Document:

Exhibit 4.15

 

	
  No. WT         

  	
   

  	
   

  	
            
  Warrants

  
	
   

  	
   

  	
   

  	
              Series A2

  

 

VOID
AFTER JUNE 12, 2013

(unless
extended by TGC Industries, Inc.)

 

TGC
INDUSTRIES, INC.

 

Warrant
Agreement and

Warrant Certificate

 

I.              A.            THIS CERTIFIES THAT for value received                 ,
or registered assigns, is the owner of the number of Warrants (“Warrants”) of
TGC Industries, Inc. (the “Company”) set forth above (which Warrants are a
part of a series of 750,000 Warrants issued of even date (the “Series B
Warrants”)), each of which entitles the owner hereof to purchase, subject to
the restrictions referenced herein, prior to the close of business on June 12, 2013, or such later date or
dates as Company may determine (the “Expiration Date”), at the principal office
of the Company, one (1) share of Common Stock of TGC Industries, Inc.
(the “Shares”), at the purchase price of twenty
cents ($.20) per whole share (the “Purchase Price”), upon
presentation and surrender of this Warrant Certificate with the Form of
Election to Purchase duly executed. The number of Warrants evidenced by this
Warrant Certificate (and the number of Shares which may be purchased upon
exercise thereof) set forth above is the number as of the date of this
Certificate, based on the shares of Common Stock of the Company as constituted
at such date.

 

B.            The Warrants are exercisable immediately and
until the Expiration Date, provided that if a registration statement or
prospectus covering the Shares is not then effective under the Securities Act
of 1933, as amended, and the securities laws of the state of the address of
record of such holder, then the holder shall represent in writing that the
Shares are being acquired for investment and will not be distributed in
violation of applicable securities laws in order that an exemption from
registration is available to the Company for the Warrant exercise and the
issuance of the Shares.

 

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION,
SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED AT ANY TIME
WHATSOEVER, EXCEPT UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH
TRANSFER.

 

 

C.            Except as hereafter provided, Company shall
have no obligation to register either the Warrants or the Shares into which the
Warrants are exercisable.

 

(1)   The
Company agrees that, upon written request from the holders of fifty-one percent
(51%) of the then outstanding Warrants (including this Warrant to the extent
then outstanding), it will take the following action with respect to a
registration of the Warrants and the Shares for sale in the public market,
considering the proposed effective date of such offering, subject to its
ability to use currently available audited financial statements without having
to have any such financial statements specially prepared for such offering:

 

(a)             promptly cause to be prepared and filed under
the Act a registration statement and related prospectus for the offering of the
Warrants and the Shares as may be required for the lawful public offering
thereof in the manner then contemplated, provided that the holders may also
elect to sell such Warrants and Shares in a private or negotiated transaction;

 

(b)            use its best efforts, through its officers
and directors, auditors, and counsel in all matters necessary or advisable to
cause such to become effective at the earliest possible date after the filing
thereof;

 

(c)             deliver to the holder of this Warrant (to the
extent then outstanding) such number of copies of such prospectuses in
preliminary and definitive form, and amendments thereto, as it, he, or she may
reasonably require, and Company hereby consents to the use of such prospectuses
and amendments for the public offering and sale of the Shares;

 

(d)            qualify the Warrants and the Shares for sale
under applicable Blue Sky laws and continue such qualification in effect so
long as required for the purposes of the sale of the Warrants and the Shares;
and

 

(e)             pay all fees, taxes (including transfer
taxes), and expenses incident to the performance of its obligations hereunder
(except that each owner of such Shares will be responsible for payment of such
owner’s own attorneys’ fees, Share sales commissions, and other expenses
personal to such owner).

 

(2)   Following the (one time) registration of
Warrants and Shares upon written request from the holders of 51% of the then
outstanding Warrants as provided above, any of the holders of the remaining
Warrants may request the registration of the remaining Warrants and Shares
issuable upon the exercise thereof (subject to Company’s ability to use
currently available audited financial statements without having to have any such
financial statements specially prepared for such offering), and Company shall
(at Company’s own expense) take the necessary action to register such Shares.

 

(3)           Whenever Company, at any time prior to the
expiration of this Warrant as herein provided, proposes to file with the
Commission for the registration under the Act of any of its securities for
Company’s own benefit, Company shall, at least thirty 

 

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days prior
to such filing, given written notice of such proposed filing to the holder of
this Warrant at the last known address of such holder, and shall offer to
include in such filing for registration any proposed disposition of Shares
deliverable upon the exercise of the then outstanding Warrants, upon receipt by
Company, not less than twenty days prior to the proposed filing date, of a
written request setting forth the facts with respect to such proposed
disposition. If such request is made, Company will take action (at Company’s
own expense) to register such Shares by including them in such filing, and will
take such other action as may be requested by such holder to qualify the Shares
for sale under applicable Blue Sky laws.

 

II.            The Purchase Price, the number of Shares
which may be purchased upon the exercise of the Warrants evidenced by this
Certificate, and the number of Warrants outstanding are subject to modification
and adjustment from time to time upon the occurrence of the events enumerated
below:

 

A.             If and whenever the Company shall issue or
sell any shares of its Common Stock for a consideration per share less than the
Purchase Price in effect immediately prior to the time of such issue or sale,
then, forthwith upon such issue or sale, the Purchase Price shall be reduced to
a price (calculated to the nearest one hundredth of a cent) determined by
dividing (1) an amount equal to the sum of (a) the number of shares
of Common Stock outstanding immediately prior to such issue or sale multiplied
by the then existing Purchase Price, and (b) the consideration, if any,
received by the Company upon such issue or sale, by (2) the total number
of shares of Common Stock outstanding immediately after such issue or sale.

 

B.              For purposes of Subsection A. above, the
following clauses (1) to (9), inclusive, shall also be applicable:

 

(1)   In case at any time the Company shall grant
(whether directly or by assumption in a merger or otherwise) any rights to
subscribe for or to purchase, or any options for the purchase of, Common Stock
or any stock or securities convertible into or exchangeable for Common Stock
(such convertible or exchangeable stock or securities being herein called
Convertible Securities) whether or not such rights or options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
the exercise of such rights or options or upon conversion or exchange of such
Convertible Securities (determined by dividing (a) the total amount, if
any, received or receivable by the Company as consideration for the granting of
such rights or options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of such rights or
options, plus, in the case of such rights or options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (b) the total
maximum number of shares of Common Stock issuable upon the exercise of such
rights or options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such rights or options) shall be less
than the Purchase Price in effect immediately prior to the time of the granting
of such rights

 

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or options,
then the total maximum number of shares of Common Stock issuable upon the exercise
of such rights or options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the exercise of such rights
or options shall (as of the date of granting of such rights or options) be
deemed to be outstanding and to have been issued for such price per share.
Except as provided in clause (3) below, no further adjustments of the
Purchase Price shall be made upon the actual issue of such Common Stock or of
such Convertible Securities upon exercise of such rights or options or upon the
actual issue of such Common Stock or of such Convertible Securities upon
exercise of such rights or options or upon the issue of such Common Stock upon
conversion or exchange of such Convertible Securities.

