EX-10.1






LOAN AGREEMENT





THIS AGREEMENT made and entered into on this 31st day of August, 2012, by and between
MITCHAM INDUSTRIES, INC., a Texas corporation, with principal offices at Huntsville,
in Walker County, Texas (herein referred to as “Borrower”), and First Victoria National
Bank, a national banking corporation, with its offices and domicile in Victoria, Victoria County,
Texas, (herein referred to as “Lender”) to induce Lender to extend credit to Borrower in the
amounts evidenced by the promissory note described in Paragraph II A of this agreement (herein
referred to as the “Loan”) and evidencing the line of credit described herein.




In consideration of their mutual warranties, covenants and agreements contained herein
and Lender’s extension of credit to Borrower in the amount aforesaid, Borrower and Lender
hereby warrant, covenant and agree as follows:



I. WARRANTIES OF BORROWER:





A. 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.




B. 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.




C. 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.




\




D. 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.




E. 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’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.




F. 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.




“Permitted Lien” means (a) Liens created by or permitted under the Security Agreement,
Lease and Rental Assignment, and such other documents and instruments under this
Loan Agreement; (b) Liens existing on the date of this Agreement; (c) 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 (“GAAP”); (d) 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)
Liens in connection with worker’s compensation, unemployment compensation and other
types of social security (excluding Liens arising under ERISA) or Liens consisting
of cash collateral securing the Borrower’s or any of its subsidiaries’ 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)
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) Liens consisting of cash collateral securing the Borrower’s
and its subsidiaries’ 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) Liens
arising solely by virtue of any statutory or common law provision relating to banker’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.



II. INDEBTEDNESS





A. 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 “Note”):



One certain promissory note of even date herewith executed by Borrower
and payable to the order of Lender in the original principal
sum of



$50,000,000.00, 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 August 31, 2015 (the “Maturity Date”)
and being partly in renewal and extension of the unpaid balance owing on
that certain promissory note dated July 27, 20ll executed by Borrower
and payable to the order of Lender in the original
principal sum of


$35,000,000.00 governed by a loan agreement dated September 24, 2008.




B. 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.




C. 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 pm1icipations 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 “Overline Portion” shall mean
the amount of loan proceeds in excess of the amount that Lender is permitted by applicable law or
Lender’s loan policy limitations to loan to Borrower.



D. 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. [f 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 limitedto 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 “highest lawful rate” 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.



Ill. SECURITY





A. As security for the Loan, Borrower shall execute and deliver to, procure for,
deposit with, and pay to Lender the following:




	 	1.	 	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 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.	 






	 	2.	 	Lease and Rental Assignment to Lender, in form and content
acceptable to Lender, of Borrower’s rights under any leases of equipment by
Borrower hereunder which have not been paid in full.	 






	 	3.	 	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, the United States of America, Canada or any other
foreign nation or province of a foreign nation.	 






	 	4.	 	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.	 






	 	5.	 	Such security agreements as are required by Lender to provide that
all collateral for Borrower’s other and future indebtedness to Lender secures
the indebtedness of Borrower arising from the Loan governed by this Agreement.	 






B. 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.




C. 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 July 27, 2011 in the amount of




$35,000,000.00 as described in the loan agreement dated September 24, 2008, 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 II. A of
this agreement.



IV COVENANTSOF BORROWER





	 	A.	 	For so long as any portion of the Loan remains unpaid, Borrower covenants
and agrees as follows:





POSITIVE COVENANTS





	 	 	 	1. 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’s rights hereunder, including attorney’s
fees and expenses of Lender’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 as part of the
consideration for the Loan a commitment fee of $123,750.00. This commitment
fee will be due and payable to Lender in three (3) annual installments as
follows: The first installment in the amount of $23,750.00 will be due on the
date of this Agreement and the second and third installments in the amount of
$50,000.00 each will be due on the first and second anniversary dates of this
Agreement.




	 	2.	 	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’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.	 






	 	3.	 	That Borrower shall furnish at its expense to Lender annually, within
ninety (90) days after the end of Borrower’s fiscal year, audited consolidated
financial statements of the Borrower, including a consolidated balance
sheet, income statement, statement of cash t1ows and statement of changes in
shareholders’ equity.	 






4. That while Borrower is indebted to Lender hereunder Borrower will:




	 	a.	 	Perform all of its obligations to
appropriate regulatory agenc1es;	 






	 	b.	 	Punctually pay all indebtedness from time to
time owing hereunder when due;	 






	 	c.	 	Perform all of its obligations under the
Security Instruments described herein;	 






	 	d.	 	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’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.




	 	e.	 	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’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;	 






	 	f.	 	Maintain a standard and modem 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.	 






	 	g.	 	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;	 






	 	h.	 	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;	 






	 	1.	 	Maintain Borrower’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:	 






	 	A.	 	A debt to shareholder’s equity ratio
of a maximum of 0.7 to 1.0. This ratio shall
be calculated with the Borrower’s consolidated
total debt being divided by the Borrower’s
consolidated total shareholder equity for the
resulting ratio.	 






