Document:

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                                                                   EXHIBIT 10.18

                               SEVERANCE AGREEMENT

                  This Severance Agreement (this "Agreement") is entered into as
of May 1, 2000 by and between Peter W. De Leeuw ("Employee") and Sterling
Chemicals Holdings, Inc. ("Holdings") and Sterling Chemicals, Inc. ("Chemicals"
and, together with Holdings, the "Company").

                  WHEREAS, the Company and Employee entered into an Employment
Agreement dated as of March 16, 1998 (the "Employment Agreement");

                  WHEREAS, Employee has announced his decision to retire from
the Company effective May 8, 2000 (the "Retirement Date"); and

                  WHEREAS, the Company and Employee are entering into this
Agreement primarily to set forth their mutual agreement as to the payments and
other benefits to be paid or provided to Employee in connection with or arising
out of the termination of his employment with the Company.

                  NOW, THEREFORE, for and in consideration of the premises and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby acknowledge, represent, warrant,
covenant and agree as follows:

                                    ARTICLE I

                                   Termination

                  Section 1.1 Termination of Employment. (a) On the Effective
Date, Employee's employment with the Company shall automatically terminate for
all purposes as of the Retirement Date. As used in this Agreement, "Effective
Date" means the date on which this Agreement becomes effective in accordance
with Section 5.5 below.

                  (b) Employee waives all rights to recall, reinstatement,
employment and reemployment with the Company and acknowledges and agrees that
the Company is not obligated or bound in any manner to provide employment to, or
otherwise engage or utilize the services of, Employee. Employee further agrees
not to apply for employment with Holdings, Chemicals or their direct and
indirect subsidiaries (collectively, the "Constituent Companies").

                  Section 1.2 Resignation as Director. Consistent with Section
4.05 of the Employment Agreement, Employee resigns as a director of all
Constituent Companies, effective as of the Retirement Date.

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                                   ARTICLE II

                                    Benefits

                  Section 2.1 Base Salary. Promptly after the Retirement Date,
but subject to all the provisions of this Agreement, the Company shall pay to
Employee a lump sum amount for all unpaid base salary earned by Employee as of
May 12, 2000.

                  Section 2.2 Severance Payment. As soon as practicable after
the Effective Date, but subject to all the provisions of this Agreement, the
Company agrees to pay to Employee a lump sum severance payment in the amount of
$1,235,000. Employee acknowledges and agrees that the severance payment provided
for in this Section 2.2 is in lieu of, and not in addition to, any severance
payment, separation payment, termination payment or other similar payment
payable to Employee under any contract or agreement (including, without
limitation, the Employment Agreement) or under any employee benefit plan
(including, without limitation, the Company's Key Employee Protection Plan),
program or practice of the Company.

                  Section 2.3 Bonus. Subject to all the provisions of this
Agreement, the Company agrees to pay to Employee a bonus in the prorated amount
of $341,250 (the "Employee Bonus"), such payment to be made when bonuses for
fiscal year 2000 are paid to salaried employees generally under the Company's
incentive compensation plan. The amount of the Employee Bonus was calculated on
the assumption that the Company will generate at least $150,000,000 of EBITDA
during fiscal 2000. In the event actual EBITDA for fiscal 2000 is less than
$150,000,000, then the amount of the Employee Bonus will be appropriately
reduced in accordance with the Company's incentive compensation plan, with the
amount of such reduction being calculated by the Company's Human Resources
Department. Employee acknowledges and agrees that the Employee Bonus is in lieu
of, and not in addition to, any bonus or other incentive compensation payable to
Employee under any contract or agreement (including, without limitation, the
Employment Agreement) or under any employee benefit plan (including, without
limitation, the Company's incentive compensation plan), program or practice of
the Company.

                  Section 2.4 Accrued Vacation. As soon as practicable after the
Effective Date, but subject to all the provisions of this Agreement, the Company
shall pay to Employee a lump sum payment in the amount of $20,837.50,
representing full and complete payment for all unused vacation time earned and
accrued by Employee as of the Retirement Date.

                  Section 2.5 Business Expenses. The Company ratifies and
confirms in all respects its obligation under Section 3.08 of the Employment
Agreement to reimburse Employee for business expenses. Employee understands and
agrees that the Company is not obligated to reimburse Employee for any expenses
incurred after May 12, 2000.

