8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 21, 2003

SEITEL, INC.(Exact name of registrant as specified in its charter)

Delaware(State of Other Jurisdiction of Incorporation)

0-14488		76-0025431
(Commission File Number)		(IRS Employer Identification No.)
10811 S. Westview Circle
Building C, Ste. 100
Houston, Texas		77043
(Address of Principal Executive Offices)		(Zip Code)
	(713) 881-8900
(Registrant's Telephone Number, Including Area Code)
	Not Applicable
(Former name or former address, if changed since last report)

Item 3.	Bankruptcy or Receivership.
	On July 21, 2003, Seitel, Inc., a Delaware corporation (the "Company"), and certain of its subsidiaries filed a voluntary petition under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"), together with a joint plan of reorganization (the "Plan"), in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") (Chapter 11 Case No. 03-12227). The Company and 30 of its U.S.-based subsidiaries (the "Debtor Subsidiaries") will operate their business under the protection of the Bankruptcy Code as "debtors-in-possession" pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code, which will allow them to continue operations during the reorganization proceeding. Each of the Company and the Debtor Subsidiaries will remain in possession of its assets and properties, and its business and affairs will continue to be managed by its directors and officers, subject in each case to the supervision of the Bankruptcy Court. The Plan is being financed by Berkshire Hathaway Inc. ("Berkshire"). If the Plan is confirmed and consummated, the Company will become a wholly owned subsidiary of Berkshire. Consummation of the Plan is subject to a number of conditions, including confirmation by the Bankruptcy Court no later than November 18, 2003. In connection with the Plan filing, the previously pending bankruptcy petitions which were filed involuntarily against the Company by its creditors on June 6, 2003 are the subject of a joint request for dismissal filed by the Company and Ranch Capital L.L.C. ("Ranch"). Ranch previously purchased all of the senior secured notes (the "Notes") held by the persons who filed the involuntary bankruptcy petitions. Ranch has sold the Notes to Berkshire. The Company has entered into a debtor-in-possession loan and security agreement (the "DIP Facility") with Wells Fargo Foothill, Inc. as lender to provide up to $20.0 million in financing to support the Company's and the Debtor Subsidiaries' operations during the course of the reorganization proceedings. The DIP Facility will supplement the Company's and the Debtor Subsidiaries' cash position to ensure that all on-going working capital needs are met, and will be secured by substantially all of the assets of the Company and the Debtor Subsidiaries. The effectiveness of the DIP Facility is subject to a number of conditions, including approval of its terms by order of the Bankruptcy Court. The Company's motions relating to the DIP Facility and other matters are scheduled to be heard by the Bankruptcy Court on or about July 23, 2003. The Company issued a press release, a copy of which is filed as Exhibit 99.1 to this Current Report, and which is incorporated herein by reference, announcing the Chapter 11 filing. In addition, a copy of the Plan and the DIP Facility are filed as Exhibits 99.2 and 99.3, respectively, and are incorporated herein by reference.
Item 7.	Financial Statements, Pro Forma Financial Information and Exhibits
	(a)	Financial Statements of Business Acquired.
		Not Applicable.
	(b)	Pro Forma Financial Information (unaudited).
		Not Applicable.
	(c)	Exhibits.
		99.1	Seitel, Inc. Press Release, dated July 21, 2003.
		99.2	Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated July 21, 2003.
		99.3	Loan and Security Agreement, dated as of June 24, 2003, among Seitel, Inc. and each of its subsidiaries signatory thereto, and Wells Fargo Foothill, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

Date:	July 22, 2003	SEITEL, INC.
		By:	/s/ Larry E. Lenig, Jr.
		Name:	Larry E. Lenig, Jr.
		Title:	Chief Executive Officer and President

EXHIBIT INDEX

Exhibit		Page
99.1	Seitel, Inc. Press Release, dated July 21, 2003.	4
99.2	Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated July 21, 2003.	5
99.3	Loan and Security Agreement, dated as of June 24, 2003, among Seitel, Inc. and each of its subsidiaries signatory thereto, and Wells Fargo Foothill, Inc.	48

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact: Larry Lenig (713) 881-2812

SEITEL FILES REORGANIZATION PLAN

Berkshire Hathaway Inc. To Fund Plan

Previous Involuntary Petitions Dismissed

HOUSTON - July 21, 2003 - Seitel, Inc. (OTC BB: SEIE; TORONTO: OSL) ("Seitel or the "Company") today announced that it filed a joint plan of reorganization (the "Plan") with the Delaware Bankruptcy Court for the Company and 30 of its U.S. based subsidiaries. The Plan is to be financed by Berkshire Hathaway Inc ("Berkshire"). As a result of this funding, if the Plan is confirmed and consummated, Seitel will become a wholly owned subsidiary of Berkshire.

As previously disclosed, Ranch Capital L.L.C. ("Ranch") purchased all $255 million of Seitel's outstanding principal amount of Seitel's senior notes (the "Notes"). Ranch has informed Seitel that all of the Notes have been sold by Ranch to Berkshire. Ranch and Berkshire will continue to work together in reorganizing the Company. Lawrence S. Hershfield, Chief Executive of Ranch, will serve as Chairman of the Board of the Company and Larry Lenig will continue as Seitel's CEO upon its emergence from bankruptcy.

In connection with the Plan filing, the Company and Ranch have filed a joint request to dismiss the previously filed involuntary bankruptcy petitions, and as a result of the voluntary filings made today, Seitel and 30 of its U. S. based subsidiaries have become debtors-in-possession under Chapter 11 of the Bankruptcy Code. As debtors-in-possession, the Company and these subsidiaries will continue to operate their business in the ordinary and normal course. As previously disclosed, the Company's Canadian subsidiaries are not debtors in the bankruptcy cases, and the Plan does not impact any operations or creditors of Seitel's Canadian subsidiaries.

The Company also announced that it has entered into an agreement with Wells Fargo Foothill, Inc. providing for the borrowing availability of up to $20 million in debtor-in-possession financing during the pendency of the Chapter 11 cases, subject to the terms and conditions of such credit facility. A motion to approve such financing has been filed with the Bankruptcy Court and a hearing on such motion is expected to be held next week. The Company presently has more than $26 million of cash on hand.

The Plan filed today generally provides, in summary, for the following treatment of claims against and equity interests in the debtors:

(i)    Secured Debt - payment in full on agreed terms or the reinstatement on existing terms of all secured debt;

(ii)    Customer Data Licenses - the assumption and reaffirmation of obligations under previously issued data license agreements with its customers;

(iii)    Unsecured Creditors of Principal Operating Entities - payment in full in cash of all allowed claims, other than the Note claims, provided that such claims do not exceed $1.5 million and further provided that no creditor will be entitled to receive more than 100% of such creditor's claim. The Plan provides that Berkshire will not participate in the first $1.5 million of cash distributions to this class. Through this procedure, the Plan maximizes the recoveries to other claim holders in this class and is intended to reduce administrative expenses and expedite the Company's emergence from Chapter 11. Including the first $1.5 million distribution outlined above, the total distribution to all claim holders, including Berkshire, in this class will equal 71% of all allowed unsecured claims which are owing or are guaranteed by entities that conduct Seitel's principal operations. After the first $1.5 million is distributed (or after all cre ditors in this class, other than Berkshire have been paid in full), all remaining payments to this class shall be distributed prorata to all remaining creditors in the class, including Berkshire. Based on the Company's present estimate of claims in this class, it is anticipated that all holders of allowed unsecured claims in this class, other than Berkshire, will receive cash equal or approximately equal to 100% of their allowed unsecured claim. If actual allowed claims in this class were to significantly exceed present estimates, the percentage recovery will be reduced, but in no event will recoveries by this class, in total, be less than 71%;

(iv)    Unsecured Claims of Entities Not Conducting Operations or Which Have No Substantial Assets - payment of cash equal to 25% of allowed unsecured claims which are owing or are guaranteed by entities not presently conducting operations or which have no substantial assets. The Company believes that only a few creditors will belong to this class. If a claim in this class also is eligible to be asserted and is an allowed claim in the class of creditors described in (iii) above, any payments made with respect such claim will be deducted from the payments otherwise due to such claim pursuant to item (iii) above; and

(v)    Seitel Shareholders - subject to the confirmation of the Plan on or before November 18, 2003, the affirmative vote of Seitel shareholders, and any reserve established or payment made in respect of estimated or allowed claims relating to securities litigation, the distribution of approximately $10.15 million in cash (equivalent to $.40 per share) to the holders of Seitel common stock in cancellation of such stock. Although, the Company believes that presently existing securities litigation should not result in any payment or in the establishment of a reserve under the Plan, there can be no assurance that such claims will not be made or allowed. In such event, the distribution to Seitel shareholders would be reduced. If shareholders were to vote to reject the Plan and the Plan nevertheless is confirmed by the Bankruptcy Court, the existing common stock will be cancelled and no distribution will be made to existing Seitel shareholders. I n all events, if the Plan is confirmed and consummated, all presently existing Seitel common stock will be cancelled upon the effective date of the Plan.

The foregoing descriptions of the treatments and recoveries under the Plan are only a summary, and any discrepancy between such descriptions and the Plan are controlled exclusively by the Plan.

The Company estimates that, in the aggregate, all allowed unsecured claims in classes (iii) and (iv) above total approximately $265 million, including the Notes and related accrued and unpaid interest. It is estimated that Berkshire controls more than 95% of all claims in these classes. As noted above, pursuant to the Plan, Seitel's existing common stock will be canceled, and upon consummation of the Plan, 100% of the new common stock of the reorganized Company will be issued to Berkshire.

The Company expects to file a disclosure statement related to the Plan with the Delaware Bankruptcy Court within the next week and to seek approval to mail such disclosure statement following Bankruptcy Court approval and, thereafter, to begin soliciting votes on the Plan as soon as possible. Such formal solicitation of creditors and shareholders will commence only after the Bankruptcy Court approves the disclosure statement.

Consummation of the Plan is subject to a number of conditions, including confirmation by the Bankruptcy Court not later than November 18, 2003 and there can be no assurance that the Plan will be confirmed or consummated.

Seitel markets its proprietary seismic information to more than 400 petroleum companies, licensing data from its library and creating new seismic surveys under multi-client projects.

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities, the most important of which is the property and casualty insurance business conducted on both a direct and reinsurance basis through a number of subsidiaries.

Ranch Capital L.L.C. is a San Diego based investment firm formed in October 2002 by Lawrence S. Hershfield and Randall L. Jensen. Mr. Hershfield previously worked with Berkshire when he was employed by Leucadia National Corporation and ran Finova Group on behalf of Berkadia LLC, a joint venture of Berkshire and Leucadia.

Information Regarding Forward Looking Statements

This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements contained in this release about Seitel's future outlook, prospects and plans, including those that express belief, expectation, estimates or intentions, as well as those that are not statements of historical fact, are forward looking. The words "proposed", "anticipates", "anticipated", "will", "would", "should", "estimates" and similar expressions are intended to identify forward-looking statements. Forward looking statements represent Seitel's reasonable belief and are based on Seitel's current expectations and assumptions with respect to future events. While Seitel believes its expectations and assumptions are reasonable, they involve risks and uncertainties beyond Seitel's control that could cause the actual results or outcome to differ materially from the expected results or outcome. Such factors inc lude the ability of the Company to continue as a going concern; the Company's ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; the impact of litigation on the Company and in any distribution to creditors or equity holders of the Company; the delay or inability of the Company to complete and/or consummate its proposed plan of reorganization; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the Company's Chapter 11 case to a Chapter 7 case; the ability of the Company to obtain and maintain normal terms with vendors and service providers; the Company's ability to maintain contracts that are critical to its operations; the potential adverse impact of the Chapter 11 cases on the Company's liquidity or results of operations and other risks a ssociated with operating a business in Chapter 11; any significant change in the oil and gas industry or the economy generally; changes in the exploration budgets of the Company's seismic data and related services customers; actual customer demand for the Company's seismic data and related services; the timing and extent of changes in commodity prices for natural gas; crude oil and condensate and natural gas liquids and conditions in the capital markets and equity markets during the periods covered by the forward looking statements; the effect on our reported operating results and stock price as a result of the Company's restatement of financial statements; the results or settlement of litigation regarding the Company or its assets; the Company's non-compliance with its debt covenants; adverse actions which may be taken by the Company's creditors; the level of the Company's cash generated from operations; the Company's ability to obtain alternative debt or equity financing on satisfactory terms if internall y generated funds are insufficient to fund its capital needs and the lack of any strategic disposition, acquisition or joint venture involving the Company's businesses and assets; and other risks and uncertainties identified from time to time in the Company's reports filed with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, copies of which may be obtained form the Company without charge. These forward-looking statements speak only as of the date hereof and Seitel disclaims any duty to update these statements other than as required by law. Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the Company's various pre-petition liabilities, common stock and/or other equity securities. As a result, no assurance can be given as to what values, if any, ultimately will be ascribed in the bankruptcy proceedings to each of these constituencies. Accordingly, the Company urges that the appropri ate caution be exercised with respect to existing and future investments in any of these liabilities and/or securities.

###

EX-99.2

Exhibit 99.3

LOAN AND SECURITY AGREEMENT

by and among

SEITEL, INC.

and

EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO

as Borrowers

and

debtors and debtors-in-possession,

and

WELLS FARGO FOOTHILL, INC.

as Lender

Dated as of June 24, 2003

	TABLE OF CONTENTS
1.	DEFINITIONS AND CONSTRUCTION.		1
	1.1	Definitions	1
	1.2	Accounting Terms	24
	1.3	Code	25
	1.4	Construction	25
	1.5	Schedules and Exhibits	25
2.	LOAN AND TERMS OF PAYMENT.		25
	2.1	Revolver Advances.	25
	2.2	Intentionally Omitted.	26
	2.3	Borrowing Procedures and Settlements.	26
	2.4	Payments.	27
	2.5	Overadvances.	28
	2.6	Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.	29
	2.7	Cash Management.	30
	2.8	Crediting Payments; Float Charge	32
	2.9	Designated Account	32
	2.10	Maintenance of Loan Account; Statements of Obligations	32
	2.11	Fees	33
	2.12	Letters of Credit.	34
	2.13	LIBOR Option.	37
	2.14	Capital Requirements	39
	2.15	Joint and Several Liability of Borrowers.	40
3.	CONDITIONS; TERM OF AGREEMENT.		42
	3.1	Conditions Precedent to the Continued Effectiveness of this Agreement, Prior to Entry of the Interim Financing Order	42
	3.2	Conditions Precedent to the Continued Effectiveness of this Agreement Following Entry of the Interim Financing Order	43
	3.3	Conditions Precedent to the Initial Extension of Credit	46
	3.4	Conditions Subsequent to the Initial Extension of Credit	46
	3.5	Conditions Precedent to the Increase to the Maximum Revolver Amount	46
	3.6	Conditions Precedent to all Extensions of Credit	47
	3.7	Term	47
	3.8	Effect of Termination	48
	3.9	Early Termination by Borrowers	48
4.	CREATION OF SECURITY INTEREST		49
	4.1	Grant of Security Interest	49
	4.2	Negotiable Collateral	49
	4.3	Collection of Accounts, General Intangibles, and Negotiable Collateral	49
	4.4	Filing of Financing Statements; Commercial Tort Claims; Delivery of Additional Documentation Required	50
	4.5	Power of Attorney	51
	4.6	Right to Inspect	51
	4.7	Control Agreements	51
	4.8	Post-Default Carve-Out	52
	4.9	Condition Precedent.	52
5.	REPRESENTATIONS AND WARRANTIES.		52
	5.1	No Encumbrances	53
	5.2	Eligible Accounts	53
	5.3	[Intentionally Deleted]	53
	5.4	Equipment	53
	5.5	Location of Inventory and Equipment	53
	5.6	Inventory Records	53
	5.7	State of Incorporation; Location of Chief Executive Office; FEIN; Organizational ID Number; Commercial Tort Claims	53
	5.8	Due Organization and Qualification; Domestic Subsidiaries	54
	5.9	Due Authorization; No Conflict	55
	5.10	Litigation	56
	5.11	No Material Adverse Change	56
	5.12	Fraudulent Transfer	56
	5.13	Employee Benefits	57
	5.14	Environmental Condition	57
	5.15	Brokerage Fees	57
	5.16	Intellectual Property	57
	5.17	Leases	57
	5.18	DDAs	57
	5.19	Complete Disclosure	58
	5.20	Indebtedness	58
	5.21	Interim Financing Order	58
	5.22	Final Financing Order	58
	5.23	Projections	58
6.	AFFIRMATIVE COVENANTS.		58
	6.1	Accounting System	58
	6.2	Collateral Reporting	59
	6.3	Financial Statements, Reports, Certificates	60
	6.4	Guarantor Reports	62
	6.5	[Intentionally Omitted.]	62
	6.6	Maintenance of Properties	63
	6.7	Taxes	63
	6.8	Insurance	63
	6.9	Location of Inventory and Equipment	64
	6.10	Compliance with Laws	64
	6.11	Leases	64
	6.12	Existence	64
	6.13	Environmental.	65
	6.14	Disclosure Updates	65
	6.15	Formation of Subsidiaries	65
7.	NEGATIVE COVENANTS.		66
	7.1	Indebtedness	66
	7.2	Liens	67
	7.3	Restrictions on Fundamental Changes	67
	7.4	Disposal of Assets	67
	7.5	Change Name	67
	7.6	Nature of Business	68
	7.7	Prepayments and Amendments	68
	7.8	Change of Control	68
	7.9	Consignments	68
	7.10	Distributions	68
	7.11	Accounting Methods	68
	7.12	Investments	68
	7.13	Transactions with Affiliates	69
	7.14	Suspension	69
	7.15	Compensation	69
	7.16	Use of Proceeds	69
	7.17	Inventory and Equipment with Bailees	69
	7.18	Financial Covenants	69
	7.19	Professional Fees Exception	70
	7.20	Use of Professional Fees, Costs and Expenses	71
8.	EVENTS OF DEFAULT		71
9.	THE LENDER'S RIGHTS AND REMEDIES.		75
	9.1	Rights and Remedies	75
	9.2	Remedies Cumulative	77
10.	TAXES AND EXPENSES.		77
11.	WAIVERS; INDEMNIFICATION.		78
	11.1	Demand; Protest.	78
	11.2	Lender's Liability for Collateral	78
	11.3	Indemnification	78
12.	NOTICES.		79
13.	CHOICE OF LAW; JURY TRIAL WAIVER.		80
14.	ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.		80
	14.1	Assignments and Participations	80
	14.2	Successors	82
15.	AMENDMENTS; WAIVERS.		83
	15.1	Amendments and Waivers	83
	15.2	No Waivers; Cumulative Remedies	83
16.	GENERAL PROVISIONS.		83
	16.1	Effectiveness	83
	16.2	Section Headings	83
	16.3	Interpretation	83
	16.4	Severability of Provisions	83
	16.5	Withholding Taxes	83
	16.6	[Intentionally Deleted.]	84
	16.7	Counterparts; Telefacsimile Execution	84
	16.8	Revival and Reinstatement of Obligations	84
	16.9	Confidentiality	85
	16.10	Integration	85
	16.11	Parent as Agent for Borrowers.	85

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is entered into as of June 24, 2003, by and among WELLS FARGO FOOTHILL, INC., a California corporation ("Lender"), SEITEL, INC., a Delaware corporation ("Parent"), and each of Parent's Subsidiaries identified on the signature pages hereof (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a "Borrower", and individually and collectively, jointly and severally, as the "Borrowers").

The parties agree as follows:

1.    DEFINITIONS AND CONSTRUCTION.

1.1    Definitions.  As used in this Agreement, the following terms shall have the following definitions:

"Account" means an account (as that term is defined in the Code), and any and all supporting obligations in respect thereof.

"Account Debtor" means any Person who is obligated under, with respect to, or on account of, an Account, chattel paper, or a General Intangible.

"ACH Transactions" means any cash management or related services (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) provided by a Bank Product Provider for the account of Administrative Borrower or its Domestic Subsidiaries.

"Additional Documents" has the meaning set forth in Section 4.4(b).

"Administrative Borrower" has the meaning set forth in Section 16.11.

"Advances" has the meaning set forth in Section 2.1(a).

"Affiliate" means, as applied to any Person, any other Person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Stock, by contract, or otherwise; provided, however, that, for purposes of the definition of Eligible Accounts and Section 7.13 hereof: (a) any Person which owns directly or indirectly 10% or more of the Stock having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an Affiliate of such Person, (b) each director (or comparable manager) of a Pers on shall be deemed to be an Affiliate of such Person, and (c) each partnership or joint venture in which a Person is a partner or fifty percent (50%) or greater-in-interest joint venturer shall be deemed an Affiliate of such Person.

"Agreement" has the meaning set forth in the preamble to this Agreement.

"Authorized Fees" has the meaning set forth in Section 7.19.

"Assignee" has the meaning set forth in Section 14.1(a).

"Authorized Person" means any officer or employee of Administrative Borrower.

"Availability" means, as of any date of determination, the amount that Borrowers are entitled to borrow as Advances hereunder (after giving effect to all then outstanding Obligations (other than Bank Product Obligations) and all sublimits and reserves then applicable hereunder).

"Avoidance Actions" means all claims and all proceeds of claims of the Borrowers and Guarantors for recovery or avoidance, as the case may be, of obligations, transfers of property, or interests in property, offsets, lawful currency of its equivalents, and other types or kinds of property (or the value thereof) recoverable or avoidable under Chapter 5 of the Bankruptcy Code.

"Bank Product" means any financial accommodation extended to Administrative Borrower or its Domestic Subsidiaries by a Bank Product Provider (other than pursuant to this Agreement) including: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including controlled disbursement, accounts or services, or (g) transactions under Hedge Agreements.

"Bank Product Agreements" means those agreements entered into from time to time by Administrative Borrower or its Domestic Subsidiaries with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

"Bank Product Obligations" means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by Administrative Borrower or its Domestic Subsidiaries to any Bank Product Provider pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that Administrative Borrower or its Domestic Subsidiaries are obligated to reimburse to Lender as a result of Lender purchasing participations from, or executing indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product Provider to Administrative Borrower or its Domestic Subsidiaries.

"Bank Product Provider" means Wells Fargo or any of its Affiliates.

"Bank Product Reserve" means, as of any date of determination, the amount of reserves that Lender has established (based upon the Bank Product Providers' reasonable determination of the net credit exposure in respect of then extant Bank Products) in respect of Bank Products then provided or outstanding.

"Bankruptcy Code" means United States Bankruptcy Code, 11 U.S.C. § §, et seq., in effect as of the date hereof, together with all rules, regulations and interpretations thereunder or related thereto, as amended, modified, supplemented or recodified from time to time.

"Bankruptcy Court" shall mean the United States Bankruptcy Court for the District of Delaware.

"Base LIBOR Rate" means the rate per annum, determined by Lender in accordance with its customary procedures, and utilizing such electronic or other quotation sources as it considers appropriate (rounded upwards, if necessary, to the next 1/100%), to be the rate at which Dollar deposits (for delivery on the first day of the requested Interest Period) are offered to major banks in the London interbank market 2 Business Days prior to the commencement of the requested Interest Period, for a term and in an amount comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of an extant LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Administrative Borrower in accordance with this Agreement, which determination shall be conclusive in the absence of manifest error.

"Base Rate" means, the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its "prime rate", with the understanding that the "prime rate" is one of Wells Fargo's base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate.

"Base Rate Loan" means the portion of the Advances that bears interest at a rate determined by reference to the Base Rate.

"Base Rate Margin" means, with respect to any calendar month, the number of percentage points set forth below that corresponds to the average daily amount of the outstanding Advances during such month, as determined by Lender, in the exercise of its Permitted Discretion:

Daily Average Advances	Base Rate Margin-- Number of Percentage Points
Less than $10,000,000:	1.25
Equal to or greater than $10,000,000, and less than or equal to $20,000,000:	1.75

"Benefit Plan" means a "defined benefit plan" (as defined in Section 3(35) of ERISA) for which any Borrower or any Domestic Subsidiary or ERISA Affiliate of any Borrower has been an "employer" (as defined in Section 3(5) of ERISA) within the past six years.

"Board of Directors" means the board of directors (or comparable managers) of Parent or any committee thereof duly authorized to act on behalf of the board of directors (or comparable managers).

"Books" means all of Administrative Borrower's and its Domestic Subsidiaries' now owned or hereafter acquired books and records (including all of their Records indicating, summarizing, or evidencing their assets (including the Collateral) or liabilities, and all of Administrative Borrower's and its Domestic Subsidiaries' Records relating to their business operations or financial condition.

"Borrower" and "Borrowers" have the respective meanings set forth in the preamble to this Agreement.

"Borrower Collateral" means all of each Borrower's now owned or hereafter acquired right, title, and interest in and to each of the following:

1. all of its Accounts,

2. all of its Books,

3. all of its commercial tort claims,

4. all of its Deposit Accounts,

5. all of its Equipment,

6. all of its General Intangibles,

7. all of its Inventory,

8. all of its Investment Property (including all of its securities and Securities Accounts),

9. all of its Negotiable Collateral,

10. money or other assets of such Borrower that now or hereafter come into the possession, custody, or control of the Lender,

11. the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing, and any and all Accounts, Books, Deposit Accounts, Equipment, General Intangibles, Inventory, Investment Property, Negotiable Collateral, money, or other tangible or intangible property resulting from the sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or interest therein, and the proceeds thereof;

provided, however, that the Borrower Collateral specifically shall exclude Avoidance Actions in the Chapter 11 Cases.

"Borrowing" means a borrowing hereunder consisting of Advances.

"Borrowing Base" means, as of any date of determination, the lesser of:

1. the result of

(i)    85% of the amount of Eligible Short-Term Accounts,

(ii)    plus, the lesser of

        A.    50% of the amount of Eligible Long-Term Accounts, or

        B.    $7,500,000,

(iii)    plus, Ten Million Dollars ($10,000,000), and

(iv)    minus, the sum of

        A.    (i)     the Bank Product Reserve (if any), and

        B.    (ii)     the aggregate amount of reserves, if any, established by Lender under Section 2.1(b); or

2. the lesser of

(i) three-quarters (3/4, or 0.75) times the trailing twelve (12) months' Cash EBITDA, and

(ii) an amount equal to Borrowers' Collections with respect to Accounts for the immediately preceding period of a number of days to be determined by Lender in its Permitted Discretion.

"Business Day" means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the State of California, except that, if a determination of a Business Day shall relate to a LIBOR Rate Loan, the term "Business Day" also shall exclude any day on which banks are closed for dealings in Dollar deposits in the London interbank market.

"Capital Expenditures" means, with respect to any Person for any period, the sum of (a) the aggregate of all expenditures by such Person and its Domestic Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed, and (b) to the extent not covered by clause (a), the aggregate of all expenditures by such Person and its Domestic Subsidiaries during such period to acquire by purchase or otherwise the business or capitalized assets of, or the Capital Stock of, any other Person.

"Capital Lease" means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

"Capitalized Lease Obligation" means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

"Cash EBITDA" means EBITDA, minus Non-Cash Revenue.

"Cash Equivalents" means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Rating Group ("S&P") or Moody's Investor Service, Inc. ("Moody's"), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1, from S&P or at least P-1 from Moody's, (d) certificates of deposit or bankers' acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) demand Deposit Accounts maintained with any bank organized under the laws of the United States or any state thereof, and (f) Investments in money market funds established by Federally insured institutions or registered mutual funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (e) above.

"Cash Management Account" has the meaning set forth in Section 2.7(a).

"Cash Management Agreements" means those certain cash management agreements, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, each of which is among Administrative Borrower or one of its Domestic Subsidiaries, Lender, and one of the Cash Management Banks.

"Cash Management Bank" has the meaning set forth in Section 2.7(a).

"Change of Control" means that (a) any "person" or "group" (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50.1%, or more, of the Stock of Parent having the right to vote for the election of members of the Board of Directors, or (b) a majority of the members of the Board of Directors do not constitute Continuing Directors, or (c) any Borrower ceases to own, directly or indirectly, and control that percentage of the outstanding Stock of each of its Domestic Subsidiaries, which owns assets in excess of $250,000, that such Borrower owns as of the Closing Date.

"Chapter 11 Cases" shall mean the Chapter 11 cases of Borrowers and Guarantors under the Bankruptcy Code pending in the Bankruptcy Court and administratively consolidated under the case captioned In re: Seitel, Inc.

"Closing Date" means the date of the making of the initial Advance (or other extension of credit) hereunder or the date on which Lender sends Administrative Borrower a written notice that each of the conditions precedent set forth in Sections 3.1 and 3.2 either have been satisfied or have been waived.

"Closing Date Business Plan" means the set of Projections of Borrowers for the period through December 31, 2003.

"Code" means the California Uniform Commercial Code, as in effect from time to time.

"Collateral" means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by Administrative Borrower or its Domestic Subsidiaries in or upon which a Lien is granted under any of the Loan Documents.

"Collateral Access Agreement" means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in any significant amount of Administrative Borrower's or its Domestic Subsidiaries' Books, Equipment or Inventory, in each case, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion.

"Collections" means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).

"Commercial Tort Claim Assignment" has the meaning set forth in Section 4.4(b).

"Compliance Certificate" means a certificate substantially in the form of Exhibit C-1 delivered by the chief financial officer or the chief accounting officer (in such capacity, and not individually) of Parent to Lender.

"Consent Date" means the date on which Borrowers and the Guarantors that are subject to existing involuntary proceedings under the Bankruptcy Code consent to the entry of an order for relief as Chapter 11 Debtors under Chapter 11 of the Bankruptcy Code and the other Loan Parties file their voluntary petitions under Chapter 11 of the Bankruptcy Code.

"Continuing Director" means (a) any member of the Board of Directors who was a director (or comparable manager) of Parent on the Closing Date, and (b) any individual who becomes a member of the Board of Directors after the Closing Date if such individual was appointed or nominated for election to the Board of Directors by a majority of the Continuing Directors, but excluding any such individual originally proposed for election in opposition to the Board of Directors in office at the Closing Date in an actual or threatened election contest relating to the election of the directors (or comparable managers) of Parent and whose initial assumption of office resulted from such contest or the settlement thereof.

"Control Agreement" means a control agreement, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, executed and delivered by Administrative Borrower or one of its Domestic Subsidiaries, Lender, and the applicable securities intermediary with respect to a Securities Account or a bank with respect to a Deposit Account.

"Daily Balance" means, as of any date of determination and with respect to any Obligation, the amount of such Obligation owed at the end of such day.

"Default" means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.

"Deposit Account" means any deposit account (as that term is defined in the Code).

"Designated Account" means the Deposit Account of Administrative Borrower identified on Schedule D-1.

"Designated Account Bank" has the meaning ascribed thereto on Schedule D-1.

"Disbursement Letter" means an instructional letter executed and delivered by Administrative Borrower to Lender regarding the extensions of credit to be made on the Closing Date, the form and substance of which is satisfactory to Lender.

"Dollars" or "$" means United States dollars.

"Domestic Subsidiary" means those Subsidiaries of the Parent and the other Borrowers that are organized under the laws of a jurisdiction within the continental United States of America. The Domestic Subsidiaries, as of the Closing Date, are set forth on Exhibit D attached hereto.

"EBITDA" means, with respect to any fiscal period, Parent's and its Domestic Subsidiaries' consolidated net earnings (or loss), minus extraordinary gains and interest income, plus interest expense, income taxes, depreciation, amortization, Reorganization Costs, and extraordinary non-cash losses for such period, all and in each case, as determined in accordance with GAAP.

"Eligible Accounts" means those Accounts created by one of Borrowers in the ordinary course of its business, that arise out of its sale of goods, lease or licensing of data, or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Lender in Lender's Permitted Discretion to address the results of any audit performed by Lender from time to time after the Closing Date. In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits and unapplied cash. Eligible Accounts shall not include the following:

(a) Accounts that the Account Debtor has failed to pay within 90 days of original invoice date,

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more in dollar amount of the aggregate Accounts owed by that Account Debtor and its Affiliates are deemed ineligible under clause (a) above,

(c) Accounts with respect to which the Account Debtor is an Affiliate of any Borrower or an employee or agent of any Borrower or any Affiliate of any Borrower,

(d) Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other similar terms by reason of which the payment by the Account Debtor may be conditional,

(e) Accounts that are not payable in Dollars,

(f) Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in the United States, or (ii) is not organized under the laws of the United States or any State or Commonwealth thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (y) the Account is supported by an irrevocable letter of credit satisfactory to Lender (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Lender and is directly drawable by Lender, or (z) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to Lender,

(g) Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which the applicable Borrower has complied, to the reasonable satisfaction of Lender, with the Assignment of Claims Act, 31 USC § 3727), or (ii) any state of the United States (exclusive, however, of Accounts with respect to which the applicable Borrower has complied, to the satisfaction of Lender in the exercise of its Permitted Discretion, with all applicable state assignment-of-claims statutes),

(h) Accounts with respect to which the Account Debtor is a creditor of any Borrower, has or has asserted a right of setoff, or has disputed its obligation to pay all or any portion of the Account, but only to the extent of the amount of such claim, right of setoff, or dispute,

(i) Accounts with respect to an Account Debtor whose total obligations owing to Borrowers exceed 10% (such percentage as applied to a particular Account Debtor being subject to reduction by Lender in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, however, that, in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by Lender based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,

(j) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which a Borrower has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,

(k) Accounts with respect to which the Account Debtor is located in a state or jurisdiction (e.g., New Jersey, Minnesota, and West Virginia) that requires, as a condition to access to the courts of such jurisdiction, that a creditor qualify to transact business, file a business activities report or other report or form, or take one or more other actions, unless the applicable Borrower has so qualified, filed such reports or forms, or taken such actions (and, in each case, paid any required fees or other charges), except to the extent that the applicable Borrower may qualify subsequently as a foreign entity authorized to transact business in such state or jurisdiction and gain access to such courts, without incurring any cost or penalty viewed by Lender to be significant in amount, and such later qualification enables access to such courts to enforce payment of such Account,

(l) Accounts, the collection of which, Lender, in its Permitted Discretion, believes to be doubtful by reason of the Account Debtor's financial condition,

(m) Accounts that are not subject to a valid and perfected first priority Lender's Lien,

(n) Except for Accounts on which the Account Debtor is obligated to pay regardless of the failure of any subsequent performance, Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor, or

(o) Except for Accounts on which the Account Debtor is obligated to pay regardless of the failure of any subsequent performance, Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by the applicable Borrower of the subject contract for goods or services.

