MITCHAM INDUSTRIES INC
EX-10.1
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit1.htm
<DESCRIPTION>EX-10.1
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<TITLE> EX-10.1 </TITLE>
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<P align="center" style="font-size: 10pt"><FONT style="font-size: 12pt"><U>LOAN AGREEMENT</U></FONT>



<P align="left" style="font-size: 12pt; text-indent: 4%">THIS AGREEMENT made and entered into on this 24th day of September, 2008, by and between
MITCHAM INDUSTRIES, INC., a Texas corporation, with principal offices at Huntsville, in Walker
County, Texas (herein referred to as &#147;Borrower&#148;), and First Victoria National Bank, a national
banking corporation, with its offices and domicile in Victoria, Victoria County, Texas, (herein
referred to as &#147;Lender&#148;) to induce Lender to extend credit to Borrower in the amounts evidenced by
the promissory note described in Paragraph&nbsp;II A of this agreement (herein referred to as the
&#147;Loan&#148;) and evidencing the line of credit described herein.


<P align="left" style="font-size: 12pt; text-indent: 4%">In consideration of their mutual warranties, covenants and agreements contained herein and
Lender&#146;s extension of credit to Borrower in the amount aforesaid, Borrower and Lender hereby
warrant, covenant and agree as follows:


<P align="center" style="font-size: 12pt">I. <U>WARRANTIES OF BORROWER:</U>



<P align="left" style="font-size: 12pt; text-indent: 4%">A.&nbsp;That Borrower is a Texas corporation currently authorized to do business in the State of
Texas, and that all franchise taxes, employment taxes, withholding taxes, income taxes, sales
taxes, use taxes and all other taxes have been paid current to the date of this agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">B.&nbsp;That the execution by Borrower of this agreement and the other documents described herein
has been duly authorized by its corporate board and that all of the agreements, indentures, or
conveyances described herein to be made or undertaken by Borrower are within its corporate powers
and not prohibited by law or its governing documents.


<P align="left" style="font-size: 12pt; text-indent: 4%">C.&nbsp;That this Loan Agreement and all promissory notes and security documents referenced herein
are legal, valid and binding obligations of Borrower which are enforceable against Borrower in
accordance with the respective terms thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">D.&nbsp;That all financial information submitted to Lender may be relied upon by Lender as fairly
representing the financial condition of the companies or individuals to which the same relate, and
that there has been no adverse change in the financial condition of Borrower subsequent to the
presentment of the financial information now held by Lender.


<P align="left" style="font-size: 12pt; text-indent: 4%">E.&nbsp;That there is no litigation, arbitration or governmental or regulatory proceedings pending
or threatened against Borrower which, if adversely determined, could have a material adverse effect
on Borrower&#146;s financial condition or affect the legality, validity or enforceability of this Loan
Agreement or any promissory notes or security documents referenced herein and that Borrower has no
material contingent liabilities or material forward commitments which are not disclosed in the
financial information now held by Lender.


