GRANT GEOPHYSICAL INC, 10-Q, 1997-08-14

GRANT GEOPHYSICAL INC
10-Q, 1997-08-14
OIL & GAS FIELD EXPLORATION SERVICES

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<PAGE> 1

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

(MARK ONE)

(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
or
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the quarter ended June 30, 1997

Commission file number
000-18816

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

DELAWARE 84-0766570
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

16850 PARK ROW
HOUSTON, TEXAS 77084
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (281) 398-9503

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No
--- ---

As of August 13, 1997, 22,206,247 shares of common stock, par value
$.002 per share, were issued and outstanding.

<PAGE> 2

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)

INDEX

PAGE(S)
-------

<S> <C>
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets as of June 30,
1997 (Unaudited) and December 31, 1996....................................... 3-4

Consolidated Statements of Operations for the
Six Months Ended June 30, 1997 (Unaudited)
and 1996 (Unaudited)......................................................... 5

Consolidated Statements of Operations for the
Three Months Ended June 30, 1997 (Unaudited)
and 1996 (Unaudited)......................................................... 6

Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1997 (Unaudited)
and 1996 (Unaudited)......................................................... 7

Notes to Consolidated Financial Statements (Unaudited)....................... 8

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................................ 11

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K....................................... 17

PART III. SIGNATURES................................................................... 18

</TABLE>

2
<PAGE> 3

PART I

ITEM 1. FINANCIAL STATEMENTS

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

JUNE 30, DECEMBER 31,
1997 1996
------------ -----------
(UNAUDITED)

ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents........................................... $ 4,489 $ 6,772
Accounts receivable:
Trade (net of allowance for doubtful accounts
of $1,624 and $5,711 at June 30,1997 and
December 31, 1996, respectively)................................. 19,092 19,471
Other............................................................ 846 996
Inventories......................................................... 530 503
Prepaids............................................................ 428 1,411
Mobilization costs.................................................. 1,882 1,071
--------- ---------
Total current assets............................................. 27,267 30,224
--------- ---------

Property, plant and equipment, at cost.............................. 95,805 94,223
Less accumulated depreciation....................................... 60,447 56,555
--------- ---------
Net property, plant and equipment................................ 35,358 37,668
--------- ---------

Restricted cash........................................................ 321 321
Other assets........................................................... 2,344 1,910
--------- ---------

Total assets..................................................... $ 65,290 $ 70,123
======== ========
</TABLE>

(Continued on next page)

3
<PAGE> 4

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

JUNE 30, DECEMBER 31,
1997 1996
------------ -----------
(UNAUDITED)
<S> <C> <C>

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Notes payable................................................... $ 3,191 $ 589
Accounts payable................................................ 5,377 3,975
Accrued expenses................................................ 4,048 3,051
Foreign income taxes payable.................................... 1,878 188
---------- ---------
Total current liabilities.................................... 14,494 7,803
---------- ---------

Pre-petition liabilities subject to chapter 11 case................ 79,085 90,244
Unearned revenue................................................... 3,775 6,031
Other liabilities and deferred credits............................. 2,206 258
Commitments and contingencies......................................

Stockholders' deficit:
$2.4375 Convertible exchangeable preferred stock, $.01 par
value. Authorized 2,300,000 shares; issued and outstanding
2,300,000 shares at June 30, 1997 and December 31, 1996....... 23 23
Series A convertible preferred stock, $.01 par value.
Authorized 75,000 shares; none outstanding....................
Junior preferred stock, $100 par value. Authorized 15,000
shares; issued and outstanding 14,904 shares................... 1,490 1,490
Serial preferred stock, $100 par value. Authorized 250,000
shares, none issued............................................
Common stock, $.002 par value. Authorized 40,000,000 shares;
issued and outstanding 22,206,247 and 20,641,765 shares
at June 30, 1997 and December 31, 1996, respectively........... 44 41
Additional paid-in capital....................................... 124,280 124,203
Accumulated deficit.............................................. (160,107) (159,970)
---------- ---------
Total stockholders' deficit................................. (34,270) (34,213)
---------- ---------

Total liabilities and stockholders' deficit................. $ 65,290 $ 70,123
========== =========

</TABLE>

See accompanying notes to consolidated financial statements.

4
<PAGE> 5

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

SIX MONTHS ENDED JUNE 30,
------------------------------
1997 1996
---- ----
(UNAUDITED)

<S> <C> <C>
Revenues........................................................... $ 67,169 $ 54,759

Expenses:
Direct operating expense........................................ 51,820 43,036
Other operating expenses........................................ 4,158 4,722
Depreciation and amortization................................... 5,589 4,986
----------- ------------
Total costs and expenses..................................... 61,567 52,744
----------- ------------

Operating income............................................. 5,602 2,015
----------- ------------

Other income (deductions):
Interest expense................................................ (2,703) (2,518)
Interest income................................................. 200 20
Reorganization costs............................................ (1,780)
Other........................................................... 215 (10)
----------- ------------
Total other deductions....................................... (4,068) (2,508)
----------- ------------

Income (loss) before income taxes............................ 1,534 (493)

Income tax expense................................................. 1,671 700
----------- ------------

Net loss..................................................... (137) (1,193)
----------- ------------

Net loss applicable to common stock.......................... $ (137) $ (5,129)
=========== ============

LOSS PER COMMON SHARE - ASSUMING NO AND FULL DILUTION:
Net loss........................................................ $ (0.01) $ (0.09)
Dividend requirement on $2.4375 preferred stock ................ (0.31)
----------- ------------
Net loss per common share....................................... $ (0.01) $ (0.40)
=========== ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Primary and fully diluted........................................ 21,634,143 12,884,808

</TABLE>

See accompanying notes to consolidated financial statements.

5
<PAGE> 6

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
-------------------------------
1997 1996
---- ----
(UNAUDITED)

<S> <C> <C>
Revenues........................................................... $ 36,873 $ 26,951

Expenses:
Direct operating expense........................................ 28,264 20,924
Other operating expenses........................................ 2,098 2,456
Depreciation and amortization................................... 2,978 2,616
----------- ------------
Total costs and expenses..................................... 33,340 25,996
----------- ------------

Operating income............................................. 3,533 955
----------- ------------

Other income (deductions):
Interest expense................................................ (1,312) (1,188)
Interest income................................................. 196 12
Reorganization costs............................................ (787)
Other........................................................... (80) (97)
----------- ------------
Total other deductions....................................... (1,983) (1,273)
----------- ------------

Income (loss) before income taxes............................ 1,550 (318)

Income tax expense................................................. 1,411 303
----------- ------------

Net income (loss)............................................ 139 (621)
----------- ------------

Net income (loss) applicable to common stock................. $ 139 $ (2,023)
=========== ============

INCOME (LOSS) PER COMMON SHARE - ASSUMING NO AND FULL DILUTION:
Net income (loss)............................................... $ 0.01 $ (0.05)
Dividend requirement on $2.4375 preferred stock ................ (0.10)
---------- ------------
Net income (loss) per common share.............................. $ 0.01 $ (0.15)
=========== ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Primary and fully diluted........................................ 22,035,860 13,056,760

</TABLE>

See accompanying notes to consolidated financial statements.

6
<PAGE> 7

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES

(DEBTOR IN POSSESSION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-----------------------------
1997 1996
---- ----
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss before dividend requirement............................. $ (137) $ (1,193)
Adjustments to reconcile net income/(loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization expense........................ 5,589 4,986
Loss (gain) on the sale of fixed assets...................... 44 (10)
Exchange loss (gain)......................................... (113) 39
Other non-cash items......................................... 199 302
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable.......................................... 529 3,249
Inventories.................................................. (27) 406
Prepaids..................................................... 983 101
Mobilization costs........................................... (811) (11,727)
Other assets................................................. (434) (360)
Increase (decrease) in:
Accounts payable............................................. 1,402 1,979
Accrued expenses............................................. 997 (581)
Foreign income taxes payable................................. 1,690 116
Other liabilities and deferred credits....................... (308) (1,829)
Change in pre-petition liabilities subject to chapter 11 case:
Accounts payable.............................................. (1,086)
Accrued expenses.............................................. (1,443)
Foreign income tax payable ................................... (194)
Other liabilities and deferred credits........................ (2,637)
----------- ---------

Net cash provided by (used in) operating activities........ 4,243 (4,522)
----------- ---------

Cash flows from (used in) investing activities:
Capital expenditures, net..................................... (4,922) (7,083)
Proceeds from the sale of assets.............................. 15 10
Restricted cash............................................... 99
----------- ---------

Net cash flows used in investing activities................ (4,907) (6,974)
----------- ---------

Cash flows from (used in) financing activities:
Proceeds from exercise of stock options and warrants............ 295
Proceeds from issuance of $2.4375 Preferred Stock............... 1,573
Proceeds from issuance of Series A Convertible Preferred Stock.. 7,000
Borrowings made during the period............................... 2,957 56,665
Repayment on borrowings during the period....................... (263) (55,086)
Pre-petition liabilities subject to chapter 11 case:
Borrowings under credit facility............................. 30,897
Repayment on borrowings...................................... (35,189)
----------- ---------

Net cash from (used in) financing activities............... (1,598) 10,447
----------- ---------

Effect of exchange rate changes on cash............................ (21) 2

Net decrease in cash and cash equivalents.................. (2,283) (1,047)
Cash and cash equivalents at beginning of period................... 6,772 1,047
----------- ---------

Cash and cash equivalents at end of period......................... $ 4,489 $
=========== ==========
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
ACTIVITIES. SEE NOTE 5.

See accompanying notes
to consolidated financial statements.

<PAGE> 8

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Grant Geophysical, Inc. ("Grant") has several wholly-owned
subsidiaries incorporated in the United States and certain foreign
jurisdictions (the "Subsidiaries"). Grant and certain of the Subsidiaries
have established branch operations in various foreign jurisdictions (the
"Branches"). Grant, the Subsidiaries and the Branches are collectively
referred to as the "Company".

The balance sheet of the Company as of June 30, 1997, and the related
statements of operations and cash flows for the six and three months ended
June 30, 1997 and 1996 are unaudited. The consolidated financial
statements should be read in conjunction with the audited financial
statements and footnotes for the year ended December 31, 1996, included in
the Company's Form 10-K, as filed with the Securities and Exchange
Commission.

On December 6, 1996 (the "Petition Date"), Grant filed a voluntary
petition in the United States Bankruptcy Court for the District of
Delaware (the "Court") for relief under chapter 11 of the United States
Bankruptcy Code ("Bankruptcy Code"). The case is in its preliminary
stages. Generally, upon the commencement of a bankruptcy proceeding, all
pre-petition litigation and other acts to enforce claims against the
debtor corporation are stayed. The debtor corporation may operate its
business and manage its assets in the ordinary course as
debtor-in-possession, but must obtain Court approval for transactions
outside the ordinary course of business. Based on these actions, all
liabilities of Grant outstanding at December 6, 1996 have been
reclassified from their respective current and non-current liability
categories to pre-petition liabilities subject to chapter 11 case.

The unaudited consolidated financial statements as of and for the six
and three month period ended June 30, 1997 have been prepared in
accordance with generally accepted accounting principles applicable to a
going concern and do not purport to reflect or to provide for all the
consequences of the ongoing chapter 11 reorganization case. Specifically,
the unaudited consolidated financial statements as of and for the six and
three month period ended June 30, 1997 do not present: (a) the realizable
value of assets on a liquidation basis or the availability of such assets
to satisfy liabilities, (b) the amount which will ultimately be paid to
settle liabilities and contingencies which may be allowed in the chapter
11 case, or (c) the effect of any changes which may be made in connection
with the debtor corporation's capitalizations or operations resulting from
a plan of reorganization. Additionally, the Company's operating results
for any particular interim period may not be indicative of results for a
full year.

Because of the ongoing nature of the chapter 11 case, the discussions
and consolidated financial statements contained herein are subject to
material uncertainties.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

8
<PAGE> 9

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

Income (Loss) Per Common Share

Income (loss) per common share is computed based upon the weighted
average number of common shares outstanding during the period. For
purposes of this calculation, outstanding stock options and warrants are
considered common stock equivalents. Fully diluted income (loss) per
common share is determined based upon the weighted average number of
common shares, calculated using the ending market price of the common
shares for the period. The income/loss for the six and three month
periods ended June 30, 1996 is decreased/increased by undeclared, unpaid
cumulative preferred stock dividends in calculating net income/loss
attributable to the common shareholder.

2. PRE-PETITION LIABILITIES SUBJECT TO CHAPTER 11 CASE

As a result of Grant's Chapter 11 reorganization proceedings, all
pre-petition liabilities of Grant outstanding at June 30, 1997 have been
classified as pre-petition liabilities subject to chapter 11 case. The terms
and amounts due are subject to the outcome of the reorganization proceedings.
Grant's secured and unsecured debt is as follows (dollars in thousands):

<TABLE>
SECURED DEBT:
<S> <C>

Revolving line of credit, 12.7%-14.7%(A)........... $ 9,970
Equipment notes payable, 7.3%-12.0%(A)............. 17,465
Other notes payable, 10.7%-15.0%(A)................ 6,046
Capital lease obligations, 9.0%-27.0%(A)........... 8,987
Other claims....................................... 1,403
----------
43,871
----------

UNSECURED DEBT:
Convertible debentures, 8%(A)..................... 269
Other notes payable, 6%-22%(A).................... 8,320
Capital lease obligations, 12%-37%(A)............. 113
Trade accounts payable............................ 23,081
Accrued expenses.................................. 1,051
Other liabilities and deferred credits............ 2,380
----------
35,214
----------

Total..................... $ 79,085
========
</TABLE>

----------------
(A)Represents contractual stated interest rates.

On February 4, 1997, the Court approved a Financing Order that authorized
Grant to enter into an agreement to obtain secured post-petition financing with
its primary working capital lender (the "Lender") under which agreement the
Lender continued to advance funds to Grant for its operations. The Financing
Order was amended by order of the Court on April 9, 1997. Pursuant to the
Amended Financing Order, the Lender agreed to make revolving advances not to
exceed $12,500,000. The advances are not to exceed a borrowing base equal to a
percentage of certain trade accounts receivable and an overadvance amount. The
maximum permitted overadvance is $7,000,000 through September 30,

9
<PAGE> 10

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

1997 when the Amended Financing Order expires. A $125,000 fee was paid to the
Lender. Interest accrues at prime plus 3.75% on the advance funds and prime
plus 7.25% on the overadvance funds.

The Amended Financing Order also includes an approved budget, an internal
cash management and reporting system and contains certain restrictions in the
movement of cash from Grant's US operations to certain of the Company's foreign
locations.

Prior to the Petition Date, interest was accrued on all debt instruments
based on contractual rates. Interest has continued to accrue on all secured
equipment notes payable and capital leases based on renegotiated rates of 7% to
11.09% since December 7, 1996. All unsecured and undersecured debt have not
been entitled to accrue interest since the Petition Date. Interest expense,
based on contractual rates of debt instruments, would have been approximately
$2,268,000 and $4,017,000 for the three and six months ended June 30, 1997,
respectively.

3. NOTES PAYABLE

A summary of notes payable of the Company at June 30, 1997 and
December 31, 1996 is as follows (dollars in thousands):

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------- -------------

<S> <C> <C>
Equipment notes payable - 10.0% - 12.0%, due 1998........... $ 1,920 $
Other notes payable - 10.5% - 12.9%/quarter, due 1997....... 1,271 589
------- ---------
Notes payable........................................... $ 3,191 $ 589
======= =========
</TABLE>

Other notes payable consisted of a $560,000 local currency revolving line
of credit maintained by a foreign subsidiary and a $711,000 short-term note
payable to a foreign bank. Both notes payable were repaid in full at the end of
July 1997.

4. CONTINGENCIES

The Company is involved in various claims and legal actions arising in the
ordinary course of business.

The Court generally has jurisdiction over all of Grant's property, as
defined in section 541 of the Bankruptcy Code, held on the Petition Date or
acquired thereafter. Under sections 1107 and 1108 of the Bankruptcy Code and by
order of the Court, Grant is operating its business and managing its assets in
the ordinary course of business as debtor-in-possession. Grant may not,
however, engage in transactions outside the ordinary course of business without
prior approval of the Court. Pursuant to section 362(a) of the Bankruptcy Code
and subject to the exceptions contained in section 362(b) thereof, the
commencement of a bankruptcy proceeding operates as an automatic stay
applicable to all persons and other entities, generally prohibiting absent
Court approval (i) the commencement or continuation of any judicial,
administrative or other proceeding against Grant, (ii) any act to obtain
possession of property of, or property from, Grant, and (iii) any act to
create, perfect or enforce any lien against property of Grant. While the
automatic stay applies to all of Grant's property wherever located, Grant
operates in several foreign jurisdictions, some of which may not give effect to
the automatic stay.

10
<PAGE> 11

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

The Company is subjected to review by various taxing authorities for the
purpose of verifying compliance with numerous local tax laws and regulations.
As a result of one of these reviews, the Company was notified that, during
1995, it had neglected to collect a certain tax from several clients and remit
those collections to the local government. The total amount of the potential
assessment, including penalties and interest, is approximately $6,000,000. The
Company believes the tax authority's claim is without merit and, as such, has
made no provision for payment. The Company intends to vigorously protest
enforcement of the claim within the local legal system. However, there can be
no assurances that the outcome of those protests will be favorable.

On July 15, 1997, the Company's Brazilian subsidiary finalized an
agreement with a former customer that resolved a long standing dispute relating
to services rendered on contracts dating back to 1983. In settlement of all
claims, the Company received payment, net of related costs and expenses, of
approximately $2,350,000. The Company anticipates recording such amount in the
third quarter. These funds were used to repay Brazilian debt, Brazilian trade
payables and provide for general working capital.

5. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
-----------------------
1997 1996
---- ----
(UNAUDITED)
<S> <C> <C>
CASH PAID FOR INTEREST AND TAXES WAS AS FOLLOWS:
Taxes, net of refunds...................................... $ 1,801 $1,606
Interest, net of amounts capitalized....................... 2,374 2,901

NONCASH INVESTING AND FINANCING ACTIVITIES:
Property, plant and equipment debt additions............... 2,207 12,713
Debenture conversion....................................... 80

</TABLE>

6. SUBSEQUENT EVENT

At a hearing before the Court on August 4, 1997, the adequacy of the
Disclosure Statement (to which the Second Amended Plan of Reorganization of
Grant Geophysical, Inc. (the "Plan") is attached) was approved. Voting on the
Plan by Grant's creditors and preferred shareholders will commence on August
13, 1997 and will be concluded by September 8, 1997. A hearing before the Court
is scheduled to be held on September 12, 1997 to confirm the Plan.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

On December 6, 1996, Grant Geophysical, Inc. ("Grant") filed for
reorganization under chapter 11 of the Bankruptcy Code. Since filing the
petition, Grant has continued to operate its business in the ordinary course as
debtor-in-possession. Grant has several wholly-owned subsidiaries incorporated
in the United States and certain foreign jurisdictions (the "Subsidiaries").
Grant and certain of the Subsidiaries have branch operations in a number of
foreign jurisdictions (the "Branches"). Grant, the Subsidiaries and the
Branches are collectively referred to as the "Company." The following
discussions of the Company's financial condition should be viewed in the
context of the ongoing chapter 11 proceedings.

11
<PAGE> 12

Since 1994, the Company has concentrated on providing contract land and
transition zone data acquisition services internationally. This coincided with
a surge in demand for 3D seismic services, particularly within the United
States. In addition, over this same period, the Company expanded its
international operations, particularly in Latin America. This rapid expansion
put a tremendous strain on the Company's capital resources. The need for
working capital to fuel this growth and to purchase new capital equipment
resulted in an ongoing liquidity problem.

In the first quarter of 1994, Grant's management began development of a
proprietary data recording system that became known as Citation. This system
was intended to replace an older recording system in use in marshy areas along
the Texas and Louisiana Gulf Coast. Grant's management initially believed that
an advantage of the system was its relatively low cost to develop and
manufacture when compared to the price of comparable third party equipment.
Original estimates ranged from savings of one-third to one-half of a purchased
system. The prototype system was planned to cost approximately $2,500,000 to
$3,000,000 with deployment in early 1996. However, software design problems and
unavailability of hardware resulted in numerous delays and cost overruns. The
ultimate cost of the system was approximately $6,000,000 and initial deployment
was not achieved until July 1996, several months behind schedule. While the
system was able to successfully acquire data, production performance was well
below expectation. Development and other costs associated with Citation
contributed significantly to destabilizing the Company's financial condition
during 1996.

In addition to the Citation development, several operational factors
contributed to a sudden and dramatic deterioration of the Company's financial
condition in 1996. The most costly factor was losses incurred in Peru. The
Company began operations in Peru in 1995 by mobilizing three crews in March,
April and May of that year. Revenue and operating income for 1995 were
$13,719,000 and $1,205,000, respectively. Peruvian operations were expanded in
1996 by adding a fourth crew and increasing the equipment complement on
another. However, an inability to accurately estimate the crews' production
capabilities coupled with costs that were significantly higher than originally
estimated, resulted in material and continuing operating losses. During the
year ended 1996, Peruvian operations had revenues of $27,490,000 and an
operating loss of $19,804,000, including $2,700,000 related to the shutdown of
operations in and withdrawal of equipment and personnel from the country. The
Company's United States operations also experienced significant losses,
substantially all of which were directly or indirectly related to the slow
development and late deployment of the Citation system. Two shallow water
transition zone projects in particular incurred operating losses in excess of
$6,000,000. These projects were delayed while waiting on the deployment of the
Citation and were subsequently conducted utilizing other seismic recording
equipment. As a result, the crews experienced adverse weather due to the delays
and production was severely hampered. These operations were ultimately
suspended in November 1996.

All of these factors: (1) rapid expansion in the United States and Latin
American markets, (2) costly and unsuccessful deployment of a proprietary
recording system and (3) poor operational results in 1996, contributed to a
rapid deterioration of the Company's financial condition. Grant explored
various alternatives to improve its capital structure and increase its
liquidity. Discussions were conducted with prospective lenders and investors,
including certain creditors and stockholders of Grant. However, these
discussions were not successful in procuring sufficient capital to adequately
fund ongoing operations. By late 1996, it became apparent to Grant that the
only feasible recourse was to commence a reorganization under bankruptcy court
protection.

Since filing its voluntary petition on December 6, 1996, Grant has
continued to operate in the ordinary course of business as
debtor-in-possession. On February 4, 1997, the Bankruptcy Court approved a
Final Financing Order authorizing Grant to enter into an agreement to obtain
secured post-petition financing with Foothill Financial Corporation (the
"Lender") under which agreement the Lender continued to advance funds to Grant
for its operations. The Lender agreed to make revolving advances not to exceed
$12,500,000 through June 30, 1997. The advances are not to exceed a borrowing
base equal to a percentage of certain trade accounts receivable and an
overadvance amount. The Final Financing Order was amended by order of the
Bankruptcy Court on April 9, 1997 to revise the overadvance amount to
$7,000,000 and to extend the maturity date to September 30, 1997. The
Financing Order also includes an internal cash management and reporting system
containing certain requirements that Grant operate within an approved budget
and restrictions in the movement of cash from the Company's domestic operations
to most foreign locations. This latter restriction has not adversely affected
foreign operations.

12
<PAGE> 13

The Company's indebtedness at June 30, 1997, totaled $99,560,000 and
included $79,085,000 of pre-petition liabilities subject to Grant's bankruptcy
proceeding. Grant's stockholders' deficit at that date totaled $34,270,000. The
ultimate recovery, if any, by Grant's various parties at interest will depend
on the resolution of the bankruptcy proceeding and the terms of a plan of
reorganization.

On March 14, 1997, Grant announced that it had entered into a term sheet
with Elliott Associates L.P. ("Elliott") pursuant to which Elliott would,
subject to terms and conditions of a definitive agreement, make certain capital
investments in connection with a plan of reorganization. In response to other
offers received by Grant in accordance with certain bidding procedures ordered
by the Bankruptcy Court, Elliott submitted a revised offer and term sheet
("Revised Term Sheet"). Both Grant and the Official Committee of Unsecured
Creditors determined that Elliott's Revised Term Sheet was the highest and best
offer received by Grant. On June 23, 1997, this decision was announced to the
Bankruptcy Court and the Revised Term Sheet was filed with the Bankruptcy
Court.

On July 7, 1997, in accordance with the provisions of the Revised Term
Sheet, Grant filed the First Amended Plan of Reorganization of Grant
Geophysical, Inc. and the accompanying Disclosure Statement. The First Amended
Plan was further amended by the filing, on August 4, 1997, of the Second
Amended Plan of Reorganization (the "Plan"). In general, the Plan provides,
among other things, for the creation of a special purpose acquisition
corporation, referred to as Newco, that will be controlled by Elliott. Elliott
will invest $23,750,000 directly into Newco and will, in addition, underwrite a
$23,750,000 rights offering of the common stock of Newco or any successor of
Newco. Those rights will be offered to the existing holders of Grant's
preferred stock and its unsecured creditors at a price of $5 per right (or its
economic equivalent in the event such rights are offered by a successor of
Newco). The rights offering will not be extended to the holders of Grant's
common stock and, once the reorganization has been completed, all currently
outstanding common and preferred stock of Grant will be canceled.

Under the Plan, Newco will assume approximately $15,100,000 of Grant's
secured debt. The remaining obligations of secured creditors which are not
assumed by Newco will be paid in full, in cash. Grant's unsecured creditors
will receive cash from a pool of funds to be established from the contributions
to be made by Elliott and from cash received from the rights offering. Elliott
will also establish a working capital facility for Newco of at least $5,000,000
at the time the reorganization is completed. Also, following the
reorganization, Newco will change its name to Grant Geophysical, Inc. and Grant
will change its name to GGI Liquidating Corporation.

At a hearing before the Bankruptcy Court on August 4, 1997, the adequacy of
the Disclosure Statement (to which the Plan is attached) was approved. Voting
on the Plan by Grant's creditors and preferred shareholders will commence on
August 13, 1997 and will be concluded by September 8, 1997. A hearing before
the Bankruptcy Court is scheduled to be held on September 12, 1997 to confirm
the Plan. Assuming confirmation of the Plan, closing of the reorganization will
occur within 30 days and initial distributions to creditors are expected to
commence no later than January 31, 1998.

In connection with the rights offering, Newco expects to file a
Registration Statement with the Securities and Exchange Commission ("SEC")
covering the rights, and the common stock of Newco (or any successor) which
will be issued pursuant thereto. In the event the rights offering has not been
completed by December 31, 1997, Elliott is obligated to fund to Newco the
entire $23,750,000 covered by the rights offering pending completion of the
rights offering.

Following the completion of the rights offering, Elliott will own
approximately 65% of Newco, which percentage could increase to 100%, depending
upon the number of rights which are exercised by the holders of Grant's
unsecured debt and preferred stock.

RESULTS OF OPERATIONS

The Company's operating profitability is dependent upon the mix of
contracts in effect during any given period.

THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996

The Company's consolidated revenues increased 37% ($9,922,000) to
$36,873,000. This increase is the result of significant increases in crew
activity in both the United States and international locations.

13
<PAGE> 14

Revenues from United States operations increased 31% ($3,563,000) to
$15,044,000. During both periods the Company operated seven seismic crews. The
increase in revenues can be attributed to the activity of a shallow water
transition zone crew operating off the coast of Louisiana. During the three
months ended June 30, 1997, revenues from that crew were approximately
$6,960,000 compared with $2,942,000 for the same period in 1996. The 1997
revenues were from one contract that began in March 1997 and was completed in
mid-July. It is anticipated that revenues from this crew in the coming quarter
will be materially less than those recorded in the second quarter.

Latin America revenues increased 28% ($4,096,000) to $18,780,000. During
the second quarter of 1997, the Company operated a total of five crews in
Colombia, Ecuador and Brazil. In the second quarter of the prior year there
were seven crews in operation in Colombia, Bolivia, Peru and Brazil. The
revenue increase in the current quarter compared to the second quarter of 1996
is the result of significant increases in activity in Colombia and Ecuador that
was offset by the completion of operations in Bolivia in 1996. The two
Colombian crews operating during the second quarter completed work during the
last week in June 1997. One of the crews is scheduled to begin a new project in
Colombia in August 1997.

Far East revenues increased 288% ($2,263,000) to $3,049,000. The Company
operated one land seismic crew in Bangladesh for the three months ended June
30, 1997 and was mobilizing a shallow water transition zone crew that began
operations offshore Bangladesh in July 1997. During the same period in 1996,
the Company was experiencing some difficulty mobilizing the current land crew
in Bangladesh due to civil unrest. In addition to Bangladesh, the Company is
exploring other opportunities in Indonesia and surrounding countries.

Direct operating expenses increased by $7,340,000 but decreased as a
percentage of revenue to 77% from 78%. The decrease is primarily the result of
more efficient operations in Colombia. The overall dollar increase is the
result of the increased revenues recorded during the period.

Other operating expenses, which consist of general and administrative
expenses at the corporate headquarters and in foreign locations, decreased as a
percentage of revenues to 6% from 9%. This was the result of cost reductions at
the corporate offices during the fourth quarter of 1996 and a reduction in
foreign overhead due to the sale of the Company's Nigerian operations.

Depreciation and amortization increased 14% ($362,000) to $2,978,000. This
increase is the result of depreciation on equipment that had been leased in the
prior year and was converted to owned equipment effective January 1997.

Interest expense increased 10% ($124,000) to $1,312,000. This increase is
the result of increased interest paid on the post-petition financing with
Foothill Capital that is partially offset by lower interest expense in the
foreign locations due to a lower level of foreign debt.

Interest income of $196,000 is the result of interest earned on cash
advances from a customer received in December 1996. All of the advances had
been earned as of June 30, 1997.

Reorganization costs of $787,000 relate to charges incurred in connection
with Grant's reorganization process. There are no comparable charges in the
second quarter of 1996.

The income tax provision in both periods consists of income taxes in
foreign locations. The increase from prior period is the result of the increase
in taxable income in Colombia. No provision for US Federal income tax was made
in either period as the Company currently has net losses available for
carryforward.

SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1996.

The Company's consolidated revenues for the year increased 23%
($12,410,000) to $67,169,000. This is primarily the result of increased
activity in Latin America and the Far East.

Revenues from the United States increased 7% ($1,578,000) to $25,725,000.
The Company operated seven crews during both periods: five land crews and two
shallow water transition zone crews. The revenue increase is

14
<PAGE> 15

largely the result of an increase in activity from one of the Company's shallow
water transition zone crews operating off the coast of Louisiana and was
partially offset by a decrease in activity from one of the land crews.

In Latin America revenues increased 28% ($7,938,000) to $35,928,000.
During the first six months in 1997, the Company operated six crews in
Colombia, Ecuador, Brazil and Peru. This compares to the same period in 1996
when eight crews were active in Peru, Colombia, Bolivia and Brazil. The
increase in revenues is the result of a significant increase in operations in
Colombia, Ecuador and Brazil that was offset by the completion of the Bolivian
operations in 1996, and the shutdown of the Peruvian operations in the first
quarter of 1997. The Colombian operations contributed $19,703,000 in 1997
compared to only $7,078,000 in 1996 and the Peruvian operations contributed
only $2,696,000 in 1997 compared to $11,898,000 in 1996. In Peru, all
operations were completed in January 1997 and the crews and equipment withdrawn
over a two month period. The two Colombian crews completed operations in late
June 1997 and one crew is currently scheduled to begin a new project in August
1997.

Far East revenues increased 226% ($3,822,000) to $5,516,000. The Company
operated one land seismic crew the full six months of 1997 in Bangladesh and
was mobilizing a second Bangladesh shallow water crew from April 1997 to June
1997 (this crew began operations in July 1997). This compares to the same
period in 1996 when there was only one month of revenue from a crew completing
operations in Indonesia and the Company was experiencing significant delays
while mobilizing the current Bangladesh land crew due to local civil unrest.

The Company had no revenue from Nigeria during the six months ended June
30, 1997 as compared to $928,000 for the same period in 1996. Due to several
factors: the risk of operating in Nigeria, the high cost of mobilizing a crew
and limited resources available, a decision to sell the Nigerian operations was
made in December 1996. The sale was completed in April 1997. The effect of the
sale was recorded in 1996 and, therefore, had no impact on the six months ended
June 30, 1997.

Direct operating expense as a percentage of revenue decreased to 77% from
79%. This was the result of more efficient operations in Colombia and the
elimination of expenses due to the shutdown of the Company's Nigerian
operations in December 1996. The overall dollar increase of $8,784,000 is due
to increased revenues in both the international and domestic areas.

Depreciation and amortization increased 12% ($603,000) to $5,589,000. This
increase is the result of depreciation on equipment that was being leased in
the prior year and was converted to owned equipment effective January 1997.

Interest expense increased 7% ($185,000) to $2,703,000. This increase is
the result of increased interest paid on the post-petition financing with
Foothill Capital that is partially offset by lower interest in the foreign
locations due to a lower level of foreign debt.

Interest income increased $180,000 to $200,000 as the result of interest
earned on cash advances from a customer received in December 1996. All of the
advances had been earned as of June 30, 1997.

Reorganization costs of $1,780,000 relate to charges incurred in
connection with Grant's reorganization process. There are no comparable charges
in the first six months of 1996.

Other income of $215,000 relates to a foreign exchange gain in Colombia
and the settlement of a law suit.

15
<PAGE> 16

LIQUIDITY AND CAPITAL RESOURCES

For more than a one year prior to filing for chapter 11, the Company as a
whole, and Grant in particular, experienced chronic liquidity problems. By the
second half of 1996, these problems had become severe. During this period,
payments were delayed to trade creditors, holders of Grant's secured and
unsecured note obligations and to lessors of capital equipment. In addition,
dividends on Grant's preferred stock had been omitted since December 1992.
Further, a lack of funding created delays in the startup of certain operations
and seriously affected the efficiency of other ongoing projects. Exacerbating
the crisis during the second half of 1996 were significant and continuing cash
flow losses on certain crews operating in Peru and in the United States coupled
with the continuation of investment in the Citation system.

