Document:

REGISTERED

Exhibit 4(b)

	
      REGISTERED
	
      SEARS ROEBUCK ACCEPTANCE CORP.
	
      REGISTERED

	 	 	 
	
      No. FLR-
	
      MEDIUM-TERM NOTE SERIES VII
	
      CUSIP

		
      (FLOATING RATE)
	

[Except as otherwise provided in Section 2.10 of the Indenture referred to on
the reverse hereof, this Note may be transferred, in whole but not in part, only
to another nominee of the Depository or to a successor Depository or to a
nominee of such successor Depository.

Unless this Note is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to Sears Roebuck
Acceptance Corp. or its agent for registration of transfer, exchange or payment,
and any Note issued upon registration of transfer of, or in exchange for, or in
lieu of, this Note is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co. ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.]

ORIGINAL ISSUE DATE:

MATURITY DATE:

	
      INTEREST RATE BASIS:
	
      ____ CD Rate
	
      ____ LIBOR

	
       

    	
      ____ CMT Rate (daily/weekly/monthly)
	
      ____ Prime Rate

	
       

    	
      ____ Commercial Paper Rate
	
      ____ Treasury Rate

	
       

    	
      ____ Federal Funds Rate
	
      ____ Other __________________

INITIAL INTEREST RATE:

INDEX MATURITY:

MAXIMUM RATE:

MINIMUM RATE:

SPREAD (plus or minus):

SPREAD MULTIPLIER:

INTEREST PAYMENT DATES:

INTEREST RESET DATES:

CALCULATION AGENT

     (IF OTHER THAN
BNY MIDWEST TRUST COMPANY):

DESIGNATED CMT MATURITY INDEX:

REDEMPTION COMMENCEMENT DATE:

	
       

    	
      REDEMPTION PRICE:
	
      IF A REDEMPTION COMMENCEMENT DATE IS SPECIFIED ABOVE, THE REDEMPTION
      PRICE SHALL BE         % OF THE
      PRINCIPAL AMOUNT OF THIS NOTE TO BE REDEEMED AND THE REDEMPTION PRICE
      SHALL DECLINE AT EACH ANNIVERSARY OF THE REDEMPTION COMMENCEMENT DATE BY
              % OF THE PRINCIPAL AMOUNT
      OF THIS NOTE TO BE REDEEMED UNTIL THE REDEMPTION PRICE IS 100% OF SUCH
      PRINCIPAL AMOUNT.

	
      13010285 02041376
	
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STATED REDEMPTION DATE(S) AND REDEMPTION PRICE(S):

	
      Stated Redemption Date
	
      Redemption Price if Redeemed at Option of Company
	
      Redemption Price if Repaid at Option of Holder

	 	 	 

  
  
  IF ONE OR MORE STATED REDEMPTION DATES ARE SPECIFIED ABOVE,
  THE REDEMPTION PRICE SHALL BE THE PERCENTAGE OF THE PRINCIPAL AMOUNT OF THIS
  NOTE TO BE REDEEMED OR REPAID AS REFLECTED ABOVE.

  REDEEMABLE AT OPTION OF: [THE COMPANY,] [THE HOLDER,] OR
  [THE COMPANY OR THE HOLDER]

  NOTICE PROVISIONS FOR REDEMPTION ON A STATED REDEMPTION
  DATE:

  

OTHER PROVISIONS:

Sears Roebuck Acceptance Corp., a corporation duly organized and existing
under the laws of the State of Delaware (herein referred to as the
"Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to CEDE & CO. or registered assigns, upon presentation and surrender
of this Note on the Maturity Date shown above or any earlier date of redemption
at the office or agency of the Company in the Borough of Manhattan of The City
of New York, or, at the option of the Holder, such office or agency, if any,
maintained by the Company in the city in which the principal executive offices
of the Company are located or the city in which the principal corporate trust
office of the Trustee is located, the principal sum of

  
	
      _________________

      Principal Amount
	 	
      _________________

      Specified Currency

and to pay interest thereon at the rate per annum equal to
the Initial Interest Rate shown above until the first Interest Reset Date shown
above and thereafter at the rate determined in accordance with the provisions on
the reverse hereof depending on the Interest Rate Basis shown above.

This Note will bear interest from and including the Original
Issue Date specified above or from and including the most recent Interest
Payment Date to which interest on this Note has been paid or duly provided for.

Interest on this Note shall be payable in arrears on the
Interest Payment Dates and on the Maturity Date indicated above (or the date of
redemption), except that if this Note was originally issued between a Regular
Record Date and an Interest Payment Date, the first payment of interest will be
made on the Interest Payment Date following the next succeeding Regular Record
Date to the registered Holder on such next succeeding Regular Record Date. If
any Interest Payment Date would fall on a day that is not a Business Day (as
defined below), such Interest Payment Date shall be postponed to the next
succeeding Business Day, except that if the Interest Rate Basis on this Note is
LIBOR and such next Business Day falls in the next calendar month, such Interest
Payment Date shall be the next preceding Business Day. If the Maturity Date of
this Note (or the date of redemption) falls on a day that is not a Business Day,
the payment of interest and principal (and premium, if any) may be made on the
next succeeding Business Day with the same force and effect as if made at
maturity, and no interest on such payment shall accrue for the period from and
after the Maturity Date (or such date of redemption) to the date of such payment
on such next Business Day.

The Regular Record Date shall be the date 15 calendar days
prior to each Interest Payment Date, whether or not such date shall be a
Business Day.

"Business Day" as used herein
means each Monday, Tuesday, Wednesday, Thursday and Friday (a) that is not
a legal holiday for banking institutions in any of the City of Wilmington,
Delaware, the City of Chicago, Illinois, The City of New York, New York or the
city in which the principal corporate trust office of the Trustee is located;
(b) if this Note is denominated in a currency other than Dollars or the Euro,
that is not a legal holiday for banking
institutions in any of the City of Wilmington, Delaware, the City of Chicago,
Illinois, The City of New York, New York, the city in which the principal
corporate trust office of the Trustee is located or

    	
      13010285 02041376
	
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      __________________________________________________

           Principal Financial Center of Country
      Issuing Currency

(c) if the Specified Currency is the Euro, that is a day on which the
Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET)
System is open and is not a legal holiday for banking institutions in any of the
City of Wilmington, Delaware, the City of Chicago, Illinois, The City of New
York, New York, the City of Brussels, Belgium or the city in which the principal
corporate trust office of the Trustee is located and (d) if the Interest Rate
Basis with respect to this Note is LIBOR, that is a day on which dealings in
deposits in Dollars are transacted in the London interbank market and is not a
legal holiday for banking institutions in any of the City of Wilmington,
Delaware, the City of Chicago, Illinois, The City of New York, New York or the
city in which the principal corporate trust office of the Trustee is located.

The principal of (and premium, if any), and interest on, this Note is payable
by the Company in the Specified Currency. Interest payable on any Interest
Payment Date (other than Defaulted Interest) shall be payable to the person who
is the registered Holder at the close of business in The City of New York on the
immediately preceding Regular Record Date. Interest payable upon redemption or
at maturity (other than a redemption or maturity occurring on an Interest
Payment Date) will be paid to the same person to whom the principal amount of
this Note is payable.

Any interest not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered Holder on such
Interest Payment Date, and may be paid to the Person in whose name this Note is
registered at the close of business in The City of New York on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice of which shall be given to Holders not less than 10 days prior to such
Special Record Date, or may be paid, at any time in any other lawful manner, all
as more fully set forth in the Indenture. To the extent permitted by law and the
Indenture, such Defaulted Interest shall accrue interest at the rate borne by
the Note from the date of such failure to punctually pay or provide for such
interest until such Defaulted Interest is paid or duly provided for.

