Document:

<PAGE>

                                                                   EXHIBIT 10.36

                                  SEITEL, INC.

                        INCENTIVE COMPENSATION AGREEMENT

     THIS CONTRACT AND AGREEMENT made and entered into this 11th day of March,
1993, by and between SEITEL, INC., a Delaware corporation, (referred to herein
as the "Company"), DEBRA D. VALICE, PAUL A. FRAME and HORACE A. CALVERT,
Trustees of the Supplemental Income Trust and each individual who executes the
Ratification Form attached hereto as Exhibit "A" (hereinafter referred to as
"Employee").

     WHEREAS, the services of the Employees, their experience and dedication to
the Company, their reputation and contacts in the industry are invaluable to the
Company; and,

     WHEREAS, the Company wishes to reward each Employee for his/her involvement
in the Company's projects and subsequent success that he/she has brought to the
Company;

     WHEREAS, the Company has established the trust in which these benefits are
to be placed for the Employee;

     NOW, THEREFORE, in further consideration for the Employee's continued
employment, and upon the terms and conditions stated below, the parties agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

     1.1  Definitions. Unless the context of this Agreement otherwise requires,
the terms defined herein shall have the following meanings:

          (a) The term "Beneficiary" shall mean the Employee and any successor
     in interest to such Employee who acquires his/her interest by devise or
     intestate succession.

          (b) The term "Benefits" shall mean those amounts which are payable to
     the Beneficiary as a result of this agreement.

          (c) The term "Company" shall mean Seitel, Inc., a Delaware
     corporation.

          (d) The term "Contributions" shall mean the amounts paid by the
     Company equal to (i) a percentage of the revenue so designated for the
     contributions to the Trusts and (ii) those amounts due and payable directly
     to Beneficiaries who are not or are no longer Employees of the Company.

          (e) The term "Designated Percentage" means the percentage of a
     particular Funding Pool assigned to a specific Employee by the Company.

<PAGE>

          (f) The term "Designated Project Line" means any Project Line
     separately identified by the Company pursuant to the procedures set forth
     in Paragraph 3.1.

          (g) The term "Employee" shall mean any employee of the Company who has
     executed the Ratification form attached hereto as Exhibit "A".

          (h) The term "Funding Pool" shall have the meaning as provided in
     Article IV hereof.

          (i) The term "Net Billing" shall mean the amount of revenue received
     for a Project Line by the Company net of the typical selling commission,
     which is 6% at the time of the execution of this Agreement.

          (j) The term "Partially Funded Project Line" means one in which all
     Third Party Costs are not paid for or underwritten by parties other than
     the Company and Company elects to pay the shortfall.

          (k) The term "Project Line" shall mean each separate and identifiable
     group of reports, data, software, charts, graphs and other forms of
     information related to a line of seismic exploration, which is gathered by
     the Company.

          (1) The term "Third Party Costs" shall mean those costs incurred by
     the Company for a Project Line. It is understood by the parties that even
     after a Project Line starts to produce revenue, additional third party
     costs may be added to a Project Line because of subsequent development.
     Third Party Costs excludes any capitalized internal charges, capitalized
     management fees or any other form of overhead allocation.

          (m) The term "Trust" means the Supplemental Income Trust executed
     effective the 30th day of December, 1990.

          (n) The term "Trustees" means Debra D. Valice, Paul A. Frame and
     Horace A. Calvert, or the then acting trustees of the Trust.

          (o) The term "Zero Cost Project Line" means a Project Line under which
     all Third Party Costs are paid for or will be underwritten by parties other
     than the Company.

                                   ARTICLE II
                             EMPLOYER'S CONTRIBUTION

     2.1  Contributions. The Company agrees to make Contributions under the
terms stated in this Agreement for the benefit of those Employees who have
executed a Ratification Agreement. If the Employee is currently employed by the
Company, such contribution shall be made to the Trust selected by Employee upon
the execution of the Ratification Agreement. If

                                       -2-

<PAGE>

Beneficiary is not an Employee, or an Employee no longer employed by the
Company, for any reason, any amounts due and payable under this Agreement shall
be made directly to the Employee/Beneficiary.

     2.2  Amount of Contributions. The Company shall fund for each calendar
quarter an amount for each Employee equal to such Employee's Designated
Percentage (as established on Exhibit B for such employees) times such
Employee's assigned Funding Pool. The Company retains the right to increase or
decrease such Designated Percentage for each Employee or switch an Employee from
one Funding Pool to another (any such change collectively called a
"Redesignation"); however the following limitations apply:

          (a) Any new Redesignation applies only to new Project Lines dedicated
     to this program. For any Project Line previously designated, the old
     designation applies.

          (b) The Company may only change the designation twice a year, once
     between January 1 and January 31 applicable that January 1 and once between
     July 1 and July 31 applicable for that July 1. The Company must provide
     written notice to Trustees of any change in designation in January by March
     1 and in July by September 1.

     2.3 Funding of Contributions. The Contributions shall be funded as provided
in Article III.

                                   ARTICLE III
                        MECHANICS FOR DETERMINING PROFITS
                            ELIGIBLE FOR CONTRIBUTION

     3.1  Designation of Project Line. Upon the instigation or purchase of a new
Project Line by the Company, the Company shall notify the Trustees that a new
Project Line has been established in the Company records. At the time of the
execution of this Agreement, those Project Lines listed on Exhibit C have
already been designated by the Company. The head of the Geophysical Department
of the Company shall be responsible for designation of new project lines and
shall do so by written notice to the Trustees.

     3.2  Eligible Project Lines. Once a Project Line has been designated as a
project under this agreement, then the Company must designate it as a Zero Cost
Project Line or a Partially Funded Project Line. All data listed on Exhibit C
represents Zero Cost Project Lines. New Project Lines purchased by the Company
shall be eligible for participation once sufficient revenue has been received by
the Company to make it a Zero Cost Project Line.

          (a) If the project is a Zero Cost Project Line, then all net billings
     are eligible for the Funding Pools.

          (b) If the project is a Partially Funded Project Line, then the
     Company must first receive sufficient revenues from third parties to make
     such project a Zero Cost

                                       -3-

<PAGE>

     Project Line. Once such revenues have been received, the project then
     becomes a Zero Cost Project Line and all future net billings are
     eligible for the Funding Pools.

               (c) The Chief Financial Officer of the Company shall
     determine when a project line becomes a Zero Cost Project Line. Such
     determination shall be made on a quarterly basis and may be audited by
     the Trustees.

     3.3  Allocation of Contributions. There will be three Funding Pools: Alpha,
Beta and Iota. Each Employee's Designated Percentage of a Funding Pool is
determined by the Company pursuant to Article II.

     3.4  Determination of Funding Pool Size. The amount considered available in
each Funding Pool will be determined on the following sliding scale:

<TABLE>
<CAPTION>
          Net Billing Available                                   Funding Percentage
          In Excess Sales Pool                         Alpha             Beta              Iota
          --------------------                        -------------------------------------------
          <S>                                         <C>               <C>               <C>
          $         0 - $  6,000,000                  2.5000%           3.0000%           3.5000%
          $ 6,000,000 - $  7,000,000                  2.6667%           3.3333%           4.0000%
          $ 7,000,000 - $  8,000,000                  2.7857%           3.5714%           4.3571%
          $ 8,000,000 - $  9,000,000                  2.8750%           3.7500%           4.6250%
          $ 9,000,000 - $ 10,000,000                  2.9444%           3.8889%           4.8333%
                      > $ 10,000,000                  3.0000%           4.0000%           5.0000%
</TABLE>

               (a) For example, for the first 0-$6,000,000 in Net Billings by
          the Company from all designated Zero Cost Project Lines for the
          calendar year

               Funding Pool Alpha= 2-1/2% of the net revenues
               Funding Pool Beta= 3% of the net revenues
               Funding Pool Iota= 3-1/2% of the net revenues

               (b) The Parties understand that the above calculation represents
          the maximum potential of each Funding Pool, but only that amount equal
          to the Designated Percentage of the Funding Pool will be contributed
          to each Employee.

               (c) The contribution amount shall be calculated quarterly (always
          based on cumulative costs and cumulative revenues to date). For
          example, if at the end of the second quarter, the increase in the
          excess sales pool necessitates use of higher funding percentage, the
          new percentages are applied to the six months excess sales pool
          information and the adjustment to the first quarter contribution is
          made at that time. Same procedure should be used at the end of nine
          and twelve months, respectively. The calculation starts over again at
          the beginning of the next fiscal year.

                                       -4-

<PAGE>

                                   ARTICLE IV
                                  MISCELLANEOUS

     4.1  LAWS OF TEXAS TO GOVERN. THIS AGREEMENT SHALL BE CONSTRUED AND
REGULATED BY THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT PREEMPTED BY
FEDERAL LAW.

     4.2  Titles and Headings not to Control. The titles to Articles and
headings of Sections in this Agreement are placed herein for convenience of
reference only and in case of any conflict the text of this Agreement, rather
than such titles or headings, shall control.

     4.3  Successors and Assigns. This Agreement may not be assigned by either
party without the prior written consent of the other, and any purported
assignment without such prior written consent shall be null and void. This
Agreement shall be binding upon the successors and permitted assigns of each
party hereto.

     4.4  Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under the present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed as if such illegal, invalid or unenforceable
provision had never comprised a part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be effected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. In lieu of such illegal, invalid or unenforceable
provisions, there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid and unenforceable
provision as may be possible and be legal, valid and enforceable.

     4.5  Notices. All notices, elections, demands or other communications
required or permitted under this Agreement shall be in writing and shall be
considered as properly given or made when personally delivered or two days after
deposit in the United States mail, first class postage, prepaid addressed to the
Beneficiary at the address set forth opposite such Beneficiary's name on Exhibit
B hereto, to the Company at 16010 Barkers Point Lane, Suite 550, Houston, Texas
77079 and the Trustees at the address specified on the signature page hereto.
Any party may change his address by giving notice to the other parties of the
new address.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year as provided
below, but effective as of the date first written above.

                                          SEITEL, INC.

                                          By: /s/ Debra D. Valice
                                              ----------------------------------
                                          Name:  [Debra D. Valice]
                                                 -------------------------------
                                          Title: Chief Financial Officer
                                                 -------------------------------

                                       -5-

<PAGE>

                                                  TRUSTEES:

                                                  /s/ Debra D Valice
                                                  ------------------------------
                                                  DEBRA D. VALICE
                                                  19907 Parsons Green Court
                                                  Katy, Texas 77450

                                                  /s/ Paul A Frame
                                                  ------------------------------
                                                  PAUL A. FRAME
                                                  2912 Mid Lane
                                                  Houston, Texas 77027

                                                  /s/ Horace A Calvert
                                                  ------------------------------
                                                  HORACE A. CALVERT
                                                  7 Post Oak Drive
                                                  Dayton, Texas 77535

                                       -6-

<PAGE>

THE STATE OF TEXAS  Section

COUNTY OF HARRIS    Section

     The foregoing instrument was acknowledged before me on this the 11th day of
MARCH, 1993, by DEBRA D. VALICE, CHIEF FINANCIAL OFFICER of SEITEL, INC., a
Texas corporation, on behalf of said corporation.

                                                /s/ [ILLEGIBLE]
                                                --------------------------------
                                                Notary Public in and for
                                                the State of Texas

THE STATE OF TEXAS  Section

COUNTY OF HARRIS    Section

     The foregoing instrument was acknowledged before me on this the 11 day of
March, 1993, by DEBRA D. VALICE.

                                                /s/ [ILLEGIBLE]
                                                --------------------------------
                                                Notary Public in and for
                                                the State of Texas

THE STATE OF TEXAS  Section

COUNTY OF HARRIS    Section

     The foregoing instrument was acknowledged before me on this the 11 day of
March, 1993, by PAUL A. FRAME.

                                                /s/ [ILLEGIBLE]
                                                --------------------------------
                                                Notary Public in and for
                                                the State of Texas

                                       -7-

<PAGE>

THE STATE OF TEXAS  Section

COUNTY OF HARRIS    Section

     The foregoing instrument was acknowledged before me on this the 11 day of
March, 1993, by HORACE A. CALVERT.

                                                /s/ [ILLEGIBLE]
                                                --------------------------------
                                                Notary Public in and for
                                                the State of Texas

                                       -8-

<PAGE>

                                    EXHIBIT A

                                  RATIFICATION

          By execution hereof, the undersigned Executive agrees to the terms
contained in the Incentive Compensation Agreement, effective December 30, 1990.

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

Designated Percentage:

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

Applicable Funding Pool:

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

<PAGE>

                                    EXHIBIT B

                               NAMES OF EMPLOYEES

                                                        Designated Percentage
                                                        ---------------------

Funding Pool Iota

      Herbert M. Pearlman                                        12.00%
      David S. Lawi                                              12.00%
      Paul A. Frame, Jr.                                         12.00%
      Horace A. Calvert                                          12.00%

 Funding Pool Beta

       James C. Rives, Jr.                                    9.854168%
       Debra D. Valice                                        9.854168%

 Funding Pool Alpha

       Douglas J. Maier (pre-1992 programs)                       6.75%
       Robert J. Simon, Jr.                                       6.75%
       Walter M. Craig, Jr.                                       6.75%
       Robert T. Choate (post-1991 programs)                      6.75%
       Allana K. May                                              5.30%
       Joe E. Morgan, Jr.                                         5.30%
       David A. Wegner                                            5.30%

<PAGE>

                                    EXHIBIT C

                               ZERO COST PROJECTS

                                (AS OF 1/1/93)

                                       SEL
                                       TERREBORNE II
                                       SLM
                                       TERREBORNE III
                                       TRP
                                       CEY
                                       SWP
                                       TTZ
                                       SEL II
                                       SLM II
                                       SLM III
                                       TERREBORNE IV
                                       NUECES CO.
                                       LTZ
                                       SEL III
                                       SEL -15l
                                       NUECES II
                                       NLA
                                       SPC
                                       SPC  20X
                                       HCP II
                                       NTR
                                       SEP
                                       SEP 105
                                       SEP 265
                                       CRP
                                       NLP
                                       SLM IV
                                       SLMTU 296
                                       MTZ
                                       MTZ 227
                                       MTZ 262-263
                                       MTZ 266-269
                                       VIP
                                       GTC
                                       CYP
                                       MBA
                                       ATC
                                       BMF
                                       TCF
                                       SPC II
                                       WMP
                                       EBR
                                       MOURA
                                       THP
                                       SEL V
                                       IPH
                                       STL
                                       WAP
                                       JOY
                                       MDY
                                       LOG
                                       SUP
                                       JOP
                                       ACA
                                       RAP

                                       TOP
                                       CANADIAN DATA
                                       TELEDYNE
                                       PHILLIPS
                                       ARKOMA
                                       LAKE DELADE
                                       GEO-SEISMIC
                                       GRANT-TENSLIP
                                       MAURICE 3D
                                       BLACK BAVOU 3D
                                       BALLARD DELARGE 3D<PAGE>

                                                                   EXHIBIT 10.37

                                  SEITEL, INC.

                             NOTE PURCHASE AGREEMENT

                          DATED AS OF DECEMBER 28, 1995

          $25,000,000 7.17% SERIES A SENIOR NOTES DUE DECEMBER 30, 2001
          $27,500,000 7.17% SERIES B SENIOR NOTES DUE DECEMBER 30, 2002
             $22,500,000 SERIES C SENIOR NOTES DUE DECEMBER 30, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                     Page
<S>                                                                         <C>
1.  AUTHORIZATION OF NOTES .............................................       1

2.  SALE AND PURCHASE OF NOTES .........................................       2

3.  CLOSINGS ...........................................................       2
    3.1     The Series A and B Closing .................................       2
    3.2     The Series C Closing .......................................       3
    3.3     Failure of the Company to Deliver ..........................       3
    3.4     Failure by You to Deliver ..................................       3

4.  YOUR CONDITIONS TO CLOSINGS ........................................       4
    4.1     Representations and Warranties .............................       4
    4.2     Performance; No Default ....................................       4
    4.3     Compliance Certificates ....................................       4
    4.4     Opinions of Counsel ........................................       4
    4.5     Purchases Permitted By
            Applicable Law, etc ........................................       5
    4.6     Sale of Other Notes ........................................       5
    4.7     Payment of Special Counsel Fees ............................       5
    4.8     Private Placement Number ...................................       5
    4.9     Changes in Corporate Structure .............................       5
    4.10    Subsidiary Guaranty ........................................       6
    4.11    Rating .....................................................       6
    4.12    Proceedings and Documents ..................................       6

4A. COMPANY'S CLOSING CONDITIONS .......................................       6
    4A.1       Representations and Warranties ..........................       6
    4A.2       Sales Permitted by Applicable Law, etc ..................       6

5.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY ......................       7
    5.1     Organization; Power and Authority ..........................       7
    5.2     Authorization, etc .........................................       7
    5.3     Disclosure .................................................       8
    5.4     Organization and Ownership of Shares
            of Restricted Subsidiaries; Affiliates .....................       8
    5.5     Financial Statements .......................................       9
    5.6     Compliance with Laws, Other Instruments, etc ...............       9
    5.7     Governmental Authorizations, etc ...........................      10
    5.8     Litigation; Observance of Agreements,
            Statutes and Orders ........................................      10
    5.9     Taxes ......................................................      10
    5.10    Title to Property; Leases ..................................      11
    5.11    Licenses, Permits, etc .....................................      11
    5.12    Compliance with ERISA ......................................      11
    5.13    Private Offering by the Company ............................      12
</TABLE>

<PAGE>

<TABLE>
    <S>                                                                       <C>
    5.14    Use of Proceeds; Margin Regulations ........................      13
    5.15    Existing Debt; Future Liens ................................      13
    5.16    Foreign Assets Control Regulations, etc ....................      13
    5.17    Status under Certain Statutes ..............................      14
    5.18    Environmental Matters ......................................      14

6.  REPRESENTATIONS OF THE PURCHASER ...................................      14
    6.1     Purchase for Investment ....................................      14
    6.2     Legend .....................................................      15
    6.3     ERISA ......................................................      15
    6.4     Organization; Power and Authority;
            Compliance with Laws .......................................      16
    6.5     Authorization, etc .........................................      17

7.  INFORMATION AS TO COMPANY ..........................................      17
    7.1     Financial and Business Information .........................      17
    7.2     Officer's Certificate ......................................      21
    7.3     Inspection .................................................      21

8.  PREPAYMENT OF THE NOTES ............................................      22
    8.1     Required Prepayments .......................................      22
    8.2     Optional Prepayments with Make-Whole
            Amount; Rescission .........................................      22
    8.3     Allocation of Partial Prepayments ..........................      24
    8.4     Maturity; Surrender, etc ...................................      24
    8.5     Purchase of Notes ..........................................      24
    8.6     Make-Whole Amount ..........................................      24

9.  AFFIRMATIVE COVENANTS ..............................................      26
    9.1     Compliance with Law ........................................      26
    9.2     Insurance ..................................................      26
    9.3     Maintenance of Properties ..................................      26
    9.4     Payment of Taxes and Claims ................................      27
    9.5     Corporate Existence, etc ...................................      27
    9.6     Pari Passu .................................................      27
    9.7     Subsidiary Guaranty ........................................      28
    9.8     Application of Proceeds; Releases ..........................      28

10. NEGATIVE COVENANTS .................................................      29
    10.1     Net Worth .................................................      29
    10.2     Interest Coverage .........................................      29
    10.3     Debt Incurrence ...........................................      29
    10.4     Liens .....................................................      30
    10.5     Mergers and Consolidations ................................      32
    10.6     Sale of Assets ............................................      33
    10.7     Restricted Payments and Restricted
             Investments ...............................................      36
    10.8     Limitations on Certain Restricted
             Subsidiary Actions ........................................      37
    10.9     Affiliate Transactions ....................................      38
    10.10    Line of Business ..........................................      38
</TABLE>

<PAGE>

<TABLE>
<S>                                                                           <C>
11. EVENTS OF DEFAULT ..................................................      38

12. REMEDIES ON DEFAULT, ETC ...........................................      40
    12.1     Acceleration ..............................................      40
    12.2     Other Remedies ............................................      40
    12.3     Rescission ................................................      41
    12.4     No Waivers or Election of Remedies,
             Expenses, etc .............................................      41

13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES ......................      41
    13.1     Registration of Notes .....................................      41
    13.2     Transfer and Exchange of Notes ............................      42
    13.3     Replacement of Notes ......................................      42

14. PAYMENTS ON NOTES ..................................................      43
    14.1     Place of Payment ..........................................      43
    14.2     Home Office Payment .......................................      43

15. EXPENSES, ETC ......................................................      43
    15.1     Transaction Expenses ......................................      43
    15.2     Survival ..................................................      44

16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
    ENTIRE AGREEMENT ...................................................      44

17  AMENDMENT AND WAIVER ...............................................      44
    17.1     Requirements ..............................................      44
    17.2     Solicitation of Holders ...................................      45
    17.3     Binding Effect, etc .......................................      45
    17.4     Notes held by Company, etc ................................      45

18. NOTICES ............................................................      46

19. REPRODUCTION OF DOCUMENTS ..........................................      46

20. CONFIDENTIAL INFORMATION ...........................................      47

21. SUBSTITUTION OF PURCHASER ..........................................      48

22. MISCELLANEOUS ......................................................      48
    22.1     Successors and Assigns ....................................      48
    22.2     Payments Due on Non-Business Days .........................      48
    22.3     Severability ..............................................      48
    22.4     Construction ..............................................      49
    22.5     Counterparts ..............................................      49
    22.6     Governing Law .............................................      49
    22.7     Consent to Jurisdiction;
             Appointment of Agent ......................................      49
    22.8     Defeasance ................................................      50
    22.9     GAAP ......................................................      53
    22.10    Usury .....................................................      53
</TABLE>

<PAGE>

SCHEDULE A        --     INFORMATION RELATING TO PURCHASERS

SCHEDULE B        --     DEFINED TERMS

SCHEDULE 4.9      --     Changes in Corporate Structure

SCHEDULE 5.3      --     Disclosure Materials

SCHEDULE 5.4      --     Subsidiaries of the Company and Ownership of
                         Subsidiary Stock

SCHEDULE 5.5      --     Financial Statements

SCHEDULE 5.8      --     Certain Litigation

SCHEDULE 5.11     --     Patents, etc.

SCHEDULE 5.12     --     ERISA

SCHEDULE 5.15     --     Existing Debt

SCHEDULE 10.8     --     Certain Agreements by Restricted Subsidiaries

EXHIBIT 1A        --     Form of 7.17% Series A Senior Note due
                         December 30, 2001

EXHIBIT 1B        --     Form of 7.17% Series B Senior Note due
                         December 30, 2002

EXHIBIT 1C        --     Form of Series C Senior Note due December 30, 2002

EXHIBIT 4.4(a)    --     Form of Opinion of Special Counsel for the Company

EXHIBIT 4.4(b)    --     Form of Opinion of Special Counsel for the Purchasers

EXHIBIT 4.10      --     Form of Subsidiary Guaranty

<PAGE>

                                  SEITEL, INC.
                            West Building, 7th Floor
                              50 Briar Hollow Lane
                              Houston, Texas 77027

          $25,000,000 7.17% SERIES A SENIOR NOTES DUE DECEMBER 30, 2001

          $27,500,000 7.17% SERIES B SENIOR NOTES DUE DECEMBER 30, 2002

             $22,500,000 SERIES C SENIOR NOTES DUE DECEMBER 30, 2002

                                                         As of December 28, 1995

Separately Addressed to each of the Purchasers Listed on Schedule A hereto:

Ladies and Gentlemen:

     SEITEL, INC., a Delaware corporation (together with any Person who succeeds
to all, or substantially all, of the assets and business of Seitel, Inc., the
"Company"), agrees with you as follows:

1.   AUTHORIZATION OF NOTES

     The Company will authorize the issue and sale of

     (a)  Twenty-Five Million Dollars ($25,000,000) aggregate principal amount
          of its seven and seventeen hundredths percent (7.17%) Series A Senior
          Notes due December 30, 2001 (the "Series A Notes," such term to
          include any such notes issued in substitution therefor pursuant to
          Section 13 of this Agreement or the Other Agreements (as hereinafter
          defined)),

     (b)  Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000)
          aggregate principal amount of its seven and seventeen hundredths
          percent (7.17%) Series B Senior Notes due December 30, 2002 (the
          "Series B Notes," such term to include any such notes issued in
          substitution therefor pursuant to Section 13 of this Agreement or the
          Other Agreements), and

     (c)  Twenty-Two Million Five Hundred Thousand Dollars ($22,500,000)
          aggregate principal amount of its Series C Senior Notes due December
          30, 2002 (the "Series C Notes," such term to include any such notes
          issued in substitution therefor pursuant to Section 13 of this
          Agreement or the Other Agreements).

<PAGE>

The Series A Notes shall be substantially in the form set out in Exhibit 1A, the
Series B Notes shall be substantially in the form set out in Exhibit 1B, and the
Series C Notes shall be substantially in the form set out in Exhibit 1C, in each
case, with such changes therefrom, if any, as may be approved by you and the
Company. The Series A Notes, the Series B Notes and the Series C Notes are
herein referred to collectively as the "Notes," and individually as a "Note".
Certain capitalized terms used in this Agreement are defined in Schedule B;
references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.

2.   SALE AND PURCHASE OF NOTES

     Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, in accordance with
the provisions hereof, at the Closings provided for in Section 3, Notes of the
Series and in the principal amounts specified opposite your name in Schedule A
at the purchase price of one hundred percent (100%) of the principal amount
thereof; provided, however, that you may change such information on Schedule A
(other than the aggregate principal amount of your commitment) by written notice
delivered to the Company prior to the relevant Closing (except that one or more
(but not more than three) of your Affiliates shall be the purchaser or
purchasers of the principal amount of the Notes specified opposite your name on
Schedule A). Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "Other Agreements")
identical with this Agreement with each of the other purchasers named in
Schedule A (the "Other Purchasers"), providing for the sale at such Closing to
each of the Other Purchasers of Notes of the Series and in the principal amounts
specified opposite its name in Schedule A. Your obligation hereunder and the
obligations of the Other Purchasers under the Other Agreements are several and
not joint obligations and you shall have no obligation under any Other Agreement
and no liability to any Person for the performance or non-performance by any
Other Purchaser thereunder.

3.   CLOSINGS

     3.1  The Series A and B Closing

     The sale and purchase of the Series A Notes and the Series B Notes to be
purchased by the purchasers thereof (the "Series A Purchasers" and the "Series B
Purchasers," respectively) shall occur at the offices of Hebb & Gitlin, One
State Street, Hartford, Connecticut 06103, at 10:00 a.m., eastern standard time,
at a closing (the "Series A and B Closing") on December 28, 1995 (the "Series A
and B Closing Date"). At the Series A and B Closing the Company will deliver to
each Series A Purchaser and Series B Purchaser the Series A Notes or Series B
Notes, as the case may be, to be purchased by it in the form of, respectively, a
single Series A Note or a single Series B Note (or such greater number of Series
A Notes or Series B Notes in denominations of at least One Hundred Thousand
Dollars ($100,000) as such Series A Purchaser or Series B Purchaser,
respectively, may request), dated the Series A and B Closing Date and registered
in its name (or in the name of its nominee), against delivery by such Series A
Purchaser or Series B Purchaser, as the case may be, to the Company or its order
of immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company to
account number 30052530 at Compass Bank-Houston, 24 Greenway Plaza, Houston,
Texas 77002, ABA # 113010547.

<PAGE>

     3.2  The Series C Closing

          (a) Notice. Subsequent to the date hereof, the Company shall deliver
     to you and the Other Purchasers an irrevocable written notice specifying a
     date no later than June 28, 1996 as the date of purchase of the Series C
     Notes (the "Series C Closing Date," the Series A and B Closing Date and the
     Series C Closing Date being sometimes referred to herein, individually, as
     a "Closing Date"). Such notice shall be given not less than thirty (30) nor
     more than forty-five (45) days prior to the Series C Closing Date.

          (b) Interest Rate. The interest rate per annum on the Series C Notes
     (the "Series C Interest Rate") shall be equal to the sum of (i) one and
     forty-five hundredths percent (1.45%) plus (ii) the Relevant Treasury
     Yield.

          (c) The Series C Closing. The sale and purchase of the Series C Notes
     to be purchased by the purchasers thereof (the "Series C Purchasers") shall
     occur at the offices of Hebb & Gitlin, One State Street, Hartford,
     Connecticut 06103, at 10:00 a.m., eastern standard time, at a closing (the
     "Series C Closing," the Series A and B Closing and the Series C Closing
     being sometimes referred to herein collectively as the "Closings" and
     individually as a "Closing") on the Series C Closing Date. At the Series C
     Closing the Company will deliver to each of the Series C Purchasers the
     Series C Notes to be purchased by it, in the form of a single Series C Note
     (or such greater number of Series C Notes in denominations of at least One
     Hundred Thousand Dollars ($100,000) as such Series C Purchaser may
     request), dated the Series C Closing Date and registered in its name (or in
     the name of its nominee), against delivery by such Series C Purchaser to
     the Company or its order of immediately available funds in the amount of
     the purchase price therefor by wire transfer of immediately available funds
     for the account of the Company to the account number set forth in Section
     3.1.

     3.3  Failure of the Company to Deliver

     If on the Series A and B Closing Date or on the Series C Closing Date the
Company fails to tender to you the Notes to be acquired by you on such date or
if the conditions specified in Section 4 have not been fulfilled on either such
date, you may thereupon elect to be relieved of all further obligations under
this Agreement with respect to the Notes to be purchased by you on such date.
Nothing in this Section shall operate to relieve the Company from any of its
obligations under this Agreement or to waive any of your rights against the
Company.

     3.4  Failure by You to Deliver

     If on the Series A and B Closing Date or on the Series C Closing Date you
fail to deliver the full amount of funds to be delivered by you on such date or
if the conditions specified in Section 4A have not been fulfilled on either such
date, the Company may thereupon elect to return immediately any funds delivered
by you on such date and to be relieved of all further obligations under this
Agreement with respect to the Notes to be purchased by you on such date. Nothing
in this Section shall operate to relieve you from any of your obligations to the
Company under this Agreement or to waive any of the Company's rights against
you.

<PAGE>

4.   YOUR CONDITIONS TO CLOSINGS

     Your obligation to purchase and pay for the Notes to be sold to you on each
Closing Date is subject to the fulfillment to your satisfaction, prior to or on
such Closing Date (except as otherwise specified), of the following conditions:

     4.1  Representations and Warranties

     The representations and warranties of the Company in this Agreement shall
be correct when made and on such Closing Date.

     4.2  Performance; No Default

     The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or on such Closing Date and after giving effect to the issue and
sale of the Notes (and the application of the proceeds thereof as contemplated
by Schedule 5.14), no Default or Event of Default shall have occurred and be
continuing.

     4.3  Compliance Certificates

          (a) Officer's Certificate. The Company shall have delivered to you an
     Officer's Certificate, dated such Closing Date, certifying that the
     conditions specified in Sections 4.1 and 4.2 have been fulfilled.

          (b) Company Secretary's Certificate. The Company shall have delivered
     to you a certificate, dated such Closing Date, signed by the Secretary or
     an Assistant Secretary of the Company, and certifying as to the
     resolutions, the bylaws and the certificate of incorporation attached
     thereto and as to other corporate proceedings relating to the
     authorization, execution and delivery of the Notes and the Agreements.

          (c) Secretary's Certificates of Restricted Subsidiaries. Each
     Restricted Subsidiary shall have delivered to you a certificate, dated such
     Closing Date, signed by the Secretary or an Assistant Secretary of such
     Restricted Subsidiary, and certifying as to the resolutions, the bylaws and
     the certificate or articles of incorporation attached thereto and as to
     other corporate proceedings relating to the authorization, execution and
     delivery of the Subsidiary Guaranty.

     4.4  Opinions of Counsel

     You shall have received from

          (a) Gardere Wynne Sewell & Riggs, L.L.P., counsel for the Company, and

          (b) Hebb & Gitlin, your special counsel, closing opinions, each dated
as of such Closing Date, substantially in the respective forms set forth in
Exhibits 4.4(a) and 4.4(b), and as to such other matters as you may reasonably
request. This Section 4.4 shall constitute direction by the Company to such
counsel named in the immediately preceding subsection (a) to deliver such
closing opinion to you.

<PAGE>

     4.5  Purchases Permitted By Applicable Law, etc.

         On such Closing Date your purchase of Notes shall (a) be permitted by
the laws and regulations of each jurisdiction to which you are subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation G, T or X of the
Board of Governors of the Federal Reserve System) and (c) not subject you to any
tax, penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.

     4.6  Sale of Other Notes

     Contemporaneously with such Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at such Closing as specified in Schedule A.

     4.7  Payment of Special Counsel Fees

     Without limiting the provisions of Section 15.1, the Company shall have
paid on or before such Closing the reasonable fees, charges and disbursements of
your special counsel referred to in Section 4.4(b) to the extent reflected in a
statement of such counsel rendered to the Company at least one (1) Business Day
prior to such Closing.

     4.8  Private Placement Numbers

     Private Placement numbers issued by Standard & Poor's CUSIP Service Bureau
(in cooperation with the Securities Valuation Office of the National Association
of Insurance Commissioners) shall have been obtained for each Series.

     4.9  Changes in Corporate Structure

     Except as specified in Schedule 4.9, the Company shall not have changed its
jurisdiction of incorporation or been a party to any merger or consolidation and
shall not have succeeded to all or any substantial part of the liabilities of
any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.

<PAGE>

     4.10 Subsidiary Guaranty; Consent

     You shall have received

          (a) the Guaranty, duly executed and delivered by each Restricted
     Subsidiary, substantially in the form of Exhibit 4.10 (the "Subsidiary
     Guaranty"), which Guaranty shall be in full force and effect; and

          (b) a consent, duly executed by Compass Bank (formerly Central Bank of
     the South), to the execution of the Subsidiary Guaranty by Seitel
     Geophysical, Inc.

     4.11 Rating

     You shall have received a copy of a letter from Duff & Phelps Credit Rating
Co. to the Company assigning a rating to the Notes of at least BBB and such
rating shall continue to be in force and effect (not having been withdrawn) as
of such Closing Date.