<P align="left" style="font-size: 12pt; text-indent: 4%">F.&nbsp;That there are no other liens or encumbrances against the property given as security
for the payment of the hereinafter described loan, except for a Permitted Lien as defined herein.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;Permitted Lien&#148; means (a)&nbsp;Liens created by or permitted under the Security Agreement,
Lease and Rental Assignment, and such other documents and instruments under this Loan Agreement;
(b)&nbsp;Liens existing on the date of this Agreement; (c)&nbsp;Liens for Taxes or other governmental charges
not at the time due and payable, or (if foreclosure, distraint sale or other similar proceeding
shall not have been initiated) which are being contested in good faith by appropriate proceedings
diligently prosecuted, so long as foreclosure, distraint, sale or other similar proceedings have
not been initiated, and in each case for which the Borrower and its subsidiaries maintain adequate
reserves in accordance with accounting principles generally accepted in the United States of
America (&#147;GAAP&#148;); (d)&nbsp;Liens in favor of carriers, warehousemen, mechanics and materialmen, or other
similar Liens imposed by law, which remain payable without penalty or which are being contested in
good faith by appropriate proceedings diligently prosecuted, which proceedings have the effect of
preventing the forfeiture or sale of the property subject thereto, and in each case for which the
Borrower and its subsidiaries maintain adequate reserves in accordance with GAAP; (e)&nbsp;Liens in
connection with worker&#146;s compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or Liens consisting of cash collateral securing the
Borrower&#146;s or any of its subsidiaries&#146; performance of surety bonds, bids, performance bonds and
similar obligations and, in each case, for which the Borrower and its subsidiaries maintain
adequate reserves in accordance with GAAP; (f)&nbsp;attachments, appeal bonds (and cash collateral
securing such bonds), judgments and other similar Liens, for sums not exceeding $1,000,000.00 in
the aggregate for the Borrower and its subsidiaries, arising in connection with court proceedings,
provided that the execution or other enforcement of such Liens is effectively stayed; (g)
easements, rights of way, restrictions, minor defects or irregularities in title and other similar
Liens arising in the ordinary course of business and not materially detracting from the value of
the property subject thereto and not interfering in any material respect with the ordinary conduct
of the business of the Borrower or any subsidiary; (h)&nbsp;Liens consisting of cash collateral securing
the Borrower&#146;s and its subsidiaries&#146; reimbursement obligations under letters of credit, provided
that the aggregate amount of cash collateral securing such Indebtedness does not exceed the undrawn
face amount of all such letters of credit outstanding at any one time; and (I)&nbsp;Liens arising solely
by virtue of any statutory or common law provision relating to banker&#146;s liens, rights of set-off or
similar rights and remedies and burdening only deposit accounts or other funds maintained with a
creditor depository institution, provided that no such deposit account is a dedicated cash
collateral account or is subject to restrictions against access by the depositor in excess of those
set forth by regulations promulgated by the Board of Governors of the Federal Reserve System and no
such deposit account is intended by the Borrowers to provide collateral to the depository
institution.


<P align="center" style="font-size: 12pt">II. <U>INDEBTEDNESS</U>



<P align="left" style="font-size: 12pt; text-indent: 4%">A.&nbsp;Lender shall advance to Borrower, according to the terms thereof and subject to the
limitations expressed therein and in this agreement, the principal sum of the following promissory
note (the &#147;Note&#148;):


<P align="left" style="margin-left:8%; margin-right:4%; font-size: 12pt">One certain promissory note of even date herewith executed by Borrower and
payable to the order of Lender in the original principal sum of
$25,000,000.00, bearing interest at the rate of the Wall Street Journal
announced prime rate as such rate is determined daily by Lender according to
the specific terms of said promissory note and interest being payable in
monthly installments and the entire principal being due (together with any
accrued and unpaid interest) on the date two (2)&nbsp;years after the date of the
note and being partly in renewal and extension of the unpaid balance owing
on that certain promissory note dated June&nbsp;27, 2005 executed by Borrower and
payable to the order of Lender in the original principal sum of
$12,500,000.00 governed by a loan agreement of even date therewith.


<P align="left" style="font-size: 12pt; text-indent: 4%">B.&nbsp;Borrower agrees to execute and deliver to Lender such promissory note in the form
prescribed by Lender and on terms described herein, evidencing the indebtedness created by such
advances.


<P align="left" style="font-size: 12pt; text-indent: 4%">C.&nbsp;Borrower hereby acknowledges and agrees that Lender has and shall have the right, at
any time, without the consent of or notice to Borrower, to grant participations in all or part of
the obligations of Borrower evidenced by this note, together with any liens or collateral securing
the payment hereof. In the event Lender elects to participate any Overline Portion (as hereinafter
defined) of the obligations evidenced by this note and if Lender is unable to procure a participant
or a participant fails or refuses to advance to Borrower any Overline Portion through no fault of
Lender, it is agreed that Lender shall have no liability to Borrower to fund such Overline Portion,
nor shall Lender have any obligation to procure funds from other sources or fund any amounts that
would cause Lender to be in violation of any state or federal law with respect to Borrower being
liable to Lender in an amount in excess of that permitted by such applicable law. The term
&#147;Overline Portion&#148; shall mean the amount of loan proceeds in excess of the amount that Lender is
permitted by applicable law or Lender&#146;s loan policy limitations to loan to Borrower.