Payment of principal of (and premium, if any), and
interest on, this Note (if the Holder of this Note is a Depository as defined in
the Indenture referred to on the reverse hereof or a nominee of such a
Depository) will be made in accordance with any applicable provisions of such
written agreement between the Company, the Trustee and such Depository (or its
nominee) as may be in effect from time to time or (if the Holder of this Note
holds an aggregate principal amount of $10,000,000 (or the equivalent in a
Foreign Currency) or more of Notes with respect to which such payment of
principal (and premium, if any) or interest, as applicable, is to be made on
such day) will be made by wire transfer if the Holder shall have designated in
writing to the Trustee an account with a bank located in the country issuing the
Specified Currency (or, if the Specified Currency is the Euro, an account
located in any member state of the European Union that has adopted the Euro) or
such other country as shall be satisfactory to the Company and the Trustee. If
payment of interest is to be made by wire transfer, such information must be
received by the Trustee at its corporate trust office in the Borough of
Manhattan of The City of New York on or prior to the Regular Record Date for an
Interest Payment Date. The Trustee will, subject to applicable laws and
regulations and until it receives notice to the contrary, make such payment to
such Holder by wire transfer to the designated account. If a payment of interest
is not made in accordance with such a written agreement or by wire transfer,
payment will be made by check. Checks for payment of interest on an Interest
Payment Date will be mailed to the Holder at the address of such Holder
appearing on the Security Register on the applicable Regular Record Date.

To receive payment of a Dollar-denominated Note upon redemption or at
maturity, a Holder must make presentation and surrender of such Note on or
before the Redemption Date or Maturity Date, as applicable. Payment (other than
payment in accordance with a written agreement between the Company, the Trustee
and a Depository (or its nominee) as set forth above) will be made by check
unless proper wire instructions are on file with the Trustee or are received at
presentment. To receive payment of a Note denominated in a Foreign Currency upon
redemption or at maturity, a Holder must make presentation and surrender such
Note not less than two Business Days prior to the Redemption Date or Maturity
Date, as applicable. Upon presentation and surrender of a Note denominated in a
Foreign Currency at any time after the date two Business Days prior to the
Redemption Date or Maturity Date, as applicable, the Company will pay the
principal amount (and premium, if

	
      13010285 02041376
	
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any) of such Note, and any interest due upon redemption or at maturity,
(unless the Redemption Date or Maturity Date is an Interest Payment Date), two
Business Days after such presentation and surrender.

The Notes will be direct, unsecured and unsubordinated obligations of the
Company and will rank equally with all of the Company's other unsecured and
unsubordinated indebtedness from time to time outstanding.

The Company will pay any administrative costs imposed by banks in connection
with sending payments by wire transfer, but any tax, assessment or governmental
charge imposed upon payments will be borne by the Holders of the Notes in
respect of which payments are made.

Notwithstanding the foregoing, if Other Provisions apply to this Note as
specified on the face hereof, this Note shall be subject to the terms set forth
in such Other Provisions.

Reference is hereby made to the further provisions of this Note set forth on
the reverse hereof, and such further provisions shall for all purposes have the
same effect as though fully set forth at this place.

This Note shall not be entitled to any benefit under the Indenture referred
to on the reverse hereof or any indenture supplemental hereto, or become valid
or obligatory for any purpose, until the certificate of authentication hereon
shall have been signed by or on behalf of the Trustee under such Indenture.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

 

	
      Dated:
	
      SEARS ROEBUCK ACCEPTANCE CORP.

	 	 
	 	
      By ________________________________

            President

	 	 
	 	 
	 	
      By ________________________________

            Vice President

CERTIFICATE OF AUTHENTICATION

This is one of the Notes designated and referred

to in the within-mentioned Indenture.

BNY MIDWEST TRUST COMPANY,

as Trustee

By ____________________________

       Authorized Signatory

[Corporate Seal]

	
      13010285 02041376
	
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SEARS ROEBUCK ACCEPTANCE CORP.

Medium-Term Note Series VII

This Note is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Company (hereinafter
called the "Securities") of the series hereinafter specified,
unlimited in aggregate principal amount, all issued or to be issued under or
pursuant to an indenture dated as of October 1, 2002, executed between the
Company and BNY MIDWEST TRUST COMPANY, as Trustee; to which indenture and all
indentures supplemental thereto (herein collectively called the
"Indenture") reference is hereby made for a specification of the
rights and limitation of rights thereunder of the Holders of the Securities, the
rights and obligations thereunder of the Company and the rights, duties and
immunities thereunder of the Trustee and for the terms upon which the Securities
are to be authenticated and delivered. The Securities may be issued in one or
more series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at different
rates, may be subject to different redemption provisions (if any), may be
subject to different covenants and defaults and may otherwise vary as in the
Indenture provided. This Note is one of a series designated as the
"Medium-Term Notes Series VII" (hereinafter referred to as the
"Notes") of the Company, up to $1,500,000,000 in aggregate principal
amount. Although the Company may not issue more than $1,500,000,000 of the Notes
of this series, the Company may, from time to time, without the consent of the
Holder of this Note, issue additional Notes or other debt securities having the
same terms as this Note (other than the date of issuance, the date interest, if
any, begins to accrue and the offering price, which may vary) that will form a
single issue with this Note. BNY Midwest Trust Company also serves as registrar
and as Paying Agent in connection with the Notes. This Note is not subject to
any sinking fund. All terms used in this Note which are defined in the Indenture
and which are not otherwise defined in this Note shall have the meanings
assigned to them in the Indenture.

This Note will bear interest at a rate per annum equal to the
Initial Interest Rate shown on the face hereof until the first Interest Reset
Date shown on the face hereof and thereafter at the rate determined in
accordance with the applicable provisions below by reference to the Interest
Rate Basis shown on the face hereof based on the Index Maturity, if any, shown
on the face hereof (i) plus or minus the Spread, if any, specified on the face
hereof, and/or (ii) multiplied by the Spread Multiplier, if any, specified on
the face hereof. The rate of interest on this Note shall be reset on each
Interest Reset Date; provided, however, that the Initial Interest Rate
shall be in effect from the Original Issue Date to the first Interest Reset
Date. If any Interest Reset Date would be a day that is not a Business Day, the
Interest Reset Date shall be postponed to the next day that is a Business Day,
except that if the Interest Rate Basis on this Note is LIBOR and if such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day.

The "Interest Determination Date" pertaining to an
Interest Reset Date, if the Interest Rate Basis for this Note is the Commercial
Paper Rate, Prime Rate or Federal Funds Rate, shall be the Market Day (as
defined below) preceding such Interest Reset Date. The "Interest
Determination Date" pertaining to an Interest Reset Date, if the Interest
Rate Basis for this Note is the LIBOR, CD Rate or CMT Rate; shall be the second
Market Day preceding such Interest Reset Date. The "Interest Determination
Date" pertaining to an Interest Reset Date, if the Interest Rate Basis for
this Note is the Treasury Rate, shall be the day of the week in which such
Interest Reset Date falls on which Treasury bills would normally be auctioned.
Treasury bills are usually sold at auction on the Monday of each week, unless
that day is a legal holiday, in which case the auction is usually held on the
following Tuesday, except that such auction may be held on the preceding Friday.
If the Interest Rate Basis on this Note is the Treasury Rate and, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
shall be the Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week. If an auction date shall fall on any
Interest Reset Date, then, if the Interest Rate Basis on this Note is the
Treasury Rate, such Interest Reset Date shall instead be the first Market Day
immediately following such auction date. The term "Market Day" means
any day that is not a legal holiday for banking institutions in The City of New
York, except that if the Interest Rate Basis on this Note is LIBOR, "Market
Day" shall mean any such day on which dealings in Dollar deposits are
transacted in the London interbank market.

The "Calculation Date" pertaining to an Interest
Determination Date shall be the earlier of (i) the tenth calendar day after each
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or the date of maturity, redemption or
repayment.