     4.12 Proceedings and Documents

     All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be reasonably satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.

4A.  COMPANY'S CLOSING CONDITIONS

     The Company's obligation to sell the Notes to be purchased by you on each
Closing Date is subject to the fulfillment to the Company's satisfaction, prior
to or on such Closing Date (except as otherwise specified), of the following
conditions:

     4A.1 Representations and Warranties.

     The representations and warranties made by you in Section 6 shall be
correct when made and on such Closing Date.

     4A.2 Sales Permitted by Applicable Law, etc.

     On such Closing Date the Company's sale of the Notes and the granting of
the Subsidiary Guaranty by the Restricted Subsidiaries shall (a) be permitted by
the laws and regulations of each jurisdiction to which the Company and the
Restricted Subsidiaries are subject, and (b) not violate any applicable law or
regulation.

<PAGE>

5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to you that:

     5.1  Organization; Power and Authority

          (a)  The Company

               (i) is a corporation duly organized, validly existing and in good
          standing under the laws of the State of Delaware;

               (ii) is duly qualified as a foreign corporation and is in good
          standing in each jurisdiction in which such qualification is required
          by law, other than those jurisdictions as to which the failure to be
          so qualified or in good standing could not, individually or in the
          aggregate, reasonably be expected to have a Material Adverse Effect;
          and

               (iii) has the corporate power and authority to own or hold under
          lease the properties it purports to own or hold under lease, to
          transact the business it transacts and proposes to transact, to
          execute and deliver this Agreement and the Other Agreements and the
          Notes and to perform the provisions hereof and thereof.

          (b)  Each Restricted Subsidiary

               (i) is a corporation duly organized, validly existing and in good
          standing under the laws of its jurisdiction of incorporation;

               (ii) is duly qualified as a foreign corporation and is in good
          standing in each jurisdiction in which such qualification is required
          by law, other than those jurisdictions as to which the failure to be
          so qualified or in good standing could not, individually or in the
          aggregate, reasonably be expected to have a Material Adverse Effect;
          and

               (iii) has the corporate power and authority to own or hold under
          lease the properties it purports to own or hold under lease, to
          transact the business it transacts and proposes to transact, to
          execute and deliver the Subsidiary Guaranty and to perform the
          provisions hereof and thereof.

     5.2  Authorization, etc.

          (a)  This Agreement and the Other Agreements and the Notes have been
     duly authorized by all necessary corporate action on the part of the
     Company, and this Agreement constitutes, and upon execution and delivery
     thereof each Note will constitute, a legal, valid and binding obligation of
     the Company enforceable against the Company in accordance with its terms,
     except as such enforceability may be limited by (i) applicable bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     enforcement of creditors' rights generally and (ii) general principles of
     equity (regardless of whether such enforceability is considered in a
     proceeding in equity or at law).

<PAGE>

          (b)  The Subsidiary Guaranty has been duly authorized by all necessary
     corporate action on the part of each Restricted Subsidiary and constitutes
     a legal, valid and binding obligation of each Restricted Subsidiary
     enforceable against such Restricted Subsidiary in accordance with its
     terms, except as such enforceability may be limited by (i) applicable
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting the enforcement of creditors' rights generally and (ii) general
     principles of equity (regardless of whether such enforceability is
     considered in a proceeding in equity or at law).

     5.3  Disclosure

     The Company, through its agent, Bear, Stearns & Co. Inc., has delivered to
you and each Other Purchaser a copy of a Confidential Private Placement
Memorandum, dated October 1995 (the "Memorandum"), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
the Restricted Subsidiaries. Except as disclosed in Schedule 5.3, this
Agreement, the Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with the
transactions contemplated hereby and the financial statements listed in Schedule
5.5, taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. All
projections and forward-looking statements contained in the Memorandum are based
upon assumptions that the Company believes to be reasonable and were made in
good faith, although no assurances can be given that the results set forth in
such projections or forward-looking statements will be achieved. Except as
disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one
of the documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 1994, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any Restricted Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other documents, certificates and
other writings delivered to you by or on behalf of the Company specifically for
use in connection with the transactions contemplated hereby.

     5.4  Organization and Ownership of Shares of Restricted Subsidiaries;
          Affiliates

          (a)  Schedule 5.4 contains (except as noted therein) complete and
     correct lists of (i) the Restricted Subsidiaries, showing, as to each
     Restricted Subsidiary, the correct name thereof, the jurisdiction of its
     organization and the percentage of shares of each class of its outstanding
     capital stock or similar equity interests owned by the Company and each
     other Restricted Subsidiary, and (ii) the Company's Affiliates (other than
     Restricted Subsidiaries).

<PAGE>

          (b)  All of the outstanding shares of capital stock or similar equity
     interests of each Restricted Subsidiary shown in Schedule 5.4 as being
     owned by the Company and the Restricted Subsidiaries have been validly
     issued, are fully paid and nonassessable and are owned by the Company or
     another Restricted Subsidiary free and clear of any Lien (except as
     otherwise disclosed in Schedule 5.4).

          (c)  Each Restricted Subsidiary identified in Schedule 5.4 is a
     corporation or other legal entity duly organized, validly existing and in
     good standing under the laws of its jurisdiction of organization, and is
     duly qualified as a foreign corporation or other legal entity and is in
     good standing in each jurisdiction in which such qualification is required
     by law, other than those jurisdictions as to which the failure to be so
     qualified or in good standing could not, individually or in the aggregate,
     reasonably be expected to have a Material Adverse Effect. Each such
     Restricted Subsidiary has the corporate or other power and authority to own
     or hold under lease the properties it purports to own or hold under lease
     and to transact the business it transacts and proposes to transact.

          (d)  No Restricted Subsidiary is a party to, or otherwise subject to
     any legal restriction or any agreement (other than this Agreement, the
     agreements listed on Schedule 5.4 and customary limitations imposed by
     corporate law statutes) restricting the ability of such Restricted
     Subsidiary to pay dividends out of profits or make any other similar
     distributions of profits to the Company or any of the Restricted
     Subsidiaries that owns outstanding shares of capital stock or similar
     equity interests of such Restricted Subsidiary.

     5.5  Financial Statements

     The Company has delivered to each Purchaser copies of the financial
statements of the Company and the Restricted Subsidiaries listed on Schedule
5.5. All of said financial statements (including in each case the related
schedules and notes) present fairly, in all material respects, the consolidated
financial position of the Company and the Restricted Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments).

     5.6  Compliance with Laws, Other Instruments, etc.

     Neither the execution, delivery and performance by the Company of this
Agreement and the Notes, nor the execution, delivery and performance by any
Restricted Subsidiary of the Subsidiary Guaranty, will (a) contravene, result in
any breach of, or constitute a default under, or result in the creation of any
Lien in respect of any property of the Company or any Restricted Subsidiary
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Restricted Subsidiary is bound or by
which the Company or any Restricted Subsidiary or any of their respective
properties may be bound or affected, (b) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Restricted Subsidiary or (c) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to the
Company or any Restricted Subsidiary.

<PAGE>

     5.7  Governmental Authorizations, etc.

     No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance (a) by the Company of this Agreement or the
Notes or (b) by any Restricted Subsidiary of the Subsidiary Guaranty.

     5.8  Litigation; Observance of Agreements, Statutes and Orders

          (a)  Except as disclosed in Schedule 5.8, there are no actions, suits
     or proceedings pending or, to the knowledge of the Company, threatened
     against or affecting the Company or any Restricted Subsidiary or any
     property of the Company or any Restricted Subsidiary in any court or before
     any arbitrator of any kind or before or by any Governmental Authority that,
     individually or in the aggregate, could reasonably be expected to have a
     Material Adverse Effect.

          (b)  Neither the Company nor any Restricted Subsidiary is in default
     under any term of any agreement or instrument to which it is a party or by
     which it is bound, or any order, judgment, decree or ruling of any court,
     arbitrator or Governmental Authority or is in violation of any applicable
     law, ordinance, rule or regulation (including without limitation
     Environmental Laws) of any Governmental Authority, which default or
     violation, individually or in the aggregate, could reasonably be expected
     to have a Material Adverse Effect.

     5.9  Taxes

     The Company and the Restricted Subsidiaries have filed all tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (a) the amount of
which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Restricted
Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and the Restricted
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate. The Federal income tax liabilities of the Company and the
Restricted Subsidiaries have been determined by the Internal Revenue Service and
paid for all fiscal years up to and including the fiscal year ended December 31,
1989.

<PAGE>

     5.10      Title to Property; Leases

     The Company and the Restricted Subsidiaries have good and sufficient title
to their respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited
balance sheet referred to in Section 5.5 or purported to have been acquired by
the Company or any Restricted Subsidiary after said date (except as sold or
otherwise disposed of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that individually or in
the aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.

     5.11 Licenses, Permits, etc

     Except as disclosed in Schedule 5.11,

          (a) the Company and the Restricted Subsidiaries own or possess all
     licenses, permits, franchises, authorizations, patents, copyrights, service
     marks, trademarks and trade names, or rights thereto, with respect to the
     business of the Company and/or any Restricted Subsidiary as currently
     conducted, that individually or in the aggregate are Material, without
     known conflict with the rights of others;

          (b) to the best knowledge of the Company, no product of the Company or
     any Restricted Subsidiary infringes in any material respect upon any
     license, permit, franchise, authorization, patent, copyright, service mark,
     trademark, trade name or other right owned by any other Person; and

          (c) to the best knowledge of the Company, there is no violation by any
     Person of any right of the Company or any Restricted Subsidiary with
     respect to any patent, copyright, service mark, trademark, trade name or
     other right owned or used by the Company or any Restricted Subsidiary
     which, individually or in the aggregate, could reasonably be expected to
     have a Material Adverse Effect.

     5.12 Compliance with ERISA

          (a)  The Company and each ERISA Affiliate have operated and
     administered each Plan in compliance with all applicable laws except for
     such instances of noncompliance as have not resulted in and could not
     reasonably be expected to result in a Material Adverse Effect. Neither the
     Company nor any ERISA Affiliate has incurred any liability pursuant to
     Title I or IV of ERISA or the penalty or excise tax provisions of the Code
     relating to employee benefit plans (as defined in Section 3 of ERISA), and
     no event, transaction or condition has occurred or exists that could
     reasonably be expected to result in the incurrence of any such liability by
     the Company or any ERISA Affiliate, or in the imposition of any Lien on any
     of the rights, properties or assets of the Company or any ERISA Affiliate,
     in either case pursuant to Title I or IV of ERISA or to such penalty or
     excise tax provisions or to Section 401(a)(29) or 412 of the Code, other
     than such liabilities or Liens as would not be individually or in the
     aggregate Material.

<PAGE>

          (b)  The present value of the aggregate benefit liabilities under each
     of the Plans (other than Multiemployer Plans), determined as of the end of
     such Plan's most recently ended plan year on the basis of the actuarial
     assumptions specified for funding purposes in such Plan's most recent
     actuarial valuation report, did not exceed the aggregate current value of
     the assets of such Plan allocable to such benefit liabilities. The term
     "benefit liabilities" has the meaning specified in section 4001 of ERISA
     and the terms "current value" and "present value" have the meaning
     specified in section 3 of ERISA.

          (c)  The Company and its ERISA Affiliates have not incurred withdrawal
     liabilities (and are not subject to contingent withdrawal liabilities)
     under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
     individually or in the aggregate are Material.

          (d)  The expected postretirement benefit obligation (determined as of
     the last day of the Company's most recently ended fiscal year in accordance
     with Financial Accounting Standards Board Statement No. 106, without regard
     to liabilities attributable to continuation coverage mandated by section
     4980B of the Code) of the Company and the Restricted Subsidiaries is not
     Material.

          (e)  The execution and delivery of this Agreement and the issuance and
     sale of the Notes hereunder will not involve any transaction that is
     subject to the prohibitions of section 406 of ERISA or in connection with
     which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
     Code. The representation by the Company in the first sentence of this
     Section 5.12(e) is made in reliance upon and subject to the accuracy of
     your representation in Section 6.3 as to the sources of the funds used to
     pay the purchase price of the Notes to be purchased by you.

          (f)  Schedule 5.12 lists all ERISA Affiliates that are Restricted
     Subsidiaries and that maintain one or more Plans and any employee
     organizations in respect of any Multiemployer Plan or Plan. Schedule 5.12
     sets forth all ERISA Affiliates and all "employee benefit plans" with
     respect to which the Company or any "affiliate" of the Company is a
     "party-in-interest" or in respect of which the Notes could constitute an
     "employer security" ("employee benefit plan," "party-in-interest" and
     "employee organization" have the meanings specified in section 3 of ERISA,
     "affiliate" has the meaning specified in section 407(d) of ERISA and
     Section V of the Department of Labor Prohibited Transaction Exemption 95-60
     (60 FR 35925, July 12, 1995) and "employer security" has the meaning
     specified in section 407(d) of ERISA).

     5.13 Private Offering by the Company

     Neither the Company nor anyone acting on its behalf has offered the Notes
or any similar Securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
Person other than you, the Other Purchasers and not more than fifty-four (54)
other Institutional Investors, each of which has been offered the Notes at a
private sale for investment. In reliance upon the accuracy of your
representations and warranties and the representations and warranties of the
Other Purchasers, neither the Company nor anyone acting on its behalf has taken,
or will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of Section 5 of the Securities Act.

<PAGE>

     5.14 Use of Proceeds; Margin Regulations

     The Company will apply the proceeds of the sale of the Notes to repay
existing Debt and for general corporate purposes (including, without limitation,
the repayment of certain accounts payable, as more fully described on Schedule
5.3, if an acceptable agreement with the payee is concluded). No part of the
proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation G of the Board of Governors of the Federal Reserve System
(12 CFR 207), or for the purpose of buying or carrying or trading in any
Securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than one percent (1%) of the value of the consolidated assets of
the Company and the Restricted Subsidiaries and the Company does not have any
present intention that margin stock will constitute more than five percent (5%)
of the value of such assets. As used in this Section, the terms "margin stock"
and "purpose of buying or carrying" shall have the meanings assigned to them in
said Regulation G.

     5.15 Existing Debt; Future Liens

          (a) Except as described therein, Schedule 5.15 sets forth a complete
     and correct list of all outstanding Debt (in excess of $100,000
     outstanding) of the Company and the Restricted Subsidiaries as of December
     15, 1995, since which date there has been no material change in the
     amounts, interest rates, sinking funds, installment payments or maturities
     of the Debt of the Company or the Restricted Subsidiaries. Neither the
     Company nor any Restricted Subsidiary is in default, and no waiver of
     default is currently in effect, in the payment of any principal of or
     interest on any Debt of the Company or such Restricted Subsidiary and no
     event or condition exists with respect to any Debt of the Company or any
     Restricted Subsidiary that would permit (or that with notice or the lapse
     of time, or both, would permit) one or more Persons to cause such Debt to
     become due and payable before its stated maturity or before its regularly
     scheduled dates of payment.

          (b) Except as disclosed in Schedule 5.15, neither the Company nor any
     Restricted Subsidiary has agreed or consented to cause or permit in the
     future (upon the happening of a contingency or otherwise) any of its
     property, whether now owned or hereafter acquired, to be subject to a Lien
     not permitted by Section 10.4.

     5.16 Foreign Assets Control Regulations, etc.

     Neither the sale of the Notes by the Company hereunder nor its use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.

<PAGE>

     5.17 Status under Certain Statutes

     Neither the Company nor any Restricted Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Transportation Acts (49 U.S.C.), as
amended, or the Federal Power Act, as amended.

     5.18 Environmental Matters

     Neither the Company nor any Restricted Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding has been
instituted raising any claim against the Company or any of the Restricted
Subsidiaries or any of their respective real properties now or formerly owned,
leased or operated by any of them or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each case, such
as could not reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in writing,

          (a) neither the Company nor any of the Restricted Subsidiaries has
     knowledge of any facts which would give rise to any claim, public or
     private, of violation of Environmental Laws or damage to the environment
     emanating from, occurring on or in any way related to real properties now
     or formerly owned, leased or operated by any of them or to other assets or
     their use, except, in each case, such as could not reasonably be expected
     to result in a Material Adverse Effect;

          (b) neither the Company nor any of the Restricted Subsidiaries has
     stored any Hazardous Materials on real properties now or formerly owned,
     leased or operated by any of them or has disposed of any Hazardous
     Materials in a manner contrary to any Environmental Laws in each case in
     any manner that could reasonably be expected to result in a Material
     Adverse Effect; and

          (c) all buildings on all real properties now owned, leased or operated
     by the Company or any of the Restricted Subsidiaries are in compliance with
     applicable Environmental Laws, except where failure to comply could not
     reasonably be expected to result in a Material Adverse Effect.

6.   REPRESENTATIONS OF THE PURCHASER

     6.1  Purchase for Investment

     You represent that you are purchasing the Notes for your own account or for
one or more separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the distribution thereof or
with any present intention of offering or selling any of the Notes in a
transaction that would violate the Securities Act or the securities laws of any
State of the United States or any other applicable jurisdiction, provided that
the disposition of your or their property shall at all times be within your or
their control. You represent and warrant that you and any Person for whose
account you are purchasing the Notes are either a Qualified Institutional Buyer
or an Accredited Institution, in either case with such knowledge and experience
in financial and business matters as are necessary in order to evaluate the
merits and risks of an investment in the Notes. You also understand that the
Company and, for purposes of the opinions to be delivered to you pursuant to
Section 4.4, counsel to the Company and your special counsel, will rely upon the
accuracy and truth of the foregoing representations and you hereby consent to
such reliance. You understand that the Notes have not been registered under the
Securities Act and may be resold only if registered pursuant to the provisions
of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is
required by law, and that the Company is not required to register the Notes.

<PAGE>

     6.2  Legend

     You agree that the Notes shall contain the following legend:

     "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED, AND MAY ONLY BE REOFFERED AND SOLD IN COMPLIANCE WITH THE
     REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION THEREFROM."

The legend requirements imposed by this Section 6.2 shall cease and terminate as
to any particular Note if the Notes represented thereby have been:

          (a)  effectively registered under the Securities Act (the Company
     having no obligation to effect the registration of such Notes) and disposed
     of in accordance with the registration statement covering such Notes,

          (b)  distributed to the public  pursuant to Rule 144 (or any successor
     provision) under the Securities Act, or

          (c)  otherwise transferred in accordance herewith and the subsequent
     disposition of such Notes shall not require the registration or
     qualification of such Notes under the Securities Act or any similar state
     law then in force.

Whenever such restrictions shall terminate as to any Notes, the holder thereof
shall be entitled to receive from the Company, without expense to such holder
(except for stamp taxes or governmental charges, if any, payable in connection
with a transfer of such Notes, as required by Section 13.2), a new Note of like
tenor not bearing the legend set forth in this Section 6.2.

     6.3  ERISA.  You represent:

          (a) if you are acquiring the Notes for your own account with funds
     from or attributable to your general account, and in reliance upon the
     Company's representations set forth in Section 5.12 and the related
     disclosures set forth in Schedule 5.12, that the amount of the reserves and
     liabilities for the general account contracts (as defined by the annual
     statement for life insurance companies approved by the National Association
     of Insurance Commissioners (the "NAIC Annual Statement")) held by or on
     behalf of any Plan together with the amount of the reserves and liabilities
     for the general account contracts held by or on behalf of any other Plans
     maintained by the same employer (or affiliate thereof, as such term is
     defined in section V of DOL Prohibited Transaction Exemption 95-60 (60 FR
     35925, July 12, 1995)) or by the same employee organization (as defined in
     ERISA) in the general account do not exceed 10% of the total reserves and
     liabilities of the general account (exclusive of separate account
     liabilities) plus surplus as set forth in the NAIC Annual Statement filed
     with the state of domicile of the insurance company; for purposes of the
     percentage limitation in this clause (a), the amount of reserves and
     liabilities for the general account contracts held by or on behalf of a
     Plan shall be determined before reduction for credits on account of any
     reinsurance ceded on a coinsurance basis; or

<PAGE>

          (b) if any part of the funds being used by you to purchase the Notes
     shall come from assets of an employee benefit plan (as defined in section 3
     of ERISA) or a plan (as defined in section 4975(e)(1) of the Code), that:

               (i) if such funds are  attributable  to a "separate  account" (as
          defined in section 3 of ERISA), then

                    (A) all requirements for an exemption under DOL Prohibited
               Transaction Exemption 90-1 (issued January 29, 1990) are met with
               respect to the use of such funds to purchase the Notes, or

                    (B) the employee benefit plans with an interest in such
               separate account have been identified in a writing delivered by
               you to the Company;

               (ii) if such funds are attributable to a "separate account" (as
          defined in section 3 of ERISA) that is maintained solely in connection
          with fixed contracted obligations of an insurance company, any amounts
          payable, or credited, to any employee benefit plan having an interest
          in such account and to any participant or beneficiary of such plan
          (including an annuitant) are not affected in any manner by the
          investment performance of the separate account;

               (iii) if such funds are attributable to an "investment fund"
          managed by a "qualified plan asset manager" (as such terms are defined
          in Part V of DOL Prohibited Transaction Exemption 84-14, issued March
          13, 1984), all requirements for an exemption under such Exemption are
          met with respect to the use of such funds to purchase the Notes; or

               (iv) such employee benefit plan is excluded from the provisions
          of section 406 of ERISA by virtue of section 4(b) of ERISA.

     6.4  Organization; Power and Authority; Compliance with Laws

     You represent and warrant that:

          (a) you are a corporation  duly organized,  validly  existing,  and in
     good standing under the laws of the state of your incorporation,

<PAGE>

          (b) you have the corporate  power and authority to execute and deliver
     this Agreement and to perform the provisions hereof, and

          (c) the execution, delivery and performance of this Agreement by you
     will not violate any provision of any statute or other rule or regulation
     of any Governmental Authority applicable to you.

     6.5  Authorization, etc

     You represent and warrant that this Agreement has been duly authorized by
all necessary corporate action on your part, and this Agreement constitutes your
legal, valid and binding obligation enforceable against you in accordance with
its terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

7.   INFORMATION AS TO COMPANY

     7.1  Financial and Business Information

     The Company shall deliver to each holder that is an Institutional Investor:

          (a) Quarterly Statements -- within forty-five (45) days after the end
     of each quarterly fiscal period in each fiscal year of the Company (other
     than the last quarterly fiscal period of each such fiscal year), duplicate
     copies of,

               (i)   consolidated   balance   sheets  of  the  Company  and  its
          consolidated  Subsidiaries,  and of the  Company  and  its  Restricted
          Subsidiaries, as at the end of such quarter, and

               (ii) consolidated statements of operations, stockholders' equity
          and cash flows of the Company and its consolidated Subsidiaries, and
          of the Company and its Restricted Subsidiaries, for such quarter and
          (in the case of the second and third quarters) for the portion of the
          fiscal year ending with such quarter,

     setting forth in each case in comparative form the figures for the
     corresponding periods in the previous fiscal year, all in reasonable
     detail, prepared in accordance with GAAP applicable to quarterly financial
     statements generally, and certified by a Senior Financial Officer as fairly
     presenting, in all material respects, the financial position of the
     companies being reported on and their results of operations and cash flows,
     subject to changes resulting from year-end adjustments, provided that, so
     long as the Company shall not have any Unrestricted Subsidiaries, delivery
     within the time period specified above of copies of the Company's Quarterly
     Report on Form 10-Q prepared in compliance with the requirements therefor
     and filed with the Securities and Exchange Commission shall be deemed to
     satisfy the requirements of this Section 7.1(a);

<PAGE>

               (b) Annual Statements -- within ninety (90) days after the end of
          each fiscal year of the Company, duplicate copies of,

                    (i)  consolidated  balance  sheets  of the  Company  and its
               consolidated Subsidiaries,  and of the Company and its Restricted
               Subsidiaries, as at the end of such year, and

                    (ii) consolidated statements of operations, stockholders'
               equity and cash flows of the Company and its consolidated
               Subsidiaries, and of the Company and its Restricted Subsidiaries,
               for such year,

          setting forth in each case in comparative form the figures for the
          previous fiscal year, all in reasonable detail, prepared in accordance
          with GAAP, and accompanied by

                    (A) an opinion thereon of independent certified public
               accountants of recognized national standing, which opinion shall
               state that such financial statements present fairly, in all
               material respects, the financial position of the companies being
               reported upon and their results of operations and cash flows and
               have been prepared in conformity with GAAP (except for the
               exclusion of Unrestricted Subsidiaries, if any, from the
               financial statements of the Company and the Restricted
               Subsidiaries), and that the examination of such accountants in
               connection with such financial statements has been made in
               accordance with generally accepted auditing standards, and that
               such audit provides a reasonable basis for such opinion in the
               circumstances, and

                    (B) a certificate of such accountants stating that they have
               reviewed this Agreement and stating further whether, in making
               their audit, they have become aware of any condition or event
               that then constitutes a Default or an Event of Default, and, if
               they are aware that any such condition or event then exists,
               specifying the nature and period of the existence thereof (it
               being understood that such accountants shall not be liable,
               directly or indirectly, for any failure to obtain knowledge of
               any Default or Event of Default unless such accountants should
               have obtained knowledge thereof in making an audit in accordance
               with generally accepted auditing standards or did not make such
               an audit),

          provided that, so long as the Company shall not have any Unrestricted
          Subsidiaries, the delivery within the time period specified above of
          the Company's Annual Report on Form 10-K for such fiscal year
          (together with the Company's annual report to shareholders, if any,
          prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
          accordance with the requirements therefor and filed with the
          Securities and Exchange Commission, together with the accountants'
          certificates described in clauses (A) and (B) above, shall be deemed
          to satisfy the requirements of this Section 7.1(b);

               (c) SEC  and  Other  Reports  --  promptly  upon  their  becoming
          available, one copy of

<PAGE>

                    (i)  each financial statement, report, notice or proxy
               statement sent by the Company or any Restricted Subsidiary to
               public securities holders generally, and

                    (ii) (A) each regular or periodic report, each registration
               statement (without exhibits except as expressly requested by such
               holder), and each prospectus and all amendments thereto filed by
               the Company or any Restricted Subsidiary with the Securities and
               Exchange Commission and (B) by facsimile only, all press releases
               and other statements made available generally by the Company or
               any Restricted Subsidiary to the public concerning developments
               that are Material;

               (d) Audit Reports -- as soon as practicable after receipt thereof
          by the Company or any Subsidiary, a copy of each other report
          submitted to the Company or any Subsidiary by its independent
          accountants in connection with any interim or special audit made by
          them of the books of the Company or any Subsidiary;

               (e) Litigation -- within five (5) days after the Company obtains
          knowledge thereof, written notice of any pending or threatened (in
          writing) (i) litigation not fully covered by insurance or as to which
          an insurance company has not accepted liability or (ii) governmental
          proceeding, in each case against the Company or any Restricted
          Subsidiary, in which the damages sought exceed One Million Dollars
          ($1,000,000), individually or in the aggregate, or which otherwise
          could reasonably be expected to have a Material Adverse Effect;

               (f) Notice of Default or Event of Default -- promptly, and in any
          event within five (5) days after a Responsible Officer shall become
          aware of the existence of any Default or Event of Default or that any
          Person has given any notice or taken any action with respect to a
          claimed default hereunder or that any Person has given any notice or
          taken any action with respect to a claimed default of the type
          referred to in Section 11(f), a written notice specifying the nature
          and period of existence thereof and what action the Company is taking
          or proposes to take with respect thereto;

               (g) Oil and Gas Reserve Reports -- promptly, and in any event no
          later than April 1 in each year, engineering reports in form and
          substance reasonably satisfactory to the Required Holders, certified
          by Forrest A. Garb & Associates, Inc. (or any other nationally or
          regionally recognized independent consulting petroleum engineers) as
          fairly and accurately setting forth

                    (i) the proven and producing, shut-in, behind-pipe, and
               undeveloped oil and gas reserves (separately classified as such)
               of the Company and its Restricted Subsidiaries as of January 1 of
               the year for which such reserve reports are furnished,

                    (ii) the aggregate present value of the future net income
               with respect to such reserves discounted at a stated per annum
               annual discount rate,

<PAGE>

                    (iii) projections of the annual rate of production, gross
               income, and net income with respect to such proven and producing
               reserves, and

                    (iv)  information   with  respect  to  the   "take-or-pay,"
               "prepayment,"  and  gas-balancing  liabilities of the Company and
               its Restricted Subsidiaries;

               (h) ERISA Matters -- promptly, and in any event within five (5)
          days after a Responsible Officer shall become aware of any of the
          following, a written notice setting forth the nature thereof and the
          action, if any, that the Company or an ERISA Affiliate proposes to
          take with respect thereto:

                    (i) with respect to any Plan, any reportable event, as
               defined in section 4043(b) of ERISA and the regulations
               thereunder, for which notice thereof has not been waived pursuant
               to such regulations as in effect on the date hereof; or

                    (ii) the taking by the PBGC of steps to institute, or the
               threatening by the PBGC of the institution of, proceedings under
               section 4042 of ERISA for the termination of, or the appointment
               of a trustee to administer, any Plan, or the receipt by the
               Company or any ERISA Affiliate of a notice from a Multiemployer
               Plan that such action has been taken by the PBGC with respect to
               such Multiemployer Plan; or

                    (iii) any event, transaction or condition that could result
               in the incurrence of any liability by the Company or any ERISA
               Affiliate pursuant to Title I or IV of ERISA or the penalty or
               excise tax provisions of the Code relating to employee benefit
               plans, or in the imposition of any Lien on any of the rights,
               properties or assets of the Company or any ERISA Affiliate
               pursuant to Title I or IV of ERISA or such penalty or excise tax
               provisions, if such liability or Lien, taken together with any
               other such liabilities or Liens then existing, could reasonably
               be expected to have a Material Adverse Effect;

               (i) Notices from Governmental Authority -- promptly, and in any
          event within thirty (30) days of receipt thereof, copies of any notice
          to the Company or any Subsidiary from any Federal or state
          Governmental Authority relating to any order, ruling, statute or other
          law or regulation that could reasonably be expected to have a Material
          Adverse Effect; and

               (j) Requested Information -- with reasonable promptness, such
          other data and information relating to the business, operations,
          affairs, financial condition, assets or properties of the Company or
          any of the Restricted Subsidiaries or relating to the ability of the
          Company to perform its obligations hereunder and under the Notes as
          from time to time may be reasonably requested by any such holder
          including, without limitation, information required by 17 C.F.R.
          ss.230.144A, as amended from time to time.

<PAGE>

     7.2  Officer's Certificate

     Each set of financial statements delivered to a holder pursuant to Section
7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of a
Senior Financial Officer setting forth:

          (a)  Covenant Compliance -- the information (including detailed
     calculations) required in order to establish whether the Company was in
     compliance with the requirements of Sections 10.1 through 10.7, inclusive,
     during the quarterly or annual period covered by the statements then being
     furnished (including with respect to each such Section, where applicable,
     the calculations of the maximum or minimum amount, ratio or percentage, as
     the case may be, permissible under the terms of such Sections, and the
     calculation of the amount, ratio or percentage then in existence); and

          (b)  Event of Default -- a statement that such officer has reviewed
     the relevant terms hereof and has made, or caused to be made, under his or
     her supervision, a review of the transactions and conditions of the Company
     and the Subsidiaries from the beginning of the quarterly or annual period
     covered by the statements then being furnished to the date of the
     certificate and that such review shall not have disclosed the existence
     during such period of any condition or event that constitutes a Default or
     an Event of Default or, if any such condition or event existed or exists
     (including, without limitation, any such event or condition resulting from
     the failure of the Company or any Subsidiary to comply with any
     Environmental Law), specifying the nature and period of existence thereof
     and what action the Company shall have taken or proposes to take with
     respect thereto.

     7.3  Inspection

     The Company shall permit the representatives of each holder that is an
Institutional Investor:

          (a) No Default -- if no Default or Event of Default then exists, at
     the expense of such holder and upon reasonable prior notice to the Company,
     to visit the principal executive office of the Company, to discuss the
     affairs, finances and accounts of the Company and the Subsidiaries with the
     Company's officers, and (with the consent of the Company, which consent
     will not be unreasonably withheld) its independent public accountants and
     its independent petroleum engineers, and (with the consent of the Company,
     which consent will not be unreasonably withheld) to visit the other offices
     and properties of the Company and each Subsidiary, all at such reasonable
     times as may be reasonably requested in writing, provided that you shall be
     permitted to make only two inspections per calendar year pursuant to the
     provisions of this subsection (a) (without limitation of the inspection
     rights of any Other Purchaser); and

          (b) Default -- if a Default or an Event of Default then exists, at the
     expense of the Company to visit and inspect any of the offices or
     properties of the Company or any Subsidiary, to examine all their
     respective books of account, records, reports and other papers, to make
     copies and extracts therefrom, and to discuss their respective affairs,
     finances and accounts with their respective officers, independent public
     accountants and independent petroleum engineers (and by this provision the
     Company authorizes said accountants and engineers to discuss the affairs,
     finances and accounts of the Company and the Subsidiaries), all at such
     times and as often as may be requested.

<PAGE>

8.   PREPAYMENT OF THE NOTES

     8.1  Required Prepayments

     Regardless of the amount of the Notes which may be outstanding from time to
time, the Company shall prepay or, in the case of principal amounts due at the
maturity of any Note, pay, and there shall become due and payable on the
respective dates specified below, the respective aggregate principal amounts of
each Series of Notes hereinafter set forth opposite such dates (or such lesser
amount as would constitute payment in full of the Notes of such Series):

<TABLE>
<CAPTION>
=========================== ========================== =========================== ==========================
                                 Principal Amount           Principal Amount            Principal Amount
                                 of Series A Notes          of Series B Notes           of Series C Notes
                                 to be prepaid or           to be prepaid or            to be prepaid or
          Date:                        paid:                      paid:                       paid:
=========================== ========================== =========================== ==========================
      <S>                          <C>                        <C>                         <C>
      December 30,                 $          0               $   5,500,000               $   4,500,000
       1998
--------------------------- -------------------------- --------------------------- --------------------------
      December 30,                 $  8,333,333               $   5,500,000               $   4,500,000
       1999
--------------------------- -------------------------- --------------------------- --------------------------
      December 30,                 $  8,333,333               $   5,500,000               $   4,500,000
       2000
--------------------------- -------------------------- --------------------------- --------------------------
      December 30,                 $  8,333,334               $   5,500,000               $   4,500,000
       2001
--------------------------- -------------------------- --------------------------- --------------------------
      December 30,                 $          0               $   5,500,000               $   4,500,000
       2002
=========================== ========================== =========================== ==========================
Totals                             $ 25,000,000               $  27,500,000               $  22,500,000
=========================== ========================== =========================== ==========================
</TABLE>

The principal amount of any Note remaining outstanding at the maturity thereof
shall be paid at such maturity. Each such prepayment or payment shall be at a
price of 100% of the principal amount prepaid or paid, together with interest
accrued thereon to (but not including) the date of prepayment or payment. No
Make-Whole Amount shall be payable in connection with any mandatory prepayment
or payment made pursuant to this Section 8.1.

