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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 5, 1997

REGISTRATION NO. 333-19997
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2

TO
FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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MITCHAM INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

TEXAS 5008 76-0210849
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) No.)

BILLY F. MITCHAM, JR.
POST OFFICE BOX 1175
44000 HIGHWAY 75 SOUTH
HUNTSVILLE, TEXAS 77342
(409) 291-2277
(Name, address, including zip code and telephone number, including
area code, of Registrant's principal executive offices and agent for service)
---------------------
Copies to:

SABRINA A. MCTOPY ALAN P. BADEN
NORTON, JACOBS, KUHN & MCTOPY, L.L.P. VINSON & ELKINS L.L.P.
1111 BAGBY, SUITE 2450 2800 FIRST CITY TOWER
HOUSTON, TEXAS 77002-2546 HOUSTON, TEXAS 77002-6760
(713) 659-1131 (713) 758-2222

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE

=====================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------

Common Stock, $.01 par value ("Common
Stock").............................. 3,450,000 $8.50 $29,325,000
- ---------------------------------------------------------------------------------------------------------------------
Representatives' Warrants.............. 200,000 $.001 $200
- ---------------------------------------------------------------------------------------------------------------------
Common Stock underlying the
Representatives' Warrants(3)......... 200,000 $10.20 $2,040,000
- ---------------------------------------------------------------------------------------------------------------------
Total........................ $31,365,200 $9,505
=====================================================================================================================

(1) Includes 450,000 shares subject to an option granted to the Underwriters to
cover over-allotments, if any.

(2) Estimated solely for purposes of calculating the registration fee.

(3) The Registration Statement also covers any additional securities that may
become issuable pursuant to the anti-dilution provisions of the
Representatives' Warrants.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
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Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the Registration Statement
becomes effective. This Prospectus shall not constitute an offer to sell or
the solicitation of an offer
to buy nor shall there be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.

SUBJECT TO COMPLETION, DATED MARCH 5, 1997

3,000,000 SHARES

[MITCHAM INDUSTRIES, INC., LOGO]
COMMON STOCK

Of the 3,000,000 shares of Common Stock offered hereby, 2,500,000 shares
are being offered by Mitcham Industries, Inc. (the "Company"), and 500,000
shares are being offered by the selling shareholders (the "Selling
Shareholders"). The Company will not receive any proceeds from the sale of
shares by the Selling Shareholders.

The Common Stock is quoted on the Nasdaq National Market under the symbol
"MIND." The last reported sale price of the Common Stock on February 28, 1997,
as reported by the Nasdaq National Market, was $9 1/8 per share. See "Price
Range of Common Stock."

FOR A DISCUSSION OF CERTAIN MATERIAL FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" COMMENCING
ON PAGE 6 HEREOF.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

=======================================================================================================================
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) SHAREHOLDERS(2)
- -----------------------------------------------------------------------------------------------------------------------

Per share.............................. $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $ $
=======================================================================================================================

(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. Does not reflect additional compensation
to the Underwriters in the form of (i) a non-accountable expense allowance
of $ ($ if the Underwriters' over-allotment option is
exercised in full) and (ii) warrants to purchase an aggregate of 200,000
shares of Common Stock at 120% of the Price to Public for two years
beginning one year after the effective date of the Registration Statement of
which this Prospectus is a part. For additional information with respect to
the arrangements between the Company and the Representatives, see
"Underwriting."

(2) Before deducting offering expenses payable by the Company, estimated to be
approximately $225,000.

(3) The Company and the Selling Shareholders have granted to the Underwriters a
30-day option to purchase up to 450,000 additional shares of Common Stock
solely to cover over-allotments, if any, on the same terms and conditions as
the shares offered hereby. If such option is exercised in full, the total
Price to Public, Underwriting Discounts and Commissions, Proceeds to Company
and Proceeds to Selling Shareholders will be $ , $ ,
$ and $ , respectively. See "Underwriting."

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

The shares of Common Stock are offered by the several Underwriters named
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that delivery of such
shares will be made at the offices of Rodman & Renshaw, Inc., New York, New
York, on or about , 1997.
------------------------------
RODMAN & RENSHAW, INC. SIMMONS & COMPANY
INTERNATIONAL

The date of this Prospectus is , 1997.
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[ILLUSTRATIONS]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF THE COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION
IN THE COMMON STOCK MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY
BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS
(IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET MAKING
TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE
WITH RULE 103 OF REGULATION M. SEE "UNDERWRITING."

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PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is qualified
in its entirety by, the more detailed information and financial statements
(including the notes thereto) appearing elsewhere in this Prospectus and
incorporated herein by reference. The term "Company" refers to Mitcham
Industries, Inc. and its wholly-owned subsidiary, Mitcham Canada Ltd., an
Alberta corporation. Unless otherwise indicated, all financial and share
information set forth in this Prospectus assumes no exercise of the
Underwriters' over-allotment option and a public offering price of $8 5/8 per
share. See "Glossary of Terms" for certain terms relating to the seismic
industry used in this Prospectus. Investors should carefully consider the
information set forth in "Risk Factors" beginning on page 6.

THE COMPANY

Mitcham Industries, Inc. leases and sells seismic data acquisition
equipment to companies engaged in the oil and gas industry. The Company believes
it is the leading independent lessor of land-based three-dimensional ("3-D")
seismic data acquisition equipment, including channel boxes and other peripheral
equipment. Seismic data acquisition equipment is used in the identification and
graphic definition of subsurface geologic structures and formations that
potentially contain oil and gas. Channel boxes are remote data acquisition units
that collect and transmit seismic data. The Company has exclusive lease referral
and supply agreements with the two principal manufacturers of land-based 3-D
seismic equipment, Input/Output, Inc. ("I/O") and Societe E'tudes Recherches et
Construction Electroniques, S.A. ("SERCEL"). From January 1, 1994 through
December 31, 1996, the Company's lease fleet of 3-D channel boxes increased from
85 to approximately 2,000 (or from 510 channels to approximately 12,000
channels). Earnings before interest, taxes, depreciation and amortization
("EBITDA") of approximately $4.0 million for the fiscal year ended January 31,
1996 represented an increase of 90.4% over the fiscal year ended January 31,
1995, and EBITDA of approximately $4.6 million for the nine months ended October
31, 1996 represented an increase of 82.6% over the same prior year period.

Demand for channel boxes has increased significantly in recent years
primarily due to the increasing use of 3-D seismic surveys. Current 3-D seismic
techniques use a greater number of channels and channel boxes than two
dimensional ("2-D") surveys, thereby providing higher resolution data for a
better representation of the earth's subsurface. Additionally, oil and gas
companies are contracting for 3-D surveys over larger geographical areas and
often specify an increase in the concentration of channel boxes as a means of
increasing data resolution. Consequently, seismic survey companies frequently
use more than twice the number of channels for surveys than they typically own.
The Company believes that many companies providing land-based seismic surveys
will meet this additional requirement by leasing channel boxes and supporting
peripheral equipment on a short-term basis rather than making the substantial
capital expenditures necessary to purchase such equipment.

The Company leases its seismic equipment primarily to seismic data
acquisition companies and major oil and gas exploration companies conducting
land-based seismic data acquisition surveys. The leases generally have terms
between three and nine months and are renewable thereafter on a month-to-month
basis. Rates for 3-D channel boxes range from between 6% to 8% per month of the
equipment's purchase price. For the nine months ending October 31, 1996, the
Company maintained a utilization rate of its 3-D channel boxes in excess of 80%.

The Company has entered into supply and exclusive referral agreements with
each of I/O and SERCEL. The Company believes that most of the land-based 3-D
seismic systems and equipment currently in use and being put into use are I/O
and SERCEL systems. The agreement with I/O, originally entered into in February
1994, has been the source of a majority of the Company's lease pool equipment to
date. Pursuant to this agreement, I/O must refer to the Company, on an exclusive
basis, any requests it receives to lease its 3-D channel boxes and certain
peripheral equipment in North and South America. A condition of the agreement
with I/O is that the Company must purchase, at favorable rates, $13.3 million of
equipment from I/O by May 31, 2000. Through December 31, 1996, the Company has
met $4.8 million of this requirement.

SERCEL must refer to the Company all requests it receives to lease its 3-D data
acquisition equipment and peripheral equipment. This agreement also provides
that the Company must purchase, at favorable rates, up to $10.2 million of 3-D
data acquisition equipment and other field equipment from SERCEL. Through
December 31, 1996, the Company has met $4.5 million of this requirement. The
second agreement provides that until September 19, 1999, subject to earlier
termination after September 20, 1997, the Company will be SERCEL's exclusive
sales agent in Canada. See "Business -- I/O Agreement" and "-- SERCEL
Agreements."

BUSINESS STRATEGY

The Company's business strategy is to meet the expanding needs of users of
3-D seismic equipment through its leasing and support services. In order to
accomplish this, the Company has identified the following major objectives:

- Enlarge and diversify its lease pool of seismic equipment. To meet
customer demand, the Company will continue to increase its lease pool of
channel boxes and peripheral seismic equipment, such as seismic
vibrators, vibrator control electronics and geophones. The Company
believes that the availability of a larger and more complete pool of 3-D
seismic equipment for lease will encourage seismic survey companies to
increasingly lease, rather than purchase, such equipment. The Company is
also evaluating the feasibility of a lease pool of marine seismic
equipment.

- Expand its international presence. The Company receives referrals from
SERCEL on a worldwide basis and is its exclusive sales agent in Canada,
where the Company has an office in Calgary, Alberta. The Company believes
that its alliances with I/O and SERCEL will help the Company to further
penetrate, on a cost-effective basis, international markets, where such
manufacturers are well-recognized and have well-developed business
relationships. The Company is also evaluating the feasibility of opening
additional foreign offices.

- Develop and enhance alliances with major seismic equipment manufacturers.
The Company uses alliances with manufacturers such as I/O and SERCEL to
acquire and build its lease pool of equipment and increase customer
referrals. The Company continues to seek to expand the scope of these
alliances, as well as develop similar arrangements with other equipment
manufacturers.

The Company was formed in January 1987. Its principal offices are located
at 44000 Highway 75 South, (Post Office Box 1175), Huntsville, Texas, and its
telephone number is (409) 291-2277.

THE OFFERING

Common Stock Offered by the Company................ 2,500,000
Common Stock Offered by the Selling Shareholders... 500,000
Common Stock to be Outstanding after the
Offering......................................... 6,974,880 shares (1)
Use of Proceeds.................................... To purchase additional 3-D seismic data
acquisition equipment for the Company's lease
pool, for repayment of debt and for other
working capital purposes. See "Use of Proceeds."
Nasdaq National Market Symbol...................... "MIND"

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(1) Does not include (i) 293,750 shares of Common Stock issuable upon the
exercise of options granted and an additional 106,250 shares that may be
granted in the future under stock option plans, (ii) 246,723 shares of
Common Stock issuable upon the exercise of certain warrants and (iii)
200,000 shares of Common Stock issuable upon the exercise of the
Representatives' Warrants. See "Description of Capital Stock and Other
Securities." Does not reflect the exercise of a warrant for 8,380 shares of
Common Stock to be sold in the Offering by one of the Selling Shareholders.
See "Principal and Selling Shareholders."
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SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following table sets forth selected financial data of the Company for
each of the four fiscal years ended January 31, 1996, which was derived from the
Company's audited financial statements, and the fiscal year ended January 31,
1992, which was derived from unaudited financial statements of the Company. Also
set forth below is selected financial data for the nine months ended October 31,
1995 and 1996 and at October 31, 1996, which was derived from the unaudited
financial statements of the Company. In the opinion of management of the
Company, the unaudited financial statements include all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation of the
financial data for such period. The results of operations for the nine months
ended October 31, 1995 and 1996 are not necessarily indicative of results for a
full fiscal year. The data should be read in conjunction with the Financial
Statements (including the notes thereto) and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
herein.

NINE MONTHS
FISCAL YEAR ENDED JANUARY 31, ENDED OCTOBER 31,
----------------------------------------------- ------------------
1992 1993 1994 1995 1996 1995 1996
----------- ------ ------ ------ ------ ------- -------
(UNAUDITED) (UNAUDITED)

SELECTED STATEMENTS OF OPERATIONS DATA:
Revenues:
Leases of seismic equipment........ $ 602 $1,266 $1,601 $2,424 $5,157 $3,431 $5,356
Sales of seismic equipment......... 1,510 1,156 2,926 2,860 2,135 1,643 2,007
------ ------ ------ ------ ------ ------ ------
Total......................... 2,112 2,422 4,527 5,284 7,292 5,074 7,363
Expenses:
Seismic equipment subleases........ 335 915 896 245 251 222 111
Sales of seismic equipment......... 1,002 796 1,772 2,027 1,085 1,000 1,261
General and administrative......... 651 655 655 924 1,344 990 1,199
Depreciation....................... 17 29 62 363 1,331 825 1,951
Provision for doubtful accounts.... -- -- 38 35 627 372 418
------ ------ ------ ------ ------ ------ ------
Total expenses................ 2,005 2,395 3,423 3,594 4,638 3,409 4,940
------ ------ ------ ------ ------ ------ ------
Other income (expense)............... (44) 15 4 (149) 17 20 49
------ ------ ------ ------ ------ ------ ------
Income before income taxes........... 63 42 1,108 1,541 2,671 1,685 2,472
Provision for income taxes........... 19 7 405 541 958 605 854
------ ------ ------ ------ ------ ------ ------
Net income........................... $ 44 $ 35 $ 703 $1,000 $1,713 $1,080 $1,618
====== ====== ====== ====== ====== ====== ======
SELECTED PER SHARE DATA:
Net income(1)........................ $ 0.03 $ 0.03 $ 0.51 $ 0.66 $ 0.52 $ 0.34 $ 0.37
====== ====== ====== ====== ====== ====== ======
Weighted average common shares
outstanding(2)..................... 1,380 1,380 1,380 1,514 3,306 3,170 4,431
SELECTED CASH FLOW AND OTHER DATA:
EBITDA(3)............................ $ 74 $ 75 $1,186 $2,113 $4,023 $2,516 $4,593
Capital expenditures................. $ -- $ 28 $ 900 $4,496 $5,765 $4,099 $8,890

AT JANUARY 31, AT OCTOBER 31, 1996
---------------------------------------------- ------------------------
1992 1993 1994 1995 1996 ACTUAL AS ADJUSTED(5)
----------- ---- ------ ------ ------- ------- --------------
(UNAUDITED) (UNAUDITED)

SELECTED BALANCE SHEET DATA:
Total assets.................. $581 $615 $2,427 $8,199 $12,239 $23,252 $38,421
Total liabilities............. 342 341 1,450 2,023 4,191 9,516 5,116
Long-term debt(4)............. -- -- -- 261 1,173 2,910 --
Shareholders' equity.......... 239 274 977 6,176 8,048 13,736 33,305

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(1) There was no dilutive effect to earnings per share for the fiscal years
ended January 31, 1992, 1993, 1994 and 1995 and for the nine months ended
October 31, 1995. Fully diluted earnings per share was $0.50 for the fiscal
year ended January 31, 1996 and $0.36 for the nine months ended October 31,
1996.
(2) The fully diluted weighted average common shares outstanding was 3,403,000
at January 31, 1996 and 4,489,000 at October 31, 1996.
(3) EBITDA is income before interest, taxes, depreciation and amortization.
EBITDA is a financial measure commonly used in the Company's industry and
should not be considered in isolation or as a substitute for net income,
cash flow provided by operating activities or other income or cash flow data
prepared in accordance with generally accepted accounting principles or as a
measure of a company's profitability or liquidity.
(4) Long-term debt includes long-term debt net of current maturities and capital
lease obligations net of current portion.
(5) As adjusted to reflect receipt by the Company of estimated net proceeds from
the issuance of 2,500,000 shares of Common Stock and the application of such
proceeds. See "Use of Proceeds" and "Capitalization."
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The discussion in this Prospectus contains forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
significantly from those discussed herein. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
in "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Business," as well as
those discussed elsewhere in this Prospectus. Statements contained in this
Prospectus that are not historical facts are forward-looking statements that are
subject to the safe harbor created by the Private Securities Litigation Reform
Act of 1995.

RISK FACTORS

In evaluating an investment in the Common Stock being offered hereby,
prospective investors should consider carefully, among other things, the
following risk factors.

POSSIBLE ADVERSE EFFECT OF INSTABILITY OF OIL AND GAS INDUSTRY AND DEMAND FOR
SERVICES

Demand for the Company's services depends upon the level of spending by oil
and gas companies for exploration, production, and development activities, as
well as on the number of crews for land-based seismic data acquisition operating
in the world, and especially in North America. Fluctuations in the price of oil
and gas in response to relatively minor changes in the supply and demand for oil
and natural gas continue to have a major effect on these activities and thus, on
the demand for the Company's services. Although published industry sources
indicate that the number of seismic crews has decreased in the last five years,
the Company believes that utilization of 3-D seismic equipment has increased.
There can be no assurance of an increased demand for additional 3-D seismic
equipment or as to the level of future demand for the Company's services. See
"Business."

DEPENDENCE UPON ADDITIONAL LEASE CONTRACTS; UNCERTAIN FUTURE RESULTS

The Company's operating risks occur primarily in its seismic equipment
leasing business. The Company's leases typically have a term of three to nine
months and provide gross revenues equal to approximately 20% to 70% of the
original acquisition cost of the equipment, thereby recovering only a portion of
the Company's capital investment. The Company's ability to generate lease
revenues, and thus its profitability, is dependent upon obtaining additional
lease contracts after the termination of an initial lease. However, lessees are
under no obligation to, and frequently do not, continue to lease seismic
equipment after the expiration of a lease. Although the Company has been
successful in obtaining additional lease contracts with other lessees after the
termination of three to nine month equipment leases, there can be no assurance
that it will continue to do so. The Company's failure to obtain additional or
extended leases beyond the initial term would have a material adverse effect on
its operations and financial condition. See "Business -- Operations."

DEPENDENCE ON KEY PERSONNEL

The Company's success is dependent on, among other things, the services of
Billy F. Mitcham, Jr., the Chairman of the Board, President and Chief Executive
Officer of the Company. Mr. Mitcham's employment agreement has an initial term
through January 15, 2002, and is automatically extended on a year-to-year basis
until terminated by either party giving 30 days notice prior to the end of the
current term (subject to earlier termination upon certain stated events). The
agreement provides for an annual salary of $150,000 and a bonus at the
discretion of the Company's Board of Directors. The agreement also prohibits Mr.
Mitcham from engaging in any business activities that are competitive with the
Company's business and from diverting any of the Company's customers to a
competitor, for two years after the termination of his employment. The Company
has obtained a $1.0 million key employee life insurance policy payable to the
Company in the event of Mr. Mitcham's death. The loss of the services of Mr.
Mitcham could have a material adverse effect on the Company. In particular, the
Exclusive Lease Referral Agreement with I/O (the "I/O Agreement") is terminable
at such time as Mr. Mitcham is no longer the President of the Company and the
Exclusive Equipment Lease Agreement with SERCEL (the "SERCEL Lease Agreement")
is terminable at such time

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as he is no longer employed by the Company in a senior management capacity. See
"Management -- Employment Agreement with Billy F. Mitcham, Jr."

CUSTOMER CONCENTRATION AND CREDIT LOSSES

The Company typically leases and sells significant amounts of seismic
equipment to a relatively small number of customers, the composition of which
changes from year to year as leases are negotiated and concluded and equipment
needs vary. Therefore, at any one time, a large portion of the Company's
revenues may be derived from a limited number of customers, and its ability to
maintain profitability includes risks associated with the creditworthiness and
profitability of those customers. In the fiscal years ended January 31, 1994,
1995 and 1996, the single largest customer accounted for approximately 36%, 16%
and 18%, respectively, of the Company's total revenues. The termination of any
large seismic lease could have a material adverse effect on the Company's
operations if the Company does not replace such business on a timely basis. See
"Business -- Customers; Sales and Marketing."

Grant Geophysical, Inc. ("Grant") filed for bankruptcy protection during
December 1996. Revenues derived from Grant amount to 17.8% of total revenues for
the eleven-month period ended December 31, 1996. As of that date, amounts due
from Grant totalled approximately $1.0 million. During December 1996, the
Company increased its allowance for trade accounts receivable from $615,000 at
October 31, 1996 to $1.5 million at December 31, 1996, which amount was intended
to fully reserve all amounts due from Grant and provide for any potential loss
associated with the Company's remaining trade accounts receivable. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

TECHNOLOGICAL OBSOLESCENCE

The Company has a substantial capital investment in 3-D seismic equipment.
In addition, under the I/O Agreement and the SERCEL Lease Agreement, the Company
is required to make a substantial additional investment in 3-D seismic and other
peripheral equipment. The Company believes that the technology represented by
the 3-D equipment in service and to be acquired from I/O and SERCEL will not
become obsolete prior to the Company's recovery of its initial investment.
However, there can be no assurance that manufacturers of seismic equipment will
not develop alternative systems that would have competitive advantages over
seismic systems now in use, thus having a potentially adverse effect on the
Company's ability to profitably lease its existing 3-D seismic equipment. In the
past, the Company has been successful in avoiding material losses caused by
technological obsolescence by selling its older technology 2-D seismic equipment
in the international market and, to a lesser extent, to smaller seismic survey
firms in the domestic market. However, there can be no assurance that the
Company will be able to sell technologically obsolete equipment in the future.
See "Business -- I/O Agreement" and "-- SERCEL Agreements."

VULNERABILITY TO WEATHER CONDITIONS AND SEASONAL RESULTS

The first and fourth quarters of the Company's fiscal year have
historically accounted for and are expected in the future to account for a
greater portion of the Company's revenues than do the second and third quarters
of its fiscal year. This fluctuation in revenues is primarily due to the
increased seismic survey activity in Canada from October through March, which
significantly affects the Company because about one-half of the Company's total
revenues are historically attributable to Canadian operations. This seasonal
pattern may cause the Company's results of operations to vary significantly from
quarter to quarter. Accordingly, period to period comparisons are not
necessarily meaningful and should not be relied on as indicative of future
results. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Seasonality" and "Business -- Seismic Equipment
Leasing."

DEPENDENCE UPON KEY SUPPLIERS

The Company relies upon and has agreements with I/O, SERCEL and Pelton
Company, Inc. ("Pelton"), a manufacturer and supplier of vibrator control
electronics, to manufacture and sell to the

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Company the seismic equipment that the Company leases and sells to its customers
and, to a lesser extent, to refer leasing customers to the Company. The
termination of the agreements for any reason, including any failure by the
Company to meet the minimum purchase requirements under the I/O Agreement or the
SERCEL Lease Agreement, could materially adversely affect the Company's
business. While the Company does not anticipate any difficulty in obtaining
seismic equipment or lease referrals from I/O, SERCEL or Pelton based upon past
experience or in meeting the minimum purchase requirements under the I/O
Agreement or the SERCEL Lease Agreement, any such occurrence could have a
material adverse effect upon the Company's business, financial condition and
results of operations. See "Business -- I/O Agreement," "-- SERCEL Agreements"
and "-- Pelton Agreement."

COMPETITION

Competition in the leasing of seismic equipment is fragmented, and the
Company is aware of numerous companies that engage in such equipment leasing.
The Company believes that its competitors do not lease seismic equipment of
several manufacturers or have as extensive a seismic equipment lease pool as
does the Company. The Company also believes that its competitors do not have
exclusive lease referral agreements with suppliers similar to the Company's.
Competition exists to a lesser extent from seismic data acquisition firms
seeking to generate revenue from equipment that is temporarily idle. Under the
I/O Agreement, I/O and its subsidiary, Global Charter Corporation ("Global")
retain the right to continue to (i) lease channel boxes in certain situations
where the Company and a prospective lessee cannot or do not enter into a lease,
as more fully described in the I/O Agreement; (ii) lease channel boxes with a
purchase option in North and South America; and (iii) lease channel boxes
outside of North and South America.

The Company has several competitors engaged in seismic equipment sales,
including companies providing land-based seismic surveys and major oil and gas
exploration companies that use seismic equipment, many of which have
substantially greater financial resources than the Company. There are also
numerous smaller competitors who, in the aggregate, generate significant revenue
from the sale of seismic survey equipment. See "Business -- I/O Agreement,"
" -- SERCEL Agreements" and "-- Competition."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of significant amounts of Common Stock in the public market following
this Offering could adversely affect prevailing market prices. The Company's
executive officers and directors, who collectively own 1,175,070 shares, or
26.3%, of the outstanding Common Stock, have agreed that for a period of 180
days after the date of this Prospectus they will not offer for sale, sell or
otherwise dispose of any shares of Common Stock (other than the 325,000 shares
being sold herein by the executive officers and directors who are Selling
Shareholders) or any securities convertible into or exchangeable for shares of
Common Stock, without the prior written consent of Rodman & Renshaw, Inc. on
behalf of the Underwriters. Upon the expiration of such agreements, all of the
shares held by such persons will be eligible for sale subject to the volume
limitations and other restrictions of Rule 144 under the Securities Act of 1933,
as amended (the "Securities Act"). There are also outstanding under the
Company's 1994 Stock Option Plan and 1994 Non-Employee Director Stock Option
Plan (collectively, the "Stock Option Plans") options to purchase 293,750 shares
of Common Stock, of which 250,250 are currently exercisable. The Company has
registered under the Securities Act the shares issuable upon the exercise of
such options and such shares are eligible for resale in the public market,
except that any such shares issued to affiliates are subject to the volume
limitations and other restrictions of Rule 144. In addition, there are
outstanding warrants to purchase 246,723 shares of Common Stock, of which
warrants to purchase 196,723 shares are currently exercisable. In connection
with this Offering, the Company has agreed to sell warrants to the
Representatives to purchase from the Company up to 200,000 shares of Common
Stock, exercisable in whole or in part at any time during the two-year period
commencing one year after the effective date of the Registration Statement of
which this Prospectus is a part. See "Dilution," "Shares Eligible for Future
Sale" and "Underwriting."

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10

DILUTION

Purchasers of Common Stock in this Offering will experience immediate and
substantial dilution of $3.79 in net tangible book value per share as of October
31, 1996. See "Dilution."

NO ANTICIPATED DIVIDENDS

The Company has never paid cash dividends on its Common Stock and does not
presently anticipate paying any cash dividends on the Common Stock in the
foreseeable future. In addition, the loan agreement between the Company and its
commercial lenders prohibits the payment of dividends. See "Dividend Policy."

POSSIBLE ADVERSE EFFECT OF ISSUANCE OF PREFERRED STOCK WITHOUT SHAREHOLDER
APPROVAL

The Company's Articles of Incorporation, as amended, authorize the issuance
of 1,000,000 shares of "blank check" preferred stock, par value $1.00 per share
("Preferred Stock"), with such designations, rights and preferences as may be
determined from time to time by the Board of Directors. No shares of Preferred
Stock will be outstanding as of the consummation of this Offering. However,
because the Board of Directors is empowered to issue Preferred Stock with such
preferences and rights as it determines, it may afford the holders of any series
of Preferred Stock preferences, rights or voting powers superior to those of the
holders of Common Stock. Although the Company has no present intention to issue
any shares of its Preferred Stock, there can be no assurance that the Company
will not do so in the future. See "Description of Capital Stock and Other
Securities -- Preferred Stock."

LIMITATION ON DIRECTOR LIABILITY

The Company's Articles of Incorporation, as amended, provide, as permitted
by governing Texas law, that a director of the Company shall not be personally
liable to the Company or its shareholders for monetary damages for breach of
fiduciary duty as a director, with certain exceptions. These provisions may
discourage shareholders from bringing suit against a director for breach of
fiduciary duty and may reduce the likelihood of derivative litigation brought by
shareholders on behalf of the Company against a director.

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11

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,500,000 shares of
Common Stock being offered hereby (assuming a public offering price of $8 5/8
per share and after deducting underwriting discounts and commissions and
estimated expenses of the Offering) are estimated to be approximately $19.6
million ($22.5 million if the Underwriters' over-allotment option is exercised
in full). Approximately (i) $12.0 million of the net proceeds will be used to
purchase additional 3-D seismic data acquisition equipment, including the $2.35
million remaining minimum purchase requirement under the I/O Agreement through
May 31, 1998, (ii) $4.4 million will be used to pay outstanding debt to
commercial lenders, (iii) $1.0 million will be used for expenses related to the
opening of the Company's Calgary, Alberta, Canada office, and (iv) $250,000 will
be used to improve computer and inventory tracking systems. The remainder of the
net proceeds will be used for other general corporate purposes.

Of the $4.4 million that will be used to pay debt to commercial lenders,
approximately $1.0 million will be used to pay the Company's revolving line of
credit (the "Working Capital Revolver") with Bank One, Texas, N.A. ("Bank One")
and $3.4 million will be used to pay its loan (the "Term Loan") with Banc One
Leasing Corporation ("Banc One Leasing"). Approximately $1.0 million of the Term
Loan was advanced in January 1996 primarily to pay amounts due to I/O for 3-D
channel boxes acquired in the 1996 fiscal year. In March 1996, an additional
approximately $3.1 million of the Term Loan was advanced to the Company, of
which approximately $1.5 million was used to pay all amounts outstanding under a
previous equipment loan and line of credit and to pay amounts due to I/O for
seismic equipment acquired in February and March 1996. Amounts may be advanced
under the Term Loan solely for equipment purchases and are payable in monthly
installments of principal and interest through January 31, 2000 and bear
interest at 9.5%. Amounts borrowed under the Working Capital Revolver bear
interest at a floating rate of interest equal to Banc One's base rate of
interest ("Base Rate") plus 0.5%, payable quarterly, and the outstanding
principal balance is due January 31, 1998. Both the Working Capital Revolver and
the Term Loan are secured by an assignment of the Company's accounts receivable,
inventory, leases and equipment, including its lease pool equipment.

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12

PRICE RANGE OF COMMON STOCK

The Common Stock is traded on the Nasdaq National Market under the symbol
"MIND." Prior to December 19, 1994, there was no public market for the Common
Stock. Prior to April 26, 1996, the Common Stock was traded on the Nasdaq
SmallCap Market.

The following table sets forth, for the periods indicated, the high and low
bid prices of the Company's Common Stock as reported on the Nasdaq SmallCap
Market and the high and low sales prices as reported on the Nasdaq National
Market, as applicable, after April 26, 1996.

HIGH LOW
---- ---

Fiscal Year Ended January 31, 1995:
Fourth Quarter (commencing December 19, 1994)............. $3 1/4 $2 5/8
Fiscal Year Ended January 31, 1996:
First Quarter............................................. $3 1/8 $2 5/16
Second Quarter............................................ 4 15/32 2 5/16
Third Quarter............................................. 4 3/4 3 5/8
Fourth Quarter............................................ 5 5/8 3 3/4
Fiscal Year Ended January 31, 1997:
First Quarter............................................. $8 $5 1/8
Second Quarter............................................ 8 5 3/4
Third Quarter............................................. 6 1/2 5 3/8
Fourth Quarter............................................ 9 7/8 5 7/8

On February 28, 1997, the last reported sale price for the Common Stock on
the Nasdaq National Market was $9 1/8. As of February 28, 1997, there were 45
shareholders of record of the Common Stock.

DIVIDEND POLICY

The Company has not paid any cash dividends on the Common Stock since its
inception, and the Board of Directors does not contemplate the payment of cash
dividends in the foreseeable future. It is the present policy of the Board of
Directors to retain earnings, if any, for use in developing and expanding the
Company's business. In addition, the Company's loan agreements with Bank One and
Banc One Leasing prohibit the payment of dividends without their prior consent.
In the future, payment of dividends by the Company will also depend on the
Company's financial condition, results of operations and such other factors as
the Board of Directors may consider. See "Management's Discussion of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

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13

CAPITALIZATION

The following table sets forth the capitalization of the Company at October
31, 1996 and as adjusted to reflect the sale and issuance by the Company of
2,500,000 shares of Common Stock at an assumed offering price of $8 5/8 per
share, and the application of the net estimated proceeds therefrom, as described
under "Use of Proceeds." This table should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's Financial Statements and notes thereto that are
included elsewhere in this Prospectus.

AT OCTOBER 31, 1996
----------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)

Long-term debt, less current portion........................ $ 2,910 $ --
Shareholders' equity:
Preferred stock, $1.00 par value; 1,000,000 shares
authorized; none issued and outstanding................ -- --
Common stock, $.01 par value; 20,000,000 shares
authorized; 4,378,650 shares issued and outstanding and
6,878,650 shares as adjusted(1)(2)..................... 44 69
Additional paid-in capital................................ 8,398 27,942
Retained earnings......................................... 5,294 5,294
------- -------
Total shareholders' equity........................ 13,736 33,305
------- -------
Total capitalization.............................. $16,646 $33,305
======= =======

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

(1) Does not include (i) 293,750 shares of Common Stock issuable upon the
exercise of options granted and an additional 106,250 shares that may be
granted in the future under stock option plans, (ii) 246,723 shares of
Common Stock issuable upon the exercise of certain warrants, and (iii)
200,000 shares of Common Stock issuable upon the exercise of the
Representatives' Warrants. See "Description of Capital Stock and Other
Securities."

(2) The number of shares issued and outstanding after completion of the Offering
does not reflect the exercise of a warrant for 8,380 shares of Common Stock
to be sold in the Offering by one of the Selling Shareholders. See
"Principal and Selling Shareholders."

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14

DILUTION

The Company's net tangible book value as of October 31, 1996 was
approximately $13.7 million, or $3.14 per share. Net tangible book value per
share is equal to the total tangible assets of the Company minus total
liabilities divided by the number of shares of Common Stock outstanding. After
giving effect to the sale of the 2,500,000 shares of Common Stock offered by the
Company hereby and the receipt of net proceeds of such sale (assuming a public
offering price of $8 5/8 per share and after deducting underwriting discounts
and commissions and estimated expenses payable by the Company), the net tangible
book value of the Company at October 31, 1996 on a pro forma basis would have
been approximately $33.3 million, or $4.84 per share, representing an immediate
dilution in pro forma net tangible book value of $3.79 per share, or 43.9%, to
new investors. The following table illustrates this per share dilution:

Assumed public offering price per share..................... $8.63
-----
Net tangible book value per share as of October 31, 1996,
before this Offering................................... $3.14
Increase in net tangible book value per share attributable
to new investors....................................... 1.70
-----
Pro forma net tangible book value per share as of October
31, 1996, giving effect to this Offering(1)............... 4.84
-----
Dilution in net tangible book value to new investors........ $3.79
=====

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

(1) Does not reflect the exercise of a warrant for 8,380 shares of Common Stock
to be sold in the Offering by one of the Selling Shareholders. See
"Principal and Selling Shareholders."

If the Underwriters' over-allotment is exercised in full, the pro forma net
tangible book value per share of Common Stock after this Offering would be $5.00
per share, which would result in dilution to new investors of $3.63 per share,
or 42.0%.