 

(2)           In case the Company shall issue (whether
directly or by assumption in a merger or otherwise) or sell any Convertible
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock is issuable
upon such conversion or exchange (determined by dividing (a) the total
amount received or receivable by the corporation as consideration for the issue
or sale of such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the corporation upon the
conversion or exchange thereof, by (b) the total maximum number of shares
of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Purchase Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall (as of the date of the issue or sale of such
Convertible Securities) be deemed to be outstanding and to have been issued for
such price per share, provided that (i) except as provided in clause (3) below,
no further adjustments of the Purchase Price shall be made upon the actual
issue of such Common Stock upon conversion or exchange of such Convertible
Securities, and (ii) if any such issue or sale of such Convertible
Securities is made upon exercise of any rights to subscribe for or to purchase
or any option to purchase any such Convertible Securities for which adjustments
of the Purchase Price have been or are to be made pursuant to other provisions
of this Subsection B., no further adjustment of the Purchase Price shall
be made by reason of such issue or sale.

 

(3)           Upon the happening of any of the following
events, namely, if the purchase price provided in any rights or options
referred to in clause (1) of this Subsection B., the additional
consideration, if any, payable upon the conversion or exchange of Convertible
Securities referred to in clause (1) or clause (2) of this Subsection B.,
or the rate at which any Convertible Securities referred to in clause (1) or
clause (2) of this Subsection (B) are convertible into or
exchangeable for Common Stock shall change (other than under or by reason of
provisions designed to protect against dilution), the Purchase Price in effect
at the time of such event shall forthwith be readjusted to the Purchase Price
which would have been in effect at such time had such rights, options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold; and on the expiration of any such
option or right or the termination of any such right to convert or exchange
such Convertible Securities, the Purchase Price

 

4

 

then in
effect hereunder shall forthwith be increased to the Purchase Price which would
have been in effect at the time of such expiration or termination had such
right, option or Convertible Security, to the extent outstanding immediately
prior to such expiration or termination, never been issued, and the Common
Stock issuable thereunder shall no longer be deemed to be outstanding. If the
purchase price provided for in any such right or option referred to in clause (1) of
this Subsection B., or the rate at which any Convertible Securities
referred to in clause (1) or clause (2) of this Subsection B.
are convertible into or exchangeable into or exchangeable for Common Stock,
shall decrease at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then in case of the delivery of
Common Stock upon the exercise of any such right or option or upon conversion
or exchange of any such Convertible Security, the Purchase Price then in effect
hereunder shall forthwith be adjusted to such respective amount as would have
been in effect had such rights, option or Convertible Security never been
issued as to such Common Stock and had adjustments been made upon the issuance
of the shares of Common Stock delivered as aforesaid, but only if as a result
of such adjustment the Purchase Price then in effect hereunder is thereby
decreased.

 

(4)             In case the Company shall declare a dividend
or make any other distributions upon any stock of the Company payable in Common
Stock or Convertible Securities, any Common Stock or Convertible Securities, as
the case may be, issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration.

 

(5)             In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such Common
Stock or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount received by
the Company therefor, without deduction therefrom of any expenses incurred or
any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any shares of Common Stock or Convertible Securities
or any rights or options to purchase any such Common Stock or Convertible Securities
shall be issued or sold for a consideration other than cash, the amount of the consideration
other than cash received by the Company shall be deemed to be the fair value of
such consideration as determined in good faith by the Board of Directors of the
Company, without deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection
therewith.  In case any shares of Common
Stock or Convertible Securities or any rights or options to purchase such
Common Stock or Convertible Securities shall be issued in connection with any merger
or consolidation in which the Company is the surviving corporation, the amount
of consideration therefor shall be deemed to be the fair value as determined by
the Board of Directors of the Company of such portion of the assets and
business of the non-surviving corporation or corporations as such Board shall
determine to be attributable to such Common Stock or Convertible Securities,
rights or options, as the case may be.

 

(6)             In case the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them (a) to
receive a dividend or other distribution payable in Common Stock or in
Convertible Securities, or (b) to subscribe for 

 

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or purchase
Common Stock or Convertible Securities, then such record date shall be deemed
to be the date of the issue or sale of the shares of Common Stock deemed to
have been issued upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

 

(7)            The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held or for the
account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock for the purposes of Subsection B.

 

(8)            Anything in clause (5) of this Subsection B.
to the contrary notwithstanding, in the case of an acquisition where all or
part of the purchase price is payable in Common Stock or Convertible Securities
but is stated as a dollar amount, where the Company upon making the acquisition
pays only part of the aggregate dollar amount consideration which is payable in
Common Stock or Convertible Securities and where the balance of such purchase
price is deferred or is contingently payable under a formula related to
earnings over a period of time, (a) the consideration received for any
Common Stock or Convertible Securities delivered at the time of the acquisition
shall be deemed to be such part of the total consideration as the portion of
the dollar amount consideration then paid in Common Stock or Convertible
Securities bears to the aggregate dollar amount consideration which is payable
in Common Stock or Convertible Securities, and (b) in connection with each
issuance of additional Common Stock or Convertible Securities pursuant to the
terms of the agreement relating to such acquisition, the consideration received
shall be deemed to be such part of the total consideration as the portion of
the dollar amount consideration then and theretofore paid in Common Stock or
Convertible Securities bears to the aggregate dollar amount consideration
payable in Common Stock or Convertible Securities multiplied by a fraction, the
numerator of which shall be the number of shares (or in the case of Convertible
Securities other than stock, the aggregate principal amount) then issued and
the denominator of which shall be the total number of shares (or in the case of
Convertible Securities other than stock, the aggregate principal amount) then
and theretofore issued under such acquisition agreement. If it is determined that
any part of the deferred or contingent portion of such purchase price shall not
be payable, the Purchase Price then in effect hereunder shall forthwith be
readjusted to such Purchase Price as would have obtained (i) had the
adjustment made in connection with such acquisition been made upon the basis of
the issuance of only the number of shares of Common Stock or Convertible
Securities actually issued in connection with such acquisition, and (ii) had
adjustments been made on the basis of the Purchase Price as adjusted in clause (1) for
all issued or sale (as prices which would have affected such adjusted Purchase
Price) of Common Stock or rights, options or Convertible Securities made after
such acquisition. In the event that only a part of the purchase price for an acquisition
is paid in Common Stock or Convertible Securities in the manner referred to in this
clause (8), the term “total consideration” as used in this clause (8) shall
mean that part of the aggregate consideration as is fairly allocable to the
purchase price paid in Common Stock or Convertible Securities in the manner
referred to in this clause (8), as determined by the Board of Directors of the
Company.

 

6

 

(9)           Notwithstanding anything to the contrary in
this Section II., no adjustment in the Purchase Price shall result,
pursuant to Subsection A. above or otherwise, from the issuance by the
Company of shares of its Common Stock as a result of the following
transactions:

 

(a)            The exercise of options heretofore or
hereafter granted under the Company’s 1993 Stock Option Plan, as the same may
be amended, extended or substituted from time to time provided, that the number
of shares available thereunder may not be increased by any such amendment,
extension or substitution;

 

(b)           The exercise of options heretofore or
hereafter granted under the Company’s 1999 Stock Option Plan, as the same may
be amended, extended or substituted from time to time provided, that the number
of shares available thereunder may not be increased by any such amendment,
extension or substitution; and

 

(c)            The exercise of any of the 850,000 warrants
issued on July 30, 1999, and which expire July 31, 2009, as the same
may be amended, substituted or extended from time to time.