<P align="left" style="font-size: 12pt; text-indent: 4%">D.&nbsp;Notwithstanding any other provision in this agreement or the provisions of any promissory
note or other loan document to the contrary, Lender shall not charge or collect and Lender does not
intend to contract for interest in excess of that permitted by law for loans of this kind, and to
prevent such occurrence, Lender will, at maturity, or an earlier final payment of any promissory
note described above, determine the total amount of interest that can be lawfully charged or
collected by applying the highest lawful rate of interest to the full periodic balances of
principal for the period each is outstanding and unpaid and compare such amount with the total
interest that has accrued under the terms of such note, and, if necessary to prevent usury, reduce
the total amount of interest payable by Borrower to the lesser amount. If the amount of interest
that has been collected exceeds the lawful amount, Lender shall either make direct refund of such
excess to Borrower or credit it against other sums owed by Borrower to Lender, whichever Lender
deems appropriate. If at any time the rate of interest provided for in any note shall exceed the
highest lawful rate, the annual rate at which interest shall accrue on such note shall be limited
to such highest lawful rate. The highest lawful rate shall thereafter be the rate at which
interest is accrued on such note until the total amount of interest accrued equals the amount of
interest that would have accrued if the interest rate provided in such note had at all times been
in effect, after which the interest rate provided in such note, if it does not exceed the highest
lawful rate, shall apply. As used herein, the term &#147;highest lawful rate&#148; means the highest rate of
interest permitted to be charged or collected under the applicable state or federal law for this
type of loan applied to the full periodic balances of principal advances for the period each is
outstanding and unpaid.


<P align="center" style="font-size: 12pt">III. <U>SECURITY</U>



<P align="left" style="font-size: 12pt; text-indent: 4%">A.&nbsp;As security for the Loan, Borrower shall execute and deliver to, procure for, deposit with,
and pay to Lender the following:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Security agreements, financing statements, registrations, and title
documents in form and content acceptable to Lender, executed by Borrower and
covering all assets of Borrower (other than stock of subsidiaries), including
but not limited to its equipment, accounts, contracts, leases, inventory,
instruments, receivables, chattel paper and general intangibles, now owned or
hereafter acquired by Borrower, and any and all proceeds, increases,
substitutions, replacements, additions, and accessions to such assets securing
the promissory note delivered by Borrower pursuant to Paragraph&nbsp;II.A hereof,
and all other and future indebtedness of Borrower to Lender and evidencing a
first lien and prior security interest in such collateral, whether now owned or
hereinafter acquired by Borrower.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lease and Rental Assignment to Lender, in form and content acceptable
to Lender, of Borrower&#146;s rights under any leases of equipment by Borrower
hereunder which have not been paid in full.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such other documents and instruments as Lender may require for the
perfection of liens and their registration under the laws of the State of
Texas, of the United States of America, of Canada or any other foreign nation
or province of a foreign nation.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hazard insurance policy or policies in form and content and issued by a
company or companies with loss payable endorsements acceptable to Lender,
insuring all collateral given as security against loss or damage and against
vandalism and malicious mischief and insuring said collateral against the usual
and customary risks and hazards as Lender may request, all of such policy or
policies to be for a total amount acceptable to Lender.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such security agreements as are required by Lender to provide that all
collateral for Borrower&#146;s other and future indebtedness to Lender secures the
indebtedness of Borrower arising from the Loan governed by this Agreement.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 12pt; text-indent: 4%">B.&nbsp;Borrower shall execute and deliver to Lender such other documents and instruments as Lender
may require to evidence the status or authority of Borrower and to evidence, govern or secure the
payment of the Loan or any portion thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">C.&nbsp;The Loan will be further secured by all of the liens and security interests heretofore
granted or created by Borrower in favor of Lender to secure the indebtedness evidenced by the
promissory note of Borrower to Lender dated June&nbsp;27, 2005 in the amount of $12,500,000.00 as
described in the loan agreement of the same date between Borrower and Lender, the balance of which
note and the liens and security interests securing same are renewed, extended and continued for the
security of hereby Note described in Paragraph&nbsp;II. A of this agreement.