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SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

NINE MONTHS
ENDED
FISCAL YEAR ENDED JANUARY 31, OCTOBER 31,
----------------------------------------------- ---------------
1992 1993 1994 1995 1996 1995 1996
----------- ------ ------ ------ ------ ------ ------
(UNAUDITED) (UNAUDITED)

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

(1) There was no dilutive effect to earnings per share for the fiscal years
ended January 31, 1992, 1993, 1994 and 1995 and for the nine months ended
October 31, 1995. Fully diluted earnings per share was $0.50 for the fiscal
year ended January 31, 1996 and $0.36 for the nine months ended October 31,
1996.

(2) The fully diluted weighted average common shares outstanding was 3,403,000
at January 31, 1996 and 4,489,000 at October 31, 1996.

(3) EBITDA is income before interest, taxes, depreciation and amortization.
EBITDA is a financial measure commonly used in the Company's industry and
should not be considered in isolation or as a substitute for net income,
cash flow provided by operating activities or other income or cash flow data
prepared in accordance with generally accepted accounting principles or as a
measure of a company's profitability or liquidity.

(4) Long-term debt includes long-term debt net of current maturities and capital
lease obligations net of current portion.

(5) As adjusted to reflect receipt by the Company of estimated net proceeds from
the issuance of 2,500,000 shares of Common Stock and the application of such
proceeds. See "Use of Proceeds" and "Capitalization."

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16

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to assist in understanding the
Company's historical financial position at January 31, 1994, 1995 and 1996, and
October 31, 1996, and results of operations and cash flows for each of the three
years in the period ended January 31, 1996 and the unaudited nine month periods
ended October 31, 1995 and 1996. The Company's historical financial statements
and notes thereto included elsewhere in this Prospectus contain detailed
financial information that should be referred to in conjunction with the
following discussion.

OVERVIEW

The Company leases and sells seismic data acquisition equipment to
companies engaged in the oil and gas industry. The Company provides short-term
leasing of peripheral seismic equipment to meet a customer's requirements, as
well as offering maintenance and support during the lease term. The Company
leases its seismic equipment primarily to seismic data acquisition companies and
major oil and gas exploration companies conducting land-based seismic surveys in
North and South America. The Company also sells and services new and used
seismic data acquisition systems and peripheral equipment to companies engaged
in oil and gas exploration.

All leases at October 31, 1996 were for a term of one year or less. Seismic
equipment held for lease consists primarily of 3-D channel boxes, and is carried
at cost, net of accumulated depreciation.

The following table sets forth, for the periods indicated, the percentages
that certain items in the Company's financial statements bear to total revenues,
and the percentage changes in the dollar amounts of such items from the
comparable prior period:

PERCENTAGE OF TOTAL REVENUES PERCENTAGE CHANGE
------------------------------------- ---------------------------------------
NINE MONTHS
FISCAL YEAR ENDED ENDED FISCAL YEAR FISCAL YEAR NINE MONTHS
JANUARY 31, OCTOBER 31, ENDED ENDED ENDED
--------------------- ------------- JANUARY 31, JANUARY 31, OCTOBER 31,
1994 1995 1996 1995 1996 1995 1996 1996
----- ----- ----- ----- ----- ----------- ----------- -----------

REVENUES:
Leases of seismic equipment... 35.4% 45.9% 70.7% 67.6% 72.7% 51.4% 112.7% 56.1%
Sales of seismic equipment.... 64.6% 54.1% 29.3% 32.4% 27.3% (2.3)% (25.3)% 22.2%
Total revenues......... 100.0% 100.0% 100.0% 100.0% 100.0% 16.7% 38.0% 45.1%
COSTS AND EXPENSES:
Seismic equipment subleases... 19.8% 4.6% 3.4% 4.4% 1.5% (72.7)% 2.4% (50.0)%
Sales of seismic equipment.... 39.1% 38.4% 14.9% 19.7% 17.1% 14.4% (46.5)% 26.1%
General and administrative.... 14.5% 17.5% 18.4% 19.5% 16.3% 41.1% 45.5% 21.1%
Depreciation.................. 1.4% 6.9% 18.3% 16.3% 26.5% 485.5% 266.7% 136.5%
Provision for doubtful
accounts.................... 0.8% 0.7% 8.6% 7.3% 5.7% (7.9)% 1,691.4% 12.4%
Total costs and
expenses............. 75.6% 68.0% 63.6% 67.2% 67.1% 5.0% 29.0% 44.9%

For the years ended January 31, 1994, 1995 and 1996, revenues from foreign
customers totalled $1.4 million, $1.8 million and $3.8 million, respectively.
All of the Company's transactions with foreign customers are denominated in
United States dollars. Therefore, the Company is not subject to material gains
or losses resulting from currency fluctuations and has not engaged in currency
hedging activities.

SEASONALITY

There is some seasonality to the Company's expected lease revenues from
customers operating in Canada. Historically, seismic equipment leasing has been
somewhat susceptible to weather patterns in certain geographic regions. For
example, in Canada, a significant percentage of the seismic survey activity
occurs in the winter months, from October through March. During the months in
which the weather is warmer, certain areas are not accessible to trucks, earth
vibrators and other equipment because of the muddy terrain. See
"Business -- Business and Operations" and " -- Seismic Equipment Leasing." This
increased leasing activity

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17

by the Company's Canadian customers has historically resulted in increased lease
revenues in the Company's first and fourth fiscal quarters.

RESULTS OF OPERATIONS

Nine Months Ended October 31, 1996 Compared with Nine Months Ended October 31,
1995

Revenues of $7,363,000 for the nine months ended October 31, 1996
represented an increase of 45.1% over revenues of $5,074,000 for the same prior
year period. Leasing services generated revenues of $5,356,000 for the nine
months ended October 31, 1996, an increase of $1,925,000, or 56.1%, as compared
to $3,431,000 for the same prior year period. This increase reflected additions
of lease fleet equipment throughout fiscal 1996 and the first three fiscal
quarters of fiscal 1997 to meet lease demand. For the nine months ended October
31, 1996, the Company maintained a unitization rate on its 3-D channel boxes of
approximately 81%. Seismic equipment sales for the nine months ended October 31,
1996 were $2,007,000, an increase of $364,000, or 22.2%, as compared to
$1,643,000 for the same prior year period.

While the Company's leasing revenues increased by $1,925,000 for the nine
months ended October 31, 1996 as compared to the same prior year period,
sublease costs decreased by $111,000 and depreciation, which related primarily
to equipment available for lease, increased by $1,126,000 due to increase in the
lease fleet, resulting in an increase in net leasing revenues of $910,000.

Gross margins on seismic equipment sales were 37.2% and 39.1% for the nine
months ended October 31, 1996 and 1995, respectively. Margins on sales of used
equipment vary based upon the size of the transaction, the availability of the
product sold and the means by which the equipment was acquired. Higher dollar
transactions tend to yield lower margins than do lower dollar transactions,
while readily available equipment yields lower margins than equipment that is
difficult to locate. In addition, the Company's costs on a specific piece of
equipment may differ substantially based upon whether it was acquired through a
bulk purchase or a discrete search.

General and administrative expenses increased 21.1%, or $209,000, for the
nine months ended October 31, 1996 as compared to the same period in 1995 and
were 16.3% and 19.5% of total revenues for the nine months ended October 31,
1996 and 1995, respectively. This decrease in general and administrative
expenses as a percent of total expenses was the result of overhead expenses
remaining relatively constant as revenues increased, offset in part by increases
in legal and accounting expenses associated with being a public company.

The Company's provision for doubtful accounts expense increased from
$372,000 in the fiscal 1996 period to $418,000 in the fiscal 1997 period. The
increase was a result of additional provisions for the allowance account. As of
October 31, 1996, the Company's allowance for doubtful accounts receivable
amounted to $615,000, which was an amount management believed was sufficient to
cover any potential losses in trade accounts receivable as of that date.

Net income for the nine months ended October 31, 1996 increased by
$538,000, as compared to the same 1995 period. The increase resulted primarily
from the increase in net leasing revenues offset by increases in general and
administrative and the provision for bad debt expense.

Fiscal Year Ended January 31, 1996 Compared with Fiscal Year Ended January 31,
1995

Revenues for fiscal 1996 of $7,292,000 represented an increase of 38.0%
over fiscal 1995 revenues of $5,284,000. Leasing services generated revenues of
$5,157,000 for fiscal 1996, an increase of $2,733,000, or 112.7%, as compared to
fiscal 1995. The majority of this increase was attributable to additions of
lease fleet equipment throughout fiscal 1996 to meet lease demand. The Company's
utilization rate in fiscal 1996 on its 3-D channel boxes was approximately 90%.
Seismic equipment sales for the year ended January 31, 1996 were $2,135,000, a
decrease of $725,000, or 25.3%, from fiscal 1995.

While the Company's leasing revenues increased by $2,733,000 during fiscal
1996 as compared to fiscal 1995, sublease costs increased by only $6,000 and
depreciation, which related primarily to equipment available

16
18

for lease, increased by $968,000 due to the increase in the lease fleet,
resulting in an increase in net leasing revenues of $1,759,000.

Gross margins on seismic equipment sales were 49.2% and 29.1% for fiscal
1996 and 1995, respectively. The margin for fiscal year 1996 was significantly
higher because of a few high-margin transactions.

General and administrative expenses increased 45.5%, or $420,000, in fiscal
1996 as compared to fiscal 1995 and were 18.4% and 17.5% of total revenues for
fiscal 1996 and 1995, respectively. The increase was due primarily to increased
personnel costs and higher legal and accounting expenses associated with the
Company being a public company. The Company's provision for doubtful accounts
increased from $35,000 in fiscal 1995 to $627,000 in fiscal 1996. The increase
reflected the write-off of amounts due from a leasing customer which became
severely past due and was ultimately settled for $272,000 less than the amount
due from such customer, and additional allowances provided for amounts due from
a second leasing customer with an outstanding receivable of $459,000 at January
31, 1996, the majority of which was past due at that date. The latter
outstanding receivable was ultimately collected in full. As of January 31, 1996,
the Company's allowance for doubtful accounts receivable amounted to $347,000,
which is an amount management believed was sufficient to cover any potential
losses in trade accounts receivable as of that date.

Net income increased in fiscal 1996 by $713,000, as compared to fiscal
1995. The increase resulted primarily from the increase in net leasing revenues.

Fiscal Year Ended January 31, 1995 Compared with Fiscal Year Ended January 31,
1994

Revenues for fiscal 1995 of $5,284,000 represented an increase of 16.7%
over fiscal 1994 revenues of $4,527,000. Leasing services generated revenues of
$2,424,000 for fiscal 1995, an increase of $823,000, or 51.4%, as compared to
fiscal 1994. The majority of this increase was attributable to additions of
lease fleet equipment throughout fiscal 1995 to meet lease demand. The Company's
utilization rate on the I/O equipment during fiscal 1995 was approximately 90%.
Seismic equipment sales for the year ended January 31, 1995 were $2,860,000, a
decrease of $66,000, or 2.3%, from fiscal 1994.

The Company's leasing revenues increased by $823,000 during fiscal 1995 as
compared to fiscal 1994, while sublease costs decreased by $651,000 and
depreciation, which related primarily to equipment available for lease,
increased by $301,000, resulting in an increase in net leasing revenues of
$1,173,000.

Gross margins on seismic equipment sales were 29.1% and 39.4% for fiscal
1995 and 1994, respectively. The Company purchases used seismic equipment for
resale when management determines that such equipment is available at
advantageous prices. Gross margins on the Company's equipment sales fluctuate
from year to year and have historically ranged from 20% to 50%. The margins for
fiscal 1995 and 1994 are consistent with historical margins on seismic equipment
sales.

General and administrative expenses increased 41.1%, or $269,000, in fiscal
1995 as compared to fiscal 1994 and were 17.5% and 14.5% of total revenues for
fiscal 1995 and 1994, respectively. The increase was due primarily to personnel,
legal and accounting expenses. Personnel costs increased as a result of the
Company adding a chief financial officer during the year. Net interest increased
$193,000 to $209,000 in fiscal 1995 due to various equipment and bridge loans
outstanding during fiscal 1995. Legal and accounting costs increased in fiscal
1995 due to legal and accounting costs associated with the Company's initial
public offering consummated in January 1995.

Net income increased in fiscal 1995 by $297,000, as compared to fiscal
1994. The increase resulted primarily from the increase in leasing revenues
combined with a $651,000 decrease in seismic equipment sublease expense, a
$301,000 increase in depreciation, and lower margins on seismic equipment sales.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities for the nine months ended October
31, 1996, increased by $749,000, or 40.2%, as compared to the same 1995 period.
At October 31, 1996, of the Company's customers with trade receivables more than
90 days past due, four customers had an aggregate of $983,000 more than

17
19

90 days past due. The Company has historically had an average collection period
of between 60 to 90 days for its trade accounts receivable. Grant Geophysical,
Inc. ("Grant") filed for bankruptcy protection during December 1996. Revenues
derived from Grant amount to 17.8% of total revenues for the eleven-month period
ended December 31, 1996. As of that date, amounts due from Grant totalled
$1,013,000. During December 1996, the Company increased its allowance for trade
accounts receivable from $615,000 at October 31, 1996 to $1,500,000 at December
31, 1996, which amount was intended to fully reserve all amounts due from Grant
and provide for any potential loss associated with the Company's remaining trade
accounts receivable.

As of October 31, 1996, the outstanding principal balance of the Term Loan
was approximately $3.6 million and there were no amounts outstanding under the
Working Capital Revolver. Approximately $1.0 million of the Term Loan was
advanced to the Company at January 31, 1996 and was used primarily to pay
amounts due to I/O for 3-D channel boxes. In March 1996, an additional
approximately $3.1 million of the Term Loan was advanced and an aggregate of
approximately $1.5 million was used to pay all amounts outstanding under a
previous term loan and revolving credit line and to pay amounts due to I/O for
3-D channel boxes. Approximately $4.4 million of the net proceeds of this
Offering will be used to pay the $1.0 million and $3.4 million currently
outstanding balances of the Working Capital Revolver and the Term Loan,
respectively.

In January 1997, the Company established a second revolving line of credit
with Bank One of up to $4.0 million (the "Equipment Revolver") to be used solely
for short-term financing of up to 75% of the seismic equipment purchased by the
Company for approved lease/purchase contracts, and a second term loan of $1.0
million (the "Second Term Loan") to be used solely for long-term financing of up
to 80% of the purchase price of other seismic equipment. Interest on the
Equipment Revolver and the Second Term Loan accrues at a floating rate of
interest equal to the Base Rate plus 0.5%. Interest on amounts advanced under
the Equipment Revolver is payable monthly, and the principal amount is due six
months after the date of the initial advance; provided, however, that if the
lessee under a lease/purchase contract does not purchase the seismic equipment
subject to the lease, and there has been no default (as defined) under the
lease, then the Company may extend the maturity date for an additional 18 months
(the "Extended Term"). In such event, the principal amount of and interest on
the amount advanced under the Equipment Revolver would be payable in ratable
monthly installments over the Extended Term. Interest on and the principal
amount of the Second Term Loan are payable in ratable monthly installments over
a two-year period through and including December 1998.

As of December 31, 1996, capital expenditures for the 1997 fiscal year
totalled approximately $14.3 million and the Company has budgeted capital
expenditures of approximately $16.0 million for the 1998 fiscal year, including
approximately $12.0 million of 3-D seismic data acquisition equipment to be
purchased with the net proceeds of this Offering. The Company believes that the
net proceeds of this Offering, cash provided by operations and funds available
from its commercial lenders will be sufficient to fund its operations and
budgeted capital expenditures for the 1998 fiscal year.

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BUSINESS

Mitcham Industries, Inc. leases and sells seismic data acquisition
equipment to companies engaged in the oil and gas industry. The Company believes
it is the leading independent lessor of land-based 3-D seismic data acquisition
equipment, including channel boxes and other peripheral equipment. Seismic data
acquisition equipment is used in the identification and graphic definition of
subsurface geologic structures and formations that potentially contain oil and
gas. Channel boxes are remote data acquisition units that collect and transmit
seismic data. The Company has exclusive lease referral and supply agreements
with the two principal manufacturers of land-based 3-D seismic equipment, I/O
and SERCEL. From January 1, 1994 through December 31, 1996, the Company's lease
fleet of 3-D channel boxes increased from 85 to approximately 2,000 (or from 510
channels to approximately 12,000 channels). EBITDA of approximately $4.0 million
for the fiscal year ended January 31, 1996 represented an increase of 90.4% over
the fiscal year ended January 31, 1995, and EBITDA of approximately $4.6 million
for the nine months ended October 31, 1996 represented an increase of 82.6% over
the same prior year period.

Demand for channel boxes has increased significantly in recent years
primarily due to the increasing use of 3-D seismic surveys. Current 3-D seismic
techniques use a greater number of channels and channel boxes than 2-D surveys,
thereby providing higher resolution data for a better representation of the
earth's subsurface. Additionally, oil and gas companies are contracting for 3-D
surveys over larger geographical areas and often specify an increase in the
concentration of channel boxes as a means of increasing data resolution.
Consequently, seismic survey companies frequently use more than twice the number
of channels for surveys than they typically own. The Company believes that many
companies providing land-based seismic surveys will meet this additional
requirement by leasing channel boxes and supporting peripheral equipment on a
short-term basis rather than making the substantial capital expenditures
necessary to purchase such equipment.

In September 1996, the Company entered into two agreements with SERCEL. One
agreement provides that until December 31, 1999, the Company will be SERCEL's
exclusive worldwide leasing agent and that SERCEL must refer to the Company all
requests it receives to lease its 3-D data acquisition equipment and peripheral
equipment. This agreement also provides that the Company must purchase, at
favorable rates, up to $10.2 million of 3-D data acquisition equipment and other
field equipment from SERCEL. Through December 31, 1996, the Company has met $4.5
million of this requirement. The second agreement provides that until September
19, 1999, subject to earlier termination after September 20, 1997, the Company
will be SERCEL's exclusive sales agent in Canada. See "-- I/O Agreement" and
"-- SERCEL Agreements."

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BUSINESS STRATEGY

- Enlarge and diversify its lease pool of seismic equipment. As demanded by
customers, the Company will continue to increase its lease pool of
channel boxes and peripheral seismic equipment, such as seismic
vibrators, vibrator control electronics and geophones. The Company
believes that the availability of a larger and more complete pool of 3-D
seismic equipment for lease will encourage seismic survey companies to
increasingly lease, rather than purchase, such equipment. The Company is
also evaluating the feasibility of a lease pool of marine seismic
equipment.

SEISMIC TECHNOLOGY

Oil and gas exploration companies utilize seismic data generated from the
use of digital seismic systems and peripheral equipment in determining optimal
locations for drilling oil and gas wells, in the development of oil and gas
reserves, and in reservoir management for the production of oil and gas. A
complete digital seismic data acquisition system generally consists of (i) a
central electronics unit that records and stores digital data ("CEU"), (ii)
channel boxes, (iii) geophones, or seismic sensors and (iv) other peripheral, or
accessory, equipment. Other peripheral equipment includes earth vibrators that
create the necessary acoustic wave being analyzed and geophysical cables that
transmit digital seismic data from the channel boxes to the CEU.

In seismic data acquisition, an acoustic wave is discharged at or below the
earth's surface through the discharge of compressed air, the detonation of small
explosive charges or the use of vibrators. As the acoustic wave travels through
the earth, portions are reflected by variations in the underlying rock layers
and the reflected energy is captured by the geophones, which are situated at
intervals along paths from the point of acoustical impulse. The resulting
signals are then transmitted to the channel boxes, which convert the reflected
energy wave from analog to digital data and transmit this data via cable to the
CEU. The CEU stores the seismic data on magnetic tape for processing. The
digital data is then input into a specialized seismic processing system that
uses sophisticated computer software programs to enhance the recorded signal and
produce an image of the subsurface strata. By interpreting seismic data, oil and
gas exploration companies create detailed maps of exploration prospects and oil
and gas reservoirs.

In the past, the 2-D seismic survey was the standard data acquisition
technique used to describe geologic formations over a broad area. 2-D seismic
data can be visualized as a single vertical plane of subsurface information, and
2-D seismic surveys typically require 120 recording channels. Data gathered from
a 3-D seismic survey is best visualized as a cube of information that can be
sliced into numerous planes, providing different views of a geologic structure
with much higher resolution than is available with traditional 2-D seismic
survey techniques. 3-D seismic surveys require much larger data acquisition
systems with a minimum of 480 recording channels. Because of the greater number
of channels and flexible configuration, 3-D seismic data provides more extensive
and detailed information regarding the subsurface geology than does 2-D data. As
a result, 3-D data allows the geophysicists interpreting the data to more
closely select the optimal location of a prospective drillsite or oil and gas
reservoir.

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In the exploration and development process, oil and gas companies establish
requirements for seismic data acquisition programs based on their technical
objectives. Because of the expense associated with drilling oil and gas wells,
decisions whether or where to drill are critical to the overall process. Because
3-D seismic data increase drilling success rates and reduce costs, the Company
believes that the major oil and gas exploration companies are increasingly
requiring 3-D seismic surveys in their exploration activities. As a result of
the increasing requirements for this higher resolution data, which in turn
requires additional channels to collect and transmit the data, the additional
required channel boxes are in great demand.

While most working 3-D systems currently use from 600 to 800 channels,
management believes that the typical request for proposal from oil and gas
exploration companies now specifies a minimum of 1,000 to 1,200 channels. The
Company believes that many seismic service companies meet this requirement for
additional equipment by leasing, rather than purchasing, the additional required
channel boxes.

BUSINESS AND OPERATIONS

Seismic Equipment Leasing. The Company typically purchases new and used
seismic equipment for lease to its customers. After the termination of the
initial lease, the Company enters into additional short-term leases with its
customers engaged in seismic data acquisition. The Company's equipment leasing
services generally include the lease of the various components of seismic data
acquisition systems to meet a customer's job specifications. Such specifications
may vary as to the number of channel boxes, geophones, geophysical cables and
other peripheral equipment items.

The Company is pursuing a strategy of growth in its seismic equipment
leasing business, as potential for growth in new and used seismic equipment
sales is not believed to be significant. The Company currently has in its lease
fleet a total of approximately 2,000 3-D channel boxes, or a total of
approximately 12,000 channels (each channel being capable of electronically
converting seismic data from analog to digital and transmitting the digital
data), and various peripheral equipment such as geophones, earth vibrators and
geophysical cables. The Company's utilization rate on its 3-D channel boxes in
the first nine months of fiscal 1997 was in excess of 80%.

Since the Company's customers lease its seismic equipment to meet shortages
of a varying number of channels for specific surveys, the Company does not lease
all of the channel boxes and other peripheral equipment required for seismic
surveys. Rather, the Company is in the business of satisfying shortages of such
equipment on a short-term basis. The Company's equipment leases generally have
terms of three to nine months and are typically renewable on a month-to-month
basis. The Company offers maintenance of its leased seismic equipment during the
lease term for malfunctions due to failure of material and parts and will
provide replacement equipment as necessary. In addition, the Company provides
telephone support to answer questions of its lease customers.

The Company's monthly lease rates for its 3-D channel boxes have ranged
from 6% to 8% of the purchase price. Lease payments are due and payable on the
first day of each month of the lease term. The Company typically requires its
lessees to provide a deposit in the amount of one month's lease payment as
security for the cost of any repairs in excess of normal wear and tear that may
be required after the termination of lease term. The lessee must also obtain and
keep in force a minimum of $1.0 million general liability and casualty insurance
on the leased equipment during the term of the lease, and, before equipment is
delivered, provide certification to the Company that the Company has been named
an additional insured and loss payee on such policy. All taxes (other than U.S.
federal income taxes) and assessments are the contractual obligation of the
lessee. To the extent foreign taxes are not paid by the lessor, the relevant
foreign taxing authority might seek to collect such taxes from the Company. To
date, no such collection action has been taken against the Company.

A majority of the Company's leasing revenues have historically come from
North American operations. Within North America, about one-half of the Company's
total revenues are attributable to Canadian operations, with the remainder
related to United States business. Management believes that the United States
and Canada will continue to be the focal points of the Company's seismic
equipment leasing operations for the foreseeable future.

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Historically, seismic equipment leasing has been somewhat susceptible to
weather patterns in certain geographic regions. For example, in Canada, a
significant percentage of the seismic survey activity usually occurs in the
winter season, from October through March. During the months in which the
weather is warmer, certain areas are not accessible to trucks and other
equipment because of the muddy terrain. In the United States, most of the
seismic survey work is not usually affected by weather. As a result of weather
conditions, the Company attempts to manage its lease pool of equipment to meet
seasonal demands. Equipment leased in Canada during the winter months may be
moved to the United States in the warmer months.

Seismic Equipment Sales. The Company's equipment sales business serves a
diverse base of industry, governmental, university and research customers. The
Company typically buys equipment for resale: (i) at disposal prices,
speculatively; and (ii) in response to specific customer orders. On occasion,
the Company will also hold equipment of third parties and sell such equipment on
consignment.

In large part, the Company's international operations (excluding Canada)
have been restricted to the sale of used equipment. Over the past three years,
its primary international markets have been Europe, Australia and China. In the
near future, the Company believes that these markets will continue to comprise a
majority of the Company's international sales.

I/O AGREEMENT

Under the I/O Agreement, the Company is the exclusive third-party recipient
of requests from I/O customers and others to lease channel boxes and certain
peripheral equipment in North and South America through May 31, 2000 and may
acquire 3-D channel boxes from I/O at favorable prices based upon the volume of
channel boxes purchased. Subject to certain exceptions, I/O may not recommend or
suggest any competitor of the Company as a potential lessor of I/O 3-D channel
boxes in North and South America. As a manufacturer of complete data acquisition
systems that are compatible only with I/O channel boxes, I/O typically receives
inquiries to lease I/O 3-D channel boxes from customers desiring to expand the
capacities of their systems on a short-term basis.

A condition of the I/O Agreement is that the Company must purchase an
aggregate of $13.25 million of I/O 3-D channel boxes on or before May 31, 2000
in the following stated installments: (i) by November 30, 1996, at least $3.0
million, (ii) from January 1, 1997 through May 31, 1997, at least $1.25 million
and (iii) in each of the years from June 1, 1997 through May 31, 1998, June 1
through May 31, 1999, and June 1, 1999 through May 31, 2000, at least $3.0
million. As of December 31, 1996, the Company had purchased I/O equipment
totalling $4.8 million under the I/O Agreement, thereby exceeding its purchase
requirements through May 1997.

Under the I/O Agreement, I/O must inform the Company by telephone,
facsimile or letter of the identity of the third party prospective lessee and
the terms, if any, that have been discussed regarding a proposed lease. The
Company may then contact the prospective lessee and negotiate the terms of a
proposed lease of channel boxes. If the Company (i) is unable to lease the 3-D
channel boxes due to a shortage in its lease fleet, (ii) cannot agree with a
prospective lessee on the terms of a proposed lease within 72 hours of the
lessee's introduction to the Company or (iii) otherwise chooses not to lease to
a prospective lessee, then I/O may lease channel boxes to the prospective
lessee. I/O has indicated that the 72-hour time period referred to may be
extended as long as the Company and a prospective lessee are engaged in good
faith negotiations and neither of them has terminated such negotiations.

Leases of channel boxes with purchase options are specifically excluded
from the I/O Agreement. Therefore, I/O may continue to enter into leases with
purchase options in North and South America during the term of the I/O
Agreement. I/O may also continue to sell 3-D channel boxes during the term of
the I/O Agreement.

The Company primarily purchases new channel boxes from I/O, but from time
to time purchases channel boxes from I/O's existing lease fleet. All of the
channel boxes purchased from I/O which are new are covered by a warranty which
covers, with certain exceptions, defects in workmanship for six months and
defects in materials and parts for 12 months. The channel boxes, if acquired
from I/O's existing lease fleet and

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24

therefore used previously, will be refurbished by I/O and carry a warranty which
covers, with certain exceptions, defects in workmanship for three months.

The I/O Agreement is subject to termination by I/O upon the occurrence of
(i) the Company's failure to comply with the terms of the I/O Agreement after
having received written notice of its non-compliance, (ii) the Company's
discontinuance as a going concern, (iii) the Company's default in the payment of
any obligations to I/O after having received notice that payment is due, (iv)
the Company's insolvency or bankruptcy, (v) Billy F. Mitcham, Jr. no longer
owning at least 250,000 shares of Common Stock of the Company, (vi) Billy F.
Mitcham, Jr. no longer remaining as the President of the Company, (vii) any
transfer of the I/O agreement by merger, consolidation, or liquidation, or
(viii) the Company's assignment, or attempted assignment of its rights under the
agreement.

SERCEL AGREEMENTS

SERCEL Lease Agreement

In September 1996, the Company entered into the Exclusive Equipment Lease
Agreement with SERCEL (the "SERCEL Lease Agreement"), under which the Company
acts as SERCEL's exclusive worldwide short-term leasing agent throughout the
world and SERCEL must refer to the Company all requests it receives (other than
requests from its affiliates) to lease its 3-D data acquisition equipment and
other field equipment. Subject to the exceptions discussed below, SERCEL may not
recommend or suggest any competitor of the Company as a potential lessor of such
data acquisition equipment. In addition, the Company may not engage in financing
leases and leases for a duration of more than one year.

A condition of the SERCEL Lease Agreement is that the Company must purchase
an aggregate of $10.2 million of SERCEL data acquisition and other field
equipment on or before December 31, 1999 in six installments of $1.7 million as
follows: (i) by June 30, 1997, and (ii) from July 1, 1997 to December 31, 1997
and each succeeding six-month period thereafter through December 31, 1999.
However, SERCEL may not terminate the agreement if the Company fails to purchase
the minimum requirement in a period ending before June 30, 1998, unless in the
succeeding period the Company does not make aggregate purchases equal to any
shortfall for the previous period, plus the minimum purchase requirement for the
succeeding period. As of December 31, 1996, the Company had purchased SERCEL
equipment totalling $4.5 million, thereby exceeding its purchase requirements
through December 31, 1997.

As with the I/O Agreement, SERCEL must inform the Company of the identity
of the third party prospective lessee and the terms, if any, that have been
discussed regarding a proposed lease. If the Company either (i) is unable to
lease the SERCEL equipment due to a shortage in its lease fleet, (ii) cannot
agree with a prospective lessee on the terms of a proposed lease within five
business days of the lessee's introduction to the Company, or (iii) otherwise
chooses not to lease to a prospective lessee, then SERCEL may lease its
equipment to the prospective lessee.

The agreement is subject to termination by SERCEL (i) at any time upon (a)
SERCEL's reasonable belief that the Company has violated or intends to violate
the Foreign Corrupt Practices Act of 1977, as amended, (b) the Company's refusal
or inability to certify that it is in compliance with laws applicable to its
activities, (c) the Company's insolvency, voluntary or involuntary bankruptcy,
assignment for the benefit of creditors or discontinuance as a going concern and
(ii) upon 90 days prior written notice if the Company no longer employs Billy F.
Mitcham, Jr. in a senior management capacity.

SERCEL Sales Agreement

Through Mitcham Canada Ltd., the Company's wholly-owned subsidiary formed
in September 1996, the Company entered into the Commercial Representation
Agreement (the "SERCEL Sales Agreement") with Georex, Inc., a wholly-owned
subsidiary of SERCEL, under which the Company is SERCEL's designated sales agent
in Canada for its data acquisition and other field equipment through September
19, 1999, subject to earlier termination after September 20, 1997 on 90 days
prior notice. If not sooner terminated, the agreement will automatically be
extended for successive one-year periods after September 19, 1999. Under the

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agreement, the Company is entitled to receive a commission on all SERCEL
equipment and spare parts sold by the Company in Canada.

In connection with the SERCEL Sales Agreement and the SERCEL Lease
Agreement, in November 1996, the Company established an office in Calgary,
Alberta, Canada to sell, service and lease SERCEL equipment and to lease and
service equipment of other manufacturers. The Company is prohibited from selling
seismic equipment that competes with SERCEL equipment during the term of the
agreement and for six months thereafter, except that the Company may sell
individual components that compete with components of SERCEL equipment, such as
I/O 3-D channel boxes and Pelton vibrator control electronics, as well as any
seismic equipment previously used in its lease fleet.

The SERCEL Sales Agreement is subject to termination by Georex upon (i)
Georex's reasonable belief that the Company has violated or intends to violate
the Foreign Corrupt Practices Act of 1977, as amended, (ii) the Company's
refusal or inability to certify that it is in compliance with laws applicable to
its activities, or (iii) the Company's insolvency, voluntary or involuntary
bankruptcy, assignment for the benefit of creditors or discontinuance as a going
concern.

PELTON AGREEMENT

In May 1996, the Company entered into an exclusive lease referral agreement
(the "Pelton Agreement") with Pelton Company, Inc. The Company believes Pelton
is the leading manufacturer and supplier of vibrator control electronics. The
terms of the Pelton Agreement regarding exclusive lease referrals and favorable
prices are substantially similar to those of the I/O Agreement, except that (i)
the Company has the exclusive referral rights with respect to Pelton's vibrator
control electronics throughout the world, through December 31, 1997, subject to
cancellation by either party thereafter upon three months prior written notice
and (ii) there are no minimum purchase requirements.

The Pelton Agreement is subject to termination upon the occurrence of (i)
the Company's failure to comply with the terms of the Pelton Agreement after
having received written notice of its non-compliance, (ii) the Company's
discontinuance as a going concern, (iii) the Company's default in the payment of
any obligations to Pelton after having received notice that payment is due, (iv)
the Company's insolvency or bankruptcy, (v) the Company's transfer of the
agreement by merger, consolidation, or liquidation, (vi) the Company's
assignment, or attempted assignment, of the rights under the agreement, (vii)
Billy F. Mitcham no longer owning at least 250,000 shares of Common Stock of the
Company, or (viii) any competitor of Pelton owning, directly or indirectly, more
than 5% of the Company's outstanding capital stock on a fully-diluted basis.

CUSTOMERS; SALES AND MARKETING

The Company's major lease customers are seismic data acquisition companies
and major and independent oil and gas exploration companies. The Company
typically has a small number of lease customers, the composition of which
changes yearly as leases are negotiated and concluded and equipment needs vary.
As of October 31, 1996, the Company had 23 lease customers with active leases of
various lengths. Customers of the Company's used and new seismic equipment sales
and service business (in addition to the aforementioned lease customers, some of
whom purchase significant amounts of equipment) include foreign governments,
universities, engineering firms and research organizations worldwide.