 

(d)           The exercise of any of the 1,500,000 Warrants
issued on September 10, 2002, and which expire September 10, 2012, as
the same may be amended, substituted or extended from time to time.

 

C.                                     (1)   In case the Company
shall declare a dividend upon the Common Stock payable other than in Common
Stock or Convertible Securities, the Company shall give the holders of each
Warrant thirty (30) days prior written notice of the date as of which the
holders of Common Stock of record entitled to such special dividend shall be
determined and, in the event a holder’s Warrants remain outstanding in whole or
in part, as of such determination date the Purchase Price for such outstanding
Warrants shall be adjusted so that the holder thereof will be entitled to the
same dollar value upon exercise thereof as if such Warrants had been exercised
by such determination date. The Company hereby agrees that it shall not declare
any such dividend in an amount which exceeds (together with all such other
dividends paid in a given fiscal year) ten percent (10%) of the net income of
the Company for the prior fiscal year. For the purposes of the foregoing a
dividend other than in cash shall be considered payable out of earnings or
surplus (other than revaluation or paid-in surplus) only to the extent that
such earnings or surplus are charged an amount equal to the fair value of such
dividend as determined by the Board of Directors of the Company.

 

(2)   In the event dividends are declared and paid on
the Company’s Senior Preferred Stock (which is currently held by WEDGE Energy
Services, L.L.C.) in additional shares of Senior Preferred Stock (“PIK Dividend”),
the Warrants shall be adjusted (the “PIK Dividend Adjustment”) so that for each
one (1) share of Senior Preferred Stock paid as a PIK Dividend the
Warrants shall be exercisable for one-half (1/2)
additional share (assuming all 750,000 Warrants originally issued, as adjusted
pursuant to the terms of the Warrant, are outstanding) and the Purchase Price
shall be adjusted proportionately.

 

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The
determination of the PIK Dividend Adjustment shall be by application of the
following formulas: (a) the number of additional shares for which the
Warrants are exercisable shall be determined by application of the following
formula: (i) a fraction in which (x) the numerator is the number of
Warrants outstanding, as adjusted, at the time of determination of the PIK
Dividend Adjustment and (y) the denominator is the number of Warrants
originally issued, as adjusted, shall be multiplied by (ii) one-half (1/2)
the number of shares paid as a PIK Dividend, which product shall equal the
number of additional shares for which the Warrants are exercisable and (b) the
adjustment of the Purchase Price shall be determined by application of the
following formula: (i) the number of Warrants outstanding, as adjusted, at
the time of the determination of the PIK Dividend Adjustment shall be
multiplied by (ii) the Purchase Price in effect, as adjusted, at the time
of determination of the PIK Dividend Adjustment, and the resulting product
shall be divided by (iii) the sum obtained from adding (x) the number of
Warrants outstanding, as adjusted, at the time of determination of the PIK Dividend
Adjustment, and (y) the number of additional shares for which the Warrants are
exercisable as determined above, which quotient shall equal the adjusted
Purchase Price. (e.g. if a PIK Dividend of 100,000 shares of Senior
Preferred Stock is declared and paid, the Warrants (assuming the 750,000
originally issued Warrants are outstanding) shall be exercisable for an
additional 50,000 shares and, assuming a Purchase Price of $0.10, the Purchase
Price at such time shall be adjusted to $0.09375 (750,000 / 750,000 x 50,000 =
50,000, and 750,000 x 0.10 divided by (750,000 + 50,000) = 0.09375).
Furthermore ,if a similar PIK Dividend of 100,000 shares of Senior Preferred
Stock is declared and paid and assuming the number of Warrants outstanding, as
adjusted, has declined by 187,500 Warrants due to the sale or exercise of
Warrants, or another event outside of an adjustment pursuant to the terms of
the Warrants, the Warrants shall be exercisable for an additional 37,500 shares
and, assuming a Purchase Price at such time of $0.10, the Purchase Price shall
be adjusted to $0.09375 (562,500 / 750,000 x 50,000 = 37,500, and 562,500 x
0.10 divided by (562,500 + 37,500) = 0.09375).

 

D.                                    (1)   In case the
Company shall at any time subdivide its outstanding shares of Common Stock into
a greater number of shares; the Purchase Price in effect immediately prior to
such subdivision shall be proportionately reduced, and, conversely (2) in
case the outstanding shares of Common Stock of the Company shall be combined into
a smaller number of shares, the Purchase Price in effect immediately prior to
such combination shall be proportionately increased.

 

E.               In case of any capital reorganization or any
reclassification of the Common Stock of the Company, the consolidation of
Company with or the merger of Company with or into any other corporation, or
the sale of the properties and assets of Company as, or substantially as, an
entirety to any other corporation, then each holder of a Warrant then
outstanding shall be entitled to purchase such number of shares of stock or
other securities or property of Company or any other corporation resulting from
such reorganization, reclassification, consolidation, merger, or sale, as was
exchanged or paid in such transaction for the number of shares of Common Stock
of Company which the holder would have been entitled to purchase except for
such action. The subdivision or combination of shares of Common Stock at any
time outstanding into a greater or lesser number of shares of Common Stock
shall not be deemed to be a reclassification of the

 

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Common Stock
of Company for the purposes of this Subsection “E.”

 

F.                                      (1)   Except as
provided in Subsection G, to follow, upon each adjustment of the Purchase
Price as a result of (a) an issuance or sale of Common Stock below the
Purchase Price as provided in Subsections A and B above, including (without limitation)
a dividend or distribution in shares of capital stock, or (b) a
subdivision of outstanding shares of Common Stock as provided in Subsection “D.(1)”
hereof, the number of shares of Common Stock purchasable upon exercise of any
Warrant Certificate shall be increased to the number of shares of Common Stock
(calculated to the nearest hundredth) obtained by multiplying (i) the
number of shares of Common Stock purchasable immediately prior to such
adjustment upon exercise of Warrants (evidenced by the Warrant Certificate held
by such holder) by (ii) the Purchase Price in effect immediately prior to such
adjustment, and dividing the product so obtained by the Purchase Price in
effect after such adjustment.

 

(2)   Except as provided in Subsection “G” to
follow, upon each adjustment of the Purchase Price as a result of a combination
of the Common Stock as provided in Subsection “D.(2)” hereof, the number
of shares of Common Stock purchasable upon exercise of any Warrant Certificate
shall be decreased to the number of shares of Common Stock (calculated to the
nearest hundredth) obtained by multiplying (a) the number of shares of Common
Stock purchasable immediately prior to such adjustment upon exercise of
Warrants evidenced by the Warrant Certificate held by such holder, by (b) the
Purchase Price in effect immediately prior to such adjustment, and then
dividing the product so obtained by the Purchase Price in effect after such
adjustment.

