Document:

Exhibit 10.1

 

(TTI-FREP)(R121698)
4158983005    *LOAN5404*

 

PROMISSORY
NOTE

 

September 19, 2005

(Date)

 

 

FOR VALUE RECEIVED, TGC Industries, Inc. a corporation located
at the address stated below (“Maker”)
promises, jointly and severally if more than one, to pay to the order of General Electric Capital Corporation or any
subsequent holder hereof (each, a “Payee”)
at its office located at 16479 Dallas Parkway
# 300, Addison, TX 75001-2512 or at such other place as Payee or the
holder hereof may designate, the principal sum of Two Hundred Eighty Six Thousand Two Hundred Thirty Five and 00/100
Dollars ($286,235.00), with interest on the unpaid principal
balance,  from the date hereof through
and including the dates of payment, at a fixed per annum simple interest rate
of Seven and 25/100 percent (7.25%).

 

Subject to the other
provisions hereof, the principal on this Note is payable in lawful money of the
United States in Thirty Six (36) consecutive monthly installments as follows:

 

	
  Periodic

  Installment

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  35

  	
  @

  	
  $

  	
  7,971.79

  	
   

  
					

 

each (“Periodic Installment”) and a final installment
which shall be in the amount of the total outstanding unpaid principal.  The first Periodic Installment shall be due
and payable on November 2, 2005 and the following Periodic Installments and the
final installment shall be due and payable on the same day of each succeeding
period (each, a “Payment Date”).  In
addition to the payments of principal provided above, accrued interest shall be
payable on the Payment Date.

 

All payments shall be applied first to interest and
then to principal.  Each payment may, at
the option of the Payee, be calculated and applied on an assumption that such
payment would be made on its due date. 
The acceptance by Payee of any payment which is less than payment in
full of all amounts due and owing at such time shall not constitute a waiver of
Payee’s right to receive payment in full at such time or at any prior or
subsequent time.  Interest shall be
calculated on the basis of a 365 day year (366 day leap year).

 

The Maker hereby expressly authorizes the Payee to insert the date value
is actually given in the blank space on the face hereof and on all related
documents pertaining hereto.

 

This Note may be secured by a security agreement,
chattel mortgage, pledge agreement or like instrument (each of which is
hereinafter called a “Security Agreement”).

 

Time is of the essence hereof.  If
any installment or any other sum due under this Note or any Security Agreement
is not received within ten (10) days after its due date, the Maker agrees to
pay, in addition to the amount of each such installment or other sum, a late
payment charge of five percent (5%) of the amount of said installment or other
sum, but not exceeding any lawful maximum. 
If (i) Maker fails to make payment of any amount due hereunder within
ten (10) days after the same becomes due and payable; or (ii) Maker is in
default under, or fails to perform under any term or condition contained in any
Security Agreement, then the entire principal sum remaining unpaid, together
with all accrued interest thereon and any other sum payable under this Note or
any Security Agreement, at the election of Payee, shall immediately become due
and payable, with interest thereon at the lesser of eighteen percent (18%) per
annum or the highest rate not prohibited by applicable law from the date of
such accelerated maturity until paid (both before and after any judgment).

 

The Maker may prepay in full, but not in part, its entire indebtedness
hereunder upon payment of the entire indebtedness plus an additional sum as a
premium equal to the following percentages of the original principal balance
for the indicated period:

Prior to the first annual anniversary date of this Note: Three percent
(3%)

Thereafter and prior to the second annual anniversary date of this Note:
One percent (1%)

Thereafter and prior to the third annual anniversary date of this Note:
One percent (1%)

 

 

and zero percent (0%) thereafter, plus all other sums due hereunder or
under any Security Agreement.

 

It is the intention of the parties hereto to comply with the applicable
usury laws; accordingly, it is agreed that, notwithstanding any provision to
the contrary in this Note or any Security Agreement, in no event shall this
Note or any Security Agreement require the payment or permit the collection of
interest in excess of the maximum amount permitted by applicable law.  If any such excess interest is contracted
for, charged or received under this Note or any Security Agreement, or if all
of the principal balance shall be prepaid, so that under any of such
circumstances the amount of interest contracted for, charged or received under
this Note or any Security Agreement on the principal balance shall exceed the
maximum amount of interest permitted by applicable law, then in such event (a)
the provisions of this paragraph shall govern and control,  (b) neither Maker nor any other person or
entity now or hereafter liable for the payment hereof shall be obligated to pay
the amount of such interest to the extent that it is in excess of the maximum
amount of interest permitted by applicable law, 
(c) any such excess which may have been collected shall be either
applied as a credit against the then unpaid principal balance or refunded to
Maker, at the option of the Payee, and (d) the effective rate of interest shall
be automatically reduced to the maximum lawful contract rate allowed under
applicable law as now or hereafter construed by the courts having jurisdiction
thereof.  It is further agreed that
without limitation of the foregoing, all calculations of the rate of interest
contracted for, charged or received under this Note or any Security Agreement
which are made for the purpose of determining whether such rate exceeds the
maximum lawful contract rate, shall be made, to the extent permitted by
applicable law, by amortizing, prorating, allocating and spreading in equal
parts during the period of the full stated term of the indebtedness evidenced
hereby, all interest at any time contracted for, charged or received from Maker
or otherwise by Payee in connection with such indebtedness; provided, however,
that if any applicable state law is amended or the law of the United States of
America preempts any applicable state law, so that it becomes lawful for the
Payee to receive a greater interest per annum rate than is presently allowed,
the Maker agrees that, on the effective date of such amendment or preemption,
as the case may be, the lawful maximum hereunder shall be increased to the
maximum interest per annum rate allowed by the amended state law or the law of
the United States of America.