	 	B.	 	A current assets to current
liabilities ratio of a minimum of 1.25 to 1.0.
This ratio shall be calculated            with            the
Borrower’s consolidated total            current            assets
being divided by the Borrower’s consolidated
total current liabilities for the resulting ratio.	 






	 	C.	 	Quarterly earnings
before interest, taxes, depreciation and
amortization (EBITDA) of not less than
$2,000,000.00 where EBITDA equals consolidated
earnings            excluding interest, taxes,
depreciation and amortization for each fiscal
quarter.	 






	 	J.	 	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.	 






	 	k.	 	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.




	 	1.	 	Maintain Borrower’s primary deposit accounts with
Lender or such other depository institutions as are necessary to
provide financial services required by Borrower in its	 










operations and as have been disclosed to Lender by


Borrower as providing such services.




	 	5.	 	That Borrower shall not incur or maintain any indebtedness or
obligations or guarantee the debts or obligations of others in a total amount
which exceeds $10,000,000.00 in the aggregate for all such obligations (other
than the indebtedness to Lender described herein) without the prior written
approval of Lender.	 






	 	6.	 	That Borrower will not guarantee any indebtedness or obligations of any
subsidiaries or affiliates of Borrower or by any action or inaction authorize or
permit Borrower to become liable for any indebtedness or obligations of any such
subsidiaries or affiliates in a total amount which exceeds	 





$5,000,000.00 in the aggregate of all such obligations without the prior
written approval of Lender.




	 	7.	 	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 “A,” 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.	 






	 	8.	 	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
fiscal year. Said appraisal shall be performed by an appraiser that is approved
by Lender in its sole discretion.	 





NEGATIVE COVENANTS





9. Borrower will not, except with the prior written consent of Lender:




	 	a.	 	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.	 






b. Assign any leases or the proceeds thereof to anyone except




Lender;




	 	10.	 	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	 






	 	•	 	r consolidation of Borrower with any other entity during the
term of this agreement without prior written consent of Lender.	 






	 	11.	 	That Borrower may not assign or otherwise transfer this Agreement
or any rights hereunder, and that this Agreement shall be binding upon
Borrower an representatives, heirs, executors, legal
representatives and successors of Borrower.	 






	 	12.	 	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) used by Borrower for any business
or other activities financed by Lender or (c) 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) The Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”), as amended by the Superfund
Amendments and Re­ Authorization Act of 1986 (“SARA”), (b) the
Resource Conservation and Recovery Act (“RCRA”), (c) the Toxic Substance
Control Act (“TSCA”), (d) any amendments to or regulations promulgated by any
agency under any of the above statutes, and (e) any other state or federal
statute or regulation for the control of hazardous or toxic substances.	 





V.COVENANTSOFLENDER





A. Subject to the terms of this agreement and of the note and security instruments described
herein, Lender covenants and agrees as follows:




	 	1.	 	Lender will advance to Borrower, according to the terms thereof and subject to the
limitations expressed herein, the unadvanced portions of the principal of the Note described
at Paragraph II.A hereof remaining after the renewal of the principal balance of the loan
renewed thereby and the reservation of any amounts of the unadvanced portions of said note
which have been reserved for the purposes of funding draws on letters of credit issued at
Borrower’s request under the terms of the prior loan agreement between Borrower and Lender.
Lender’s obligation to make advances to Borrower will be limited to the unadvanced and
unreserved portions of the principal of the Note and will be subject to the fulfillment or
existence of the following conditions:






	 	a.	 	Receipt by Lender of a request by Borrower for an advance of loan
funds in the amount of $500,000.00 or multiples thereof via telecopier (FAX)
accompanied by a current borrowing base certificate and confirmed by a	 






	 	 	 	telephone call to Lender. Lender will make advances on the
same banking day that a request for the advance is made if the request
is confirmed by	 





12:00 noon on that day. Lender will make advance by 12:00 noon the
following banking day if the request is confirmed after 12:00 noon on any
banking day.




	 	b.	 	Compliance by Borrower with all terms and conditions
of this Loan Agreement with respect to said Loan and with no event of
default under the Note, this Agreement or any security document having
occurred.	 






c. Payment by Borrower of all fees and expenses contemplated by this



Agreement.




	 	d.	 	Execution by Borrower all notes, security agreements and
other documents required by Lender.	 






	 	2.	 	The total of all advances of principal of the Loan outstanding and unpaid at any time,
plus the unpaid balance of any separate amortizing loan made to Borrower pursuant
to Paragraph V.C. hereof, will never exceed the borrowing base of Borrower calculated as
follows:






	 	a.	 	70% of Borrower’s trade accounts receivable arising
from services performed by Borrower for third parties in the United States
of America or Canada or leases of equipment by Borrower to third parties in
the United States of America or Canada and which have been first invoiced to
the third party less than 90 days before the date of Borrower’s Borrowing Base
Certificate as determined by Lender; plus	 






	 	b.	 	50% of the appraised fair market value of equipment owned by
Borrower that is part of the equipment lease pool that is collateral for the
loan under the Security Agreement of even date herewith, as determined by the
most recent appraisal of the equipment lease pool; plus	 






	 	c.	 	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.	 





