Document:

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made and entered into as of November 1, 2008
(“Effective Date”) by and between PLATO Learning, Inc., a Delaware corporation headquartered in
Minneapolis, Minnesota (the “Company”), and Vincent Riera (“Executive”).

WITNESSETH THAT:

WHEREAS, the Company wishes to offer Executive employment and Executive wishes to accept
employment from the Company, pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, the Company and Executive hereby agree as follows:

	1.	 	Employment. The Company hereby agrees to employ Executive to perform the duties set
forth in Section 3 hereof, and Executive hereby accepts such employment, on the terms and
conditions of this Agreement.

	2.	 	Term. The term of this Agreement (“Term”) shall commence on the Effective Date and
shall end on December 31, 2010, subject to earlier termination pursuant to Section 6. On
December 31, 2010 and on each December 31 thereafter, unless earlier terminated pursuant to
Section 6, the Term will be automatically extended for an additional one (1) year, unless
either party gives written notice not to extend the Term hereof at least forty-five (45) days
prior to the date such extension would be effective. Notwithstanding anything contained
herein to the contrary, in the event of a Change in Control (as such term is defined in
Appendix A), the Term shall be automatically extended until the second anniversary of the
Change in Control.

	3.	 	Duties. Executive will serve as the Company’s President and Chief Executive Officer,
and as a member of the Company’s Board of Directors (the “Board”), with the responsibilities
and duties customarily associated with such positions, and any other consistent
responsibilities and duties assigned or delegated to Executive by the Board. Executive will
follow applicable policies and procedures adopted by the Company from time to time, including
without limitation policies relating to business ethics, conflict of interest,
non-discrimination, confidentiality and protection of trade secrets, and insider trading.

	4.	 	Time Commitment. Executive will devote Executive’s time, attention and energies to
the performance of his duties and responsibilities under this Agreement. Executive may not be
associated with, consult, advise, work for, be employed by, contract with, or otherwise devote
any of Executive’s time to the pursuit of any other work or business activities that may
interfere with the performance of such duties and responsibilities. The foregoing shall not
preclude Executive from devoting reasonable time to the supervision of his personal
investments, civic, charitable, educational, religious and similar types of activities,
speaking engagements and membership on other boards of directors, provided such activities do
not interfere in any way with the business of the Company; and provided further that,
Executive cannot serve on the board of directors of more than one publicly-traded company
without the written consent of the Board. The time involved in such activities shall not be
treated as vacation time. Executive shall be entitled to keep any amounts paid to him in
connection with such activities (e.g., director fees and honoraria).

	5.	 	Compensation and Benefits. Beginning on the Effective Date, the Company will pay the
following compensation to Executive in full consideration for performance of his services
hereunder, payable in regular installments in accordance with the Company’s usual payroll
policies and procedures.

	 	(a)	 	Salary Bonus Compensation. Executive will receive an annual salary of
Three Hundred Ninety Thousand ($390,000). The Board or the Compensation Committee of
the Board will review Executive’s salary at least annually. Executive’s salary will
not be reduced, and after any increase the term “salary” for purposes of this Agreement
shall refer to Executive’s annual salary as most recently increased.

	 	(b)	 	Bonus Compensation. Executive will be eligible to participate
in the Company’s executive incentive plan as established each year by the Board of
Directors or Compensation Committee of the Board. Executive’s target bonus plan for
fiscal year 2009 shall be set forth in the Company’s Fiscal 2009 Executive Annual
Incentive Plan.

	 	(c)	 	Stock Options. Executive shall be eligible to receive grants of stock
options and performance shares of the Company’s common stock as may be determined by
the Board under provisions of the Company’s Annual Executive Incentive Plan. All
options to purchase shares of the Company’s common stock shall be evidenced by the
Company’s standard form of stock option agreement, and all grants of performance share
of the Company’s common stock shall be evidenced by the Company’s standard form of
performance share award agreement. All options and grants of performance shares shall
be subject to the terms and conditions of the Company’s 2006 Stock Incentive Plan.

	 	(e)	 	Vacation. Executive shall be entitled to five (5) weeks of paid
vacation on an annual basis, to be accrued and used in accordance with the Company’s
policies as in effect from time to time.

	 	(e)	 	Benefits. Executive shall be eligible to participate in such group
life insurance, major medical, and other employee benefit plans and programs generally
available to senior executive employees of the Company (collectively “Benefit Plans”)
as established by the Company, in accordance with the applicable terms and conditions
of such Benefit Plans (including the requirements of the Benefit Plans for
participation). The benefits under the Benefit Plans available to Executive shall be
no less favorable than those available to other senior executives of the Company.

