Document:

Exhibit 10.2

 

STORE CLOSING GUIDELINES

 

The following
procedures shall apply to the Sale(1) to be held at the closing Stores and
the disposal of the Owned FF&E in the closing Stores:

 

1.             The Sale shall be conducted so that
the closing Stores in which sales are to occur remain open no longer than the
normal hours of operation provided for in the respective leases or other
occupancy agreements for the closing Stores.

 

2.             The Sale shall be conducted in
accordance with applicable state and local “Blue Laws,” and thus, where
applicable, no Sale shall be conducted on Sunday unless the Merchant had been
operating such Stores on a Sunday.

 

3.             All display and hanging signs used
by the Merchant and the Agent in connection with Sale shall be professionally
produced and all hanging signs shall be hung in a professional manner. The
Merchant and the Agent may advertise the Sale as a “going out of business”, “sale
on everything”, “store closing”, or similar theme sale at the closing Stores as
provided by the Agency Agreement.  The
Merchant and the Agent shall not use neon or day-glo signs. Furthermore, with
respect to enclosed mall locations no exterior signs or signs in common areas
of a mall shall be used. Nothing contained herein shall be construed to create
or impose upon the Merchant and the Agent any additional restrictions not
contained in the applicable lease or other occupancy agreement. In addition,
the Merchant and the Agent shall be permitted to utilize exterior banners at (i) non-enclosed
mall Stores, and (ii) enclosed mall Stores to the extent the applicable
Store entrance does not require entry into the enclosed mall common area; provided,
however, that such banners shall be located or hung so as to make clear
that the Sale is being conducted only at the affected store shall not be wider
than the closing Storefront of the closing Store and shall not be larger than 4
feet by 40 feet. In addition, the Merchant and the Agent shall be permitted to
utilize sign walkers and street signage, notwithstanding any state, county or
local law or ordinance; provided  however the use of sign walkers
and use of street signage shall be done in a safe manner and shall not be
permitted on mall or shopping center property.

 

4.             Conspicuous signs
shall be posted in the cash register areas of each Store to the effect that all
sales are “final” and that customers with any questions or complaints
subsequent to the conclusion of the Sale may contact a named representative of
the Merchant or the Agent at a specified telephone number.  Conspicuous signage shall be posted in the
cash register area of each Store to the effect that the manufacturer’s
warranty, if any, may still exist and customers should consult the packaging
materials to see what, if any, manufacturer’s warranties are available.

 

5.             Within a “Shopping
Center”, the Agent shall not distribute handbills, leaflets or other written
materials to customers outside of any of the closing Stores, unless permitted
by the applicable lease or, if distribution is customary in the shopping center
in which the closing Store is located. Otherwise, the Agent may solicit
customers in the closing Stores themselves. The 

 

(1)  Capitalized terms
used but not defined herein shall have the meanings ascribed to such terms in
the Agency Agreement.

 

1

 

Agent shall
not use any flashing lights or amplified sound to advertise the Sale or solicit
customers, except as permitted under the applicable lease or agreed to by the
landlord.

 

6.             Agent shall provide
signage in the Closing Stores notifying customers that the Additional Agent
Merchandise has been included in the Sale.

 

7.             At the conclusion
of the Sale, Agent shall vacate the closing Stores in “broom-clean” condition,
and shall otherwise leave the closing Stores in the same condition as on the
commencement of the Sale, ordinary wear and tear excepted; provided, however,
that the Merchant and Agent hereby do not undertake any greater obligation than
as set forth in an applicable lease with respect to a Stores. The Merchant may
abandon any FF&E or other materials (the “Abandoned Property”) not sold in
the Sale at the closing Store premises at the conclusion of the Sale. Any
Abandoned Property left in a Store after a lease is rejected shall be deemed
abandoned with the landlord having the right to dispose of the same as the
landlord chooses without any liability whatsoever on the part of the landlord
to any party and without waiver of any damage claims against the Merchant.

 

8.             Subject to the
provisions of the Agency Agreement, the Agent shall have the right to sell
Owned FF&E located in the closing Stores; provided, however,
Merchant shall have the right (subject to the consent of the Indenture Trustee
and the Noteholders), at any time prior to the date that is fourteen days after
the Sale Commencement Date, to designate certain FF&E located in the
closing Stores that Merchant intends to keep for its own use and which Agent
shall not be permitted or entitled to sell. The Agent may advertise the sale of
the Owned FF&E consistent with the guidelines provided in paragraphs 4 and
6 hereof. Additionally, the purchasers of any Owned FF&E sold during the
Sale shall only be permitted to remove the Owned FF&E either through the
back shipping areas or through other areas after store business hours unless
otherwise agreed by on-site mall management. 
For the avoidance of doubt, as of the Sale Termination Date, Agent may
abandon, in place, and without further responsibility, any unsold FF&E
located at the closing Stores.