<P align="center" style="font-size: 12pt">IV. <U>COVENANTS OF BORROWER</U>



<P align="left" style="font-size: 12pt; text-indent: 4%">A.&nbsp;For so long as any portion of the Loan remains unpaid, Borrower covenants and agrees as
follows:


<P align="center" style="font-size: 12pt"><U>POSITIVE COVENANTS</U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That Borrower agrees to pay to Lender, upon demand, all expenses of
every nature incurred by Lender in connection with the consummation of the
transaction contemplated by this agreement, or the enforcement or preservation
of Lender&#146;s rights hereunder, including attorney&#146;s fees and expenses of
Lender&#146;s counsel, hazard insurance premiums, filing and recording fees, court
costs, and other fees and reasonable expenses incurred by Lender. Borrower
agrees to pay to Lender a commitment fee of $50,000.00 as consideration for the
Loan. This commitment fee will be due and payable to Lender in two (2)
installments of $25,000.00 each, the first being due on the date of this Loan
Agreement and the second being due on the first anniversary of the date of this
Loan Agreement.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That Borrower shall furnish or cause to be furnished at its expense to
Lender statements or reports in form and content acceptable to Lender on the
forty-fifth (45th) day after the end of each quarter for first three quarters
of Borrower&#146;s fiscal year which shall set forth a consolidated operating
statement and balance sheet for Borrower herein named as Borrower; an ageing of
notes, accounts receivable and accounts payable of Borrower for the preceding
calendar quarter. Lender shall be allowed to make reasonable inspections of
all assets securing said loan and shall further have the right to inspect the
books of Borrower or other records relating to the affairs of Borrower.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That Borrower shall furnish at its expense to Lender annually, within
ninety (90)&nbsp;days after the end of Borrower&#146;s fiscal year, audited consolidated
financial statements of the Borrower, including a consolidated balance sheet,
income statement, statement of cash flows and statement of changes in
shareholders&#146; equity.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That while Borrower is indebted to Lender hereunder Borrower will:</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Perform all of its obligations to appropriate
regulatory agencies;</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Punctually pay all indebtedness from time to
time owing hereunder when due;</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Perform all of its obligations under the
Security Instruments described herein;</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promptly pay and discharge any and all
indebtedness or obligations when due and owing in excess of
$500,000.00, including all taxes of every kind and character,
all assessments, and other claims which might give rise to a
lien on the property given as security for this loan or impair
Borrower&#146;s obligation to conduct its business, except as it may
in good faith contest or as to which a bona fide dispute may
arise, provided provision is made to the satisfaction of Lender
for eventual payment thereof in the event that it is found that
such indebtedness or obligation or tax or claim is an
obligation of Borrower, and when such dispute or contest is
settled or determined, it will promptly pay the amount then
due.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintain and keep in force insurance of the
types and in the amounts customarily carried by companies in
similar lines of business, including adequate amounts of fire,
windstorm, explosion, public liability, property damage, and
workman&#146;s compensation insurance; all insurance is to be
carried by nationally reputable companies, and Borrower will
deliver to Lender from time to time, at the request of Lender,
a schedule setting forth all insurance in effect;</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintain a standard and modern accounting
system in accordance with generally accepted practices for
similarly situated companies, permit Lender to inspect its
books of account and records at all reasonable times, furnish
to Lender such information respecting the business affairs and
financial condition of Borrower as Lender may reasonably
request.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preserve all rights, privileges, franchises,
licenses, and permits connected with its business and to the
extent of its ability will conduct its business in an orderly,
efficient manner without voluntary interruptions, and comply
with all applicable laws and regulations of government
agencies;</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">h.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintain, preserve and keep all properties and
equipment in good repair, working order and condition,
reasonable wear and tear excepted, and from time to time make
all necessary and proper repairs, renewals, replacements, and
improvements thereto so that at all times the efficiency and
value thereof shall be fully preserved and maintained, and
maintain leases, licenses and permits, but nothing herein
contained shall prevent Borrower from in good faith contesting
or seeking legal construction of any dispute, terms or
conditions of a contract, lease or other obligation; Lender
may, at reasonable times, visit and inspect any of the
properties of Borrower;</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintain Borrower&#146;s financial condition in
compliance with the following ratios and obtain the following
minimum earnings, measured at the end of each quarter of the