The Company participates in both domestic and international trade shows and
expositions to inform the oil and gas industry of its products and services. In
addition to advertising in major geophysical trade journals, direct advertising
in the form of a biannual listing of equipment offerings is mailed to over 3,000
oil and gas industry participants. The Company believes this mailing generates
significant seismic equipment lease and sales revenues. In addition, the Company
placed advertisements of its affiliation with each of I/O, SERCEL and Pelton in
several major geophysical trade journals. The Company also maintains a web site
at http://www.mitchamindustries.com on which it lists its seismic equipment for
sale and lease.

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The Company works with a network of representatives in several
international markets, including the United Kingdom, Canada and the Commonwealth
of Independent States. These agents generate equipment sales, and to a lesser
extent, equipment leasing business for the Company and are compensated on a
commission basis. The Company also expends resources in the areas of customer
service, product support and the maintenance of customer relationships. In
November 1996, the Company established an office in Calgary, Alberta, Canada
from which it leases and sells seismic equipment.

COMPETITION

Competition in seismic equipment leasing is fragmented. The Company is
aware of numerous companies that own seismic equipment that lease such
equipment; however, the Company believes those companies do not lease seismic
equipment of several manufacturers or have as extensive a lease pool as does the
Company. The Company also believes those companies do not have exclusive lease
referral agreements with suppliers similar to the Company's. Competition exists
to a lesser extent from seismic data acquisition firms that may lease equipment
that is temporarily idle. Under the I/O Agreement, I/O and its subsidiary,
Global Charter Corporation, retain the right to continue to (i) lease channel
boxes in certain situations where the Company and a prospective lessee cannot or
do not enter into a lease, as more fully described in the I/O Agreement; (ii)
lease channel boxes with a purchase option in North and South America; and (iii)
lease channel boxes outside of North and South America. Global owns and operates
a lease fleet of rental seismic equipment, including 3-D channel boxes. Global
leases seismic equipment subject to purchase options and arranges the financing
for such leases. The Company does not believe those equipment leases compete
with the Company's seismic equipment leases, as the Company does not typically
engage in lease/purchase arrangements of I/O seismic equipment. See "Risk
Factors -- Competition."

The Company competes for seismic equipment leases on the basis of (i) price
and delivery, (ii) availability of both peripheral seismic equipment and
complete data acquisition systems which may be configured to meet a customer's
particular needs, and (iii) length of lease term. The Company competes in the
used equipment sales market with a broad base of seismic equipment owners,
including the major oil and gas exploration companies which use and eventually
dispose of seismic equipment, many of which have substantially greater financial
resources than the Company. The Company believes there is one competitor in the
used seismic equipment sales business that generates comparable revenues from
such sales, as well as numerous, smaller competitors who, in the aggregate,
generate significant revenue from such sales.

SUPPLIERS

The Company has several suppliers of the seismic equipment for its lease
fleet. The Company currently acquires the majority of the 3-D channel boxes for
its lease fleet from I/O and SERCEL and acquires the majority of its vibrator
control electronics from Pelton. The Company believes that I/O and SERCEL
manufacture most of the land-based seismic systems and equipment in use. Other
suppliers of peripheral seismic equipment include OYO/Geospace (geophones,
cables and seismic cameras), Mark Products (geophones and cables), Mertz, Inc.
(seismic vibrators) and George E. Failing Co. (seismic vibrators). From time to
time, the Company purchases new and used peripheral seismic equipment from
various other manufacturers. Management believes that its current relationships
with its suppliers are satisfactory.

EMPLOYEES

As of October 31, 1996, the Company employed 13 people, none of whom is
covered by a collective bargaining agreement. Nine employees are involved in
sales, management and administration and four work in field operations. The
Company considers its employee relations to be satisfactory.

PROPERTIES

The Company owns its corporate office and warehouse facilities in
Huntsville, Texas. Its headquarters facility consists of 25,000 square feet of
office and warehouse space on approximately six acres. See "Certain

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Transactions and Relationships." The Company also leases approximately 10,000
square feet of office and warehouse space at its facilities in Calgary, Alberta,
Canada.

LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
directors and executive officers of the Company:

NAME AGE POSITION(S) WITH THE COMPANY
---- --- ----------------------------

Billy F. Mitcham, 49 Chairman of the Board of Directors, President and Chief
Jr. ................. Executive Officer
Paul C. Mitcham........ 32 Vice-President -- Operations and Director
Roberto Rios........... 39 Vice-President -- Finance, Secretary, Treasurer and
Director
William J. Sheppard.... 49 Vice-President -- International Operations and Director
Gordon M. Greve........ 62 Director
Randal Dean Lewis...... 53 Director
John F. Schwalbe....... 52 Director

Billy F. Mitcham, Jr. has been Chairman of the Board of Directors,
President and Chief Executive Officer of the Company since 1987. He has more
than 20 years of experience in the geophysical industry. From 1979 to 1987, he
served in various management capacities with Mitcham Associates, Inc., an
unrelated equipment leasing company. From 1975 to 1979, Mr. Mitcham served in
various capacities with Halliburton Services, primarily in oilfield services.

Paul C. Mitcham is Vice President -- Operations and a director of the
Company. He is the brother of Billy F. Mitcham, Jr. Mr. Mitcham has been
employed by the Company in various management positions since 1989. Prior to
1989, he worked in various field positions in the geophysical industry.

Roberto Rios was elected Vice-President -- Finance, Secretary and Treasurer
and a director of the Company in September 1994. From 1990 until joining the
Company in September 1994, Mr. Rios held several senior-level positions,
including Vice President and General Manager, with ADVO, Incorporated, a
publicly-traded nationwide direct mail distribution company. From 1980 to 1989,
he held several senior-level financial positions, including Controller, of The
Shoppers' Guide, a company that produces a direct mail advertising guide and
that is a subsidiary of Harte-Hanks Communications, Inc., a multimedia company.
Mr. Rios is a Certified Public Accountant and a member of the American Institute
of Certified Public Accountants.

William J. Sheppard was elected Vice-President -- International Operations
and a director of the Company in October 1994. Mr. Sheppard has more than 25
years of experience in the geophysical industry. From 1987 until October 1994,
Mr. Sheppard was the President of Alberta Supply Company, a Canadian seismic
equipment sales and services company.

Gordon M. Greve was elected a director of the Company in June 1995. He held
various management positions with Amoco Corporation from July 1977 through
September 1994 and has more than 30 years of experience in the geophysical
industry. He served as the Acting Vice-President of Exploration Technology and
Services from February through September 1994. From February 1991 through
February 1994, he was manager of exploration. From July 1986 to February 1991,
he was a manager in geophysics. Mr. Greve served as the President of the Society
of Exploration Geophysicists for the 1995-1996 term, which began in October
1995.

Randal Dean Lewis was elected a director of the Company in November 1994.
Mr. Lewis is the interim Dean of the Business School at Sam Houston State
University and he has served in this capacity since October 1995. From 1987 to
October 1995, Mr. Lewis was the Associate Dean and Professor of Marketing at Sam
Houston State University. Prior to 1987, Mr. Lewis held a number of executive
positions in the banking and finance industries.

John F. Schwalbe was elected a director of the Company in November 1994.
Mr. Schwalbe has been a Certified Public Accountant in private practice since
1978, with primary emphasis on tax planning, consultation, and compliance.

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The Bylaws of the Company authorize the Board of Directors to fix the
number of directors of the Company. The Board of Directors is currently
comprised of seven members. Each director and each executive officer of the
Company serves until the earliest to occur of (i) his death, resignation or
removal; or (ii) the election of his successor. No family relationships exist
among the officers and directors of the Company except among Messrs. Mitcham.
See "Certain Transactions and Relationships."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the Company's executive officers or directors serve on the board of
directors or the compensation committee of any other entity. None of the members
of the Compensation Committee are, or were formerly, officers or employees of
the Company.

BOARD COMMITTEES

The Board of Directors has established an Audit Committee and a
Compensation Committee. The Audit Committee is comprised of Messrs. Schwalbe,
Lewis and Greve. Its functions are to: (i) recommend the appointment of
independent public accountants; (ii) review the scope of the audit by the
independent public accountants; (iii) review the independence of the independent
public accountants; (iv) consider the adequacy of the system of internal
controls and review any proposed corrective actions; (v) review and monitor the
Company's policies regarding business ethics and conflicts of interest; and (vi)
discuss with management and the independent public accountants the Company's
draft of annual financial statement and key accounting and/or reporting matters.
The Compensation Committee, also comprised of Messrs. Schwalbe, Lewis and Greve,
is responsible for (i) reviewing the Company's general compensation strategy;
(ii) establishing the salaries and bonuses of the Company's executive officers;
and (iii) reviewing and administering the Company's 1994 Stock Option Plan.

BOARD COMPENSATION

The Company pays directors who are not employees of the Company $500 for
every meeting attended and reimburses their expenses incurred in attending board
and committee meetings. In addition, the Director Plan provides that each
nonemployee director will receive an option to purchase 1,000 shares of Common
Stock upon becoming a director and on the date of each annual meeting of
shareholders at which he is re-elected as a director. See " -- Stock Option
Plans."

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EXECUTIVE COMPENSATION

The following table sets forth all compensation paid by the Company for the
fiscal years ended January 31, 1994, 1995 and 1996 to Billy F. Mitcham, Jr., the
Chairman of the Board, Chief Executive Officer and President of the Company. No
other executive officer of the Company received total salary and bonus that
exceeded $100,000 during any of those fiscal years.

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------- -------------
FISCAL YEAR SECURITIES
ENDED UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION JANUARY 31 SALARY BONUS OTHER STOCK OPTIONS COMPENSATION
--------------------------- ----------- -------- ------- ----- ------------- ------------

Billy F. Mitcham, Jr. ........ 1996 $100,000 $40,685(2) -- 9,000 --
Chairman of the Board, 1995 72,000(1) -- -- 116,000 --
President and Chief 1994 72,000 25,000 -- --
Executive Officer

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

(1) Mr. Mitcham, Jr. opted to receive a lower salary in the fiscal year ended
January 31, 1995 than he was entitled to under the terms of his Employment
Agreement, described below. Though not specifically stated in the Employment
Agreement, Mr. Mitcham, Jr. felt the intent of the parties was that the
increased salary would not be effective until the consummation of the
Company's initial public offering, which occurred in January 1995. The
$28,000 of his salary that he opted not to receive was not deferred and will
not be paid in a future year. As of February 1, 1995, Mr. Mitcham, Jr. began
receiving his full salary.

(2) Bonus actually paid in the subsequent fiscal year.

Option Grants. The following table sets forth the individual grants of
stock options made by the Company during the fiscal year ended January 31, 1996
to Billy F. Mitcham, Jr. The Company does not grant any stock appreciation
rights.

OPTION GRANTS IN LAST FISCAL YEAR

% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES
SECURITIES GRANTED TO OF STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM(2)
OPTIONS IN 1996 OR BASE EXPIRATION ----------------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE 0% 5% 10%
---- ----------- ----------- ------------ ------------ ------- ------- -------

Billy F. Mitcham, Jr...... 9,000(1) 14.3% $3.29(1) Dec. 4, 2005 $3.87 $5.36 $8.53

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

(1) Nonqualified stock option granted on December 4, 1995 under the 1994 Stock
Option Plan. The option may be exercised to purchase the total number of
shares on December 4, 1996. The option price was set at 85% of the fair
market value of the Company's Common Stock. The fair market value of a share
of the Company's Common Stock is the closing price at which the Common Stock
was sold on the date of grant. To the extent the option is not vested on the
optionee's retirement, death or disability, it is forfeited.

(2) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of the Company's future
Common Stock prices. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock and overall stock
market conditions. The amounts reflected in this table may not necessarily
be achieved.

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Option Exercises and Year-End Option Grants. The following table sets forth
the year-end values of unexercised options held by Billy F. Mitcham, Jr. at
January 31, 1996. Billy F. Mitcham, Jr. did not exercise any stock options in
the 1996 fiscal year.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING OPTIONS AT IN-THE-MONEY OPTIONS
JANUARY 31, 1996 (#) AT JANUARY 31, 1996(1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------

Billy F. Mitcham, Jr................... 116,000/9,000 $58,000/$11,160

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

(1) Represents the difference between the closing price of the Company's Common
Stock on January 31, 1996 ($5.50) and the exercise price of the options,
multiplied by number of shares represented by such options.

EMPLOYMENT AGREEMENT WITH BILLY F. MITCHAM, JR.

Billy F. Mitcham, Jr.'s employment agreement with the Company is for a term
of five years, beginning January 15, 1997, which term is automatically extended
for successive one-year periods unless either party gives written notice of
termination at least 30 days prior to the end of the current term. The agreement
provides for an annual salary of $150,000 and a bonus at the discretion of the
Board of Directors. It may be terminated prior to the end of the initial term or
any extension thereof if Mr. Mitcham dies; if it is determined that Mr. Mitcham
has become disabled (as defined); if Mr. Mitcham gives three months prior notice
of resignation; if the Company gives Mr. Mitcham notice of termination "without
cause"; or if the Board of Directors determines that Mr. Mitcham has breached
the employment agreement in any material respect, has appropriated a material
business opportunity of the Company or has engaged in fraud or dishonesty with
respect to the Company's business or is convicted of or indicted for any felony
criminal offense or any crime punishable by imprisonment. If Mr. Mitcham
terminates his employment within 60 days following (i) a material reduction in
his duties and responsibilities (without his consent) or (ii) a reduction in, or
failure by the Company to pay when due, any portion of his salary, he will be
entitled to payments equal to $450,000, payable ratably over the 24 months
following such termination. For a period of two years after the termination of
the agreement, Mr. Mitcham is prohibited from engaging in any business
activities that are competitive with the Company's business and from diverting
any of the Company's customers to a competitor. The Company has no employment
agreements with any of its other executive officers. See "Risk Factors --
Dependence on Key Personnel."

STOCK OPTION PLANS

The Company has adopted the Mitcham Industries, Inc. 1994 Stock Option Plan
(the "Stock Option Plan"). Options to purchase a maximum of 350,000 shares of
Common Stock may be issued under the Stock Option Plan to officers, employee
directors, key employees and consultants of the Company. As of December 31,
1996, options to purchase an aggregate of 285,750 shares of Common Stock are
issued and outstanding under the Stock Option Plan with a weighted average
exercise price of $4.74 per share. The Stock Option Plan provides both for the
grant of options intended to qualify as "incentive stock options" under the
Internal Revenue Code of 1986, as amended (the "Code"), as well as options that
do not so qualify. Pursuant to the Stock Option Plan, the Compensation Committee
will determine the persons to whom options are granted, the number of shares of
Common Stock subject to options, the period during which the options vest and
may be exercised, and the option price. The Stock Option Plan places
restrictions on the grant of options under any plan of the Company to persons
who are, at the time of the grant, members of the Compensation Committee. With
respect to incentive stock options, no option may be granted more than 10 years
after the effective date of the Stock Option Plan or exercised more than 10
years after the date of grant (five years if the optionee owns more than 10% of
the Common Stock of the Company). Additionally with regard to incentive stock
options, the exercise price of the option may not be less than 100% of the fair
market value of the Common Stock on the date of grant (110% if the optionee owns
more than 10% of the Common Stock of the Company). Subject to certain limited
exceptions, options may not be exercised unless, at the time of exercise, the
optionee is in the service of the Company.

The Company has also adopted the Mitcham Industries, Inc. 1994 Non-Employee
Director Stock Option Plan (the "Non-Employee Director Plan"). Options to
purchase a maximum of 50,000 shares of Common

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Stock may be issued under the Non-Employee Director Plan to non-employee
directors of the Company. The Non-Employee Director Plan provides for the grant
of options that do not qualify as "incentive stock options" under the Code.
Pursuant to the Non-Employee Director Plan, options to purchase 1,000 shares of
Common Stock are granted to each person who is not an employee of the Company
upon his election for the first time as a director of the Company and an option
to purchase an additional 1,000 shares of Common Stock will automatically be
granted each year thereafter that such director is re-elected. Options granted
under the Non-Employee Director Plan must be granted at an exercise price of not
less than 100% of the fair market value of the Common Stock on the date of grant
and vest in full one year after their grant. Options granted under the
Non-Employee Director Plan expire 10 years after the date of grant. As of
December 31, 1996, 8,000 options were issued and outstanding under the
Non-Employee Director Plan with a weighted average exercise price of $4.65 per
share.

CERTAIN TRANSACTIONS AND RELATIONSHIPS

Prior to September 1995, the Company leased its facilities located at 44000
Highway 75 South in Huntsville, Texas, consisting of 19,000 square feet, from
Mitcham Properties, Inc., a Texas corporation of which Billy F. Mitcham, Jr. is
the sole shareholder, for $4,000 per month (or approximately $.21 per square
foot), exclusive of the cost of utilities, taxes and insurance. An unrelated
third party rented from Mitcham Properties, Inc. a portion of the facilities
adjacent to the Company's facilities, consisting of 6,000 square feet for $606
per month (or approximately $.10 per square foot), exclusive of the cost of
utilities, taxes and insurance. Therefore, Mitcham Properties, Inc. was leasing
to the Company at approximately twice the cost per square foot being paid by an
unrelated third party for adjacent facilities. The difference in lease terms
amounts to approximately $25,000 of additional lease expense to the Company
annually. In September 1995, the Company purchased the facilities from Mitcham
Properties, Inc. for $325,000; $276,000 of such amount was financed with bank
financing and the remaining amount was paid from cash flows. The bank's
appraisal report reflects an estimated fair value of $325,000 for the
facilities.

In fiscal 1995 and 1996, the Company purchased equipment from corporations
and partnerships which are owned or controlled by Billy F. Mitcham, Jr., the
Company's Chairman, President and Chief Executive Officer. Such purchases
totalled $11,000 and $28,000 in the years ended January 31, 1995 and 1996,
respectively. The Company does not anticipate making any further such purchases.

Effective September 20, 1993, the Company and Billy F. Mitcham, Jr. entered
into a Voting Agreement (the "Voting Agreement") with Billy F. Mitcham, Sr.,
Paul C. Mitcham and two trusts established for the benefit of Mr. Mitcham, Jr.'s
sons. Under the Voting Agreement, the holders of shares subject thereto have
agreed that Mr. Mitcham, Jr. has the authority to vote an additional 445,740
shares of Common Stock, or 10.0%, of the Company's outstanding Common Stock. Mr.
Mitcham, Jr. has voting control of an aggregate of 1,154,370 shares, or 25.8%,
of the Company's outstanding Common Stock, as of December 31, 1996. The Voting
Agreement will terminate on the earlier of the agreement of the parties or the
expiration of 25 years. See "Principal and Selling Shareholders."

Since April 1994, the Company has engaged Billy F. Mitcham, Sr. as a
consultant under a consulting agreement. Mr. Mitcham, Sr. has been involved in
the energy industry since 1952 and was formerly the owner and the President of
Mitcham Associates, Inc. which was also engaged in the leasing and sale of
peripheral seismic equipment. Mr. Mitcham, Sr. has served as an industry expert
and consultant for the Company since 1987 and was engaged on terms similar to
those in his present consulting agreement during that time, though not pursuant
to a written agreement. The agreement calls for monthly payments to Mr. Mitcham,
Sr. of $5,500. The Company paid Mr. Mitcham, Sr. a total of $66,000 under the
agreement in the 1996 fiscal year. The consulting agreement prohibits Mr.
Mitcham, Sr. from providing consulting services to, and from contacting or
soliciting in an effort to provide services to, any competitor of the Company
for two years after the termination of his engagement. The current term of the
agreement expires January 31, 1999, subject to earlier termination on the
occurrence of certain stated events, and is renewable for successive one-year
terms at the Company's option. The Company believes Mr. Mitcham, Sr. could
successfully compete with the Company, given his contacts and extensive
knowledge of the seismic leasing industry. For the above reasons, the Company
believes the terms of Mr. Mitcham, Sr.'s consulting agreement are no less
favorable than could be obtained from an unaffiliated third party with similar
experience.

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PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information with respect to
beneficial ownership of Common Stock as of December 31, 1996 by (i) each of the
Company's directors; (ii) each Selling Shareholder; (iii) each person who is
known by the Company to own beneficially more than 5% of the Common Stock; and
(iv) all executive officers and directors as a group. The Alamo Atlas Group,
Inc. will exercise a warrant for 8,380 shares of Common Stock to be sold in the
Offering. The only percentage for shares owned after the Offering that gives
effect to the exercise of this warrant is the percentage for The Alamo Atlas
Group.

SHARES OWNED SHARES OWNED
BEFORE OFFERING NUMBER OF AFTER OFFERING
NAMES AND ADDRESS OF -------------------- SHARES --------------------
BENEFICIAL OWNERS(1) NUMBER PERCENT OFFERED NUMBER PERCENT
-------------------- --------- ------- --------- --------- -------

Billy F. Mitcham, Jr. ................... 1,373,062(2) 29.3% 300,000 1,073,062 14.9%
FMR Corp. ............................... 446,500(3) 10.00% -- 446,500 5.9%
82 Devonshire Street
Boston, Massachusetts 02109
Wellington Management Company, LLP....... 385,000(4) 8.79% -- 385,000 5.1%
75 State Street
Boston, Massachusetts 02109
Billy F. Mitcham, Sr. ................... 298,290(3) 6.6% 50,000 248,290 3.5%
Paul C. Mitcham.......................... 149,180(4) 3.3% 25,000 124,180 1.8%
The Alamo Atlas Group, Inc. ............. 148,597(5) 3.3% 125,000 23,597 *
16420 Park Ten Place, Suite 300
Houston, Texas 77084-5051
Roberto Rios............................. 33,772(6) * -- 33,772 *
William J. Sheppard...................... 33,772(6) * -- 33,772 *
Gordon M. Greve.......................... 2,000 * -- 2,000 *
14855 Memorial Drive #1014
Houston, Texas 77079
Randal Dean Lewis........................ 3,000 * -- 3,000 *
College of Business Administration
P.O. Box 2056
Sam Houston State University
Huntsville, Texas 77341
John F. Schwalbe......................... 3,000 * -- 3,000 *
10700 Richmond Avenue #219
Houston, Texas 77042
All executive officers and directors as a
group
(7 persons).............................. 1,448,606 30.6% -- 1,070,606 14.8%

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

* Less than 1%

(1) The business address of each shareholder is the same as the address of the
Company's principal executive offices, unless otherwise indicated.

(2) Includes an aggregate of 445,740 shares of Common Stock owned by Billy F.
Mitcham, Sr. (252,540 shares), Paul C. Mitcham (118,680 shares) and two
trusts established for the benefit of Mr. Mitcham, Jr.'s sons (74,520
shares), and as to which shares Mr. Mitcham, Jr. has the right to vote under
the Voting Agreement. Also includes shares underlying currently exercisable
options to purchase an aggregate of 218,692 shares of Common Stock, as
follows: Billy F. Mitcham, Jr. (125,000 shares), Billy F. Mitcham, Sr.
(45,750 shares), Paul C. Mitcham (30,500 shares), and the two trusts (17,442
shares). See "Certain Transactions and Relationships."

(3) Based solely upon information contained in a Schedule 13G dated February 14,
1997 filed by FMR Corp. with the SEC.

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(4) Based solely upon information contained in a Schedule 13G dated February 11,
1995 filed by Wellington Management Company, LLP with the SEC.

(5) Includes shares underlying a currently exercisable option to purchase 45,750
shares of Common Stock.

(6) Includes shares underlying currently exercisable options to purchase 30,500
shares.

(7) Includes shares underlying a currently exercisable warrant to purchase
31,977 shares.

(8) Includes shares underlying currently exercisable options to purchase 21,000
shares and a currently exercisable warrant to purchase 2,422 shares.

DESCRIPTION OF CAPITAL STOCK AND OTHER SECURITIES

The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock, par value $.01 per share, and 1,000,000 shares of Preferred
Stock, par value $1.00 per share. As of December 31, 1996 there were outstanding
4,474,880 shares of Common Stock, no shares of Preferred Stock, options to
purchase up to 293,750 shares of Common Stock, and warrants to purchase up to
246,723 shares of Common Stock. Upon completion of this Offering, there will be
6,974,880 issued and outstanding shares of Common Stock.

The following description of the Company's capital stock and other
securities and selected provisions of its Amended and Restated Articles of
Incorporation (the "Amended Articles") and Restated Bylaws is a summary and is
qualified in its entirety by the Company's Amended Articles and Restated Bylaws,
copies of which have been filed with the Commission.

COMMON STOCK

Holders of the Common Stock are entitled to one vote per share for the
election of directors and other corporate matters. Holders of Common Stock are
not entitled to cumulative voting rights in connection with the election of
directors. Therefore, the holders of a majority of the shares voting for the
election of directors may elect all the directors. The Amended Articles permit
actions to be taken by the shareholders of the Company without a meeting, by
written consent, including a written consent signed by less than all of the
shareholders of the Company. Section 9.10A of the Texas Business Corporation Act
requires that prompt notice of the taking of any action by shareholders without
a meeting by less than unanimous written consent be given to all shareholders
who did not consent in writing to the action.

Subject to the rights of any outstanding shares of Preferred Stock, the
holders of Common Stock are entitled to dividends in such amounts and at such
times as may be declared by the Board of Directors of the Company out of funds
legally available therefor. Upon liquidation or dissolution, holders of the
Common Stock are entitled to share ratably in all assets remaining available for
distribution to them after payment or provision for all liabilities and any
preferential rights of any Preferred Stock then outstanding. The Common Stock
carries no preemptive rights. All outstanding shares of Common Stock are, and
the shares of Common Stock to be sold by the Company in the Offering will be,
upon payment therefor as contemplated herein, validly issued, fully paid and
nonassessable securities of the Company.

WARRANTS

There are currently outstanding warrants issued in connection with the
Company's initial public offering of units ("Units") in January 1995, entitling
the holders to purchase 17,000 Units, each Unit consisting of two shares of
Common Stock and a warrant to purchase one share of Common Stock (an "Underlying
Warrant"). The warrants are exercisable through and including December 19, 1999,
at an exercise price of $7.97 per Unit. The Underlying Warrants are exercisable
through and including December 19, 1997 at an exercise price of $4.20 per share
of Common Stock.

The warrants contain provisions providing for appropriate adjustment in the
event of any merger, consolidation, recapitalization, reclassification, stock
dividend, stock split or similar transaction. The warrants contain net issuance
provisions permitting the holder thereof to elect to exercise the warrants in
whole or in part and instruct the Company to withhold from the Units issuable
upon exercise a number of Units, valued at

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35

the current fair market value on the date of exercise, to pay the exercise
price. Such net exercise provision has the effect of requiring the Company to
issue shares of Common Stock without a corresponding increase in capital. A net
exercise of the Underlying Warrants will have the same dilutive effect on the
interests of the Company's shareholders as will a cash exercise.

There are also outstanding currently exercisable warrants to acquire up to
60,723 shares of Common Stock held by seven holders, at $3.87 per share, May 9,
1999; currently exercisable warrants to acquire 35,000 shares of Common Stock at
$3.50 per share, exercisable to purchase 17,500 shares through July 17, 2000 and
the remaining 17,500 shares through January 17, 2001; currently exercisable
warrants to acquire 50,000 shares of Common Stock at $6.43 per share,
exercisable through August 22, 2000; and warrants to acquire 50,000 shares of
Common Stock at $9.28 per share, exercisable beginning December 31, 1997 through
December 31, 2001.

The Company will issue warrants to the Representatives ("Representatives'
Warrants") to purchase 200,000 shares of Common Stock in connection with the
Offering, with an exercise price equal to 120% of the price of the Common Stock
to the public in the offering. The Representatives' Warrants will be exercisable
for a two-year period beginning one year after the effective date of the
Registration Statement of which this Prospectus is a part. See "Underwriting."

OPTIONS

As of December 31, 1996, options to purchase an aggregate of 293,750 shares
of Common Stock had been granted pursuant to the Plans, 250,250 of which are
currently exercisable. See "Management -- Stock Option Plans."

PREFERRED STOCK

The Board of Directors of the Company is empowered, without approval of the
Company's shareholders, to cause shares of Preferred Stock to be issued in one
or more series and to establish the number of shares to be included in each such
series and the designations, preferences, limitations and relative rights,
including voting rights, of the shares of any series. Because the Board of
Directors has the power to establish the preferences and rights of each series,
it may afford the holders of any series of Preferred Stock preferences, powers
and rights, voting or otherwise, senior to the rights of holders of Common
Stock. This includes, among other things, voting rights, conversion privileges,
divided rates, redemption rights, sinking fund provisions and liquidation rights
which shall be superior to the Common Stock. The issuance of shares of Preferred
Stock could have the effect of delaying or preventing a change in control of the
Company. No shares of Preferred Stock will be outstanding at the consummation of
this Offering, and the Board of Directors has no current plans to issue any
shares of Preferred Stock.

LIMITATION ON DIRECTORS' LIABILITY

The Amended Articles limit the liability of the Company's directors to the
Company or its shareholders (in their capacity as directors but not in their
capacity as officers) to the fullest extent permitted by Texas law.
Specifically, directors of the Company will not be personally liable for
monetary damages for an act or omission in the director's capacity as a director
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its shareholders; (ii) for acts or omissions not in good faith that
constitute a breach of duty of the director to the Company or that involve
intentional misconduct or a knowing violation of law; (iii) for any transaction
from which the director derived an improper personal benefit; or (iv) an act or
omission for which the liability of the director is expressly provided for by an
applicable statute.

The inclusion in the Company's Amended Articles of the limitation of the
personal liability of the Company's directors to the Company may have the effect
of reducing the likelihood of derivative litigation against those directors, and
may deter shareholders or management from bringing a lawsuit against those
directors for breach of their duty of care, even though such an action, if
successful, might otherwise have benefitted the Company and its shareholders.

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TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is North American
Transfer Co. Its address is 147 West Merrick Road, Freeport, New York 11520.

SHARES ELIGIBLE FOR FUTURE SALE

As of December 31, 1996, there were 4,474,880 shares of Common Stock
outstanding. In addition, the Company has reserved for issuance 400,000 shares
upon the exercise of options granted under the Stock Option Plans, 246,723
shares for issuance upon exercise of outstanding warrants and up to 200,000
shares for issuance upon exercise of the Representatives' Warrants. Of the
6,974,880 shares of Common Stock to be outstanding after the completion of this
Offering, approximately 6,122,781 shares will be freely tradable without
restriction or further registration under the Securities Act, unless held by
"affiliates" of the Company, as that term is defined in Rule 144 under the
Securities Act (whose sales would be subject to certain volume limitations and
other restrictions described below.) The remaining 852,099 shares of Common
Stock are "restricted securities" as defined in Rule 144 promulgated under the
Securities Act, and may only be sold in the public market if such shares are
registered under the Securities Act or sold in accordance with Rule 144 or
another exemption from registration under the Securities Act. The number of
shares issued and outstanding after completion of the Offering does not reflect
the exercise of a warrant for 8,380 shares of Common Stock to be sold in the
Offering by one of the Selling Shareholders. See "Principal and Selling
Shareholders."

In general, under Rule 144 as currently in effect, a person who has
beneficially owned his or her Common Stock for at least two years, including
persons who may be deemed "affiliates" of the Company, is entitled to sell
within any three-month period a number of shares that does not exceed the
greater of 1% of the then-outstanding shares of Common Stock (approximately
69,750 shares immediately after this Offering) or the average weekly trading
volume of such shares in the over-the-counter market during the four calendar
weeks preceding the date on which notice of the proposed sale is filed with the
Commission. A person who is not deemed an "affiliate" of the Company and who has
beneficially owned his or her shares of Common Stock for at least three years
would be entitled to sell such shares under Rule 144 without regard to the
volume limitations described above. Sales under Rule 144 are also subject to
certain manner of sale provisions, notice requirements, and the availability of
current public information about the Company. A person who has not been an
"affiliate" of the Company for the 90 days preceding a sale and who has
beneficially owned restricted securities for at least three years will be
entitled to sell such shares in the public market without restriction.
Restricted securities properly sold in reliance upon Rule 144 are thereafter
freely tradeable without restrictions or registration under the Securities Act,
unless thereafter held by an "affiliate" of the Company.

The Company has filed a registration statement under the Securities Act
covering 400,000 shares of Common Stock reserved for issuance under the Stock
Option Plans. Accordingly, shares issued under such registration statement upon
the exercise of options will be available for sale in the open market subject to
the agreements not to sell described below. See "Management -- Stock Option
Plans."

The Company is unable to estimate the amount, timing or nature of future
sales of outstanding Common Stock. Of the 852,099 restricted shares that will be
outstanding upon completion of this Offering, executive officers and directors,
holding an aggregate of 800,070 shares, have agreed that for a period of 180
days from the date of this Prospectus, they will not offer for sale, sell,
solicit an offer to buy, contract to sell, distribute, grant any option for the
sale of or otherwise transfer of dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into, exercisable for or
exchangeable for any shares of Common Stock without the prior written consent of
Rodman & Renshaw, Inc. on behalf of the Underwriters. All of the remaining
52,029 restricted shares are eligible for sale under Rule 144. See
"Underwriting."

In connection with this Offering, the Company has agreed to sell warrants
to the Representatives to purchase from the Company up to 200,000 shares of
Common Stock, exercisable in whole or in part at any time during the two-year
period commencing one year after the effective date of the Registration
Statement of which this Prospectus is a part.

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UNDERWRITING

The Underwriters named below, for whom Rodman & Renshaw, Inc. and Simmons &
Company International are acting as representatives (the "Representatives"),
have severally agreed to purchase from the Company the respective number of
shares of Common Stock set forth opposite their names:

NUMBER OF
UNDERWRITER SHARES
----------- ---------

Rodman & Renshaw, Inc.......................................
Simmons & Company International.............................

---------
Total..................................................... 3,000,000
=========

The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other considerations. The nature of the Underwriters'
obligations is such that they are committed to purchase and pay for all of the
above shares of Common Stock if any are purchased.

The Underwriters, through the Representatives, have advised the Company
that they propose to offer the Common Stock initially at the public offering
price set forth on the cover page of this Prospectus; that the Underwriters may
allow to selected dealers a concession of $ per share; and that such
dealers may reallow a concession of $ per share to certain other
dealers. After the public offering, the offering price and other selling terms
may be changed by the Underwriters. The Common Stock is included for quotation
on the Nasdaq National Market.

The Company and the Selling Shareholders have granted to the Underwriters a
30-day over-allotment option to purchase up to 375,000 and 75,000 additional
shares of Common Stock, respectively, exercisable at the public offering price
less the underwriting discount. If the Underwriters exercise such over-allotment
option, then each of the Underwriters will have a firm commitment, subject to
certain conditions, to purchase approximately the same percentage thereof as the
number of shares of Common Stock to be purchased by it as shown in the above
table bears to the 3,000,000 shares of Common Stock offered by the Company and
the Selling Shareholders hereby. The Underwriters may exercise such option only
to cover over-allotments made in connection with the sale of the shares of
Common Stock offered hereby.