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                  Section 2.6 Stock Options, etc. (a) Employee acknowledges and
agrees as follows:

                  (i) Employee does not own or hold any options, warrants,
         calls, subscriptions or other rights of any nature to acquire any
         shares of capital stock or other securities of Holdings or any other
         Constituent Company, except that (A) Employee holds options to purchase
         125,000 shares of Holdings' common stock (the "Employee Options"), all
         of which were granted to Employee pursuant to Holdings' Omnibus Stock
         Awards and Incentive Plan and (B) as a participant in Holdings'
         Employee Stock Ownership Plan, Employee is the beneficial owner of a
         portion of the shares of Holdings' common stock currently held in such
         Plan;

                  (ii) Employee does not own or hold any phantom stock, stock
         appreciation right or any similar rights with respect to Holdings or
         any other Constituent Company; and

                  (iii) none of the Constituent Companies is obligated to
         repurchase, redeem or otherwise acquire any shares of capital stock or
         other securities owned or held by Employee.

                  (b) Subject to Sections 5.3 and 5.5 below, the Company agrees
that all Employee Options shall automatically vest in full on the Effective Date
and shall be exercisable at any time prior to March 16, 2008.

                  Section 2.7 Restricted Stock. Pursuant to Section 3.03 of the
Employment Agreement, the Company granted to Employee 10,000 shares of Holdings'
common stock contingent upon future vesting as therein provided. Subject to
Sections 5.3 and 5.5 below, the Company agrees that all of such shares shall
automatically vest in full on the Effective Date and that after the Effective
Date none of such shares shall be subject to the provisions or restrictions of
Holdings' Stockholders Agreement dated as of August 21, 1996, as heretofore or
hereafter amended.

                  Section 2.8 Tax Withholding. Each payment to Employee under
this Agreement will be subject to withholding for federal income and FICA taxes
and other elected deductions.

                                   ARTICLE III

                                 Mutual Releases

                  Section 3.1 Release by Employee. (a) Employee, on behalf of
himself and his heirs, beneficiaries and personal representatives and assigns,
knowingly and voluntarily releases, acquits and forever discharges the Company
Parties (defined below) of and from any and all claims, charges, complaints,
obligations, liabilities, promises, agreements, contracts, damages, actions,
causes of action, suits and accrued benefits of every kind and nature and
whether known or unknown, both at law (whether common law, statutory or
otherwise) and in equity, arising from or

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in any way connected with or related to Employee's employment with the Company
or the termination of Employee's employment with the Company or any of the
events or circumstances leading to, surrounding or resulting in such
termination. Employee acknowledges and agrees that the foregoing is a full and
complete release which covers, without limitation, any and all:

                  (i) claims, charges, complaints, obligations, liabilities,
         damages, actions, causes of action and suits based, in whole or in
         part, on wrongful termination, discrimination, breach of contract,
         retaliatory discharge, discharge in violation of public policy,
         intentional infliction of emotional distress, negligent infliction of
         emotional distress, defamation, fraud, invasion of privacy or violation
         of any federal, state or local law, including, but not limited to,
         Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
         Section 2000e et seq., the Equal Pay Act, 29 U.S.C. Section 206, the
         Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001
         et seq., the Americans with Disabilities Act, 42 U.S.C. Section 12101
         et seq., the Fair Labor Standards Act, as amended, 29 U.S.C. Section
         215(a)(3), the Age Discrimination in Employment Act of 1967, as
         amended, 29 U.S.C. Section 621 et seq., the Family and Medical Leave
         Act, 29 U.S.C. Section 2601 et seq., the Worker Adjustment and
         Retraining Notification Act, 29 U.S.C. Section 201 et seq., the
         Occupational Safety and Health Act, 29 U.S.C. Section 660(c), the Texas
         Commission on Human Rights Act, Texas Labor Code Section 21.001, et.
         seq., the Texas Workers' Compensation Act, Texas Labor Code Sections
         451.001, Texas Payday Law, Title II, Chapter 61 and Texas Labor Code;
         and

                  (ii) claims for severance pay, bonuses or benefits under any
         compensation or employee benefit plan, program, policy, contract or
         other arrangement of the Company, but excluding (A) any severance pay,
         bonus or benefits which Employee is entitled to receive under Article
         II of this Agreement and (B) any benefits which Employee is entitled to
         receive under any Company plan that is a qualified plan under IRC
         Section 401(a), such as the Company's Salaried Employees' Pension Plan,
         Holdings' Employee Stock Ownership Plan and 401(k) Plan, or is a group
         health plan subject to the Consolidated Omnibus Recertification Act of
         1985, as amended, to the extent Employee properly elects and pays for
         continuation coverage under such Act.