	 	(f)	 	Expenses. The Company will reimburse Executive for all reasonable
and necessary expenses incurred by Executive in connection with the performance of his
services hereunder upon submission by Executive of appropriate documentation in
accordance with the Company’s expense reimbursement policy.

6. Termination.

	 	(a)	 	Death or Disability. This Agreement and Executive’s employment shall
be terminated immediately upon Executive’s death. In the event of Executive’s
Disability, this Agreement and Executive’s employment shall be terminated thirty (30)
days after the Company gives written notice to Executive, unless Executive has returned
to the substantial performance of his duties on a full-time basis. For purposes of
this Agreement, “Disability” means that as a result of physical or mental incapacity
Executive is unable for a period of 120 consecutive days during any consecutive 180-day
period to perform his duties hereunder on a full-time basis.

Upon termination by reason of death or Disability, Executive shall be entitled only
to accrued but unpaid salary through the date of termination, together with any
other benefit or payment provided under the Company’s plans, policies or programs in
accordance with their terms (collectively, “Accrued Obligations”).

	 	(b)	 	Cause or Without Good Reason. The Company may terminate this Agreement
and Executive’s employment for Cause (as defined in paragraph (d) of this Section) upon
ten (10) day’s prior written notice to Executive. Executive may terminate the
Agreement and his employment without Good Reason (as defined in paragraph (d) of this
Section) upon thirty (30) days’ prior written notice to the Company.

Upon termination for Cause or without Good Reason, Executive shall be entitled only
to the Accrued Obligations.

	 	(c)	 	Good Reason; Without Cause. Executive may terminate this Agreement and
his employment for Good Reason by providing written notice to the Company within
(90) days after the initial existence of the condition; provided however, that the
Company shall have a period of thirty (30) days during which it may remedy the
condition. The Company may terminate this Agreement and Executive’s employment without
Cause upon thirty (30) days’ prior written notice to Executive.

Upon termination for Good Reason or Without Cause, Executive shall be entitled to:

	 	(i)	 	the Accrued Obligations;

	 	(ii)	 	a lump sum severance payment equal to two (2) times Executive’s
annual salary in effect on the termination date (without regard to any
reduction in salary referred to in clause (ii) of the definition of Good
Reason), which shall be paid to Executive within ten (10) business days
following the lapse of the recession period for such termination; and

	 	(iii)	 	continuation of health and other welfare benefits (including
life, accident and disability benefits) to Executive and his spouse and
dependents under the Benefit Plans in which they participated on the date of
Executive’s termination, for eighteen (18) months following the date of
Executive’s termination on substantially the same terms and conditions
(including contributions by Executive) as in effect immediately prior to
Executive’s termination; provided, that the Company’s obligation to
provide such health or other welfare benefit shall cease with respect to such
benefit at the time Executive becomes eligible to participate in a group plan
of another employer providing comparable benefits in the aggregate.

To the extent that the health and other welfare benefits referred to in clause (iii)
above cannot be provided after termination of employment under applicable law or the
terms of the Benefit Plans then in effect (and cannot be provided through the
Company’s paying the applicable premium for Executive under COBRA), the Company
shall pay to Executive such amount as is necessary to provide Executive, on an
after-tax basis, with an amount equal to the cost of acquiring, for Executive and
his spouse and dependents, (on a non-group basis) those health and other welfare
benefits that would otherwise be lost to Executive and his spouse and dependents as
a result of Executive’s termination.

	 	(d)	 	Definitions. For the purposes of this Agreement, “Cause” shall mean
Executive’s:

	 	(i)	 	indictment or plea of guilty or nolo contendere
involving any felony or gross misdemeanor involving dishonesty, fraud, or
breach of trust under any law of the United States or any State thereof;

	 	(ii)	 	willful engagement in any conduct or gross negligence that in
either case materially injures the Company or any of its subsidiaries; or

	 	(iii)	 	willful and substantial nonperformance of assigned duties,
provided that such nonperformance has continued more than ten days after the
Company has given written notice of such nonperformance and of its intention to
terminate Executive’s employment because of such nonperformance.

For purpose of this Agreement “Good Reason” shall exist if the Company, without
Executive’s written consent:

	 	(i)	 	materially reduces the nature, scope, level or extent of
Executive’s responsibilities;

	 	(ii)	 	reduces Executive’s salary;

	 	(iii)	 	gives written notice to the Executive pursuant to Section 2
not to extend the Term of this Agreement; or

	 	(iv)	 	relocates Executive’s principal business office to a location
which is more than fifty (50) miles from both (A) Executive’s principal
business office immediately prior to such relocation and (B) Executive’s
principal place of residence at the time of such relocation.