 

9.             The Agent shall not
make any alterations to interior or exterior Store lighting. No property of any
landlord of a Store shall be removed or sold during the Sale. The hanging of
exterior banners or other signage shall not constitute an alteration to a
Store.

 

10.           At the conclusion of
the Sale at each Store, pending assumption or rejection of applicable leases,
the landlords of the closing Stores shall have reasonable access to the closing
Store premises as set forth in the applicable leases. The Merchant, the Agent
and their agents and representatives shall continue to have exclusive and
unfettered access to the closing Stores.

 

11.           Post-petition rents
shall be paid by the Merchant as required by the Bankruptcy Code until the
rejection or assumption and assignment of each lease.

 

12.           The rights of the
landlords for any damages to the closing Stores shall be reserved in accordance
with the applicable leases.

 

2

 

13.           The Merchant shall
notify a representative of the relevant landlord of the date on which the Sale
is scheduled to conclude at a given Store, within three business days of the
Merchant’s receipt of such notice from the Agent.

 

14.           To the extent that
any Store landlord affected hereby contends that the Merchant is in breach or
default under these Store Closing Guidelines, such landlord shall provide at
least five (5) days’ written notice, served by facsimile and overnight
delivery, on the Merchant and the Merchant’s counsel, and the Agent and the
Agent’s counsel, at the following facsimile numbers and addresses:

 

	
  If to the Merchant:

  	
   

  	
  LINENS
  HOLDING CO.

  
	
   

  	
   

  	
  6
  Brighton Road

  
	
   

  	
   

  	
  Clifton,
  NJ 07012

  
	
   

  	
   

  	
  Attn:

  	
  Dave
  Coder

  
	
   

  	
   

  	
  Fax:

  	
  (973)
  836-0309

  
	
   

  	
   

  	
  Email:

  	
  dcoder@lnt.com

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  ASSET DISPOSITION ADVISORS, LLC

  
	
   

  	
   

  	
  499 Park Avenue

  
	
   

  	
   

  	
  New York, NY 10022

  
	
   

  	
   

  	
  Attn:

  	
  Paul Traub

  
	
   

  	
   

  	
   

  	
  Steven Fox

  
	
   

  	
   

  	
  Tel:

  	
  (212) 573-9084

  
	
   

  	
   

  	
  Fax:

  	
  (212) 652-3863

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RICHARDS, LAYTON & FINGER, P.A.

  
	
   

  	
   

  	
  920 North King Street

  
	
   

  	
   

  	
  P.O. Box 551

  
	
   

  	
   

  	
  Wilmington, DE 19899

  
	
   

  	
   

  	
  Attn:

  	
  Mark D. Collins

  
	
   

  	
   

  	
  Tel:

  	
  (302) 651-7700

  
	
   

  	
   

  	
  Fax:

  	
  (302) 651-7701

  
	
   

  	
   

  	
  Email:

  	
  Collins@rlf.com

  
	
   

  	
   

  	
   

  
	
  If to the Agent:

  	
   

  	
  [TBD]

  

 

If the parties are
unable to resolve the dispute between themselves, either the landlord or the
Merchant shall have the right to schedule a “status hearing” before the
Bankruptcy Court on no less than five (5) days notice to the other
parties.

 

3Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

(TGC INDUSTRIES, INC.)

 

THIS AGREEMENT is
made this 20th day of October, 2008, between TGC
Industries, Inc., a Texas
corporation (the “Company”), and
                                          (“Indemnitee”).  This
Agreement completely replaces and supersedes the Indemnification Agreement
dated August 26, 2005, between Indemnitee and the Company.

 

Competent and experienced persons are becoming more reluctant to serve
as directors and/or officers of corporations unless they are provided with
adequate protection against claims and actions against them for their
activities on behalf or at the request of such corporations, generally through
insurance and/or indemnification.

 

Uncertainties in the interpretations of the statutes and regulations,
laws, and public policies relating to indemnification of corporate directors
and officers are such as to make adequate, reliable assessment of the risks to
which directors and officers of such corporations may be exposed difficult, particularly
in light of the proliferation of lawsuits against directors and officers
generally.

