Document:

Exhibit
10.1

TERMINATION AGREEMENT

This
Termination Agreement is entered into as of June 30, 2006 by and between
Coming Home Studios, LLC (“CHS”) located at 5540 Hollywood Boulevard,
Hollywood, California 90028 and SRS Labs, Inc. (“SRS”) located at 2909 Daimler
Street, Santa Ana, CA. 92705 with reference to the following:

A.            On June 16, 2004, CHS and SRS
formed CHS/SRS, LLC as a limited liability company (the “Company”) to produce
and distribute six concert DVDs by Duran Duran, Godsmack, Boz Scaggs and All Access
(the “Concert Videos”).

B.            Pursuant to the Operating Agreement
of the Company dated as of September 23, 2004 between CHS and SRS (the “Operating
Agreement”), CHS was appointed Manager of the Company.

C.            CHS was removed as Manager of the
Company and SRS was appointed Manager pursuant to unanimous written consent of
the Members dated July 18, 2005, and SRS has been acting as Manager since
such date.

D.            SRS is willing to sell and CHS is
willing to purchase all of SRS Membership Interest in the Company representing
a 50% equity interest in the Company (the “Membership Interest”) upon the terms
and conditions set forth herein.

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
conditions contained herein the parties agree as follows:

I.

PURCHASE OF MEMBERSHIP INTEREST

Section 1.01.          Terms
of the Purchase.

On
the basis of the representations, warranties, covenants, and agreements
contained in this Agreement and subject to the terms and conditions of this
Agreement:

(a)           At the Closing (as
defined in Section 1.02), SRS will sell, assign, transfer, and convey to
CHS the Membership Interest for the following consideration:

(i)            $200,000 cash,
$50,000 (the “Deposit”) of which shall be paid upon execution of this Agreement
and $150,000 to be paid on the Closing;

(ii)           All cash held in
the Company’s accounts as of the Closing;

(iii)          All proceeds,
including accounts receivable, accrued from the sale of the Duran Duran Live in London Concert Video
(the “Duran Duran Payments”) through December 31, 2005; and

 

(iv)          All proceeds,
including accounts receivable, accrued from the sale of the Godsmack Changes DVD through December 31,
2005 and payable to the Company as of the Closing Date, but not received by the
Company (the “Godsmack Payments”) because such proceeds are (i) not yet
due to be paid to the Company; or (ii) have been withheld by Rounder
Records because of the CHS cross-collateralization arrangement with Rounder.

(b)           CHS will pay the
Duran Duran Payments and the Godsmack Payments to SRS on the Closing by
delivery of a promissory note in the total amount of One Hundred and Seventy
Five Thousand Dollars ($175,000) (the “Note”) to be secured by the Concert
Videos. The Note shall be due on the sixth month anniversary of the Closing and
be payable as follows::

(i)            20% of the proceeds
from the sale of all of the Concert Videos from January 1, 2006 through
the Maturity Date will be paid directly by the distributors to SRS in respect
of the Note, with the remaining 80% to be paid to CHS;

(ii)           If the Note has not
been repaid in full by the Maturity Date, all of the proceeds from the sale of
the Concert Videos will be paid directly to SRS by distributors from the
Maturity Date until the Note is paid in full; and

(iii)          If any investor
makes an equity investment into CHS or an affiliate thereof while any
obligations under the Note are outstanding, all of the proceeds of the equity
investment will be used to pay the outstanding obligations under the Note until
it is paid in full.

The Note shall be in form and substance
acceptable to SRS.

(c)           Notwithstanding
anything herein to the contrary, CHS shall be entitled to all payments from the
liquidation of reserves with respect to the Concert Videos.

Section 1.02.          The
Closing. The closing of the transactions contemplated hereby  (the “Closing”) shall take place at a
location mutually agreeable to both the CHS and SRS no later than June 30,
2006. If the Closing does not occur by June 30, 2006 (unless such date is
extended by mutual agreement) through no fault of SRS, SRS shall have the right
to terminate this Agreement and retain the Deposit as liquidated damages. If
SRS is unable to close through no fault of CHS, SRS shall return the Deposit to
CHS. Effective as of the Closing, SRS will resign as manager of the Company.

