Document:

AMENDMENT #3 TO THE THIRD RESTATED AND AMENDED LOAN AND SECURITY AGREEMENT

February 11, 2005

JACO ELECTRONICS, INC. ("Jaco")
145 Oser Avenue
Hauppauge, NY  11778

NEXUS CUSTOM ELECTRONICS, INC. ("Nexus")
Prospect Street
Brandon, VT.

INTERFACE ELECTRONICS, INC. ("Interface")
124 Grove Street
Franklin, MA 02028

Gentlemen:

      Reference is made to the Third Restated and Amended Loan and Security
Agreement in effect between GMAC Commercial Finance LLC, as successor by merger
to GMAC Commercial Credit LLC, which was the successor in interest to BNY
Financial Corporation ("GMAC CF"), as Agent and Lender, and PNC Bank, National
Association ("PNC") as Lender and Co-Agent, Jaco, Nexus, Interface and Jaco de
Mexico, Inc., dated December 22, 2003 ( as restated, supplemented, extended,
renewed, amended and otherwise modified from time to time, the "Agreement").
Reference is also made to Amendment #1 to the Agreement, dated September 20,
2004, and to Amendment # 2 to the Agreement, dated November 23, 2004 (together,
the "Amendments"). Both GMAC CF and PNC may hereafter be referred to jointly as
the "Lenders", and individually, as a "Lender" and GMAC CF may also be herein
referred to as "Agent" when acting in such capacity, as the case may be, and PNC
may also herein be referred as "Co-Agent" when acting in such capacity, as the
case may be. Each capitalized term herein not otherwise defined herein shall
have the meanings ascribed to such term in the Agreement. Jaco, Nexus and
Interface may hereinafter and in the Agreement, be referred to jointly and
severally as "Borrowers", and each individually as a "Borrower".

               It is hereby agreed, among the parties to the Agreement, that the
Agreement, as heretofore amended, is hereby further amended as follows,
effective as of the date hereof:

              1.Definitions. (a) Section 1.2 of the Agreement (General Terms) is
hereby amended by the addition thereto of the following defined terms:

                  "Initial Sales Projection" shall mean, with respect to any
     given week, the sales projected for such week in the first Weekly Forecast,
     as defined below, in which sales projections for such week appear.

                   "Market Value" shall mean, with respect to any Marketable
     Security, as of any given day, the closing price therefor on the
     immediately preceding Business Day published in the Wall Street Journal or
     any other publicly available reliable quotation source (such as Yahoo
     Finance)."

                   "Marketable Securities" shall mean publicly traded
     securities, solely to the extent and for so long as (i) such securities are
     wholly owned beneficially by Jaco, (ii) such securities may be transferred
<PAGE>

     or otherwise disposed of by Agent in accordance with the terms hereof
     without restriction, (iii) current prices for such securities are published
     on each Business Day in the Wall Street Journal or in any other publicly
     available and reliable quotation service such as Yahoo Finance, and (iv)
     such securities are subject to a Control Agreement, satisfactory in form
     and substance to Agent (or other document satisfactory to Agent in its sole
     discretion), granting to Agent, until all of the Obligations are paid or
     otherwise satisfied in full, control over the transfer and disposition
     thereof."

                    "Marketable Securities Availability" shall mean Revolving
     Advances against Marketable Securities which Lenders may, from time to time
     during the term of this Agreement, make available to Borrowers, in an
     amount up to seventy-five percent (75%) of the Market Value of the
     Marketable Securities."

                     " LCD Inventory" shall mean Jaco Eligible Inventory
     consisting of LCD Panels that are (i) the subject of, and are saleable
     pursuant to, that certain Contract No.4600000002, dated July 9, 2004, with
     the Specified Customer., as in effect on the date hereof, and (ii) sold
     prior to June 30, 2005, it being understood that, anything in the Agreement
     to the contrary notwithstanding, any of the LCD Panels referred to in
     clause (i) above that remain in inventory after June 30, 2005 shall not be
     deemed Eligible Inventory."

                    "Specified Customer" shall mean the Customer specified by
separate letter agreement.