	 	(e)	 	Conditions. Executive’s eligibility to receive the payment and
benefits under this Section is conditioned on (i) his compliance with the provisions of
Section 8 of this Agreement and (ii) his execution of a general release and waiver of
all claims against the Company and its directors, officers and subsidiaries, in a
reasonable and customary form prepared by the Company.

	 	(f)	 	Right of Recapture. In the event that (x) within one year after
termination of this Agreement and Executive’s employment for any reason the Company
determines that prior to such termination he engaged in any activity which would have
constituted a basis for termination by the Company for Cause while employed by the
Company or (y) Executive breaches the restrictive covenants of Section 8, then:

	 	(i)	 	the Company shall have no further obligations to pay the lump
sum severance payment or to continue providing Executive and his spouse and
dependents with health and other welfare benefits, as provided in paragraph (c)
above, if such termination was by the Company without Cause or by Executive for
Good Reason;

	 	(ii)	 	upon written notice to Executive from the Company, Executive
shall pay to the Company within ten (10) business days any lump severance
payment received by Executive pursuant to paragraph (c) above, and

	 	(iii)	 	if Executive has exercised any stock options granted to him by
the Company, Executive shall pay to the Company within ten (10) business days
after written notice from the Company the difference between (A) the aggregate
fair market value on the date (or dates) of exercise of the shares subject to
stock options which were exercised by Executive on or after the date which is
one (1) year prior to Executive’s termination of employment and (B) the
aggregate exercise price of such stock options.

If Executive disputes the exercise by the Company of any rights under this Section
6(f), Executive shall have the right to submit such dispute to arbitration in
accordance with Section 13(e). Notwithstanding anything contained herein, this
paragraph shall not apply to any breach of the provisions of Section 8(a) unless
there has been substantial damage to the Company. For purposes of this paragraph,
“fair market value” on any date means the per share closing price of the Company’s
common stock on the Nasdaq Stock Market on that date (or, if there was no reported
closing price on that date, on the last preceding date on which the closing price
was reported) or, if the Company is not then listed on the Nasdaq Stock Market, as
determined by the Board in good faith.

	7.	 	Change in Control.

	 	(a)	 	Retention Bonus. In the event that Executive’s employment continues
for two (2) years after a Change in Control (as such term is defined in Appendix A),
Executive shall be entitled to a lump sum cash retention bonus equal to two (2) times
Executive’s annual salary then in effect. Such retention bonus shall be paid to
Executive within ten (10) business days following the second anniversary of the Change
in Control.

	 	(b)	 	Severance Payment and Benefits. In the event that Executive’s
employment is terminated less than two (2) years after a Change in Control by the
Company without Cause or by Executive for Good Reason, Executive shall be entitled to
the same rights, payments and benefits as provided in paragraph (c) of Section 6.

For purposes of this Section, Good Reason shall also include the Company’s failure
without Executive’s written consent to continue in effect any incentive or bonus
plan, or Benefit Plan, unless Executive is permitted to participate in other plans
providing Executive with substantially equivalent compensation and benefits in the
aggregate (and, with respect to life insurance, major medical and other employee
welfare benefit plans, at a substantially equivalent cost).

	 	(c)	 	Reduction of Payment. If, as provided in Appendix B, Executive would
otherwise be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code, the amounts payable under this Agreement shall be reduced as provided in
Appendix B.

	 	(d)	 	Legal Fees. If any contest or dispute shall arise under this Agreement
involving termination of Executive’s employment with the Company after a Change in
Control or involving the failure or refusal of the Company to perform fully in
accordance with the terms of this Section, the Company shall reimburse Executive for
all reasonable legal fees and related expenses, if any, incurred by Executive in
connection with such contest or dispute if a court of competent jurisdiction or an
arbitration panel substantially upholds Executive’s position.

	8.	 	Restrictive Covenants.

	 	(a)	 	Confidentiality. Executive agrees not to directly or indirectly,
without the Company’s prior written consent:

	 	(i)	 	use or disclose, for the benefit of any person, firm or entity
other than the Company and its subsidiaries, the Confidential Business
Information of the Company or any of its subsidiaries;

	 	(ii)	 	distribute or disseminate in any way to any person, firm or
entity anyone other than the Company and its subsidiaries, any Confidential
Business Information in any form whatsoever;

	 	(iii)	 	copy any Confidential Business Information other than for use
by the Company or any of its subsidiaries;

	 	(iv)	 	remove any Confidential Business Information from the premises
of the Company;

	 	(v)	 	fail to safeguard all confidential documents; and

	 	(vi)	 	copy any confidential documents belonging to any of the
Company’s customers.