 

G.             In lieu of an adjustment in the number of
shares covered by a Warrant, Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Warrants.

 

H.            Irrespective of any adjustments or change in
the Purchase Price or the number of shares of the Common Stock issuable upon
the exercise of the Warrants, the Warrant Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share and the
number of shares which were expressed upon the Warrant Certificates when
initially issued.

 

I.              Before taking any action which would cause an
adjustment reducing the Purchase Price below the then par value, if any, of the
shares of Common Stock issuable upon exercise of the Warrants, Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that Company may validly and legally issue fully paid and
nonassessable shares of such Common Stock at such adjusted Purchase Price.

 

J.             Whenever the Purchase Price, the number of
shares of Common Stock issuable upon the exercise of each Warrant, or the
number of Warrants are adjusted as provided in this Section II., Company
shall promptly prepare a certificate setting forth the Purchase Price as so
adjusted, the number of shares of Common Stock issuable upon

 

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the exercise of each Warrant as so adjusted, and a brief statement of
the facts accounting for such adjustment.

 

K.            If any event occurs as to which in the
opinion of the Board of Directors of the Company the other provisions of this Section II.
are not strictly applicable or if strictly applicable would not fairly protect
the conversion rights of the holders of the Warrants in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such exercise
rights as aforesaid.

 

III.           A.            This Certificate, with or without other
Warrant Certificates, upon surrender at the principal office of the Company,
may be exchanged for another Warrant Certificate or Warrant Certificates of
like tenor evidencing Warrants entitling the holder to purchase a like
aggregate number of Shares as the Warrants evidenced by the Warrant Certificate
or Warrant Certificates surrendered. If only a part of the Warrants evidenced
by this Certificate are exercised, the holder hereof shall be entitled to
receive, upon surrender hereof, another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.

 

B.              Upon receipt by Company of evidence
reasonably satisfactory to it of the loss, theft, destruction, or mutilation of
a Warrant Certificate, and, in case of loss, theft, destruction, or mutilation,
of indemnity or security reasonably satisfactory to it, and reimbursement to
Company of all reasonable expenses incidental thereto, and upon surrender to
the Company and cancellation of the Warrant Certificate, if mutilated, the Company
shall deliver to the registered owner a new Warrant Certificate in lieu of, and
evidencing the right to purchase the same number of shares as, the Warrant
Certificate so lost, stolen, destroyed, or mutilated.

 

C.              No holder of the Warrants evidenced by this
Certificate shall be entitled to vote or receive dividends or be deemed the
holder of Shares or any other securities of Company which may at any time be
issuable on the exercise of these Warrants for any purpose, nor shall anything
contained in the Warrant Agreement or herein be construed to confer upon the
holder of these Warrants, as such, any of the rights of a shareholder of
Company or any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent to any corporate
action (whether upon any recapitalization, issue of stock, reclassification of stock,
change of par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise, until the Warrants evidenced by this Warrant Certificate have been
exercised and the Common Stock purchasable upon the exercise thereof is issued
to the holder as the holder of record as provided in III.J. below.

 

D.              To the extent that any Warrant Certificates
remain outstanding at 5:01 P.M. Dallas, Texas time on the Expiration Date,
such outstanding Warrant Certificates shall be automatically deemed exercised
on behalf of each record holder of Warrant Certificates into shares of the
Company’s Common Stock at the rate (“Conversion Rate”)

 

10

 

of one-tenth
(1/10) of a share of Common Stock for each Warrant Certificate or Certificates
representing, immediately before the Expiration Date, the right to purchase one
share of Common Stock.

 

E.                                         Upon the exercise of the Warrant, in lieu of
the issuance of any fractional Shares, the Company shall pay cash to the
registered holder of the Warrant based on the difference between the market
price of the Shares, which price shall be computed as the per Share closing
price (if such Shares are listed on an exchange) or the average between the per
Share bid and asked prices as of the close of business on the exercise date as
reported by the National Association of Securities Dealers Automated Quotation
System and the Purchase Price on the exercise date times the fractional Share which
is represented by the Warrants on the exercise date. However, if no market
price exists, then the amount of cash to be paid to the registered holder of
the Warrant in lieu of any fractional Shares shall be the product of the
difference between the per share Net Book Value (defined hereafter) of the
shares of the Company’s Common Stock outstanding on the last business day prior
to the exercise date and the Purchase Price on the exercise date times the
fractional security which otherwise would have been issuable in the absence of
this provision. For purposes of payment of cash in lieu of the issuance of
fractional securities, the term “Net Book Value” means the consolidated total
shareholders’ equity, determined in accordance with generally accepted
accounting principles (“GAAP”).

 

F.             The holder hereof, by accepting same,
consents and agrees with Company and with every other holder of a Warrant
Certificate that:

 

(1)             The Warrants evidenced by this Certificate
are transferable only on the registry books of the Company upon surrender of
this Certificate at the principal office of the Company and only as provided
below; and

 

(2)             Company and may deem and treat the person in
whose name this Certificate is registered as the absolute owner thereof and of
the Warrants evidenced thereby (notwithstanding any notations of ownership or
writing on the Certificate made by anyone other than Company) for all purposes
whatsoever, and the Company shall not be affected by any notice to the
contrary.

 

G.            The registered holder of any Warrant
Certificate may exercise it in whole or in part at any time, but only in such
multiples as are required to permit the issuance by Company of one or more
shares, by surrender of the Warrant Certificate with the form of election to
purchase on the reverse side thereof duly executed, to the Company at the
principal office of the Company at or prior to 5:00 P.M. Dallas, Texas
time on June 12, 2013, or such later date or dates as Company may
determine together with payment of the Purchase Price, payable to Company, for
each share into which the Warrants are exercised.

 

H.            Upon receipt of a Warrant Certificate, with
the form of election to

 

11

 

purchase duly executed,
accompanied by payment of the Purchase Price for its shares to be purchased and
an amount equal to any applicable transfer tax in cash, or by certified check,
bank draft, or postal or express money order payable to the order of Company,
the Company shall thereupon cause the certificates for the number of whole shares
to be purchased to be delivered to or upon the order of the registered holder
of such Warrant Certificate registered in such name or names as may be
designated by such holder.

 

I.              In case the
registered holder of any Warrant Certificate exercises less than all the
Warrants evidenced thereby, a new Warrant Certificate evidencing Warrants
equivalent to the Warrants remaining unexercised shall be issued by Warrant
Agent to the registered holder of such Warrant Certificate or to such holder’s
duly authorized assigns.

 

J.                                        Each person in
whose name any certificate for shares of Common Stock of the Company is issued
upon the exercise of Warrants shall for all purposes be deemed to have become
the holder of record of the shares of Common Stock represented thereby on, and
such certificate shall be dated, the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the transfer books of
Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding business day on which the transfer books of Company are open. Prior
to the exercise of the Warrants evidenced thereby, the holder of a Warrant
Certificate shall not be entitled to any rights of a shareholder of Company
with respect to shares for which the Warrants are exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions, or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of Company, except as provided herein.

 

12

 

WITNESS the facsimile signatures of the proper officers of Company and
its corporate seal. Dated as of June 12, 2003.