                           (b) The definition of the term "Contract Rate" is
hereby amended to read in its
entirety as follows:

                    "Contract Rate" shall mean, as applicable, with respect to
     Revolving Advances, an Interest Rate per annum equal to:

          (A) the Base Rate,  plus (x) until July 1, 2005,  one and  one-quarter
     (1.25%)  percent,  and (y) from and  after  July1,  2005,  (i) if the Fixed
     Charge  Coverage  Ratio  for  the  two  consecutive  full  fiscal  quarters
     immediately  preceding the date of calculation was equal to or greater than
     1.1 to 1.0,  three-quarters  of one (0.75%)  percent,  or (ii) if the Fixed
     Charge  Coverage  Ratio  for  the  two  consecutive  full  fiscal  quarters
     immediately preceding the date of calculation was less than 1.1 to 1.0, one
     and one-quarter (1.25%) percent ;or

          (B)  the  Eurodollar  Rate,  plus  (x)  until  July1,2005,  three  and
     three-quarters  (3.75%) percent, and (y) from and after July1,2005,  (i) if
     the  Fixed  Charge  Coverage  Ratio  for the two  consecutive  full  fiscal
     quarters  immediately  preceding  the date of  calculation  was equal to or
     greater than 1.1 to 1.0, three and one-quarter  (3.25%) percent, or (ii) if
     the  Fixed  Charge  Coverage  Ratio  for the two  consecutive  full  fiscal
     quarters immediately preceding the date of calculation was less than 1.1 to
     1.0, three and three-quarters (3.75%) percent."

          (c)  Subparagraph  (f) and  subparagraph  (g) of the definition of the
     term  "Eligible  Receivables"  are each amended to read in their  entirety,
     respectively, as follows:

                                    "(f) the sale is to a Customer outside the
     continental United States of
     America, unless the sale is on letter of credit, guaranty, acceptance terms
     or is covered by credit insurance, in each case acceptable to Agent in its
     Reasonable Discretion; provided, however, that until March 13, 2005,
     Receivables of a foreign Customer to be identified by separate letter
     agreement, of an aggregate maximum of $5,000,000, shall not be disqualified
     as Eligible Receivables solely by virtue of this subparagraph (f) if, and
     solely for so long as (but not beyond March 13, 2005), such Receivables
     remain covered by credit insurance issued by Continental Casualty Company
     of not less than $3,000,000 and satisfactory to Agent in the exercise of
     its Reasonable Discretion;
<PAGE>

                                     (g) the sale to the Customer is on a
     bill-and-hold, guaranteed sale,
     sale-and-return, sale on approval, consignment or any other repurchase or
     return basis or is evidenced by chattel paper; provided, however, that if
     Jaco delivers to Agent a letter in the form of Exhibit I hereto, duly
     executed by Jaco and the Specified Customer, with respect to Receivables,
     of an aggregate maximum of $2,212,000, arising from the sale of LCD
     Inventory, such Receivables as are the subject of such letter shall not be
     disqualified as Eligible Receivables solely by virtue of this subparagraph
     (g);"

                            (d) "Inventory Availability is hereby amended to
read in its entirety as follows:

     "Inventory Availability" shall mean the Revolving Advances against Eligible
     Inventory which Lenders may from time to time during the Term make
     available to Borrowers, in an amount up to the least of (a) $17,000,000
     (the "Inventory Sublimit") or (b) the sum of (i) 31% of Jaco Eligible
     Inventory other than LCD Inventory, plus, (ii) until June 30, 2005, 47.5%
     of LCD Inventory ( but after June 30, 2005, 0% ) (clauses (i) and (ii)
     collectively, the "Jaco Inventory Advance Rate"), or (c) eighty-five (85%)
     percent of the net orderly liquidation value of such Jaco Eligible
     Inventory (calculated as of the date of any calculation), (the Jaco
     Inventory Advance Rate, as subject to the limitation percentage described
     in (c) above, shall be referred to herein as the "Inventory Advance Rate").
     Such Inventory Advance Rate shall be calculated on the cost of such
     Eligible Inventory, on a first-in, first-out basis."

            2. Formula Amount Section 2.1 of the Agreement (Revolving Advances)
is hereby amended by the deletion of clause (y) in its entirety from Section 2.1
(a) and the substitution of the following therefor:

                          "(y)      an amount equal to the sum of: (i)
                                    Receivables Availability, plus (ii)
                                    Inventory Availability, plus (iii)
                                    Marketable Securities Availability, minus
                                    (iv) the amount of any outstanding Letters
                                    of Credit, minus (v) Reserves."

            3. Financial Covenants Sections 6.9 of the Agreement (Financial
Covenants), Section 6.10 of the Agreement (Minimum Net Worth) and Section 6.12
of the Agreement (Permanent Undrawn Availability) are each hereby amended in
their entirety to read as follows:

                           "6.9     Financial Covenants.