Determination of Commercial Paper Rate. If the
Interest Rate Basis on this Note is the Commercial Paper Rate, the Commercial
Paper Rate with respect to this Note for each Interest Reset Date shall equal
the

	
      13010285 02041376
	
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Money Market Yield (calculated as described below) of the per
annum rate (quoted on a bank discount basis) for the relevant Interest
Determination Date for commercial paper having the Index Maturity specified on
the face hereof as such rate is published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15 (519) Selected Interest
Rates" or any successor publication of the Board of Governors of the
Federal Reserve System ("H.15 (519)") under the heading
"Commercial Paper - Nonfinancial" or such other heading representing
commercial paper of non-financial issuers whose bond rating is "AA,"
or the equivalent, from a nationally recognized statistical rating agency. In
the event that such rate is not published prior to 3:00 P.M., New York City
time, on the relevant Calculation Date, then the Commercial Paper Rate with
respect to such Interest Reset Date shall be the Money Market Yield of such rate
on such Interest Determination Date for commercial paper having the Index
Maturity specified on the face hereof as published in the daily update of H.15
(519), available through the world wide web site of the Board of Governors of
the Federal Reserve System at http://www.federalreserve.gov/releases/H15/update,
or any successor site or publication or such other recognized electronic source
used for the purpose of displaying the applicable rate ("H.15 Daily
Update"), under the heading "Commercial Paper - Nonfinancial,"
or another heading representing commercial paper of non-financial issuers whose
bond rating is "AA," or the equivalent, from a nationally recognized
statistical rating agency. If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or the H.15
Daily Update as described above, the Commercial Paper Rate with respect to such
Interest Reset Date shall be calculated by the Calculation Agent and shall be
the Money Market Yield of the arithmetic mean of the offered per annum rates
(quoted on a bank discount basis), as of 11:00 A.M., New York City time, on such
Interest Determination Date, of three leading unaffiliated dealers of Dollar
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper of the Index Maturity specified on the face hereof placed for
an industrial issuer whose bond rating is "AA", or the equivalent,
from a nationally recognized statistical rating agency; provided, however,
that if fewer than three dealers selected as aforesaid by the Calculation Agent
are quoting as mentioned in this sentence, the Commercial Paper Rate with
respect to such Interest Reset Date shall be the Commercial Paper Rate in effect
on such Interest Determination Date.

"Money Market Yield" means for the rate which is
quoted on a bank discount basis, a yield (expressed as a percentage) calculated
in accordance with the following formula:

	 	
      Money Market Yield =
	
          D X 360    
      X 100

	 	 	
      360 - (D X M)

where "D" refers to the per annum rate for a
security, quoted on a bank discount basis and expressed as a decimal; and
"M" refers to the number of days in the period for which accrued
interest is being calculated.

Determination of Prime Rate. If the Interest Rate
Basis on this Note is the Prime Rate, the Prime Rate with respect to this Note
for each Interest Reset Date shall equal the rate set forth for the relevant
Interest Determination Date in H.15(519) under the heading "Bank Prime
Loan." In the event that such rate is not published prior to 3:00 P.M., New
York City time, on the relevant Calculation Date, then the Prime Rate with
respect to such Interest Reset Date shall be the rate on such Interest
Determination Date as published in the H.15 Daily Update under the heading
"Bank Prime Loan." In the event that such rate is not published prior
to 3:00 P.M., New York City time, on the relevant Calculation Date, in either
H.15 (519) or the H.15 Daily Update, then the Prime Rate with respect to such
Interest Reset Date shall be the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the display designated as page
"USPRIME1" on the Reuters Monitor Money Rates Service (or such other
page as may replace the USPRIME1 page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks)
("Reuters Screen USPRIME1 Page") as such bank's prime rate or base
lending rate as in effect for such Interest Determination Date as quoted on the
Reuters Screen USPRIME1 Page as of 11:00 a.m. New York City time on such
Interest Determination Date. If fewer than four such rates appear on the Reuters
Screen USPRIME1 Page on such Interest Determination Date, the Prime Rate with
respect to such Interest Reset Date shall be the arithmetic mean of the prime
rates or base lending rates (quoted on the basis of the actual number of days in
the year divided by a 360-day year) as of the close of business on such Interest
Determination Date by three major unaffiliated banks in The City of New York
selected by the Calculation Agent; provided, however, that if fewer than
three banks selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Prime Rate with respect to such Interest Reset
Date will be the Prime Rate in effect on such Interest Determination Date.

Determination of LIBOR. If the Interest Rate Basis on
this Note is LIBOR, LIBOR with respect to this Note for each Interest Reset Date
shall be determined in accordance with the following provisions:

	
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  (i) On the relevant Interest Determination Date, LIBOR will be the rate for
  deposits in Dollars having the Index Maturity specified on the face hereof,
  commencing on the second Market Day immediately following such Interest
  Determination Date that appears on page 3750 of Moneyline Telerate, Inc., as
  displayed on "BBAM" (British Bankers Association Official BBA LIBOR
  Fixings) in The Bloomberg Professional Service, or any other service that may
  replace Moneyline Telerate, Inc. on page BBAM or such other page as may
  replace that page on the Bloomberg Professional Service or a successor
  service, in each case, for the purposes of displaying London interbank offered
  rates of major banks ("Bloomberg Page BBAM"), as of 11:00 A.M.,
  London time, on such Interest Determination Date. If such rate does not appear
  on Bloomberg Page BBAM, LIBOR with respect to such Interest Reset Date shall
  be determined as described in (ii) below.

  (ii) With respect to an Interest Determination Date on
  which no such rate appears on Bloomberg Page BBAM as described in (i) above,
  LIBOR shall be determined on the basis of the rates at approximately 11:00
  A.M., London time, on such Interest Determination Date at which deposits in
  Dollars having the Index Maturity specified on the face hereof are offered to
  prime banks in the London interbank market by four major banks in the London
  interbank market selected by the Calculation Agent commencing on the second
  Market Day immediately following such Interest Determination Date and in a
  principal amount equal to an amount of not less than U.S.$1,000,000 that in
  the Calculation Agent's judgment is representative for a single transaction in
  such market at such time (a "Representative Amount"). The
  Calculation Agent shall request the principal London office of each of such
  banks to provide a quotation of its rate. If at least two such quotations are
  provided, LIBOR with respect to such Interest Reset Date shall be the
  arithmetic mean of such quotations. If fewer than two quotations are provided,
  LIBOR with respect to such Interest Reset Date shall be the arithmetic mean of
  the rates quoted at approximately 11:00 A.M., New York City time, on such
  Interest Determination Date by three major unaffiliated banks in The City of
  New York, selected by the Calculation Agent, for loans in Dollars to leading
  European banks having the Index Maturity specified on the face hereof
  commencing on the Interest Reset Date and in a Representative Amount; provided,
  however, that if fewer than three banks selected as aforesaid by the
  Calculation Agent are quoting as mentioned in this sentence, LIBOR with
  respect to such Interest Reset Date shall be the LIBOR in effect on such
  Interest Determination Date.