Subject to Section 5.5 below, the foregoing release is unconditional and
irrevocable.

                  (b) As used herein, "Company Parties" means the Constituent
Companies and their respective former, present and future directors, officers,
employees, agents and stockholders and all persons acting by, through or in
concert with any of them.

                  Section 3.2 Release by Company. The Company, on behalf of
itself and its successors and assigns, knowingly and voluntarily releases,
acquits and forever discharges Employee of and from all claims, charges,
complaints, obligations, liabilities, promises, agreements, contracts, damages,
actions, causes of action and suits of every kind and nature and whether known
or unknown, both at law and in equity, arising from or in any way connected with
or related to Employee's employment with the Company or the termination of
Employee's employment with the

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Company, including, but not limited to, claims, charges, complaints,
obligations, liabilities, damages, actions, causes of action and suits based, in
whole or in part, on breach of contract. Subject to Section 5.5 below, the
foregoing release is unconditional and irrevocable.

                                   ARTICLE IV

                                Certain Covenants

                  Section 4.1 Non-Competition. Prior to the first anniversary of
the Retirement Date, Employee will not own an interest in, manage, operate,
join, control, lend money to or render financial or other assistance to or
participate or be connected with, as an officer, employee, partner, stockholder,
consultant or otherwise, any individual, corporation, partnership or other
business organization that competes with Holdings or any other Constituent
Company in the manufacture, marketing or sale of styrene monomer, acrylonitrile
or sodium chlorate; provided, however, that the foregoing restriction will not
preclude Employee from acquiring or holding up to 5% of the voting securities of
any corporation that are listed on a national securities exchange. Employee
acknowledges and agrees that the foregoing restriction is fair and reasonable in
all respects and is reasonably required for the protection of the Company.
Employee understands that the foregoing restriction may limit his ability to
engage in a business similar to the Company's business, but Employee
acknowledges that he will receive sufficiently high remuneration and benefits
from the Company hereunder to justify such restriction. If Employee delivers to
the Company a written request that the Company waive compliance with the
foregoing restriction as to a particular activity which Employee desires to
engage in, the Company agrees to consider such request in good faith and further
agrees not to unreasonably refuse such request. For this purpose, a refusal by
the Company of a request relating to any particular activity will not be deemed
unreasonable if such activity could have a detrimental or prejudicial effect on
the Company or any other Constituent Company. Nothing in this Section 4.1 shall
prohibit Employee from consulting with or serving as a director of any entity
whose only business is providing a neutral electronic marketplace (i.e., an
online business-to-business exchange) for independent sellers and buyers of
chemicals, plastics and rubbers.

                  Section 4.2 Confidentiality. (a) Employee ratifies and
confirms in all respects the covenants and agreements set forth in Article V of
the Employment Agreement, which provisions are hereby incorporated into this
Agreement as if set forth in their entirety. Employee acknowledges and agrees
that such covenants and agreement shall survive the termination of Employee's
employment with the Company.

                  (b) Each party agrees that the terms and conditions of this
Agreement, including without limitation the amount of money and other
consideration payable under this Agreement, shall not be revealed or disclosed
by such party to any other person or entity whatsoever except (i) that each
party may make such disclosures as are required by law or legal process, (ii)
that Employee may make disclosures to his family, accountants and legal, tax or
financial advisors, (iii) that the Company may make disclosures to its
directors, accountants and legal, tax or financial advisors and (iv) that the
Company may make disclosures to its employees on a need-to-know basis. The

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foregoing restriction shall not apply to any information about this Agreement
that is publicly known, including, without limitation, information contained in
the Company's public filings with the Securities and Exchange Commission.

                  Section 4.3 Non-disparagement. (a) Subject to Section 5.5
below, the Company agrees that it will not make any statements to third parties
which are intended to disparage, discredit or injure the reputation of Employee.

