Document:

Exhibit
10.7

 

*MULT1000*

 

AMENDMENT

 

THIS AMENDMENT
is made as of the twelfth day of
September, 2005, between General Electric Capital
Corporation, together with its successors and assigns, if any, and TGC Industries, Inc. in connection with Schedule Number
004 of that certain Master Security Agreement,
dated or dated as of October 22, 2004 (“Agreement”).
The terms of this Amendment are hereby incorporated into the Agreement as
though fully set forth therein. The Agreement is hereby amended as follows:

 

The first Periodic Installment on the Promissory Note is changed from November
2, 2005 to October 12, 2005.

 

TERMS
USED, BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN TO THEM IN
THE AGREEMENT. EXCEPT AS EXPRESSLY AMENDED HEREBY, THE AGREEMENT SHALL REMAIN
IN FULL FORCE AND EFFECT.

 

IN WITNESS WHEREOF, the parties hereto have
executed this Amendment by signature of their respective authorized
representative set forth below.

 

	
  SECURED PARTY:

  	
   

  	
  DEBTOR:

  
	
  General Electric Capital Corporation

  	
   

  	
  TGC Industries, Inc.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ W. Scott Cummins

  	
   

  	
  By:

  	
   

  	
  /s/ Wayne Whitener

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  W. Scott Cummins

  	
   

  	
  Name:

  	
   

  	
  Wayne Whitener

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Risk Analyst

  	
   

  	
  Title:

  	
   

  	
  PresidentEXHIBIT 4.1
 
FORM OF COMMON STOCK CERTIFICATE
 

	NUMBER
	[GRAPHIC]
	SHARES
	 

 
 
TGC INDUSTRIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS
THIS CERTIFICATE IS TRANSFERABLE IN NEW YORK, NEW YORK
 

	COMMON STOCK
	 
	CUSIP 

	 
	 
	SEE REVERSE FOR CERTAIN DEFINITIONS

 
THIS CERTIFIES THAT
 
is the owner of
 
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, OF THE PAR VALUE OF ONE CENT

($.01) PER SHARE, OF
TGC INDUSTRIES, INC.
 
transferable on the books of the Corporation by the holder hereof, in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed.  This Certificate and the shares represented hereby are issued and shall be held subject to all the provisions of the Restated Articles of Incorporation of the Corporation, any amendments thereof, and the By-Laws (copies of which are on file at the office of the Transfer Agent), to all of which the holder of this Certificate by acceptance hereof assents.
 
This Certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
 

	/s/
	Wayne Whitener
	[CORPORATE SEAL]
	Dated

	 
	President
	 
	 
	 

	 
	 
	Countersigned and Registered:

	/s/
	Kenneth Uselton
	 
	 
	AMERICAN STOCK TRANSFER & TRUST COMPANY

	 
	Secretary
	 
	 
	 
	Transfer Agent and Registrar

	 
	 
	 
	 
	 

	 
	 
	By

	 
	 
	 

	 
	 
	Authorized Signature

										

 

 

[GRAPHIC]
TGC Industries, Inc.
 
THE RESTATED ARTICLES OF INCORPORATION OF TGC INDUSTRIES, INC. ON FILE IN THE OFFICE OF THE SECRETARY OF STATE OF TEXAS SET FORTH A FULL STATEMENT OF (A) ALL OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND RELATIVE RIGHTS OF THE SHARES OF EACH CLASS OF SHARES AUTHORIZED TO BE ISSUED, (B) THE AUTHORITY OF THE BOARD OF DIRECTORS TO FIX AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF THE SHARES OF PREFERRED STOCK WHICH THE CORPORATION IS AUTHORIZED TO ISSUE IN SERIES AND, IF AND TO THE EXTENT THAT THEY HAVE BEEN FIXED AND DETERMINED, THE RELATIVE RIGHTS AND PREFERENCES OF ANY SUCH SERIES, (C) THE DENIAL TO SHAREHOLDERS OF PREEMPTIVE RIGHTS AND (D) THE DENIAL TO SHAREHOLDERS OF THE RIGHT TO CUMULATIVE VOTING.  THE CORPORATION WILL FURNISH A COPY OF SUCH STATEMENT TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
 