Determination of Treasury Rate. If the Interest Rate
Basis on this Note is the Treasury Rate, the Treasury Rate with respect to this
Note for each Interest Reset Date shall equal

  (i) the rate for the auction (the "Auction") on
  the relevant Interest Determination Date of direct obligations of the United
  States ("Treasury bills") having the Index Maturity specified on the
  face hereof as that rate appears on the display designated as "AUCR
  US" on The Bloomberg Professional Service (or any successor service)
  opposite the caption "INVESTMENT RT" (or any other page as may
  replace that page on that service), or

  (ii) if the appropriate page referred to in clause (i) is
  not displayed by 3:00 P.M. New York City time, on such Calculation Date, the
  Bond Equivalent Yield of the auction rate of the applicable Treasury bills as
  announced by the United States Department of the Treasury, or

  (iii) if the appropriate page referred to in clause (i) is
  not published as provided in clause (i), or if the rate referred to in clause
  (ii) is not so announced by the United States Department of the Treasury, or
  if the Auction is not held, the Bond Equivalent Yield of the rate on the
  relevant Interest Determination Date of the applicable Treasury bills as
  published in H.15 (519) under the heading "U.S. Government
  Securities/Treasury Bills/Secondary Market," or

  (iv) if the rate referred to in clause (iii) is not so
  published by 3:00 P.M., New York City time, on the relevant Calculation Date,
  the rate on the relevant Interest Determination Date of the applicable
  Treasury bills as published in the H.15 Daily Update under the heading
  "U.S. Government Securities/Treasury Bills/Secondary Market," or

  (v) if the rate referred to in clause (iv) is not so
  published by 3:00 P.M. New York City time, on the relevant Calculation Date,
  the rate on the relevant Interest Determination Date calculated by the
  Calculation

	
      13010285 02041376
	
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  Agent as the Bond Equivalent Yield of the arithmetic mean
  of the secondary market bid rates as of approximately 3:30 P.M., New York City
  time, on such Interest Determination Date, of three primary unaffiliated
  United States government securities dealers in The City of New York selected
  by the Calculation Agent for the issue of Treasury bills with a remaining
  maturity closest to the Index Maturity specified on the face hereof; or

  (vi) if fewer than three dealers selected as aforesaid by
  the Calculation Agent are quoting as mentioned in clause (v), the Treasury
  Rate with respect to such Interest Reset Date shall be the Treasury Rate in
  effect on such Interest Determination Date.

"Bond Equivalent Yield" means a yield (expressed as
a percentage) calculated in accordance with the following formula:

	
       

    	
      Bond Equivalent Yield =
	
           D x
      N      X
      100

	
       

    	
       

    	
      360 - (D x M)

where "D" refers to the per annum rate for Treasury
bills, quoted on a bank discount basis and expressed as a decimal; and "N
" refers to 365 or 366, as the case may be, and "M" refers to the
number of days in the period for which accrued interest is being calculated.

Determination of CD Rate. If the Interest Rate Basis
on this Note is the CD Rate, the CD Rate with respect to this Note for each
Interest Reset Date shall equal the rate for the relevant Interest Determination
Date for negotiable Dollar certificates of deposit having the Index Maturity
specified on the face hereof as published in H.15(519) under the heading
"CDs (Secondary Market)". In the event that such rate is not published
prior to 3:00 P.M., New York City time, on the relevant Calculation Date, then
the CD Rate with respect to such Interest Reset Date shall be the rate on such
Interest Determination Date for negotiable Dollar certificates of deposit having
the Index Maturity specified on the face hereof as published in the H.15 Daily
Update, under the heading "CDs (Secondary Market)." If by 3:00 P.M.,
New York City time, on such Calculation Date such rate is not published in
either H.15(519) or the H.15 Daily Update the CD Rate with respect to such
Interest Reset Date shall be calculated by the Calculation Agent and shall be
the arithmetic mean of the secondary market offered rates, as of 10:00 A.M., New
York City time, on such Interest Determination Date, of three leading
unaffiliated nonbank dealers of negotiable Dollar certificates of deposit in The
City of New York selected by the Calculation Agent for negotiable Dollar
certificates of deposit of major United States money market banks with a
remaining maturity closest to the Index Maturity specified on the face hereof in
an amount that is representative for a single transaction in that market at that
time; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this sentence,
the CD Rate with respect to such Interest Reset Date shall be the CD Rate in
effect on such Interest Determination Date.

Determination of Federal Funds Rate. If the Interest
Rate Basis on this Note is the Federal Funds Rate, the Federal Funds Rate with
respect to this Note for each Interest Reset Date shall equal the rate on the
relevant Interest Determination Date for Dollar Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)" as
displayed on the Bloomberg Professional Service (or any successor service) on
page FEDL01 (or any other page as may replace such page on that service)
("Bloomberg Page FEDL01"). In the event that such rate does not appear
on Bloomberg Page FEDL01 or is not published prior to 3:00 P.M., New York City
time, on the relevant Calculation Date, then the Federal Funds Rate with respect
to such Interest Reset Date will be the rate for Dollar Federal Funds on such
Interest Determination Date as published in the H.15 Daily Update under the
heading "Federal Funds (Effective)". If by 3:00 P.M., New York City
time, on such Calculation Date such rate is not published in either H.15(519) or
the H.15 Daily Update, the Federal Funds Rate with respect to such Interest
Reset Date shall be calculated by the Calculation Agent and shall be the
arithmetic mean of the rates, prior to 9:00 A.M., New York City time, on such
Interest Determination Date, for the last transaction in overnight Federal Funds
arranged by three leading unaffiliated brokers of Federal Funds transactions in
The City of New York selected by the Calculation Agent; provided, however,
that if fewer than three brokers selected as aforesaid by the Calculation Agent
are quoting as mentioned in this sentence, the Federal Funds Rate with respect
to such Interest Reset Date shall be the Federal Funds Rate in effect on such
Interest Determination Date.

Determination of CMT Rate. If the Interest Rate Basis
on this Note is the CMT Rate, the CMT Rate with respect to this Note for each
Interest Reset Date shall equal the rate displayed on the Bloomberg Professional

	
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Service (or any successor service) on page NDX
H15 3 (or any successor page on such service) under the heading
"Treasury Const. Mat.11" for Mondays approximately 3:45 P.M., at the
row for the Designated CMT Maturity Index for (i) if the daily average is
specified on the face hereof, the rate on such Interest Determination Date and
(ii) if the weekly or monthly average is specified on the face hereof, the week,
or the month, as applicable, ended immediately preceding the week or month, as
applicable in which the related Interest Determination Date occurs. If such rate
is no longer displayed on the relevant page, or if not displayed by 3:00 P.M.,
New York City time, on the relevant Calculation Date, the CMT Rate shall be such
treasury constant maturity rate for the Designated CMT Maturity Index as
published in the relevant H.15(519) under the heading "Treasury Constant
Maturities". If such rate is not published by 3:00 p.m., New York City
time, on the Calculation Date, then the CMT Rate will be the treasury constant
maturity rate set forth in the H.15 Daily Update, under the heading
"Treasury Constant Maturities". If such rate is not published by 3:00
P.M., New York City time, on the relevant Calculation Date, the CMT Rate shall
be such treasury constant maturity rate for the Designated CMT Maturity Index
(or other United States Treasury rate for the Designated CMT Maturity Index) for
the Interest Determination Date with respect to such Interest Reset Date as may
then be published by either the Board of Governors of the Federal Reserve System
or the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on Bloomberg Page NDX
H15 3 and published in the relevant H.15(519). If such information is not
published by 3:00 P.M., New York City time, on the relevant Calculation Date,
the CMT Rate shall be calculated by the Calculation Agent and will be a yield to
maturity, based on the arithmetic mean of the secondary market closing bid side
prices as of approximately 3:30 P.M., New York City time, on the Interest
Determination Date reported, according to their written records, by three
leading unaffiliated primary United States government securities dealers (each,
a "Reference Dealer") in The City of New York selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original
maturity of approximately the Designated CMT Maturity Index in a principal
amount that is representative for a single transaction in the securities in that
market at that time and a remaining term to maturity of not less than such
Designated CMT Maturity Index minus one year. If three or four (and not five) of
such Reference Dealers are quoting, than the CMT Rate shall be based on the
arithmetic mean of the bid prices obtained and neither the highest nor the
lowest of such quotes will be eliminated. If the Calculation Agent cannot obtain
three such Treasury Note quotations, the CMT Rate shall be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market bid side prices as of approximately 3:30 P.M., New York
City time, on the Interest Determination Date of three Reference Dealers in The
City of New York (from five such Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity Index and in a
principal amount that is representative for a single transaction in the
securities in that market at that time. If three or four (and not five) of such
Reference Dealers are quoting, than the CMT Rate shall be based on the
arithmetic mean of the bid prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that if
fewer than three Reference Dealers selected by the Calculation Agent are
quoting, the CMT Rate shall be the CMT Rate in effect on such Interest
Determination Date. If two Treasury Notes with an original maturity as described
in the second preceding sentence have remaining terms to maturity equally close
to the Designated CMT Maturity Index, the quotes for the Treasury Note with the
shorter remaining term to maturity will be used.