"Eligible Short-Term Accounts" means those Eligible Accounts that are not Eligible Long-Term Accounts and that are less than 90 days from original invoice date.

"Eligible Long-Term Accounts" means those Eligible Accounts that are contracts with terms providing for periods of performance from 30 days to 18 months, where the Account Debtor is required to make specific payments over the term of the contract.

"Eligible Transferee" means (a) a commercial bank organized under the laws of the United States, or any state thereof, and having total assets in excess of $250,000,000, (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development or a political subdivision of any such country and which has total assets in excess of $250,000,000, provided that such bank is acting through a branch or agency located in the United States, (c) a finance company, insurance company, or other financial institution or fund that is engaged in making, purchasing, or otherwise investing in commercial loans in the ordinary course of its business and having (together with its Affiliates) total assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of Lender, (e) so long as no Event of Default has occurred and is continuing, any other Person approved by A dministrative Borrower (which approval of Administrative Borrower shall not be unreasonably withheld, delayed, or conditioned), and (f) during the continuation of an Event of Default, any other Person approved by Lender.

"Environmental Actions" means any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other communication from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of any Borrower, any Domestic Subsidiary of a Borrower, or any of their predecessors in interest, (b) from adjoining properties or businesses to or onto any property occupied by any Borrower or Domestic Subsidiary, or (c) from or onto any facilities which received Hazardous Materials generated by any Borrower, any Domestic Subsidiary of a Borrower, or any of their predecessors in interest.

"Environmental Law" means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on any Borrower or any Domestic Subsidiary of a Borrower, relating to the environment, employee health and safety, or Hazardous Materials, including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC § 1251 et seq.; the Toxic Substances Control Act, 15 USC, § 2601 et seq.; the Clean Air Act, 42 USC § 7401 et seq.; the Safe Drinking Water Act, 42 USC. § 3803 et seq.; the Oil Pollution Act of 1990, 33 USC. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know A ct of 1986, 42 USC. § 11001 et seq.; the Hazardous Material Transportation Act, 49 USC § 1801 et seq.; and the Occupational Safety and Health Act, 29 USC. § 651 et seq. (to the extent it regulates occupational exposure to Hazardous Materials); any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

"Environmental Liabilities and Costs" means all liabilities, monetary obligations, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand by any Governmental Authority or any third party, and which relate to any Environmental Action.

"Environmental Lien" means any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs.

"Equipment" means equipment (as that term is defined in the Code) and includes machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles (including motor vehicles), computer hardware, tools, parts, and goods (other than consumer goods, farm products, or Inventory), wherever located, including all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto.

"ERISA Affiliate" means (a) any Person subject to ERISA whose employees are treated as employed by the same employer as the employees of a Borrower or a Domestic Subsidiary of a Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of a Borrower or a Domestic Subsidiary of a Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which a Borrower or a Domestic Subsidiary of a Borrower is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a party to an arrangement with a Borrower or a Domestic Subsidiary of a Borrower and whose employees are aggregated with the employees of a Borrower or a Domestic Subsidiary of a Bo rrower under IRC Section 414(o).

"Event of Default" has the meaning set forth in Section 8.

"Excess Availability" means, as of any date of determination, the amount equal to Availability minus the aggregate amount, if any, of all trade payables of Borrowers and their Domestic Subsidiaries aged in excess of their historical levels with respect thereto and all book overdrafts of Borrowers and their Domestic Subsidiaries in excess of their historical practices with respect thereto, in each case as determined by Lender in its Permitted Discretion.

"Exchange Act" means the Securities Exchange Act of 1934, as in effect from time to time.

"Existing Lender" means Heller Financial Leasing, Inc.

"FEIN" means Federal Employer Identification Number.

"Final Financing Order" shall mean a Joint Stipulation And Agreed Final Order (i) Approving Post-Petition Financing, (ii) Granting Senior Liens And Super-Priority Administrative Expense Treatment, (iii) Modifying the Automatic Stay, and (iv) Authorizing Debtors To Enter Into Agreements With Lender, in form and substance agreed to by Lender and its counsel, to be entered by the Bankruptcy Court subsequent to entry of the Interim Financing Order, as the same may be amended, modified, supplemented or extended from time to time.

"Financing Orders" shall mean the Interim Financing Order and the Final Financing Order, in each case as amended, modified, supplemented or extended from time to time.

"Funding Date" means the date on which a Borrowing occurs.

"Funding Losses" has the meaning set forth in Section 2.13(b)(ii).

"GAAP" means generally accepted accounting principles as in effect from time to time in the United States, consistently applied.

"General Intangibles" means general intangibles (as that term is defined in the Code), including payment intangibles, contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill, patents, trade names, trade secrets, trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, infringement claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, insurance premium rebates, tax refunds, and tax refund claims, and any and all supporting obligations in respect thereof, and any other personal property other than Accounts, Deposit Accounts, goods, Investment Property, and Negotiable Collateral.

"Governing Documents" means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.

"Governmental Authority" means any federal, state, local, or other governmental or administrative body, instrumentality, department, or agency or any court, tribunal, administrative hearing body, commission, or other similar dispute-resolving panel or body acting under the authority of government.

"Guarantor" means each Domestic Subsidiary that is not a Borrower.

"Guarantor Security Agreement" means one or more security agreements executed and delivered by each Guarantor in favor of Lender, in each case, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion.

"Guaranty" means that certain general continuing guaranty executed and delivered by each Guarantor in favor of Lender and the Bank Product Providers, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion.

"Hazardous Materials" means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as "hazardous substances," "hazardous materials," "hazardous wastes," "toxic substances," or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts p er million.

"Hedge Agreement" means any and all agreements or documents now existing or hereafter entered into by any Borrower that provide for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging any Borrower's exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations or commodity prices.

"Indebtedness" means (a) all obligations for borrowed money, (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, interest rate swaps, or other financial products, (c) all obligations as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of a Person or its Domestic Subsidiaries, irrespective of whether such obligation or liability is assumed, (e) all obligations to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices), (f) all obligations owing under Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of an y other Person that constitutes Indebtedness under any of clauses (a) through (f) above.

"Indemnified Liabilities" has the meaning set forth in Section 11.3.

"Indemnified Person" has the meaning set forth in Section 11.3.

"Insolvency Proceeding" means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

"Intercompany Subordination Agreement" means a subordination agreement executed and delivered by Borrowers and each of their Domestic Subsidiaries and Lender, the form and substance of which is satisfactory to Lender in the exercise of its Permitted Discretion.

"Interest Expense" means, for any period, the aggregate of the interest expense of Parent and its Domestic Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

"Interest Period" means, with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, however, that (a) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next succeeding Business Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (c) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (d) with respe ct to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2, or 3 months after the date on which the Interest Period began, as applicable, and (e) Borrowers (or Administrative Borrower on behalf thereof) may not elect an Interest Period which will end after the Maturity Date.

"Interim Financing Order" shall mean the Joint Stipulation And Agreed Interim Order Status, Authorizing Interim Financing, Granting Senior Liens And Priority Administrative Expense Status, Modifying The Automatic Stay, Authorizing Debtor To Enter Into Agreements With Wells Fargo Foothill, Inc., And Setting Final Hearing On Such Financing, in form and substance agreed to by Lender and its counsel, which the parties contemplate will be entered by the Bankruptcy Court on or before July 31, 2003, as the same may be amended, modified, supplemented or extended from time to time.

"Inventory" means inventory (as that term is defined in the Code).

"Investment" means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, or capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide Accounts arising in the ordinary course of business consistent with past practices), purchases or other acquisitions of Indebtedness, Stock, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.

"Investment Property" means investment property (as that term is defined in the Code), and any and all supporting obligations in respect thereof.

"IRC" means the Internal Revenue Code of 1986, as in effect from time to time.

"L/C" has the meaning set forth in Section 2.12(a).

"L/C Disbursement" means a payment made by Lender pursuant to a Letter of Credit.

"L/C Undertaking" has the meaning set forth in Section 2.12(a).

"Lender" has the meaning set forth in the preamble to this Agreement.

"Lender Expenses" means all (a) costs or expenses (including taxes, and insurance premiums) required to be paid by a Borrower or its Domestic Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by Lender, (b) fees or charges paid or incurred by Lender in connection with Lender's transactions with Borrowers or their Domestic Subsidiaries, including, fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches (including tax lien, litigation, and UCC searches and including searches with the patent and trademark office, the copyright office, or the department of motor vehicles), filing, recording, publication, appraisal (including periodic collateral appraisals or business valuations to the extent of the fees and charges (and up to the amount of any limitation) contained in this Agreement, real estate surveys, real estate title policies and endorsements, and environmenta l audits, but excluding Lender's normal overhead expenses, (c) costs and expenses incurred by Lender in the disbursement of funds to or for the account of Borrowers (by wire transfer or otherwise), (d) charges paid or incurred by Lender resulting from the dishonor of checks, (e) reasonable costs and expenses paid or incurred by Lender to correct any default or enforce any provision of the Loan Documents, or in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (f) audit fees and expenses of Lender related to audit examinations of the Books to the extent of the fees and charges (and up to the amount of any limitation) contained in this Agreement, (g) reasonable costs and expenses of third party claims or any other suit paid or incurred by Lender in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or Lender's relationship with any Borrower or any Domestic Subsidiary of a Borrower, (h) Lender's reasonable costs and expenses (including attorneys' fees) incurred in advising, structuring, drafting, reviewing, administering, syndicating, or amending the Loan Documents, but excluding Lender's normal overhead expenses, and (i) Lender's reasonable costs and expenses (including attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a "workout," a "restructuring," or an Insolvency Proceeding concerning any Borrower or any Domestic Subsidiary of a Borrower or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in taking any Remedial Action concerning the Collateral.

"Lender-Related Person" means Lender, together with its Affiliates, officers, directors, employees, attorneys, and agents.

"Lender's Account" means the account identified on Schedule L-1.

"Lender's Liens" means the Liens granted by Borrowers or Guarantors to Lender under this Agreement or the other Loan Documents.

"Letter of Credit" means an L/C or an L/C Undertaking, as the context requires.

"Letter of Credit Usage" means, as of any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit.

"LIBOR Deadline" has the meaning set forth in Section 2.13(b)(i).

"LIBOR Notice" means a written notice in the form of Exhibit L-1.

"LIBOR Rate" means, for each Interest Period for each LIBOR Rate Loan, the rate per annum determined by Lender (rounded upwards, if necessary, to the next 1/100%) by dividing (a) the Base LIBOR Rate for such Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of the effective day of any change in the Reserve Percentage.

"LIBOR Rate Loan" means each portion of an Advance that bears interest at a rate determined by reference to the LIBOR Rate.

"LIBOR Rate Margin" means, with respect to any calendar month, the number of percentage points set forth below that corresponds to the average daily amount of the outstanding Advances during such month, as determined by Lender, in the exercise of its Permitted Discretion:

Daily Average Advances	LIBOR Rate Margin-- Number of Percentage Points
Less than $10,000,000:	3.25
Equal to or greater than $10,000,000, and less than or equal to $20,000,000:	3.75

"Lien" means any interest in an asset securing an obligation owed to, or a claim by, any Person other than the owner of the asset, irrespective of whether (a) such interest is based on the common law, statute, or contract, (b) such interest is recorded or perfected, and (c) such interest is contingent upon the occurrence of some future event or events or the existence of some future circumstance or circumstances. Without limiting the generality of the foregoing, the term "Lien" includes the lien or security interest arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, security agreement, conditional sale or trust receipt, or from a lease, consignment, or bailment for security purposes and also includes reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Real Prope rty.

"Loan Account" has the meaning set forth in Section 2.10.

"Loan Documents" means this Agreement, the Bank Product Agreements, the Cash Management Agreements, the Control Agreements, the Disbursement Letter, the Due Diligence Letter, the Guarantor Security Agreement, the Guaranty, the Intercompany Subordination Agreement, the Letters of Credit, the Officers' Certificate, the Stock Pledge Agreement, the Trademark Security Agreement, any note or notes executed by a Borrower in connection with this Agreement and payable to Lender, and any other agreement entered into, now or in the future, by any Borrower and Lender in connection with this Agreement.

"Loan Parties" means each Borrower and each Guarantor.

"Material Adverse Change" means (a) a material adverse change in the business, prospects, operations, results of operations, assets, liabilities or condition (financial or otherwise) of Borrowers and their Domestic Subsidiaries, taken as a whole, (b) a material impairment of a Borrower's or a Domestic Subsidiary of Borrower's ability to perform its obligations under the Loan Documents to which it is a party or of Lender's ability to enforce the Obligations or realize upon the Collateral, or (c) a material impairment of the enforceability or priority of the Lender's Liens with respect to the Collateral as a result of an action or failure to act on the part of a Borrower or a Guarantor; provided, however, that the filing and continuance of the Chapter 11 Cases shall not be deemed or considered to be, constitute, or cause or result in a Material Adverse Change.

"Maturity Date" has the meaning set forth in Section 3.7.

"Maximum Revolver Amount" means

(a) from the Closing Date until the satisfaction of the conditions precedent set forth in Section 3.5 below, Ten Million Dollars ($10,000,000); and

(b) subject to satisfaction of each of the conditions precedent set forth in Section 3.5 below, Twenty Million Dollars ($20,000,000).

"Negotiable Collateral" means letters of credit, letter of credit rights, instruments, promissory notes, drafts, documents, and chattel paper (including electronic chattel paper and tangible chattel paper), and any and all supporting obligations in respect thereof.

"Non-Cash Revenue" means, for any period of determination, the sum of non-monetary seismic data exchanges, plus selections of seismic data, less deferral of revenue, in each case for the applicable period and determined in accordance with GAAP.

"Obligations" means (a) all loans, Advances, debts, principal, interest (including any interest that, but for the commencement of an Insolvency Proceeding, would have accrued), contingent reimbursement obligations with respect to outstanding Letters of Credit, premiums, liabilities (including all amounts charged to Borrowers' Loan Account pursuant hereto), obligations (including indemnification obligations), fees, charges, costs, Lender Expenses (including any fees or expenses that, but for the commencement of an Insolvency Proceeding, would have accrued), guaranties, covenants, and duties of any kind and description owing by Borrowers to Lender pursuant to or evidenced by the Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all Lender Expenses that Borrowers are required to pay or reimburse by the Loan Documents, by law, or otherwise, and (b) all Bank Product Obligations. Any reference in this Agreement or in the Loan Documents to the Obligations shall include all extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

"Officers' Certificate" means the representations and warranties of officers form submitted by Lender to Administrative Borrower, together with Borrowers' completed responses to the inquiries set forth therein, the form and substance of such responses to be satisfactory to Lender.

"Overadvance" has the meaning set forth in Section 2.5.

"Parent" has the meaning set forth in the preamble to this Agreement.

"Participant" has the meaning set forth in Section 14.1(d).

"Pay-Off Letter" means a letter, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, from Existing Lender to Lender respecting the amount necessary to repay in full all of the obligations of Borrowers and Guarantors owing to Existing Lender and obtain a release of all of the Liens existing in favor of Existing Lender in and to the assets of Borrowers and Guarantors.

"Permitted Discretion" means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

"Permitted Dispositions" means (a) sales or other dispositions of Equipment that is substantially worn, damaged, or obsolete in the ordinary course of business, (b) sales of Inventory to buyers in the ordinary course of business (which, in the case of Borrowers, shall include seismic data exchanges consistent with past practice), (c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents, and (d) the licensing, on a non-exclusive basis, of seismic data, patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business.

"Permitted Investments" means (a) Investments in cash and Cash Equivalents, (b) Investments in negotiable instruments for collection, (c) advances made in connection with purchases of seismic data, goods, or services in the ordinary course of business, and (d) Investments received in settlement of amounts due to a Borrower or any Subsidiary of a Borrower effected in the ordinary course of business or owing to a Borrower or any Subsidiary of a Borrower as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Borrower or any Subsidiary of a Borrower.

"Permitted Liens" means (a) Liens held by Lender, (b) Liens for unpaid taxes that either (i) are not yet delinquent, or (ii) do not constitute an Event of Default hereunder and are the subject of Permitted Protests, (c) Liens set forth on Schedule P-1, (d) the interests of lessors under operating leases, (e) purchase money Liens or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as such Lien attaches only to the asset purchased or acquired and the proceeds thereof, (f) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of Borrowers' business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests, (g) Liens arising from de posits made in connection with obtaining worker's compensation or other unemployment insurance or in connection with social security or other such programs, (h) Liens or deposits to secure performance of bids, tenders, or leases incurred in the ordinary course of business and not in connection with the borrowing of money, (i) Liens granted as security for surety or appeal bonds in connection with obtaining such bonds in the ordinary course of business, (j) Liens resulting from any judgment or award that is not an Event of Default hereunder, and (k) with respect to any Real Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof.

"Permitted Protest" means the right of Administrative Borrower or any of its Subsidiaries to protest any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (a) a reserve with respect to such obligation is established on the Books in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by Administrative Borrower or any of its Subsidiaries, as applicable, in good faith, and (c) Lender is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of the Lender's Liens.

"Permitted Purchase Money Indebtedness" means, as of any date of determination, Purchase Money Indebtedness incurred after the Closing Date in an aggregate amount outstanding at any one time not in excess of One Million Dollars ($1,000,000).

"Person" means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

"Projections" means Borrower's forecasted (a) profit and loss statements, and (b) cash flow statements, all prepared on a consistent basis with Parent's historical financial statements, together with appropriate supporting details and a statement of underlying assumptions for the Parent's 2003 fiscal year, all of which are attached hereto as Exhibit A. In addition, the term "Projections" shall mean and refer to any other forecasted, profit and loss statements and cash flow statements prepared for other fiscal years or periods of time proposed by Borrowers and specifically approved in writing by Lender (such approval to be made or withheld at the option of Lender) with respect to such period as Lender may specifically agree. The provision of alternative projections from time to time by Borrowers shall not alter or amend the Projections as approved by Lender, which shall be altered or amended only pursuant to a writing signed by Lender and specifical ly designating such as approved Projections, such designation to be made or withheld at the option of Lender.

"Post-Default Carve-Out" has the meaning set forth in Section 4.8(a).

"Purchase Money Indebtedness" means Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof.

"Qualified Cash" means, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of Borrowers and their Domestic Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any combination thereof, and which such Deposit Account or Securities Account is the subject of a Control Agreement and is maintained by a branch office of the bank or securities intermediary located within the United States.

"Real Property" means any estates or ownership interests in real property now owned or hereafter acquired by any Borrower or a Domestic Subsidiary of any Borrower and the improvements thereto.

"Record" means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

"Remedial Action" means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (d) conduct any other actions authorized by 42 USC § 9601.

"Reorganization Costs" means the legal and professional fees and expenses, and bank facility fees to the extent of the Approval Fee and the Final Funding Fee incurred in connection with the reorganization of the Borrowers and the Domestic Subsidiaries in the Chapter 11 Cases.

"Required Availability" means that the sum of (a) Excess Availability, plus (b) Qualified Cash, exceeds Ten Million Dollars ($10,000,000).

"Reserve Percentage" means, on any day, for Lender, the maximum percentage prescribed by the Board of Governors of the Federal Reserve System (or any successor Governmental Authority) for determining the reserve requirements (including any basic, supplemental, marginal, or emergency reserves) that are in effect on such date with respect to eurocurrency funding (currently referred to as "eurocurrency liabilities") of Lender, but so long as Lender is not required or directed under applicable regulations to maintain such reserves, the Reserve Percentage shall be zero.

"Revolver Usage" means, as of any date of determination, the sum of (a) the then extant amount of outstanding Advances, plus (b) the then extant amount of the Letter of Credit Usage.

"SEC" means the United States Securities and Exchange Commission and any successor thereto.

"Securities Account" means a "securities account" as that term is defined in the Code.

"Solvent" means, with respect to any Person on a particular date, that, at fair valuations, the sum of such Person's assets is greater than all of such Person's debts.

"Stock" means all shares, options, warrants, equity interests, equity participations, or other equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting, including common stock, preferred stock, or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

"Stock Pledge Agreement" means a stock pledge agreement, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, executed and delivered by each Borrower that owns Stock of a Domestic Subsidiary of Parent.

"Subsidiary" of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the shares of Stock having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity.

"Taxes" has the meaning set forth in Section 16.5.

"Trademark Security Agreement" means a trademark security agreement executed and delivered by each Borrower and Lender, the form and substance of which is satisfactory to Lender in the exercise of its Permitted Discretion.

"Trustee's Fee Carve-Out" has the meaning set forth in Section 4.8(b).

"UCC Filing Authorization Letter" means a letter duly executed by each Borrower and each Guarantor authorizing Lender to file appropriate financing statements on Form UCC-1 without the signature of such Borrower or Guarantor, as applicable, in such office or offices as may be necessary or, in the exercise of Lender's Permitted Discretion, desirable to perfect the security interests purported to be created by the Loan Documents.

"Underlying Issuer" means a third Person which is the beneficiary of an L/C Undertaking and which has issued a letter of credit at the request of Lender for the benefit of Borrowers.

"Underlying Letter of Credit" means a letter of credit that has been issued by an Underlying Issuer.

"United States" means the United States of America.

"US Seismic Library" shall mean the library of onshore and offshore seismic data that Seitel Solutions, Ltd. offers for license to oil and gas companies, which library is maintained, warehoused, and stored in Houston, Texas.

"Voidable Transfer" has the meaning set forth in Section 16.8.

"Wells Fargo" means Wells Fargo Bank, National Association, a national banking association.

1.2    Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with GAAP. When used herein, the term "financial statements" shall include the notes and schedules thereto. Whenever the term "Borrowers" or the term "Parent" is used in respect of a financial covenant or a related definition, it shall be understood to mean Parent and its Domestic Subsidiaries on a consolidated basis unless the context clearly requires otherwise.

1.3    Code.   Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein.

1.4    Construction. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term "including" is not limiting, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in the other Loan Documents to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to the repayment in full of the Obligations shall mean the repayment in full in cash of all Obligations other than contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and are not required to be repaid or cash collateralized pursuant to the provisions of this Agreement. Any reference herein to any Person shall be construed to include such Person's successors and assigns. Any requirement of a writing contained herein or in the other Loan Documents shall be satisfied by the transmission of a Record and any Record transmitted shall constitute a represe ntation and warranty as to the accuracy and completeness of the information contained therein.

1.5    Schedules and Exhibits.  All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

2.    LOAN AND TERMS OF PAYMENT.

2.1    Revolver Advances.

(a)    Subject to the terms and conditions of this Agreement, and during the term of this Agreement, Lender agrees to make advances ("Advances") to Borrowers in an amount at any one time outstanding not to exceed an amount equal to the lesser of (i) the Maximum Revolver Amount minus the Letter of Credit Usage, or (ii) the Borrowing Base minus the Letter of Credit Usage.

(b)    Anything to the contrary in this Section 2.1 notwithstanding, Lender shall have the right to establish reserves in such amounts, and with respect to such matters, as Lender in its Permitted Discretion shall deem necessary or appropriate, against the Borrowing Base, including reserves with respect to (i) sums that Borrowers are required to pay (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and have failed to pay under any Section of this Agreement or any other Loan Document, (ii) amounts owing by Borrowers or their Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than any existing Permitted Lien set forth on Schedule P-1 which is specifically identified thereon as entitled to have priority over the Lender's Liens), which Lien or trust, in the Permitted Discreti on of Lender, likely would have a priority superior to the Lender's Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral, and (iii) amounts designated in the Financing Orders as administrative expenses in the Chapter 11 Cases, such as the Professional Fees Exception, the Post-Default Carve-Out, and the Trustee's Fee Carve-Out.

(c)    Lender shall have no obligation to make additional Advances hereunder to the extent such additional Advances would cause the Revolver Usage to exceed the Maximum Revolver Amount.

(d)    Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.

2.2    Intentionally Omitted.

2.3    Borrowing Procedures and Settlements.

(a)    Procedure for Borrowing.     Each Borrowing shall be made by an irrevocable written request by an Authorized Person delivered to Lender (which notice must be received by Lender no later than 10:00 a.m. (California time) on a Business Day specifying (i) the amount of such Borrowing, and (ii) the requested Funding Date, which shall be a Business Day. At Lender's election, in lieu of delivering the above-described written request, any Authorized Person may give Lender telephonic notice of such request by the required time. In such circumstances, Borrowers agree that any such telephonic notice will be confirmed in writing within one (1) Business Day of the giving of such notice and the failure to provide such written confirmation shall not affect the validity of the request.

(b)    Making of Advances.     If Lender has received a timely request for a Borrowing in accordance with the provisions hereof, and subject to the satisfaction of the applicable terms and conditions set forth herein, Lender shall make the proceeds of such Advance available to Borrowers on the applicable Funding Date by transferring available funds equal to such proceeds to Administrative Borrower's Designated Account.

2.4    Payments.

(a)    Payments by Borrowers. Except as otherwise expressly provided herein, all payments by Borrowers shall be made to Lender's Account for the account of Lender and shall be made in immediately available funds, no later than 11:00 a.m. (California time) on the date specified herein. Any payment received by Lender later than 11:00 a.m. (California time), shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

(b)    Application of Payments.

(i)    All payments in respect of the Obligations shall be remitted to Lender and all such payments and all proceeds of Collateral received by Lender, shall be applied as follows:

A.    first, to pay any Lender Expenses then due to Lender under the Loan Documents, until paid in full,

B.    second, to pay any fees then due to Lender under the Loan Documents until paid in full,

C.    third, to pay interest due in respect of Advances until paid in full,

D.    fourth, so long as no Event of Default has occurred and is continuing, and at Lender's election (which election Lender hereby agrees will not be made if an Overadvance would be created thereby), to pay amounts then due and owing by Administrative Borrower or its Domestic Subsidiaries in respect of Bank Products, until paid in full,

E.    fifth, so long as no Event of Default has occurred and is continuing, to pay the principal of all Advances (exclusive of LIBOR Rate Loans prior to the end of the applicable Interest Period if, and only if, Lender charges Borrowers for a Funding Loss with respect to the prepayment of the LIBOR Rate Loan to which to payment is to be applied, except to the extent otherwise agreed by Administrative Borrower in writing) until paid in full,

F.    sixth, if an Event of Default has occurred and is continuing, ratably (i) to pay the principal of all Advances until paid in full, (ii) to Lender, to be held by Lender as cash collateral in an amount up to 105% of the then extant Letter of Credit Usage until paid in full, and (iii) to Lender, to be held by Lender, for the benefit of the Bank Products Providers, as cash collateral in an amount up to the amount of the Bank Product Reserve established prior to the occurrence of, and not in contemplation of, the subject Event of Default, until Borrowers' and their Domestic Subsidiaries' obligations in respect of the then extant Bank Products have been paid in full or the cash collateral amount has been exhausted,

G.    seventh, to pay any other Obligations (including the provision of amounts to Lender, to be held by Lender, for the benefit of the Bank Product Providers, as cash collateral in an amount up to the amount determined by Lender in its Permitted Discretion as the amount necessary to secure Borrowers' and their Domestic Subsidiaries' obligations in respect to the then extant Bank Products), and

H.    eighth, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

(ii)     In each instance, so long as no Event of Default has occurred and is continuing, this Section 2.4(b) shall not be deemed to apply to any payment by Borrowers specified by Borrowers to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement.

(iii)     For purposes of the foregoing, "paid in full" means payment of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not any of the foregoing would be allowed or disallowed in whole or in part in any Insolvency Proceeding.

(iv)     In the event of a direct conflict between the priority provisions of this Section 2.4 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that such priority provisions in such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.4 shall control and govern.

2.5    Overadvances.  If, at any time or for any reason, the amount of Obligations (other than Bank Product Obligations) owed by Borrowers to Lender pursuant to Section 2.1 or Section 2.12 is greater than either the Dollar or percentage limitations set forth in Section 2.1 or Section 2.12, as applicable (an "Overadvance"), Borrowers immediately shall pay to Lender, in cash, the amount of such excess, which amount shall be used by Lender to reduce the Obligations in accordance with the priorities set forth in Section 2.4(b). In addition, Borrowers hereby promise to pay the Obligations (including principal, interest, fees, costs, and expenses) in Dollars in full as and when due and payable under the terms of this Agreement and the other Loan Documents.

2.6    Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

(a)    Interest Rates. Except as provided in clause (c) below, all Obligations (except for undrawn Letters of Credit and except for Bank Product Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof as follows: (i) if the relevant Obligation is an Advance that is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and (ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.

The foregoing notwithstanding, at no time shall any portion of the Obligations (other than Bank Product Obligations) that accrue interest at a rate that is determined by reference to the Base Rate bear interest on the Daily Balance thereof at a per annum rate that is determined by reference to a Base Rate that is less than 4.25%. To the extent that interest accrued hereunder at the rate set forth herein would be less than the foregoing minimum daily rate, the interest rate chargeable hereunder for such day automatically shall be deemed increased to the minimum rate.

(b)    Letter of Credit Fee. Borrowers shall pay Lender a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.12(e)) which shall accrue at a rate equal to 3.00% per annum times the original "face" or stated amount of all outstanding Letters of Credit.

(c)    Default Rate. Upon the occurrence and during the continuation of an Event of Default, at the election of Lender,

(i)    all Obligations (except for undrawn Letters of Credit and except for Bank Product Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof at a per annum rate equal to three (3) percentage points above the per annum rate otherwise applicable hereunder, and

(ii)    the Letter of Credit fee provided for above shall be increased to three (3) percentage points above the per annum rate otherwise applicable hereunder.

(d)    Payment. Except as provided to the contrary in Section 2.13(a), interest and all fees payable hereunder (other than Letter of Credit fees) shall be due and payable, in arrears, on the first day of each month at any time that Obligations or obligation to extend credit hereunder are outstanding. Letter of Credit fees shall be due and payable, in advance, on the first day of each month at any time that Obligations or obligation to extend credit hereunder are outstanding. Borrowers hereby authorize Lender, from time to time, without prior notice to Borrowers, to charge such interest and fees, all Lender Expenses (as and when incurred), the charges, commissions, fees, and costs provided for in Section 2.12(e) (as and when accrued or incurred), the fees and costs provided for in Section 2.11 (as and when accrued or incurred), and all other payments as and when due and payable under any Loan Document (including any amounts due a nd payable to the Bank Product Providers in respect of Bank Products up to the amount of the then extant Bank Products Reserve) to Borrowers' Loan Account, which amounts thereafter shall constitute Advances hereunder and shall accrue interest at the rate then applicable to Advances hereunder. Any interest not paid when due shall be compounded by being charged to Borrowers' Loan Account and shall thereafter constitute Advances hereunder and shall accrue interest at the rate then applicable to Advances that are Base Rate Loans hereunder.

(e)    Computation. All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360-day year for the actual number of days elapsed. In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.

(f)    Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrowers and Lender, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall be liable only for the payment of such maximum as allowed by law, and payment received from or in respect of Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.

2.7    Cash Management.

(a)    Borrowers shall and shall cause each of their Domestic Subsidiaries to (i) establish and maintain cash management services of a type and on terms satisfactory to Lender at one or more of the banks set forth on Schedule 2.7(a) (each a "Cash Management Bank"), and shall request in writing and otherwise take such reasonable steps to direct that all of their and their Domestic Subsidiaries' Account Debtors forward payment of the amounts owed by them directly to such Cash Management Bank, and (ii) deposit or direct each applicable Cash Management Bank to deposit promptly, and in any event no later than the first Business Day after the date of receipt thereof, all of their Collections (including those sent directly by their Account Debtors to a Cash Management Bank) into a bank account in Lender's name (a "Cash Management Account") at one of the Cash Management Banks.

(b)    Each Cash Management Bank shall establish and maintain Cash Management Agreements with Lender and Borrowers, in form and substance acceptable to Lender in the exercise of its Permitted Discretion. Each such Cash Management Agreement shall provide, among other things, that (i) all items of payment deposited in such Cash Management Account and proceeds thereof are held by such Cash Management Bank on behalf of Lender as bailee-in-possession for Lender, (ii) the Cash Management Bank has no rights of setoff or recoupment or any other claim against the applicable Cash Management Account, other than for payment of its service fees and other charges directly related to the administration of such Cash Management Account and for returned checks or other items of payment, and (iii) it immediately will forward by daily sweep all amounts in the applicable Cash Management Account to the Lender's Account.