<PAGE>

     8.2  Optional Prepayments with Make-Whole Amount; Rescission

          (a) Optional Prepayments with Make-Whole Amount. The Company may, at
     its option, upon notice as provided below, prepay at any time all, or from
     time to time any part of, the Notes, in a principal amount of not less than
     (i) in the case of a partial prepayment other than a Contingent Optional
     Prepayment, Five Million Dollars ($5,000,000), or (ii) in the case of a
     partial prepayment which is a Contingent Optional Prepayment, Two Million
     Dollars ($2,000,000), or, in either case, such lesser amount as shall then
     be outstanding, at one hundred percent (100%) of the principal amount so
     prepaid, plus the Make-Whole Amount determined for the prepayment date with
     respect to such principal amount. The Company will give each holder written
     notice (an "Optional Prepayment Notice") of each optional prepayment under
     this Section 8.2 not less than thirty (30) days and not more than sixty
     (60) days prior to the date fixed for such prepayment (the "Optional
     Prepayment Date"). Each such Optional Prepayment Notice shall

               (i) specify the Optional Prepayment Date,

               (ii) state whether such prepayment is contingent upon the
          completion of an asset disposition by the Company or a Restricted
          Subsidiary or the consummation of a new credit facility with another
          creditor or group of creditors (a "Contingent Optional Prepayment")
          and describe in reasonable detail the terms thereof,

               (iii) specify the aggregate principal amount of each Series to be
          prepaid on such date,

               (iv)  specify the principal amount of each Note held by such
          holder to be prepaid (determined in accordance with Section 8.3),

               (v) specify the interest to be paid on the  prepayment  date with
          respect to such principal amount being prepaid, and

               (vi) be accompanied by a certificate of a Senior Financial
          Officer as to the estimated Make-Whole Amount due in connection with
          such prepayment (calculated as if the date of such notice were the
          date of the prepayment), setting forth the details of such
          computation.

     Two (2) Business Days prior to such prepayment, the Company shall deliver
     to each holder a certificate of a Senior Financial Officer specifying the
     calculation of such Make-Whole Amount as of the specified prepayment date.

          (b)  Rescission. In the event that the Company shall give an Optional
     Prepayment Notice of any Contingent Optional Prepayment pursuant to Section
     8.2(a), the Company thereafter shall have the right to rescind such
     Optional Prepayment Notice by giving each holder written notice of such
     rescission (a "Rescission Notice") not less than ten (10) Business Days
     prior to the Optional Prepayment Date specified in such Optional Prepayment
     Notice. Upon delivery of such Rescission Notice in accordance with this
     Section 8.2(b), the Company shall be relieved of any obligation to make the
     Contingent Optional Prepayment on the Optional Prepayment Date in respect
     of which such Rescission Notice was delivered.

<PAGE>

     8.3  Allocation of Partial Prepayments

     All partial prepayments of the Series A Notes, the Series B Notes and the
Series C Notes pursuant to Section 8.1 shall be allocated to all outstanding
Notes of the relevant Series ratably in accordance with the unpaid principal
amounts thereof. All partial prepayments of the Notes pursuant to Section 8.2
shall be allocated to all outstanding Notes (without distinguishing among the
different Series) ratably in accordance with the unpaid principal amounts
thereof. Any partial prepayment of the Series A Notes, the Series B Notes and
the Series C Notes pursuant to Section 8.2 shall reduce the principal amount of
each required prepayment of such Series becoming due under Section 8.1 on and
after the date of such prepayment in the inverse order of the maturity thereof.

     8.4  Maturity; Surrender, etc.

     In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

     8.5  Purchase of Notes

     The Company will not and will not permit any Restricted Subsidiary or
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Restricted
Subsidiary or Affiliate pursuant to any payment or prepayment of Notes pursuant
to any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.

     8.6  Make-Whole Amount

     The term "Make-Whole Amount" means, with respect to any Series A Note,
Series B Note or Series C Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:

          "Called Principal" means, with respect to any Series A Note, Series B
     Note, or Series C Note, the principal of such Note that is to be prepaid
     pursuant to Section 8.2 or has become or is declared to be immediately due
     and payable pursuant to Section 12.1, as the context requires.

<PAGE>

          "Discounted Value" means, with respect to the Called Principal of any
     Series A Note, Series B Note, or Series C Note, the amount obtained by
     discounting all Remaining Scheduled Payments with respect to such Called
     Principal from their respective scheduled due dates to the Settlement Date
     with respect to such Called Principal, in accordance with accepted
     financial practice and at a discount factor (applied on the same periodic
     basis as that on which interest on the Notes is payable) equal to the
     Reinvestment Yield with respect to such Called Principal.

          "Reinvestment Yield" means, with respect to the Called Principal of
     any Series A Note, Series B Note, or Series C Note, the sum of one half
     percent (.5%) per annum plus the yield to maturity implied by (i) the
     yields reported, as of 10:00 a.m. (New York City time) on the second (2nd)
     Business Day preceding the Settlement Date with respect to such Called
     Principal, on the display designated as "Page 678" on the Telerate Access
     Service (or such other display as may replace Page 678 on the Telerate
     Access Service) for actively traded U.S. Treasury securities having a
     maturity equal to the Remaining Average Life of such Called Principal as of
     such Settlement Date, or (ii) if such yields are not reported as of such
     time or the yields reported as of such time are not ascertainable, the
     Treasury Constant Maturity Series Yields reported, for the latest day for
     which such yields have been so reported as of the second (2nd) Business Day
     preceding the Settlement Date with respect to such Called Principal, in
     Federal Reserve Statistical Release H.15 (519) (or any comparable successor
     publication) for actively traded U.S. Treasury securities having a constant
     maturity equal to the Remaining Average Life of such Called Principal as of
     such Settlement Date. Such implied yield will be determined, if necessary,
     by (a) converting U.S. Treasury bill quotations to bond-equivalent yields
     in accordance with accepted financial practice and (b) interpolating
     linearly between (1) the actively traded U.S. Treasury security with the
     duration closest to and greater than the Remaining Average Life and (2) the
     actively traded U.S. Treasury security with the duration closest to and
     less than the Remaining Average Life.

          "Remaining Average Life" means, with respect to any Called Principal,
     the number of years (calculated to the nearest one-twelfth year) obtained
     by dividing (i) such Called Principal into (ii) the sum of the products
     obtained by multiplying (a) the principal component of each Remaining
     Scheduled Payment with respect to such Called Principal by (b) the number
     of years (calculated to the nearest one-twelfth year) that will elapse
     between the Settlement Date with respect to such Called Principal and the
     scheduled due date of such Remaining Scheduled Payment.

          "Remaining Scheduled Payments" means, with respect to the Called
     Principal of any Series A Note, Series B Note, or Series C Note, all
     payments of such Called Principal and interest thereon that would be due
     after the Settlement Date with respect to such Called Principal if no
     payment of such Called Principal were made prior to its scheduled due date,
     provided that if such Settlement Date is not a date on which interest
     payments are due to be made under the terms of the Notes of such Series,
     then the amount of the next succeeding scheduled interest payment will be
     reduced by the amount of interest accrued to such Settlement Date and
     required to be paid on such Settlement Date pursuant to Section 8.2 or
     12.1.

<PAGE>

          "Settlement Date" means, with respect to the Called Principal of any
     Series A Note, Series B Note, or Series C Note, the date on which such
     Called Principal is to be prepaid pursuant to Section 8.2 or has become or
     is declared to be immediately due and payable pursuant to Section 12.1, as
     the context requires.

9.   AFFIRMATIVE COVENANTS

     The Company covenants that so long as any of the Notes are outstanding:

     9.1  Compliance with Law

     The Company will and will cause each of the Subsidiaries to comply with all
laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

     9.2  Insurance

     The Company will and will cause each of the Subsidiaries to maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated,
except to the extent that the failure to maintain such insurance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     9.3  Maintenance of Properties

     The Company will and will cause each of the Subsidiaries to maintain and
keep, or cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all
times, provided that

          (a) no violation of this Section 9.3 shall be deemed to have occurred
     with respect to any property of the Company or any Subsidiary damaged or
     destroyed by a casualty occurrence, so long as the Company or such
     Restricted Subsidiary is proceeding diligently to repair or replace such
     property, and

          (b) this Section shall not prevent the Company or any Subsidiary from
     discontinuing the operation and the maintenance of any of its properties if
     such discontinuance is desirable in the conduct of its business and the
     Company has concluded that such discontinuance could not, individually or
     in the aggregate, reasonably be expected to have a Material Adverse Effect
     (which term shall not, for the purpose of this clause (b) only, include the
     discontinuance of the operation and maintenance of a Restricted
     Subsidiary's properties that would render such Restricted Subsidiary unable
     to perform its obligations under the Subsidiary Guaranty, and therefore
     result in a Material Adverse Effect only under clause (c) of the definition
     of such term).

<PAGE>

     9.4  Payment of Taxes and Claims

     The Company will and will cause each of the Subsidiaries to file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (a) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or such Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (b) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.

     9.5  Corporate Existence, etc.

     The Company will at all times preserve and keep in full force and effect
its corporate existence. Subject to Sections 10.5 and 10.6, the Company will at
all times preserve and keep in full force and effect the corporate existence of
each of the Subsidiaries (unless merged into the Company or a Subsidiary) and
all rights and franchises of the Company and the Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (which term shall not (for the purpose of this Section
9.5 only) include, with respect to any Restricted Subsidiary, the termination of
or failure to preserve and keep in full force and effect such corporate
existence, right or franchise that would render such Restricted Subsidiary
unable to perform its obligations under the Subsidiary Guaranty, and therefore
result in a Material Adverse Effect only under clause (c) of the definition of
such term).

     9.6  Pari Passu

     The Company covenants that its obligations under the Notes and under this
Agreement and the Other Agreements do and will rank at least pari passu with all
its other present and future unsecured Senior Debt.

<PAGE>

     9.7  Subsidiary Guaranty

     The Company will cause each Subsidiary which becomes a Restricted
Subsidiary after the Series A and B Closing Date to execute and deliver to the
holders a copy of the Joinder Agreement in the form attached to the Subsidiary
Guaranty as Annex 2, duly executed by such Subsidiary, together with an opinion
of counsel satisfactory to the Required Holders addressing with respect to such
Subsidiary the issues relating to Subsidiaries and the Subsidiary Guaranty in
the form of opinion attached hereto as Exhibit 4.4(a).

     9.8  Application of Proceeds; Releases

     The Company will

          (a) not later than December 29, 1995,

               (i) cause all Debt outstanding under the Revolving Facility and
          the DDD Facility to be paid in full with the proceeds of the sale of
          the Series A Notes and Series B Notes, and

               (ii) deliver to the holders of the Notes

                    (A) with respect to the Revolving Facility, copies of (I) a
               written statement, executed by the Revolving Facility Lenders,
               terminating the Revolving Facility, and (II) such UCC-3
               termination statements, executed by the Revolving Facility
               Lenders, and such other releases executed by the Revolving
               Facility Lenders, as shall be deemed necessary or appropriate by
               the Company to terminate the Revolving Facility Lenders' security
               interest in any and all properties of the Company and the
               Restricted Subsidiaries, and

                    (B) with respect to the DDD Facility, copies of (I) a
               written statement, executed by the DDD Facility Lenders,
               terminating the DDD Facility, and (II) a written statement,
               executed by the DDD Facility Lenders, providing further
               assurances to execute and deliver such acknowledgements, mortgage
               releases and other releases as shall be necessary to permit the
               Company to comply with the provisions of clause (b) of this
               Section 9.8,

          (b) not later than January 5, 1996, deliver to the holders of the
     Notes an acknowledgement by the Company of receipt of all stock of the
     Restricted Subsidiaries pledged as security to the Revolving Facility
     Lenders and the DDD Facility Lenders, and

          (c) not later than January 15, 1996, with respect to the DDD Facility,
     deliver to the holders of the Notes copies of such mortgage releases and
     such other releases executed by the DDD Facility Lenders as shall be deemed
     necessary or appropriate by the Company to terminate the DDD Facility
     Lenders' security interest in any and all properties of DDD.

<PAGE>

10.  NEGATIVE COVENANTS

     The Company covenants that so long as any of the Notes are outstanding:

     10.1 Net Worth

     The Company will not, at any time, permit Consolidated Net Worth to be less
than the sum of (a) Ninety Million Dollars ($90,000,000), plus (b) an aggregate
amount equal to fifty percent (50%) of Consolidated Net Income (but, in each
case, only if a positive number) for each completed fiscal year of the Company
beginning with the fiscal year ending December 31, 1995.

     10.2 Interest Coverage

     The Company will not, at any time, permit (a) EBITDA for the period of four
consecutive fiscal quarters of the Company then most recently ended to be less
than (b) five hundred percent (500%) of Consolidated Interest Expense for such
period.

     10.3 Debt Incurrence

          (a) Company Debt. The Company will not, directly or indirectly,
     create, incur, assume, guarantee, or otherwise become directly or
     indirectly liable with respect to, any Debt (including, without limitation,
     any extension, renewal or refunding of Debt), unless on the date the
     Company becomes liable with respect to any such Debt and immediately after
     giving effect thereto and the concurrent retirement of any other Debt,

               (i) no Default or Event of Default exists, and

               (ii) Consolidated Debt does not exceed fifty percent (50%) of
          Total Capitalization.

          (b) Restricted Subsidiary Debt. The Company will not permit any of the
     Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
     guarantee, or otherwise become directly or indirectly liable with respect
     to, any Debt (including, without limitation, any extension, renewal or
     refunding of Debt), unless on the date such Restricted Subsidiary becomes
     liable with respect to any such Debt and immediately after giving effect
     thereto and the concurrent retirement of any Debt,

               (i) no Default or Event of Default exists,

               (ii) the  aggregate  amount of Priority  Debt does not exceed ten
          percent (10%) of Consolidated Tangible Assets, and

               (iii) Consolidated Debt does not exceed fifty percent (50%) of
          Total Capitalization.

<PAGE>

          (c) Time of Incurrence of Debt. For the purposes of this Section 10.3,
     any Person becoming a Restricted Subsidiary after the date hereof shall be
     deemed, at the time it becomes a Restricted Subsidiary, to have incurred
     all of its then outstanding Debt, and any Person extending, renewing or
     refunding any Debt shall be deemed to have incurred such Debt at the time
     of such extension, renewal or refunding.

     10.4 Liens

     The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
(upon the happening of a contingency or otherwise) any Lien on or with respect
to any property (including, without limitation, any document or instrument in
respect of goods or accounts receivable) of the Company or any Restricted
Subsidiary, whether now owned or held or hereafter acquired, or any income or
profits therefrom (whether or not provision is made for the equal and ratable
securing of the Notes in accordance with the last paragraph of this Section
10.4), or assign or otherwise convey any right to receive income or profits,
except:

          (a) Liens for taxes,  assessments  or other  governmental  charges the
     payment of which is not at the time required by Section 9.4;

          (b) statutory Liens of landlords and Liens of carriers, warehousemen,
     mechanics, materialmen and other similar Liens, in each case, incurred in
     the ordinary course of business for sums not yet due or the payment of
     which is not at the time required by Section 9.4;

          (c) Liens (other than any Lien imposed by ERISA) incurred or deposits
     made in the ordinary course of business (i) in connection with workers'
     compensation, unemployment insurance and other types of social security or
     retirement benefits, or (ii) to secure (or to obtain letters of credit that
     secure) the performance of tenders, statutory obligations, surety bonds,
     appeal and supersedeas bonds (not in excess of Two Million Dollars
     ($2,000,000)), bids, leases (other than Capital Leases), performance bonds,
     purchase, construction or sales contracts and other similar obligations, in
     each case not incurred or made in connection with the borrowing of money,
     the obtaining of advances or credit or the payment of the deferred purchase
     price of property;

<PAGE>

          (d) leases or subleases granted to others, easements, rights-of-way,
     restrictions and other similar charges or encumbrances, in each case
     incidental to, and not interfering with, the ordinary conduct of the
     business of the Company or any of the Restricted Subsidiaries, provided
     that such Liens do not, in the aggregate, materially detract from the value
     of such property with respect to its then current use;

          (e)  Liens  on  property  of the  Company  or  any  of the  Restricted
     Subsidiaries  securing  Debt  owing  to the  Company  or to a  Wholly-Owned
     Restricted Subsidiary;

          (f) Liens existing on the date of this Agreement and securing the Debt
     of the Company and the Restricted Subsidiaries identified as secured Debt
     in Schedule 5.15, but not any refinancing of such Debt;

          (g) Liens on property acquired or constructed by the Company or any
     Restricted Subsidiary after the date of this Agreement to secure Debt of
     the Company or such Restricted Subsidiary incurred in connection with or
     related to such acquisition or construction, and Liens existing on such
     property at the time of acquisition thereof, provided that

               (i) no such Lien shall extend to or cover any property other than
          the property being acquired or constructed (including contractual and
          other rights related thereto and proceeds thereof),

               (ii) the amount of Debt secured by any such Lien shall not exceed
          an amount equal to the lesser of the total purchase or construction
          price or Fair Market Value (as determined in good faith by the Board
          of Directors or the board of directors of such Restricted Subsidiary)
          of the property being acquired or constructed, determined at the time
          of such acquisition or at the time of substantial completion of such
          construction,

               (iii) such Lien shall be created concurrently with or within
          twelve months after such acquisition or substantial completion of such
          construction, and

               (iv) no Default or Event of  Default  shall  exist at the time of
          creation, incurrence or assumption of such Lien;

          (h) Liens existing on property of a corporation at the time it becomes
     a Restricted Subsidiary or is merged or consolidated with the Company or a
     Restricted Subsidiary, provided that

               (i) no such Lien shall extend to or cover any property other than
          the property subject to such Lien at the time of any such transaction,

               (ii) the amount of Debt secured by any such Lien shall not exceed
          the Fair Market Value (as determined in good faith by the Board of
          Directors or the board of directors of such Restricted Subsidiary) of
          the property subject thereto, determined at the time of such
          transaction,

               (iii)  such Lien was not  created  in  contemplation  of any such
          transaction, and

               (iv) no Default or Event of  Default  shall  exist at the time of
          any such transaction;

          (i) Liens incidental to the conduct of the business referred to in
     Section 10.10 (including, without limitation, licenses, participation
     rights, rebate or revenue sharing obligations, or similar encumbrances),
     provided that such Liens have not arisen in connection with the incurrence
     of Debt; and

<PAGE>

          (j) Liens, not otherwise permitted by the provisions of this Section
     10.4, on property of the Company or any Restricted Subsidiary, provided
     that on the date the Company or such Restricted Subsidiary becomes liable
     with respect to the Debt secured by such Liens, and immediately after
     giving effect thereto and the concurrent retirement of any other Debt
     constituting Priority Debt,

               (i) no Default or Event of Default exists, and

               (ii) the aggregate amount of Priority Debt does not exceed ten
          percent (10%) of Consolidated Tangible Assets.

     In case any property shall be subjected to a Lien in violation of this
Section 10.4, the Company will forthwith make or cause to be made, to the
fullest extent permitted by applicable law, provision whereby the Notes will be
secured equally and ratably as to such property with all other obligations
secured thereby pursuant to such agreements and instruments as shall be approved
by the Required Holders, and the Company will promptly cause to be delivered to
each holder of a Note an opinion, reasonably satisfactory to the Required
Holders, of Gardere Wynne Sewell & Riggs, L.L.P. or other independent counsel
satisfactory to the Required Holders to the effect that such agreements and
instruments are enforceable in accordance with their terms, and in any event the
Notes shall have the benefit, to the full extent that, and with such priority
as, the holders of Notes may be entitled under applicable law, of an equitable
Lien on such property (and any proceeds thereof) securing the Notes. Such
violation of this Section 10.4 will constitute an Event of Default hereunder,
whether or not any such provision is made or any equitable Lien is created
pursuant to this Section 10.4.

     10.5 Mergers and Consolidations

     The Company will not, and will not permit any of the Restricted
Subsidiaries to, consolidate with or merge with any other corporation or convey,
transfer, spin-off or lease substantially all of its assets in a single
transaction or series of transactions to any Person (except that a Restricted
Subsidiary may (x) consolidate with or merge with, or convey, transfer, spin-off
or lease substantially all of its assets in a single transaction or series of
transactions to, another Restricted Subsidiary or the Company and (y) convey,
transfer, spin-off or lease all of its assets in compliance with the provisions
of Section 10.6), provided that the foregoing restriction does not apply to the
consolidation or merger of the Company with, or the conveyance, transfer,
spin-off or lease of substantially all of the assets of the Company in a single
transaction or series of transactions to, any Person so long as:

          (a) the successor formed by such consolidation or the survivor of such
     merger or the Person that acquires by conveyance, transfer, spin-off or
     lease substantially all of the assets of the Company as an entirety, as the
     case may be (the "Successor Corporation"), shall be a solvent corporation
     organized and existing under the laws of the United States of America, any
     state thereof or the District of Columbia and shall conduct substantially
     all of its business in one or more of such jurisdictions;

          (b) if the Company is not the Successor Corporation, such corporation
     shall have executed and delivered to each holder its assumption of the due
     and punctual performance and observance of each covenant and condition of
     this Agreement and the Notes (pursuant to such agreements and instruments
     as shall be reasonably satisfactory to the Required Holders), and the
     Company shall have caused to be delivered to each holder an opinion,
     reasonably satisfactory to the Required Holders, of Gardere Wynne Sewell &
     Riggs, L.L.P. or other nationally recognized independent counsel
     satisfactory to the Required Holders, to the effect that all agreements or
     instruments effecting such assumption are enforceable in accordance with
     their terms and comply with the terms hereof;

<PAGE>

          (c) immediately prior to, and immediately after giving effect to, such
     transaction, no Default or Event of Default would exist; and

          (d) immediately after giving effect to such transaction, the Successor
     Corporation would be permitted, pursuant to the provisions of Section 10.3,
     to incur at least One Dollar ($1) of additional Debt owing to a Person
     other than a Restricted Subsidiary of the Successor Corporation.

No such conveyance, transfer, spin-off or lease of substantially all of the
assets of the Company shall have the effect of releasing the Company or any
Successor Corporation from its liability under this Agreement or the Notes.

     10.6 Sale of Assets

          (a) Sale of Assets. The Company will not, and will not permit any of
     the Restricted Subsidiaries to, make any Transfer, provided that the
     foregoing restriction does not apply to a Transfer if:

               (i) the property that is the subject of such Transfer constitutes
          either (A) inventory held for sale, or (B) equipment, fixtures,
          supplies or materials no longer required in the operation of the
          business of the Company or such Restricted Subsidiary or that is
          obsolete, and, in the case of any Transfer described in clause (A) or
          clause (B), such Transfer is in the ordinary course of business (an
          "Ordinary Course Transfer");

               (ii) either

                    (A) such Transfer is from a Restricted Subsidiary to the
               Company or a Wholly-Owned Restricted Subsidiary, or

<PAGE>

                    (B) such Transfer is from the Company to a Wholly-Owned
               Restricted Subsidiary,

          so long as immediately before and immediately after the consummation
          of such transaction, and after giving effect thereto, no Default or
          Event of Default exists or would exist (each such Transfer, an
          "Intergroup Transfer," and, collectively with any Ordinary Course
          Transfers, "Excluded Transfers"); or

               (iii) such Transfer is not an Excluded Transfer and all of the
          following conditions shall have been satisfied with respect thereto:

                    (A) such Transfer does not involve a Substantial Portion of
               the property of the Company and the Restricted Subsidiaries,

                    (B) in the good faith opinion of the Company, the Transfer
               is in exchange for consideration with a Fair Market Value at
               least equal to that of the property exchanged, and is in the best
               interests of the Company, and

                    (C) immediately after giving effect to such transaction no
               Default or Event of Default would exist.

          (b) Debt Prepayment Transfers and Reinvested Transfers.

               (i) Notwithstanding the provisions of Section 10.6(a), the
          determination of whether a Transfer involves a Substantial Portion of
          the property of the Company and the Restricted Subsidiaries, as
          provided in Section 10.6(a)(iii)(A), shall be made without taking into
          account the same proportion of the book value attributable to the
          property subject to such Transfer as shall be equal to the proportion
          of the Net Asset Sale Proceeds Amount (the "Designated Portion") to be
          applied to either a prepayment of the Notes pursuant to Section 8.2 (a
          "Prepayment Transfer") or the acquisition of assets similar to the
          assets which were the subject of such Transfer (a "Reinvested
          Transfer") within one hundred eighty (180) days of the consummation of
          such Transfer, as specified in an Officer's Certificate delivered to
          each holder prior to, or contemporaneously with, the consummation of
          such Transfer.

               (ii) If, notwithstanding the certificate referred to in the
          foregoing clause (i), the Company shall fail to apply the entire
          amount of the Designated Portion as specified in such certificate
          within the period stated in Section 10.6(b)(i), the computation of
          whether such Transfer involved a Substantial Portion of the property
          of the Company and the Restricted Subsidiaries shall be recomputed, as
          of the date of such Transfer, by taking into account the same
          proportion of the book value attributable to the property subject to
          such Transfer as shall be equal to the proportion of the Net Asset
          Sale Proceeds Amount actually applied to either a Prepayment Transfer
          or a Reinvested Transfer within such period. If, upon the
          recomputation provided for in the preceding sentence, such Transfer
          involved a Substantial Portion of the property of the Company and the
          Restricted Subsidiaries, an Event of Default shall be deemed to have
          existed as of the expiration of such period.

          (c)  Certain  Definitions.  The  following  terms  have the  following
     meanings:

               (i) Disposition  Value -- means, at any time, with respect to any
          Transfer of property,

                    (A) in the case of property that does not constitute capital
               stock of a Restricted Subsidiary, the book value thereof, valued
               at the amount taken into account (or which would be taken into
               account) in the consolidated balance sheet of the Company then
               most recently required to have been delivered to the holders
               pursuant to Section 7.1, and

<PAGE>

                    (B) in the case of property that constitutes capital stock
               of a Restricted Subsidiary, an amount equal to that percentage of
               the book value of the assets of the Restricted Subsidiary that
               issued such capital stock as is equal to the percentage that the
               book value of such capital stock represents of the book value of
               all of the outstanding capital stock of such Restricted
               Subsidiary (assuming, in making such calculations, that all
               Securities convertible into such capital stock are so converted
               and giving full effect to all transactions that would occur or be
               required in connection with such conversion), determined as of
               the date of the balance sheet referred to in the foregoing clause
               (A).

               (ii)  Substantial  Portion -- means,  at any time,  any  property
          subject to a Transfer if

                    (A) the Disposition Value of such property, when added to
               the Disposition Value of all other property of the Company and
               the Restricted Subsidiaries that has been the subject of a
               Transfer (other than an Excluded Transfer and subject, with
               respect to both such property and all such other property, to the
               provisions of Section 10.6(b)) during the then current fiscal
               year of the Company, exceeds an amount equal to ten percent (10%)
               of Consolidated Total Assets as reflected (or as would be
               reflected) in the consolidated balance sheet of the Company then
               most recently required to have been delivered to the holders
               pursuant to Section 7.1, or

                    (B) the Disposition Value of such property, when added to
               the Disposition Value of all other property of the Company and
               the Restricted Subsidiaries that has been the subject of a
               Transfer (other than an Excluded Transfer and subject, with
               respect to both such property and all such other property, to the
               provisions of Section 10.6(b)) during the period beginning on the
               Series A and B Closing Date and ending on and including the date
               of the consummation of such Transfer, exceeds an amount equal to
               twenty percent (20%) of Consolidated Total Assets as reflected
               (or as would be reflected) in the consolidated balance sheet of
               the Company then most recently required to have been delivered to
               the holders pursuant to Section 7.1 hereof.

               (iii) Transfer -- means, with respect to any Person, any
          transaction in which such Person sells, conveys, transfers or leases
          (as lessor) any of its property, including, without limitation,
          capital stock of any other Person.

<PAGE>

     10.7 Restricted Payments and Restricted Investments

          (a) Limitation. The Company will not, and will not permit any of the
     Restricted Subsidiaries to, directly or indirectly, declare, make or incur
     any liability to make any Restricted Payment or make or authorize any
     Restricted Investment unless immediately after giving effect to such
     action:

               (i) the sum of (x) the aggregate amount of outstanding Restricted
          Investments (valued immediately after such action), plus (y) the
          aggregate amount of Restricted Payments of the Company and the
          Restricted Subsidiaries declared or made during the period commencing
          on the Series A and B Closing Date, and ending on the date such
          Restricted Payment or Restricted Investment is declared or made,
          inclusive, would not exceed the sum of

                    (A) Ten Million Dollars ($10,000,000), plus

                    (B) fifty percent (50%) of Consolidated Net Income for the
               period commencing July 1, 1995 and ending on the date such
               Restricted Payment or such Restricted Investment is declared or
               made (or minus 100% of Consolidated Net Income for such period if
               Consolidated Net Income for such period is a loss), plus

                    (C) the aggregate  amount of Net Proceeds of Common Stock of
               the Company for such period; and

               (ii) the Company could incur, pursuant to Section 10.3, at least
          One Dollar ($1) of additional Debt owing to a Person other than a
          Restricted Subsidiary; and

               (iii) no Default or Event of Default would exist.

          (b) Time of Payment. The Company will not, nor will it permit any of
     the Restricted Subsidiaries to, authorize a Restricted Payment that is not
     payable within sixty (60) days of authorization.

          (c) Investments of Subsidiaries. Each Person which becomes a
     Restricted Subsidiary after the Series A and B Closing Date will be deemed
     to have made, on the date such Person becomes a Restricted Subsidiary, all
     Restricted Investments of such Person in existence on such date.
     Investments in any Person that ceases to be a Restricted Subsidiary after
     the Series A and B Closing Date (but in which the Company or another
     Restricted Subsidiary continues to maintain an Investment) will be deemed
     to have been made on the date on which such Person ceases to be a
     Restricted Subsidiary.

<PAGE>

     10.8 Limitations on Certain Restricted Subsidiary Actions

     The Company will not, and will not permit any of the Restricted
Subsidiaries to, enter into any agreement which would restrict any Restricted
Subsidiary's legal ability or right to:

          (a) pay dividends or make any other distributions on its common stock;

          (b) pay any Debt owing to the Company or another Restricted Subsidiary
     (other than waivers of subrogation);

          (c)  make  any  Investment  in  the  Company  or  another   Restricted
     Subsidiary;

          (d) transfer its property to the Company or another Restricted
     Subsidiary (except that any such agreement may (i) prohibit the assignment
     of contractual rights, (ii) include grants of contractual rights of first
     refusal, and (iii) include similar contractual obligations not unusual in
     the course of such Restricted Subsidiary's business); or

          (e) Guaranty the Notes or any renewals or refinancings thereof;

provided, however, that

          (i) the restrictions of this Section 10.8 shall not apply to

               (A) any such agreement in existence on the Series A and B Closing
          Date and set forth in Schedule 10.8,

               (B) this Agreement, or

               (C) other agreements relating to the creation of Senior Debt
          incurred in accordance with the terms of this Agreement, and

          (ii) the restrictions of clause (d) of this Section 10.8 shall not
     apply to any agreement relating to the creation of Priority Debt or Debt of
     Restricted Subsidiaries secured by Liens permitted by Section 10.4(a) to
     Section 10.4(i), inclusive, to the extent that such restrictions limit the
     ability of any Restricted Subsidiary to transfer the Property that secures
     such Priority Debt or such other Debt;

provided further that, in the case of the foregoing clauses (i) and (ii), such
agreement does not impose any limitations on any Restricted Subsidiary's ability
to perform its obligations under the Subsidiary Guaranty.

<PAGE>

     10.9 Affiliate Transactions

     The Company will not, and will not permit any of the Restricted
Subsidiaries to, enter into any transaction (other than transactions among the
Company and its wholly-owned Unrestricted Subsidiaries that are not,
individually or in the aggregate, Material), including, without limitation, the
purchase, sale or exchange of property or the rendering of any service, with any
Affiliate, except in the ordinary course of business of the Company or such
Restricted Subsidiary and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than it would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.

     10.10 Line of Business

     The Company will not, and will not permit any of the Subsidiaries to,
engage in any business if, as a result, the Company and the Subsidiaries, taken
as a whole, would not be engaged primarily in the provision of (a) seismic data
services, (b) exploration for, and development and ownership of, gas and oil
reserves, (c) gas marketing and (d) businesses related to the foregoing
businesses.