In an effort to resolve the liquidity crisis, Grant sought to obtain loans
and/or equity contributions from a number of sources. In connection with its
attempt to improve its liquidity and financial condition, Grant entered into
arrangements with a variety of lenders and investors pursuant to which loans
totaling approximately $11,000,000 (of which, about $6,000,000 was unsecured
debt) were advanced and an additional $1,573,000 of preferred stock was sold.
However, this financing was not sufficient to offset the Company's continuing
need for liquidity, and additional required financing was not available. As a
result, Grant was left with no alternative except to file the chapter 11
proceeding in December 1996.

Immediately prior to and following the chapter 11 filing, the Company took
a number of steps to substantially reduce its cash outflows. The most
significant of these was the renegotiation of certain contracts in Peru and the
subsequent withdrawal of all equipment and personnel from that country, the
cessation of certain transition zone operations in the United States and a
suspension of all work on the Citation system.

Grant's short-term liquidity has improved in recent weeks but remains
restricted. The Company's primary sources of liquidity since filing for chapter
11 are its cash, cash flow from operations, advances from customers, available
lines of credit in foreign locations and Grant's post petition working capital
line of credit.

At June 30, 1997, the Company had cash of approximately $4,489,000,
substantially all of which was held by the Company's foreign operations. On the
Petition Date, Grant and the Lender entered into a Bankruptcy Court approved
interim financing order which provided for the Lender to continue to make
certain working capital advances to Grant for its United States and certain
foreign operations. On February 4, 1997 this interim financing order became
final and such final order was thereafter amended on April 9, 1997. Under the
amended financing order, the Lender has made available the loans as discussed
earlier in this Management's Discussion. As of August 6, 1997, Grant had
borrowed $8,548,000 under the Amended Financing Order and there was $2,219,000
available for borrowing.

For the quarter ended June 30, 1997, the Company's capital expenditures
totaled approximately $2,663,000. As a result of newly awarded contracts, the
Company believes that its capital spending requirements for the remainder of
1997 will be approximately $3,000,000 and that such amount will be adequate to
support its operations.

Grant believes that its available liquidity is sufficient to support its
operations and capital spending for the near term. However, the Company's
liquidity is and is expected to remain very restricted for the foreseeable
future. Any material reduction in demand for the Company's services or any
significant operating losses would adversely affect Grant's ability to complete
any proposed plan of reorganization and would likely jeopardize the Company's
ability to continue to fund ongoing operations.

16
<PAGE> 17

OTHER

Foreign Exchange Gains and Losses. In order to mitigate foreign exchange
rate fluctuations, the Company attempts to structure the majority of its
international contracts to be billed and paid at a certain U.S. Dollar rate.
Additionally, the Company periodically enters into same currency debt of a
foreign subsidiary to pay expenses incurred locally. Foreign currency
transaction/translation gains and losses resulting from these arrangements are
included in Other income. Presently, the Company does not use derivatives or
forward foreign exchange hedging contracts.

Recent Accounting Pronouncements. In February 1997, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 128, Earnings per Share ("SFAS 128"). SFAS 128 specifies the compilation,
presentation and disclosure requirements for earnings per share for entities
with publicly held common stock or potential common stock. The requirements of
this statement will be effective for both interim and annual periods ending
after December 15, 1997. Management does not believe that the implementation of
SFAS 128 will have a material effect on its financial statements.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
130"). SFAS 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. The requirements of this statement will be effective for
both interim and annual periods beginning after December 15, 1997. Management
does not believe that the implementation of SFAS 130 will have a material
effect on its financial statements.

17
<PAGE> 18

PART II

OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) List of Exhibits

Exhibit No.
-----------

2.01 Disclosure Statement including the Second Amended
Plan of Reorganization of Grant Geophysical, Inc.

11.01 Computation of Income (Loss) Per Common and Common
Equivalent Share for the Six Months Ended
June 30, 1997 and 1996.

11.02 - Computation of Income (Loss) Per Common and Common
Equivalent Share for the Three Months Ended
June 30, 1997 and 1996.

27.01 - Financial data schedule.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended
June 30, 1997.

18
<PAGE> 19

SIGNATURES

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

GRANT GEOPHYSICAL, INC.
(REGISTRANT)

Date August 14, 1997 By Larry E. Lenig, Jr.
-------------------------------------- ----------------------------
Larry E. Lenig, Jr.
Chief Operating Officer,
President
(Principal Executive Officer)

Date August 14, 1997 By Michael P. Keirnan
-------------------------------------- ----------------------------
Michael P. Keirnan
Chief Financial Officer
(Principal Financial and
Accounting Officer)

19
<PAGE> 20

INDEX TO EXHIBITS

Exhibit No. Description
----------- -----------

2.01 Disclosure Statement including the Second Amended
Plan of Reorganization of Grant Geophysical, Inc.

11.01 Computation of Income (Loss) Per Common and Common
Equivalent Share for the Six Months Ended
June 30, 1997 and 1996.

11.02 - Computation of Income (Loss) Per Common and Common
Equivalent Share for the Three Months Ended
June 30, 1997 and 1996.

27.01 - Financial data schedule.

<PAGE> 1

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

IN RE: )
) Chapter 11
GRANT GEOPHYSICAL, INC. )
) Case No. 96-1936 (HSB)
Debtor. )

DISCLOSURE STATEMENT PURSUANT TO SECTION 1125
OF THE BANKRUPTCY CODE WITH RESPECT TO
SECOND AMENDED PLAN OF REORGANIZATION OF GRANT GEOPHYSICAL, INC.

Dated: August 5, 1997

YOUNG, CONAWAY, STARGATT
& TAYLOR KING & PENNINGTON, L.L.P.

Laura Davis Jones (#2436) C. Robert Bunch
Scott Cousins (#3079) 3100 South Tower Pennzoil Place
Eleventh Floor, Rodney Square North -- AND -- 711 Louisiana
Post Office Box 391 Houston, Texas 77002
Wilmington, Delaware 19899-0391 (713) 225-8400
(302) 571-6684

CO-COUNSEL TO DEBTOR AND
DEBTOR-IN-POSSESSION

SCOTT, DOUGLASS
& MCCONNICO L.L.P.

Christopher Fuller
600 Congress Ave., Suite 1500
Austin, Texas 78701
(512) 485-6300

SPECIAL COUNSEL TO THE DEBTOR
AND DEBTOR-IN-POSSESSION
<PAGE> 2
DISCLOSURE STATEMENT DATED AUGUST 4, 1997

SOLICITATION OF VOTES
WITH RESPECT TO THE SECOND AMENDED PLAN OF REORGANIZATION
OF GRANT GEOPHYSICAL, INC.

THIS DISCLOSURE STATEMENT SOLICITS ACCEPTANCES OF THE SECOND AMENDED
PLAN OF REORGANIZATION (THE "PLAN") OF GRANT GEOPHYSICAL, INC. ("GRANT" OR THE
"DEBTOR") FROM HOLDERS OF CERTAIN CLAIMS AND INTERESTS UNDER THE PLAN. THE PLAN
IS BEING PROPOSED JOINTLY WITH THE DEBTOR BY ELLIOTT ASSOCIATES, L.P. ("EALP").

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

THE PURPOSE OF THIS DISCLOSURE STATEMENT IS TO ENABLE YOU, IF YOU ARE
A CREDITOR OR INTEREST HOLDER WHOSE CLAIM OR INTEREST IS IMPAIRED AND WHO WILL
RECEIVE A DISTRIBUTION UNDER THE PLAN, TO MAKE AN INFORMED DECISION IN
EXERCISING YOUR RIGHT TO VOTE TO ACCEPT OR REJECT THE PLAN.

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

GRANT BELIEVES THAT THE PLAN IS IN THE BEST INTERESTS OF CREDITORS AND
INTEREST HOLDERS. ACCORDINGLY, HOLDERS OF IMPAIRED CLAIMS AND INTERESTS WHO ARE
ENTITLED TO VOTE ARE URGED TO VOTE IN FAVOR OF THE PLAN. VOTING INSTRUCTIONS
ARE SET FORTH AT PAGE 62 OF THIS DISCLOSURE STATEMENT. TO BE COUNTED, YOUR
BALLOT MUST BE DULY COMPLETED, EXECUTED AND ACTUALLY RECEIVED NO LATER THAN
4:00 P.M. EASTERN TIME ON SEPTEMBER 8, 1997.

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

THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS (THE "OFFICIAL
COMMITTEE") ALSO BELIEVES THAT THE PLAN IS IN THE BEST INTERESTS OF THE
DEBTOR'S UNSECURED CREDITORS. ACCORDINGLY, THE OFFICIAL COMMITTEE URGES HOLDERS
OF CLASS 5 AND 6 CLAIMS TO VOTE IN FAVOR OF THE PLAN.

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

THE CONFIRMATION AND EFFECTIVENESS OF THE PLAN ARE SUBJECT TO MATERIAL
CONDITIONS PRECEDENT. SEE "OVERVIEW OF THE PLAN -- CONDITIONS TO CONFIRMATION
AND EFFECTIVE DATE" AND "VOTING AND CONFIRMATION OF THE PLAN -- CONFIRMATION
WITHOUT ACCEPTANCE BY ALL IMPAIRED CLASSES." THERE CAN BE NO ASSURANCE THAT
THOSE CONDITIONS WILL BE SATISFIED OR WAIVED.

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

READ THE DISCLOSURE STATEMENT AND PLAN. HOLDERS OF IMPAIRED CLAIMS OR
INTERESTS SHOULD READ CAREFULLY THE DISCLOSURE STATEMENT, INCLUDING THE MATTERS
DESCRIBED HEREIN UNDER "CERTAIN RISK FACTORS," AND THE PLAN IN THEIR ENTIRETY
PRIOR TO VOTING ON THE PLAN.

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

CONSULT YOUR ADVISORS. EACH HOLDER OF AN IMPAIRED CLAIM OR INTEREST
SHOULD CONSULT THEIR INDIVIDUAL ATTORNEY, ACCOUNTANT AND/OR FINANCIAL ADVISOR
AS TO THE EFFECT OF THE PLAN ON SUCH HOLDER.

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

PLAN SUMMARIES CANNOT CHANGE THE PLAN. FOR THE CONVENIENCE OF
CREDITORS AND EQUITY SECURITY HOLDERS, THE DISCLOSURE STATEMENT SUMMARIZES
<PAGE> 3
THE TERMS OF THE PLAN BUT THE PLAN ITSELF, INCLUDING THE EXHIBITS THERETO,
QUALIFIES ALL SUMMARIES. IF ANY INCONSISTENCY EXISTS BETWEEN THE PLAN AND THE
DISCLOSURE STATEMENT, THE TERMS OF THE PLAN ARE CONTROLLING.

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

THIS DISCLOSURE STATEMENT IS ONLY FOR USE IN RELATION TO THE PLAN OF
REORGANIZATION. THE DISCLOSURE STATEMENT MAY NOT BE RELIED ON FOR ANY PURPOSE
OTHER THAN TO DETERMINE WHETHER TO VOTE IN FAVOR OF OR AGAINST THE PLAN AND TO
MAKE RELATED OPTIONS AND ELECTIONS, AND NOTHING CONTAINED HEREIN SHALL
CONSTITUTE AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PARTY, OR BE ADMISSIBLE
IN ANY PROCEEDING INVOLVING THE DEBTOR OR ANY OTHER PARTY, OR BE DEEMED
CONCLUSIVE EVIDENCE OF THE TAX OR OTHER LEGAL EFFECTS OF THE REORGANIZATION OF
THE DEBTOR ON HOLDERS OF CLAIMS OR EQUITY INTERESTS. CERTAIN OF THE INFORMATION
CONTAINED IN THE DISCLOSURE STATEMENT, BY ITS NATURE, IS FORWARD LOOKING,
CONTAINS ESTIMATES, FORECASTS AND ASSUMPTIONS WHICH MAY PROVE TO BE WRONG OR
WHICH MAY BE MATERIALLY DIFFERENT FROM ACTUAL RESULTS.

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

STATEMENTS NOT UPDATED AFTER AUGUST 4, 1997. THE STATEMENTS CONTAINED
IN THE DISCLOSURE STATEMENT ARE MADE AS OF THE DATE HEREOF UNLESS ANOTHER TIME
IS SPECIFIED, AND NEITHER DELIVERY OF THE DISCLOSURE STATEMENT NOR ANY EXCHANGE
OF RIGHTS MADE IN CONNECTION WITH THE PLAN SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET
FORTH HEREIN SINCE THE DATE THE DISCLOSURE STATEMENT AND THE MATERIALS RELIED
ON IN PREPARATION OF THE DISCLOSURE STATEMENT WERE COMPILED.

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

NO REPRESENTATIONS OR ASSURANCES CONCERNING THE DEBTOR'S BUSINESS OR
THE PLAN ARE AUTHORIZED BY GRANT GEOPHYSICAL, INC. OTHER THAN AS SET FORTH IN
THIS DISCLOSURE STATEMENT AND THE EXHIBITS ATTACHED HERETO OR INCORPORATED BY
REFERENCE OR REFERRED TO HEREIN. ANY REPRESENTATIONS OR INDUCEMENTS MADE BY ANY
PERSON TO SECURE YOUR VOTE THAT ARE OTHER THAN HEREIN CONTAINED SHOULD NOT BE
RELIED UPON IN ARRIVING AT ANY DECISION, AND SUCH ADDITIONAL REPRESENTATIONS OR
INDUCEMENTS SHOULD BE REPORTED TO COUNSEL FOR GRANT GEOPHYSICAL, INC., WHO, IN
TURN, SHALL DELIVER SUCH INFORMATION TO THE BANKRUPTCY COURT FOR SUCH ACTION AS
MAY BE DEEMED APPROPRIATE.

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

ALL CAPITALIZED TERMS USED IN THIS DISCLOSURE STATEMENT AND NOT
OTHERWISE DEFINED HEREIN HAVE THE MEANINGS ASCRIBED THERETO IN THE PLAN.

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

NEITHER THE SECURITIES OFFERED UNDER THE PLAN NOR THE PLAN ITSELF HAVE
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION APPROVED OR DISAPPROVED THIS DISCLOSURE
STATEMENT OR PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
HEREIN.

<PAGE> 4
TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. BIDDING PROCEDURES AND OTHER EVENTS LEADING TO THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

III. OVERVIEW OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
A. General Information Concerning Chapter 11 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 3
B. General Information Concerning Treatment of Claims and Interests . . . . . . . . . . . . . . . . . . . 3
C. General Information Concerning Plan Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
D. Summary of Classes and Treatment of Claims and Interests . . . . . . . . . . . . . . . . . . . . . . . 5
E. Summary of Plan Treatment of Claims and Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1. Plan Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Means for Implementation of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Distributions to Creditors and Interest Holders . . . . . . . . . . . . . . . . . . . . . . . 6
F. Additional Information Regarding Treatment Of Certain Claims And Interests . . . . . . . . . . . . . 13
1. Administrative Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2. Equipment Purchase Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3. Certain Secured Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4 The Class 5 Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5. Cramdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
G. Conditions Precedent To Confirmation and Effective Date . . . . . . . . . . . . . . . . . . . . . . 15
1. Conditions to Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2. Conditions to Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3. Waiver of Conditions to Confirmation and Effective Date . . . . . . . . . . . . . . . . . . 16
H. Modification Or Revocation Of The Plan; Severability . . . . . . . . . . . . . . . . . . . . . . . . 16

IV. GENERAL INFORMATION CONCERNING THE DEBTOR
AND CERTAIN EVENTS PRECEDING THE DEBTOR'S CHAPTER 11 FILING . . . . . . . . . . . . . . . . . . . . . . . . 17
A. Historical Description of the Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
B. Overview of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2. Management and Management Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3. Customers and Market Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
C. Certain Events Preceding the Debtor's Chapter 11 Filing . . . . . . . . . . . . . . . . . . . . . . 28

V. THE CHAPTER 11 CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
A. Commencement of the Chapter 11 Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
B. Parties in Interest in the Chapter 11 Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1. The Bankruptcy Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2. Retention of Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3. The Official Committee of Unsecured Creditors . . . . . . . . . . . . . . . . . . . . . . . 29
C. Postpetition Operations and Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
D. Bar Date and Other Claim Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

VI. EALP AND THE NEWCO ASSET PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
A. EALP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
B. Term Sheet and Revised Term Sheet Between EALP and the Debtor . . . . . . . . . . . . . . . . . . . 30
</TABLE>

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C. Material Provisions of Newco Asset Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . 31
1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2. Certain Assigned Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4. Certain Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
a. Alternative Transactions and Break-Up Fee Provisions . . . . . . . . . . . . . . . 32
b. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
c. Disclosure Statement, Solicitation and Plan Related Documents . . . . . . . . . . . 33
5. Conditions to Obligations of EALP, Newco and the Debtor . . . . . . . . . . . . . . . . . . 33
D. EALP Guaranty of Rights Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
E. Establishment of New Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
F. Name Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

VII. NEWCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
A. Business of Newco and Strategic Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
B. Initial Capitalization of Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
C. Audited Consolidated Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
D. Unaudited Interim Consolidated Financial Information . . . . . . . . . . . . . . . . . . . . . . . . 34
E. Unaudited Projected Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
F. Management of Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
1. Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2. Executive Officers and Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . 36
a. Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
b. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3. Benefit Plans and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4. Certain Corporate Governance Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5. Limitation of Liability; Indemnification, Director and Officer Insurance . . . . . . . . . 38
a. Certificate of Incorporation and Bylaws Provisions . . . . . . . . . . . . . . . . 38
b. Directors' and Officers' Insurance . . . . . . . . . . . . . . . . . . . . . . . . 38
G. Authorized Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

VIII. STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

IX. CERTAIN TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
A. Transactions with EALP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
B. Transactions with Other Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

X. THE RIGHTS OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
B. Rights Exercise Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
C. Exercise Procedures; Delivery of Rights Offering New Common Stock . . . . . . . . . . . . . . . . . 40

XI. SECURITIES TO BE ISSUED AND DISTRIBUTED UNDER THE PLAN
AND THE NEWCO ASSET PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
A. The Newco Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
B. The Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
C. Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
D. Application of Federal and Other Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 43

XII. CERTAIN RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
A. Risks Relating to the Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
B. Noncomparability of Historical Financial Information . . . . . . . . . . . . . . . . . . . . . . . . 43
C. Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>

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D. Certain Risks Associated With the Registration Statement . . . . . . . . . . . . . . . . . . . . . . 43
E. Certain Risks Associated With the Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
F. Absence of a Public Market; Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
G. Lack of Anticipated Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
H. Certain Risks Associated with the Chapter 11 Case; Risks of Non-Confirmation . . . . . . . . . . . . 44
I. Certain Conditions to the Effective Date; Termination Provisions . . . . . . . . . . . . . . . . . . 45
J. Certain Provisions of the Certificate of Incorporation and the Bylaws;
Delaware General Corporation Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
K. Concentration of Ownership; Certain Holders of New Common Stock . . . . . . . . . . . . . . . . . . 45
L. Loss of Corporation Tax Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
M. Disruption of Operations Relating to Bankruptcy Filing . . . . . . . . . . . . . . . . . . . . . . . 46
N. Industry Cyclicality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
O. Business and Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
P. Certain Timing Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Q. Fixed Price Contracts and Other Project Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
R. Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
S. Foreign Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
T. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
U. Other Operating Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
V. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

XIII. GENERAL INFORMATION CONCERNING THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
A. Legal Effect of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
1. Continued Corporate Existence; Vesting of Assets . . . . . . . . . . . . . . . . . . . . . 48
2. Cancellation of Capital Stock; Surrender of Securities
and Other Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3. Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4. Limitation of Liability in Connection With The Plan, Disclosure
Statement and Related Documents; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 49
5. Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6. Other Secured Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
B. Releases Under the Plan; Related Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
1. Releases By the Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2. Releases By Holders of Claims or Interests . . . . . . . . . . . . . . . . . . . . . . . . 50
a. Holders of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
b. Holders of Certain Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
c. Release of Official Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3. Injunction Related to Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4. Limitation on Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
C. Retention of Bankruptcy Court Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
D. Executory Contracts and Unexpired Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
1. Rejection of Executory Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2. Bar Date for Rejection Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3. Assumption of Executory Contracts and Unexpired Leases . . . . . . . . . . . . . . . . . . 53
4. Cure of Defaults in Connection With Assumptions . . . . . . . . . . . . . . . . . . . . . . 53
5. Special Executory Contract and Unexpired Lease Matters . . . . . . . . . . . . . . . . . . 53
a. Existing Employment, Retirement and Other Agreements
and Incentive Compensation Programs . . . . . . . . . . . . . . . . . . . . . . . . 53
b. Indemnification Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6. Executory Contracts and Unexpired Leases Entered Into and Other
Obligations Incurred After the Petition Date . . . . . . . . . . . . . . . . . . . . . . . 54
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XIV. DISTRIBUTIONS UNDER THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
1. Sources of Cash To Make Plan Distributions . . . . . . . . . . . . . . . . . . . . . . . . 54
2. Distributions for Claims and Interests Allowed as of the Effective Date . . . . . . . . . . 54
3. Distributions by Disbursing Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
B. Distribution Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
C. Timing and Calculation of Amounts To Be Distributed . . . . . . . . . . . . . . . . . . . . . . . . 55
1. In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2. Distributions to Holders of Claims in Class 5 . . . . . . . . . . . . . . . . . . . . . . . 56
3. Distributions of Rights and Newco Common Stock . . . . . . . . . . . . . . . . . . . . . . 56
4. Compliance with Tax Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
D. Surrender of Cancelled Debt Instruments or Securities . . . . . . . . . . . . . . . . . . . . . . . 57
1. Surrender of Capital Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 57
2. Special Procedures for Lost, Stolen, Mutilated or Destroyed
Capital Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3. Failure to Surrender Cancelled Capital Stock Certificates . . . . . . . . . . . . . . . . . 57
E. Undeliverable or Unclaimed Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
F. Prosecution of Objections to Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
G. Disputed Claims; Reserve and Estimations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
1. Treatment of Disputed Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
a. No Payments on Account of Disputed Claims or Interests . . . . . . . . . . . . . . 58
b. Resolution or Estimation of Claims . . . . . . . . . . . . . . . . . . . . . . . . 58
2. Distributions on Account of Disputed Claims Once They Are Allowed . . . . . . . . . . . . . 59
3. Claims Not Filed Prior to the Bar Date . . . . . . . . . . . . . . . . . . . . . . . . . . 59
H. Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

XV. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
A. Tax Consequences to Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
B. Tax Consequences to Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

XVI. VOTING AND CONFIRMATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
A. Voting Procedures And Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
1. Persons Entitled to Vote on the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
B. Classes Impaired Under the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
1. Voting Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
C. Confirmation Hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
D. Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
E. Acceptance of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
F. Confirmation Without Acceptance By All Impaired Classes . . . . . . . . . . . . . . . . . . . . . . 65
G. Best Interests Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
H. Feasibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
I. Compliance With Applicable Provisions of the Bankruptcy Code . . . . . . . . . . . . . . . . . . . . 67

XVII. ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

XVIII. RECOMMENDATION AND CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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TABLE OF EXHIBITS

EXHIBIT 1 Second Amended Plan of Reorganization of Grant Geophysical,
Inc. Dated August 4, 1997 (with selected exhibits)

EXHIBIT 2 Audited Consolidated Financial Statements of the Debtor and
its Subsidiaries for the Years Ended December 31, 1996 and
1995

EXHIBIT 3 Unaudited Consolidated Financial Statements of the Debtor and
its Subsidiaries for the Three Months Ended March 31, 1997 and
1996

EXHIBIT 4 Business Plan and Financial Analysis

EXHIBIT 5 Liquidation Analysis

EXHIBIT 6 Fairness Opinion of Simmons & Company International

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I. INTRODUCTION

This Disclosure Statement relates to the second amended plan of
reorganization (as from time to time hereafter further amended or modified, the
"Plan") of Grant Geophysical, Inc., the debtor and debtor-in-possession in the
above-captioned chapter 11 case ("Grant" or the "Debtor"). A copy of the Plan
is attached hereto as Exhibit I. The proponents of the Plan are the Debtor and
Elliott Associates, L.P. ("EALP" and collectively with the Debtor, the
"Proponents"). The Proponents seek Confirmation of the Plan and the Debtor
submits this Disclosure Statement in connection with the solicitation of
acceptances of the Plan.

The requirements for Confirmation of the Plan, including the vote of
creditors to accept the Plan and certain of the statutory findings prerequisite
to Confirmation, are described below under the caption "Voting and Confirmation
of the Plan."

Confirmation of the Plan and the occurrence of the Effective Date are
subject to a number of material conditions precedent, which are summarized in
"Overview of the Plan -- Conditions to Confirmation and Effective Date." There
can be no assurance that these conditions will be satisfied.

II. BIDDING PROCEDURES AND OTHER EVENTS LEADING TO THE PLAN

Grant filed for protection under chapter 11 of the United States
Bankruptcy Code on December 6, 1996. On January 28, 1997, the Bankruptcy Court
approved the joint retention of Simmons & Company International ("Simmons") by
Grant and the Official Committee as investment bankers. Since that time, Grant
identified and contacted over thirty prospective investors in coordination with
Simmons and the Debtor's other financial and legal advisors. On March 14, 1997,
the Debtor and EALP executed a Term Sheet (the "EALP Term Sheet") which
outlined the material terms of a plan of reorganization to be jointly proposed
by the Debtor and EALP. The EALP Term Sheet called for the Debtor to seek
Bankruptcy Court approval of a break-up fee for EALP. In addition, the EALP
Term Sheet also provided for the purchase by EALP of a $2.5 million
participation in the Debtor's debtor-in-possession financing facility
immediately upon the Bankruptcy Court's approval of the break-up fee.

On April 9, 1997, in connection with the approval of the $1.25 million
EALP break-up fee, the Bankruptcy Court ordered that certain bidding procedures
be followed in connection with the solicitation and evaluation of competing
offers for Grant. On May 23, 1997, Grant filed a plan of reorganization and
accompanying disclosure statement (the "Original Plan" and "Original Disclosure
Statement" respectively) with the Bankruptcy Court reflecting the provisions of
the EALP Term Sheet. As ordered by the Bankruptcy Court, the following bidding
procedures were followed:

a) prospective offerors were notified that all offers must be
received by Grant, the Official Committee and EALP by the date
established by the Bankruptcy Court as the deadline for
objections to be filed to the Original Disclosure Statement,
which deadline was June 13, 1997; at the request of one
prospective offeror, this deadline was extended with Court
approval until 9:00 a.m. on June 19, 1997;

b) in order to make a valid offer, the offeror was required to
agree to purchase, at par, EALP's participation in Grant's
debtor-in-possession financing facility;

c) if any valid offer was received by Grant by the deadline, an
auction was to be conducted at the offices of Young, Conaway,
Stargatt & Taylor, on a date as soon as practicable after June
19, 1997;

d) at the auction, Grant and the Official Committee were to
jointly determine the highest and best offer with such offer
to be considered the "Winning Offer;" and

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e) the selection of the Winning Offer was to be subject to the
approval of the Bankruptcy Court.

Three offers in addition to the EALP Term Sheet were received by the
deadline. Consequently, an auction was commenced on June 23, 1997 at 8:30 a.m.
in the offices of Young, Conaway, Stargatt & Taylor, co-counsel for the Debtor.
Three of the four offerors (including EALP) appeared at the auction in person,
and the fourth indicated that its representatives were available by telephone.
Representatives of Simmons were also present at the auction. The Debtor and the
Official Committee announced that, based on the EALP Term Sheet and the
qualified offers received, the Offer to Jointly Propose a Plan of
Reorganization with Grant received from an offeror other than EALP represented
the highest and best offer received prior to the commencement of the auction.
The Debtor then invited the parties in attendance to make any additional
offers.

EALP submitted a revised Term Sheet (the "Revised EALP Term Sheet")
reflecting substantially the terms described in the Plan and this Disclosure
Statement. Copies of the Revised EALP Term Sheet were distributed to the
parties in attendance at the auction. After consultation by the Debtor, the
Official Committee and Simmons with each of the other offerors in attendance,
each of the other offerors declined to submit a revised offer. Therefore, the
Debtor closed the auction and announced that in its judgment, with the
agreement of the Official Committee, the Revised EALP Term Sheet was the
highest and best offer received. Specifically, the Revised EALP Term Sheet
provided for (a) greater recovery to unsecured creditors in cash than any other
offer and (b) a distribution of rights to purchase shares of common stock in
Newco to holders of the Debtor's Old Preferred Stock and to general unsecured
creditors. No other offer provided for any distribution to holders of the
Debtor's Old Preferred Stock.

THE DEBTOR BELIEVES THAT THE PROCESS DESCRIBED ABOVE HAS RESULTED IN A
PLAN WHICH ACHIEVES THE HIGHEST AND BEST RECOVERY FOR THE CREDITORS AND
INTEREST-HOLDERS OF GRANT AND RECOMMENDS ITS ACCEPTANCE. IN ADDITION, THE
OFFICIAL COMMITTEE ALSO RECOMMENDS THAT HOLDERS OF CLASS 5 AND 6 ALLOWED
UNSECURED CLAIMS VOTE IN FAVOR OF THE PLAN.

As described in this Disclosure Statement, the Plan generally
contemplates the acquisition of substantially all of the assets of the Debtor
by Newco, a special purpose corporation formed to effect such acquisition.
Newco, in turn, is to be funded by EALP or a designated affiliate. However,
EALP's obligation to create and fund Newco and cause Newco to undertake the
other actions contemplated by the Plan is subject to various conditions. These
conditions are described in section III G "Conditions Precedent to Confirmation
and Effective Date" below. There can be no assurance that each of these
conditions will be satisfied or waived by EALP.

Prior to the filing of the Plan and this Disclosure Statement, the
Debtor held an auction during which the Debtor received bids from four
different entities, including EALP, as discussed above. There is no guarantee
that any of these bidders other than EALP have a continuing interest in
acquiring the assets of the Debtor. However, in the event that EALP fails to
close or to proceed with the acquisition, the Debtor reserves the right to find
any other entity to act as a substitute for EALP in forming and funding Newco
and ensuring that Newco takes the steps necessary to consummate the
transactions contemplated in the Plan. If the Plan is modified to provide that
such substitute entity rather than EALP forms and funds Newco, all classes of
Claims will receive the same cash distributions and other treatment under the
Plan, provided, however, that there is no assurance, and the Debtor considers
it unlikely, that holders of any Preferred or Common Interests, including
holders of Interests in Old Preferred Stock, will receive any distribution on
account of such Interests under a plan based on such substitute entity's
formation and funding of Newco and, further, in the Debtor's opinion, it is
likely that there will be no rights offering to the holders of any Claims or
Interests under such a modified plan.

2
<PAGE> 11
III. OVERVIEW OF PLAN

The following constitutes a general description of the chapter 11
process and an overview of certain material provisions of the Plan, which is
attached hereto as Exhibit I. The following summaries of the material
provisions of the Plan do not purport to be complete and are qualified in their
entirety by reference to all the provisions of the Plan, including all exhibits
thereto, all documents described therein and the definitions therein of certain
terms used below. For a description of certain other significant terms and
provisions of the Plan, see "The Rights Offering," "The Newco Asset Purchase
Agreement," "General Information Concerning the Plan" and "Distributions Under
the Plan." See also "Certain Risk Factors" for a description of certain risk
factors relating to the New Securities.

A. GENERAL INFORMATION CONCERNING CHAPTER 11 PROCEEDINGS

Chapter 11 is the principal reorganization chapter of the Bankruptcy
Code. Pursuant to chapter 11, a debtor-in-possession attempts to reorganize
its business for the benefit of itself, its creditors, and other parties in
interest. The Debtor's chapter 11 case (the "Chapter 11 Case") commenced with
the filing of a voluntary chapter 11 petition by the Debtor on December 6,
1996. The Chapter 11 Case is pending before the Honorable Helen S. Balick,
Chief Judge of the United States Bankruptcy Court for the District of Delaware,
under Case No. 96-1936 (HSB).

The commencement of a chapter 11 case creates an estate comprising all
the legal and equitable interests of the debtor in property as of the date the
petition is filed. Sections 1101, 1107, and 1108 of the Bankruptcy Code provide
that a debtor may continue to operate its business and remain in possession of
its property as a "debtor-in-possession" unless the bankruptcy court orders the
appointment of a trustee.

The filing of a chapter 11 petition also triggers the automatic stay
provisions of the Bankruptcy Code. Section 362 of the Bankruptcy Code provides,
inter alia, for an automatic stay of all attempts to collect prepetition claims
from the debtor or to otherwise interfere with its property or business. Except
as otherwise ordered by the bankruptcy court, the automatic stay remains in
full force and effect until the effective date of a confirmed plan of
reorganization.

The formulation of a plan of reorganization is the principal purpose
of a chapter 11 case. A plan sets forth the means for satisfying the claims
against and interests in the debtor. Generally, unless a trustee is appointed,
only the debtor may file a plan during the first 120 days of a chapter 11 case
(the "Exclusive Period"). However, section 1121(d) of the Bankruptcy Code
permits the court to extend or reduce the Exclusive Period upon a showing of
"cause." On April 9, 1997, the Bankruptcy Court ordered that the Debtor's
exclusive right to file a plan of reorganization be extended through and
including August 4, 1997. After the Exclusive Period has expired, a creditor or
any other party in interest may file a plan, unless the debtor has filed a plan
within the Exclusive Period, in which case, the debtor is generally given 60
additional days (the "Solicitation Period") during which it may solicit
acceptance of its plan. The Solicitation Period may also be extended or reduced
by the court upon a showing of "cause." On April 9, 1997, the Bankruptcy Court
also extended the Debtor's exclusive right to solicit acceptances of a plan of
reorganization, through and including October 2, 1997. The Debtor may seek
further extensions of the Exclusive Period and the Solicitation Period.