calendar year, as determined by Lender in accordance with GAAP:</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A debt to shareholder&#146;s
equity ratio of a maximum of 0.7 to 1.0. This
ratio shall be calculated with the Borrower&#146;s
consolidated total debt being divided by the
Borrower&#146;s consolidated total shareholder
equity for the resulting ratio.</TD>
    <TD width="12%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A current assets to
current liabilities ratio of a minimum of 1.25
to 1.0. This ratio shall be calculated with
the Borrower&#146;s consolidated total current
assets being divided by the Borrower&#146;s
consolidated total current liabilities for the
resulting ratio.</TD>
    <TD width="12%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Quarterly earnings
before interest, taxes, depreciation and
amortization (EBITDA)&nbsp;of not less than
$2,000,000.00 where EBITDA equals consolidated
earnings excluding interest, taxes,
depreciation and amortization for each fiscal
quarter.</TD>
    <TD width="12%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">j.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To give notice in writing to Lender within 30
days of any proceedings by any public or private body, agency,
or authority, pending or threatened, which may have a
substantial adverse effect on Borrower, and of any litigation
involving the possibility of judgments or liabilities in excess
of an aggregate of $1,000,000.00 not covered by insurance.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">k.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To give notice to Lender immediately if
Borrower is in default on any financial or legal obligation in
excess of $250,000.00 owing to any person, entity or
governmental agency.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">l.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintain Borrower&#146;s primary deposit accounts
with Lender or another depository institution that Lender has
identified as having a participation interest in the Loan.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That Borrower shall not incur or maintain any indebtedness or
obligations or guarantee the debts or obligations of others in a total
aggregate amount which exceeds $1,000,000.00 other than the indebtedness to
Lender described herein without the prior written approval of Lender.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That Borrower shall furnish or cause to be furnished at its expense to
Lender, Borrowing Base Certificates in the form and content contained on the
attached Exhibit &#147;A,&#148; which is incorporated herein by reference for all
purposes, on the 20th day of each calendar month for the preceding calendar
month. Borrower shall provide and complete the information and calculations
required by the Borrowing Base Certificates, and the availability of advances
to Borrower shall be subject to and governed by the restrictions set forth in
said Borrowing Base Certificates.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That Borrower shall furnish or cause to be furnished at its expense to
Lender, an appraisal of the equipment lease pool at the end of each calendar
year. Said appraisal shall be performed by an appraiser that is approved by
Lender in its sole discretion.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 12pt"><U>NEGATIVE COVENANTS</U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Borrower will not, except with the prior written consent of Lender:</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Permit any lien (other than for taxes not
delinquent and for taxes and other items being contested in
good faith) to exist on property given as security for this
loan or on the income or profits thereof, excepting a Permitted
Lien.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assign any leases or the proceeds thereof to
anyone except Lender;</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Borrower will take no action which would result in any change in the
form of the corporate entity of Borrower or result in any reorganization,
merger or consolidation of Borrower with any other entity during the term of
this agreement without prior written consent of Lender.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That Borrower may not assign or otherwise transfer this Agreement or
any rights hereunder, and that this Agreement shall be binding upon Borrower an
the representatives, heirs, executors, legal representatives and successors of
Borrower.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, except after written notice to Lender and where such use and the
activities relating thereto are in material compliance with all applicable laws
and regulations, Borrower shall not hereafter permit any property which is (a)
given as security for this Loan, (b)&nbsp;used by Borrower for any business or other
activities financed by Lender or (c)&nbsp;the source of repayment of this Loan, to
be used in any way for the generation, transportation, treatment, disbursal,
storage, discharge or disposal of any pollutants, hazardous or toxic
substances, or hazardous wastes as defined or regulated by any of the following
federal statutes: (a)&nbsp;The Comprehensive Environmental Response, Compensation
and Liability Act (&#147;CERCLA&#148;), as amended by the Superfund Amendments and
Re-Authorization Act of 1986 (&#147;SARA&#148;), (b)&nbsp;the Resource Conservation and
Recovery Act (&#147;RCRA&#148;), (c)&nbsp;the Toxic Substance Control Act (&#147;TSCA&#148;), (d)&nbsp;any
amendments to or regulations promulgated by any agency under any of the above
statutes, and (e)&nbsp;any other state or federal statute or regulation for the
control of hazardous or toxic substances.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 12pt">V. <U>COVENANTS OF LENDER</U>