Notwithstanding the foregoing, the interest rate on this Note
shall not be greater than the Maximum Rate, if any, or less than the Minimum
Rate, if any, shown on the face hereof. The interest rate on this Note will in
no event be higher than the maximum rate permitted by Delaware law, as the same
may be modified by United States federal law of general application.

At the request of the Holder hereof, the Calculation Agent
will provide to the Holder hereof the interest rate then in effect and, if
determined, the interest rate which will become effective as of the next
Interest Reset Date. The Calculation Agent shall calculate the interest rate
hereon in accordance with the provisions hereof on or before each Calculation
Date. The Calculation Agent's determination of any interest rate will be final
and binding in the absence of manifest error.

Unless otherwise specified on the face of this Note, accrued
interest on this Note from the date of issue or from the last date to which
interest has been paid shall be calculated by multiplying the face amount hereof
by an

	
      13010285 02041376
	
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accrued interest factor. Unless otherwise specified on the
face of this Note, such accrued interest factor is computed by adding the
interest factor calculated for each day from the date of issue, or from the last
date to which interest has been paid, whichever is later, to but excluding the
date for which accrued interest is being calculated. Unless otherwise specified
on the face of this Note, the interest factor (expressed as a decimal, rounded
if necessary to the nearest one hundred thousandth of a percentage point for
each such day, with five one-millionths of a percentage point rounded upward)
shall be computed by dividing the interest rate (expressed as a decimal)
applicable to such date by 360 if the Interest Rate Basis with respect to this
Note is the Commercial Paper Rate, Prime Rate, LIBOR, CD Rate or Federal Funds
Rate, or by the actual number of days in the year, if the Interest Rate Basis
with respect to this Note is the Treasury Rate or the CMT Rate. The applicable
interest rate on any Interest Reset Date will be the interest rate as reset on
such date. The applicable interest rate on any other day will be the interest
rate from the immediately preceding Interest Reset Date (or, if none, the
Initial Interest Rate).

Payments of interest on this Note with respect to any
Interest Payment Date or Maturity Date (or date of redemption) will include
interest accrued to but excluding such Interest Payment Date or Maturity Date
(or date of redemption).

The Notes are issuable only in registered form without
coupons and will be either (a) book-entry Notes represented by one or more
global notes (each a "Global Note") recorded in the book-entry system
maintained by the Depository ("Book-Entry Notes") or (b) certificated
notes issued to, and registered in the names of, the beneficial owners or their
nominees ("Certificated Notes"). Notes are issuable in minimum
denominations of (i) in the case of Notes denominated in Dollars, U.S.$1,000 and
in any larger amount in integral multiples of U.S. $1,000 and (ii) in the case
of Notes denominated in any Foreign Currency, the equivalent in such Foreign
Currency determined in accordance with the Market Exchange Rate for such Foreign
Currency on the Business Day immediately preceding the date on which the Company
accepts an offer to purchase a Note, of U.S.$1,000 (rounded down to an integral
multiple of 1,000 units of the Foreign Currency but in no event rounded down to
fewer than 1,000 units of such Foreign Currency), and in any larger amount in
integral multiples of 1,000 units of such Foreign Currency (each, an
"Authorized Denomination"). In the manner and subject to the
limitations provided in the Indenture, the Global Notes or Certificated Notes
are exchangeable, without charge except for any tax or other governmental charge
imposed in relation thereto, for other Notes of authorized denominations for a
like aggregate principal amount, at the office or agency of the Company in the
Borough of Manhattan of The City of New York, or, at the option of the Holders
thereof, such office or agency, if any, maintained by the Company in the city in
which the principal executive offices of the Company are located or the city in
which the principal corporate trust office of the Trustee is located.

Unless this Note is denominated in Dollars, in the event that
the currency in which this Note is denominated is not available for payment at a
time at which any payment is required hereunder due to the imposition of
exchange controls or other circumstances beyond its control, the Company may, in
full satisfaction of its obligation to make such payment, make instead a payment
in an equivalent amount of Dollars, determined in accordance with the Market
Exchange Rate for such currency on the latest date for which such rate was
established on or before the date on which payment is due, and such substituted
payment of Dollars shall not constitute a default under this Note or the
Indenture.

Unless this Note is denominated in Dollars, the Company will
indemnify the Holder of this Note against any loss incurred as a result of any
judgment or order being given or made for any amount due under this Note and
that judgment or order requiring payment in a currency (the "Judgment
Currency") other than the Specified Currency, and as a result of any
variation between (a) the rate of exchange at which the Specified Currency
amount is converted into the Judgment Currency for the purpose of that judgment
or order; and (b) the rate of exchange at which the Holder, on the date of
payment of that judgment or order, is able to purchase the Specified Currency
with the amount of the Judgment Currency actually received.

If a Redemption Commencement Date is specified above, this
Note may be redeemed, whether or not any other Note is concurrently redeemed, at
the option of the Company, as a whole, or from time to time in part in
increments of U.S.$1,000 or the minimum Authorized Denomination (provided that
any remaining principal amount hereof shall be at least U.S.$1,000 or such
minimum Authorized Denomination), on any Business Day on or after the Redemption
Commencement Date and prior to the Maturity Date, upon mailing by first-class
mail, postage prepaid, a notice of such redemption not less than 30 nor more
than 60 calendar days prior to the Redemption Date, to the Holder of this Note
at such Holder's address appearing in the Security Register, as provided in the
Indenture (provided that, if the Holder of this Note is a Depository or a
nominee of a Depository, notice of such redemption shall be given in accordance
with any applicable provisions of such written agreement between the Company,
the Trustee and such Depository (or its nominee) as may be in effect from time
to time), at the Redemption Price specified on the face of this Note (expressed
in percentages of the principal amount hereof to be redeemed) together in each
case with interest accrued to the Redemption Date (subject to the right of the

	
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Holder of record on a Regular Record Date to receive interest
due on an Interest Payment Date). If a Stated Redemption Date or Stated
Redemption Dates are specified above this Note may be redeemed or repaid,
whether or not any other Note is concurrently redeemed or repaid, at the option
of the Company, the Holder, or either the Company or the Holder, as specified
above, as a whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), on such
Stated Redemption Date, at the Redemption Price set forth in the table above
(expressed in percentages of the principal amount hereof to be redeemed),
together in each case with interest accrued to the Redemption Date (subject to
the right of the Holder of record on a Regular Record Date to receive interest
due on an Interest Payment Date) upon delivery of the notice specified above.
Any election by the Holder of this Note to have all or any portion of this Note
repaid shall be irrevocable. If the Holder of this Note is a Depository or a
nominee of a Depository, any redemption will also be conducted in accordance
with the procedures of the Depository. In the event of redemption of this Note
in part only, a new Note or Notes of this series, and of like tenor, for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.

In case a default, as defined in the Indenture, shall occur
and be continuing with respect to the Notes, the principal amount of all Notes
then outstanding under the Indenture may be declared or may become due and
payable upon the conditions and in the manner and with the effect provided in
the Indenture. The Indenture provides that such declaration may in certain
events be annulled by the Holders of a majority in principal amount of the Notes
outstanding.

To the extent permitted by, and as provided in, the
Indenture, modifications or alterations of the Indenture, or of any indenture
supplemental thereto, and of the rights and obligations of the Company and the
Holders of the Notes, may be made without the consent of any Holders of Notes,
for the limited purposes described in Section 11.1 of the Indenture.