 

The Board of Directors of the Company, based upon its business
experience, has concluded that the continuation of present trends in litigation
against corporate directors and officers will inevitably make it more difficult
for the Company to attract and retain directors and officers of the highest
degree of competence committed to the active and effective direction and
supervision of the business and affairs of the Company and its subsidiaries and
affiliates and the operation of its and their facilities. In fact, the Board
deems such consequence to be so detrimental to the best interests of the
Company that it has concluded that the Company should act to provide its
directors and officers with enhanced protection against inordinate risks
attendant on their positions in order to assure that the most capable persons
otherwise available will be attracted to, or will remain in, such positions. In
such connection, such directors have further concluded that it is not only
reasonable and prudent but necessary for the Company to obligate itself
contractually to indemnify, to the fullest extent permitted by applicable law,
financial responsibility for expenses and liabilities which might be incurred
by such individuals in connection with claims lodged against them for their
decisions and actions in such capacities.

 

Article 2.02-1 of the Texas Business Corporation Act of the State
of Texas, under which law the Company is organized, empowers a corporation
organized in Texas to indemnify persons who serve as directors and/or officers
of the corporation, or persons who serve at the request of the corporation as
directors and/or officers of an affiliated corporation,  and further empowers a corporation to “purchase and maintain insurance” on
behalf of such persons “against any
liability asserted against him and incurred by him in such a capacity or
arising out of his status as such a person, whether or not the corporation
would have the power to indemnify him against that liability under this
[Article].”

 

 

The Articles of Incorporation and Bylaws of the Company permit
indemnification to the fullest extent permitted by applicable law.

 

The Company desires to have the Indemnitee serve or continue to serve
as a director and/or officer of the Company, and/or as a director, officer,
employee, partner, trustee, agent, and/or fiduciary of such other corporations
partnerships, joint ventures, employee benefit plans, trusts, and/or other enterprises
(herein referred to as “Company Affiliate”)
of which he or she has been or is serving, or will serve on behalf of or at the
request of or for the convenience of, or to represent the interests of the
Company, free from undue concern for unpredictable, inappropriate, or
unreasonable claims for damages by reason of his or her being, or having been,
a director and/or officer of the Company, and/or a director, officer, employee,
partner, trustee, agent, and/or fiduciary of a Company Affiliate, or by reason
of his or her decisions or actions on their behalf.

 

The Indemnitee is willing to serve, or to continue to serve, or to take
on additional service for, the Company and/or the Company Affiliate in such
aforesaid capacities on the condition that he or she be indemnified as provided
for herein.

 

Accordingly, in consideration of the premises and the covenants
contained herein, the Company and the Indemnitee do hereby covenant and agree
as follows:

 

1                                          Services to the Company: The
Indemnitee shall serve or continue to serve as a director and/or officer of the
Company (in the case of a Company officer at the will of the Company or under
separate contract, if any such contract exists or shall hereafter exist),
and/or as a director, and/or officer, or fiduciary of a Company Affiliate,
faithfully and to the best of his or her ability so long as he or she is duly
elected and qualified in accordance with the provisions of the Bylaws or other
applicable constitutive documents thereof; provided. however that: (a) the
Indemnitee may at any time and for any reason resign from such position
(subject to any contractual obligations which the Indemnitee has assumed apart
from this Agreement); and (b) neither the Company nor the Company
Affiliate will have any obligation under this Agreement to continue the
Indemnitee in any such position.

 

2                                          Right to Indemnification:

 

2.1                                 The
Company shall, except to the extent prohibited by applicable law as then in
effect, indemnify any Indemnitee who is or was involved in any manner (including,
without limitation, as a party or witness), or is threatened to be made so
involved, in any threatened, pending, or completed investigation, claim,
action, suit, or proceeding whether civil, criminal, administrative, or
investigative (including, without limitation, any action, suit, or proceeding
by or in the right of the Company to procure a judgment in its favor) (herein
referred to as a “Proceeding”) by reason of the
fact that such person is or was a director or officer of the Company, and/or is
or was serving at the request of the Company as a 

 

2

 

director or officer, of any Company
affiliate, against all expenses (including attorneys’ fees), judgments, fines,
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such Proceeding; provided. however, that, except as
provided in Paragraph 3.4, the foregoing shall not apply to a director or
officer of the Company with respect to a Proceeding that was commenced by such
director or officer. Such indemnification shall include the right to receive
payment in advance of any expenses incurred by the Indemnitee in connection
with such Proceeding, consistent with the provisions of applicable law as then
in effect.

