EXHIBIT (a)
TGC INDUSTRIES, INC.
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is made and
entered into effective as of the 12th day of February, 2004, by and among WEDGE
ENERGY SERVICES, L.L.C., a Delaware limited liability company (the "Seller" or
"WEDGE"), and the undersigned purchaser set forth on the signature page hereof
(the "Purchaser") with respect to the sale by WEDGE to the Purchaser of the
number of shares of 8-1/2% SENIOR CONVERTIBLE PREFERRED STOCK (the "Senior
Preferred Stock") of TGC Industries, Inc., a Texas corporation (the "Company")
as set forth adjacent to the Purchaser's signature on the signature page hereof.
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller the shares of Senior Preferred Stock under terms and
conditions set forth herein; and
WHEREAS, Seller and Purchaser understand that the transaction pursuant
to this Agreement is a part of the sale by WEDGE of all of its 3,024,264 shares
of Senior Preferred Stock of the Company for a total cash consideration of
$1,602,859.92 and that the Closing of the transaction pursuant to this Agreement
will be conditioned on and simultaneous with the closing of the transactions for
the sale by WEDGE to the other purchasers pursuant to Preferred Stock Purchase
Agreements of like tenor to this Agreement.
WHEREAS, WEDGE has entered into a Financial Advisory Services Agreement
with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Associates, Inc. ("▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇") for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to
provide certain financial advisory services to assist WEDGE in connection with
the sale of the Senior Preferred Stock for an advisory fee of $102,860.00 plus
17,304 shares of Common Stock of the Company, to be paid to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by
WEDGE at the Closing.
NOW THEREFORE, in consideration of the foregoing and the covenants of
the parties contained herein, it is hereby agreed as follows:
1. Purchase and Sale of Senior Preferred Stock; Purchase Price.
Subject to the terms and conditions set forth herein, at the Closing, as defined
below, Seller will sell and Purchaser will purchase the number of shares of
Senior Preferred Stock set forth adjacent to the Purchaser's signature on the
signature page hereof at the purchase price set forth on the signature page
hereof, which represents a purchase price of fifty three cents ($0.53) per share
of Senior Preferred Stock (the "Purchase Price").
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2. Closing; Closing Deliveries. The closing of the purchase and
sale of the Senior Preferred Stock (the "Closing") should take place at the
offices of Law, Snakard & ▇▇▇▇▇▇▇, P.C., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, upon the execution and delivery of this Agreement by
Seller and Purchaser and upon the execution and delivery of agreements of like
tenor between WEDGE and the other purchasers for the sale and purchase, in the
aggregate, of all of Seller's 3,024,264 shares of Senior Preferred Stock. At the
Closing, the Seller shall deliver certificate(s) representing its shares of
Senior Preferred Stock duly endorsed for transfer, against delivery by the
Purchaser of the Purchase Price by Purchaser's check or by wire transfer. It is
understood and agreed by Seller and Purchaser that the above deliveries of
certificates representing the shares of Senior Preferred Stock and of the
Purchase Price by check or wire transfer will be delivered pursuant to an Escrow
Agreement entered into contemporaneously herewith between Seller, Purchaser,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Law, Snakard & ▇▇▇▇▇▇▇, P.C., as escrow agent. (This
Agreement and the Escrow Agreement may be referred to collectively as the
"Transaction Documents").
3. Representations and Warranties of Seller. Seller hereby
represents and warrants to Purchaser that:
3.1 Power and Authority. Seller has all requisite power
and authority, without restriction, to sell, transfer and deliver the
shares of Senior Preferred Stock to Purchaser. All company actions on
the part of Seller and it's officers and owners necessary for the
authorization, execution and delivery of the Transaction Documents, the
performance of all of its obligations thereunder, and the delivery of
the shares of Senior Preferred Stock have been taken, and each of the
Transaction Documents has been duly and validly executed and delivered
by Seller and constitutes a valid and legally binding obligation of
Seller, enforceable in accordance with its terms, except only as may be
limited by the availability of equitable remedies and by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditor's rights generally.
3.2 Title. Seller is the record and beneficial owner of
the shares of Senior Preferred Stock and has good title to the Senior
Preferred Stock, and upon the sale, transfer and delivery to Purchaser
of the Senior Preferred Stock at the Closing, Purchaser will obtain
good title to such Senior Preferred Stock, free and clear of all liens,
encumbrances, security interests, exceptions or claims of any nature
whatsoever; and
3.3 No Conflicts. The execution and delivery by Seller of
the Transaction Documents, and the consummation of the transactions
contemplated thereby:
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(a) do not violate or conflict with or
constitute a default under, or result in the creation
of any security interest in or lien upon, the shares
of Senior Preferred Stock, any agreement, security
agreement, mortgage, or other instrument to which
Seller is a party or by which it or the Preferred
Stock is bound; or
(b) do not violate any statute, law, rule, or
regulation or the order, writ, injunction, or decree
of any court or governmental authority; or
(c) do not require the approval, authorization,
or consent of any third party.