     (a) EBITDA. Maintain EBITDA for the Loan Parties on a Consolidated Basis as
     of the end of each fiscal quarter set forth below for the respective fiscal
     periods set forth below ending on the last day of such fiscal quarter in an
     amount not less than the amount set forth below:

                  Quarter Ended              Minimum EBITDA
                  -------------              --------------
                  December 31, 2004             $(1,450,000)
                  March 31, 2005                  $260,000
                  June 30, 2005                   $830,000
                  September 30, 2005            $1,000,000

     (b) Fixed Charge  Coverage  Ratio.  Maintain,  as of the end of the quarter
     ended  December  31,  2005,  and  as of  the  end of  each  fiscal  quarter
     thereafter, on a four-quarter rolling basis for the previous four quarters,
     a Fixed Charge Coverage Ratio for the Loan Parties on a Consolidated  Basis
     of not less than 1.1 to 1.0.
<PAGE>

     (c) Minimum  Sales.  Maintain  bona fide sales of Inventory in the ordinary
     course of  business  by the Loan  Parties in the  aggregate  (exclusive  of
     inter-Borrower  sales or sales to any other direct or indirect Affiliate of
     a Loan Party),  for each four-week period on a weekly rolling basis for the
     previous four calendar weeks, commencing with the four calendar weeks ended
     January  28,  2005,  of not less than  eighty-  five  percent  (85%) of the
     aggregate Initial Sales Projections for such four weeks."

                      "6.10    Minimum Net Worth.

         Maintain at all times a minimum Net Worth of at least $44,475,000, to
     be (x) increased as of the end of each fiscal year by sixty-five (65%)
     percent of such fiscal year's year-end net profit, if any, and (y) reduced
     by the amount of (i) any charge for impairment of goodwill, and (ii) any
     write-off of the note executed by the buyer of Nexus' assets for the
     benefit of Jaco (during the fiscal year of any such write-off) ."

                      "6.12    Permanent Undrawn Availability.

         Maintain at all times (for all Loan Parties) an aggregate
     Undrawn Availability of not less than $1,500,000."

                4. Capital Expenditures. Section 7.6 of the Agreement (Capital
Expenditures) is hereby amended to read in its entirety as follows:

                        "7.6. Capital Expenditures.

                              "Contract for, purchase or make any net Capital
Expenditures in an amount exceeding
     (i) $1,150,000, for the fiscal year ending June 30, 2005, and (ii)
     $500,000, for each fiscal year thereafter."

                5. Accounts and Inventory Reports. The first sentence of
Paragraph (b) of Section 9.2 of the Agreement (Schedules) is hereby amended to
read in its entirety as follows:

                              "Deliver to Agent:
                               (1) on or before the twentieth (20th) day of each
                            month as and for the prior month, (i) accounts
                            receivable agings, accompanied by a reconciliation
                            of such agings with the accounts receivable
                            information contained in the Borrowing Base
                            Certificate most recently delivered to Agent and
                            with the general ledgers of the Loan Parties,
                            respectively, and (ii) accounts payable agings;
                                (2) on each Monday for the prior week, Inventory
                            reports, with the last Inventory report delivered in
                            each calendar month accompanied by a reconciliation
                            of the information contained therein with the
                            perpetual inventories of the Loan Parties,
                            respectively;
                                (3) on each Monday, a reconciliation of the
                            Receivables from Customers outside the continental
                            United States ("Foreign Receivables") reported in
                            the Borrowing Base Certificate most recently
                            delivered to Agent, and the amount of credit
                            insurance coverage in effect on such date with
                            respect to each of such Foreign Receivables;
                                (4) on each Monday, a rolling cash flow forecast
                            for the following thirteen (13) weeks in the form
                            attached hereto as Schedule 9.2(b) (each such cash
                            flow forecast, a " Weekly Forecast"); and
                                 (5) on each Monday, a reconciliation of actual
                            sales for the prior rolling four-week period with
                            the Initial Sales Projections for such four-week
                            period. "
<PAGE>

                      6. Expenses. Paragraph (c) of Section 16.10 of the
Agreement (Expenses) is hereby
amended by the addition thereto of the following:

          "...including,  without limitation,  in connection with the engagement
     by Lenders of a financial  consultant,  selected by Lenders in the exercise
     of their sole  discretion,  to verify and confirm the cash flow projections
     of the Loan Parties and to provide  such  additional  financial  consulting
     services  concerning  the Loan  Parties  as  Lenders  may from time to time
     request  (it  being  further  agreed  by the  Loan  Parties  that  any such
     financial  consultant shall, as a representative  of the Lenders,  have the
     same rights of access,  audit and  inspection as are enjoyed by the Lenders
     pursuant to Section  4.10 hereof and shall be provided  with full access to
     the accounts,  books and records of the Loan Parties no later than February
     15, 2005)";

                 7. Ratifications. (a) By their signatures below, Jaco, Nexus
and Interface hereby ratify the Agreement ( as hereby amended) and agree to be
jointly and severally liable for all Obligations under the Agreement and agree
that all of the outstanding amounts of the Loans under the Agreement, as of the
dated hereof, shall be valid and binding Obligations of each of them, and shall
be deemed Obligations outstanding under the Agreement, and hereby agree and
promise to repay to the Agent, for the benefit of the Lenders, such Obligations
(including but not limited to all applicable interest) in accordance with the
terms of the Agreement, but in no event, later than the Termination Date.

     (b) By their signatures below,  Jaco, Nexus and Interface hereby ratify and
affirm to the Agent and the Lenders that as of the date hereof, they are in full
compliance with all covenants under the Agreement (except as waived above),  and
certify (i) that all  representations  and  warranties of the Agreement are true
and  accurate  as of the date  hereof,  with the same effect as if they had been
made as of the date hereof, (ii) no Default or Event of Default has occurred and
is continuing,  or would result from the execution,  delivery and performance by
Borrowers of this  Amendment or the  Agreement  (as amended by this  Amendment),
except as specifically waived herein;  (iii) each Borrower has full power, right
and legal authority to execute,  deliver and perform its obligations  under this
Amendment;  (iv) each  Borrower has taken all action  necessary to authorize the
execution and delivery of, and the  performance  of its  obligations  under this
Amendment;  and (v) this  Amendment  constitutes  a  legal,  valid  and  binding
obligation of each Borrower enforceable against each Borrower in accordance with
its  terms,  and  does  not  constitute  a  breach  of any  other  agreement  or
understanding  to which such  Borrower  is a party or by which its  property  is
bound.

              8 Continuing Effect. Except as herein specifically amended, the
Agreement shall remain in full force and effect in accordance with its original
terms, except as previously amended.

              9. Amendment Fee. In consideration of the Lenders' consent to the
foregoing, the Loan parties agree to pay to the Agent for the ratable benefit of
the Lenders, concurrently with their execution hereof, a fee in the amount of
$50,000. The Loan Parties hereby authorize the Lenders to automatically charge
to Borrowers' account the amount of such fee.

         If the foregoing accurately reflects our understanding, kindly sign the
enclosed copy of this letter and return it to our office as soon as practicable.

                                         Very truly yours,

                                         GMAC COMMERCIAL FINANCE LLC
                                         (as Agent and Lender)

                                         By: /s/ Daniel Murray
                                             ---------------------
                                        Title: 1st VP

                            [Signatures Continued on Next Page]

<PAGE>

                                     [Signatures Continued From Previous Page]

                                     PNC BANK, NATIONAL ASSOCIATION
                                     (as Lender)

                                     By: /s/ Wing Louie
                                        --------------
                                    Title: VP

AGREED AND ACCEPTED:

JACO ELECTRONICS, INC.

By:/s/ Jeffrey D, Gash
     ----------------------
Title: VP Finance

NEXUS CUSTOM ELECTRONICS, INC.

By:/s/ Jeffrey D, Gash
     ----------------------
Title: VP Finance

INTERFACE ELECTRONICS, INC.

By:/s/ Jeffrey D, Gash
     ----------------------
Title: VP Finance_

Exhibit 4.2

 

[Form of Grant for Employees under Plan]

 

SEITEL,
INC.

RESTRICTED STOCK AWARD
AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this
"Agreement") is made and entered into by and between Seitel, Inc., a Delaware
corporation (the "Company"), and [Name of Employee] ("Grantee"),
effective as of the grant date shown in Appendix A attached hereto
pursuant to the Seitel, Inc. 2004 Stock Option Plan (the "Plan").  The Plan is
incorporated by reference herein in its entirety.  Capitalized terms not
otherwise defined in this Agreement shall have the meaning given such terms as
defined in the Plan.