 

	
   

  	
  TGC INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Wayne A. Whitener, President

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
  Kenneth W. Uselton,

  	
   

  
	
  Assistant Secretary

  	
   

  
						

 

13

 

ASSIGNMENT

 

(To
be executed by the registered holder if such

holder desires to transfer the Warrant Certificate)

 

FOR
VALUE RECEIVED
                                                                         
hereby sells, assigns, and transfers unto
                               

 

(Please
print name and address of transferee)

 

 

this
Warrant Certificate, together with all right, title, and interest therein, and
does hereby irrevocably constitute and appoint
                                            
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.

 

 

	
  Dated:

  	
   

  	
   ,
  20     .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guaranteed

  	
   

  

 

NOTICE:               The signature(s) to this assignment must correspond
with the name(s) as written upon the face of the Certificate in every
particular without alteration or enlargement or any change whatever.
Signature(s) must be guaranteed by a commercial bank or trust company or a
member firm of a major stock exchange.

 

14

 

ELECTION
TO PURCHASE

 

(To be executed if holder desires

to exercise the Warrant Certificate)

To: TGC INDUSTRIES, INC.

 

The undersigned hereby irrevocably elects to exercise
                                 
Warrants represented by this Warrant Certificate to purchase the shares of
Common Stock issuable upon the exercise of such Warrants and requests that
certificates for such shares be issued in the name of:

 

 

(Please insert social security or other identifying number)

 

 

(Please print name and address)

 

If such number of Warrants does not constitute all of the Warrants
evidenced by this Warrant Certificate, a new Warrant Certificate for the
balance remaining of such Warrants shall be registered in the name of and
delivered to:

 

 

(Please insert social security or other identifying number)

 

 

	
  Dated:

  	
   

  	
   , 20  

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guaranteed

  	
   

  

 

NOTICE:               The
signature on this Form of Election to Purchase must correspond with the
name(s) as written upon the face of the Certificate without alteration or
enlargement or any change whatever. Signature(s) must be guaranteed by a
commercial bank or trust company or a member firm of a major stock exchange.

 

15Exhibit 4.16

 

	
  No. WT
        

  	
   

  	
           Warrants

  
	
   

  	
   

  	
  Series C2

  

 

VOID AFTER DECEMBER 15, 2007

(unless extended by TGC Industries, Inc.)

 

TGC INDUSTRIES, INC.

 

Warrant Agreement and

Warrant Certificate

 

I.              A.            THIS
CERTIFIES THAT for value received              
or registered assigns, is the owner of the number of Warrants (“Warrants”) of
TGC Industries, Inc. (the “Company”) set forth above (which Warrants are
part of a series of              
Warrants issued of even date (the “Series C2 Warrants”)), each of which
entitles the owner hereof to purchase, subject to the restrictions referenced
herein, prior to the close of business on December 15, 2007,
or such later date or dates as the Company may determine (the “Expiration Date”),
at the principal office of the Company, one (1) share of Common Stock of
TGC Industries, Inc. (the “Shares”), at the purchase price of One Dollar ($1.00) per whole share (the “Purchase Price”),
upon presentation and surrender of this Warrant Certificate with the Form of
Election to Purchase duly executed.  The
number of Warrants evidenced by this Warrant Certificate (and the number of
Shares which may be purchased upon exercise thereof) set forth above is the
number as of the date of this Certificate, based on the shares of Common Stock
of the Company as constituted at such date.

 

B.            No
Warrant is exercisable by a holder unless, at the time of an exercise by such
holder, there is either (1) a registration statement or prospectus
covering the Shares that is effective under the Securities Act of 1933, as
amended, and the securities laws of the state of the address of record of such
holder; or (2) an exemption from registration is available for the Warrant
exercise and the issuance of the Shares in the opinion of counsel to the
Company (and the holder represents in writing that the Shares are being
acquired for investment and will not be distributed in violation of applicable
securities laws).

 

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE. 
WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER, EXCEPT UPON DELIVERY TO THE
CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER.

 

1

 

C.            Except
as hereafter provided, the Company will have no obligation to register either
the Warrants or the Shares into which the Warrants are exercisable.  Accordingly, upon exercise of a Warrant the
Shares received by the Warrant holder will contain the usual restrictive legend
regarding limitation on resales of such Shares.

 

(1)           Whenever
the Company, at any time prior to the expiration of this Warrant as herein
provided, proposes to file with the Commission for the registration under the
Act of any of its securities for the Company’s own benefit, the Company shall,
at least thirty days prior to such filing, give written notice of such proposed
filing to the holder of this Warrant at the last known address of such holder,
and shall offer to include in such filing for registration such Warrants and
any proposed disposition of Shares deliverable upon the exercise of the then
outstanding Warrants, upon receipt by the Company, not less than twenty days
prior to the proposed filing date, of a written request setting forth the facts
with respect to such proposed disposition. 
If such request is made, the Company will take action (at the Company’s
own expense) to register such Warrants and Shares by including them in such
filing, and will take such other action as may be requested by such holder to
qualify such Warrants and Shares for sale under applicable Blue Sky laws.

 

(2)           The
Company agrees that, upon written request from one or more of the holders of
the then outstanding Warrants (including this Warrant to the extent then
outstanding), the Company shall (at the expense of those Warrant holders making
the request) file with the Commission a Registration Statement covering such
Warrants and the proposed disposition of Shares deliverable upon the exercise
of those Warrants designated by such Warrant holders.  Such registration will take place as soon as
the Company has available audited and interim financial statements without
having to have any such financial statements specially prepared for such
offering.  Upon such filing, the Company
shall deliver to each such Warrant holder such number of copies of such prospectuses
in preliminary and definitive form, and amendments thereto, as may be
reasonably required.  The Company shall
also qualify such Warrants and Shares for sale under applicable Blue Sky Laws
and continue such qualification in effect so long as required for the purposes
of the sale of such Warrants and Shares. 
Each Warrant holder shall pay to the Company his, her, or its
proportionate share of all fees, taxes, and expenses incident to filing such
Registration Statement and the actions required in connection therewith.  This obligation on the part of the Company
shall be a one-time obligation.

 

II.            The
Purchase Price, the number of Shares which may be purchased upon the exercise
of the Warrants evidenced by this Certificate, and the number of Warrants outstanding
are subject to modification and adjustment from time to time upon the
occurrence of the events enumerated below:

 

A.            If
and whenever the Company shall issue or sell any shares of its Common Stock for
a consideration per share less than the Purchase Price in effect immediately
prior to the time of such issue or sale, then, forthwith upon such issue or

 

2

 

sale, the Purchase Price
shall be reduced to a price (calculated to the nearest one hundredth of a cent)
determined by dividing (1) an amount equal to the sum of (a) the
number of shares of Common Stock outstanding immediately prior to such issue or
sale multiplied by the then existing Purchase Price, and (b) the
consideration, if any, received by the Company upon such issue or sale, by (2) the
total number of shares of Common Stock outstanding immediately after such issue
or sale.