 

2.2                                 Notwithstanding
the obligation of the Company to indemnify attorneys’ fees as above provided in
Paragraph 2.1, as a condition to being so indemnified the following shall
apply. With regard to any “Proceeding” (as
above defined), there will be groups the members of which have totally common
interests  —  i.e., their goals are identical and there are
no conflicts-of-interest among them. At such time as the determination of these
groups has been completed (such determination to be made by “Independent Counsel” [as hereafter defined] if the parties
involved cannot make such determination among themselves), each group shall, by
majority vote of those comprising such group, select a single attorney or law
firm to serve as (exclusive) legal counsel for all of the members of such
group. In the event that any member of any such group acts independently by
retaining the legal services of any other attorney or law firm to additionally
or separately represent him, her, or it, all legal fees and expenses of such
independently retained attorney or law firm shall be the (sole) responsibility
of such independently acting member of the group.

 

3                                          Advancement of Expenses; Procedures; Presumptions
and Effect of Certain Proceedings: Remedies: In furtherance, but
not in limitation, of the foregoing provisions, the following procedures,
presumptions, and remedies shall apply with respect to advancement of expenses
and the right to indemnification hereunder:

 

3.1                                 Advancement of Expenses: All
reasonable expenses incurred by or on behalf of the Indemnitee in connection
with any Proceeding shall, after initial approval in accordance with Paragraph
3.2, be advanced to the Indemnitee by the Company within twenty (20) calendar
days after the receipt by the Company of a statement or statements from the
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall:  (a) be delivered to the
Company within ninety (90) days after the incurrence of the expenses being
reported on such statement or statements; and (b) reasonably evidence the
expenses incurred by the Indemnitee (and, if required by law at the time of
such advance, shall include or be accompanied by an undertaking by or on behalf
of the Indemnitee to repay the amounts advanced if it should ultimately be
determined that the Indemnitee is not entitled to be indemnified against such
expenses hereunder).

 

3

 

3.2                                 Procurement for Determination of Entitlement to
Indemnification:

 

3.2.1                        To obtain
indemnification as herein provided, an Indemnitee shall submit to the President
or Secretary of the Company a written request, including such documentation and
information as is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to
indemnification (herein referred to as the “Supporting Documentation”). The
determination of the Indemnitee’s entitlement to indemnification shall be made
not later than 60 calendar days after receipt by the Company of the written
request for Indemnification together with the Supporting Documentation. The
Secretary or President of the Company shall, promptly upon receipt of such a
request for indemnification, advise the Board of Directors in writing that the
Indemnitee has requested indemnification.

 

3.2.2                        The
Indemnitee’s entitlement to indemnification hereunder shall (except as provided
in Subparagraph 3.2.3 below) be determined in one of the following ways (each
of which shall give effect to the presumptions set forth in Paragraph 3.3): (a) by
a majority vote of the Disinterested Directors (as hereinafter defined) if they
constitute a quorum of the Board of Directors; (b) by a written opinion of
Independent Counsel (as hereinafter defined) if a quorum of the Board of
Directors consisting of Disinterested Directors is not obtainable or, even if
obtainable, a majority of such Disinterested Directors so directs: (c) by
the stockholders of the Company (but only if a majority of the Disinterested
Directors, if they constitute a quorum of the Board of Directors, presents the
issue of entitlement to indemnification to the stockholders for their
determination); or (d) as provided in Paragraph 3.3. In the event that
this Subparagraph 3.2.2 applies, stockholder approval will be deemed to have
been received if the holders of a majority of the Company’s total common stock
outstanding vote in favor of such approval.

 

3.2.3                        Notwithstanding
what is stated above, in the event of a Change in Control (see definition
contained in Exhibit “A” hereto) of the
Company, the Indemnitee’s entitlement to indemnification shall be determined by
a written opinion of Independent Counsel in a written opinion to the Board of
Directors, a copy of which shall be delivered to the Indemnitee. The
Independent Counsel shall be selected by the Indemnitee. In the event the
Company objects to the Independent Counsel so selected, within seven days after

 

4

 

written notice of the selection has been
given by the Indemnitee to the Company, the Company may object to such
selection by written notification given to the Indemnitee. Such objection may
be asserted only on the ground that the Independent Counsel so selected does
not meet the requirement of “Independent
Counsel” as hereafter defined, and the objection shall set forth
with particularity the factual basis of such assertion. If such written
objection is made, the Independent Counsel so selected may not serve as
Independent Counsel unless and until a court has determined that such objection
is without merit. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with the performance of his or her responsibilities hereunder, and
the Company shall pay all reasonable fees and expenses instant to the
implementation of the procedures referred to above. Upon the due commencement
of any judicial proceeding or arbitration pursuant to Subparagraph 3.4.1
hereof, the Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