                  (b) Subject to Section 5.5 below, Employee agrees that he will
not make any statements to third parties which are intended to disparage,
discredit or injure the reputation of the Company or any of the other Company
Parties. Employee agrees that he will not do anything that would in any way tend
to harm the Company's good will and relationships with customers, suppliers and
others having business dealings with the Company.

                  (c) Nothing in this Section 4.3 shall obligate either party to
commit perjury or violate any law or court order.

                  Section 4.4 Return of Company Property, etc. Employee agrees
to promptly turn over to the Company all files, memoranda, records, documents,
credit cards, parking cards and other personal property of any Constituent
Company in the possession or under the control of Employee. Employee understands
and agrees that Employee is no longer authorized to incur any expenses,
obligations or liabilities or otherwise act in the name or on behalf of any
Constituent Company.

                  Section 4.5 Cooperation. Employee agrees that, if requested by
the Company, Employee will be reasonably available to, and will cooperate in all
reasonable respects with, the Company and the other Constituent Companies and
their respective counsel in connection with any litigation, proceeding or
investigation (administrative, civil or criminal). It is understood and agreed
that Employee shall not be required to devote more than one day of his time
pursuant to any particular request by the Company under this Section 4.5 unless
the parties shall have mutually agreed upon the amount of reasonable
compensation to be paid to Employee therefor. Upon written request accompanied
by appropriate documentation, the Company agrees to reimburse Employee for any
reasonable expenses incurred by Employee in connection with any actions taken by
Employee pursuant to this Section 4.5.

                                    ARTICLE V

                                  Miscellaneous

                  Section 5.1 Additional Representations, Warranties, etc. of
Employee. (a) Employee represents and warrants that he has not filed any
complaints, charges or lawsuits against any Company Party with any governmental
agency or in any court.

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                  (b) Employee acknowledges and agrees that the execution,
delivery and performance of this Agreement by the Company shall not to be
construed as an admission of liability of any kind on the part of, or as
evidence of unlawful or improper conduct of any kind by, the Company or any
other Company Party, all such liability and conduct being expressly denied.

                  (c) Employee voluntarily accepts the payments and other
benefits described in Article II hereof as sufficient payment for the release
contained in Section 3.1 hereof and the other representations, warranties and
agreements of Employee set forth in this Agreement. Employee acknowledges and
agrees that no promises, commitments, statements or representations (oral or
written) have been made to Employee by or on behalf of the Company or any other
Company Party which are contrary to the terms of this Agreement.

                  (d) Employee understands and agrees that the release contained
in Section 3.1 above is a full, complete and final release of the Company and
all other Company Parties. Employee represents and warrants that Employee has
completely read this Agreement and fully understands its terms, contents,
conditions and effects.

                  (e) Employee acknowledges that Employee has been represented
in connection with this Agreement by the law firm of Glickman & Hughes, his
attorneys of choice.

                  (f) Employee represents and warrants that Employee is not
presently affected by any disability which would prevent Employee from knowingly
and voluntarily signing this Agreement or granting the release set forth in
Section 3.1 above. Employee represents and warrants that the representations,
warranties, releases and agreements made by Employee in this Agreement are made
of his own free will and accord and were not made under duress, coercion or
undue influence and that Employee does not consider himself to be in a disparate
bargaining position relative to the Company with respect to the matters covered
by this Agreement.

                  (g) Employee expressly represents and warrants that Employee
has completely read this Agreement prior to executing it, has had an opportunity
to review it with Employee's counsel, has been offered twenty-one days within
which to consider this Agreement and to understand its terms, contents,
conditions and effects and has entered into this Agreement knowingly and
voluntarily.

                  Section 5.2 Entire Agreement. This Agreement constitutes the
entire understanding and agreement between the parties with respect to the
subject matter hereof and supersedes all prior contracts and agreements relating
to such matter, whether oral or written, provided, however, that, (i) the
Indemnity Agreement between the Company and Employee dated as of March 16, 1998
shall remain in full force and effect in accordance with its terms and (ii) to
the extent not inconsistent with or contrary to the terms of this Agreement,
Articles V and VI of the Employment Agreement shall remain in full force and
effect in accordance with its terms.

