evidenced
hereby does not exceed the applicable usury ceiling. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, notice of
dishonor, notice of intent to accelerate the maturity of this Note, and notice
of acceleration of the maturity of this Note. Upon any change in the terms of
this Note, and unless otherwise expressly stated in writing, no party who signs
this Note, whether as maker, guarantor, accommodation maker or endorser, shall
be released from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s
security interest in the collateral without the consent of or notice to anyone.
All such parties also agree that Lender may modify this loan without the consent
of or notice to anyone other than the party with whom the modification is made.
The obligations under this Note are joint and several.


 


2

















 


PRIOR TO SIGNING THIS NOTE,
BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.


 


BORROWER ACKNOWLEDGES RECEIPT
OF A COMPLETED COPY OF THIS PROMISSORY NOTE.


 


	
  BORROWER:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TGC INDUSTRIES, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Wayne Whitener, President
  & CEO of TGC 

  Industries, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LENDER:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SOVEREIGN BANK

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  X

  	
   

  	
   

  
	
   

  	
  Authorized Signer

  	
   

  
	
   

  	
   

  
				



 


LASER
PRO Lending. Ver. 5.30.10.001 Copr. Harland Financial Solutions, Inc. 1997,
2007.


All
Rights Reserved. TX LACFI\PL\D2G FC TR-1443


 


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