11.  EVENTS OF DEFAULT

     An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

          (a) the Company defaults in the payment of any principal of or
     Make-Whole Amount, if any, on any Note when the same becomes due and
     payable, whether at maturity or at a date fixed for prepayment or by
     declaration or otherwise; or

          (b) the Company defaults in the payment of any interest on any Note
     for more than five (5) Business Days after the same becomes due and
     payable; or

          (c) the Company defaults in the performance of or compliance with any
     term contained in Sections 10.1 through 10.9, inclusive, except as set
     forth in paragraph 11(d) below with respect to Section 10.4; or

          (d) the Company defaults in the performance of or compliance with any
     term contained herein (other than those referred to in paragraphs (a), (b)
     and (c) of this Section 11) or incurs at any time Liens of the types
     described in paragraphs (a), (b) and (c) of Section 10.4 for obligations
     then due aggregating less than Two Million Five Hundred Thousand Dollars
     ($2,500,000), and such default is not remedied within thirty (30) days
     after the earlier of (i) a Responsible Officer obtaining actual knowledge
     of such default and (ii) the Company receiving written notice of such
     default from any holder (any such written notice to be identified as a
     "notice of default" and to refer specifically to this Section 11(d)); or

          (e) any representation or warranty made in writing by or on behalf of
     the Company or any Restricted Subsidiary or by any officer of the Company
     or any Restricted Subsidiary in this Agreement or the Subsidiary Guaranty
     or in any writing furnished in connection with the transactions
     contemplated hereby proves to have been false or incorrect in any material
     respect on the date as of which made; or

<PAGE>

          (f) (i) the Company or any Restricted Subsidiary is in default (as
     principal or as guarantor or other surety) in the payment of any principal
     of or premium or make-whole amount or interest on any one or more issues of
     outstanding Debt in an aggregate principal amount of at least Ten Million
     Dollars ($10,000,000) beyond any period of grace provided with respect
     thereto, or (ii) the Company or any Restricted Subsidiary is in default in
     the performance of or compliance with any term of any evidence of any one
     or more issues of Debt in an aggregate outstanding principal amount of at
     least Ten Million Dollars ($10,000,000) or of any mortgage, indenture or
     other agreement relating thereto or any other condition exists, and the
     effect of such default or condition is to cause, or the holder or holders
     of such obligation (or a trustee on behalf of such holder or holders) as a
     result of such default or condition actually cause, such obligation to
     become due prior to any originally stated maturity, or to be repurchased by
     the Company or any Restricted Subsidiary prior to any originally scheduled
     maturity; or

          (g) the Company or any Restricted Subsidiary (i) is generally not
     paying, or admits in writing its inability to pay, its debts as they become
     due, (ii) files, or consents by answer or otherwise to the filing against
     it of, a petition for relief or reorganization or arrangement or any other
     petition in bankruptcy, for liquidation or to take advantage of any
     bankruptcy, insolvency, reorganization, moratorium or other similar law of
     any jurisdiction, (iii) makes an assignment for the benefit of its
     creditors, (iv) consents to the appointment of a custodian, receiver,
     trustee or other officer with similar powers with respect to it or with
     respect to any substantial part of its property, (v) is adjudicated as
     insolvent or to be liquidated, or (vi) takes corporate action for the
     purpose of any of the foregoing; or

          (h) a court or governmental authority of competent jurisdiction enters
     an order appointing, without consent by the Company or any of the
     Subsidiaries, a custodian, receiver, trustee or other officer with similar
     powers with respect to it or with respect to any substantial part of its
     property, or constituting an order for relief or approving a petition for
     relief or reorganization or any other petition in bankruptcy or for
     liquidation or to take advantage of any bankruptcy or insolvency law of any
     jurisdiction, or ordering the dissolution, winding-up or liquidation of the
     Company or any of the Subsidiaries, or any such petition shall be filed
     against the Company or any of the Subsidiaries and such petition shall not
     be dismissed within sixty (60) days; or

          (i) a final judgment or judgments for the payment of money aggregating
     in excess of One Million Dollars ($1,000,000) are rendered against one or
     more of the Company and the Subsidiaries and such judgments are not, within
     forty-five (45) days after entry thereof, bonded, discharged or stayed
     pending appeal, or are not discharged within forty-five (45) days after the
     expiration of such stay; or

          (j)  (i) the Subsidiary Guaranty shall cease to be in full force and
     effect or shall be declared by a court or governmental authority of
     competent jurisdiction to be void, voidable or unenforceable against any
     Restricted Subsidiary,

<PAGE>

          (ii) the validity or enforceability of the Subsidiary Guaranty against
     any Restricted Subsidiary shall be contested by such Restricted Subsidiary,
     the Company or any Affiliate, or

          (iii) any Restricted Subsidiary, the Company or any Affiliate shall
     deny that such Restricted Subsidiary has any further liability or
     obligation under the Subsidiary Guaranty.

12.  REMEDIES ON DEFAULT, ETC

     12.1 Acceleration

          (a) If an Event of Default with respect to the Company described in
     paragraph (g) or (h) of Section 11 (other than an Event of Default
     described in clause (i) of paragraph (g) or described in clause (vi) of
     paragraph (g) by virtue of the fact that such clause encompasses clause (i)
     of paragraph (g)) has occurred, all the Notes then outstanding shall
     automatically become immediately due and payable.

          (b) If any other Event of Default has occurred and is continuing, the
     Required Holders may at any time at its or their option, by notice or
     notices to the Company, declare all the Notes then outstanding to be
     immediately due and payable.

          (c) If any Event of Default described in paragraph (a) or (b) of
     Section 11 has occurred and is continuing, any holder or holders of Notes
     at the time outstanding affected by such Event of Default may at any time,
     at its or their option, by notice or notices to the Company, declare all
     the Notes held by it or them to be immediately due and payable.

     Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder has the right to
maintain its investment in the Notes free from repayment by the Company (except
as herein specifically provided for) and that the provision for payment of a
Make-Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default is intended to provide
compensation for the deprivation of such right under such circumstances.

<PAGE>

     12.2 Other Remedies

     If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.

     12.3  Rescission

     At any time after any Notes have been declared due and payable pursuant to
clause (b) or (c) of Section 12.1, the Required Holders, by written notice to
the Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.

     12.4  No Waivers or Election of Remedies, Expenses, etc.

     No course of dealing and no delay on the part of any holder in exercising
any right, power or remedy shall operate as a waiver thereof or otherwise
prejudice such holder's rights, powers or remedies. No right, power or remedy
conferred by this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Company under Section 15, the Company will pay
to each holder on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys'
fees, expenses and disbursements.

13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

     13.1  Registration of Notes

     The Company shall keep at its principal executive office a register for the
registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder that
is an Institutional Investor promptly upon request therefor, a complete and
correct copy of the names and addresses of all registered holders.

<PAGE>

     13.2  Transfer and Exchange of Notes

     Upon surrender of any Note at the principal executive office of the Company
for registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder of such Note or his attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof, and subject to compliance with all
restrictions on transfer set forth herein and in such Note), the Company shall
execute and deliver, at the Company's expense (except as provided below),
promptly and, in any event, within ten (10) days of the surrender of such Note
by the registered holder thereof, one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1A, Exhibit 1B or Exhibit 1C, as the case may be. Each such
new Note shall be dated and bear interest from the date to which interest shall
have been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon. The Company may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Notes. Notes shall not be transferred in
denominations of less than One Hundred Thousand Dollars ($100,000), provided
that if necessary to enable the registration of transfer by a holder of its
entire holding of Notes, one Note may be in a denomination of less than One
Hundred Thousand Dollars ($100,000). Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representations set forth in Section 6.1 (unless such transfer is
effected pursuant to a transaction in which the representation set forth in such
Section is not required in order to comply with the securities laws applicable
to such transfer) and Section 6.3.

     13.3  Replacement of Notes

     Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and

          (a) in the case of loss, theft or destruction, of indemnity reasonably
     satisfactory to it (provided that if a Qualified Institutional Buyer is the
     holder of such Note, the unsecured agreement of indemnity of such holder
     shall be deemed to be satisfactory), or

          (b) in the case of mutilation, upon surrender and cancellation
     thereof,

the Company at its own expense shall execute and, within ten (10) days after
such receipt, deliver, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.

<PAGE>

14.  PAYMENTS ON NOTES

     14.1  Place of Payment

     The Company will punctually pay, or cause to be paid, the principal of and
interest (and Make-Whole Amount, if any) on the Notes, as and when the same
shall become due and payable according to the terms hereof and of the Notes.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and
interest becoming due and payable on the Notes shall be made at the principal
office of the Company. The Company may at any time, by notice to each holder,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

     14.2 Home Office Payment

     So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by you under this Agreement.

15.  EXPENSES, ETC

     15.1 Transaction Expenses

     Whether or not the transactions contemplated hereby are consummated, the
Company will pay all reasonable attorneys' fees of Hebb & Gitlin, special
counsel to you and the Other Purchasers, in connection with such transactions,
and will pay all costs and expenses (including reasonable attorneys' fees of a
special counsel and, if reasonably required, local or other counsel) incurred by
you and each Other Purchaser or holder in connection with the consideration,
evaluation, analysis, assessment, negotiation, preparation and/or execution of
any amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not any such amendment, waiver or consent becomes effective),
or in connection with any controversy or potential controversy thereunder,
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights

<PAGE>

under this Agreement or the Notes or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder, and (b) the costs and
expenses, including financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other holder harmless
from, all claims in respect of any fees, costs or expenses if any, of brokers
and finders (other than those retained by you).

     15.2 Survival

     The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.

16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

     All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note (but not the payment in full of all of the Notes), and may be relied upon
by any subsequent holder of a Note, regardless of any investigation made at any
time by or on behalf of you or any other holder. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between you and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.

17.  AMENDMENT AND WAIVER

     17.1 Requirements

     This Agreement and the Notes may be amended, and the observance of any term
hereof or of the Notes may be waived (either retroactively or prospectively),
with (and only with) the written consent of the Company and the Required
Holders, except that (a) no amendment or waiver of any of the provisions of
Section 1 to Section 6, inclusive, or Section 21, or any defined term as it is
used therein, will be effective as to you unless consented to by you in writing,
and (b) no such amendment or waiver may, without the written consent of the
holder of each Note at the time outstanding affected thereby, (i) subject to the
provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.

<PAGE>

     17.2 Solicitation of Holders

          (a) Solicitation. The Company will provide each holder (irrespective
     of the amount of Notes then owned by it) with sufficient information,
     sufficiently far in advance of the date a decision is required, to enable
     such holder to make an informed and considered decision with respect to any
     proposed amendment, waiver or consent in respect of any of the provisions
     hereof or of the Notes. The Company will deliver executed or true and
     correct copies of each amendment, waiver or consent effected pursuant to
     the provisions of this Section 17 to each holder promptly following the
     date on which it is executed and delivered by, or receives the consent or
     approval of, the requisite holders.

          (b) Payment. The Company will not directly or indirectly pay or cause
     to be paid any remuneration, whether by way of supplemental or additional
     interest, fee or otherwise, or grant any security, to any holder as
     consideration for or as an inducement to the entering into by any holder of
     any waiver or amendment of any of the terms and provisions hereof unless
     such remuneration is concurrently paid, or security is concurrently
     granted, on the same terms, ratably to each holder then outstanding even if
     such holder did not consent to such waiver or amendment.

          (c) Scope of Consent. Any consent made pursuant to this Section 17.2
     by a holder of Notes that has transferred or has agreed to transfer its
     Notes to the Company, any Subsidiary or any Affiliate and has provided or
     has agreed to provide such written consent as a condition to such transfer
     shall be void and of no force and effect except solely as to such holder,
     and any amendments effected or waivers granted or to be effected or granted
     that would not have been or would not be so effected or granted but for
     such consent (and the consents of all other holders of Notes that were
     acquired under the same or similar conditions) shall be void and of no
     force and effect, retroactive to the date such amendment or waiver
     initially took or takes effect, except solely as to such holder.

     17.3 Binding Effect, etc.

     Any amendment or waiver consented to as provided in this Section 17 applies
equally to all holders and is binding upon them and upon each future holder of
any Notes and upon the Company without regard to whether such Note has been
marked to indicate such amendment or waiver. No such amendment or waiver will
extend to or affect any obligation, covenant, agreement, Default or Event of
Default not expressly amended or waived or impair any right consequent thereon.
No course of dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein, the term "this
Agreement" and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.

<PAGE>

     17.4 Notes held by Company, etc.

     Solely for the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then outstanding have
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company, any Wholly-Owned
Restricted Subsidiary or any of the Company's Affiliates shall be deemed not to
be outstanding.

18.  NOTICES

     All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:

          (i) if to you or your nominee, to you or it at the address specified
     for such communications in Schedule A, or at such other address as you or
     it shall have specified to the Company in writing,

          (ii) if to any other holder, to such holder at such address as such
     other holder shall have specified to the Company in writing, or

          (iii) if to the Company, to the Company at its address set forth at
     the beginning hereof to the attention of the Company's Chief Financial
     Officer, or at such other address as the Company shall have specified to
     each of the holders in writing.

Notices under this Section 18 will be deemed given only when actually received.

19.  REPRODUCTION OF DOCUMENTS

     This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closings (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder from contesting any such
reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.

<PAGE>

20.  CONFIDENTIAL INFORMATION

     For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure, (b) subsequently becomes publicly known through
no act or omission by you or any Person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you and will use such Confidential Information only for the
purposes of evaluating and administering your investment in the Notes, provided
that you may deliver or disclose Confidential Information to

          (i)  your directors, officers, employees, agents, attorneys and
     affiliates (to the extent such disclosure reasonably relates to the
     administration of the investment represented by your Notes),

          (ii) your financial advisors and other professional advisors who agree
     to hold confidential the Confidential Information substantially in
     accordance with the terms of this Section 20,

          (iii) any other holder,

          (iv) any Institutional Investor to which you sell or offer to sell
     such Note or any part thereof or any participation therein (if such Person
     has agreed in writing prior to its receipt of such Confidential Information
     to be bound by the provisions of this Section 20),

          (v) any Institutional Investor from which you offer to purchase any
     Security of the Company (if such Person has agreed in writing prior to its
     receipt of such Confidential Information to be bound by the provisions of
     this Section 20),

          (vi) any federal or state  regulatory  authority  having  jurisdiction
     over you,

          (vii) the National Association of Insurance Commissioners or any
     similar organization, or any nationally recognized rating agency that
     requires access to information about your investment portfolio, or

          (viii) any other Person to which such delivery or disclosure may be
     necessary or appropriate (w) to effect compliance with any law, rule,
     regulation or order applicable to you, (x) in response to any subpoena or
     other legal process, (y) in connection with any litigation to which you are

<PAGE>

     a party or (z) if an Event of Default has occurred and is continuing, to
     the extent you may reasonably determine such delivery and disclosure to be
     necessary or appropriate in the enforcement or for the protection of the
     rights and remedies under your Notes and this Agreement.

Each holder, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 20 as though it were
a party to this Agreement.

21.  SUBSTITUTION OF PURCHASER

     You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder under this
Agreement.

22.  MISCELLANEOUS

     22.1 Successors and Assigns

     All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and permitted assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.

     22.2 Payments Due on Non-Business Days

     If any payment due on, or with respect to, any Note shall fall due on a day
other than a Business Day, then such payment shall be made on the first (1st)
Business Day following the day on which such payment shall have so fallen due,
provided that if all or any portion of such payment shall consist of a payment
of interest, for purposes of calculating such interest, such payment shall be
deemed to have been originally due on such first (1st) following Business Day,
such interest shall accrue and be payable to (but not including) the actual date
of payment and the amount of the next succeeding interest payment shall be
adjusted accordingly.

     22.3 Severability

     Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

<PAGE>

     22.4 Construction

     Each covenant contained herein shall be construed (absent express provision
to the contrary) as being independent of each other covenant contained herein,
so that compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other covenant.
Where any provision herein 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.

     22.5 Counterparts

     This Agreement may be executed in any number of counterparts, each of which
shall be an original but all of which together shall constitute one instrument.
Each counterpart may consist of a number of copies hereof, each signed by less
than all, but together signed by all, of the parties hereto.

     22.6 Governing Law

     THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

     22.7 Consent to Jurisdiction; Appointment of Agent

          (a)  Consent to Jurisdiction. THE COMPANY HEREBY IRREVOCABLY AND
     UNCONDITIONALLY AGREES THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
     OR RELATING TO THIS AGREEMENT OR THE NOTES, OR ANY ACTION OR PROCEEDING TO
     EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH
     HEREUNDER OR THEREUNDER, BROUGHT BY ANY HOLDER OF NOTES AGAINST THE COMPANY
     OR ANY OF ITS PROPERTY, MAY BE BROUGHT BY SUCH HOLDER OF NOTES IN ANY
     FEDERAL DISTRICT COURT LOCATED IN NEW YORK CITY, NEW YORK OR ANY NEW YORK
     STATE COURT SITTING IN NEW YORK CITY, NEW YORK, AS SUCH HOLDER OF NOTES MAY
     IN ITS SOLE DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS
     AGREEMENT, THE COMPANY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
     NON-EXCLUSIVE IN PERSONAM JURISDICTION OF EACH SUCH COURT, AND THE COMPANY
     IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY
     TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS
     NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY SUCH COURT. IN ADDITION,
     THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
     LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE

<PAGE>

     IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
     GUARANTY BROUGHT IN ANY SUCH COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM
     THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
     BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED
     TO LIMIT THE ABILITY OR RIGHT OF ANY HOLDER OF NOTES TO OBTAIN JURISDICTION
     OVER THE COMPANY IN SUCH OTHER JURISDICTION AS MAY BE PERMITTED BY
     APPLICABLE LAW.

          (b) Agent for Service of Process. THE COMPANY HEREBY IRREVOCABLY AND
     UNCONDITIONALLY AGREES THAT PROCESS SERVED EITHER PERSONALLY OR BY
     REGISTERED MAIL SHALL CONSTITUTE, TO THE EXTENT PERMITTED BY LAW, ADEQUATE
     SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
     RELATING TO THIS AGREEMENT OR THE NOTES, OR ANY ACTION OR PROCEEDING TO
     EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH
     HEREUNDER OR THEREUNDER, BROUGHT BY ANY HOLDER OF NOTES AGAINST THE COMPANY
     OR ANY OF ITS PROPERTY. RECEIPT OF PROCESS SO SERVED SHALL BE CONCLUSIVELY
     PRESUMED AS EVIDENCED BY A DELIVERY RECEIPT FURNISHED BY THE UNITED STATES
     POSTAL SERVICE OR ANY COMMERCIAL DELIVERY SERVICE. WITHOUT LIMITING THE
     FOREGOING, THE COMPANY HEREBY APPOINTS, IN THE CASE OF ANY SUCH ACTION OR
     PROCEEDING BROUGHT IN THE COURTS OF OR IN THE STATE OF NEW YORK:

                              CT CORPORATION SYSTEM
                                  1633 BROADWAY
                            NEW YORK, NEW YORK 10019

     TO RECEIVE, FOR IT AND ON ITS BEHALF, SERVICE OF PROCESS. THE COMPANY SHALL
     AT ALL TIMES MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN NEW YORK CITY, NEW
     YORK AND MAY FROM TIME TO TIME APPOINT SUCCEEDING AGENTS FOR SERVICE OF
     PROCESS BY NOTIFYING EACH HOLDER OF NOTES OF SUCH APPOINTMENT, WHICH AGENTS
     SHALL BE ATTORNEYS, OFFICERS OR DIRECTORS OF THE COMPANY, OR CORPORATIONS
     WHICH IN THE ORDINARY COURSE OF BUSINESS ACT AS AGENTS FOR SERVICE OF
     PROCESS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OR
     RIGHT OF ANY HOLDER OF NOTES TO SERVE ANY WRITS, PROCESS OR SUMMONSES IN
     ANY MANNER PERMITTED BY APPLICABLE LAW.

     22.8 Defeasance

          (a) Option of Company. Anything to the contrary contained herein
     notwithstanding, the Company may, in its sole discretion and at any time
     upon not less than thirty (30) days' prior written notice to all holders,
     elect to establish a trust (the "Trust"), solely in favor of all holders of
     the Notes then outstanding, and irrevocably and absolutely assign,
     transfer, and convey to, and deposit into, said Trust an amount of United
     States Governmental Securities having interest and principal payments
     sufficient to pay in full all remaining principal and interest payments
     and, if any principal is to be repaid on a date other than the date
     scheduled therefor in Section 8.1, together with the Make-Whole Amount, if
     any, as the same shall fall due, in respect of all Notes then outstanding.

<PAGE>

          (b) Discharge. Provided that

               (i) the Trust, the trustee thereof, and the terms and conditions
          (as well as the form and substance) of the indenture whereby the Trust
          shall have been established shall be reasonably satisfactory to the
          Required Holders,

               (ii) the purchase price of the United States Governmental
          Securities to be deposited into the Trust shall have been fully paid
          by the Company, and such United States Governmental Securities shall
          have been so deposited into the Trust (and each holder shall have
          received written verification thereof by the trustee of the Trust) and
          shall, as so deposited, be unencumbered by any Lien and sufficient to
          pay all principal, interest and Make-Whole Amount, if any, to fall due
          on the Notes then outstanding as provided in Section 22.8(a) (and each
          holder shall have received written verification of such sufficiency by
          the independent certified public accountants of recognized national
          standing selected by the Company),

               (iii) the Company shall have (A) paid in full all fees, costs and
          expenses of the trustee of the Trust and of all holders incurred in
          connection with the preparation of the trust indenture and the
          establishment of the Trust, including, without limitation, all
          reasonable attorneys' fees and disbursements, and (B) prepaid in full
          any and all fees, costs and expenses of the trustee of the Trust for
          the entire term of the Trust (and the holders of the Notes shall have
          received written confirmation from the trustee confirming its receipt
          of the payments required to be made to it pursuant to this clause
          (iii)),

               (iv) the Company shall have no continuing legal or equitable
          interest in the Trust or the United States Governmental Securities
          deposited into the Trust (other than a reversionary interest in any
          such United States Governmental Securities or the proceeds therefrom,
          remaining after the full, final and indefeasible payment of the
          principal amount of the Notes and all interest and Make-Whole Amount,
          if any, thereon) and shall have no right to direct or instruct the
          trustee of the Trust, or to remove such trustee, or otherwise to
          require such trustee to take any action with respect to such United
          States Governmental Securities or otherwise,

               (v) no Event of Default  shall have occurred and be continuing at
          the time of such deposit,

               (vi) the Company shall have delivered the written notice referred
          to in Section 22.8(a) hereof to the holders and a legal opinion of
          Gardere Wynne Sewell & Riggs, L.L.P. or other independent counsel to
          the Company, reasonably satisfactory to the Required Holders stating,
          among other things which the Required Holders may reasonably request,
          that (A) the Trust is validly created and duly constituted and that
          the sole beneficiaries thereof are the holders, (B) the United States
          Governmental Securities deposited therein were validly contributed to
          the Trust and constitute a legal and valid res of the Trust, (C) the
          Company's actions in creating the Trust and contributing the United

<PAGE>

          States Governmental Securities thereto were duly authorized and valid,
          (D) the Company, as the settlor of the Trust, has no right, title or
          interest in and to the Trust or the res thereof (other than a
          reversionary interest in any United States Governmental Securities, or
          the proceeds thereof, remaining after the full, final and indefeasible
          payment of the principal amount of the Notes and all interest and
          Make-Whole Amount, if any, thereon) and has no power of direction, or
          right of removal, with respect to the trustee of the Trust, (E) if any
          of the events described in clause (g) or clause (h) of Section 11 were
          to occur, the Trust and the res thereof would not be part of the
          estate of the Company and (F) the creation of the Trust and the
          depositing of the United States Governmental Securities therein shall
          not, for purposes of the Code with respect to any holder, result in a
          taxable event whereby (I) such holder may become liable to pay a tax
          on any gain deemed to have arisen with respect to such transaction or
          (II) such holder shall have been deemed to have suffered a loss with
          respect to such transaction,

               (vii) all principal, interest costs, expenses and other sums due
          and payable to the holders under the this Agreement, the Other
          Agreements and the Notes on the date the Trust is created shall have
          been paid in full, and

               (viii) either (A) the Company shall have delivered to the holders
          an opinion of independent certified public accountants of recognized
          national standing selected by the Company, reasonably satisfactory to
          the Required Holders, or (B) at the option of the Company at its
          expense (provided that the Company shall have the right to negotiate
          with such accountants regarding the cost of furnishing such opinion),
          the holders shall have received an opinion of independent certified
          public accountants of recognized national standing, reasonably
          satisfactory to the Required Holders, stating that under GAAP the
          creation of the Trust and the depositing of the United States
          Governmental Securities therein shall not result, with respect to any
          holder, in an exchange of the Note or Notes of such holder for all or
          part of such United States Governmental Securities which exchange
          would result in a gain or loss being realized by such holder under
          GAAP in respect of such transaction, then, and in that case, all
          obligations of the Company under this Agreement, the Other Agreements
          and the Notes shall be discharged; provided, however, if the
          contribution to the Trust of any United States Governmental Securities
          is invalidated, declared to be fraudulent or preferential, set aside,
          or if any such United States Governmental Securities are required to
          be returned or redelivered to the Company, or any custodian, trustee,
          receiver or any other Person under any bankruptcy act, state or
          federal law, common law or equitable cause, then, to the extent of
          such invalidation, return or redelivery, the obligations under this
          Agreement, the Other Agreements and the Notes (less any payments,
          which shall not have been themselves invalidated, returned or
          redelivered, made thereon from or in respect of the United States
          Governmental Securities so invalidated, returned or redelivered) shall
          be revived and restored.

<PAGE>

     22.9 GAAP.

     Where the character or amount of any asset or liability or item of income
or expense, or any consolidation or other accounting computation is required to
be made for any purpose hereunder, it shall be done in accordance with GAAP as
in effect on the date of, or at the end of the period covered by, the financial
statements from which such asset, liability, item of income, or item of expense,
is derived, or, in the case of any such computation, as in effect on the date as
of which such computation is required to be determined, provided, that if any
term defined herein includes or excludes amounts, items or concepts that would
not be included in or excluded from such term if such term was defined with
reference solely to generally accepted accounting principles, such term will be
deemed to include or exclude such amounts, items or concepts as set forth
herein.

     22.10 Usury.

     It is the intention of the parties hereto to comply with all applicable
usury laws; accordingly, it is agreed that notwithstanding any provision to the
contrary herein or in the Notes, or in any of the documents securing payment
thereof or otherwise relating hereto, no such provision shall require the
payment or permit the collection of interest in excess of the highest rate
allowed by applicable law (the "Maximum Rate"). If any excess of interest in
such respect is provided for, or shall be adjudicated to be so provided for,
herein or in the Notes or in any of the documents securing payment thereof or
otherwise relating hereto, then in such event

          (a) the provisions of this Section 22.10 shall govern and control,

          (b) neither the Company, endorsers or Restricted Subsidiaries, nor
     their heirs, legal representatives, successors or assigns nor any other
     party liable for the payment on the Notes, shall be obligated to pay the
     amount of such interest to the extent that it is in excess of the Maximum
     Rate,

          (c) any such excess with respect to any such Note which may have been
     collected shall, at the election of the holder of such Note, be either
     applied as a credit against the then unpaid principal amount on such Note
     or refunded to the Company, and

          (d) the provisions hereof and of the Notes and any documents securing
     payment thereof shall be automatically reformed so that the effective rate
     of interest shall be reduced to the Maximum Rate. For the purpose of
     determining the Maximum Rate, all interest payments with respect hereto
     shall be amortized, prorated and spread throughout the full term of the
     Notes so that the effective rate of interest thereunder is uniform
     throughout the term thereof.

                       [Next page is the signature page.]

<PAGE>

     If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.

                                   Very truly yours,

                                   SEITEL, INC.

                                   By   /s/ Debra D. Valice
                                        ---------------------------------------

                                        Name:  Debra D. Valice

                                        Title:  Senior Vice President-Finance
                                                and Chief Financial Officer

The foregoing is hereby agreed
to as of the date thereof.

PRINCIPAL MUTUAL LIFE INSURANCE COMPANY

By   /s/ Warren Shank
     ----------------------------------
   Name:  Warren Shank
  Title:  Counsel

By   /s/ Clint Woods
     ----------------------------------
   Name:  Clint Woods
  Title:  Counsel

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By   /s/ Richard C. Morrison
     ----------------------------------
   Name:  Richard C. Morrison
  Title:  Vice President

JOHN ALDEN LIFE INSURANCE

By   /s/ Michael E. Halligan
     ----------------------------------
   Name:  Michael E. Halligan
  Title:  Vice President

THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK

By   /s/ Peter W. Oliver
     ----------------------------------
   Name:  Peter W. Oliver
  Title:  Managing Director

MONY LIFE INSURANCE COMPANY OF AMERICA

By   /s/ Peter W. Oliver
     ----------------------------------
   Name:  Peter W. Oliver
  Title:  Authorized Agent

UNITED OF OMAHA LIFE INSURANCE COMPANY

By   /s/ Victor N. Hanson
     ----------------------------------
   Name:  Victor N. Hanson
  Title:  First Vice President

PAN-AMERICAN LIFE INSURANCE COMPANY

By   /s/ F. Anderson Stone
     ----------------------------------
   Name:  F. Anderson Stone
  Title:  Vice President, Corporate Securities

<PAGE>

                                  Schedule A-15

                                   SCHEDULE A
                       INFORMATION RELATING TO PURCHASERS

================================================================================
Purchaser Name                          PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
================================================================================
Registered Name                         Principal Mutual Life Insurance Company
================================================================================
Note Registration Number; Principal     RA-1; $21,000,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Norwest Bank Iowa, N.A.
                                        7th and Walnut Street
                                        Des Moines, IA 50304

                                        For credit to Principal Mutual Life
                                             Insurance Company
                                        General Account No. 014752
                                        Reference: Bond No. 1-B-60639
================================================================================
Accompanying                            Information Seitel, Inc.; 7.17% Series A
                                        Senior Notes due December 30, 2001 PPN:
                                        816074 A* 9; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Principal Mutual Life Insurance Company
                                        711 High Street Des Moines, IA
                                        50392-0960
                                        ATTN: Investment Department - Securities
                                              Division
                                        Fax: 515-248-2643
================================================================================
Address/Fax # for Other Notices         Principal Mutual Life Insurance Company
                                        711 High Street Des Moines, IA 50392
                                        ATTN: Investment Department - Securities
                                              Division
                                        Fax: 515-248-2490
================================================================================
Other Instructions (if any)             2 signature lines required
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               42-0127290
================================================================================

<PAGE>

================================================================================
Purchaser Name                          PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
================================================================================
Registered Name                         Principal Mutual Life Insurance Company
================================================================================
Note Registration Number; Principal     RA-2; $4,000,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Norwest Bank Iowa, N.A.
                                        7th and Walnut Street
                                        Des Moines, IA 50304

                                        For credit to Principal Mutual Life
                                             Insurance Company
                                        Separate Account No. 032395
                                        Reference: Bond No. 16-B-60639
================================================================================
Accompanying                            Information Seitel, Inc.; 7.17% Series A
                                        Senior Notes due December 30, 2001 PPN:
                                        816074 A* 9; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Principal Mutual Life Insurance Company
                                        711 High Street
                                        Des Moines, IA 50392-0960
                                        ATTN: Investment - Accounting & Treasury
                                              - Securities
                                        Fax: 515-248-2643
================================================================================
Address/Fax # for Other Notices         Principal Mutual Life Insurance Company
                                        711 High Street
                                        Des Moines, IA 50392
                                        ATTN: Investment Department - Securities
                                              Division
                                        Fax: 515-248-2490
================================================================================
Other Instructions (if any)             2 signature lines required
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               42-0127290
================================================================================

<PAGE>

================================================================================
Purchaser Name                          MASSACHUSETTS MUTUAL LIFE INSURANCE
                                             COMPANY
================================================================================
Registered Name                         Massachusetts Mutual Life Insurance
                                             Company
================================================================================
Note Registration Number; Principal     RB-1; $4,000,000
Amount                                  RC-1; $4,000,000
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Chase Manhattan Bank, N.A.
                                        4 Chase MetroTech Center
                                        New York, NY 10081
                                        ABA No. 021000021

                         For MassMutual IFM Traditional
                             Account No. 910-1388131
================================================================================
Accompanying Information                Seitel, Inc.; 7.17% Series B Senior
                                             Notes due December 30, 2002
                                        PPN: 816074 A@ 7;

                                        Seitel, Inc.; Series C Senior Notes due
                                             December 30, 2002
                                        PPN:  816074 A# 5;

                                        [due date and application (as among
                                        principal, Make-Whole Amount and
                                        interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Massachusetts Mutual Life Insurance
                                             Company
                                        1295 State Street
                                        Springfield, MA  01111
                                        ATTN: Securities Custody and Collection
                                              Department

                                        With telephone advice of payment to:
                                        Securities Custody and Collection
                                             Department at 413-744-3878
================================================================================
Address/Fax # for Other Notices         Massachusetts Mutual Life Insurance
                                             Company
                                        1295 State Street
                                        Springfield, MA  01111
                                        ATTN: Securities Investment Division,
                                              Richard C. Morrison,
                                              Vice President

                                        Telephone:   413-788-8411
                                        Fax:   413-744-6127
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               04-1590850
================================================================================

<PAGE>

================================================================================
Purchaser Name                          MASSACHUSETTS MUTUAL LIFE INSURANCE
                                             COMPANY
================================================================================
Registered Name                         Massachusetts Mutual Life Insurance
                                             Company
================================================================================
Note Registration Number; Principal     RB-2; $3,000,000
Amount                                  RC-2; $3,000,000
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Chase Manhattan Bank, N.A.
                                        4 Chase MetroTech Center
                                        New York, NY 10081
                                        ABA No. 021000021

                       For MassMutual IFM Non-Traditional
                             Account No. 910-2509073
================================================================================
Accompanying Information                Seitel, Inc.; 7.17% Series B Senior
                                             Notes due December 30, 2002
                                        PPN: 816074 A@ 7;

                                        Seitel, Inc.; Series C Senior Notes due
                                             December 30, 2002
                                        PPN:  816074 A# 5;

                                        [due date and application (as among
                                        principal, Make-Whole Amount and
                                        interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Massachusetts Mutual Life Insurance
                                             Company
                                        1295 State Street
                                        Springfield, MA  01111
                                        ATTN: Securities Custody and Collection
                                              Department

                                        With telephone advice of payment to:
                                        Securities Custody and Collection
                                             Department at 413-744-3878
================================================================================
Address/Fax # for Other Notices         Massachusetts Mutual Life Insurance
                                             Company
                                        1295 State Street
                                        Springfield, MA  01111
                                        ATTN: Securities Investment Division,
                                              Richard C. Morrison,
                                              Vice President

                                        Telephone:   413-788-8411
                                        Fax:   413-744-6127
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               04-1590850
================================================================================

<PAGE>

================================================================================
Purchaser Name                          MASSACHUSETTS MUTUAL LIFE INSURANCE
                                             COMPANY
================================================================================
Registered Name                         Massachusetts Mutual Life Insurance
                                             Company
================================================================================
Note Registration Number; Principal     RB-3; $3,000,000
Amount                                  RC-3; $3,000,000
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Chase Manhattan Bank, N.A.
                                        4 Chase MetroTech Center
                                        New York, NY 10081
                                        ABA No. 021000021

                        For MassMutual Pension Management
                             Account No. 910-2594018
================================================================================
Accompanying Information                Seitel, Inc.; 7.17% Series B Senior
                                             Notes due December 30, 2002
                                        PPN: 816074 A@ 7;

                                        Seitel, Inc.; Series C Senior Notes due
                                             December 30, 2002
                                        PPN: 816074 A# 5;

                                        [due date and application (as among
                                        principal, Make-Whole Amount and
                                        interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Massachusetts Mutual Life Insurance
                                             Company
                                        1295 State Street
                                        Springfield, MA  01111
                                        ATTN: Securities Custody and Collection
                                             Department

                                        With telephone advice of payment to:
                                        Securities Custody and Collection
                                             Department at 413-744-3878
================================================================================
Address/Fax # for Other Notices         Massachusetts Mutual Life Insurance
                                             Company
                                        1295 State Street
                                        Springfield, MA  01111
                                        ATTN: Securities Investment Division,
                                              Richard C. Morrison,
                                              Vice President

                                        Telephone:   413-788-8411
                                        Fax:   413-744-6127
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               04-1590850
================================================================================

<PAGE>

================================================================================
Purchaser Name                          JOHN ALDEN LIFE INSURANCE COMPANY
================================================================================
Registered Name                         Atwell & Co.
================================================================================
Note Registration Number; Principal     RB-4; $2,500,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     The Chase Manhattan Bank, N.A.
                                        ABA #021 000 021
                                        Chase Account No. 900-9-002206
                                        BBK: Chase Manhattan Bank, N.A.