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                  Section 5.3 Dispute Resolution; Remedies. (a) In the event a
dispute shall arise between the parties as to whether the provisions of this
Agreement have been complied with, the parties agree, subject to paragraphs (b)
and (c) below, to resolve such dispute in accordance with the provisions of
Article VI of the Employment Agreement, which provisions are hereby incorporated
in this Agreement as if set forth in their entirety. In the event a dispute
under this Agreement is resolved by mediation or arbitration in accordance with
this paragraph (a), the non-prevailing party shall be responsible for the legal
fees and expenses incurred by the prevailing party in connection with such
mediation or arbitration.

                  (b) Employee acknowledges and agrees that a breach of any of
the covenants contained in Article IV hereof may result in material irreparable
injury to the Company for which there is no adquate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of such a breach, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction restraining
Employee from engaging in activities prohibited by such covenants or such other
relief as may be required or appropriate to specifically enforce any of such
covenants. Employee submits to the in personam jurisdiction before each and
every court in Harris County, Texas for that purpose.

                  (c) The Company acknowledges and agrees that a breach of
Section 4.3(a) hereof may result in material irreparable injury to Employee for
which there is no adquate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach,
Employee shall be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction restraining the Company from engaging in
activities prohibited by Section 4.3(a) or such other relief as may be required
or appropriate to specifically enforce Section 4.3(a). The Company submits to
the in personam jurisdiction before each and every court in Harris County, Texas
for that purpose.

                  (d) If Employee breaches any of his obligations under this
Agreement, the Company shall be entitled, by giving prior written notice to
Employee, to (i) rescind and revoke its obligation to pay the bonus described in
Section 2.3 hereof, (ii) reduce the term of the Employee Stock Options so that
they may not be exercised after the first anniversary of the Retirement Date
and/or (iii) cause the shares described in Section 2.7 hereof to be subject to
the provisions Stockholders Agreement referred to therein to the same extent as
if this Agreement had not been entered into. Each notice given by the Company
pursuant to this paragraph (d) shall describe, in reasonable detail, the breach
of this Agreement by Employee which is the basis for such notice. Any dispute
under this paragraph (d) shall be resolved as provided in paragraph (a) of this
Section 5.3.

                  (e) Subject to paragraph (a) above, no right, power or remedy
granted under this Agreement is intended to be exclusive, but each shall be
cumulative and in addition to any and all other rights, powers and remedies
referred to in this Agreement or otherwise available at law or in equity.

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                  Section 5.4 Governing Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF TEXAS WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.

                  Section 5.5 Employee's Right of Revocation. Employee
understands that Employee has until 4:00 p.m. on May 30, 2000 within which to
consider this Agreement and that this Agreement is revocable by Employee for a
period of seven days following the execution of this Agreement and, if not so
revoked, this Agreement will become effective and enforceable. For the
revocation to be effective, written notice of revocation must be delivered to
Robert O. McAlister, Vice President, Human Resources and Administration,
Sterling Chemicals, Inc., 1200 Smith Street, Suite 1900, Houston, TX, 77002, no
later than the close of business on the seventh day after Employee has signed
this Agreement. If Employee revokes this Agreement as aforesaid, this Agreement
shall automatically terminate and cease to be of any force or effect.

                  Section 5.6 Amendments and Waivers. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the parties. The failure of
the Company or Employee to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver thereof or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other terms of the Agreement.

                  Section 5.7 Severability. The invalidity, illegality or
unenforceability of any provision of this Agreement shall not affect the
validity, legality or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

                  Section 5.8 Counterparts. This Agreement may be signed in any
number of identical counterparts, each of which shall be deemed an original for
all purposes.

                  Section 5.9 Interpretation. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
The words "herein", "hereof" and "hereunder" and words of similar import refer
to this Agreement as a whole and not to any particular Article, Section or other
subdivision. No provision of this Agreement shall be construed against either
party solely because that party (or its counsel) drafted such provision.

                  Section 5.10 Successors and Assigns. This Agreement shall be
binding upon and enforceable against the Company and its successors and assigns.
Each other Company Party is a beneficiary of this Agreement and may enforce this
Agreement the same as if such Company Party were a party thereto. This Agreement
shall be binding upon and enforceable against Employee and his heirs,
beneficiaries, personal representatives and assigns.