B. GENERAL INFORMATION CONCERNING TREATMENT OF CLAIMS AND INTERESTS

A chapter 11 plan may provide anything from a complex restructuring of
a debtor's business and its related obligations to a simple liquidation of the
debtor's assets. After a chapter 11 plan has been filed, certain holders of
claims against, or interests in, a debtor are permitted to vote to accept or
reject the plan. Before soliciting acceptances of the proposed plan, section
1125 of the Bankruptcy Code requires the debtor to prepare a disclosure
statement containing adequate information of a kind, and in sufficient detail,
to enable a hypothetical reasonable investor to make an informed judgment about
the plan. This Disclosure Statement is presented to holders of impaired Claims
against, and Interests in, the Debtor that will receive distributions under the
Plan to satisfy the requirements of section 1125 of the Bankruptcy Code.

3
<PAGE> 12
Chapter 11 does not require that each holder of a claim against, or
interest in, a debtor vote in favor of a chapter 11 plan in order for the
bankruptcy court to confirm the plan. At a minimum, however, the plan must be
accepted by a majority in number and two-thirds in amount of those claims
actually voting in at least one class of impaired claims under the plan. ONLY
THE HOLDERS OF CLAIMS AND INTERESTS WHO ACTUALLY VOTE WILL BE COUNTED AS EITHER
ACCEPTING OR REJECTING THE PLAN.

In addition, classes of claims or equity interests that are not
"impaired" under a plan of reorganization are conclusively presumed to have
accepted the plan and thus are not entitled to vote. Similarly, classes of
claims or equity interests that are not entitled to receive or retain any
property under the plan are conclusively presumed not to have accepted the plan
and thus are not entitled to vote. Accordingly, acceptances of a plan will
generally be solicited only from those persons who hold claims or equity
interests in an impaired class that will receive distributions under the Plan.
A class is "impaired" if the legal, equitable, or contractual rights attaching
to the claims or equity interests of that class are modified in any way under
the plan. Modification for purposes of determining impairment, however, does
not include curing defaults and reinstating maturity or payment in full in
cash. CLASSES 1, 2 AND 4 ARE UNIMPAIRED UNDER THE PLAN AND THUS ARE DEEMED TO
HAVE ACCEPTED THE PLAN. CLASSES 3, 5, 6, 7 AND 8 ARE IMPAIRED UNDER THE PLAN,
MAY RECEIVE A DISTRIBUTION UNDER THE PLAN, AND ARE THUS ENTITLED TO VOTE ON THE
PLAN. CLASSES 9, 10 AND 11 ARE NOT ENTITLED TO RECEIVE OR RETAIN ANY PROPERTY
UNDER THE PLAN, ARE CONCLUSIVELY PRESUMED TO HAVE REJECTED THE PLAN, AND THUS
ARE NOT ENTITLED TO VOTE ON THE PLAN.

C. GENERAL INFORMATION CONCERNING PLAN CONFIRMATION

If all classes of claims and equity interests accept a chapter 11
plan, the bankruptcy court may nonetheless still not confirm the plan unless
the court independently determines that the requirements of section 1129 of the
Bankruptcy Code have been satisfied. See "Voting and Confirmation of the Plan."
Section 1129 sets forth the requirements for confirmation of the plan and,
among other things, requires that a plan meet the "best interests" test and be
feasible. The "best interests" test generally requires that the value of the
consideration to be distributed to the holders of claims and equity interests
under a plan may not be less than those parties would receive if the debtor
were liquidated pursuant to a hypothetical liquidation occurring under chapter
7 of the Bankruptcy Code. Under the "feasibility" requirement, the bankruptcy
court must find that there is a reasonable probability that the debtor will be
able to meet its obligations under its plan of reorganization without the need
for further financial reorganization. THE PROPONENTS BELIEVE THAT THE PLAN
SATISFIES ALL THE APPLICABLE REQUIREMENTS OF SECTION 1129(A) OF THE BANKRUPTCY
CODE, INCLUDING, IN PARTICULAR, THE "BEST INTERESTS OF CREDITORS" TEST AND THE
"FEASIBILITY" REQUIREMENT.

The bankruptcy court may also confirm a chapter 11 plan even though
fewer than all the classes of impaired claims and interests accept it. For a
plan of reorganization to be confirmed despite its rejection by a class of
impaired claims or equity interests, the proponents of the plan must show,
among other things, that the plan does not "discriminate unfairly" and that the
plan is "fair and equitable" with respect to each impaired class of claims or
interests that has not accepted the plan.

Under section 1129(b) of the Bankruptcy Code, a plan is "fair and
equitable" as to a class of rejecting claims if, among other things, the plan
provides: (a) with respect to secured claims, that each such holder will
receive or retain on account of its claim property that has a value, as of the
effective date of the plan, equal to the allowed amount of such claim; (b) with
respect to unsecured claims, that either (x) the holder receive full payment or
(y) the holder of any claim that is junior to the claims of such class will not
receive or retain on account of such junior claim any property at all unless
the senior class is paid in full; and (c) with respect to equity interests,
that either (x) the holder receive full payment of any fixed liquidation
preference or redemption price or (y) the holder of any interest that is junior
to the interests of such class will not receive or retain on account of such
junior interest any property.

A plan does not "discriminate unfairly" against a rejecting class of
Claims or Interests if (a) the relative value of the recovery of such class
under the plan does not differ materially from that of any class (or

4
<PAGE> 13
classes) of similarly situated Claims or Interests, and (b) no senior class of
Claims is to receive more than 100% of the amount of the claims in such class.

The Proponents believe that the Plan provides consideration to all
Classes of Claims and Interests that reflects an appropriate resolution of
their Claims and Interests, and that the Bankruptcy Court will find that the
Debtor and the Plan have satisfied the aforementioned statutory tests. The
Proponents have reserved the right to request Confirmation pursuant to the
cramdown provisions of the Bankruptcy Code and to amend the Plan if any Class
of Claims or Interests fails to accept the Plan. Although the Proponents
believe that, if necessary, the Plan could be confirmed under the cramdown
provisions of the Bankruptcy Code if certain Classes of Claims or Interests do
not accept the Plan, there can be no assurance that the requirements of such
provisions would be satisfied.

D. SUMMARY OF CLASSES AND TREATMENT OF CLAIMS AND INTERESTS

Section 1123 of the Bankruptcy Code provides that a plan of
reorganization must classify the claims of a debtor's creditors and equity
security holders. In compliance therewith, the Plan divides Claims and
Interests into Classes and sets forth the treatment for each Class. In
accordance with section 1123(a), Administrative Claims and Priority Tax Claims
have not been classified. The Debtor also is required, under section 1122 of
the Bankruptcy Code, to classify Claims against and Interests in the Debtor
into Classes that contain Claims and Interests that are substantially similar
to the other Claims and Interests in such Class. The Debtor believes that the
Plan has classified all Claims and Interests in compliance with the provisions
of section 1122, but it is possible that a holder of a Claim or Interest may
challenge the classification of Claims and Interests and that the Bankruptcy
Court may find that a different classification is required for the Plan to be
confirmed. In such event, the Debtor intends, to the extent permitted by the
Bankruptcy Court, the Plan and the Newco Asset Purchase Agreement, to make such
reasonable modifications to the classifications under the Plan to permit
Confirmation and to use the Plan acceptances received in this solicitation for
the purpose of obtaining the approval of the reconstituted Class or Classes of
which the accepting holder is ultimately deemed to be a member. Any such
reclassification could adversely affect the Class in which such holder
initially was a member, or any other Class under the Plan, by changing the
composition of such Class and the vote required of that Class for approval of
the Plan. Furthermore, a reclassification of a Claim or Interest after approval
of the Plan could necessitate a resolicitation of acceptances of the Plan.

The classification of Claims and Interests and the nature of
distributions to holders of Impaired Claims or Impaired Interests are
summarized in the table below, which should be read in conjunction with the
information set forth in "--Additional Information Regarding Treatment of
Certain Claims and Interests" and the other information set forth in this
Disclosure Statement.

E. SUMMARY OF PLAN TREATMENT OF CLAIMS AND INTERESTS

1. PLAN OBJECTIVES

In the Chapter 11 Case, the overall purpose of the Plan is to
provide for the restructuring of the Debtor's liabilities in a manner designed
to maximize recoveries by all stakeholders to the extent possible. The Plan,
which incorporates the terms and conditions of the Newco Asset Purchase
Agreement described below, contemplates the purchase by Newco, a special
purpose acquisition corporation formed and controlled by EALP or a designated
affiliate of EALP, of substantially all of the assets of the Debtor for cash
plus the assumption of certain liabilities. The Plan, as proposed by the Debtor
and EALP, provides for, among other things, (i) the satisfaction of all Allowed
Secured Claims upon the terms provided in the Plan; (ii) satisfaction of
Allowed General Unsecured Claims by means of cash distributions or credits;
(iii) the opportunity for holders of Allowed General Unsecured Claims and
holders of Old Preferred Stock to purchase Newco Common Stock or the stock of a
successor to Newco through the exercise of the Rights; and (iv) a methodology
for the liquidation and satisfaction of Disputed Claims. To achieve the Plan
objectives, the Plan provides for the sale of substantially all of the assets
of Grant, the assumption by Newco of certain of the Debtor's liabilities and
the distribution of the proceeds of such sale, along with rights to purchase
shares of

5
<PAGE> 14
Newco, to creditors and interest-holders on the terms described herein. This
purchase and sale of substantially all of the Debtor's assets will provide the
resources required for the Debtor to meet its commitments under the Plan, as
well as the basis for Newco to take full advantage of the current market for
geophysical services, both in the United States and internationally.

2. MEANS FOR IMPLEMENTATION OF THE PLAN

Based on the bidding procedures and other negotiations
described in section II above, EALP and Grant agreed to a transaction in which
EALP shall, in connection with a rights offering and subject to a number of
conditions, purchase substantially all of the assets of Grant for (i) $47.5
million in cash (of which $23.75 may be raised by the Rights Offering which is
guaranteed by EALP), (ii) assumption of certain secured debts and long-term
lease commitments of Grant to Oyo Geospace Corporation, General Electric
Capital Corporation, Nynex Credit Corporation and in connection with Grant's
real estate mortgage not to exceed $15.1 million, (iii) assumption of certain
unearned revenue and other liabilities and deferred credits of Grant and (iv)
assumption of Grant's post-petition trade payables incurred in the ordinary
course of business. EALP shall directly capitalize Newco with $23.75 million in
cash through EALP's acquisition of 4.75 million shares of Newco at $5.00 per
share. Rights to purchase 4.75 million shares of Newco at $5.00 per share, or
to purchase shares of a successor to Newco on economically equivalent terms,
will be distributed to holders of allowed unsecured claims and holders of Old
Preferred Stock. EALP shall purchase all or any portion of the Rights Offering
Shares not purchased by holders of allowed general unsecured claims or holders
of Old Preferred Stock. In addition, Newco will have a working capital facility
with at least $5 million in borrowing availability immediately following the
Effective Date. In the event that the Rights Offering is not completed by
December 31, 1997 or if EALP determines to do so at any time, EALP may cause
Newco to pay the full $47.5 million Cash purchase price to the Debtor and
subsequently retain the Rights Offering proceeds.

3. DISTRIBUTIONS TO CREDITORS AND INTEREST HOLDERS

Under the Plan, holders of Allowed Secured Claims (other than
TIAA) will receive full recovery of their allowed secured claims, generally to
be paid in Cash as soon as practicable after the Newco Cash Payment Deadline on
terms agreed between the secured creditor and Grant, in full and final
satisfaction of such claims. Allowed administrative claims, priority claims,
and unsecured claims of $500 and under will also be paid in full in Cash.
Unsecured creditors with allowed claims in excess of $500 will receive a pro
rata share of the Class 5 Rights to purchase Newco Common Stock. In addition,
these unsecured creditors may select from three options: (i) a pro rata portion
of the Class 5 Cash Distribution, (ii) a Credit in an amount equal to the
holder's allowed unsecured claim or (iii) Cash equal to $500.00 for all such
unsecured creditor's claims in the aggregate. Holders of Old Preferred Stock
will receive a pro rata share of the Class 7 and Class 8 Rights to purchase
Newco Common Stock or the stock of a successor to Newco.

BECAUSE NO ASSURANCES CAN BE PROVIDED REGARDING THE AMOUNT OF
ADMINISTRATIVE CLAIMS TO BE INCURRED IN THE FUTURE OR REGARDING CLAIMS THAT
WILL ULTIMATELY BE DISALLOWED OR REDUCED, DISTRIBUTIONS UNDER THE PLAN MAY
DIFFER SUBSTANTIALLY FROM THE PROJECTED ULTIMATE RECOVERIES REFLECTED BELOW.

THE TREATMENT OF CLAIMS AND INTERESTS DESCRIBED IN THE TABLE BELOW IS
SUBJECT TO THE PLAN PROVISIONS AND OTHER MATTERS DESCRIBED IN "--ADDITIONAL
INFORMATION REGARDING TREATMENT OF CERTAIN CLAIMS AND INTERESTS." REFERENCE
SHOULD BE MADE TO THE ENTIRE DISCLOSURE STATEMENT AND TO THE PLAN FOR A
COMPLETE DESCRIPTION OF THE CLASSIFICATION AND TREATMENT OF CLAIMS AND
INTERESTS.

6
<PAGE> 15
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION OF CLAIMS AMOUNT OF CLAIM
OR INTERESTS OR INTEREST(1) TREATMENT UNDER PLAN
--------------------- --------------- --------------------
($ in thousands)
<S> <C> <C>
Unclassified Claims

Administrative Claims $ 2,700 Subject to the provisions of Sections 2.1.2
and 2.1.3 of the Plan with respect to the
Administrative Claims bar date and
Professionals, respectively, as soon as
practicable after the Newco Cash Payment
Deadline, each holder of an Allowed
Administrative Claim shall receive Cash equal
to the amount of such Allowed Administrative
Claim, unless such holder and the Debtor or
GGI agree to other terms or a Final Order of
the Bankruptcy Court provides for other
terms; provided, however, that Allowed
Administrative Claims representing
obligations incurred in the ordinary course
of business, including Administrative Claims
of governmental units for taxes, shall be
assigned to Newco on the Effective Date
pursuant to Section 5.1.1.2 of the Plan and
the Newco Asset Purchase Agreement, and paid,
performed or settled by Newco when due in
accordance with the terms and conditions of
the particular agreements governing such
obligations, without the need for holders of
such Claims to comply with Section 2.1.2 of
the Plan.

Priority Tax Claims $ 372 Unless otherwise agreed by the holder of a
Priority Tax Claim and the Debtor or GGI and
as provided in Section 2.2 of the Plan, as
soon as practicable after the Newco Cash
Payment Deadline, each holder of an Allowed
Priority Tax Claim shall receive Cash equal
to the amount of such Allowed Priority Tax
Claim in full and final satisfaction of such
Claim.

DIP Financing Facility Claims $ 12,500 All amounts owing as of the Effective Date
(maximum will be paid in full in Cash on the Effective
commitment Date as provided in Section 2.3 of the Plan.
under DIP
Financing
Facility)

Postpetition Secured Claims $ 447 As provided in Section 2.4 of the Plan, as
soon as practicable after the Newco Cash
Payment Deadline, each holder of a
Postpetition Secured Claim shall receive Cash
equal to the amount of
</TABLE>

7
<PAGE> 16
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION OF CLAIMS AMOUNT OF CLAIM
OR INTERESTS OR INTEREST(1) TREATMENT UNDER PLAN
--------------------- --------------- --------------------
($ in thousands)
<S> <C> <C>
such Claims, in full and final satisfaction of
such Claims. Postpetition Secured Claims
consist of the Claims of (i) Leica, Inc.
(estimated at $169), (ii) Macha Equipment
Corporation other than Claims arising out of
the exercise of the Macha Purchase Options
(estimated at $148) and (iii) Geo Space Canada,
Inc. (estimated at $130).

Claims Arising from Exercise of $ 563 As provided in Section 2.5 of the Plan, as
Equipment Purchase Options soon as practicable after the Newco Cash
Payment Deadline, GGI shall exercise the
Equipment Purchase Options. All payments
required to be made upon exercise of the
Equipment Purchase Options shall be made by
GGI. Title to all assets purchased by GGI
pursuant to the Equipment Purchase Options
shall automatically be transferred to, and
shall vest in, Newco, pursuant to Section
5.1.1.1 of the Plan and the Newco Asset
Purchase Agreement, without any further
action by the Debtor, GGI, Newco or any other
party. Equipment Purchase Options consist of,
collectively, the (i) Macha Purchase Options
(estimated at $110), (ii) the Green Tree
Purchase Option (estimated at $139), (iii)
the Forum Financial Purchase Option
(estimated at $285) and (iv) the Winthrup
Resources Purchase Option (estimated at $29).

Classified Claims

Class 1 -- Priority Claims $ 300 Unimpaired -- not entitled to vote.

As provided in Section 3.2.1 of the Plan, as
soon as practicable after the Newco Cash
Payment Deadline, each holder of an Allowed
Class 1 Claim shall receive Cash equal to the
amount of such Claim, unless the holder of
such Claim and the Debtor or GGI agree to a
different treatment. Any Allowed Class 1
Claim not due and owing on the Newco Cash
Payment Deadline will be paid in full in Cash
by GGI when such Claim becomes due and owing.
</TABLE>

8
<PAGE> 17
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION OF CLAIMS AMOUNT OF CLAIM
OR INTERESTS OR INTEREST(1) TREATMENT UNDER PLAN
--------------------- --------------- --------------------
($ in thousands)
<S> <C> <C>
Class 2 -- Foothill Claim $ 0 Unimpaired -- not entitled to vote.

As provided in Section 3.2.2 of the Plan, all
payments of the Foothill Claim made prior to
the Effective Date shall be deemed to be paid
indefeasibly. Any portion of the Foothill
Claim unpaid as of the Effective Date shall
be paid in full in Cash on the Effective
Date.

Class 3 -- Assigned Secured Claims $ 631 Impaired -- entitled to vote.

Class 3 consists of the TIAA Claim.
As provided in Section 3.2.3 of the Plan, the
Debtor's liabilities arising out of the TIAA
Claim shall be assigned to and assumed by
Newco pursuant to Section 5.1.1.2 of the Plan
and the Newco Asset Purchase Agreement, on
the terms and conditions set forth below:

3.1 The TIAA Claim

The holder of the TIAA Claim shall
receive, in full and final satisfaction of
such Claim, (i) as soon as practicable after
the Newco Cash Payment Deadline, Cash equal
to the aggregate amount of prepetition and
postpetition arrearages (exclusive of any
penalties, default interest or other charges)
from Newco and (ii) deferred Cash payments by
Newco equal to the amount of principal and
interest due under the TIAA Mortgage. TIAA
shall retain the liens securing the TIAA
Claim to secure such deferred Cash payments,
and shall have no claims against GGI or the
funds paid by Newco pursuant to Section
5.1.1.4 of the Plan.

Class 4 -- Other Identified $ 15,928 Unimpaired -- not entitled to vote.
Secured Claims
Class 4 consists of Other Identified
Secured Claims. As provided in Section 3.2.4
of the Plan, as soon as practicable after the
Newco Cash Payment Deadline, each holder of
an Allowed Class 4 Claim shall receive Cash
in an amount equal to such Allowed Class 4
Claim. Allowed Class 4 Claims shall include
all interest, fees, and expenses accrued
under the respective
</TABLE>

9
<PAGE> 18
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION OF CLAIMS AMOUNT OF CLAIM
OR INTERESTS OR INTEREST(1) TREATMENT UNDER PLAN
--------------------- --------------- --------------------
($ in thousands)
<S> <C> <C>

contractual provisions for each such Claim
through the date such Claim is actually paid.
Other Identified Secured Claims are the
following:

4.1. The Input/Output Claim (Estimated at
$9,972)

The holder of the Claims of
Input/Output, Inc. shall receive, as soon as
practicable after the Newco Cash Payment
Deadline, Cash equal to the allowed amount of
such Claims (which do not include obligations
under leases of Input/Output designated for
assumption or rejection under the Plan).
Credits arising as a result of such payment
shall be assigned to Newco under the Plan.

4.2 The Madeleine Claim (Estimated at
$ 5,788)

The holder of the Claims of
Madeleine, L.L.C. shall receive as soon as
practicable after the Newco Cash Payment
Deadline, Cash equal to the allowed amount of
such Claims.

4.3 The Fairfield Claim (Estimated at
$168)

The holder of the Claims of
Fairfield Industries, Inc. shall receive, as
soon as practicable after the Newco Cash
Payment Deadline, Cash equal to $168,175 in
full and final satisfaction of such Claims.

Class 5 -- General Unsecured $ 28,100 Impaired -- entitled to vote.
Claims Over $500 (excluding
about $7,914 Class 5 consists of all General
of Claims filed Unsecured Claims that exceed $500 in amount.
in respect of As set forth more fully below and as provided
pending or in Section 3.2.5 of the Plan, holders of
threatened Allowed Class 5 Claims shall receive the
litigation, following treatment:
the
substantial 1. The Class 5 Rights Offering.
majority of
which are for On the commencement of the Rights
insured perils, Exercise Period, which is subject to the
damages or
personal injury)

</TABLE>

10
<PAGE> 19
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION OF CLAIMS AMOUNT OF CLAIM
OR INTERESTS OR INTEREST(1) TREATMENT UNDER PLAN
--------------------- --------------- --------------------
($ in thousands)
<S> <C> <C>
effectiveness of the Registration Statement,
and subject to the provisions of Section 5.3
of the Plan, each Eligible Class 5 Claim
Holder shall receive its Pro Rata share of
the Class 5 Rights. Any Class 5 Rights
distributed pursuant to Section 3.2.5.1 of
the Plan must be exercised in accordance with
the provisions of Section 5.3 of the Plan.
Holders of Allowed Class 5 Claims that are
not Eligible Class 5 Claim Holders shall not
receive any Rights. (See "Rights Offering").

2. The Class 5 Cash Distribution.

As soon as practicable after the
Newco Cash Payment Deadline, each holder of
an Allowed Class 5 Claim, in full and final
satisfaction of such Claim, shall receive a
Pro Rata share of the Class 5 Cash
Distribution.

3. Claim Reduction Option

Any holder of an Allowed Class 5
Claim may elect on its Ballot to reduce all
of such holder's Claims in the aggregate to
$500 and receive, instead of the Class 5
Rights and the Class 5 Election described
above, the same treatment as Allowed Claims
in Class 6. Any creditor electing the
treatment provided for in Class 6 shall be
deemed to have aggregated all of such
holder's claims into a single claim.

4. Credit Option

Any Eligible Class 5 Claim Holder
may elect on its Ballot to receive Credits in
the amount of such holder's Allowed Class 5
Claim in lieu of the Class 5 Distributions;
provided, however, that the aggregate amount
of Credits shall not exceed $2 million. If
the aggregate amount of Allowed Claims of
Eligible Class 5 Claim Holders electing the
Credits exceeds $2 million, Eligible Class 5
Claim Holders that elect to receive the
Credits shall receive a proportionate share
of Credits and the Class 5 Cash Distribution
(based on the amount of Claim not satisfied
by the Credits). The Class 5 Cash
Distribution that would have been distributed
to Eligible Class 5 Claim Holders that elect
to receive Credits, if they had not elected
to receive Credits, shall be distributed to
Newco.
</TABLE>

11
<PAGE> 20
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION OF CLAIMS AMOUNT OF CLAIM
OR INTERESTS OR INTEREST(1) TREATMENT UNDER PLAN
--------------------- --------------- --------------------
($ in thousands)
<S> <C> <C>
Class 6 -- General Unsecured Claims $ 29 Impaired -- entitled to vote.
of $500 and Under
Class 6 consists of all General
Unsecured Claims that are $500 and under in
amount, provided that no Claims that are the
result of a split of a Claim amongst
different holders shall be classified in
Class 6 and all such Claims shall be
classified in Class 5. As soon as practicable
after the Newco Cash Payment Deadline, each
holder of an Allowed Class 6 Claim shall
receive the full amount of such Allowed Claim
in Cash.

Class 7 -- Interests of holders of Impaired -- entitled to vote.
Old $2.4375 Preferred Stock
Class 7 consists of the Interests of
holders of Old $2.4375 Preferred Stock. On
the commencement of the Rights Exercise
Period, and subject to the provisions of
Section 5.3 of the Plan, each holder of an
Allowed Class 7 Interest shall receive, in
full and final satisfaction of such Interest,
a Pro Rata share of the Class 7 Rights. Any
Class 7 Rights distributed pursuant to
Section 3.2.7 of the Plan must be exercised
in accordance with the provisions of Section
5.3 of the Plan. EALP, Westgate and any of
their respective affiliates that hold Allowed
Class 7 Interests shall exercise the Rights
distributed to such holders. (See "Rights
Offering").

Class 8 -- Interests of holders of Impaired -- entitled to vote.
Old Junior Preferred Stock
Class 8 consists of the Interests of
holders of Old Junior Preferred Stock. On the
commencement of the Rights Exercise Period,
and subject to the provisions of Section 5.3
of the Plan, each holder of an Allowed Class
8 Interest shall receive, in full and final
satisfaction of such Interest, a Pro Rata
share of the Class 8 Rights. Any Class 8
Rights distributed pursuant to Section 3.2.8
of the Plan must be exercised in accordance
with the provisions of Section 5.3 of the
Plan. (See "Rights Offering").
</TABLE>

12
<PAGE> 21
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION OF CLAIMS AMOUNT OF CLAIM
OR INTERESTS OR INTEREST(1) TREATMENT UNDER PLAN
--------------------- --------------- --------------------
($ in thousands)
<S> <C> <C>
Class 9 -- Interests of holders of Impaired - deemed to have rejected the Plan
Old Common Stock
Class 9 consists of the Interests of
holders of Old Common Stock. The holders of
Class 9 Interests shall not receive or retain
any property under the Plan on account of
such Interests.

Class 10 -- Interests in the Debtor Impaired - deemed to have rejected the Plan
Not Otherwise Classified
Class 10 consists of the Interests
in the Debtor that are not otherwise
classified in Classes 7, 8 or 9, including,
without limitation, Old Series A Preferred
Stock, Old Serial Preferred Stock and all
options, warrants or any other right to
purchase or receive Old Common Stock or Old
Preferred Stock The holders of Class 10
Interests shall not receive or retain any
property under the Plan on account of such
Interests.

Class 11 -- Subordinated Claims Impaired - deemed to have rejected Plan

Class 11 consists of all
Subordinated Claims. The holders of Class 11
Claims shall not receive or retain any
property under the Plan on account of such
Claims.
</TABLE>

- -------------------------
(1) Estimated as of the Newco Cash Payment Deadline unless otherwise stated.

F. ADDITIONAL INFORMATION REGARDING TREATMENT OF CERTAIN CLAIMS AND
INTERESTS

1. ADMINISTRATIVE CLAIMS

a. Bar Date for Administrative Claims. Requests for
payment of Administrative Claims must be Filed and served on the
Debtor or GGI no later than 30 days after the Effective Date. Holders
of Administrative Claims that are required to File and serve a request
for payment of such Claims and that do not File and serve a request by
such date will be forever barred from asserting such Claims against
the Debtor, GGI or their respective property. Objections to such
requests must be Filed and served on the

13
<PAGE> 22

Debtor or GGI and the requesting party no later than 30 days after the
date on which the applicable request for payment was Filed.

b. Professionals. Professionals or other entities
requesting compensation or reimbursement of expenses pursuant to
sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code for
services rendered before the Effective Date (including compensation
requested pursuant to section 503(b)(4) of the Bankruptcy Code by any
Professional or other entity for making a substantial contribution in
the Chapter 11 Case) shall File and serve on GGI, the Official
Committee, counsel for GGI and counsel for the Official Committee an
application for final allowance of compensation and reimbursement of
expenses no later than 30 days after the Effective Date, unless such
Filing and service deadline is extended by the Bankruptcy Court.
Objections to applications of Professionals or other entities for
compensation or reimbursement of expenses must be Filed and served on
GGI, the Official Committee, counsel for GGI and counsel for the
Official Committee and the requesting Professional or other entity no
later than 30 days after the date on which the applicable application
for compensation or reimbursement was Filed.

2. EQUIPMENT PURCHASE OPTIONS

Section 2.5 of the Plan provides that, as soon as practicable
after the Newco Cash Payment Deadline, GGI shall exercise the Equipment
Purchase Options and that title to all assets purchased by GGI pursuant to the
Equipment Purchase Options shall automatically be transferred to Newco. In the
case of each of the Equipment Purchase Options, the payment required to be made
by GGI upon exercise of the Equipment Purchase Option is less than or equal to
the aggregate amount of the Debtor's unpaid post-petition rental obligation
under the related lease agreement plus one dollar.

3. CERTAIN SECURED CLAIMS

Certain of the Debtor's secured claims have been modified by
agreements reached between the holders of such Claims and the Debtor after the
Petition Date providing for credits or discounts in the event such Claims are
paid in full before certain specified dates. As provided in Section 5.1.1.1 of
the Plan, Newco shall purchase the rights to all such future credits or
discounts arising from such agreements from the Debtor on the Effective Date.

4. THE CLASS 5 ELECTION

(a) Subject to the provisions of subsections (b) and (c)
below, as soon as practicable after the Newco Cash Payment Deadline, each
Eligible Class 5 Claim Holder shall receive, in full and final satisfaction of
such Allowed Claim, at the election of such holder on the Class 5 Ballot, one
of the following: (i) a Credit in an amount equal to the holder's Allowed Class
5 Claim Amount or (ii) a Pro Rata share of the Class 5 Cash Distribution. EALP,
Westgate and their respective affiliates shall be deemed to have elected the
Class 5 Cash Distribution in satisfaction of its Allowed Class 5 Claims. Each
Eligible Class 5 Claim Holder that does not return a Ballot which indicates
such holder's Class 5 Election shall be deemed to have elected the Class 5 Cash
Distribution. Each holder of an Allowed Class 5 Claim that is not an Eligible
Class 5 Claim Holder shall receive, in full and final satisfaction of such
Allowed Claim, a Pro Rata share of the Class 5 Cash Distribution.

(b) Any Eligible Class 5 Claim Holder may elect on its
Ballot to receive Credits in the amount of such holder's Allowed Class 5 Claim
in lieu of the Class 5 Cash Distributions; provided, however, that the
aggregate amount of Credits shall not exceed $2 million. If the aggregate
amount of Allowed Claims of Eligible Class 5 Claim Holders electing the Credits
exceeds $2 million, Eligible Class 5 Claim Holders that elect to receive the
Credits shall receive a proportionate share of Credits and the Class 5 Cash
Distribution (based on the amount of Claim not satisfied by the Credits). The
Credits shall be nontransferable instruments entitling the holder thereof to
receive credit from Newco against the contract price for certain services to be
provided to such holder by Newco in accordance with the terms and conditions of
the form of Scrip Agreement attached to the Plan as Exhibit H thereto. The
Scrip Agreement provides, among other things, that the Credits are
nontransferable and that the use of the Credits shall be limited to 20% of the
contract price per contract of such Eligible Class 5 Claim Holder with

14
<PAGE> 23
Newco. The Class 5 Cash Distribution that would have been distributed to
Eligible Class 5 Claim Holders that elect to receive Credits, if they had not
elected to receive Credits, shall be distributed to Newco.

(c) The Class 5 Cash Distribution shall be the Cash of
GGI obtained from Newco pursuant to Section 5.1 of the Plan and the Newco Asset
Purchase Agreement ($47.5 million) and remaining after GGI makes all payments
provided for in Sections 2.1, 2.2, 2.3, 2.4, 2.5, 3.2.1, 3.2.2, 3.2.4, 3.2.6,
5.1.3 and 6.2.2 of the Plan, which shall be distributed to holders of Allowed
Class 5 Claims pursuant to Section 3.2.5 of the Plan. A segregated disbursement
account for Class 5 shall be established upon the payment of the Newco Asset
Purchase Proceeds. Based on the estimates in the table in section E 3 "Summary
of Plan Treatment of Claims and Interests -Distributions to Creditors and
Interest Holders" above, the Debtor estimates that the Class 5 Cash
Distribution shall be about $14-15 million, or about 50% of the estimated Class
5 Claims in such table. AS NOTED ABOVE, BECAUSE NO ASSURANCES CAN BE PROVIDED
REGARDING THE AMOUNT OF ADMINISTRATIVE CLAIMS TO BE INCURRED IN THE FUTURE OR
REGARDING CLAIMS THAT WILL ULTIMATELY BE ALLOWED, DISALLOWED OR REDUCED, BOTH
THE AMOUNT OF THE CLASS 5 CASH DISTRIBUTION AND THE ESTIMATED PERCENTAGE
RECOVERY UNDER THE PLAN MAY DIFFER SUBSTANTIALLY FROM THESE PROJECTED ULTIMATE
RECOVERIES.