For purposes of this Agreement, “Confidential Business Information” means
information or material that is not generally available to or used by others or the
utility or value of which is not generally known or recognized as a standard
practice, whether or not the underlying details are in the public domain, including
but not limited to its computerized and manual systems, procedures, reports, client
lists, review criteria and methods, financial methods and practices, plans, pricing
and marketing techniques, business methods and procedures and other valuable and
proprietary information relating to the pricing, marketing, design, manufacture and
formulation of educational software, as well as information regarding the past,
present and prospective clients of the Company or any of its subsidiaries, and their
particular needs and requirements, and their own confidential information.

Upon termination of employment under this Agreement for any reason, Executive agrees
to return to the Company all policy and procedure manuals, records, notes, data,
memoranda, and reports of any nature (including computerized and electronically
stored information) which are in Executive’s possession and/or control which relate
to (i) the Confidential Business Information of the Company or any of its
subsidiaries, (ii) the business activities or facilities of the Company or its past,
present, or prospective clients.

	 	(b)	 	Non-Compete. During the period of Executive’s employment and for a
period of two (2) years following termination of this Agreement and Executive’s
employment for any reason (the “Restricted Period”), Executive will not directly or
indirectly, on his behalf, or as a partner, officer, director, trustee, member,
employee, or otherwise, within the United States or in any foreign market in which
Executive was engaged in activities on behalf of the Company or any of its
subsidiaries, own, engage in or participate in, in any way, any business that is
similar to or competitive with any actual or planned business activity engaged in or
planned by the Company or any of its subsidiaries at the time the employment under this
Agreement was terminated. However, this Agreement shall not prohibit ownership by
Executive of up to 2% of the shares of stock of any corporation the stock of which is
listed on a national securities exchange or is traded in the over-the-counter market.

	 	(c)	 	Non-Solicitation. During the Restricted Period, Executive will not
directly or indirectly, for the purpose of selling services and/or products provided or
planned by the Company or any of its subsidiaries at the time the employment under this
Agreement was terminated, call upon, solicit or divert any actual customer or
prospective customer of the Company or any of its subsidiaries, unless employed by the
Company to do so. An actual customer, for purposes of this Section, is any customer to
whom the Company or any of its subsidiaries has provided services and/or products
within one year prior to Executive’s termination of employment under this Agreement. A
prospective customer, for purposes of this Section, is any prospective customer to whom
the Company or any of its subsidiaries sought to provide services and/or products
within one year prior to the date of Executive’s termination of employment under this
Agreement when Executive had knowledge of or was involved in such solicitation.

Executive further agrees that during the Restricted Period Executive shall not
directly or indirectly induce any person to leave the employ of the Company or any
of its subsidiaries, or solicit any person who is currently or was an employee of
the Company or any of its subsidiaries at any time during the twelve months prior to
Executive’s termination of employment under this Agreement.

	 	(d)	 	Judicial Modification. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section is invalid or
unenforceable, the parties agree that (i) the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope, duration, or
geographic area of the term or provision, to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the invalid
or unenforceable term or provision, (ii) the parties shall request that the court
exercise that power, and (iii) this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment or decision may be appealed.

	9.	 	Remedies. In the event Executive breaches or threatens to breach any provision of
Section 8 of this Agreement, the Company shall, in addition to the provisions of Section 6(f)
be entitled to injunctive relief, enjoining or restraining such breach or threatened breach.
Executive acknowledges that the Company’s remedy at law is inadequate and that the Company and
its subsidiaries will suffer irreparable injury if such conduct is not prohibited.

Executive further agrees that the covenants contained in Section 8 shall be construed as
separate and independent of other provisions of this Agreement and the existence of any
claim by Executive against the Company or any of its subsidiaries, except for a claim that
Executive was terminated without Cause or terminated his employment for Good Reason, shall
not constitute a defense to the enforcement by the Company of either Section 8 or this
Section.

	10.	 	Property Rights. All discoveries, designs, improvements, ideas, inventions,
intellectual property, creations, and works of art, whether or not patentable or subject to
copyright, relating to the business of the Company or any of its subsidiaries, or its clients,
conceived, developed or made by Executive during employment under this Agreement, either
solely or jointly with others (hereafter “Developments”) shall automatically become the sole
property of the Company. Executive shall immediately disclose to the Company all such
Developments and shall, without additional compensation, execute all assignments, application
or any other documents deemed necessary by the Company to perfect the Company’s rights
therein. These obligations shall continue throughout the Restricted Period under this
Agreement with respect to Developments conceived, developed or made by Executive during the
period of employment under this Agreement.

