EXHIBIT (b)
TGC INDUSTRIES, INC.
ESCROW AGREEMENT
This ESCROW AGREEMENT ("Escrow 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"), the undersigned purchaser from Seller as set forth on the signature
page hereof (the "Purchaser"), Xxxxxxx Xxxxxxx Associates, Inc., a New Jersey
corporation ("Xxxxxxx Xxxxxxx") and Law, Snakard & Xxxxxxx, P.C., a Texas
Professional Corporation (the "Escrow Agent").
WHEREAS, the Seller and Purchaser have entered into that certain
Preferred Stock Purchase Agreement dated February 12, 2004 (the "Preferred Stock
Purchase Agreement") providing for the sale by Seller of shares of its 8-1/2%
Senior Convertible Preferred Stock (the "Senior Preferred Stock") of TGC
Industries, Inc., a Texas corporation (the "Company") in accordance with the
terms thereof, which terms provide that the Closing thereunder is conditioned on
and will be simultaneous with the Closing of the sale to a number of purchasers
of all of Seller's 3,024,264 shares of Senior Preferred Stock pursuant to
preferred stock purchase agreements of like tenor to the Preferred Stock
Purchase Agreement;
WHEREAS, the Preferred Stock Purchase Agreement requires this Escrow
Agreement with the Escrow Agent for the deposit of and maintenance of funds
("Escrow Funds") received from Purchaser and for the deposit and maintenance of
certificates representing shares of Senior Preferred Stock ("Escrow Shares")
received from Seller, pending the Closing under the Preferred Stock Purchase
Agreement; and
WHEREAS, that certain Financial Advisory Services Agreement dated
February 12, 2004 (the "Financial Advisory Agreement") between Xxxxxxx Xxxxxxx
and Seller, requires this Escrow Agreement with the Escrow Agent for the deposit
and maintenance of funds in the amount of $102,860 (the "Advisory Fee Funds")
and 17,304 shares of Common Stock of the Company (the "Advisory Fee Shares")
received from Seller, pending the Closing under the Preferred Stock Purchase
Agreement
WHEREAS, the Escrow Agent has agreed to open and maintain an escrow
account in accordance with the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. Appointment of Escrow Agent. The Seller and Purchaser hereby
appoint the Escrow Agent to act in accordance with and subject to the terms of
this Agreement, and the Escrow Agent hereby accepts such appointment and agrees
to act in accordance with and subject to such terms.
2. Escrow Account. Escrow Agent agrees to maintain an escrow
account (the "Escrow Account") in accordance wit the terms of this Agreement.
Escrow Agent further agrees that the Escrow Funds and the Escrow Shares placed
into such Escrow Account, as well as the Advisory Fee Funds and the Advisory Fee
Shares, will be held and disposed of in accordance with the terms of this
Agreement.
3. Deposit of Escrow Funds and Escrow Shares. In accordance with
the terms of the Preferred Stock Purchase Agreement: (a) Purchaser shall
promptly deliver the Purchase Price for the Senior Preferred Stock, in cash by
wire transfer or delivery of Purchaser's check, to Escrow Agent, which Escrow
Agent shall deposit in the Escrow Account, and (b) Seller shall promptly deliver
certificates representing the shares of Senior Preferred Stock, duly endorsed
for transfer or accompanied by stock powers for transfer, which Escrow Agent
shall hold in escrow. The Escrow Agent shall maintain the Escrow Account as an
account which can be drawn upon at any time. The Escrow Agent agrees that the
Escrow Funds and the Escrow Shares will be held and maintained by the Escrow
Agent for the exclusive benefit of the Purchaser and the Seller in accordance
with the terms and provisions of this Escrow Agreement.
4. Deposit of Advisory Fee Funds and Advisory Fee Shares. In
accordance with the terms of the Financial Advisory Services Agreement, Seller
shall promptly deliver the Advisory Fee Funds to Escrow Agent, which Escrow
Agent shall deposit in the Escrow Account, and Seller shall promptly deliver
certificates representing the Advisory Fee Shares duly endorsed for transfer or
accompanied by stock powers for transfer, which Escrow Agent shall hold in
escrow. The Escrow Agent shall maintain the Escrow Account as an account which
can be drawn upon at any time. The Escrow Agent agrees that the Advisory Fee
Funds and the Advisory Fee Shares will be held and maintained by the Escrow
Agent for the exclusive benefit of Xxxxxxx Xxxxxxx and the Seller in accordance
with the terms and provisions of this Escrow Agreement.