 

The Maker and all sureties, endorsers, guarantors or any others (each
such person, other than the Maker, an “Obligor”)
who may at any time become liable for the payment hereof jointly and severally
consent hereby to any and all extensions of time, renewals, waivers or
modifications of, and all substitutions or releases of, security or of any
party primarily or secondarily liable on this Note or any Security Agreement or
any term and provision of either, which may be made, granted or consented to by
Payee, and agree that suit may be brought and maintained against any one or
more of them, at the election of Payee without joinder of any other as a party
thereto, and that Payee shall not be required first to foreclose, proceed
against, or exhaust any security hereof in order to enforce payment of this
Note.  The Maker and each Obligor hereby
waives presentment, demand for payment, notice of nonpayment, protest, notice
of protest, notice of dishonor, and all other notices in connection herewith,
as well as filing of suit (if permitted by law) and diligence in collecting
this Note or enforcing any of the security hereof, and agrees to pay (if
permitted by law) all expenses incurred in collection, including Payee’s actual
attorneys’ fees.  Maker and each Obligor
agrees that fees not in excess of twenty percent (20%) of the amount then due
shall be deemed reasonable.

 

THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF,
DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS
BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR
ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN MAKER AND PAYEE.  THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.)  THIS WAIVER IS IRREVOCABLE
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.  IN THE EVENT OF LITIGATION, THIS NOTE MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

This Note and other Debt Documents constitute the entire agreement of
the Maker and Payee with respect to the subject matter hereof and supercedes
all prior understandings, agreements and representations, express or implied.

 

No variation or modification of this Note, or any waiver of any of its provisions
or conditions, shall be valid unless in writing and signed by an authorized
representative of Maker and Payee.  Any
such waiver, consent, modification or change shall be effective only in the
specific instance and for the specific purpose given.

 

 

Any provision
in this Note or any of the other Debt Documents which is in conflict with any
statute, law or applicable rule shall be deemed omitted, modified or altered to
conform thereto.

 

	
   

  	
  TGC Industries, Inc. 

  
	
   

  	
   

  
	
   

  	
  /s/  David Swan

  	
   

  	
  By:

  	
     /s/  Wayne Whitener

  	
   

  
	
   

  	
  (Witness)

  	
   

  
	
   

  	
  David Swan

  	
   

  	
  Name:

  	
  Wayne Whitener

  	
   

  
	
   

  	
  (Print name)

  	
   

  
	
   

  	
  16479 Dallas Pkwy, Addison, Texas

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
  (Address)

  	
   

  
	
   

  	
   

  
	
   

  	
  Federal Tax ID #:

  	
  742095844

  	
   

  
	
   

  	
   

  
	
   

  	
  Address: 1304 SUMMIT AVE SUITE 2, PLANO, COLLIN County, TX 75074-

  
									

 

 

3010 (3/91) 
139571194   *MULT3010*

 

CROSS-COLLATERAL AND
CROSS-DEFAULT AGREEMENT

 

General Electric Capital Corporation

16479 Dallas Parkway # 300

Addison, TX 75001-2512

 

Gentlemen:

 

You (and/or your successors or assigns, “you”) have entered into or purchased one or more conditional
sale contracts, lease agreements, chattel mortgages, security agreements, notes
and other choses in action (herein designated “Accounts”)
arising from the bona fide sale or lease to us, by various vendors or lessors,
of equipment and inventory (herein designated “Collateral”)
and/or you have made direct loans to or otherwise extended credit to us
evidenced by Accounts creating security interests in Collateral.

 

In order to induce you to extend our time of payment on one or more Accounts
and/or to make additional loans to us and/or to purchase additional Accounts
and/or to lease us additional equipment, and in consideration of you so doing,
and for other good and valuable consideration, the receipt of which we hereby
acknowledge, we agree as follows:

 

All presently existing and hereafter acquired Collateral in which you
have or shall have a security interest shall secure the payment and performance
of all of our liabilities and obligations to you of every kind and character,
whether joint or several, direct or indirect, absolute or contingent, due or to
become due, and whether under presently existing or hereafter created Accounts
or agreements, or otherwise.