                                        Account Name:   JALIC SPREAD PRODUCT
                                        Account No.:   89922410
================================================================================
Accompanying                            Information Seitel, Inc.; 7.17% Series B
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A@ 7; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       The Chase Manhattan Bank, N.A.
                                        770 Broadway
                                        New York, NY 10005-9598
                                        Attn:  Larry Seidel
                                        ABA #021 000 021
                                        Account Name:   JALIC SPREAD PRODUCT
                                        Account No.:   89922410
                                        Tax ID# 41-0999752
================================================================================
Address/Fax # for Other Notices         Investment Accounting
                                        John Alden Asset Management Company
                                        P.O. Box 020270 - 3rd Floor
                                        Miami, Florida 33102-0270
================================================================================
Other Instructions (if any)             Signature Block:

                        JOHN ALDEN LIFE INSURANCE COMPANY

                                        By
                            Name: Michael E. Halligan
                              Title: Vice President
================================================================================
Instructions re Delivery of Notes       The Chase Manhattan Bank, N.A.
                                        Securities Services & Trust Operations
                                        Two Chase Manhattan Plaza - Fourth Floor
                                             Securities Window
                                        New York, NY  10081

                         Reference: JALIC SPREAD PRODUCT
                         Reference: Account No. 89922410
                               Tax ID# 41-0999752
================================================================================
Tax Identification Number               ATWELL & CO.  13-6050547
================================================================================

<PAGE>

================================================================================
Purchaser Name                          JOHN ALDEN LIFE INSURANCE COMPANY OF
                                             NEW YORK
================================================================================
Registered Name                         Atwell & Co.
================================================================================
Note Registration Number; Principal     RB-5; $2,500,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     The Chase Manhattan Bank, N.A.
                                        ABA #021 000 021
                                        Chase Account No. 900-9-002206
                                        BBK: Chase Manhattan Bank, N.A.

                                        Account Name:   JANY SPREAD PRODUCT
                                        Account No.:   89922403
================================================================================
Accompanying                            Information Seitel, Inc.; 7.17% Series B
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A@ 7; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       The Chase Manhattan Bank, N.A.
                                        770 Broadway
                                        New York, NY 10005-9598
                                        Attn:  Larry Seidel
                                        ABA #021 000 021
                                        Account Name:   JANY SPREAD PRODUCT
                                        Account No.:   89922403
                                        Tax ID# 13-6178234
================================================================================
Address/Fax # for Other Notices         Investment Accounting
                                        John Alden Asset Management Company
                                        P.O. Box 020270 - 3rd Floor
                                        Miami, Florida 33102-0270
================================================================================
Other Instructions (if any)             Signature Block:

                                        JOHN ALDEN LIFE INSURANCE COMPANY OF
                                             NEW YORK

                                        By
                            Name: Michael E. Halligan
                              Title: Vice President
================================================================================
Instructions re Delivery of Notes       The Chase Manhattan Bank, N.A.
                                        Securities Services & Trust Operations
                                        Two Chase Manhattan Plaza - Fourth Floor
                                             Securities Window
                                        New York, NY  10081

                                        Reference: JANY SPREAD PRODUCT
                                        Reference: Account No. 89922403
                                        Tax ID# 13-6178234
================================================================================
Tax Identification Number               ATWELL & CO.  13-6050547
================================================================================

<PAGE>

================================================================================
Purchaser Name                          THE MUTUAL LIFE INSURANCE COMPANY OF
                                             NEW YORK
================================================================================
Registered Name                         The Mutual Life Insurance Company of
                                             New York
================================================================================
Note Registration Number; Principal     RB-6; $5,000,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Chemical Bank
                                        ABA# 021000128

                                        For credit to:  The Mutual Life
                                                        Insurance Company of
                                                        New York's Security

                        Remittance Account No. 321-023803
================================================================================
Accompanying                            Information Seitel, Inc.; 7.17% Series B
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A@ 7; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Telecopy Confirms and Notices:
                                                 (201) 907-6979
                                                 Attention: Securities Custody

                                        Mailing Confirms and Notices:
                                                  Glenpointe Marketing &
                                                  Operations Center - MONY
                                                  Glenpointe Center West
                                                  500 Frank W. Burr Blvd.
                                                  Teaneck, NJ 07666-6888
                                                  Attention: Securities Custody
================================================================================
Address/Fax # for Other Notices         The Mutual Life Insurance Company of
                                             New York
                                        1740 Broadway
                                        New York, NY 10019
                     Attention: MONY Capital Management Unit
                                Fax: 212-708-2491
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               13-1632487
================================================================================

<PAGE>

================================================================================
Purchaser Name                          THE MUTUAL LIFE INSURANCE COMPANY OF
                                             NEW YORK
================================================================================
Registered Name                         The Mutual Life Insurance Company of
                                             New York
================================================================================
Note Registration Number; Principal     RC-4; $5,000,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Chemical Bank
                                        ABA# 021000128
                                        For credit to:  The Mutual Life
                                                        Insurance Company of
                                                        New York's Security
                        Remittance Account No. 321-023803
================================================================================
Accompanying                            Information Seitel, Inc.; Series C
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A# 5; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Telecopy Confirms and Notices:
                                                 (201) 907-6979
                                                 Attention: Securities Custody

                                        Mailing Confirms and Notices:
                                                  Glenpointe Marketing &
                                                  Operations Center - MONY
                                                  Glenpointe Center West
                                                  500 Frank W. Burr Blvd.
                                                  Teaneck, NJ 07666-6888
                                                  Attention: Securities Custody
================================================================================
Address/Fax # for Other Notices         The Mutual Life Insurance Company of
                                             New York
                                        1740 Broadway
                                        New York, NY 10019
                     Attention: MONY Capital Management Unit
                                Fax: 212-708-2491
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               13-1632487
================================================================================

<PAGE>

================================================================================
Purchaser Name                          MONY LIFE INSURANCE COMPANY OF AMERICA
================================================================================
Registered Name                         MONY Life Insurance Company of America
================================================================================
Note Registration Number; Principal     RB-7; $2,500,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Chemical Bank
                                        ABA# 021000128
                                        For credit to:  MONY Life Insurance
                                                        Company of America
                                        Account No. 323-161243
================================================================================
Accompanying                            Information Seitel, Inc.; 7.17% Series B
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A@ 7; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Telecopy Confirms and Notices:
                                                 (201) 907-6979
                                                 Attention: Securities Custody

                                        Mailing Confirms and Notices:
                                                  Glenpointe Marketing &
                                                  Operations Center - MONY
                                                  Glenpointe Center West
                                                  500 Frank W. Burr Blvd.
                                                  Teaneck, NJ 07666-6888
                                                  Attention: Securities Custody
================================================================================
Address/Fax # for Other Notices         MONY Life Insurance Company of America
                                        c/o The Mutual Life Insurance Company of
                                             New York
                                        1740 Broadway
                                        New York, NY 10019
                     Attention: MONY Capital Management Unit
                                Fax: 212-708-2491
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               86-0222062
================================================================================

<PAGE>

================================================================================
Purchaser Name                          MONY LIFE INSURANCE COMPANY OF AMERICA
================================================================================
Registered Name                         MONY Life Insurance Company of America
================================================================================
Note Registration Number; Principal     RC-5; $2,500,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     Chemical Bank
                                        ABA# 021000128
                                        For credit to:  MONY Life Insurance
                                                        Company of America
                                        Account No.  323-161243
================================================================================
Accompanying                            Information Seitel, Inc.; Series C
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A# 5; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Telecopy Confirms and Notices:
                                                  (201) 907-6979
                                                  Attention: Securities Custody

                                        Mailing Confirms and Notices:
                                                  Glenpointe Marketing &
                                                  Operations Center - MONY
                                                  Glenpointe Center West
                                                  500 Frank W. Burr Blvd.
                                                  Teaneck, NJ 07666-6888
                                                  Attention: Securities Custody
================================================================================
Address/Fax # for Other Notices         MONY Life Insurance Company of America
                                        c/o The Mutual Life Insurance Company of
                                             New York
                                             1740 Broadway
                                             New York, NY 10019
                     Attention: MONY Capital Management Unit
                                Fax: 212-708-2491
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Law Department of Purchaser
================================================================================
Tax Identification Number               86-0222062
================================================================================

<PAGE>

================================================================================
Purchaser Name                          UNITED OF OMAHA LIFE INSURANCE COMPANY
================================================================================
Registered Name                         United of Omaha Life Insurance Company
================================================================================
Note Registration Number; Principal     RB-8; $3,500,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     FirsTier Bank - Omaha
                                        ABA #1040-0002-9
                                        17th & Farnam Streets
                                        Omaha, NE  68102

                                        For credit to United of Omaha Life
                                             Insurance Company
                                        Account #144-7-076
================================================================================
Accompanying                            Information Seitel, Inc.; 7.17% Series B
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A@ 7; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       United of Omaha Life Insurance Company
                                        Attention:  Investments / Securities
                                                    Accounting
                                        Mutual of Omaha Plaza
                                        Omaha, NE  68175
================================================================================
Address/Fax # for Other Notices         United of Omaha Life Insurance Company
                                        Attention: Investment Division
                                        Mutual of Omaha Plaza
                                        Omaha, NE  68175
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       United of Omaha Life Insurance Company
                                        Attention:  Investments / Securities
                                                    Accounting
                                        Mutual of Omaha Plaza
                                        Omaha, NE  68175
================================================================================
Tax Identification Number               47-0322111
================================================================================

<PAGE>

================================================================================
Purchaser Name                          UNITED OF OMAHA LIFE INSURANCE COMPANY
================================================================================
Registered Name                         United of Omaha Life Insurance Company
================================================================================
Note Registration Number; Principal     RC-6; $3,500,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     FirsTier Bank - Omaha
                                        ABA #1040-0002-9
                                        17th & Farnam Streets
                                        Omaha, NE  68102

                                        For credit to United of Omaha Life
                                             Insurance Company
                                        Account #144-7-076
================================================================================
Accompanying                            Information Seitel, Inc.; Series C
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A# 5; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       United of Omaha Life Insurance Company
                                        Attention:  Investments / Securities
                                                    Accounting
                                        Mutual of Omaha Plaza
                                        Omaha, NE  68175
================================================================================
Address/Fax # for Other Notices         United of Omaha Life Insurance Company
                                        Attention: Investment Division
                                        Mutual of Omaha Plaza
                                        Omaha, NE  68175
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       United of Omaha Life Insurance Company
                                        Attention:  Investments / Securities
                                                    Accounting
                                        Mutual of Omaha Plaza
                                        Omaha, NE  68175
================================================================================
Tax Identification Number               47-0322111
================================================================================

<PAGE>

================================================================================
Purchaser Name                          PAN-AMERICAN LIFE INSURANCE COMPANY
================================================================================
Registered Name                         Pan-American Life Insurance Company
================================================================================
Note Registration Number; Principal     RB-9; $1,500,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     First National Bank of Commerce
                                        210 Baronne Street
                                        New Orleans, LA  70112

                                        ABA No. 065-000-029

                                        For credit to Pan-American Life
                                             Insurance Company
                                        Account No. 1100-29496
================================================================================
Accompanying                            Information Seitel, Inc.; 7.17% Series B
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A@ 7; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Pan-American Life Insurance Company
                                        Pan American Life Center
                                        601 Poydras Street
                                        New Orleans, LA  70130
                                        Attn:  Investment Department -
                                               28th Floor,
                                               Bond & Stock Accounting
================================================================================
Address/Fax # for Other Notices         Pan-American Life Insurance Company
                                        Pan American Life Center
                                        601 Poydras Street
                                        New Orleans, LA  70130
                                        Attn:  Investment Department -
                                               28th Floor,
                                               Fixed Income Securities
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Pan-American Life Insurance Company
                                        Pan American Life Center
                                        601 Poydras Street
                                        New Orleans, LA  70130
                                        Attn:  Marylyn Andree,
                                               Investment Department -
                                               28th Floor
================================================================================
Tax Identification Number               72-0281240
================================================================================

<PAGE>

================================================================================
Purchaser Name                          PAN-AMERICAN LIFE INSURANCE COMPANY
================================================================================
Registered Name                         Pan-American Life Insurance Company
================================================================================
Note Registration Number; Principal     RC-7; $1,500,000
Amount
================================================================================
Method of Payment                       Federal Funds Wire Transfer
================================================================================
Account Information                     First National Bank of Commerce
                                        210 Baronne Street
                                        New Orleans, LA  70112

                                        ABA No. 065-000-029

                                        For credit to Pan-American Life
                                             Insurance Company
                                        Account No. 1100-29496
================================================================================
Accompanying                            Information Seitel, Inc.; Series C
                                        Senior Notes due December 30, 2002 PPN:
                                        816074 A# 5; [due date and application
                                        (as among principal, Make-Whole Amount
                                        and interest) of the payment being made;
                                        [contact name at Company] and [telephone
                                        number]
================================================================================
Address/Fax # for Payment Notices       Pan-American Life Insurance Company
                                        Pan American Life Center
                                        601 Poydras Street
                                        New Orleans, LA  70130
                                        Attn:  Investment Department -
                                               28th Floor,
                                               Bond & Stock Accounting
================================================================================
Address/Fax # for Other Notices         Pan-American Life Insurance Company
                                        Pan American Life Center
                                        601 Poydras Street
                                        New Orleans, LA  70130
                                        Attn:  Investment Department -
                                               28th Floor,
                                               Fixed Income Securities
================================================================================
Other Instructions (if any)             [None]
================================================================================
Instructions re Delivery of Notes       Pan-American Life Insurance Company
                                        Pan American Life Center
                                        601 Poydras Street
                                        New Orleans, LA  70130
                                        Attn:  Marylyn Andree,
                                               Investment Department -
                                               28th Floor
================================================================================
Tax Identification Number               72-0281240
================================================================================

<PAGE>

                                   SCHEDULE B
                                  DEFINED TERMS

     As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:

     Accredited Institution -- means any Person who is an "accredited investor"
within the meaning of such term set forth in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.

     Affiliate -- means, at any time,

          (a) with respect to any Person other than the Company, any other
     Person that at such time directly or indirectly through one or more
     intermediaries Controls, or is Controlled by, or is under common Control
     with, such Person, and

          (b) with respect to the Company, a Person (other than a Wholly-Owned
     Restricted Subsidiary),

               (i) that at such time directly or indirectly through one or more
          intermediaries Controls, or is Controlled by, or is under common
          Control with, the Company,

               (ii) that at such time beneficially owns or holds, directly or
          indirectly, ten percent (10%) or more of the Voting Stock of the
          Company, or

               (iii) ten percent (10%) or more of the Voting Stock of which is
          at such time beneficially owned or held by the Company or any one or
          more of the Subsidiaries.

As used in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting Securities, by
contract or otherwise.

     Agreement -- is defined in Section 17.3.

     Board of Directors -- at any time means the board of directors of the
Company or any committee thereof which, in the instance, shall have the lawful
power to exercise the power and authority of such board of directors.

     Business Day -- means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York,
New York are required or authorized to be closed, and (b) for the purposes of
any other provision of this Agreement, any day other than a Saturday, a Sunday
or a day on which commercial banks in Houston, Texas or New York, New York are
required or authorized to be closed.

     Capital Lease -- means a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.

<PAGE>

     Capital Lease Obligation -- means, with respect to any Person and a Capital
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a liability on a
balance sheet of such Person.

     Closing Date -- is defined in Section 3.2.

     Closings -- is defined in Section 3.2.

     Code -- means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.

     Company -- is defined in the introductory paragraph of this Agreement.

     Confidential Information -- is defined in Section 20.

     Consolidated Debt -- means, as of any date of determination, the total of
all Debt of the Company and the Restricted Subsidiaries outstanding on such
date, after eliminating all offsetting debits and credits between the Company
and the Restricted Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of the
Company and the Restricted Subsidiaries in accordance with GAAP.

     Consolidated Interest Expense -- means, with respect to any period, the sum
(without duplication) of the following (in each case, eliminating all offsetting
debits and credits between the Company and the Restricted Subsidiaries and all
other items required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and the Restricted Subsidiaries
in accordance with GAAP):

          (a) all interest in respect of Debt of the Company and the Restricted
     Subsidiaries (including imputed interest on Capital Lease Obligations)
     deducted in determining Consolidated Net Income for such period, and

          (b) all debt discount and expense amortized or required to be
     amortized in the determination of Consolidated Net Income for such period.

     Consolidated Net Income -- means, with reference to any period, the net
income (or loss) of the Company and the Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and the Restricted Subsidiaries in accordance with GAAP, provided that there
shall be excluded:

          (a) any gains resulting from any write-up of any assets (but not any
     loss resulting from any write-down of any assets),

          (b) the income (or loss) of any Person accrued prior to the date it
     becomes a Restricted Subsidiary or is merged into or consolidated with the
     Company or a Restricted Subsidiary, and the income (or loss) of any Person,
     substantially all of the assets of which have been acquired in any manner

<PAGE>

     by the Company or any Restricted Subsidiary,  realized by such other Person
     prior to the date of acquisition,

          (c) in the case of a successor to the Company by consolidation or
     merger or as a transferee of its assets, any earnings of the successor
     corporation prior to such consolidation, merger or transfer of assets,

          (d) any aggregate net gain (but not any aggregate net loss) during
     such period arising from the sale, conversion, exchange or other
     disposition of capital assets (such term to include, without limitation,
     (i) all non-current assets and, without duplication, (ii) the following,
     whether or not current: all fixed assets, whether tangible or intangible,
     all inventory sold in conjunction with the disposition of fixed assets, and
     all securities),

          (e) any portion of such net income that cannot be freely converted
     into United States Dollars,

          (f) the income (or loss) of any Person (other than a Restricted
     Subsidiary) in which the Company or any Restricted Subsidiary has an
     ownership interest, except to the extent that any such income has been
     actually received by the Company or such Restricted Subsidiary in the form
     of cash dividends or similar cash distributions,

          (g) any gain arising from the acquisition of any security, or the
     extinguishment, under GAAP, of any Debt, of the Company or any Restricted
     Subsidiary,

          (h) any net income or gain or any net loss during such period from (i)
     any change in accounting principles in accordance with GAAP or (ii) any
     prior period adjustments resulting from any change in accounting principles
     in accordance with GAAP, and

          (i) any net income or gain (but not any net loss) during such period
     from (i) any extraordinary items or (ii) any discontinued operations or the
     disposition thereof.

     Consolidated Net Worth -- means, at any time, the total stockholders'
equity which would be shown in consolidated financial statements of the Company
and the Restricted Subsidiaries prepared at such time in accordance with GAAP.

     Consolidated Tangible Assets -- means, at any time, Consolidated Total
Assets at such time, minus

          (a) deferred assets, other than prepaid expenses which are refundable;

          (b) patents, copyrights, trademarks, trade names, service marks, brand
     names, franchises, goodwill, experimental expenses and other similar
     intangibles;

          (c) unamortized debt discount and expense; and

          (d) all other property which would be classified as intangible under
     GAAP.

<PAGE>

     Consolidated Total Assets -- means, at any time, the amount at which the
total assets of the Company and the Restricted Subsidiaries would be shown in
consolidated financial statements of the Company and the Restricted Subsidiaries
prepared at such time in accordance with GAAP, after deduction of depreciation,
amortization and all other properly deductible valuation reserves.

     Contingent Optional Prepayment -- is defined in Section 8.2.

     DDD -- means DDD Energy, Inc., a Delaware corporation.

     DDD Facility -- means the Credit Agreement dated June 14, 1995, among DDD
and the DDD Facility Lenders, as amended.

     DDD Facility Lenders -- means Bank One, Texas, National Association, as
agent and as a lender, and Compass Bank-Houston, as a lender, in each case under
the DDD Facility.

     Debt -- means, with respect to any Person, without duplication,

          (a) its obligations for borrowed money;

          (b) its obligations in respect of banker's acceptances, other
     acceptances, letters of credit and other instruments serving a similar
     function issued or accepted by banks and other financial institutions for
     the account of such Person (whether or not incurred in connection with the
     borrowing of money);

          (c) its obligations that are evidenced by bonds, notes, debentures or
     similar instruments;

          (d) its obligations for the deferred purchase price of property
     acquired by such Person (excluding accounts payable arising in the ordinary
     course of business but including, without limitation, all obligations
     created or arising under any conditional sale or other title retention
     agreement with respect to any such property);

          (e) its Capital Lease Obligations;

          (f) its obligations in respect of all mandatorily redeemable preferred
     stock of such Person;

          (g) its obligations for borrowed money secured by any Lien with
     respect to any property owned by such Person (whether or not it has assumed
     or otherwise become liable for such obligations); and

          (h) any Guaranty of such Person with respect to liabilities of a type
     described in any of clauses (a) through (g) hereof.

Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (h) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP.

<PAGE>

     Default -- means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

     Default Rate -- means the rate of interest for overdue payments as stated
in the first paragraph of the relevant Series of Notes.

     Designated Portion -- is defined in Section 10.6(b)(i).

     Disposition Value -- is defined in Section 10.6(c)(i).

     EBITDA -- means, in respect of any period, Consolidated Net Income for such
period minus

          (a) to the extent added in the computation of such Consolidated Net
     Income, each of the following:

               (i) extraordinary gains, net of extraordinary losses, and

               (ii) gains, net of losses, arising from the disposition of
          property other than in the ordinary course of business, plus

          (b) to the extent deducted in the computation of such Consolidated Net
     Income, each of the following:

               (i) Consolidated Interest Expense, net of interest and other
          investment income,

               (ii) taxes imposed on or measured by income or excess profits of
          the Company and the Restricted Subsidiaries,

               (iii) the amount of all depreciation, depletion and amortization
          allowances and other non-cash expenses of the Company and the
          Restricted Subsidiaries,

               (iv) extraordinary losses, net of extraordinary gains, and

               (v) losses, net of gains, arising from the disposition of
          property other than in the ordinary course of business.

     Environmental Laws -- means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

<PAGE>

     Equity Interest -- means

          (a) the outstanding Voting Stock of a corporation or other business
     entity,

          (b) the interest in the capital or profits of a corporation, limited
     liability company, partnership or joint venture, or

          (c) the beneficial interest in a trust or estate.

     ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

     ERISA Affiliate -- means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.

     Event of Default -- is defined in Section 11.

     Exchange Act -- means the Securities Exchange Act of 1934, as amended.

     Excluded Transfer -- is defined in Section 10.6.

     Fair Market Value -- means, at any time and with respect to any property,
the sale value of such property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell, respectively).

     GAAP -- means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.

     Governmental Authority -- means

          (a) the government of

               (i) the United States of America or any State or other political
          subdivision thereof, or

               (ii) any jurisdiction in which the Company or any Subsidiary
          conducts all or any part of its business, or which asserts
          jurisdiction over any properties of the Company or any Subsidiary, or

          (b) any entity exercising executive, legislative, judicial, regulatory
     or administrative functions of, or pertaining to, any such government.

<PAGE>

     Guaranty -- means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

          (a) to purchase such indebtedness or obligation or any property
     constituting security therefor;

          (b) to advance or supply funds (i) for the purchase or payment of such
     indebtedness or obligation, or (ii) to maintain any working capital or
     other balance sheet condition or any income statement condition of any
     other Person or otherwise to advance or make available funds for the
     purchase or payment of such indebtedness or obligation;

          (c) to lease properties or to purchase properties or services
     primarily for the purpose of assuring the owner of such indebtedness or
     obligation of the ability of any other Person to make payment of the
     indebtedness or obligation; or

          (d) otherwise to assure the owner of such indebtedness or obligation
     against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

     Hazardous Material -- means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).

     holder -- means, at any time and with respect to any Note, the Person in
whose name such Note is registered at such time in the register maintained by
the Company pursuant to Section 13.1.

     Institutional Investor -- means (a) any original purchaser of a Note or an
Affiliate thereof, (b) any holder of more than five percent (5%) in aggregate
principal amount of the Notes then outstanding, and (c) any Accredited
Institution.

     Intergroup Transfer -- is defined in Section 10.6.

     Investment -- means any investment, made in cash or by delivery of
property, by the Company or any of the Subsidiaries in any Person, whether by
acquisition of stock, indebtedness or other obligation or Security (including,
without limitation, any interests in any partnership or joint venture), or by

<PAGE>

loan, Guaranty, advance, capital contribution or otherwise; provided that
"Investment" does not include trade credit to the extent extended in the
ordinary course of business.

     Lien -- means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).

     Make-Whole Amount -- is defined in Section 8.6.

     Material -- means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and the
Restricted Subsidiaries taken as a whole.

     Material Adverse Effect -- means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and the Restricted Subsidiaries, taken as a whole, (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, (c)
the ability of any Restricted Subsidiary to perform its respective obligations
under the Subsidiary Guaranty, or (d) the validity or enforceability of this
Agreement, the Subsidiary Guaranty or the Notes.

     Maximum Rate -- is defined in Section 22.10.

     Memorandum -- is defined in Section 5.3.

     Multiemployer Plan -- means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).

     NAIC Annual Statement -- is defined in Section 6.3.

     Net Asset Sale Proceeds Amount -- means, with respect to any Transfer of
any property by any Person, an amount equal to the difference of

          (a) the aggregate amount of the consideration (valued at the Fair
     Market Value of such consideration at the time of the consummation of such
     Transfer) received by such Person in respect of such Transfer, minus

          (b) all ordinary and reasonable out-of-pocket costs and expenses
     actually incurred by such Person in connection with such Transfer.

     Net Proceeds of Common Stock -- means, with respect to any period, cash
proceeds (net of all costs and out-of-pocket expenses incurred in connection
therewith, including, without limitation, placement, underwriting and brokerage
fees and expenses) received by the Company and the Restricted Subsidiaries
during such period from the sale of all common stock of the Company, including
in such net proceeds:

<PAGE>

          (a) the net amount paid upon issuance and exercise during such period
     of any right to acquire any common stock, or paid during such period to
     convert a convertible debt Security to common stock (but excluding any
     amount paid to the Company upon issuance of such convertible debt
     Security); and

          (b) any amount paid to the Company upon issuance of any convertible
     debt Security that is converted to common stock during such period.

     Notes -- is defined in Section 1.

     Officer's Certificate -- means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.

     Optional Prepayment Date -- is defined in Section 8.2.

     Optional Prepayment Notice -- is defined in Section 8.2.

     Ordinary Course Transfer -- is defined in Section 10.6.

     Other Agreements -- is defined in Section 2.

     Other Purchasers -- is defined in Section 2.

     PBGC -- means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

     Person -- means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.

     Plan -- means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.

     Prepayment Transfer -- is defined in Section 10.6.

     Priority Debt -- means, without duplication, the sum of (a) all Debt of the
Company secured by a Lien permitted only by Section 10.4(j) and (b) all Debt of
Restricted Subsidiaries (except (i) Debt held by the Company or a Wholly-Owned
Restricted Subsidiary, (ii) Debt of a Restricted Subsidiary that is an unsecured
guaranty of Senior Debt and that ranks pari passu with the obligations of the
Restricted Subsidiaries under the Subsidiary Guaranty, and (iii) Debt of a
Restricted Subsidiary secured by a Lien permitted by the provisions of Section
10.4(a) through (i), inclusive).

     property or properties -- means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.

<PAGE>

     Purchaser -- means any Person that is a Series A Purchaser and/or a Series
B Purchaser and/or a Series C Purchaser.

     Qualified Institutional Buyer -- means you, each of the Other Purchasers,
and any Person who is a "qualified institutional buyer," within the meaning of
such term as set forth in Rule 144A(a)(1) under the Securities Act.

     Reinvested Transfer -- is defined in Section 10.6.

     Relevant Treasury Yield -- means the yield to maturity implied by

          (i) the yields reported, as of 10:00 A.M. (New York City time) on the
     fifth (5th) Business Day preceding the Series C Closing Date, on the
     display designated as "Page 678" on the Telerate Access Service (or such
     other display as may replace Page 678 on the Telerate Access Service) for
     actively traded U.S. Treasury securities having a maturity of five (5)
     years, or if such yields are not reported as of such time or the yields
     reported as of such time are not ascertainable,

         (ii) the Treasury Constant Maturity Series Yields reported, for the
     latest day for which such yields have been so reported as of the fifth
     (5th) Business Day preceding the Series C Closing Date, in Federal Reserve
     Statistical Release H.15 (519) (or any comparable successor publication)
     for actively traded U.S. Treasury securities having a constant maturity
     equal to five (5) years. Such implied yield will be determined, if
     necessary, by (a) converting U.S. Treasury bill quotations to
     bond-equivalent yields in accordance with accepted financial practice and
     (b) interpolating linearly between (1) the actively traded U.S. Treasury
     security with the duration closest to and greater than five (5) years and
     (2) the actively traded U.S. Treasury security with the duration closest to
     and less than five (5) years.

     Required Holders -- means, at any time, the holders of at least a majority
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).

     Rescission Notice -- is defined in Section 8.2.

     Responsible Officer -- means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.

     Restricted Investments -- means all Investments except the following:

          (a) cash;

          (b) Investments in one or more Restricted Subsidiaries or any Person
     engaged in the business referred to in Section 10.10 that concurrently with
     such Investment becomes a Wholly-Owned Restricted Subsidiary;

          (c) Investments in United States Governmental Securities, provided
     that such obligations mature within 365 days from the date of acquisition
     thereof;

<PAGE>

          (d) Investments in certificates of deposit or banker's acceptances
     issued by an Acceptable Bank, provided that such obligations mature within
     365 days from the date of acquisition thereof;

          (e) Investments in commercial paper given the highest rating by a
     credit rating agency of recognized national standing and maturing not more
     than 270 days from the date of creation thereof; and

          (f) Investments in money market mutual funds that invest solely in
     so-called "money market" instruments maturing not more than one year after
     the acquisition thereof, which funds have assets in excess of Five Hundred
     Million Dollars ($500,000,000).

For purposes of this Agreement, an Investment shall be valued at the lesser of
(i) cost and (ii) the value at which such Investment is to be shown on the books
of the Company and the Restricted Subsidiaries in accordance with GAAP.

As used in this definition of "Restricted Investments":

          Acceptable Bank -- means any bank or trust company (i) which is
     organized under the laws of the United States of America or any State
     thereof and (ii) which has capital, surplus and undivided profits
     aggregating at least Five Hundred Million Dollars ($500,000,000).

          Restricted Payment -- means

               (a) any Distribution in respect of the Company or any Restricted
          Subsidiary (other than on account of capital stock or other equity
          interests of a Restricted Subsidiary owned legally and beneficially by
          the Company or another Restricted Subsidiary), including, without
          limitation, any Distribution resulting in the acquisition by the
          Company of Securities which would constitute treasury stock; and

               (b) any payment, repayment, redemption, retirement, repurchase or
          other acquisition, direct or indirect, by the Company or any
          Restricted Subsidiary of, on account of, or in respect of, the
          principal of any Subordinated Debt (or any installment thereof) prior
          to the regularly scheduled maturity date thereof (as in effect on the
          date such Subordinated Debt was originally incurred).

For purposes of this Agreement, the amount of any Restricted Payment made in
property shall be the greater of (x) the Fair Market Value of such property (as
determined in good faith by the board of directors (or equivalent governing
body) of the Person making such Restricted Payment) and (y) the net book value
thereof on the books of such Person, in each case determined as of the date on
which such Restricted Payment is made.

     Distribution -- means, in respect of any corporation, association or other
business entity:

<PAGE>

          (a) dividends or other distributions or payments on capital stock or
     other equity interest of such corporation, association or other business
     entity (except distributions in such stock or other equity interest); and

          (b) the redemption or acquisition of such stock or other equity
     interests or of warrants, rights or other options to purchase such stock or
     other equity interests (except when solely in exchange for such stock or
     other equity interests).

     Restricted Subsidiary -- means and includes each and every Subsidiary other
than any Subsidiary which, at the time of any determination hereunder, has been
designated by the Board of Directors and by written notice of the Company to all
of the holders to be an Unrestricted Subsidiary; provided, in any event, that
each of the following shall at all times constitute a Restricted Subsidiary:

          (a) each Subsidiary identified on Schedule 5.4; and

          (b) each Subsidiary which owns, directly or indirectly, more than
     fifty percent (50%) of the Equity Interest of a Restricted Subsidiary.