Section 1.03.          Deliveries.
At the Closing, SRS shall deliver to CHS all documentation in its possession or
under its control relating to the Company and transfer all accounts of the
Company to CHS.

II.

REPRESENTATIONS AND WARRANTIES

A.            SRS
represents and warrants to CHS as follows:

Section 2.01.          Authority.
SRS has all requisite power and authority to execute, deliver, and perform this
Agreement. All necessary proceedings of SRS have been duly taken to authorize
the execution, delivery, and performance of this Agreement thereby. This
Agreement has been duly authorized, executed, and delivered by SRS, constitutes
the legal, valid, and binding obligation of SRS, and is enforceable as to SRS
in accordance with its terms. No 

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consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any federal,
state, local, or other governmental authority or any court or other tribunal is
required by SRS for the execution, delivery, or performance of this Agreement thereby.
No consent of any party to any material contract, agreement, instrument, lease,
license, arrangement, or understanding to which SRS is a party, or to which it
or any of its businesses, properties, or assets are subject, is required for
the execution, delivery, or performance of this Agreement; and the execution,
delivery, and performance of this Agreement will not violate, result in a
breach of, conflict with, or (with or without the giving of notice or the
passage of time or both) entitle any party to terminate or call a default
under, entitle any party to receive rights or privileges that such party was
not entitled to receive before this Agreement was executed under, or create any
obligation on the part of SRS to which it was not subject immediately before
this Agreement was executed under, any term of any such material contract,
agreement, instrument, lease, license, arrangement, or understanding, or
violate or result in a breach of any term of the limited partnership agreement
(or other governing document) of SRS or any subsidiary thereof, or (if the
provisions of this Agreement are satisfied) violate, result in a breach of, or
conflict with any law, rule, regulation, order, judgment, or decree binding on
SRS or any subsidiary thereof or to which any of their respective businesses,
properties, or assets are subject, which violation or breach would have a
material adverse effect on SRS and its subsidiaries taken as a whole.

Section 2.02.          Ownership.
The Membership Interest is owned of record and beneficially by SRS free and
clear of any security interest, pledge, mortgage, lien (including, without
limitation, tax liens), charge, encumbrance, adverse claim, preferential
arrangement or similar restriction of any kind, including, without limitation,
any restriction on the use, voting, transfer, receipt of income or other
exercise of any attributes of ownership.  The Membership Interest is not subject to any
options, warrants, convertible securities or other rights, agreements,
arrangements or commitments of any character relating to interests therein.

B.            CHS represents and warrants to SRS
as follows:

Section 2.03.          Authority.
CHS has all requisite power and authority to execute, deliver, and perform this
Agreement. All necessary proceedings of CHS have been duly taken to authorize
the execution, delivery, and performance of this Agreement thereby. This
Agreement has been duly authorized, executed, and delivered by CHS, constitutes
the legal, valid, and binding obligation of CHS, and is enforceable as to CHS
in accordance with its terms. No consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or filing with, any
federal, state, local, or other governmental authority or any court or other
tribunal is required by CHS for the execution, delivery, or performance of this
Agreement thereby. No consent of any party to any material contract, agreement,
instrument, lease, license, arrangement, or understanding to which CHS is a
party, or to which it or any of its businesses, properties, or assets are
subject, is required for the execution, delivery, or performance of this
Agreement; and the execution, delivery, and performance of this Agreement will
not violate, result in a breach of, conflict with, or (with or without the giving
of notice or the passage of time or both) entitle any party to terminate or
call a default under, entitle any party to receive rights or privileges that
such party was not entitled to receive before this Agreement was executed
under, or create any obligation on the part of CHS to which it was not subject
immediately before this Agreement was executed under, any term of any such
material contract, agreement, instrument, lease, license, arrangement, or
understanding, or violate or result in a breach of any term of the 

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limited partnership agreement (or other governing
document) of CHS or any subsidiary thereof, or (if the provisions of this
Agreement are satisfied) violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment, or decree binding on CHS or any
subsidiary thereof or to which any of their respective businesses, properties,
or assets are subject, which violation or breach would have a material adverse
effect on CHS and its subsidiaries taken as a whole.