The Company acknowledges and agrees that the provisions of this section shall not apply to
inventions or for which no equipment, supplies, facility or trade secret information of the
Company or its clients were used by Executive and which were developed entirely on
Executive’s own time unless (a) such inventions relate (i) to the business of the Company or
(ii) to the Company’s actual or demonstrably anticipated research or development or (b) such
inventions result from any work performed by Executive for the Company.

	11.	 	Assignments. Neither party shall have the right or power to assign any rights or
duties under this Agreement without the written consent of the other party, provided, however,
that the Company shall have the right to assign this Agreement without consent pursuant to any
corporate reorganization, merger, or other transaction involving a Change in Control of the
Company or any of its subsidiary companies. Any attempted assignment in breach of this
Section shall be void.

If Executive performs services and duties for any subsidiary or other affiliated entity of
the Company, then the provisions of Sections 8 and 9 shall apply to the confidential
information and business activities, property rights, clients, and employees of that
subsidiary or other entity.

	12.	 	Severability. Each section, paragraph, clause, sub-clause and provision
(collectively “Provisions”) of this Agreement shall be severable from each of the others, and
if for any reason any section, paragraph, clause, sub-clause or provision is invalid or
unenforceable, such invalidity or unenforceability shall not prejudice or in any way affect
the validity or enforceability of any other Provision hereof.

13. Miscellaneous.

	 	(a)	 	This Agreement (including the appendices) contains the entire agreement of the
parties with respect to the employment of Executive and supersedes all prior
agreements, provisions, covenants, arrangements, communications, representations or
warrantees, whether written or oral, by any officer, employee or representative of any
party with respect to the subject matter of this Agreement, including without
limitation Executive’s prior Employment Agreement with the Company dated April 16,
2007, as amended on or about October 1, 2007.

	 	(b)	 	Failure on the part of either party to insist upon strict compliance by the
other with respect to any of the terms, covenants and conditions hereof, shall not be
deemed a subsequent waiver of such term, covenant or condition.

	 	(c)	 	The provisions of any section containing a continuing obligation after
termination shall survive such termination whether with or without Cause and even if
occasioned by the Company’s breach or wrongful termination.

	 	(d)	 	This Agreement may not be modified except in a written amendment signed by the
parties.

	 	(e)	 	Except for action by the Company to enforce the restrictive covenants of
Section 8, any dispute, controversy or difference that may arise between the parties
hereto out of or in relation to or in connection with this Agreement or for the breach
thereof which cannot be settled amicably by the parties within thirty (30) days shall
be finally and exclusively settled by arbitration in Minneapolis, Minnesota, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The arbitrator shall have discretion to award the
prevailing party reasonable attorney’s fees, subject to Section 7(d). In the event of
litigation under this Agreement, the court shall have discretion to award the
prevailing party reasonable attorney’s fees, subject to Section 7(d).

	 	(f)	 	The headings in this Agreement are inserted for convenience and identification
only and are not intended to describe, interpret, define or limit the scope, extent, or
intent of this Agreement or any provision hereof. Each party has cooperated in the
preparation of this Agreement. As a result, this Agreement shall not be construed
against any party on the basis that the party was the draftsperson.

	 	(g)	 	All forms of compensation referred to in this Agreement are subject to
reduction to reflect withholding for applicable income, payroll and other taxes.

	14.	 	Governing Law. It is the intention of the parties hereto that all questions with
respect to the construction, formation, and performance of this Agreement and the rights and
liabilities of the parties hereto shall be determined in accordance with the laws of the State
of Minnesota. The parties hereto submit to the jurisdiction and venue of the courts of
Hennepin County, Minnesota in respect to any dispute arising out of this Agreement.

	15.	 	Insurance. For the period from the date hereof through at least the fifth
anniversary of Executive’s termination of employment from the Company, the Company agrees to
maintain Executive as an insured party on all directors’ and officers’ insurance maintained by
the Company for the benefit of its directors and officers on at least the same basis as all
other covered individuals.

	16.	 	Notices. Any notice required pursuant to this Agreement will be in writing and will
be deemed given upon the earlier of (i) delivery thereof, if by hand, (ii) five (5) business
days after mailing if sent by mail (registered or certified mail, postage prepaid, return
receipt requested), (iii) the next business day after deposit if sent by a recognized
overnight delivery service, or (iv) upon transmission if sent by facsimile transmission or by
electronic mail, with return notification (provided that any notice sent by facsimile or
electronic mail shall also promptly be sent by one of the means described in clauses (i)
through (iii) of this Section. All notices will be addressed as follows or to such other
address as a party may identify in a written notice to the other party:

	 	 	 
	to the Company:

	 	PLATO Learning, Inc.