(c)    So long as no Default or Event of Default has occurred and is continuing, Administrative Borrower may amend Schedule 2.7(a) or (b) to add or replace a Cash Management Bank or Cash Management Account; provided, however, that (i) such prospective Cash Management Bank shall be satisfactory to Lender in the exercise of its Permitted Discretion and Lender shall have consented in writing (which consent will not, in the exercise of Lender's Permitted Discretion, be withheld, delayed or conditioned) in advance to the opening of such Cash Management Account with the prospective Cash Management Bank, and (ii) prior to the time of the opening of such Cash Management Account, a Borrower or a Domestic Subsidiary of a Borrower, as applicable, and such prospective Cash Management Bank shall have executed and delivered to Lender a Cash Management Agreement. A Borrower or a Domestic Subsidiary of a Borrower, as applicable, shall close any o f their Cash Management Accounts (and establish replacement cash management accounts in accordance with the foregoing sentence) promptly and in any event within 30 days of notice from Lender that the creditworthiness of any Cash Management Bank is no longer acceptable in Lender's reasonable judgment, or as promptly as practicable and in any event within 60 days of notice from Lender that the operating performance, funds transfer, or availability procedures or performance of the Cash Management Bank with respect to Cash Management Accounts or Lender's liability under any Cash Management Agreement with such Cash Management Bank is no longer acceptable in Lender's reasonable judgment.

(d)    The Cash Management Accounts shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Obligations, and in which Borrowers hereby grant a Lien to Lender.

2.8    Crediting Payments; Float Charge. The receipt of any payment item by Lender (whether from transfers to Lender by the Cash Management Banks pursuant to the Cash Management Agreements or otherwise) shall not be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to the Lender's Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Lender only if it is received into the Lender's Account on a Business Day on or before 11:00 a.m. (California time). If any payment item is received into the Lender's Account on a non-Business Day or after 11:00 a.m. (California time) on a Business Day, it shall be deemed to have been received by Lender as of the opening of business on the immediately following Business Day. From and after the Closing Date, Lender shall be entitled to charge Borrowers for one (1) Business Day of 'clearance' or 'float' at the rate then applicable under Section 2.6 to Advances that are Base Rate Loans on all Collections that are received by Borrowers and their Domestic Subsidiaries (regardless of whether forwarded by the Cash Management Banks to Lender). This across-the-board one (1) Business Day clearance or float charge on all Collections of Borrowers and their Domestic Subsidiaries is acknowledged by the parties to constitute an integral aspect of the pricing of the financing of Borrowers; provided, however, that this across-the-board one (1) Business Day clearance or float charge shall apply only when and if there are any outstanding monetary Obligations; the effect of such clearance or float charge being the equivalent of charging interest on such Collections through the completion of a per iod ending one (1) Business Day after the receipt thereof during any period of time in which there are any outstanding monetary Obligations.

2.9    Designated Account,  Lender is authorized to make the Advances, and Lender is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person, or without instructions if pursuant to Section 2.6(d). Administrative Borrower agrees to establish and maintain the Designated Account with the Designated Account Bank for the purpose of receiving the proceeds of the Advances requested by Borrowers and made by Lender hereunder. Unless otherwise agreed by Lender and Administrative Borrower, any Advance requested by Borrowers and made by Lender hereunder shall be made to the Designated Account.

2.10    Maintenance of Loan Account; Statements of Obligations.  Lender shall maintain an account on its books in the name of Borrowers (the "Loan Account") on which Borrowers will be charged with all Advances made by Lender to Borrowers or for Borrowers' account, the Letters of Credit issued by Lender for Borrowers' account, and with all other payment Obligations hereunder or under the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees, and Lender Expenses. In accordance with Section 2.8, the Loan Account will be credited with all payments received by Lender from Borrowers or for Borrowers' account, including all amounts received in the Lender's Account from any Cash Management Bank. Lender shall, within 20 days after the close of each calendar month, render to Administrative Borrower statements regarding all activities in the Loan Account during such month, including pr incipal, interest, fees, and including an itemization of all charges and expenses constituting Lender Expenses owing, and such statements, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and Lender unless, within 60 days after receipt thereof by Administrative Borrower, Administrative Borrower shall deliver to Lender written objection thereto describing the error or errors contained in any such statements.

2.11    Fees. Borrowers shall pay to Lender the following fees and charges, which fees and charges shall be non-refundable when paid (irrespective of whether this Agreement is terminated thereafter):

(a)    Final Funding Fee. A final funding fee (the "Final Funding Fee") shall be due and payable upon the entry of the Interim Financing Order, which Final Funding Fee shall be in consideration for the financial accommodations being made available to Borrowers by Lender. The Final Funding Fee will be earned in full as of the entry of the Interim Financing Order, and will be non-refundable. The Final Funding Fee will be in the amount of Fifty Thousand Dollars ($50,000).

(b)    Unused Line Fee. On the first day of each calendar month following the calendar month in which the Interim Financing Order is entered, and continuing during the remainder of term of this Agreement, an unused line fee in the amount equal to one-half of one percent (0.50%) per annum times the result of (i) the Maximum Revolver Amount, minus (i) the sum of (A) the average Daily Balance of Advances that were outstanding during the immediately preceding month, plus (B) the average Daily Balance of the Letter of Credit Usage during the immediately preceding month.

(c)    Servicing Fee. A servicing fee (the "Servicing Fee") shall be due and payable monthly, in arrears, on the first day of each calendar month following the calendar month in which the Interim Financing Order is entered, and continuing during the remainder of term of this Agreement, which monthly Servicing Fee shall be in the amount of Five Thousand Dollars ($5,000) and shall be deemed fully earned as of the date it becomes due.

(d)    Audit, Appraisal, and Valuation Charges. Audit, appraisal, and valuation fees and charges as follows, (i) a fee of $850 per day, per auditor, plus reasonable out-of-pocket expenses for each financial audit of a Borrower performed by personnel employed by Lender, (ii) a fee of $850 per day, per applicable individual, plus reasonable out-of-pocket expenses for the establishment of electronic collateral reporting systems, and (iii) the actual charges paid or incurred by Lender if it elects to employ the services of one or more third Persons to perform financial audits of Borrowers or their Domestic Subsidiaries, to establish electronic collateral reporting systems, to appraise the Collateral, or any portion thereof, or to assess Borrowers' and their Domestic Subsidiaries' business valuation; provided, however, that exclusive of audits conducted during the continuance of an Event of Default, Borrowers will not be charged for mo re than two (2) audits in any calendar year.

(e)    Approval Fee. Upon Lender's approval of the debtor-in-possession financing facility, which is evidenced by this fully executed Agreement, Borrowers paid to Lender an "approval" or "commitment" fee of One Hundred Fifty Thousand Dollars ($150,000), which was non-refundable and fully earned upon Lender's approval of this facility.

2.12    Letters of Credit.

(a)    Subject to the terms and conditions of this Agreement, Lender agrees to issue letters of credit for the account of Borrowers (each, an "L/C") or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, an "L/C Undertaking") with respect to letters of credit issued by an Underlying Issuer (as of the Closing Date, the prospective Underlying Issuer is to be Wells Fargo) for the account of Borrowers. To request the issuance of an L/C or an L/C Undertaking (or the amendment, renewal, or extension of an outstanding L/C or L/C Undertaking), Administrative Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by Lender) to Lender (reasonably in advance of the requested date of issuance, amendment, renewal, or extension) a notice requesting the issuance of an L/C or L/C Undertaking, or identifying the L/C or L/C Undertaking to be amended, renewed, or extended, the date of issuance, amendment, renewal, or extension, the date on which such L/C or L/C Undertaking is to expire, the amount of such L/C or L/C Undertaking, the name and address of the beneficiary thereof (or of the Underlying Letter of Credit, as applicable), and such other information as shall be necessary to prepare, amend, renew, or extend such L/C or L/C Undertaking. If requested by Lender, Borrowers also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. Lender shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the requested Letter of Credit:

(i)    the Letter of Credit Usage would exceed the Borrowing Base less the then extant amount of outstanding Advances, or

(ii)    the Letter of Credit Usage would exceed Five Million Dollars ($5,000,000), or

(iii)    the Letter of Credit Usage would exceed the Maximum Revolver Amount less the then extant amount of outstanding Advances.

Borrowers and Lender acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Lender is obligated to advance funds under a Letter of Credit, Borrowers immediately shall reimburse such L/C Disbursement to Lender by paying to Lender an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if Administrative Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Administrative Borrower prior to suc h time on such date, then not later than 11:00 a.m., California time, on (i) the Business Day that Administrative Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.6. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers' obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance.

(b)    Each Borrower hereby agrees to indemnify, save, defend, and hold Lender harmless from any loss, cost, expense, or liability, and reasonable attorneys fees incurred by Lender arising out of or in connection with any Letter of Credit; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, liability, or related attorneys' fees, to the extent that it is caused by the gross negligence or willful misconduct of Lender. Each Borrower agrees to be bound by the Underlying Issuer's regulations and interpretations of any Underlying Letter of Credit or by Lender's interpretations of any L/C issued by Lender to or for such Borrower's account, even though this interpretation may be different from such Borrower's own, and each Borrower understands and agrees that Lender shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrowers' in structions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Each Borrower understands that the L/C Undertakings may require Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrowers against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save, defend, and hold Lender harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by Lender under any L/C Undertaking as a result of Lender's indemnification of any Underlying Issuer; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, liability, or related attorneys' fees, to the extent that it is caused by the gross negligence or willful misconduct of Lender.

(c)    Each Borrower hereby authorizes and directs any Underlying Issuer to deliver to Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon Lender's instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application.

(d)    Any and all charges, commissions, fees, and costs incurred by Lender relating to Underlying Letters of Credit shall be Lender Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrowers to Lender for the account of Lender; it being acknowledged and agreed by each Borrower that, as of the Closing Date, the usage charge imposed by the prospective Underlying Issuer is .825% per annum times the face amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to time, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals.

(e)    If by reason of (i) any change after the Closing Date in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by the Underlying Issuer or Lender with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto):

(i)    any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued hereunder, or

(ii)    there shall be imposed on the Underlying Issuer or Lender any other condition regarding any Underlying Letter of Credit or any Letter of Credit issued pursuant hereto;

and the result of the foregoing is to increase, directly or indirectly, the cost to Lender of issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by Lender, then, and in any such case, Lender may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and Borrowers shall pay on demand such amounts as Lender may specify to be necessary to compensate Lender for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder. The determination by Lender of any amount due pursuant to this Section, as set forth in a certificate setting forth the calculation thereof in reasonable detail (which certificate shall, if requested by Administrative Borrower, shall be delivered within thirty (30) days after such request), shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

2.13    LIBOR Option.

(a)    Interest and Interest Payment Dates. In lieu of having interest charged at the rate based upon the Base Rate, Borrowers shall have the option (the "LIBOR Option") to have interest on all or a portion of the Advances be charged at a rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto, (ii) the occurrence of an Event of Default in consequence of which Lender has elected to accelerate the maturity of all or any portion of the Obligations(provided, that Lender shall not accelerate any LIBOR Rate Loans unless all Base Rate Loans are or have been accelerated), or (iii) termination of this Agreement pursuant to the terms hereof. On the last day of each applicable Interest Period, unless Administrative Borrower properly has exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBOR R ate Loan automatically shall convert to the rate of interest then applicable to Base Rate Loans hereunder. At any time that an Event of Default has occurred and is continuing, Borrowers no longer shall have the option to request that Advances bear interest at the LIBOR Rate and Lender shall have the right to convert the interest rate on all outstanding LIBOR Rate Loans to the rate then applicable to Base Rate Loans hereunder.

(b)    LIBOR Election.

(i)    Administrative Borrower may, at any time and from time to time, so long as no Event of Default has occurred and is continuing, elect to exercise the LIBOR Option by notifying Lender prior to 11:00 a.m. (California time) at least 3 Business Days prior to the commencement of the proposed Interest Period (the "LIBOR Deadline"). Notice of Administrative Borrower's election of the LIBOR Option for a permitted portion of the Advances and an Interest Period pursuant to this Section shall be made by delivery to Lender of a LIBOR Notice received by Lender before the LIBOR Deadline, or by telephonic notice received by Lender before the LIBOR Deadline (to be confirmed by delivery to Lender of a LIBOR Notice received by Lender prior to 5:00 p.m. (California time) on the same day).

(ii)    Each LIBOR Notice shall be irrevocable and binding on Borrowers. In connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Lender harmless against any loss, cost, or expense incurred by Lender as a result of (a) the payment of any principal of any LIBOR Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any LIBOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, and expenses, collectively, "Funding Losses"). Funding Losses shall, with respect to Lender, be deemed to equal the amount determined by Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amou nt of such LIBOR Rate Loan had such event not occurred, at the LIBOR Rate that would have been applicable thereto, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period therefor), minus (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which Lender would be offered were it to be offered, at the commencement of such period, Dollar deposits of a comparable amount and period in the London interbank market. A certificate of Lender delivered to Administrative Borrower setting forth any amount or amounts that Lender is entitled to receive pursuant to this Section shall be conclusive absent manifest error.

(iii)    Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any given time. Borrowers only may exercise the LIBOR Option for LIBOR Rate Loans of at least $1,000,000 and integral multiples of $500,000 in excess thereof.

(c)    Prepayments. Borrowers may prepay LIBOR Rate Loans at any time; provided, however, that in the event that LIBOR Rate Loans are prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any automatic prepayment through any required application by Lender of proceeds of Borrowers' and their Domestic Subsidiaries' Collections in accordance with Section 2.4(b) or for any other reason (other than as described in Section 2.13(d)(ii)(y)), including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold Lender and its Participants harmless against any and all Funding Losses in accordance with clause (b) above.

(d)    Special Provisions Applicable to LIBOR Rate.

(i)    The LIBOR Rate may be adjusted by Lender on a prospective basis to take into account any additional or increased costs to Lender of maintaining or obtaining any eurodollar deposits or increased costs due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, including changes in tax laws (except changes of general applicability in corporate income tax laws) and changes in the reserve requirements imposed by the Board of Governors of the Federal Reserve System (or any successor), excluding the Reserve Percentage, which additional or increased costs would increase the cost of funding loans bearing interest at the LIBOR Rate. In any such event, Lender shall give Administrative Borrower notice of such a determination and adjustment and, upon its receipt of the notice from Lender, Administrative Borrower may, by notice to Lender (y) require Lender to furnish to Administrativ e Borrower a statement setting forth the basis for adjusting such LIBOR Rate and the method for determining the amount of such adjustment, or (z) repay the LIBOR Rate Loans with respect to which such adjustment is made (together with any amounts due under clause (b)(ii) above).

(ii)    In the event that any change in market conditions or any law, regulation, treaty, or directive, or any change therein or in the interpretation of application thereof, shall at any time after the date hereof, in the reasonable opinion of Lender, make it unlawful or impractical for Lender to fund or maintain LIBOR Advances or to continue such funding or maintaining, or to determine or charge interest rates at the LIBOR Rate, Lender shall give notice of such changed circumstances to Administrative Borrower and (y) in the case of any LIBOR Rate Loans that are outstanding, the date specified in Lender's notice shall be deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of Lender thereafter shall accrue interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR Option until Lender determines that it would no lon ger be unlawful or impractical to do so.

(e)    No Requirement of Matched Funding. Anything to the contrary contained herein notwithstanding, neither Lender, nor any of its Participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBOR Rate. The provisions of this Section shall apply as if Lender or its Participants had match funded any Obligation as to which interest is accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the amount of the LIBOR Rate Loans.

2.14    Capital Requirements. If, after the date hereof, Lender determines that (i) the adoption of or change in any law, rule, regulation or guideline regarding capital requirements for banks or bank holding companies, or any change in the interpretation or application thereof by any Governmental Authority charged with the administration thereof, or (ii) compliance by Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on Lender's or such holding company's capital as a consequence of Lender's obligations hereunder to a level below that which Lender or such holding company could have achieved but for such adoption, change, or compliance (taking into consideration Lender's or such holding company's then existing policies with respect to capital adequacy and assuming the full utiliza tion of such entity's capital) by any amount deemed by Lender to be material, then Lender may notify Administrative Borrower thereof. Following receipt of such notice, Borrowers agree to pay Lender on demand the amount of such reduction of return of capital as and when such reduction is determined, payable within 90 days after presentation by Lender of a statement of the amount and setting forth in reasonable detail Lender's calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error). In determining such amount, Lender may use any reasonable averaging and attribution methods.

2.15    Joint and Several Liability of Borrowers.

(a) Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by Lender under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.

(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including, without limitation, any Obligations arising under this Section 2.15), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Person composing Borrowers without preferences or distinction among them.

(c) If and to the extent that any of Borrowers shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Persons composing Borrowers will make such payment with respect to, or perform, such Obligation.

(d) The Obligations of each Person composing Borrowers under the provisions of this Section 2.15 constitute the absolute and unconditional, full recourse Obligations of each Person composing Borrowers enforceable against each such Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement as against any other Borrower(s) or any other circumstances whatsoever.

(e) Except as otherwise expressly provided in this Agreement, each Person composing Borrowers hereby waives notice of acceptance of its joint and several liability, notice of any Advances or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Lender under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement). Each Person composing Borrowers hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of a ny partial payment thereon, any waiver, consent or other action or acquiescence by Lender at any time or times in respect of any default by any Person composing Borrowers in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Lender in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Person composing Borrowers. Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of Lender with respect to the failure by any Person composing Borrowers to comply with any of its respective Obligations, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this Section 2.15, afford grounds for terminating, discharging or relieving any Person composing Borrowers, in whole or in part, from any of its Obligations under this Section 2.15, it being the intention of each Person composing Borrowers that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of such Person composing Borrowers under this Section 2.15 shall not be discharged except by performance and then only to the extent of such performance. The Obligations of each Person composing Borrowers under this Section 2.15 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Person composing Borrowers or Lender. The joint and several liability of the Persons composing Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, constitution or place of formation of any of the Persons composing Borrowers or Lender.

(f) Each Person composing Borrowers represents and warrants to Lender that such Borrower is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Person composing Borrowers further represents and warrants to Lender that such Borrower has read and understands the terms and conditions of the Loan Documents. Each Person composing Borrowers hereby covenants that such Borrower will continue to keep informed of Borrowers' financial condition, the financial condition of other guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

(g) Each of the Persons composing Borrowers waives all rights and defenses arising out of an election of remedies by Lender, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed Lender's rights of subrogation and reimbursement against such Borrower by the operation of Section 580(d) of the California Code of Civil Procedure or otherwise.

(h) The provisions of this Section 2.15 are made for the benefit of Lender and its successors and Assignees, and may be enforced by it or them from time to time against any or all of the Persons composing Borrowers as often as occasion therefor may arise and without requirement on the part of Lender, successor, or assign first to marshal any of its or their claims or to exercise any of its or their rights against any of the other Persons composing Borrowers or to exhaust any remedies available to it or them against any of the other Persons composing Borrowers or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy. The provisions of this Section 2.15 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must oth erwise be restored or returned by Lender upon the insolvency, bankruptcy or reorganization of any of the Persons composing Borrowers, or otherwise, the provisions of this Section 2.15 will forthwith be reinstated in effect, as though such payment had not been made.

(i) Each of the Persons composing Borrowers hereby agrees that it will not enforce any of its rights of contribution or subrogation against the other Persons composing Borrowers with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to Lender with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations have been paid in full in cash. Any claim which any Borrower may have against any other Borrower with respect to any payments to Lender hereunder or under any other Loan Documents are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor.

(j) Each of the Persons composing Borrowers hereby agrees that, after the occurrence and during the continuance of any Event of Default, the payment of any amounts due with respect to the indebtedness owing by any Borrower to any other Borrower is hereby subordinated to the prior payment in full in cash of the Obligations. Each Borrower hereby agrees that after the occurrence and during the continuance of any Event of Default, such Borrower will not demand, sue for or otherwise attempt to collect any indebtedness of any other Borrower owing to such Borrower until the Obligations shall have been paid in full in cash. If, notwithstanding the foregoing sentence, such Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee for the Lender, and such Borrower shall deliver any such amounts to Lender for application to the Obligations in ac cordance with Section 2.4(b).

3.    CONDITIONS; TERM OF AGREEMENT.

3.1    Conditions Precedent to the Continued Effectiveness of this Agreement, Prior to Entry of the Interim Financing Order.  The obligation of Lender to continue to be bound under the terms of this Agreement from and after the execution and delivery of this is subject to the fulfillment, to the satisfaction of Lender, of the condition precedent set forth below:

(a)    the Interim Financing Order shall have been entered on or before July 31, 2003; and

(b)    Borrowers shall have paid the Final Funding Fee within two (2) Business Days after the entry of the Interim Financing Order.

3.2    Conditions Precedent to the Continued Effectiveness of this Agreement Following Entry of the Interim Financing Order.  The obligation of Lender to continue to be bound under the terms of this Agreement from and after the execution and delivery of this is subject to the fulfillment, to the satisfaction of Lender, of each of the conditions precedent set forth below on or before ten (10) Business Days following entry of the Interim Financing Order:

(a)    the Closing Date shall occur;

(b)    Lender shall have received a UCC Filing Authorization Letter, duly executed by each Borrower and each Guarantor, together with appropriate financing statements on Form UCC-1 duly filed in such office or offices as may be necessary or, in the Permitted Discretion of Lender, desirable to perfect the Lender's Liens in and to the Collateral, and Lender shall have received searches reflecting the filing of all such financing statements;

(c)      Lender shall have received each of the following documents, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, duly executed, and each such document shall be in full force and effect:

(i)    the Cash Management Agreements,

(ii)    the Control Agreements,

(iii)    the Disbursement Letter with respect to any Advance to be borrowed on the Closing Date,

(iv)    the Guarantor Security Agreement,

(v)    the Guaranty,

(vi)    the Intercompany Subordination Agreement,

(vii)    the Officers' Certificate,

(viii)    the Stock Pledge Agreement, together with all certificates representing the shares of Stock pledged thereunder, as well as Stock powers with respect thereto endorsed in blank, and

(ix)    the Trademark Security Agreement;

(d)    Lender shall have received a certificate from the Secretary or an Assistant Secretary of each Borrower attesting to the resolutions of such Borrower's board of directors authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents to which such Borrower is a party and authorizing specific officers of such Borrower to execute the same;

(e)    Lender shall have received copies of each Borrower's Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary or an Assistant Secretary of such Borrower;

(f)    Lender shall have received a certificate of status with respect to each Borrower, dated within 20 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Borrower, which certificate shall indicate that such Borrower is in good standing in such jurisdiction;

(g)    Lender shall have received certificates of status with respect to each Borrower, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Borrower) in which its failure to be duly qualified would constitute a Material Adverse Change, which certificates shall indicate that such Borrower is in good standing in such jurisdictions;

(h)    Lender shall have received a certificate from the Secretary or an Assistant Secretary of each Guarantor attesting to the resolutions of such Guarantor's Board of Directors authorizing its execution, delivery, and performance of the Loan Documents to which such Guarantor is a party and authorizing specific officers of such Guarantor to execute the same;

(i)    Lender shall have received copies of each Guarantor's Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary or an Assistant Secretary of such Guarantor;

(j)    Lender shall have received a certificate of status with respect to each Guarantor, dated within 20 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Guarantor, which certificate shall indicate that such Guarantor is in good standing in such jurisdiction;

(k)    Lender shall have received certificates of status with respect to each Guarantor, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Guarantor) in which its failure to be duly qualified would constitute a Material Adverse Change, which certificates shall indicate that such Guarantor is in good standing in such jurisdictions;

(l)    Lender shall have received a certificate of insurance, together with the endorsements thereto, as are required by Section 6.8, the form and substance of which shall be satisfactory to Lender;

(m)    either (i) Lender shall have received a Collateral Access Agreement with respect to the following location: 10811 S. Westview Circle, Building C, Suite 100, Houston, Texas 77043, or (ii) the terms in the Financing Orders, with regard to the rights of Lender with respect to the premises at such location, are satisfactory to Lender in the exercise of its Permitted Discretion;

(n)    Lender shall have received opinions of Borrowers' counsel in form and substance satisfactory to Lender in the exercise of its Permitted Discretion;

(o)    Lender shall have received satisfactory evidence (including a certificate of the chief accounting officer of Parent) that all tax returns required to be filed by Borrowers and their Domestic Subsidiaries have been timely filed and all taxes upon Borrowers and their Domestic Subsidiaries or their properties, assets, income, and franchises (including Real Property taxes, sales taxes, and payroll taxes) have been paid prior to delinquency, except such taxes that are the subject of Permitted Protests;

(p)    Borrowers shall have the Required Availability after giving effect to the initial extensions of credit hereunder and the payment of all fees and expenses required to be paid by Borrowers on the Closing Date under this Agreement and the other Loan Documents;

(q)    Lender shall have received completed reference checks with respect to Borrowers' senior management, the results of which are satisfactory to Lender in its Permitted Discretion;

(r)    Borrowers shall have paid all Lender Expenses theretofore incurred and invoiced in connection with the transactions evidenced by this Agreement;

(s)    Borrowers and each of their Domestic Subsidiaries shall have received all licenses, approvals or evidence of other actions (if any) required by any Governmental Authority in connection with the execution and delivery by Borrowers or their Domestic Subsidiaries of the Loan Documents or with the consummation of the transactions contemplated thereby;

(t)    no Material Adverse Change shall have occurred and be continuing, as determined by Lender in its Permitted Discretion; and

(u)    all other documents and legal matters in connection with the transactions contemplated by this Agreement shall have been delivered, executed, or recorded (as appropriate) and shall be in form and substance satisfactory to Lender in the exercise of its Permitted Discretion.

3.3    Conditions Precedent to the Initial Extension of Credit. The obligation of Lender to make the initial Advance (or otherwise to extend any credit provided for hereunder), is subject to the fulfillment, to the satisfaction of Lender, of each of the conditions precedent set forth below:

(a)    satisfaction of the conditions precedent set forth in Sections 3.1 and 3.2 above; and

(b)    Lender shall have received each of the following documents, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, duly executed, and each such document shall be in full force and effect:

(i)    the Pay-Off Letter; and

(ii)    UCC termination statements and other documentation evidencing the termination by Existing Lender of its Liens in and to the properties and assets of Borrowers and their Domestic Subsidiaries.

3.4    Conditions Subsequent to the Initial Extension of Credit.  The obligation of Lender to continue to make Advances (or otherwise extend credit hereunder) is subject to the fulfillment, on or before the date applicable thereto, of the condition subsequent set forth below (the failure by Borrowers to so perform or cause to be performed constituting an Event of Default):

(a)    within 30 days of the Closing Date, deliver to Lender certified copies of the policies of insurance, together with the endorsements thereto, as are required by Section 6.8, the form and substance of which shall be satisfactory to Lender and its counsel.

3.5    Conditions Precedent to the Increase to the Maximum Revolver Amount. The obligation of Lender to increase the Maximum Revolver Amount from Ten Million Dollars to Twenty Million Dollars, is subject to the fulfillment, of each of the conditions precedent set forth below:

(a)    entry of the Final Financing Order; and

(b)    Lender shall have completed its business, legal, and collateral due diligence, including (i) a collateral audit and review of Borrowers' books and records and verification of Borrowers' representations and warranties to Lender, (ii) a business enterprise valuation of the Loan Parties' business, (iii) a review of the Loan Parties' most recent thirteen week cash receipts and disbursements forecast, (iv) the results of a field survey and audit and appraisal of the Collateral by Lender's auditors, examiners and appraisers, (v) a review of the Loan Parties' material contracts and confirmation that the Loan Parties have all required licenses and permits required and material for the conduct of their business, and (vi) verification of Borrowers' EBITDA for the two fiscal years of Borrowers ended December 31, 2001 and 2002 and for the period of January 1 to April 30, 2003, the results of which, in each case, shall be satisfactory to Lender, in the exercise of its Permitted Discretion.

3.6    Conditions Precedent to all Extensions of Credit.  The obligation of Lender to make any Advances hereunder at any time (or to extend any other credit hereunder) shall be subject to the following conditions precedent:

(a)    the representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, and except for changes in the ordinary course of business not otherwise constituting an Event of Default);

(b)    no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof;

(c)    no injunction, writ, restraining order, or other judicial or administrative order restricting or prohibiting, directly or indirectly, the extending of such credit shall have been issued and remain in force by any Governmental Authority against any Borrower, Lender, or any of their Affiliates; and

(d)    no Material Adverse Change shall have occurred and be continuing.

3.7  Term. This Agreement shall continue in full force and effect for a term ending on the date (the "Maturity Date") that is the earliest to occur of the following:

(a)    June 30, 2004,

(b)    the occurrence of the "Effective Date", as defined in a plan of reorganization (a "Plan") in the Chapter 11 Cases, which has been confirmed by an order of the Bankruptcy Court, or

(c)    the conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code.

Any confirmation order entered in the Chapter 11 Cases shall not discharge or otherwise affect in any way of the joint and several obligations of Borrowers or Guarantors to Lender under the Loan Documents, other than after the indefeasible payment in full and in cash to Lender of all Obligations on or before the Effective Date of the Plan.

The foregoing notwithstanding, Lender shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default. Lender also shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of any failure of the parties to satisfy any of the conditions set forth in Sections 3.1, 3.2, and 3.4, inclusive.

3.8    Effect of Termination. On the date of termination of this Agreement, all Obligations (including contingent reimbursement obligations of Borrowers with respect to any outstanding Letters of Credit and including all Bank Products Obligations) immediately shall become due and payable without notice or demand (including (a) either (i) providing cash collateral to be held by Lender in an amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing the original Letters of Credit to be returned to Lender, and (b) providing cash collateral (in an amount determined by Lender in the exercise of its Permitted Discretion as sufficient to satisfy the reasonably estimated credit exposure) to be held by Lender for the benefit of the Bank Product Providers with respect to the then extant Bank Products Obligations). No termination of this Agreement, however, shall relieve or discharge Borrowers or their Domes tic Subsidiaries of their duties, Obligations, or covenants hereunder and the Lender's Liens in the Collateral shall remain in effect until all Obligations have been paid in full and Lender's obligations to provide additional credit hereunder have been terminated. When this Agreement has been terminated and all of the Obligations have been paid in full and Lender's obligations to provide additional credit under the Loan Documents have been terminated irrevocably, Lender will, at Borrowers' sole expense, execute and deliver any lien releases, mortgage releases, re-assignments of trademarks, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, the Lender's Liens and all notices of security interests and liens previously filed by Lender with respect to the Obligations, and authorize Borrowers and Guarantors to file, at their expense, UCC termination statements in respect of Code fili ngs made by Lender in respect of the Loan Parties.

3.9    Early Termination by Borrowers.  Borrowers have the option, at any time upon thirty (30) days prior written notice by Administrative Borrower to Lender, to terminate this Agreement by paying to Lender, in cash, the Obligations (including (a) either (i) providing cash collateral to be held by Lender in an amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing the original Letters of Credit to be returned to Lender, and (b) providing cash collateral (in an amount determined by Lender in the exercise of its Permitted Discretion as sufficient to satisfy the reasonably estimated credit exposure) to be held by Lender for the benefit of the Bank Product Providers with respect to the then extant Bank Products Obligations), in full. If Administrative Borrower has sent a notice of termination pursuant to the provisions of this Section, then Lender's obligations to extend cred it hereunder shall terminate and Borrowers shall be obligated to repay the Obligations (including (a) either (i) providing cash collateral to be held by Lender in an amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing the original Letters of Credit to be returned to Lender, and (b) providing cash collateral (in an amount determined by Lender in the exercise of its Permitted Discretion as sufficient to satisfy the reasonably estimated credit exposure) to be held by Lender for the benefit of the Bank Product Providers with respect to the then extant Bank Products Obligations), in full, on the date set forth as the date of termination of this Agreement in such notice.

4.    CREATION OF SECURITY INTEREST

4.1    Grant of Security Interest. Each Borrower hereby grants to Lender for the benefit of Lender and the Bank Product Providers a continuing security interest in all of its right, title, and interest in all currently existing and hereafter acquired or arising Borrower Collateral, as security for the repayment of any and all of the Obligations in accordance with the terms and conditions of the Loan Documents and in order to secure prompt performance by Borrowers of each of their covenants and duties under the Loan Documents. The Lender's Liens in and to the Borrower Collateral shall attach to all Borrower Collateral without further act on the part of Lender or Borrowers pursuant to the Financing Orders and shall have the relative priorities specified in such Financing Orders, which shall be a first-priority lien on all of the assets pursuant to 11 U.S.C. § 364(c)(2) in each Chapter 11 Case, s ubject only to those matters set forth in Section 4.8 below. Anything contained in this Agreement or any other Loan Document to the contrary notwithstanding, except for the use of cash in the ordinary course of business and for the purposes permitted under this Agreement, and except for Permitted Dispositions, Borrowers and their Domestic Subsidiaries have no authority, express or implied, to dispose of any item or portion of the Collateral.

4.2    Negotiable Collateral. In the event that any Borrower Collateral, including proceeds, is evidenced by or consists of Negotiable Collateral, and if and to the extent that Lender determines that perfection or priority of Lender's security interest is dependent on or enhanced by possession, the applicable Borrower, immediately upon the request of Lender, shall endorse and deliver physical possession of such Negotiable Collateral to Lender.