Section 2.04.          Nature
of Membership Interest. CHS understands that the Membership Interest is a “restricted
security” and has not been registered under the Securities Act or any
applicable state securities law. CHS is acquiring the Membership Interest as
principal for its own account and not with a view to or for distributing or
reselling such Membership Interest or any part thereof in violation of the
Securities Act of 1933, as amended or any applicable state securities law.

III.

INDEMNIFICATION

CHS
shall indemnify SRS from any and all liabilities of any kind in respect of SRS’
service as Manager of the Company, consistent with and only to the extent of
the Company’s indemnification obligations under Section 10.1 of the
Operating Agreement.

IV.

MISCELLANEOUS

Section 4.01.          Further
Actions. At any time and from time to time, each party agrees, at its or
his expense, to take such actions and to execute and deliver such documents as
may be reasonably necessary to effectuate the purposes of this Agreement.

Section 4.02.          Availability
of Equitable Remedies.  Since a
breach of the provisions of this Agreement could not adequately be compensated
by money damages, any party shall be entitled, either before or after the date
of the execution and delivery hereof, in addition to any other right or remedy
available to it, to an injunction restraining such breach or a threatened
breach and to specific performance of any such provision of this Agreement, and
in either case no bond or other security shall be required in connection therewith,
and the parties hereby consent to the issuance of such an injunction and to the
ordering of specific performance.

Section 4.03.          Survival.
The covenants, agreements, representations, and warranties contained in or made
pursuant to this Agreement shall survive the Closing and any transfer of the
Membership Interest to CHS, irrespective of any investigation made by or on
behalf of any party.

Section 4.04.          Modification.
This Agreement set forth the entire understanding of the parties with respect
to the subject matter hereof supersede all existing agreements among them
concerning such subject matter, and may be modified only by a written
instrument duly executed by each party.

Section 4.05.          Notices.
Any notice or other communication required or permitted to be given hereunder
shall be in writing and shall be mailed by certified mail, return receipt
requested (or by the most nearly comparable method if mailed from or to a
location outside of the United States) or by Federal Express, Express Mail, or
similar overnight delivery or courier service or 

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delivered (in person or by telecopy, telex, or similar
telecommunications equipment) against receipt to the party to whom it is to be
given at the address of such party set forth in the preamble to this Agreement
(or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 4.05) with a copy to each
of the other parties hereto. Any notice given to any corporate party shall be
addressed to the attention of the Corporate Secretary. Notice to the estate of
any party shall be sufficient if addressed to the party as provided in this Section 4.05.
Any notice or other communication given by certified mail (or by such
comparable method) shall be deemed given at the time of certification thereof
(or comparable act), except for a notice changing a party’s address which will
be deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 3.05 shall be deemed given at the time of receipt
thereof. A copy of any and all notices to CHS shall be delivered in accordance
with this section to Troy & Gould, 1801 Century Park East, 16th Floor, Los Angeles, California 90078,
Attention: David Ficksman.

Section 4.06.          Waiver.
Any waiver by any party of a breach of any term of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that term or
of any breach of any other term of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one or more
occasions will not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing.

Section 4.07.          Binding
Effect. The provisions of this Agreement shall be binding upon and inure to
the benefit of CHS and SRS and their respective successors and assigns.

Section 4.08.          No
Third Party Beneficiaries. This Agreement does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Agreement.

Section 4.09.          Separability.
If any provision of this Agreement is invalid, illegal, or unenforceable, the
balance of this Agreement shall remain in effect, and if any provision is inapplicable
to any person or circumstance, it shall nevertheless remain applicable to all
other persons and circumstances.

Section 4.10.          Headings.
The headings in this Agreement are solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.