 

B.            For
purposes of Subsection A. above, the following clauses (1) to (9),
inclusive, shall also be applicable:

 

(1)           In
case at any time the Company shall grant (whether directly or by assumption in
a merger or otherwise) any rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any stock or securities
convertible into or exchangeable for Common Stock (such convertible or
exchangeable stock or securities being herein called Convertible Securities)
whether or not such rights or options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and the price per
share for which Common Stock is issuable upon the exercise of such rights or
options or upon conversion or exchange of such Convertible Securities
(determined by dividing (a) the total amount, if any, received or
receivable by the Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional consideration payable
to the Company upon the exercise of such rights or options, plus, in the case
of such rights or options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the issue or
sale of such Convertible Securities and upon the conversion or exchange
thereof, by (b) the total maximum number of shares of Common Stock
issuable upon the exercise of such rights or options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise of such
rights or options) shall be less than the Purchase Price in effect immediately
prior to the time of the granting of such rights or options, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
rights or options or upon conversion or exchange of the total maximum amount of
such Convertible Securities issuable upon the exercise of such rights or
options shall (as of the date of granting of such rights or options) be deemed
to be outstanding and to have been issued for such price per share. Except as
provided in clause (3) below, no further adjustments of the Purchase Price
shall be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such rights or options or upon the actual issue of
such Common Stock or of such Convertible Securities upon exercise of such
rights or options or upon the issue of such Common Stock upon conversion or
exchange of such Convertible Securities.

 

(2)           In
case the Company shall issue (whether directly or by assumption in a merger or
otherwise) or sell any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the price 

 

3

 

per share for which
Common Stock is issuable upon such conversion or exchange (determined by
dividing (a) the total amount received or receivable by the corporation as
consideration for the issue or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
corporation upon the conversion or exchange thereof, by (b) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange of
all such Convertible Securities) shall be less than the Purchase Price in
effect immediately prior to the time of such issue or sale, then the total
maximum number of shares of Common Stock issuable upon conversion or exchange
of all such Convertible Securities shall (as of the date of the issue or sale
of such Convertible Securities) be deemed to be outstanding and to have been
issued for such price per share, provided that (i) except as provided in
clause (3) below, no further adjustments of the Purchase Price shall be
made upon the actual issue of such Common Stock upon conversion or exchange of
such Convertible Securities, and (ii) if any such issue or sale of such
Convertible Securities is made upon exercise of any rights to subscribe for or
to purchase or any option to purchase any such Convertible Securities for which
adjustments of the Purchase Price have been or are to be made pursuant to other
provisions of this Subsection B., no further adjustment of the Purchase
Price shall be made by reason of such issue or sale.

 

(3)           Upon
the happening of any of the following events, namely, if the purchase price
provided in any rights or options referred to in clause (1) of this Subsection B.,
the additional consideration, if any, payable upon the conversion or exchange
of Convertible Securities referred to in clause (1) or clause (2) of
this Subsection B., or the rate at which any Convertible Securities
referred to in clause (1) or clause (2) of this Subsection (B) are
convertible into or exchangeable for Common Stock shall change (other than
under or by reason of provisions designed to protect against dilution), the
Purchase Price in effect at the time of such event shall forthwith be
readjusted to the Purchase Price which would have been in effect at such time
had such rights, options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate,
as the case may be, at the time initially granted, issued or sold; and on the
expiration of any such option or right or the termination of any such right to
convert or exchange such Convertible Securities, the Purchase Price then in
effect hereunder shall forthwith be increased to the Purchase Price which would
have been in effect at the time of such expiration or termination had such
right, option or Convertible Security, to the extent outstanding immediately
prior to such expiration or termination, never been issued, and the Common
Stock issuable thereunder shall no longer be deemed to be outstanding. If the
purchase price provided for in any such right or option referred to in clause (1) of
this Subsection B. or the rate at which any Convertible Securities
referred to in clause (1) or clause (2) of this Subsection B.
are convertible into or exchangeable into or exchangeable for Common Stock,
shall decrease at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then in case of the delivery of
Common Stock upon the exercise of any such right or option or upon conversion
or exchange of any such 

 

4

 

Convertible Security, the
Purchase Price then in effect hereunder shall forthwith be adjusted to such
respective amount as would have obtained had such rights, option or Convertible
Security never been issued as to such Common Stock and had adjustments been
made upon the issuance of the shares of Common Stock delivered as aforesaid, but
only if as a result of such adjustment the Purchase Price then in effect
hereunder is thereby decreased.

 

(4)           In
case the Company shall declare a dividend or make any other distributions upon
any stock of the Company payable in Common Stock or Convertible Securities, any
Common Stock or Convertible Securities, as the case may be, issuable in payment
of such dividend or distribution shall be deemed to have been issued or sold
without consideration.

 

(5)           In
case any shares of Common Stock or Convertible Securities or any rights or
options to purchase any such Common Stock or Convertible Securities shall be
issued or sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Company therefor, without deduction therefrom of
any expenses incurred or any underwriting commissions or concessions paid or
allowed by the Company in connection therewith. In case any shares of Common
Stock or Convertible Securities or any rights or options to purchase any such
Common Stock or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board of Directors of the
Company, without deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection
therewith.  In case any shares of Common
Stock or Convertible Securities or any rights or options to purchase such
Common Stock or Convertible Securities shall be issued in connection with any
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor shall be deemed to be the fair value as determined
by the Board of Directors of the Company of such portion of the assets and
business of the non-surviving corporation or corporations as such Board shall
determine to be attributable to such Common Stock or Convertible Securities,
rights or options, as the case may be.

 

(6)           In
case the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them (a) to receive a dividend or other distribution
payable in Common Stock or in Convertible Securities, or (b) to subscribe
for or purchase Common Stock or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued upon the declaration of such dividend or the
making of such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.

 

5

 

(7)           The
number of shares of Common Stock outstanding at any given time shall not
include shares owned or held or for the account of the Company, and the
disposition of any such shares shall be considered an issue or sale of Common
Stock for the purposes of Subsection B.

 

(8)           Anything
in clause (5) of this Subsection B. to the contrary notwithstanding,
in the case of an acquisition where all or part of the purchase price is
payable in Common Stock or Convertible Securities but is stated as a dollar
amount, where the Company upon making the acquisition pays only part of a
maximum dollar purchase price which is payable in Common Stock or Convertible
Securities and where the balance of such purchase price is deferred or is
contingently payable under a formula related to earnings over a period of time,
(a) the consideration received for any Common Stock or Convertible
Securities delivered at the time of the acquisition shall be deemed to be such
part of the total consideration as the portion of the dollar purchase price
then paid in Common Stock or Convertible Securities bears to the total maximum
dollar purchase price then paid in Common Stock or Convertible Securities, and (b) in
connection with each issuance of additional Common Stock or Convertible
Securities pursuant to the terms of the agreement relating to such acquisition,
the consideration received shall be deemed to be such part of the total
consideration as the portion of the dollar purchase price then and theretofore
paid in Common Stock or Convertible Securities bears to the total maximum
dollar purchase price payable in Common Stock or Convertible Securities
multiplied by a fraction, the numerator of which shall be the number of shares
(or in the case of Convertible Securities other than stock, the aggregate
principal amount) then issued and the denominator of which shall be the total
number of shares (or in the case of Convertible Securities other than stock,
the aggregate principal amount) then and theretofore issued under such
acquisition agreement. If it is determined that any part of the deferred or
contingent portion of such purchase price shall not be payable, the Purchase
Price then in effect hereunder shall forthwith be readjusted to such Purchase
Price as would have obtained (i) had the adjustment made in connection
with such acquisition been made upon the basis of the issuance of only the
number of shares of Common Stock or Convertible Securities actually issued in
connection with such acquisition, and (ii) had adjustments been made on
the basis of the Purchase Price as adjusted in clause (1) for all issued
or sale (as prices which would have affected such adjusted Purchase Price) of
Common Stock or rights, options or Convertible Securities made after such
acquisition. In the event that only a part of the purchase price for an
acquisition is paid in Common Stock or Convertible Securities in the manner
referred to in this clause (8), the term “total consideration” as used in this
clause (8) shall mean that part of the aggregate consideration as is
fairly allocable to the purchase price paid in Common Stock or Convertible
Securities in the manner referred to in this clause (8), as determined by the
Board of Directors of the Company.