5. Disbursement from the Escrow Account. Upon satisfaction of the
conditions set forth below, Escrow Agent shall disburse (the "Closing
Disbursement"): (a) the Escrow Funds, without interest, by wire transfer to
Seller; (b) the Escrow Shares by delivery of certificate(s) registered in
Purchaser's name for the number of shares purchased by Purchaser under the
Preferred Stock Purchase Agreement to Purchaser; (c) the Advisory Fee Funds,
without interest, by wire transfer to Xxxxxxx Xxxxxxx; and (d) the Advisory Fee
Shares by delivery of certificate(s) registered in Xxxxxxx Xxxxxxx'x name to
Xxxxxxx Xxxxxxx. The conditions which must be satisfied for Escrow Agent to make
the Closing Disbursement are as follows: (w) Escrow Agent shall be in receipt of
Escrow Funds from Purchaser and from all purchasers under preferred stock
purchase agreements of like tenor to Purchaser's in the aggregate amount of One
Million Six Hundred Two Thousand Eight Hundred Sixty Dollars ($1,602,860.00)
(representing $0.53 per share of Senior Preferred Stock) in immediately
available funds; (x) Escrow Agent shall be in receipt of the Escrow Shares from
Seller representing all of Seller's 3,024,264 shares of Senior Preferred Stock
duly endorsed for transfer or accompanied by stock powers for transfer; (y)
Escrow Agent shall be in receipt of the Advisory Fee Funds from Seller in the
amount of One Hundred Two Thousand Eight Hundred Sixty Dollars ($102,860.00) in
immediately available funds; and (z) Escrow Agent shall be in receipt of the
Advisory Fee Shares from Seller representing 17,304 shares of Common Stock of
the Company duly
Page 2
endorsed for transfer or accompanied by stock powers for transfer. In the event
that all of the above conditions to the Closing Disbursement have not occurred
within thirty (30) days from the date of this Escrow Agreement, Escrow Agent
return: (A) the Escrow Funds, without interest, to Purchaser; (B) the Escrow
Shares to Seller; (C) the Advisory Fee Funds, without interest, to Seller, and
(D) the Advisory Fee Shares to Seller (the "Return Disbursement"). Upon
occurrence of either the Closing Disbursement or the Return Disbursement, the
Escrow Agent shall be released from further obligation or liability hereunder.
6. Concerning the Escrow Agent.
6.1 The Escrow Agent shall not be liable for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best judgment, and may rely conclusively
and shall be protected in acting upon any order, notice, demand, certificate,
opinion or advice of counsel (including counsel chosen by the Escrow Agent),
statement, instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its provisions, but also as to
the truth and acceptability, of any information therein contained) which is
believed by the Escrow Agent to be genuine and to be signed or presented by the
proper person or persons. The Escrow Agent shall not be bound by any notice or
demand, or any waiver, modification, termination or rescission of this Agreement
unless evidenced by a writing delivered to the Escrow Agent signed by the proper
party or parties and, if the duties or rights of the Escrow Agent are affected,
unless it shall have given its prior written consent thereto;
6.2 The Escrow Agent shall not be responsible for the sufficiency
or accuracy, the form of, or the execution, validity, value or genuineness of,
any document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein, nor shall the Escrow Agent be responsible or liable in
any respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any document or
property paid or delivered by the Escrow Agent pursuant to the provisions
hereof. The Escrow Agent shall not be liable for any loss which may be incurred
by reason of any investment of any monies or properties which it holds
hereunder.
6.3 The Escrow Agent shall have the right to assume in the absence
of written notice to the contrary from the proper person or persons that a fact
or an event by reason of which an action would or might be taken by the Escrow
Agent does not exist or has not occurred, without incurring liability for any
action taken or omitted, in good faith and in the exercise of its own best
judgment, in reliance upon such assumption.
6.4 The Escrow Agent shall be indemnified and held harmless by the
Seller, Purchaser and Xxxxxxx Xxxxxxx from and against any expenses, including
counsel fees and disbursements, or loss suffered by the Escrow Agent in
connection with any action, suit or other proceeding involving any claim, or in
connection with any claim or demand, which in any way directly or indirectly,
arises out of or relates to this Agreement, the services of the Escrow Agent
hereunder, the monies or other property held by it hereunder or any such expense
or loss. Promptly after the receipt by the Escrow Agent of notice of any demand
or claim or the commencement of any action, suit or proceeding, the
Page 3
Escrow Agent shall, if a claim in respect thereof shall be made against a party
hereto, notify the appropriate party thereof in writing; but the failure by the
Escrow Agent to give such notice shall not relieve such party from any liability
which such party may have to the Escrow Agent hereunder. In the event of the
receipt of such notice, the Escrow Agent, in its sole discretion, may commence
an action in the nature of interpleader in an appropriate court to determine
ownership or disposition of the Escrow Funds or it may deposit the Escrow Funds
with the clerk of any appropriate court or it may retain the Escrow Funds
pending receipt of a final, non-appealable order of a court having jurisdiction
over the parties hereto directing to whom and under what circumstances the
Escrow Funds are to be disbursed and delivered.