Section 4.11.          Counterparts;
Governing Law. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall be
governed by, and construed in accordance with, the laws of California, without
giving effect to conflict of laws.  Each
of the parties hereto hereby irrevocably submits to the jurisdiction of any
court of the State of California or the United States District Court located in
Los Angeles or Orange County, California for the purpose of any suit, action,
or other proceeding arising out of this Agreement, or any of the agreements or
transactions contemplated hereby, which is brought by or against any party
hereto and (i) hereby irrevocably agrees that all claims in respect of any
such suit, action, or proceeding may be heard and determined in any such court
and (ii) to the extent that any party has acquired, or hereafter may acquire,
any immunity from jurisdiction of any such court or from 

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any legal process therein, such party hereby waives,
to the fullest extent permitted by law, such immunity. Each party hereto hereby
waives, and agrees not to assert in any such suit, action, or proceeding, in
each case, to the fullest extent permitted by applicable law, any claim that (a) such
party is not personally subject to the jurisdiction of any such court, (b) such
party is immune from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, execution, or
otherwise) with respect to such party’s property or (c) any such suit,
action, or proceeding is brought in an inconvenient forum.

Section 4.12.          Marketing
Agreement. The Strategic Alliance Agreement between SRS and CHS will be
amended to provide:

·                                          extension
to July 9, 2011;

·                                          that
SRS, on a non-exclusive basis, promote the sale, licensing or distribution of
any of the DVDs in the CHS library, including without limitation the Concert
Videos, with SRS to be paid an 18% commission on any revenues generated in
respect of such DVDs by SRS marketing efforts; and

·                                          SRS
will retain a non-exclusive, no-fee license to use all or any part of the
content of any of the Concert Videos in SRS’ promotional marketing efforts for
its technology or business.

The amendment shall be in form and substance
acceptable to the parties.

Section 4.13.          Dissolution.
Within thirty days of the Closing, CHS will take all necessary steps to
dissolve the Company and will provide SRS with copies of the documentation
confirming such dissolution.

Section 4.14.          Disclosure.
The parties agree that no press release or other public disclosure concerning
the subject matter of this Agreement shall 
be made without advance written approval of SRS. Notwithstanding the
above, SRS shall have the right to make any public disclosures required by law
or deemed necessary by SRS in its sole discretion and in such event will use
reasonable efforts to allow CHS an opportunity to provide comments to any  press release.

Section 4.15.          IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.

	
  

  	
  SRS LABS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMING HOME STUDIOS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 6Exhibit
10.2

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND THUS
MAY NOT BE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND SUCH LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

PROMISSORY NOTE

 

Due December 30,
2006

FOR VALUE RECEIVED, Coming Home Studios, LLC, a California limited
liability company (“Company”), hereby promises to pay to SRS Labs, Inc., a
Delaware corporation (“Holder”), or its registered assigns, the sum of One
Hundred Seventy Five Thousand Dollars ($175,000). Upon default, the note will
bear interest at the rate of 8% per annum from the date of such default.

In no event shall Holder
be entitled to interest exceeding the maximum rate permitted by law. If any
excess interest is provided for or shall be adjudicated to be so provided for
in this Note, then in such event: (i) the provisions of this paragraph
shall govern and control; (ii) Company shall not be obligated to pay the
amount of such interest to the extent that it is in excess of the maximum
amount permitted by law, and the same shall be construed as a mutual mistake of
the parties; and (iii) any such excess which may have been collected or
attributed shall be subtracted from the then unpaid principal amount hereof, or
refunded to Company.

Both principal hereof and
interest thereon are payable in lawful money of the United States of America at
the offices of Holder as indicated in the official records of Company. Interest
hereunder shall be computed on the basis of a year of three hundred sixty (360)
days for the actual number of days elapsed.

This Note is secured by a
certain Security Agreement of even date herewith executed by Company, as such
document may be amended, restated, supplemented or otherwise modified from time
to time.

Principal and any accrued
but unpaid interest thereon shall be due and payable on December 30, 2006
(the “Due Date”); provided, however, (i) 20% of the proceeds from the sale
of all of the Concert Videos from January 1, 2006 through the Maturity
Date will be paid directly by the distributors to SRS in respect of the Note,
with the remaining 80% 

 

to be paid to CHS; (ii) If the Note has not been
repaid in full by the Maturity Date, all of the proceeds from the sale of the
Concert Videos will be paid directly to SRS by distributors from the Maturity
Date until the Note is paid in full; and (iii) If any investor makes an
equity investment into CHS or an affiliate thereof while any obligations under
the Note are outstanding, all of the proceeds of the equity investment will be
used to pay the outstanding obligations under the Note until it is paid in
full.