                  Section 5.11 Further Assurances. Each party agrees, from time
to time, to do and perform any and all acts and to execute any and all further
instruments required or reasonably requested by the other party more fully to
effect and carry out the intent and purposes of this Agreement.

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                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.

                               EMPLOYEE

                               -----------------------------------------
                               Peter W. De Leeuw

                               Date: May ___, 2000

                               STERLING CHEMICALS HOLDINGS, INC.

                               By:
                                  --------------------------------------
                                  Frank P. Diassi, Chairman of the Board

                               STERLING CHEMICALS, INC.

                               By:
                                  --------------------------------------
                                  Frank P. Diassi, Chairman of the Board<PAGE>   1
                                                                    EXHIBIT 10.1

                                 LOAN AGREEMENT

THE STATE OF TEXAS

COUNTY OF WALKER                                                     WITNESSETH:

         THIS AGREEMENT made and entered into on this 10th day of November 2000,
by and between MITCHAM INDUSTRIES, INC., a Texas corporation, with principal
offices at 44,000 Highway 75S, Huntsville, Texas 77340, 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 notes described in Paragraph
II of this agreement (herein referred to as the "Loan").

         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 him in accordance with the respective terms
thereof.

         D. That all audits and 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 material change in the financial condition of Borrower.

<PAGE>   2

         E. That there are 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 as
stated herein.

         G. That, except as has been disclosed to Lender in writing of even date
with this loan agreement and which writing shall be attached hereto, none of the
property given as security for the payment of the herein described Loan is now
or has at any time in the past been used for or contaminated by 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.

         H. That Borrower presently has no claims or defenses against Lender
arising out of this Loan Agreement or the promissory notes or security documents
referenced herein, the indebtedness or obligations of any party governed
thereby, or any action previously taken or not taken by Lender with respect
thereto and that Borrower is aware that Lender is relying upon this warranty in
connection with this extension of credit. Borrower hereby waives, releases and
forever discharges Lender from and against any and all such claims, defenses and
causes of action which might now exist against Lender or which arise out of this
Loan Agreement or the promissory notes or security documents referenced herein,
the indebtedness or obligations of any party governed thereby, or any action
previously taken or not taken by Lender with respect thereto.

                                       2
<PAGE>   3

                                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:

          One certain promissory note of even date herewith executed by Borrower
          and payable to the order of Lender in the original principal sum of
          $8,500,000.00, bearing interest at the Wall Street Journal Prime Rate,
          plus One percent (1%) per annum, as such rate is determined daily on
          the principal balance outstanding, providing for multiple advances,
          until the total amount of principal has been advanced, interest being
          payable monthly as it accrues, and being due on or before the 9th day
          of November, 2004.

         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 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 "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

                                       3
<PAGE>   4

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 "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.

                                  III. SECURITY

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

         1.       Commercial Security Agreement and financing statements in form
                  and content acceptable to Lender, executed by Borrower and
                  granting a purchase money security interest in all equipment
                  purchased from Sercel, Ltd., GeoSpace Corp. and Mark Products
                  and containing an assignment of all leases and revenues
                  generated from such equipment. Such security agreement shall
                  also cover all accounts receivable arising from Borrower's
                  business operations, together with all instruments, chattel
                  paper, general intangibles, proceeds and cash proceeds arising
                  therefrom, securing payment of the note described in Paragraph
                  II A. hereof evidencing a first lien and prior security
                  interest in such collateral, whether now owned or hereinafter
                  acquired by Borrower.

         2.       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 or of the United States.

         3.       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

                                       4
<PAGE>   5

                   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.

          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.

                    IV. COVENANTS OF BORROWER AND GUARANTORS

         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.

         2.       That Borrower shall furnish or cause to be furnished at its
                  expense to Lender financial statements or reports in form and
                  content acceptable to Lender, within 45 days of the end of
                  each quarter, which shall set forth an operating statement and
                  balance sheet for Borrower herein; an ageing of notes,
                  contract rights, accounts receivable and accounts payable of
                  Borrower for the preceding 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.
                  The reasonable costs of any such inspection are to be borne by
                  Borrower.