     Revolving Facility -- means the Restated Revolving Credit and Security
Agreement dated effective as of December 31, 1994, among the Company and certain
Restricted Subsidiaries, as borrowers, and the Revolving Facility Lenders, as
amended.

     Revolving Facility Lenders -- means Bank One, Texas, National Association,
as agent and as a lender, and Compass Bank-Houston, as a lender, in each case
under the Revolving Facility.

     Securities Act -- means the Securities Act of 1933, as amended from time to
time.

     Security -- means "security" as defined by section 2(1) of the Securities
Act.

     Senior Debt -- means any Debt of the Company that is not in any manner
subordinated in right of payment or security in any respect to the Debt
evidenced by the Notes or to any other Debt of the Company.

     Senior Financial Officer -- means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.

     Series -- means any one or more of the series of Notes issued hereunder.

     Series A and B Closing -- is defined in Section 3.1.

     Series A and B Closing Date -- is defined in Section 3.1.

     Series A Notes -- is defined in Section 1.

     Series A Purchasers -- is defined in Section 3.1.

<PAGE>

     Series B Notes -- is defined in Section 1.

     Series B Purchasers -- is defined in Section 3.1.

     Series C Closing -- is defined in Section 3.2.

     Series C Closing Date -- is defined in Section 3.2.

     Series C Interest Rate -- is defined in Section 3.2.

     Series C Notes -- is defined in Section 1.

     Series C Purchasers -- is defined in Section 3.2.

     Subordinated Debt -- mean any Debt of the Company other than Senior Debt.

     Subsidiary -- means, as to any Person, any corporation, limited liability
company, partnership, joint venture, trust or estate in which such Person or one
or more of the Subsidiaries or such Person and one or more of the Subsidiaries
own more than fifty percent (50%) of the Equity Interest. Unless the context
otherwise clearly requires, any reference to a "Subsidiary" is a reference to a
Subsidiary of the Company.

     Subsidiary Guaranty -- is defined in Section 4.10.

     Substantial Portion -- is defined in Section 10.6(c)(ii).

     Successor Corporation -- is defined in Section 10.5.

     Total Capitalization -- means, at any time, the sum of Consolidated Debt
plus Consolidated Net Worth, in each case at such time.

     Transfer -- is defined in Section 10.6(c)(iii).

     Trust -- is defined in Section 22.8.

     United States Governmental Security -- means any direct obligation of, or
obligation guaranteed by, the United States of America, or any agency controlled
or supervised by or acting as an instrumentality of the United States of America
pursuant to authority granted by the Congress of the United States of America,
so long as such obligation or guarantee shall have the benefit of the full faith
and credit of the United States of America which shall have been pledged
pursuant to authority granted by the Congress of the United States of America.

     Unrestricted Subsidiary -- means each Subsidiary other than a Restricted
Subsidiary.

<PAGE>

     Voting Stock -- shall mean the capital stock or similar interest of any
class or classes (however designated) of a corporation or other business entity,
the holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of the members of the board of directors (or Persons
performing similar functions) of a corporation or other business entity.

     Wholly-Owned Restricted Subsidiary -- means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the Equity Interests (except
directors' qualifying shares) and voting interests of which are owned by any one
or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries at such time.

<PAGE>

                                 Schedule 4.9-1

                                  SCHEDULE 4.9

                         CHANGES IN CORPORATE STRUCTURE

                                      NONE

<PAGE>

                                  SCHEDULE 5.3

                              DISCLOSURE MATERIALS

               SEE ATTACHED LETTER FROM SEITEL, INC. TO PURCHASERS
                             DATED DECEMBER 15, 1995

<PAGE>

                                  SCHEDULE 5.4

                           SUBSIDIARIES OF THE COMPANY
                        AND OWNERSHIP OF SUBSIDIARY STOCK

A.

     I. Restricted Subsidiaries

Name of Restricted             Jurisdiction of
Subsidiary                      Incorporation          100% of Stock Owned By:
-------------------------      ---------------         ------------------------
Seitel Data Corp.                 Delaware             Seitel, Inc.
Seitel Geophysical, Inc.          Delaware             Seitel, Inc.
DDD Energy, Inc.                  Delaware             Seitel, Inc.
Seitel Gas & Energy Corp.         Delaware             Seitel, Inc.
Seitel Power Corp.                Delaware             Seitel, Inc.
Seitel Natural Gas, Inc.          Delaware             Seitel Gas & Energy Corp.
Matrix Geophysical, Inc.          Delaware             Seitel, Inc.
Exsol, Inc.                       Delaware             Seitel, Inc.
Datatel, Inc.                     Delaware             Seitel Data Corp.
Seitel Offshore Corp.             Delaware             Seitel Data Corp.
Polymer Dynamics, Inc.            Delaware             Seitel, Inc.
Seitel International, Inc.        Cayman Islands       Seitel Data Corp.
African Geophysical, Inc.         Cayman Islands       Seitel Geophysical, Inc.
Geo-Bank, Inc.                    Texas                Seitel, Inc.
Alternative Communication
Enterprises, Inc.                 Texas                Seitel, Inc.

     II. Affiliates

     Affiliate Name                            Owner and Type of Interest Owned
-----------------------------                  --------------------------------
TGC/SEI Joint Venture                           Seitel Data Corp. - 50%
                                                 Joint Venture Interest
SSC/SEI Joint Venture                           Seitel Data Corp. - 41%
                                                 Joint Venture Interest
Marsh Joint Venture                             Seitel Data Corp. - 50%
                                                 Joint Venture Interest
Digitel Data Joint Venture                      Seitel Offshore Corp. -
                                                 50% Joint Venture Interest
Spectrum/SII Joint Venture                      Seitel International, Inc. -
                                                 50% Joint Venture Interest
Redman/Smackover Joint Venture                  DDD Energy, Inc. - 38%
                                                 Joint Venture Interest

B.   All stock of the Restricted Subsidiaries is currently pledged as security
     under the DDD Facility described in Item 1 of Schedule 5.15 or the
     Revolving Facility described in Item 2 of Schedule 5.15, which loans shall
     be paid in full with the proceeds of the sale of the Series A Notes and
     Series B Notes immediately upon funding thereof. The DDD Facility and the
     Revolving Facility and all security interests granted in connection
     therewith, including but not limited to the pledges of such stock, will be
     terminated immediately upon receipt by such banks of such payments.

C.   Reference  is hereby made to each of the agreements described  in Items 1
     through 9 inclusive of Schedule 5.15 hereof.

<PAGE>

                                  SCHEDULE 5.5

                              FINANCIAL STATEMENTS

1.   Financial  Statements  contained in the Company's  Form 10-K for the twelve
     months ended December 31, 1994.

2.   Financial Statements contained in the Company's Form 10-Q for the quarterly
     period ended June 30, 1995.

3.   Financial Statements contained in the Company's Form 10-Q for the quarterly
     period ended September 30, 1995.

<PAGE>

                                  SCHEDULE 5.8

                               CERTAIN LITIGATION

                                      NONE

<PAGE>

                                  SCHEDULE 5.11

                                  PATENTS, ETC.

                                      NONE

<PAGE>

                                  SCHEDULE 5.12

                                      ERISA

A.   The following  Restricted  Subsidiaries  are ERISA Affiliates that maintain
     one or more Plans.  There are no employee  organizations  in respect of any
     Plan or Multiemployer Plan.

                    Datatel, Inc.

                    DDD Energy, Inc.

                    Matrix Geophysical, Inc.

                    Seitel Data Corp.

                    Seitel Gas & Energy Corp.

                    Seitel Geophysical, Inc.

B.   All of the Restricted Subsidiaries may be considered ERISA Affiliates. The
     following Plans constitute all "employee benefit plans" with respect to
     which the Company or any "affiliate" of the Company is a
     "party-in-interest" or in respect of which the Notes could constitute an
     "employer security." All plans apply to all ERISA Affiliates listed in A.
     above except as specifically set forth below.

                    Seitel, Inc. 401(k) Plan

                    Medical Insurance through New York Life Insurance Company

                    Dental Insurance through New York Life Insurance Company

                    Life Insurance through Guarantee Mutual Life Company (Seitel
                    Geophysical, Inc. does not participate in this insurance)

                    Accidental Death and Dismemberment Insurance through
                    Guarantee Mutual Life Company (Seitel Geophysical, Inc. does
                    not participate in this insurance)

                    Disability Insurance through Guarantee Mutual Life Company

<PAGE>

                                  SCHEDULE 5.15

                       EXISTING DEBT IN EXCESS OF $100,000

1.   Credit Agreement dated June 14, 1995, between DDD Energy, Inc. as borrower
     and Bank One, Texas, N.A. and Compass Bank-Houston as lenders relating to a
     loan of up to $75 Million secured primarily by oil and gas interests and a
     pledge of the stock of DDD Energy, Inc., the outstanding balance of which
     as of December 15, 1995 was approximately $8.1 Million, and related
     agreements. Copies of these agreements have been provided to Purchasers'
     special counsel, Hebb & Gitlin. The credit facility evidenced by these
     agreements will be paid in full with the proceeds of the sale of the Series
     A Notes and Series B Notes immediately upon funding thereof, and this
     credit facility and all security interests granted in connection therewith
     will be terminated immediately upon receipt by such Banks of such payments.

2.   Restated  Revolving  Credit and Security  Agreement  dated  effective as of
     December 31, 1994, between Seitel, Inc., Seitel Geophysical, Inc., Exsol,
     Inc., Seitel Data Corp., and Seitel Offshore Corp. as borrowers and Compass
     Bank-Houston and Bank One, Texas, N.A. as lenders relating to a revolving
     line of credit of up to $25 Million secured primarily by accounts
     receivable, seismic data, and a pledge of the stock of all of the
     Restricted Subsidiaries other than DDD Energy, Inc., the outstanding
     balance of which as of December 15, 1995 was approximately $18.9 Million,
     and related agreements. Copies of these agreements have been provided to
     Purchasers' special counsel, Hebb & Gitlin. The credit facility evidenced
     by these agreements will be paid in full with the proceeds of the sale of
     the Series A Notes and Series B Notes immediately upon funding thereof, and
     this credit facility and all security interests granted in connection
     therewith will be terminated immediately upon receipt by such banks of such
     payments.

3.   Term Credit and  Security  Agreement  dated July 15, 1993,  between  Seitel
     Geophysical, Inc. and Compass Bank (formerly Central Bank of the South)
     relating to a term loan in the original principal amount of $4,300,000
     secured primarily by certain equipment, and related agreements. As of
     December 15, 1995, the outstanding balance of this debt was approximately
     $2.4 Million. The consent required by Section 4.10(b) amended certain
     covenants under the Term Credit and Security Agreement. Copies of these
     agreements have been provided to Purchasers' special counsel, Hebb &
     Gitlin.

<PAGE>

4.   Master Equipment Lease Agreement dated May 20, 1994, and amendments
     thereto, between Seitel Geophysical, Inc. and METLIFE CAPITAL, Limited
     Partnership relating to the lease by Seitel Geophysical, Inc. of certain
     equipment. As of December 15, 1995, the outstanding balance under this
     lease was approximately $3.5 Million. Copies of these agreements have been
     provided to Purchasers' special counsel, Hebb & Gitlin.

5.   Master Equipment Lease Agreement dated February 2, 1994, and amendments
     thereto, between Seitel Geophysical, Inc. and Gelco Corporation, dba
     McCullagh Leasing, a unit of GE Capital Fleet Services, relating to the
     lease by Seitel Geophysical, Inc. of certain vehicles and related
     equipment. As of December 15, 1995, the outstanding balance under this
     lease was approximately $128,000.

6.   Master Equipment Lease Agreement dated March 4, 1994, and amendments
     thereto, between Seitel, Inc. and NationsBanc Leasing Corporation relating
     to the lease by Seitel, Inc. of certain geophysical computer processing
     equipment and related furniture and fixtures. As of December 15, 1995, the
     outstanding balance under this lease was approximately $210,000.

7.   Note and Security Agreement dated July 7, 1995, between DDD Energy, Inc.
     and CoreStates Bank, N.A. relating to a term loan in the original principal
     amount of $329,701.36 secured primarily by certain computer equipment, and
     related agreements. As of December 15, 1995, the outstanding balance of
     this debt was approximately $278,000.

8.   Note and Security Agreement dated November 29, 1995,  between Seitel,  Inc.
     and CoreStates Bank, N.A. relating to a term loan in the original principal
     amount of $386,663.62 secured primarily by a Marathon Coach Bus, and
     related agreements. As of December 15, 1995, the outstanding balance of
     this debt was approximately $375,000.

9.   Seitel,  Inc.  and Seitel Data  Corp.'s  accounts  payable  incurred in the
     ordinary course of business to PGS Exploration (U.S.), Inc. for PGS'
     services in connection with conducting 3D seismic surveys in the U.S. Gulf
     of Mexico, the current balance of which is approximately $19.4 Million, of
     which approximately $1.5 Million is secured by the seismic data acquired by
     one of such surveys. The Company currently intends to pay such payables in
     full with the proceeds of the sale of the Series A Notes and Series B
     Notes, as described in the letter attached to Schedule 5.3 hereof, and to
     obtain the release of such security interest in such seismic data.

10.  Seitel,  Inc. 9%  Convertible  Subordinated  Debentures due March 31, 2002,
     which are convertible into Seitel, Inc. common stock at a conversion rate
     of one share/$9.28. As of December 15, 1995, the outstanding balance due
     under these debentures is approximately $2.0 Million.

<PAGE>

                                  SCHEDULE 10.8

                  CERTAIN AGREEMENTS BY RESTRICTED SUBSIDIARIES

Reference is hereby made to each of the agreements described in Items 1 through
9 inclusive of Schedule 5.15 hereof.

<PAGE>

                                                                      EXHIBIT 1A

                          FORM OF SERIES A SENIOR NOTE

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY ONLY BE REOFFERED AND SOLD IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION THEREFROM.

                                  SEITEL, INC.

                7.17% Series A Senior Note Due December 30, 2001

No.______                                                _________ , 19 __
$ ___________                                             PPN: 816074 A* 9

     SEITEL, INC. (the "Company"),  a Delaware corporation,  for value received,
hereby  promises to pay to_______ or  registered  assigns the  principal  sum of
______ DOLLARS  ($______) on December 30, 2001 and to pay interest  (computed on
the basis of a 360-day year of twelve 30-day months) on the unpaid principal
balance thereof from the date of this Note at the rate of seven and seventeen
hundredths percent (7.17%) per annum, semiannually on the thirtieth (30th) day
of June and December in each year, commencing on the later of June 30, 1996 or
the payment date next succeeding the date hereof, until the principal amount
hereof shall become due and payable; and to pay on demand interest on any
overdue principal (including any overdue prepayment of principal) and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the lesser of (a) the highest rate
allowed by applicable law or (b) the greater of (i) nine and seventeen
hundredths percent (9.17%) per annum and (ii) two percent (2%) over the rate of
interest publicly announced by Morgan Guaranty Trust Company of New York in New
York, New York as its "base" or "prime" rate.

     Payments of principal, Make-Whole Amount, if any, and interest shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts to the
registered holder hereof at the address shown in the register maintained by the
Company for such purpose, in the manner provided in the Note Purchase Agreement
(defined below).

     This Note is one of an issue of Series A Notes of the Company issued in an
aggregate principal amount limited to Twenty-Five Million Dollars ($25,000,000)
pursuant to the Company's separate Note Purchase Agreements (collectively, the
"Note Purchase Agreement"), each dated as of December 28, 1995, with the
purchasers listed on Schedule A thereto, and is entitled to the benefits
thereof. Capitalized terms used herein and not otherwise defined herein have the
meanings specified in the Note Purchase Agreement. As provided in the Note

<PAGE>

Purchase Agreement, this Note is subject to prepayment, in whole or in part, in
certain cases without a Make-Whole Amount and in other cases with a Make-Whole
Amount. The Company agrees to make required prepayments on account of such Notes
in accordance with the provisions of the Note Purchase Agreement.

     The Notes and all other obligations of the Company under the Note Purchase
Agreement have been unconditionally guarantied by the Restricted Subsidiaries
pursuant to the Guaranty, dated as of December 28, 1995, entered into by such
Restricted Subsidiaries.

     This Note is a registered Note and is transferable, subject to the
restrictions set forth in the Note Purchase Agreement and in the legend above,
only by surrender thereof at the principal office of the Company as specified in
the Note Purchase Agreement, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Note or
his attorney duly authorized in writing.

     Under certain circumstances, as specified in the Note Purchase Agreement,
the principal of this Note (together with any applicable Make-Whole Amount) may
be declared due and payable in the manner and with the effect provided in the
Note Purchase Agreement.

     It is the intention of the parties hereto to comply with all applicable
usury laws; accordingly, it is agreed that notwithstanding any provision to the
contrary herein or in the Note Purchase Agreement, or in any of the documents
securing payment hereof or otherwise relating hereto, no such provision shall
require the payment or permit the collection of interest in excess of the
highest rate allowed by applicable law (the "Maximum Rate"). If any excess of
interest in such respect is provided for, or shall be adjudicated to be so
provided for, herein or in the Note Purchase Agreement or in any of the
documents securing payment hereof or otherwise relating hereto, then in such
event (a) the provisions of this paragraph shall govern and control, (b) neither
the Company, endorsers or Restricted Subsidiaries, nor their heirs, legal
representatives, successors or assigns nor any other party liable for the
payment hereof, shall be obligated to pay the amount of such interest to the
extent that it is in excess of the Maximum Rate, (c) any such excess which may
have been collected shall, at the election of the holder of this Note, be either
applied as a credit against the then unpaid principal amount hereof or refunded
to the Company, and (d) the provisions hereof and of the Note Purchase Agreement
and any documents securing payment hereof shall be automatically reformed so
that the effective rate of interest shall be reduced to the Maximum Rate. For
the purpose of determining the Maximum Rate, all interest payments with respect
hereto shall be amortized, prorated and spread throughout the full term hereof
so that the effective rate of interest hereunder is uniform throughout the term
hereof.

     THIS NOTE AND THE NOTE PURCHASE AGREEMENT ARE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.

                                 SEITEL, INC.

                                 By:

                                    Name:

                                    Title:

<PAGE>

                                                                      EXHIBIT 1B

                          FORM OF SERIES B SENIOR NOTE

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY ONLY BE REOFFERED AND SOLD IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION THEREFROM.

                                  SEITEL, INC.

                7.17% Series B Senior Note Due December 30, 2002

No._____                                                     ____________, 19__
$________                                                       PPN:816074 A@ 7

     SEITEL, INC. (the "Company"), a Delaware corporation, for value received,
hereby promises to pay to ______ or registered assigns the principal sum of
______ DOLLARS ($______) on December __, 2002 and to pay interest (computed on
the basis of a 360-day year of twelve 30-day months) on the unpaid principal
balance thereof from the date of this Note at the rate of seven and seventeen
hundredths percent (7.17%) per annum, semiannually on the thirtieth (30th) day
of June and December in each year, commencing on the later of June 30, 1996 or
the payment date next succeeding the date hereof, until the principal amount
hereof shall become due and payable; and to pay on demand interest on any
overdue principal (including any overdue prepayment of principal) and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the lesser of (a) the highest rate
allowed by applicable law or (b) the greater of (i) nine and seventeen
hundredths percent (9.17%) per annum and (ii) two percent (2%) over the rate of
interest publicly announced by Morgan Guaranty Trust Company of New York in New
York, New York as its "base" or "prime" rate.

     Payments of principal, Make-Whole Amount, if any, and interest shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts to the
registered holder hereof at the address shown in the register maintained by the
Company for such purpose, in the manner provided in the Note Purchase Agreement
(defined below).

     This Note is one of an issue of Series B Notes of the Company issued in an
aggregate principal amount limited to Twenty-Seven Million Five Hundred Thousand
Dollars ($27,500,000) pursuant to the Company's separate Note Purchase
Agreements (collectively, the "Note Purchase Agreement"), each dated as of
December 28, 1995, with the purchasers listed on Schedule A thereto, and is
entitled to the benefits thereof. Capitalized terms used herein and not
otherwise defined herein have the meanings specified in the Note Purchase
Agreement. As provided in the Note Purchase Agreement, this Note is subject to
prepayment, in whole or in part, in certain cases without a Make-Whole Amount
and in other cases with a Make-Whole Amount. The Company agrees to make required
prepayments on account of such Notes in accordance with the provisions of the
Note Purchase Agreement.

<PAGE>

     The Notes and all other obligations of the Company under the Note Purchase
Agreement have been unconditionally guarantied by the Restricted Subsidiaries
pursuant to the Guaranty, dated as of December 28, 1995, entered into by such
Restricted Subsidiaries.

     This Note is a registered Note and is transferable, subject to the
restrictions set forth in the Note Purchase Agreement and in the legend above,
only by surrender thereof at the principal office of the Company as specified in
the Note Purchase Agreement, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Note or
his attorney duly authorized in writing.

     Under certain circumstances, as specified in the Note Purchase Agreement,
the principal of this Note (together with any applicable Make-Whole Amount) may
be declared due and payable in the manner and with the effect provided in the
Note Purchase Agreement.

     It is the intention of the parties hereto to comply with all applicable
usury laws; accordingly, it is agreed that notwithstanding any provision to the
contrary herein or in the Note Purchase Agreement, or in any of the documents
securing payment hereof or otherwise relating hereto, no such provision shall
require the payment or permit the collection of interest in excess of the
highest rate allowed by applicable law (the "Maximum Rate"). If any excess of
interest in such respect is provided for, or shall be adjudicated to be so
provided for, herein or in the Note Purchase Agreement or in any of the
documents securing payment hereof or otherwise relating hereto, then in such
event (a) the provisions of this paragraph shall govern and control, (b) neither
the Company, endorsers or Restricted Subsidiaries, nor their heirs, legal
representatives, successors or assigns nor any other party liable for the
payment hereof, shall be obligated to pay the amount of such interest to the
extent that it is in excess of the Maximum Rate, (c) any such excess which may
have been collected shall, at the election of the holder of this Note, be either
applied as a credit against the then unpaid principal amount hereof or refunded
to the Company, and (d) the provisions hereof and of the Note Purchase Agreement
and any documents securing payment hereof shall be automatically reformed so
that the effective rate of interest shall be reduced to the Maximum Rate. For
the purpose of determining the Maximum Rate, all interest payments with respect
hereto shall be amortized, prorated and spread throughout the full term hereof
so that the effective rate of interest hereunder is uniform throughout the term
hereof.

<PAGE>

     THIS NOTE AND THE NOTE PURCHASE AGREEMENT ARE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.

                                  SEITEL, INC.

                                  By:

                                  Name:

                                  Title:

<PAGE>

                                                                      EXHIBIT 1C

                          FORM OF SERIES C SENIOR NOTE

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY ONLY BE REOFFERED AND SOLD IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION THEREFROM.

                                  SEITEL, INC.

                   Series C Senior Note Due December 30, 2002

No._____                                                     ____________, 19__
$_______                                                       PPN: 816074 A# 5

     SEITEL, INC. (the "Company"), a Delaware corporation, for value received,
hereby promises to pay to _______ or registered assigns the principal sum of
______ DOLLARS ($______) on December 30, 2002 and to pay interest (computed on
the basis of a 360-day year of twelve 30-day months) on the unpaid principal
balance thereof from the date of this Note at the rate of _____________________
percent (___%) per annum, semiannually on the thirtieth (30th) day of June and
December in each year, commencing on the later of June 30, 1996 or the payment
date next succeeding the date hereof, until the principal amount hereof shall
become due and payable; and to pay on demand interest on any overdue principal
(including any overdue prepayment of principal) and Make-Whole Amount, if any,
and (to the extent permitted by applicable law) on any overdue installment of
interest, at a rate equal to the lesser of (a) the highest rate allowed by
applicable law or (b) the greater of (i) ____________________ percent (___%) per
annum and (ii) two percent(2%) over the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York, New York as its "base" or
"prime" rate.

     Payments of principal, Make-Whole Amount, if any, and interest shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts to the
registered holder hereof at the address shown in the register maintained by the
Company for such purpose, in the manner provided in the Note Purchase Agreement
(defined below).

     This Note is one of an issue of Series C Notes of the Company issued in an
aggregate principal amount limited to Twenty-Two Million Five Hundred Thousand
Dollars ($22,500,000) pursuant to the Company's separate Note Purchase
Agreements (collectively, the "Note Purchase Agreement"), each dated as of
December 28, 1995, with the purchasers listed on Schedule A thereto, and is
entitled to the benefits thereof. Capitalized terms used herein and not
otherwise defined herein have the meanings specified in the Note Purchase

<PAGE>

Agreement. As provided in the Note Purchase Agreement, this Note is subject to
prepayment, in whole or in part, in certain cases without a Make-Whole Amount
and in other cases with a Make-Whole Amount. The Company agrees to make required
prepayments on account of such Notes in accordance with the provisions of the
Note Purchase Agreement.

     The Notes and all other obligations of the Company under the Note Purchase
Agreement have been unconditionally guarantied by the Restricted Subsidiaries
pursuant to the Guaranty, dated as of December 28, 1995, entered into by such
Restricted Subsidiaries.

     This Note is a registered Note and is transferable, subject to the
restrictions set forth in the Note Purchase Agreement and in the legend above,
only by surrender thereof at the principal office of the Company as specified in
the Note Purchase Agreement, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Note or
his attorney duly authorized in writing.

     Under certain circumstances, as specified in the Note Purchase Agreement,
the principal of this Note (together with any applicable Make-Whole Amount) may
be declared due and payable in the manner and with the effect provided in the
Note Purchase Agreement.

     It is the intention of the parties hereto to comply with all applicable
usury laws; accordingly, it is agreed that notwithstanding any provision to the
contrary herein or in the Note Purchase Agreement, or in any of the documents
securing payment hereof or otherwise relating hereto, no such provision shall
require the payment or permit the collection of interest in excess of the
highest rate allowed by applicable law (the "Maximum Rate"). If any excess of
interest in such respect is provided for, or shall be adjudicated to be so
provided for, herein or in the Note Purchase Agreement or in any of the
documents securing payment hereof or otherwise relating hereto, then in such
event (a) the provisions of this paragraph shall govern and control, (b) neither
the Company, endorsers or Restricted Subsidiaries, nor their heirs, legal
representatives, successors or assigns nor any other party liable for the
payment hereof, shall be obligated to pay the amount of such interest to the
extent that it is in excess of the Maximum Rate, (c) any such excess which may
have been collected shall, at the election of the holder of this Note, be either
applied as a credit against the then unpaid principal amount hereof or refunded
to the Company, and (d) the provisions hereof and of the Note Purchase Agreement
and any documents securing payment hereof shall be automatically reformed so
that the effective rate of interest shall be reduced to the Maximum Rate. For
the purpose of determining the Maximum Rate, all interest payments with respect
hereto shall be amortized, prorated and spread throughout the full term hereof
so that the effective rate of interest hereunder is uniform throughout the term
hereof.

     THIS NOTE AND THE NOTE PURCHASE AGREEMENT ARE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.

                                  SEITEL, INC.

                                  By:

                                     Name:

                                     Title:

<PAGE>

                                                                  EXHIBIT 4.4(a)

               FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY

                         [Letterhead of Company Counsel]

                                                                  [Closing Date]

To the Persons Listed on
Annex 1 hereto

          Re:       Seitel, Inc. (the "Company")
                    Our File No. 979275/086

Ladies and Gentlemen:

     Reference is made to the separate Note Purchase Agreements, each dated as
of December 28, 1995 (collectively, the "Note Purchase Agreement"), between the
Company and each of the purchasers listed on Schedule A attached hereto (the
"Purchasers"), which provide, among other things, for the issuance and sale by
the Company of its

          (a) 7.17% Series A Senior Notes due December 30, 2001, in the
     aggregate principal amount of Twenty-Five Million Dollars ($25,000,000),

          (b) 7.17% Series B Senior Notes due December 30, 2002, in the
     aggregate principal amount of Twenty-Seven Million Five Hundred Thousand
     Dollars ($27,500,000), and

          (c) Series C Senior Notes due December 30, 2002, in the aggregate
     principal amount of Twenty-Two Million Five Hundred Thousand Dollars
     ($22,500,000).

The capitalized terms used herein and not defined herein have the meanings
specified in the Note Purchase Agreement.

     We have acted as special counsel to the Company in connection with the
transactions contemplated by Note Purchase Agreement. We advise you that we have
previously represented the Company and certain Restricted Subsidiaries only with
respect to specific matters referred to us. Consequently, there are matters of a
legal nature concerning the Company and the Restricted Subsidiaries of which we
have no knowledge. This opinion is delivered to you pursuant to Section 4.4(a)
of the Note Purchase Agreement. In acting as such counsel, we have examined:

          (a) the Note Purchase Agreement;

<PAGE>

          (b) the Company's 7.17% Series A Senior Notes due December 30, 2001,
     dated the date hereof, in the form set forth in Exhibit 1A to the Note
     Purchase Agreement, and in the principal amounts, and with the registration
     numbers set forth on Schedule A to the Note Purchase Agreement (the "Series
     A Notes");

          (c) the Company's 7.17% Series B Senior Notes due December 30, 2002,
     dated the date hereof, in the form set forth in Exhibit 1B to the Note
     Purchase Agreement, and in the principal amounts, and with the registration
     numbers set forth on Schedule A to the Note Purchase Agreement (the "Series
     B Notes");

          (d) the Subsidiary Guaranty executed and delivered by each Restricted
     Subsidiary;

          (e) the compliance certificates of the Company and the Restricted
     Subsidiaries required by Section 4.3 of the Note Purchase Agreement (which
     compliance certificates, together with the Note Purchase Agreement, the
     Series A Notes, the Series B Notes, and the Subsidiary Guaranty, are
     referred to herein collectively as the "Documents");

          (f) the bylaws and minute books of the Company and each Restricted
     Subsidiary incorporated under the laws of any jurisdiction within the
     United States, and a certified copy of the certificate or articles of
     incorporation of the Company and each such Restricted Subsidiary, as in
     effect on the date hereof;

          (g) a long-form good standing certificate from the state of
     incorporation of the Company and each Restricted Subsidiary incorporated
     under the laws of any jurisdiction within the United States, and foreign
     good standing certificates for each of such corporations from each of the
     states set forth on Annex 2 hereto;

          (h) a letter to Hebb & Gitlin and Gardere Wynne Sewell & Riggs from
     Bear, Stearns & Co., Inc., describing the manner of the offering of the
     Notes (the "Offeree Letter");

          (i) the opinion of Hebb & Gitlin, counsel to the Purchasers, dated the
     date hereof;

          (j) certificate of officer of the Company and the Restricted
     Subsidiaries, a copy of which is attached hereto as Annex 3 (the "Officer's
     Certificate"); and

          (k) originals, or copies certified or otherwise identified to our
     satisfaction, of such other documents, records, instruments and
     certificates of public officials as we have deemed necessary or appropriate
     to enable us to render this opinion.

     In rendering our opinion, we have relied, to the extent we deem necessary
and proper, on:

<PAGE>

          (a) warranties and representations as to factual matters contained in
     the Note Purchase Agreement and the Subsidiary Guaranty;

          (b) the Officer's Certificate;

          (c) the Offeree Letter; and

          (d) said opinion of Hebb & Gitlin with respect to all matters governed
     by New York law.

     We have no actual knowledge of any material inaccuracies in any of the
facts contained in the Note Purchase Agreement or the Subsidiary Guaranty. We
have made no independent investigations as to the accuracy or completeness of
any factual representation, warranty, data or other information, whether written
or oral, that may have been made by or on behalf of the parties to the
Documents. We have not made any examination of any accounting or financial
matters and express no opinion with respect thereto.

     By accepting this opinion, you are agreeing that in rendering this opinion
we may assume (i) the genuineness of all signatures (except for the signatures
of the Company and the Restricted Subsidiaries), (ii) the authenticity of all
documents submitted to us as originals and the conformity to original documents
of all documents submitted to us as certified or photostatic copies, (iii) the
correctness of all statements set forth in certificates or written documents of
governmental officials and certificates or written documents of the Company or
the Restricted Subsidiaries or representatives of the Company or the Restricted
Subsidiaries as to corporate proceedings, incumbency of officers and other
corporate matters (which statements, to our knowledge, are correct), (iv) that
none of the parties upon whom we have relied for purposes of this opinion has
perpetuated a fraud upon any of the parties to the transactions evidenced by the
Documents or any of the attorneys representing any of such parties, (v) that all
of the terms and conditions of, or relating to, the purchase and sale of the
Notes are correctly and completely embodied in the Note Purchase Agreement and
the Schedules thereto, (vi) that the Purchasers will comply with all the terms
and provisions of the Documents including, without limitation, the usury savings
clause contained therein, (vii) that no attorney representing any Purchaser has
any opinion regarding the subject matter of this letter which is contrary to or
inconsistent with any of the opinions expressed herein, and (viii) that the
Purchasers have disbursed or advanced the entire amount due upon issuance of the
Series A Notes and the Series B Notes to the account specified by the Company to
the Purchasers.

     Based on the foregoing, we are of the following opinions:

     1.   (a) The Company is a corporation duly incorporated, validly existing
          and in good standing under the laws of the State of Delaware and has
          all requisite corporate power and authority to own its property and
          carry on its business as currently conducted.

<PAGE>

          (b) Each Restricted Subsidiary incorporated under the laws of any
          jurisdiction within the United States is a corporation duly
          incorporated, validly existing and in good standing under the laws of
          its state of incorporation and has all requisite corporate power and
          authority to own its property and carry on its business as currently
          conducted.

     2.   Each of the Company and the Restricted Subsidiaries that are
          incorporated under the laws of any jurisdiction within the United
          States has duly qualified and is in good standing as a foreign
          corporation in each jurisdiction where it is shown to be so qualified
          and in good standing in Annex 2 hereto, which jurisdictions, to our
          knowledge, are the only jurisdictions in which the character or
          location of the properties of each such entity (owned, leased or
          licensed) or the nature or conduct of its business makes such
          qualification necessary, except for where the failure to be so
          qualified or in good standing will not in the aggregate have a
          Material Adverse Effect on the Company and the Restricted Subsidiaries
          taken as a whole.