3.2.4                        In the
event of a Potential Change in Control (as hereinafter defined) of the Company,
the Company, upon written request by the Indemnitee, shall create a trust
(which shall be a “grantor trust” for federal income tax purposes) for the
benefit of the Indemnitee and from time to time upon written request of the
Indemnitee shall fund such trust in an amount sufficient to satisfy any and all
expenses which at the time of each such request it is reasonably anticipated
will be incurred in connection with a Proceeding for which the Indemnitee is
entitled to rights of indemnification under Paragraph 2 hereof, and any and all
judgments, fines, penalties, and settlement amounts of any and all proceedings
for which the Indemnitee is entitled to rights of indemnification under
Paragraph 2 from time to time actually paid or claimed, reasonably anticipated,
or proposed to be paid. The amount or amounts to be deposited in the trust
pursuant to the foregoing funding obligation shall be determined by the
Independent Counsel referred to in Subparagraph 3.2.2 above. The terms of the
trust shall provide that upon a Change in Control:  (i) the trust shall ‘not be revoked or
the principal thereof invaded, without the written consent of the Indemnitee; (ii) the
trustee shall advance, within two (2) business days of a request by the
Indemnitee, any and all expenses to the Indemnitee; (iii) the trust shall
continue to be funded by the Company in accordance with the funding obligations
set forth above; (iv) the trustee shall promptly pay to the Indemnitee all
amounts for which the Indemnitee is entitled to indemnification pursuant to
this Agreement or otherwise; and (v) all unexpended 

 

5

 

funds in such trust shall revert to the
Company upon a final determination by such Independent Counsel that the
Indemnitee has been fully indemnified under the terms of this Agreement. The
trustee shall be an institutional trustee with a highly regarded reputation
chosen by the Indemnitee. Nothing in this Subparagraph 3.2.4 shall relieve the
Company of any of its obligations under this Agreement. Nothing contained in
this Subparagraph 3.2.4. shall prevent the Board of Directors of the Company in
its discretion at any time and from time to time, upon request of the
Indemnitee, from providing security to the Indemnitee for the Company’s
obligations hereunder through an irrevocable line of credit, funded trust as
described above, or other collateral. Any such security, once provided to the
Indemnitee, may not be revoked or released without the Indemnitee’s prior
written consent.

 

3.3                                 Presumptions and Effect of Certain Proceedings:
Except as otherwise expressly provided herein, the Indemnitee shall be presumed
to be entitled to indemnification hereunder upon submission of a request for
indemnification together with the Supporting Documentation in accordance with
Subparagraph 3.2.1, and thereafter the Company shall have the burden of proof
to overcome that presumption in reaching a contrary determination. In any
event, if the person or persons empowered under Paragraph 3.2 to determine
entitlement to indemnification have not been appointed or have not made a
determination within 60 calendar days after receipt by the Company of the
request therefor together with the Supporting Documentation, the Indemnitee
shall be deemed to be entitled to indemnification, and the Indemnitee shall be
entitled to such indemnification unless the Company establishes as provided in
the final sentence of Paragraph 3.4.2 or by written opinion of Independent
Counsel that: (a) the Indemnitee misrepresented or failed to disclose a
material fact in making the request for indemnification or in the Supporting
Documentation; or (b) such indemnification is prohibited by law. The
termination of any Proceeding described in Paragraph 2, or of any claim, issue,
or matter therein, by judgment, order, settlement, or conviction, or upon a
plea of nolo contendere  or
its equivalent, shall not, of itself, adversely affect the right of the
Indemnitee to indemnification or create a presumption that the Indemnitee did
not act in good faith and in a manner which the Indemnitee reasonably believed
to be in, or not opposed to, the best interests of the Company or, with respect
to any criminal Proceeding, that the Indemnitee had reasonable cause to believe
that his or her conduct was unlawful.

 

3.4                                 Remedies of Indemnitee:

 

3.4.1                        In the
event that a determination is made pursuant to Paragraph 3.2 that the
Indemnitee is not entitled to indemnification hereunder: (a) the
Indemnitee shall be entitled to seek an adjudication of his or 

 

6

 

her entitlement to such indemnification
either, at the Indemnitee’s option, in (x) an appropriate court of the
State of Texas or any other court of competent jurisdiction, or (y) an
arbitration to be conducted by a single arbitrator, selected by mutual
agreement of the Company and the Indemnitee (or, failing such agreement by the
then sitting Chief Judge of the United States District Court for the
appropriate jurisdiction), pursuant to the commercial arbitration rules of
the American Arbitration Association; (b) any such judicial proceeding or
arbitration shall be de novo, and
the Indemnitee shall not be prejudiced by reason of such adverse determination;
and (c) in any such judicial proceeding or arbitration, the Company shall
have the burden of proving that indemnification is prohibited by applicable
law. If any such determination is made, the Indemnitee shall be entitled, on
five days’ written notice to the Secretary of the Company, to receive the
written report of the persons making such determination, which report shall
include the reasons and factual findings, if any, upon which such determination
was based.