5. CRAMDOWN

The so-called "cramdown" provisions of section 1129(b) of the
Bankruptcy Code permit confirmation of a chapter 11 plan of reorganization in
certain circumstances even if the plan is not accepted by all impaired classes
of claims and interests. See "Voting and Confirmation of the Plan -- Acceptance
or Cramdown." Because holders of Class 11 Claims and Class 9 and 10 Interests
will not receive or retain any property on account of such Claims or Interests,
they are deemed not to have accepted the Plan pursuant to section 1126(g) of
the Bankruptcy Code. See "Voting and Confirmation of the Plan -- Voting
Procedures and Requirements." Accordingly, the Debtor will seek Confirmation of
the Plan under section 1129(b) of the Bankruptcy Code. The Proponents have
reserved the right to modify the Plan to the extent, if any, that Confirmation
pursuant to section 1129(b) of the Bankruptcy Code requires or permits
modification of the Plan. If a request to confirm the Plan pursuant to the
cramdown provisions of the Bankruptcy Code were to be granted by the Bankruptcy
Court and, if necessary, corresponding modifications of the Plan were to be
made in connection therewith, the dissenting Classes could receive, in certain
circumstances, alternative treatment under the Plan. IF THE DEBTOR IS REQUIRED
TO SEEK CONFIRMATION PURSUANT TO SUCH ALTERNATIVE CRAMDOWN PROVISIONS, THERE
CAN BE NO ASSURANCE THAT THE REQUIREMENTS OF SUCH PROVISIONS WILL BE SATISFIED,
OR EVEN IF SUCH REQUIREMENTS ARE SATISFIED, THAT SUCH ALTERNATIVE TREATMENT
WILL NOT MATERIALLY AFFECT THE PROPOSED CONSIDERATION TO BE DISTRIBUTED TO
CERTAIN CREDITORS.

G. CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVE DATE

1. CONDITIONS TO CONFIRMATION

The Plan provides that (1) the Confirmation Order must be in
form and substance satisfactory to the Proponents and (2) all
documents necessary to effectuate the transactions described in the
Plan consistent with the Plan, including the Newco Asset Purchase
Agreement and Newco Credit Facility Documents, shall be in form and
substance reasonably acceptable to GGI, Newco, EALP and the Official
Committee.

In addition to the foregoing conditions to Confirmation, there
are a number of procedural and substantive confirmation requirements
under the Bankruptcy Code that must be satisfied for the Plan to be
confirmed pursuant to section 1129 of the Bankruptcy Code. See "Voting
and Confirmation of the Plan." There can be no assurance that the
Confirmation conditions or the conditions set forth in section 1129 of
the Bankruptcy Code will be satisfied or, if permitted, waived.

2. CONDITIONS TO EFFECTIVE DATE

The Effective Date is defined as a Business Day, as determined
by EALP and the Debtor, after all conditions to the Effective Date set
forth in Section 9.2 of the Plan have been satisfied or waived (if

15
<PAGE> 24
available) pursuant to and subject to Sections 9.3 and 9.4 of the
Plan, as described in "Waiver of Conditions to Confirmation and
Effective Date." There can be no assurance that the conditions to the
Effective Date will be satisfied or, if permitted, waived.

The Effective Date shall not occur and the Plan shall not be
consummated unless and until each of the following conditions has been
satisfied or, if permitted, duly waived:

(i) Either (a) the Confirmation Order shall have become a
Final Order or (b) no stay of the Confirmation Order shall be in
effect and no other relief has been entered nor any facts exist that
would render the doctrine of "mootness" inapplicable as a matter of
law.

(ii) There shall be no injunction or court order
restraining consummation of the transactions contemplated by the Plan
and there shall not have been adopted any law or regulation making all
or any portion of such transactions illegal.

(iii) There shall have been no material adverse change in
the Debtor's financial or operational condition since June 23, 1997;
provided that this condition shall expire on September 30, 1997.

3. WAIVER OF CONDITIONS TO CONFIRMATION AND EFFECTIVE DATE

Each of the conditions to Confirmation and the Effective Date may be
waived in whole or in part by the Proponents at any time, without notice, an
order of the Bankruptcy Court or any further action other than proceeding to
Confirmation and consummation of the Plan. The failure to satisfy or waive any
condition may be asserted by the Proponents regardless of the circumstances
giving rise to the failure of such condition to be satisfied. The failure of
the Proponents to exercise any of the foregoing rights shall not be deemed a
waiver of any other rights and each such right will be deemed an ongoing right
that may be asserted at any time.

Each of the conditions to Confirmation and the Effective Date must be
satisfied or duly waived, as provided above, within 30 days after the
Confirmation Date, which date may only be extended by the mutual consent of
Proponents and the Official Committee. If such mutual consent cannot be
obtained, such time period may only be extended by order of the Bankruptcy
Court. If each condition to the Effective Date has not been satisfied or duly
waived pursuant to Section 9.3 of the Plan, within 30 days after the
Confirmation Date or such later date agreed to by the Proponents and the
Official Committee or as ordered by the Bankruptcy Court, then upon motion by
any party in interest made before the time that each of such conditions has
been satisfied or duly waived and upon notice to such parties in interest as
the Bankruptcy Court may direct, the Confirmation Order must be vacated by the
Bankruptcy Court; provided, however, that, notwithstanding the filing of such
motion, the Confirmation Order may not be vacated if each of the conditions to
the Effective Date is either satisfied or duly waived before the Bankruptcy
Court enters an order granting such motion. If the Confirmation Order is
vacated pursuant to Section 9.4 of the Plan, the Plan will be deemed null and
void in all respects, including the discharge of Claims and termination of
Interests pursuant to section 1141 of the Bankruptcy Code and the assumptions
or rejections of executory contracts and unexpired leases pursuant to Sections
6.1 and 6.2 of the Plan, and nothing contained in the Plan shall (1) constitute
a waiver or release of any Claims by or against, or any Interests in, the
Debtor or (2) prejudice in any manner the rights of the Debtor. Notwithstanding
anything else in the Plan to the contrary, the Effective Date shall occur and
all documents shall be executed and become binding on the Proponents not later
than thirty (30) days following the Confirmation Date if the conditions to
Effective Date are satisfied or waived. If such conditions are not satisfied or
waived at that time, the Effective Date and execution of documents shall occur
on the first Business Day after such satisfaction or waiver.

H. MODIFICATION OR REVOCATION OF THE PLAN; SEVERABILITY

Subject to the restrictions on modifications set forth in section 1127
of the Bankruptcy Code and any applicable notice requirements, the Proponents
have reserved the right to alter, amend or modify the Plan before its
substantial consummation. The Proponents have also reserved the right to revoke
or withdraw the Plan prior to the Confirmation Date. If the Debtor revokes or
withdraws the Plan, or if Confirmation does not occur, then the

16
<PAGE> 25
Plan shall be null and void in all respects, and nothing contained in the Plan
will: (1) constitute a waiver or release of any Claims by or against, or any
Interests in, the Debtor; or (2) prejudice in any manner the rights of the
Debtor.

If, prior to Confirmation, any term or provision of the Plan is held
by the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy
Court, at the request of the Proponents, has the power to alter and interpret
such term or provision to make it valid or enforceable to the maximum extent
practicable, consistent with the original purpose of the term or provision held
to be invalid, void or unenforceable, and such term or provision will then be
applicable as altered or interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the terms and provisions of the
Plan will remain in full force and effect and will in no way be affected,
impaired or invalidated by such holding, alteration or interpretation. The
Confirmation Order will constitute a judicial determination and will provide
that each term and provision of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.

IV. GENERAL INFORMATION CONCERNING THE DEBTOR
AND CERTAIN EVENTS PRECEDING THE DEBTOR'S CHAPTER 11 FILING

A. HISTORICAL DESCRIPTION OF THE DEBTOR

Grant was incorporated in Delaware on June 27, 1978, and is the
successor to several companies as a result of mergers. The merged companies
include Norpac Geophysical Company, Seiscom Delta, Inc., United Geophysical
Company, and Tensor Incorporated. As a result of these transactions, Grant
formerly was known as Grant-Norpac, Inc. and, later, as Grant Tensor
Geophysical Corp. In 1993, after selling substantially all of its seismic data
processing assets, Grant resumed the name Grant Geophysical, Inc.

The Debtor has several wholly-owned subsidiaries incorporated in the
United States and certain foreign jurisdictions (the "Subsidiaries"). The
Debtor and certain of the Subsidiaries have branch operations in a number of
foreign jurisdictions (the "Branches").

B. OVERVIEW OF OPERATIONS

1. BUSINESS

Grant is engaged primarily in the gathering of seismic data used by
oil and gas companies in determining whether subsurface geological conditions
appear favorable for the accumulation of oil and gas reserves. Demand for
contract land seismic data acquisition in the United States has declined
substantially since the peak levels in 1981. Beginning in 1993, however, bid
activity relating to 3-D projects began to increase. These projects are
generally a combination of new exploration, and exploitation of existing
fields. Grant believes that 3-D seismic data acquisition techniques will
continue to be an important tool for the discovery and development of oil and
gas fields because of the value these techniques provide. However, Grant cannot
predict the level of future demand for its services.

In addition to the United States, Grant, either directly or through
certain of its Subsidiaries and Branches, has been active in Latin America
since 1940, with continuous operations through its Brazilian subsidiary since
that date. Grant, either directly or through one or more of its Subsidiaries,
also has seismic crews operating in Ecuador, Colombia and Bangladesh. In March
1997, the Bankruptcy Court approved the sale of Grant's Nigerian subsidiary,
and the sale was subsequently completed. Neither Grant nor any of the
Subsidiaries or Branches are currently operating in Africa or the Middle East.

Exploration Seismology. The principles of seismology have been used in
the exploration for oil and gas reserves since about 1929. Exploration
seismology encompasses the generation and recording of reflected seismic energy
which is computer processed to produce representations of the earth's
subsurface. These processed seismic data are used by geoscientists to identify
geological conditions favorable for the accumulation of oil and gas reserves
and to optimize and monitor field production operations.

17
<PAGE> 26
The principal components of a seismic system are the energy source
device and the recording system. The energy source device generates an impact
or vibration at or near the earth's surface which produces sonic waves. These
sonic waves travel downward through the earth's subsurface and are partially
reflected back to the surface as they pass through the subsurface rock layers.
The energy source devices typically used by Grant in its seismic data
acquisition are explosives, vibroseis, a mechanical device used to generate
input signals at desired frequencies, and airguns.

The reflected sonic waves are detected by highly sensitive devices
called geophones, which convert the seismic reflections to electrical signals.
These electrical signals represent the time required for the waves to travel
from the earth's surface to the subsurface interfaces and be reflected back to
the surface. A reflection seismograph converts the electrical signals to
digital information ("seismic data") at remote recording locations and
transmits the seismic data by telemetric means to a central recording station
where the seismic data are stored on magnetic computer tapes. More
sophisticated reflection seismographs digitally record the seismic data at the
remote recording location, thereby eliminating the need for real-time
transmission of the data to a central recording unit. Once recorded, the
seismic data are sent to data processing centers where they are enhanced to
illuminate the desired reflected signals. The processed seismic data are then
arranged for input to imaging devices that produce representations of the
survey site's subsurface.

Grant has experienced an increase in demand during the last several
years among its customers for three- dimensional ("3-D") seismic surveys.
Three-dimensional seismic surveys produce seismic data that allow the user to
view subsurface conditions with a much higher degree of resolution than those
produced using earlier two-dimensional ("2-D") seismic surveys. In known
producing areas, 3-D seismic data aid its users in more precisely positioning
step-out and development wells. Unlike 2-D seismic surveys (which typically use
between 240 and 480 remote recording locations), 3-D surveys require much
larger recording systems (1,000 to 3,000 or more recording channels arranged in
patterns at numerous locations).

Contract Land Seismic Data Acquisition. Grant, either directly or
through its Subsidiaries, is currently operating 10 land seismic crews and two
shallow water transition zone crews. Five of these crews are operating in the
United States, and seven are operating in Latin America and the Far East.

A seismic crew typically consists of a manager; permitting agents who
secure permission to enter landowners' properties; surveyors who mark the
locations for geophone and source placement; general laborers who place and
move the geophones and connecting cables; an observer who operates the
seismograph and controls the recording of the seismic data; and either (1) a
drill crew to drill holes and shooters to detonate explosives, if explosives
are used, or (2) drivers to operate the vibroseis trucks, if vibroseis is used
as the energy source. A fully staffed seismic crew in the United States
typically utilizes 25 to 55 personnel. International seismic crews normally
require a significantly greater number of general laborers and support
personnel because the survey sites are often in remote locations. For example,
a desert seismic crew may require 10 to 15 expatriate personnel plus 100 to 150
local personnel, while a seismic crew operating in marsh or swamp conditions or
in a remote jungle region with limited access to roads may require a crew of
600 to 2,500 persons, all of whom must be provided with food and shelter at the
survey site.

Grant also operates shallow water transition zone seismic crews using
a radio telemetry recording system. Typically, the transition zone is a unique
area of operation in that the area to be surveyed lies either in shallow water
or in marshy grasslands where a conventional land or marine seismic crew cannot
operate efficiently. This type of seismic crew utilizes an airgun barge to
create the energy source, a vessel to house the crew and various utility boats
to position the recording system. A crew of this sort will typically utilize
approximately 90 to 115 personnel.

Grant's seismic data acquisition activities are conducted under
contracts with oil and gas exploration and production companies which retain
exclusive ownership of the acquired seismic data. Contracts, which are usually
awarded on a competitive bid basis, are either "turnkey," which provide for a
fixed fee to be paid to Grant for each unit of data acquired, or "term," which
provide for a fixed monthly fee during the term of the project. The majority of
Grant's contracts are on a turnkey basis.

18
<PAGE> 27
Contracts awarded for seismic data acquisition outside the United
States are generally denominated partially in U.S. dollars and partially in the
local currency of the country in which the seismic survey is conducted. The
portion of the contract denominated in local currency is principally used to
pay local crew-related expenses.

The costs of mobilizing seismic crews varies from location to
location. Typically, the costs tend to be higher in foreign locations. When
possible, Grant charges a mobilization fee which may be collected either in
advance of the commencement of the survey or over the term of the contract.

The capital expenditures necessary to equip a new seismic crew are
primarily related to the type and quantity of energy source devices, recording
systems and logistical support equipment to be used in a seismic survey. If the
seismic crew is in a remote location, Grant may also provide facilities to
house members of the seismic crew. On multi- year contracts, Grant tries to
recover its investment over the term of the work. Grant's capital expenditures
in any year depend on the mix of its business and customer demand for certain
types of geophysical equipment.

Physical Properties. Grant's primary physical properties are seismic
equipment. These systems include a recording system, along with necessary
ancillary equipment such as geophones and cables. The size of a seismic data
acquisition system is typically measured by the number of recording channels.
Grant currently operates about 19,000 channels of seismic data recording
equipment.

2. MANAGEMENT AND MANAGEMENT COMPENSATION

J. Kelly Elliott, 66, was re-elected to the Board of Directors and
elected Chairman and Chief Executive Officer of Grant on November 20, 1996. Mr.
Elliott was previously Chairman from June 1993 until November 1995. Mr. Elliott
is also Chairman, President and Chief Executive Officer of Sigrna Electronics,
Inc. and of OmniComp Graphics Corporation, and is Chairman of Seaboard-Arval
Corporation. He serves on the boards of directors of Tescorp, Inc., Oil States
Industries, Incorporated and XL Systems Inc., and is a Consultant to the Board
of Directors of Weatherford Interra.

On January 28, 1997, Larry E. Lenig, Jr., 48, was elected President
and Chief Operating Officer of Grant. Mr. Lenig was President and Chief
Operating Officer of Digicon Inc., now known as Veritas DGC, from 1989 until
1993. Since 1993 until his appointment as President of Grant, Mr. Lenig
provided consulting services to various energy and energy service companies and
financial institutions. Immediately prior to joining Grant, Mr. Lenig was a
consultant to Foothill Capital Corporation, Grant's principal prepetition and
post-petition secured lender, regarding Foothill's loans to Grant.

Other officers of Grant include Mr. Hugh Fraser, Vice President for
North American Operations, Mr. Barry Burt, Vice President for International
Operations, and Mr. Michael P. Keirnan, Vice President and Chief Financial
Officer.

In addition to Mr. Elliott, the other directors of Grant are Harvey D.
Attra, Orville D. Gaither, Sr., Donald G. Russell, J. Michael Adcock, and
Douglas K. Stewart.

The following table sets forth all cash compensation, including cash
bonuses, paid to each of the five most highly compensated executive officers of
Grant and all executive officers of Grant as a group for services rendered from
January 1, 1996 to December 31, 1996 in all capacities to Grant and its
subsidiaries.

19
<PAGE> 28
<TABLE>
<CAPTION>

Name of Individual or
Number in Group Capacities in Which Served Cash Compensation
--------------------- -------------------------- -----------------
<S> <C> <C>
J. Kelly Elliott Chairman and Chief Executive $ 60,000.00
Officer

Thomas B. Portwood, Jr. President and Chief Executive $ 10,000.00
Officer

George W. Tilley Chief Executive Officer $ 175,008.00

William B. Cleveland Chief Financial Officer $ 106,973.00
</TABLE>

Grant's Annual Management Incentive Plan (the "Incentive Plan")
provides an annual award of cash bonuses to its executive officers and other
management personnel who contribute significantly to the growth and success of
Grant. No bonuses were awarded for performance in 1996. Any incentive awards to
the management of Grant for 1997 will be at the discretion of Grant's board of
directors.

In January 1997, Grant entered into a one-year agreement with Larry E.
Lenig, Jr. to serve as President and Chief Operating Officer, which provides
for a minimum base salary of $120,000, incentive compensation equal to $5,000
monthly until Grant's plan of reorganization is confirmed by the Bankruptcy
Court, and, upon such confirmation of a plan of reorganization, an additional
one-time payment of up to $300,000 based on the "Transaction Value" of the
plan, which payment shall not exceed $300,000. Based on the terms of the Plan,
Mr. Lenig will receive the maximum payment of $300,000 if the Plan is
consummated.

During 1997 until the Effective Date, each non-employee director of
Grant will receive compensation of $1,000 per month.

3. CUSTOMERS AND MARKET COMPETITION

Customers. Grant's major customers are multi-national oil and gas
companies, foreign national oil companies and independent oil and gas
companies. Revenues from a U.S. based international oil company were about
$20,233,000 in 1996, or 19% of consolidated revenues of Grant and its
Subsidiaries for that year, and $12,683,000 in 1995, or 14% of consolidated
revenues of Grant and its Subsidiaries for that year.

Competition. The acquisition of seismic data for the oil and gas
industry is highly competitive worldwide. Although precise comparative data
are not available, Grant believes that its principal competitors have greater
financial, operating and other resources than Grant. Principal competitors of
Grant in the United States are Western Atlas, Inc., Veritas DGC, Inc.,
Geco-Prakla, a subsidiary of Schlumberger Limited, and several other regional
operators. Competition is based primarily on price and crew availability.
Other competitive factors may include prior performance, technology, safety and
dependability.

In Latin America, Grant, either directly or through certain
Subsidiaries, competes with Western Atlas, Compagnie General de Geophysique,
Inc. ("CGG"), Geco-Prakla, along with several local companies. In the Far East,
CGG, Geco-Prakla, ELNUSA, a state-owned seismic company, and Western Atlas are
the principal competitors. International work is also awarded primarily on the
basis of price and crew availability, with consideration also given to
technology and the contractor's expertise in the particular area where the
survey is to be conducted.

Backlog. Grant had a total backlog of land and transition zone seismic
data acquisition contracts in the United States of about $12,530,000 and
$27,385,000 at December 31, 1996 and 1995, respectively. Grant expects to
complete substantially all of the 1996 U.S. backlog in 1997. Grant, together
with certain of its Subsidiaries, had a total backlog of land and transition
zone seismic data acquisition contracts in its international operations of
about $58,918,000 and $46,219,000 at December 31, 1996 and 1995, respectively,
with about $11,869,000 of the 1995

20
<PAGE> 29
backlog carried over to 1996. Grant expects that it and its Subsidiaries will
not complete about $2,850,000 of the 1996 backlog until 1998.

Most of Grant's and its Subsidiaries' international contracts, and
almost all of its U.S. contracts, are terminable by the customer upon
relatively short notice and, in some cases, without penalty. Consequently,
Grant's backlog as of any particular date is not indicative of Grant's likely
operating results for any succeeding fiscal period. There can be no assurance
that the amount of backlog will ultimately be realized as revenues.

4. SELECTED FINANCIAL DATA

Grant is engaged primarily in one line of business, the gathering of
seismic data used by oil and gas companies in determining whether subsurface
geological conditions appear favorable for the accumulation of oil and gas
reserves. The following table sets forth, for the periods and at the dates
indicated, selected historical consolidated financial data for the Debtor and
its non-Debtor Subsidiaries.

21
<PAGE> 30
<TABLE>
<CAPTION>
(In Thousands, Except Per Share Amounts)

Audited Unaudited
---------------------------------------- ----------------------------
Year Ended December 31, Three Months Ended March 31,
---------------------------------------- ----------------------------
1996 1995 1994 1997 1996
------ ------ ------ --------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:

Revenues $ 105,523 $ 91,996 $ 73,691 $ 30,296 $ 27,808
Operating income/loss (65,970) 4,999 (9,241) 2,069 1,060

Reorganization expenses (412) (993)

Income/(loss) before income taxes (74,406) 3,553 (11,245) (16) (175)

Net income/(loss) $ (76,027) $ 3,162 $ (11,438) $ (276) $ (572)
Net loss applicable to common $ (82,390) $ (2,096) $ (16,696) $ (276) $ 3,106

INCOME/(LOSS) PER COMMON SHARE --
ASSUMING FULL AND NO DILUTION:

Net income/(loss) $ (5.17) $ 0.25 $ (0.92) $ (0.01) $ (0.05)

Dividend requirement on $2.4375
preferred stock (0.43) (0.42) (0.42) (0.20)
Net loss per common share $ (5.60) $ (0.17) $ (1.34) $ (0.01) $ (0.25)

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:

Primary 14,700 12,535 12,471 21,228 12,672

Fully Diluted 14,700 12,572 12,484 21,228 12,672
CASH FLOW DATA:

Net cash provided by (used in)
operating activities $ (9,346) $ 2,759 $ 3,170 $ 2,122 $ 546

Net cash used in investing
activities (10,181) (9,272) (9,698) (1,238) (3,642)

Net cash from (used in) financing
activities 25,667 6,929 5,260 (3,854) (2,949)
Capital expenditures, net 10,339 13,757 9,697 1,243 3,744

BALANCE SHEET DATA:

Working capital $ 22,421 $ 8,033 $ 3,022 $ 17,169 $ 4,782
Total assets 70,123 86,932 61,609 60,045 93,523

Prepetition] liabilities subject 90,244 81,181
to chapter 11 case

Total stockholders' equity (34,213) 29,715 26,399 (34,429) 31,074
(deficit)
</TABLE>

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<PAGE> 31
5. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH
31, 1996

The Company's consolidated revenues increased 9% ($2,488,000) to
$30,296,000. This was the result of increased activity in the international
operations in Latin America and the Far East that was partially offset by a
decrease in the United States.

Revenues from Latin America increased 20% ($3,842,000) to $17,148,000.
During the quarter, the Company operated five crews in the countries of
Columbia, Ecuador and Brazil and also wound down the operation of two crews in
Peru. In the first quarter of the prior year, the Company operated as many as
nine crews in Latin America, primarily in Columbia, Brazil, Peru and Bolivia.
The revenue increase for the current quarter compared with the first quarter of
1996 is primarily due to a significant rise in operations in Columbia, Ecuador
and Brazil offset by lower revenues in Peru and the completion of operations in
Bolivia in 1996. The Peruvian operations contributed $2,696,000 of revenues to
the current year's first quarter compared with $5,987,000 of revenues in the
first quarter a year ago. These operations were completed and the crews
withdrawn from the country during the month of January 1997.

Far East revenues increased 172% ($1,559,000) to $2,467,000. The
Company operated one land seismic crew in Bangladesh during this period and was
mobilizing a shallow water transition zone crew that is expected to begin
operations offshore Bangladesh, in the Bay of Bengal, in May 1997. During the
same period in 1996, the Company was demobilizing a crew in Indonesia and was
experiencing some difficulty mobilizing the current land seismic crew in
Bangladesh due to civil unrest. In addition to the activity in Bangladesh, the
Company is exploring other opportunities in Indonesia and surrounding
countries.

The Company had no revenue from Nigeria during the first quarter of
1997 as compared to $938,000 in the first quarter of 1996. Due to several
factors, including the risk of operating in Nigeria, the high cost of
mobilizing a crew and limited resources available, a decision to sell the
Nigerian operations was made in December 1996. The sale was completed in April
1997. The effect of the sale was recorded in 1996 and, therefore, had no impact
on the first quarter of 1997.

Revenues from United States data acquisition operations decreased 16%
($1,975,000) to $10,681,000. The Company operated five to six crews during 1997
compared to six to seven during 1996.

Direct operating expenses increased by $1,444,000 but decreased as a
percentage of revenue to 78% from 80%. The decrease is due to improved results
from certain crews operating in Columbia and Ecuador. The overall dollar
increase was the result of the increased revenue in both Latin America and the
Far East.

Other operating expenses, which consist of general and administrative
expenses at the corporate headquarters and in foreign locations, decreased as a
percentage of revenue to 7% from 8%. This was the result of cost reductions at
the corporate offices during the fourth quarter of 1996 and a reduction in
foreign overhead due to the sale of the Nigerian operations also in December of
1996.

Depreciation and amortization expense increased 10% ($241,000) to
$2,611,000 as the result of the purchase of three seismic acquisition systems
during 1996. Two of the systems are operating in Brazil and Columbia and the
third is being leased to a third party.

Interest expense increased only slightly to $1,391,000 from $1,330,000
in the prior year. Pursuant to the Bankruptcy Code, under certain
circumstances, secured lenders may be entitled to adequate protection of their
interest in collateral pending confirmation of a reorganization plan. Grant has
made adequate protection payments to certain secured lenders.

Reorganization costs of $993,000 relate to charges incurred in
connection with the Company's reorganization process. There are no comparable
charges in the first quarter of 1996.

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<PAGE> 32
Other income of $295,000 was primarily the result of a gain on foreign
exchange transactions in Columbia of approximately $146,000 and miscellaneous
other income of $112,000.

The income tax provisions in both periods consist of income taxes in
foreign locations. The level of foreign taxes has decreased from prior periods
due to the recognition of a net operating loss carryforward in Columbia. No
provision for U.S. Federal income tax was made in either period as the Company
currently has net losses available for carryforward.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR ENDED DECEMBER 31,
1995

The Company's revenues for the year ended December 31, 1996 increased
$13,527,000 or 15% from $91,996,000 for year ended December 31, 1995 to
$105,523,000 in the most recent year. This was the result of significant growth
in the Company's international operations in Latin America and Bangladesh,
which was offset partially by a reduction in revenues earned in the United
States and Nigeria.

Revenues from United States data acquisition operations decreased 12%
(5,775,000) to $42,074,000. This reduction was the result of several factors
experienced during the fourth quarter of 1996. The filing of the chapter 11
petition on December 6, 1996 and the severe shortage of operating funds
experienced for several weeks prior to the filing caused major disruptions on
many domestic crews and resulted in lower revenues for the quarter. In
addition, the Company's Citation data acquisition recording system, which
operated for two months in the third quarter, experienced lower than
anticipated production performance. And finally, a shallow water transition
zone crew, operating along the coast of Louisiana, was hampered by severe
weather and frequent leased equipment failures. These factors, coupled with the
Company's inability to continue to adequately fund the crew, resulted in a
suspension of operations in November 1996.

Revenues from international operations increased 44% ($19,302,000) to
$63,449,000. These increases were primarily the result of a significant
increase in seismic operations in Latin America and to a lesser extent the Far
East, that were partially offset by a reduction in revenues from Nigeria.

Latin America revenue during 1996 increased 124% ($31,601,000) to
$57,133,000. During this period, the Company operated one crew in Bolivia,
Brazil and Ecuador, two crews in Columbia and four crews in Peru. In the prior
year crew activity consisted of one crew during the fourth quarter in Bolivia,
one in Brazil, one to two crews in Columbia and three crews in Peru. The most
significant increases occurred in Columbia and Peru, where revenue increased
181% ($8,187,000) to $12,722,000 and 100% ($13,771,000) to $27,490,000,
respectively. Due to the significant operating losses incurred in Peru during
1996, each of the four crews previously operating there have been discontinued
and the seismic equipment moved to other Company crews.

Revenue from the Far East also increased during 1996 a total of 49%
($1,791,000) to $5,412,000. Crew activity consisted primarily of one crew in
operation for the entire year in Bangladesh. This compares to 1995 when the
Company operated one crew in Indonesia and mobilized the Bangladesh crew in the
fourth quarter. The Company is continuing to operate the Bangladesh crew and is
currently mobilizing a second crew, a shallow water transition zone crew, with
operations scheduled to commence in May, 1997. The Company is also exploring
other opportunities in Indonesia and other surrounding countries.

Revenues from Nigeria decreased 94% ($13,304,000) to $904,000. The
Company had operated three crews during most of 1995 but completed two of these
contracts in the fourth quarter of 1995 and the other in the first quarter of
1996. Although the Company participated in the bid for new contracts, all
three crews remained idle during 1996. Due to the risks involved in operating
in Nigeria, the anticipated high cost of mobilizing a new crew and the limited
resources available to Grant at the current time, a decision to sell the
Nigerian operations was made in December 1996. The sale was approved by the
Bankruptcy court on March 24, 1997 and was completed in April 1997.

The Company had no revenues from the Middle East during 1996. Middle
East revenues in 1995 were the result of various rental contracts for equipment
and personnel that expired in July 1995.

24
<PAGE> 33
Direct operating expense as a percentage of revenue increased to 129%
from 75%. This increase was due to higher than anticipated operating costs,
accelerated amortization of prepaid and deferred costs associated with certain
ongoing operations and the writedown of other Company's assets as a result of a
comprehensive review of the Company's operations. The most significant cost
increases were in United States, Peru and Nigeria. In the U.S., on a transition
zone crew, adverse weather conditions and the repeated breakdown of a leased
recording system combined for an increase in operating costs of approximately
$7,700,000. Also affecting the U.S. was the slow development and late
deployment of Citation. As described above, the system was originally planned
to be completed and operational by early 1996 but was delayed until the summer
of 1996. As a result, several contracts that were priced and bid with the
system were performed with other, less well-suited equipment. The result was
significantly higher operating costs of approximately $3,000,000. When the
system was finally deployed in July 1996, the production performance was well
below anticipated levels causing additional operating costs of approximately
$1,400,000. The late deployment and poor performance of the system was the
cause of a general equipment shortage during most of 1996. The shuffling of
equipment between crews resulted in inefficiencies that caused higher than
anticipated operating costs. In Peru, actual operating costs exceeded planned
costs by approximately $22,956,000. The primary cause of the increased Peruvian
operating costs was a combination of modified job parameters which were not
adequately compensated in the contract price and a general lack of effective
crew oversight. In Nigeria, certain operating costs continued despite no crew
activity during most of the year. These operating costs exceeded expectations
by $2,732,000 and were primarily related to idle assets and standby costs
incurred while pursuing new contracts.

Other operating expenses, which consist of general and administrative
expenses at corporate headquarters and in foreign locations, increased as a
percentage of revenues to 17% from 9%. This increase is attributable almost
entirely to allowances and charges incurred at the corporate headquarters that
resulted in an increase in corporate overhead of approximately $6,806,000. This
includes an increase in the reserve for doubtful trade accounts of
approximately $5,511,000 compared to no increase in the reserve for 1995. Other
one time or unusual items include severance costs of $423,000, write off of
Citation startup support costs of $824,000 and legal fees and settlements of
$367,000.

At December 31, 1996, the Company recorded a special charge for asset
impairment of $5,802,000. Management considered this special charge to be
necessary following an assessment of events and changes in circumstances that
clearly indicated that the carrying amount of certain assets was not
recoverable. This charge relates solely to the writedown of the carrying value
of the Citation system as previously discussed.

Depreciation and amortization expense increased 22% to $11,500,000.
This is due to an increased level of depreciable assets. Additions to fixed
assets during 1995 and 1996 were approximately $14,931,000 and $26,038,000,
respectively.

Interest expense increased 108% to $7,558,000. The increase was the
result of approximately $1,141,000 of interest paid to finance additional
equipment purchases, a $921,000 increase resulting from higher levels of
domestic working capital borrowings, new financing evidenced by subordinated
convertible debentures caused $589,000 of the increase and $950,000 was due to
an increase in the use of foreign lines of credit.

Other income/(deductions) for 1996 consisted primarily of a $251,000
loss on foreign exchange and a $198,000 loss on the sale of the Venezuelan and
Nigerian subsidiaries.

The income tax provision in both periods consist of taxes owed to
foreign countries based on local tax laws. No provision for U.S. Federal income
taxes was made in either period as Grant has net operating losses available for
carryforward.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

The Company's consolidated revenues increased 25% ($18,305,000) to
$91,996,000. The revenue growth during 1995 is due to an increase in demand for
Grant's United States seismic services. This increase, however, was offset
slightly by a decrease in revenue from the Company's international operations.

Revenues from the United States data acquisition operations increased
72% ($20,058,000) to $47,849,000. This growth was fueled by strong demand for
Grant's 3D seismic data acquisition services primarily within the Gulf

25
<PAGE> 34
Coast Region of the United States. In addition, larger and more complex
projects performed during 1995 contributed to the revenue increase. This is
evidenced by the increase in crew months from 46 to 62 and an increase in
average monthly revenue billed of approximately $604,000 to $771,000.

Revenues from international operations decreased 4% to $44,147,000 due
to the shutdown of Middle East operations in August 1994 and reduced activity
in the Far East and Nigeria during 1995. These decreases were offset by a
significant increase in Latin American operations during the 1995 fiscal year.
Middle East operations in 1994 consisted of one shallow water crew in Abu Dhabi
which was demobilized in August of that year. No revenues from seismic services
were generated in the Middle East during 1995. Middle East revenues for 1995
resulted only from equipment rental contracts with local seismic contractors. A
decision to close the Abu Dhabi office was made in December 1994 and completed
by mid-August 1995.

Revenues in the Far East were down 40% in 1995 to $3,621,000 due
primarily to the decrease in demand for the Company's services in the region
and the size of awarded contracts. The Company operated two crews throughout
the majority of 1994 with one crew operating on a sizable contract. During
1995, the Company again operated two crews; however, the contracted jobs were
of a shorter duration and were not of the same value. Bangladesh operations
were temporarily suspended due to political unrest in that country. Operations
were resumed shortly thereafter, without any significant impact.