This Note is subject to
the terms and conditions set forth below:

1.             Definitions.
As used in this Note, the following terms shall mean:

1.1           “Event of Default” — shall
have the meaning given such term in Section 4 below.

1.2           “Loan Documents” — shall refer
to this Note and the Security Agreement described above.

1.3           “Note” — shall mean this Note
and any notes delivered in substitution or exchange therefor as provided
herein, as they may hereafter be amended, restated, supplemented or otherwise
modified from time to time.

2.             Optional
Prepayment of Note. Company, at its option, may make payments in reduction
of the principal outstanding on this Note at any time.

3.             Replacement
of Note. Upon receipt of evidence reasonably satisfactory to Company of the
ownership of and the loss, theft, destruction or mutilation of this Note and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement in an amount reasonably satisfactory to Company, or (in the case of
mutilation) upon surrender and cancellation of the mutilated Note, Company will
execute and deliver, in lieu thereof, a new Note of like tenor.

4.             Events
of Default.

The occurrence and
continuation of any of the events or conditions described in Section 4.1
or Section 4.2 shall be an “Event of Default”.

4.1           Holder Action. The occurrence
of any of the following Events of Default shall, at the option of the Holder,
entitle Holder to declare all sums of principal and interest then remaining
unpaid, and all other amounts payable hereon, due and payable, all without
demand, presentment, notice or protest, all of which hereby are expressly
waived, and permit Holder to exercise any other right available to it at law or
in equity, all of which rights and powers may be exercised cumulatively and not
alternatively.

(a)           Failure to Pay Principal or
Interest. Failure to pay any installment of interest or principal hereon
when due.

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(b)           Breach of Covenants. The
breach by Company of any of the material covenants contained in the Loan
Documents and the continuance thereof for a period of thirty (30) days after
written notice thereof to Company.

(c)           Breach of Representations and
Warranties. Any of Company’s representations or warranties made in the Loan
Documents shall prove to have been false or misleading in any material respect
as of the date such representations and warranties were made.

4.2           Acceleration Without Specific
Action. The occurrence of any of the following Events of Default shall make
all sums of principal and interest then remaining unpaid and all other amounts
payable hereon due and payable, all without demand, presentment, notice or
protest, all of which hereby are expressly waived, and permit Holder to
exercise any other right available to it at law or in equity, all of which
rights and powers may be exercised cumulatively and not alternatively.

(a)           Bankruptcy. The voluntary
institution of bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors by Company or the institution of any such proceedings
against Company, which involuntary proceedings shall not have been vacated by
appropriate court order within thirty (30) days of such institution.

(b)           Dissolution. Any order,
judgment or decree shall have been entered against Company decreeing the
dissolution or liquidation of Company and such order shall remain undischarged
or unstayed for a period of thirty (30) days.

(c)           Insolvency, Receiver or Trustee.
The making by Company of an assignment for the benefit of creditors; or the
making by Company of an offer of settlement, composition or extension to the
claims of all or substantially all of Company’s creditors or the application
for or consent to the appointment of a receiver or trustee for it or for a
substantial part of its property or business; or the appointment otherwise of
such a receiver or trustee or a committee of Company’s creditors.

5.             Transfer
of Securities. This Note and all rights hereunder are transferable on the
books of Company maintained for such purpose at its principal office referred
to above by Holder in person or by duly authorized attorney, upon surrender of
this Note properly endorsed and upon payment of any necessary transfer tax or
other governmental charge imposed upon such transfer; provided, however, that
this Note shall not be transferred without prior written notice to the Company.
Each taker and holder of this Note, by taking or holding the same, consents and
agrees that this Note when endorsed in blank shall be deemed negotiable and
agrees that when this Note shall have been so endorsed, Holder hereof may be
treated by Company and all other persons dealing with this Note, as the
absolute owner hereof for any purpose and as the person entitled to exercise
the rights represented hereby, or to the transfer hereof on the books of
Company, 

 3
 

 

any notice to the contrary notwithstanding; but until
such transfer on such books, Company may treat Holder hereof as the owner for
all purposes.