4.3    Collection of Accounts, General Intangibles, and Negotiable Collateral. At any time after the occurrence and during the continuation of an Event of Default, Lender or Lender's designee may (a) notify Account Debtors of Borrowers that Borrowers' Accounts, chattel paper, or General Intangibles have been assigned to Lender or that Lender has a security interest therein, or (b) collect Borrowers' Accounts, chattel paper, or General Intangibles directly and charge the reasonable collection costs and expenses to the Loan Account. Each Borrower agrees that it will hold in trust for Lender, as Lender's trustee, any of its or its Domestic Subsidiaries' Collections that it receives and immediately will deliver such Collections to Lender or a Cash Management Bank in their original form as received by such Borrower or its Domestic Subsidiaries.

4.4    Filing of Financing Statements; Commercial Tort Claims; Delivery of Additional Documentation Required. Borrowers authorize Lender to file any financing statement necessary or, in the exercise of Lender's Permitted Discretion, desirable to effectuate the transactions contemplated by the Loan Documents upon the entry of the Interim Financing Order, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of Borrowers where permitted by applicable law. Borrowers hereby ratify the filing of the financing statements to be filed upon the entry of the Interim Financing Order without the signature of Borrowers prior to the date hereof and described on Schedule 4.4 hereof.

(a)    If Borrowers or their Domestic Subsidiaries acquire any commercial tort claims after the date hereof, Borrowers shall promptly (but in any event within five (5) Business Days after such acquisition) deliver to Lender a written description of such commercial tort claim and shall deliver a written agreement, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, pursuant to which the applicable Borrower or its Domestic Subsidiary shall pledge and collaterally assign all of its right, title and interest in and to such commercial tort claim to Lender, as security for the Obligations (a "Commercial Tort Claim Assignment").

(b)    At any time upon the request of Lender, Borrowers shall execute or deliver to Lender and shall cause their Domestic Subsidiaries to execute or deliver to Lender any and all financing statements, original financing statements in lieu of continuation statements, fixture filings, security agreements, pledges, assignments, Commercial Tort Claim Assignments, endorsements of certificates of title, and all other documents (collectively, the "Additional Documents") that Lender may request in its Permitted Discretion, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, to create, perfect and continue perfected or to better perfect the Lender's Liens in the assets of Borrowers and their Domestic Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal), to create and perfect Liens in favor of Lender in any Real Property acquired after the Closing D ate, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents. To the maximum extent permitted by applicable law, each Borrower authorizes Lender to execute any such Additional Documents in the applicable Borrower's name and authorize Lender to file such executed Additional Documents in any appropriate filing office to the extent relating to the perfection or continued perfection of Lender's Liens. In addition, on such periodic basis as Lender shall require in the exercise of its Permitted Discretion, Borrowers shall (i) provide Lender with a report of all new material patentable, copyrightable, or trademarkable materials acquired or generated by Borrowers or their Domestic Subsidiaries during the prior period, (ii) cause all material patents, copyrights, and trademarks acquired or generated by Borrowers or their Domestic Subsidiaries that are not already the subject of a registration with the appropriate filing office (or an application therefor d iligently prosecuted) to be registered with such appropriate filing office in a manner sufficient to impart constructive notice of a Borrower's or a Domestic Subsidiary of a Borrower's ownership thereof, and (iii) cause to be prepared, executed, and delivered to Lender supplemental schedules to the applicable Loan Documents to identify such patents, copyrights, and trademarks as being subject to the security interests created thereunder.

4.5    Power of Attorney, Each Borrower hereby irrevocably makes, constitutes, and appoints Lender (and any of Lender's officers, or employees) as such Borrower's true and lawful attorney, with power to (a) if such Borrower refuses to, or fails timely to execute and deliver any of the documents described in Section 4.4, sign the name of such Borrower on any of the documents described in Section 4.4, (b) at any time that an Event of Default has occurred and is continuing, sign such Borrower's name on any invoice or bill of lading relating to the Borrower Collateral, drafts against Account Debtors, or notices to Account Debtors, (c) send requests for verification of Borrowers' or their Domestic Subsidiaries' Accounts, (d) endorse such Borrower's name on any of its payment items (including all of its Collections) that may come into Lender's possession, (e) at any time that an Event of Default has occurred and is continuing, make, settle, and adjust all claims under such B orrower's policies of insurance and make all determinations and decisions with respect to such policies of insurance, in each case in the exercise of Lender's Permitted Discretion, and (f) at any time that an Event of Default has occurred and is continuing, settle and adjust disputes and claims respecting Borrowers' or their Domestic Subsidiaries' Accounts, chattel paper, or General Intangibles directly with Account Debtors, for amounts and upon terms that Lender determines to be reasonable in the exercise of Lender's Permitted Discretion, and Lender may cause to be executed and delivered any documents and releases that Lender determines to be necessary for such purpose. The appointment of Lender as each Borrower's attorney, and each and every one of its rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully and finally repaid and performed and Lender's obligations to extend credit hereunder are terminated.

4.6    Right to Inspect. Lender (through any of its officers, employees, or agents) shall have the right, from time to time hereafter, to inspect the Books and make copies or abstracts thereof and to check, test, and appraise the Collateral, or any portion thereof, in order to verify Borrowers' and their Domestic Subsidiaries' financial condition or the amount, quality, value, condition of, or any other matter relating to, the Collateral, subject to the limitations set forth in Section 2.11(d) with respect to chargeable expenses.

4.7    Control Agreements. Borrowers agree that they will not, and will not permit their Domestic Subsidiaries to, transfer assets out of any of their Deposit Accounts or Securities Accounts; provided, however, that so long as no Event of Default has occurred and is continuing or would result therefrom, Borrowers and their Domestic Subsidiaries may use such assets (and the proceeds thereof) to the extent not prohibited by this Agreement or the other Loan Documents and, if the transfer is to another bank or securities intermediary, so long as the applicable Borrower or Domestic Subsidiary, Lender, and the substitute bank or securities intermediary have entered into a Control Agreement. Borrowers agree that they will and will cause their Domestic Subsidiaries to take any or all reasonable steps that Lender requests in order for Lender to obtain control in accordance with Sections 9-104, 9-105, 9-106, and 9-107 of the Code with respect to a ny of its or their Securities Accounts, Deposit Accounts, electronic chattel paper, Investment Property, and letter-of-credit rights. No arrangement contemplated hereby or by any Control Agreement in respect of any Securities Accounts or other Investment Property shall be modified by Borrowers without the prior written consent of Lender. Upon the occurrence and during the continuance of an Event of Default, Lender may notify any bank or securities intermediary to liquidate the applicable Deposit Account or Securities Account or any related Investment Property maintained or held thereby and remit the proceeds thereof to the Lender's Account.

4.8    Post-Default Carve-Out. Following the occurrence of an Event of Default and otherwise subject to compliance with Sections 7.19 and 7.20 below, the liens and super-priority claims of Lender granted pursuant hereto and the Financing Orders shall be subordinate to the payment of the following:

(a)    all accrued and unpaid Authorized Fees, including expenses of attorneys, accountants, financial advisors and consultants retained by Borrower, any unsecured creditors' committee, or any equity committee pursuant to Bankruptcy Code § 327 or 1103(a) (incurred following the occurrence of an Event of Default) to the extent that the same are authorized by order of the Bankruptcy Court, subject to disallowance and disgorgement for the benefit of Lender as set forth in the Financing Orders if there is a later disgorgement of such fees; provided, however, the amount of the foregoing fees and expenses, incurred after the occurrence of an Event of Default, that will be entitled to priority over Lender's super-priority claim and first priority lien from and after the occurrence of an Event of Default shall not exceed the sum of Four Hundred Thousand Dollars ($400,000) from and after the occurrence of an Event of Default; and

(b)    the fees payable to the United States Trustee pursuant to 28 U.S.C. § 1930(a) (the "Trustee's Fee Carve-Out").

4.9    Conditions Precedent.  The terms and provisions of Sections 4.1 through and including 4.7 are subject to the condition precedent that the Interim Financing Order be entered by the Bankruptcy Court. Until the entry of the Interim Financing Order, the terms and provisions of Sections 4.1 through and including 4.7 shall have no force or effect. Immediately upon entry of the Interim Financing Order, the terms and provisions of Sections 4.1 through and including 4.7 will be in full force and effect, without the necessity for any further action by any party.

5.    REPRESENTATIONS AND WARRANTIES.

In order to induce Lender to enter into this Agreement, each Borrower makes the following representations and warranties to Lender which shall be true, correct, and complete, in all material respects, as of the date hereof, and shall be true, correct, and complete, in all material respects, as of the Closing Date, and at and as of the date of the making of each Advance (or other extension of credit) made thereafter, as though made on and as of the date of such Advance (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date, and except for changes in the ordinary course of business not otherwise constituting an Event of Default) and such representations and warranties shall survive the execution and delivery of this Agreement:

5.1    No Encumbrances. Each Borrower and its Domestic Subsidiaries has good and indefeasible title to their assets (other than leased assets), in each case free and clear of Liens except for Permitted Liens.

5.2    Eligible Accounts. The Eligible Accounts are bona fide existing payment obligations of Account Debtors created by the leasing or licensing of seismic data, the sale and delivery of Inventory or the rendition of services to such Account Debtors in the ordinary course of Borrowers' business, owed to Borrowers without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, except to the extent deducted in the calculation of the Borrowing Base. As to each Account that is identified by Administrative Borrower as an Eligible Account in a borrowing base report submitted to Lender, such Account is not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Accounts.

5.3    [Intentionally Deleted]

5.4    Equipment. All of the Equipment of Borrowers and their Domestic Subsidiaries is used or held for use in their business and is in operating condition, reasonable wear and tear excepted.

5.5    Location of Inventory and Equipment. The Inventory and Equipment of Borrowers and their Domestic Subsidiaries are not stored with a bailee, warehouseman, or similar party and are located only at, or in-transit between, the locations identified on Schedule 5.5 (as such Schedule may be updated pursuant to Section 6.9).

5.6    Inventory Records. Each Borrower keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Domestic Subsidiaries' Inventory and the book value thereof.

5.7    State of Incorporation; Location of Chief Executive Office; FEIN; Organizational ID Number; Commercial Tort Claims

(a)    The jurisdiction of organization of each Borrower and each of its Domestic Subsidiaries is set forth on Schedule 5.7(a).

(b)    The chief executive office of each Borrower and each of its Domestic Subsidiaries is located at the address indicated on Schedule 5.7 (b) (as such Schedule may be updated pursuant to Section 6.9).

(c)    Each Borrower's and each of its Domestic Subsidiaries' FEIN and organizational identification number, if any, are identified on Schedule 5.7(c).

(d)    As of the date of this Agreement, Borrowers and their Domestic Subsidiaries do not hold any commercial tort claims, except as set forth on Schedule 5.7(d).

5.8    Due Organization and Qualification; Domestic Subsidiaries

(a)    Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its organization and qualified to do business in any state where the failure to be so qualified reasonably could be expected to have a Material Adverse Change.

(b)    Set forth on Schedule 5.8(b), is a complete and accurate description of the authorized capital Stock of each Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding. Other than as described on Schedule 5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of each Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. No Borrower is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock.

(c)    Set forth on Schedule 5.8(c), is a complete and accurate list of each Borrower's direct and indirect Domestic Subsidiaries, showing: (i) the jurisdiction of their organization; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Domestic Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by the applicable Borrower. All of the outstanding capital Stock of each such Domestic Subsidiary has been validly issued and is fully paid and non-assessable.

(d)    Except as set forth on Schedule 5.8(c), there are no subscriptions, options, warrants, or calls relating to any shares of any Borrower's Domestic Subsidiaries' capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. No Borrower or any of its respective Domestic Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of any Borrower's Domestic Subsidiaries' capital Stock or any security convertible into or exchangeable for any such capital Stock.

5.9    Due Authorization; No Conflict

(a)    As to each Borrower, the execution, delivery, and performance by such Borrower of this Agreement and the other Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Borrower.

(b)    As to each Borrower, the execution, delivery, and performance by such Borrower of this Agreement and the other Loan Documents to which it is a party do not and will not (i) violate any provision of federal, state, or local law or regulation applicable to any Borrower, the Governing Documents of any Borrower, or any order, judgment, or decree of any court or other Governmental Authority binding on any Borrower, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation of any Borrower, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of Borrower, other than Permitted Liens, or (iv) require any approval of any Borrower's interest holders or any approval or consent of any Person under any material contractual obligation of any Borrower, other tha n consents or approvals that have been obtained and that are still in force and effect.

(c)    Other than the filing of financing statements, the execution, delivery, and performance by each Borrower of this Agreement and the other Loan Documents to which such Borrower is a party do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than consents or approvals that have been obtained and that are still in force and effect.

(d)    As to each Borrower, this Agreement and the other Loan Documents to which such Borrower is a party, and all other documents contemplated hereby and thereby, when executed and delivered by such Borrower, will be the legally valid and binding obligations of such Borrower, enforceable against such Borrower in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors' rights generally.

(e)    Subject to the provisions of Section 4.9, the Lender's Liens are validly created, perfected, and first priority Liens, subject only to Permitted Liens.

(f)    The execution, delivery, and performance by each Guarantor of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Guarantor.

(g)    The execution, delivery, and performance by each Guarantor of the Loan Documents to which it is a party do not and will not (i) violate any provision of federal, state, or local law or regulation applicable to such Guarantor, the Governing Documents of such Guarantor, or any order, judgment, or decree of any court or other Governmental Authority binding on such Guarantor, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation of such Guarantor, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of such Guarantor, other than Permitted Liens, or (iv) require any approval of such Guarantor's interest holders or any approval or consent of any Person under any material contractual obligation of such Guarantor, other than consents or approvals that have been obtained and that are still in force and effect.

(h)    Other than the filing of financing statements, the execution, delivery, and performance by each Guarantor of the Loan Documents to which such Guarantor is a party do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than consents or approvals that have been obtained and that are still in force and effect.

(i)    The Loan Documents to which each Guarantor is a party, and all other documents contemplated hereby and thereby, when executed and delivered by such Guarantor, will be the legally valid and binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors' rights generally.

5.10    Litigation. Other than those matters disclosed on Schedule 5.10, there are no actions, suits, or proceedings pending or, to the best knowledge of Borrowers, threatened against Borrowers, or any of their Domestic Subsidiaries, as applicable, except for (a) matters that are fully covered by insurance (subject to customary deductibles), and (b) matters arising after the date of this Agreement that, if decided adversely to Borrowers, or any of their Domestic Subsidiaries, as applicable, reasonably could not be expected to result in a Material Adverse Change.

5.11    No Material Adverse Change. All financial statements relating to Borrowers and their Domestic Subsidiaries that have been delivered by Borrowers to Lender have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, Borrowers' and their Domestic Subsidiaries' financial condition as of the date thereof and results of operations for the period then ended. There has not been a Material Adverse Change with respect to Borrowers and their Domestic Subsidiaries (or Guarantors, as applicable) since the date of the latest financial statements submitted to Lender on or before the Closing Date.

5.12    Fraudulent Transfer. No transfer of property is being made by any Borrower or any Domestic Subsidiary of a Borrower and no obligation is being incurred by any Borrower or any Domestic Subsidiary of a Borrower in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of Borrowers or their Subsidiaries.

5.13    Employee Benefits. Except as set forth on Schedule 5.13, none of Borrowers, any of their Domestic Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any Benefit Plan.

5.14    Environmental Condition. Except as set forth on Schedule 5.14, (a) to Borrowers' knowledge, none of Borrowers' or their Subsidiaries' properties or assets has ever been used by Borrowers, their Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such production, storage, handling, treatment, release or transport was in violation, in any material respect, of applicable Environmental Law, (b) to Borrowers' knowledge, none of Borrowers' or their Subsidiaries' properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) none of Borrowers or any of their Subsidiaries have received notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by Borrowers or their Subs idiaries, and (d) none of Borrowers or any of their Subsidiaries have received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal or state governmental agency concerning any action or omission by any Borrower or any Subsidiary of a Borrower resulting in the releasing or disposing of Hazardous Materials into the environment.

5.15    Brokerage Fees. Borrowers and their Domestic Subsidiaries have not utilized the services of any broker or finder in connection with obtaining financing from Lender under this Agreement and no brokerage commission or finders fee is payable by Borrowers or their Domestic Subsidiaries in connection herewith.

5.16    Intellectual Property. Each Borrower and each Domestic Subsidiary of a Borrower owns, or holds licenses in, all trademarks, trade names, copyrights, patents, patent rights, and licenses that are necessary to the conduct of its business as currently conducted. Attached hereto as Schedule 5.16 (as updated from time to time) is a true, correct, and complete listing of all material patents, patent applications, trademarks, trademark applications, copyrights, and copyright registrations as to which each Borrower or one of its Domestic Subsidiaries is the owner or is an exclusive licensee.

5.17    Leases. Borrowers and their Domestic Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business and to which they are parties or under which they are operating. All of such leases are valid and subsisting and no material default by Borrowers or their Domestic Subsidiaries exists under any of them.

5.18    DDAs. Set forth on Schedule 5.18 are all of Borrowers' and their Domestic Subsidiaries' Deposit Accounts and Securities Accounts, including, with respect to each bank or securities intermediary, (i) the name and address of such Person, and (ii) the account numbers of the Deposit Accounts or Securities Accounts maintained with such Person.

5.19    Complete Disclosure. All factual information (taken as a whole) furnished by or on behalf of Borrowers or their Subsidiaries in writing to Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement, the other Loan Documents or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of Borrowers or their Subsidiaries in writing to the Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided.

5.20    Indebtedness. Set forth on Schedule 5.20 is a true and complete list of all Indebtedness of each Borrower and each Domestic Subsidiary of a Borrower outstanding immediately prior to the Closing Date that is to remain outstanding after the Closing Date and such Schedule accurately reflects the aggregate principal amount of such Indebtedness on the date of this Agreement and the principal terms thereof.

5.21    Interim Financing Order. Upon entry of the Interim Financing Order, the Interim Financing Order will have been duly entered, will be valid, subsisting and continuing, and will not be subject to any pending appeal or stay.

5.22    Final Financing Order. Upon entry of the Final Financing Order, the Final Financing Order will have been duly entered, and will be valid, subsisting and continuing, and will not be subject to any pending appeal or stay.

5.23    Projections. The Projections attached hereto as Exhibit A are a true, correct and complete weekly cash flow forecast and monthly operating budget providing Borrowers' projected cash disbursements, requirements, and receipts for each week or month, as applicable, from and after the Consent Date through at least December 31, 2003. In the event Lender shall, at its option, approve in writing an alternative cash flow forecast and operating budget as contemplated in the definition of "Projections", the foregoing representation shall be true and correct as to such alternative "Projections."

6.    AFFIRMATIVE COVENANTS.

Each Borrower covenants and agrees that, so long as any credit hereunder shall be available and until payment in full of the Obligations, Borrowers shall, and shall cause each of their respective Domestic Subsidiaries to, do all of the following:

6.1    Accounting System. Maintain a system of accounting that enables Borrowers to produce financial statements in accordance with GAAP and maintain records pertaining to the Collateral that contain information as from time to time reasonably may be requested by Lender.

6.2    Collateral Reporting. Provide Lender with the following documents at the following times in form satisfactory to Lender:

Weekly, for any week during which  there are any outstanding monetary Obligations	(a) on each Wednesday, a certificate showing the detailed calculation of the Borrowing Base as of the end of the previous calendar week (the "Borrowing Base Certificate", a form of which is attached hereto as Exhibit B-1) which may be sent by facsimile transmission or electronically only upon Lender's request,
Monthly (not later than the 10th day of each month)	(b) a Borrowing Base Certificate (including detail regarding those Accounts of Borrowers that are not Eligible Accounts), (c) a detailed aging, by total, of the Accounts of Borrowers, together with a reconciliation to the detailed calculation of the Borrowing Base previously provided to Lender, (d) a summary aging, by vendor, of Borrowers' and their Domestic Subsidiaries' accounts payable and any book overdraft, and (e) a detailed report regarding Borrowers' and their Domestic Subsidiaries' cash and Cash Equivalents including an indication of which amounts constitute Qualified Cash.
Quarterly	(f) a detailed list of each Borrower's and each Domestic Subsidiary of a Borrower's customers, and (g) a report regarding each Borrower's and each Domestic Subsidiary of a Borrower's accrued, but unpaid, ad valorem taxes.
Promptly upon request by Lender, in the exercise of its Permitted Discretion	(h) copies of invoices in connection with Borrowers' and their Domestic Subsidiaries' Accounts, credit memos, remittance advices, deposit slips, shipping and delivery documents in connection with Borrowers' and their Domestic Subsidiaries' Accounts and, for Inventory and Equipment acquired by Borrowers or their Domestic Subsidiaries, purchase orders and invoices, and (i) such other reports as to the Collateral, or the financial condition of Borrowers and their Domestic Subsidiaries, as Lender may request in the exercise of its Permitted Discretion.

In addition, each Borrower agrees to cooperate fully with Lender to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth above.

6.3    Financial Statements, Reports, Certificates. Deliver to Lender:

(a)    bi-weekly, on each second Tuesday, beginning with the first Tuesday to occur after the Closing Date and continuing every second Tuesday thereafter, a current and updated forecast of weekly cash receipts and disbursements forecast for the immediately following thirteen-week period, showing projected cash receipts and planned disbursements for the applicable calendar week

(b)    as soon as available, but in any event within 30 days (45 days in the case of a month that is the end of one of Parent's fiscal quarters) after the end of each month during each of Parent's fiscal years,

(i)    a company-prepared consolidated balance sheet, income statement, and statement of cash flow covering Parent's and its Domestic Subsidiaries' operations during such period,

(ii)    a certificate signed on behalf of the Parent by the chief financial officer or, if the chief financial officer is not available, the chief accounting officer of Parent to the effect that:

A.    the financial statements delivered hereunder have been prepared in accordance with GAAP (except for the lack of footnotes and being subject to year-end audit adjustments) and fairly present in all material respects the financial condition of Parent and its Domestic Subsidiaries,

B.    the representations and warranties of Borrowers contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of such certificate, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, and except for changes in the ordinary course not otherwise constituting an Event of Default), and

C.    there does not exist any condition or event that constitutes a Default or Event of Default (or, to the extent of any non-compliance, describing such non-compliance as to which he or she may have knowledge and what action Borrowers have taken, are taking, or propose to take with respect thereto), and

(iii)    for each month that is the date on which a financial covenant in Section 7.18 is to be tested, a Compliance Certificate demonstrating, in reasonable detail, compliance at the end of such period with the applicable financial covenants contained in Section 7.18,

(c)    as soon as available, but in any event within 90 days after the end of each of Parent's fiscal years,

(i)    financial statements of Parent and its Subsidiaries for each such fiscal year, audited by independent certified public accountants reasonably acceptable to Lender and certified, without any qualifications, by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, and statement of cash flow and, if prepared, such accountants' letter to management), and

(ii)    a certificate of such accountants addressed to Lender stating that, in the course of performing their audit of the aforedescribed annual financial statements, there did not come to the attention of such accountants the existence of any Default or Event of Default under Section 7.18 with respect to the subject fiscal year,

(d)    as soon as available, but in any event within 30 days after the start of each of Parent's fiscal years, copies of Borrowers' Projections, in form and substance (including as to scope and underlying assumptions) satisfactory to Lender, in its Permitted Discretion, for the forthcoming eighteen (18) months, quarter by quarter, and for the forthcoming fiscal year, month by month, certified by the chief financial officer or chief accounting officer of Parent as being such officer's good faith best estimate of the financial performance of Parent and its Domestic Subsidiaries during the period covered thereby,

(e)    if and when (or within five Business Days after) filed by any Borrower,

(i)    Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports,

(ii)    any other filings made by such Borrower with the SEC,

(iii)    copies of Borrowers' federal income tax returns, and any amendments thereto, filed with the Internal Revenue Service, and

(iv)    any other information that is provided by Parent to its shareholders generally,

(f)    if and when filed by any Borrower or any Domestic Subsidiary of a Borrower and if requested by Lender, satisfactory evidence of payment of applicable excise taxes in each jurisdiction in which (i) any Borrower or any Domestic Subsidiary of a Borrower conducts business or is required to pay any such excise tax, (ii) any Borrower's or any Domestic Subsidiary of a Borrower's failure to pay any such applicable excise tax would result in a Lien on the properties or assets of such Borrower or such Domestic Subsidiary, or (iii) any Borrower's and any Domestic Subsidiary of a Borrower's failure to pay any such applicable excise tax reasonably could be expected to result in a Material Adverse Change,

(g)    as soon as a Borrower has knowledge of any event or condition that constitutes a Default or an Event of Default, notice thereof and a statement of the curative action that Borrowers are taking or propose to take with respect thereto,

(h)    promptly after the commencement thereof, but in any event within 5 Business Days after the service of process with respect thereto on any Borrower or any Domestic Subsidiary of a Borrower, notice of all actions, suits, or proceedings brought by or against any Borrower or any Domestic Subsidiary of a Borrower before any Governmental Authority which, if determined adversely to such Borrower or such Domestic Subsidiary, reasonably could be expected to result in a Material Adverse Change, and

(i)    promptly upon the request of Lender, any other report reasonably requested relating to the financial condition of Borrowers or their Domestic Subsidiaries.

In addition to the financial statements referred to above, Borrowers agree to deliver financial statements for the subject dates and periods prepared on both a consolidated and consolidating basis and agrees that no Domestic Subsidiary of Parent will have a fiscal year different from that of Parent. Borrowers agree to cooperate with Lender to allow Lender to consult with their independent certified public accountants if Lender reasonably requests the right to do so and that, in such connection, their independent certified public accountants are authorized to communicate with Lender and to release to Lender whatever financial information concerning Borrowers or their Subsidiaries that Lender reasonably may request.

6.4    Guarantor Reports. Cause each Guarantor to deliver its annual unaudited financial statements at the time when Parent provides its audited financial statements to Lender, but only to the extent such Guarantor's financial statements are not consolidated with Parent's financial statements, and copies of all of its federal income tax returns (unless filing consolidated returns with Parent) as soon as the same are available and in any event no later than 30 days after the same are required to be filed by law.

6.5    [Intentionally Omitted.]

6.6    Maintenance of Properties. Maintain and preserve all of their properties which are necessary or useful in the proper conduct of their business in good working order and condition, ordinary wear and tear excepted, and comply at all times with the provisions of all leases to which it is a party as lessee, so as to prevent any loss or forfeiture thereof or thereunder, if the loss or forfeiture would cause a Material Adverse Change.

6.7    Taxes. Cause all assessments and taxes, whether real, personal, or otherwise, due or payable by, or imposed, levied, or assessed against Borrowers, their Subsidiaries, or any of their respective assets to be paid in full, before delinquency or before the expiration of any extension period, except to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest. Borrowers will, and will cause their Subsidiaries to, make timely payment or deposit of all tax payments and withholding taxes required of them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Lender with proof satisfactory to Lender indicating that the applicable Borrower or Subsidiary of a Borrower has made such payments or deposits, except to the extent of any pending Permitted Protests in respect th ereof.

6.8    Insurance

(a)    At Borrowers' expense, maintain insurance respecting their and their Domestic Subsidiaries' assets wherever located, covering loss or damage by fire, theft, explosion, and all other hazards and risks as ordinarily are insured against by other Persons engaged in the same or similar businesses. Borrowers also shall maintain public liability and product liability insurance, as well as insurance against larceny, embezzlement, and criminal misappropriation. All such policies of insurance shall be in such amounts and with such insurance companies as are reasonably satisfactory to Lender. Borrowers shall deliver copies of all such policies to Lender with a satisfactory lender's loss payable endorsement (other than in respect of workers' compensation insurance) naming Lender as loss payee (as its interests appear) or additional insured, as appropriate. Each policy of insurance or endorsement shall contain a clause requiring the insurer to give not less than 30 days prior writte n notice to Lender in the event of cancellation of the policy for any reason whatsoever.

(b)    Administrative Borrower shall give Lender prompt notice of any loss covered by such insurance. Lender shall have the exclusive right to adjust any losses claimed under any such insurance policies in excess of $250,000 (or in any amount after the occurrence and during the continuation of an Event of Default), without any liability to Borrowers whatsoever in respect of such adjustments absent gross negligence or willful misconduct by Lender. Any monies received as payment for any loss under any insurance policy mentioned above (other than liability insurance policies) or as payment of any award or compensation for condemnation or taking by eminent domain, shall be paid over to Lender to be applied at the option of Lender either to the prepayment of the Obligations; provided, that in the case of proceeds of casualty insurance involving a casualty where the proceeds are in an amount less than $250,000 and so long as no Event o f Default shall then be continuing, then such proceeds shall be disbursed to Administrative Borrower under staged payment terms reasonably satisfactory to Lender in the exercise of its Permitted Discretion for application to the cost of repairs, replacements, or restorations. Any such repairs, replacements, or restorations shall be effected with reasonable promptness and shall be of a value at least equal to the value of the items or property destroyed prior to such damage or destruction.

(c)    Borrowers shall not, and shall not suffer or permit their Domestic Subsidiaries to, take out separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 6.8, unless Lender is included thereon as named insured with the loss payable to Lender under a lender's loss payable endorsement or its equivalent. Administrative Borrower immediately shall notify Lender whenever such separate insurance is taken out, specifying the insurer thereunder and full particulars as to the policies evidencing the same, and copies of such policies promptly shall be provided to Lender.

6.9    Location of Inventory and Equipment. Keep Borrowers' and their Domestic Subsidiaries' Inventory and Equipment only at the locations identified on Schedule 5.5 and their chief executive offices only at the locations identified on Schedule 5.7(b); provided, however, that Administrative Borrower may amend Schedule 5.5 and Schedule 5.7(b) so long as such amendment occurs by written notice to Lender not less than 30 days prior to the date on which such Inventory or Equipment is moved to such new location or such chief executive office is relocated, so long as such new location is within the continental United States, and so long as, at the time of such written notification, the applicable Borrower provides to Lender a Collateral Access Agreement with respect thereto.

6.10    Compliance with Laws. Comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, including the Fair Labor Standards Act and the Americans With Disabilities Act, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change.

6.11    Leases. Pay when due all rents and other amounts payable under any leases to which any Borrower or any Domestic Subsidiary of a Borrower is a party or by which any Borrower's or any Domestic Subsidiary of a Borrower's properties and assets are bound, unless such payments are the subject of a Permitted Protest or, in the case of any leases other than the Borrowers' lease of the premises at 10811 S. Westview Circle, Houston, Texas (which premises are the storage site for the US Seismic Library), the loss or forfeiture of such lease would not cause a Material Adverse Change.

6.12    Existence. At all times preserve and keep in full force and effect each Borrower's and each Domestic Subsidiary of a Borrower's valid existence and good standing and any rights and franchises material to their businesses.

6.13    Environmental.

(a)    Keep any property either owned or operated by any Borrower or any Subsidiary of a Borrower free of any Environmental Liens or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens, (b) comply, in all material respects, with Environmental Laws and provide to Lender documentation of such compliance which Lender reasonably requests, (c) notify Lender, promptly upon obtaining knowledge thereof, of any release of a Hazardous Material of any reportable quantity from or onto property owned or operated by any Borrower or any Subsidiary of a Borrower and take any Remedial Actions required to abate said release or otherwise to come into compliance with applicable Environmental Law, and (d) promptly, but in any event within 5 days of its receipt thereof, provide Lender with written notice of any of the following: (i) notice that an Environmental Lien has been filed against any of the real or personal property of any Borrower or any Subsidiary of a Borrower, (ii) commencement of any Environmental Action or notice that an Environmental Action will be filed against any Borrower or any Subsidiary of a Borrower, and (iii) notice of a violation, citation, or other administrative order which reasonably could be expected to result in a Material Adverse Change.

6.14    Disclosure Updates. Promptly and in no event later than 5 Business Days after obtaining knowledge thereof, notify Lender if any written information, exhibit, or report furnished to Lender contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made. The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the affect of amending or modifying this Agreement or any of the Schedules hereto.

6.15    Formation of Subsidiaries. At the time that any Borrower or any Guarantor forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Closing Date, such Borrower or such Guarantor shall (a) cause such new Subsidiary to provide to Lender a joinder to this Agreement or to the Guaranty and the Guarantor Security Agreement, together with such other security documents, as well as appropriate UCC-1 financing statements, all in form and substance satisfactory to Lender in the exercise of its Permitted Discretion (including being sufficient to grant Lender a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary), (b) provide to Lender a pledge agreement and appropriate certificates and powers or UCC-1 financing statements, hypothecating all of the direct or beneficial ownership interest owned by the subject Borrower or Guarantor in such new Subsidia ry, in form and substance satisfactory to Lender in the exercise of its Permitted Discretion, and (c) provide to Lender all other documentation, including one or more opinions of counsel satisfactory to Lender in the exercise of its Permitted Discretion, which in its Permitted Discretion is appropriate with respect to the execution and delivery of the applicable documentation referred to above. Any document, agreement, or instrument executed or issued pursuant to this Section 6.15 shall be a Loan Document.