Nigerian revenues decreased 8% ($1,292,000) to $14,208,000 for fiscal
year 1995. At October 31, 1995, two of the Company's crews had completed all
contractual backlog. The Company continued to operate one crew in the Niger
Delta; however, this crew completed its contractual backlog in February 1996
and was demobilized.

Revenues from Latin America increased 63% to $25,532,000. This
increase was primarily the result of mobilizing three seismic crews into Peru
during March, April and May of 1995. These crews had operated in Bolivia and
Columbia in 1994 but were moved into Peru during the first and second quarter
of 1995 to accommodate market demand.

Direct operating expenses as a percentage of revenue increased to 75%
from 72%. The increase is a result of higher direct operating expenses in
Nigeria. Operating efficiencies achieved during 1994 were not repeated during
1995 due to lack of available funds, equipment shortages and difficult terrain.
The overall dollar increase was the result of increased seismic activity in the
United States and Latin America.

Other operating expenses, which consist of general and administrative
expenses at the corporate headquarters and in the foreign locations, decreased
as a percentage of revenues to 9% from 11%. However, the total of Other
Operating Expense increased by 9% to $8,527,000. Charges related to termination
of a proposal to reclassify Grant's preferred stock and increased overhead
costs in Peru and the United States contributed to this increase.

Depreciation and amortization expense decreased 22% to $9,424,000.
This decrease can be attributed to a lower level of depreciable assets
resulting from the special charge for asset impairment recorded in December
1994.
Interest expense increased 2% to $3,635,000. Demobilization activities
for two crews in Nigeria coupled with the lack of necessary, immediate funds
contributed to the increased usage of foreign lines of credit in that region
during the third and fourth quarter of 1995.

Other income/(deductions) for 1995 consisted primarily of a $1,247,000
gain on an insurance settlement and a gain on the sale of miscellaneous fixed
assets of $212,000. Other income/(deductions) for fiscal year 1994 was the
result of an approximately $664,000 recovery of a bad debt and a non-recurring
royalty income item of $500,000.

The income tax provision in both periods consisted of taxes owed to
foreign countries based on local tax laws. No provision for U.S. Federal
income taxes was made in either period as Grant currently has net operating
losses available for carryforward.

26
<PAGE> 35
LIQUIDITY AND CAPITAL RESOURCES

For more than one year prior to filing for chapter 11, the Company as
a whole, and Grant in particular, experienced chronic liquidity problems. By
the second half of 1996 these problems had become severe. During this period,
payments were delayed to trade creditors, holders of Grant's secured and
unsecured note obligations and to lessors of capital equipment. In addition,
dividends on Grant's preferred stock had been omitted since December 1992.
Further, a lack of funding created delays in the startup of certain operations
and seriously affected the efficiency of other ongoing projects. Exacerbating
the crisis during the second half of 1996 were significant and continuing cash
flow losses on certain crews operating in Peru and in the United States coupled
with the continuation of investment in the Citation system.

In an effort to resolve the liquidity crisis, Grant sought to obtain
loans and/or equity contributions from a number of sources. In connection with
its attempt to improve its liquidity and financial condition, Grant entered
into arrangements with a variety of lenders and investors pursuant to which
loans totaling approximately $11,000,000 (of which about $6,000,000 was
unsecured debt) were advanced and an additional $1,573,000 of preferred stock
was sold. However, this financing was not sufficient to offset the Company's
continuing need for liquidity, and additional required financing was not
available. As a result, Grant was left with no alternative except to file the
chapter 11 proceeding in December 1996.

Immediately prior to and following the chapter 11 filing, the Company
took a number of steps to substantially reduce its cash outflows. The most
significant of these were the renegotiations of certain contracts in Peru and
the subsequent withdrawal of all equipment and personnel from that country, the
cessation of certain transition zone operations in the United States and a
suspension of all work on the Citation system.

Grant's short-term liquidity remains restricted. The Company's primary
sources of liquidity since filing for chapter 11 are its cash, cash flow from
operations, advances from customers, available lines of credit in foreign
locations and Grant's postpetition working capital line of credit.

At March 31, 1997, the Company had cash of $3,826,000, substantially
all of which was held in the Company's foreign operations. This cash balance
represents both contract prepayments by customers immediately following the
chapter 11 filing and payment for services rendered during the first quarter.
These balances are required to support the operations from which the
prepayments and the payments have been received.

On the Petition Date, Grant and Foothill entered into a Court-approved
interim DIP financing facility which provided for Foothill to continue to make
certain working capital advances to Grant for its United States and certain
foreign operations. On February 4, 1997 this interim financing order became
final and such final order was thereafter amended on April 9, 1997. Under the
amended financing order, Foothill has made available the loans as discussed
earlier in this Management's Discussion. As of May 13, 1997, Grant had borrowed
$11,110,044 under the DIP Financing Facility and there was $235,023 available
for borrowing.

For the quarter ended March 31, 1997, the Company's capital
expenditures totaled approximately $955,000. The Company believes that its
capital spending requirement for the remainder of 1997 will be approximately
$2,000,000 and that such amount will be adequate to support its operations.

Grant believes that its available liquidity is sufficient to support
its operations and capital spending for the near term. However, the Company's
liquidity is currently, and is expected to remain, very restricted for the
foreseeable future. Any material reduction in demand for the Company's services
or any significant operating losses would adversely affect Grant's ability to
complete any proposed plan of reorganization and would likely jeopardize the
Company's ability to continue to fund ongoing operations.

OTHER

FOREIGN EXCHANGE GAINS AND LOSSES. In order to mitigate foreign
exchange rate fluctuations, the Company attempts to structure the majority of
its international contracts to be filled and paid at a certain U.S. Dollar
rate. Additionally, the Company periodically enters into same currency debt of
a foreign subsidiary to pay expenses incurred

27
<PAGE> 36
locally. Foreign currency transaction/translation gains and losses resulting
from these arrangements are included in Other income. Presently, the Company
does not use derivatives or forward foreign exchange hedging contracts.

RECENT ACCOUNTING PRONOUNCEMENTS. In February 1997, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 128, Earnings per Share ("SFAS 128"). SFAS 128 specifies the compilation,
presentation and disclosure requirements for earnings per share for entities
with publicly held common stock or potential common stock. The requirements of
this statement will be effective for fiscal years beginning after December 15,
1997. Management does not believe that the implementation of SFAS 128 will have
a material effect on its financial statements.

C. CERTAIN EVENTS PRECEDING THE DEBTOR'S CHAPTER 11 FILING

Grant's chapter 11 case was precipitated by several factors, including
rapid expansion in the United States and Latin American markets, costs related
to the development of a proprietary data recording system and poor operational
results. These factors impaired Grant's ability to service its indebtedness,
fund essential capital spending and provide working capital for operations. In
addition, the substantial dividend arrearages to which the holders of the Old
$2.4375 Preferred Stock were entitled inhibited Grant's ability to raise
additional equity, causing a disproportionate reliance on debt financing and
equipment leasing.

Citation development costs. In the first quarter of 1994, Grant began
development of a proprietary data recording system that became known as
Citation. This system was intended to replace an older recording system used in
marshy areas along the Texas and Louisiana Gulf Coast. Grant's management at
the time believed that the cost to develop and manufacture the system would be
significantly less than the cost to acquire a comparable system from another
manufacturer. However, software design problems and the unavailability of
hardware caused numerous delays and cost overruns. The cost of the system was
about twice original estimates, and deployment was several months behind
schedule. While the system successfully acquired seismic data, its production
performance was significantly below expectations. The development costs
associated with Citation, along with the scheduling problems caused by the
delays in completion, contributed significantly to destabilizing Grant's
financial condition in 1996.

Peru losses. Grant and a Subsidiary mobilized three crews in Peru in
1995, and a fourth crew was added in 1996. Because of an inability to
accurately estimate the crews' production capabilities, coupled with
significantly higher costs than budgeted, Grant and its Subsidiary incurred
operating losses of $19,804,000 in Peru in 1996. Operations in Peru were ceased
in 1997, and neither Grant nor any of its Subsidiaries is currently operating
in Peru.

Other losses. Grant's United States operations also incurred operating
losses in 1996, principally related to the delayed deployment and inadequate
production rates of the Citation system.

In late 1996, it was determined by Foothill Capital Corporation
("Foothill"), Grant's prepetition working capital lender, that advances to
Grant exceeded Grant's eligible borrowing base, creating an "overadvance"
condition. In addition, Elliott Associates L.P. determined that one or more
material conditions to the consummation of a previously agreed loan facility
had not been met, and EALP notified Grant that no additional funding would be
forthcoming. Finally, Grant had issued certain payments in anticipation of
funding under the expected borrowing availability. When these sources of
liquidity ceased to be available, Grant was unable to honor these outstanding
payments.

Grant explored several alternatives to improve its capital structure
and increase liquidity. Discussions were conducted with prospective lenders and
investors, including certain creditors and stockholders of Grant. However,
these discussions were not successful in procuring sufficient additional
capital to adequately fund ongoing operations.

By late 1996, it became apparent that the only feasible recourse for
Grant was to commence a reorganization under bankruptcy court protection. As of
the date of this Disclosure Statement, none of the Subsidiaries or Branches has
filed for relief under the Bankruptcy Code or similar foreign laws. However, it
is anticipated that the Debtor's branch in Peru and certain dormant
subsidiaries of the Debtor and their respective branches may be liquidated
under applicable laws.

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<PAGE> 37
V. THE CHAPTER 11 CASE

A. COMMENCEMENT OF THE CHAPTER 11 CASE

On December 6, 1996 (the "Petition Date"), Grant commenced the Chapter
11 Case by filing a voluntary petition for protection under the Bankruptcy Code
in the United States Bankruptcy Court for the District of Delaware, the
Honorable Helen S. Balick presiding. The Chapter 11 Case is being administered
under Case No. 96-1936 (HSB). Since the Petition Date, Grant has continued to
operate its business and manage its properties as a debtor in possession
pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

B. PARTIES IN INTEREST IN THE CHAPTER 11 CASE

1. THE BANKRUPTCY COURT

The Chapter 11 Case is pending before the Honorable Helen S. Balick,
of the United States Bankruptcy Court for the District of Delaware.

2. RETENTION OF PROFESSIONALS

Grant has retained and has been represented in the Chapter 11 Case by
the law firms of Young, Conaway, Stargatt & Taylor, 11th Floor - Rodney Square
North, P.O. Box 391, Wilmington, Delaware 19899-0391, Telephone: (302)
571-6600; King & Pennington, L.L.P., 3100 South Tower Pennzoil Place, 711
Louisiana, Houston, Texas 77002, Telephone (713) 225- 8400; and Scott, Douglass
& McConnico, L.L.P., One American Center, 600 Congress Avenue, 15th Floor,
Austin, Texas 78701-3234, Telephone (512) 495-6300.

3. THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS

Shortly after the Petition Date, the United States Trustee for the
District of Delaware held a meeting of the Debtor's twenty largest unsecured
creditors and appointed the Official Committee. The Official Committee
currently consists of the following members: BGP International, Inc., Wells
Fargo Bank (Texas), N.A., Mitcham Industries, Inc., Racal-NCS, Concesiones &
Catering Industrial S.A. and Halifax Fund, L.P.

C. POSTPETITION OPERATIONS AND LIQUIDITY

Grant continues to operate its business as a debtor-in-possession
subject to the supervision of the U.S. Trustee and orders of the Bankruptcy
Court. The Bankruptcy Court has, upon application by Grant, entered orders that
determined the adequate assurance of payment for future utility services;
authorized payment of certain prepetition compensation, benefits, employee
reimbursements, withholding taxes, and independent contractor obligations; and
directed certain banks to honor prepetition checks for certain of these
amounts. The Court also approved the centralized cash management systems of
Grant and authorized Grant to honor certain prepetition obligations to certain
creditors. Further, the Bankruptcy Court authorized Grant to enter into certain
leases and other contracts.

On February 4, 1997, the Bankruptcy Court approved a final order (the
"Final Financing Order") authorizing Grant to enter into an agreement to obtain
secured post-petition financing from Foothill Capital Corporation ("Foothill").
Foothill agreed to make revolving advances not to exceed $12,500,000 through
June 30, 1997. The advances are not to exceed a borrowing base equal to a
percentage of certain trade accounts receivable and an overadvance amount. The
maximum permitted overadvance was $6,000,000 through March 30, 1997. The Final
Financing Order was amended by the Bankruptcy Court on April 9, 1997 to
increase the maximum permitted overadvance to $7,000,000 and extend the
maturity date of the secured post-petition financing to September 30, 1997.
This modification and extension occurred as a result of EALP's purchase of a
$2,500,000 "last-out" participation in the DIP Financing Facility. The Final
Financing Order provides for, and incorporates, an Approved Budget within which
Grant must operate, along with restrictions on Grant's authority to transfer
cash to most foreign locations.

The monthly operating reports filed with the U.S. Trustee do not
reflect any substantial negative change during the Chapter 11 Case. Grant has,
during the pendency of this proceeding, taken a number of steps to reduce its
costs,

29
<PAGE> 38
including reducing corporate overhead, terminating or selling unprofitable
operations, and restructuring most of its equipment financing obligations.

D. BAR DATE AND OTHER CLAIM MATTERS

On March 24, 1997, the Bankruptcy Court entered an order establishing
a deadline of May 7, 1997 for creditors to file proofs of claim (the "Bar
Date"). The face amount of all Claims against the Debtor, based on the proofs
of claim filed by the Bar Date, is approximately $ 80 million. The Debtor has
filed or anticipates filing objections to certain Claims. A claim or interest,
proof of which is timely filed under section 501 of the Bankruptcy Code, is
deemed allowed unless a party in interest objects. Grant will individually
evaluate each proof of claim and will object to any which it determines to be
in excess of the amount owed the claimant. Bases for objection include (i) the
proof of claim is not timely filed, (ii) the claim is unenforceable against the
debtor and property of the debtor under any agreement or applicable law for a
reason other than because such claim is contingent or unmatured; (iii) the
claim is for unmatured interest; (iv) the claim is for a tax assessed against
property of the estate and the amount of such claim exceeds the value of the
estate's interest in such property; (v) the claim exceeds certain limits
relating to claims by lessors resulting from the termination of a lease of real
property; (vi) the claim is for services of an insider or attorney of the
debtor and exceeds the reasonable value of such services; or (vii) the claim
exceeds certain limits relating to claims by employees for damages resulting
from the termination of an employment contract.

VI. EALP AND THE NEWCO ASSET PURCHASE AGREEMENT

A. EALP

EALP is a limited partnership which commenced operations in February
1977. The general partners of EALP are Paul E. Singer and Braxton Associates,
L.P. EALP provides investment and portfolio management services to pension
plans, corporations, family groups and individuals. As of January 1, 1997,
EALP's total capital was approximately $597.3 million, consisting of
approximately $514.1 million in partnership interests and approximately $83.2
million in variable rate notes issued by EALP. EALP's in-house analysts and
traders analyze, evaluate and execute the complex trades in EALP's program.
Stonington Management Corporation, a company that provides administrative
services for EALP, currently has 40 employees, including 18 analysts and
traders, most of whom have been with EALP for more than 5 years. Brokerage is
conducted through, and assets are held by, major Wall Street firms.

EALP's investment program is based on an active trading strategy which
commits capital to a diversified group of techniques which include (i)
distressed securities and special fixed income situations, both hedged and
unhedged; (ii) convertible hedging in Japan, the United States and Europe;
(iii) fixed income hedging and arbitrage and (iv) hedging and trading in
stocks, bonds, currencies, indices, commodities and closed-end mutual funds. At
present, trading in distressed securities and fixed income special situations
represents the single largest sector of EALP's capital deployment.

EALP has holdings in other entities that are in the energy business.
Such holdings include (a) ownership of a majority interest in Solid State
Geophysical and promissory notes from Solid State exceeding $12.0 million, (b)
ownership of promissory notes exceeding $2.0 million from Coastline
Geophysical, Inc. and (c) ownership of approximately 2.7% of the common stock
of Universal Seismic Associates, Inc.

B. TERM SHEET AND REVISED TERM SHEET BETWEEN EALP AND THE DEBTOR

On March 14, 1997, the Debtor entered into a term sheet with EALP (the
"EALP Term Sheet"), pursuant to which EALP would, subject to terms and
conditions of a definitive agreement, make certain capital investments in
connection with a plan of reorganization for the Debtor. On April 9, 1997, the
Bankruptcy Court entered an order approving substantially the break-up fees and
bidding procedures set forth in the EALP Term Sheet. As described in section II
above, in response to other offers received by the Debtor in accordance with
the bidding procedures ordered by the Bankruptcy Court, EALP submitted a
revised offer and Term Sheet (the "Revised EALP Term Sheet"). Both the Debtor
and the Official Committee determined that the Revised EALP Term Sheet was the
highest and best offer received by the Debtor. On June 23, 1997, this decision
was announced to the Bankruptcy Court and the Revised EALP

30
<PAGE> 39
Term Sheet was filed with the Bankruptcy Court. The Plan and this Disclosure
Statement reflect the provisions of such Revised EALP Term Sheet.

C. MATERIAL PROVISIONS OF NEWCO ASSET PURCHASE AGREEMENT

1. GENERAL

The Debtor and EALP currently are finalizing the terms of the
Newco Asset Purchase Agreement, a copy of which will be appended to the Plan as
Exhibit A. Subject to the terms and conditions contained therein and in the
Plan, the Newco Asset Purchase Agreement, provides, among other things, for the
creation of a special purpose acquisition corporation controlled by EALP and
referred to herein as "Newco." Newco shall purchase substantially all of the
assets, and assume certain specified liabilities, of the Debtor and its Estate
in consideration for a Cash payment of $47,500,000. In addition, Newco (or any
successor to Newco) shall issue Rights to purchase Newco Common Stock or the
stock of any successor to Newco to Eligible Class 5 Claim Holders and holders
of Allowed Class 7 and 8 Interests as provided in Sections 5.2.3.2 and 5.3 of
the Plan.

(a) On the Effective Date, pursuant to Section 5.1.1.1 of
the Plan and the Newco Asset Purchase Agreement, all assets of the Estate other
than as specifically set forth on Exhibit D to the Plan, including without
limitation all Cash of the Debtor, any right of the Debtor to any future
credits from any third party, any assets purchased upon GGI's exercise of the
Equipment Purchase Options and all claims and rights of action not released
pursuant to Sections 5.6.1.1 and 5.6.1.2 of the Plan or retained by GGI
pursuant to Section 5.6.1.3 of the Plan shall be purchased by, and shall vest
in, Newco, free and clear of all Claims, Interests, liens and charges arising
prior to the Effective Date, other than as specifically set forth in Sections
5.1.1.2 and 5.7 of the Plan. Assets of the Estate listed on Exhibit D to the
Plan shall vest in GGI.

(b) On the Effective Date, pursuant to Section 5.1.1.2 of
the Plan and the Newco Asset Purchase Agreement, all Assigned Liabilities and
all Administrative Claims representing obligations incurred in the ordinary
course of the Debtor's business shall be assigned to and assumed by Newco.
Except as noted elsewhere in the Plan, no other liabilities of the Estate shall
be assigned to and assumed by Newco. Under the Plan, Assigned Liabilities
consist of the Claims against, and liabilities of, the Debtor to Oyo, GECC,
Nynex and TIAA as described in Sections 3.2.3 and 5.1.2 of the Plan, the
Contingent LC Liabilities, consisting of the reimbursement obligations of the
Debtor to Wells Fargo and Home Insurance, and certain unearned revenue and
other liabilities and deferred credits on the Debtor's balance sheet (which
were approximately $8.5 million as of April 30, 1997).

(c) Pursuant to Section 6.2 of the Plan, on the Effective
Date all executory contracts and unexpired leases listed on Exhibit F to the
Plan shall be assumed and assigned to Newco.

(d) Pursuant to Section 5.1.1.4 of the Plan and the Newco
Asset Purchase Agreement, Newco shall pay GGI $47,500,000 in Cash, which shall
be paid not later than the Newco Cash Payment Deadline; provided, however, that
Newco shall pay GGI that portion of such Cash necessary to allow GGI to satisfy
its obligations under Sections 2.3 and 3.2.2 of the Plan on the Effective Date;
provided further that EALP shall be obligated to make such payments and assume
the liabilities in Section 5.1.1.2 of the Plan if Newco fails to do so. EALP
shall execute a document evidencing such commitment. At the Confirmation
hearing, the Debtor, Newco, EALP and the Official Committee shall advise the
Bankruptcy Court of the amount of such funds that shall initially be paid
directly to the Unsecured Creditors Trust on the Newco Cash Payment Deadline.

(e) The Newco Asset Purchase Agreement provides that
Newco shall purchase all rights to the names "Grant" and "Grant Geophysical."
Immediately after the Effective Date, Newco shall change its name to Grant
Geophysical, Inc. and GGI shall change its name to GGI Liquidating Corporation.

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<PAGE> 40
2. CERTAIN ASSIGNED LIABILITIES

a. Assignment of GECC Master Lease Agreement.

As provided in Section 5.1.2.1 of the Plan,
notwithstanding anything contained in the Plan, the terms of the GECC Lease
Assumption Order are expressly incorporated in the Plan by reference. All
obligations of the Debtor under the GECC Lease Assumption Order shall be, on
the Effective Date, assigned to Newco pursuant to Section 5.1.1.2 of the Plan
and the Newco Asset Purchase Agreement, and neither the Debtor, GGI, nor any
funds paid by Newco to GGI or the Disbursing Agent shall be subject to claims
arising therefrom.

b. Assignment of Nynex Master Lease Agreement.

As provided in Section 5.1.2.2 of the Plan,
notwithstanding anything contained in the Plan, the terms of the Nynex Lease
Assumption Order are expressly incorporated in the Plan by reference. All
obligations of the Debtor under the Nynex Lease Assumption Order shall be, on
the Effective Date, assigned to Newco pursuant to Section 5.1.1.2 of the Plan
and the Newco Asset Purchase Agreement, and neither the Debtor, GGI, nor any
funds paid by Newco to GGI or the Disbursing Agent shall be subject to claims
arising therefrom.

c. Assignment of the Oyo Obligations.

As provided in Section 5.1.2.3 of the Plan,
notwithstanding anything contained in the Plan, the Oyo Obligations are
expressly incorporated in the Plan by reference. All obligations of the Debtor
under the Oyo Obligations shall be, on the Effective Date, assigned to Newco
pursuant to Section 5.1.1.2 of the Plan and the Newco Asset Purchase Agreement,
and neither the Debtor, GGI, nor any funds paid by Newco to GGI or the
Disbursing Agent shall be subject to claims arising therefrom.

3. REPRESENTATIONS AND WARRANTIES

The Newco Asset Purchase Agreement contains various representations
and warranties of Newco and the Debtor. These include representations and
warranties by the Debtor to Newco with respect to corporate organization, good
standing, corporate authority, capitalization, subsidiaries, conflicts,
information contained in this Disclosure Statement and the Registration
Statement, consents and approvals, compliance with laws and absence of certain
developments. Newco has also made representations and warranties to the Debtor
with respect to corporate organization, good standing and corporate authority.

4. CERTAIN OTHER AGREEMENTS

a. Alternative Transactions and Break-Up Fee Provisions

The Newco Asset Purchase Agreement expressly incorporates the terms of
the Bankruptcy Court's order of April 9, 1997 approving, with certain
modifications, the break-up fee provisions agreed to by EALP and the Debtor, as
set forth in the EALP Term Sheet. Such provisions, among other things, provide
that upon the closing of an alternative transaction, EALP shall be paid, if it
prepared to consummate the transactions outlined in the EALP Term Sheet, (i)
$1.25 million in cash, as compensation for the time incurred and value to the
Debtor in pursuing the transactions contemplated by the EALP Term Sheet and
(ii) an amount equal to EALP's reasonable legal and due diligence costs and
expenses, both of which amounts shall be granted the priority status of
Administrative Claims against the Debtor's estate.

b. Conduct of Business

The Newco Asset Purchase Agreement provides that prior to the
Effective Date, the Debtor will, in general, conduct its business in the
ordinary course consistent with past practice.

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<PAGE> 41
c. Disclosure Statement, Solicitation and Plan Related
Documents

Under the Newco Asset Purchase Agreement, EALP, Newco and the Debtor
will use their good faith efforts to consummate the transactions set forth in
the Revised EALP Term Sheet, including without limitation the filing of the
Plan and Disclosure Statement and obtaining confirmation of the Plan in
accordance with the Bankruptcy Code and on terms consistent with the Newco
Asset Purchase Agreement. The parties further agreed that the Solicitation
Procedures Motion and the Plan Related Documents (both as defined in the Newco
Asset Purchase Agreement) shall be in form and substance reasonably
satisfactory in all respects to the Debtor, Newco and EALP and their respective
counsel and advisors.

5. CONDITIONS TO OBLIGATIONS OF EALP, NEWCO AND THE DEBTOR

The Newco Asset Purchase Agreement contains certain material
conditions to the Debtor's, Newco's and EALP's obligations thereunder. Such
conditions include, among other things, the satisfaction of all conditions to
the Effective Date. There can be no assurance that such conditions will be
satisfied. Consequently, there can be no assurance that the transactions
contemplated by the Newco Asset Purchase Agreement will be consummated.

The foregoing constitutes a summary of the material provisions of the
Newco Asset Purchase Agreement, a copy of which is attached to the Plan as
Exhibit A. This summary does not purport to be complete and is qualified in its
entirety by the full text of the Newco Asset Purchase Agreement, which is
incorporated herein by this reference.

D. EALP GUARANTY OF RIGHTS OFFERING

As provided in Section 5.2.3.4 of the Plan, EALP or an affiliate of
EALP designated by EALP shall purchase for Cash all Rights Offering Shares not
purchased by recipients of the Rights under the Plan. Prior to the Newco Cash
Payment Deadline, EALP may cause Newco to pay the Debtor the full $47.5 million
Cash purchase price and subsequently retain the Rights Offering proceeds.

E. ESTABLISHMENT OF NEW CREDIT FACILITY

As provided in Section 5.2.4 of the Plan, on the Effective Date Newco
shall enter into the New Credit Facility by entering into the New Credit
Facility Documents.

F. NAME CHANGE

As provided in Section 5.2.5 of the Plan, immediately after the
Effective Date Newco shall change its name to Grant Geophysical, Inc. and GGI
shall change its name to GGI Liquidating Corporation.

VII. NEWCO

A. BUSINESS OF NEWCO AND STRATEGIC PLAN

After the Closing Date, Newco will own substantially all of the assets
of the Debtor, and will have assumed certain specified liabilities and
obligations of the Debtor as well as the contracts representing the Debtor's
backlog as of the Closing Date. Newco expects to continue to conduct 3-D and
2-D geophysical surveys on a worldwide basis in the onshore, transition zone
and shallow water markets to the same extent as the Debtor. Newco's initial
focus will be directed to the operations of crews in the Debtor's markets of
the United States, Colombia, Ecuador, Brazil and Bangladesh. However, Newco
will aggressively seek to expand its presence to other South American and Far
Eastern countries and may also investigate opportunities for both direct and
joint venture participation in offering geophysical services in Canada, the
Middle East, the former Soviet Union, and certain African countries. Newco may
also initiate non-exclusive surveys pursuant to which Newco, either singly or
in participation with others, acquires surveys for license to multiple parties
for cash or for other consideration.

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<PAGE> 42
To augment its geophysical services business, Newco intends to
participate in the development and commercialization of geophysical techniques
for the use of three-component geophones which permit the recording of shear
wave information in addition to traditional P or vertical profile data and
"time-lapse" or 4-D projects where surveys are reacquired frequently or
continuously to monitor production progress and identify new completion targets
in existing oil and gas reservoirs. As part of this effort, Newco may
participate in research programs and enter into joint venture or other
cooperative agreements with entities providing seismic data processing,
interpretation, petroleum engineering, wireline or similar services.

In addition, Newco may consult with equipment manufacturers or
providers of ancillary services in the commercialization of systems or
techniques used in the conduct of geophysical surveys. This may include
equipment used in seismic data recording operations or in the "front end"
processes of surveying and drilling in preparation for data recording.

Newco may also consider participation in the consolidation of the
geophysical industry which it believes is currently underway. As set forth
herein in section V.A., EALP has interests in other entities in the energy
services business. The Debtor has conducted discussions with several industry
participants during the Chapter 11 process and will continue to consider
opportunities to combine its operations, either directly or through joint
ventures, with other parties if such combinations appear to provide significant
efficiencies in terms of extended market or services coverage, technology
transfers, capital spending or consolidation savings. Newco may effectuate such
a transaction prior to commencing the Rights Offering, and delay the Rights
Offering until such transaction is complete. However, no assurances can be
given that any such combinations or joint ventures will become available or, if
available, will be consummated by Newco.

B. INITIAL CAPITALIZATION OF NEWCO

On the Effective Date, EALP shall cause Newco to be formed in
accordance with Delaware law and to comply with all of EALP's and Newco's
obligations under the Plan and the Newco Asset Purchase Agreement, including
making the payments thereunder. Newco shall issue the Newco Common Stock. On
the commencement of the Rights Exercise Period, the Rights shall be issued to
holders of Claims and Interests as set forth in Sections 3.2.5, 3.2.7 and 3.2.8
of the Plan. EALP or any affiliate of EALP designated by EALP shall (i)
receive 4,750,000 shares of Newco Common Stock in exchange for capitalizing
Newco with Cash equal to $23,750,000 ($5.00 per share) and (ii) receive 237,500
shares of Newco Common Stock as compensation for EALP's obligations set forth
in Section 5.2.3.4 of the Plan. Newco's capitalization may, however, be in any
structure determined by EALP, provided that Newco and EALP shall continue to be
obligated to make the payments set forth in Section 5.1.1.4.

C. AUDITED CONSOLIDATED FINANCIAL INFORMATION

Exhibit 2 is a copy of Grant's audited consolidated financial
statements and the related notes for the years ended December 31, 1996 and
1995. The audited financial information includes the accounts of Grant
Geophysical, Inc. and its subsidiaries.

D. UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION

Exhibit 3 is a copy of Grant's unaudited consolidated financial
statements for the quarters ended March 31, 1997 and 1996. The unaudited
financial information includes the accounts of Grant Geophysical, Inc. and its
subsidiaries. The unaudited interim financial statements reflect all
adjustments which are, in the opinion of management of Grant, necessary to a
fair statement of the results for the interim periods presented. However, such
interim financial statements omit footnote disclosures which would
substantially duplicate the disclosure contained in Grant's most recent audited
financial statements. Therefore, such interim financial statements should be
read in conjunction with Grant's audited financial statements for the years
ended December 31, 1996 and 1995 contained in Exhibit 2.

E. UNAUDITED PROJECTED FINANCIAL INFORMATION

Exhibit 4 consists of a management-prepared Business Plan and
Financial Analysis. This Exhibit includes (i) operating forecasts, (ii) cash
flow statements, (iii) projected balance sheets and (iv) projected capital
spending

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<PAGE> 43
requirements for each of the five years following the Effective Date. The
significant assumptions which support the Business Plan and Financial Analysis
are also included. Material variances in the forecasted financial information
contained therein may result from unforeseen factors.

ALTHOUGH GRANT BELIEVES THAT THE FINANCIAL FORECASTS FOR NEWCO SET
FORTH IN EXHIBIT 4 ARE REASONABLE IN LIGHT OF CURRENT FACTS AND CIRCUMSTANCES
KNOWN TO MANAGEMENT, THE FORECASTS ARE BASED ON A NUMBER OF ASSUMPTIONS AND ARE
SUBJECT TO SIGNIFICANT UNCERTAINTIES WHICH ARE BEYOND THE CONTROL OF GRANT OR
NEWCO; THEREFORE, THERE CAN BE NO ASSURANCE THAT THESE FORECASTS WILL BE
REALIZED, AND ACTUAL OPERATING RESULTS MAY BE MATERIALLY HIGHER OR LOWER THAN
FORECAST.

F. MANAGEMENT OF NEWCO

1. BOARD OF DIRECTORS

Subject to any requirement of Bankruptcy Court approval
pursuant to section 1129(a)(5) of the Bankruptcy Code, the initial board of
directors of Newco will solely consist of seven directors designated by EALP,
four of whom are listed below. The remaining three directors shall be
designated by EALP prior to Confirmation.

<TABLE>
<CAPTION>
Name Age Affiliations
---- --- ------------
<S> <C> <C>
Jon D. Pollock 34 Chairman of the Board of Newco. Mr. Pollock is Portfolio Manager
with Elliott Associates L.P., the majority stockholder of Newco.

J. Kelly Elliott 66 Vice-Chairman of Newco. Mr. Elliott served as Chairman of the
Board of Grant from June 1993 through November 1995, and from
November 20, 1996 until the Effective Date. Mr. Elliott is
also currently Chairman, President and Chief Executive
Officer of Sigma Electronics, Inc., in which capacities he as
served since 1989. Mr. Elliott currently serves as a director
of Tescorp, Inc., Oil States Industries, Incorporated and XL
Systems Inc. He is also Chairman, President and Chief
Executive Officer of Omnicomp Graphics Corporation, Chairman
of Seaboard-Arval Corporation and Consultant to the Board of
Directors of Weatherford Interra.

Larry E. Lenig, Jr. 48 President and Chief Executive Officer and Director of Newco. Mr.
Lenig served as President and Chief Operating Officer of Grant
from January 1997 until the Closing Date. Mr. Lenig was President
and Chief Operating Officer of Digicon Inc. from 1989 until 1993,
and was engaged in private consulting to a variety of energy and
energy services companies and financial institutions from 1993
until joining Grant.