WHEREAS, Grantee is an employee of the Company
and in connection with such employment, the Committee on behalf of the Company
has authorized a grant to Grantee a number of restricted shares of the
Company's Stock, par value $.01 per share (the "Common Stock"), effective [Date],
in the amount indicated on Appendix A and which is pursuant to and shall be
subject to the terms and conditions of this Agreement and the Plan, with a view
to increasing Grantee's interest in the Company's welfare and growth; and

WHEREAS, Grantee desires to receive shares of
the Common Stock as Restricted Stock pursuant to this Agreement in connection
with his employment.

NOW, THEREFORE, in consideration of the
premises, mutual covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree
as follows:

1.                 
Grant of Common Stock.  Subject to the
restrictions, forfeiture provisions and other terms and conditions set forth
herein (a) the Company hereby grants to Grantee the number of shares of
Common Stock ("Restricted Shares") as set out in Appendix A hereto, and
(b) subject to the terms hereof, Grantee shall have and may exercise
rights and privileges of ownership of such Restricted Shares, including,
without limitation, the voting rights of such shares and the right to receive
dividends declared in respect thereof.  This Agreement and the grant of
Restricted Shares are subject to administration by and the rules and procedures
established by the Committee under the Plan.

2.                 
Transfer Restrictions; Vesting.

(a)              
Generally.  Grantee shall not sell, assign, transfer,
exchange, pledge, encumber, gift, devise, hypothecate or otherwise dispose of
(collectively, "Transfer") any Restricted Shares prior to their vesting in
accordance with the Vesting Dates set out in Appendix A.  Further, even after
such Restricted Shares becomes vested, such vested Restricted Shares may not be
sold or otherwise disposed of in any manner which would constitute a violation
of any applicable federal or state securities laws or other applicable law,
rules of any exchange on which the Company's securities are traded or listed,
or Company rules or policies as determined by Company in its sole discretion. 
Restricted Shares shall vest as of each of the Vesting Dates set out in
Appendix A provided that Grantee remains employed with the Company through the
Vesting Date, except as may otherwise be provided herein.

(b)              
Dividends, etc.  If the Company (i) declares a dividend
or makes a distribution on Common Stock in shares of Common Stock or
(ii) subdivides or reclassifies outstanding shares of Common Stock into a
greater number of shares of Common Stock or (iii) combines or reclassifies
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, then the number of shares of Grantee's Common Stock subject to the
transfer restrictions in this Agreement shall be proportionally increased or
reduced as to prevent enlargement or dilution of Grantee's rights and duties
hereunder.  The determination of the Company's Board of Directors regarding
such adjustment should be final and binding.

3.                 
Vesting on Change in Control.  Notwithstanding the provisions
in Section 2, if the Grantee's employment is
terminated, without Cause (as defined below) after a Change in Control (as
defined below), on the effective
date of such termination of employment the Restricted Shares shall be 100% vested.  For purposes of this
Agreement, a "Change in Control" shall mean the occurrence of any of the
following events:

(a)              
any Person (other than the Company, any trustee or other fiduciary
holding securities under any employee benefit plan of the Company, or any
company owned, directly or indirectly, by the stockholders of the Company
immediately prior to the occurrence with respect to which the evaluation is
being made in substantially the same proportions as their ownership of the
common stock of the Company) acquires securities of the Company and immediately
thereafter is the Beneficial Owner (except that a Person shall be deemed to be
the Beneficial Owner of all shares that any such Person has the right to
acquire pursuant to any agreement or arrangement or upon exercise of conversion
rights, warrants or options or otherwise, without regard to the 60-day period
referred to in Rule 13d-3 under the Securities Exchange Act of 1934 (the
"Exchange Act"), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities (except that an acquisition of original issue securities
directly from the Company shall not be deemed an acquisition for purposes of
this clause (a));

(b)              
during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (a), (c), or (d) of this
paragraph) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two thirds of the
directors then still in office who either were directors at the beginning of
the two-year period or whose election or nomination for election was previously
so approved but excluding for this purpose any such new director whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of an individual, corporation,
partnership, group, associate or other entity or Person other than the Board,
cease for any reason to constitute at least a majority of the Board; 

 

(c)               
the consummation of a merger or consolidation of the Company with
any other entity, other than (i) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or resulting entity) more
than 50% of the combined voting power of the surviving or resulting entity
outstanding immediately after such merger or consolidation or (ii) a merger or consolidation in which no premium is intended to be paid to any
shareholder participating in the merger or consolidation;