Attn: Chairman of the Board of Directors

10801 Nesbitt Avenue South

Bloomington, MN 55437-3109
	to Executive:

	 	Mr. Vincent Riera

10617 Sonoma Ridge

Eden Prairie, MN 55347

Each party named above may change its address and that of its representative for notice by
the giving of notice thereof in the manner hereinabove provided.

	17.	 	Counterparts. This Agreement may be executed in one or more counterparts, all of
which together shall constitute but one Agreement.

	18.	 	Section 409A.

	 	(a)	 	This Agreement is intended to comply and shall be administered in a manner
that is intended to comply with Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the interpretative guidance thereunder, including the
exceptions for short-term deferrals, separation pay arrangements, reimbursements, and
in-kind distributions. The Agreement shall be construed and interpreted in accordance
with such intent. In addition, each payment shall be considered a separate payment
for purposes of Section 409A of the Code.

	 	(b)	 	Notwithstanding any provision to the contrary, to the extent the Executive is
considered a specified employee under Section 409A of the Code and would be entitled
to a payment during the six month period beginning on the Executive’s date of
termination that is not otherwise excluded under Section 409A of the Code under the
exceptions for short-term deferrals, separation pay arrangements, reimbursements,
in-kind distributions, or an otherwise applicable exemption, the payment will not be
made to the Executive until the earlier of the six month anniversary of the
Executive’s date of termination or the Executive’s death.

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

	 	 	 	 	 
	 	 	PLATO Learning, Inc.
	 
	 	By: ____________________________
	_______________________________
	 	Name: __________________________
	Vincent Riera
	 	Title:   __________________________

1

APPENDIX A

“Change in Control” means the occurrence of any one of the following events:

(i) (i) individuals who, on November 1, 2008, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to November 1, 2008 whose election or
nomination for election was approved by a vote of at least a majority of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies by or on behalf of any
person other than the Board shall be deemed to be an Incumbent Director;

(ii) any “person” (as such term is defined in the Securities Exchange Act of 1934 (the
“Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the combined voting
power of the Company’s then outstanding securities eligible to vote for the election of the
Board (“Company Voting Securities”); provided, however, that the event
described in this paragraph (ii) shall not be deemed to be a Change in Control by virtue of
any of the following acquisitions:  (A) by the Company or any subsidiary, (B) by any
employee benefit plan (or related trust) sponsored or maintained by the Company or any
subsidiary, (C) by any underwriter temporarily holding securities pursuant to an offering of
such securities, (D) pursuant to a Non-Qualifying Transaction, as defined in paragraph
(iii), or (E) by any person of Voting Securities from the Company, if a majority of the
Incumbent Board approves in advance the acquisition of beneficial ownership of 50% or more
of Company Voting Securities by such person;

(iii) the consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or any of its subsidiaries that requires
the approval of the Company’s stockholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately following such
Business Combination: (A) more than 60% of the total voting power of (x) the corporation
resulting from such Business Combination (the “Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the Surviving
Corporation (the “Parent Corporation”), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting Securities
among the holders thereof immediately prior to the Business Combination, (B) no person
(other than any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner,
directly or indirectly, of 50% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the members of the
board of directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business Combination were Incumbent
Directors at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination (any Business Combination which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”);

(iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or the consummation of a sale of all or substantially all of the
Company’s assets; or

(v) the occurrence of any other event that the Board determines by a duly approved
resolution constitutes a Change in Control.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any
person acquires beneficial ownership of more than 50% of Company Voting Securities as a result of
the acquisition of Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control of the Company shall then occur.

2

APPENDIX B

Cut-back to Safe Harbor Cap on Payments

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be
determined that any payment, award, benefit or distribution (or any acceleration of any payment,
award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of
Executive, whether pursuant to the terms of this Agreement or otherwise (the “Payments”), would be
subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”), then the amounts payable to Executive under this Agreement shall
be reduced (reducing first the payments under Section 7(a) and (b)) to the maximum amounts will
result in no portion of the Payments being subject to such excise tax (the “Safe Harbor Cap”). For
purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable to Executive under
this Agreement (and no other Payments) shall be reduced, unless consented to by Executive.