Donald G. Russell 65 Director of Newco. Mr. Russell served as a director of Grant from
July 1993 through November 1995 and from February 1997 until the
Closing Date. Mr. Russell is currently Chairman of the Board and
Chief Executive Officer of Sonat Exploration Company, a post he
has held since 1988.
</TABLE>

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<PAGE> 44
All directors of Newco shall serve until their successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Newco Certificate of Incorporation and Bylaws.

Non-employee directors of Newco will receive, as compensation for such
service, (i) $1,500 per month in Cash, (ii) $500 for each Board or Committee
meeting attended by such Director, and (iii) options granted annually to
purchase 3,000 shares of Newco Common Stock at fair market value.

2. EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION

a. Executive Officers

Subject to any requirement of Bankruptcy Court approval
pursuant to section 1129(a)(5) of the Bankruptcy Code, the initial officers of
Newco and their respective compensation shall be designated by EALP prior to
Confirmation. EALP currently expects that the initial Officers of Newco, and
their base compensation, will be the following:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Larry E. Lenig, Jr. 48 President and Chief Executive Officer and Director(2)
(Proposed base compensation: $180,000 per year)

Michael P. Keirnan 45 Vice President and Chief Financial Officer. Mr. Kiernan was
appointed to his current position in February 1997. He previously
served as Manager of Treasury Operations for Gundle/SLT
Environmental from March 1996 until February 1997. Since 1986 and
until March 1996, Mr. Kiernan served in various senior accounting
management positions for Grant, including service as
Controller/Treasurer from 1993.

(Proposed base compensation: $90,000 per year)
</TABLE>

Each officer of Newco will serve from and after the Effective Date until his or
her successor is duly appointed and qualified or until their earlier death,
resignation or removal in accordance with the terms of the Newco Certificate of
Incorporation and Bylaws. Compensation of the officers of Newco will be
established by the Board of Directors of Newco on the Effective Date.

b. Executive Compensation

Newco expects to offer to its employees a reasonable compensation plan
consisting of (1) current cash compensation at prevailing market rates for the
industry and geographic location in which the employees work, (2) a cash bonus
plan based on meeting pre-agreed financial performance targets and individual
performance, (3) stock options generally vesting over three years and (4)
reasonable group health and other benefits. EALP has agreed that Newco may
grant stock options on the Effective Date to certain persons who are employees
of Newco on the Effective Date. The initial grants of options will be based on
the Rights of Newco Common Stock (or stock of a successor of Newco). EALP
currently expects to grant stock options on the Effective Date as follows:

- ---------------
(2) For information regarding Mr. Lenig, see "Directors" above.

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<PAGE> 45
<TABLE>
<CAPTION>
Name of Prospective Employee Number of Option Shares
---------------------------- -----------------------
<S> <C>
Larry E. Lenig, Jr. 240,000 shares
Michael P. Keirnan 36,000 shares
Other Employees 725,000 shares(3)
</TABLE>

The details of the compensation plan have not yet been completed. All decisions
regarding compensation, including base compensation, cash bonus plans and stock
options, are subject to the determination of the Board of Directors of Newco.

3. BENEFIT PLANS AND AGREEMENTS

Exhibit G to the Plan constitutes the exclusive list of the
employment, retirement and other agreements and incentive compensation programs
that will be assumed and assigned by Newco on the Effective Date.

4. CERTAIN CORPORATE GOVERNANCE ISSUES

Corporate governance matters with respect to Newco will be
controlled by the Newco Certificate of Incorporation and the Newco Bylaws, in
addition to the applicable provisions of Delaware law. The Newco Certificate of
Incorporation and the Newco Bylaws will provide, in general, that: (a)
stockholder action can be taken at an annual or special meeting of
stockholders; (b) special meetings of stockholders may be called for any proper
purpose or purposes by (i) the Chairman of the Board, (ii) the President, (iii)
a majority of the board of directors, or (iv) holders of shares that are
entitled to call a special meeting of the stockholders by virtue of any
preferred stock designation; and (c) written notice of every meeting of the
stockholders shall be provided to each stockholder of record, stating the
place, date and hour, and in the case of a special meeting, the purpose(s) for
which the meeting is called. The Newco Certificate of Incorporation will also
provide that the number of directors shall be fixed by the Newco Bylaws and may
be increased or decreased as prescribed therein. The Newco Bylaws will provide
that, subject to the rights of holders of preferred stock, the number of
directors shall be not less than three nor more than a specified number, with
the exact number to be fixed from time to time by a vote of the majority of the
entire board of directors. In addition, stockholders of a Delaware corporation
cannot elect directors by cumulative voting unless its certificate of
incorporation so provides. The Newco Certificate of Incorporation will not
provide for cumulative voting. As a result, the holders of shares having a
majority of the voting power in the election of directors will be able to elect
all of the directors then being elected.

Delaware law allows amendments of the certificate of incorporation if
the board of directors adopts a resolution setting forth the amendment
proposed, declaring its advisability, and the stockholders thereafter approve
such proposed amendment either at a special meeting or at the next annual
meeting of stockholders. At any such meeting, the proposed amendment generally
must be approved by a majority of the stockholders. Under Delaware law, the
power to adopt, amend or repeal the bylaws resides with the stockholders;
however, such power may be conferred upon the board of directors by the
certificate of incorporation. The Newco Certificate of Incorporation will
provide that the board of directors may adopt, amend or repeal the Newco
Bylaws, but this grant will not divest the stockholders of such power.

With respect to a merger, consolidation or sale of substantially all
of the assets of a corporation, Delaware law requires approval by a majority of
the stockholders. However, Delaware law permits mergers without approval if,
among other things, no amendment of the certificate of incorporation is
involved and no more than a 20% maximum increase in the corporation's
outstanding common stock will result.

Delaware law permits a corporation's certificate of incorporation to
allow the board of directors to issue, without stockholder approval, a series
of preferred stock and to designate their rights, preferences, privileges and
restrictions. The Newco Certificate of Incorporation will grant such power to
the board of directors, including the power to fix the voting rights of such
preferred stock. Delaware law also permits, and the Newco Certificate of
Incorporation will not prohibit, the board of directors to authorize the
repurchase of Newco's capital stock, so long as capital is not impaired and, in
the case of redeemable shares, so long as the purchase price is not greater
than the redemption price.

- ---------------
(3) Reserved for grant on and after the Effective Date.

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<PAGE> 46
Furthermore, the Newco Certificate of Incorporation will provide that
Newco will not] be subject to section 203 of the Delaware General Corporation
Law, which provides that a corporation shall not engage in any] business
combination with any interested stockholder for a period of three years after
such stockholder becomes an interested stockholder, unless (a) prior to such
time the board of directors of the corporation approves either the business
combination or the transaction which results in the stockholder becoming an
interested stockholder, (b) upon consummation of the transaction which results
in the stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding certain shares); or
(c) at or subsequent to such time, the business combination is approved by the
board of directors of the corporation and by the affirmative vote of at least
two-thirds of the outstanding voting stock which is not owned by the interested
stockholder. An interested stockholder includes any person who is the owner of
15% or more of the outstanding voting stock of the corporation, or is an
affiliate or associate of the corporation and was the owner of 15% or more of
the outstanding voting stock of the corporation, at any time within three years
prior to the relevant date. A business combination is a merger or
consolidation, a sale or other disposition of more than 10% of the
corporation's assets, a security issuance that increases the interested
stockholder's proportionate share of the corporation's stock or any other
transaction that confers a potential benefit on the interested stockholder.

5. LIMITATION OF LIABILITY; INDEMNIFICATION, DIRECTOR AND OFFICER
INSURANCE

a. Certificate of Incorporation and Bylaws Provisions

The Newco Certificate of Incorporation will limit personal
liability of Newco's directors to the full extent permitted by the Delaware
General Corporation Law. Section 102(b)(7) of the Delaware General Corporation
Law enables a Delaware corporation to include in its certificate of
incorporation a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for
breaches of fiduciary duties as a director, but no such provision may eliminate
or limit the liability of a director (i) for any breach of the duty of loyalty,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under section 174 of the
Delaware General Corporation Law (dealing with illegal redemptions and stock
repurchases), or (iv) for any transaction from which the director derived an
improper personal benefit.

The Newco Certificate of Incorporation will also provide, as do the
charters of many other publicly held companies, for the mandatory
indemnification of directors and officers to the full extent authorized or
permitted by law. Section 145 of the Delaware General Corporation Law provides
that a corporation (a) must indemnify its directors, officers, employees and
agents for all expenses of litigation when they are successful on the merits or
otherwise, (b) may indemnify such persons for the expenses, judgments, fines
and amounts paid in settlement of litigation (other than a derivative suit)
even if they are not successful on the merits, if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation (and, in the case of criminal proceedings, have no
reason to believe that their conduct was unlawful), and (c) may indemnify such
persons for the expenses of a derivative suit even if they are not successful
on the merits if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation,
provided that no such indemnification may be made on behalf of a person
adjudged to be liable in a derivative suit, unless the Delaware Chancery Court
determines that, despite such adjudication but in view of all of the
circumstances, such person is entitled to indemnification. In any such case,
indemnification may be made only upon determination by (i) a majority of the
disinterested directors, (ii) independent legal counsel, or (iii) the
stockholders that indemnification is proper because the applicable standard of
conduct was met. The advancement of litigation expenses to a director or
officer is also authorized upon receipt by the board of directors of an
undertaking to repay such amounts if it is ultimately determined that such
person is not entitled to be indemnified for them. The Newco Certificate of
Incorporation will authorize Newco to enter into indemnification agreements
with its officers and directors.

The Newco Bylaws will also mandate indemnification of directors and
officers to the full extent permitted by the Delaware General Corporation Law.

b. Directors' and Officers' Insurance

Section 145 of the Delaware General Corporation Law permits a
corporation to purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the corporation, or is or was

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serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability. The
Newco Bylaws will authorize Newco to purchase and maintain insurance protecting
its officers and directors as permitted by the Delaware General Corporation
Law. However, Newco and the directors or officers cannot be sure that such
insurance coverage will continue to be available in the future or, if
available, that it will not be unreasonably expensive to purchase and maintain.

G. AUTHORIZED CAPITAL STOCK

The Newco Certificate of Incorporation will authorize the issuance of
shares of Newco Common Stock in amounts not less than the amounts necessary to
permit the distributions thereof required or contemplated by the Plan. Any
future issuance of shares of Newco Common Stock could have the effect of
diluting the earnings per share, book value per share and voting power of
shares held by the stockholders of Newco. The Newco Certificate of
Incorporation will provide, to the extent required by section 1123 of the
Bankruptcy Code (if applicable), that Newco will not issue nonvoting equity
securities.

VIII. STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND EXECUTIVE OFFICERS

For information with respect to shares of Old Common Stock which are
held by persons known by the Debtor to be beneficial owners of more than 5% of
such stock, including each person who is expected to serve as a director or
executive officer of Newco, see the Company's Annual Report on Form 10-K, at
page 30. For purposes of this Disclosure Statement, beneficial ownership of
securities is defined in accordance with the rules of the Securities and
Exchange Commission.

The Proponents are unable to determine the number and percentage of
shares of Newco Common Stock that will be beneficially owned by such persons on
the Effective Date because, among other things, the Newco Common Stock will not
be issued in exchange for the Old Common Stock. Rather, the Old Common Stock
will be canceled. Additionally, certain holders of Old Common Stock may receive
Newco Common Stock on account of Rights received on account of certain Claims
or other Interests.

IX. CERTAIN TRANSACTIONS WITH AFFILIATES

A. TRANSACTIONS WITH EALP

As of the date of this Disclosure Statement, EALP owned
415,564 shares of Old $2.4375 Preferred Stock. Additionally, the Liverpool
Limited Partnership, an affiliate of EALP, owned 282,050 shares of Old $2.4375
Preferred Stock. From time to time prior to the Petition Date, EALP made
certain loans to the Debtor. Specifically, in August and November, 1994, EALP
loaned $2 million and $1 million, respectively, to the Debtor. The Debtor
repaid such loans in installments of $2 million on January 1, 1995 and $1
million on February 15, 1996.

Additional unsecured loans of $325,000, $840,000 and $489,000 were
made by EALP to the Debtor in November, 1996. Such loans are evidenced by
90-day promissory notes, bearing interest at the per annum rate of 15%. The
notes evidencing the Debtor's indebtedness to EALP have been assigned by EALP
to Westgate International, L.P., an affiliate of EALP. Westgate made additional
loans of $560,000, $385,000 and $550,000 to the Debtor in October and November,
1996. As of the Petition Date, Westgate held a General Unsecured Claim in the
amount of $3,252,897 and The Liverpool Limited Partnership held a general
unsecured claim in the amount of $95,604.

In addition to the prepetition loans made to the Debtor, EALP, in
accordance with the provisions of the EALP Term Sheet and an order of the
Bankruptcy Court, purchased a $2.5 million "last-out" participation in the DIP
Financing Facility.

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B. TRANSACTIONS WITH OTHER AFFILIATES

The Debtor engages, in the ordinary course of business, in various
transactions with its subsidiaries on a regular basis. These transactions
include the transfer of personnel and equipment, advances, repayments,
guarantees, and other similar transactions. Since the Petition Date, the Debtor
has not advanced any funds to any of the subsidiaries, nor has the Debtor
transferred any material amount of equipment to any subsidiary.

See Note 15 of Notes to Consolidated Financial Statements included in
the Company's Annual Report on Form 10-k for the year ended December 31, 1996,
at page F-26, for additional information regarding related party transactions.

X. THE RIGHTS OFFERING

A. GENERAL

Subject to the effectiveness of the Registration Statement, the Rights
will be issued to holders of Allowed Class 5 Claims and Allowed Class 7 and 8
Interests. The Rights will be nontransferable, will not be evidenced by
certificates and will expire on the Rights Expiration Date. The Rights will
represent the right to purchase, in the aggregate, 4,750,000 shares of Rights
Offering Common Stock, for an aggregate purchase price of $23,750,000, or
shares in a successor to Newco on economically equivalent terms. The Rights
will be divided into (a) the Class 5 Rights, which will be issued to Eligible
Class 5 Claim Holders and will represent the right to purchase, in the
aggregate, 475,000 shares of Rights Offering Common Stock, for an aggregate
purchase price of $2,375,000, (b) the Class 7 Rights, which will be issued to
holders of Allowed Class 7 Interests and will represent the right to purchase,
in the aggregate, 4,255,000 shares of Rights Offering Common Stock, for an
aggregate purchase price of $21,275,000 and (c) the Class 8 Rights, which will
be issued to holders of Allowed Class 8 Interests and will represent the right
to purchase, in the aggregate, 20,000 shares of Rights Offering Common Stock,
for an aggregate purchase price of $100,000 or, in each case, shares in a
successor to Newco on economically equivalent terms, in the same proportions.

B. RIGHTS EXERCISE PERIOD

The Rights Exercise Period shall commence as soon as practicable
following the later of the (a) Effective Date and (b) the effective date of the
Registration Statement. The Rights Exercise Period will conclude on the date
occurring forty-five (45) days after the commencement of the Rights Exercise
Period. As set forth in section VI.D "EALP Guaranty of Rights Offering" above,
EALP may cause Newco to pay the full $47.5 million Cash purchase price to the
Debtor at any time prior to the Newco Cash Payment Deadline and retain the
proceeds of the Rights Offering. In such event, it is possible that the
commencement of the Rights Offering will be delayed. In addition, in the event
that Newco is unable to cause the Registration Statement to be declared
effective within a reasonable time after the Effective Date, Newco may
discontinue the Rights Offering.

C. EXERCISE PROCEDURES; DELIVERY OF RIGHTS OFFERING NEW COMMON STOCK

Rights may be exercised by the respective holders thereof at any time
during the Rights Exercise Period. Each Right shall entitle the holder thereof
to purchase one share of the Rights Offering Common Stock at a price equivalent
to the price at which EALP acquires shares of Newco Common Stock pursuant to
Section 5.2.3.3 of the Plan. All Rights that are to be exercised by an
individual holder must be exercised concurrently. Any exercise of Rights shall
be irrevocable after the Rights Expiration Date.

In order for an exercise of the Rights to be valid and effective, the
holder of the Rights seeking to effect such an exercise must have been the
holder of an Allowed Claim or Allowed Interest on account of which the Rights
were issued and must deliver to the Rights Agent prior to the Rights Expiration
Period a properly completed and duly executed Rights Exercise Notice which (i)
indicates the number of Rights sought to be exercised and (ii) is accompanied
by a certified check or bank draft drawn upon a United States bank or wire
transfer in an amount equal to the product of the Rights exercise price and the
number of Rights sought to be exercised. The foregoing items will not be deemed
to have been timely delivered to the Rights Agent (and thus the attempted
exercise of the Rights will not be valid or

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effective) unless they are actually received by the Rights Agent, at the
address specified therefor in the instructions (the 'Exercise Instructions")
accompanying the form of Rights Exercise Notice to be provided pursuant to
Section 5.3.3 of the Plan, prior to the Rights Expiration Date and are
completed and executed in conformity with the Exercise Instructions.

In order to facilitate the exercise of the Rights, the Rights Agent
will mail, on the date upon which the Rights Exercise Period commences, to each
Eligible Class 5 Claim Holder or the holder of an Allowed Class 7 or 8
Interest, a Rights Exercise Notice together with the Exercise Instructions
(which will include instructions for the proper completion and due execution of
the Rights Exercise Notice and timely delivery thereof, together with
instructions for the payment of the applicable aggregate exercise price for the
Rights sought to the exercised, to the Rights Agent and may specify other
requirements relating to the valid and effective exercise of the Rights). All
determinations as to proper completion, due execution, timeliness, eligibility
and other matters affecting the validity or effectiveness of any attempted
exercise of any Rights shall be made by the Rights Agent, whose determination
shall be final and binding. The Rights Agent in its sole discretion may waive
any defect or irregularity, or permit a defect or irregularity to be corrected
within such time as it may determine or reject the purported exercise of any
Right subject to any such defect or irregularity. Deliveries required to be
received by the Rights Agent in connection with a purported exercise of Rights
will not be deemed to have been so received or accepted until actual receipt
thereof by the Rights Agent shall have occurred and any defects or
irregularities shall have been waived or cured within such time as the Rights
Agent may determine in its sole discretion. Neither the Debtor nor the Rights
Agent will have any obligation to give notice to any holder of a Right of any
defect or irregularity in connection with any purported exercise thereof or
incur any liability as a result of any failure to give any such notice.

As promptly as practicable following the Rights Expiration Date, the
Rights Agent will mail,(or cause to be mailed) to each holder of Rights that
has sought to exercise Rights, a written statement specifying the number of
Rights that were validly and effectively exercised by such holder and the
number of shares of stock purchased upon such exercise of such Rights, together
with a stock certificate representing the shares of Newco Common Stock) stock
so purchased.

XI. SECURITIES TO BE ISSUED AND DISTRIBUTED UNDER THE PLAN
AND THE NEWCO ASSET PURCHASE AGREEMENT

As of the later of (i) the Effective Date or (ii) the date on which
the Registration Statement becomes effective, Newco will issue the Rights. In
the event that Newco is unable to cause the Registration Statement to be
declared effective within a reasonable time after the Effective Date, Newco may
discontinue the Rights Offering. The Rights will be issued for distribution in
accordance with the Plan and the Newco Asset Purchase Agreement to or for the
benefit of holders of certain Allowed Claims and Allowed Interests. See
"Overview of the Plan --Summary of Classes and Treatment of Claims and
Interests," "Distributions Under the Plan" and "Certain Risk Factors." The
following discussion summarizes the material provisions of the Rights and of
the Newco Common Stock to which the Rights relate, including reference, where
applicable, to the Newco Certificate of Incorporation and the Newco Bylaws.
This summary does not purport to be complete and is qualified in its entirety
by reference to the full text of the Newco Certificate of Incorporation and the
Newco Bylaws, forms of which are appended as Exhibits B and C, respectively, to
the Plan.

A. THE NEWCO COMMON STOCK

The Newco Common Stock will be issued to EALP and to holders of Rights
who duly exercise such Rights (unless the Rights are to purchase shares of a
successor to Newco). The Newco Certificate of Incorporation will authorize the
issuance of shares of Newco Common Stock in amounts not less than the amounts
necessary to permit the distributions thereof required or contemplated by the
Plan. Giving effect to the transactions contemplated by the Plan and the Newco
Asset Purchase Agreement, the Debtor estimates that there will be 9,737,500
shares of Newco Common Stock outstanding on the Closing Date (as defined in the
Newco Asset Purchase Agreement).

The rights of holders of the Newco Common Stock will be governed by
the laws of the State of Delaware as well as by the Newco Certificate of
Incorporation and the Newco Bylaws. Under the Newco Certificate of

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Incorporation, the holders of Newco Common Stock will be entitled to one vote
for each share held of record on all matters submitted to a vote of
stockholders, including the election of directors. The Newco Common Stock will
not have cumulative voting rights. As a result, the holders of more than 50% of
Newco Common Stock will be able to elect 100% of the directors to be elected if
they choose to do so. In such event, the holders of the remaining shares of
Newco Common Stock will not be able to elect any directors. Holders of Newco
Common Stock will be entitled to participate equally in such dividends as may
be declared by the Board of Directors out of funds legally available therefor.
However, it is not anticipated that dividends will be paid on the Newco Common
Stock in the foreseeable future. See "Certain Risk Factors - - Dividend
Restrictions." In the event of a liquidation, dissolution or winding up of
Newco, holders of Newco Common Stock will be entitled to participate equally in
all assets remaining after payment of liabilities and the liquidation
preference of any preferred stock of Newco. Holders of Newco Common Stock will
have no preemptive rights. Holders of Newco Common Stock will have no rights to
convert their Newco Common Stock into any other securities and will have no
redemption provisions or sinking fund provisions with respect to such shares.

B. THE RIGHTS

For a description of the Rights to be issued by Newco to holders of
Allowed Class 5 Claims and Allowed Class 7 and 8 Interests, see "The Rights
Offering." Rights may not be issued if the Registration Statement is not
declared effective within a reasonable time after the Effective Date.

C. REGISTRATION RIGHTS AGREEMENT

On the Effective Date, EALP, or any affiliate of EALP
designated by EALP, and Newco shall be deemed to have entered into the Newco
Common Stock Registration Rights Agreement , the form of which is appended as
Exhibit E to the Plan, without further action on the part of Newco, EALP, the
Debtor, GGI or any other party. The Newco Common Stock Registration Rights
Agreement is subject to further negotiation and may contain terms different
from or additional to the following described terms. Pursuant to the Newco
Common Stock Registration Rights Agreement, individuals holding at least 25% of
the Registrable Shares (as defined therein) shall have the right to request the
registration of such Registrable Securities (a "Demand"). Newco will then be
required to file with the SEC within 60 days after receiving notice of such
Demand, a registration statement (a "Newco Registration Statement") on the
appropriate form. Newco must use its best efforts to cause such Newco
Registration Statement to become effective. The holders of Registrable
Securities will have the right to make 5 Demands (no more than 3 Demands within
any twelve-month period) under the Newco Common Stock Registration Rights
Agreement. In addition, pursuant to the Newco Common Stock Registration Rights
Agreement, if Newco proposes to register any of its equity securities under the
Securities Act for its own account or for the account of other stockholders,
the holders of Registrable Shares will have the right to include their
Registrable Shares ("Piggyback") in such registration, subject to the right of
the underwriters of any such offering to limit the number of shares included in
such registration.

"Registrable Securities" is defined in the Newco Common Stock
Registration Rights Agreement as all shares of Newco Common Stock issued to
EALP as described in Section 5.2.3.3 of the Plan or as provided in Sections
3.2.5 or 3.2.7 of the Plan, and any equity securities of Newco issued or
distributed in respect thereof by way of any stock dividend, stock split or
other distribution, recapitalization or reclassification and any equity
securities acquired upon exercise or conversion of any such securities.

Holders of Registrable Securities participating in any registration
pursuant to the Newco Common Stock Registration Rights Agreement must satisfy
certain conditions relating to the provision of information in connection with
any such registration statement. The Newco Common Stock Registration Rights
Agreement contains a variety of other provisions applicable to Demand and
Piggyback registrations. However, the provisions of the Newco Common Stock
Registration Rights Agreement are for the exclusive benefit of the parties
thereto. Newco is required to pay virtually all expenses (other than
underwriting discounts and commissions) in connection with Demand and Piggyback
registrations and is required to indemnify the selling stockholders against
certain liabilities, including liabilities under the Securities Act. The rights
provided in the Newco Common Stock Registration Rights Agreement are
transferable to transferees of Registrable Shares.

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D. APPLICATION OF FEDERAL AND OTHER SECURITIES LAWS

A registration statement will be filed under the Securities Act with
respect to the issuance of the Rights.

XII. CERTAIN RISK FACTORS

The securities to be issued or transferred pursuant to the Plan are
subject to a number of material risks, including those enumerated below. The
risk factors enumerated below assume Confirmation and the consummation of the
Plan and all transactions contemplated therein (including the transactions
contemplated by the Newco Asset Purchase Agreement), and do not include matters
that could prevent or delay confirmation. See "General Information Concerning
the Plan -- Conditions Precedent to Confirmation and Consummation of the Plan"
and "Acceptance and Confirmation of the Plan" for a discussion of such matters.
Prior to deciding whether and how to vote on the Plan, Holders of Claims and
Interests should carefully consider all of the information contained in this
Disclosure Statement, especially the factors described in the following
paragraphs.

A. RISKS RELATING TO THE PROJECTIONS

The management of the Debtor has prepared the projected financial
information contained in this Disclosure Statement to present the projected
effects of the Plan and the transactions contemplated thereby. See Exhibit 4
appended hereto. The Projections assume the Plan and the transactions
contemplated thereby will be implemented in accordance with their terms. The
assumptions and estimates underlying such Projections are inherently uncertain
and are subject to significant business, economic and competitive risks and
uncertainties that could cause actual results to differ materially from those
projected, including, among others, those enumerated in the Projections.
Accordingly, the Projections are not necessarily indicative of the future
financial condition or results of operations of Newco, which may vary
significantly from those set forth in the Projections. Consequently, the
projected financial information contained herein should not be regarded as a
representation by the Debtor, the Debtor's advisors or any other person that
the Projections can or will be achieved.

B. NONCOMPARABILITY OF HISTORICAL FINANCIAL INFORMATION

As a result of the consummation of the Plan and the transactions
contemplated thereby, the financial condition and results of operations of
Newco from and after the Effective Date will not be comparable to the financial
condition or results of operations reflected in the historical financial
statements of the Debtor contained in Exhibits 2 and 3.

C. CAPITAL REQUIREMENTS

Newco's business is expected to require large amounts of capital
spending and working capital. While the Projections assume that Newco will
generate sufficient funds to meet its capital spending and working capital
needs for the foreseeable future, the ability of Newco to gain access to
additional capital, if needed, cannot be assured, particularly in view of
competitive factors and industry conditions. See "Newco -- Discussion and
Analysis of Financial Condition and Results of Operations."

D. CERTAIN RISKS ASSOCIATED WITH THE REGISTRATION STATEMENT

Effectiveness of the Registration Statement is a condition to the
distribution of the Rights, but is not a condition to the Effective Date of the
Plan. There can be no assurance that this condition will be satisfied. If the
Registration Statement is not declared effective within a reasonable period of
time following the Effective Date, Newco may elect to discontinue the Rights
Offering and, in such case, the Rights will not be issued and holders of
Eligible Class 5 Claims and Class 7 and 8 Interests will not receive any
Rights, but such holders of Claims and Interests will still be bound by the
Plan.

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E. CERTAIN RISKS ASSOCIATED WITH THE RIGHTS

Assuming the Rights are issued, the exercise of the Rights and the
purchase of the Newco Common Stock or the stock of a successor to Newco upon
the exercise thereof may be subject to the reporting and waiting period
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"). Under the HSR Act, acquisitions of Newco Common Stock
or the stock of a successor to Newco which exceed the thresholds of the HSR Act
(including those which would result in the acquiror holding Newco Common Stock
or the stock of a successor to Newco having a value of $15.0 million or more)
may not be consummated, unless an exemption is available under the HSR Act,
until the expiration of an initial 30-calendar-day waiting period following the
filing of HSR notification and report forms by the acquiring person and Newco.
If the parties request, the Antitrust Division of the United States Department
of Justice (the "Antitrust Division") and the Federal Trade Commission (the
"FTC") may terminate such waiting period prior to the running of the
30-calendar-day waiting period. If during such waiting period either the
Antitrust Division or the FTC requests additional information or material from
the parties, the waiting period would be extended and would expire at 11:59
Eastern time, on the 20th calendar day after the date of substantial compliance
by the parties with such request. Persons who will receive a substantial
number of Rights under the Plan, or who anticipate purchasing a substantial
amount of Newco Common Stock or the stock of a successor to Newco pursuant to
an exercise of the Rights, should consult with their own legal counsel to
determine the applicability of the requirements of the HSR Act to their
circumstance and to assure compliance with such requirements as may be so
applicable. There can be no assurance that holders who exercise Rights will
have made an appropriate investment decision.

F. ABSENCE OF A PUBLIC MARKET; VOLATILITY

There is no existing market for the Newco Common Stock. Accordingly,
there can be no assurance that a market will develop for such securities, or,
if any such market does develop, that it will continue to exist, or as to the
degree of price volatility in any such market which does develop. Accordingly,
no assurance can be given as to the liquidity of the market for the Newco
Common Stock or the price at which the Newco Common Stock will trade in the
market.

G. LACK OF ANTICIPATED DIVIDENDS

It is not anticipated that any cash dividends will be paid on the
Newco Common Stock for the foreseeable future.

H. CERTAIN RISKS ASSOCIATED WITH THE CHAPTER 11 CASE; RISKS OF
NON-CONFIRMATION

The Debtor is a party to various contractual arrangements, including
without limitation contracts with governmental authorities, job-related
contracts and joint venture and similar agreements, under which the
commencement of the Chapter 11 Case could (i) result in a breach, violation,
default or conflict, (ii) give other parties thereto rights of termination or
cancellation or (iii) have other adverse consequences for the Debtor or Newco.
The magnitude of any such adverse consequences may depend upon, among other
things, the diligence and vigor with which other parties to such contracts may
seek to assert any such rights and pursue any such remedies in respect of such
matters, and the ability of the Debtor or Newco to resolve such matters on
acceptable terms through negotiations with such other parties or otherwise. The
Debtor does not believe that any breach of or default under any such agreement
has occurred. Although the Debtor presently believes that none of the foregoing
matters would have a material adverse effect on the business, financial
condition or results of operations of Newco, there can be no assurance with
respect thereto.

RISKS OF NON-CONFIRMATION

There can be no assurance that the requisite acceptance to confirm the
Plan will be received. Even if the requisite acceptances are received, there
can be no assurance that the Bankruptcy Court will confirm the Plan. A non-
accepting creditor or stockholder of the Debtor might challenge the adequacy of
the disclosure of the balloting procedures and results as not being in
compliance with the Bankruptcy Code. Even if the Bankruptcy court were to
determine that the disclosure and the balloting procedures and results were
appropriate, the Bankruptcy Court could still

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decline to confirm the Plan if it were to find that any statutory conditions to
confirmation had not been met. Section 1129 of the Bankruptcy Code sets forth
the requirements for confirmation and requires, among other things, a finding
by the Bankruptcy court that the confirmation of the Plan is not likely to be
followed by a liquidation or a need for further financial reorganization and
that the value of distributions to non-accepting creditors and equity security
holders will not be less than the value of distributions such creditors and
equity security holders would receive if the Debtor were liquidated under
chapter 7 of the Bankruptcy Code. See "Voting and Confirmation of the Plan --
Best Interests Test." While there can be no assurance that the Bankruptcy Court
will conclude that these requirements have been met, the Debtor believes that
the Plan will not be followed by a need for further financial reorganization
and that non-accepting creditors and equity security holders will receive
distributions at lease as great as would be received following a liquidation
pursuant to chapter 7 of the Bankruptcy Code. See "Voting and Confirmation of
the Plan --Chapter 7 Liquidation Analysis."

The Confirmation and consummation of the Plan are also subject to
certain conditions. See "Overview of the Plan -- Conditions Precedent to
Confirmation and Consummation of the Plan."

If the Plan, or a plan determined not to require resolicitation of any
Classes of Claims or Interests by the Bankruptcy Court, were not to be
confirmed, it is unclear what distribution holders of Claims and Interests
ultimately would receive with respect to their Claims and Interests. If an
alternative plan could not be agreed to, it is possible that the Debtor would
have to liquidate its assets, in which case it is likely that holders of Claims
and Interests would receive less than they would have received pursuant to the
Plan. See "Voting and Confirmation of the Plan -- Alternatives if the
Restructuring is Not Consummated -- Possible Liquidation."

I. CERTAIN CONDITIONS TO THE EFFECTIVE DATE; TERMINATION PROVISIONS

The obligations of the Debtor under the Plan and the obligations of
EALP and Newco under the Newco Asset Purchase Agreement are subject to the
satisfaction or waiver of certain conditions on the Effective Date. See section
III G above. There can be no assurance that such conditions will be satisfied
or waived on or prior to the Effective Date.

J. CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND THE BYLAWS;
DELAWARE GENERAL CORPORATION LAW

The Newco Certificate of Incorporation and the Newco Bylaws contain
certain provisions that may have the effect of delaying, deferring or
preventing a change in control of Newco. Newco will be subject to the
provisions of the Delaware General Corporation Law, which may also delay, deter
or prevent a change in control. See "Newco -- Certain Corporate Governance
Matters."