(d)              
the stockholders of the Company approve a plan or agreement for the
sale or disposition of all or substantially all of the consolidated assets of
the Company (other than such a sale or disposition immediately after which such
assets will be owned directly or indirectly by the stockholders of the Company,
in substantially the same proportions as their ownership of the common stock of
the Company immediately prior to such sale or disposition) in which case the
Board shall determine the effective date of the Change in Control resulting
therefrom; or

(e)               
any other event occurs which the Board determines, in its
discretion, would materially alter the structure of the Company or its
ownership.

(f)                
"Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 under the Exchange Act and any successor to such Rule.

(g)              
"Cause" shall mean:

(i)                 
willful misconduct or gross negligence by the Grantee in the performance
of his duties; 

 

(ii)               
failure by the Grantee to perform his duties;

(iii)              
 material violation by the Grantee of the Company's code of business
conduct or the Company's policies or procedures; or

(iv)             
conviction of the Grantee of, or a plea of nolo contrendere to, a
felony, or his engagement in fraud or other willful misconduct which is
injurious to the business or reputation of the Company.

(h)              
"Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and
shall include a "group" as defined in Section 13(d) thereof.

4.                 
Forfeiture.

(a)              
Termination of Service.  If Grantee's employment with the
Company is terminated by the Company or Grantee for any reason, other than as
provided in Section 3, then Grantee shall immediately forfeit all
Restricted Shares which are unvested unless the Committee, in its sole
discretion, determines that any or all of such unvested Restricted Shares shall
not be so forfeited.

(b)              
Forfeited Shares.  Any Restricted Shares forfeited under this
Section 4 shall automatically revert to the Company and become canceled and
such shares shall be again subject to the Plan as provided in Section 4 of the
Plan.  Any certificate(s) representing Restricted Shares which include
forfeited shares shall only represent that number of Restricted Shares which
have not been forfeited hereunder.  Upon the Company's request, Grantee agrees
for himself and any other holder(s) to tender to the Company any certificate(s)
representing Restricted Shares which include forfeited shares for a new
certificate representing the unforfeited number of Restricted Shares.

5.                 
Issuance of Certificate.

(a)              
The Company shall cause to be issued a stock certificate, registered
in the name of the Grantee, evidencing the Restricted Shares upon receipt of a
stock power duly endorsed in blank with respect to such shares.  Each such
stock certificate shall bear the following legend:

The
transferability of this certificate and the shares of stock represented hereby
are subject to the restrictions, terms and conditions (including forfeiture and
restrictions against transfer) contained in the restricted stock agreement
entered into between the registered owner of such shares and Seitel, Inc. 
copies of the restricted stock agreement are on file in the office of the
secretary of Seitel, Inc., located at 10811 S. Westview Circle Drive, Suite 100, Bldg. C, Houston, TEXAS  77043.
 

Such legend shall not be removed from the
certificate evidencing Restricted Shares until such time as the restrictions
thereon have lapsed.

(b)              
The certificate issued pursuant to this Section 5, together with the
stock powers relating to the Restricted Shares evidenced by such certificate,
shall be held by the Company.  The Company may issue to the Grantee a receipt
evidencing the certificates held by it which are registered in the name of the
Grantee.

6.                 
Miscellaneous.

(a)              
Certain Transfers Void.  Any purported transfer of Restricted
Shares in breach of any provision of this Agreement shall be void and
ineffectual, and shall not operate to transfer any interest or title in the
purported transferee.

(b)              
No Fractional Shares.  All provisions of this Agreement
concern whole shares of Common Stock.  If the application of any provision
hereunder would yield a fractional share, the value of such fractional share
shall be paid to the Grantee in cash.

(c)               
Not an Agreement for Continued Employment or Services.  This
Agreement shall not, and no provision of this Agreement shall be construed or
interpreted to, create any right of Grantee to continue employment with or
provide services to the Company, Company affiliates, parent, subsidiary or
their affiliates.  

 

(d)              
Dispute Resolution.

(i)                 
Arbitration. All disputes and controversies of every kind and
nature between any parties hereto arising out of or in connection with this
Agreement or the transactions described herein as to the construction,
validity, interpretation or meaning, performance, non-performance, enforcement,
operation or breach, shall be submitted to arbitration pursuant to the
following procedures:

(1)              
After a dispute or controversy arises, any party may, in a written
notice delivered to the other parties to the dispute, demand such arbitration.
Such notice shall designate the name of the arbitrator (who shall be an
impartial person) appointed by such party demanding arbitration, together with
a statement of the matter in controversy.