 

We further agree that your security interest in the property covered by
any Account now held or hereafter acquired by you shall not be terminated in
whole or in part until and unless all indebtedness of every kind, due or to
become due, owed by us to you is fully paid and satisfied and the terms of
every Account have been fully performed by us. 
It is further agreed that you are to retain your security interest in
all property covered by all Accounts held or acquired by you, as security for
payment and performance under each such Account, notwithstanding the fact that
one or more of such Accounts may become fully paid.

 

This instrument is intended to create cross-default and cross-security
between and among all the within described Accounts now owned or hereafter
acquired by you.

 

A default under any Account or agreement shall be deemed to be a default
under all other Accounts and agreements. 
A default shall result if we fail to pay any sum when due on any Account
or agreement, or if we breach any of the other terms and conditions thereof, or
if we become insolvent, cease to do business as a going concern, make an
assignment for the benefit of creditors, or if a petition for a receiver or in
bankruptcy is filed by or against us, or if any of our property is seized,
attached or levied upon.  Upon our
default any or all Accounts and agreements shall, at your option, become
immediately due and payable without notice or demand to us or any other party
obligated thereon, and you shall have and may exercise any and all rights and
remedies of a secured party under the Uniform Commercial Code as enacted in the
applicable jurisdiction and as otherwise granted to you under any Account or
other agreement.  We hereby waive, to the
maximum extent permitted by law, notices of default, notices of repossession and
sale or other disposition of collateral, and all other notices, and in the
event any such notice cannot be waived, we agree that if such notice is mailed
to us postage prepaid at the address shown below at least five (5) days prior
to the exercise by you of any of your rights or remedies, such notice shall be
deemed to be reasonable and shall fully satisfy any requirement for giving
notice.

 

All rights granted to you hereunder shall be cumulative and not
alternative, shall be in addition to and shall in no manner impair or affect
your rights and remedies under any existing Account, agreement, statute or rule
of law.

 

This agreement may not be varied or altered nor its provisions waived
except by your duly executed written agreement. 
This agreement shall inure to the benefit of your successors and assigns
and shall be binding upon our heirs, administrators, executors, legal
representatives, successors and assigns.

 

IN WITNESS WHEREOF, this agreement is executed this 19th day of September,
2005

 

	
   

  	
  TGC
  Industries, Inc.

  
	
   

  	
  (Name of
  Proprietorship, Partnership or Corporation, as applicable)

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/  Wayne
  Whitener

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  Title:

  	
    President

  	
   

  
	
   

  	
   

  	
  (Owner,
  Partner or Officer, as applicable)

  
	
   

  	
   

  
	
   

  	
  Address:   1304 SUMMIT AVE SUITE 2, PLANO, TX 75074-Exhibit
10.1

 

CONFIDENTIAL

 

Date: September 30, 2005

 

 

Mr. Philip Wong

3B 3 Stubbs Road

Happy Valley

Hong Kong PRC

 

Re:          Separation Agreement

 

Dear Philip,

 

This is to confirm that
you have tendered your resignation as President and as a Director of ValenceTech,
Ltd., a wholly owned subsidiary of SRS Labs, Inc., (together referred to
as the “Company”). This letter sets forth the severance package that the
Company is offering to assure a smooth transition for both you and the Company.
Once signed by you, this letter will confirm our agreement on the following
terms:

 

1.             Separation Date: Your resignation of employment with the
Company is effective on September 11, 2005, and you will be paid on that
day all salary and accrued vacation earned through your date of termination.

 

2.             Return of Company Property: If you have not already done so, please
return all Company property in your possession or under your control
immediately. This includes but is not limited to all keys, credit cards,
originals and copies of documents, and all office, or telephone equipment. You
should contact Reivlin Cham if you believe the Company still has any of your
personal belongings.

 

3.             Separation Benefits: In consideration for your signing and
fulfilling your obligations under this agreement, the Company will provide the
following severance pay and benefits:

 

A.            Severance Pay: The Company will pay you an amount that
is equal to two (2) months of your base salary, minus appropriate
withholding and payroll deductions, payable on the date this agreement takes
effect.

 

B.            Stock Option and Other Benefits: Your stock options will vest and be exercisable
in accordance with the terms of the Company stock option plan(s) and your stock
option agreement(s) based on your termination date of September 9, 2005. Your
participation in all other employee benefits offered by the Company will cease
on September 9, 2005.