(b) All determinations required to be made under this Appendix B shall be made by the public
accounting firm that is retained by the Company as of the date immediately prior to the Change in
Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the
Company and Executive within ten (10) business days of the receipt of notice from the Company or
Executive that there has been a Payment, or such earlier time as is requested by the Company.
Notwithstanding the foregoing, in the event (i) the Board shall determine prior to the Change in
Control that the Accounting Firm is precluded from performing such services under applicable
auditor independence rules or (ii) the Audit Committee of the Board determines that it does not
want the Accounting Firm to perform such services because of auditor independence concerns or (iii)
the Accounting Firm is serving as accountant or auditor for the person(s) effecting the Change in
Control, the Board shall appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses (including, but not limited to, the costs of
retaining experts) of the Accounting Firm shall be borne solely by the Company and the Company
shall enter into any agreement requested by the Accounting Firm in connection with the performance
of the services hereunder.

If the Accounting Firm determines that payments shall be reduced to the Safe Harbor Cap, it
shall furnish Executive with a written opinion to that effect, and to the effect that Executive is
not required to report any Excise Tax on Executive’s federal income tax return. If the Accounting
Firm determines that no Excise Tax would otherwise be payable by Executive, it shall furnish
Executive with a written opinion to such effect, and to the effect that Executive is not required
to report any Excise Tax on Executive’s federal income tax return. The determination by the
Accounting Firm shall be binding upon the Company and Executive (except as provided in paragraph
(c) below).

(c) If it is established pursuant to a final determination of a court or the Internal Revenue
Service (the “IRS”) proceeding which has been finally and conclusively resolved, that Payments have
been made to, or provided for the benefit of, Executive by the Company, which are in excess of the
limitations provided in this Appendix B (hereinafter referred to as an “Excess Payment”), Executive
shall repay the Excess Payment to the Company on demand, together with interest on the Excess
Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of
Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the determination, it is
possible that Payments which will not have been made by the Company should have been made (an
“Underpayment”), consistent with the calculations required to be made under this Appendix B. In
the event that it is determined (i) by the Accounting Firm, the Company (which shall include the
position taken by the Company, or together with its consolidated group, on its federal income tax
return) or the IRS or (ii) pursuant to a determination by a court, that an Underpayment has
occurred, the Company shall pay an amount equal to such Underpayment to Executive within ten (10)
days of such determination together with interest on such amount at the applicable federal rate
from the date such amount would have been paid to Executive until the date of payment. Executive
shall cooperate, to the extent Executive’s expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contests or disputes with the Internal
Revenue Service in connection with the Excise Tax or the determination of the Excess Payment.
Notwithstanding the foregoing, in the event that amounts payable under this Agreement were reduced
pursuant to paragraph (a) of this Appendix B and the value of its stock options is subsequently
redetermined by the Accounting Firm (as defined below) within the context of Treasury Regulation
§1.280G-1 Q/A 33 that reduces the value of the Payments attributable to such options, the Company
shall promptly pay to Executive any amounts payable under this Agreement that were not previously
paid solely as a result of paragraph (a) up to the Safe Harbor Cap. Payments to the Executive will
be made by the end of the Executive’s taxable year next following the year in which the Executive
remits the related taxes, in accordance with Code Section 409A and Treas. Reg. §1.409A-3(i)(1)(v)
(or any similar or successor provisions).

3EX-10.1

LOAN AGREEMENT

THIS AGREEMENT made and entered into on this 24th day of September, 2008, by and between
MITCHAM INDUSTRIES, INC., a Texas corporation, with principal offices at Huntsville, in Walker
County, Texas (herein referred to as “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
$25,000,000.00, bearing interest at the rate of the Wall Street Journal
announced prime rate as such rate is determined daily by Lender according to
the specific terms of said promissory note and interest being payable in
monthly installments and the entire principal being due (together with any
accrued and unpaid interest) on the date two (2) years after the date of the
note and being partly in renewal and extension of the unpaid balance owing
on that certain promissory note dated June 27, 2005 executed by Borrower and
payable to the order of Lender in the original principal sum of
$12,500,000.00 governed by a loan agreement of even date therewith.

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 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 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, of the United States of America, of 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 June 27, 2005 in the amount of $12,500,000.00 as
described in the loan agreement of the same date between Borrower and Lender, the balance of which
note and the liens and security interests securing same are renewed, extended and continued for the
security of hereby Note described in Paragraph II. A of this agreement.

IV. COVENANTS OF 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 a commitment fee of $50,000.00 as consideration for the
Loan. This commitment fee will be due and payable to Lender in two (2)
installments of $25,000.00 each, the first being due on the date of this Loan
Agreement and the second being due on the first anniversary of the date of this
Loan Agreement.	 

	 	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 flows 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 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 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 modern accounting
system in accordance with generally accepted practices for
similarly situated companies, permit Lender to inspect its
books of account and records at all reasonable times, furnish
to Lender such information respecting the business affairs and
financial condition of Borrower as Lender may reasonably
request.	 