         3.       That Borrower shall furnish at its expense to Lender annually,
                  within 90 days after the end of Borrower's income tax
                  reporting year, an audited report prepared by the Certified
                  Public Accounting firm for Borrower, including a balance
                  sheet, income statement, sources and uses of funds statement,
                  and a reconciliation of net worth. Additionally, Borrower
                  shall furnish their tax returns at its expense to Lender
                  annually, within 150 days after the end of Borrower's income
                  tax reporting year.

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

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

                  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, including all
                           taxes of

                                       5
<PAGE>   6

                           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 in company
                           or companies satisfactory to Lender, 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 modern accounting system in
                           accordance with generally accepted principles of
                           accounting, 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, 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;

                  i.       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.

                  j.       To provide copies of all correspondence between
                           Borrower and the Securities and Exchange Commission,
                           whether such correspondence is prepared by Borrower
                           or the

                                       6
<PAGE>   7

                           Securities and Exchange Commission, within thirty
                           (30) days of delivery or receipt of such
                           correspondence by Borrower.

                  k.       To provide monthly status reports of pending
                           litigation between Borrower and Stanley Moskowitz,
                           et al, in Cause No. 98-CV-1244, which cause of action
                           was filed April 23, 1998, in the U. S. District
                           Court, Southern District of Texas.

                  l.       Borrower shall maintain operating accounts at one of
                           the following Citizens Bank of Texas locations:
                           Huntsville, Texas; New Waverly, Texas or The
                           Woodlands, Texas.

         5.       That Borrower will indemnify Lender against and hold Lender
                  harmless from any and all claims, liabilities, obligations,
                  penalties, loss, damage or causes of action of any kind
                  (including attorney's fees and costs of remediation
                  necessarily incurred by Lender in connection therewith),
                  whether arising under statute or regulation, common law, tort
                  or contract, and whether claimed, asserted, or assessed, in
                  any way by or necessarily paid by Lender to any private party
                  or any governmental entity or agency or any number or
                  combination thereof, and resulting or arising in any way from
                  the generation, transportation, treatment, disbursal, storage,
                  discharge or disposal of any pollutants, hazardous or toxic
                  substances, or hazardous wastes by Borrower, its agents,
                  employees, or contractors, at any location, or from the past,
                  present or future use of any property given as security for
                  this Loan for such purposes by any party, or from the presence
                  of any pollutants, hazardous or toxic substances, or hazardous
                  wastes on any such property, or from the falsity of any
                  warranty made herein with regard to the presence or uses of
                  such pollutants, hazardous or toxic substances, or hazardous
                  wastes, or from the use by Borrower of any underground storage
                  tanks or the presence of such tanks on any property given as
                  security for this Loan, or in any way from the actual,
                  threatened or alleged discharge, disbursal, release, storage,
                  treatment, generation, disposal or escape of pollutants, or
                  other toxic or hazardous substances, at any location, whether
                  occurring before or after the date of this agreement.

                               NEGATIVE COVENANTS

         6.       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 liens existing as of the date hereof
                           and as otherwise provided herein.

                  b.       Except in the normal course of business; amend,
                           modify, terminate or otherwise alter the terms of any
                           account, contract or lease, nor accept or surrender
                           of any personal property subject thereto;

                  c.       Assign any leases or the proceeds thereof to anyone
                           except Lender;

         7.       That Borrower may not assign or otherwise transfer this
                  Agreement or any rights hereunder, and that this Agreement
                  shall be binding upon Borrower

                                       7
<PAGE>   8

                  and the representatives, heirs, executors, legal
                  representatives and successors of Borrower.

         8.       That Borrower shall not incur any indebtedness or obligations
                  (other than accounts payable which arise in the usual and
                  normal course of Borrower's operations) or guarantee the debt
                  or obligations of others in excess of $20,000,000.00, without
                  the prior written approval of Lender.

         9.       That, except after written notice to Lender and where such use
                  and the activities relating thereto are in strict 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. COVENANTS OF LENDER

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

         1.       That Lender shall be bound to make the advances herein on the
                  following conditions up to the amount specified as the
                  original principal sum of each note, subject to the following:

                  a.       Compliance with all terms and conditions of Loan
                           Commitment and Loan Agreement, with respect to said
                           loan.

                  b.       Payment of all fees and expenses contemplated by such
                           loan commitment, including remittance of a Twenty-six
                           Thousand Dollars ($26,000.00) commitment fee to
                           Lender.

                  c.       Execution of all documents required by Lender.

                  d.       Furnishing of financial statements evidencing sound
                           and satisfactory financial condition of each
                           Borrower.