(2)              
Within 30 days after receipt of such demand, the other parties shall, in
a written notice delivered to the first party, name such parties' arbitrator
(who shall be an impartial person). If such parties fail to name an arbitrator,
then the second arbitrator shall be named by the American Arbitration
Association (the "AAA"). The two arbitrators so selected shall name a
third arbitrator (who shall be an impartial person) within 30 days, or in lieu
of such agreement on a third arbitrator by the two arbitrators so appointed,
the third arbitrator shall be appointed by the AAA. If any arbitrator appointed
hereunder shall die, resign, refuse or become unable to act before an
arbitration decision is rendered, then the vacancy shall be filled by the
method set forth in this Section for the original appointment of such arbitrator.

(3)              
Each party shall bear its own arbitration costs and expenses. The
arbitration hearing shall be held in Houston, Texas at a location designated by
a majority of the arbitrators. The Commercial Arbitration Rules of the American
Arbitration Association shall be incorporated by reference at such hearing and
the substantive laws of the State of Texas (excluding conflict of laws
provisions) shall apply.

(4)              
The arbitration hearing shall be concluded within ten (10) days unless
otherwise ordered by the arbitrators and the written award thereon shall be
made within fifteen (15) days after the close of submission of evidence. An
award rendered by a majority of the arbitrators appointed pursuant to this
Agreement shall be final and binding on all parties to the proceeding, shall
resolve the question of costs of the arbitrators and all related matters, and
judgment on such award may be entered and enforced by either party in any court
of competent jurisdiction.

(5)              
Except as set forth in Section 6(e)(d)(ii), the parties stipulate
that the provisions of this Section shall be a complete defense to any suit,
action or proceeding instituted in any federal, state or local court or before
any administrative tribunal with respect to any controversy or dispute arising
out of this Agreement or the transactions described herein. The arbitration
provisions hereof shall, with respect to such controversy or dispute, survive
the termination or expiration of this Agreement.

No party to an arbitration may disclose the existence or
results of any arbitration hereunder without the prior written consent of the
other parties; nor will any party to an arbitration disclose to any third party
any confidential information disclosed by any other party to an arbitration in
the course of an arbitration hereunder without the prior written consent of
such other party.

(ii)               
Emergency Relief. Notwithstanding anything in this Section 6(d)
to the contrary, any party may seek from a court any provisional remedy that
may be necessary to protect any rights or property of such party pending the
establishment of the arbitral tribunal or its determination of the merits of
the controversy or to enforce a party's rights under Section 6(d).

(e)               
Notices.  Any notice, instruction, authorization, request or
demand required hereunder shall be in writing, and shall be delivered either by
personal in-hand delivery, by telecopy or similar facsimile means, by certified
or registered mail, return receipt requested, or by courier or delivery
service, addressed to the Company at the address indicated beneath its
signature on the execution page of this Agreement, and to Grantee at his
address indicated herewith, or at such other address and number as a party
shall have previously designated by written notice given to the other party in
the manner herein set forth.  Notices shall be deemed given when received, if
sent by facsimile means (confirmation of such receipt by confirmed facsimile
transmission being deemed receipt of communications sent by facsimile means),
and when delivered and receipted for (or upon the date of attempted delivery
where delivery is refused), if hand-delivered, sent by express courier or
delivery service, or sent by certified or registered mail, return receipt
requested.

(f)                
Amendment and Waiver.  This Agreement may be amended,
modified or superseded only by written instrument executed by the Company and
Grantee.  Any waiver of the terms or conditions hereof shall be made only by a
written instrument executed and delivered by the party waiving compliance.  Any
amendment or waiver agreed to by the Company shall be effective only if
executed and delivered by a duly authorized executive officer of the Company. 
The failure of any party at any time or times to require performance of any
provisions hereof shall in no manner effect the right to enforce the same.  No
waiver by any party of any term or condition in this Agreement, or breach thereof,
in one or more instances shall be deemed a continuing waiver of any such
condition or breach, a waiver of any other condition, or the breach of any
other term or condition.