K. CONCENTRATION OF OWNERSHIP; CERTAIN HOLDERS OF NEW COMMON STOCK

Assuming that the transactions contemplated by the Plan and the Newco
Asset Purchase Agreement are consummated, EALP would hold not less than about
65% of the issued and outstanding shares of Newco Common Stock as of the
Closing Date (as defined in the Newco Asset Purchase Agreement). The voting
power held by EALP may have the effect of discouraging certain types of
transactions involving an actual or potential change of control of Newco,
including transactions in which the holders of Newco Common Stock might
otherwise receive a premium for their shares over then- current market prices,
and may adversely affect the market price of the Newco Common Stock. In
addition, as a result of such voting power, EALP will have the ability to
affect significantly the election of the directors of Newco who will control
the management and affairs of Newco, as well as the outcome of other matters
that may be submitted to a stockholder vote from time to time.

L. LOSS OF CORPORATION TAX BENEFITS

The Debtor reported net operating loss carryforwards of approximately
$173 million at December 31, 1996. Since the transaction between the Debtor and
Newco is structured as an asset sale, Newco may not be able to utilize such net
operating loss carryforwards. See "Certain Federal Income Tax Consequences --
Loss of Net Operating Loss Carryforwards," for additional information regarding
the operation of section 382 of the Tax Code.

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M. DISRUPTION OF OPERATIONS RELATING TO BANKRUPTCY FILING

The Chapter 11 Case could adversely affect the Debtor's subsidiaries'
relationships with their customers, suppliers and employees. Employees of the
Debtor and its subsidiaries generally are not parties to employment contracts.
The Debtor believes that, due to uncertainty about its financial condition, it
may be difficult to retain or attract high quality employees. If the Debtor's
relationships with its customers, suppliers and employees are adversely
affected, the Debtor's subsidiaries' operations could be materially affected.
Weakened operating results could adversely affect the Debtor's ability to
complete the solicitation of acceptances of the Plan or, if such solicitation
is successfully completed, to obtain Confirmation of the Plan. The Debtor
anticipates, however, that it will have sufficient cash to service the
obligations that it intends to pay during the period prior to and at the
consummation of the Plan.

N. INDUSTRY CYCLICALITY

Demand for the services to be offered by Newco has been, and is
expected to continue to be, subject to significant fluctuations due to a
variety of factors beyond the control of Newco, including economic conditions.
During economic downturns, the ability of both private and governmental
entities in targeted markets to make capital expenditures may decline
significantly. There can be no assurance that economic conditions generally
will be favorable or that there will not be significant fluctuations adversely
affecting the industry as a whole or key markets targeted by Newco and, as a
result Newco and its financial results. In addition, Newco's operations will be
in part dependent upon foreign governmental funding of projects. Significant
changes in the level of foreign government funding of these projects could have
a favorable or unfavorable impact on the operating results of Newco.

O. BUSINESS AND COMPETITION

The Debtor is engaged in highly competitive business. Newco will
compete with other seismology firms, both foreign and domestic, including small
local contractors. Many such competitors have a substantially stronger
financial position than will Newco. While the Debtor's management believes
that, after consummation of the Plan, Newco's ability to compete effectively
will be significantly greater than the Debtor's, there can be no assurance that
Newco will be able to compete successfully for new projects following the
consummation of the Plan. In addition, implementation of Newco's business
strategy will be subject to numerous contingencies beyond the control of Newco,
including general and regional economic conditions, interest rates,
competition, changes in regulation and the ability to attract and maintain
skilled employees. As a result, there can be no assurance that Newco's business
strategies will prove effective or that Newco will achieve its goals.

P. CERTAIN TIMING CONSIDERATIONS

The Debtor's business operations are being adversely affected by the
Debtor's poor financial position, and by the reluctance of some customers and
potential customers to engage the Debtor on new or additional projects. In
addition, the Debtor's primary assets are its highly skilled professionals, who
have the ability to leave the Debtor and so deprive it of the skill and
knowledge essential for performance of new and existing contracts. Because the
Debtor is engaged in service businesses, it is highly dependent on its
customers' and potential customers' belief that the Debtor will perform
professional tasks in accordance with the highest standards over a lengthy
period of time. Continued deterioration of the Debtor's businesses, or the loss
of significant numbers of key professionals, could have a material adverse
effect on the Debtor and may threaten its ability to survive as a going
concern.

Q. FIXED PRICE CONTRACTS AND OTHER PROJECT RISKS

The Debtor typically enters into two basic types of contracts: turnkey
contracts providing for a fixed price per unit of seismic data acquired, or
term contracts providing for a fixed fee to be paid to the Debtor during the
term of the project. The majority of the Debtor's contracts are on a turnkey
basis, and it is likely that Newco will also enter into turnkey contracts.

Regardless of the type of contract, the Debtor's business has always
been subject to unusual risks, including unforeseen conditions encountered
during testing, the impact of inflation upon costs and financing requirements
of clients and changes in political and legal circumstances, particularly since
contracts for major projects are performed

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over extended periods of time. Other risks include the failure of third-party
project participants, including joint venture partners and subcontractors, to
obtain required permits or to perform essential functions on a timely basis,
the failure of local governing authorities to take certain necessary actions,
opposition by community groups in the locality of a project or by other
interested third parties to the project's development, and the failure to
obtain adequate financing for the project. Foreign operations and joint
ventures are particularly vulnerable to changing political and economic
environments, foreign currency controls and fluctuations, civil disturbances,
labor strikes and other uncertainties associated with operations in foreign
countries. See "--Foreign Operations." The Debtor and, after the Effective
Date, Newco may be exposed to significant risks and uncertainties in the
performance of contracts, particularly turnkey contracts. Although the Debtor
constantly seeks to minimize and spread the risks over a large number of
contracts, a combination of unusual circumstances could result in losses on a
particular contract or contracts, and the Debtor and Newco may experience
significant changes in operating results on a quarterly or annual basis.

R. BACKLOG

Backlog consists of the uncompleted portion of contract revenue. All
contracts with agencies of the U.S. Government and some commercial and foreign
contracts are subject to unilateral termination at the option of the customer.
In the event of a termination, the Debtor and, after the Effective Date, Newco
would not receive projected revenues or profits associated with the terminated
portion of such contracts.

S. FOREIGN OPERATIONS

The Debtor anticipates that it and, after the Effective Date, Newco
will continue to pursue project opportunities throughout the world through
foreign and domestic subsidiaries as well as agreements with foreign joint
venture partners. Such foreign operations are subject to uncertain political
and economic environments, potential incompatibility with foreign joint venture
partners, foreign currency controls and fluctuations, civil disturbances, labor
strikes, as well as other uncertainties associated with operations in foreign
countries. Events outside of the Debtor's or Newco's control may limit or
disrupt operations, restrict the movements of funds, result in deprivation of
contract rights, increase foreign taxation or limit repatriation of earnings.
In addition, in certain cases applicable law and joint venture or other
agreements may provide that each joint venture partner is jointly and severally
liable for all liabilities of the venture.

T. EMPLOYEES

One of the Debtor's primary assets is its group of highly skilled
professionals, who have the ability to leave the Debtor and so deprive it of
the skill and knowledge essential for performance of new and existing
contracts. While the Debtor anticipates that substantially all of its employees
who are offered employment by Newco will accept such employment, there can be
no assurance that Newco will retain the services of such employees. The Debtor
is engaged in service businesses and is highly dependent on its customers' and
potential customers' belief that the Debtor will perform professional tasks in
accordance with the highest standards over an extended period of time.
Continued deterioration of the Debtor's business, or loss of a significant
number of key professionals, would have a material adverse effect on the Debtor
and, after the Effective Date, Newco.

U. OTHER OPERATING FACTORS

Unforeseen circumstances encountered during the development of
projects often require changes in the scope of work or additional work that are
authorized by the project owner but not priced. This process often results in
claims against the owner which are negotiated or litigated after a project is
completed. The outcome of the claims resolution process is often determinative
of the financial success of the project. The receipt of proceeds from claims
resolution may materially affect the Debtor's and, after the Effective Date,
Newco's financial results in the period received. Operations may also be
adversely affected by weather conditions, the potential for changes in
technology, demand, product substitution and political factors which effect
alternative fuel decisions.

V. ENVIRONMENTAL MATTERS

The Debtor is, and after the Effective Date Newco will be, subject to
a variety of environmental laws and regulations governing, among other things,
discharges to air and water, the handling, storage, and disposal of hazardous

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or solid waste materials and the remediation of contamination associated with
releases of hazardous substances. Such laws and regulations and the risk of
attendant litigation can cause significant delays to a project and add
significantly to its cost. Violations of these environmental laws and
regulations could subject Newco and its management to civil and criminal
penalties and other liabilities.

Various federal, state and local environmental laws and regulations,
as well as common law, may impose liability for property damage and costs of
investigation and cleanup of hazardous or toxic substances on property
currently or previously owned by the Debtor or arising out of the Debtor's or
Newco's waste management activities. Such laws may impose responsibility and
liability without regard to knowledge of or causation of the presence of the
contaminants, and the liability under such laws is joint and several.

XIII. GENERAL INFORMATION CONCERNING THE PLAN

A. LEGAL EFFECT OF THE PLAN

1. CONTINUED CORPORATE EXISTENCE; VESTING OF ASSETS

GGI will continue to exist after the Effective Date with only
the powers of corporations under the general corporation law of Delaware that
are necessary to implement the provisions of the Plan relating to: (i)
distributions pursuant to Section 7.2 of the Plan, (ii) Claims objections
pursuant to Section 8.1 of the Plan and (iii) such other duties pursuant to the
Plan with the agreement of the Official Committee or as ordered by the
Bankruptcy Court; its business purpose will be to conduct an orderly
distribution of the proceeds of the sale of its assets; it will not engage in
new business or incur liabilities except in connection with the foregoing
business purpose.] Except as otherwise provided in the Plan or the Confirmation
Order, on and after the Effective Date, all property of the Estate of the
Debtor not vested in or assigned to Newco or released pursuant to the Plan, and
any property acquired by the Debtor or GGI under or in connection with the
Plan, including the right to receive the Newco Asset Purchase Proceeds, shall
vest in GGI. On and after the Effective Date, GGI shall distribute its assets
to holders of Allowed Claims and Interests as set forth in the Plan (subject to
the provisions for distributions in Article VII of the Plan) and only the
Official Committee may compromise or settle any Claims or Interests without
supervision or approval by the Bankruptcy Court and free of any restrictions of
the Bankruptcy Code or Bankruptcy Rules, other than restrictions expressly
imposed by the Plan or the Confirmation Order. Without limiting the foregoing,
GGI may pay the charges that it incurs on or after the Effective Date for
Professionals' fees, disbursements, expenses or related support services
without application to the Bankruptcy Court upon written notice to the Official
Committee (any dispute with respect to which shall be resolved by the
Bankruptcy Court). GGI shall not take any actions not contemplated in the Plan
absent the consent of the Official Committee or an order of the Bankruptcy
Court. As soon as practicable after the Final Distribution Date, GGI shall file
a request for entry of a final decree concluding this Chapter 11 Case. Upon
entry of the final decree, GGI shall be deemed dissolved and shall cease to
exist for any purpose without any further corporate action.

2. CANCELLATION OF CAPITAL STOCK; SURRENDER OF SECURITIES AND OTHER
DOCUMENTATION

On the Effective Date, the Capital Stock (whether issued and
outstanding or held in the treasury of the Debtor immediately prior to the
Effective Date) shall be deemed to be canceled, extinguished, retired and of no
further force and effect, in all events without any further action on the part
of the Debtor, GGI, the holders of Capital Stock, EALP, Newco or any other
entity. The holders of such canceled securities and other documentation shall
have no rights arising from or relating to such securities or other
documentation, or the cancellation thereof, except the rights provided pursuant
to the Plan; provided, however, that no distribution under the Plan shall be
made to or on behalf of any holder of any Allowed Claim or Allowed Interest
evidenced by such canceled securities or other documentation unless or until
such securities or documentation are received by the Disbursing Agent pursuant
to Section 7.8 of the Plan.

3. INJUNCTION

Except as provided in the Plan or the Confirmation Order, as
of the Effective Date, all entities that have held, currently hold or may hold
a Claim or other debt or liability or an Interest or other right of an equity
security

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holder are permanently enjoined from taking any of the following actions on
account of any such Claims, debts or liabilities or Interests or rights: (a)
commencing or continuing, in any manner or in any place, any action or other
proceeding against GGI, the Official Committee, Newco, EALP, Westgate or their
respective affiliates or property; (b) enforcing, attaching, collecting or
recovering in any manner any judgment, award, decree or order against GGI, the
Official Committee, Newco or EALP; (c) creating, perfecting or enforcing any
lien or encumbrance against GGI, the Official Committee, Newco or EALP or their
respective property; and (d) commencing or continuing, in any manner or in any
place, any action that does not comply with or is inconsistent with the
provisions of the Plan.

As of the Effective Date, all entities that have held, currently hold
or may hold a claim, counterclaim, demand, debt, right, cause of action or
liability that is released pursuant to Section 5.6.2 of the Plan are
permanently enjoined from taking any of the following actions on account of
such released claims, demands, debts, rights, causes of action or liabilities:
(a) commencing or continuing in any manner any action or other proceeding; (b)
enforcing, attaching, collecting or recovering in any manner any judgment,
award, decree or order; (c) creating, perfecting or enforcing any lien or
encumbrance; and (d) commencing or continuing any action, in any manner, in any
place that does not comply with or is inconsistent with the provisions of the
Plan.

By accepting distributions pursuant to the Plan, each holder of an
Allowed Claim or Allowed Interest receiving distributions pursuant to the Plan
will be deemed to have specifically consented to the injunctions set forth in
Section 11.1 of the Plan.

4. LIMITATION OF LIABILITY IN CONNECTION WITH THE PLAN,
DISCLOSURE STATEMENT AND RELATED DOCUMENTS; INDEMNITY

To the fullest extent permissible under applicable law, the
Proponents and their officers, directors, members, agents and representatives
will neither have nor incur any liability to any entity, including,
specifically any holder of a Claim or Interest, for any act taken or omitted to
be taken in connection with or related to the formulation, preparation,
dissemination, implementation, Confirmation or consummation of the Plan, the
Disclosure Statement, the Confirmation Order or any contract, instrument,
release or other agreement or document created or entered into, or any other
act taken or omitted to be taken in connection with the Plan, the Disclosure
Statement or the Confirmation Order, including solicitation of acceptances of
the Plan.

Newco and GGI shall indemnify each Proponent and their
officers, directors, members, agents and representatives, and shall hold each
Proponent and their officers, directors, members, agents and representatives
harmless from, and reimburse each Proponent for, any and all losses, costs,
expenses (including attorneys' fees and expenses), liabilities and damages
sustained by a Proponent and their officers, directors, members, agents and
representatives arising from any liability described in Section 13.1 of the
Plan.

5. RELEASE OF LIENS

Except as otherwise provided in the Plan or in any contract,
instrument, indenture or other agreement or document created in connection with
the Plan, on the Effective Date, all mortgages, deeds of trust, liens or other
security interests against the property of the Estate shall be released, and
all right, title and interest of any holder of such mortgages, deeds of trust,
liens or other security interests shall revert to Newco and its successors and
assigns; provided that liens securing Postpetition Secured Claims and Other
Identified Secured Claims shall continue against their respective property
until such Claims are paid in full as set forth in the Plan, and provided
further that such liens shall automatically be released without any further
action by any party upon such payment. Funds paid by Newco to GGI pursuant to
Section 5.1.1.4 shall not be subject to any claims or liens by Newco, Newco's
creditors or shareholders or the holders of obligations assigned to or assumed
by Newco.

6. OTHER SECURED CLAIMS

To the extent that a Secured Claim is not otherwise classified
in the Plan and is not a Class 11 Claim, such claim shall be paid by GGI;
provided, however, that if the collateral for such Secured Claim has not been
transferred to Newco, such Claim shall be satisfied by the return or
abandonment of such collateral to the holder of such Claim.

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B. RELEASES UNDER THE PLAN; RELATED INJUNCTION

1. RELEASES BY THE DEBTOR

a. As of the Effective Date, the Debtor, GGI and the
Official Committee (to the extent applicable) will be deemed to have released
and waived all causes of action of the Debtor arising under sections 510, 544,
547, 548, 549 or 550 of the Bankruptcy Code except with respect to claims
against any entity in Peru or claims resulting from the Debtor's operations in
Peru.

b. As of the Effective Date, for good and valuable
consideration, the adequacy of which is hereby confirmed, the Debtor, GGI and
the Official Committee (to the extent applicable) will be deemed to forever
release, waive and discharge all claims, counterclaims, obligations, suits,
judgments, damages, demands, debts, rights, causes of action and liabilities
whatsoever in connection with or related to the Debtor, the Chapter 11 Case or
the Plan (other than the rights of the Debtor, GGI or the Official Committee to
enforce the Plan and its implementation and the contracts, instruments,
releases and other agreements or documents delivered thereunder), whether
liquidated or unliquidated, fixed or contingent, matured or unmatured, known or
unknown, foreseen or unforeseen, then existing or thereafter arising, in law,
equity or otherwise that are based in whole or in part on any act, omission,
transaction, event or other occurrence taking place on or prior to the
Effective Date in any way relating to the Debtor, the parties released pursuant
to Section 5.6.1.2 of the Plan, the Chapter 11 Case or the Plan, and that may
be asserted by or on behalf of a Debtor or its Estate against (i) the Debtor's
current officers and directors, (ii) the current and former officers, directors
and shareholders of EALP, Westgate and Newco, (iii) the respective current and
former agents, employees, consultants, advisors, attorneys, accountants and
other representatives of the Debtor, EALP, Westgate and Newco (including the
respective current and former members and professionals of the foregoing)
acting in such capacity, (iv) Foothill and Foothill's current and former
employees, officers, directors, agents, advisors, attorneys and
representatives, (v) Oyo, Input/Output, Inc. and the Official Committee and
their predecessors in interest (vi) EALP, Westgate and their respective
affiliates; provided, however, that the Debtor shall not release the persons
identified in subclauses (i) and (v) of Section 5.6.1.2 of the Plan from any
claims with respect to (a) any loan, advance or similar receivable due the
Debtor from such person or (b) any contractual obligation owed by such person
to the Debtor.

c. Any and all claims or causes of action (other than
released pursuant to Sections 5.6.1.1 and 5.6.1.2 of the Plan) (i) against any
entity in Peru (whether for affirmative recovery or as a defense to a Claim by
any such entity) or (ii) the successful prosecution of which would result in no
affirmative recovery but rather a Secured Claim becoming a General Unsecured
Claim, shall not be released but shall be preserved for the benefit of, and
shall vest in, GGI, subject to disposition as agreed among GGI and the Official
Committee. Newco may appear and object with respect to the Official Committee's
resolution of Claims of or claims against entities in Peru or arising out of
the Debtor's operations in Peru or defenses thereto if Newco believes that any
such proposed resolution will negatively impact Newco's business or important
business relationships.

2. RELEASES BY HOLDERS OF CLAIMS OR INTERESTS

a. Holders of Claims

As of the Effective Date, to the fullest extent permitted by
applicable law, in consideration for the obligations of the Debtor and GGI
under the Plan and the Cash, Rights, contracts, instruments, releases and other
agreements or documents to be delivered in connection with the Plan, each
holder of a Claim that is Impaired under the Plan will be deemed to forever
release, waive and discharge all claims, demands, debts, rights, causes of
action and liabilities (other than the right to enforce the Debtor's or GGI's
obligations under the Plan and the contracts, instruments, releases and other
agreements and documents delivered thereunder or right of setoff or recoupment,
if any), whether liquidated or unliquidated, fixed or contingent, matured or
unmatured, known or unknown, foreseen or unforeseen, then existing or
thereafter arising, that are based in whole or in part on any act, omission or
other occurrence taking place on or prior to the Effective Date in any way
relating to their Claims against the Debtor, the Chapter 11 Case or the Plan
against (i) the Debtor, EALP, Westgate and Newco, (ii) the current and former
officers, directors and shareholders of the Debtor, EALP, Westgate and Newco or
(iii) their respective affiliates, agents, advisors, attorneys and
representatives (including the respective current and former officers,
directors, employees, shareholders and professionals of the foregoing), acting
in such capacity.

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b. Holders of Certain Interests

As of the Effective Date, to the fullest extent permissible
under applicable law, in consideration for the obligations of the Debtor and
GGI under the Plan, the Rights, contracts, instruments, releases or other
agreements or documents to be delivered in connection with the Plan, each
entity that has held, holds or may hold an Interest classified in Classes 7 or
8 will be deemed to forever release, waive and discharge all claims, demands,
debts, rights, causes of action and liabilities (other than the right to
enforce the Debtor's or GGI's obligations under the Plan and the contracts,
instruments, releases and other agreements and documents delivered thereunder),
whether liquidated or unliquidated, fixed or contingent, matured or unmatured,
known or unknown, foreseen or unforeseen, then existing or thereafter arising,
that are based in whole or in part on any act, omission or other occurrence
taking place on or prior to the Effective Date in any way relating to their
Interests in the Debtor, the Chapter 11 Case or the Plan against: (i) the
Debtor, EALP, Westgate and Newco, (ii) the current or former officers,
directors and shareholders of the Debtor, EALP, Westgate and Newco or (iii)
their respective affiliates, agents, advisors, attorneys and representatives
(including the respective current and former directors, officers, employees,
shareholders and professionals of the foregoing), acting in such capacity.

c. Release of Official Committee

As of the Effective Date, to the fullest extent permissible
under applicable law, in consideration for the contracts, instruments, releases
or other agreements or documents to be delivered in connection with the Plan,
each entity that has held, holds or may hold a Claim or an Interest which is
Impaired will be deemed to forever release, waive and discharge all claims,
demands, debts, rights, causes of action and liabilities, whether liquidated or
unliquidated, fixed or contingent, matured or unmatured, known or unknown,
foreseen or unforeseen, then existing or thereafter arising, that are based in
whole or in part on any act, omission or other occurrence taking place on or
prior to the Effective Date in any way relating to their Claims against or
Interests in the Debtor, the Chapter 11 Case or the Plan against the Official
Committee, its agents, advisors, attorneys and representatives (including the
respective current and former directors, officers, employees, shareholders and
professionals of the foregoing), acting in such capacity.

3. INJUNCTION RELATED TO RELEASES

As further provided in Section 11.1 of the Plan, the Confirmation
Order will enjoin the prosecution, whether directly, derivatively or otherwise,
of any claim, counterclaim, demand, debt, right, cause of action, liability or
interest released, discharged or terminated pursuant to the Plan.

4. LIMITATION ON RELEASES

Notwithstanding the provisions of Section 5.6 of the Plan, if and to
the extent that the Bankruptcy Court concludes that the Plan cannot be
confirmed with any portion of the releases set forth in the Plan, then the Plan
may be confirmed with that portion excised so as to give effect as much as
possible to the foregoing releases without precluding confirmation of the Plan.

C. RETENTION OF BANKRUPTCY COURT JURISDICTION

Notwithstanding the entry of the Confirmation Order and the occurrence
of the Effective Date, the Bankruptcy Court will retain such jurisdiction over
the Chapter 11 Case after the Effective Date to the fullest extent permitted by
applicable law, including, without limitation, jurisdiction to:

i) Allow, disallow, determine, liquidate, classify,
estimate or establish the priority or secured or unsecured status of
any Claim or Interest, including the resolution of any request for
payment of any Administrative Claim, the resolution of any objections
to the allowance or priority of Claims or Interests and the resolution
of any dispute as to the treatment necessary to Reinstate a Claim
pursuant to the Plan;

ii) Grant or deny any applications for allowance of
compensation or reimbursement of expenses authorized pursuant to the
Bankruptcy Code or the Plan, for periods ending on or before the
Effective Date;

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iii) Resolve any matters related to the assumption or
rejection of any executory contract or unexpired lease to which the
Debtor is a party or with respect to which the Debtor may be liable,
and to hear, determine and, if necessary, liquidate any Claims arising
therefrom;

iv) Ensure that distributions to holders of Allowed
Claims or Allowed Interests are accomplished pursuant to the
provisions of the Plan;

v) Decide or resolve any motions, adversary proceedings,
contested or litigated matters and any other matters and grant or deny
any applications involving the Debtor or Newco that may be pending on
the Effective Date;

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

vii) Resolve any case, controversies, suits or disputes
that may arise in connection with the consummation, interpretation or
enforcement of the Plan or the Confirmation Order, including the
release and injunction provisions set forth in and contemplated by the
Plan and the Confirmation Order, or any entity's rights arising under
or obligations incurred in connection with the Plan or the
Confirmation Order;

viii) Modify the Plan before or after the Effective Date
pursuant to section 1127 of the Bankruptcy Code or modify the
Disclosure Statement, the Confirmation Order or any contract,
instrument, release, indenture or other agreement or document created
in connection with the Plan, the Disclosure Statement or the
Confirmation Order; or remedy any defect or omission or reconcile any
inconsistency in any Bankruptcy Court order, the Plan, the Disclosure
Statement, the Confirmation Order or any contract, instrument,
release, indenture or other agreement or document created in
connection with the Plan, the Disclosure Statement or the Confirmation
Order, in such manner as may be necessary or appropriate to consummate
the Plan, to the extent authorized by the Bankruptcy Code;

ix) Issue injunctions, enter and implement other orders
or take such other actions as may be necessary or appropriate to
restrain interference by any entity with consummation, implementation
or enforcement of the Plan or the Confirmation Order;

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

xi) Determine any other matters that may arise in
connection with or relating to the Plan, the Disclosure Statement, the
Confirmation Order or any contract, instrument, release, indenture or
other agreement or document created in connection with the Plan, the
Disclosure Statement or the Confirmation Order, except as otherwise
provided in the Plan; and

xii) Enter an order concluding the Chapter 11 Case.

D. EXECUTORY CONTRACTS AND UNEXPIRED LEASES

1. REJECTION OF EXECUTORY CONTRACTS

Except as otherwise provided in the Plan, including Section 6.2 of the
Plan, or in any contract, instrument, release, indenture or other agreement or
document entered into in connection with the Plan, on the Effective Date,
pursuant to section 365 of the Bankruptcy Code, the Debtor will reject each
executory contract and unexpired lease entered into by the Debtor prior to the
Petition Date that has not previously: (a) expired or terminated pursuant to
its own terms or (b) been assumed or rejected pursuant to section 365 of the
Bankruptcy Code. The Confirmation Order will constitute an order of the
Bankruptcy Court approving the rejections described in Section 6.1.1 of the
Plan, pursuant to section 365 of the Bankruptcy Code, as of the Effective Date.

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2. BAR DATE FOR REJECTION DAMAGES

If the rejection of an executory contract or unexpired lease pursuant
to Section 6.1.1 of the Plan gives rise to a Claim by the other party or
parties to such contract or lease, such Claim will be forever barred and will
not be enforceable against the Debtor, GGI, its successor or properties unless
(a) a Stipulation of Amount and Nature of Claim has been entered into and
approved by the Bankruptcy Court with respect to the rejection of such
executory contract or unexpired lease or (b) a proof of Claim is Filed and
served on GGI and the Official Committee and counsel for GGI and the Official
Committee within 30 days after the Effective Date or such earlier date as
established by the Bankruptcy Court.

3. ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

Except as otherwise provided in the Plan or in any contract,
instrument, release, indenture or other agreement or document entered into in
connection with the Plan, on the Effective Date, pursuant to section 365 of the
Bankruptcy Code, the Debtor will assume each of the executory contracts and
unexpired leases listed on Exhibit F to the Plan; provided, however, that Newco
has reserved the right, at any time prior to the Effective Date, to amend
Exhibit F in order to (a) delete any executory contract or unexpired lease
listed therein, thus providing for its rejection pursuant to Section 6.1.1 of
the Plan or (b) add any executory contract or unexpired lease thereto, thus
providing for its assumption pursuant to Section 6.2.1 of the Plan. Each
contract and lease listed on Exhibit F shall be assumed and assigned only to
the extent that any such contract or lease constitutes an executory contract or
unexpired lease. Listing a contract or lease on Exhibit F shall not constitute
an admission by the Debtor, GGI or Newco that such contract or lease is an
executory contract or unexpired lease or that the Debtor or GGI has any
liability thereunder. The Confirmation Order will constitute an order of the
Bankruptcy Court approving such assumptions, pursuant to section 365 of the
Bankruptcy Code, as of the Effective Date.

4. CURE OF DEFAULTS IN CONNECTION WITH ASSUMPTIONS

Any monetary amounts by which each executory contract and unexpired
lease to be assumed pursuant to the Plan is in default shall be satisfied,
pursuant to section 365(b)(1) of the Bankruptcy Code, at the option of GGI: (a)
by payment of the default amount in Cash as soon as practicable after the Newco
Cash Payment Deadline or (b) on such other terms as are agreed to by the
parties to such executory contract or unexpired lease; provided, however, that
Newco shall assume the Debtor's cure obligation under (i) the Stipulated Order
Resolving (1) Motion to Compel Debtor to Timely Perform Obligations with
Respect to Equipment Leases and to Compel Debtor to Decide Whether to Assume or
Reject Equipment Leases and (2) Motion for Relief from Automatic Stay filed by
Leasing Associates, Inc. - H1 and entered by the Bankruptcy Court on March 24,
1997, (ii) the Stipulated Order Resolving Motion to Compel Assumption or
Rejection of Lease and for Adequate Protection filed by GE Capital Fleet
Services, Inc. and entered by the Bankruptcy Court on June 26, 1997, (iii) the
TIAA Mortgage and (iv) unexpired leases of the Debtor with Input/Output, Inc.
that are assumed pursuant to Section 6.2.1 of the Plan, and provided further
that the aggregate amount of cure payments required to be paid in excess of
$200,000 (excluding those specifically designated to be paid by Newco) shall be
paid by Newco. The Debtor believes that the aggregate amount of cure payments
to be paid by GGI relating to executory contracts and unexpired leases to be
assumed pursuant to the Plan, other than the cure payments expressly being
assumed by Newco hereunder, will be about $50,000. If there is a dispute
regarding: (i) the amount of any cure payments; (ii) the ability of Newco to
provide "adequate assurance of future performance" (within the meaning of
section 365 of the Bankruptcy Code) under the contract or lease to be assumed;
or (iii) any other matter pertaining to assumption, the cure payments required
by section 365(b)(1) of the Bankruptcy Code shall be made following the entry
of a Final Order resolving the dispute and approving the assumption.

5. SPECIAL EXECUTORY CONTRACT AND UNEXPIRED LEASE MATTERS

a. Existing Employment, Retirement and Other Agreements
and Incentive Compensation Programs

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assigned to Newco pursuant to sections 365 and 1123 of the Bankruptcy Code, and
neither the Debtor, GGI nor their assets shall be subject to any claims
thereunder.

b. Indemnification Obligations

To the extent any indemnification obligation of the Debtor existing as
of the Petition Date to any current officer or director of the Debtor
constitutes an executory contract, such executory contract shall be deemed to
have been assumed by the Debtor and assigned to Newco as of the Effective Date
pursuant to section 365 of the Bankruptcy Code, and neither the Debtor, GGI nor
their assets shall be subject to any claims thereunder.

6. EXECUTORY CONTRACTS AND UNEXPIRED LEASES ENTERED INTO AND
OTHER OBLIGATIONS INCURRED AFTER THE PETITION DATE

Executory contracts and unexpired leases entered into and other
obligations incurred after the Petition Date by the Debtor shall be assigned to
Newco and shall be performed by Newco in the ordinary course of its business,
and neither the Debtor, GGI nor their assets shall be subject to any claims
thereunder, unless such contract or lease is listed on Exhibit D to the Plan.
Accordingly, such executory contracts, unexpired leases and other obligations
will survive and remain unaffected except for such assignment by entry of the
Confirmation Order.

XIV. DISTRIBUTIONS UNDER THE PLAN

A. GENERAL

1. SOURCES OF CASH TO MAKE PLAN DISTRIBUTIONS

Except as otherwise provided in the Plan or the Confirmation Order,
all Cash necessary for GGI to make payments pursuant to the Plan shall be
obtained from the Newco Asset Purchase Proceeds. Cash payments to be made
pursuant to the Plan will be made by GGI or the Disbursing Agent.

2. DISTRIBUTIONS FOR CLAIMS AND INTERESTS ALLOWED AS OF THE
EFFECTIVE DATE

Except as otherwise provided in Sections 2.3 and 3.2.2 of the
Plan, distributions to be made on account of Claims or Interests that are
Allowed as of the Effective Date shall be made as soon as practicable after the
Newco Cash Payment Deadline. Distributions shall be deemed made as soon as
practicable after the Newco Cash Payment Deadline if made on the Newco Cash
Payment Deadline or as promptly thereafter as practicable, but in any event no
later than 30 days after the Newco Cash Payment Deadline or such later date
when the applicable conditions of Sections 6.1.3 (regarding cure payments for
executory contracts and unexpired leases being assumed); 7.3.2 (regarding
undeliverable distributions); 7.6.6.2 (regarding arrangements for the
satisfaction and payment of tax obligations relating to distributions of Cash
or securities pursuant to the Plan); or 5.2 and 7.8 (regarding surrender of
canceled debt instruments and securities) of the Plan are satisfied.
Distributions on account of Claims or Interests that are Allowed after the
Effective Date shall be made pursuant to Sections 7.6 and 8.3 of the Plan.