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
 

	TEN COM
	-
	as tenants in common
	 
	 
	 
	UNIF GIFT MIN ACT -   
	 
	 Custodian
	 

	TEN ENT
	-
	as tenants by the entireties
	 
	 
	 
	 
	(Cust)
	 
	 
	(Minor)

	JT TEN
	-
	as joint tenants with right
	 
	 
	 
	 
	under Uniform Gifts to Minors

	 
	 
	of survivorship and not as
	 
	 
	 
	 
	Act 
	 
	 
	 

	 
	 
	tenants in common
	 
	 
	 
	 
	(State)
	 

															

 

Additional abbreviations may also be used though not in the above list.
 
For Value Received,                                                            hereby sell, assign and transfer unto
 
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
 
 

	 

	PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 
 
  Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
 
 
Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.
 

	Dated,
	 
	 

 
 

	 
	 

	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.Exhibit 4.14

 

	
  No. WT         

  	
   

  	
   

  	
            
  Warrants

  
	
   

  	
   

  	
   

  	
         Series
  A

  

 

VOID AFTER SEPTEMBER 10, 2012

(unless extended by TGC Industries, Inc.)

 

TGC INDUSTRIES, INC.

 

Warrant Agreement and

Warrant Certificate

 

I.              A.            (1)           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 1,500,000 Warrants issued of even date (the “Series A Warrants”)),
each of which entitles the owner hereof to purchase, subject to the
restrictions referenced herein, prior to the close of business on September 10, 2012, 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 $.20 (provided,
however, that the exercise price at the time of a given exercise of the
Warrants shall not be less than the then per share par value of the Common
Stock) 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.

 

(2)           Furthermore, in the event that the per share
par value of the Common Stock is not reduced to one cent ($.01) within eighteen
(18) months from the date hereof, then this Warrant certificate shall entitle
the warrant holder to purchase (in lieu of one (1) share of Common Stock) one (1)
unit at the Purchase Price, such unit consisting of one (1) share of Common
Stock of the Company and one (1) warrant (the “Series B Warrant”) of like tenor
to this Warrant to purchase one (1) share of Common Stock under the same terms
and provisions as provided in this Warrant Agreement (the “Unit”). In the event
this Warrant becomes exercisable for Units in lieu of Shares, then all
references hereinafter to the “Shares” shall be deemed to refer to either the
Units or, where the context requires, the Shares, as the case may be.

 

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.

 

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.

 

2

 

(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 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.

 

 

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.

 

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.

 

3

 

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 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

 

4

 

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 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

 

5

 

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.

 

(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.

 

6

 

(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.

 

(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:

 

7

 

(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.

 

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 (1) additional share (assuming all
1,500,000 Warrants originally issued, as adjusted pursuant to the terms of the
Warrant, are outstanding) and the Purchase Price shall be adjusted
proportionately. 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

 

8

 

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) 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 1,500,000 originally issued Warrants are outstanding) shall be exercisable
for an additional 100,000 shares and, assuming a Purchase Price of $0.20, the
Purchase Price at such time shall be adjusted to $0.1875 (1,500,000 / 1,500,000
x 100,000 = 100,000 and 1,500,000 x 0.20 divided by (1,500,000 + 100,000) =
0.1875) Furthermore, if a similar PIK Dividend of 100,000 shares of Senior
Preferred Stocks is declared and paid and assuming the number of Warrants
outstanding, as adjusted, has declined by 375,000 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
75,000 shares and, assuming a Purchase Price at such time of $0.20, the
Purchase Price shall be adjusted to $0.1875 (1,125,000 / 1,500,000 x 100,000 =
75,000, and 1,125,000 x 0.20 divided by (1,125,000 + 75,000) = 0.1875).

 

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

 

9

 

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 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

 

10

 

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 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

 

11

 

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”) 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

 

12

 

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
September 10, 2012, 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 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.

 

13

 

WITNESS
the facsimile signatures of the proper officers of Company and its corporate
seal. Dated as of September 10, 2002.

 

	
   

  	
  TGC INDUSTRIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Wayne A. Whitener,
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Kenneth W. Uselton,

  	
   

  
	
  Secretary

  	
   

  
						

 

14

 

REISSUE

 

(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.

 

15

 

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.

 

16

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