<P align="left" style="font-size: 12pt; text-indent: 4%">A.&nbsp;Subject to the terms of this agreement and of the note and security instruments described
herein, Lender covenants and agrees as follows:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Advances of principal of the loan will be requested by Borrower via
facsimile accompanied by a current borrowing base certificate and confirmed by
a telephone call to Lender. Lender will make advance on the same day as the
request is made if the request is confirmed by 12:00 noon on that day. Lender
will make advance by 12:00 noon the following day if the request is confirmed
after 12:00 noon. Lender shall be bound to make the advances herein on the
following conditions up to the amount specified as the original principal sum
of the note and subject to the limitations described herein and the borrowing
base limitations described below and to the following:</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Compliance by Borrower with all terms and
conditions of this Loan Agreement, with respect to said Loan
and the absence of any default by Borrower hereunder.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment of all fees and expenses contemplated
by this Agreement.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Execution of all notes, security agreements and
other documents required by Lender.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The aggregate amount of all advances of principal of the loan
outstanding and unpaid at any time will never exceed the borrowing base of
Borrower calculated as follows:</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>70% of Borrower&#146;s trade accounts receivable
arising from services performed by Borrower or Mitcham Canada,
Ltd. for third parties in the United States of America or
Canada or leases of equipment by Borrower or Mitcham Canada,
Ltd. to third parties in the United States of America or Canada
and which have been first invoiced to the third party less than
90&nbsp;days before the date of Borrower&#146;s Borrowing Base
Certificate as determined by Lender; plus</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>50% of the appraised fair market value of
equipment of Borrower that is collateral for the loan, as
determined by the most recent appraisal of the equipment lease
pool; plus</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>80% of the value of new equipment purchased by
Borrower that is collateral for the loan, as determined by
invoice reflecting the actual cost thereof to Borrower.</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P align="left" style="margin-left:8%; margin-right:4%; font-size: 12pt">Without regard to the geographical limitations on the location of third
parties whose accounts with Borrower may be included in the borrowing base
described in (a)&nbsp;above, Borrower may include specific accounts arising from
services or leases to third parties outside the United States and Canada
with the written approval of Lender.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At Borrower&#146;s option, Lender will reserve for the purposes of funding
amounts drawn on letters of credit issued by Lender at Borrower&#146;s request up to
$5,000,000.00 of the amount of the Loan which would otherwise be available for
advances hereunder. Amounts drawn on any such letters of credit will be
advanced by Lender from the principal of the Loan upon draws made in accordance
with the terms of the letter. The amounts either drawn or available to be
drawn on any such letter of credit will reduce the amount of the principal of
the Loan available to be advanced to Borrower and the aggregate amount of all
advances on the loan, together with all amounts which may be drawn under any
letters of credit will not exceed the original principal amount of the Note
described in Paragraph&nbsp;II. A of this Agreement ($25,000,000.00). Borrower will
pay a fee of 1.0% of the face amount of each domestic letter of credit and 1.5%
of the face amount of each foreign letter of credit for each year in which it
will be in effect. Lender will have no obligation to issue any letter of
credit that is not acceptable to Lender as to form, term, and conditions.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lender will, at Borrower&#146;s request, renew, extend and rearrange any
portion of the unpaid balance of the Loan as a separate, amortizing loan
evidenced by a promissory note requiring monthly installments of principal and
interest in amounts sufficient to repay the balance over a period of 48&nbsp;months
at an interest rate equal to the prime rate published in the Wall Street
Journal at the time of such renewal and rearrangement, adjusted annually
thereafter, in the form attached hereto as Exhibit &#147;B.&#148; Any portion of the
unpaid balance of the Loan which is so renewed and rearranged will be deducted
from the amount of the Loan that is available to be advanced to Borrower
hereunder, so that the total of all advances of principal of the Loan, the
amounts drawn or which may be drawn under any letters of credit issued pursuant
to Paragraph&nbsp;V. B, above, and the portion of the unpaid principal renewed and
rearranged as a separate, amortizing loan will never exceed the original
principal amount of the Note described in Paragraph&nbsp;II. A of this Agreement
($25,000,000.00).</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 12pt">VI. <U>DEFAULT AND REMEDIES</U>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The occurrence of any one of the following events of default