7.    NEGATIVE COVENANTS.

Each Borrower covenants and agrees that, so long as any credit hereunder shall be available and until payment in full of the Obligations, Borrowers will not and will not permit any of their respective Domestic Subsidiaries to do any of the following:

7.1    Indebtedness. Create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except:

(a)    Indebtedness evidenced by this Agreement and the other Loan Documents, together with Indebtedness owed to Underlying Issuers with respect to Underlying Letters of Credit;

(b)    Indebtedness set forth on Schedule 5.19;

(c)    Permitted Purchase Money Indebtedness;

(d)    refinancings, renewals, or extensions of Indebtedness permitted under clauses (b) and (c) of this Section 7.1 (and continuance or renewal of any Permitted Liens associated therewith) so long as: (i) the terms and conditions of such refinancings, renewals, or extensions do not, in Lender's Permitted Discretion, materially impair the prospects of repayment of the Obligations by Borrowers or materially impair Borrowers' creditworthiness, (ii) such refinancings, renewals, or extensions do not result in an increase in the then extant principal amount of, or interest rate with respect to, the Indebtedness so refinanced, renewed, or extended or add one or more Borrowers as liable with respect thereto if such additional Borrowers were not liable with respect to the original Indebtedness, (iii) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity of the Inde btedness so refinanced, renewed, or extended, nor are they on terms or conditions, that, taken as a whole, are materially more burdensome or restrictive to the applicable Borrower, (iv) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension Indebtedness must be include subordination terms and conditions that, taken as a whole, are at least as favorable to Lender as those that were applicable to the refinanced, renewed, or extended Indebtedness, and (v) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended;

(e)    endorsement of instruments or other payment items for deposit;

(f)    Indebtedness constituting Permitted Investments; and

(g) other Indebtedness in a principal amount not exceeding $250,000 at any time outstanding.

7.2    Liens. Create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens (including Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is refinanced, renewed, or extended under Section 7.1(d) and so long as the replacement Liens only encumber those assets that secured the refinanced, renewed, or extended Indebtedness).

7.3    Restrictions on Fundamental Changes

(a)    Enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its Stock.

(b)    Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution).

(c)    Other than Permitted Dispositions and transactions in the ordinary course of business consistent with past practices and the licensing of the US Seismic Library in the ordinary course of business, convey, sell, lease, license, assign, transfer, or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its assets.

7.4    Disposal of Assets. Other than Permitted Dispositions and transactions in the ordinary course of business consistent with past practices and the licensing of the US Seismic Library in the ordinary course of business, convey, sell, lease, license, assign, transfer, or otherwise dispose of all or any substantial portion of the assets of any Borrower or any Domestic Subsidiary of a Borrower. The use and transfer of money, Cash Equivalents, or any other asset or property by or from any of the Loan Parties to any Domestic Subsidiary or Affiliate of a Loan Party that is not organized under the laws of a jurisdiction located in the continental United States of America expressly is prohibited by the terms of this Agreement.

7.5    Change Name. Change any Borrower's or any Domestic Subsidiary of a Borrower's name, FEIN, organizational identification number, state of organization, or organizational identity; provided, however, that a Borrower or a Domestic Subsidiary of a Borrower may change its name upon at least 30 days prior written notice by Administrative Borrower to Lender of such change and so long as, at the time of such written notification, such Borrower or such Domestic Subsidiary provides any financing statements or amendments necessary to perfect and continue perfected Lender's Liens.

7.6    Nature of Business. Make any change in the principal nature of their business.

7.7    Prepayments and Amendments. Except in connection with a refinancing permitted by Section 7.1(d),

(a)    prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any Borrower or any Domestic Subsidiary of a Borrower, other than the Obligations in accordance with this Agreement, or

(b)    directly or indirectly, amend, modify, alter, increase, or change any of the terms or conditions of any agreement, instrument, document, indenture, or other writing evidencing or concerning Indebtedness permitted under Section 7.1(b) or (c).

7.8    Change of Control. Cause, permit, or suffer, directly or indirectly, any Change of Control.

7.9    Consignments. Consign any of their Inventory or sell any of their Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale.

7.10    Distributions. Other than distributions or declaration and payment of dividends by a Borrower to another Borrower, make any distribution or declare or pay any dividends (in cash or other property, other than common Stock) on, or purchase, acquire, redeem, or retire any of any Borrower's Stock, of any class, whether now or hereafter outstanding.

7.11    Accounting Methods. Modify or change their fiscal year or their method of accounting (other than as may be required to conform to GAAP) or enter into, modify, or terminate any agreement currently existing, or at any time hereafter entered into with any third party accounting firm or service bureau for the preparation or storage of Borrowers' or their Domestic Subsidiaries' accounting records without said accounting firm or service bureau agreeing to provide Lender information regarding Borrowers' and their Domestic Subsidiaries' financial condition.

7.12    Investments. Except for Permitted Investments and existing Investments in direct and indirect Subsidiaries of Parent, directly or indirectly, make or acquire any Investment, or incur any liabilities (including contingent obligations) for or in connection with any Investment; provided, however, that Administrative Borrower and its Domestic Subsidiaries shall not have Permitted Investments (other than in the Cash Management Accounts) in Deposit Accounts or Securities Accounts in an aggregate amount in excess of $50,000 outstanding at any one time unless Administrative Borrower or its Domestic Subsidiary, as applicable, and the applicable securities intermediary or bank have entered into Control Agreements or similar arrangements governing such Permitted Investments in order to perfect (and further establish) the Lender's Liens in such Permitted Investments. Subject to the foregoing proviso, Borrowers shall no t and shall not permit their Domestic Subsidiaries to establish or maintain any Deposit Account or Securities Account unless Lender shall have received a Control Agreement in respect of such Deposit Account or Securities Account.

7.13    Transactions with Affiliates. Directly or indirectly enter into or permit to exist any transaction with any Affiliate of any Borrower except for transactions that are in the ordinary course of Borrowers' business, upon fair and reasonable terms, that are fully disclosed to Lender, and that are no less favorable to Borrowers than would be obtained in an arm's length transaction with a non-Affiliate.

7.14    Suspension. Suspend or go out of a substantial portion of their business, unless such suspension or going out of a substantial portion of their business would not result in a Material Adverse Change.

7.15    Compensation. Increase the annual fee or per-meeting fees paid to the members of its Board of Directors during any year by more than 15% over the prior year; or pay or accrue total cash compensation (exclusive of sales commissions) during any year, to its officers and senior management employees in an aggregate amount in excess of 115% of that paid or accrued in the prior year.

7.16    Use of Proceeds. Use the proceeds of the Advances for any purpose other than (a) on the date of the first Advance hereunder, (i) to repay in full the outstanding principal, accrued interest, and accrued fees and expenses owing to Existing Lender, and (ii) to pay transactional fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and the transactions contemplated hereby and thereby, (b) thereafter, to fund Borrowers' working capital in the ordinary course of business, consistent with the terms and conditions hereof, for its lawful and permitted purposes, and (c) to fund Borrowers' and Guarantors' expenses under the Chapter 11 Cases, consistent with the terms and conditions hereof. Specifically, but without limitation, none of the proceeds of the Advances may be used for the benefit of, or further distributed to, any Subsidiary of the Loan Parties that is an entity organized under the laws of a jurisdiction outside the United States or any Subsidiary that is not a Guarantor (e.g., Vision Energy, Inc.).

7.17    Inventory and Equipment with Bailees. Store the US Seismic Library at any time now or hereafter with a bailee, warehouseman, or similar party without Lender's prior written consent, or store any material amount of the Inventory or Equipment of Borrowers or their Domestic Subsidiaries (other than the US Seismic Library) at any time now or hereafter with a bailee, warehouseman, or similar party, without providing to Lender a Collateral Access Agreement from such bailee, warehouseman, or similar party.

7.18    Financial Covenants. (a) Fail to maintain or achieve:

(i)    Minimum Cash EBITDA. Cash EBITDA, measured on a month-end basis, of at least Fifty Million Dollars ($50,000,000) for the trailing twelve-month period ending as of the end of the month for which Cash EBITDA is then being measured;

Not later than the 30 days after the start of each of Parent's fiscal years, as required by Section 6.3(d), Administrative Borrower will provide Lender with updated Projections, on a month-to-month basis, for the next following fiscal year which shall be acceptable to Lender in its Permitted Discretion, from which the Cash EBITDA covenant will be set for such fiscal year, based on such Projections, pursuant to the good-faith agreement between Lender and Administrative Borrower. In the absence of a good-faith agreement, the existing minimum Cash EBITDA covenant will continue to apply.

(b)    Make:

(i)    Capital Expenditures. Capital expenditures (net of non-monetary exchanges of seismic data) in any fiscal quarter in excess of the amount set forth in the following table for the applicable period:

Fiscal quarter ending September 30, 2003:	Fiscal quarter ending December 31, 2003:
$15,000,000	$16,000,000

Not later than 30 days after the start of each of Parent's fiscal years, as required by Section 6.3(d), Administrative Borrower will provide Lender with updated Projections, on a month-to-month basis, for the next following fiscal year which shall be acceptable to Lender in its Permitted Discretion, from which the Capital Expenditures covenant will be set for such fiscal year, based on such Projections, pursuant to the good-faith agreement between Lender and Administrative Borrower. In the absence of a good-faith agreement, the existing maximum Capital Expenditures covenant for the fiscal quarter ending December 31, 2003 will continue to apply.

7.19    Professional Fees Exception. Except as otherwise set forth in this Section 7.19 (the "Professional Fees Exception") and the Post-Default Carve-Out, and subject in each case to the limitations set forth at Section 7.20 below, the Loan Parties shall not pay any fees or expenses of Professionals (as defined below). Subject to the limitations set forth in Section 7.20 below, prior to the occurrence of an Event of Default, the fees and expenses (the "Authorized Fees") of the Bankruptcy Court retained professionalsin the Chapter 11 Cases, including the fees and expenses of the equity committee itself, the creditors' committee itself, the equity committee counsel, the creditors' committee, and other court-approved professionals of each, (collectively, the "Professionals") are permitted to be paid, in each case to the extent that they satisfy the following conditions:

(a)    payment of such fees and expenses is authorized by Bankruptcy Court order;

(b)    the Authorized Fees were incurred prior to an Event of Default under the Loan Documents or Financing Orders, and no such Event of Default is continuing; and

(c)    the Authorized Fees are not subject to the further limitations set forth in the Financing Orders.

7.20    Use of Professional Fees, Costs and Expenses. Fees, costs and expenses otherwise permitted to be paid pursuant to the Professional Fees Exception set forth at Section 7.19 preceding and the Post-Default Carve-Out shall exclude, and no portion of such fees, costs and expenses (whether the proposed source of funds shall be cash collateral or advances under this Agreement) shall be used to fund, any fees, costs or expenses:

(a)    incurred in connection with the assertion or joinder in any claim, counterclaim, action, proceeding application, motion, objection, defenses or other contested matter, the purpose of which is to seek any order, judgment, determination or similar relief (i) invalidating, setting aside, avoiding, subordinating, in whole or in part, (x) any Obligations purportedly owed to Lender (y) any of Lender's Liens in the assets of the Loan Parties, or (ii) preventing, hindering or delaying whether directly or indirectly, the Lender's assertions or enforcement of its Liens, security interest or realization upon any Collateral,

(b)    in using cash collateral of Lender, selling or otherwise disposing of any other Collateral, or incurring any Indebtedness not permitted under this Agreement, without Lender's written consent, or

(c)    arising after the conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code.

8.    EVENTS OF DEFAULT. Any one or more of the following events shall constitute an event of default (each, an "Event of Default") under this Agreement:

8.1    If Borrowers fail to pay when due and payable or when declared due and payable, all or any portion of the Obligations (whether of principal, interest (including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts), fees and charges due Lender, reimbursement of Lender Expenses, or other amounts constituting Obligations);

8.2    If any Borrower

(a)    fails to perform, keep, or observe any term, provision, covenant, or agreement contained in Sections 2.7, 3.2, 4.2, 4.4, 4.6, 6.8, 6.12, 6.15, and 7.1 through 7.20 of this Agreement;

(b)    fails or neglects to perform, keep, or observe any term, provision, covenant, or agreement contained in Sections 4.5, 6.2, 6.3, 6.6, 6.7, 6.9, 6.10, 6.11, and 6.14 of this Agreement and such failure continues for a period of five (5) Business Days; or

(c)    fails or neglects to perform, keep, or observe any other term, provision, covenant, or agreement contained in this Agreement, or in any of the other Loan Documents (giving effect to any grace periods, cure periods, or required notices, if any, expressly provided for in such Loan Documents); in each case, other than any such term, provision, covenant, or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of 10 Business Days;

provided that, during any period of time that any such failure or neglect referred to in this paragraph exists, even if such failure or neglect is not yet an Event of Default, Lender shall be relieved of its obligation to extend credit hereunder;

8.3    If any material portion of any Borrower's or any Domestic Subsidiary of a Borrower's assets is attached, seized, subjected to a writ or distress warrant, levied upon, or comes into the possession of any third Person and the same is not discharged before the earlier of 30 days after the date it first arises or 5 days prior to the date on which such property or asset is subject to forfeiture by such Borrower or Domestic Subsidiary;

8.4    [Intentionally omitted.];

8.5    [Intentionally omitted.];

8.6    If any Borrower or any Domestic Subsidiary of a Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs;

8.7    (a) If a notice of Lien is filed of record with respect to Borrower's or any of its Domestic Subsidiaries' assets by the United States or any department, agency, or instrumentality thereof (a "Federal Lien"), or by any state, county, municipal, or governmental agency and such state, county, municipal, or governmental agency Lien has priority over the Liens of Lender in and to the Collateral or any portion thereof (a "Non-Federal Priority Lien"); or

(b) If a notice of Lien is filed of record with respect to Borrowers' assets or any of its Domestic Subsidiaries' assets by any state, county, municipal, or governmental agency that is not a Non-Federal Priority Lien (a "Non-Federal Non-Priority Lien"); provided, however, that, if the aggregate amount claimed with respect to any such Non-Federal Non-Priority Liens, or combination thereof, is less than $100,000, an Event of Default shall not occur under this subsection if the claims that are the subject of such Liens are the subject of Permitted Protests and if the Liens are released, discharged, or bonded against within 30 days of each such Lien first being filed of record or, if earlier, at least 5 days prior to the date on which assets that are subject to such Liens are subject to being sold or forfeited and, in any such case, Lender shall have the absolute right to establish and maintain a reserve against the Borrowing Base and the Maximum Revo lver Amount in an amount equal to the aggregate amount of the underlying claims (determined by Lender, in its Permitted Discretion, and irrespective of any Permitted Protests with respect thereto and including any penalties or interest that are estimated by Lender, in its Permitted Discretion, to arise in connection therewith);

8.8    If one or more judgments or other claims involving an aggregate amount of $250,000 or more, in excess of the amount covered by insurance, becomes a Lien or encumbrance upon any material portion of any Borrower's or any Domestic Subsidiary of a Borrower's assets and the same is not released, discharged, bonded against, or stayed pending appeal before the earlier of 30 days after the date it first arises or 5 days prior to the date on which such asset is subject to being forfeited by such Borrower or Domestic Subsidiary;

8.9    (a)    If there is a default in one or more agreements to which Borrower is a party with one or more third Persons relative to Borrower's Indebtedness involving an aggregate amount of $250,000, or more, and such default (i) occurs at the final maturity of obligations thereunder, or (ii) results in a right by such third Person(s), irrespective of whether exercised, to accelerate the maturity of Borrower's obligations thereunder, or (b) if there is a default in any other material agreement to which Borrower is a party with one or more third Persons and such default results in a right by such third Person(s), irrespective of whether exercised, to terminate such agreement;

8.10    If any Borrower or any Domestic Subsidiary of a Borrower makes any payment on account of Indebtedness that has been contractually subordinated in right of payment to the payment of the Obligations, except to the extent such payment is permitted by the terms of the subordination provisions applicable to such Indebtedness;

8.11    If any material misstatement or misrepresentation exists now or hereafter in any warranty, representation, statement, or Record made to Lender by any Borrower, any Subsidiary of a Borrower, or any officer, employee, agent, or director of any Borrower or any Subsidiary of a Borrower;

8.12    If the obligation of any Guarantor under the Guaranty is limited or terminated by operation of law or by such Guarantor thereunder;

8.13    Subject to the provisions of Section 4.9, if this Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien on or security interest in the Collateral covered hereby or thereby;

8.14    Any provision of any Loan Document shall at any time for any reason be declared to be null and void by a court of competent jurisdiction, or the validity or enforceability thereof shall be contested by any Borrower or any Domestic Subsidiary of a Borrower, or a proceeding shall be commenced by any Borrower or any Domestic Subsidiary of a Borrower, or by any Governmental Authority having jurisdiction over any Borrower or any Domestic Subsidiary of a Borrower, seeking to establish the invalidity or unenforceability thereof, or any Borrower or any Domestic Subsidiary of a Borrower shall deny that it has any liability or obligation purported to be created under any Loan Document.

8.15    If any Borrower or any Guarantor violates or breaches any of the terms of the Financing Orders or there shall occur any "Event of Default" (as such term is defined in the Interim Financing Order);

8.16    If any of the Chapter 11 Cases is converted to a case under Chapter 7 of the Bankruptcy Code;

8.17    If the Bankruptcy Court appoints a Chapter 11 Trustee or examiner with expanded powers beyond an investigative role in any of the Chapter 11 Cases;

8.18    If there shall occur the reversal, vacation, stay, amendment, supplementation, or other modification of either of the Financing Orders in a manner that would, in the sole opinion of Lender, materially and adversely affect the rights of Lender under either of the Financing Orders or materially and adversely affect the priority of any or all of Lender's security interests, liens, or claims, or other protections granted to Lender under either of the Financing Orders;

8.19    If there shall be the entry of any order which provides relief from the automatic stay otherwise imposed pursuant to Section 362 of the Bankruptcy Code, which order permits any creditor, other than Lender, to realize upon, or to exercise any right or remedy with respect to, any asset of Borrower or any Guarantor or to terminate any license, franchise or similar agreement, where such termination could result in a Material Adverse Change with respect to the Loan Parties taken as a whole;

8.20    If any superpriority administrative expense claim which is senior to or pari passu with the Lender's claims shall be granted;

8.21    If a plan of reorganization shall be confirmed in any of the Chapter 11 Cases, which does not provide for termination of this Agreement and indefeasible payment in full in cash of the Loan Parties' obligations hereunder on the Effective Date of such plan of reorganization;

8.22    If an order shall be entered which dismisses any of the Loan Parties' Chapter 11 Cases and which order does not provide for termination of this Agreement and indefeasible payment in full in cash of the Loan Parties' obligations hereunder on the effective date of such dismissal;

8.23    If any of the Loan Parties shall take any action, including the filing of an application, in support of any of the events or circumstances described in Sections 8.21 and 8.22 or any person other than the Loan Parties shall do so, and such application is not contested in good faith by the Loan Parties, and the relief requested is granted in an order that is not stayed pending appeal; or

8.24    If the Bankruptcy Court shall enter an order granting relief from the automatic stay to the holder of any security interest in any asset of the Loan Parties having a book value in an amount equal to or exceeding $250,000; or if the Bankruptcy Court shall enter an order granting relief from the automatic stay to the holder of any security interest in any an asset of the Loan Parties having a book value in an amount less than $250,000, and the entry of such order or the exercise of the remedies permitted to the holder of the security interest covered thereby would result in a Material Adverse Change.

9.    THE LENDER'S RIGHTS AND REMEDIES.

9.2    Rights and Remedies. Upon the occurrence, and during the continuation, of an Event of Default, Lender (at its election but without notice of its election and without demand) may do any one or more of the following, all of which are authorized by Borrowers:

(a)    Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable;

(b)    Cease advancing money or extending credit to or for the benefit of Borrowers under this Agreement, under any of the Loan Documents, or under any other agreement between Borrowers and Lender;

(c)    Terminate this Agreement and any of the other Loan Documents as to any future liability or obligation of Lender, but without affecting any of the Lender's Liens in the Collateral and without affecting the Obligations;

(d)    Settle or adjust disputes and claims directly with Borrowers' Account Debtors for amounts and upon terms which Lender considers advisable in the exercise of its Permitted Discretion, and in such cases, Lender will credit the Loan Account with only the net amounts received by Lender in payment of such disputed Accounts after deducting all Lender Expenses incurred or expended in connection therewith;

(e)    Cause Borrowers to hold all of their returned Inventory in trust for Lender, and segregate all such Inventory from all other assets of Borrowers or in Borrowers' possession;

(f)    Without notice to or demand upon any Borrower, make such payments and do such acts as Lender considers necessary or reasonable in its Permitted Discretion to protect its security interests in the Collateral. Each Borrower agrees to assemble the Collateral if Lender so requires, and to make the Collateral available to Lender at a place that Lender may designate which is reasonably convenient to both parties. Each Borrower authorizes Lender to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any Lien that in Lender's Permitted Discretion appears to conflict with the Lender's Liens in and to the Collateral and to pay all reasonable expenses incurred in connection therewith and to charge Borrowers' Loan Account therefor. With respect to any of Borrowers' owned or leased premises, each Borrower hereby grants Lender a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Lender's rights or remedies provided herein, at law, in equity, or otherwise;

(g)    Without notice to any Borrower (such notice being expressly waived), and without constituting an acceptance of any collateral in full or partial satisfaction of an obligation (within the meaning of the Code), set off and apply to the Obligations any and all (i) balances and deposits of any Borrower held by Lender (including any amounts received in the Cash Management Accounts), or (ii) Indebtedness at any time owing to or for the credit or the account of any Borrower held by Lender;

(h)    Hold, as cash collateral, any and all balances and deposits of any Borrower held by Lender, and any amounts received in the Cash Management Accounts, to secure the full and final repayment of all of the Obligations;

(i)    Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Borrower Collateral. Each Borrower hereby grants to Lender a license or other right to use, without charge, such Borrower's labels, patents, copyrights, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Borrower Collateral, in completing production of, advertising for sale, and selling any Borrower Collateral and such Borrower's rights under all licenses and all franchise agreements shall inure to Lender's benefit;

(j)    Sell the Borrower Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrowers' premises) as Lender, in the exercise of its Permitted Discretion, determines is commercially reasonable. It is not necessary that the Borrower Collateral be present at any such sale;

(k)    Lender shall give notice of the disposition of the Borrower Collateral as follows:

(i)    Lender shall give Administrative Borrower (for the benefit of the applicable Borrower) a notice in writing of the time and place of public sale, or, if the sale is a private sale or some other disposition other than a public sale is to be made of the Borrower Collateral, the time on or after which the private sale or other disposition is to be made; and

(ii)    The notice shall be personally delivered or mailed, postage prepaid, to Administrative Borrower as provided in Section 12, at least 10 days before the earliest time of disposition set forth in the notice; no notice needs to be given prior to the disposition of any portion of the Borrower Collateral that is perishable or threatens to decline speedily in value or that is of a type customarily sold on a recognized market;

(l)    Lender may credit bid and purchase at any public sale;

(m)    Lender may seek the appointment of a receiver or keeper to take possession of all or any portion of the Borrower Collateral or to operate same and, to the maximum extent permitted by law, may seek the appointment of such a receiver without the requirement of prior notice or a hearing; and

(n)    Lender shall have all other rights and remedies available to it at law or in equity pursuant to any other Loan Documents.

9.2    Remedies Cumulative. The rights and remedies of Lender under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. Lender shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Event of Default shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence by it.

10.    TAXES AND EXPENSES.

If any Borrower fails to pay any monies (whether taxes, assessments, insurance premiums, or, in the case of leased properties or assets, rents or other amounts payable under such leases) due to third Persons, or fails to make any deposits or furnish any required proof of payment or deposit, all if, as, and to the extent required under the terms of this Agreement, then, Lender, in its sole discretion and without prior notice to any Borrower, may do any or all of the following: (a) make payment of the same or any part thereof, (b) set up such reserves in Borrowers' Loan Account as Lender deems necessary to protect Lender from the exposure created by such failure, or (c) in the case of the failure to comply with Section 6.8 hereof, obtain and maintain insurance policies of the type described in Section 6.8 and take any action with respect to such policies as Lender deems prudent in the exercise of its Permitted Discretion. Any such amounts paid by L ender shall constitute Lender Expenses and any such payments shall not constitute an agreement by Lender to make similar payments in the future or a waiver by Lender of any Event of Default under this Agreement. Lender need not inquire as to, or contest the validity of, any such expense, tax, or Lien and the receipt of the usual official notice for the payment thereof shall be conclusive evidence that the same was validly due and owing.

11.    WAIVERS; INDEMNIFICATION.

11.1    Demand; Protest.. Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by Lender on which any such Borrower may in any way be liable.

11.2    Lender's Liability for Collateral. Each Borrower hereby agrees that: (a) so long as Lender complies with its obligations, if any, under the Code, Lender shall not in any way or manner be liable or responsible for: (i) the safekeeping of the Borrower Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person (provided that, if such Person has been chosen by Lender, such choice was made in Lender's Permitted Discretion), and (b) all risk of loss, damage, or destruction of the Borrower Collateral shall be borne by Borrowers.

11.3    Indemnification. Each Borrower shall indemnify, defend, and hold the Lender-Related Persons and each Participant (each, an "Indemnified Person") harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, and damages, and all reasonable attorneys fees and disbursements and other costs and expenses actually incurred in connection therewith (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution, delivery, enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Borrowers' and their Do mestic Subsidiaries' compliance with the terms of the Loan Documents, and (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto (all the foregoing, collectively, the "Indemnified Liabilities"). The foregoing to the contrary notwithstanding, Borrowers shall have no obligation to any Indemnified Person under this Section 11.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person. This provision shall survive the termination of this Agreement and the repayment of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borr owers were required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

12.    NOTICES.. Unless otherwise provided in this Agreement, all notices or demands by Borrowers or Lender to the other relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as Administrative Borrower or Lender, as applicable, may designate to each other in accordance herewith), or telefacsimile to Borrowers in care of Administrative Borrower or to Lender, as the case may be, at its address set forth below:

If to Administrative Borrower:	SEITEL, INC. 10811 S. Westview Circle Building C, Suite 100 Houston, Texas 77043 Attn.: Larry E. Lenig, Jr. Fax No. 713-881-8901
with copies to:	Greenberg Traurig, LLP 200 Park Avenue, 14th Floor New York, New York 10166 Attn: Allen G. Kadish, Esq. Fax No. 212-801-6400
If to Lender: ;	WELLS FARGO FOOTHILL, INC. 2450 Colorado Avenue Suite 3000W Santa Monica, California 90404 Attn: Specialty Finance Manager Fax No. 310-453-7442
with copies to: & #9;	HUGHES & LUCE, LLP 1717 Main Street, Suite 2800 Dallas, Texas 75201 Attn: David Weitman, Esq. Fax No. 214/939-5849

Lender and Borrowers may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party. All notices or demands sent in accordance with this Section 12, other than notices by Lender in connection with enforcement rights against the Borrower Collateral under the provisions of the Code, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail. Each Borrower acknowledges and agrees that notices sent by Lender in connection with the exercise of enforcement rights against Borrower Collateral under the provisions of the Code shall be deemed sent when deposited in the mail or personally delivered, or, where permitted by law, transmitted by telefacsimile or any other method set forth above.

13.    CHOICE OF LAW; JURY TRIAL WAIVER.

(a)    THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

(b)    BORROWERS AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

14.    ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

14.1    Assignments and Participations

(a)    Lender may assign and delegate to one or more assignees (each an "Assignee") that are Eligible Transferees all, or any ratable part of all, of the Obligations and the other rights and obligations of Lender hereunder and under the other Loan Documents; provided, however, that Borrowers may continue to deal solely and directly with Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Administrative Borrower by Lender and the Assignee and (ii) Lender and its Assignee have delivered to Borrower an appropriate assignment and acceptance agreement. Anything contained herein to the contrary notwithstanding, the Assignee need not be an Eligible Transferee if such assignment is in connection with any merger, consolidation, sale, transfer, or other dispositio n of all or any substantial portion of the business or loan portfolio of Lender.

(b)    From and after the date that Lender provides Administrative Borrower with such written notice and executed assignment and acceptance agreement, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such assignment and acceptance agreement, shall have the rights and obligations of Lender under the Loan Documents, and (ii) Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such assignment and acceptance agreement, relinquish its rights (except with respect to Section 11.3 hereof) and be released from any future obligations under this Agreement (and in the case of an assignment and acceptance covering all or the remaining portion of Lender's rights and obligations under this Agreement and the other Loan Documents, Lender shall cease to be a party hereto an d thereto), and such assignment shall effect a novation between Borrowers and the Assignee; provided, however, that nothing contained herein shall release Lender from obligations that survive the termination of this Agreement, including Lender's obligations under Section 16.9 of this Agreement.

(c)    Immediately upon Borrower's receipt of such fully executed assignment and acceptance agreement, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the rights and duties of Lender arising therefrom.

(d)    Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons not Affiliates of Lender (a "Participant") participating interests in Obligations and the other rights and interests of Lender hereunder and under the other Loan Documents; provided, however, that (i) Lender shall remain the "Lender" for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations and the other rights and interests of Lender hereunder shall not constitute a "Lender" hereunder or under the other Loan Documents and Lender's obligations under this Agreement shall remain unchanged, (ii) Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers and Lender shall continue to deal solely and directly with each other in connection with Lender's rights and obligations under this Agreement and the other Loan Documents, (iv) Lender shall not transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through Lender, or (E) change the amount or due dates of scheduled principal repayments o r prepayments or premiums, and (v) all amounts payable by Borrowers hereunder shall be determined as if Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. The rights of any Participant shall only be derivative through Lender and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to Borrowers or Guarantors, the Collections of Borrowers or their Domestic Subsidiaries, the Collateral, or otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by L ender.

(e)    In connection with any such assignment or participation or proposed assignment or participation, Lender may, subject to the provisions of Section 16.9, disclose all documents and information which it now or hereafter may have relating to Borrowers and their Subsidiaries and their respective businesses.

(f)    Any other provision in this Agreement notwithstanding, Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR 𨴣.24, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

14.2    Successors. This Agreement shall bind and inure to the benefit of the respective successors and Assignees of each of the parties; provided, however, that Borrowers may not assign this Agreement or any rights or duties hereunder without Lender's prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent to assignment by Lender shall release any Borrower from its Obligations. Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 14.1 hereof and, except as expressly required pursuant to Section 14.1 hereof, no consent or approval by any Borrower is required in connection with any such assignment.

15.    AMENDMENTS; WAIVERS.

15.1    Amendments and Waivers. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by Borrowers therefrom, shall be effective unless the same shall be in writing and signed by Lender and Administrative Borrower (on behalf of all Borrowers) and then any such waiver or consent shall be effective only in the specific instance and, if a specific purpose is set forth in such waiver or consent, for the specific purpose for which it was given.

15.2    No Waivers; Cumulative Remedies. No failure by any party to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay in exercising the same, will operate as a waiver thereof. No waiver by any party will be effective unless it is in writing, and then only to the extent specifically stated. No waiver on any occasion shall affect or diminish any party's rights thereafter to require strict performance on any subsequent occasion of any provision of this Agreement. The parties' rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that the parties may have.

16.    GENERAL PROVISIONS.

16.1    Effectiveness. This Agreement shall be binding and deemed effective when executed by Borrowers and Lender.

16.2    Section Headings. Section headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

16.3    Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against Lender or Borrowers, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

16.4    Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

16.5    Withholding Taxes. All payments made by Borrowers hereunder or under any note will be made without setoff, counterclaim, or other defense, except as required by applicable law other than for Taxes (as defined below). All such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction (other than the United States) or by any political subdivision or taxing authority thereof or therein (other than of the United States) with respect to such payments (but excluding, any tax imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein (i) measured by or based on the net income or net profits of Lender, or (ii) to the extent that such tax results from a change in the circumstances of Lender, including a change in the residence, pla ce of organization, or principal place of business of Lender, or a change in the branch or lending office of Lender participating in the transactions set forth herein) and all interest, penalties or similar liabilities with respect thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as "Taxes"). If any Taxes are so levied or imposed, each Borrower agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any note, including any amount paid pursuant to this Section 16.5 after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein; provided, however, that Borrowers shall not be required to increase any such amounts payable to Lender if the increase in such amount payable results from Lender's own willful misconduct or gross negligence. Borrowers will furnish to Lender a s promptly as possible after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts evidencing such payment by Borrowers.

16.6    [Intentionally Deleted.]

16.7    Counterparts; Telefacsimile Execution. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.

16.8    Revival and Reinstatement of Obligations. If the incurrence or payment of the Obligations by any Borrower or Guarantor or the transfer to Lender of any property in respect of the Obligations shall for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors' rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a "Voidable Transfer"), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of Lender related thereto, the liability of Borrowers [or Gua rantor] automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

16.9    Confidentiality. Lender agrees that material, non-public information regarding Borrowers and their Subsidiaries and other Affiliates, their operations, assets, and existing and contemplated business plans shall be treated by Lender in a confidential manner, and shall not be disclosed by Lender to Persons who are not parties to this Agreement, except: (a) to attorneys for and other advisors, accountants, auditors, and consultants to Lender, (b) to Subsidiaries and Affiliates of Lender (including the Bank Product Providers), provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 16.9, (c) as may be required by statute, decision, or judicial or administrative order, rule, or regulation, (d) as may be agreed to in advance by Administrative Borrower or as requested or required by any Governmental Authority pursuant to any subpoena or other legal process , (e) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Lender or any of its Subsidiaries or Affiliates), (f) in connection with any assignment, prospective assignment, sale, prospective sale, participation or prospective participations, or pledge or prospective pledge of Lender's interest under this Agreement, provided that any such assignee, prospective assignee, purchaser, prospective purchaser, participant, prospective participant, pledgee, or prospective pledgee shall have agreed in writing to receive such information hereunder subject to the terms of this Section 16.9, and (g) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents. The provisions of this Section 16.9 shall survive for 2 years after the payment in full of the O bligations. Anything contained herein or in any other Loan Document to the contrary notwithstanding, the obligations of confidentiality contained herein and therein, as they relate to the transactions contemplated hereby, shall not apply to the federal tax structure or federal tax treatment of such transactions, and each party hereto (and any employee, representative, or agent of any party hereto) may disclose to any and all Persons, without limitation of any kind, the federal tax structure and federal tax treatment of such transactions (including all written materials related to such tax structure and tax treatment). The preceding sentence is intended to cause the transactions contemplated hereby to not be treated as having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations promulgated under Section 6011 of the IRC, and shall be construed in a manner consistent with such purpose. In addition, each party hereto a cknowledges that it has no proprietary or exclusive rights to the tax structure of the transactions contemplated hereby or any tax matter or tax idea related thereto.

