Exhibit 10.1


 


[TGC
Letterhead]


 


October 11, 2005


 


 


Sovereign Bank, N.A.,


Preston Center


6060 Sherry Lane


Dallas, Texas 75225


 


Re:                               TGC Industries, Inc. Promissory Note and
Business Loan Agreement


 


Ladies and Gentlemen:


 


Reference is made to that certain Promissory
Note (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Note”) and Business Loan Agreement (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the “Agreement”),
both dated September 16, 2005, among TGC Industries, Inc. (“Borrower”) and
Sovereign Bank, N.A., (the “Lender”). 
Capitalized terms used herein shall, unless otherwise indicated, have
the respective meanings set forth in the Note and the Agreement, respectively.


 


Section 1.              Requests by Borrower.


 


(a)           In connection with the Borrower’s issuance of up to
6,325,000 shares of its common stock pursuant to the Underwriting Agreement by
and between the Borrower and Oppenheimer & Co, Inc., as representative of
the underwriters (the “Offering”), Borrower has requested that Lender waive
compliance with the “Change in Material Ownership” sub-section of the “DEFAULT”
section of the Note that states that any change in ownership of twenty-five
percent (25%) or more of the Borrower’s common stock is an event of default.


 


(b)           For the term of the Agreement, except for those assets
included in the Assignment of Accounts Receivable and Intangibles described in
the “COLLATERAL” section of the Note, Borrower has requested that Lender waive
compliance with the “Properties” sub-section under the “REPRESENTATION AND
WARRANTIES” section of the Agreement that states that the Borrower’s properties
are free and clear of all Security Interest, and the Borrower has not executed
any security documents or financing statements relating to such properties.


 


(c)           With regard to the current litigation against the Borrower
involving the death of an employee, as described in Exhibit “A” attached
hereto, Borrower has requested that Lender waive compliance with item (2) of
the “Notices of Claims and Litigation” sub-section under the “AFFIRMATIVE
COVENANTS” section of the Agreement that states that the Borrower will inform
the Lender in writing of any threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting the Borrower.


 


(d)           For the term of this Agreement, Borrower has requested
that Lender waive compliance with item (3) of the “Continuity of Operations”
sub-section under the “NEGATIVE COVENANTS” section of the Agreement that states
that the Borrower shall not pay any dividends on Borrower’s stock.


 


(e)           In connection with the Offering, Borrower has requested
that Lender waive compliance


 


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with
the “Change of Ownership” sub-section under the “DEFAULT” section of the
Agreement that states that any change in ownership of twenty-five percent (25%)
or more of the Borrower’s common stock is an event of default.


 


Section 2.              Waiver.   Subject to the terms and conditions set forth herein, the Lender
executing this letter hereby agrees to waive (the “Waiver”) the
following requirements, events of default or anticipated events of default:


 


(a)           in the “Change in
Material Ownership” sub-section of the “DEFAULT” section of the Note that any
change in ownership of twenty-five percent (25%) or more of the Borrower’s
common stock is or will be an event of default in connection with the Offering;


 


(b)           in the “Properties”
sub-section under the “REPRESENTATION AND WARRANTIES” section of the Agreement
that the Borrower’s properties, except for those assets included in the
Assignment of Accounts Receivable and Intangibles described in the “COLLATERAL”
section of the Note, are free and clear of all Security Interest, and the Borrower
has not executed any security documents or financing statements relating to
such properties, for the term of the Agreement;


 


(c)           in item (2) of the “Notices of Claims and Litigation”
sub-section under the “AFFIRMATIVE COVENANTS” section of the Agreement that the
Borrower will inform the Lender in writing of any threatened litigation,
claims, investigations, administrative proceedings or similar actions affecting
the Borrower, in connection with the litigation against the Borrower involving
the death of an employee, as described in Exhibit “A” attached hereto.


 


(d)           in item (3) of the “Continuity
of Operations” sub-section under the “NEGATIVE COVENANTS” section of the
Agreement that the Borrower shall not pay any dividends on Borrower’s stock,
for the term of the Agreement; and


 


(e)           in the “Change of
Ownership” sub-section under the “DEFAULT” section of the Agreement that any
change in ownership of twenty-five percent (25%) or more of the Borrower’s
common stock is or will be an event of default, in regard to the Offering.


 


Section 3.              No Impairment.  The
Waiver hereby granted by Lender does not, other than to the extent expressly
waived or amended hereby, (a) constitute a waiver or modification of any
other terms or provisions set forth in the Note or the Agreement, (b) impair
any right that Lender may now or hereafter have under or in connection with the
Note or the Agreement, or (c) impair the Lender’s rights to insist upon
strict compliance with the Note or the Agreement.


 


Section 4.              Counterparts.       This
letter may be signed 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 LETTER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.


 


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[Remainder of Page Intentionally Left Blank;


Signature Pages to Follow.]


 


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Please execute a copy of this letter in the
space provided below to acknowledge your agreement to the foregoing.


 


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  TGC
  INDUSTRIES, INC., as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Wayne A. Whitener

  	
   

  
	
   

  	
   

  	
  Wayne A. Whitener, Chief
  Executive Officer

  



 


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Agreed to and acknowledged this 12th
day of October, 2005 and effective as of September 16, 2005.


 


	
  SOVEREIGN
  BANK, N.A., as
  Lender

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Stephanie B. Velasquez

  	
   

  	
   

  
	
  Name:

  	
  Stephanie B. Velasquez

  	
   

  
	
  Title:

  	
  President – Park Cities

  	
   

  
				



 


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