The Company and the officers and directors of the Company have agreed that
they will not sell or dispose of any shares of Common Stock of the Company for a
period of 180 days after the later of the date on which the Registration
Statement is declared effective by the Commission or the first date on which the
shares are bona fide offered to the public, without the prior written consent of
Rodman & Renshaw, Inc.

In connection with the Offering made hereby, the Company has agreed to sell
to the Representatives, for nominal consideration, Representatives' Warrants to
purchase from the Company up to 200,000 shares of Common Stock. The
Representatives' Warrants are exercisable, in whole or in part, at an exercise
price of 120% of the price to public at any time during the two-year period
commencing one year after the effective date of the Registration Statement of
which this Prospectus is a part. The Representatives' Warrants contain
provisions providing for adjustment of the exercise price and the number and
type of securities issuable upon exercise of the Representatives' Warrants
should any one or more of certain specified events occur. The

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Representatives' Warrants grant to the holders thereof certain rights of
registration for the securities issuable upon exercise of the Representatives'
Warrants. The Representatives' Warrants may not be sold, transferred, assigned,
pledged or hypothecated until one year after the effective date of the Offering,
except as provided in Rule 2710(c)(7)(A) of the NASD Conduct Rules.

The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, losses and expenses, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act"),
or to contribute to payments that the Underwriters may be required to make in
respect thereof. The Company has agreed to pay to the Representatives a
non-accountable expense allowance of 1.0% of the gross proceeds derived from the
sale of Common Stock (including the sale of any Common Stock subject to the
Underwriters' over-allotment option).

In connection with this Offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M, pursuant to which such persons may bid for or
purchase Common Stock for the purpose of stabilizing its market price. The
Underwriters also may create a short position for the account of the
Underwriters by selling more Common Stock in connection with the Offering than
they are committed to purchase from the Company and the Selling Shareholders,
and in such case may purchase Common Stock in the open market following
completion of the Offering to cover all or a portion of such short position. The
Underwriters may also cover all or a portion of such short position, up to
450,000 shares of Common Stock, by exercising the Underwriters' over-allotment
options referred to above. In addition, Rodman & Renshaw, Inc., on behalf of the
Underwriters, may impose "penalty bids" under contractual arrangements with the
Underwriters whereby it may reclaim from an Underwriter (or dealer participating
in the Offering) for the account of the other Underwriters, the selling
concession with respect to Common Stock that is distributed in the Offering but
subsequently purchased for the account of the Underwriters in the open market.
Any of the transactions described in this paragraph may result in the
maintenance of the price of the Common Stock at a level above that which might
otherwise prevail in the open market. None of the transactions described in this
paragraph are required, and, if they are undertaken, they may be discontinued at
any time.

LEGAL MATTERS

The validity of the issuance of shares of Common Stock offered hereby will
be passed upon for the Company by Norton, Jacobs, Kuhn & McTopy, L.L.P.,
Houston, Texas. Certain legal matters in connection with the sale of such
securities will be passed upon for the Underwriters by Vinson & Elkins L.L.P.,
Houston, Texas. Members of Norton, Jacobs, Kuhn & McTopy, L.L.P. own an
aggregate of 38,681 shares of Common Stock. The Norton Family Trust, of which
Carl L. Norton is a beneficiary, and Sabrina A. McTopy own warrants to acquire
an additional 103,230 shares of Common Stock. Carl L. Norton and Sabrina A.
McTopy are partners in Norton, Jacobs, Kuhn & McTopy, L.L.P.

EXPERTS

The financial statements of the Company as of January 31, 1994, 1995 and
1996 and for each of the years in the three-year period ended January 31, 1996
included in this Prospectus have been audited by Hein + Associates LLP,
independent certified public accountants, as set forth in their report appearing
elsewhere herein, and is included herein in reliance upon such report and upon
the authority of such firm as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 under the Securities Act with
respect to the Common Stock offered by this Prospectus. This Prospectus does not
contain all of the information set forth in such Registration Statement, certain
parts of which were omitted in accordance with the rules and regulations of the

37
39

Commission. For further information with respect to the Company and to the
securities offered hereby, reference is made to such Registration Statement,
including the exhibits thereto. Statements contained in this Prospectus as to
the contents of any contract or other document are not necessarily complete, and
in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.

The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files periodic reports, proxy and information
statements and other information filed with the Commission. Reports, proxy
statements, and other information filed by the Company with the Commission are
available at the web site that the Commission maintains at http://www.sec.gov.
and can be inspected and copied at the public reference facilities maintained by
the Commission at its principal offices at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, New York, New York, 10048, and the
Chicago Regional Office, Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may also be
obtained from the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. The Common Stock is quoted on
the Nasdaq National Market and such reports, proxy and information statements
and other information concerning the Company are available at the offices of the
Nasdaq National Market located at 1735 K Street, N.W., Washington, D.C. 20006.

38
40

GLOSSARY OF TERMS

Certain words and terms commonly used in the seismic business which are
used throughout this Prospectus are defined below.

Acoustic wave. A sonic wave travelling through the earth's subsurface
induced by a release of energy, normally dynamite or vibroseis.

CEU. Central Electronics unit that records and stores seismic data.

Channel. A set of geophones recording acoustic waves reflected from
formations below the earth's surface.

Channel box. A remote data acquisition unit that collects seismic data
from a multi-conductor geophysical cable attached to the geophones and transmits
the data to the CEU.

Data acquisition system. The electronic field instruments and associated
equipment required for seismic acquisition.

Geophones. Electro-magnetic coils placed on the earth's surface to receive
the acoustic waves reflected by subsurface geological layers.

Seismic processing system. The computer hardware and software required to
convert seismic records to seismic cross-sections.

2-D seismic. Seismic data representing a vertical plane of subsurface
information.

3-D seismic. Seismic data representing a cube of subsurface information
that can be sliced into numerous planes offering a different view of the target.

39
41

INDEX TO FINANCIAL STATEMENTS

PAGE
----

Independent Auditor's Report................................ F-2
Balance Sheets as of January 31, 1995 and 1996 and October
31, 1996 (unaudited)...................................... F-3
Statements of Income for the Years Ended January 31, 1994,
1995 and 1996 and the Nine Months Ended October 31, 1995
(unaudited) and 1996 (unaudited).......................... F-4
Statements of Changes in Stockholders' Equity for the Years
Ended January 31, 1994, 1995 and 1996 and the Nine Months
Ended October 31, 1996 (unaudited)........................ F-5
Statements of Cash Flows for the Years Ended January 31,
1994, 1995 and 1996 and the Nine Months Ended October 31,
1995 (unaudited) and 1996 (unaudited)..................... F-6
Notes to Financial Statements............................... F-7

F-1
42

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Stockholders
Mitcham Industries, Inc.
Huntsville, Texas

We have audited the accompanying balance sheets of Mitcham Industries, Inc. as
of January 31, 1995 and 1996, and the related statements of income, changes in
stockholders' equity and cash flows for each of the years in the three year
period ended January 31, 1996. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mitcham Industries, Inc. as of
January 31, 1995 and 1996, and the results of its operations and its cash flows
for each of the years in the three year period ended January 31, 1996, in
conformity with generally accepted accounting principles.

HEIN + ASSOCIATES LLP
Certified Public Accountants

Houston, Texas
February 23, 1996

F-2
43

MITCHAM INDUSTRIES, INC.

BALANCE SHEETS

ASSETS

JANUARY 31,
------------------------- OCTOBER 31,
1995 1996 1996
---------- ----------- -----------
(UNAUDITED)

Current assets:
Cash................................................ $ 874,000 $ 637,000 $ 3,330,000
Accounts receivable, net of allowance for doubtful
accounts of $90,000, $347,000 and $615,000 at
January 31, 1995 and 1996 and October 31, 1996,
respectively..................................... 1,792,000 2,277,000 3,288,000
Installment notes receivable, trade................. 289,000 193,000 72,000
Inventory........................................... 84,000 206,000 630,000
Prepaid expenses and other current assets........... 69,000 274,000 103,000
---------- ----------- -----------
Total current assets........................ 3,108,000 3,587,000 7,423,000
Seismic equipment lease pool, net of accumulated
depreciation..................................... 4,979,000 8,115,000 15,247,000
Property and equipment, net of accumulated
depreciation..................................... 73,000 472,000 530,000
Other assets........................................ 39,000 65,000 52,000
---------- ----------- -----------
Total assets................................ $8,199,000 $12,239,000 $23,252,000
========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Notes payable to bank............................... $ 256,000 $ 400,000 $ --
Current installments of long-term debt.............. 167,000 447,000 938,000
Obligation under capital lease...................... 6,000 -- --
Accounts payable.................................... 614,000 491,000 3,370,000
Income taxes payable................................ 28,000 311,000 --
Deferred income taxes payable....................... 505,000 544,000 916,000
Accrued liabilities and other current liabilities... 80,000 474,000 737,000
---------- ----------- -----------
Total current liabilities................... 1,656,000 2,667,000 5,961,000
---------- ----------- -----------
Long-term debt:
Long-term debt, net of current installments......... 234,000 1,155,000 2,910,000
Capital lease obligations, net of current portion... 27,000 18,000 --
Deferred income taxes................................. 106,000 351,000 645,000
---------- ----------- -----------
Total liabilities........................... 2,023,000 4,191,000 9,516,000
Stockholders' equity:
Preferred stock, $1.00 par value; 1,000,000 shares
authorized; none issued and outstanding.......... -- -- --
Common stock, $.01 par value; 20,000,000 shares
authorized; 3,170,000, 3,221,000 and 4,378,650
shares, respectively, issued and outstanding..... 32,000 32,000 44,000
Additional paid-in capital.......................... 4,181,000 4,340,000 8,398,000
Retained earnings................................... 1,963,000 3,676,000 5,294,000
---------- ----------- -----------
Total stockholders' equity.................. 6,176,000 8,048,000 13,736,000
---------- ----------- -----------
Total liabilities and stockholders' equity............ $8,199,000 $12,239,000 $23,252,000
========== =========== ===========

The accompanying notes are an integral part of these financial statements.

F-3
44

MITCHAM INDUSTRIES, INC.

STATEMENTS OF INCOME

NINE MONTHS
YEARS ENDED JANUARY 31, ENDED OCTOBER 31,
------------------------------------ -----------------------
1994 1995 1996 1995 1996
---------- ---------- ---------- ---------- ----------
(UNAUDITED)

Revenues:
Leases of seismic equipment........ $1,601,000 $2,424,000 $5,157,000 $3,431,000 $5,356,000
Sales of seismic equipment......... 2,926,000 2,860,000 2,135,000 1,643,000 2,007,000
---------- ---------- ---------- ---------- ----------
Total revenues............. 4,527,000 5,284,000 7,292,000 5,074,000 7,363,000
---------- ---------- ---------- ---------- ----------
Costs and expenses:
Seismic equipment subleases........ 896,000 245,000 251,000 222,000 111,000
Sales of seismic equipment......... 1,772,000 2,027,000 1,085,000 1,000,000 1,261,000
General and administrative......... 655,000 924,000 1,344,000 990,000 1,199,000
Provision for doubtful accounts.... 38,000 35,000 627,000 372,000 418,000
Depreciation....................... 62,000 363,000 1,331,000 825,000 1,951,000
---------- ---------- ---------- ---------- ----------
Total costs and expenses... 3,423,000 3,594,000 4,638,000 3,409,000 4,940,000
---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest, net...................... (16,000) (209,000) (21,000) (6,000) (170,000)
Other, net......................... 20,000 60,000 38,000 26,000 219,000
---------- ---------- ---------- ---------- ----------
Total other income
(expense)................ 4,000 (149,000) 17,000 20,000 49,000
---------- ---------- ---------- ---------- ----------
Income before income taxes........... 1,108,000 1,541,000 2,671,000 1,685,000 2,472,000
Provision for income taxes........... 405,000 541,000 958,000 605,000 854,000
---------- ---------- ---------- ---------- ----------
Net income........................... $ 703,000 $1,000,000 $1,713,000 $1,080,000 $1,618,000
========== ========== ========== ========== ==========
Earnings per common and common
equivalent share:
Primary............................ $ 0.51 $ 0.66 $ 0.52 $ 0.34 $ 0.37
Assuming full dilution............. $ 0.51 $ 0.66 $ 0.50 $ 0.34 $ 0.36
========== ========== ========== ========== ==========
Shares used in computing earnings per
common and common equivalent share:
Primary............................ 1,380,000 1,514,000 3,306,000 3,170,000 4,431,000
Assuming full dilution............. 1,380,000 1,514,000 3,403,000 3,170,000 4,489,000
========== ========== ========== ========== ==========

The accompanying notes are an integral part of these financial statements.

F-4
45

MITCHAM INDUSTRIES, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

COMMON STOCK ADDITIONAL
------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
--------- ------- ---------- ---------- -----------

Balances, February 1, 1993............. 1,380,000 $14,000 $ -- $ 260,000 $ 274,000
Net income........................... -- -- -- 703,000 703,000
--------- ------- ---------- ---------- -----------
Balances, February 1, 1994............. 1,380,000 14,000 -- 963,000 977,000
Issuance of common stock, net of
offering expenses................. 1,790,000 18,000 4,181,000 -- 4,199,000
Net income........................... -- -- -- 1,000,000 1,000,000
--------- ------- ---------- ---------- -----------
Balances, January 31, 1995............. 3,170,000 32,000 4,181,000 1,963,000 6,176,000
Compensation on stock options issued
to employees...................... -- -- 37,000 -- 37,000
Issuance of common stock upon
exercise of warrants.............. 51,000 -- 122,000 -- 122,000
Net income........................... -- -- -- 1,713,000 1,713,000
--------- ------- ---------- ---------- -----------
Balances, January 31, 1996............. 3,221,000 32,000 4,340,000 3,676,000 8,048,000
Issuance of common stock upon
exercise of warrants
(unaudited)....................... 1,158,000 12,000 4,058,000 -- 4,070,000
Net income (unaudited)............... -- -- -- 1,618,000 1,618,000
--------- ------- ---------- ---------- -----------
Balances, October 31, 1996
(unaudited).......................... 4,379,000 $44,000 $8,398,000 $5,294,000 $13,736,000
========= ======= ========== ========== ===========

The accompanying notes are an integral part of these financial statements.

F-5
46

MITCHAM INDUSTRIES, INC.

STATEMENTS OF CASH FLOWS

NINE MONTHS
YEARS ENDED JANUARY 31, ENDED OCTOBER 31,
------------------------------------- -------------------------
1994 1995 1996 1995 1996
--------- ----------- ----------- ----------- -----------
(UNAUDITED)

Cash flows from operating activities:
Net income.............................. $ 703,000 $ 1,000,000 $ 1,713,000 $ 1,080,000 $ 1,618,000
Adjustments to reconcile net income to
net cash provided by operating
activities:
Trade accounts receivable, net........ (318,000) (1,404,000) (742,000) (316,000) (1,158,000)
Accounts payable and other current
liabilities......................... 428,000 71,000 554,000 20,000 (193,000)
Depreciation.......................... 62,000 363,000 1,331,000 825,000 1,951,000
Provision for doubtful accounts, net
of chargeoffs....................... -- (3,000) 257,000 -- 268,000
Loss on disposal of assets............ -- 12,000 -- -- --
Deferred income taxes................. 94,000 467,000 284,000 109,000 666,000
Other, net............................ (23,000) (46,000) (171,000) 145,000 (540,000)
--------- ----------- ----------- ----------- -----------
Net cash provided by operating
activities..................... 946,000 460,000 3,226,000 1,863,000 2,612,000
--------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Purchases of seismic equipment held for
lease................................. (875,000) (1,938,000) (5,321,000) (2,547,000) (5,750,000)
Purchases of property and equipment..... (7,000) (22,000) (444,000) (377,000) (131,000)
Proceeds from sale of property and
equipment............................. -- -- 846,000 797,000 --
--------- ----------- ----------- ----------- -----------
Net cash used in investing
activities..................... (882,000) (1,960,000) (4,919,000) (2,127,000) (5,881,000)
--------- ----------- ----------- ----------- -----------
Cash flows from financing activities:
Proceeds from short-term borrowings..... 709,000 1,413,000 400,000 400,000 --
Payments on short-term borrowings....... (146,000) (4,242,000) (256,000) (256,000) (400,000)
Proceeds from long-term debt............ 500,000 1,372,000 326,000 3,126,000
Payments on long-term debt and
capitalized lease obligations......... (6,000) (97,000) (182,000) (134,000) (834,000)
Capitalized stock issuance costs and
deferred financing charges............ (109,000) (25,000) -- (36,000) --
Proceeds from issuance of common stock,
net of offering expenses.............. -- 4,186,000 122,000 -- 4,070,000
--------- ----------- ----------- ----------- -----------
Net cash provided by financing
activities..................... 448,000 1,735,000 1,456,000 300,000 5,962,000
--------- ----------- ----------- ----------- -----------
Net increase (decrease) in cash........... 512,000 235,000 (237,000) 36,000 2,693,000
Cash, beginning of period................. 127,000 639,000 874,000 874,000 637,000
--------- ----------- ----------- ----------- -----------
Cash, end of period....................... $ 639,000 $ 874,000 $ 637,000 $ 910,000 $ 3,330,000
========= =========== =========== =========== ===========
Supplemental cash flow information:
Cash paid for:
Interest.............................. $ 17,000 $ 196,000 $ 78,000 $ 79,000 $ 289,000
Taxes................................. $ 8,000 $ 800 -- $ 300,000 $ 515,000
========= =========== =========== =========== ===========
Equipment acquired under capital
lease................................. $ 18,000 $ 36,000 -- -- --
Equipment purchases in accounts
payable............................... $ -- -- $ -- $ 1,175 $ 3,009
Equipment purchased with vendor
financing............................. -- $ 2,500,000 -- -- --
========= =========== =========== =========== ===========

The accompanying notes are an integral part of these financial statements.

F-6
47

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization -- Mitcham Industries, Inc. (the Company), is a Texas
corporation formed on January 29, 1987. The Company provides full-service
equipment leasing to the seismic industry primarily in North and South America.
The Company also sells and services new and used seismic data acquisition
equipment on a worldwide basis.

Description of leasing arrangements -- The Company leases various types of
seismic equipment to seismic data acquisition companies. All leases at October
31, 1996 are for one year or less. Lease revenue is recognized ratably over the
term of the lease.

Equipment sold on the installment basis -- The Company periodically sells
seismic equipment on an installment basis. The terms of the sale agreements
generally require twelve payments, with two payments due upon delivery of the
equipment and the remaining payments due over the succeeding ten months. To the
extent a down payment equal to at least 16.5% of the sales price is not
received, the gross profit from the sale is deferred until sufficient payments
have been received to warrant full revenue recognition.

Inventories -- Inventories consist primarily of used seismic equipment
purchased in bulk liquidation sales. Inventories are valued at the lower of cost
or market using the average cost method.

Seismic equipment held for lease -- Seismic equipment held for lease
consists primarily of remote signal conditioners (channel boxes) and peripheral
equipment and is carried at cost, net of accumulated depreciation. Depreciation
is computed on the straight-line method over the estimated useful lives of the
equipment, which range from three to seven years.

Property and equipment -- Property and equipment is carried at cost, net of
accumulated depreciation. Depreciation is computed on the straight-line method
over the estimated useful lives of the property and equipment. The estimated
useful lives of equipment range from three to seven years. Buildings are
depreciated over 40 years and property improvements over 10 years.

Income taxes -- The Company accounts for its taxes under FASB 109 under
which the Company recognizes on a current and long-term basis, deferred tax
assets and liabilities which represent differences between the financial and
income tax reporting bases of its assets and liabilities.

Cash equivalents -- For purposes of presenting cash flows, the Company
considers all highly liquid investments with remaining maturities of 90 days or
less on the purchase date to be cash equivalents.

Earnings per share -- Primary earnings per common and common equivalent
share and earnings per common and common equivalent share assuming full dilution
are computed on the weighted average number of shares outstanding adjusted for
the incremental shares attributed to outstanding options and warrants to
purchase common stock.

Use of estimates -- The preparation of the Company's financial statements
in conformity with generally accepted accounting principles requires the
Company's management to make estimates and assumptions that affect the amounts
reported in these financial statements and accompanying notes. Actual results
could differ from these estimates.

Industry Concentration -- The Company's lease revenues are derived from
seismic equipment leased to seismic companies providing 3-D seismic acquisition
services. The seismic industry has rapidly expanded its 3-D seismic acquisition
capabilities over the past few years as this technology has gained broader
market acceptance from the oil and gas exploration companies. With this
expansion, many of the seismic acquisition companies in North America, while
experiencing rapid growth in 3-D seismic acquisition revenues, have not
experienced corresponding increases in profitability and have become
increasingly leveraged. Should the

F-7
48

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

financial performance of the companies in this industry not improve, the Company
could be exposed to additional credit risk and subjected to declining demand for
its leased products.

New Accounting Pronouncements -- The Financial Accounting Standards Board
issued FASB 121 entitled "Impairment of Long-Lived Assets". FASB 121, which
became effective beginning February 1, 1996, provides that in the event that
facts and circumstance indicate that the cost of assets or other assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is required, the estimated future undiscounted cash flows associated with the
asset would be compared to the assets carrying amount to determine if a
writedown to market value or discounted cash flow is required. FASB 121 did not
have a material impact on the operating results or financial condition of the
Company upon implementation.

The FASB also issued SFAS No. 123, "Accounting for Stock Based
Compensation", effective for fiscal years beginning after December 15, 1995.
This statement allows companies to choose to adopt the statement's new rules for
accounting for employee stock-based compensation plans. For those companies
which choose not to adopt the new rules, the statement requires disclosures as
to what earnings per share would have been if the new rules had been adopted.
Management adopted the disclosure requirements of this statement during fiscal
1997.

Unaudited Interim Information -- The accompanying financial information as
of October 31, 1996 and for the nine month periods ended October 31, 1995 and
1996 has been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The financial statements
reflect all adjustments, consisting of normal recurring accruals, which are, in
the opinion of management, necessary to fairly present such information in
accordance with generally accepted accounting principles.

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

JANUARY 31,
-------------------- OCTOBER 31,
1995 1996 1996
-------- -------- -----------

Land............................................... $ -- $ 25,000 $ 25,000
Building and improvements.......................... -- 346,000 331,000
Furniture and fixtures............................. 80,000 153,000 234,000
Autos and trucks................................... 37,000 37,000 86,000
-------- -------- ---------
117,000 561,000 676,000
Less accumulated depreciation...................... (44,000) (89,000) (146,000)
-------- -------- ---------
$ 73,000 $472,000 $ 530,000
======== ======== =========

3. NOTES PAYABLE TO BANK

The Company has a $1,000,000 line of credit pursuant to a loan agreement.
Borrowings under this line of credit bear interest at the prime rate plus .5%
(totaling 9% at January 31, 1996). $400,000 was outstanding under this line at
January 31, 1996. The line of credit is collateralized by accounts receivable,
inventory and lease pool equipment.

On January 31, 1996, the Company executed a new line of credit with a bank
to replace the aforementioned line of credit. The Company may borrow up to
$1,000,000 under the new line of credit which will bear interest at prime plus
.5% (9% at January 31, 1996). Advances under the line of credit will be
collateralized by accounts receivable and inventory. Borrowings under the line
will be limited to 80% of eligible accounts receivable and 50% of eligible
inventory.

F-8
49

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

The Company had a demand note payable to a bank with interest at 1.5% over
its base lending rate (total of 11% at January 31, 1995). If no demand is made,
the note is due in monthly installments of $28,475 plus interest, through
October 1995. The note is collateralized by lease fleet equipment and
assignments of leases. The Company was required to maintain compensating
balances with the bank of approximately $97,000. At January 31, 1995, $256,000
was outstanding under the note. This note expired during fiscal 1996.

4. LONG-TERM DEBT

Long-term debt consists of the following:

JANUARY 31,
----------------------- OCTOBER 31,
1995 1996 1996
--------- ---------- -----------

Note payable to bank, due in monthly installments of
$13,889 plus interest at 1% over its base lending
rate (10.5% and 10.75% at January 31, 1995 and 1996),
due June 1997, collateralized by lease pool
equipment............................................ $ 401,000 $ 234,000 $ --
Note payable to bank, due in monthly installments of
$2,803 including interest at 9%, due September 1998,
collateralized by land and a building................ -- 274,000 266,000
Note payable to bank, due in monthly installments of
$833 plus interest at its base lending rate plus 1%
(9.75% at January 31, 1996), due September 2000,
collateralized by land and a building................ -- 48,000 --
Note payable to bank under $4,206,000 term loan
facility, due in monthly installments of $26,270,
including interest at 9.5%, through January 2000,
collateralized primarily by lease pool equipment and
an assignment of leases.............................. -- 1,046,000 3,582,000
--------- ---------- ----------
401,000 1,602,000 3,848,000
Less current maturities................................ (167,000) (447,000) (938,000)
--------- ---------- ----------
$ 234,000 $1,155,000 $2,910,000
========= ========== ==========

Aggregate maturities of long-term debt at January 31, 1996 are as follows:

YEAR ENDING JANUARY 31,
- -----------------------

1997............................................................ $ 447,000
1998............................................................ 350,000
1999............................................................ 525,000
2000............................................................ 271,000
2001............................................................ 9,000
----------
$1,602,000
==========

The term loan facility includes various financial covenants, the most
significant of which require the Company to maintain its tangible net worth at
90% of tangible net worth at October 31, 1995, and to increase quarterly by 50%
of net income for each quarter thereafter, maintain a ratio of total liabilities
to tangible net worth of not more than 1.25 to 1.0, and to maintain a ratio of
cash flow from operations, as defined, to current maturities of long-term debt
of not less than 1.25 to 1.0.

F-9
50

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

In January 1997, the Company established a second revolving line of credit
of up to $4.0 million (the "Equipment Revolver") to be used solely for
short-term financing of up to 75% of the seismic equipment purchased by the
Company for approved lease/purchase contracts, and a second term loan of $1.0
million (the "Second Term Loan") to be used solely for long-term financing of up
to 80% of the purchase price of other seismic equipment. Interest on the
Equipment Revolver and the Second Term Loan accrues at a floating rate of
interest equal to the bank's base rate of interest ("Base Rate") plus 0.5%.
Interest on amounts advanced under the Equipment Revolver is payable monthly,
and the principal amount is due six months after the date of the initial
advance; provided, however, that if the lessee under a lease/purchase contract
does not purchase the seismic equipment subject to the lease, and there has been
no default (as defined) under the lease, then the Company may extend the
maturity date for an additional 18 months (the "Extended Term"). In such event,
the principal amount of and interest on the amount advanced under the Equipment
Revolver would be payable in ratable monthly installments over the Extended
Term. Interest on and the principal amount of the Second Term Loan are payable
in ratable monthly installments over a two-year period through and including
December 1998.

5. LEASES

The Company leases and subleases seismic equipment to customers under
operating leases with non-cancellable terms of one year or less. These leases
are generally renewable on a month-to-month basis. All taxes (other than U.S.
federal income taxes) and assessments are the contractual responsibility of the
lessee. To the extent the foreign taxes are not paid by the lessee, the relevant
foreign taxing authorities might seek to collect such taxes from the Company.
Under the terms of its lease agreements, any amounts paid by the Company to such
foreign taxing authorities may be billed and collected from the lessee. If the
Company is unable to collect the foreign taxes it paid on behalf of its lessees,
the Company may have foreign tax credits in the amounts paid which could be
applied against its U.S. income tax liability subject to certain limitations.
The Company is not aware of any foreign tax obligations as of October 31, 1996.

The Company leases seismic equipment from others under month-to-month
operating leases. Lease expense incurred by the Company in connection with such
leases amounted to $896,000, $245,000 and $251,000 for the years ended January
31, 1994, 1995 and 1996, respectively and $222,000 and $111,000 for the nine
months ended October 31, 1995 and 1996, respectively.

A summary of the equipment held for lease to others is as follows:

JANUARY 31,
------------------------- OCTOBER 31,
1995 1996 1996
---------- ----------- -----------

Remote signal conditioners (channel boxes)
and other equipment........................ $5,395,000 $ 9,580,000 $18,589,000
Less: accumulated depreciation............... (416,000) (1,465,000) (3,342,000)
---------- ----------- -----------
$4,979,000 $ 8,115,000 $15,247,000
========== =========== ===========

F-10
51

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

6. INCOME TAXES

The components of income tax expense are as follows:

YEAR ENDED JANUARY 31,
-----------------------------------
1994 1995 1996
--------- --------- ---------

Current:
Federal....................................... $ 301,000 $ 71,000 $ 698,000
State......................................... 10,000 3,000 (24,000)
--------- --------- ---------
311,000 74,000 674,000
Deferred........................................ 94,000 467,000 284,000
--------- --------- ---------
$ 405,000 $ 541,000 $ 958,000
========= ========= =========

The components of the Company's deferred tax liability are as follows:

JANUARY 31,
----------------------
1995 1996
--------- ---------

Deferred Tax asset -- allowance for doubtful
accounts.................................................. $ 31,000 $ 123,000
Deferred tax liabilities:
Conversion from accrual to cash method of accounting...... (536,000) (667,000)
Depreciation.............................................. (106,000) (351,000)
--------- ---------
Deferred tax liability, net............................... $(611,000) $(895,000)
========= =========

Beginning in fiscal 1998, the Company will no longer be eligible to report on
the cash basis of accounting for federal income tax reporting purposes.

The following is a reconciliation of expected to actual income tax expense:

YEAR ENDED JANUARY 31,
--------------------------------------
1994 1995 1996
---------- ---------- ----------

Federal income tax expense at 34%.............. $ 377,000 $ 524,000 $ 913,000
State income taxes and nondeductible
expenses..................................... 29,000 17,000 45,000
Other, net..................................... (1,000) -- --
---------- ---------- ----------
$ 405,000 $ 541,000 $ 958,000
========== ========== ==========

7. RELATED PARTY TRANSACTIONS

The Company engages in transactions with companies controlled by a
stockholder of the Company or in which a stockholder of the Company has a
substantial ownership interest. The following is a summary of transactions with
these companies:

YEAR ENDED JANUARY 31,
-------------------------------
1994 1995 1996
-------- ------- --------

Office and warehouse rent expense................... $ 48,000 $48,000 $ 32,000
Equipment lease expense and purchases............... $270,000 $11,000 $ 28,000
Seismic equipment sales............................. $ 8,000 $ -- $ --
Purchase of office and warehouse.................... $ -- $ -- $325,000
======== ======= ========

F-11
52

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

See Note 11 for discussion of the employment agreement with the Company's
President.

In September 1994, the Company entered into an equipment lease whereby the
lessors acquired $250,000 of channel boxes from the Company and leased them back
to the Company. In October 1994, the Company exercised its right to purchase the
equipment for $250,000. The Company's legal counsel was one of the lessors in
this transaction and provided $50,000 of the consideration for the acquisition
of the equipment by the lessors.

8. EXPORT SALES AND MAJOR CUSTOMERS

A summary of the Company's revenues from foreign customers by geographic
region is as follows:

YEAR ENDED JANUARY 31,
--------------------------------------
1994 1995 1996
---------- ---------- ----------

Canada......................................... $ 876,000 $ 346,000 $1,022,000
Columbia....................................... -- -- 949,000
China.......................................... -- 885,000 943,000
Europe......................................... 293,000 339,000 699,000
Other.......................................... 240,000 222,000 213,000
---------- ---------- ----------
Totals............................... $1,409,000 $1,792,000 $3,826,000
========== ========== ==========

One customer represented 36%, 16% and 18% of the Company's total revenues
for the years ended January 31, 1994, 1995 and 1996, respectively. No other
customer exceeded 10% of revenues for fiscal 1994, 1995 and 1996.

9. CONCENTRATIONS OF CREDIT RISK

As of January 31, 1995 and 1996, and October 31, 1996, amounts due from
customers which exceeded 10 percent of accounts receivable, amounted to an
aggregate of $1,298,000 (four customers) $1,138,000 (three customers) and
$1,663,000 (three customers), respectively.

One of the Company's significant customers filed for bankruptcy protection
during December 1996. Revenues derived from this customer amount to 18.5% of
total revenues for the eleven-month period ended December 31, 1996. As of that
date, amounts due from this customer totalled approximately $1.0 million. During
December 1996, the Company increased its allowance for trade accounts receivable
from $615,000 at October 31, 1996 to $1.5 million at December 31, 1996, which
amount was intended to fully reserve all amounts due from this customer and
provide for any potential loss associated with the Company's remaining trade
accounts receivable.

The Company maintains deposits with banks which exceed the FDIC insured
limit and has a money market account included in its cash balances which is not
FDIC insured. Management believes the risk of loss in connection with these
accounts is minimal.

10. STOCKHOLDERS' EQUITY

The Company has 1,000,000 shares of preferred stock authorized, none of
which are outstanding as of October 31, 1996. The preferred stock may be issued
in multiple series with various terms, as authorized by the Company's Board of
Directors. The Company has 20,000,000 shares of common stock authorized, of
which 4,378,650 are issued and outstanding as of October 31, 1996. In connection
with the Company's initial public offering, 1,790,000 shares of the Company's
common stock were issued during fiscal 1995. Proceeds of the offering amounted
to $4,185,000, net of offering costs of $1,283,000. Warrants to acquire 895,000
shares of

F-12
53

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

the Company's commons stock at $3.50 per share were issued in connection with
this offering. 892,750 of these warrants had been exercised as of October 31,
1996.

The Company issued warrants to various stockholders during fiscal 1995 to
acquire 49,500 shares of the Company's common stock at $5.00 per share. The
number of shares and exercise price of the warrants was increased to 63,953 and
$3.87, respectively, during fiscal 1996 as a result of the anti-dilution
provisions of the warrants.

In connection with bridge financing during 1994, the Company issued
warrants to the bridge note holders to purchase 200,000 shares of its common
stock for $3.75 per share. The exercise price of the warrants was later
decreased to $3.50 per share in connection with the Company's sale and leaseback
of channel boxes and subsequent exercise of an option to purchase such channel
boxes. The warrants were exercisable beginning December 29, 1994, and unless
exercised, automatically expire five years from the date of their issuance. All
these warrants have been exercised as of October 31, 1996.

The Company issued warrants to acquire 35,000 shares of its common stock to
a public relations firm engaged by the Company. The warrants are exercisable at
$3.50 per share and are unexercised at October 31, 1996.

Warrants to acquire 85,000 units (consisting of two shares of common stock
and one warrant to purchase one share of common stock at $4.20 per share) at
$7.97 per unit were issued to underwriters in connection with the Company's
initial public offering. The securities underlying these warrants, as well as
the common stock underlying currently outstanding options and warrants, are
subject to certain demand and piggy-back registration rights. As of October 31,
1996, 68,000 of these warrants had been exercised.