4. Representations and Warranties of Purchaser. The Purchaser
hereby represents and warrants to the Seller, as to and on behalf of itself only
that:
4.1 Power and Authority. Purchaser has all requisite
power and authority, without restriction, to perform its obligations
under the Transaction Documents. All action on the part of Purchaser,
necessary for the authorization, execution and delivery of the
Transaction Documents, the performance by Purchaser of its obligations
thereunder, and the delivery of the Purchase Price has been taken, and
each of the Transaction Documents has been duly and validly executed
and delivered by Purchaser and constitutes a valid and legally binding
obligation of Purchaser, enforceable in accordance with its terms,
except only as may be limited by the availability of equitable remedies
and by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditor's rights generally.
4.2 Purchase Entirely for Own Account. The Senior
Preferred Stock is being acquired or will be acquired for the
Purchaser's own account, not as a nominee or agent, and not with a view
toward the resale or distribution of any part thereof. The Purchaser
does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to such person or
to any third person, with respect to any of the Senior Preferred Stock.
Purchaser expressly represents that he, she or it is not acting in the
capacity as an "underwriter" as that term is defined in the Securities
Act of 1933 (the "Securities Act"). The Purchaser understands that
ownership of securities convertible into a class of registered
securities under the Securities Act may be subject to certain federal
reporting requirements as a result of such Purchaser being deemed a
beneficial owner of a certain minimum amount of the Senior Preferred
Stock and that such Purchaser may be subject to certain timely
reporting requirements. Purchaser has obtained Purchaser's own
independent legal counsel to assist in analyzing its reporting
obligations under the Securities and Exchange Act of 1934
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and Purchaser is not relying on any advice or input from Seller or its
counsel for any securities matters.
4.3 Investment Experience. Purchaser is experienced in
evaluating and investing in securities and acknowledges that he, she or
it is able to fend for himself, herself or itself, can bear the
economic risk of the investment, and has such knowledge and experience
in financial and business matters that Purchaser is capable of
evaluating the merits and risks of the investment in the Senior
Preferred Stock. The Purchaser is an "accredited investor" as that term
is defined in Rule 501 under Regulation D promulgated under the
Securities Act.
4.4 No Reliance on Seller Regarding Investment. Purchaser
acknowledges that Purchaser is making an independent investment
decision based upon Purchaser's own gathering of information and
analysis thereof, and is not relying upon information or analysis from
Seller or upon any recommendation from Seller, with respect to the
purchase of the Senior Preferred Stock. In this regard, Purchaser has
independently obtained, reviewed and understands the designations,
rights and preferences currently on file with the Texas Secretary of
State applicable to the Senior Preferred Stock. Purchaser also
understands that certain rights, duties and obligations contained in
such designations by, or on behalf of WEDGE will not be applicable to
Purchaser, and Purchaser has obtained Purchaser's own independent legal
counsel to assist in analyzing same.
4.5 Restricted Securities. Purchaser understands that the
Senior Preferred Stock may not be sold, transferred or otherwise
disposed of without registration under the Securities Act of 1933
("Securities Act") or an exemption from such registration requirement,
and that absent an effective registration statement covering the Senior
Preferred Stock or an available exemption from registration under the
Securities Act, the Securities must be held indefinitely. Furthermore,
the Purchaser understands that the Senior Preferred Stock is being
acquired from an "Affiliate" of the Company, as that term is defined
under the Securities Act, and as such certain additional limitations on
resale may be applicable to the Senior Preferred Stock or any shares
convertible therefrom.
4.6 Legend. The certificate representing the Senior
Preferred Stock which Purchaser will receive shall be endorsed with the
legends set forth below, and Purchaser agrees that, except to the
extent such restrictions are waived by the Company, Purchaser shall not
transfer the Senior Preferred Stock without complying with the
restrictions on transfer described in the first such legend set forth
below:
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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 OR THE
SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE
SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT ANY SUCH
TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY
RULE OR REGULATION PROMULGATED THEREUNDER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN DESIGNATIONS, RIGHTS AND PREFERENCES AS SET FORTH IN
THE STATEMENT OF RESOLUTION ESTABLISHING THE 8-1/2% SENIOR
CONVERTIBLE PREFERRED STOCK, AS AMENDED, OF TGC INDUSTRIES,
INC. ON FILE WITH THE SECRETARY OF STATE OF THE STATE OF
TEXAS.
5. Miscellaneous.
5.1 Successors and Assigns. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties.
5.2 Governing Law; Venue. This Agreement shall be
governed by and construed under the laws of the State of Texas, without
giving effect to the conflicts of laws provisions thereof, and venue
for the resolution of any disputes hereunder shall be had in the state
and federal courts located in Tarrant County, Texas.
5.3 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and
all of which together shall constitute one and the same instrument.
5.4 Entire Agreement; Amendments and Waivers. This
Agreement contains the entire agreement of the parties hereto with
respect to the subject matter hereof, and any term in this Agreement
may be amended, and the observance of any term in this Agreement may be
waived, only by an instrument in writing.
5.5 Survival of Representations and Warranties. The
representations and warranties of the parties hereto contained in this
Agreement or in any writing
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delivered pursuant hereto or at the Closing, shall survive the Closing
and the consummation of the transactions contemplated hereby (and any
examination or investigation by or on behalf of any party hereto) until
the second anniversary of the Closing date.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or has caused this Agreement to be executed on its behalf by a
representative duly authorized, as of the date first above set forth.
SELLER
WEDGE ENERGY SERVICES, L.L.C.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
PURCHASER
___________________________________________
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
Number of Shares of Senior Preferred Stock
purchased pursuant to this Agreement: __________________
Purchase Price: ($0.53 per Share) $_________________
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