 

6

 

(9)           Notwithstanding
anything to the contrary in this Section II., no adjustment in the
Purchase Price shall result, pursuant to Subsection A. above or otherwise,
from the issuance by the Company of shares of its Common Stock as a result of
the following transactions:

 

(a)           The
exercise of options heretofore or hereafter granted under the Company’s 1999
Stock Option Plan, as the same may be amended, extended or substituted from
time to time provided, that the number of shares available thereunder may not
be increased by any such amendment, extension or substitution; and

 

(b)           The
exercise of any of the 850,000 warrants issued on July 30, 1999, and which
expire July 31, 2009, as the same may be amended, substituted or extended
from time to time.

 

(c)           The
exercise of any of the 1,500,000 Warrants issued on September 10, 2002,
and which expire September 10, 2012, as the same may be amended,
substituted or extended from time to time.

 

(d)           The
exercise of any of the 750,000 Warrants issued on June 12, 2003, and which
expire June 12, 2013, as the same may be amended, substituted or extended
from time to time.

 

C.            In
case the Company at any time subdivides its outstanding shares of Common Stock
into a greater or lesser number of shares, the Purchase Price in effect
immediately prior to such subdivision shall be proportionately reduced or
increased, and the number of shares of Common Stock purchasable upon exercise
of any Warrant Certificate shall be increased or decreased, as provided in Subsection E.
below.

 

D.            In
case of any capital reorganization or any reclassification of the Common Stock
of the Company, the consolidation of the Company with or the merger of the
Company with or into any other corporation, or the sale of the properties and
assets of the Company as, or substantially as, an entirety to any other
corporation, then each holder of a Warrant then outstanding shall be entitled to
purchase such number of shares of stock or other securities or property of the
Company or any other corporation resulting from such reorganization,
reclassification, consolidation, merger, or sale, as was exchanged for the
number of shares of Common Stock of the Company which the holder would have
been entitled to purchase except for such action.  The subdivision or combination of shares of
Common Stock at any time outstanding into a greater or lesser number of shares
of Common Stock shall not be deemed to be a reclassification of the Common
Stock of the Company for the purposes of this Subsection ”D.”

 

7

 

E.

 

(1)                                  Except
as provided in Subsection F, to follow, upon each adjustment of the
Purchase Price as a result of (a) an issuance or sale of Common Stock
below the Purchase Price as provided in Subsections A and B above, including
(without limitation) a dividend or distribution in shares of capital stock, or (b) a
subdivision of outstanding shares of Common Stock into a greater number of
shares as provided in Subsection “C.” hereof, the number of shares of
Common Stock purchasable upon exercise of any Warrant Certificate shall be
increased to the number of shares of Common Stock (calculated to the nearest
hundredth) obtained by multiplying (i) the number of shares of Common
Stock purchasable immediately prior to such adjustment upon exercise of
Warrants (evidenced by the Warrant Certificate held by such holder) by (ii) the
Purchase Price in effect immediately prior to such adjustment, and dividing the
product so obtained by the Purchase Price in effect after such adjustment.

 

(2)           Except
as provided in Subsection ”F” to follow, upon each adjustment of the
Purchase Price as a result of a subdivision of the Common Stock into a lesser
number of shares as provided in Subsection ”C” hereof, the number of
shares of Common Stock purchasable upon exercise of any Warrant Certificate
shall be decreased to the number of shares of Common Stock (calculated to the
nearest hundredth) obtained by multiplying (a) the number of shares of
Common Stock purchasable immediately prior to such adjustment upon exercise of
Warrants evidenced by the Warrant Certificate held by such holder, by (b) the
Purchase Price in effect immediately prior to such adjustment, and then
dividing the product so obtained by the Purchase Price in effect after such
adjustment.

 

F.             In
lieu of an adjustment in the number of shares covered by a Warrant, the Company
may elect, on or after the date of any adjustment of the Purchase Price, to
adjust the number of Warrants.

 

G.            Irrespective
of any adjustments or change in the Purchase Price or the number of shares of
the Common Stock issuable upon the exercise of the Warrants, the Warrant
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed upon the
Warrant Certificates when initially issued.

 

H.            Before
taking any action which would cause an adjustment reducing the Purchase Price below
the then par value, if any, of the shares of Common Stock issuable upon
exercise of the Warrants, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Common
Stock at such adjusted Purchase Price.

 

8

 

I.              Whenever
the Purchase Price, the number of shares of Common Stock issuable upon the
exercise of each Warrant, or the number of Warrants are adjusted as provided in
this Section II., the Company shall promptly prepare a certificate setting
forth the Purchase Price as so adjusted, the number of shares of Common Stock
issuable upon the exercise of each Warrant as so adjusted, and a brief
statement of the facts accounting for such adjustment.

 

J.             If
any event occurs as to which in the opinion of the Board of Directors of the
Company the other provisions of this Section II. are not strictly
applicable or if strictly applicable would not fairly protect the conversion
rights of the holders of the Warrants in accordance with the essential intent
and principles of such provisions, then the Board of Directors shall make an
adjustment in the application of such provisions, in accordance with such
essential intent and principles, so as to protect such exercise rights as
aforesaid.

 

III.           A.            This
Certificate, with or without other Warrant Certificates, upon surrender at the
principal office of the Company, may be exchanged for another Warrant
Certificate or Warrant Certificates of like tenor evidencing Warrants entitling
the holder to purchase a like aggregate number of Shares as the Warrants
evidenced by the Warrant Certificate or Warrant Certificates surrendered.  If only a part of the Warrants evidenced by
this Certificate are exercised, the holder hereof shall be entitled to receive,
upon surrender hereof, another Warrant Certificate or Warrant Certificates for
the number of whole Warrants not exercised.

 

B.            Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction, or mutilation of a Warrant Certificate, and, in case of
loss, theft, destruction, or mutilation, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender to the Company and cancellation of the
Warrant Certificate, if mutilated, the Company shall deliver to the registered
owner a new Warrant Certificate in lieu of, and evidencing the right to
purchase the same number of shares as, the Warrant Certificate so lost, stolen,
destroyed, or mutilated.