To the extent permitted by, and as provided in, the
Indenture, modifications or alterations of the Indenture, or of any indenture
supplemental thereto, and of the rights and obligations of the Company and the
Holders of the Notes, may be made with the consent of the Company by the
affirmative vote or consent of the Holders of not less than a majority in
aggregate principal amount of the Securities then outstanding (as defined in the
Indenture) of each series to be affected, evidenced as provided in the
Indenture; provided, however, that no such modification or alteration
shall (i) change the stated maturity of the principal of (and premium, if any),
or the interest on, any Security, or reduce the principal amount of (and
premium, if any), or the rate of interest on, any Security, or change the
Currency in which the principal of (and premium, if any), or interest on, such
Security is denominated or payable, or reduce the amount of the principal of an
Original Issue Discount Security that would be payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 6.1 of the Indenture
without the consent of the Holder of each outstanding Security so affected, or
(ii) reduce the percentage of Securities, the vote or consent of the Holders of
which is required for such modifications and alterations, without the consent of
the Holders of all Securities affected. The Indenture also provides that,
provided the Securities of any series shall not then be due and payable by
reason of a declaration pursuant to Section 6.1 of the Indenture, the Holders of
a majority in principal amount of the Securities of that series then outstanding
may waive any past default with respect to Securities of such series under the
Indenture and its consequences, except a default in the payment of interest on
or the principal of (or premium, if any, on), any of such Securities.

No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if
any) and interest on this Note at the place, at the respective times, at the
rate, and in the Currency, herein prescribed.

This Note is transferable by the registered Holder hereof or
by his attorney duly authorized in writing at the office or agency of the
Company in the Borough of Manhattan of The City of New York or, at the option of
the Holder hereof, such office or agency, if any, maintained by the Company in
the city in which the principal executive offices of the Company are located or
the city in which the principal corporate trust office of the Trustee is
located, without charge except for any tax or other governmental charge imposed
in relation thereto, but only in the manner and subject to the limitations
provided in the Indenture and upon surrender of this Note. Upon any such
transfer a Note or Notes of authorized denominations for a like aggregate
principal amount and bearing a number not contemporaneously outstanding will be
issued in exchange herefor.

The Company, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat the registered Holder
hereof as the absolute owner hereof (whether or not this Note shall be

	
      13010285 02041376
	
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overdue and notwithstanding any notice of ownership or other
writing hereon by anyone other than the Company or any Security registrar) for
the purpose of receiving payment of or on account of the principal hereof (and
premium, if any), and interest hereon, and for all other purposes, and none of
the Company, the Trustee, an Authenticating Agent, a paying agent or the
Security registrar shall be affected by any notice to the contrary. All such
payments shall be valid and effectual to satisfy and discharge the liability
upon this Note to the extent of the sum or sums so paid.

No recourse under or upon any obligation, covenant or
agreement of the Indenture or of this Note, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that the Indenture and this Note are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by the incorporators, stockholders, officers or directors, as such, of
the Company or of any successor corporation, or any of them, because of the
creation of the indebtedness authorized by the Indenture, or under or by reason
of the obligations, covenants or agreements contained in the Indenture or this
Note or implied therefrom; and that any and all such personal liability, either
at common law or in equity or by constitution or statute, of, and any and all
such rights and claims against, every such incorporator, stockholder, officer or
director, as such, because of the creation of the indebtedness authorized by the
Indenture, or under or by reason of the obligations, covenants or agreements
contained in the Indenture or this Note or implied therefrom, are, by acceptance
of this Note, hereby expressly waived and released as a condition of, and as
consideration for, the issue of this Note. In the event of any sale or transfer
of its assets and liabilities substantially as an entirety to a successor
corporation, the predecessor corporation may be dissolved and liquidated as more
fully set forth in the Indenture.

All Dollar amounts used in or resulting from calculations
referred to in this Note shall be rounded to the nearest cent (with one half
cent being rounded upwards).

This Note shall be governed by, and construed in accordance
with, the internal laws of the State of Delaware.

	
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ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

 

(Insert assignee's social security or tax I.D. no.)

__________________________________________________________________________________

(Print or type assignee's name, address and zip code)

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

and irrevocably appoint
_______________________________________________________________ agent

to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

__________________________________________________________________________________

  
    
      
Date __________________________

      

      
Your signature _____________________________________

      

    

    
__________________________________________________________________________________

    

    
      
(Sign exactly as your name appears on the other side of this Note. The
      signature to this assignment must be guaranteed pursuant to Rule 17Ad-15
      under the Securities Exchange Act of 1934 by a commercial bank or trust
      company having its principal office or a correspondent in The City of New
      York or by a member of The New York Stock Exchange.)

      

    

  

	
      13010285 02041376
	
      
      13Exhibit 10.1

 

THIRD AMENDMENT TO THIRD STANDSTILL AGREEMENT

 

This THIRD AMENDMENT TO THIRD STANDSTILL AND AMENDMENT AGREEMENT
(this "Amendment"), dated as of May 15, 2003, is among SEITEL, INC.
(the "Company"), a Delaware corporation, each of its subsidiaries
(whether direct or indirect and whether or not wholly-owned, collectively, the "Subsidiaries"), and each of the Noteholders listed on the signature pages hereto.  Capitalized terms have the respective meanings ascribed thereto in the Third Standstill Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, the Noteholders, the Company and the Subsidiary Guarantors are party to that certain Standstill and Amendment Agreement dated as of July 17, 2002, that certain Second Standstill and Amendment Agreement dated as of October 15, 2002, and that certain Third Standstill and Amendment Agreement dated as of December 2, 2002, as amended by that Amendment to Third Standstill Agreement dated as of February 28, 2003 and the Second Amendment to Third Standstill Agreement dated as of April 10, 2003 (and together with various preceding standstill, forbearance and/or amendment letters and agreements between the Company and the Noteholders,
collectively, the "Existing Third Standstill Agreement" and as
amended by this Amendment and as may be further amended from time to time, the "Third Standstill Agreement") pursuant to which such Noteholders agreed to forbear until June 2, 2003 or earlier upon the occurrence of a Termination Event (as defined in the Existing Third Standstill Agreement) or delivery by the Noteholders of a Termination Notice from exercising rights and remedies they have pursuant to the Note Purchase Agreements as a result of the existence and occurrence of certain Events of Default and the Company agreed to comply with certain terms and conditions as more fully described therein; and

 

WHEREAS, a Termination Event (as defined in the Existing Third Standstill Agreement) will occur if the Company fails to complete and, as applicable, perform under, all documentation required to implement a financial restructuring by May 15, 2003 on terms and conditions satisfactory to the Noteholders
(the "Documentation Termination Event"); and

 

WHEREAS, upon the occurrence of the Documentation Termination Event, the Noteholders will have the right to immediately exercise, without further notice, any one or more rights and remedies that they may have under any of the Note Purchase Agreements, any of the Notes or any of the other Financing Documents, under law and in equity; and

 

WHEREAS, the Company has requested that the Noteholders extend the deadline for completion and, as applicable, performance under, all documentation required to implement a financial restructuring of the Company and its Subsidiaries and continue to forbear from exercising their rights and remedies, subject to the terms of the Third Standstill Agreement, to allow the Company to implement such financial restructuring; and

 

WHEREAS, the Company, each Subsidiary and each Noteholder party hereto are desirous of entering into this Amendment on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the matters referred to above, the mutual covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.    AMENDMENTS.

 

Subject to the provisions of Section 5 hereof, the Existing Third Standstill Agreement is amended as follows:

a.    Section 1 of the Existing Third Standstill Agreement is hereby amended by amending and restating subsection (ix) of the definition of
"Termination Event" to read as follows:

 

"(ix)  the failure of the Company to complete and, as applicable, perform under, all documentation required to implement a financial restructuring by May 30, 2003 on terms and conditions satisfactory to the Noteholders."