         2.       Lender shall from time to time advance to Borrower portions of
                  the principal amount of the note described in Paragraph II.A.1
                  hereof upon delivery of an appraisal in form and content
                  satisfactory to Lender, establishing valuation of the
                  geophysical seismic equipment to be purchased with proceeds of
                  this loan in the amount of $22,000,000.00 or more, along with
                  purchase orders and other documentation from Sercel, Ltd.,
                  GeoSpace Corp, and Mark Products which evidences Borrower's
                  purchase and provides a specific description of such
                  collateral. The aggregate unpaid balance of all such advances
                  at any one time outstanding

                                       8
<PAGE>   9

                  shall not exceed $8,500,000.00. The provisions of said
                  security agreement are hereby incorporated herewith by this
                  reference.

                            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 discretion shall determine, immediately due and
payable:

         1.       Failure of Borrower to pay within 10 days after demand any sum
                  past due hereunder;

         2.       Failure of Borrower to pay within 5 days after demand any debt
                  hereunder, the maturity of which has been accelerated;

         3.       The breach of any warranties of Borrower herein contained in
                  any material respect;

         4.       Insolvency;

         5.       The making by Borrower of an assignment for the benefit of
                  creditors;

         6.       The levy of any attachment, execution, or other like process
                  against any of Borrower's property;

         7.       The voluntary suspension of business by Borrower;

         8.       The entry of any decree or order of a court having
                  jurisdiction in the premises appointing a receiver of all or
                  any substantial part of Borrower's property;

         9.       The breach by Borrower of any of the provisions of this
                  Agreement, or of any of the promissory notes or security
                  instruments described herein, if the same is not remedied
                  within 10 days after written notice from Lender.

          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

                                       9
<PAGE>   10

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.

                             VII. GENERAL PROVISIONS

         A. Any notice or demand required or permitted to be given hereunder by
Lender may be given in writing by depositing such notice in the United States
Mail, postage prepaid, addressed to Borrower at 44,000 Highway 75S, Huntsville,
Texas 77340, Attn: Billy F. Mitcham, Jr., or such other place as Borrower shall
have designated in writing. Notice shall be deemed to have been given 48 hours
after being so deposited in the United States Mail.

         B. 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. In any suit arising under this
agreement or relating in any way to the obligations of the parties hereunder,
venue shall be fixed in Victoria County, Texas. Notwithstanding the provisions
of this paragraph, Chapter Fifteen of the Texas Credit Code, Art. 5069-15.01 et
seq., 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 and Guarantors to Lender.

                                       10
<PAGE>   11

         EXECUTED on the date first hereinabove mentioned in New Waverly, Walker
County, Texas.

                                               MITCHAM INDUSTRIES, INC.
ATTEST:

                                               By  /s/ BILLY F. MITCHAM, JR.
                                                  ------------------------------
/s/ KIM WILLIAMS                                  Billy F. Mitcham, Jr.
--------------------------                        Its CEO

--------------------------

                                                                 BORROWER

                                               FIRST VICTORIA NATIONAL BANK

ATTEST:

                                               By  /s/ JOHN D. HOWARD
                                                  ------------------------------
/s/ KIM WILLIAMS                                  John D. Howard
--------------------------                        Its Vice President

--------------------------

                                                                 LENDER

THE STATE OF TEXAS

COUNTY OF WALKER

         This instrument was acknowledged before me on November 10, 2000, by
Billy F. Mitcham, Jr., as President of Mitcham Industries, Inc., on behalf of
said corporation.

[STATE OF TEXAS NOTARY SEAL]                 /s/ KIM WILLIAMS
                                             -----------------------------------
                                             Notary Public, State of Texas

THE STATE OF TEXAS

COUNTY OF WALKER

         This instrument was acknowledged before me on November 10, 2000, by
John D. Howard, as Vice President of First Victoria National Bank, on behalf of
said corporation.

[STATE OF TEXAS NOTARY SEAL]                 /s/ KIM WILLIAMS
                                             -----------------------------------
                                             Notary Public, State of Texas

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