16.10    Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.

16.11    Parent as Agent for Borrowers.  Each Borrower hereby irrevocably appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers (the "Administrative Borrower") which appointment shall remain in full force and effect unless and until Lender shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower. Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide Lender with all notices with respect to Advances and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and (ii) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Advances and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of thi s Agreement. It is understood that the handling of the Loan Account and Collateral of Borrowers in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that Lender shall not incur liability to any Borrower as a result hereof. Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group. To induce Lender to do so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify Lender harmless against any and all liability, expense, loss or claim of damage or injury, made against Lender by any Borrower or by any third party whosoever, arising from or incurred by reason of (a) the handling of the Loan Account and Collateral of Borrowers as herein provided, (b) Lender's relying on any instructions of the Administrative Borrower, or (c) any other action taken by Lender hereunder or under the other Loan Documents, except that Borrowers will have no liability to any Lender-Related Person under this Section 16.11 with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Lender-Related Person.

[Signature pages to follow.]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

SEITEL, INC.,

a Delaware corporation

By: /s/  Larry E. Lenig, Jr.                                                 

Larry E. Lenig, Jr.,

President and Chief Executive Officer

SEITEL DATA, LTD.,

a Texas limited partnership

By: Seitel Delaware, Inc.,

a Delaware corporation, its general partner

By: /s/  Larry E. Lenig, Jr.                                                 

Larry E. Lenig, Jr., Executive Vice President

SEITEL MANAGEMENT, INC.,

a Delaware corporation

By: /s/  Larry E. Lenig, Jr.                                                 

Larry E. Lenig, Jr., Executive Vice President

MATRIX GEOPHYSICAL, INC.,

a Delaware corporation

By: /s/  Larry E. Lenig, Jr.                                                 

Larry E. Lenig, Jr., Executive Vice President

SEITEL SOLUTIONS, LTD.,

a Texas limited partnership

By: Seitel Solutions, Inc.,

a Delaware corporation, its general partner

By: /s/  Larry E. Lenig, Jr.                                               

Larry E. Lenig, Jr., Executive Vice President

WELLS FARGO FOOTHILL, INC.,

a California corporation

By: /s/  Stephen Schwartz                                               

Stephen Schwartz,

Senior Vice President / Loan Portfolio Manager

EX-99.3

Exhibit 99.2

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

In re:	)	Chapter 11
	)
Seitel, Inc., et al., 1	)	Case No. 03-12227 (PJW)
	)
Debtors.	)	(Jointly Administered)

DEBTORS' JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

GREENBERG TRAURIG, LLP

100 West Street, Suite 1540

Wilmington, Delaware 19801

(302) 661-7000

Attention: Scott D. Cousins (No. 3079)

- and -

200 Park Avenue

New York, New York 10166

(212) 801-9200

Attention: Hal M. Hirsch

                  Allen G. Kadish

Counsel to Seitel, Inc., et al., Debtors and Debtors-in-Possession

Dated: July 21, 2003

¹    The Debtors are the following entities: Seitel, Inc.; Seitel Management, Inc.; N360X, L.L.C.; Seitel Delaware, Inc.; Seitel Data Corp.; Seitel Data, Ltd.; Seitel Offshore Corp.; Datatel, Inc.; Seitel Solutions, Inc.; Seitel Solutions, L.L.C.; Seitel Solutions, Ltd.; SI Holdings, G.P.; Seitel Solutions Holdings, L.L.C.; Seitel Canada Holdings, Inc.; SEIC, Inc.; SEIC, L.L.C.; DDD Energy, Inc.; Energy Venture Holdings, L.L.C.; Endeavor Exploration, L.L.C.; Seitel Geophysical, Inc.; Seitel Gas & Energy Corp.; Seitel Power Corp.; Geo-Bank, Inc.; Alternative Communication Enterprises, Inc.; EHI Holdings, Inc.; Exsol Inc.; Seitel IP Holdings, LLC; Seitel Natural Gas, Inc.; Seitel Canada L.L.C.; Matrix Geophysical, Inc.; and Express Energy I, LLC.

TABLE OF CONTENTS
		PAGE
ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION,		1
COMPUTATION OF TIME AND GOVERNING LAW		1
Section 1.1	Definitions.	1
Section 1.2	Rules of Interpretation and Governing Law.	11
ARTICLE II ADMINISTRATIVE AND PRIORITY TAX CLAIMS		12
Section 2.1	Administrative Claims.	12
Section 2.2	Priority Tax Claims.	12
Section 2.3	Professional Fees.	13
Section 2.4	Debtor-in-Possession Financing Claims.	13
ARTICLE III CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS		13
Section 3.1	Summary.	13
Section 3.2	Classification and Treatment of Claims Against the Debtors.	14
ARTICLE IV ACCEPTANCE OR REJECTION OF THE PLAN		18
Section 4.1	Classes Entitled to Vote.	18
Section 4.2	Non-Consensual Confirmation.	19
Section 4.3	Noteholders' Reservation of Rights.	19
ARTICLE V MEANS FOR IMPLEMENTATION OF THIS PLAN		19
Section 5.1	Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors.	19
Section 5.2	Cancellation of Notes, Instruments and Common Stock.	19
Section 5.3	Issuance of New Securities; Execution of Related Documents.	20
Section 5.4	Corporate Restructure.	20
Section 5.5	Corporate Governance, Directors and Officers, and Corporate Action.	20
Section 5.6	Sources of Cash for Plan Distribution.	21
Section 5.7	Revesting of Assets.	21
ARTICLE VI TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES		22
Section 6.1	Assumption or Rejection of Executory Contracts and Unexpired Leases.	22
Section 6.2	Claims Based on Rejection of Executory Contracts or Unexpired Leases.	22
Section 6.3	Cure of Defaults for Executory Contracts and Unexpired Leases Assumed.	23
Section 6.4	Limited Indemnification of Directors, Officers and Employees.	23
ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS		24
Section 7.1	Distributions for Claims or Equity Interests Allowed as of the Effective Date.	24
Section 7.2	Distributions by the Reorganized Debtors.	24
Section 7.3	Delivery and Distributions and Undeliverable or Unclaimed Distributions.	24
Section 7.4	Distribution Record Date.	25
Section 7.5	Timing and Calculation of Amounts to be Distributed.	25
Section 7.6	Setoffs.	25
Section 7.7	Surrender of Cancelled Instruments or Securities.	26
ARTICLE VIII PROCEDURES FOR RESOLVING DISPUTED CLAIMS AND INTERESTS		26
Section 8.1	Prosecution of Objections to Claims and Interests.	26
Section 8.2	Estimation of Claims.	26
Section 8.3	Payments and Distributions on Disputed Claims or Disputed Interests.	27
Section 8.4	Reserves.	27
Section 8.5	Distributions After Allowance.	28
ARTICLE IX CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS PLAN		28
Section 9.1	Conditions Precedent to Effectiveness.	28
Section 9.2	Waiver of Conditions.	28
Section 9.3	Effect of Failure of Conditions.	28
ARTICLE X EFFECT OF PLAN CONFIRMATION		29
Section 10.1	Binding Effect.	29
Section 10.2	Classification and Enforceability of Claims and Equity Interests.	29
Section 10.3	Discharge.	29
Section 10.4	Releases.	30
Section 10.5	Preservation of Rights of Action.	31
Section 10.6	Exculpation.	32
Section 10.7	Injunction.	32
ARTICLE XI RETENTION OF JURISDICTION		32
Section 11.1	Retention of Jurisdiction.	32
ARTICLE XII MISCELLANEOUS PROVISIONS		34
Section 12.1	Payment of Statutory Fees.	34
Section 12.2	Dissolution of the Committee.	34
Section 12.3	Amendment or Modification of Plan.	34
Section 12.4	Revocation of Plan.	34
Section 12.5	Successors and Assigns.	35
Section 12.6	Reservation of Rights.	35
Section 12.7	Exemption from Certain Transfer Taxes.	35
Section 12.8	Further Assurances.	35
Section 12.9	Implementation.	36
Section 12.10	Service of Documents.	36
Section 12.11	Plan Supplement.	36
Section 12.12	Compromise of Controversies.	36
Section 12.13	Final Order.	37
Section 12.14	Business Days.	37
Section 12.15	Severability.	37
Section 12.16	Time.	37
Section 12.17	No Interest.	37
Section 12.18	No Attorneys' Fees.	37
Section 12.19	Defenses with Respect to Unimpaired Claims.	38
Section 12.20	No Injunctive Relief.	38
Section 12.21	Continued Confidentiality Obligations.	38
Section 12.22	No Admissions.	38
Section 12.23	Waiver.	38
Section 12.24	Waiver of Automatic Stay to Enforce Judgment.	38

    Seitel, Inc., and its direct and indirect Debtor subsidiaries propose the following Joint Plan of Reorganization under chapter 11 of the Bankruptcy Code. The Debtors are the proponents of this Plan within the meaning of section 1129 of the Bankruptcy Code.

    Other direct and indirect subsidiaries of Seitel Inc., and of the other Debtors herein that are incorporated outside of the United States of America have not commenced cases under chapter 11 of the Bankruptcy Code; these non-debtor subsidiaries continue to operate their businesses outside of bankruptcy.

ARTICLE I

DEFINED TERMS, RULES OF INTERPRETATION,

COMPUTATION OF TIME AND GOVERNING LAW

Section 1.1          Definitions.

    Unless the context otherwise requires, the following terms shall have the following meanings when used in capitalized form in this Plan

    "Administrative Claim" means a Claim for costs and expenses of administration under sections 503(b), 507(a)(1) or 1114(e)(2) of the Bankruptcy Code, including: (a) the actual and necessary costs and expenses incurred after the Petition Date of preserving the Estates, and operating the businesses of the Debtors (such as wages, salaries or commissions for services and payments for goods and other services and leased premises); (b) compensation for legal, financial advisory, accounting and other services and reimbursement of expenses awarded or allowed under sections 330(a), 331 or 503(b) of the Bankruptcy Code; and (c) all fees and charges assessed against the Estates pursuant to 28 U.S.C. §§ 1911-1930.

    "Allowed" means, any Claim or Equity Interest or portion thereof against any Debtor, (a) proof of which was filed within the applicable period of limitation fixed by the Bankruptcy Court in accordance with Bankruptcy Rule 3003(c) as to which (i) no objection to the allowance thereof, or action to equitably subordinate or otherwise limit recovery with respect thereto has been interposed within the applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules or a Final Order or (ii) any objection has been settled, waived, withdrawn or denied by a Final Order, or (iii) if an objection has been interposed, to the extent such Claim or Equity Interest has been allowed by a Final Order, (b) which, if no proof of claim was so filed, has been listed by a Debtor in its Schedules as liquidated in an amount and not disputed or contingent as to which (i) no objection to t he allowance thereof, or action to equitably subordinate or otherwise limit recovery with respect thereto, has been interposed within the applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules or a Final Order, (ii) any objection has been settled, waived, withdrawn or denied by a Final Order, or (iii) if an objection has been interposed, to the extent such Claim or Equity Interest has been allowed by a Final Order, (c) which Claim arises from the recovery of property under sections 550 or 553 of the Bankruptcy Code and is allowed in accordance with section 502(h) of the Bankruptcy Code, (d) which Claim or Equity Interest is expressly allowed under this Plan or (e) which Claim or Equity Interest is allowed by a Final Order; provided, however, that the term "Allowed" shall not include, unless otherwise specified in this Plan, interest on any Claim or Equity Interest from the Petition Date.

    "Allowed Class. . . Claim" means, when used in reference to a Claim within a particular Class, an Allowed Claim of the type described in such Class.

    "Allowed Equity Interest" means any Equity Interest that (a) is registered as of the Distribution Record Date in a stock register maintained by or on behalf of the Debtors and (b) is not Disputed.

    "Amended By-Laws" means, collectively, the By-Laws (or documents of similar import for non-corporate Debtors) of the Reorganized Debtors which shall become effective on the Effective Date and which shall be in form and substance filed with the Plan Supplement and shall be satisfactory to the Plan Funders in their sole and absolute discretion.

    "Amended Certificates of Incorporation" means, collectively, the Certificates of Incorporation (or documents of similar import for non-corporate Debtors) of the Reorganized Debtors which shall become effective on the Effective Date and which shall be in form and substance filed with the Plan Supplement and shall be satisfactory to the Plan Funders in their sole and absolute discretion.

    "Ballots" mean the ballots accompanying the Disclosure Statement upon which Holders of Impaired Claims or Equity Interests may indicate their acceptance or rejection of this Plan in accordance with this Plan and the Voting Instructions.

    "Bankruptcy Causes of Action" means all claims, claims for relief, actions, causes of action, choses in action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, third-party claims, counterclaims, and crossclaims (including, but not limited to, all claims and any avoidance, recovery, subordination or other actions against insiders and/or any other Entities under the Bankruptcy Code, including sections 502(d), 510, 522(f), 522(h), 542, 543, 544, 545, 547, 548, 549, 550, 551, 553 and 724(a) of the Bankruptcy Code or otherwise) of the Debtors, as debtors and/or as debtors in possession, whether or not they shall have been asserted on or before the Effective Date and whether or not they are pending on the Effective Date or after the Effective Date against any Entity, based in law, admiralty or equi ty, including, but not limited to, under the Bankruptcy Code, whether direct, indirect, derivative, or otherwise and whether asserted or unasserted as of the Effective Date.

    "Bankruptcy Code" means sections 101, et seq. of title 11 of the United States Code, and applicable portions of titles 18 and 28 of the United States Code, as amended from time to time, to the extent such amendments are by their terms applicable to the Chapter 11 Cases.

    "Bankruptcy Court" means the United States District Court for the District of Delaware or such other District Court having jurisdiction over the Chapter 11 Cases and, to the extent of any reference made pursuant to section 157 of title 28 of the United States Code and/or the General Order of such District Court pursuant to section 151 of title 28 of the United States Code, the United States Bankruptcy Court in such district with authority over the Chapter 11 Cases.

    "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure, as amended from time to time, as applicable to the Chapter 11 Cases, promulgated under 28 U.S.C. § 2075 and the General, Local and Chambers Rules of the Bankruptcy Court.

    "Bar Date" means, with respect to any Claim or Equity Interest, the date with respect to that Claim or Equity Interest fixed by the Bankruptcy Court as the last day for timely filing a proof of Claim or Equity Interest.

    "Beneficially" has the same meaning with respect to any asset or liability as used in the term "beneficial ownership" as defined by the Securities and Exchange Commission with respect to certain securities under section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, whether or not disclaimed or disclaimable under Rule 13d-3.

   "Business Day" means any day, other than a Saturday, Sunday or legal holiday, as defined in Bankruptcy Rule 9006(a).

    "Cash" means legal tender of the United States and equivalents thereof.

    "Cash Infusion" means the Cash that the Plan Funders shall pay to the Debtors on the Effective Date as new capital in an amount equal to all payments to Class 3 (General Unsecured Claims) and Class 4 (Seitel Unsecured Claims), plus $10,150,273.20, in exchange for the aggregate of which the Plan Funders (or such wholly owned direct or indirect subsidiary or subsidiaries of Berkshire Hathaway Inc. as they may designate) will receive 100% of the Equity Interests in each of the Reorganized Debtors, other than the No Asset Debtors, provided that the Plan Funders reserve the right to deduct from this sum an amount equal to the Cash distribution to which the Plan Funders are entitled on account of their Class 3 Claims and Class 4 Claims if they elect to do so on or prior to the Effective Date.

    "Causes of Action" means all claims, Derivative Suits, claims for relief, actions, causes of action, choses in action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, third-party claims, counterclaims, Bankruptcy Causes of Action and crossclaims of the Debtors and/or as debtors in possession, whether or not they shall have been asserted on or before the Effective Date and whether or not they are pending on the Effective Date against any Entity, based in law, admiralty or equity, including, but not limited to, under the Bankruptcy Code, whether direct, indirect, derivative, or otherwise.

    "Chapter 11 Cases" means the cases under chapter 11 of the Bankruptcy Code commenced by the Debtors in the Bankruptcy Court.

    "Claim" means a claim (as defined in section 101(5) of the Bankruptcy Code) against any of the Debtors, including, but not limited to: (a) any right to payment from the Debtors, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (b) any right to an equitable remedy for breach of performance if such performance gives rise to a right of payment from the Debtors, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

    "Claimant" means the Holder of a Claim.

    "Class" means a category of Claims or Equity Interests as set forth in Article III of this Plan.

    "Class Action" means that certain consolidated action entitled In re Seitel, Inc. Securities Litigation, bearing Case No. 02-1566, pending in the United States District Court for the Southern District of Texas, Houston Division.

    "Committee" means any statutory official committee appointed in the Chapter 11 Cases.

    "Confirmation" means the entry, within the meaning of Bankruptcy Rules 5003 and 9021, of the Confirmation Order on the docket of the Bankruptcy Court.

    "Confirmation Date" means the date upon which the Confirmation Order is entered on the docket of the Bankruptcy Court within the meaning of Bankruptcy Rules 5003 and 9021.

    "Confirmation Hearing" means the hearing at which the Bankruptcy Court considers confirmation of this Plan.

    "Confirmation Order" means the order of the Bankruptcy Court confirming this Plan pursuant to section 1129 of the Bankruptcy Code.

    "Consummation" means the occurrence of the Effective Date.

    "Creditor" means any Holder of a Claim.

    "D&O Insurance Policies" means the executive liability and indemnification policies purchased by the Debtors to provide coverage for its directors and officers in the event of litigation involving a director or officer in his or her capacity as such.

    "D&O Releasees" means all officers, directors, employees, attorneys, financial advisors, investment bankers, agents and representatives of the Debtors and their affiliates who served in such capacity on the Confirmation Date, in each case in their capacity as such, but does not include any auditors who have been retained by the Debtors.

    "Data" means the onshore and offshore seismic data or any derivations thereof owned or held by the Debtors.

   "Data Library" means the library of Data of the Debtor's available to be sold or licensed to third parties by the Debtors.

    "Data License Agreement" means a written agreement executed by any Debtor which permits the other party to such agreement to review, possess, license, select or otherwise obtain Data from the Data Library.

    "Debtors" means Seitel, Inc. and its affiliates and subsidiaries that are debtors and debtors-in-possession herein, as follows: Seitel Management, Inc.; N360X, L.L.C.; Seitel Delaware, Inc.; Seitel Data Corp.; Seitel Data, Ltd.; Seitel Offshore Corp.; Datatel, Inc.; Seitel Solutions, Inc.; Seitel Solutions, L.L.C.; Seitel Solutions, Ltd.; SI Holdings, G.P.; Seitel Solutions Holdings, L.L.C.; Seitel Canada Holdings, Inc.; SEIC, Inc.; SEIC, L.L.C.; DDD Energy, Inc.; Energy Venture Holdings, L.L.C.; Endeavor Exploration, L.L.C.; Seitel Geophysical, Inc.; Seitel Gas & Energy Corp.; Seitel Power Corp.; Geo-Bank, Inc.; Alternative Communication Enterprises, Inc.; EHI Holdings, Inc.; Exsol Inc.; Seitel IP Holdings, LLC; Seitel Natural Gas, Inc.; Seitel Canada L.L.C.; Matrix Geophysical, Inc.; and Express Energy I, LLC.

    "Delaware General Corporation Law" means title 8 of the Delaware Code, as now in effect or hereafter amended.

    "Derivative Suits" means the shareholders' derivative suits identified as Basser v. Frame, et al., Case No. 02-CV-1874, United States District Court, Southern District of Texas; Almekinder v. Frame, et al., Case No. 02-CV-2960 in the United States District Court, Southern District of Texas, Houston Division; Berger v. Frame, et al., No. 19534-NC, Court of Chancery, State of Delaware, Castle County; Chemical Valley & North Central West Virginia Carpenters Pension Plan v. Frame, et al., No. 02-CV-3343, United States District Court for the Southern District of Texas; Couture v. Frame, et al. Case No. 20002-37065, in the 80^th Judicial District Court of Harris County, Texas; Talley v. Frame, et al., Case No. 2002-33338 in the 151^st Judicial District Court of Harris County, Texas; and Zambie v. Frame, et al., Case No. 2002-23913 in the 333< SUP>rd Judicial District Court of Harris County, Texas.

    "Disallowed" means a Claim or Equity Interest or any portion thereof that (a) has been disallowed by a Final Order, (b) has been listed on the Schedules as zero or as contingent, disputed or unliquidated and to which the Bar Date has been established but no proof of claim or Equity Interest has been timely filed or deemed timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order or otherwise deemed timely filed under applicable law, or (c) is not listed on the Schedules and as to which the Bar Date has been set and no proof of claim or interest has been timely filed or deemed timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order or otherwise deemed timely filed under applicable law.

    "Disbursing Agent" means the Debtors, the Reorganized Debtors, or any Person(s) selected by the Debtors or Reorganized Debtors making distributions under this Plan, as the case may be.

    "Disclosure Statement" means the Disclosure Statement for this Plan, as amended, supplemented, or modified from time to time, describing this Plan, that is prepared and distributed in accordance with sections 1125 and/or 1145 of the Bankruptcy Code and Bankruptcy Rule 3017 and/or other applicable law.

    "Disputed" means a Claim or Equity Interest or any portion thereof, that is neither an Allowed Claim or Equity Interest nor a Disallowed Claim or Equity Interest, and includes without limitation, a Claim or Equity Interest that (a) has not been listed on the Schedules or has been listed on the Schedules as zero, or is listed on the Schedules as unknown, contingent, unliquidated or disputed and is the subject of a proof of claim or interest in the Bankruptcy Court, (b) is the subject of a proof of claim or interest that differs in nature, amount or priority from the Schedules, or (c) is the subject of an objection or request for estimation with the Bankruptcy Court which has not been withdrawn, settled or overruled by a Final Order.

    "Disputed Claims Reserve" means the reserve established necessary to effect payment of Disputed Claims.

    "Disputed Interest Amount" means, with respect to a Disputed Equity Interest, the number of shares set forth in a timely Filed proof of interest.

    "Disputed Interest Reserve" means the Cash reserve, if any, established and maintained on account of Disputed Equity Interests, if any.

    "Distribution Record Date" means the date to be established by the Bankruptcy Court for distribution to holders of Old Seitel Common Stock.

    "Effective Date" means the first Business Day after the Confirmation Date (or such date thereafter as is mutually acceptable to the Debtors and the Plan Funders) on which (a) no stay of the Confirmation Order is in effect, and (b) all conditions specified in Section 9.1 have been satisfied or waived pursuant to Section 9.2 of this Plan.

    "Equity Interest" means (a) all rights (including unpaid dividends) arising from any equity security (as defined in section 101(16) of the Bankruptcy Code) of the Debtors including Old Seitel Common Stock or any Old Subsidiary Equity Interest, and (b) the legal, equitable, contractual or other rights of any Person or Entity to acquire or receive any of the foregoing, including, but not limited to, all issued, unissued, authorized or outstanding shares of Old Seitel Common Stock, and any options and warrants therefor.

    "Estate" means the estate of each Debtor as created pursuant to section 541 of the Bankruptcy Code on the Petition Date.

    "File" or "Filed" means file or filed with the Clerk of the Bankruptcy Court in the Chapter 11 Cases.

    "Final Decree" means the decree contemplated under Bankruptcy Rule 3022.

    "Final Order" means, as to any court, administrative agency or other tribunal, including the Bankruptcy Court, an order or judgment of such tribunal as entered on its docket as to which the time to appeal, petition for certiorari or move for a new trial, reargument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceeding for a new trial, reargument or rehearing is pending or, if an appeal, petition for certiorari, or other proceeding for a new trial, reargument or rehearing has been timely filed or taken, the order or judgment of the tribunal has been affirmed (or such appeal or petition has been dismissed) by the highest court (or other tribunal having appellate jurisdiction over the order or judgment) to which the order was appealed or the petition for certiorari or motion for a ne w trial, reargument or rehearing has been denied, and the time to take any further appeal or to seek further certiorari or move for a new trial, reargument or rehearing has expired, provided, however, that the possibility of a motion under Rule 59 or Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be filed with respect to such order does not prevent such order from being a Final Order.

    "General Unsecured Claim" means any Claim against a Debtor that is not an Administrative Claim, Priority Tax Claim, Secured Claim, Other Priority Claim, Pearlman Claim, Seitel Unsecured Claim, Intercompany Claim or Securities Claim.

    "Heller" means Heller Financial Leasing, Inc.

    "Heller Secured Claim" means the Allowed Secured Claim held by Heller pursuant to a master security agreement by and between Heller and Seitel Data, Ltd., one of the Debtors, as evidenced that certain promissory note in the original principal amount of $10,000,000.

    "Holder" means a Person or Entity which holds a Claim or Equity Interest and, with respect to Old Seitel Common Stock, means the owner Beneficially as of the Voting Record Date or any authorized signatory who has completed and executed a Ballot or on whose behalf a Master Ballot has been completed and executed in accordance with the Voting Instructions.

    "Impaired Claim" means a Claim classified in an Impaired Class.

    "Impaired Class" means a Class of Claims or Class of Equity Interests which is impaired under this Plan.

    "Indemnification Rights" means all obligations or rights of the Debtors to indemnify, reimburse, advance, or contribute to the losses, liabilities or expenses of an Indemnitee pursuant to any Debtor's certificate of incorporation, by-laws, policy of providing employee indemnification, applicable law, or specific agreement in respect of any claims, demands, suits, causes of action or proceedings against an Indemnitee based upon any act or omission related to an Indemnitee's service with, for, or on behalf of the Debtors.

    "Indemnitee" means all present and former directors, officers, employees, agents or representatives of the Debtors who are entitled to assert Indemnification Rights.

    "Insurance Coverage" means all of the Debtors' insurance policies and agreements and the proceeds thereof.

    "Intercompany Claim" means any Claim between and among the Debtors and between and among the Debtors and any Non-Debtor Affiliate or Non-Debtor Foreign Affiliate.

    "Master Ballots" means the Ballots distributed to Nominees or Holders of record of Old Seitel Common Stock accompanying the Disclosure Statement to record the votes, if any, of the Beneficial Holders of the Old Seitel Common Stock in accordance with the Voting Instructions.

    "New Seitel Common Stock" means the shares of Common Stock of Reorganized Seitel to be issued by Seitel as Reorganized Debtor on the Effective Date to the Plan Funders.

    "New Subsidiary Equity Interests" means the Equity Interests of the Reorganized Debtors other than Seitel and the No Asset Debtors.

    "No Asset Debtors" means, N360X, L.L.C., Seitel Delaware, Inc., Seitel Offshore Corp., Seitel Solutions, L.L.C., SI Holdings, G.P., Energy Venture Holdings, L.L.C., Endeavor Exploration, L.L.C., Seitel Geographical, Inc., Seitel Gas & Energy Corp., Seitel Power Corp., Geo-Bank, Inc., Alternative Communications Enterprise, Inc., EHI Holdings, Inc., Exsol Inc., Seitel IP Holdings, LLC, Seitel Natural Gas, Inc., and Express Energy I, LLC.

    "Nominee" means any partnership, broker, dealer, commercial bank, trust company, clearing organization, savings and loan or other nominee holding a Claim or Equity Interest of record for or on account of any Entity which owns the same Beneficially.

    "Non-Debtor Affiliate" means any affiliate of a Debtor which is not a Debtor in the Chapter 11 Cases.

    "Non-Debtor Foreign Affiliate" means a Non-Debtor Affiliate which is organized under the laws of a country other than the United States of America.

    "Noteholder Claims" means all Claims arising from or related to the Old Note Purchase Agreements, which Claims are Allowed Claims under this Plan.

"Noteholder Releasee" shall mean the Plan Funders and their respective present and former members, officers, directors, shareholders, partners, employees, advisors, professionals, attorneys, and agents acting in such capacity.

    "Noteholders" means the Holders of the Notes.

    "Notes" means all of the notes issued pursuant to the Old Note Purchase Agreements.

    "Old Note Purchase Agreements" means, collectively, the 1995 Note Purchase Agreement, the 1999 Note Purchase Agreement and the 2001 Note Purchase Agreement.

    "Old Seitel Common Stock" means the shares of common stock, $0.01 par value, of Seitel issued and outstanding as of immediately prior to the Effective Date.

    "Old Subsidiary Equity Interests" means the Equity Interests in each of the Debtors other than Seitel that were issued and outstanding as of immediately prior to the Effective Date.

    "Other Priority Claim" means a Claim accorded priority in right of payment under section 507(a) of the Bankruptcy Code, other than a Priority Tax Claim or an Administrative Claim.

    "Other Secured Claim" means any Secured Claim other than a Heller Secured Claim.

    "Pearlman Claims" means the Claims of Herbert Pearlman.

    "Petition Date" means July 21, 2003, the date upon which the Chapter 11 Cases were Filed.

    "Plan" means this joint plan of reorganization, either in its present form or as it may be altered, amended, modified or supplemented from time to time in accordance with the Bankruptcy Code and the Bankruptcy Rules.

    "Plan Funders" means Ranch Capital, L.L.C. and Berkshire Hathaway Inc., jointly and severally.

    "Plan Funding Agreement" means that certain agreement between and among the Debtors, on the one hand, and the Plan Funders, on the other hand, pursuant to which the Plan Funders have agreed, upon the terms and subject to the conditions therein, to fund the Cash Infusion.

    "Plan Supplement" means the forms of documents specified in Section 12.13 of this Plan.

    "Priority Tax Claim" means a Claim of a governmental unit of the kind specified in section 507(a)(8) of the Bankruptcy Code.

    "Professional" means a Person or Entity employed pursuant to a Final Order in accordance with sections 327, 1103 and 1107(b) of the Bankruptcy Code and to be compensated for services rendered prior to the Confirmation Date, pursuant to sections 327, 328, 329, 330 and/or 331 of the Bankruptcy Code.

    "Professional Fees" means all allowances of compensation and reimbursement of expenses allowed to Professionals in accordance with sections 330, 331 and/or 503(b) of the Bankruptcy Code.

    "Pro Rata" means, proportionately, such that with respect to an Allowed Claim or Equity Interest, the ratio of (a) (i) the amount of property distributed on account of a particular Allowed Claim or Equity Interest, as applicable, to (ii) the amount of Allowed Claim or Equity Interest, as applicable, is identical and corresponds directly to the ratio of (b)(i) the aggregate amount of property distributed on account of all Allowed Claims or Equity Interests of the Class in which the particular Allowed Claims or Equity Interest is included to (ii) the aggregate amount of all Allowed Claims or Equity Interests in that Class.

    "Reorganized Debtor" means each reorganized Debtor on and after the Effective Date.

    "Reorganized Seitel" means Seitel as reorganized pursuant to this Plan on and after the Effective Date.

    "Schedules" means the schedules of assets and liabilities, schedules of executory contracts, and the statement of financial affairs filed pursuant to section 521(1) of the Bankruptcy Code and the Bankruptcy Rules.

    "Secured Claim" means, with respect to any Debtor, a Claim that is secured by a lien on, or security interest in, property of any such Debtor, or that has the benefit of rights of setoff under section 553 of the Bankruptcy Code, but only to the extent of the value of the Creditor's interest in such Debtor's interest in such property, or to the extent of the amount subject to setoff, which value shall be determined as provided in section 506 of the Bankruptcy Code.

    "Securities Claim" means any and all Claims that are subject to subordination under section 510(b) of the Bankruptcy Code, including all claims for fraud, misrepresentation, rescission, reimbursement, contribution, indemnification or damages arising from, under or in connection, directly or indirectly, with, (i) all agreements entered into by the Debtors or any one or more affiliates of the Debtors in connection with the issuance of any security including, without limitation, the Old Seitel Common Stock, options or warrants, or (ii) any purchase or sale of any security including, without limitation, the Old Seitel Common Stock, options or warrants, including, without limitation, any and all Claims asserted or that could have been asserted in the Class Action ("Securities Claim" shall not apply to the Plan Funding Agreement).

    "Seitel" means Seitel, Inc.

    "Seitel Unsecured Claim" means any General Unsecured Claim that is an obligation of Seitel or a No Asset Debtor, including without limitation obligations on which Seitel is jointly liable with other Debtors.

    "Solicitation Procedures Order" means the order entered by the Bankruptcy Court establishing procedures with respect to the solicitation and tabulation of votes to accept or reject this Plan.

    "Unimpaired Claim" means an unimpaired Claim within the meaning of section 1124 of the Bankruptcy Code.

    "Unimpaired Class" means an unimpaired Class within the meaning of section 1124 of the Bankruptcy Code.