11. COMMITMENTS AND CONTINGENCIES

Equipment purchases:

On February 22, 1994, the Company executed an agreement with Input/Output,
Inc. (I/O) under which I/O will notify the Company of any inquiries it receives
to lease I/O's remote signal conditioners in North and South America and will
allow the Company the opportunity to provide such leasing. In the event the
Company and a prospective customer are unable to reach agreement on such leases
in a 72-hour period, I/O shall have the right to offer the equipment for lease
to the prospective customer. The agreement, which expired December 1996, was
contingent upon the Company purchasing a minimum of $10,000,000 of I/O remote
signal conditioners as follows: $1,000,000 on or before June 30, 1994;
$2,500,000 on or before August 31, 1994; an additional $2,500,000 through
February 22, 1996; and a further $4,000,000 through December 31, 1996. In the
event the Company had not made the required amount of purchases, it would have
lost its exclusivity as recipient of lease requests for I/O channel boxes.

Effective June 1, 1996, the Company entered into an agreement with I/O to
amend the terms of and extend the Exclusive Lease Referral Agreement through May
31, 2000. Under the I/O Agreement as amended, the Company must purchase an
aggregate of $13.25 million of I/O equipment as follows: $3.0 million of I/O
equipment between June 1 and November 30, 1996, (the "Renewal Purchase") with a
minimum of $1.5 million to be purchased by August 31, 1996. Thereafter, from
January 1, 1997 through May 31, 1997, the Company must purchase at least an
aggregate of $1.25 million of I/O equipment. In each of the years from June 1,
1997 through May 31, 1998, June 1 through May 31, 1999 and June 1, 1999 through
May 31, 2000, the Company must purchase at least an aggregate of $3.0 million of
I/O equipment (or an aggregate additional $10.25 million after the $3.0 million
Renewal purchase is made). As of October 31, 1996, the Company believes it has
fulfilled the terms of the agreement, including the minimum purchase
commitments.

F-13
54

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

In September 1996, the Company entered into two agreements with SERCEL,
S.A. ("SERCEL") a designer and manufacturer of land/shallow water seismic data
acquisition systems and related equipment. One agreement, the Exclusive
Equipment Lease Agreement provides that until December 31, 1999, the Company
will be SERCEL's short-term leasing agency throughout the world and that SERCEL
will refer to the Company all requests it receives from its customers to lease
its 3-D data acquisition equipment and other field equipment; and the Company
will acquire up to $10.2 million of SERCEL's 3-D data acquisition equipment and
other field equipment from SERCEL at favorable prices, $800,000 of which will
consist of SERCEL's existing lease pool of primarily 3-D channel boxes. The
second agreement, the Commercial Representation Agreement, provides that until
September 19, 1999, the Company will be SERCEL's exclusive sales agent in
Canada. In connection with entering into this agreement, the Company established
an office in Calgary, Alberta, Canada in November 1996. As of October 31, 1996,
the Company believes it has fulfilled the terms of the agreement, including the
minimum purchase commitments.

Employment Agreement

Effective January 15, 1997, the Company entered into an employment
agreement with the Company's President for a term of five years, beginning
January 15, 1997, which term is automatically extended for successive one-year
periods unless either party gives written notice of termination at least 30 days
prior to the end of the current term. The agreement provides for an annual
salary of $150,000, subject to increase by the Board of Directors. It may be
terminated prior to the end of the initial term or any extension thereof if the
President dies; if it is determined that the President has become disabled (as
defined); if the Board of Directors determines that the President has breached
the employment agreement in any material respect, has appropriated a material
business opportunity of the Company or has engaged in fraud or dishonesty with
respect to the Company's business or is convicted of or indicted for any felony
criminal offense or any crime punishable by imprisonment. If the President's
employment is terminated by the Company prior to the end of the initial
five-year term other than for a reason enumerated above, the President will be
entitled to payments equal to $450,000, payable ratably over the 24 months
following such termination. For a period of two years after the termination of
the agreement, the President is prohibited from engaging in any business
activities that are competitive with the Company's business and from diverting
any of the Company's customers to a competitor.

Consulting agreement:

The Company has a contract with the father of the Company's President, to
provide sales consulting services. The agreement calls for payments of $5,500
per month through April 1999, subject to earlier termination on the occurrence
of certain events.

12. STOCK OPTION PLANS

The Company has a stock option plan under which options to purchase a
maximum of 300,000 shares of common stock may be issued to officers, employee
directors, key employees and consultants of the Company. The stock option plan
provides both for the grant of options intended to qualify as "incentive stock
options" under the Internal Revenue Code of 1986, as amended (the Code), as well
as options that do not so qualify.

With respect to incentive stock options, no option may be granted more than
ten years after the effective date of the stock option plan or exercised more
than ten years after the date of grant (five years if the optionee owns more
than 10% of the common stock of the Company). Additionally, with regard to
incentive stock options, the exercise price of the option may not be less than
100% of the fair market value of the common stock at the date of grant (110% if
the optionee owns more than 10% of the common stock of the Company). Subject to
certain limited exceptions, options may not be exercised unless, at the time of
exercise, the optionee

F-14
55

MITCHAM INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION SUBSEQUENT TO JANUARY 31, 1996 IS UNAUDITED)

is in the service of the Company. As of October 31, 1996, options to purchase an
aggregate of 285,750 shares of common stock are issued and outstanding under the
Stock Option Plan, 183,250 of which are exercisable at a price of $5.00 per
share, 62,000 of which are exercisable at $3.29 per share, 39,500 of which are
exercisable at $5.75 and 1,000 of which are exercisable at $6.00 per share.

The Company has a non-employee director stock option plan (the Director
Plan) which provides for the grant of options that do not qualify as "incentive
stock options" under the Code. Options granted under the Director Plan are to
have an exercise price at least equal to the fair market value of the Company's
common stock on the date of grant. Pursuant to the Director Plan, options to
purchase 1,000 shares of common stock are granted to each non-employee director
upon his election to the Board and every year thereafter so long as he is
re-elected to the Board of Directors. Options granted under the Director Plan
are fully vested one year after their grant and expire ten years after the date
of the grant. As of October 31, 1996, 8,000 options have been granted under this
Plan.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of trade receivables and
payables and notes payable to banks. The Company believes the carrying value of
these financial instruments approximate their estimated fair value.

14. SECONDARY PUBLIC OFFERING

The Company is preparing to register with the Securities and Exchange
Commission 2,500,000 shares of its common stock. The Company has granted an
option to the underwriters to purchase up to 375,000 shares on the same terms to
satisfy over-allotments in the sale of the 2,500,000 shares.

F-15
56

================================================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR SOLICITATION OF ANY OFFER TO BUY BY ANY ONE IN ANY JURISDICTION IN
WHICH SUCH OFFER TO SELL OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

PAGE
----

Prospectus Summary.................... 3
Cautionary Statement Regarding
Forward-Looking Statements.......... 6
Risk Factors.......................... 6
Use of Proceeds....................... 10
Price Range of Common Stock........... 11
Dividend Policy....................... 11
Capitalization........................ 12
Dilution.............................. 13
Selected Financial Data............... 14
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 15
Business.............................. 19
Management............................ 27
Certain Transactions and
Relationships....................... 31
Principal and Selling Shareholders.... 32
Description of Capital Stock and Other
Securities.......................... 33
Shares Eligible for Future Sale....... 35
Underwriting.......................... 36
Legal Matters......................... 37
Experts............................... 37
Available Information................. 37
Glossary of Terms..................... 39
Index to Financial Statements......... F-1

================================================================================

================================================================================
[Mitcham Industries Logo]

3,000,000 SHARES

COMMON STOCK
---------------------

PROSPECTUS

---------------------
RODMAN & RENSHAW, INC.

SIMMONS & COMPANY
INTERNATIONAL

, 1997
================================================================================
57

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Expenses payable in connection with the issuance and distribution of the
securities to be registered, other than underwriting discounts and commissions,
are estimated as follows:

Securities and Exchange Commission filing fee............... $ 9,505
Nasdaq filing fee........................................... 3,650
Printing expenses........................................... 75,000
Legal fees and expenses..................................... 80,000
Accounting fees and expenses................................ 25,000
Blue Sky fees and expenses.................................. 5,000
Transfer Agent fees......................................... 3,500
Miscellaneous expenses...................................... 23,345
--------
TOTAL............................................. $225,000
========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Article Nine of the Company's Amended and Restated Articles of
Incorporation (the "Articles") eliminates or limits the personal liability of
directors for damages for an act or omission in the director's capacity as a
director, except for (i) a breach of a director's duty of loyalty to the Company
or its shareholders; (ii) an act or omission not in good faith that constitutes
a breach of duty of the director to the Company or that involves intentional
misconduct or a knowing violation of the law; (iii) a transaction from which a
director received an improper benefit, whether or not the benefit resulted from
an action taken within the scope of the directors' office; or (iv) an act or
omission for which the liability of a director is expressly provided for by an
applicable statute.

Article Eleven of the Articles makes mandatory the indemnification of
directors permitted under Section B of Article 2.02-1 of the Texas Business
Corporation Act ("TBCA") and permits the Company to advance the reasonable
expenses of a director upon compliance with the requirements of Sections K and L
thereof.

Article 2.02-1 of the TBCA provides as follows:

A. In this article:

(1) "Corporation" includes any domestic or foreign predecessor entity
of the corporation in a merger, consolidation, or other transaction in
which the liabilities of the predecessor are transferred to the corporation
by operation of law and in any other transaction in which the corporation
assumes the liabilities of the predecessor but does not specifically
exclude liabilities that are the subject matter of this article.

(2) "Director" means any person who is or was a director of the
corporation and any person who, while a director of the corporation, is or
was serving at the request of the corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan, or other
enterprise.

(3) "Expenses" include court costs and attorneys' fees.

II-1
58

(4) "Official capacity" means

(a) when used with respect to a director, the office of director in
the corporation, and

(b) when used with respect to a person other than a director, the
elective or appointive office in the corporation held by the
officer or the employment or agency relationship undertaken by
the employee or agent in behalf of the corporation, but

(c) in both Paragraphs (a) and (b) does not include service for any
other foreign or domestic corporation or any partnership, joint
venture, sole proprietorship, trust, employee benefit plan, or
other enterprise.

(5) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, arbitrative,
or investigative, any appeal in such an action, suit, or proceeding, and
any inquiry or investigation that could lead to such an action, suit, or
proceeding.

B. A corporation may indemnify a person who was, is or is threatened to be
a made a named defendant or respondent in a proceeding because the person is or
was a director only if it is determined in accordance with Section F of this
article that the person:

(1) conducted himself in good faith;

(2) reasonably believed:

(a) in the case of conduct in his official capacity as a director
of the corporation, that his conduct was in the corporation's
best interests; and

(b) in all other cases, that his conduct was at least not opposed
to the corporation's best interests; and

(3) in the case of any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful.

C. Except to the extent permitted by Section E of this article, a director
may not be indemnified under Section B of this article in respect of a
proceeding:

(1) in which the person is found liable on the basis that personal
benefit was improperly received by him, whether or not the benefit resulted
from an action taken in the person's official capacity; or

(2) in which the person is found liable to the corporation.

D. The termination of a proceeding by judgment, order, settlement, or
conviction, or on a plea of nolo contendere or its equivalent is not of itself
determinative that the person did not meet the requirements set forth in Section
B of this article. A person shall be deemed to have been found liable in respect
of any claim, issue or matter only after the person shall have been so adjudged
by a court of competent jurisdiction after exhaustion of all appeals therefrom.

E. A person may be indemnified under Section B of this article against
judgments, penalties (including excise and similar taxes), fines, settlements,
and reasonable expenses actually incurred by the person in connection with the
proceeding; but if the person is found liable to the corporation or is found
liable on the basis that personal benefit was improperly received by the person,
the indemnification (1) is limited to reasonable expenses actually incurred by
the person in connection with the proceeding and (2) shall not be made in
respect of any proceeding in which the person shall have been found liable for
willful or intentional misconduct in the performance of his duty to the
corporation.

F. A determination of indemnification under Section B of this article must
be made:

(1) by a majority vote of a quorum consisting of directors who at the
time of the vote are not named defendants or respondents in the proceeding;

II-2
59

(2) if such a quorum cannot be obtained, by a majority vote of a
committee or the board of directors, designated to act in the matter by a
majority vote of all directors, consisting solely of two or more directors
who at the time of the vote are not named defendants or respondents in the
proceeding;

(3) by special legal counsel selected by the board of directors of a
committee of the board by vote as set forth in Subsection (1) or (2) of
this section, or if such a quorum cannot be obtained and such a committee
cannot be established, by a majority vote of all directors; or

(4) by the shareholders in a vote that excludes the shares held by
directors who are named defendants or respondents in the proceeding.

G. Authorization of indemnification and determination as to reasonableness
of expenses must be made in the same manner as the determination that
indemnification is permissible, except that if the determination that
indemnification is permissible is made by special legal counsel, authorization
of indemnification and determination as to reasonableness of expenses must be
made in the manner specified by Subsection (3) of Section F of this article for
the selection of special legal counsel. A provision obtained in the articles of
incorporation, the bylaws, a resolution of shareholders or directors, or an
agreement that makes mandatory the indemnification permitted under Section B of
this article shall be deemed to constitute authorization of indemnification in
the manner required by this section even though such provision may not have been
adopted or authorized in the same manner as the determination that
indemnification is permissible.

H. A corporation shall indemnify a director against reasonable expenses
incurred by him in connection with a proceeding in which he is a named defendant
or respondent because he is or was a director if he has been wholly successful,
on the merits or otherwise, in the defense of the proceeding.

I. If, in a suit for the indemnification required by Section H of this
article, a court of competent jurisdiction determines that the director is
entitled to indemnification under that section, that court shall order
indemnification and shall award to the director the expenses incurred in
securing the indemnification.

J. If, upon application of a director, a court of competent jurisdiction
determines, after giving any notice the court considers necessary, that the
director is fairly and reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not he has met the requirements set forth in
Section B of this article or has been adjudged liable in the circumstances
described by Section C of this article, the court may order the indemnification
that the court determines is proper and equitable; but if the person is found
liable to the corporation or is found liable on the basis that personal benefit
was improperly received by the person, the indemnification shall be limited to
reasonable expenses actually incurred by the person in connection with the
proceeding.

K. Reasonable expenses incurred by a director who was, is, or is threatened
to be made a named defendant or respondent in a proceeding may be paid or
reimbursed by the corporation, in advance of the final disposition of the
proceeding and without any of the determinations specified in Sections F and G
of this article, after the corporation receives a written affirmation by the
director of his good faith belief that he has met the standard of conduct
necessary for indemnification under this article and a written undertaking by or
on behalf of the director to repay the amount paid or reimbursed if it is
ultimately determined that he has not met that standard or if it is ultimately
determined that indemnification of the director against expenses incurred by him
in connection with that proceeding is prohibited by Section E of this article. A
provision contained in the articles of incorporation, the bylaws, a resolution
of shareholders or directors, or an agreement that makes mandatory the payment
or reimbursement permitted under this section shall be deemed to constitute
authorization of that payment or reimbursement.

L. The written undertaking required by Section K of this article must be an
unlimited general obligation of the director but need not be secured. It may be
accepted without reference to financial ability to make repayment.

M. A provision for a corporation to indemnify or to advance expenses to a
director who was, is or is threatened to be made a named defendant or respondent
in a proceeding, whether contained in the articles of incorporation, the bylaws,
a resolution of shareholders or directors, an agreement, or otherwise, except in

II-3
60

accordance with Section R of this article, is valid only to the extent it is
consistent with this article as limited by the articles of incorporation, if
such a limitation exists.

N. Notwithstanding any other provision of this article, a corporation may
pay or reimburse expenses incurred by a director in connection with his
appearance as a witness or other participation in a proceeding at a time when he
is not a named defendant or respondent in the proceeding.

O. An officer of the corporation shall be indemnified as, and to the same
extent, provided by Sections H, I, and J of this article for a director and is
entitled to seek indemnification under those sections to the same extent as a
director. A corporation may indemnify and advance expenses to an officer,
employee, or agent of the corporation to the same extent that it may indemnify
and advance expenses to directors under this article.

P. A corporation may indemnify and advance expenses to persons who are or
were not officers, employees, or agents of the corporation but who are or were
serving at the request of the corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise to the same
extent that it may indemnify and advance expenses to directors under this
article.

Q. A corporation may indemnify and advance expenses to an officer,
employee, agent, or person identified in Section P of this article and who is
not a director such further extent, consistent with law, as may be provided by
its articles of incorporation, bylaws, general or specific action of its board
of directors, or contract or as permitted or required by common law.

R. A corporation may purchase and maintain insurance or another arrangement
on behalf of any person who is or was a director, officer, employee, or agent of
the corporation or who is or was serving at the request of the corporation as a
director, officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or other
enterprise, against any liability asserted against him and incurred by him in
such a capacity or arising out of his status as such a person, whether or not
the corporation would have the power to indemnify him against that liability
under this article. If the insurance or other arrangement is with a person or
entity that is not regularly engaged in the business of providing insurance
coverage, the insurance or arrangement may provide for payment of a liability
with respect to which the corporation would not have the power to indemnify the
person only if including coverage for the additional liability has been approved
by the shareholders of the corporation. Without limiting the power of the
corporation to procure or maintain any kind of insurance or other arrangement, a
corporation may, for the benefit of persons indemnified by the corporation, (1)
create a trust fund; (2) establish any form of self-insurance; (3) secure its
indemnity obligation by grant of a security interest or other lien on the assets
of the corporation; or (4) establish a letter of credit, guaranty, or surety
arrangement. The insurance or other arrangement may be procured, maintained, or
established within the corporation or with any insurer or other person deemed
appropriate by the board of directors regardless of whether all or part of the
stock or other securities of the insurer or other person are owned in whole or
part by the corporation. In the absence of fraud, the judgment of the board of
directors as to the terms and conditions of the insurance or other arrangement
and the identity of the insurer or other person participating in an arrangement
shall be conclusive and the insurance or arrangement shall not be voidable and
shall not subject the directors approving the insurance or arrangement to
liability, on any ground, regardless of whether directors participating in the
approval are beneficiaries of the insurance or arrangement.

S. Any indemnification of or advance of expenses to a director in
accordance with this article shall be reported in writing to the shareholders
with or before the notice or waiver of notice of the next shareholders' meeting
or with or before the next submission to shareholders of a consent to action
without a meeting pursuant to Section A, Article 9.10, of this Act and, in any
case, within the 12-month period immediately following the date of the
indemnification or advance.

T. For purposes of this article, the corporation is deemed to have
requested a director to serve an employee benefit plan whenever the performance
by him of his duties to the corporation also imposes duties on or otherwise
involves services by him to the plan or participants or beneficiaries of the
plan. Excise taxes assessed on a director with respect to an employee benefit
plan pursuant to applicable law are deemed fines.

II-4
61

Action taken or omitted by him with respect to an employee benefit plan in the
performance of his duties for a purpose reasonably believed by him to be in the
interest of the participants and beneficiaries of the plan is deemed to be for a
purpose which is not opposed to the best interests of the corporation.

U. The articles of incorporation of a corporation may restrict the
circumstances under which the corporation is required or permitted to indemnify
a person under Section H, I, J, O, P, or Q of this article.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

During the past three years, the Company had made the following sales of
unregistered securities, all of which sales were exempt from the negotiation
requirements of the Securities Act pursuant to Section 4(2) thereof:

In connection with the Company's bridge financing consummated in June 1994,
the Company issued to the following investors a promissory note in the original
principal amount of $500,000 (in which the investors have undivided interests
therein as indicated below) and for an aggregate consideration of $200, Bridge
Warrants to purchase an aggregate of 200,000 shares of Common Stock for $3.50
per share:

INTEREST IN BRIDGE PURCHASE
NAME OF INVESTOR THE NOTE WARRANTS PRICE
---------------- ----------- -------- --------

Heptagon Investments Limited................ 80% 160,000 $160
Carl L. Norton.............................. 20% 40,000 $ 40

On March 19, 1996, the Company issued 4,900 shares of Common Stock to
Norton, Jacobs, Kuhn & McTopy, L.L.P. for services rendered in connection with
the Company obtaining a $1,000,000 revolving line of credit and a $4,200,000
term loan from Bank One, Texas, N.A. and Bank One Leasing Corporation,
respectively.

On August 22, 1996, the Company issued warrants to purchase 40,000 and
10,000 shares of Common Stock for $6.43 per share (110% of the average closing
price of a share of Common Stock for the 20 trading days preceding their
issuance) to Norton Family Trust (the "Trust") and Sabrina A. McTopy ("McTopy"),
respectively. Such warrants were acquired by the Trust and McTopy for $40.00 and
$10.00, respectively. The warrants are exercisable at any time after their
issuance through August 22, 2000.

On December 13, 1996, the Company issued warrants to purchase 40,000 and
10,000 shares of Common Stock for $9.28 per share (110% of the average closing
price of a share of Common Stock for the 20 trading days preceding their
issuance) to the Trust and McTopy, respectively. Such warrants were acquired by
the Trust and McTopy for $40.00 and $10.00, respectively. The warrants are
exercisable at any time after December 14, 1997 through December 12, 2001.

II-5
62

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

EXHIBIT NO. DESCRIPTION
----------- -----------

1* -- Form of Underwriting Agreement
3.1 -- Amended and Restated Articles of Incorporation of Mitcham
Industries, Inc. (1) (Exhibit 3.1)
3.2 -- Amended and Restated Bylaws of Mitcham Industries, Inc.
(1) (Exhibit 3.2)
4.1 -- Copy of specimen stock certificate evidencing Common
Stock of Mitcham Industries, Inc. (2) (Exhibit 4.1)
5* -- Opinion of Norton, Jacobs, Kuhn & McTopy, L.L.P. as to
the legality of the securities being registered
9 -- Voting Agreement, dated September 20, 1993, between the
Company, Billy F. Mitcham, Jr. and certain shareholders
(1) (Exhibit 9)
10.1 -- Exclusive Lease Referral Agreement, dated February 22,
1994, between Mitcham Industries, Inc. and Input/Output,
Inc., as amended (3) (Exhibit 10.1)
10.2+ -- Fifth Amendment to Exclusive Lease Referral Agreement
with Input/Output, dated January 9, 1997
10.3 -- Registration Rights Agreement, dated September 20, 1993,
between the Company and certain shareholders (1) (Exhibit
10.14)
10.4+ -- Employment Agreement, dated January 15, 1997, between the
Company and Billy F. Mitcham, Jr.
10.5 -- Consulting Agreement, dated April 1, 1994, between the
Company and Billy F. Mitcham, Sr. (1) (Exhibit 10.16)
10.6+ -- First Amendment to Consulting Agreement, dated January
15, 1997, between the Company and Billy F. Mitcham, Jr.
10.7 -- Promissory Note, dated September 22, 1995, in the
original principal amount of $276,250, made payable by
the Company to the order of First National Bank of
Huntsville (4) (Exhibit 10.26)
10.8 -- Deed of Trust, dated September 22, 1995, securing the
$276,250 loan (4) (Exhibit 10.27)
10.9 -- Promissory Note, dated January 31, 1996, in the original
principal amount of $1,000,000 made payable by the
Company to the order of Bank One, Texas, National
Association ("Bank One") (5) (Exhibit 10.8)
10.10 -- Promissory Note, dated January 31, 1996, in the original
principal amount of $4,206,000, made payable by the
Company to the order of Banc One Leasing Corporation
("Banc One Leasing") (5) (Exhibit 10.9)
10.11 -- Letter Loan Agreement, dated January 31, 1996, as
amended, between the Company, Bank One and Banc One
Leasing Corporation (5) (Exhibit 10.10)
10.12 -- Assignment of Leases, dated January 31, 1996, between the
Company, Bank One and Banc One Leasing (5) (Exhibit
10.11)
10.13 -- Security Agreement, dated January 31, 1996, between the
Company, Bank One, and Banc One Leasing (5) (Exhibit
10.12)
10.14 -- Exclusive Lease Referral Agreement, dated May 14, 1996,
between the Company and Pelton Company, Inc. (6) (Exhibit
10.1)
10.15 -- Exclusive Equipment Lease Agreement, effective September
20, 1996, between the Company and SERCEL, S.A. (6)
(Exhibit 10.2)

II-6
63

10.16 -- Commercial Representation Agreement, effective September 20, 1996, between Mitcham
Canada LTD., an Alberta corporation, and Georex, Inc. (6) (Exhibit 10.3)
10.17+ -- First Amendment of Exclusive Lease Referral Agreement, dated January , 1997, between
the Company and Pelton
10.18 -- 1994 Stock Option Plan of Mitcham Industries, Inc. (2) (Exhibit 10.9)
10.19 -- Form of Incentive Stock Option Agreement (2) (Exhibit 10.10)
10.20 -- Form of Nonqualified Stock Option Agreement (2) (Exhibit 10.11)
10.21 -- 1994 Non-Employee Director Stock Option Plan of Mitcham Industries, Inc. (2) (Exhibit
10.12)
10.22 -- Form of Nonqualified Stock Option Agreement (2) (Exhibit 10.13)
10.23 -- Form of Mitcham Industries, Inc. customer lease agreement (1) (Exhibit 10.20)
10.24+ -- Letter Loan Agreement, dated January 16, 1997, between the Company and Bank One
10.25+ -- Assignment of Leases, dated January 16, 1997, between the Company and Bank One
10.26+ -- Security Agreement, dated January 16, 1997, between the Company and Bank One
10.27+ -- Promissory Note, dated January 16, 1997, made payable by the Company to the order of
Bank One in the original principal amount of $1,000,000
10.28+ -- First Amendment to Letter Loan Agreement, dated January 16, 1997, among the Company,
Bank One and Bank One Leasing
21 -- Subsidiaries of the Company (6) (Exhibit 11)
23.1* -- Consent of Hein + Associates LLP
23.2* -- Consent of Norton, Jacobs, Kuhn & McTopy, L.L.P. (included in Exhibit 5).

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

* Filed herewith.

+ Previously filed.

(1) Incorporated by reference to the indicated exhibit number of the
Registrant's Registration Statement on Form SB-2 (File No. 33-81164-D),
filed with the SEC on July 5, 1994.

(2) Incorporated by reference to the indicated exhibit number of the
Registrant's Amendment No. 2 to the Registration Statement on Form SB-2,
filed with the SEC on November 9, 1994.

(3) Incorporated by reference to the indicated exhibit number of the
Registrant's Amendment No. 3 to the Registration Statement on Form SB-2,
filed with the SEC on December 12, 1994.

(4) Incorporated by reference to the indicated exhibit number of the
Registrant's Post-Effective Amendment No. 2 to its Registration Statement on
Form SB-2, filed with the SEC on October 30, 1995.

(5) Incorporated by reference to the indicated exhibit number of the
Registrant's Post-Effective Amendment No. 4 to its Registration Statement on
Form SB-2, filed with the SEC on April 17, 1996.

(6) Incorporated by reference to the indicated exhibit number of the
Registrant's Registration Statement on Form S-3 (File No. 333-10555), filed
with the SEC on October 30, 1996.

(b) Financial Statement Schedules

SCHEDULE DESCRIPTION
-------- -----------

Schedule II, including Independent Statement of Valuation and
Auditor's Report on Financial Qualifying Accounts
Statement Schedule

II-7
64

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser. In addition, the undersigned
Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933 Act, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(d) The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-8
65

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form S-1 and has duly authorized
this Amendment No. 2 to be signed on its behalf by the undersigned, thereto duly
authorized in the City of Huntsville, State of Texas, on March 5, 1997.

MITCHAM INDUSTRIES, INC.

By: /s/ BILLY F. MITCHAM, JR.
----------------------------------
Billy F. Mitcham, Jr.,
Chairman of the Board, President
and Chief Executive Officer

In accordance with the requirements of the Securities Act of 1933, as
amended, this Amendment No. 2 has been signed by the following persons in the
capacities indicated on March 5, 1997.

SIGNATURE TITLE/CAPACITY
--------- --------------

/s/ BILLY F. MITCHAM, JR. Chairman of the Board, President and Chief Executive
- -------------------------------------------- Officer
Billy F. Mitcham, Jr.

/s/ PAUL C. MITCHAM* Vice President -- Operations and Director
- --------------------------------------------
Paul C. Mitcham

/s/ ROBERTO RIOS Vice President -- Finance, Secretary, Treasurer and
- -------------------------------------------- Director
Roberto Rios

/s/ WILLIAM J. SHEPPARD* Vice President -- International Operations and
- -------------------------------------------- Director
William J. Sheppard

/s/ JOHN F. SCHWALBE* Director
- --------------------------------------------
John F. Schwalbe

*By: /s/ BILLY F. MITCHAM, JR.
---------------------------------------
Billy F. Mitcham, Jr.,
Attorney-in-fact

II-9
66

INDEPENDENT AUDITOR'S REPORT
ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Stockholders
Mitcham Industries, Inc.
Huntsville, Texas

We have audited in accordance with generally accepted auditing standards, the
financial statements of Mitcham Industries, Inc. included in this Registration
Statement and have issued our report thereon dated February 23, 1996. Our audit
was made for the purpose of forming an opinion on the basic financial statements
taken as a whole. The financial statement schedule listed in Item 16(b) herein
(Schedule II -- Valuation and Qualifying Accounts) is the responsibility of the
Company's management and is presented for purpose of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. The financial statement schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respect with the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

/s/ HEIN + ASSOCIATES LLP

HEIN + ASSOCIATES LLP
Certified Public Accountants

Houston, Texas
February 23, 1996

II-10
67

SCHEDULE II

MITCHAM INDUSTRIES, INC.

VALUATION AND QUALIFYING ACCOUNTS

================================================================================

COL. A COL. B COL. C(1) COL. D COL. E
- ---------------------------------------------------------------------------------------------------
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND DEDUCTIONS - AT END
DESCRIPTION OF PERIOD EXPENSES DESCRIBE OF PERIOD
- ---------------------------------------------------------------------------------------------------

January 31, 1994
Allowance for doubtful accounts........... $58,000 $ 38,000 3,000(A) $ 93,000
January 31, 1995
Allowance for doubtful accounts........... $93,000 $ 35,000 $ 38,000(A) $ 90,000
January 31, 1996
Allowance for doubtful accounts........... $90,000 $627,000 $370,000(A) $347,000

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

(A) Represents recoveries and uncollectible accounts written off.

Column C(2) has been omitted, as all answers would be "none."

II-11
68

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION
----------- -----------

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

* Filed herewith.

+ Previously filed.

(1) Incorporated by reference to the indicated exhibit number of the
Registrant's Registration Statement on Form SB-2 (File No. 33-81164-D),
filed with the SEC on July 5, 1994.

(2) Incorporated by reference to the indicated exhibit number of the
Registrant's Amendment No. 2 to the Registration Statement on Form SB-2,
filed with the SEC on November 9, 1994.

(3) Incorporated by reference to the indicated exhibit number of the
Registrant's Amendment No. 3 to the Registration Statement on Form SB-2,
filed with the SEC on December 12, 1994.

(4) Incorporated by reference to the indicated exhibit number of the
Registrant's Post-Effective Amendment No. 2 to its Registration Statement on
Form SB-2, filed with the SEC on October 30, 1995.

(5) Incorporated by reference to the indicated exhibit number of the
Registrant's Post-Effective Amendment No. 4 to its Registration Statement on
Form SB-2, filed with the SEC on April 17, 1996.

(6) Incorporated by reference to the indicated exhibit number of the
Registrant's Registration Statement on Form S-3 (File No. 333-10555), filed
with the SEC on October 30, 1996.

   1


                                ________ Shares

                            MITCHAM INDUSTRIES, INC.

                                  Common Stock

                             UNDERWRITING AGREEMENT


                              September ___, 1996

Rodman & Renshaw, Inc.
Simmons & Company International
c/o Rodman & Renshaw, Inc.
Two World Financial Center
225 Liberty St., 30th Floor
New York, New York  10281

On behalf of the Several Underwriters
  named in Schedule I attached hereto

Ladies and Gentlemen:

       Mitcham Industries, Inc., a Texas corporation (the "Company") and
certain stockholders of the Company named in Schedule III hereto (the "Selling
Stockholders") propose to sell to you and the other underwriters named in
Schedule I attached hereto (the "Underwriters"), for whom you are acting as the
Representatives, an aggregate of 3,000,000 shares (the "Firm Shares") of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"), of
which 2,500,000 shares (the "Company Shares") are to be issued and sold by the
Company and 500,000 shares (the "Selling Stockholders Shares") are to be sold
by the Selling Stockholders.  The obligation of each Selling Stockholder to
sell Firm Shares shall be as set forth opposite his name on Schedule III
attached hereto.  The Company and the Selling Stockholders also propose to
grant to the Underwriters an option to purchase up to an additional 450,000
shares (the "Option Shares") of Common Stock for the purpose of covering over-
allotments in connection with the sale of the Firm Shares, of which 375,000
shares are to be issued and sold by the Company and 75,000 shares are to be
sold by the Selling Stockholders.  The Firm Shares and the Option Shares are
together called the "Shares."

       1.     Sale and Purchase of the Shares.  On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:

              (a)    The Company agrees to issue and sell the Company Shares
       and the Selling Stockholders, severally and not jointly, agree to sell
       the Selling Stockholder Shares to the several Underwriters, and each of
       the Underwriters agrees, severally and not jointly, to purchase at the
       purchase price per share of Common Stock of $_____ (the "Initial
       Price"),
   2
       the aggregate number of Firm Shares set forth opposite such
       Underwriter's name in Schedule I attached hereto.

              (b)    The Company grants to the several Underwriters an option
       to purchase up to an additional _______ shares at the Initial Price and
       the Selling Stockholders grant to the several Underwriters an option to
       purchase up to an additional _______ shares at the Initial Price.
       Pursuant to such option, the Company and each of the Selling
       Stockholders agree to issue and sell the Option Shares to the several
       Underwriters, and each of the Underwriters agrees, severally and not
       jointly, to purchase at the Initial Price the same percentage (adjusted
       by Rodman & Renshaw, Inc. to eliminate fractions) of the total number of
       Option Shares to be purchased by the Underwriters as such Underwriter is
       purchasing of the Firm Shares.  Such option may be exercised only to
       cover over-allotments in the sales of the Firm Shares by the
       Underwriters and may be exercised in whole or in part at any time on or
       before 12:00 noon, New York City time, on the business day before the
       Firm Shares Closing Date (as defined below) and from time-to-time
       thereafter within 30 days after the date of this Agreement, upon verbal
       or telephonic notice by Rodman & Renshaw, Inc. ("Rodman") to the Company
       and the Selling Stockholders setting forth the number of Option Shares
       to be purchased and the time and date (if other than the Firm Shares
       Closing Date) of such purchase.