6.5 The Escrow Agent shall maintain the Escrow Account as an
account which can be drawn upon at any time. The Escrow Agent agrees that the
Escrow Funds, the Escrow Shares, the Advisory Fee Funds, and the Advisory Fee
Shares will be held and maintained by the Escrow Agent for the exclusive benefit
of the Purchaser, the Seller and Xxxxxxx Xxxxxxx in accordance with the terms
and provisions of this Escrow Agreement. The Escrow Agent shall be entitled to
reimbursement from the Seller, Purchaser and Xxxxxxx Xxxxxxx for all accountable
expenses paid or incurred by the Escrow Agent in the administration of its
duties hereunder, if any.
6.6 From time to time on and after the date hereof, Seller,
Purchaser, and Xxxxxxx Xxxxxxx shall deliver or cause to be delivered to the
Escrow Agent such further documents and instruments and shall do or cause to be
done such further acts as the Escrow Agent shall reasonably request (it being
understood that the Escrow Agent shall have no obligation to make such request)
to carry out more effectively the provisions and purposes of this Agreement, to
evidence compliance herewith or to assure itself that it is protected in acting
hereunder.
6.7 The Escrow Agent may resign at any time and be discharged from
its duties as escrow agent hereunder by its giving the parties hereto at least
thirty (30) days prior written notice thereof. As soon as practicable after its
resignation, the Escrow Agent shall turn over to a successor escrow agent
appointed by the parties hereto, all monies and property held hereunder upon
presentation of the document appointing the new escrow agent and its acceptance
thereof. If no new agent is so appointed within the sixty (60) day period
following the giving of such notice of resignation, the Escrow Agent may deposit
the monies and property held hereunder with any court it deems appropriate.
6.8 The Escrow Agent shall resign and be discharged from its
duties as escrow agent hereunder if so requested in writing at anytime by the
parties hereto, provided, however, that such resignation shall become effective
only upon acceptance of appointment by a successor escrow agent as provided in
paragraph 6.7.
6.9 Notwithstanding anything herein to the contrary, the Escrow
Agent shall not be relieved from liability hereunder for its own gross
negligence or its own willful misconduct.
Page 4
7. Miscellaneous.
7.1 This Agreement shall for all purposes be deemed to be made
under and shall be construed in accordance with 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.
7.2 This Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and, except as expressly
provided herein, may not be changed or modified except by an instrument in
writing signed by the party to be charged.
7.3 This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
7.4 This Agreement shall be binding upon and inure to the benefit
of the respective parties hereto and their legal representatives, successors and
assigns.
7.5 Any notice or other communication required or which may be
given hereunder shall be in writing and either be delivered personally or be
mailed, certified or registered mail, return receipt requested, postage prepaid,
and shall be deemed given when so delivered personally or, if mailed, two (2)
business days after the date of mailing as follows:
If to the Seller, to: if to the Purchaser, to:
WEDGE Energy Services, L.L.C. To the address set forth below Purchaser's
0000 Xxxxxxxxx, Xxxxx 0000 signature on the signature page hereof
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxx
if to Xxxxxxx Xxxxxxx, to: and if to the Escrow Agent, to:
Xxxxxxx Xxxxxxx Associates, Inc. Law, Snakard & Xxxxxxx, P.C.
000 Xxxxx Xxxx 0000 Xxxx 0xx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxx Xxxxxx 00000 Xxxx Xxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxxx Attn: Xxxxxx X. Xxx, Xx., Shareholder
Page 5
The parties may change the persons and addresses to which the notices
or other communications are to be sent by giving written notice of any
such change in the manner provided herein for giving notice.
IN WITNESS WHEREOF, each of the parties has executed this Escrow
Agreement, as of the dated above set forth.
SELLER XXXXXXX XXXXXXX
WEDGE ENERGY SERVICES, L.L.C. XXXXXXX XXXXXXX ASSOCIATES, INC.
By: ____________________________ By: ________________________________________
Name: __________________________ Name: Xxxxxxx X. Xxxxxxx
Title: _________________________ Title: President
PURCHASER ESCROW AGENT
________________________________ LAW, SNAKARD & XXXXXXX, P.C.
By: ____________________________ By: ________________________________________
Name: __________________________ Name: Xxxxxx X. Xxx, Xx.
Title: _________________________ Title: Shareholder
PURCHASER'S ADDRESS
_________________________________
_________________________________
_________________________________
Page 6