shall, at the option of Lender and without notice or demand, except as
described hereunder, make all or such parts of the sums owing from
Borrower to Lender hereunder, as Lender in its discretion shall
determine, immediately due and payable:</TD>
    <TD width="8%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Failure of Borrower to pay within 10&nbsp;days after demand any sum past due
hereunder or under the Note, Security Agreement, and Lease and Rental Assignment of
even date;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Failure of Borrower to pay upon demand any debt hereunder or under the
Note, Security Agreement, and Lease and Rental Assignment of even date, the
maturity of which has been accelerated;</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Borrower&#146;s failure to punctually perform any of the obligations, covenants,
terms, or provisions contained or referred to in this Loan Agreement or in any note
secured by this Loan Agreement or in the Security Agreement, Lease and Rental
Assignment or any other instrument relating to the indebtedness to the Lender which
remains unperformed after thirty (30)&nbsp;days of non-compliance thereof.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any warranty, representation, or statement contained in this Loan Agreement or
any other writing between the parties made or furnished to the Lender by or on behalf
of the Borrower in connection with this Loan Agreement or any other agreement, or to
induce the Lender to make a loan to the Borrower that proves to have been false in any
material respect when made or furnished.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except to the extent covered by insurance, any loss, theft, substantial damage,
destruction, sale (other than in the normal course of business), encumbrance or seizure
of or to any of the Collateral (as defined in the Security Agreement of even date) of a
total value of more than $250,000.00.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Borrower&#146;s dissolution or merger.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Borrower&#146;s business failure, insolvency, assignment for the benefit of
creditors, or the appointment of a receiver, or institution of either voluntary or
involuntary bankruptcy proceedings concerning the Borrower.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any statement of the financial condition of the Borrower submitted to the
Lender that proves to be false or materially inaccurate.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Receipt by the Lender of notice at any time from any third party that the third
party is acquiring or attempting to acquire a security interest of any kind in the
Collateral that is the subject of the Security Agreement of the even date.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Failure of the Borrower to maintain its existence as a Texas corporation.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Borrower&#146;s removing or replacing of any of the component parts of
Collateral (as defined by the Security Agreement of even date) so as materially to
lessen its market value.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lapse or cancellation of any insurance required by the Security Agreement of
even date, and the Borrower&#146;s failure to furnish satisfactory proof to the Lender that
satisfactory substitute policies have been obtained within thirty (30)&nbsp;days of the
termination of coverage.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">13.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The levy of any attachment, execution, or other like process against
any of Lender&#146;s collateral;</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">14.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The voluntary suspension of business by Borrower;</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">15.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any default by Borrower in the payment or performance of any other
obligation of Borrower to Lender, including but not limited to any event of
default under any other loan agreement between Borrower and Lender or any
failure of Borrower to timely pay any sum when due on any indebtedness owing by
Borrower to Lender, regardless of how arising, or any breach by Borrower of any
covenant in any security agreement relating to any indebtedness of Borrower to
Lender;</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">16.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The failure or inability of Borrower for any reason, within a period of
90&nbsp;days after notice from Lender thereof, to correct, cure or eliminate any
conditions, circumstances, or events (whether or not caused by any action or
inaction of Borrower), which Lender determines, in good faith, to affect
Borrower or its operations or Borrower&#146;s business or financial prospects in a
manner which impairs security of Lender or Borrower&#146;s ability to perform its
obligations.</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 12pt; text-indent: 4%">B.&nbsp;That no waiver of any default on the part of Borrower shall be considered waiver of any
other or subsequent default and no forbearance, delay, or omission in exercising or enforcing the
rights and powers of Lender shall be construed as a waiver of such rights and powers, and likewise
no exercise or partial exercise of any rights or powers hereunder by Lender shall be held to
preclude further exercise of such rights and powers, and every such right and power may be
exercised from time to time.