 

b.    Section 5(b)(iii) of the Existing Third Standstill Agreement is hereby amended by inserting the following parenthetical immediately after the term
"Debt" appearing in the first line thereof:

 

"(excluding any Debt incurred in connection with the settlement of litigation
involving Herbert Pearlman (the "Pearlman Litigation") on terms that the Company reasonably believes are in its, and its creditors', best interests, provided however, that nothing contained herein shall be deemed to limit or prejudice the Noteholders'
rights in any insolvency proceeding with regard to the Pearlman Litigation and
any settlement related thereto)"

 

c.    Section 5(b)(viii) of the Existing Third Standstill Agreement is hereby amended by deleting the parenthetical immediately after the term
"Required Noteholders" appearing in the fourth and fifth lines thereof and there is substituted therefor the following parenthetical:

 

"(excluding the settlement of litigation in connection with the Winthrop Lease obligations and the Pearlman Litigation on terms that the Company reasonably believes are in its, and its creditors', best interests, provided however, that nothing contained herein shall be deemed to limit or prejudice the Noteholders'
rights in any insolvency proceeding with regard to the Winthrop Lease, the
Pearlman Litigation and any settlement related thereto)"

 

d.    Section 5(b)(x) of the Existing Third Standstill Agreement is hereby amended by inserting the following parenthetical immediately after the term
"Subsidiary" appearing in the third line thereof:

 

"(excluding any settlement payments made in connection with the settlement of the Pearlman Litigation on terms that the Company reasonably believes are in its, and its creditors', best interests, provided however, that nothing contained herein shall be deemed to limit or prejudice the Noteholders'
rights in any insolvency proceeding with regard to the Pearlman Litigation and
any settlement related thereto)"

 

2.    REPRESENTATIONS AND WARRANTIES.

 

To induce the Noteholders to enter into this Amendment, the Company and the Subsidiaries, as applicable, represent and warrant, as of the Amendment Effective Date, as follows:

a.    the Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware;

 

b.    each of the Subsidiaries is an organization duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization;

 

c.    the execution and delivery of this Amendment is within the corporate powers of the Company and each Subsidiary, has been duly authorized by the Company and each Subsidiary and constitutes a valid and binding obligation of the Company and each Subsidiary, enforceable in accordance with its terms, except that such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors' rights generally and except that such enforceability is subject to the availability of equitable remedies;

 

d.    the execution and delivery of this Amendment does not conflict with, result in any breach of any of the provisions of, constitute a default under, or result in the creation of any Lien upon any property of the Company or any Subsidiary under the provisions of, any agreement, charter instrument, bylaw or other instrument to which the Company or any Subsidiary is a party or by which the Company, any Subsidiary, or any of their respective properties may be bound;

 

e.    each of the Third Standstill Agreement, the Notes, the Note Purchase Agreements and the other Financing Documents to which the Company and each Subsidiary is a party, as each may be have been amended prior to the date hereof, constitutes a valid and binding obligation of the Company and such Subsidiary party thereto, enforceable in accordance with its terms, except that such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors' rights generally and except that such enforceability is subject to the availability of equitable remedies;

 

f.    except with respect to Existing Events of Default, there are, to the best present actual knowledge of the Company, no Defaults or Events of Default in existence on the Amendment Effective Date (although the Company continues its investigation and diligence into certain matters that may reveal the existence of additional Defaults or Events of Default); and

 

g.    except as disclosed on Exhibit B to the Existing Third Standstill Agreement, neither the Company nor any Subsidiary has any Debt to any Person or group of Persons that is outstanding (including any drawn or undrawn facilities providing for the incurrence of Debt) in an aggregate principal amount with respect to such Person or group of Persons of more than $5,000,000.

 

3.   
AGREEMENTS OF THE COMPANY AND THE SUBSIDIARIES.

 

a.    Good Faith Negotiation of Documents.  The Company hereby covenants and agrees to negotiate all documents relating to the financial restructuring in good faith and to take actions consistent therewith as expeditiously as practicable.

 

b.    Ratification by Company.  The Company hereby adopts again, ratifies and confirms in all respects, as its own act and deed, each of the Existing Third Standstill Agreement, the Note Purchase Agreements, the Notes and the other Financing Documents and any document or instrument delivered pursuant to or in connection with the Financing Documents and acknowledges (i) that all such instruments and documents shall continue in full force and effect and (ii) that as of the Amendment Effective Date, it has no claim or cause of action against any Noteholder (or any of its respective directors, officers, employees or agents) or any offset right, counterclaim or defense of any kind against any of its obligations, indebtedness or liabilities to any Noteholder.  The Company on its own behalf and on behalf of its shareholders, employees, successors and assigns hereby waives, releases and discharges the Noteholders and any of their predecessors and affiliates, and all directors, officers, employees, attorneys and agents of the Noteholders and of any of their predecessors and affiliates, from any and all claims, demands, actions or causes of action.

 

c.    Ratification by Subsidiaries.  Each Subsidiary Guarantor hereby adopts again, ratifies and confirms, as its own act and deed, each of the Existing Third Standstill Agreement, its respective Subsidiary Guaranty and any document or instrument delivered pursuant to or in connection with such Subsidiary Guaranty and acknowledges that all such instruments and documents shall continue in full force and effect.  Each Subsidiary acknowledges that as of the Amendment Effective Date, it has no claim or cause of action against any Noteholder (or any of its respective directors, officers, employees or agents) or any offset right, counterclaim or defense of any kind against any of its obligations, indebtedness or liabilities to any Noteholder.  Each Subsidiary on its own behalf and on behalf of its shareholders, employees, successors and assigns hereby waives, releases and discharges the Noteholders and any of their predecessors and affiliates, and all directors, officers, employees, attorneys and agents of the Noteholders and of any of their predecessors and affiliates, from any and all claims, demands, actions or causes of action.

 

4.    NONWAIVER AND NO AMENDMENT.

 

TIME IS OF THE ESSENCE WITH RESPECT TO ALL COVENANTS, CONDITIONS, AGREEMENTS, AND OTHER PROVISIONS HEREIN.  Except as otherwise expressly provided for in this Amendment, the terms of this Amendment shall not operate as a waiver by any of the Noteholders of, or otherwise prejudice, the Noteholders' rights, remedies or powers under the Existing Third Standstill Agreement, the Notes, the Note Purchase Agreements, the other Financing Documents, the Noteholder Consent or applicable law.  Except as expressly provided herein, no terms or provisions of the Existing Third Standstill Agreement are modified or changed by this Amendment, and all of the terms and provisions of the Existing Third Standstill Agreement shall continue in full force and effect.  The Company and each Subsidiary hereby acknowledges and reaffirms all of their respective obligations and duties under each of the Existing Third Standstill Agreement, the Note Purchase Agreements, the Notes and the other Financing Documents to which each is a party, as each such Financing Document may have been amended from time to time prior to the date hereof.

 

5.   
AMENDMENT EFFECTIVE DATE.

 

Each provision of this Amendment shall become effective on the first date (but in all respects shall be deemed to be nunc pro tunc
to May 15, 2003, the "Amendment Effective Date") on which the Company and the Noteholders required by each Note Purchase Agreement to effect waivers and amendments thereunder respectively shall have executed and delivered this Amendment.

 

6.   
ACKNOWLEDGEMENT.

 

The Company and each Subsidiary acknowledges that the Noteholders shall continue to have the right to deliver a Termination Notice in the manner prescribed by Section 2(b) of the Third Standstill Agreement at any time for any reason or no reason, and after any such delivery any Noteholder shall be entitled to immediately exercise, without further notice, any one or more rights and remedies that it may have under any of the Note Purchase Agreements, any of the Notes or any of the other Financing Documents.

 

7.    HEADINGS.

 

All headings and captions preceding the text of the several Sections of this Amendment are intended solely for the convenience of reference and shall not constitute a part of this Amendment nor shall they affect its meaning, construction or effect.

 

8.    ENTIRE AGREEMENT.

 

This Amendment, the Third Standstill Agreement, the Note Purchase Agreement, the Notes and the other Financing Documents, as amended to the date hereof, embody the entire agreement and understanding between the Noteholders, the Company and the Subsidiaries and supersede all prior agreements and understandings relating to the subject matter hereof and thereof.