(g)              
Independent Legal and Tax Advice.  The Grantee has been
advised and Grantee hereby acknowledges that he has been advised to obtain
independent legal and tax advice regarding this grant of the Restricted Shares
and the disposition of such shares, including, without limitation, the election
available under Section 83(b) of the Internal Revenue Code.

(h)              
Governing Law and Severability.  This Agreement shall be
governed by the internal laws, and not the laws of conflict, of the State of Delaware.  The invalidity of any provision of this Agreement shall not affect any other
provision of this Agreement which shall remain in full force and effect.

(i)                
Successors and Assigns.  Subject to the limitations which
this Agreement imposes upon transferability of Restricted Shares, this
Agreement shall bind, be enforceable by and inure to the benefit of the Company
and its successors and assigns, and Grantee, and, upon his death, on his estate
and beneficiaries thereof (whether by will or the laws of descent and
distribution).

(j)                
Community Property.  Each spouse individually is bound by,
and such spouse's interest, if any, in any shares is subject to, the terms of
this Agreement. Nothing in this Agreement shall create a community property
interest where none otherwise exists.

(k)              
Entire Agreement.  This Agreement supersedes any and all
other prior understandings and agreements, either oral or in writing, between
the parties with respect to the subject matter hereof and constitute the sole
and only agreements between the parties with respect to the said subject
matter. All prior negotiations and agreements between the parties with respect
to the subject matter hereof are merged into this Agreement. Each party to this
Agreement acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any party or by anyone acting
on behalf of any party, which are not embodied in this Agreement and that any
agreement, statement or promise that is not contained in this Agreement shall
not be valid or binding or of any force or effect.

(l)                
Compliance with Other Laws and Regulations.  This Agreement,
the grant of Restricted Shares and issuance of Common Stock shall be subject to
all applicable federal and state laws, rules, regulations and applicable rules
and regulations of any exchanges on which such securities are traded or listed,
and Company rules or policies.  Any determination in this connection by the
Committee shall be final, binding and conclusive on the parties hereto and on
any third parties, including any individual or entity.

(m)            
Tax Requirements.

(i)                 
Tax Withholding.  This grant under this Agreement is subject to
and the Company shall have the power and the right to deduct or withhold, or
require the Grantee to remit to the Company, an amount sufficient to satisfy
federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result
of the Plan and this Agreement.

(ii)               
Share Withholding.  With respect to tax withholding required upon
any taxable event arising as a result of this Agreement, Grantee may elect,
subject to the approval of the Committee in its discretion, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
shares of Stock having a Fair Market Value on the date the tax is to be
determined equal to the statutory total tax which could be imposed on the
transaction.  All such elections shall be made in writing, signed by the
Grantee, and shall be subject to any restrictions or limitations that the
Committee, in its discretion, deems appropriate.  Any fraction of a share of
Stock required to satisfy such obligation shall be disregarded and the amount
due shall instead be paid in cash by the Grantee.

(n)              
Grantee's Address.  

 

            Grantee's
address of record is:                          _________________________________

                                                                                  _________________________________

                                                                                  _________________________________

Grantee shall be responsible to notify the
Company of any changes to his address.

[Signature page follows]

 

IN WITNESS
WHEREOF, the parties have caused this Agreement to be executed on the date
first above written.

                                                                              

  	COMPANY:	 
	 	 
	SEITEL,
INC.	 

   

  	By:   	 
	Name:    	 
	Title:    	 
	 Address:
       
	
       

       

      
      Seitel,
Inc.

      
      10811 S. Westview Circle Drive,
      
      

      
      Suite 100, Bldg. C

      
      Houston, TX   77043

      
      Facsimile: 
(713) 881-2815

      
      Attention:
Secretary

                                                                              

 

 

                                                                              
 

  	
      
      GRANTEE: 

       
	 
	
      Signature
	 
       

	
      Printed Name

                                                                                            
 

 

APPENDIX A TO

RESTRICTED STOCK
AGREEMENT

Grantee's Name:       
[Name]                                                

	
  
  Grant
  Date:

  	
  
  Number
  of

  
  Restricted
  Shares Granted

  
	
  __________________

  	
  
  __________________

  

Vesting Dates:

	
  
  Date:

  	
  
  Number
  of

  
  Restricted
  Shares Granted

  
	
  __________________

  	
  
  33.3%

  
	
  __________________

  	
  
  33.3%

  
	
  __________________

  	
  
  33.4%

  

Note:  All vesting is subject to the terms and
conditions of the Agreement.

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