 

4.             Cooperation:  You and the Company
agree to cooperate in assuring a smooth and orderly transition of your duties
and responsibilities. During the period represented by the base severance pay
you receive under this agreement, you will make yourself reasonably available
by phone and email to answer

 

 

questions
and provide information relating to your duties and responsibilities. In
addition, you agree to fully cooperate with the Company in the pending
arbitration case, Wong v. ValenceTech, including
but not limited to travel to the United States for the arbitration hearing, in
which event the Company shall reimburse you for all reasonable and ordinary
expenses incurred by you.

 

5.             Non-Disparagement: You and the management of the Company will
refrain from making any disparaging comments about the other or from
interfering in any way with the other’s business or future employment. In
responding to inquiries about you from prospective employers, the Company will
disclose your dates of employment, title, final rate of pay, provided you refer
all such inquiries to the human resources department.

 

6.             Final Settlement: Since these benefits go beyond what you are
entitled to under the Company’s policies, you agree that this severance
agreement constitutes a full and final settlement of any and all claims, known
or unknown, of any kind that you or your dependents may have to date against
the Company or any of its parent or affiliated companies and their officers,
directors, shareholders, employees, insurers, agents, successors, or assigns,
and you agree to dismiss and never to bring any legal or administrative action
based on any such claim. This includes but is not limited to claims arising
from your hiring, employment, compensation, or termination, or arising under
equal employment laws such as Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, or the California Fair Employment and Housing
Act.

 

7.             You understand and agree that this is a full
and final release of any and all claims and causes of action which you now
have, or in the future may have, against all persons or entities to be released
as described in paragraph 6, above, for any and all alleged actions or
inactions of the persons or entities released, including any and all claims for
any alleged injuries or damages of any type or description arising out of, or
in any way connected with, your employment with the Company. You hereby
acknowledge that there is a risk that subsequent to the execution of this
agreement, you may incur, suffer or sustain injury, loss, damage, costs, attorneys’
fees, expenses or any of these, which are in some way caused by or connected
with your employment and which are unknown or unanticipated at the time this
agreement is executed. You further acknowledge that there is a risk that such
damages as are presently known may become more serious than you now expect or anticipate.
Nevertheless, you acknowledge that this agreement has been negotiated and
agreed upon in light of these realizations and you hereby expressly waive all
rights that you may have in such unknown or unanticipated claims related to your
employment. In so doing, you understand and knowingly, voluntarily, and specifically
waive all rights you may have under California Civil Code Section 1542,
which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.

 

8.             Confidentiality: You agree to keep this agreement, including
the fact and amount of pay and benefits, strictly confidential to the fullest
extent allowed by law, but you may make disclosures as necessary to your
spouse, attorney, and accountant.

 

9.             Trade Secrets: During your employment, you were entrusted
with access to highly confidential trade secrets of the Company concerning its
technology, know-how, customers, bids, prospects, finances, business plans,
personnel, and other areas. The Confidentiality, Non-Competition and Compliance
Agreement you signed shall remain in full force and effect.

 

 

10.           Voluntary
Agreement: You
acknowledge that you are entering into this agreement freely and voluntarily,
with a full understanding of its terms including the release of all claims. I
advise you to consult an attorney if you so desire before signing this
agreement.

 

11.           Complete
Agreement: You agree
that this letter sets forth all of the terms of your agreement with the
Company, but that any other agreements you have signed with the Company
concerning confidential information or assignment of inventions shall remain in
effect.

 

12.           No
Admission: You
acknowledge that this is not an admission of wrongdoing by you or the Company,
and shall not be used as evidence of guilt. If you elect not to sign this
letter, it will become null and void.

 

In order to assure that you are making a voluntary decision, you will
have twenty-one (21) days after you receive this agreement in which to decide
whether or not to sign it, and if you sign it you will have an additional
period of seven (7) days in which to revoke your acceptance by notifying
the Company. This agreement will not take effect until that seven day period
has ended, at which time you will receive your severance pay and benefits.

 

To confirm that you agree to these terms, please sign and date the
enclosed copy of this letter, and return it to me in the enclosed envelope.

 

Please call me if you have any questions or comments. I wish you the
best in your future endeavors.

 

 

Very truly yours,

 

 

	
  /s/ Thomas. C. K. Yuen

  	
   

  
	
  Thomas.
  C. K. Yuen

  
	
  President
  and Chief Executive Officer

  

 

 

I have carefully read and fully understand all of the
provisions of this General Release Agreement.  I further acknowledge that this General
Release Agreement is knowing and voluntary on my part, that I have had a
reasonable time to deliberate regarding its terms, and that I have had the
right to consult with an attorney if I so desired.

 

 

I agree to the terms stated in this letter.

 

 

	
  /s/ Philip Wong

  	
   

  	
  Dated:

  	
  September
  30, 2005

  	
   

  
	
  Philip
  Wong

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