 

9.    GOVERNING LAW.

 

This Amendment and the Third Standstill Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York.

 

10.  DIRECTLY OR INDIRECTLY.

 

Where any provision in this Amendment refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person, including actions taken by or on behalf of any partnership or limited liability company in which such Person is a general partner or managing member, as applicable.

 

11.  COUNTERPARTS.

 

This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  An executed copy of this Amendment sent by facsimile shall be effective as an original.

 

[Remainder of page intentionally left blank.  Next page is signature page.]

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their authorized officers as of the date first written above.

 

SEITEL, INC.

By_/s/_____________________

Name:

Title:

 

 

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By:David L. Babson & Company Inc., as Investment Adviser

 

By_/s/_____________________

Name:

Title:

C.M. LIFE INSURANCE COMPANY
By:David L. Babson and Company Inc. as Investment Sub-Adviser

 

By_/s/_____________________

Name:

Title:

MASSMUTUAL ASIA LIMITED
By:David L. Babson & Company Inc. as Investment Adviser

 

By_/s/_____________________

Name:

Title:

SUNAMERICA LIFE INSURANCE COMPANY
By:AIG Global Investment Corp., Investment Adviser

 

By:_________________________

Name:

Title:

FIRST SUNAMERICA LIFE INSURANCE COMPANY

By:_________________________

Name:

Title:

 

J. ROMEO & CO. as NOMINEE for

MONY LIFE INSURANCE COMPANY

By_/s/_____________________

Name:

Title:

J. ROMEO & CO. as NOMINEE for

MONY LIFE INSURANCE COMPANY OF AMERICA

By_/s/_____________________

Name:

Title:

UNITED OF OMAHA LIFE INSURANCE COMPANY

By:_________________________

Name:

Title:

PAN-AMERICAN LIFE INSURANCE COMPANY

By:_________________________

Name:

Title:

PRINCIPAL LIFE INSURANCE COMPANY, ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS

 

By:Principal Global Investors, LLC, a Delaware limited liability company, its authorized signatory

 

By_/s/_____________________

Name:

Title:

 

By_/s/_____________________

Name:

Title:

CGU LIFE INSURANCE COMPANY OF AMERICA, a Delaware corporation (formerly known as Commercial Union Life Insurance Company of America)

By:Principal Global Investors, LLC, a Delaware limited liability company, its attorney in fact

 

  By_/s/_____________________

Name:

Title:

   

By_/s/_____________________

Name:

Title:

WIND RIVER CORPORATION

By:Principal Global Investors, LLC, a Delaware limited liability company, its authorized signatory

By_/s/_____________________

Name:

Title:

 

By_/s/_____________________

Name:

Title:

 

ALLSTATE LIFE INSURANCE COMPANY

 

By_/s/_____________________

Name:

Title:

 

By_/s/_____________________

Name:

Title:

 

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

 

By_/s/_____________________

Name:

Title:

 

By_/s/_____________________

Name:

Title:

 

PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY

THE PAUL REVERE LIFE INSURANCE COMPANY

 

Severally By:  Provident Investment     Management, LLC

Their:  Agent

 

By_/s/_____________________

Name:

Title:

PHOENIX LIFE INSURANCE COMPANY

 

By_/s/_____________________

Name:

Title:

 

RELIASTAR LIFE INSURANCE COMPANY
By:ING Investment Management, LLC, as Agent

 

By_/s/_____________________

Name:

Title:

NORTHERN LIFE INSURANCE COMPANY
By:ING Investment Management, LLC, as Agent

 

By_/s/_____________________

Name:

Title:

RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
By: ING Investment Management LLC, as Agent

  
    By_/s/_____________________

Name:

Title:

  

SECURITY CONNECTICUT LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as Agent

 

By_/s/_____________________

Name:

Title:

TRUSTMARK LIFE INSURANCE CO.

 

 

By_/s/_____________________

Name:

Title:

 

REPUBLIC WESTERN INSURANCE COMPANY

 

 

By:_________________________

Name:

Title:

 

OXFORD LIFE INSURANCE COMPANY

 

 

By:_________________________

Name:

Title:

 

UNITED LIFE INSURANCE COMPANY

 

 

By:_________________________

Name:

Title:

 

THE
GUARDIAN INSURANCE & ANNUITY COMPANY, INC.

 

 

By_/s/_____________________

Name:

Title:

 

FORT DEARBORN LIFE INSURANCE COMPANY

 

By:Guardian Investor Services

LLC

 

By_/s/_____________________

Name:

Title:

 

THE
GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

 

By_/s/_____________________

Name:

Title:

 

BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA

 

 

By_/s/_____________________

Name:

Title:

 

NATIONWIDE LIFE INSURANCE COMPANY

 

 

By_/s/_____________________

Name:

Title:

 

NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY

 

 

By_/s/_____________________

Name:

Title:

 

CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By:CIGNA Investments, Inc. (authorized agent)

By_/s/_____________________

Name:

Title:

 

LIFE INSURANCE COMPANY OF NORTH AMERICA
By:CIGNA Investments, Inc. (authorized agent)

 

By_/s/_____________________

Name:

Title:

LONESTAR PARTNERS, L.P.

 

 

By:__________________________

Name:

Title:

 

COHANZICK HIGH YIELD PARTNERS, LP

 

 

By:__________________________

Name:

Title:

 

COHANZICK CREDIT Opportunities Fund, Ltd.

 

 

By:__________________________

Name:

Title

 

AMERICAN INVESTORS LIFE INSURANCE COMPANY
By:AmerUs Capital Management Group, Inc., its authorized attorney-in-fact

 

By_/s/_____________________

Name:

Title:

 

Accepted and Agreed:

 

SEITEL DATA CORP.

By_/s/_____________________

Name:

Title:

 

SEITEL DATA, LTD.

By:Seitel Delaware, Inc., general partner

 

 

By_/s/_____________________

Name:

Title:

 

N360X, L.L.C.

By:Seitel Management, Inc.,

managing member

 

 

By_/s/_____________________

Name:

Title:

 

SEITEL MANAGEMENT, INC.

 

 

By_/s/_____________________

Name:

Title:

 

818312 ALBERTA LTD

AFRICAN GEOPHYSICAL, INC.

ALTERNATIVE COMMUNICATIONS ENTERPRISES, INC.

DATATEL INC.

DDD ENERGY, INC.

EHI HOLDINGS, INC.

ENDEAVOR EXPLORATION, LLC

ENERGY VENTURES HOLDINGS, LLC

EXPRESS ENERGY I, LLC

EXSOL, INC.

GEO-BANK

MATRIX GEOPHYSICAL, INC.

OLYMPIC SEISMIC LTD.

SEIC HOLDINGS LTD.

SEIC, INC.

SEIC, L.L.C.

SEIC PARTNERS LIMITED PARTNERSHIP

SEIC TRUST ADMINISTRATION, LTD.

SEITEL CANADA HOLDINGS, INC.

SEITEL CANADA, L.L.C.

SEITEL DELAWARE, INC.

SEITEL GAS & ENERGY CORP.

SEITEL GEOPHYSICAL INC.

SEITEL INTERNATIONAL, CV

SEITEL INTERNATIONAL INC.

SEITEL IP HOLDINGS, L.L.C.

SEITEL NATURAL GAS INC.

SEITEL OFFSHORE CORP.

SEITEL POWER CORP.

SEITEL SOLUTIONS CANADA, LTD.

SEITEL SOLUTIONS HOLDINGS, LLC

SEITEL SOLUTIONS LTD.

SEITEL SOLUTIONS, INC.

SEITEL SOLUTIONS, L.L.C.

SI HOLDINGS, GP

VISION ENERGY, INC.

 

By_/s/_____________________

Name:

Title:

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