     3.   To the best of our knowledge, in reliance on the Officer's Certificate
          and after inquiry of the lawyers at this firm identified in the third
          from last paragraph of this letter, there is no judgment, order,
          action, suit, proceeding, inquiry, order or investigation, at law or
          in equity, before any court or Governmental Authority, arbitration
          board or tribunal, pending or threatened against the Company or any
          one or more of the Restricted Subsidiaries, except for the actions,
          suits, and proceedings listed on Annex 4 hereto.

     4.   (a) The Company has the requisite corporate power and authority to
          execute and deliver the Note Purchase Agreement, the Series A Notes,
          and the Series B Notes, and the Company's obligations under the Note
          Purchase Agreement, the Series A Notes and the Series B Notes may be
          performed in a manner which is within the Company's corporate power
          and authority.

          (b) Each Restricted Subsidiary incorporated under the laws of any
          jurisdiction within the United States has the requisite corporate
          power and authority to execute and deliver the Subsidiary Guaranty and
          each such Restricted Subsidiary's obligations under the Subsidiary
          Guaranty may be performed in a manner which is within such Restricted
          Subsidiary's corporate power and authority.

     5.   (a) Each of the Note Purchase Agreement, the Series A Notes and the
          Series B Notes has been duly authorized by all necessary corporate
          action on the part of the Company (no action on the part of the
          stockholders of the Company being required in respect thereof), has
          been executed and delivered by duly authorized officers of the
          Company, and constitutes a legal, valid and binding obligation of the
          Company, enforceable against the Company in accordance with its
          terms.1

          (b) The Subsidiary Guaranty has been duly authorized by all necessary
          corporate action on the part of each of the Restricted Subsidiaries
          incorporated under the laws of any jurisdiction within the United

<PAGE>

          States (no action on the part of the stockholders of any such
          Restricted Subsidiary being required in respect thereof), has been
          executed and delivered by duly authorized officers of each Restricted
          Subsidiary, and constitutes a legal, valid and binding obligation of
          each Restricted Subsidiary, enforceable against each such Restricted
          Subsidiary in accordance with its terms.

     6.   (a) The execution and delivery of the Note Purchase Agreement, the
          Series A Notes and the Series B Notes, and the issue and sale of the
          Series A Notes and the Series B Notes, by the Company will not and the
          obligations of the Company thereunder may be performed in a manner
          which will not conflict with, constitute a violation of, result in a
          breach of any provision of, constitute a default under, or result in
          the creation or imposition of any Lien or encumbrance upon any of the
          property of the Company pursuant to, the certificate of incorporation
          or by-laws of the Company, any applicable statute, rule or regulation
          to which the Company is subject, or, to the best of our knowledge
          based on the Officer's Certificate, any agreement or instrument known
          to us to which the Company is a party or by which its properties may
          be bound, except for (i) such conflicts, violations, breaches,
          defaults or encumbrances under agreements and instruments as may have
          been waived by the other party thereto, or (ii) such conflicts,
          violations, breaches, defaults or encumbrances under agreements and
          instruments which would not have, alone or in the aggregate, a
          Material Adverse Effect on the Company and the Restricted Subsidiaries
          taken as a whole.

          (b) The execution and delivery of the Subsidiary Guaranty by each of
          the Restricted Subsidiaries that are incorporated under the laws of
          any jurisdiction within the United States will not, and the
          obligations of each such Restricted Subsidiary thereunder may be
          performed in a manner which will not, conflict with, constitute a
          violation of, result in a breach of any provision of, constitute a
          default under, or result in the creation or imposition of any Lien or
          encumbrance upon any of the property of any such Restricted
          Subsidiaries pursuant to the certificate or articles of incorporation
          or by-laws of any such Restricted Subsidiary, any applicable statute,
          rule or regulation to which any such Restricted Subsidiary is subject,
          or, to the best of our knowledge based on the Officer's Certificate,
          any agreement or instrument known to us to which any such Restricted
          Subsidiary is a party or by which its respective properties may be
          bound, except for (i) such conflicts, violations, breaches, defaults
          or encumbrances under agreements and instruments as may have been
          waived by the other party thereto, or (ii) such conflicts, violations,
          breaches, defaults or encumbrances under agreements and instruments
          which would not have, alone or in the aggregate, a Material Adverse
          Effect on the Company and the Restricted Subsidiaries taken as a
          whole.

     7.   All consents, approvals and authorizations of, and all designations,
          declarations, filings, registrations, qualifications and recordations
          with, Governmental Authorities required on the part of the Company and
          the Restricted Subsidiaries incorporated under the laws of any
          jurisdiction within the United States have been obtained in connection
          with the execution and delivery of the Note Purchase Agreement and the
          Subsidiary Guaranty and the issue and sale of the Series A Notes and
          the Series B Notes, except for such informational filings as may be
          required to be made after the issue and sale of the Series A Notes and
          the Series B Notes.

<PAGE>

     8.   The offering, issuance and sale by the Company of the Series A Notes
          and the Series B Notes are exempt from the registration requirements
          under the Securities Act, and the Company is not required to qualify
          an indenture with respect thereto under the Trust Indenture Act of
          1939, as amended.2

     9.   Neither the issuance of the Series A Notes or the Series B Notes, nor
          the intended use of the proceeds of such Notes (as set forth in
          Section 5.14 of the Note Purchase Agreement), will violate Regulations
          G, T or X of the Federal Reserve Board.3

     10.  Neither the Company nor any Restricted Subsidiary

          (a) is an "investment company" within the meaning of the Investment
          Company Act of 1940, as amended, or

          (b) is a "holding company" or an "affiliate" of a "holding company,"
          or a "subsidiary company" of a "holding company," or a "public
          utility" within the meaning of the Public Utility Holding Company Act
          of 1935, as amended.

     11.  All of the outstanding shares of capital stock of each Restricted
          Subsidiary incorporated under the laws of any jurisdiction within the
          United States listed in Schedule 5.4 to the Note Purchase Agreement as
          being owned by the Company and the Restricted Subsidiaries have been
          validly issues and are fully paid and nonassessable. To the best of
          our knowledge in reliance on the Officer's Certificate, such shares
          are free and clear in each case of any perfected security interest or
          any other Lien, except as set forth in Schedule 5.4 to the Note
          Purchase Agreement.

          The foregoing opinions are subject to and are qualified in all respect
          by the following:

               (i)   The enforceability of the Documents may be limited by (a)
          bankruptcy, insolvency, reorganization, moratorium and similar laws
          from time to time in effect and affecting creditors' rights or the
          collection of debtors' obligations generally (including, without
          limitation, laws generally defining and restricting fraudulent
          conveyances), (b) principles of equity, (c) principles of public
          policy and (d) requirements of commercial reasonableness and good
          faith.

               (ii)  We express no opinion as to the availability or
          enforceability of certain provisions or remedies set forth in the
          Documents, including but not limited to those (a) that purport to
          provide access to or restrict legal or equitable remedies such as
          specific performance and the appointment of a receiver, (b) that
          purport to establish evidentiary standards, (c) that relate to

<PAGE>

          waivers, or to delays or omissions of enforcement of remedies or
          severance, (d) that attempt to prohibit or restrict the transfer,
          alienation, mortgaging, encumbering or hypothecation of any property
          described in the Documents, (e) that relate to subrogation rights or
          the waiver thereof and (f) that attempt to establish proper venue for
          the filing and maintenance of any claim, suit or action with respect
          to the Documents; provided, however, that such limitations on the
          availability of remedies under the Documents or the legality,
          validity, binding effect or enforceability of the Documents will not,
          in our opinion, substantially interfere with the practical realization
          of the benefits expressed in the Documents except for the economic
          consequences of any procedural delay which may result from such laws.

               (iii) We express no opinion as to the enforceability of
          provisions in the Documents attempting to establish choice of laws.

               (iv)  We express no opinion as to whether the investment in the
          Notes complies with any statutory, regulatory or other loan limits
          applicable to any Purchaser or complies with any other statutes, laws,
          rules or regulations which prescribe permissible and lawful
          investments for the Purchasers (either as to type, amount, percentage
          of total investments or other).

               (v)   With respect to the opinion expressed in 8 above, we have
          specifically assumed (without limiting the generality of our
          assumptions elsewhere herein) that (A) in reliance on the
          representations and warranties of the Purchasers in the Note Purchase
          Agreement, each Purchaser is an "accredited investor" within the
          meaning of Regulation D promulgated by the Securities and Exchange
          Commission under the Securities Act, (B) in reliance on the Company's
          representations and warranties in the Note Purchase Agreement and on
          Bear, Stearns & Co. Inc.'s representations in the Offeree Letter, the
          Company and Bear, Stearns & Co. Inc. have complied, as applicable,
          with the requirements of paragraphs (b)(2)(v) and (c) of Rule 502 of
          Regulation D in connection with the issuance of the Notes, and (C) the
          issuance by the Company of the Notes will not be integrated with the
          offer or sale of any other securities.

     We acknowledge that this opinion is being issued at the request of the
Company pursuant to Section 4.4(a) of the Note Purchase Agreement and we agree
that the parties listed on Annex 1 hereto may rely and are relying hereon in
connection with the consummation of the transactions contemplated by the Note
Purchase Agreement. Hebb & Gitlin, special counsel to the Purchasers, may rely
on this opinion for the sole purpose of rendering their opinion to be rendered
pursuant to Section 4.4(b) of the Note Purchase Agreement.

     Our "knowledge" as to any matters in connection with this opinion is
limited to the actual knowledge of the lawyers in our firm who have participated
in the negotiation and preparation of the Documents and such other lawyers in
the firm who have represented the Company and the Restricted Subsidiaries that
the lawyer in charge of the matter reasonably believes should be consulted, and
does not include constructive or imputed knowledge.

<PAGE>

     We are admitted to the Bar in the State of Texas. This opinion is limited
to United States federal law, laws of the State of Texas, and general corporate
law of the State of Delaware, all as now in effect, and we disclaim any
responsibility to inform you of any change thereto after the date hereof. No
opinion is expressed as to any matter that may be governed by the laws of any
other jurisdiction; provided, however, to the extent that the laws of any state
other than Texas govern the Documents, you may rely on our opinion to the extent
that the laws of such state or states are the same as the laws of the State of
Texas, as to which sameness we express no opinion.

     Subsequent holders of the Notes may rely on this opinion as if it were
addressed to them.

                                                   Very truly yours,

<PAGE>

                                     ANNEX 1
                                   Addressees

Seitel, Inc.
50 Briar Hollow Lane, 7th Floor West
Houston, TX 77027

Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392

Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA  01111

John Alden Life Insurance Company
P.O. Box 020270 - 3rd Floor
Miami, Florida 33102-0270

John Alden Life Insurance Company of New York
P.O. Box 020270 - 3rd Floor
Miami, Florida 33102-0270

The Mutual Life Insurance Company of New York
1740 Broadway
New York, NY 10019

MONY Life Insurance Company of America
1740 Broadway
New York, NY 10019

United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Omaha, NE  68175

Pan-American Life Insurance Company
Pan American Life Center
601 Poydras Street
New Orleans, LA  70130

<PAGE>

                                     ANNEX 2
                       Foreign Good Standing Certificates

Corporation                   State
-----------                   -----
Seitel, Inc.                  Alabama, Louisiana, Texas
Seitel Data Corp.             Louisiana, Texas
Seitel Geophysical, Inc.      Louisiana, Texas, Mississippi, Alabama
DDD Energy, Inc.              Louisiana, Texas, Alabama
Seitel Gas & Energy Corp.     Texas, Massachusetts, Connecticut, New Jersey,
                              Pennsylvania, New York
Seitel Offshore Corp.         Texas
Datatel, Inc.                 Colorado, Louisiana, Texas
Exsol, Inc.                   Texas

<PAGE>

                                     ANNEX 3
                              Officer's Certificate

[To be provided.]

<PAGE>

     1    For the second closing, reference would be made to the Series C Notes
          in this paragraph in lieu of the Series A Notes and the Series B
          Notes.

     2    For the second closing, reference would be made to the Series C Notes
          in this paragraph in lieu of the Series A Notes and the Series B
          Notes.

     3    For the second closing, reference would be made to the Series C Notes
          in this paragraph in lieu of the Series A Notes and the Series B
          Notes.

<PAGE>

                                                                  EXHIBIT 4.4(b)

              FORM OF OPINION OF SPECIAL COUNSEL FOR THE PURCHASERS

                          [Letterhead of Hebb & Gitlin]

                                                                  [Closing Date]

To the Persons Listed on

Annex 1 hereto

       Re: Seitel, Inc. (the "Company")

Ladies and Gentlemen:

     Reference is made to the separate Note Purchase Agreements, each dated as
of December 28, 1995 (collectively, the "Note Purchase Agreement"), between the
Company and each of the purchasers listed on Schedule A attached thereto (the
"Purchasers"), which provide, among other things, for the issuance and sale by
the Company of its

          (a) 7.17% Series A Senior Notes due December 30, 2001, in the
     aggregate principal amount of Twenty-Five Million Dollars ($25,000,000),

          (b) 7.17% Series B Senior Notes due December 30, 2002, in the
     aggregate principal amount of Twenty-Seven Million Five Hundred Thousand
     Dollars ($27,500,000), and

          (c) Series C Senior Notes due December 30, 2002, in the aggregate
     principal amount of Twenty-Two Million Five Hundred Thousand Dollars
     ($22,500,000).

The capitalized terms used herein and not defined herein have the meanings
assigned to them by or pursuant to the terms of the Note Purchase Agreement.

     We have acted as special counsel to the Purchasers in connection with the
transactions contemplated by the Note Purchase Agreement. This opinion is
delivered to you pursuant to Section 4.4(b) of the Note Purchase Agreement. In
acting as such counsel, we have examined:

          (a) the Note Purchase Agreement;

          (b) the Company's 7.17% Series A Senior Notes due December 30, 2001,
     dated the date hereof, in the form set forth in Exhibit 1A to the Note
     Purchase Agreement, and in the principal amounts and with the registration
     numbers set forth on Schedule A to the Note Purchase Agreement (the "Series
     A Notes");

<PAGE>

          (c) the Company's 7.17% Series B Senior Notes due December 30, 2002,
     dated the date hereof, in the form set forth in Exhibit 1B to the Note
     Purchase Agreement, and in the principal amounts and with the registration
     numbers set forth on Schedule A to the Note Purchase Agreement (the "Series
     B Notes");4

          (d) the Subsidiary Guaranty executed and delivered by each Restricted
     Subsidiary;

          (e) an Officer's Certificate of the Company, dated the date hereof;

          (f) a certificate of the Secretary of the Company, dated the date
     hereof;

          (g) a certificate of the Secretary of each Restricted Subsidiary
     incorporated under the laws of any state of the United States (each, a
     "U.S. Restricted Subsidiary"), dated the date hereof;

          (h) a letter to Hebb & Gitlin and Gardere Wynne Sewell & Riggs from
     Bear, Stearns & Co., Inc. dated the date hereof, making certain
     representations with respect the manner in which the Notes were offered
     (the "Offeree Letter");

          (i) the opinion of Gardere Wynne Sewell & Riggs, counsel to the
     Company and the U.S. Restricted Subsidiaries, dated the date hereof; and

          (j) originals, or copies certified or otherwise identified to our
     satisfaction, of such other documents, records, instruments and
     certificates of public officials as we have deemed necessary or appropriate
     to enable us to render this opinion.

     In rendering our opinion, we have assumed that all signatures are genuine,
that all documents submitted to us as originals are genuine, that all copies
submitted to us conform to the originals, that all natural Persons have legal
capacity, and as to documents executed by or on behalf of Persons other than the
Company and the Restricted Subsidiaries,

          (i) that each such Person executing documents had the power to enter
     into and perform its obligations under such documents, and

          (ii) that such documents have been duly authorized, executed and
     delivered by, and are binding upon and enforceable against, such Persons.

<PAGE>

     In addition, we have assumed that each U.S. Restricted Subsidiary received
fair consideration and reasonably equivalent value in exchange for executing the
Subsidiary Guaranty.

     In rendering our opinion, we have relied, to the extent we deem necessary
and proper, on:

          (a) warranties and representations as to certain factual matters
     contained in the Note Purchase Agreement;

          (b) the Offeree Letter; and

          (c) said opinion of Gardere Wynne Sewell & Riggs with respect to all
     questions governed by Delaware law and with respect to all questions
     concerning the due incorporation, valid existence and good standing of, and
     the authorization, execution and delivery of instruments by, the Company
     and each U.S. Restricted Subsidiary (except that we have made an
     independent examination of a certified copy of the certificate or articles
     of incorporation of the Company and each U.S. Restricted Subsidiary, and
     certificates of officers of the Company and each U.S. Restricted Subsidiary
     setting forth their respective by-laws and corporate resolutions
     authorizing the participation by such entities in the transactions
     contemplated by the Note Purchase Agreement and the Subsidiary Guaranty);
     based on such investigation as we have deemed appropriate, said opinion is
     satisfactory in form and scope to us and in our opinion the Purchasers and
     we are justified in relying thereon. As to such opinion and the matters
     therein upon which we are relying, we incorporate herein the assumptions
     and qualifications to such opinion set forth therein.

     Based on the foregoing, we are of the following opinions:

     1.   (a) The Company is a corporation duly incorporated, validly existing
          and in good standing under the laws of the State of Delaware.

          (b) Each U.S. Restricted Subsidiary is a corporation duly
          incorporated, validly existing and in good standing under the laws of
          its jurisdiction of incorporation.

     2.   (a) The Company has all requisite corporate power and authority to
          execute and deliver the Note Purchase Agreement, the Series A Notes
          and the Series B Notes, to issue and sell the Series A Notes and the
          Series B Notes, and to perform its obligations set forth in each of
          the Note Purchase Agreement, the Series A Notes and the Series B
          Notes.5

<PAGE>

          (b) Each U.S. Restricted Subsidiary has all requisite corporate power
          and authority to execute and deliver the Subsidiary Guaranty and to
          perform its obligations set forth in the Subsidiary Guaranty.6

     3.   (a) Each of the Note Purchase Agreement, the Series A Notes and the
          Series B Notes has been duly authorized by all necessary corporate
          action on the part of the Company, has been executed and delivered by
          duly authorized officers of the Company, and constitutes a legal,
          valid and binding obligation of the Company, enforceable against the
          Company in accordance with its terms.7

          (b) The Subsidiary Guaranty has been duly authorized by all necessary
          corporate action on the part of each of the U.S. Restricted
          Subsidiaries, has been executed and delivered by duly authorized
          officers of each U.S. Restricted Subsidiary, and constitutes a legal,
          valid and binding obligation of each U.S. Restricted Subsidiary,
          enforceable against such U.S. Restricted Subsidiary in accordance with
          its terms.

     4.   (a) The execution and delivery of the Note Purchase Agreement, the
          Series A Notes and the Series B Notes, and the issue and sale of the
          Series A Notes and the Series B Notes, by the Company and the
          performance by the Company of its obligations thereunder will not
          conflict with, result in a breach of any provision of, constitute a
          default under, or result in the creation or imposition of any Lien
          upon any of its properties pursuant to, the certificate of
          incorporation or bylaws of the Company.8

<PAGE>

          (b) The execution and delivery of the Subsidiary Guaranty by each of
          the U.S. Restricted Subsidiaries, and the performance by each such
          U.S. Restricted Subsidiary of its obligations thereunder will not
          conflict with, result in a breach of any provision of, constitute a
          default under, or result in the creation or imposition of any Lien
          upon any of the properties pursuant to, the certificate or articles of
          incorporation or bylaws of such U.S. Restricted Subsidiary.9

     5.   No consents, approvals or authorizations of governmental authorities
          are required on the part of the Company under the laws of the United
          States of America or the State of New York in connection with the
          execution and delivery of each of the Note Purchase Agreement, the
          Series A Notes and the Series B Notes, and the offer, issue, sale and
          delivery of the Series A Notes and the Series B Notes.10 Our opinion
          in this paragraph 5 is based solely on a review of generally
          applicable laws of the United States of America and New York, and not
          on any search with respect to, or review of, any orders, decrees,
          judgments or other determinations specifically applicable to the
          Company.

     6.   Under existing law, the Series A Notes and the Series B Notes are not
          subject to the registration requirements under the Securities Act of
          1933, as amended or the "Blue Sky" laws of the State of New York, and
          the Company is not required to qualify an indenture with respect
          thereto under the Trust Indenture Act of 1939, as amended.11

     All opinions herein contained with respect to the enforceability of
     documents and instruments are qualified to the extent that:

<PAGE>

     (a) the availability of equitable remedies, including without limitation,
     specific enforcement and injunctive relief, is subject to the discretion of
     the court before which any proceedings therefor may be brought; and

     (b) the enforceability of certain terms provided in the Note Purchase
     Agreement and the Notes may be limited by

          (i) applicable bankruptcy, reorganization, arrangement, insolvency,
          moratorium or similar laws affecting the enforcement of creditors'
          rights generally as at the time in effect, and

          (ii) common law or statutory requirements with respect to commercial
          reasonableness.

     We express no opinion as to the law of any jurisdiction other than the law
of New York, United States federal law and, in reliance on the opinion of
Gardere Wynne Sewell & Riggs, the law of Delaware and Texas. Gardere Wynne
Sewell & Riggs may rely on this opinion for the sole purpose of rendering their
opinion to be rendered pursuant to Section 4.4(a) of the Note Purchase
Agreement.

     Subsequent holders of the Notes may rely on this opinion as if it were
addressed to them.

                                            Very truly yours,

<PAGE>

                                     ANNEX 1
                                   Addressees

Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392

Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA  01111

John Alden Life Insurance Company
P.O. Box 020270 - 3rd Floor
Miami, Florida 33102-0270

John Alden Life Insurance Company of New York
P.O. Box 020270 - 3rd Floor
Miami, Florida 33102-0270

The Mutual Life Insurance Company of New York
1740 Broadway
New York, NY 10019

MONY Life Insurance Company of America
1740 Broadway
New York, NY 10019

United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Omaha, NE  68175

Pan-American Life Insurance Company
Pan American Life Center
601 Poydras Street
New Orleans, LA  70130

<PAGE>

     4    Paragraphs (b) and (c) would be replaced by the following for the
          second closing:

               [the Company's ____ % Series C Senior Notes due December 30,
               2002, dated the date hereof, in the form set forth in Exhibit 1C
               to the Note Purchase Agreement, and in the principal amounts, and
               with the registration numbers set forth on Schedule A to the Note
               Purchase Agreement (the "Series C Notes")]

     5    Paragraph 2(a) would read as follows for the second closing:

               The Company had the requisite corporate power and authority to
               execute and deliver the Note Purchase Agreement at the time of
               its execution and delivery thereof. The Company has the requisite
               corporate power and authority to execute, deliver, issue and sell
               the Series C Notes, and to perform its obligations set forth in
               each of the Note Purchase Agreement and the Series C Notes.

     6    Paragraph 2(b) would read as follows for the second closing:

               Each U.S. Restricted Subsidiary had the requisite corporate power
               and authority to execute and deliver the Subsidiary Guaranty at
               the time of its execution and delivery thereof. Each U.S.
               Restricted Subsidiary has the requisite corporate power and
               authority to perform its obligations set forth in the Subsidiary
               Guaranty.

     7    For the second closing, reference would be made to the Series C Notes
          in this paragraph in lieu of the Series A Notes and the Series B
          Notes.

     8    Paragraph 4(a) would read as follows for the second closing:

               The execution and delivery of the Note Purchase Agreement, the
               Series A Notes and the Series B Notes by the Company did not, and
               the execution, delivery, issue and sale of the Series C Notes by
               the Company and the performance by the Company of its obligations
               under the Note Purchase Agreement and the Notes will not,
               conflict with, constitute a violation of, result in a breach of
               any provision of, constitute a default under, or result in the
               creation or imposition of any Lien or encumbrance upon any of the
               property of the Company pursuant to, the certificate of
               incorporation or by-laws of the Company.

     9    Paragraph 4(b) would read as follows for the second closing:

               The execution and delivery of the Subsidiary Guaranty by each
               U.S. Restricted Subsidiary did not, and the performance by each
               U.S. Restricted Subsidiary of its obligations thereunder will
               not, conflict with, constitute a violation of, result in a breach
               of any provision of, constitute a default under, or result in the
               creation or imposition of any Lien or encumbrance upon any of the
               property of such U.S. Restricted Subsidiary pursuant to, the
               certificate of incorporation or by-laws of such U.S. Restricted
               Subsidiary.

     10   For the second closing, reference would be made to the Series C Notes
          in this paragraph in lieu of the Series A Notes and the Series B
          Notes.

     11   For the second closing, reference would be made to the Series C Notes
          in this paragraph in lieu of the Series A Notes and the Series B
          Notes.

<PAGE>

                                                                    EXHIBIT 4.10

                           FORM OF SUBSIDIARY GUARANTY

                                    GUARANTY

     THIS GUARANTY, dated as of December 28, 1995 (as amended or restated from
time to time, this "Guaranty"), by SEITEL DATA CORP., a Delaware corporation
(together with its successors and assigns, "SDC"), SEITEL GEOPHYSICAL, INC., a
Delaware corporation (together with its successors and assigns, "SG"), DDD
ENERGY, INC., a Delaware corporation (together with its successors and assigns,
"DDD"), SEITEL GAS & ENERGY CORP., a Delaware corporation (together with its
successors and assigns, "SG&E"), SEITEL POWER CORP., a Delaware corporation
(together with its successors and assigns, "SPC"), SEITEL NATURAL GAS, INC., a
Delaware corporation (together with its successors and assigns, "SNG"), MATRIX
GEOPHYSICAL, INC., a Delaware corporation (together with its successors and
assigns, "MG"), EXSOL, INC., a Delaware corporation (together with its
successors and assigns, "EXSOL"), DATATEL, INC., a Delaware corporation
(together with its successors and assigns, "DATATEL"), SEITEL OFFSHORE CORP., a
Delaware corporation (together with its successors and assigns, "SOC"), POLYMER
DYNAMICS, INC., a Delaware corporation (together with its successors and
assigns, "PD"), SEITEL INTERNATIONAL, INC., a Cayman Islands corporation
(together with its successors and assigns, "SI"), AFRICAN GEOPHYSICAL, INC., a
Cayman Islands corporation (together with its successors and assigns, "AG"),
GEO-BANK, INC., a Texas corporation (together with its successors and assigns,
"GB"), and ALTERNATIVE COMMUNICATION ENTERPRISES, INC., a Texas corporation
(together with its successors and assigns, "ACE" and ACE, SDC, SG, DDD, SG&E,
SPC, SNG, MG, Exsol, Datatel, SOC, PD, SI, AG and GB, and each other corporation
which becomes a party hereto, each a "Guarantor" and, collectively, the
"Guarantors"), in favor of each of the Noteholders (as such term is hereinafter
defined).

     1.   PRELIMINARY STATEMENT.

     1.1  SEITEL, INC. (together with its successors and assigns, the
"Company"), a Delaware corporation, has authorized the issuance of (i) its
Series A Senior Notes due December 30, 2001 (as may be amended or restated from
time to time, the "Series A Notes"), in the aggregate principal amount of
Twenty-Five Million Dollars ($25,000,000), (ii) its Series B Senior Notes due
December 30, 2002 (as may be amended or restated from time to time, the "Series
B Notes,"), in the aggregate principal amount of Twenty-Seven Million Five
Hundred Thousand Dollars ($27,500,000), and (iii) its Series C Senior Notes due
December 30, 2002 (as may be amended or restated from time to time, the "Series
C Notes," and, together with the Series A Notes and the Series B Notes, the
"Notes"), in the aggregate principal amount of Twenty-Two Million Five Hundred
Thousand Dollars ($22,500,000), pursuant to those certain Note Purchase
Agreements (collectively, as may be amended or restated from time to time, the
"Note Purchase Agreement"), each dated as of December 28, 1995, entered into
separately between the Company and, respectively, each of the purchasers of the
Notes named on Schedule A to the Note Purchase Agreement (the "Purchasers").

<PAGE>

     1.2  In order to induce the Purchasers to purchase the Notes, the Company
has agreed, pursuant to the Note Purchase Agreement, that the Restricted
Subsidiaries (including each of the Guarantors) will be required to jointly and
severally guaranty unconditionally all of the obligations of the Company under
and in respect of the Notes and the Note Purchase Agreement pursuant to the
terms and provisions hereof.

     1.3  Each Guarantor will receive direct and indirect economic, financial
and other benefits from the indebtedness incurred under the Note Purchase
Agreement and the Notes by the Company, and under this Guaranty, and the
incurrence of such indebtedness is in the best interests of each Guarantor. The
Company and the Guarantors have explicitly induced the Purchasers to purchase
the Notes based upon and in reliance upon the consolidated financial condition
of the Company and its subsidiaries, including the Guarantors.

     1.4  All acts and proceedings required by law and by the certificate or
articles of incorporation, as the case may be, and by-laws of each Guarantor
necessary to constitute this Guaranty a valid and binding agreement for the uses
and purposes set forth herein in accordance with its terms have been done and
taken, and the execution and delivery hereof has been in all respects duly
authorized.

     2.   GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS

     2.1  Guarantied Obligations.

     Each Guarantor, in consideration of the execution and delivery of the Note
Purchase Agreement and the purchase of the Notes by the Purchasers, hereby
irrevocably, unconditionally, absolutely, jointly and severally guarantees, on a
continuing basis, to each Noteholder, as and for the Guarantor's own debt, until
final and indefeasible payment has been made:

          (a) the due and punctual payment by the Company of the principal of,
     and interest, and the Make-Whole Amount (if any) on, the Notes at any time
     outstanding and the due and punctual payment of all other amounts payable,
     and all other indebtedness owing, by the Company to the Noteholders under
     the Note Purchase Agreement and the Notes, in each case when and as the
     same shall become due and payable, whether at maturity, pursuant to
     mandatory or optional prepayment, by acceleration or otherwise, all in
     accordance with the terms and provisions hereof and thereof; it being the
     intent of the Guarantors that the guaranty set forth herein shall be a
     continuing guaranty of payment and not a guaranty of collection; and

          (b) the punctual and faithful performance, keeping, observance, and
     fulfillment by the Company of all duties, agreements, covenants and
     obligations of the Company contained in the Note Purchase Agreement and the
     Notes.

All of the obligations set forth in subsection (a) and subsection (b) of this
Section 2.1 are referred to herein as the "Guarantied Obligations" and the
guaranty thereof contained herein is a primary, original and immediate
obligation of each Guarantor and is an absolute, unconditional, continuing and
irrevocable guaranty of payment and performance and shall remain in full force
and effect until the full, final and indefeasible payment of the Guarantied
Obligations.

<PAGE>

     2.2  Performance Under the Note Purchase Agreement.

     In the event the Company fails to pay, perform, keep, observe, or fulfill
any Guarantied Obligation in the manner provided in the Notes or in the Note
Purchase Agreement, the Guarantors shall cause forthwith to be paid the moneys,
or to be performed, kept, observed, or fulfilled each of such obligations, in
respect of which such failure has occurred in accordance with the terms and
provisions of the Note Purchase Agreement and the Notes. In furtherance of the
foregoing, if an Event of Default shall exist, all of the Guarantied Obligations
shall, in the manner and subject to the limitations provided in the Note
Purchase Agreement for the acceleration of the Notes, forthwith become due and
payable without notice, regardless of whether the acceleration of the Notes
shall be stayed, enjoined, delayed or otherwise prevented.

     2.3  Undertakings in Note Purchase Agreement.

     The Guarantors will comply with each of the undertakings of the Company in
the Note Purchase Agreement in respect of which the Company undertakes to cause
the Guarantors (in their capacities, respectively, as a Guarantor and as a
Restricted Subsidiary) to comply with such undertakings, as if such undertakings
(as they apply to the Guarantors) were set forth at length herein as the
undertakings of the Guarantors.

     2.4  Releases.

     Each Guarantor consents and agrees that, without any notice whatsoever to
or by such Guarantor and without impairing, releasing, abating, deferring,
suspending, reducing, terminating or otherwise affecting the obligations of such
Guarantor hereunder, each Noteholder, by action or inaction, may:

          (a) compromise or settle, renew or extend the period of duration or
     the time for the payment, or discharge the performance of, or may refuse
     to, or otherwise not, enforce, or may, by action or inaction, release all
     or any one or more parties to, any one or more of the Notes, the Note
     Purchase Agreement, any other guaranty or agreement or instrument related
     thereto or hereto;

          (b) assign, sell or transfer, or otherwise dispose of, any one or more
     of the Notes;

          (c) grant waivers, extensions, consents and other indulgences of any
     kind whatsoever to the Company or any Other Guarantor in respect of any one
     or more of the Notes, the Note Purchase Agreement, any other guaranty or
     any agreement or instrument related thereto or hereto;

          (d) amend, modify or supplement in any manner whatsoever and at any
     time (or from time to time) any one or more of the Notes, the Note Purchase
     Agreement, any other guaranty or any agreement or instrument related
     hereto;

          (e) release or substitute any one or more of the endorsers or
     guarantors of the Guarantied Obligations whether parties hereto or not; and

<PAGE>

          (f) sell, exchange, release, surrender or enforce, by action or
     inaction, any property at any time pledged or granted as security in
     respect of the Guarantied Obligations, whether so pledged or granted by the
     Company, such Guarantor or any Other Guarantor, or pursuant to any other
     guaranty or any agreement or instrument related hereto.