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) 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.




B. At Borrower’s option,, Lender will reserve for the purposes
of funding amounts drawn on letters of credit issued by Lender or The Frost National Bank at
Borrower’s request and with Lender’s approval up to $10,000,000.00 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 currently evidencing the line of credit extended to Borrower
under this Agreement ($50,000,000.00). 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. Borrower will pay, in addition to the fees
prescribed in the Loan Agreement for issuance of any letter of credit, any fees assessed by any
other bank or other parties to the letter of credit transaction. Neither Lender nor The Frost
National Bank will have any obligation to issue any letter of credit that is not acceptable to
Lender as to form, term, and conditions.




C. Provided that Borrower is in compliance with the borrowing base requirements of
Paragraph V.A.2 hereof, Lender will, at Borrower’s request, renew, extend and rearrange
any portion of the unpaid balance of the Loan as a separate, an1ortizing 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 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




1\


thereafter, in the form attached hereto as Exhibit “B.” Such separate
loan will be secured by all of the security interests and liens that secure the Note described in
Paragraph II.A hereof and governed by this Agreement. Borrower will be required to execute a
promissory note in the form attached as Exhibit B and such other documents as may be required by
Lender to evidence such loan and the security therefor as provided herein. 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 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 II. A of this Agreement ($50,000,000.00).




VI. DEFAULT AND REMEDIES




A. 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 sole discretion
shall determine, immediately due and payable:




	 	1.	 	Failure of Borrower to pay within 10 days after demand any sum past due
hereunder or under the Note, Security Agreement, and Lease and Rental Assignment of
even date






	 	2.	 	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;	 






	 	3.	 	Failure of Borrower to 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 for more than thirty (30) days after notice to Borrower of such failure.




	 	4.	 	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.






	 	5.	 	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.






	 	6.	 	Any dissolution of Borrower, any merger, consolidation, conversion of entity
or other change in the corporate form of Borrower without prior consent of the
Lender.






	 	7.	 	The Borrower’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 conceming the Borrower.






	 	8.	 	Any statement of the financial condition of the Borrower submitted to the
Lender that proves to be false or materially inaccurate.






	 	9.	 	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.






	 	10.	 	Failure of Borrower to maintain its existence in good standing as a
Texas corporation.






	 	11.	 	The Borrower’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.






	 	12.	 	Lapse or cancellation of any insurance required by the Security Agreement of
even date, and the Borrower’s failure to furnish satisfactory proof to the Lender
that satisfactory substitute policies have been obtained within thirty (30) days of
the termination of coverage.






13. The levy of any attachment, execution, or other like process against any of




Lender’s collateral;




14. The voluntary suspension of business by Borrower;




	 	15.	 	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;	 






	 	16.	 	The failure or inability of Borrower for any reason, within a
period of 90 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’s business or financial
prospects in a manner which impairs security of Lender or Borrower’s
ability to perform its obligations.	 






B. 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.




C. 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) 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.



VTI. GENERAL PROVISIONS





A. 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 providing confirmation of delivery,
enclosed 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:




U.S. Mail Delivery:




To Borrower: Mitcham Industries, Inc.




P.O. Box 1175




Huntsville, Texas 77342-1175




Attn: Billy F. Mitcham, Jr.




To Lender: First Victoria National Bank




P.O. Box 1338




Victoria, Texas 77902-1338




Attn: Herschel Van Sickle




with a copy transmitted by telecopier (FAX)




to Lender at (361) 574-8417




Overnight Courier Delivery:




To Borrower: Mitcham Industries, Inc.




8141 Highway 75 South




Huntsville, Texas 77340




To Lender: First Victoria National Bank




101 S. Main Street




Victoria, Texas 77901




Attn: Herschel Van Sickle




with a copy transmitted by telecopier (FAX)


to Lender at (361) 574-8417









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 in accordance with this
paragraph.




Either party may change the address or addresses for delivery of notice to that party under
this provision by giving notice of such change to the other party in the manner provided herein
not less than fifteen (15) days before the effective date of such change of address.




B. This agreement shall be construed under and in accordance with the laws of the
State of Texas, and all obligations of the pa1ties created hereunder are performable in
Victoria County, Texas. Notwithstanding the provisions of this paragraph, Chapter 346 of the
Texas Finance Code, shall not apply to the loan governed by this agreement or any part thereof.




C. 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.




D. 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.




E. 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.




EXECUTED on the date first hereinabove mentioned in Victoria, Victoria County,
Texas.




MITCHAM INDUSTRIES, INC.




	 	 	 	By
/s/ Billy F. Mitcham, Jr.	 






	 	 	BILLY
F. MITCHAM, JR.	 





Its: President



BORROWER





FIRST VICTORIA NATIONAL BANK



By /s/ Herschel Vansickle 





	 	 	Herschel Vansickle	 





ITS: SRVP



LENDER