<P align="left" style="font-size: 12pt; text-indent: 4%">C.&nbsp;The rights, powers and remedies given to Lender hereunder shall be in addition to all
rights, powers and remedies given to Lender by law against Borrower and any other person. D. No
action shall be commenced by Borrower for any claim against Lender under the terms of this Loan
Agreement or arising from the subject loan relationship unless a notice in writing specifically
setting forth the claim of Borrower shall have been given to Lender within six (6)&nbsp;months after the
occurrence of the event which Borrower alleges gave rise to such claim. Failure to give such
notice shall constitute a waiver of any such claim.


<P align="center" style="font-size: 12pt">VII. <U>GENERAL PROVISIONS</U>



<P align="left" style="font-size: 12pt; text-indent: 4%">A.&nbsp;Any notice or demand required or permitted to be given to Borrower or Lender
hereunder shall be given in writing by United States mail, certified mail, return receipt
requested, enclosed in a proper wrapper, postage prepaid, or by delivery into the hands of a
nationally recognized overnight courier service in proper container, fees prepaid, in either case
addressed for delivery to the party entitled to receive such notice at the appropriate address for
that party, as follows:


<P align="left" style="font-size: 12pt; text-indent: 4%">U.S. Mail Delivery:

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">To Borrower:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Mitcham Industries, Inc.</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">P.O. Box 1175</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Huntsville, Texas  77342-1175</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Attn:  Billy F. Mitcham, Jr.</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">To Lender:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">First Victoria National Bank</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">P.O. Box 1338</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Victoria, Texas  77902-1338</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Attn:  David Yeates</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">Overnight Courier Delivery:<BR></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">To Borrower:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Mitcham Industries, Inc.</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">8141 Highway 75 South</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Huntsville, Texas 77340</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">To Lender:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">First Victoria National Bank</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt; text-indent: 15%">101 S. Main Street


<P align="left" style="font-size: 12pt; text-indent: 15%">Victoria, Texas 77901


<P align="left" style="font-size: 12pt; text-indent: 15%">Attn: David Yeates


<P align="left" style="font-size: 12pt; text-indent: 4%">All notices will be deemed to have been given upon deposit in the United States Mail or
delivery into the hands of the overnight courier service.


<P align="left" style="font-size: 12pt; text-indent: 4%">B.&nbsp;This agreement shall be construed under and in accordance with the laws of the State of
Texas, and all obligations of the parties created hereunder are performable in Victoria County,
Texas. Notwithstanding the provisions of this paragraph, Chapter&nbsp;346 of the Texas Finance Code,
shall not apply to the loan governed by this agreement or any part thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">C.&nbsp;In any case, if any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had never been contained
herein.


<P align="left" style="font-size: 12pt; text-indent: 4%">D.&nbsp;This Agreement constitutes the sole and only agreement of the parties hereto and supersedes
any prior understandings or written or oral agreements between the parties respecting the within
subject matter.


<P align="left" style="font-size: 12pt; text-indent: 4%">E.&nbsp;This agreement shall apply to and govern the herein described extensions of credit and all
renewals, extensions and rearrangements of such indebtedness of Borrower to Lender.


<P align="center" style="font-size: 10pt; display: none; text-indent: 4%">1
<!-- PAGEBREAK -->


<P align="left" style="font-size: 12pt">EXECUTED on the date first hereinabove mentioned in Victoria, Victoria County, Texas.


<P align="left" style="font-size: 12pt; text-indent: 23%">MITCHAM INDUSTRIES, INC.


<P align="left" style="font-size: 12pt; text-indent: 23%">By _/s / Billy F. Mitcham Jr.



<P align="left" style="margin-left:23%; font-size: 12pt; text-indent: 2%">BILLY F. MITCHAM, JR.



<P align="left" style="margin-left:23%; font-size: 12pt; text-indent: 2%">Its: President



<P align="left" style="margin-left:23%; font-size: 12pt; text-indent: 15%">BORROWER


<P align="left" style="font-size: 12pt; text-indent: 23%">FIRST VICTORIA NATIONAL BANK


<P align="left" style="font-size: 12pt; text-indent: 23%">By _/s/_R. David Yeates <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>R. DAVID YEATES<BR>
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Its: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>Vice President<BR>
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

</TABLE>


<P align="left" style="font-size: 12pt; text-indent: 45%">LENDER


<P align="left" style="font-size: 12pt; text-indent: 23%"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>




<P align="center" style="font-size: 10pt; display: none">2


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