6.             Notices.
All notices and other communications under or in connection with this Note
shall be in writing and shall be deemed given (a) if delivered personally,
upon delivery, (b) if delivered by registered or certified mail (return
receipt requested), upon the earlier of actual delivery or three days after
being mailed, or (c) if given by telecopy, upon confirmation of
transmission by telecopy, in each case to the parties at the following
addresses:

(a)           If to Company, addressed to:

Coming
Home Studios, LLC

5540
Hollywood Blvd.

Hollywood,
California  90028

Attention:   Daniel E. Catullo III

                   Manager

Facsimile:  (323) 467-6400

With an additional copy
to:

Troy & Gould PC

1801 Century Park East, Suite 1600

Los Angeles, CA 90067-2367

Attention:  David L. Ficksman

Facsimile:  (310) 789-1490

(b)           If to Holder, addressed to:

SRS
Labs, Inc. 

2909 Daimler Street

Santa Ana, California 92705

Attention:  Ulrich Gottschling 

                 Chief
Financial Officer 

Facsimile:  (949) 852-1099

7.             Miscellaneous.

7.1           Survival of Covenants. All
agreements and covenants made herein shall survive the execution and delivery
hereof.

7.2           Failure or Indulgence Not Waiver.
No failure or delay on the part of Holder in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any one or
more of such failures or delays constitute a course of

 4
 

 

performance or dealing on which Company is entitled to
rely, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercises thereof or of any other right,
power or privilege. All rights and remedies existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

7.3           Cost of Collection. If any
default is made in the payment of this Note, Company shall pay Holder all costs
of collection, including, without limitation, reasonable attorneys’ and
accountants’ fees and costs of appeals and interest on any sums actually
disbursed at the rate set forth herein.

7.4           Governing Law. This Note shall
be governed by and construed in accordance with the internal laws (and not the
law of conflicts) of the State of California.

7.5           Arbitration. Any unresolved controversy or claim arising from or
relating to this Note or breach thereof shall be settled by arbitration
administered by the American Arbitration Association in accordance with its
Commercial Arbitration Rules, then in effect. The decision of arbitration
unless clearly erroneous, shall be final and conclusive upon the parties, and
judgment upon the award rendered by the arbitrator may be entered in any court
having competent jurisdiction. The arbitration proceedings shall be held in
Santa Ana, California. The arbitration proceedings shall be conducted before
one (1) neutral arbitrator who shall be a member of the California
Bar who has been actively engaged in the practice of corporate and business law
for at least fifteen (15) years, and shall proceed under any expedited
procedures of the Commercial Arbitration Rules. The arbitrator shall have
authority to award only (i) money damages, (ii) attorneys’ fees,
costs and expert witness fees to the prevailing party, and (iii) sanctions
for abuse or frustration of the arbitration process. The arbitrator’s
compensation, and the administrative costs of the arbitration, shall be borne
by the parties in the manner set forth in the arbitration award, as determined
by the arbitrator. Notwithstanding the foregoing provisions of this Section 7.5,
the parties are not required to arbitrate any issue for which injunctive relief
is sought by any party hereto and both parties may seek injunctive relief in
any federal or state court having jurisdiction.

7.6           Modification. Neither this
Note nor any provision hereof may be amended, modified, waived, discharged or
terminated without the consent of Holder.

7.7           Severability. Whenever
possible, each provision of this Note will be interpreted in such manner as to
be effective and valid under applicable law, but, if any provision of this Note
is held to be prohibited by or invalid under applicable law, such provision
will be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Note.

7.8           Successors. All the covenants,
agreements, representations and warranties contained in this Note shall bind
the parties hereto and their respective heirs, executors, administrators, distributees,
successors and assigns.

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7.9           Headings. The section headings
in this Note are inserted for purposes of convenience only and shall have no
substantive effect.

[SIGNATURE PAGE
FOLLOWS]

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IN WITNESS WHEREOF,
Company has caused this Note to be signed by its duly authorized officer and to
be dated June 30, 2006.

COMING HOME STUDIOS, LLC

By:                                                                                          

Name:                                                                                     

Its:                                                                                          

 7

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