     2.5  Waivers.

          To the fullest extent permitted by law, each Guarantor does hereby
     waive:

               (a)  any notice of

                     (i)   acceptance of this Guaranty;

                     (ii)  any purchase of the Notes under the Note Purchase
               Agreement, or the creation, existence or acquisition of any of
               the Guarantied Obligations, or the amount of the Guarantied
               Obligations, subject to such Guarantor's right to make inquiry of
               each Noteholder to ascertain the amount of the Guarantied
               Obligations owing to such Noteholder at any reasonable time,
               provided that such Guarantor will look solely to the Company for
               the determination of the identities of the Noteholders;

                     (iii) any transfer of Notes from one Noteholder to another;

                     (iv)  any adverse change in the financial condition of the
               Company or any other fact that might increase, expand or affect
               such Guarantor's risk hereunder;

                     (v)   presentment for payment, demand, protest, and notice
               thereof as to the Notes or any other instrument;

                     (vi)  any Default or Event of Default; and

                     (vii) any kind or nature whatsoever to which such Guarantor
               might otherwise be entitled other than those specifically
               required to be given to such Guarantor pursuant to the terms of
               this Guaranty);

               (b) the right by statute or otherwise to require any Noteholder
          to institute suit against the Company or any Other Guarantor or to
          exhaust the rights and remedies of any Noteholder against the Company
          or any Other Guarantor;

               (c) the benefit of any stay (except in connection with a pending
          appeal), valuation, appraisal, redemption or extension law now or at
          any time hereafter in force which, but for this waiver, might be
          applicable to any sale of property of the Guarantor made under any
          judgment, order or decree based on this Guaranty, and the Guarantor
          covenants that it will not at any time insist upon or plead, or in any
          manner claim or take the benefit or advantage of such law;

<PAGE>

               (d) any defense or objection to the absolute, primary, continuing
          nature, or the validity or enforceability of, or the amount guaranteed
          pursuant to, this Guaranty, including, without limitation, any defense
          based on (and the primary, continuing nature, and the validity,
          enforceability and amount, of this Guaranty shall be unaffected by),
          any of the following:

                     (i)     any change in future conditions;

                     (ii)    any change of law;

                     (iii)   any invalidity or irregularity with respect to the
               issuance or assumption of any obligations (including, without
               limitation, the Note Purchase Agreement, the Notes or any
               agreement or instrument related hereto) by the Company or any
               other Person;

                     (iv)    the execution and delivery of any agreement at any
               time hereafter (including, without limitation, the Note Purchase
               Agreement, the Notes or any agreement or instrument related
               hereto) by the Company or any other Person;

                     (v)     the genuineness, validity, regularity or
               enforceability of any of the Guarantied Obligations;

                     (vi)    any default, failure or delay, willful or
               otherwise, in the performance of any obligations by the Company
               or such Guarantor;

                     (vii)   any creditors' rights, bankruptcy, receivership or
               other insolvency proceeding of the Company or such Guarantor, or
               sequestration or seizure of any property of the Company or such
               Guarantor, or any merger, consolidation, reorganization,
               dissolution, liquidation or winding up or change in corporate
               constitution or corporate identity or loss of corporate identity
               of the Company or such Guarantor;

                     (viii)  any disability or other defense of the Company or
               such Guarantor to payment and performance of all Guarantied
               Obligations other than the defense that the Guarantied
               Obligations shall have been fully and finally performed and
               indefeasibly paid;

                     (ix)    the cessation from any cause whatsoever of the
               liability of the Company or such Guarantor in respect of the
               Guarantied Obligations;

                     (x)     impossibility or illegality of performance on the
               part of the Company or such Guarantor under the Note Purchase
               Agreement, the Notes or this Guaranty;

<PAGE>

                     (xi)    any change of the circumstances of the Company,
               such Guarantor or any other Person, whether or not foreseen or
               foreseeable, whether or not imputable to the Company or such
               Guarantor, including, without limitation, impossibility of
               performance through fire, explosion, accident, labor disturbance,
               floods, droughts, embargoes, wars (whether or not declared),
               civil commotions, acts of God or the public enemy, delays or
               failure of suppliers or carriers, inability to obtain materials,
               economic or political conditions, or any other causes affecting
               performance, or any other force majeure, whether or not beyond
               the control of the Company or such Guarantor and whether or not
               of the kind hereinbefore specified;

                     (xii)   any attachment, claim, demand, charge, Lien, order,
               process, encumbrance or any other happening or event or reason,
               similar or dissimilar to the foregoing, or any withholding or
               diminution at the source, by reason of any taxes, assessments,
               expenses, indebtedness, obligations or liabilities of any
               character, foreseen or unforeseen, and whether or not valid,
               incurred by or against any Person, or any claims, demands,
               charges or Liens of any nature, foreseen or unforeseen, incurred
               by any Person, or against any sums payable under the Note
               Purchase Agreement or the Notes or any agreement or instrument
               related hereto so that such sums would be rendered inadequate or
               would be unavailable to make the payment as herein provided;

                     (xiii)  any change in the ownership of the equity
               securities of the Company, such Guarantor or any other Person
               liable in respect of the Notes; or

                     (xiv)   any other action, happening, event or reason
               whatsoever that shall delay, interfere with, hinder or prevent,
               or in any way adversely affect, the performance by the Company or
               such Guarantor of any of its obligations under the Note Purchase
               Agreement, the Notes or this Guaranty.

     2.6  Waivers of Subrogation, Reimbursement and Indemnity.

     No Guarantor shall have any right of subrogation, reimbursement or
indemnity whatsoever in respect of the Guarantied Obligations, or any right of
recourse to or with respect to any assets or property of the Company.

     2.7  Invalid Payments.

     To the extent the Company makes a payment or payments to any Noteholder,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required, for any of the
foregoing reasons or for any other reason, to be repaid or paid over to a
custodian, trustee, receiver or any other party or officer under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, state or federal law, or any common law or
equitable cause, then to the extent of such payment or repayment, the obligation
or part thereof intended to be satisfied shall be revived and continued in full
force and effect as if said payment had not been made and each Guarantor shall
be primarily liable for such obligation.

<PAGE>

     2.8  Marshaling.

     Neither any Noteholder nor any Person acting for the benefit of any
Noteholder shall be under any obligation to marshal any assets in favor of any
Guarantor or against or in payment of any or all of the Guarantied Obligations.

     2.9  Setoff, Counterclaim or Other Deductions.

     Except as otherwise required by law, each payment by any Guarantor shall be
made without setoff, counterclaim or other deduction.

     2.10 Election by Guarantors to Perform Obligations.

     Any election by the Guarantor to pay or otherwise perform any of the
obligations of the Company under the Notes, the Note Purchase Agreement or any
agreement or instrument related hereto shall not release the Company, the
Guarantor or any Other Guarantor from such obligations or any of such Person's
other obligations under the Notes, the Note Purchase Agreement or any agreement
or instrument related hereto.

     2.11 No Election of Remedies by Noteholders.

     To the extent provided in the Note Purchase Agreement, each Noteholder
shall, individually or collectively, have the right to seek recourse against
each Guarantor to the fullest extent provided for herein for such Guarantor's
obligations under this Guaranty in respect of the Guarantied Obligations. No
election to proceed in one form of action or proceeding, or against any party,
or on any obligation, shall constitute a waiver of such Noteholder's right to
proceed in any other form of action or proceeding or against other parties
(including, without limitation, any Other Guarantor) unless such Noteholder has
expressly waived such right in writing. Specifically, but without limiting the
generality of the foregoing, no action or proceeding by any Noteholder against
the Company or any Guarantor under any document or instrument evidencing
obligations of the Company or such Guarantor to such Noteholder shall serve to
diminish the liability of such Guarantor under this Guaranty, except to the
extent that such Noteholder finally and unconditionally shall have realized
payment by such action or proceeding in respect of the Guarantied Obligations.

     2.12 Separate Action; Other Enforcement Rights.

     Each of the rights and remedies granted under this Guaranty to each
Noteholder in respect of the Notes held by such Noteholder may be exercised by
such Noteholder without notice by such Noteholder to, or the consent of or any
other action by, any other Noteholder. Each Noteholder may proceed to protect
and enforce this Guaranty by suit or suits or proceedings in equity, at law or
in bankruptcy, and whether for the specific performance of any covenant or
agreement contained herein or in execution or aid of any power herein granted or
for the recovery of judgment for the obligations hereby guarantied or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.

     2.13 Noteholder Setoff.

     Each Noteholder shall have, to the fullest extent permitted by law and this
Guaranty, a right of set-off against any and all credits and any and all other
property of each or all of the Guarantors, now or at any time whatsoever, with
or in the possession of, such Noteholder, or anyone acting for such Noteholder,
to ensure the full performance of any and all obligations of the Guarantors
hereunder.

<PAGE>

     2.14 Delay or Omission; No Waiver.

     No course of dealing on the part of any Noteholder and no delay or failure
on the part of any such Person to exercise any right hereunder shall impair such
right or operate as a waiver of such right or otherwise prejudice such Person's
rights, powers and remedies hereunder. Every right and remedy given by this
Guaranty or by law to any Noteholder may be exercised from time to time as often
as may be deemed expedient by such Person.

     2.15 Restoration of Rights and Remedies.

     If any Noteholder shall have instituted any proceeding to enforce any right
or remedy under this Guaranty or under any Note held by such Noteholder, and
such proceeding shall have been dismissed, discontinued or abandoned for any
reason, or shall have been determined adversely to such Noteholder, then and in
every such case each such Noteholder, the Company and each Guarantor shall,
except as may be limited or affected by any determination (including, without
limitation, any determination in connection with any such dismissal) in such
proceeding, be restored severally and respectively to its respective former
positions hereunder and thereunder, and thereafter, subject as aforesaid, the
rights and remedies of such Noteholders shall continue as though no such
proceeding had been instituted.

     2.16 Cumulative Remedies.

     No remedy under this Guaranty, the Note Purchase Agreement or the Notes is
intended to be exclusive of any other remedy, but each and every remedy shall be
cumulative and in addition to any and every other remedy given pursuant to this
Guaranty, the Note Purchase Agreement or the Notes.

     2.17 Limitation on Guarantied Obligations.

     It is the intention of each Guarantor and each Noteholder that the maximum
amount of the obligations of any Guarantor hereunder shall be equal to, but not
in excess of, the amount equal to the lesser of

     (a) the Guarantied Obligations, and

     (b) the maximum amount permitted by applicable law.

To that end, with respect to the determination of the "maximum amount permitted
by applicable law," but only to the extent such obligations would otherwise be
avoidable, the obligations of each Guarantor hereunder shall be limited to the
maximum amount that, after giving effect to the incurrence thereof, would not
render such Guarantor insolvent or unable to pay its debts (within the meaning
of Title 11 of the United States Code or as defined in the analogous applicable
law) as they mature or leave such Guarantor with an unreasonably small capital.
The need for any such limitation shall be determined, and any such needed
limitation shall be effective, at the time or times that such Guarantor is
deemed, under applicable law, to incur obligations hereunder. Any such
limitation shall be apportioned among the Guarantied Obligations owed to the
Noteholders pro rata. This Section 2.17 is intended solely to preserve the
rights of each Noteholder hereunder to the maximum extent permitted by
applicable law, and neither the Guarantors nor any other Person shall have any
rights under this Section 2.17 that it would not otherwise have under applicable
law. For the purposes of this Section 2.17, "insolvency", "unreasonably small
capital" and "inability to pay debts (as so defined) as they mature" shall be
determined in accordance with applicable law.

<PAGE>

     2.18 Maintenance of Offices.

     The Guarantors will maintain an office at the address set forth in Section
5.3 where notices, presentations and demands in respect of this Guaranty may be
made upon them. Such office will be maintained at such address until such time
as any Guarantor shall notify the Noteholders of any change of location of such
office.

     2.19 Further Assurances.

     Each Guarantor will cooperate with the Noteholders and execute such further
instruments and documents as the Required Holders shall reasonably request to
carry out, to the reasonable satisfaction of the Required Holders, the
transactions contemplated by the Note Purchase Agreements, the Notes, this
Guaranty and the documents and instruments related thereto.

     2.20 Pari Passu.

     Each Guarantor covenants that its obligations under this Guaranty do and
will rank at least pari passu with all its other present and future unsecured
Senior Debt.

3.   INTERPRETATION OF THIS GUARANTY

     3.1  Terms Defined.

     As used in this Guaranty, the capitalized terms have the meaning specified
in the Note Purchase Agreement unless otherwise specified below or set forth in
the section of this Guaranty referred to immediately following such term (such
definitions, unless otherwise expressly provided, to be equally applicable to
both the singular and plural forms of the terms defined):

     AC&E -- has the meaning assigned to such term in the first paragraph
hereof.

     AG -- has the meaning assigned to such term in the first paragraph hereof.

     Company -- Section 1.1.

     Datatel -- has the meaning assigned to such term in the first paragraph
hereof.

     DDD -- has the meaning assigned to such term in the first paragraph hereof.

     Debt -- has the meaning assigned to such term in the Note Purchase
Agreement.

     Exsol -- has the meaning assigned to such term in the first paragraph
hereof.

<PAGE>

     GB -- has the meaning assigned to such term in the first paragraph hereof.

     Guarantied Obligations -- Section 2.1.

     Guarantor -- has the meaning assigned to such term in the first paragraph
hereof.

     Guaranty, this -- has the meaning assigned to such term in the first
paragraph hereof.

     MG -- has the meaning assigned to such term in the first paragraph hereof.

     Note Purchase Agreement -- Section 1.1.

     Noteholder -- means, at any time, each Person that is the holder of any
Note at such time.

     Notes -- Section 1.1.

     Other Guarantors -- means, at any time with respect to any Guarantor, each
other Guarantor and all other guarantors of the Company's obligations under the
Note Purchase Agreement and the Notes at such time.

     PD -- has the meaning assigned to such term in the first paragraph hereof.

     Purchasers -- Section 1.1.

     SDC -- has the meaning assigned to such term in the first paragraph hereof.

     Senior Debt -- means, with respect to any Guarantor, any Debt of such
Guarantor that is not in any manner subordinated in right of payment or security
in any respect to the Debt evidenced by this Guaranty or to any other Debt of
such Guarantor.

     Series A Notes -- Section 1.1.

     Series B Notes -- Section 1.1.

     Series C Notes -- Section 1.1.

     SG -- has the meaning assigned to such term in the first paragraph hereof.

     SG&E -- has the meaning assigned to such term in the first paragraph
hereof.

     SI -- has the meaning assigned to such term in the first paragraph hereof.

     SNG -- has the meaning assigned to such term in the first paragraph hereof.

     SOC -- has the meaning assigned to such term in the first paragraph hereof.

     SPC -- has the meaning assigned to such term in the first paragraph hereof.

<PAGE>

     3.2  Section Headings and Construction.

          (a) Section Headings, etc. The titles of the Sections appear as a
     matter of convenience only, do not constitute a part hereof and shall not
     affect the construction hereof. The words "herein," "hereof," "hereunder"
     and "hereto" refer to this Guaranty as a whole and not to any particular
     Section or other subdivision.

          (b) Construction. Each covenant contained herein shall be construed
     (absent an express contrary provision herein) as being independent of each
     other covenant contained herein, and compliance with any one covenant shall
     not (absent such an express contrary provision) be deemed to excuse
     compliance with one or more other covenants.

4.   WARRANTIES AND REPRESENTATIONS

     Each Guarantor represents and warrants to each Purchaser, as of the date of
effectiveness hereof, as follows:

     4.1  Generally.

          (a) Such Guarantor is fully aware of the financial condition of the
     Company. Such Guarantor delivers this Guaranty based solely upon its own
     independent investigation and in no part upon any representation or
     statement of any one or more Noteholders with respect thereto. Such
     Guarantor is in a position to obtain, and hereby assumes full
     responsibility for obtaining, any additional information concerning the
     financial condition of the Company as such Guarantor may deem material to
     its obligations hereunder, and such Guarantor is not relying upon, nor
     expecting, any Noteholder to furnish it any information concerning the
     financial condition of the Company.

          (b) As of the date of the execution and delivery of this Guaranty, the
     fair salable value of the assets of such Guarantor, taken as a whole,
     exceeds its liabilities, taken as a whole; such Guarantor is able to pay
     and discharge all of its debts (including, without limitation, its current
     liabilities) as they become due and after giving effect to the transactions
     contemplated by this Guaranty, such Guarantor will not become unable to pay
     and discharge such debts as they become due; there are no presently pending
     material court or administrative proceedings or undischarged judgments
     against such Guarantor; and no tax liens have been filed or threatened
     against such Guarantor, nor is such Guarantor in default or claimed default
     under any agreement for borrowed money.

          (c) Such Guarantor is a corporation duly organized and validly
     existing and in good standing under the laws of its jurisdiction of
     incorporation. Such Guarantor has the corporate power to own its properties
     and carry on its business as it is now being conducted. Such Guarantor has
     the valid authority and the corporate power to enter into and perform, and
     has taken all necessary action to authorize its entry into, and the
     performance and delivery of, this Guaranty and the transactions
     contemplated hereby.

<PAGE>

          (d) This Guaranty has been duly authorized by all necessary action on
     the part of such Guarantor, has been duly executed and delivered by duly
     authorized officers of such Guarantor, and constitutes a legal, valid and
     binding obligation of such Guarantor.

          (e) The entry into and performance of this Guaranty and the
     transactions contemplated hereby do not and will not conflict with any
     applicable law or regulation or official or judicial order, conflict with
     the articles or certificate of incorporation, as the case may be, or
     by-laws, of such Guarantor, conflict with any agreement or document to
     which such Guarantor is a party or that is binding upon it or any of its
     properties, or result in the creation or imposition of any Lien on any of
     its properties pursuant to the provisions of any agreement or document.

     4.2  Nature of Business of Company and Restricted Subsidiaries.

          The Company and the Restricted Subsidiaries have sought and obtained
     the Note Purchase Agreement, the sale of the Notes and the related
     transactions based upon their consolidated financial position and the
     Company and the Restricted Subsidiaries understand that the Purchasers are
     relying upon the consolidated financial condition of the Company and the
     Restricted Subsidiaries in purchasing the Notes. Nothing herein shall be
     deemed to prohibit any transfer by the Company or any Restricted Subsidiary
     of any of its or a Subsidiary's stock otherwise permitted under the terms
     and provisions of the Note Purchase Agreement.

     4.3  Solvency.

          The fair value of the business and assets of each of the Company and
     the Guarantors exceeds the amount that will be required to pay its
     liabilities (including, without limitation, contingent, subordinated,
     unmatured and unliquidated liabilities on existing debts, as such
     liabilities may become absolute and matured), in each case after giving
     effect to the transactions contemplated by the Note Purchase Agreement, the
     Notes and this Guaranty, including, without limitation, the provisions of
     Section 2.17. None of the Guarantors nor the Company, after giving effect
     to the transactions contemplated by the Note Purchase Agreement, the
     Notes and this Guaranty, will be insolvent or will be engaged in any
     business or transaction, or about to engage in any business or transaction,
     for which such Person has unreasonably small assets or capital (within the
     meaning of the Uniform Fraudulent Transfer Act, the Uniform Fraudulent
     Conveyance Act and Section 548 of Title 11 of the United States Code), and
     none of the Guarantors nor the Company has any intent to hinder, delay or
     defraud any entity to which it is, or will become, on or after the date of
     the Closing, indebted or incur debts that would be beyond its ability to
     pay as they mature.

5.   MISCELLANEOUS

     5.1  Successors and Assigns.

          (a) Whenever any Guarantor or any of the parties to the Note Purchase
     Agreement is referred to, such reference shall be deemed to include the
     successors and assigns of such party, and all the covenants, promises and

<PAGE>

     agreements contained in this Guaranty by or on behalf of such Guarantor
     shall bind the successors and assigns of such Guarantor and shall inure to
     the benefit of each of the Noteholders from time to time whether so
     expressed or not and whether or not an assignment of the rights hereunder
     shall have been delivered in connection with any assignment or other
     transfer of Notes.

          (b) Each Guarantor agrees to take such action as may be reasonably
     requested by any Noteholder to confirm such Guarantor's Guaranty of the
     Guarantied Obligations in connection with the transfer of the Notes of such
     Noteholder.

     5.2  Partial Invalidity.

          The unenforceability or invalidity of any provision or provisions
     hereof shall not render any other provision or provisions contained herein
     unenforceable or invalid.

     5.3  Communications.

          (a)  Method; Address. All communications hereunder shall be in
     writing, shall be delivered in the manner required by the Note Purchase
     Agreement, and shall be addressed, if to the Guarantors, at the address set
     forth on Annex 1 hereto, and if to any of the Noteholders:

               (A) if such Noteholder is a Purchaser, at the address set forth
          on Schedule A to the Note Purchase Agreement for such Noteholder, and
          further including any parties referred to on such Schedule A which are
          required to receive notices in addition to such Noteholder, and

               (B) if such Noteholder is not a Purchaser, at the address set
          forth in the register for the registration and transfer of Notes
          maintained pursuant to Section 13.1 of the Note Purchase Agreement for
          such Noteholder,

         or to any such party at such other address as such party may designate
         by notice duly given in accordance with this Section 5.3.

          (b)  When Given. Any communication addressed and delivered as herein
     provided shall be deemed to be received when actually delivered to the
     address of the addressee (whether or not delivery is accepted) or received
     by the telecopy machine of the recipient. Any communication not so
     addressed and delivered shall be ineffective.

     5.4  Governing Law.

          THIS GUARANTY SHALL BE CONSTRUED, INTERPRETED AND ENFORCED IN
     ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW
     YORK.

     5.5  Effective Date.

          This Guaranty shall be effective as of the date hereof.

<PAGE>

     5.6  Benefits of Guaranty Restricted to Noteholders.

          Nothing express or implied in this Guaranty is intended or shall be
     construed to give to any Person other than the Guarantors and the
     Noteholders any legal or equitable right, remedy or claim under or in
     respect hereof or any covenant, condition or provision therein or herein
     contained, and all such covenants, conditions and provisions are and shall
     be held to be for the sole and exclusive benefit of the Guarantors and the
     Noteholders.

     5.7  Survival of Representations and Warranties; Entire Agreement.

          All representations and warranties contained herein or made in writing
     by the Guarantors in connection herewith shall survive the execution and
     delivery hereof.

     5.8  Expenses.

          (a) The Guarantors shall pay when billed the reasonable costs and
     expenses (including reasonable attorneys' fees) incurred by the Noteholders
     in connection with the consideration, negotiation, preparation or execution
     of any amendments, waivers, consents, standstill agreements and other
     similar agreements with respect hereto (whether or not any such amendments,
     waivers, consents, standstill agreements or other similar agreements are
     executed).

          (b) At any time when any one or more of the Company or the Guarantors
     and the Noteholders are conducting restructuring or workout negotiations in
     respect hereof, or a Default or Event of Default exists, the Guarantors
     shall pay when billed the reasonable costs and expenses (including
     reasonable attorneys' fees and the reasonable fees of professional
     advisors) incurred by the Noteholders in connection with the assessment,
     analysis or enforcement of any rights or remedies that are or may be
     available to the Noteholders.

          (c) If the Guarantors shall fail to pay when due any principal of, or
     Make-Whole Amount or interest on, any Note, the Guarantors shall pay to
     each Noteholder, to the extent permitted by law, such amounts as shall be
     sufficient to cover the costs and expenses, including but not limited to
     reasonable attorneys' fees, incurred by such Noteholder in collecting any
     sums due on such Notes.

     5.9  Amendment.

          This Guaranty may be amended only in a writing executed by the
     Guarantors and the Required Holders.

     5.10 Consent to Jurisdiction; Appointment of Agent.

          (a) Consent to Jurisdiction. EACH GUARANTOR HEREBY IRREVOCABLY AND
     UNCONDITIONALLY AGREES THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
     OR RELATING TO THIS GUARANTY, OR ANY ACTION OR PROCEEDING TO EXECUTE OR
     OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER, BROUGHT
     BY ANY NOTEHOLDER AGAINST SUCH GUARANTOR OR ANY OF ITS PROPERTY, MAY BE
     BROUGHT BY SUCH NOTEHOLDER IN ANY FEDERAL DISTRICT COURT LOCATED IN NEW
     YORK CITY, NEW YORK OR ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY,
     NEW YORK, AS SUCH NOTEHOLDER MAY IN ITS SOLE DISCRETION ELECT, AND BY THE

<PAGE>

     EXECUTION AND DELIVERY OF THIS GUARANTY, SUCH GUARANTOR IRREVOCABLY AND
     UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE IN PERSONAM JURISDICTION OF
     EACH SUCH COURT, AND SUCH GUARANTOR IRREVOCABLY WAIVES AND AGREES NOT TO
     ASSERT IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A
     DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO THE IN PERSONAM
     JURISDICTION OF ANY SUCH COURT. IN ADDITION, SUCH GUARANTOR HEREBY
     IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
     THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT,
     ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY BROUGHT IN
     ANY SUCH COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT,
     ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
     INCONVENIENT FORUM. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE
     ABILITY OR RIGHT OF ANY NOTEHOLDER TO OBTAIN JURISDICTION OVER SUCH
     GUARANTOR IN SUCH OTHER JURISDICTION AS MAY BE PERMITTED BY APPLICABLE LAW.

          (b) Agent for Service of Process. EACH GUARANTOR HEREBY IRREVOCABLY
     AND UNCONDITIONALLY AGREES THAT PROCESS SERVED EITHER PERSONALLY OR BY
     REGISTERED MAIL SHALL CONSTITUTE, TO THE EXTENT PERMITTED BY LAW, ADEQUATE
     SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
     RELATING TO THIS GUARANTY, OR ANY ACTION OR PROCEEDING TO EXECUTE OR
     OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER, BROUGHT
     BY ANY NOTEHOLDER AGAINST SUCH GUARANTOR OR ANY OF ITS PROPERTY. RECEIPT OF
     PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A DELIVERY
     RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY COMMERCIAL
     DELIVERY SERVICE. WITHOUT LIMITING THE FOREGOING, SUCH GUARANTOR HEREBY
     APPOINTS, IN THE CASE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN THE
     COURTS OF OR IN THE STATE OF NEW YORK:

                           CT CORPORATION SYSTEM
                           1633 BROADWAY
                           NEW YORK, NEW YORK 10019

     TO RECEIVE, FOR IT AND ON ITS BEHALF, SERVICE OF PROCESS. EACH GUARANTOR
     SHALL AT ALL TIMES MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN NEW YORK
     CITY, NEW YORK AND MAY FROM TIME TO TIME APPOINT SUCCEEDING AGENTS FOR
     SERVICE OF PROCESS BY NOTIFYING EACH NOTEHOLDER OF SUCH APPOINTMENT, WHICH
     AGENTS SHALL BE ATTORNEYS, OFFICERS OR DIRECTORS OF SUCH GUARANTOR, OR
     CORPORATIONS WHICH IN THE ORDINARY COURSE OF BUSINESS ACT AS AGENTS FOR
     SERVICE OF PROCESS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE
     ABILITY OR RIGHT OF ANY NOTEHOLDER TO SERVE ANY WRITS, PROCESS OR SUMMONSES
     IN ANY MANNER PERMITTED BY APPLICABLE LAW.

<PAGE>

     5.11 Survival.

          So long as the Guarantied Obligations and all payment obligations of
     the Guarantors hereunder shall not have been fully and finally performed
     and indefeasibly paid, the obligations of the Guarantors hereunder shall
     survive the transfer and payment of any Note and the payment in full of all
     the Notes.

     5.12 Entire Agreement.

          This Guaranty Agreement constitutes the final written expression of
     all of the terms hereof and is a complete and exclusive statement of those
     terms.

     5.13 Duplicate Originals, Execution in Counterpart.

          Two or more duplicate originals hereof may be signed by the parties,
     each of which shall be an original but all of which together shall
     constitute one and the same instrument. This Guaranty may be executed in
     one or more counterparts and shall be effective as to each party hereto
     when at least one counterpart shall have been executed by such party, and
     each set of counterparts that, collectively, show execution by each party
     hereto shall constitute one duplicate original.

     5.14 Additional Guarantors.

          In addition to SDC, SG, DDD, SG&E, SPC, SNG, MG, Exsol, Datatel, SOC,
     PD, SI, GB and AC&E, other Restricted Subsidiaries may become Guarantors
     hereunder in accordance with the terms of the Note Purchase Agreement, by
     execution of the form of Joinder Agreement attached hereto as Annex 2.

     5.15 Release of Guarantors.

          Without any action required of any Noteholder but subject to Section
     2.7, any Guarantor shall be released from its obligations under this
     Guaranty upon

               (a)  the designation of such Guarantor as an Unrestricted
          Subsidiary by the Company pursuant to the provisions of the Note
          Purchase Agreement, or

               (b)  the disposition of such Guarantor pursuant to the Section
          10.5 or Section 10.6 of the Note Purchase Agreement,

     provided that immediately after giving effect to such designation or
     disposition, as the case may be, no Default or Event of Default under the
     Note Purchase Agreement would exist. The Noteholders shall, at the expense
     of the Company or said Guarantor, execute and deliver such documents as may
     be reasonably necessary to evidence such release.

                         [Next page is signature page.]

<PAGE>

          IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
     executed on its behalf by one of its duly authorized officers.

                                  SEITEL DATA CORP.

                                  By

                                      Name:

                                      Title:

                                  SEITEL GEOPHYSICAL, INC.

                                  By

                                      Name:

                                      Title:

                                  DDD ENERGY, INC.

                                  By

                                      Name:

                                      Title:

                                  SEITEL GAS & ENERGY CORP.

                                  By

                                      Name:

                                      Title:

<PAGE>

                                  SEITEL POWER CORP.

                                  By

                                      Name:

                                      Title:

                                  SEITEL NATURAL GAS, INC.

                                  By

                                      Name:

                                      Title:

                                  MATRIX GEOPHYSICAL, INC.

                                  By

                                      Name:

                                      Title:

                                  EXSOL, INC.

                                  By

                                      Name:

                                      Title:

<PAGE>

                                  DATATEL, INC.

                                  By

                                      Name:

                                      Title:

                                  SEITEL OFFSHORE CORP.

                                  By

                                      Name:

                                      Title:

                                  POLYMER DYNAMICS, INC.

                                  By

                                      Name:

                                      Title:

                                  SEITEL INTERNATIONAL, INC.

                                  By

                                      Name:

                                      Title:

<PAGE>

                                  AFRICAN GEOPHYSICAL, INC.

                                  By

                                      Name:

                                      Title:

                                  GEO-BANK, INC.

                                  By

                                      Name:

                                      Title:

                                  ALTERNATIVE COMMUNICATION
                                  ENTERPRISES, INC.

                                  By

                                      Name:

                                      Title:

<PAGE>

                                     Annex 1

                              Address of Guarantors

The Address of each Guarantor is:

     50 Briar Hollow Lane
     West Building, 7th Floor
     Houston, Texas 77027

<PAGE>

                                     Annex 2

                           [FORM OF JOINDER AGREEMENT]

                                                                          [DATE]

To each of the Noteholders (as defined in the Guaranty
          Agreement hereinafter referred to)

Ladies and Gentlemen:

     Reference is made to the Guaranty dated as of December 28, 1995 (as amended
or restated from time to time, the "Guaranty"), among SEITEL DATA CORP., a
Delaware corporation (together with its successors and assigns, "SDC"), SEITEL
GEOPHYSICAL, INC., a Delaware corporation (together with its successors and
assigns, "SG"), DDD ENERGY, INC., a Delaware corporation (together with its
successors and assigns, "DDD"), and SEITEL GAS & ENERGY CORP., a Delaware
corporation (together with its successors and assigns, "SG&E"), SEITEL POWER
CORP., a Delaware corporation (together with its successors and assigns, "SPC"),
SEITEL NATURAL GAS, INC., a Delaware corporation (together with its successors
and assigns, "SNG"), MATRIX GEOPHYSICAL, INC., a Delaware corporation (together
with its successors and assigns, "MG"), EXSOL, INC., a Delaware corporation
(together with its successors and assigns, "EXSOL"), DATATEL, INC., a Delaware
corporation (together with its successors and assigns, "DATATEL"), SEITEL
OFFSHORE CORP., a Delaware corporation (together with its successors and
assigns, "SOC"), POLYMER DYNAMICS, INC., a Delaware corporation (together with
its successors and assigns, "PD"), SEITEL INTERNATIONAL, INC., a Cayman Islands
corporation (together with its successors and assigns, "SI"), AFRICAN
GEOPHYSICAL, INC., a Cayman Islands corporation (together with its successors
and assigns, "AG"), GEO-BANK, INC., a Texas corporation (together with its
successors and assigns, "GB"), and ALTERNATIVE COMMUNICATION ENTERPRISES, INC.,
a Texas corporation (together with its successors and assigns, "ACE" and ACE,
SDC, SG, DDD, SG&E, SPC, SNG, MG, Exsol, Datatel, SOC, PD, SI, AG and GB, and
each other corporation which becomes a party hereto, each a "Guarantor" and,
collectively, the "Guarantors"), in favor of each of the Noteholders (as defined
in the Guaranty). Capitalized terms used herein and not otherwise defined have
the meanings ascribed to such terms in the Guaranty.

     [NEW GUARANTOR], a [jurisdiction of incorporation] corporation (the
"Company"), agrees with you as follows:

     1.   Guaranty. The Company hereby unconditionally and expressly agrees to
become a party to the Guaranty and to perform and observe each and every one of
the covenants, agreements, terms, conditions, obligations, duties and
liabilities of a Guarantor thereunder, and that all references to the Guarantors
in the Guaranty or any document, instrument or agreement executed and delivered
or furnished, or to be executed and delivered or furnished, in connection
therewith shall be deemed to be references which include the Company, as a
Guarantor.

<PAGE>

     2.   Warranties and Representations. The Company hereby warrants and
represents that each of the warranties and representations set forth in Sections
4.1 through 4.3, inclusive, of the Guaranty, are true and correct with respect
to the Company as of the date hereof and such warranties and representations are
incorporated by reference herein in their entirety. Such representations and
warranties shall survive the execution and delivery hereof.

     3.   Further Assurances. The Company agrees to cooperate with the
Noteholders and execute such further instruments and documents as the Required
Holders shall reasonably request to effect, to the reasonable satisfaction of
the Required Holders, the purposes of this Agreement.

     4.   Amendment. This Agreement may be amended only in a writing executed by
the Company and the Required Holders.

     5.   Binding Effect. This Agreement shall be binding upon the Company and
shall inure to the benefit of the Noteholders and their respective successors
and assigns.

     6.   Governing Law; Submission to Jurisdiction; Agent for Service of
Process. This Agreement shall be construed, interpreted and enforced in
accordance with, and governed by, the internal laws of the State of New York.
The provisions of Section 5.10 of the Guaranty shall apply to this Agreement as
if each reference to "this Guaranty" therein was a reference to this Agreement.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by one of its duly authorized officers.

                                                  [NEW GUARANTOR]

                                                  By

                                                      Name:

                                                      Title:

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