       2.     Delivery and Payment.  Delivery by the Company and the Selling
Stockholders of the Firm Shares to the Representatives for the respective
accounts of the Underwriters, and payment of the purchase price by certified or
official bank check or checks payable in New York Clearing House (next day)
funds to the Company and the Selling Stockholders, shall take place at the
offices of Rodman & Renshaw, Inc., at Two World Financial Center, 225 Liberty
St., 30th Floor, New York, New York, 10281, at 10:00 a.m., New York City time,
on the third business day following the date on which the public offering of
the Shares commences (unless such date is postponed in accordance with the
provisions of Section 10(b)), or at such time and place on such other date, not
later than 10 business days after the date of this Agreement, as shall be
agreed upon by the Company and Rodman (such time and date of delivery and
payment are called the "Firm Shares Closing Date").  The public offering of the
Shares shall be deemed to have commenced at the time, which is the earlier of
(a) the time, after the Registration Statement (as defined in Section 4 below)
becomes effective, of the release by you for publication of the first newspaper
advertisement which is subsequently published relating to the Shares or (b) the
time, after the Registration Statement becomes effective, when the Shares are
first released by you for offering by the Underwriters or dealers by letter,
facsimile transmission or telegram.

       In the event the option with respect to the Option Shares is exercised,
delivery by the Company and the Selling Stockholders of the Option Shares to
the Representatives for the respective accounts of the Underwriters, and
payment of the purchase price by certified or official bank check or checks
payable in New York, Clearing House (next day) funds to the Company and the
Selling Stockholders shall take place at the offices of Rodman & Renshaw, Inc.
specified above at the time and on the date (which may be the same date as, but
in no event shall be earlier than, the Firm Shares Closing Date) specified in
the notice referred to in Section 1(b) (such time and date of delivery and





                                       2
   3
payment is called the "Option Shares Closing Date").  The Firm Shares Closing
Date and the Option Shares Closing Date are called, individually, a "Closing
Date" and, together, the "Closing Dates."

       Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as Rodman shall request at least two full
business days before the Firm Shares Closing Date or the Option Shares Closing
Date, as the case may be, and shall be made available to Rodman for checking
and packaging, at such place as is designated by Rodman, on the full business
day before the Firm Shares Closing Date or the Option Shares Closing Date, as
the case may be.

       The documents to be delivered at each Closing Date by or on behalf of
the parties hereto, including the cross receipt for the Shares and any
additional documents requested by the Underwriters, will be delivered at the
offices of Vinson & Elkins L.L.P., 2300 First City Tower, 1001 Fannin, Houston,
Texas 77002 (the "Closing Location").  A meeting will be held at the Closing
Location at 2:00 p.m., Houston time, on the New York Business Day next
preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto.  "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law
or executive order to close.

       3.     Public Offering.  The Company and the Selling Stockholders
understand that the Underwriters propose to make a public offering of the
Shares, as set forth in and pursuant to the Prospectus (as defined in Section 4
below), as soon after the effective date of the Registration Statement and the
date of this Agreement as the Representatives deem advisable.  The Company and
the Selling Stockholders hereby confirm that the Underwriters and dealers have
been authorized to distribute or cause to be distributed each preliminary
prospectus and are authorized to distribute the Prospectus (as from time to
time amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).

       4.     Representations and Warranties of the Company and the Selling
Stockholders.

              (a)    The Company represents and warrants to, and agrees with,
       the several Underwriters that:

                     (i)    The Company has filed with the Securities and
              Exchange Commission (the "Commission") a registration statement,
              and may have filed one or more amendments thereto, on Form S-1
              (Registration No. 333-______), including in such registration
              statement and each such amendment a related preliminary
              prospectus (a "Preliminary Prospectus"), for the registration of
              the Shares, in conformity with the requirements of the Securities
              Act of 1933, as amended (the "Act").  In addition, the Company
              has filed or will promptly file a further amendment to such
              registration statement, in the form heretofore delivered to you.
              Other than a registration statement, if any, increasing the size
              of the offering (a "Rule 462(b) Registration Statement"), filed
              pursuant to Rule 462(b) under the Act, which became effective
              upon filing, no other document with respect to the registration
              statement referred to





                                       3
   4
              above has heretofore been filed with the Commission.  As used in
              this Agreement, the term "Registration Statement" means such
              registration statement and the Rule 462(b) Registration
              Statement, if any, as amended, on file with the Commission at the
              time such registration statement becomes effective (including the
              prospectus, financial statements, exhibits and all other
              documents filed as a part thereof or incorporated by reference
              directly or indirectly therein), provided that such Registration
              Statement, at the time it becomes effective, may omit such
              information as is permitted to be omitted from the Registration
              Statement when it becomes effective pursuant to Rule 430A of the
              General Rules and Regulations promulgated under the Act (the
              "Regulations"), which information ("Rule 430 Information") shall
              be deemed to be included in such Registration Statement when a
              final prospectus is filed with the Commission in accordance with
              Rules 430A and 424(b)(1) or (4) of the Regulations; the term
              "Preliminary Prospectus" means each prospectus included in the
              Registration Statement, or any amendments thereto, before it
              becomes effective under the Act, the form of prospectus omitting
              Rule 430A Information included in the Registration Statement when
              it becomes effective, if applicable (the "Rule 430A Prospectus"),
              and any prospectus filed by the Company with your consent
              pursuant to Rule 424(a) of the Regulations; and the term
              "Prospectus" means the final prospectus included as part of the
              Registration Statement, except that if the prospectus relating to
              the securities covered by the Registration Statement in the form
              first filed on behalf of the Company with the Commission pursuant
              to Rule 424(b) of the Regulations shall differ from such final
              prospectus, the term "Prospectus" shall mean the prospectus as
              filed pursuant to Rule 424(b) from and after the date on which it
              shall have first been used.

                     (ii)   When the Registration Statement becomes effective,
              and at all times subsequent thereto to and including the Closing
              Dates and during such longer period as the Prospectus may be
              required to be delivered in connection with sales by the
              Underwriters or a dealer, and during such longer period until any
              post-effective amendment thereto shall become effective, the
              Registration Statement (and any post-effective amendment thereto)
              and the Prospectus (as amended or as supplemented if the Company
              shall have filed with the Commission any amendment or supplement
              to the Registration Statement or the Prospectus) will contain all
              statements which are required to be stated therein in accordance
              with the Act and the Regulations, will comply with the Act and
              the Regulations, and will not contain any untrue statement of a
              material fact or omit to state any material fact required to be
              stated therein or necessary to make the statements therein not
              misleading, and no event will have occurred which should have
              been set forth in an amendment or supplement to the Registration
              Statement or the Prospectus which has not then been set forth in
              such an amendment or supplement; if a Rule 430A Prospectus is
              included in the Registration Statement at the time it becomes
              effective, the Prospectus filed pursuant to Rules 430A and
              424(b)(1) or (4) will contain all Rule 430A Information: and each
              Preliminary Prospectus, as of the date filed with the Commission,
              did not include any untrue statement of a material fact or omit
              to state any material fact required to be stated therein or
              necessary to make the statements therein not





                                       4
   5
              misleading; except that no representation or warranty is made in
              this Section 4(a)(ii) with respect to statements or omissions
              made in reliance upon and in conformity with written information
              furnished to the Company as stated in Section 7(b) with respect
              to any Underwriter by or on behalf of such Underwriter through
              the Representatives expressly for inclusion in any Preliminary
              Prospectus, the Registration Statement or the Prospectus, or any
              amendment or supplement thereto.

                     (iii)  Neither the Commission nor the "blue sky" or
              securities authority of any jurisdiction have issued an order (a
              "Stop Order") suspending the effectiveness of the Registration
              Statement, preventing or suspending the use of any Preliminary
              Prospectus, the Prospectus, the Registration Statement, or any
              amendment or supplement thereto, refusing to permit the
              effectiveness of the Registration Statement or suspending the
              registration or qualification of the Firm Shares or the Option
              Shares, nor has any of such authorities instituted or, to the
              knowledge of the Company, threatened to institute any proceedings
              with respect to a Stop Order.

                     (iv)   Any contract, agreement, instrument, lease or
              license required to be described in the Registration Statement or
              the Prospectus has been properly described therein.  Any contract
              agreement, instrument, lease or license required to be filed as
              an exhibit to the Registration Statement has been filed with the
              Commission as an exhibit to or has been incorporated as an
              exhibit by reference into the Registration Statement.

                     (v)    The Company has no subsidiary or subsidiaries and
              does not control, directly or indirectly, any corporation,
              partnership, joint venture, association or other business
              organization, except for those set forth on Schedule II hereto
              (each such corporation singly a "Subsidiary" and collectively the
              "Subsidiaries").  The Company and its Subsidiaries are
              corporations duly organized, validly existing and in good
              standing under the laws of the jurisdiction of its incorporation,
              with full corporate power and authority and all necessary
              consents, authorizations, approvals, orders, licenses,
              certificates and permits of and from, and declarations and
              filings with, all federal, state, foreign, local and other
              governmental authorities and all courts and other tribunals, to
              own, lease, license and use their properties and assets and to
              carry on their business as now being conducted and in the manner
              described in the Prospectus, except where such failure would not
              have a material adverse effect on the Company and the
              Subsidiaries.  The Companies and its Subsidiaries have been duly
              qualified to do business and are in good standing in each
              jurisdiction in which their respective ownership, leasing,
              licensing or character, location or use of property and assets or
              the conduct of their respective business makes such qualification
              necessary, except where the failure to so qualify would not have
              a material adverse effect upon the operations, business,
              properties, assets, stockholder's equity, results of operations
              or financial condition of the Company or any of the Subsidiaries
              ("Material Adverse Effect").





                                       5
   6
                     (vi)   The Company has an authorized capitalization as set
              forth in the Prospectus, and all of the issued shares of capital
              stock of the Company have been duly and validly authorized and
              issued, are fully paid and nonassessable, without any personal
              liability attaching to the ownership thereof, and have not been
              issued and are not owned or held in violation of any preemptive
              rights of shareholders, optionholders, warrantholders or other
              persons.  The Company owns all of the shares of capital stock of
              the Subsidiaries, free and clear of all liens, claims, security
              interests, restrictions, stockholders' agreements, voting trusts
              and any other encumbrances whatsoever, except as described in the
              Prospectus.  There is no commitment, plan, preemptive right or
              arrangement to issue, and no outstanding option, warrant or other
              right calling for the issuance of, shares of capital stock of the
              Company or any of the Subsidiaries or any security or other
              instrument which by its terms is convertible into, exercisable
              for or exchangeable for capital stock of the Company or any of
              the Subsidiaries, except as described in the Prospectus.  There
              is outstanding no security or other instrument which by its terms
              is convertible into or exchangeable for capital stock of the
              Company or any of the Subsidiaries, except as described in the
              Prospectus.

                     (vii)  The financial statements of the Company included in
              the Registration Statement and the Prospectus fairly present in
              all material respects, with respect to the Company, the financial
              position, the results of operations and the other information
              purported to be shown therein at the respective dates and for the
              respective periods to which they apply.  Such financial
              statements have been prepared in accordance with generally
              accepted accounting principles consistently applied throughout
              the periods involved, are correct and complete and are in
              accordance with the books and records of the Company.  The
              accountants whose reports on the audited financial statements are
              filed with the Commission as a part of the Registration Statement
              are, and during the periods covered by their reports included in
              the Registration Statement and the Prospectus were, independent
              certified public accountants with respect to the Company within
              the meaning of the Act and the Regulations.  No other financial
              statements are required by Form S-1 or otherwise to be included
              in the Registration Statement or the Prospectus.  There has at no
              time been a material adverse change in the financial condition,
              results of operations, business, properties, assets, liabilities,
              or future prospects of the Company or any of the Subsidiaries
              from the latest information set forth in the Registration
              Statement or the Prospectus.

                     (viii) There is no litigation, arbitration, claim,
              governmental or other proceeding (formal or informal) or
              investigation before any court or before any public body or board
              pending, or, to the knowledge of the Company, threatened or in
              prospect (or any basis therefor) with respect to the Company or
              any of the Subsidiaries, or any of their respective operations,
              business, properties or assets, except as may be properly
              described in the Prospectus or such as individually or in the
              aggregate do not now have and could not reasonably be expected in
              the future to have a Material Adverse Effect.  Neither the
              Company nor any of the Subsidiaries is





                                       6
   7
              involved in any labor dispute nor, to the knowledge of the
              Company, is such dispute threatened, which dispute could
              reasonably be expected to have a Material Adverse Effect.
              Neither the Company nor any of the Subsidiaries is in violation
              of, or in default with respect to, the provisions of its articles
              of incorporation or by-laws or any law, rule, regulation, order,
              judgment or decree which could reasonably be expected to have a
              Material Adverse Effect; nor is the Company or any of the
              Subsidiaries required to take any action in order to avoid any
              such violation or default with respect thereto.

                     (ix)   Except as described in the Prospectus, the Company
              and each of the Subsidiaries have (1) good and indefeasible title
              to all real property and good and marketable title to all other
              material properties and assets described in the Prospectus as
              owned by the Company or any of the Subsidiaries and (2) valid,
              subsisting and enforceable leases for all of the properties and
              assets, real or personal, described in the Prospectus as leased
              by them, in each case free and clear of any security interests,
              mortgages, pledges, liens, encumbrances or charges of any kind,
              other than those described in the Prospectus and those that could
              not, individually or in the aggregate, have a Material Adverse
              Effect.

                     (x)    The Company and each of the Subsidiaries, and to
              the knowledge of the Company, any other party, is not now and is
              not expected by the Company to be in violation or breach of, or
              in default with respect to, complying with any term, obligation
              or provision of any contract, agreement, instrument, lease,
              license, indenture, mortgage, deed of trust, note, arrangement or
              understanding which is material to the Company or any of the
              Subsidiaries and no event has occurred which with notice or lapse
              of time or both would constitute such a default, and each such
              contract, agreement, instrument, lease, license, indenture,
              mortgage, deed of trust, note, arrangement or understanding is in
              full force and is the legal, valid and binding obligation of the
              parties thereto and is enforceable as to the Company, each of the
              Subsidiaries and, to the knowledge of the Company, each other
              party thereto, in accordance with its terms, subject to
              applicable bankruptcy, insolvency and other laws affecting the
              enforceability of creditor's rights generally and the effects of
              general principles of equity.  The Company and each of the
              Subsidiaries enjoys peaceful and undisturbed possession under all
              property leases and licenses under which it is operating, the
              loss of any of which would not have a Material Adverse Effect.
              Neither the Company nor any of the Subsidiaries is in violation
              or breach of, or in default with respect to, any term of its
              certificate of incorporation (or other charter document) or
              by-laws or of any franchise, license, permit, judgment, decree,
              order, statute, rule or regulation, which breach or default of
              such franchise, license, permit, judgment, decree, order,
              statute, rule or regulation could reasonably be expected to have
              a Material Adverse Effect.

                     (xi)   The Company and the Subsidiaries have filed all
              federal, state, local and foreign tax returns which are required
              to be filed through the date hereof, or have received extensions
              thereof, and have paid all taxes shown on such returns and all





                                       7
   8
              assessments received by them to the extent that the same are
              material and have become due.

                     (xii)  None of the Company, any Subsidiary, director,
              officer, agent, employee or other person associated with or
              acting on behalf of the Company and the Subsidiaries has,
              directly or indirectly: used any corporate funds for unlawful
              contributions, gifts, entertainment or other unlawful expenses
              relating to political activity; made any unlawful payment to
              foreign or domestic government officials or employees or to
              foreign or domestic political parties or campaigns from corporate
              funds; violated any provision of the Foreign Corrupt Practices
              Act of 1977, as amended; or made any bribe, rebate, payoff,
              influence payment, kickback or other unlawful payment.  No
              transaction has occurred between or among the Company or the
              Subsidiaries and any officers or directors or any affiliates or
              affiliates of any such officer or director, except as described
              in the Prospectus.

                     (xiii) The Company and each of the Subsidiaries (A) are in
              compliance with any and all applicable federal, state and local
              laws and regulations relating to the protection of human health
              and safety, the environment or hazardous or toxic substances or
              waste, pollutants or contaminants ("Environmental Laws"), (B)
              have received all permits, licenses or other approvals required
              of it under applicable Environmental Laws to conduct its business
              and (C) are in compliance with all terms and conditions of any
              such permit, license or approval, except for such noncompliance
              with Environmental Laws, failure to receive required permits,
              licenses or other approvals or failure to comply with the terms
              and conditions of such permits, licenses or approvals that would
              not, singly or in the aggregate, have a Material Adverse Effect.
              There has been no storage, disposal, generation, transportation,
              handling or treatment of hazardous substances or solid wastes by
              the Company or any of the Subsidiaries (or to the knowledge of
              the Company, any of their predecessors in interest) at, upon or
              from any of the property now or previously owned or leased by the
              Company or any of the Subsidiaries in violation of any applicable
              law, ordinance, rule, regulation, order, judgment, decree or
              permit or which would require remedial action by the Company or
              any of the Subsidiaries under any applicable law, ordinance,
              rule, regulation, order, judgment, decree or permit, except for
              any violation or remedial action which would not result in, or
              which would not be reasonably likely to result in, singularly or
              in the aggregate with all such violations and remedial actions, a
              Material Adverse Effect; there has been no spill, discharge,
              leak, emission, injection, escape, dumping or release of any kind
              onto such property or into the environment surrounding such
              property of any solid wastes or hazardous substances due to or
              caused by the Company or any of the Subsidiaries, except for any
              such spill, discharge, leak, emission, injection, escape, dumping
              or release which would not result in or would not be reasonably
              likely to result in, singularly or in the aggregate with all such
              spills, discharges, leaks, emissions, injections, escapes,
              dumpings and releases, a Material Adverse Effect; and the terms
              "hazardous substances" and "solid wastes" shall have the meanings





                                       8
   9
              specified in any applicable local, state and federal laws or
              regulations with respect to environmental protection;

                     (xiv)  The Company and the Subsidiaries have all requisite
              corporate power and authority to execute, deliver and perform
              this Agreement.  All necessary corporate proceedings of the
              Company and the Subsidiaries have been duly taken to authorize
              the execution, delivery and performance of this Agreement.  This
              Agreement has been duly authorized, executed and delivered by the
              Company, is the legal, valid and binding obligation of the
              Company and is enforceable as to the Company in accordance with
              its terms, subject to applicable bankruptcy, insolvency and other
              laws affecting the enforceability of creditor's rights generally
              and the effects of general principles of equity.  No consent,
              authorization, approval, order, license, certificate or permit of
              or from, or declaration or filing with, any federal, state,
              local, foreign or other governmental authority or any court or
              other tribunal is required by the Company or the Subsidiaries for
              the execution, delivery or performance by the Company of this
              Agreement (except filings under the Act which have been or will
              be made before the applicable Closing Date and such consents
              consisting only of consents under "blue sky" or securities laws
              which have been obtained at or prior to the date of this
              Agreement).  No consent of any party to any contract, agreement,
              instrument, lease, license, indenture, mortgage, deed of trust,
              note, arrangement or understanding to which the Company or the
              Subsidiaries is a party, or to which any of their respective
              properties or assets are subject, is required for the execution,
              delivery or performance of this Agreement, and the execution,
              delivery and performance of this Agreement will not violate,
              result in a breach of, conflict with, accelerate the due date of
              any payments under, or (with or without the giving of notice or
              the passage of time or both) entitle any party to terminate or
              call a default under any such contract, agreement, instrument,
              lease, license, indenture, mortgage, deed of trust, note,
              arrangement or understanding, or violate or result in a breach of
              any term of the certificate of incorporation (or other charter
              document) or by-laws of the Company or any of the Subsidiaries,
              or violate, result in a breach of or conflict with any law, rule,
              regulation, order, judgment or decree binding on the Company or
              any of the Subsidiaries or to which any of their respective
              operations, business, properties or assets are subject.

                     (xv)   The Shares have been duly and validly authorized.
              The Firm Shares, when issued and delivered in accordance with
              this Agreement, and the Option Shares, when issued and delivered
              in accordance with this Agreement, will be duly and validly
              issued, fully paid and nonassessable, without any personal
              liability attaching to the ownership thereof, and will not be
              issued in violation of any preemptive rights of shareholders,
              optionholders, warrantholders and any other persons and the
              Underwriters will receive good title to the Firm Shares and the
              Option Shares purchased by them, respectively, free and clear of
              all liens, security interests, pledges, charges, encumbrances,
              shareholders' agreements and voting trusts.





                                       9
   10
                     (xvi)  All types and series of capital stock of the
              Company, the Firm Shares and the Option Shares conform to all
              statements relating thereto contained in the Registration
              Statement or the Prospectus.

                     (xvii) Subsequent to the respective dates as of which
              information is given in the Registration Statement and the
              Prospectus, and except as may otherwise be properly described
              therein, there has not been any material adverse change in the
              assets or properties, business or results of operations or
              financial condition of the Company or the Subsidiaries, whether
              or not arising from transactions in the ordinary course of
              business; neither the Company nor the Subsidiaries have sustained
              any material loss or interference with its respective business or
              properties from fire, explosion, earthquake, flood or other
              calamity, whether or not covered by insurance; since the date of
              the latest balance sheet included in the Registration Statement
              and the Prospectus, except as reflected in the Registration
              Statement, neither the Company nor the Subsidiaries, have
              undertaken any liability or obligation, direct or contingent,
              except for liabilities or obligations undertaken in the ordinary
              course of business; and neither the Company nor the Subsidiaries
              have (A) issued any securities or incurred any liability or
              obligation, primary or contingent, for borrowed money, (B)
              entered into any transaction not in the ordinary course of
              business or (C) declared or paid any dividend or made any
              distribution on any of its capital stock or redeemed, purchased
              or otherwise acquired or agreed to redeem, purchase or otherwise
              acquire any shares of its capital stock.

                     (xviii) The Company and each Subsidiary maintain insurance
              covering their properties, operations, personnel and businesses
              that, in the Company's reasonable judgment, insures against such
              losses and risks as are adequate in accordance with customary
              industry practice to protect the Company and the Subsidiaries and
              their businesses.

                     (xix)  The Company and each Subsidiary maintain a system
              of internal accounting controls sufficient to provide reasonable
              assurance that (a) transactions are executed in accordance with
              management's general or specific authorizations, (b) transactions
              are recorded as necessary to permit preparation of financial
              statements in conformity with generally accepted accounting
              principles and to maintain asset accountability, (c) access to
              assets is permitted only in accordance with management's general
              or specific authorization and (d) the recorded accountability for
              assets is compared with the existing assets at reasonable
              intervals and appropriate action is taken with respect to any
              differences.

                     (xx)   Neither the Company nor its Subsidiaries or any of
              their respective officers, directors or affiliates (as defined in
              the Regulations), have taken or will take, directly or
              indirectly, prior to the termination of the underwriting
              syndicate contemplated by this Agreement, any action designed to
              stabilize or manipulate the price of any security of the Company,
              or which has caused or resulted in, or which might in the future
              reasonably be expected to cause or result in, stabilization or





                                       10
   11
              manipulation of the price of any security of the Company, to
              facilitate the sale or resale of any of the Firm Shares or the
              Option Shares.

                     (xxi)  The Company has obtained from each of its executive
              officers and directors, their enforceable written agreement, in
              form and substance satisfactory to counsel for the Underwriters,
              that for a period of 180 days from the date on which the public
              offering of the Shares commences they will not, without your
              prior written consent, offer, pledge, sell, contract to sell,
              grant any option for the sale of or otherwise dispose of,
              directly or indirectly, any shares of Common Stock or other
              securities of the Company (or any security or other instrument
              which by its terms is convertible into, exercisable for or
              exchangeable for shares of Common Stock or other securities of
              the Company, including, without limitation, any shares of Common
              Stock issuable under any employee stock options), beneficially
              owned by them, except with respect to Shares being sold in
              connection herewith.

                     (xxii) The Company and Subsidiary are not, and after
              giving effect to the offering and sale of the Shares, will not be
              an "investment company" or an entity "controlled" by an
              "investment company," as such terms are defined in the Investment
              Company Act of 1940, as amended (the "Investment Company Act").

                     (xxiii) Hein & Associates LLP, who have certified certain
              financial statements of the Company, are independent public
              accountants as required by the Act and the rules and regulations
              of the Commission thereunder.

                     (xxiv) No person or entity has the right to require
              registration of shares of Common Stock or other securities of the
              Company because of the filing or effectiveness of the
              Registration Statement, other than such rights as described in
              the Prospectus and which have been duly and effectively waived.

                     (xxv)  Except as may be set forth in the Prospectus, the
              Company has not incurred any liability for a fee, commission or
              other compensation on account of the employment of a broker or
              finder in connection with the transactions contemplated by this
              Agreement.

                     (xxvi) No transaction has occurred between or among the
              Company, the Subsidiaries or any of their officers or directors
              or any affiliates of any such officers or directors that is
              required to be described in and is not described in the
              Registration Statement and the Prospectus.

                     (xxvii) The Common Stock, including the Shares, are
              authorized for quotation on the Nasdaq National Market.

              (b)    The Selling Stockholders, severally and not jointly,
       represent and warrant to, and agree with, the several Underwriters that:





                                       11
   12
                     (i)    There is no litigation, arbitration, claim,
              governmental or other proceeding (formal or informal), or
              investigation before any court or beneficiary, public body or
              board pending, threatened, or in prospect (or any basis therefor
              known to such Selling Stockholder) with respect to such Selling
              Stockholder or any of such Selling Stockholder's business,
              properties or assets.  Such Selling Stockholder is not in
              violation of, or in default with respect to, any law, rule,
              regulation, order, judgment, or decree; nor is such Selling
              Stockholder required to take any action in order to avoid such
              violation or default.

                     (ii)   Such Selling Stockholder has all requisite power
              and authority to execute, deliver, and perform this Agreement.
              This Agreement has been duly executed and delivered by or on
              behalf of such Selling Stockholder, is the legal, valid and
              binding obligation of such Selling Stockholder, and is
              enforceable as to such Selling Stockholder in accordance with its
              terms.  No consent, authorization, approval, order, license,
              certificate, or permit of or from, or declaration or filing with,
              any federal, state, local or other governmental authority or any
              court or other tribunal is required by such Selling Stockholder
              for the execution, delivery or performance of this Agreement
              (except filings under the Act which have been made before the
              applicable Closing Date and such consents consisting only of
              consents under "blue sky" or securities laws which have been
              obtained at or prior to the date of this Agreement) by such
              Selling Stockholder.  No consent of any party to any contract,
              agreement, instrument, lease, license, indenture, mortgage, deed
              of trust, note, arrangement or understanding to which such
              Selling Stockholder is a party, or to which any of such Selling
              Stockholder's properties or assets are subject, is required for
              the execution, delivery or performance of this Agreement; and the
              execution, delivery and performance of this Agreement will not
              violate, result in a breach of, conflict with, or (with or
              without the giving of notice or the passage of time or both)
              entitle any party to terminate or call a default under any such
              contract, agreement, instrument, lease, license, indenture,
              mortgage, deed of trust, note, arrangement or understanding, or
              violate, result in or breach of, or conflict with, any law, rule,
              regulation, order, judgment or decree binding on such Selling
              Stockholder or to which any of such Selling Stockholder's
              operations, business, properties, or assets are subject.

                     (iii)  Such Selling Stockholder has good title to the
              Selling Stockholder shares and Option Shares, as the case may be,
              to be sold by such Selling Stockholder pursuant to this
              Agreement, free and clear of all liens, security interests,
              pledges, charges, encumbrances, stockholders' agreements and
              voting trusts and when delivered in accordance with this
              Agreement, the Underwriters will receive good title to the
              Selling Stockholder Shares and the Option Shares purchased by
              them, respectively, from such Selling Stockholder, free and clear
              of all liens, security interests, pledges, charges, encumbrances,
              stockholders' agreements and voting trusts.





                                       12
   13
                     (iv)   Neither such Selling Stockholder nor any of such
              Selling Stockholder's affiliates (as defined in the Regulations)
              has taken or will take, directly or indirectly, prior to the
              termination of the underwriting syndicate contemplated by this
              Agreement, any action designed to stabilize or manipulate the
              price of any security of the Company, or which has caused or
              resulted in, or which might in the future reasonably be expected
              to cause or result in, stabilization or manipulation of the price
              of any security of the Company, to facilitate the sale or resale
              of any of the Selling Stockholder Shares or the Option Shares.

                     (v)    All Information furnished or to be furnished to the
              Company by or on behalf of such Selling Stockholder for use in
              connection with the preparation of the Registration Statement and
              the Prospectus is true in all respects and does not and will not
              include any untrue statement of a material fact or omit to state
              any material fact required to be stated therein or necessary to
              make the statements therein not misleading.

                     (vi)   Except as may be set forth in the Prospectus, such
              Selling Stockholder has not incurred any liability for a fee,
              commission or other compensation on account of the employment of
              a broker or finder in connection with the transactions
              contemplated by this Agreement.

                     (vii)  Such Selling Stockholder has no knowledge that, and
              does not believe that, any representation or warranty of the
              Company in Section 4(a) is incorrect.

                     (viii) Such Selling Stockholder has not, directly or
              indirectly: used any corporate funds for unlawful contributions,
              gifts, entertainment, or other unlawful expenses relating to
              political activity; made any unlawful payment to foreign or
              domestic government officials or employees or to foreign or
              domestic political parties or campaigns from corporate funds;
              violated any provision of the Foreign Corrupt Practices Act of
              1977, as amended; or made any bribe, rebate, payoff, influence
              payment, kickback, or other unlawful payment.

                     (ix)   No transaction has occurred between such Selling
              Stockholder and the Company that is required to be described in
              the Registration Statement or the Prospectus.

       5.     Conditions of the Underwriters' Obligations.  The obligations of
the Underwriters under this Agreement are several and not joint.  The
respective obligations of the Underwriters to purchase the Shares are subject
to each of the following terms and conditions:

              (a)    The Prospectus shall have been timely filed with the
       Commission in accordance with Section 6(a)(i) of this Agreement.

              (b)    No order preventing or suspending the use of any
       preliminary prospectus or the Prospectus shall have been or shall be in
       effect and no order suspending the effectiveness





                                       13
   14
       of the Registration Statement shall be in effect and no proceedings for
       such purpose shall be pending before or threatened by the Commission,
       and any requests for additional information on the part of the
       Commission (to be included in the Registration Statement or the
       Prospectus or otherwise) shall have been complied with to the
       satisfaction of the Representatives.

              (c)    The representations and warranties of the Company and of
       the Selling Stockholders contained in this Agreement and in the
       certificates delivered pursuant to Section 5(d) shall be true and
       correct when made and on and as of each Closing Date as if made on such
       date and the Company and the Selling Stockholders shall have performed
       all covenants and agreements and satisfied all the conditions contained
       in this Agreement required to be performed or satisfied by them at or
       before such Closing Date.

              (d)    The Representatives shall have received on each Closing
       Date (i) a certificate, addressed to the Representatives and dated such
       Closing Date, of the chief executive officer and the chief financial
       officer of the Company to the effect that the persons executing such
       certificate have carefully examined the Registration Statement, the
       Prospectus and this Agreement and that the representations and
       warranties of the Company in this Agreement are true and correct on and
       as of such Closing Date with the same effect as if made on such Closing
       Date and the Company has performed all covenants and agreements and
       satisfied all conditions contained in this Agreement required to be
       performed or satisfied by it at or prior to such Closing Date and (ii)
       certificates, addressed to the Representatives and dated such Closing
       Date, of each of the Selling Stockholders to the effect that the
       representations and warranties of such Selling Stockholders are true and
       correct on and as of such Closing Date and such Selling Stockholder has
       performed all covenants and agreements and satisfied all conditions
       contained in this Agreement required to be performed or satisfied by
       such Selling Stockholder at or prior to such Closing Date.

              (e)    The Representatives shall have received at the time this
       Agreement is executed and on each Closing Date, signed letters from Hein
       & Associates LLP, addressed to the Representatives and dated,
       respectively, the date of this Agreement and each such Closing Date, in
       the form and scope reasonably satisfactory to the Representatives, with
       reproduced copies or signed counterparts thereof for each of the
       Underwriters confirming that they are independent accountants within the
       meaning of the Act and the Regulations, that the response to Item 10 of
       the Registration Statement is correct in so far as it relates to them
       and stating in effect that:

                     (i)    in their opinion the audited financial statements
              included in the Registration Statement and the Prospectus
              (including the related schedules and notes) and reported on by
              them comply as to form in all material respects with the
              applicable accounting requirements of the Act, the Exchange Act
              and the related published rules and regulations thereunder;

                     (ii)   on the basis of specified procedures as of a
              specified date not more than five days prior to the date of their
              letter (which procedures do not constitute an examination made in
              accordance with generally accepted accounting principles) and





                                       14
   15
              which include a reading of the latest available unaudited interim
              consolidated financial statements of the Company and the
              Subsidiaries, a reading of the minutes of the meetings of the
              shareholders and directors of the Company and inquiries of
              certain officials of the Company and the Subsidiaries who have
              responsibility for financial and accounting matters of the
              Company and the Subsidiaries as to transactions and events
              subsequent to the date of the latest audited financial
              statements, except as disclosed in the Registration Statement and
              the Prospectus, nothing came to their attention which caused them
              to believe that:

                            (A)    the amounts in "Summary Financial Data," and
                     included in the Registration Statement and the Prospectus
                     do not agree with the corresponding amounts in the audited
                     financial statements from which such amounts were derived;
                     or

                            (B)    there were any decreases in net lease or
                     sales revenue, income before income taxes and net income
                     or any increases in long-term debt of the Company or any
                     decreases in the capital stock, working capital or the
                     shareholders' equity in the Company, as compared with the
                     amounts shown on the Company's audited Balance Sheet for
                     the fiscal year ended January 31, 1996, included in the
                     Registration Statement or the audited Statement of
                     Operations, for such year; and

                     (iii)  information of an accounting, financial or
              statistical nature (which is limited to accounting, financial or
              statistical information derived from the general accounting
              records of the Company) set forth in the Registration Statement
              and the Prospectus and reasonably specified by the
              Representatives agrees with the accounting records of the
              Company.

              References to the Registration Statement and the Prospectus in
       this paragraph (e) are to such documents as amended and supplemented at
       the date of such letter.