    "Voting Deadline" means the date stated in the Voting Instructions by which all Ballots must be received.

    "Voting Instructions" means the instructions for voting to accept or reject this Plan contained in the section of the Disclosure Statement titled: "Voting and Confirmation Procedures" and in the Ballots and the Master Ballots.

    "Voting Record Date" means the date established by the Bankruptcy Court by which Holders of Allowed Claims and Holders of Allowed Equity Interests are determined for purposes of such Holders' right to submit Ballots.

    "Warrants" means all authorized but not issued Old Seitel Common Stock and all warrants, options and contract rights to purchase or acquire Old Seitel Common Stock at any time.

    "1995 Note Purchase Agreement" means the Note Purchase Agreement dated as of December 28, 1995, as amended from time to time, pursuant to which the Debtor, Seitel, issued those certain (a) $25,000,000 aggregate principal amount of 7.17% Series A Senior Notes due December 30, 2001, (b) $27,500,000 aggregate principal amount of 7.17% Senior Notes due December 30, 2002, and (c) $43,000,000 aggregate principal amount of 7.43% Series F Senior Notes due February 15, 2009, each as guaranteed by most of Seitel's U.S. affiliates and subsidiaries.

    "1999 Note Purchase Agreement" means the Note Purchase Agreement dated as of February 12, 1999, as amended from time to time, pursuant to which the Debtor, Seitel, issued those certain (a) $20,000,000 aggregate principal amount of 7.03% Series D Senior Notes due February 15, 2004, (b) $75,000,000 aggregate principal amount of 7.28% Series E Senior Notes due February 15, 2009, and (c) $43,000,000 aggregate principal amount of 7.43% Series F Senior Notes due February 15, 2009, each as guaranteed by most of Seitel's U.S. affiliates and subsidiaries.

    "2001 Note Purchase Agreement" means the Note Purchase Agreement dated as of October 15, 2001, pursuant to which the Debtor, Seitel, issued those certain (a) $20,000,000 aggregate principal amount of 7.04% Series G Senior Notes due October 15, 2006, (b) $50,000,000 aggregate principal amount of 7.19% Series H Senior Notes due October 15, 2008, and (c) $37,000,000 aggregate principal amount of 7.34% Series I Senior Notes due October 15, 2011, each as guaranteed by most of Seitel's U.S. affiliates and subsidiaries.

Section 1.2          Rules of Interpretation and Governing Law.

    (a)          For purposes of this Plan: (a) whenever from the context it is appropriate, each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and the neuter gender; (b) any reference in this Plan to a contract, instrument, release, indenture or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be in such form in all material respects or in all material respects on such terms and conditions; (c) any reference in this Plan to an existing document or exhibit Filed, or to be Filed, shall mean such document or exhibit, as it may have been or may be amended, modified or supplemented; (d) unless otherwise specified, all references in this Plan to Sections, Articles and Exhibits are references to Sections, Articles and Exhibits of or to this Plan; (e) the words "herein" and "hereto" refer to this Plan in its entirety rather than to a particular portion of this Plan; (f) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of this Plan; (g) the rules of construction set forth in section 102 of the Bankruptcy Code shall apply to this Plan; and (h) any term used in capitalized form in this Plan that is not defined herein but that is defined in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to such term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be.

    (b)          Except to the extent that the Bankruptcy Code or Bankruptcy Rules are applicable, and subject to the provisions of any note, contract, instrument, release, indenture or other agreement or document entered into in connection with this Plan, the rights and obligations arising under this Plan shall be governed by, and construed and enforced in accordance with, the Delaware law, without giving effect to the principles of conflicts of laws of Delaware; provided, however, that the laws of the state of incorporation of each Debtor shall govern corporate governance matters with respect to that Debtor, without giving effect to the principles of conflicts of laws thereof.

ARTICLE II

ADMINISTRATIVE AND PRIORITY TAX CLAIMS

Section 2.1          Administrative Claims.

    Subject to the provisions of sections 330(a) and 331 of the Bankruptcy Code, each Holder of an Allowed Administrative Claim shall be paid the full unpaid amount of such Allowed Administrative Claim in Cash on the Effective Date or as soon as practicable thereafter, or on such other terms as may be agreed upon by such Holder of such Administrative Claim and the Debtors or the Reorganized Debtors or otherwise upon order of the Bankruptcy Court; provided, however, that Allowed Administrative Claims representing obligations incurred in the ordinary course of business or otherwise assumed by the Debtors pursuant to this Plan and unpaid as of the Effective Date, shall be assumed on the Effective Date and paid or performed by the Reorganized Debtors when due in accordance with the terms and conditions of the particular agreements governing such obligations. All requests for payment of Administrative Claims (other than Professional Fees) must be filed by the Business Day that is the thirtieth (30^th) day after the Confirmation Date or the holders thereof shall be forever barred from asserting such Administrative Claims against the Debtors or the Reorganized Debtors.

Section 2.2          Priority Tax Claims.

    (a)          Except with respect to Allowed Priority Tax Claims that the Debtors elect to pay pursuant to Section 2.2(b) or 2.2(c), each Allowed Priority Tax Claim shall be paid by the Debtors in full, in Cash upon the latest of (i) the Effective Date, (ii) the date upon which there is a Final Order allowing such Allowed Priority Tax Claim, (iii) the date such Allowed Priority Tax Claim would have been due and payable if the Chapter 11 Cases had not been commenced, or (iv) as may be agreed upon between the Holder of such Allowed Priority Tax Claim and the Debtors.

    (b)          Each Debtor may, at its option, in lieu of payment in full of an Allowed Priority Tax Claim on the date when it would otherwise have been paid under Section 2.2(a), make Cash payments on account of such Allowed Priority Tax Claim, deferred to the extent permitted pursuant to section 1129(a)(9)(C) of the Bankruptcy Code and, in such event, interest shall be paid on the unpaid portion of such Allowed Priority Tax Claim at a rate to be agreed upon by the Debtors and the applicable governmental unit or as determined by the Bankruptcy Court.

    (c)          If an Allowed Priority Tax Claim is for a tax assessed against property of a Debtor's Estate and that Allowed Priority Tax Claim may also be classified as an Allowed Other Secured Claim, such Debtor may, at its option, elect to treat such Allowed Priority Tax Claim as an Allowed Other Secured Claim.

Section 2.3          Professional Fees.

    All final applications for Professional Fees for services rendered in connection with the Chapter 11 Cases prior to the Confirmation Date shall be filed with the Bankruptcy Court not later than thirty (30) days after the Confirmation Date.

Section 2.4          Debtor-in-Possession Financing Claims.

    Any and all amounts due under any debtor-in-possession financing facility shall be repaid in full on the Effective Date from the Debtors' Cash on hand or from any other sources, unless, the repayment and treatment of such debtor-in-possession financing facility is otherwise agreed to by the Debtors and/or the Reorganized Debtors, and such lender.

ARTICLE III

CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS

Section 3.1          Summary.

    The categories of Claims and Equity Interests listed below classify Claims and Equity Interests for all purposes, including voting, confirmation and distribution pursuant to this Plan and pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or Equity Interest shall be deemed classified in a particular Class only to the extent that the Claim or Equity Interest qualifies within the description of that Class and shall be deemed classified in a different Class to the extent that any remainder of such Claim or Equity Interest qualifies within the description of such different Class. A Claim or Equity Interest is in a particular Class only to the extent that such Claim or Equity Interest is Allowed in that Class and has not been paid or otherwise satisfied prior to the Effective Date. The treatment afforded to the Creditors or Equity Interest Holders as set forth hereunder shall be in full satisfaction, settlement, release, and discharge for and in exchange for such Creditors' Claim and such Equity Interest Holders' Equity Interests, respectively. The Claims (except for Administrative Claims, Priority Tax Claims and claims for debtor-in-possession financing, which are set forth above and which are not required to be classified pursuant to section 1123(a)(i) of the Bankruptcy Code) and Equity Interests against the Debtors are classified as follows:

	Class	Status	Voting Rights
Class 1	Other Priority Claims	Unimpaired	Not Entitled to Vote
Class 2	Heller Secured Claim	Impaired	Entitled to Vote
Class 2A	Other Secured Claims	Unimpaired	Not Entitled to Vote
Class 3	General Unsecured Claims	Impaired	Entitled to Vote
Class 4	Seitel Unsecured Claims	Impaired	Entitled to Vote
Class 5	Pearlman Claims	Unimpaired	Not Entitled to Vote
Class 6	Securities Claims	Impaired	Entitled to Vote
Class 7	Old Seitel Common Stock	Impaired	Entitled to Vote
Class 8	Old Subsidiary Equity           Interests	Impaired	Not Entitled to Vote
Class 9	Warrants	Impaired	Not Entitled to Vote
Class 10	Intercompany Claims	Unimpaired	Note Entitled to Vote

Section 3.2          Classification and Treatment of Claims Against the Debtors.

    (a)          Class 1 - Other Priority Claims.

(i)          Classification: Class 1 consists of all Other Priority Claims against the Debtors (and shall not include Administrative Claims or Priority Tax Claims).

(ii)          Treatment: The legal, equitable and contractual rights of the Holders of Class 1 Claims are unaltered by this Plan. Unless the Holder of such Claim and the Debtors agree to a different treatment, each Holder of an Allowed Class 1 Other Priority Claim shall receive one of the following alternative treatments, at the election of the Debtors:

(A)          to the extent then due and owing on the Effective Date, such Claim shall be paid in full in Cash by the Reorganized Debtor on the Effective Date, or as soon thereafter as is practicable; or

(B)          to the extent not due and owing on the Effective Date, such Claim shall be paid in full in Cash by the Reorganized Debtor when and as such Claim becomes due and owing in the ordinary course of business.

Any default with respect to any Class 1 Other Priority Claim that existed immediately prior to the Petition Date shall be deemed cured upon the Effective Date.

(iii)          Voting: Class 1 is not impaired. The Holders of Class 1 Claims are conclusively deemed to have accepted this Plan pursuant to section 1126(f) of the Bankruptcy Code, and the Holders of Claims in Class 1 are not entitled to vote to accept or reject this Plan.

(b)          Class 2 - Heller Secured Claim.

(i)          Treatment: To the extent the Heller Secured Claim is not satisfied in full and released prior to the Effective Date, Heller shall retain its liens securing the Heller Secured Claim to the extent of the Allowed amount of such Claim. Unless otherwise agreed to by the Debtors and Heller, the maturity of the Heller Secured Claim shall be extended through and including April 30, 2005, and from and after the Effective Date the Debtors shall pay Heller $208,333.33 per month plus interest calculated at the rate provided for in the loan documents presently governing the Heller Secured Claim on the outstanding principal balance with any remaining principal and accrued interest thereon to be paid in full on or before April 30, 2005.

(ii)          Voting: Class 2 is impaired. The Holder of the Heller Secured Claim is entitled to vote to accept or reject this Plan.

(c)          Class 2A - Other Secured Claims.

(i)          Classification: Class 2 consists of all Other Secured Claims. Each such Other Secured Claim shall be deemed to be in its own subclass of Class 2A unless otherwise expressly stated in the Plan Supplement. Each such subclass shall be unimpaired.

(ii)          Treatment: The legal, equitable and contractual rights of the Holders of Other Secured Claims against the Debtors are unaltered by this Plan. Unless the Holder of such Claim and the Debtors agree to a different treatment, each Holder of an Allowed Other Secured Claim shall receive one of the following alternative treatments, at the election of the Debtors:

(A)          the applicable Reorganized Debtor shall execute a written undertaking in favor of the Holder of such Claim, whereby the Reorganized Debtor assumes such Claim and leaves unaltered such Holder's legal, equitable and contractual rights with respect to such Claim; or

(B)          notwithstanding any contractual provision or applicable law that entitles the Holder of such Claim to demand or receive accelerated payment of such Claim after the occurrence of a default, the applicable Reorganized Debtor shall:

(i)          cure any such default that occurred before or after the Petition Date, other than a default of a kind specified in 𨷅(b)(2) of the Bankruptcy Code,

(ii)          reinstate the maturity of such Claim as such maturity existed before such default,

(iii)          compensate the Holder of such Claim for any damages incurred as a result of any reasonable reliance by such Holder on such contractual provision or such applicable law, and

(iv)          execute a written undertaking in favor of such Holder, whereby the applicable Reorganized Debtor assumes such Claim and does not otherwise alter the legal, equitable or contractual rights of such Holder with respect to such Claim; or

(C)          the applicable Reorganized Debtor shall surrender to the Holder all collateral securing such Holder's Claim and such Holder shall be Allowed a Class 3 Claim or Class 4 Claim, as applicable, if and to the extent that the Bankruptcy Court determines that the value of the Holder's collateral was less than its total Allowed Secured Claim.

(iii)          Voting: Each subclass of Class 2A (Other Secured Claims) is unimpaired. The Holders of Class 2A Other Secured Claims are conclusively deemed to have accepted this Plan pursuant to section 1126(f) of the Bankruptcy Code, and the Holders of Claims in Class 2A are not entitled to vote to accept or reject this Plan.

(d)          Class 3 - General Unsecured Claims.

(i)          Classification: Class 3 consists of the Claims of Holders of General Unsecured Claims against the Debtors, but does not include Seitel Unsecured Claims, Priority Tax Claims, Other Priority Claims, Intercompany Claims or Securities Claims.

(ii)          Treatment: On the later of: (a) the Effective Date; or (b) a Final Order Allowing a Claim, each Holder of a Class 3 General Unsecured Claim will be paid Cash equal to 71% of its Allowed Claim; provided, however, that (1) to maximize the recoveries to be received by all other Holders of Allowed Class 3 Claims and to reduce administrative expenses and expedite the Effective Date, the first $1,500,000 distributed to Holders of Allowed Class 3 Claims shall be distributed Pro Rata to Holders of Allowed Class 3 Claims other than Allowed Class 3 Claims of the Noteholders, provided that no Class 3 Creditor shall be entitled to receive or shall be paid more than 100% on account of such Holder's Class 3 Allowed Claim; and (2) if a Holder of an Allowed Class 3 Claim is entitled to a distribution under Class 4, all distributions on account of its Class 4 Claim(s) will be credited against the distribution on ac count of its Class 3 Claim. By way of example of the second proviso, the Noteholders have Allowed Claims in both Class 3 and Class 4 because Seitel and subsidiaries that are not No Asset Debtors are jointly liable on account of the Notes. As a result, the Noteholders shall first receive the treatment and distributions provided for Holders of Allowed Class 4 Claims and such distributions shall be deducted from the distributions due to the Noteholders pursuant to their Allowed Class 3 Claim.

(iii)          Voting: Class 3 is impaired, and the Holders of Class 3 Claims are entitled to vote to accept or reject this Plan.

(e)          Class 4 - Seitel Unsecured Claims.

(i)          Classification: Class 4 consists of the Claims of Holders of Seitel Unsecured Claims.

(ii)          Treatment: On the later of: (a) the Effective Date; or (b) a Final Order Allowing a Claim, each holder of a Class 4 Seitel Unsecured Claim will be paid Cash equal to 25% of its Allowed Claim.

(iii)          Voting: Class 4 is impaired, and the Holders of Class 4 Claims are entitled to vote to accept or reject this Plan.

(f)          Class 5 - Pearlman Claims.

(i)          Classification: Class 5 consists of the Pearlman Claims.

(ii)          Treatment: As of the Effective Date, Reorganized Seitel shall assume that certain settlement agreement approved by order of the United States District Court for the Southern District of Texas dated May 23, 2003 in the action styled Seitel Inc. v. Pearlman, Case No. H-02-1843, and shall perform all of its obligations under the settlement agreement.

(iii)          Voting: Class 5 is unimpaired. The Holder of the Class 5 Claim is presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code and is not entitled to vote accept or reject this Plan.

(g)          Class 6 - Securities Claims

(i)          Classification: Class 6 consists of all Securities Claims.

(ii)          Treatment: The Allowed Securities Claims, if any, shall be satisfied exclusively from the D&O Insurance Policies and within the limits of the D&O Insurance Policies, and the Holders of any Allowed Securities Claims shall be deemed to have waived any recovery against any person other than under the D&O Insurance Policies in accordance with that certain stipulation and order entered into between the Debtors and counsel for the plaintiffs in the Class Action.

(iii)          Voting: Class 6 (Securities Claims) is impaired, and the Holders of Class 6 Claims are entitled to vote to accept or reject the Plan.

(h)          Class 7 - Old Seitel Common Stock.

(i)          Classification: Class 7 consists of all Old Seitel Common Stock.

(ii)          Treatment: Provided that Class 7 votes to accept the Plan, on the later of: the Effective Date; or (b) a Final Order Allowing an Equity Interest, each holder of Old Seitel Common Stock shall receive in Cash its Pro Rata share of $10,150,273.20. If Class 7 votes to reject the Plan, no distribution of Cash or any other property shall be made to the Holders of Equity Interests in Class 7.

(iii)          Voting: Class 7 is impaired, and the Holders of Class 7 Equity Interests are entitled to vote to accept or reject this Plan.

(i)          Class 8 - Old Subsidiary Equity Interests.

(i)          Classification: Class 8 consists of the Old Subsidiary Equity Interests in each of the Debtors except Seitel.

(ii)          Treatment: On the Effective Date, the Old Subsidiary Equity Interests shall be cancelled and the Holders of the Old Subsidiary Equity Interests shall not receive or retain any distributions under this Plan.

(iii)          Voting: Holders of Old Subsidiary Equity Interests are impaired. Because no distributions will be made to Holders of Class 8 Interests, such Holders are deemed to have rejected this Plan pursuant to section 1126(g) of the Bankruptcy Code. Class 8 is not, therefore, entitled to vote to accept or reject this Plan.

(j)          Class 9 - Warrants.

(i)          Classification: Class 9 consists of the Holders of Warrants.

(ii)          Treatment: On the Effective Date, the Warrants shall be cancelled and the Holders of Class 9 Warrants shall not receive or retain any distributions under this Plan.

(iii)          Voting: Holders of Class 9 Warrants are impaired. Because no distributions will be made to Holders of Class 9 Warrants, such Holders are deemed to have rejected this Plan pursuant to section 1126(g) of the Bankruptcy Code. Class 9 is not, therefore, entitled to vote to accept or reject this Plan.

(k)          Class 10 - Intercompany Claims.

(i)          Classification: Class 10 consists of the Holders of Intercompany Claims.

(ii)          Treatment: On the Effective Date, Intercompany Claims shall be reinstated.

(iii)          Voting: Class 10 is unimpaired. The Holders of Class 10 Intercompany Claims are conclusively presumed to have accepted this Plan pursuant to section 1126(f) of the Bankruptcy Code and are not entitled to vote to accept or reject this Plan.

ARTICLE IV

ACCEPTANCE OR REJECTION OF THE PLAN

Section 4.1          Classes Entitled to Vote.

    (a)          Classes 1, 2A, 5 and 10 are Unimpaired under this Plan, and, therefore, are conclusively presumed to have accepted this Plan pursuant to section 1126(f) of the Bankruptcy Code.

    (b)          Classes 8 and 9 will not receive or retain any distributions or property under this Plan and, therefore, the Holders of Claims and Equity Interests in such Classes are conclusively presumed to have rejected this Plan pursuant to section 1126(g) of the Bankruptcy Code.

    (c)          Classes 2, 3, 4, 6 and 7 are impaired under this Plan and are entitled to vote to accept or reject this Plan.

Section 4.2          Non-Consensual Confirmation.

    If an Impaired Class of Claims or Equity Interests fails to accept this Plan by the statutory majorities provided in section 1126(c) of the Bankruptcy Code, the Debtors reserve the right to request the Bankruptcy Court to confirm this Plan as to such rejecting Classes of Claims or Equity Interests in accordance with section 1129(b) of the Bankruptcy Code. With respect to any Impaired Class of Equity Interests that is deemed to have rejected this Plan, the Debtors shall request the Bankruptcy Court to confirm the Plan under section 1129(b) of the Bankruptcy Code.

Section 4.3          Noteholders' Reservation of Rights.

    Unless the Plan Funders receive 100% of the New Seitel Common Stock and New Subsidiary Equity Interests on the Effective Date as provided in this Plan, and unless the Noteholders vote in favor of this Plan, the Noteholders shall not be deemed to have agreed to accept as payment 71% of their Allowed Class 3 Claims, or to subordinate their recovery to the $1,500,000 payment as set forth above, or to permit payment of any amount to Old Seitel Common Stock, or otherwise to waive any rights to recover in full under the absolute priority rule as set forth in the Bankruptcy Code.

ARTICLE V

MEANS FOR IMPLEMENTATION OF THIS PLAN

Section 5.1          Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors.

    Except as provided in Section 5.4 with respect to dissolution of the No Asset Debtors, the Reorganized Debtors shall continue to exist after the Effective Date as separate corporate entities, with all the powers granted to them under their organizational documents and the laws of the states of their organization and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under such applicable state law. At the election of the Reorganized Debtors, the No Asset Debtors shall be dissolved upon the Effective Date without further action and the Confirmation Order, once the Effective Date occurs, shall serve as an order dissolving such No Asset Debtors.

Section 5.2          Cancellation of Notes, Instruments and Common Stock.

    On the Effective Date, except to the extent otherwise provided in this Plan, (i) all instruments, certificates, and other documents evidencing the Notes and the Old Note Purchase Agreements, and (ii) all Equity Interests, including all Old Seitel Common Stock and Warrants, and Old Subsidiary Equity Interests shall be cancelled and deemed terminated.

Section 5.3          Issuance of New Securities; Execution of Related Documents.

    On the Effective Date, Seitel shall issue the New Seitel Common Stock to the Plan Funders (or such wholly owned direct or indirect subsidiary or subsidiaries of Berkshire Hathaway Inc. as they may direct) (subject to Section 5.4(c) of this Plan), and each of the other Reorganized Debtors shall issue the New Subsidiary Equity Interests in accordance with an Exhibit to the Plan Supplement which delineates the Reorganized Debtors' corporate organizational structure, and on the Effective Date the Reorganized Debtors shall issue all other securities, certificates, and other documents required to be issued pursuant to this Plan. The Reorganized Debtors and the other parties thereto shall execute and deliver all such other agreements, documents and instruments as are required to be executed and delivered pursuant to the terms of this Plan. All Plan documents shall become effective and binding in accordance with their respective terms and conditions upon t he parties thereto and shall be deemed to become effective simultaneously.

Section 5.4          Corporate Restructure.

    (a)          The New Seitel Common Stock and New Subsidiary Equity Interests shall be issued to the Plan Funders (or such wholly owned direct or indirect subsidiary or subsidiaries of Berkshire Hathaway Inc. as they may direct) as of the Effective Date in consideration and exchange for the Cash Infusion. The Plan Funders shall immediately contribute the New Subsidiary Equity Interests to Seitel.

    (b)          As of the Effective Date, at the Reorganized Debtors' election the No Asset Debtors shall be dissolved without further action, and the Confirmation Order shall serve as an order dissolving such No Asset Debtors.

    (c)          So long as the Cash available for distribution to each Class of Creditors and Equity Interest Holders on the Effective Date remains unchanged, the Plan Funders may, at their option and in their sole discretion, elect to modify the form of the transaction to provide for a purchase of all existing and after acquired assets of all of the Debtors free and clear of all liens, claims and encumbrances other than those preserved by this Plan, so long as the Cash made available by the Plan Funders on the Effective Date equals the Cash Infusion, and provided that no Holder of an Allowed Claim or Equity Interest receives less than such Holder would have received if the transaction had not been modified. Any such election shall be exercised by a notice to the Debtors and a pleading filed with the Bankruptcy Court not later than ten (10) days prior to the Confirmation Hearing. If the Plan Funders make such election, the P lan and the Plan Supplement will be modified or amended as necessary to reflect the alternative structure.

    (d)          Notwithstanding any other provision in the Plan, the Equity Interests in the foreign subsidiaries, which are not Debtors, shall remain Unimpaired and shall continue to be owned by Seitel.

Section 5.5          Corporate Governance, Directors and Officers, and Corporate Action.

    (a)          Amended Certificate of Incorporation.

    On or as soon as practicable after the Effective Date, the Reorganized Debtors will file their Amended Certificates of Incorporation with the Secretary of State or other appropriate official of the state of their organization. The Amended Certificates of Incorporation will, among other things, prohibit the issuance of nonvoting equity securities to the extent required by section 1123(a) of the Bankruptcy Code and the Amended Certificate of Incorporation for Reorganized Seitel shall change the number of authorized shares of New Seitel Common Stock to implement the Plan.

    (b)          Directors and Officers of the Reorganized Debtors.

Subject to any requirement of Bankruptcy Court approval pursuant to section 1129(a)(5) of the Bankruptcy Code, as of the Effective Date, the officers and directors of the Reorganized Debtors shall be selected by the Plan Funders and identified in the Plan Supplement. Each such director and officer shall serve from and after the Effective Date pursuant to the terms of the Amended Certificates of Incorporation and other constituent documents of the Reorganized Debtors.

    (c)          Corporate Action.

    On the Effective Date, the adoption of the Amended Certificates of Incorporation or similar constituent documents, the Amended By-Laws, the selection of directors and officers for the Reorganized Debtors, and all actions contemplated by this Plan shall be authorized and approved in all respects. All matters provided for in this Plan involving the corporate organizational structure of the Debtors or the Reorganized Debtors, and any corporate action required by the Debtors or the Reorganized Debtors in connection with this Plan, shall be and become effective, without any requirement of further action by the security holders or directors of the Debtors or the Reorganized Debtors. On the Effective Date, the appropriate officers of the Reorganized Debtors and members of the boards of directors of the Reorganized Debtors are authorized and directed to issue, execute and deliver the agreements, documents, securities and instruments contemplated by this Pl an in the name of and on behalf of the Reorganized Debtors.

Section 5.6          Sources of Cash for Plan Distribution.

    The Plan Funders shall make the Cash Infusion. All Cash necessary for the Reorganized Debtors to make payments pursuant to this Plan shall be obtained from: (i) the Cash Infusion; (ii) existing Cash balances; and (iii) the operations of the Debtors or Reorganized Debtors. The Reorganized Debtors may also make such payments using Cash received from their affiliates or subsidiaries through the Reorganized Debtors' consolidated cash management system and from advances or dividends from such subsidiaries in the ordinary course. Any payment or distributions of Cash by the Reorganized Debtors pursuant to this Plan shall be made by check drawn on a domestic bank.

Section 5.7          Revesting of Assets.

    The property of the Estates of the Debtors will vest in the Reorganized Debtors on the Effective Date free and clear of all Claims, liens, charges or other encumbrances and Equity Interests (other than New Seitel Common Stock and New Equity Subsidiary Equity Interests). On and after the Effective Date, the Reorganized Debtors may operate their businesses and may use, acquire or dispose of property and compromise or settle any Claims or Equity Interests, without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by this Plan and the Confirmation Order.

ARTICLE VI

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

Section 6.1          Assumption or Rejection of Executory Contracts and Unexpired Leases.

    (a)          Immediately prior to the Effective Date, the customer Data License Agreements, the D&O Insurance Policies and the Insurance Coverage of the Debtors shall be deemed assumed by the Reorganized Debtors in accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code except any such customer Data License Agreements, D&O Insurance Policies and the Insurance Coverage that (1) have been rejected by order of the Bankruptcy Court, (2) are the subject of a motion to reject pending on the Effective Date (which shall thereafter be rejected, or otherwise treated in accordance with orders disposing of such motions), (3) are identified on a list filed with the Bankruptcy Court on or before the Confirmation Date, as to be rejected, or (4) are rejected pursuant to the terms of this Plan. Entry of the Confirmation Order by the B ankruptcy Court shall constitute approval of such assumptions and rejections pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Any and all reimbursements made under the D&O Insurance Policies on account of defense costs paid by the Debtors and/or the Reorganized Debtors before or after the Petition Date shall be paid directly to the Debtors to the extent such reimbursements are made after the Confirmation Date.

    (b)          Immediately prior to the Effective Date, except for the customer Data License Agreements, D&O Insurance Policies and the Insurance Coverage, all employment agreements, incentive plans and executory contracts and unexpired leases of the Debtors shall be deemed rejected by the Reorganized Debtors in accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code except those employment agreements, incentive plans and executory contracts and unexpired leases that (1) have been assumed by order of the Bankruptcy Court, (2) are the subject of a motion to assume pending on the Effective Date (which shall thereafter be assumed, or otherwise treated in accordance with orders disposing of such motions), (3) are identified on a list filed with the Bankruptcy Court on or before the Confirmation Date, as to be assumed, or (4) are assumed pursuant to the terms of this Plan. Entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of such assumptions and rejections pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Each executory contract and unexpired lease assumed pursuant to this Article VI shall revest in and be fully enforceable by the respective Reorganized Debtor in accordance with its terms, except as modified by the provisions of this Plan, or any order of the Bankruptcy Court authorizing and providing for its assumption or applicable federal law.

Section 6.2          Claims Based on Rejection of Executory Contracts or Unexpired Leases.

    All proofs of claim with respect to Claims arising from the rejection of executory contracts or unexpired leases, if any, must be Filed within thirty (30) days after the date of entry of an order of the Bankruptcy Court approving such rejection. Any Claims arising from the rejection of an executory contract or unexpired lease not Filed within such time will be forever barred from assertion against the Debtors, the Reorganized Debtors or the Estates and their property unless otherwise ordered by the Bankruptcy Court or provided in this Plan.

Section 6.3          Cure of Defaults for Executory Contracts and Unexpired Leases Assumed.

    Any monetary amounts by which each executory contract and unexpired lease to be assumed pursuant to this Plan is in default shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the default amount in Cash on the Effective Date or on such other terms as the parties to such executory contracts or unexpired leases may otherwise agree. In the event of a dispute regarding (1) the amount of any cure payments, (2) the ability of the Reorganized Debtors or any assignee to provide "adequate assurance of future performance" (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be assumed, or (3) any other matter pertaining to assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving the dispute and approving the assumption.

Section 6.4          Limited Indemnification of Directors, Officers and Employees.

    The obligations of the Debtors to indemnify any Person serving at any time on or prior to the Effective Date as one of its directors, officers or employees by reason of such Person's service in such capacity, or as a director, officer or employee of any other corporation or legal entity, to the extent provided in any Debtor's constituent documents or by a written agreement with the Debtors or the Delaware General Corporation Law, shall be deemed assumed by the Reorganized Debtors pursuant to this Plan and section 365 of the Bankruptcy Code as of the Effective Date to the limited extent of the obligation to defend against claims that are not Securities Claims. The Debtors' obligations, if any, to defend Securities Claims or to satisfy any judgment or liability of any such Person on account of any Securities Claim shall be a Class 6 Securities Claim. The Debtors' obligation, if any, to indemnify any such Person with respect to any liability with respect to any claim or cause of action that arose prior to the Petition Date shall not be assumed and shall be deemed satisfied by the assumption of the obligation to defend, except as set forth in Section 10.4(a) hereof. The Debtors' existing directors' and officers' insurance coverage the term of which runs through February 5, 2004, shall be assumed and maintained in effect (as set forth in Section 6.1(a) hereof). Accordingly, the limited indemnification obligations to defend described above as assumed shall survive unimpaired and unaffected by entry of the Confirmation Order, irrespective of whether such indemnification is owed for an act or event occurring before or after the Petition Date, but all other indemnification obligations that arose before the Petition Date shall be discharged. All indemnification obligations based on any fact or circumstance first arising after the Petition date is part of the directors', officers' and employees' administrative compensation claim and therefore, shall be assumed and honored post-Eff ective Date.          

Section 6.5          Benefit Programs.

    Except as otherwise expressly provided hereunder or by separate motion, all programs of the Debtors applicable to its current employees with respect to 401(k) plans, health care plans, disability insurance plans, life insurance plans, accidental death, and dismemberment insurance plans, vacation allowances and educational reimbursement plans are treated as executory contracts under this Plan and on the Effective Date shall be assumed pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code; provided, however, that nothing contained herein shall assume any plan or program that requires the issuance of any Equity Interests or any New Seitel Common Stock.

ARTICLE VII

PROVISIONS GOVERNING DISTRIBUTIONS

Section 7.1          Distributions for Claims or Equity Interests Allowed as of the Effective Date.

    Except as otherwise provided in this Article VII or as may be ordered by the Bankruptcy Court, distributions to be made on the Effective Date on account of Claims or Equity Interests that are Allowed as of the Effective Date and are entitled to receive distributions under this Plan shall be made on the Effective Date, or as soon as practicable thereafter. Distributions on account of Claims or Equity Interests that become Allowed Claims or Allowed Equity Interests, as the case may be, after the Effective Date shall be made pursuant to Section 7.3 and Section 8.3 below.

Section 7.2          Distributions by the Reorganized Debtors.

    The Reorganized Debtors shall make all distributions required under this Plan.

Section 7.3          Delivery and Distributions and Undeliverable or Unclaimed Distributions.

    (a)          Delivery of Distributions in General.

    Distributions to Holders of Allowed Claims shall be made at the address of the Holder of such Claim as indicated on records of the Debtors. Distributions to Plan Funders shall be made directly to the Plan Funders. Distributions to Holders of Allowed Equity Interests shall be made, to the extent available, at the address of the Holder of such Equity Interests indicated on records of the Debtors, otherwise distributions will be made to the record holders of Allowed Equity Interests along with a request to forward the materials to Beneficial owners.

    (b)          Undeliverable Distributions.

