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ASSIGNMENT OF LEASES
In consideration of Ten and No/100 Dollars ($10.00) and other
good and valuable considerations in hand paid, the receipt and sufficiency of
which are hereby acknowledged and confessed, Mitcham Industries, Inc., a Texas
corporation ("Borrower"), having an address of P.O. Box 1175, Huntsville, Texas
77342, and Bank One, Texas, N.A. ("Lender"), having an address of 000 Xxxxxx,
Xxxxxxx, Xxxxx 00000, in connection with and as security for the Indebtedness
described in that certain Letter Loan Agreement of even date herewith by and
among Xxxxxxxx and Lender ("Agreement") enter into this Assignment of Leases
("Assignment"). Unless otherwise defined herein, capitalized terms defined in
the Agreement shall have the same meaning when used herein. Xxxxxxxx and
Xxxxxx hereby agree as follows:
1. Notwithstanding the restrictions against leasing or renting
Collateral in the Agreement, Borrower may lease any item of equipment
("Lease/Purchase Equipment") which is (i) to be leased to a third party under a
lease/purchase agreement upon the terms and conditions set forth in the
Agreement, (ii) purchased by Borrower with funds advanced by Lender under a
Traunch, and (iii) covered by an Advance Note under the Revolving Line of
Credit, but only upon the following conditions:
(a) as used in this Assignment, the term "Lease" shall include any
present or future lease, rental contract and any other contract for
the use or operation of any of the Lease/Purchase Equipment;
(b) Borrower shall have absolute and unconditional primary
liability for payment and performance of all its obligations,
agreements and indemnities under the Agreement, including, without
limitation, payment of all principal and interest payments and other
amounts due or to become due under the Agreement directly to Lender;
(c) each Lease shall be entered into in the ordinary course of
Xxxxxxxx's business and the terms of each Lease shall be arm's length
terms;
(d) each Lease shall not involve the transfer of legal or
beneficial title to the Lease/Purchase Equipment to the lessee except
upon the purchase of such Lease/Purchase Equipment by the lessee and
in accordance with, and as provided in, the Agreement; and
(e) Borrower shall remain liable under each Lease to perform all
of its agreements, obligations and indemnities thereunder and Lender
shall have absolutely no obligation or liability under any Lease.
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2. As collateral security for all of its agreements, obligations
and indemnities under the Agreement, Borrower hereby assigns to Lender, and
hereby grants to Lender a continuing first priority security interest in, all
of Borrower's right, title and interest in, to and under (a) the Leases and all
rental payments and other monies from time to time payable to or receivable by
Borrower under the Leases, including all proceeds thereof, and (b) all of
Borrower's rights, powers and remedies under the Leases. Borrower represents,
warrants and covenants to Lender: (i) that the collateral described in the
immediately preceding sentence is now and will remain at all times free and
clear of any liens, security interests and other claims other than the rights
of the lessees under the Leases and the rights of Lender under the Agreement
and this Assignment; and (ii) that if an event of default occurs under the
Agreement, then Lender shall have all the rights and remedies of a secured
party under the applicable Uniform Commercial Code as well as the rights and
remedies provided under the Agreement and/or the Leases, by law or in equity.
3. Notwithstanding anything to the contrary contained herein, the
liens created by this Assignment are junior, second and inferior to the liens
against the Collateral described in that certain Assignment of Leases from
Borrower in favor of Xxxxxx and Banc One Leasing Corporation (collectively, the
lender thereunder), executed by Xxxxxxxx as of January 31, 1996 (the "Bank One
First Lien"). Neither Borrower nor Lender intend that there be, and there
shall not in any event be, a merger of any of the liens created by this
Assignment with the title, any other lien or other interest of Lender in the
Collateral by virtue of the Bank One First Lien or any of the Loan Documents
(as defined in that certain Letter Loan Agreement dated as of January 31, 1996
entered into by and among Borrower, Lender, and Banc One Leasing Corporation),
and the parties hereto expressly provide that each such interest in any lien
created hereby on one hand and any other title, lien or other interest on the
other are and remain at all times SEPARATE and DISTINCT.
4. Except as expressly amended by this Assignment, the Agreement
remains unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
as of January 16, 1997.
BORROWER:
MITCHAM INDUSTRIES, INC.,
a Texas Corporation
By: /s/ XXXXX X. XXXXXXX, XX.
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Xxxxx X. Xxxxxxx, Xx., President
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LENDER:
BANK ONE, TEXAS, N.A.
By: /s/ XXXXXX X. XXXXX, III
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Name: Xxxxxx X. Xxxxx, III
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Title: Vice President
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