 

3.4.2                        If a
determination has been made, or is deemed to have been made, pursuant to
Paragraph 3.2 or 3.3, that the Indemnitee is entitled to indemnification, the
Company shall be obligated to pay the amounts constituting such indemnification
within five days after such determination has been made or deemed to have been
made and shall be conclusively bound by such determination unless the Company
establishes as provided in the final sentence of this paragraph that: (a) the
Indemnitee misrepresented or failed to disclose a material fact in making the
request for indemnification or in the Supporting Documentation; or (b) such
indemnification is prohibited by law. If either (x) advancement of expenses is
not timely made pursuant to Paragraph 3.1, or (y) payment of
indemnification is not made within five calendar days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Paragraph 3.2 or 3.3, the Indemnitee shall be entitled to seek
judicial enforcement of the Company’s obligation to pay to the Indemnitee such
advancement of expenses or indemnification. Notwithstanding the foregoing, the
Company may bring an action, in an appropriate court in the State of Texas or
any other court of competent jurisdiction, contesting the right of the
Indemnitee to receive indemnification hereunder due to the occurrence of an
event described in subclause (a) or (b) of this Subparagraph 3.4.2
(herein referred to as a “Disqualifying Event”); provided, however, that
in any such action the Company will have the burden of proving the occurrence of
such Disqualifying Event.

 

7

 

3.4.3                        The
Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Paragraph 3.4 that the procedures and
presumptions of this Paragraph 3 are not valid, binding, and enforceable, and
shall stipulate in any such court or before any such arbitrator that the
Company is bound by all of the provisions of this Agreement.

 

3.4.4                        If the
Indemnitee, pursuant to this Paragraph 3.4, seeks a judicial adjudication of,
or an award in arbitration to enforce, his or her rights under, or to recover
damages for breach of, this Agreement, the Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by the Company against,
those expenses (see definition contained in Paragraph 2 above) actually and reasonably
incurred by the Indemnitee if the Indemnitee prevails in such judicial
adjudication or arbitration. If it shall be determined in such judicial
adjudication or arbitration that the Indemnitee is entitled to receive part but
not all of the indemnification or advancement of expenses sought, the expenses
incurred by the Indemnitee in connection with such judicial adjudication or
arbitration shall be prorated accordingly. 
Provided, however, notwithstanding what has just been stated:  (1) the amount of expenses for
reimbursement during the Indemnitee’s taxable year may not affect the expenses
eligible for reimbursement in any other taxable year; (2) the
reimbursement of an eligible expense must be made on or before ninety (90) days
after the date the Indemnitee prevailed in such adjudication or arbitration; (3) the
right to reimbursement may not be subject to liquidation or exchange for
another benefit.  Further, the Indemnitee’s
recovery from the Company of any such expenses must take place during the duration
of this Agreement (see Paragraph 5.1 which follows).

 

3.5                                 Definitions:  For purposes of this
Paragraph 3:

 

“Disinterested Director” means a director of the Company who
is not or was not a party to the Proceeding in respect of which indemnification
is sought by the Indemnitee.

 

“Independent Counsel” means a law firm or a
member of a law firm that neither presently is, nor in the past five years has
been, retained to represent: (a) the Company or the Indemnitee in any
matter material to either such party; or (b) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing under the laws of the State
of Texas would have a conflict of interest in representing either the company
or the Indemnitee in an action to determine the Indemnitee’s rights hereunder.

 

8

 

“Potential Change in Control” shall be deemed
to have occurred if: (i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control; (ii) a
person (including the Company) publicly announces a legitimate intention to
take or to consider taking actions which if consummated would constitute a
Change in Control; (iii) any person, other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of stock  of the Company, who is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 9.5 % or more of the combined voting power of the Company’s then
outstanding Voting  Securities, increases
his or her beneficial ownership of such securities by five percentage points or
more over the percentage so owned by such person; or (iv) the Board of
Directors adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

 

4                                          Other Rights to Indemnification:
The indemnification and advancement of costs and expenses (including attorneys’
fees and disbursements) provided by this Agreement shall not be deemed
exclusive of any other rights to which the Indemnitee may now or in the future
be entitled under any provision of applicable law, the Articles of
Incorporation, or any Bylaw of the Company or any other agreement, or any vote
of directors or stockholders or otherwise, whether as to action in his or her
official capacity or in another capacity while occupying any of the positions
or having any of the relationships referred to in Paragraph 1 of this
Agreement.