(i)          Holding of Undeliverable Distributions. If any Allowed Claim or Allowed Equity Interest Holder's distribution is returned to the Reorganized Debtors as undeliverable, no further distributions shall be made to such Holder unless and until the Reorganized Debtors are notified in writing of such Holder's then-current address. Undeliverable distributions shall remain in the possession of the Reorganized Debtors pursuant to this Section 7.3 until such time as a distribution becomes deliverable. Undeliverable Cash shall not be entitled to any interest, dividends or other accruals of any kind.

(ii)          After Distributions Become Deliverable. Within twenty (20) days after the end of each calendar quarter following the Effective Date, the Reorganized Debtors shall make all distributions that become deliverable during the preceding calendar quarter.

(iii)          Failure to Claim Undeliverable Distributions. In an effort to ensure that all Holders of Allowed Claims and all Holders of Allowed Equity Interests receive their allocated distributions, the Reorganized Debtors shall file with the Bankruptcy Court a listing of holders of unclaimed distributions. This list shall be maintained for as long as the Chapter 11 Cases stay open. Any Holder of an Allowed Claim or an Allowed Equity Interest who does not assert a Claim or Equity Interest pursuant to this Plan for an undeliverable distribution within twelve (12) months after the Effective Date shall have such Claim or Equity Interest for such undeliverable distribution discharged and shall be forever barred from asserting any such Claim or Equity Interest against the Reorganized Debtors or their property. In such cases, any Cash held for distribution on account of such Claims shall be property of the Reorgan ized Debtors. Nothing contained in this Plan shall require the Reorganized Debtors to attempt to locate any Holder of an Allowed Claim or an Allowed Equity Interest.

Section 7.4          Distribution Record Date.

    As of the close of business on the Distribution Record Date, the (i) transfer of the Notes or any interest therein, and (ii) transfer register for the Old Seitel Common Stock shall be closed and the transfer of the Notes and Old Seitel Common Stock, or any interest therein, shall be prohibited. Moreover, the Reorganized Debtors shall not have any obligation to recognize any transfer of the Notes and the Old Seitel Common Stock occurring after the Distribution Record Date, and shall be entitled for all purposes herein to recognize and deal only with those Holders of record as of the close of business on the Distribution Record Date.

Section 7.5          Timing and Calculation of Amounts to be Distributed.

    Unless otherwise provided for in Article III or Article VIII or agreed to by the Holder of a Claim or Equity Interest and the Debtors, on the Effective Date or as soon as practicable thereafter, each Holder of an Allowed Claim against or an Allowed Equity Interest in the Debtors shall receive the full amount of the distributions that this Plan provides for Allowed Claims or Allowed Equity Interests in the applicable Class. Beginning on the date that is twenty (20) calendar days after the end of the calendar quarter following the Effective Date and twenty (20) calendar days after the end of each calendar quarter thereafter, distributions shall also be made, pursuant to Section 8.3 below, to Holders of Disputed Claims or Disputed Equity Interests in any such Class whose Claims or Equity Interests were Allowed during the preceding calendar quarter. Such quarterly distributions shall also be in the full amount that th is Plan provides for Allowed Claims or Allowed Equity Interests in such applicable Class.

Section 7.6          Setoffs.

    The Reorganized Debtors may, pursuant to section 553 of the Bankruptcy Code or applicable non-bankruptcy law, set off against any Allowed Claim or Equity Interest and the distributions to be made pursuant to this Plan on account of such Claim (before any distribution is made on account of such Claim or Equity Interest), the claims, rights and Causes of Action of any nature that the Debtors may hold against the Holder of such Allowed Claim; provided, however, that neither the failure to effect such a setoff nor the allowance of any Claim hereunder shall constitute a waiver or release by the Reorganized Debtors of any such claims, rights and causes of action that the Debtors may possess against such Holder.

Section 7.7          Surrender of Cancelled Instruments or Securities.

    As a condition precedent to receiving any distribution pursuant to this Plan on account of an Allowed Claim or Allowed Equity Interest evidenced by the instruments, securities or other documentation cancelled pursuant to Section 5.2 above, the Holder of such Claim or Equity Interest shall tender the applicable instruments, securities or other documentation evidencing such Claim or Equity Interest to the Reorganized Debtors. Any distributions on account of any such Claim or Equity Interest shall, pending such surrender, be treated as an undeliverable distribution pursuant to Section 7.3 above.

    (a)          Notes.

    The Plan Funders shall tender their Notes relating to the Noteholder Claims to the Reorganized Debtors in accordance with written instructions to be provided to the Plan Funders by the Reorganized Debtors as promptly as practicable following the Effective Date. Such instructions shall specify that delivery of such Notes will be effected, and risk of loss and title thereto will pass, only upon the proper delivery of such Notes with a letter of transmittal in accordance with such instructions. All surrendered Notes shall be marked as cancelled.

    (b)          Failure to Surrender Cancelled Instruments.

    Any Holder of Notes that fails to surrender or is deemed to have failed to surrender the applicable Notes required to be tendered hereunder within twelve (12) months after the Effective Date shall have its Claim for a distribution pursuant to this Plan on account of such Notes discharged and shall be forever barred from asserting any such Claim against the Reorganized Debtors or their respective property.

ARTICLE VIII

PROCEDURES FOR RESOLVING DISPUTED CLAIMS AND INTERESTS

Section 8.1          Prosecution of Objections to Claims and Interests.

    After the Confirmation Date, the Debtors or the Reorganized Debtors shall have the exclusive authority to File objections, settle, compromise, withdraw or litigate to judgment objections to Claims and Equity Interests. From and after the Confirmation Date, such parties may settle or compromise any Disputed Claim or Disputed Equity Interest without approval of the Bankruptcy Court. Any objections to Claims or Equity Interests must be made before the date that is ninety (90) days after the Effective Date.

Section 8.2          Estimation of Claims.

    The Debtors or the Reorganized Debtors may, at any time, request that the Bankruptcy Court fix, liquidate or estimate any contingent or unliquidated Claim or Equity Interest pursuant to section 502(c) of the Bankruptcy Code or other applicable law regardless of whether the Debtors have previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any Claim or Equity Interest at any time during litigation concerning any objection to any Claim or Equity Interest, including during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any contingent or unliquidated Claim or Equity Interest, such estimated amount will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim or Equity Interest, as determined by the Bankruptcy Court. The Bankrupt cy Court's entry of this order may limit the distribution to be made on individual Disputed Claims or Equity Interests regardless of the amount finally Allowed on account of such Disputed Claims or Equity Interests, and no Holder shall have recourse against the Debtors or the Reorganized Debtors or any of their respective professionals. If the estimated amount constitutes a maximum limitation on such Claim or Equity Interest, the Debtors or the Reorganized Debtors may elect to pursue any supplemental proceedings to object to any ultimate payment on such Claim or Equity Interest. All of the aforementioned Claims or Equity Interests objection, estimation and resolution procedures are cumulative and not necessarily exclusive of one another. Claims or Equity Interests may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.

Section 8.3          Payments and Distributions on Disputed Claims or Disputed Interests.

    (a)          Notwithstanding any provision in this Plan to the contrary, no partial payments and no partial distributions will be made with respect to a Disputed Claim or Disputed Equity Interest until the resolution of such disputes by settlement or Final Order and the Disputed Claim or Disputed Equity Interest, or some portion thereof, has become an Allowed Claim or an Allowed Equity Interest, as the case may be.

    (b)          The Reorganized Debtors shall withhold from the distributions to be made to Holders of Disputed Claims or Equity Interests amounts equal to one hundred (100%) percent of the distributions to which holders of Disputed Claims or Interests would be entitled under this Plan if such Disputed Claims and Equity Interests were Allowed Claims or Equity Interests.

Section 8.4          Reserves.

    On the Effective Date, the Reorganized Debtors shall establish the Disputed Interest Reserve by withholding from the initial distribution an amount of Cash calculated as if all Class 7 Equity Interests were Allowed Class 7 Equity Interests in an amount equal to one hundred (100%) percent of the distributions to which holders of Disputed Class 7 Equity Interests would be entitled if their Equity Interests were Allowed in the Disputed Interest Amount. The Reorganized Debtors shall administer the Disputed Interest Reserve and any other Disputed Claims Reserve established for Disputed Claims. The Reorganized Debtors shall have the right to file a motion seeking to modify any Disputed Claim amounts or Disputed Interest Amounts.

Section 8.5          Distributions After Allowance.

    The Reorganized Debtors shall make all payments and distributions required to be made under this Plan as soon as practicable after the date such Disputed Claim or Disputed Equity Interest becomes an Allowed Claim or an Allowed Equity Interest. Such distributions shall be based upon the cumulative distributions that would have been made to the Holder of such Claim or Equity Interest under this Plan if the Disputed Claim or Equity Interest had been Allowed on the Effective Date. After a Final Order has been entered, or other final resolution has been reached with respect to each Disputed Claim, any Cash that remains in the Disputed Claims Reserve shall be transferred to the Reorganized Debtors. After a Final Order has been entered, or other final resolution has been reached with respect to each Disputed Equity Interest, any Cash that remains in the Disputed Interest Reserve shall be distributed Pro Rata to Holders of Allowed Class 7 Interests.

ARTICLE IX

CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS PLAN

Section 9.1          Conditions Precedent to Effectiveness.

    The Effective Date shall not occur until each of the following conditions shall have been satisfied or waived pursuant to the provisions of Section 9.2:

    (a)          The Bankruptcy Court shall have entered the Confirmation Order in form and substance acceptable to Plan Funders on or before November 18, 2003, and such Confirmation Order shall not have been modified after entry;

    (b)          The Confirmation Order shall have become a Final Order;

    (c)          The new board of directors of Seitel as Reorganized Debtor shall have been appointed by the Plan Funders and agreed to serve.

    (d)          The Plan Funders make the Cash Infusion.

Section 9.2          Waiver of Conditions.

    The Debtors with the consent of the Plan Funders, in the Plan Funders' sole and absolute discretion, may waive any of the conditions set forth in Section 9.1(b) or (c), at any time, without notice, without leave or order of the Bankruptcy Court, and without any formal action other than proceeding to consummate this Plan.

Section 9.3          Effect of Failure of Conditions.

    If one or more of the conditions specified in Section 9.1 of this Plan have not occurred and have not been waived on or before 120 days after the Confirmation Date, (a) the Confirmation Order shall be vacated and this Plan shall be null and void in all respects, (b) the Debtors and all holders of Claims and Equity Interests shall be restored to the status quo ante as of the day immediately preceding the Confirmation Date as though the Confirmation Date never occurred, (c) the Debtors' obligations with respect to Claims and Equity Interests shall remain unchanged and nothing contained herein shall constitute or be deemed a waiver or release of any Claims or Equity Interests by or against the Debtors or any other person or to prejudice in any manner the rights of the Debtors or any person in any further proceedings involving the Debtors, and (d) nothing contained in this Plan or the Disclosure Statement shall constitute an admission, acknowled gment, offer or undertaking by the Debtors in any respect.

ARTICLE X

EFFECT OF PLAN CONFIRMATION

Section 10.1          Binding Effect.

    Except as otherwise provided in section 1141(d) of the Bankruptcy Code, on and after the Confirmation Date, the provisions of this Plan shall bind any holder of a Claim against, or Equity Interest in, the Debtors and their respective successors and assigns, whether or not the Claim or Equity Interest of such holder is impaired under this Plan and whether or not such holder has accepted this Plan.

Section 10.2          Classification and Enforceability of Claims and Equity Interests.

    The classification and manner of satisfying all Claims and Equity Interests and the respective distributions and treatments under this Plan take into account and/or conform to the relative priority and rights of the Claims and Equity Interests in each Class in connection with any contractual, legal and equitable subordination rights relating thereto whether arising under general principles of equitable subordination, section 510 of the Bankruptcy Code or otherwise, and any and all such rights are settled, compromised and released pursuant to this Plan.  The Confirmation Order shall permanently enjoin, effective as of the Effective Date, all Persons and Entities from enforcing or attempting to enforce any such contractual, legal and equitable subordination rights satisfied, compromised and settled pursuant to this Plan. All Securities Claims are deemed to be permanently subordinated pursuant to the terms of section 510(b) of the Bankruptcy Code, and as such, have been placed in a separate class.

Section 10.3          Discharge.

    Except as otherwise provided in this Plan or the Confirmation Order and subject to section 1141(d)(1) of the Bankruptcy Code, upon the Effective Date, the Plan, all debts of, Claims against and Equity Interests in any of the Debtors, their assets, or properties, shall be discharged and released. The discharge of the Reorganized Debtors shall be effective as to each debt, Claim or Equity Interest, regardless of whether a proof of Claim or proof of interest therefor was filed, whether the Claim or Equity Interest is Allowed, or whether the holder thereof votes to accept this Plan. On the Effective Date, as to every discharged debt, Claim and Equity Interest, all persons, entities and governmental units (including, without limitation, any Holder of a debt, Claim or Equity Interest) shall be precluded from asserting against any Debtor or Reorganized Debtor or against such Debtor or Reorganized Debtor's assets or properties, any other or further debt, Claim or Equity Interest based upon any document, instrument, act, omission, transaction, or other activity of any kind or nature that occurred before the Confirmation Date.

Section 10.4          Releases.

    In consideration of the contributions of certain parties to the Debtors' Chapter 11 Cases, including, but not limited to (a) the restructuring of the Debtors as provided for in this Plan, and (b) the waiver by certain parties (or their affiliates) of rights they might otherwise seek to assert against one or more of the Debtors, this Plan provides for certain waivers, exculpations, releases and injunctions.

    (a)          Releases and Indemnification by Debtors.

    Except as otherwise specifically provided herein, for good and valuable consideration, including, but not limited to, the commitments and obligations of the Plan Funders necessary for consummation of this Plan, the service of the D&O Releasees to facilitate the expeditious reorganization of the Debtors and the implementation of the restructuring contemplated by this Plan, the commitment of Plan Funders to allow junior creditors to receive distributions under this Plan ahead of the Plan Funders' senior claims under the Notes, the efforts of the Plan Funders to facilitate the expeditious reorganization of the Debtors and the implementation of the restructuring contemplated by this Plan and the release granted by the Plan Funders hereunder, the Plan Funders, the Debtors and the Reorganized Debtors hereby release (i) all Noteholder Releasees, and (ii) all D&O Releasees, and their respective officers, directors, employees, attorneys, financ ial advisors, accountants (but not auditors), investment bankers, agents and representatives from any and all Claims, obligations, rights, suits, damages, Causes of Action, Claims asserted in the Derivative Suits, remedies and liabilities whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that the Debtors or their subsidiaries or the Plan Funders would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the Holder of any Claim or Equity Interest or other Person or Entity, based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date, except for claims and liabilities (x) in respect of any loan, advance or similar payment by the Debtors or their subsidiaries to any such Person, or (y) in respect of any contractual obligation owed by such Person to the Debtors or their subsidiaries. Notwithstand ing the foregoing, neither the Plan Funders, the Debtors, the Reorganized Debtors, nor any other party shall be construed under this Plan to have released or compromised in any way their rights including Causes of Action against Paul Frame, Cindy Moulton and Franklin Cardwell & Jones, P.C. The Reorganized Debtors shall support and defend the Plan, and defend the D&O Releasees with respect to the relief provided to the D&O Releasees under this Plan, by enforcing all Plan provisions in the Bankruptcy Court or any other court, and by paying any and all fees, costs or other expenses incurred in the defense of the D&O Releasees, to the extent necessary to effectuate and enforce the releases set forth herein, against any and all claims, obligations, rights, suits, damages, causes of action, remedies and liabilities, except to the extent limited in the foregoing subparagraph (a). The Reorganized Debtors shall defend and fully indemnify the D&O Releasees with respect to the exclusions set forth i n Section 10.4(b) of this Plan regarding any and all federal, state or local tax statutes, regulations and/or rules, and any and all federal, state or local environmental statutes, regulations and/or rules unless there is a final determination that such liability is the result of fraud or willful misconduct. The Reorganized Debtors shall fully indemnify the D&O Releasees for any act or omission, transaction, agreement, event or other occurrence that occurs after the Petition Date, except for those acts or omissions that are the result of fraud or willful misconduct.

    (b)          Limited Releases by Holders of Claims and Equity Interests.

    On the Effective Date, each Holder of a Claim and/or Equity Interest other than as otherwise provided in this Plan or the Confirmation Order, and any Committee shall be deemed to have released the Noteholder Releasees, the Debtors and the Reorganized Debtors and the D&O Releasees, from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date in any way relating or pertaining to (i) the Chapter 11 Cases, (ii) the Debtors as debtors-in-possession, or (iii) the negotiation, formulation and preparation of this Plan or Plan documents, except that no party shall be released from acts or omissions which are the result of fraud, willful misc onduct, gross negligence or, with respect to officers and directors of the Debtors, the usurpation of any corporate opportunity, and the provisions of this Section 10.4 shall not release or discharge any such Persons from any liabilities arising under (i) the Internal Revenue Code; (ii) the environmental laws of the United States, or (iii) any criminal laws of the United States or of any state. The foregoing release of the D&O Releasees is in consideration for their services rendered during the Chapter 11 Cases, the essential nature of such release to this Plan, the impact that any claims against D&O Releasees could have on the D&O Insurance Policies and other property of the Estate, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

Section 10.5          Preservation of Rights of Action.

    Except as otherwise provided in this Plan or in any contract, instrument, release, indenture or other agreement entered into in connection with this Plan, in accordance with section 1123(b) of the Bankruptcy Code, the Reorganized Debtors shall retain and may exclusively enforce any claims, rights and Causes of Action, including and claims against Paul Frame, Cindy Moulton and Franklin Cardwell & Jones, P.C., and in the Derivative Suits, that the Debtors or the Estates may hold against any Person or Entity that have not been released under this Plan. The Reorganized Debtors may pursue such retained claims, rights or Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors. All Causes of Action, rights or avoidance actions, claims, whether known or unknown, against any defendant in the Derivative Suits, or against any Entity arising from the same, similar or related operative facts which have been or may be brought, are preserved solely and exclusively for the Reorganized Debtors. These retained claims include, but are not limited to, actions or Causes of Action against Paul Frame, Cindy Moulton and Franklin Cardwell & Jones, P.C. On the Effective Date the Derivative Suits shall be deemed dismissed.

Section 10.6          Exculpation.

    The Debtors, the Reorganized Debtors, the D&O Releasees, the Noteholder Releasees and any Committee formed during the Debtors' Chapter 11 Cases and their respective advisors, attorneys, agents or any professionals retained by them (acting in such capacity) shall neither have nor incur any liability to, nor be subject to any right of action by, any Person or Entity for any act taken or omitted to be taken in connection with or related to the formulation, preparation, dissemination, implementation, administration, Confirmation or effectiveness of this Plan, the Disclosure Statement, the solicitation of votes for and the pursuit of Confirmation of this Plan, the consummation of this Plan or the administration of this Plan or the property to be distributed under this Plan, or any contract, instrument, release or other agreement or document created or entered into in connection with this Plan, or any other act taken or omitted to be taken in co nnection with the Chapter 11 Cases; provided, however, that the foregoing provisions of this Section 10.6 shall have no effect on the liability of any Person or Entity that results from any such act or omission that is determined in a Final Order to have constituted gross negligence, recklessness or willful misconduct.

Section 10.7          Injunction.

    Except as otherwise provided in this Plan, from and after the Confirmation Date, all Persons and Entities that have held, currently hold or may hold a Claim or Interest (including a Securities Claim) or other debt or liability or an Equity Interest or other right of an equity security holder that is terminated under this Plan are forbidden from taking any of the following actions against the Debtors, the Reorganized Debtors, the Estates or their respective property on account of any such Claims (including Securities Claims) or other debts, liabilities or Equity Interests or other terminated Equity Interests or rights: (a) commencing or continuing in any manner, any suit, action or other proceeding on account of or respecting any claim, obligation, debt, right, cause of action, remedy or liability released or to be released pursuant to this Article X; (b) enforcing, attaching, collecting or recovering in any m anner any judgment, award, decree or order; (c) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to the Debtors; (d) creating, perfecting or enforcing any lien or encumbrance; and (e) commencing or continuing any action, in any manner, in any place, that does not comply with or is inconsistent with the provisions of this Plan or the Bankruptcy Code, provided, however, that the foregoing injunction shall not preclude police or regulatory agencies from fulfilling their statutory duties.

ARTICLE XI

RETENTION OF JURISDICTION

Section 11.1          Retention of Jurisdiction.

    Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter 11 Cases after the Effective Date as legally permissible, including jurisdiction to:

    (a)          allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim or Equity Interest, including the resolution of any request for payment of any Administrative Claim or Priority Tax Claim and the resolution of any and all objections to the allowance or priority of Claims and Equity Interests;

    (b)          grant or deny any applications for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or this Plan, for periods ending on or before the Confirmation Date;

    (c)          resolve any matters related to the assumption, assumption and assignment, or rejection of any executory contract or unexpired lease to which the Debtors are parties or with respect to which the Debtors may be liable and to hear, determine and, if necessary, liquidate, any Claims arising therefrom, including those matters related to the amendment after the Effective Date pursuant to Article VI above to add any executory contracts or unexpired leases to the list of executory contracts and unexpired leases to be rejected;

  (d)          ensure that distributions to Holders of Allowed Claims and Holders of Allowed Equity Interests are accomplished pursuant to the provisions of this Plan, including ruling on any motion Filed pursuant to Article VII;

    (e)          decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any applications involving the Debtors that may be pending on the Effective Date;

    (f)          enter such orders as may be necessary or appropriate to implement or consummate the provisions of this Plan and all contracts, instruments, releases, indentures and other agreements or documents created in connection with this Plan or the Disclosure Statement;

    (g)          resolve any cases, controversies, suits or disputes that may arise in connection with the Consummation, interpretation or enforcement of this Plan or any Person's or Entity's obligations incurred in connection with this Plan;

    (h)          issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person or Entity with Consummation or enforcement of this Plan, except as otherwise provided herein;

    (i)          resolve any cases, controversies, suits or disputes with respect to the releases, injunction and other provisions contained in Article X and enter such orders as may be necessary or appropriate to implement such releases, injunction and other provisions;

    (j)          enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked or vacated;

    (k)          determine any other matters that may arise in connection with or relate to this Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release, or other agreement or document created in connection with this Plan or the Disclosure Statement;

    (l)          enter an order and/or final decree concluding the chapter 11 Cases;

    (m)          resolve disputes concerning any reserves with respect to Disputed Claims and Disputed Equity Interests or the administration thereof;

    (n)          recover all assets of the Debtors and property of their Estates, wherever located, including any Causes of Action; and

    (o)          hear and resolve all matters concerning state, local and federal taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy Code.

ARTICLE XII

MISCELLANEOUS PROVISIONS

Section 12.1          Payment of Statutory Fees.

    All fees payable pursuant to Section 1930 of title 28 of the United States Code, as determined by the Bankruptcy Court at the hearing pursuant to Section 1128 of the Bankruptcy Code, shall be paid on or before the Effective Date. Any such fees accrued after the Effective Date will constitute an Allowed Administrative Claim and be treated in accordance with Section 2.1.

Section 12.2          Dissolution of the Committee.

    On the Effective Date, any Committee that has been appointed shall be deemed dissolved and its members shall be released and discharged from all rights and duties arising from, or related to, the Chapter 11 Cases.

Section 12.3          Amendment or Modification of Plan.

    Subject to the limitations contained herein, (1) the Debtors reserve the right, subject to the consent of the Plan Funders, in accordance with the Bankruptcy Code and the Bankruptcy Rules, to amend or modify this Plan prior to the entry of the Confirmation Order, and (2) after the entry of the Confirmation Order, the Debtors, may, upon the consent of the Plan Funders, and order of the Bankruptcy Court, amend or modify this Plan, in accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or reconcile any inconsistency in this Plan in such manner as may be necessary to carry out the purpose and intent of this Plan. The Plan Funders shall not be obligated to proceed under the Plan Funding Agreement if they do not consent to modifications or amendments made to the Plan.

Section 12.4          Revocation of Plan.

    The Debtors reserve the right, subject to the consent of Plan Funders, at any time prior to the entry of the Confirmation Order, to revoke and withdraw this Plan. The Debtors shall have the right to revoke and withdraw this Plan without the consent of the Plan Funders if the Debtors' failure to do so would violate the Debtors' fiduciary duties to consider and propound a plan or otherwise seek to effectuate a transaction which would yield a material enhancement to the benefits to Holders of Allowed Claims and/or Allowed Interests beyond the benefits provided by this Plan. In the event of a withdrawal of this Plan, nothing contained herein or in the Disclosure Statement shall be deemed an admission by the Debtors.

Section 12.5          Successors and Assigns.

    The rights, benefits and obligations of any Person or Entity named or referred to in this Plan shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign of such Person or Entity.

Section 12.6          Reservation of Rights.

    Except as expressly set forth herein, this Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. Neither the filing of this Plan, nor any statement or provision contained herein or in the Disclosure Statement, nor the taking of any action by the Debtors with respect to this Plan shall be deemed to be an admission or waiver of any rights of the Debtors with respect to the Holders of Claims or Equity Interests prior to the Effective Date.

Section 12.7          Exemption from Certain Transfer Taxes.

    Pursuant to section 1146 of the Bankruptcy Code: (a) the issuance, transfer or exchange of any securities, instruments or documents; (b) the creation of any other lien, mortgage, deed of trust or other security interest; (c) the making or assignment of any lease or sublease or the making or delivery of any deed or other instrument of transfer under, pursuant to, in furtherance of, or in connection with this Plan, including, without limitation, any deeds, bills of sale or assignments executed in connection with any of the transactions contemplated under this Plan or the reinvesting, transfer or sale of any real or personal property of the Debtors pursuant to, in implementation of, or as contemplated in this Plan, and (d) the issuance, renewal, modification or securing of indebtedness by such means, and the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, this Plan, including, without limitation, the Confirmation Order, shall not be subject to any document recording tax, stamp tax, conveyance fee or other similar tax, mortgage tax, real estate transfer tax, mortgage recording tax or other similar tax or governmental assessment. Consistent with the foregoing, each recorder of deeds or similar official for any country, city of governmental unit in which any instrument hereunder is to be recorded shall, pursuant to the Confirmation Order, be ordered and directed to accept such instrument without requiring the payment of any filing fees, documentary stamp tax, deed stamps, stamp tax, transfer tax, intangible tax or similar tax.

Section 12.8          Further Assurances.

    The Debtors, the Reorganized Debtors and all Holders of Claims or Equity Interests receiving distributions under this Plan and all other parties in interest shall, from time to time, prepare, execute and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of this Plan.

Section 12.9          Implementation.

    The Debtors shall take all steps and execute all documents, including appropriate releases, necessary to effectuate the provisions contained in this Plan.

Section 12.10          Service of Documents.

    Any pleading, notice or other document required by this Plan to be served on or delivered to the Debtor shall be sent by first class U.S. mail, postage prepaid to:

Seitel, Inc.
Attn: President
10811 South Westview Circle Drive
Suite 100, Building C
Houston, Texas 77043

                                                                with copies to:

Greenberg Traurig, LP

Counsel to Seitel, Inc., et al.
Attn:    Hal M. Hirsch, Esq.
           Allen G. Kadish, Esq.
200 Park Avenue
New York, New York 10166

Fax: (212) 801-6400

Section 12.11          Plan Supplement.

    The Amended Certificates of Incorporation, Amended By-Laws and such other documents to implement this Plan as may be designated by the Debtors and approved, in form and substance, by the Plan Funders shall be contained in the Plan Supplement and Filed at least five (5) days prior to the last day upon which Holders of Impaired Classes of Claims and Equity Interests may vote to accept or reject this Plan.

Section 12.12          Compromise of Controversies.

    Pursuant to Bankruptcy Rule 9019, and in consideration for the classification, distribution and other benefits provided under this Plan, the provisions of this Plan shall constitute a good faith compromise and settlement of all Claims and Equity Interests or controversies resolved pursuant to this Plan. The entry of the Confirmation Order shall constitute the Bankruptcy Court's approval of each of the foregoing compromises or settlements, and all other compromises and settlements provided for in this Plan, and the Bankruptcy Court's findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtors, the Reorganized Debtors, the Estates, and any Entity holding Claims or Equity Interests against the Debtors.

Section 12.13          Final Order.

    Except as otherwise expressly provided in this Plan (including without limitation in section 9.2, which requires the consent of the Plan Funders to any waiver with respect to the Confirmation Order), any requirement in the Plan for a Final Order may be waived by the Debtors upon written notice filed with the Bankruptcy Court. No such waiver shall prejudice the right of any party in interest to seek a stay pending appeal of any order that is not a Final Order.

Section 12.14          Business Days.

    If any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, but shall be deemed to have been completed as of the required date.

Section 12.15          Severability.

    Should the Bankruptcy Court determine, prior to the Confirmation Date, that any provision of the Plan is either illegal on its face or illegal as applied to any Claims or Equity Interests, such provision shall be unenforceable as to all holders of Claims or Equity Interests or to the specific holder of such Claim or Equity Interest, as the case may be, as to which the provision is illegal. Unless otherwise determined by the Bankruptcy Court, such a determination of unenforceability shall in no way limit or affect the enforceability and operative effect of any other provision of this Plan. The Debtors reserve the right not to proceed with Confirmation or consummation of this Plan if any such ruling occurs.

Section 12.16          Time.

    Unless otherwise specified herein, in computing any period of time prescribed or allowed by this Plan, the day of the act or event from which the designated period begins to run shall not be included. The last day of the period so computed shall be included, unless it is not a Business Day, in which event the period runs until the end of next succeeding day that is a Business Day. Otherwise, the provisions of Bankruptcy Rule 9006 shall apply.

Section 12.17          No Interest.

    Unless otherwise specifically provided for in this Plan or Confirmation Order or Allowed by a Final Order, post-petition interest shall not accrue or be paid on Claims, and no holder of a Claim or Equity Interest shall be entitled to such interest or any penalty or late charge accruing on or after the Petition Date on any such Claim or Equity Interest. Interest shall not accrue or be paid upon any Disputed Claim with respect to the period from the Petition Date to the date paid with respect to such Claim once Allowed.

Section 12.18          No Attorneys' Fees.

    No attorneys' fees will be paid by the Debtors with respect to any Claim or Equity Interest except as expressly specified herein or Allowed by a Final Order.

Section 12.19          Defenses with Respect to Unimpaired Claims.

    Except as otherwise provided in this Plan, nothing shall affect the rights and legal and equitable defenses of the Debtors, with respect to any Unimpaired Claim, including, but not limited to, all rights in respect of legal and equitable defenses to setoffs or recoupments against Unimpaired Claims.

Section 12.20          No Injunctive Relief.

    No Claim or Equity Interest shall under any circumstances be entitled to specific performance or other injunctive, equitable or other prospective relief.

Section 12.21          Continued Confidentiality Obligations.

    Pursuant to the terms thereof, members of and advisors to any Committee, any other holder of a Claim or Equity Interest and their respective predecessors, successors and assigns shall continue to be obligated and bound by the terms of any confidentiality agreement executed by them in connection with these Chapter 11 Cases or the Debtors, to the extent that such agreement by its terms, may continue in effect after the Confirmation Date.

Section 12.22          No Admissions.

    Notwithstanding anything herein to the contrary, nothing contained in this Plan shall be deemed an admission by the Debtors with respect to any matter set forth herein, including, without limitation, liability on any Claim or Equity Interest or the propriety of any classification of any Claim or Equity Interest.

Section 12.23          Waiver.

    The Debtors reserve the right, in their sole discretion, to waive any provision of this Plan to the extent such provision is for the sole benefit of the Debtors and/or their affiliates.

Section 12.24          Waiver of Automatic Stay to Enforce Judgment.

    The Debtors with the consent of the Plan Funders may request that the Confirmation Order include (i) a finding that Federal Rule of Civil Procedure 62(a), Bankruptcy Rule 7062 and Bankruptcy Rule 3020(e) shall not apply to the Confirmation Order and (ii) authorization for the Debtors to consummate this Plan immediately after entry of the Confirmation Order.

Dated:        Houston, Texas                   July 21, 2003 SEITEL, INC.


By:/s/ Larry E. Lenig, Jr.                              
          Larry E. Lenig, Jr.
          President and Chief Executive Officer Seitel Management, Inc.,
N360X, L.L.C., Seitel Delaware, Inc.,
Seitel Data Corp., Seitel Data, Ltd.,
Seitel Offshore Corp., Datatel, Inc.,
Seitel Solutions, Inc., Seitel Solutions, L.L.C., Seitel Solutions, Ltd., SI Holdings, G.P.,
Seitel Solutions Holdings, L.L.C.,
Seitel Canada Holdings, Inc., SEIC, Inc.,
SEIC, L.L.C., DDD Energy, Inc.,
Energy Venture Holdings, L.L.C.,
Endeavor Exploration, L.L.C.,
Seitel Geophysical, Inc., Matrix Geophysical, Inc., Seitel Gas & Energy Corp.,
Seitel Power Corp., Geo-Bank, Inc.,
Alternative Communication Enterprises, Inc.,
EHI Holdings, Inc., Exsol Inc.,
Seitel IP Holdings, LLC, Seitel Natural Gas, Inc.,
Seitel Canada L.L.C.
and Express Energy I, LLC


By:/s/ Larry E. Lenig, Jr.                              
          Larry E. Lenig, Jr.
          Executive Vice President