              (f)    The Representatives shall have received on each Closing
       Date from Norton, Jacobs, Kuhn & McTopy, L.L.P., counsel for the
       Company, an opinion, addressed to the Representatives and dated such
       Closing Date, and in form and scope satisfactory to counsel for the
       Underwriters, with reproduced copies or signed counterparts thereof for
       each of the Underwriters, to the effect that:

                     (i)    The Company and its Subsidiaries are corporations
              duly organized, validly existing and in good standing under the
              laws of the jurisdiction of their incorporation, with full
              corporate power and authority to own, lease, license and use
              their





                                       15
   16
              properties and assets and to conduct their business in the manner
              described in the Prospectus.  The Company and its Subsidiaries
              have all necessary consents, authorizations, approvals, orders,
              certificates and permits of and from, and declarations and
              filings with, all federal, state, foreign, local and other
              governmental authorities and all courts and other tribunals, to
              own, lease, license and use their properties and assets and to
              conduct their business in the manner described in the Prospectus.
              The Company has no subsidiary or subsidiaries and does not
              control, directly or indirectly, any corporation, partnership,
              joint venture, association or other business organization, except
              for those set forth on Schedule II hereto.

                     (ii)   The Company and its Subsidiaries have been duly
              qualified to do business and are in good standing under the laws
              of each other jurisdiction in which they own or lease properties
              or conduct any business so as to require such qualification or
              are subject to no material liability or disability by reason of
              failure to be so qualified in any such jurisdiction (such counsel
              being entitled to rely in respect of the opinion in this clause
              upon opinions of local counsel and in respect of matters of fact
              upon certificates of officers of the Company or the Subsidiaries,
              provided that such counsel shall state that they believe that
              both you and they are justified in relying upon such opinions and
              certificates);

                     (iii)  The Company has authorized, issued and outstanding
              capital stock as set forth in the "actual" column of the
              capitalization table under the caption "Capitalization" in the
              Prospectus.  The certificates evidencing the shares are in due
              and proper legal form.  Each outstanding share of Common Stock
              has been duly and validly authorized and issued and is fully paid
              and nonassessable, without any personal liability attaching to
              the ownership thereof, and has not been issued and is not owned
              or held in violation of any preemptive right of shareholders.
              The Company owns all of the shares of capital stock of the
              Subsidiaries, except as disclosed in the Prospectus, and to the
              knowledge of such counsel, such shares have been duly and validly
              authorized and issued, are fully paid and non-assessable, and
              (except as set forth in the Prospectus) are owned directly or
              indirectly by the Company, and are owned by the Company free and
              clear of all liens, claims, security interests, restrictions,
              shareholders' agreements, voting trusts and any other
              encumbrances whatsoever.  There is no commitment, plan or
              arrangement to issue, and no outstanding option, warrant or other
              right calling for the issuance of, any share of capital stock of
              the Company or any security or other instrument which by its
              terms is convertible into, exercisable for or exchangeable for
              capital stock of the Company, except as described in the
              Prospectus.  There is outstanding no security or other instrument
              which by its terms is convertible into, exercisable for or
              exchangeable for capital stock of the Company or any of the
              Subsidiaries, except as described in the Prospectus.

                     (iv)   There is no litigation, arbitration, claim,
              governmental or other proceeding (formal or informal) or
              investigation before any court or before any public body or board
              pending, or to the best of such counsel's knowledge threatened or
              in prospect (or any basis therefor) with respect to the Company,
              any of the Subsidiaries or any of their respective operations,
              businesses, properties, assets or financial condition except as
              may be properly described in the Prospectus or such as
              individually or in the aggregate do not now have and could not
              reasonably be expected in the future to have a Material Adverse
              Effect.





                                       16
   17
                     (v)    Neither the Company nor any of the Subsidiaries or
              any other party is now or is expected by the Company to be in
              violation or breach of, or in default with respect to, complying
              with any term, obligation or provision of any contract,
              agreement, instrument, lease, license, indenture, mortgage, deed
              of trust, note, arrangement or understanding which is material to
              the Company and known to such counsel, and to the knowledge of
              such counsel, no event has occurred which with notice or lapse of
              time or both would constitute such a default.

                     (vi)   Neither the Company nor any of the Subsidiaries is
              in violation or breach of, or in default with respect to, any
              term of its certificate of incorporation (or other charter
              document) or bylaws.

                     (vii)  The Company has all requisite power and authority
              to execute, deliver and perform this Agreement and to issue and
              sell the Shares.  All necessary corporate proceedings of the
              Company have been taken to authorize the execution, delivery and
              performance by the Company of this Agreement.  This Agreement has
              been duly authorized, executed and delivered by the Company, is
              the legal, valid and binding obligation of the Company, and
              (subject to applicable bankruptcy, insolvency and other laws
              affecting the enforceability of creditor's rights generally and
              the effects of general principles of equity) is enforceable as to
              the Company in accordance with its terms.  No consent,
              authorization, approval, order, license, certificate or permit of
              or from, or declaration or filing with, any federal, state,
              foreign, local or other governmental authority or any court or
              other tribunal is required by the Company for the execution,
              delivery or performance by the Company of this Agreement (except
              filings under the Act which have been made prior to the Closing
              Date and consents consisting only of consents under "blue sky" or
              securities laws).  No consent of any party to any contract,
              agreement, instrument, lease, license, indenture, mortgage, deed
              of trust, note, arrangement or understanding to which the Company
              or any of the Subsidiaries is a party, or to which any of their
              respective properties or assets are subject, is required for the
              execution, delivery or performance of this Agreement; and the
              execution, delivery and performance of this Agreement will not
              violate, result in a breach of, conflict with or (with or without
              the giving of notice or the passage of time or both) entitle any
              party to terminate or call a default under any such contract,
              agreement, instrument, lease, license, indenture, mortgage, deed
              of trust, note, arrangement or understanding, or violate or
              result in a breach of any term of the certificate of
              incorporation (or other charter document) or by-laws of the
              Company or any of the Subsidiaries, or violate, result in a
              breach of, or conflict with any law, rule, regulation, order,
              judgment, or decree binding on the Company or any of the
              Subsidiaries or to which any of their respective operations,
              businesses, properties or assets are subject.

                     (viii) The Shares are duly and validly authorized.  Such
              opinion delivered at each of the Closing Dates shall state that
              each Share, as the case may be, to be delivered on that date is
              duly and validly issued, fully paid and non-assessable, with no
              personal liability attaching to the ownership thereof, and is not
              issued in violation





                                       17
   18
              of any preemptive rights of shareholders, and the Underwriters
              have received good title to the Shares purchased by them from the
              Company for the consideration contemplated herein.  The Shares
              and all series of preferred stock conform to all statements
              relating thereto contained in the Registration Statement or the
              Prospectus.

                     (ix)   Any contract, agreement, instrument, lease or
              license required to be described in the Registration Statement or
              the Prospectus has been properly described therein.  Any
              contract, agreement, instrument, lease or license required to be
              filed as an exhibit to the Registration Statement has been filed
              with the Commission as an exhibit to or has been incorporated as
              an exhibit by reference into the Registration Statement.

                     (x)    Insofar as statements in the Prospectus purport to
              summarize the status of litigation or the provisions of laws,
              rules, regulations, orders, judgments, decrees, contracts
              agreements, instruments, leases or licenses, such statements have
              been prepared or reviewed by such counsel and to the knowledge of
              such counsel, accurately reflect the status of such litigation
              and provisions purported to be summarized and are correct in all
              material respects.

                     (xi)   Neither the Company nor any of the Subsidiaries is
              an "investment company" as defined in Section 3(a) of the
              Investment Company Act and, if the Company and the Subsidiaries
              conduct their businesses as set forth in the Prospectus, will not
              become an "investment company" and will not be required to be
              registered under the Investment Company Act.

                     (xii)  No person or entity has the right to require
              registration of shares of Common Stock or other securities of the
              Company because of the filing or effectiveness of the
              Registration Statement.

                     (xiii) The Registration Statement has become effective
              under the Act.  No Stop Order has been issued and no proceedings
              for that purpose have been instituted or are threatened, pending
              or contemplated.

                     (xiv)  The Registration Statement, any Rule 430A
              Prospectus and the Prospectus, and any amendment or supplement
              thereto (other than financial statements and other financial data
              and schedules which are or should be contained in any thereof, as
              to which such counsel need express no opinion), comply as to form
              in all material respects with the requirements of the Act and the
              Regulations.  The conditions for the use of Form S-1 have been
              satisfied with respect to the Registration Statement.

                     (xv)   Since the effective date of the Registration
              Statement, no event has occurred which should have been set forth
              in an amendment or supplement to the Registration Statement or
              the Prospectus which has not been set forth in such an amendment
              or supplement.





                                       18
   19
              In addition, such counsel shall state that such counsel has
       participated in the preparation of the Registration Statement and the
       Prospectus and in conferences with officers and other representatives of
       the Company, representatives of the Representatives and representatives
       of the independent accountants of the Company, at which conferences the
       contents of the Registration Statement and the Prospectus and related
       matters were discussed and, although such counsel has not independently
       verified and is not passing upon and does not assume any responsibility
       for the accuracy, completeness or fairness of the statements contained
       in the Registration Statement and the Prospectus (except as specified in
       the foregoing opinion), on the basis of the foregoing and relying as to
       materiality upon the representations of executive officers of the
       Company after conferring with such executive officers, no facts have
       come to the attention of such counsel which lead such counsel to believe
       that the Registration Statement at the time it became effective
       contained any untrue statement of a material fact or omitted to state a
       material fact required to be stated therein or necessary to make the
       statements therein not misleading, or that the Prospectus, except for
       the financial statements and other financial and statistical data
       included therein as to which counsel need express no opinion, as amended
       or supplemented on the date thereof contained any untrue statement of a
       material fact or omitted to state a material fact necessary in order to
       make the statements therein, in light of the circumstances under which
       they were made, not misleading.

              In rendering their opinion as aforesaid, such counsel may rely,
       as to matters of fact, to the extent such counsel deems proper, on
       certificates of responsible officers of the Company, provided that
       executed copies of such certificates are provided to the
       Representatives.

              (g)    The Representatives shall have received on each Closing
       Date from counsel for each of the Selling Stockholders, an opinion,
       addressed to the Representatives and dated such Closing Date, and in
       form and scope satisfactory to counsel for the Underwriters, with
       reproduced copies or signed counterparts thereof for each of the
       Underwriters, to the effect that:

                     (i)    There is no litigation, arbitration, claim,
              governmental or other proceeding (formal or informal), or
              investigation before any court or beneficiary, public body or
              board pending, threatened, or in prospect (or any basis therefor
              known to such Selling Stockholder) with respect to such Selling
              Stockholder or any of such Selling Stockholder's business,
              properties or assets.  Such Selling Stockholder is not in
              violation of, or in default with respect to, any law, rule,
              regulation, order, judgment, or decree; nor is such Selling
              Stockholder required to take any action in order to avoid such
              violation or default.

                     (ii)   Such Selling Stockholder has all requisite power
              and authority to execute, deliver, and perform this Agreement.
              This Agreement has been duly executed and delivered by or on
              behalf of such Selling Stockholder, is the legal, valid and
              binding obligation of such Selling Stockholder, and is
              enforceable as to such Selling Stockholder in accordance with its
              terms.  No consent, authorization,





                                       19
   20
              approval, order, license, certificate, or permit of or from, or
              declaration or filing with, any federal, state, local or other
              governmental authority or any court or other tribunal is required
              by such Selling Stockholder for the execution, delivery or
              performance of this Agreement (except filings under the Act which
              have been made before the applicable Closing Date and such
              consents consisting only of consents under "blue sky" or
              securities laws which have been obtained at or prior to the date
              of this Agreement) by such Selling Stockholder.  No consent of
              any party to any contract, agreement, instrument, lease, license,
              indenture, mortgage, deed of trust, note, arrangement or
              understanding to which such Selling Stockholder is a party, or to
              which any of such Selling Stockholder's properties or assets are
              subject, is required for the execution, delivery or performance
              of this Agreement; and the execution, delivery and performance of
              this Agreement will not violate, result in a breach of, conflict
              with, or (with or without the giving of notice or the passage of
              time or both) entitle any party to terminate or call a default
              under any such contract, agreement, instrument, lease, license,
              indenture, mortgage, deed of trust, note, arrangement or
              understanding, or violate, result in or breach of, or conflict
              with, any law, rule, regulation, order, judgment or decree
              binding on such Selling Stockholder or to which any of such
              Selling Stockholder's operations, business, properties, or assets
              are subject.

                     (iii)  Such Selling Stockholder has good title to the
              Selling Stockholder shares and Option Shares, as the case may be,
              to be sold by such Selling Stockholder pursuant to this
              Agreement, free and clear of all liens, security interests,
              pledges, charges, encumbrances, stockholders' agreements and
              voting trusts and when delivered in accordance with this
              Agreement, the Underwriters will receive good title to the
              Selling Stockholder Shares and the Option Shares purchased by
              them, respectively, from such Selling Stockholder, free and clear
              of all liens, security interests, pledges, charges, encumbrances,
              stockholders' agreements and voting trusts.

                     (iv)   Neither such Selling Stockholder nor any of such
              Selling Stockholder's affiliates (as defined in the Regulations)
              has taken or will take, directly or indirectly, prior to the
              termination of the underwriting syndicate contemplated by this
              Agreement, any action designed to stabilize or manipulate the
              price of any security of the Company, or which has caused or
              resulted in, or which might in the future reasonably be expected
              to cause or result in, stabilization or manipulation of the price
              of any security of the Company, to facilitate the sale or resale
              of any of the Selling Stockholder Shares or the Option Shares.

                     (v)    All Information furnished or to be furnished to the
              Company by or on behalf of such Selling Stockholder for use in
              connection with the preparation of the Registration Statement and
              the Prospectus is true in all respects and does not and will not
              include any untrue statement of a material fact or omit to state
              any material fact required to be stated therein or necessary to
              make the statements therein not misleading.





                                       20
   21
                     (vi)   Except as may be set forth in the Prospectus, such
              Selling Stockholder has not incurred any liability for a fee,
              commission or other compensation on account of the employment of
              a broker or finder in connection with the transactions
              contemplated by this Agreement.

                     (vii)  Counsel for such Selling Stockholder has no
              knowledge that, and does not believe that, any representation or
              warranty of the Company in Section 4(a) is incorrect.

                     (viii) To counsel's knowledge, such Selling Stockholder
              has not, directly or indirectly: used any corporate funds for
              unlawful contributions, gifts, entertainment, or other unlawful
              expenses relating to political activity; made any unlawful
              payment to foreign or domestic government officials or employees
              or to foreign or domestic political parties or campaigns from
              corporate funds; violated any provision of the Foreign Corrupt
              Practices Act of 1977, as amended; or made any bribe, rebate,
              payoff, influence payment, kickback, or other unlawful payment.

                     (ix)   No transaction has occurred between such Selling
              Stockholder and the Company that is required to be described in
              the Registration Statement or the Prospectus.

              (h)    All proceedings taken in connection with the sale of the
       Firm Shares and the Option Shares as herein contemplated shall be
       satisfactory in form and substance to the Representatives and its
       counsel, and the Underwriters shall have received from Vinson & Elkins
       L.L.P., a favorable opinion, addressed to the Representatives and dated
       such Closing Date, with respect to such matters as the Representatives
       may reasonably request, and the Company shall have furnished to Vinson &
       Elkins L.L.P., such documents as they may reasonably request for the
       purpose of enabling them to pass upon such matters.

              (i)    The Company shall not have sustained (i) since the date of
       the latest audited financial statements included in the Prospectus, any
       loss or interference with its business from fire, explosion, flood or
       other calamity, whether or not covered by insurance, or from any labor
       dispute or court or governmental action, order or decree, otherwise than
       as set forth or contemplated in the Prospectus and (ii) since the
       respective dates as of which information is given in the Prospectus,
       there shall not have been any change in the capital stock, short-term
       debt or long-term debt of the Company or any change, or any development
       involving a prospective change, in or affecting the general affairs,
       management, financial position, stockholders' equity or results of
       operations of the Company, otherwise than as set forth or contemplated
       in the Prospectus, the effect of which, in any such case described in
       Clause (i) or (ii), in the judgment of the Representatives, makes it
       impracticable or inadvisable to proceed with the public offering or the
       delivery of the Shares being delivered at such Time of Delivery on the
       terms and in the manner contemplated in the Prospectus.





                                       21
   22
              (j)    The Company has obtained and delivered to the Underwriters
       executed copies of an agreement from each of its officers and directors,
       substantially to the effect set forth in Subsection 6(a)(viii) hereof in
       form and substance satisfactory to you.

              (k)    At the Firm Shares Closing Date, the Company shall have
       executed and entered into a Warrant Agreement in substantially the form
       attached hereto (Exhibit A) granting and issuing to the Representatives
       a warrant to purchase pursuant to such Warrant Agreement 200,000 shares
       of Common Stock.

       6.     Covenants of the Company.

              (a)    The Company covenants and agrees as follows:

                     (i)    The Company shall use its best efforts to cause the
              Registration Statement to become effective as promptly as
              possible.  If the Registration Statement has become or becomes
              effective with a form of prospectus omitting Rule 430A
              information, or filing of the Prospectus is otherwise required
              under Rule 424(b), the Company will file the Prospectus, properly
              completed, pursuant to Rule 424(b) within the time period
              prescribed and will provide evidence satisfactory to you of such
              timely filing.  The Company shall notify you immediately, and
              confirm such notice in writing, (A) when the Registration
              Statement and any post-effective amendment thereto become
              effective, (B) of the receipt of any comments from the Commission
              or the "blue sky" or securities authority of any jurisdiction
              regarding the Registration Statement, any posteffective amendment
              thereto, the Prospectus or any amendment or supplement thereto
              and (C) of the receipt of any notification with respect to a Stop
              Order.  The Company shall not file any amendment of the
              Registration Statement or supplement to the Prospectus unless the
              Company has furnished the Representatives a copy for their review
              prior to filing and shall not file any such proposed amendment or
              supplement to which the Representatives reasonably object.  The
              Company shall use its best efforts to prevent the issuance of any
              Stop Order and, if issued, to obtain as soon as possible the
              withdrawal thereof.

                     (ii)   During the time when a prospectus relating to the
              Shares is required to be delivered hereunder or under the Act or
              the Regulations, the Company shall comply so far as it is able
              with all requirements imposed upon it by the Act, as now existing
              and as hereafter amended, and by the Regulations, as from time to
              time in force, so far as necessary to permit the continuance of
              sales of or dealings in the Shares in accordance with the
              provisions hereof and the Prospectus.  If, at any time when a
              prospectus relating to the Shares is required to be delivered
              under the Act and the Regulations, any event as a result of which
              the Prospectus as then amended or supplemented would include any
              untrue statement of a material fact or omit to state any material
              fact necessary to make the statements therein in the light of the
              circumstances under which they were made not misleading, or if it
              shall be necessary to amend or supplement the Prospectus to
              comply with the Act or the Regulations, the Company promptly
              shall prepare and file with the Commission, subject to the





                                       22
   23
              fourth sentence of paragraph (i) of this Section 6(a), an
              amendment or supplement which shall correct such statement or
              omission or an amendment which shall effect such compliance.

                     (iii)  Prior to 10:00 a.m., New York City Time, on the New
              York Business Day next succeeding the date of this Agreement and
              from time to time, the Company shall furnish the Underwriters
              with copies of the Prospectus in New York City in such quantities
              as you may reasonably request.  The Company shall make generally
              available to its security holders and to the Representatives as
              soon as practicable, but not later than 45 days after the end of
              the 12-month period beginning at the end of the fiscal quarter of
              the Company during which the Effective Date (or 90 days if such
              12-month period coincides with the Company's fiscal year), an
              earnings statement (which need not be audited) of the Company,
              covering such 12-month period, which shall satisfy the provisions
              of Section 11(a) of the Act or Rule 158 of the Regulations.

                     (iv)   If the Company elects to rely upon Rule 462(b), the
              Company shall file a Rule 462(b) Registration Statement with the
              Commission in compliance with Rule 462(b) by 10:00 p.m.,
              Washington, D.C. time, on the date of this Agreement, and the
              Company shall at the time of filing either pay to the Commission
              the filing fee for the Rule 462(b) Registration Statement or give
              irrevocable instructions for the payment of such fee pursuant to
              Rule 111(b) under the Act.

                     (v)    The Company shall furnish to the Representatives
              and counsel for the Underwriters, without charge, signed copies
              of the Registration Statement (including all exhibits and
              amendments thereto) and to each other Underwriter a copy of the
              Registration Statement (without exhibits thereto) and all
              amendments thereof and, so long as delivery of a prospectus by an
              Underwriter or dealer may be required by the Act or the
              Regulations, as many copies of any preliminary prospectus and the
              Prospectus and any amendments thereof and supplements thereto as
              the Representatives may reasonably request.

                     (vi)   The Company shall cooperate with the
              Representatives and their counsel in endeavoring to qualify the
              Shares for offer and sale under the laws of such jurisdictions as
              the Representatives may designate and shall maintain such
              qualifications in effect so long as required for the distribution
              of the Shares; provided, however, that the Company shall not be
              required in connection therewith, as a condition thereof, to
              qualify as a foreign corporation or to execute a general consent
              to service of process in any jurisdiction or subject itself to
              taxation as doing business in any jurisdiction.

                     (vii)  For a period of five years after the date of this
              Agreement, the Company shall supply to the Representatives, and
              to each other Underwriter who may so request in writing, copies
              of such financial statements and other periodic and special
              reports as the Company may from time to time distribute generally
              to the





                                       23
   24
              holders of any class of its capital stock and to furnish to the
              Representatives a copy of each annual or other report it shall be
              required to file with the Commission.

                     (viii) Without the prior written consent of the
              Representatives, for a period of 180 days from the date on which
              a public offering of the Shares commences, the Company shall not
              issue, sell or register with the Commission or otherwise dispose
              of, directly or indirectly, any securities of the Company (or any
              securities convertible into or exercisable or exchangeable for
              securities of the Company), except for the issuance of the Shares
              pursuant to the Registration Statement; and the Company agrees
              that it will deliver to the Representatives agreements of the
              Company's officers and directors to the same effect.

                     (ix)   On or before completion of this offering, the
              Company shall make all filings required under applicable
              securities laws and by the Nasdaq National Market.

                     (x)    During a period of five years from the effective
              date of the Registration Statement, the Company shall furnish to
              you copies of all reports or other communications (financial or
              other) furnished to stockholders and deliver to you (i) as soon
              as they are available, copies of any reports and financial
              statements furnished to or filed with the Commission or any
              national securities exchange on which any class of securities of
              the Company is listed and (ii) such additional information
              concerning the business and financial condition of the Company as
              you may from time to time reasonably request (such financial
              statements to be on a consolidated basis to the extent the
              accounts of the Company and its subsidiaries are consolidated in
              reports furnished to its stockholders generally or to the
              Commission).

                     (xi)   The Company shall use the net proceeds received by
              it from the sale of the Shares pursuant to this Agreement in the
              manner specified in the Prospectus under the caption "Use of
              Proceeds."

                     (xii)  Prior to each Closing Date and for a period of 25
              days thereafter, you shall be given reasonable written prior
              notice of any press release or other direct or indirect
              communication and of any press conference with respect to the
              Company, the financial conditions, results of operations,
              business, properties, assets, liabilities of the Company, or this
              offering.

              (b)    The Company agrees to pay, or reimburse if paid by the
       Representatives, whether or not the transactions contemplated hereby are
       consummated or this Agreement is terminated, all costs and expenses
       relating to the registration and public offering of the Shares including
       those relating to:  (i) the preparation, printing, filing and
       distribution of the Registration Statement including all exhibits
       thereto, each preliminary prospectus, the Prospectus, all amendments and
       supplements to the Registration Statement and the Prospectus, and any
       documents required to be delivered with any Preliminary Prospectus or
       the Prospectus, and the printing, filing and distribution of the
       Agreement Among Underwriters, this Agreement and related documents; (ii)
       the preparation and delivery of





                                       24
   25
       certificates for the Shares to the Underwriters; (iii) the registration
       or qualification of the Shares for offer and sale under the securities
       or Blue Sky laws of the various jurisdictions referred to in Section
       6(a)(vi), including the fees and disbursements of counsel for the
       Underwriters in connection with such registration and qualification and
       the preparation, printing, distribution and shipment of preliminary and
       supplementary Blue Sky memoranda; (iv) the furnishing (including costs
       of shipping and mailing) to the Representatives and to the Underwriters
       of copies of each preliminary prospectus, the Prospectus and all
       amendments or supplements to the Prospectus, and of the several
       documents required by this Section to be so furnished, as may be
       reasonably requested for use in connection with the offering and sale of
       the Shares by the Underwriters or by dealers to whom Shares may be sold;
       (v) the filing fees of the National Association of Securities Dealers,
       Inc. in connection with its review of the terms of the public offering;
       (vi) the furnishing (including costs of shipping and mailing) to the
       Representatives and to the Underwriters of copies of all reports and
       information required by Section 6(a)(vii); (vii) inclusion of the Shares
       for quotation on the Nasdaq National Market; (viii) the cost and charges
       of any transfer agent or registration; and (ix) all transfer taxes, if
       any, with respect to the sale and delivery of the Shares by the Company
       to the Underwriters.  In addition, the Company will pay the
       Representatives a nonaccountable expense allowance in an amount equal to
       1.0% of the gross amount of funds raised by the offering of the Shares.
       Except as otherwise contemplated by Section 9 hereof, the Underwriters
       will pay their own counsel fees and expenses to the extent not otherwise
       covered by clause (iii) above, and their own travel and travel-related
       expenses in connection with the distribution of the Shares.

       7.     Indemnification.

              (a)    (i) The Company agrees to indemnify and hold harmless each
       Underwriter and each person, if any, who controls any Underwriter within
       the meaning of Section 15 of the Act or Section 20 of the Exchange Act
       against any and all losses, claims, damages and liabilities, joint or
       several (including any reasonable investigation, legal and other
       expenses incurred in connection with, and any amount paid in settlement
       of, any action, suit or proceeding or any claim asserted), to which
       they, or any of them, may become subject under the Act, the Exchange Act
       or other federal, state or foreign law or regulation, at common law or
       otherwise, insofar as such losses, claims, damages or liabilities arise
       out of or are based upon any untrue statement or alleged untrue
       statement of a material fact contained in any preliminary prospectus,
       the Registration Statement or the Prospectus or any amendment thereof or
       supplement thereto, or arise out of or are based upon any omission or
       alleged omission to state therein such fact required to be stated
       therein or necessary to make such statements therein not misleading. The
       Selling Stockholders agree, jointly and severally, to indemnify such
       Underwriter and each person, if any, who controls any Underwriter within
       the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
       against any and all losses, claims, damages and liabilities, joint or
       several (including any reasonable investigation, legal and other
       expenses incurred in connection with, and any amount paid in settlement
       of, any action, suit or proceeding or any claim asserted), to which
       they, or any of them, may become subject under the Act, the Exchange Act
       or other Federal or state law or regulation, at common law or otherwise,
       insofar as such losses, claims, damages or liabilities





                                       25
   26
       arise out of or are based upon any untrue statement or alleged untrue
       statement or alleged untrue statement of a material fact with respect to
       such Selling Stockholders contained in any preliminary prospectus, the
       Registration Statement or the Prospectus or any amendment thereof or
       supplement thereto (which amendments or supplements are furnished to
       such Selling Stockholders), or which arise out of or are based upon any
       omission or alleged omission to state therein such fact required to be
       stated therein or necessary to make such statements therein not
       misleading, but only with reference to information relating to such
       Selling Stockholders furnished in writing to the Company by or on behalf
       of such Selling Stockholders expressly for use in connection with the
       preparation of the Registration Statement and Prospectus or any
       amendment thereof or supplement thereto.  Such indemnity shall not inure
       to the benefit of any Underwriter (or any person controlling such
       Underwriter) on account of any losses, claims, damages or liabilities
       arising from the sale of the Shares to any person by such Underwriter if
       such untrue statement or omission or alleged untrue statement or
       omission was made in such preliminary prospectus, the Registration
       Statement or the Prospectus, or such amendment or supplement, in
       reliance upon and conformity with information furnished in writing to
       the Company by the Representatives on behalf of any Underwriter
       specifically for use therein.  The obligations of each of the Selling
       Stockholders, pursuant to this Section 7(a) and Section 8, shall be
       limited to an amount not exceeding the product of the Per Share Price to
       Public of the Shares as set forth on the cover page of the Prospectus
       and the number of Shares being sold by each of them.  In no event shall
       the indemnification agreement contained in this Section 7(a) inure to
       the benefit of any Underwriter (or to the benefit of any person
       controlling such Underwriter) on account of any losses, claims, damages,
       liabilities or actions arising from the sale of the Shares upon the
       public offering to any person by such Underwriter if such losses,
       claims, damages, liabilities or actions arise out of, or are based upon,
       a statement or omission or alleged omission in a preliminary prospectus
       and if, in respect to such statement, omission or alleged omission, the
       Prospectus differs in a material respect from such preliminary
       prospectus and a copy of the Prospectus has not been sent or given to
       such person at or prior to the confirmation of such sale to such person.
       This indemnity agreement will be in addition to any liability which the
       Company and Selling Stockholders may otherwise have.

              (b)    Each Underwriter agrees, severally and not jointly, to
       indemnify and hold harmless the Company, each person, if any, who
       controls the Company within the meaning of Section 15 of the Act or
       Section 20 of the Exchange Act, each director of the Company, and each
       officer of the Company who signs the Registration Statement and each
       Selling Stockholder, to the same extent as the foregoing indemnity from
       the Company and the Selling Stockholders to each Underwriter, but only
       insofar as such losses, claims, damages or liabilities arise out of or
       are based upon any untrue statement or omission or alleged untrue
       statement or omission which was made in any Preliminary Prospectus, any
       Rule 430A Prospectus, the Registration Statement or the Prospectus, or
       any amendment thereof or supplement thereto, which were made in reliance
       upon and in conformity with information furnished in writing to the
       Company by the Representatives on behalf of any Underwriter for specific
       use therein; provided, however, that the obligation of each Underwriter
       to indemnify the Company (including any controlling person, director or
       officer thereof) and the Selling Stockholders shall be limited to the
       excess of the net proceeds received by such Underwriter





                                       26
   27
       from the offering of Shares and all expenses, penalties and other
       damages incurred by such Underwriter by reason of such untrue statement
       or omission or alleged untrue statement or omission.  For all purposes
       of this Agreement the amounts of the selling concession and reallowance
       set forth in the Prospectus constitute the only information furnished in
       writing by or on behalf of any Underwriter expressly for inclusion in
       any Preliminary Prospectus, any Rule 430A Prospectus, the Registration
       Statement or the Prospectus or any amendment or supplement thereto.

              (c)    Any party that proposes to assert the right to be
       indemnified under this Section will, promptly after receipt of notice of
       commencement of any action, suit or proceeding against such party in
       respect of which a claim is to be made against an indemnifying party or
       parties under this Section, notify each such indemnifying party of the
       commencement of such action, suit or proceeding, enclosing a copy of all
       papers served.  No indemnification provided for in Section 7(a) or 7(b)
       shall be available to any party who shall fail to give notice as
       provided in this Section 7(c) if the party to whom notice was not given
       was unaware of the proceeding to which such notice would have related
       and was prejudiced by the failure to give such notice but the omission
       so to notify such indemnifying party of any such action, suit or
       proceeding shall not relieve it from any liability that it may have to
       any indemnified party for contribution or otherwise than under this
       Section.  In case any such action, suit or proceeding shall be brought
       against any indemnified party and it shall notify the indemnifying party
       of the commencement thereof, the indemnifying party shall be entitled to
       participate in, and, to the extent that it shall wish, jointly with any
       other indemnifying party similarly notified, to assume the defense
       thereof, with counsel reasonably satisfactory to such indemnified party,
       and after notice from the indemnifying party to such indemnified party
       of its election so to assume the defense thereof and the approval by the
       indemnified party of such counsel, the indemnifying party shall not be
       liable to such indemnified party for any legal or other expenses, except
       as provided below and except for the reasonable costs of investigation
       subsequently incurred by such indemnified party in connection with the
       defense thereof.  The indemnified party shall have the right to employ
       its counsel in any such action, but the fees and expenses of such
       counsel shall be at the expense of such indemnified party unless (i) the
       employment of counsel by such indemnified party has been authorized in
       writing by the indemnifying parties, (ii) the indemnified party shall
       have reasonably concluded that there may be a conflict of interest
       between the indemnifying parties and the indemnified party in the
       conduct of the defense of such action (in which case the indemnifying
       parties shall not have the right to direct the defense of such action on
       behalf of the indemnified party) or (iii) the indemnifying parties shall
       not have employed counsel to assume the defense of such action within a
       reasonable time after notice of the commencement thereof, in each of
       which cases the reasonable fees and expenses of counsel shall be at the
       expense of the indemnifying parties.  An indemnifying party shall not be
       liable for any settlement of any action, suit, proceeding or claim
       effected without its written consent.

       8.     Contribution.  In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Sections 7(a) and (b) is due in accordance with its terms but for any reason is
held to be unavailable from the Company, the Selling Stockholders or the





                                       27
   28
Underwriters, the Company, the Selling Stockholders and the Underwriters shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting any contribution received by the
Company from persons other than the Underwriters, such as the Selling
Stockholders, persons who control the Company within the meaning of the Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who may also be liable for contribution) to which the Company and
the Selling Stockholders and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Stockholders on the one hand and the Underwriters
on the other from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations.  The relative benefits received by the Company, the
Selling Stockholders and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the Offering (net of underwriting
discounts but before deducting expenses) received by the Company, or the
Selling Stockholders, from the sale of the Shares, as set forth in the table on
the cover page of the Prospectus (but not taking into account the use of the
proceeds of such sale of Shares by the Company), bear to (y) the underwriting
discount received by the Underwriters, as set forth in the table on the cover
page of the Prospectus.  The relative fault of the Company, the Selling
Stockholders and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The Company,
the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above.  Notwithstanding the provisions
of this Section 8, (i) in no case shall any Underwriter (except as may be
provided in the Agreement Among Underwriters) be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, (ii) in no case shall any of the
Selling Stockholders be liable or responsible for any amount in excess of the
product of the Per Share Price to public of the Shares as set forth on the
cover page of the Prospectus and the number of Shares being sold by each of
them subject to the limitation expressed in Section 7(a), and (iii) the Company
shall be liable and responsible for any amount in excess of the underwriting
discount and the amount referred to in clause (ii); provided, however, that  no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  For purposes of this Section 8,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the





                                       28
   29
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to clauses (i), (ii) and (iii) in the immediately preceding
sentence of this Section 8.  Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this Section.
No party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its written consent.  The Underwriters'
obligations to contribute pursuant to this Section 8 are several in proportion
to their respective underwriting commitments and not joint.