 

5                                          Duration of Agreement:

 

5.1                                 This
Agreement shall be effective from and after the date hereof, and shall continue
until and terminate upon the later of: (i) the tenth (10th)
anniversary after the Indemnitee has ceased to occupy any of the positions or
have any of the relationships described in Paragraph 1 of this Agreement; or (ii) (a) the
final termination or resolution of all proceedings with respect to the
Indemnitee commenced during such ten (10) year period, and (b) either
(x) receipt by the Indemnitee of the Indemnification to which he or she is
entitled hereunder with respect thereto, or (y) a final adjudication or
binding arbitration that the Indemnitee is not entitled to any further
indemnification with respect thereto, as the case may be.

 

5.2                                 This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of the Indemnitee and his or her heirs, devisees,
executors, administrators, or other legal representatives.

 

6.                                       Severability: If any provision or
provisions of this Agreement are held to be invalid, illegal, or unenforceable
under any particular circumstances or for any 

 

9

 

reason
whatsoever: (a) the validity, legality, and enforceability of the remaining
provisions of this Agreement (including, without limitation, all other portions
of any paragraph or clause of this Agreement that contains any provision that
has been found to be invalid, illegal, or unenforceable, that are not
themselves invalid, illegal, or unenforceable) or the validity, legality, or
enforceability under any other circumstances shall not in any way be affected
or impaired thereby; and (b) to the fullest extent possible consistent
with applicable law, the provisions of this Agreement (including, without
limitation, all other portions of any paragraph or clause of this Agreement
that contains any such provision that has been found to be invalid, illegal, or
unenforceable, that are not themselves invalid, illegal, or unenforceable) shall
be deemed revised and shall be construed so as to give effect to the intent
manifested by this Agreement (including the provision held invalid, illegal, or
unenforceable).

 

7.                                       Identical Counterparts: This
Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original, but all of which together shall
constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence
the existence of this Agreement.

 

8.                                       Headings: The headings of the
paragraphs of this Agreement are inserted for convenience and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.

 

9.                                       Modification and Waiver: No
supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

10.                                 Notification and Defense of Claim:
The Indemnitee agrees to notify the Company promptly in writing upon being
served with any summons, citation, subpoena, complaint, indictment,
information, or other document relating to any matter which may be subject to
indemnification hereunder, whether civil, criminal, or investigative; provided.
however, that the failure of the Indemnitee to give such notice to the Company
shall not adversely affect the Indemnitee’s rights under this Agreement except
to the extent the Company has been materially prejudiced as a direct result of
such failure. Nothing in this Agreement shall constitute a waiver of the
Company’s right to seek participation at its own expense in any Proceeding
which may give rise to indemnification hereunder.

 

11.                                 Notices: All notices, requests,
demands, and other communications hereunder shall be in writing and shall be
deemed to have been duly given if: (i) delivered by hand and receipted for
by the party to whom said notice or other communication shall have been
directed; or (ii) mailed by certified or registered mail with postage 

 

10

 

prepaid, on
the third business day after the date on which it is so mailed, in either case:

 

(a)           if to the Indemnitee, at the address
indicated on the signature page hereof;

 

(b)           if to the Company:

 

TGC Industries, Inc.

101 E. Park
Blvd., Suite 955

Plano, TX  75074

 

or to such
address as may have been furnished to either party by the other Party.

 

12                                    Governing Law: The parties hereto
agree that this Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Texas.

 

IN WITNESS
WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TGC Industries, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Wayne A.
  Whitener

  
	
   

  	
   

  	
   

  	
  President
  and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Printed
  Name of Indemnitee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Address)

  

 

11

 

Exhibit “A”

to

Indemnification
Agreement

 

I.             Change in the ownership
of a corporation

 

(A)   In
general.  A change in the ownership of a
corporation occurs on the date that any one person, or more than one person
acting as a group, acquires ownership of stock of the corporation that,
together with stock held by such person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of
such corporation.  However, if any one
person, or more than one person acting as a group, is considered to own more
than 50 percent of the total fair market value or total voting power of the
stock of a corporation, the acquisition of additional stock by the same person
or persons is not considered to cause a change in the ownership of the
corporation (or to cause a change in the effective control of the
corporation).  An increase in the
percentage of stock owned by any one person, or persons acting as a group, as a
result of a transaction in which the corporation acquires its stock in exchange
for property will be treated as an acquisition of stock.  This applies only when there is a transfer of
stock of a corporation (or issuance of stock of a corporation) and stock in such
corporation remains outstanding after the transaction.