	 	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;	 

	 	i.	 	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.	 

	 	l.	 	Maintain Borrower’s primary deposit accounts
with Lender or another depository institution that Lender has
identified as having a participation interest in the Loan.	 

	 	5.	 	That Borrower shall not incur or maintain any indebtedness or
obligations or guarantee the debts or obligations of others in a total
aggregate amount which exceeds $1,000,000.00 other than the indebtedness to
Lender described herein without the prior written approval of Lender.	 

	 	6.	 	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.	 

	 	7.	 	That Borrower shall furnish or cause to be furnished at its expense to
Lender, an appraisal of the equipment lease pool at the end of each calendar
year. Said appraisal shall be performed by an appraiser that is approved by
Lender in its sole discretion.	 

NEGATIVE COVENANTS

	 	8.	 	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;	 

	 	9.	 	Borrower will take no action which would result in any change in the
form of the corporate entity of Borrower or result in any reorganization,
merger or consolidation of Borrower with any other entity during the term of
this agreement without prior written consent of Lender.	 

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

	 	11.	 	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. COVENANTS OF LENDER

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

	 	1.	 	Advances of principal of the loan will be requested by Borrower via
facsimile accompanied by a current borrowing base certificate and confirmed by
a telephone call to Lender. Lender will make advance on the same day as the
request is made if the request is confirmed by 12:00 noon on that day. Lender
will make advance by 12:00 noon the following day if the request is confirmed
after 12:00 noon. Lender shall be bound to make the advances herein on the
following conditions up to the amount specified as the original principal sum
of the note and subject to the limitations described herein and the borrowing
base limitations described below and to the following:	 

	 	a.	 	Compliance by Borrower with all terms and
conditions of this Loan Agreement, with respect to said Loan
and the absence of any default by Borrower hereunder.	 

	 	b.	 	Payment of all fees and expenses contemplated
by this Agreement.	 

	 	c.	 	Execution of all notes, security agreements and
other documents required by Lender.	 

	 	2.	 	The aggregate amount of all advances of principal of the loan
outstanding and unpaid at any time will never exceed the borrowing base of
Borrower calculated as follows:	 

	 	a.	 	70% of Borrower’s trade accounts receivable
arising from services performed by Borrower or Mitcham Canada,
Ltd. for third parties in the United States of America or
Canada or leases of equipment by Borrower or Mitcham Canada,
Ltd. to third parties in the United States of America or Canada
and which have been first invoiced to the third party less than
90 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 of Borrower that is collateral for the loan, 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 at Borrower’s request up to
$5,000,000.00 of the amount of the Loan which would otherwise be available for
advances hereunder. Amounts drawn on any such letters of credit will be
advanced by Lender from the principal of the Loan upon draws made in accordance
with the terms of the letter. The amounts either drawn or available to be
drawn on any such letter of credit will reduce the amount of the principal of
the Loan available to be advanced to Borrower and the aggregate amount of all
advances on the loan, together with all amounts which may be drawn under any
letters of credit will not exceed the original principal amount of the Note
described in Paragraph II. A of this Agreement ($25,000,000.00). Borrower will
pay a fee of 1.0% of the face amount of each domestic letter of credit and 1.5%
of the face amount of each foreign letter of credit for each year in which it
will be in effect. Lender will have no obligation to issue any letter of
credit that is not acceptable to Lender as to form, term, and conditions.	 

	 	C.	 	Lender will, at Borrower’s request, renew, extend and rearrange any
portion of the unpaid balance of the Loan as a separate, amortizing loan
evidenced by a promissory note requiring monthly installments of principal and
interest in amounts sufficient to repay the balance over a period of 48 months
at an interest rate equal to the prime rate published in the Wall Street
Journal at the time of such renewal and rearrangement, adjusted annually
thereafter, in the form attached hereto as Exhibit “B.” 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
($25,000,000.00).	 

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 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.	 	The Borrower’s failure to punctually perform any of the obligations, covenants,
terms, or provisions contained or referred to in this Loan Agreement or in any note
secured by this Loan Agreement or in the Security Agreement, Lease and Rental
Assignment or any other instrument relating to the indebtedness to the Lender which
remains unperformed after thirty (30) days of non-compliance thereof.

	 	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.	 	The Borrower’s dissolution or merger.

	 	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 concerning 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 the Borrower to maintain its existence 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.

VII. 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 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:  David Yeates
	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: David Yeates

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.

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. 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.

1

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/_R. David Yeates      

	 	 	     R. DAVID YEATES

     

Its:      Vice President

     

LENDER

     

2

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