       9.     Termination.  This Agreement may be terminated with respect to
the Shares to be purchased on any Closing Date by the Representatives by
notifying the Company at any time prior to the purchase of the Shares:

              (a)    in the absolute discretion of the Representatives at or
       before any Closing Date:  (i) if on or prior to such date, any domestic
       or international event or act or occurrence has materially disrupted, or
       in the opinion of the Representatives will in the future materially
       disrupt, the securities markets; (ii) if there has occurred any outbreak
       or material escalation of hostilities or other calamity or crisis the
       effect of which on the financial markets of the United States is such as
       to make it, in the judgment of the Representatives, inadvisable to
       proceed with the Offering; (iii) if there shall be such a material
       adverse change in, general financial, political or economic conditions
       or the effect of international conditions on the financial markets in
       the United States such as to make it, in the judgment of the
       Representatives, inadvisable or impracticable to market the Shares; (iv)
       if trading in the Shares has been suspended by the Commission or trading
       generally on the New York Stock Exchange, Inc., the American Stock
       Exchange, Inc. or the Nasdaq National Market has been suspended or
       limited, or minimum or maximum ranges for prices for securities shall
       have been fixed, or maximum ranges for prices for securities have been
       required, by said exchanges or by order of the Commission, the National
       Association of Securities Dealers, Inc., or any other governmental or
       regulatory authority; or (v) if a banking moratorium has been declared
       by any state or federal authority, or

              (b)    at or before any Closing Date, if any of the conditions
       specified in Section 5 shall not have been fulfilled when and as
       required by this Agreement.

       If this Agreement is terminated pursuant to any of its provisions,
neither the Company nor the Selling Stockholders shall be under any liability
to any Underwriter, and no Underwriter shall be under any liability to the
Company or the Selling Stockholders, except that (y) if this Agreement is
terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of their counsel) incurred by them in connection with the
proposed





                                       29
   30
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused
to purchase the Shares agreed to be purchased by it under this Agreement,
without some reason sufficient hereunder to justify cancellation or termination
of its obligations under this Agreement, shall be relieved of liability to the
Company and the Selling Stockholders or to the other Underwriters for damages
occasioned by its failure or refusal.

       10.    Substitution of Underwriters.  If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement.  If
no such arrangements have been made by the close of business on the business
day following such Closing Date:

              (a)    if the number of Shares to be purchased by the defaulting
       Underwriters on such Closing Date shall not exceed 10% of the Shares
       that all the Underwriters are obligated to purchase on such Closing
       Date, then each of the nondefaulting Underwriters shall be obligated to
       purchase such Shares on the terms herein set forth in proportion to
       their respective obligations hereunder; provided, that in no event shall
       the maximum number of Shares that any Underwriter has agreed to purchase
       pursuant to Section 1 be increased pursuant to this Section 10 by more
       than one-ninth of such number of Shares without the written consent of
       such Underwriter, or

              (b)    if the number of Shares to be purchased by the defaulting
       Underwriters on such Closing Date shall exceed 10% of the Shares that
       all the Underwriters are obligated to purchase on such Closing Date,
       then the Company shall be entitled to an additional business day within
       which it may, but is not obligated to, find one or more substitute
       underwriters reasonably satisfactory to the Representatives to purchase
       such Shares upon the terms set forth in this Agreement.

       In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company.  If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and the Selling
Stockholders and without liability on the part of the Company and the Selling
Stockholders, except in both cases as provided in Sections 6(b), 7, 8 and 9.
The provisions of this





                                       30
   31
Section shall not in any way affect the liability of any defaulting Underwriter
to the Company or the Selling Stockholders or the nondefaulting Underwriters
arising out of such default.  A substitute underwriter hereunder shall become
an Underwriter for all purposes of this Agreement.

       11.    Miscellaneous.  The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, of
the Selling Stockholders, and of the Underwriters set forth in or made pursuant
to this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Selling
Stockholder or the Company or any of the officers, directors or controlling
persons referred to in Sections 7 and 8 hereof, and shall survive delivery of
and payment for the Shares.  The provisions of Sections 6(b), 7, 8 and 9 shall
survive the termination or cancellation of this Agreement.

       This Agreement has been and is made for the benefit of the Underwriters,
the Company and the Selling Stockholders and their respective successors and
assigns and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, the Company, and the directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement.  The term "successors and assigns" shall not include any purchaser
of Shares from any Underwriter merely because of such purchase.

       All notices and communications hereunder shall be in writing and mailed
or delivered, or by telefax or telegraph if subsequently confirmed by letter,
(a) if to the Representatives, to Rodman & Renshaw, Inc., Two World Financial
Center, 225 Liberty Street, 30th Floor, New York, New York 10281, Attention:
Peter Blum, Managing Director, telecopy:  (212) 416-7439, (b) if to the
Company, to the Company's agent for service as such agent's address appears on
the cover page of the Registration Statement, and (c) if to any Selling
Stockholder, to such Selling Stockholder at its address set forth in Schedule
III hereto.

       This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.

       This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

       All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, singular or plural, as the identity of the
person or persons or entity or entities require.

       All section headings herein are for convenience of reference only and
are not part of this Agreement, and no construction or inference shall be
derived therefrom.





                                       31
   32
       Please confirm that the foregoing correctly sets forth the agreement
among us.


                                      Very truly yours,

                                      MITCHAM INDUSTRIES, INC.


                                      By:                                       
                                         ---------------------------------------
                                         Billy F. Mitcham


                                                                                
                                      ------------------------------------------
                                      Billy F. Mitcham, Jr.

                                                                                
                                      ------------------------------------------
                                      Billy F. Mitcham, Sr.

                                                                                
                                      ------------------------------------------
                                      Paul C. Mitcham

                                      ALAMO ATLAS GROUP, INC.


                                      By:                                       
                                         ---------------------------------------
                                         Name:




Confirmed on behalf of themselves and as the
Representatives of the several Underwriters
named in Schedule I annexed hereto:

RODMAN & RENSHAW, INC.
SIMMONS & COMPANY INTERNATIONAL


By:                                   
   -----------------------------------
   (Rodman & Renshaw, Inc.)





                                       32
   33
                                   SCHEDULE I


                                                        NUMBER OF FIRM
                                                         SHARES TO BE
         NAME OF UNDERWRITER                               PURCHASED    
         -------------------                         --------------------
                                                       
 Rodman & Renshaw, Inc.  . . . . . . . . . . . .

 Simmons & Company International . . . . . . . .





                Total  . . . . . . . . . . . . .          
                                                          -----------






                                       33
   34
                                  SCHEDULE II




    SUBSIDIARIES
    ------------
                                                             
 Mitcham Canada Ltd. . . . . . . . . . . . . . . . . . . . . 






                                       34
   35
                                  SCHEDULE III


                                                            
 Billy F. Mitcham, Jr. . . . . . . . . . . . . . . . . . . . 
 Address:


 Billy F. Mitcham, Sr. . . . . . . . . . . . . . . . . . . . 
 Address:


 Paul C. Mitcham . . . . . . . . . . . . . . . . . . . . . . 
 Address:


 Alamo Atlas Group, Inc. . . . . . . . . . . . . . . . . . . 
 Address:

 






                                       35
   36
                                   EXHIBIT A


                                                        WARRANT FOR COMMON STOCK
                                                             W/CASHLESS EXERCISE


                            MITCHAM INDUSTRIES, INC.

              Warrant for the Purchase of Shares of Common Stock,
                           par value $0.01 per share

No. _______                                                    __________ Shares


              THIS CERTIFIES that, for receipt in hand of $________, and other
value received, ________________________ (the "Holder"), is entitled to
subscribe for and purchase from MITCHAM INDUSTRIES, INC., a Texas corporation
(the "Company"), upon the terms and conditions set forth herein, at any time or
from time to time after [one year after the effective date], and before 5:00
P.M. on [two years after the effective date], New York time (the "Exercise
Period"), __________ shares of the Company's Common Stock, par value  $0.01 per
share ("Common Stock"), at a price of $_____ per share [120% of the offering
price] (the "Exercise Price").  This Warrant is the warrant or one of the
warrants (collectively, including any warrants issued upon the exercise or
transfer of any such warrants in whole or in part, the "Warrants") issued
pursuant to the Underwriting Agreement, dated __________, between Rodman &
Renshaw, Inc. and Simmons & Company International, as representatives of the
several Underwriters named therein, and the Company.  As used herein the term
"this Warrant" shall mean and include this Warrant and any Warrant or Warrants
hereafter issued as a consequence of the exercise or transfer of this Warrant
in whole or in part.  This Warrant may not be sold, transferred, assigned or
hypothecated until [one year after the effective date] except that it may be
transferred, in whole or in part, to (i) one or more officers or partners of
the Holder (or the officers or partners of any such partner); (ii) any other
underwriting firm or member of the selling group which participated in the
public offering of Common Stock (the "Offering") which commenced on [effective
date] (or the officers or partners of any such firm); (iii) a successor to the
Holder, or the officers or partners of such successor; (iv) a purchaser of
substantially all of the assets of the Holder; or (v) by operation of law; and
the term the "Holder" as used herein shall include any transferee to whom this
Warrant has been transferred in accordance with the above.

              The number of shares of Common Stock issuable upon exercise of
the Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from
time to time as hereinafter set forth.

       1.     Manner of Exercise; Payment for Shares.  This Warrant may be
exercised during the Exercise Period, as to the whole or any lesser number of
whole Warrant Shares, by the surrender of this Warrant (with the election in
the form attached hereof duly executed) to the Company at its office at Post
Office Box 1175, 44000 Highway 75 South, Huntsville, Texas 77342, or at such
other place as is designated in writing by the Company, together with a
certified or bank cashier's check payable to the order of the Company in an
amount equal to the Exercise Price multiplied by the number of Warrant Shares
for which this Warrant is being exercised (the "Stock Purchase Price").
   37
       2.     Cashless Exercise.  (a) In lieu of the payment of the Stock
Purchase Price, the Holder shall have the right (but not the obligation), to
require the Company to convert this Warrant, in whole or in part, into shares
of Common Stock (the "Conversion Right") as provided for in this Section 2.
Upon exercise of the Conversion Right, the Company shall deliver to the Holder
(without payment by the Holder of any of the Stock Purchase Price) that number
of shares of Common Stock (the "Conversion Shares") equal to the quotient
obtained by dividing (x) the value of this Warrant (or portion thereof as to
which the Conversion Right is being exercised if the Conversion Right is being
exercised in part) at the time the Conversion Right is exercised (determined by
subtracting the aggregate Stock Purchase Price of the shares of Common Stock as
to which the Conversion Right is being exercised in effect immediately prior to
the exercise of the Conversion Right from the aggregate Current Market Price
(as defined in Section 6(e) hereof) of the shares of Common Stock as to which
the Conversion Right is being exercised immediately prior to the exercise of
the Conversion Right) by (y) the Current Market Price of one share of Common
Stock immediately prior to the exercise of the Conversion Right.

              (b)    The Conversion Rights provided under this Section 2 may be
exercised in whole or in part and at any time and from time to time while any
Warrants remain outstanding.  In order to exercise the Conversion Right, the
Holder shall surrender to the Company, at its offices, this Warrant with the
Notice of Conversion in the form attached hereof duly executed.  The
presentation and surrender shall be deemed a waiver of the Holder's obligation
to pay all or any portion of the aggregate purchase price payable for the
shares of Common Stock as to which such Conversion Right is being exercised.
This Warrant (or so much thereof as shall have been surrendered for conversion)
shall be deemed to have been converted immediately prior to the close of
business on the day of surrender of such Warrant for conversion in accordance
with the foregoing provisions.

       3.     Delivery of Warrant Shares; Partial Exercise.  Upon each exercise
of the Holder's rights to purchase Warrant Shares or Conversion Shares, the
Holder shall be deemed to be the holder of record of the Warrant Shares or
Conversion Shares issuable upon such exercise or conversion, notwithstanding
that the transfer books of the Company shall then be closed or certificates
representing such Warrant Shares or Conversion Shares shall not then have been
actually delivered to the Holder.  As soon as practicable after each such
exercise or conversion of this Warrant, the Company shall issue and deliver to
the Holder a certificate or certificates for the Warrant Shares or Conversion
Shares issuable upon such exercise or conversion, registered in the name of the
Holder or its designee.  If this Warrant should be exercised or converted in
part only, the Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the right of the Holder to
purchase the balance of the Warrant Shares (or portions thereof) subject to
purchase hereunder.

       4.     Registry; Transfer of Warrants.  Any Warrants issued upon the
transfer or exercise or conversion in part of this Warrant shall be numbered
and shall be registered in a Warrant Register as they are issued.  The Company
shall be entitled to treat the registered holder of any Warrant on the Warrant
Register as the owner in fact thereof for all purposes and shall not be bound
to recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a





                                      A-2
   38
fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith.  This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment, or authority to transfer.  In all
cases of transfer by an attorney, executor, administrator, guardian, or other
legal representative, duly authenticated evidence of his or its authority shall
be produced.  Upon any registration of transfer, the Company shall deliver a
new Warrant or Warrants to the person entitled thereto.  This Warrant may be
exchanged, at the option of the Holder thereof, for another Warrant, or other
Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrant Shares (or portions
thereof), upon surrender to the Company or its duly authorized agent.
Notwithstanding the foregoing, the Company shall have no obligation to cause
Warrants to be transferred on its books to any person if, in the opinion of
counsel to the Company, such transfer does not comply with the provisions of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations thereunder.

       5.     Reservation of Shares; Shares to be Fully Paid.  The Company
shall at all times reserve and keep available out of its authorized and
unissued Common Stock, solely for the purpose of providing for the exercise of
the rights to purchase all Warrant Shares and/or Conversion Shares granted
pursuant to the Warrants, such number of shares of Common Stock as shall, from
time to time, be sufficient therefor.  The Company covenants that all shares of
Common Stock issuable upon exercise of this Warrant, upon receipt by the
Company of the full Exercise Price therefor, and all shares of Common Stock
issuable upon conversion of this Warrant, shall be validly issued, fully paid,
and nonassessable, without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive rights of
stockholders, optionholders, warrantholders and any other persons and the
Holders will receive good title to the securities purchased by them,
respectively, free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements and voting trusts which might
be created by acts or omissions to act of the Company.

       6.     Anti-Dilution Provisions.  (a) In case the Company shall at any
time after the date the Warrants were first issued (i) declare a dividend on
the outstanding Common Stock payable in shares of its capital stock, (ii)
subdivide the outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then, in each case, the Exercise Price,
and the number and kind of securities issuable upon exercise or conversion of
this Warrant, in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination, or reclassification, shall
be proportionately adjusted so that the Holder after such time shall be
entitled to receive the aggregate number and kind of shares which, if such
Warrant had been exercised or converted immediately prior to such time, he
would have owned upon such exercise or conversion and been entitled to receive
by virtue of such dividend, subdivision, combination, or reclassification.
Such adjustment shall be made successively whenever any event listed above
shall occur.





                                      A-3
   39
              (b)    In case the Company shall distribute to all holders of
Common Stock (including any such distribution made to the stockholders of the
Company in connection with a consolidation or merger in which the Company is
the continuing corporation) evidences of its indebtedness, cash (other than any
cash dividend which, together with any cash dividends paid within the 12 months
prior to the record date for such distribution, does not exceed 5% of the
Current Market Price at the record date for such distribution) or assets (other
than distributions and dividends payable in shares of Common Stock), or rights,
options, or warrants to subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock, then, in each
case, the Exercise Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by a fraction, the numerator
of which shall be (i) the Current Market Price per share of Common Stock on
such record date, less the fair market value (as determined in good faith by
the board of directors of the Company, whose determination shall be conclusive
absent manifest error) of the portion of the evidences of indebtedness or
assets so to be distributed, or of such rights, options, or warrants or
convertible or exchangeable securities, or the amount of such cash, applicable
to one share, and the denominator of which shall be (ii) such Current Market
Price per share of Common Stock.  Such adjustment shall be made whenever any
such distribution is made, and shall become effective on the record date for
the determination of stockholders entitled to receive such distribution.

              (c)    For the purpose of any computation under this Section 6,
the Current Market Price per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices for the 30 consecutive trading
days immediately preceding the date in question.  The closing price for each
day shall be the last reported sales price regular way or, in case no such
reported sale takes place on such day, the closing bid price regular way, in
either case on the principal national securities exchange (including, for
purposes hereof, the NASDAQ National Market) on which the Common Stock is
listed or admitted to trading or, if the Common Stock is not listed or admitted
to trading on any national securities exchange, the highest reported bid price
for the Common Stock as furnished by the National Association of Securities
Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer
reporting such information.  If on any such date the Common Stock is not listed
or admitted to trading on any national securities exchange and is not quoted by
NASDAQ or any similar organization, the fair  value of a share of Common Stock
on such date, as determined in good faith by the board of directors of the
Company, whose determination shall be conclusive absent manifest error, shall
be used.

              (d)    No adjustment in the Exercise Price shall be required if
such adjustment is less than $.05; provided, however, that any adjustments
which by reason of this Section 6 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.  All calculations
under this Section 6 shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.

              (e)    In any case in which this Section 6 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, issuing to the Holder, if the Holder exercised or converted this Warrant
after such record date, the shares of Common Stock, if any, issuable upon such
exercise or conversion over and above the shares of Common Stock, if any,
issuable upon such 




                                      A-4
   40
exercise or conversion on the basis of the Exercise Price in effect prior to 
such adjustment; provided, however, that the Company shall deliver to the 
Holder a due bill or other appropriate instrument evidencing the Holder's 
right to receive such additional shares upon the occurrence of the event 
requiring such adjustment.

              (f)    Upon each adjustment of the Exercise Price as a result of
the calculations made in this Section, this Warrant shall thereafter evidence
the right to purchase, at the adjusted Exercise Price, that number of shares
(calculated to the nearest thousandth) obtained by dividing (i) the product
obtained by multiplying the number of shares purchasable upon exercise of this
Warrant prior to adjustment of the number of shares by the Exercise Price in
effect prior to adjustment of the Exercise Price, by (ii) the Exercise Price in
effect after such adjustment of the Exercise Price.

              (g)    Whenever there shall be an adjustment as provided in this
Section 6, the Company shall promptly cause written notice thereof to be sent
by registered mail, postage prepaid, to the Holder, at its address as it shall
appear in the Warrant Register, which notice shall be accompanied by an
officer's certificate setting forth the number of Warrant Shares purchasable
upon the exercise of this Warrant and the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
the computation thereof, which officer's certificate shall be conclusive
evidence of the correctness of any such adjustment absent manifest error.

              (h)    The Company shall not be required to issue fractions of
shares of Common Stock or other capital stock of the Company upon the exercise
or conversion of this Warrant.  If any fraction of a share would be issuable on
the exercise or conversion of this Warrant (or specified portions thereof), the
Company shall purchase such fraction for an amount in cash equal to the same
fraction of the Current Market Price of such share of Common Stock on the date
of exercise or conversion of this Warrant.

       7.     Merger or Consolidation of the Company; Sale, Lease, or
Conveyance of Property; Reclassification of the Shares.  (a) In case of any
consolidation with or merger of the Company with or into another corporation
(other than a merger or consolidation in which the Company is the surviving or
continuing corporation), or in case of any sale, lease, or conveyance to
another corporation of the property and assets of any nature of the Company as
an entirety or substantially as an entirety, such successor, leasing, or
purchasing corporation, as the case may be, shall (i) execute with the Holder
an agreement providing that the Holder shall have the right thereafter to
receive upon exercise or conversion of this Warrant solely the kind and amount
of shares of stock and other securities, property, cash, or any combination
thereof receivable upon such consolidation, merger, sale, lease, or conveyance
by a holder of the number of shares of Common Stock for which this Warrant
might have been exercised or converted immediately prior to such consolidation,
merger, sale, lease, or conveyance, and (ii) make effective provision in its
certificate of incorporation or otherwise, if necessary, to effect such
agreement.  Such agreement shall provide for adjustments which shall be as
nearly equivalent as practicable to the adjustments in Section 6.

              (b)    In case of any reclassification or change of the shares of
Common Stock issuable upon exercise or conversion of this Warrant (other than a
change in par value or from no par value to a specified par value, or as a
result of a subdivision or combination, but including any change in the shares
into two or more classes or series of shares), or in case of any consolidation
or merger of another corporation into the Company in which the Company is the
continuing corporation





                                      A-5
   41
and in which there is a reclassification or change (including a change to the
right to receive cash or other property) of the shares of Common Stock (other
than a change in par value, or from no par value to a specified par value, or
as a result of a subdivision or combination, but including any change in the
shares into two or more classes or series of shares), the Holder shall have the
right thereafter to receive upon exercise or conversion of this Warrant solely
the kind and amount of shares of stock and other securities, property, cash, or
any combination thereof receivable upon such reclassification, change,
consolidation, or merger by a holder of the number of shares of Common Stock
for which this Warrant might have been exercised or converted immediately prior
to such reclassification, change, consolidation, or merger.  Thereafter,
appropriate provision shall be made for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 6.

              (c)    The above provisions of this Section 7 shall similarly
apply to successive reclassifications and changes of shares of Common Stock and
to successive consolidations, mergers, sales, leases, or conveyances.

       8.     Prior Notice of Certain Events.  In case at any time the Company
shall propose

              (a)    to pay any dividend or make any distribution on shares of
       Common Stock in shares of Common Stock or make any other distribution
       (other than regularly scheduled cash dividends which are not in a
       greater amount per share than the most recent such cash dividend) to all
       holders of Common Stock; or

              (b)    to issue any rights, warrants, or other securities to all
       holders of Common Stock entitling them to purchase any additional shares
       of Common Stock or any other rights, warrants, or other securities; or

              (c)    to effect any reclassification or change of outstanding
       shares of Common Stock, or any consolidation, merger, sale, lease, or
       conveyance of property, described in Section 7; or

              (d)    to effect any liquidation, dissolution, or winding-up of
       the Company; or

              (e)    to take any other action which would cause an adjustment
       to the Exercise Price;

then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Warrant Register, mailed at least 15
days prior to (i) the date as of which the holders of record of shares of
Common Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up, or (iii) the date of such action which would
require an adjustment to the Exercise Price.





                                      A-6
   42
       9.     Taxes.  The issuance of any shares or other securities upon the
exercise or conversion of this Warrant, and the delivery of certificates or
other instruments representing such shares or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance.  The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder and the Company shall not
be required to issue or deliver any such certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

       10.    Indemnification.  (a) Subject to the conditions set forth below,
the Company agrees to indemnify and hold harmless each Eligible Holder, its
officers, directors, partners, employees, agents, and counsel, and each person,
if any, who controls any such person within the meaning of Section 15 of the
Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all loss, liability, charge, claim,
damage, and expense whatsoever (which shall include, for all purposes of this
Section 10, but not be limited to, reasonable attorneys' fees and any and all
reasonable expense whatsoever incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), as and when incurred, arising out of, based upon, or in connection
with (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any registration statement, preliminary prospectus, or final
prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, relating to the sale of any of the Underwriters'
Securities, or (B) in any application or other document or communication (in
this Section 10 collectively called an "application") executed by or on behalf
of the Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to register or qualify any of
the Underwriters' Securities under the securities or blue sky laws thereof or
filed with the Commission or any securities exchange; or any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such statement
or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to such Eligible Holder by or
on behalf of such person expressly for inclusion in any registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company contained in
this Warrant.  The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have, including liabilities arising under
this Warrant.

       If any action is brought against any Eligible Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any
controlling persons of such person (an "indemnified party") in respect of which
indemnity may be sought against the Company pursuant to the foregoing
paragraph, such indemnified party or parties shall promptly notify the Company
in writing of the institution of such action (but the failure so to notify
shall not relieve the Company from any liability pursuant to this Section 10(a)
and the Company shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such indemnified party or
parties) and payment of expenses.  Such indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action or the
Company





                                      A-7
   43
shall not have promptly employed counsel reasonably satisfactory to such
indemnified party or parties to have charge of the defense of such action or
such indemnified party or parties shall have reasonably concluded that there
may be a conflict of interest between the indemnified party or parties and the
Company in the conduct of the defense of such action in any of which events
such fees and expenses shall be borne by the Company and the Company shall not
have the right to direct the defense of such action on behalf of the
indemnified party or parties.  Anything in this Section 10 to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which shall not be
unreasonably withheld.  The Company shall not, without the prior written
consent of each indemnified party that is not released as described in this
sentence, settle or compromise any action, or permit a default or consent to
the entry of judgment in or otherwise seek to terminate any pending or
threatened action, in respect of which indemnity may be sought hereunder
(whether or not any indemnified party is a party thereto), unless such
settlement, compromise, consent, or termination includes an unconditional
release of each indemnified party from all liability in respect of such action.
The Company agrees promptly to notify the Eligible Holders of the commencement
of any litigation or proceedings against the Company or any of its officers or
directors in connection with the sale of any Underwriters' Securities or any
preliminary prospectus, prospectus, registration statement, or amendment or
supplement thereto, or any application relating to any sale of any
Underwriters' Securities.

       (b)    The Holder agrees to indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who shall have signed
any registration statement covering Underwriters' Securities held by the
Holder, each other person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, and its or their
respective counsel, to the same extent as the foregoing indemnity from the
Company to the Holder in Section 10(a), but only with respect to statements or
omissions, if any, made in any registration statement, preliminary prospectus,
or final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, or in any application, in reliance upon and in
conformity with written information furnished to the Company with respect to
the Holder by or on behalf of the Holder expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be.  If
any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus,
or final prospectus, or any amendment or supplement thereto, or in any
application, and in respect of which indemnity may be sought against the Holder
pursuant to this Section 10(b), the Holder shall have the rights and duties
given to the Company, and the Company and each other person so indemnified
shall have the rights and duties given to the indemnified parties, by the
provisions of Section 10(a).

       (c)    To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 10(a)
or 10(b) (subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this Agreement
expressly provides for indemnification in such case, or (ii) any indemnified or
indemnifying party seeks contribution under the Act, the Exchange Act or
otherwise, then the Company (including for this purpose any contribution made
by or on behalf of any director of the Company, any  officer of the Company who
signed any such registration statement, any controlling person of the Company,
and its or their respective counsel), as one entity, and the Eligible Holders
of the Underwriters' Securities included in such registration in the aggregate
(including for this purpose any contribution by or on behalf of an indemnified
party),





                                      A-8
   44
as a second entity, shall contribute to the losses, liabilities, claims,
damages, and expenses whatsoever to which any of them may be subject, on the
basis of relevant equitable considerations such as the relative fault of the
Company and such Eligible Holders in connection with the facts which resulted
in such losses, liabilities, claims, damages, and expenses.  The relative
fault, in the case of an untrue statement, alleged untrue statement, omission,
or alleged omission, shall be determined by, among other things, whether such
statement, alleged statement, omission, or alleged omission relates to
information supplied by the Company or by such Eligible Holders, and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement, alleged statement, omission, or alleged
omission.  The Company and the Holder agree that it would be unjust and
inequitable if the respective obligations of the Company and the Eligible
Holders for contribution were determined by pro rata or per capita allocation
of the aggregate losses, liabilities, claims, damages, and expenses (even if
the Holder and the other indemnified parties were treated as one entity for
such purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 10(c).  In no case shall
any Eligible Holder be responsible for a portion of the contribution obligation
imposed on all Eligible Holders in excess of its pro rata share based on the
number of shares of Common Stock owned (or which would be owned upon exercise
of all Underwriters' Securities) by it and included in such registration as
compared to the number of shares of Common Stock owned (or which would be owned
upon exercise of all Underwriters' Securities) by all Eligible Holders and
included in such registration.  No person guilty of a fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation.  For purposes of this Section 10(c), each person, if any,
who controls any Eligible Holder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each officer, director, partner,
employee, agent, and counsel of each such Eligible Holder or control person
shall have the same rights to contribution as such Eligible Holder or control
person and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, each officer of the
Company who shall have signed any such registration statement, each director of
the Company, and its or their respective counsel shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 10(c).  Anything in this Section 10(c) to the contrary notwithstanding,
no party shall be liable for contribution with respect to the settlement of any
claim or action effected without its written consent.  This Section 10(c) is
intended to supersede any right to contribution under the Act, the Exchange Act
or otherwise.

       11.    Replacement of Warrants.  Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction, or mutilation of any Warrant
(and upon surrender of any Warrant if mutilated), and upon reimbursement of the
Company's reasonable incidental expenses, the Company shall execute and deliver
to the Holder thereof a new Warrant of like date, tenor, and denomination.

       12.    No Rights as a Stockholder.  The Holder of any Warrant shall not
have, solely on account of such status, any rights of a stockholder of the
Company, either at law or in equity, or to any notice of meetings of
stockholders or of any other proceedings of the Company, except as provided in
this Warrant.

       13.    Headings.  The headings in this Warrant are for convenience only
and shall not limit or otherwise affect the meaning.





                                      A-9
   45
       14.    Governing Law.  This Warrant shall be construed in accordance
with the laws of the State of New York applicable to contracts made and
performed within such State, without regard to principles of conflicts of law.


Dated:             , 1997
                                           MITCHAM INDUSTRIES, INC.


                                           By:                                  
                                              ----------------------------------
                                                  Billy F. Mitcham


[Seal]


                              
- ------------------------------
Secretary





                                      A-10
   46
                               FORM OF ASSIGNMENT


(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)

              FOR VALUE RECEIVED, _______________________________ hereby sells,
assigns, and transfers unto __________________ a Warrant to purchase __________
shares of Common Stock, par value $0.01 per share, of Mitcham Industries, Inc.
(the "Company"), together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint _____________________________________
attorney to transfer such Warrant on the books of the Company, with full power
of substitution.


Dated:                             
       ----------------------------


                                           Signature                        
                                                    ------------------------




                                     NOTICE


       The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.





                                      A-11
   47
To:    Mitcham Industries, Inc.
       Post Office Box 1175
       4400 Highway 75 South
       Huntsville, Texas  77342


                              ELECTION TO EXERCISE


       The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in
the amount of $_________ in accordance with the terms thereof, and requests
that certificates for such securities be issued in the name of, and delivered
to:
                                                                                
- --------------------------------------------------------------------------------
                                                                                
- --------------------------------------------------------------------------------
                                                                                
- --------------------------------------------------------------------------------
                    (Print Name, Address and Social Security
                          or Tax Identification Number)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the address stated below.


Dated:                                     Name                        
       ----------------------------            ------------------------
                                                    (Print)

Address:                                                  
        --------------------------------------------------



                                             -------------------------
                                                    (Signature)





                                      A-12
   48
To:    Mitcham Industries, Inc.
       Post Office Box 1175
       4400 Highway 75 South
       Huntsville, Texas  77342




                             CASHLESS EXERCISE FORM
            (To be executed upon conversion of the attached Warrant)


       The undersigned hereby irrevocably elects to surrender its Warrant for
the number of shares of Common Stock as shall be issuable pursuant to the
cashless exercise provisions of the within Warrant, in respect of _____ shares
of Common Stock underlying the within Warrant, and requests that certificates
for such securities be issued in the name of and delivered to:

- --------------------------------------------------------------------------------
                                                                                
- --------------------------------------------------------------------------------
                                                                                
- --------------------------------------------------------------------------------
                    (Print Name, Address and Social Security
                         or Tax Identification Number)

and, if such number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the addressed stated below.


Dated:                                     Name                        
       ----------------------------            ------------------------
                                                    (Print)

Address:                                                  
        --------------------------------------------------



                                             -------------------------
                                                    (Signature)






                                      A-13

   1

             [NORTON, JACOBS, KUHN & MCTOPY, L.L.P. LETTERHEAD]


                                 March 3, 1997



Mitcham Industries, Inc.
44000 Highway 75 South
Huntsville, Texas 77342

Gentlemen:

         We have acted as legal counsel for Mitcham Industries, Inc., a Texas
corporation (the "Company"), with respect to the Registration Statement on Form
S-1, Registration No. 333-19997 (the "Registration Statement"), filed by the
Company in connection with the registration under the Securities Act of 1933,
as amended (the "Act") of the following securities:

          (i)    3,450,000 shares of Common Stock, consisting of 2,875,000
                 shares of common stock, par value $0.01 per share ("Common
                 Stock") offered by the Company and up to 575,000 shares of
                 Common Stock offered by certain shareholders of the Company
                 ("Selling Shareholders");

         (ii)    Representatives' Warrants (as defined in the Registration
                 Statement) to purchase 200,000 shares of Common Stock; and

         (iii)   200,000 shares of Common Stock underlying the Representatives'
                 Warrants.

         The Common Stock, Representatives' Warrants and shares of Common Stock
underlying the Representatives' Warrants are collectively referred to herein as
the "Registered Securities."

         In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following
documents and instruments:

         1.      Articles of Incorporation of the Company, as amended to date;

         2.      Bylaws of the Company, as amended to date;





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Mitcham Industries, Inc.
March 3, 1997
Page 2


         3.      The Registration Statement, including the Prospectus included
                 therein, as filed with the Securities and Exchange Commission
                 (the "Commission") on January 17, 1997, together with all
                 exhibits thereto and all amendments to the Registration
                 Statement through the date hereof; and

         4.      Such other instruments and documents as we have deemed
                 necessary for the purpose of rendering the following opinion.

         In such examination, we have assumed the genuineness of all signatures
and the conformity to original documents of all documents submitted to us as
certified or photostatic copies thereof.  As to various questions of fact
material to our opinion, we have, when the relevant facts were not
independently established and to the extent we have deemed such reliance
proper, relied upon certificates of public officials and certificates and/or
factual representations of officers of the Company.

         Based upon and subject to the foregoing, it is our opinion that the
Registered Securities have been duly and validly authorized for issuance and,
when issued and delivered as described in the Underwriting Agreement (the
"Underwriting Agreement"), the form of which is filed as Exhibit 1.1 to the
Registration Statement, will be validly issued, fully paid and non-assessable.

         We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as Exhibit 5.1 to the Registration Statement and
further consent to the statements made in the Registration Statement regarding
our firm and the use of our name under the heading "Legal Matters" in the
Prospectus constituting a part of such Registration Statement.

         We are licensed to practice in the State of Texas only and do not
express any opinion as to matters governed by the laws of any jurisdiction
other than the laws of the State of Texas (without reference to choice-of-law
or conflict-of-law provisions, principles or decisions under Texas law, or
under any other state, Federal or foreign law); and we have assumed compliance
with all other laws, including, without limitation, Federal, foreign and other
states' laws.

                                     Very truly yours,

                                     NORTON, JACOBS, KUHN & MCTOPY, L.L.P.

                                     /s/ NORTON, JACOBS, KUHN & MCTOPY, L.L.P.

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                                                                    EXHIBIT 23.1
 
              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
     We consent to the use of our reports on the financial statements and
related financial statement schedule as of January 31, 1995 and 1996 and for
each of the years in the three year period ended January 31, 1996, dated
February 23, 1996, included herein, in this Registration Statement on Form S-1
and to the reference to our Firm under the heading "Experts."
 
/s/  HEIN + ASSOCIATES LLP
 
HEIN + ASSOCIATES LLP
Certified Public Accountants
Houston, Texas
   
March 5, 1997