 

C.            No
holder of the Warrants evidenced by this Certificate shall be entitled to vote
or receive dividends or be deemed the holder of Shares or any other securities
of the Company which may at any time be issuable on the exercise of these
Warrants for any purpose, nor shall anything contained in the Warrant Agreement
or herein be construed to confer upon the holder of these Warrants, as such,
any of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issue of stock, reclassification of stock,
change of par value, consolidation, merger, conveyance, 

 

9

 

or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise, until the Warrants evidenced by this Warrant Certificate have been
exercised and the Common Stock purchasable upon the exercise thereof has become
deliverable.

 

D.            To
the extent that any Warrant Certificates remain outstanding at 5:01 P.M.
central standard time on the Expiration Date, such outstanding Warrant
Certificates shall be automatically deemed exercised on behalf of each record
holder of Warrant Certificates into shares of the Company’s Common Stock at the
rate (“Conversion Rate”) of one-tenth (1/10) of a share of Common Stock for
each Warrant Certificate or Certificates representing, immediately before the
Expiration Date, the right to purchase one share of Common Stock.

 

E.             Upon
the exercise of the Warrant, in lieu of the issuance of any fractional Shares,
the Company shall pay cash to the registered holder of the Warrant based on the
difference between the market price of the Shares, which price shall be
computed as the per Share closing price (if such Shares are listed on an exchange)
or the average between the per Share bid and asked prices as of the close of
business on the exercise date as reported by the National Association of
Securities Dealers Automated Quotation System and the Purchase Price on the
exercise date times the fractional Share which is represented by the Warrants
on the exercise date.  However, if no
market price exists, then the amount of cash to be paid to the registered
holder of the Warrant in lieu of any fractional Shares shall be the product of
the difference between the per share Net Book Value (defined hereafter) of the
shares of the Company’s Common Stock outstanding on the last business day prior
to the exercise date and the Purchase Price on the exercise date times the
fractional security which otherwise would have been issuable in the absence of
this provision.  For purposes of payment
of cash in lieu of the issuance of fractional securities, the term “Net Book
Value” means the consolidated total shareholders’ equity, determined in
accordance with generally accepted accounting principles (“GAAP”).

 

F.             The
holder hereof, by accepting same, consents and agrees with the Company and with
every other holder of a Warrant Certificate that:

 

(1)           The
Warrants evidenced by this Certificate are transferable only on the registry
books of the Company upon surrender of this Certificate at the principal office
of the Company and only as provided below;

 

(2)           The
Company may deem and treat the person in whose name this Certificate is
registered as the absolute owner thereof and of the Warrants evidenced thereby
(notwithstanding any notations of ownership or writing on the Certificate made
by anyone other than the Company) for all purposes whatsoever, and the Company
shall not be affected by any notice to the contrary; and

 

10

 

(3)           The
Company may modify the terms of the Warrant from time to time.

 

G.            The
registered holder of any Warrant Certificate may exercise it in whole or in
part at any time, but only in such multiples as are required to permit the
issuance by the Company of one or more shares, by surrender of the Warrant
Certificate with the form of election to purchase on the reverse side thereof
duly executed, to the Company at the principal office of the Company at or prior
to 5:00 P.M. central standard time on December 15, 2007,
or such later date or dates as the Company may determine together with payment
of the Purchase Price, payable to the Company, for each share into which the
Warrants are exercised.

 

H.                                    Upon
receipt of a Warrant Certificate, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for its shares to be
purchased and an amount equal to any applicable transfer tax in cash, or by
certified check, bank draft, or postal or express money order payable to the
order of the Company, the Company shall thereupon cause the certificates for
the number of whole shares to be purchased to be delivered to or upon the order
of the registered holder of such Warrant Certificate registered in such name or
names as may be designated by such holder.

 

I.              In
case the registered holder of any Warrant Certificate exercises less than all
the Warrants evidenced thereby, a new Warrant Certificate evidencing Warrants
equivalent to the Warrants remaining unexercised shall be issued by Warrant
Agent to the registered holder of such Warrant Certificate or to such holder’s
duly authorized assigns.

 

J.             Each
person in whose name any certificate for shares of Common Stock of the Company
is issued upon the exercise of Warrants shall for all purposes be deemed to
have become the holder of record of the shares of Common Stock represented
thereby on, and such certificate shall be dated, the date upon which the
Warrant Certificate evidencing such Warrants was duly surrendered and payment
of the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which
the transfer books of the Company are closed, such person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding business day on which the transfer books of the
Company are open.  Prior to the exercise
of the Warrants evidenced thereby, the holder of a Warrant Certificate shall
not be entitled to any rights of a shareholder of the Company with respect to
shares for which the Warrants are exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions, or to exercise
any preemptive rights, and shall not be

 

11

 

entitled to receive any
notice of any proceedings of the Company, except as provided herein.

 

WITNESS
the facsimile signatures of the proper officers of the Company and its
corporate seal.  Dated as of December 15,
2004.

 

	
   

  	
  TGC
  INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Wayne A. Whitener, President

  

 

ATTEST:

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Kenneth W. Uselton,

  
	
   

  	
  Secretary

  

 

12

 

ASSIGNMENT

 

(To be executed by the registered holder if such

holder desires to transfer the Warrant Certificate)

 

FOR
VALUE RECEIVED                                       
hereby sells, assigns, and transfers unto 

 

(Please print name and address of transferee)

 

 

this Warrant Certificate,
together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint                             
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.

 

 

	
  Dated:

  	
   

  	
  , 20

  	
   

  	
  .

  

 

 

	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guaranteed

  

 

 

	
  NOTICE:

  	
   

  	
  The signature(s)
  to this assignment must correspond with the name(s) as written upon the face
  of the Certificate in every particular without alteration or enlargement or
  any change whatever. Signature(s) must be guaranteed by a commercial bank or
  trust company or a member firm of a major stock exchange.

  

 

13

 

ELECTION TO PURCHASE

 

(To be executed if holder desires

to exercise the Warrant Certificate)

To: TGC INDUSTRIES, INC.

 

The
undersigned hereby irrevocably elects to exercise                  
Warrants represented by this Warrant Certificate to purchase the shares of
Common Stock issuable upon the exercise of such Warrants and requests that
certificates for such shares be issued in the name of:

 

 

(Please insert social security or other identifying number)

 

 

(Please print name and address)

 

If
such number of Warrants does not constitute all of the Warrants evidenced by
this Warrant Certificate, a new Warrant Certificate for the balance remaining
of such Warrants shall be registered in the name of and delivered to:

 

 

(Please insert social security or other identifying number)

 

 

	
  Dated:

  	
   

  	
  , 20

  	
   

  	
   

  

 

 

	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guaranteed

  

 

 

	
  NOTICE:

  	
   

  	
  The signature on
  this Form of Election to Purchase must correspond with the name(s) as
  written upon the face of the Certificate without alteration or enlargement or
  any change whatever. Signature(s) must be guaranteed by a commercial bank or
  trust company or a member firm of a major stock exchange.

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