 

(B)           Persons acting as a group.  Persons will not be considered to be acting
as a group solely because they purchase or own stock of the same corporation at
the same time, or as a result of the same public offering.  However, persons will be considered to be
acting as a group if they are owners of a corporation that enters into a
merger, consolidation, purchase, or acquisition of stock, or similar business
transaction with the corporation.  If a
person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase, or acquisition of stock, or similar
transaction, such shareholder is considered to be acting as a group with other
shareholders in a corporation prior to the transaction giving rise to the
change and not with respect to the ownership interest in the other corporation.

 

II.            Change
in the effective control of a corporation.

 

(A)          In general.  Notwithstanding that a corporation has not
undergone a change in ownership, (see above), a change in the effective control
of a corporation occurs only on the date that either —

 

(1)           Any one person, or more than one
person acting as a group, acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the corporation possessing 35 percent or more of the
total voting power of the stock of such corporation; or

 

(2)           A majority of members of the
corporation’s board of directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of the corporation’s board of directors prior to the election, provided
that for purposes of this paragraph  the
term corporation refers solely to the relevant corporation 

 

1

 

for which no other corporation is a majority
shareholder for purposes of that paragraph (for example, if Corporation A is a
publicly held corporation with no majority shareholder, and Corporation A is
the majority shareholder of Corporation B, which is the majority shareholder of
Corporation C, the term corporation for purposes of this paragraph would refer
solely to Corporation A).

 

(B)           Multiple change in
control events.  A change in effective
control also may occur in any transaction in which either of the two
corporations involved in the transaction has a change in control event.  Thus, for example, assume Corporation P
transfers more than 40 percent of the total gross fair market value of its
assets to Corporation O in exchange for 35 percent of O’s stock.  P has undergone a change in ownership of a
substantial portion of its asset, and O has a change in effective control.

 

(C)           Acquisition of additional control.  If any one person, or more than one person
acting as a group, is considered to effectively control a corporation, the
acquisition of additional control of the corporation by the same person or
persons is not considered to cause a change in the effective control of the
corporation (or to cause a change in the ownership of the corporation).

 

(D)          Persons acting as a
group.  Persons will not be considered to
be acting as a group solely because they purchase or own stock of the same
corporation at the same time, or as a result of the same public offering.  However, persons will be considered to be
acting as a group if they are owners of a corporation that enters into a
merger, consolidation, purchase, or acquisition of stock, or similar business
transaction with the corporation.  If a
person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase, or acquisition of stock, or similar
transaction, such shareholder is considered to be acting as a group with other
shareholders in a corporation only with respect to the ownership in that
corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation.

 

III.           Change
in the ownership of a substantial portion of a corporation’s assets.

 

(A)          In general.  Change in the ownership of a substantial
portion of a corporation’s assets.  A
change in the ownership of a substantial portion of a corporation’s assets
occurs on the date that any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or person) assets from the
corporation that have a total gross fair market value equal to or more than 40 percent
of the total gross fair market value of all of the assets of the corporation
immediately prior to such acquisition or acquisitions.  For this purpose, gross fair market value
means the value of the assets of the corporation, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
such assets.

 

(B)           Transfers to a related person.

 

(1)           There is no change in control event
when there is a transfer to an entity that is controlled by the shareholders of
the transferring corporation immediately after the 

 

2

 

transfer. 
A transfer of assets by a corporation is not treated as a change in the
ownership of such assets if the assets are transferred to –

 

(i)  A
shareholder of the corporation (immediately before the asset transfer) in
exchange for or with respect to its stock;

 

(ii)  An
entity, 50 percent or more of the total value or voting power of which is
owned, directly or indirectly, by the corporation;

 

(iii)  A
person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the corporation; or

 

(iv)  An
entity, at least 50 percent of the total value or voting power of which is
owned, directly or indirectly, by a person described in “(iii)” immediately
preceding.

 

(2)           A person’s status is determined
immediately after the transfer of the assets. 
For example, a transfer to a corporation in which the transferor
corporation has no ownership interest before the transaction, but which is a
majority-owned subsidiary of the transferor corporation after the transaction
is not treated as a change in the ownership of the assets of the transferor
corporation.

 

(C)           Persons acting as a group.  Persons will not be considered to be acting
as a group solely because they purchase assets of the same corporation at the
same time.  However, persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase, or acquisition of assets, or
similar business transaction with the corporation.  If a person, including an entity shareholder,
owns stock in both corporations that enter into a merger, consolidation, purchase,
or acquisition of assets, or similar transaction, such shareholder is
considered to be acting as a group with other shareholders in a corporation
only to the extent of the ownership in that corporation prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

 

3

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