On the Newco Cash Payment Deadline, Newco shall pay the Newco
Asset Purchase Proceeds in three wire installments: an amount necessary to pay
the GGI expenses provided in Section 7.2.1 (the "GGI Expense Portion"), an
amount necessary to pay or reserve for all claims to be paid by the Debtor
other than those classified in Class 5 (the "GGI Trustee Portion") and an
amount equal to the remaining balance (the "Unsecured Creditors Trust
Portion"). The GGI Expense Portion and the GGI Trustee Portion shall be in
amounts designated at the Confirmation hearing. The Unsecured Creditors Trust
Portion shall be not less than $10 million. GGI shall hold the GGI Trustee
Portion in a trust account for the benefit of all creditors. The Unsecured
Creditors Trust shall be for the benefit only of Class 5 Claims. The Official
Committee will appoint the initial Trustee for the Unsecured Creditors Trust
and such Trustee or the Trust Committee will choose any successor Trustee or
members of the Trust Committee without any further order of the Bankruptcy
Court. GGI as trustee shall pay claims only after providing the Unsecured
Creditors Trust five (5) business days notice of the amount, calculation and
recipient of such payment. The Unsecured Creditors Trust than has the
opportunity to object; if no objection is filed within five (5) business days,
the payment can be made; if an objection

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is filed, it shall be resolved by the Bankruptcy Court; provided, however, that
GGI shall make the payment by the deadline otherwise provided in the Plan
unless the Bankruptcy Court shall order otherwise by such time. As soon as
reasonably possible after the receipt by GGI of the Newco Asset Purchase
Proceeds, GGI as trustee shall adjust its reserves to equal the amount of all
claims remaining to be paid by the Debtor that are not Class 5 Claims. The
difference between this number and the original GGI Trustee Portion shall be,
as soon as reasonably possible after receipt by GGI of the Newco Asset Purchase
Proceeds, paid to the Unsecured Creditors Trust for distribution in accordance
with the terms of that trust. After any claims are disallowed that were
previously reserved for by GGI as trustee, GGI as trustee shall pay the amount
of reserves freed by such disallowance to the Unsecured Creditors Trust. The
Unsecured Creditors Trust and/or the Official Committee shall have the right to
conduct audits at the expense of the Unsecured Creditors Trust to assure the
implementation of the Plan and the transactions contemplated in the Plan and
its Exhibits. The powers and duties of the Official Committee may be exercised
by the Unsecured Creditors Trust.

From and after the Newco Cash Payment Deadline, Cash to be
distributed on account of Claims allowed as of the Effective Date shall be held
pending distribution in trust in segregated bank accounts in the name of the
Disbursing Agent for the benefit of the holders of such Claims. The Disbursing
Agent shall invest such cash in a manner consistent with the Disbursing Agent's
investment and deposit guidelines. Distributions of Cash on account of each
Claim allowed as of the Effective Date shall include a Pro Rata share of the
Reorganization Investment Yield from such investment of Cash.

3. DISTRIBUTIONS BY DISBURSING AGENT

Except as provided in Section 7.3.2 of the Plan, the Disbursing Agents
shall make all distributions of Cash and New Securities required to be
distributed under the applicable provisions of the Plan. The Disbursing Agents
may employ or contract with other entities to assist in or make the
distributions required by the Plan. The Disbursing Agent shall serve without
bond, and shall receive, without further Bankruptcy Court approval, reasonable
compensation for distribution services rendered pursuant to the Plan and
reimbursement of reasonable out-of-pocket expenses incurred in connection with
such services from GGI on terms acceptable to GGI and the Official Committee;
provided, however, that GGI shall not spend or incur liabilities of more than
$5,000 per month, including salaries, wages and directors fees, acting as a
Disbursing Agent without either (i) consent of the Official Committee or (ii)
approval of the Bankruptcy Court.

B. DISTRIBUTION RECORD DATE

As of the close of business on the Distribution Record Date, the
transfer registers for the Capital Stock maintained by the Debtor, or their
respective agents, shall be closed. The Disbursing Agents and their respective
agents shall have no obligation to recognize the transfer of any Capital Stock
occurring after the Distribution Record Date, and shall be entitled for all
purposes herein to recognize and deal only with those holders of record as of
the close of business on the Distribution Record Date.

C. TIMING AND CALCULATION OF AMOUNTS TO BE DISTRIBUTED

1. IN GENERAL

On the Effective Date (or on such later date as is prescribed by
Section 3.2 of the Plan), to the extent that the Plan provides for
distributions on account of Allowed Claims or Allowed Interests in the
applicable Class, each holder of an Allowed Claim or Allowed Interest shall
receive the full amount of the distributions that the Plan provides for Allowed
Claims or Allowed Interests in the applicable Class. On each Distribution Date,
distributions shall also be made, pursuant to Sections 7.3 and 8.3 of the Plan,
respectively, to (a) holders of Claims or Interests to whom a distribution has
become deliverable during the preceding quarter and (b) to holders of Disputed
Claims or Disputed Interests in any such Class whose Claims or Interests were
Allowed during the preceding quarter. Such quarterly distributions shall also
be in the full amount that the Plan provides for Allowed Claims or Allowed
Interests in the applicable Class.

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2. DISTRIBUTIONS TO HOLDERS OF CLAIMS IN CLASS 5

As soon as practicable after the Newco Cash Payment Deadline, the
Third-Party Disbursing Agent shall make initial distributions of Cash or
Credits to the holders of Allowed Claims in Class 5 that are entitled to
receive Cash or Credits, as the case may be, pursuant to Section 3.2.5 of the
Plan. The amount of the Cash or Credits to be distributed to holders of Allowed
Claims in Class 5 on such date shall be calculated as if each Disputed Claim in
Class 5 were an Allowed Claim in the amount of the Claim as Filed. Pursuant to
Sections 8.1.2 and 8.3 of the Plan, (a) beginning on the first Distribution
Date, the Third-Party Disbursing Agent shall make distributions of Cash to
holders of Disputed Claims whose Claims become Allowed Claims during the
preceding quarter and thus are entitled to receive Cash, (b) all fees and
expenses of the Third-Party Disbursing Agent with respect to distributions to
holders of Class 5 Claims shall be paid out of the funds in the Class 5
Disbursement Account and (c) all costs incurred by the Official Committee in
connection with the resolution of Disputed Claims after the Effective Date
shall be paid out of the funds in the Class 5 Disbursement Account. Such
distributions shall be calculated pursuant to the provisions set forth in
Section 7.6.2.1 of the Plan.

On each Distribution Date, each holder of a previously Allowed Claim
in Class 5 that is entitled to receive Cash pursuant to Section 3.2.5 of the
Plan shall receive an additional distribution of Cash on account of such Claim
equal to: (i) the amount of Cash that such holder would be entitled to receive
under the Plan as if such Claim had become an Allowed Claim on such
Distribution Date, minus (ii) the aggregate amount of Cash previously
distributed on account of such Claim. Each such additional distribution shall
also include, on the basis of the amount then being distributed, a Pro Rata
share of the Reorganization Investment Yield, from the date such amounts would
have been due had such claim initially been paid 100% of the distribution on
account of the Allowed Amount of such Claim, to the date such distribution is
made, net of any taxes paid or payable by the Disbursing Agent and properly
attributable to such share of the Reorganization Investment Yield.

3. DISTRIBUTIONS OF RIGHTS AND NEWCO COMMON STOCK

Notwithstanding any other provision of the Plan, only whole numbers of
Rights or shares of Newco Common Stock (or stock of any successor to Newco)
shall be issued or transferred, as the case may be, pursuant to the Plan. When
any distribution on account of an Allowed Claim or Allowed Interest pursuant to
the Plan would otherwise result in the issuance or transfer of a number of
Rights or shares of Newco Common Stock that is not a whole number, the actual
distribution of shares of such securities shall be rounded to the next higher
or lower whole number as follows: (a) fractions of 1/2 or greater shall be
rounded to the next higher whole number and (b) fractions of less than 1/2
shall be rounded to the next lower whole number. The total number of Rights or
shares of Newco Common Stock to be distributed to a Class of Claims or
Interests shall be adjusted as necessary to account for the rounding provided
for in Section 7.6.3.2 of the Plan. No consideration shall be provided in lieu
of fractional securities that are rounded down.

4. COMPLIANCE WITH TAX REQUIREMENTS

a. In connection with the Plan, to the extent
applicable, the Disbursing Agent shall comply with all tax withholding and
reporting requirements imposed on it by any governmental unit, and all
distributions pursuant to the Plan shall be subject to such withholding and
reporting requirements. The Disbursing Agent shall be authorized to take any
and all actions that may be necessary or appropriate to comply with such
withholding and reporting requirements.

b. Notwithstanding any other provision of the Plan: (i)
each holder of an Allowed Claim or Interest that is to receive a distribution
of Cash or Rights pursuant to the Plan shall have sole and exclusive
responsibility for the satisfaction and payment of any tax obligations imposed
by any governmental unit, including income, withholding and other tax
obligations, on account of such distribution; and (ii) no distribution shall be
made to or on behalf of such holder pursuant to the Plan unless and until such
holder has made arrangements satisfactory to the Disbursing Agent for the
payment and satisfaction of such tax obligations. Any Cash or Rights to be
distributed pursuant to the Plan shall, pending the implementation of such
arrangements, be treated as an undeliverable distribution pursuant to Section
7.3.2 of the Plan.

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D. SURRENDER OF CANCELLED DEBT INSTRUMENTS OR SECURITIES

Subject to the provisions of Section 7.8.2 of the Plan, as a condition
precedent to receiving any distribution pursuant to the Plan on account of an
Allowed Claim or Allowed Interest evidenced by the instruments, securities or
other documentation canceled pursuant to Section 5.2.1 of the Plan, the holder
of such Claim or Interest must tender the applicable instruments, Old Preferred
Stock or other documentation evidencing such Claim or Interest to the
Disbursing Agent pursuant to a letter of transmittal furnished by the
Disbursing Agent. Any Rights to be distributed pursuant to the Plan on account
of any such Claim or Interest shall, pending such surrender, be treated as an
undeliverable distribution pursuant to Section 7.3.2 of the Plan.

1. SURRENDER OF CAPITAL STOCK CERTIFICATES

Except as provided in Section 7.8.2 of the Plan for lost, stolen,
mutilated or destroyed Capital Stock certificates, each holder of an Allowed
Claim or Allowed Interest evidenced by a Capital Stock certificate must tender
such Capital Stock certificate to the Disbursing Agent in accordance with
written instructions to be provided in a letter of transmittal to such holders
by the Disbursing Agent as promptly as practicable following the Effective
Date. Such letter of transmittal must specify that delivery of such Capital
Stock certificates shall be effected, and risk of loss and title thereto shall
pass, only upon the proper delivery of such Capital Stock certificates with the
letter of transmittal in accordance with such instructions. Such letter of
transmittal must also include, among other provisions, customary provisions
with respect to the authority of the holder of the applicable Capital Stock
certificate to act and the authenticity of any signatures required on the
letter of transmittal. All surrendered Capital Stock certificates shall be
marked as canceled and delivered to GGI.

2. SPECIAL PROCEDURES FOR LOST, STOLEN, MUTILATED OR DESTROYED
CAPITAL STOCK CERTIFICATES

In addition to any requirements under the applicable certificate or
articles of incorporation or bylaws of the Debtor, any holder of an Interest
evidenced by a Capital Stock certificate that has been lost, stolen, mutilated
or destroyed shall, in lieu of surrendering such Capital Stock certificate,
deliver to the Disbursing Agent: (a) evidence satisfactory to the Disbursing
Agent of the loss, theft, mutilation or destruction; and (b) such indemnity as
may be required by the Disbursing Agent to hold the Disbursing Agent harmless
from any damages, liabilities or costs incurred in treating such individual as
a holder of a Capital Stock certificate. Upon compliance with Section 7.8.2 of
the Plan by a holder of an Interest evidenced by a Capital Stock certificate,
such holder shall, for all purposes under the Plan, be deemed to have
surrendered the Capital Stock certificate.

3. FAILURE TO SURRENDER CANCELLED CAPITAL STOCK CERTIFICATES

Any holder of a Capital Stock certificate that fails to surrender or
be deemed to have surrendered such Capital Stock certificate within one year
after the Effective Date shall have its claim for a distribution pursuant to
the Plan on account of such Capital Stock certificate discharged and shall be
forever barred from asserting any such claim against GGI, Newco or EALP or
their respective property. In such case, any Rights held for distribution on
account of such Interest shall be disposed of pursuant to the provisions set
forth in Section 7.3.2 of the Plan.

E. UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS

If the distribution to any holder of an Allowed Claim or Allowed
Interest is returned to a Disbursing Agent as undeliverable, no further
distributions shall be made to such holder unless and until the Disbursing
Agent is notified in writing of such holder's then-current address.
Undeliverable distributions shall remain in the possession of the Disbursing
Agent pursuant to Section 7.3.2.1 of the Plan until such time as a distribution
becomes deliverable. Undeliverable Cash shall be held in trust in segregated
bank accounts in the name of the Disbursing Agent for the benefit of the
potential claimants of such funds, and must be accounted for separately.

On each Distribution Date, the applicable Disbursing Agent shall make
all distributions that become deliverable to holders of Allowed Claims or
Allowed Interests during the preceding quarter. Each such distribution shall
include a Pro Rata share of the Reorganization Investment Yield.

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Any holder of an Allowed Claim that does not assert a claim pursuant
to the Plan for an undeliverable distribution within one year after the
Effective Date shall have its claim for such undeliverable distribution
discharged and shall be forever barred from asserting any such claim for an
undeliverable distribution against GGI or its respective property. In such
case, any Cash held for distribution on account of such claims for
undeliverable distributions shall be held and distributed by the Disbursing
Agent in accordance with Section 7.6.2 of the Plan. Any holder of an Allowed
Claim or Interest entitled to receive Rights that does not assert a claim for
an undeliverable distribution by the Rights Expiration Date shall be forever
barred from asserting a claim for such undeliverable distribution against GGI,
Newco or EALP. Rights with respect to any such Claim or Interest shall be
canceled. Nothing contained in the Plan shall require the Debtor, GGI or any
Disbursing Agent to attempt to locate any holder of an Allowed Claim or
Interest.

F. PROSECUTION OF OBJECTIONS TO CLAIMS

Prior to the Effective Date, the Debtor and the Official Committee
shall retain all rights they may have to File objections, settle, compromise,
withdraw or litigate to judgment objections to Claims and Interests.

After the Effective Date, the Official Committee (or any duly
authorized representative thereof) shall have the exclusive authority to File
objections, or to settle, compromise, withdraw or litigate to judgment
objections to Claims; provided, however, that (a) GGI and the Official
Committee shall retain the authority to File objections to Administrative
Claims and, if upon request the Official Committee refuses to object, other
Claims, and litigate to judgment such objections, and GGI shall be responsible
for all fees, costs and expenses which it incurs with respect to such
activities; (b) the Official Committee (or any duly authorized representative
thereof) shall give Newco at least ten (10) business days written notice before
Filing an objection, or before settling, compromising or withdrawing any
objection; (c) Newco may object to any such objection, settlement or compromise
relating to a Claim that Newco reasonably believes would negatively impact
Newco's operations or relationships with key vendors or other third parties,
and Newco shall be responsible for all fees, costs and expenses which it incurs
with respect to such objection; and (d) any proposed objection, settlement,
compromise or withdrawal objected to by Newco shall be adjudicated by the
Bankruptcy Court. Except to the extent that the Plan expressly provides
otherwise the Debtor, Newco and/or the Official Committee have retained their
rights to avoid Claims and commence avoidance actions (including preference
actions) against holders of Claims. Any and all fees, costs and expenses
incurred by the Official Committee or its representatives in connection with
any and all objections, settlements or litigation of any Disputed Claim under
Section 8.1.2 of the Plan shall be paid on a monthly basis out of the funds
held by the Disbursing Agent for distribution to holders of Allowed Class 5
Claims and neither GGI, EALP nor Newco shall have any liability for payment of
such fees, costs and expenses. The Official Committee may, in its discretion,
establish a reserve from the Class 5 Cash Distribution for such fees, costs and
expenses.

G. DISPUTED CLAIMS; RESERVE AND ESTIMATIONS

1. TREATMENT OF DISPUTED CLAIMS

a. No Payments on Account of Disputed Claims or Interests

Notwithstanding any other provisions of the Plan, no payments or
distributions shall be made on account of a Disputed Claim or a Disputed
Interest until such Claim or Interest becomes an Allowed Claim or Allowed
Interest.

b. Resolution or Estimation of Claims

The Debtor and the Official Committee (and the Official Committee only
after the Effective Date) may, at any time, request that the Bankruptcy Court
estimate any contingent or unliquidated Claim pursuant to section 502(c) of the
Bankruptcy Code, irrespective of whether the Debtor, GGI or the Official
Committee has previously objected to such Claim or whether the Bankruptcy Court
has ruled on any such objection. The Bankruptcy Court will retain jurisdiction
to estimate any contingent or unliquidated Claim at any time during litigation
concerning any objection to the Claim, including during the pendency of any
appeal relating to any such objection. If the Bankruptcy Court estimates any
contingent or unliquidated Claim, that estimated amount shall constitute either
the Allowed Amount of such Claim or a maximum limitation on such Claim, as
determined by the Bankruptcy Court. If the estimated amount constitutes a
maximum limitation on such Claim, GGI or the Official Committee, as the case
may be, may elect to pursue any

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supplemental proceedings to object to any ultimate payment on account of such
Claim. All of these Claims objection, estimation and resolution procedures are
cumulative and not necessarily exclusive of one another. In addition to seeking
estimation of Claims as provided in Section 8.2.2 of the Plan, subject to the
provisions of Section 8.1.2 of the Plan, the Debtor or the Official Committee,
as the case may be, may resolve or adjudicate any Disputed Claim in the manner
in which the amount of such Claim and the rights of the holder of such Claim
would have been resolved or adjudicated if the Chapter 11 Case had not been
commenced. Claims may be subsequently compromised, settled, withdrawn or
resolved by the Debtor, GGI or the Official Committee pursuant to Section 8.1
of the Plan.

2. DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS ONCE THEY ARE
ALLOWED

On each Distribution Date, the Disbursing Agent shall make all
distributions on account of any Disputed Claim or Disputed Interest that has
become an Allowed Claim or Allowed Interest during the preceding quarter. Such
distributions shall be made pursuant to the provisions of the Plan governing
the applicable Class. Holders of Disputed Claims or Disputed Interests that are
ultimately allowed shall also be entitled to receive, on the basis of the
amount ultimately allowed, a Pro Rata share of the Reorganization Investment
Yield.

3. CLAIMS NOT FILED PRIOR TO THE BAR DATE

Unless otherwise provided in a Final Order of the Bankruptcy Court,
any Claim for which a proof of claim is not filed prior to the Bar Date shall
be deemed disallowed and/or subordinated to all Allowed Claims. The holder of a
Claim which is disallowed and/or subordinated pursuant to Section 8.4 of the
Plan shall not receive any distribution on account of such Claim.

H. SETOFFS

Except with respect to claims of the Debtor or GGI released pursuant
to the Plan or any contract, instrument, release or other agreement or document
created in connection with the Plan, the Debtor or GGI may, pursuant to section
553 of the Bankruptcy Code or applicable nonbankruptcy law, set off against any
Allowed Claim and the distributions to be made pursuant to the Plan on account
of such Claim (before any distribution is made on account of such Claim), the
claims, rights and causes of action of any nature that the Debtor or GGI may
hold against the holder of such Allowed Claim; provided, however, that neither
the failure to effect such a setoff nor the allowance of any Claim hereunder
shall constitute a waiver or release by the Debtor or GGI of any such claims,
rights and causes of action that the Debtor or GGI may possess against such
holder.

XV. CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE PLAN

The following discussion is a summary of certain federal income tax
aspects of the Plan for general information only. It should not be relied upon
for purposes of determining the specific tax consequences of the Plan with
respect to a particular holder of a Claim or Interest. This discussion does not
purport to be a complete analysis or listing of all potential tax factors.

The following discussion is based upon existing provisions of the
Internal Revenue Code ("IRC"), existing regulations thereunder, and current
administrative rulings and court decisions. No assurance can be given that
legislative or administrative changes or court decisions may not be forthcoming
which would require significant modification of the statements expressed in
this section. Moreover, the tax consequences to holders of the Claims and
Interests may vary based upon the individual tax circumstances of each such
holder. Nothing herein purports to describe any state, local, or foreign tax
consequences.

NO RULING HAS BEEN SOUGHT OR OBTAINED FROM THE IRS WITH RESPECT TO ANY
OF THE TAX ASPECTS OF THE PLAN AND NO OPINION OF COUNSEL HAS BEEN OBTAINED BY
GRANT WITH RESPECT THERETO. NO REPRESENTATIONS OR ASSURANCES ARE BEING MADE
WITH RESPECT TO THE FEDERAL INCOME TAX CONSEQUENCES AS DESCRIBED HEREIN.
CERTAIN TYPES OF CLAIMANTS AND INTEREST HOLDERS MAY BE SUBJECT TO SPECIAL RULES
NOT

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ADDRESSED IN THIS SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES. THERE MAY ALSO BE
STATE, LOCAL, OR FOREIGN TAX CONSIDERATIONS APPLICABLE TO A HOLDER OF A CLAIM
OR INTEREST WHICH ARE NOT ADDRESSED HEREIN. EACH HOLDER OF A CLAIM OR INTEREST
AFFECTED BY THE PLAN MUST CONSULT, AND RELY UPON, HIS OR HER OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE PLAN WITH RESPECT TO THAT
HOLDER'S CLAIM OR INTEREST. THIS INFORMATION MAY NOT BE USED OR QUOTED IN WHOLE
OR IN PART IN CONNECTION WITH THE OFFERING FOR SALE OF SECURITIES.

A. TAX CONSEQUENCES TO GRANT

Under the IRC, a taxpayer generally must include in gross income the
amount of any discharge of indebtedness income realized during the taxable
year. Section 108(a)(1)(A) of the IRC provides an exception to this general
rule, however, in the case of a taxpayer that is under the jurisdiction of a
bankruptcy court in a case brought under the Bankruptcy Code where the
discharge of indebtedness is granted by the court or is pursuant to a plan
approved by the court, provided that the amount of discharged indebtedness that
would otherwise be required to be included in income is applied to reduce
certain tax attributes of the taxpayer. Section 108(e)(2) of the IRC provides
that a taxpayer shall not realize income from the discharge of indebtedness to
the extent that satisfaction of the liability would have given rise to a
deduction. As a result of Sections 108(a)(1)(A) and 108(e)(2) of the IRC, Grant
does not anticipate it shall recognize any income from the discharge of
indebtedness through the Chapter 11 case.

GGI shall make various payments and distributions pursuant to the
Plan. Grant anticipates that it shall claim federal income tax deductions on
its tax returns for all such payments.

B. TAX CONSEQUENCES TO CREDITORS

A Creditor who receives Cash or other consideration in satisfaction of
any Claim may recognize ordinary income. The impact of such ordinary income,
as well as the tax year for which the income shall be recognized, shall depend
upon the individual circumstances of each Claimant, including the nature and
manner of organization of the Claimant, the applicable tax bracket for the
Claimant, and the taxable year of the Claimant. Each creditor is urged to
consult with its tax advisor regarding the tax implications of any payments or
distributions under the Plan.

THE FOREGOING IS INTENDED TO BE A SUMMARY ONLY AND NOT A SUBSTITUTE
FOR CAREFUL TAX PLANNING OR CONSULTATION WITH A TAX ADVISOR. THE FEDERAL,
STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF THE PLAN ARE COMPLEX AND, IN SOME
CASES, UNCERTAIN. SUCH CONSEQUENCES MAY ALSO VARY BASED UPON THE INDIVIDUAL
CIRCUMSTANCES OF EACH HOLDER OF A CLAIM OR INTEREST. ACCORDINGLY, EACH HOLDER
OF A CLAIM OR INTEREST IS STRONGLY URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR REGARDING THE FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF
THE PLAN.

XVI. VOTING AND CONFIRMATION OF THE PLAN

The Bankruptcy Code requires that, to confirm the Plan, the Bankruptcy
Court must make a series of findings concerning the Plan and the Debtor,
including that (A) the Plan has classified Claims and Interests in a
permissible manner, (B) the Plan complies with applicable provisions of the
Bankruptcy Code, (C) the Debtor has complied with applicable provisions of the
Bankruptcy Code, (D) the Proponents have proposed the Plan in good faith and
not by any means forbidden by law and (E) the disclosure required to be made by
section 1125 of the Bankruptcy Code has in fact been made. The Debtor believes
that all of these conditions shall have been met by the date of the
Confirmation Hearing described below and shall seek rulings of the Bankruptcy
Court to such effect at that hearing.

The Bankruptcy Code also requires that the Plan be accepted by the
requisite votes of creditors (except to the extent that cramdown is available
under section 1129(b) of the Bankruptcy Code), that the Plan be feasible (that
is, that there be a reasonable prospect that GGI and Newco shall be able to
perform their obligations under the Plan and that Newco shall be able to
operate its business without the need for further financial reorganization) and
that the Plan be

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in the "best interests" of all holders of Claims or Interests in an Impaired
class (that is, that creditors and equity security holders shall receive at
least as much pursuant to the Plan as they would receive or retain in a chapter
7 liquidation). To confirm the Plan, the Bankruptcy Court must find that all of
these conditions are met. Thus, even if the Debtor's creditors and equity
security holders accept the Plan by the requisite votes, the Bankruptcy Court
must make independent findings concerning the Plan's feasibility and whether it
is in the best interests of the Debtor's creditors and equity security holders
before it may confirm the Plan. The voting requirements and statutory
conditions to confirmation are discussed below.

A. VOTING PROCEDURES AND REQUIREMENTS

1. PERSONS ENTITLED TO VOTE ON THE PLAN

A holder of a Claim against, or Interest in, Grant whose Claim or
Interest is impaired under the Plan is entitled to vote to accept or reject the
Plan if either (i) its Claim has been scheduled by Grant and such Claim is not
scheduled as disputed, contingent, or unliquidated or (ii) it has filed a proof
of claim on or before the applicable Bar Date set by the Bankruptcy Court for
such filings or any extension of such date approved by the Bankruptcy Court.
ANY CLAIM AS TO WHICH AN OBJECTION HAS BEEN FILED IS NOT ENTITLED TO VOTE
UNLESS THE BANKRUPTCY COURT, UPON APPLICATION OF THE HOLDER TO WHOSE CLAIM
OBJECTION HAS BEEN MADE, TEMPORARILY ALLOWS SUCH CLAIM IN AN AMOUNT THAT IT
DEEMS PROPER FOR THE PURPOSE OF ACCEPTING OR REJECTING THE PLAN. A Ballot may
be disregarded if the Bankruptcy Court determines, after notice and a hearing,
that such Ballot was not solicited or procured in good faith or in accordance
with the provisions of the Bankruptcy Code.

The allowance of any Claim for purposes of voting on the Plan shall
not constitute an allowance of the Claim for purposes of receiving any
distribution pursuant to the Plan. Similarly, any references in the Plan or
Disclosure Statement to any Claims shall not constitute an admission of the
existence, nature, extent or allowability thereof.

All proofs of claim by creditors other than governmental units must
have been filed with the Clerk of the Bankruptcy Court by 4:00 p.m., Eastern
Time, on May 7, 1997. Proofs of claim by governmental units must be filed by
4:00 p.m., Eastern Time, on June 4, 1997. IF A CLAIMANT HAS ALREADY FILED A
PROOF OF CLAIM WITH THE BANKRUPTCY COURT OR IS LISTED IN GRANT'S SCHEDULES AS
NONCONTINGENT, LIQUIDATED, AND UNDISPUTED, A PROOF OF CLAIM NEED NOT HAVE BEEN
FILED. The schedules are on file with the Bankruptcy Court and are open for
inspection during regular Bankruptcy Court hours.

As set forth in Section 1124 of the Bankruptcy Code, a class of claims
or interests is impaired under a plan of reorganization unless, with respect to
each claim of such class, the plan:

a. leaves unaltered the legal, equitable, and
contractual rights of the holder of such claim or interest; or

b. notwithstanding any contractual provision or
applicable law that entitles the holder of a claim or interest to demand or
receive accelerated payment of such claim after the occurrence of a default:

(i) cures any such default that occurred
before or after the commencement of the case under the
Bankruptcy Code, other than a default of a kind specified in
Section 365(b)(2) of the Bankruptcy Code;

(ii) reinstates the maturity of such claim or
interest as it existed before such default;

(iii) compensates the holder of such claim for any
damages incurred as a result of any reasonable reliance on
such contractual provision or such applicable law; and

(iv) does not otherwise alter the legal, equitable or
contractual rights to which such claim or interest entitles
the holder of such claim or interest.

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B. CLASSES IMPAIRED UNDER THE PLAN

The following Classes of Claims are impaired under the Plan, shall
receive distributions under the Plan, and are entitled to vote to accept or
reject the Plan:

Class 3 -- Assigned Secured Claims
Class 5 -- General Unsecured Claims Over $500
Class 6 --- General Unsecured Claims of $500 and Under
Class 7 -- Interests of holders of Old $2.4375 Preferred Stock
Class 8 --- Interests of holders of Old Junior Preferred Stock

All other Classes of Claims or Interests are either (i) unimpaired under the
Plan and are thus deemed to accept the Plan or (ii) impaired under the Plan but
shall not receive or retain any property under the Plan on account of their
Claim or Interest and are thus deemed not to have accepted the Plan, and are
not entitled to vote with respect to the acceptance or rejection of the Plan.
They include:

Class 1 -- Priority Claims (deemed accepted)
Class 2 -- Foothill Claim (deemed accepted)
Class 4 -- Other Secured Claims (deemed accepted)
Class 9 -- Interests of holders of Old Common Stock (deemed
not to have accepted)
Class 10 -- Interests in the Debtor Not Otherwise Classified
(deemed not to have accepted)
Class 11 -- Subordinated Unsecured Claims (deemed not to have
accepted)

1. VOTING INSTRUCTIONS

After carefully reviewing this Disclosure Statement, including the
attached exhibits, please indicate your acceptance or rejection of the Plan by
voting in favor of or against the Plan on an enclosed ballot and returning the
same to the address set forth on the ballots in the enclosed, postage prepaid,
return envelope so that it shall be received no later than 4:00 p.m., Eastern
Time, on September 8, 1997.

TO BE SURE YOUR BALLOT IS COUNTED, YOUR BALLOT MUST BE RECEIVED NO
LATER THAN 4:00 P.M., EASTERN TIME ON SEPTEMBER 8, 1997. If you do not vote to
accept the Plan or if you are the holder of an unimpaired Claim, you may be
bound by the Plan if it is accepted by the requisite number/percentage of
holders of Claims and/or Interests. See Article XVI, subsection F -- "Voting
Procedures and Requirements -- Vote Required for Class Acceptance," and Article
III, subsection F -- "Additional Information Regarding Treatment of Certain
Claims and Interests -- Cramdown" included in this Disclosure Statement.

C. CONFIRMATION HEARING

Pursuant to section 1128(a) of the Bankruptcy Code, the Bankruptcy
Court has scheduled a hearing to consider confirmation of the Plan (the
"Confirmation Hearing") on September 12, 1997, at 11:00 a.m. (Standby), Eastern
Time, in the United States Bankruptcy Court for the District of Delaware.

Section 1128(b) of the Bankruptcy Code provides that any party in
interest may object to confirmation of a chapter 11 plan. The Bankruptcy Court
has directed that objections, if any, to confirmation of the Plan be filed with
the Bankruptcy Court on or before 4:00 p.m., Eastern Time, on September 8,
1997, and concurrently served on the following parties:

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Counsel for Grant:

YOUNG, CONAWAY, STARGATT & TAYLOR
Laura Davis Jones (#2436)
Scott Cousins (#3079)
Eleventh Floor, Rodney Square North
Post Office Box 391
Wilmington, Delaware 19899-0391
(302) 571-6684

AND

KING & PENNINGTON, L.L.P.
C. Robert Bunch
3100 Pennzoil Place, South Tower
Houston, Texas 77002
(713) 225-8400

AND

SCOTT, DOUGLASS & MCCONNICO, L.L.P.
Christopher Fuller
One American Center
600 Congress Avenue, Suite 1500
Austin, Texas 78701-3234
(512) 495-6300

Counsel for EALP

JONES, DAY, REAVIS & POGUE
Timothy R. Pohl
77 West Wacker
Chicago, Illinois 60601-1692
(312) 782-3939

AND

BAYARD HANDELMAN & MURDOCH, P.A.
Neil B. Glassman
902 Market Street, 13th Floor
Wilmington, Delaware 19899
(302) 655-5000

Counsel for Creditors Committee:

ANDREWS & KURTH, L.L.P.
Hugh Ray
James F. Donnell
4200 Texas Commerce Tower
Houston, Texas 77002
(713) 220-4200

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U.S. Trustee:

Office of the United States Trustee
601 Walnut
Curtis Center, Room 950W
Philadelphia, PA 19106-3314
ATTN: John D. McLaughlin, Jr., Esq.

The Objection must also be served upon the creditors and parties in
interest entitled to notice under the Bankruptcy Court's Order entered on
August 4, 1997.

Objections to confirmation of the Plan are governed by Rule 9014.
UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY SERVED AND FILED, THE BANKRUPTCY
COURT MAY NOT CONSIDER IT.

D. CONFIRMATION

At the Confirmation hearing, the Bankruptcy Court shall confirm the
Plan only if all of the requirements of section 1129 of the Bankruptcy Code are
met. See "-General." Among the requirements for Confirmation of the Plan are
that the Plan (i) is accepted by the requisite holders of impaired classes of
Claims and Interests, or if not so accepted, is "fair and equitable" and "does
not discriminate unfairly" as to the nonaccepting Class or Classes; (ii) is in
the "best interests" of each holder of a Claim or Interest in each impaired
Class under the Plan; (iii) is feasible and (iv) complies with the applicable
provisions of the Bankruptcy Code.

"Fair and equitable" has different meanings with respect to the
treatment of secured and unsecured claims. As set forth in Section 1129(b)(2)
of the Bankruptcy Code, those meanings are as follows:

1. With respect to a class of secured claims, the Plan provides:

a. that the holders of such claims retain the liens
securing such claims, whether the property subject to such liens is retained by
the debtor or transferred to another entity, to the extent of the allowed
amount of such claims; and

b. that each holder of a claim of such class receive on
account of such claim deferred cash payments totaling at least the allowed
amount of such claim, of a value, as of the effective date of the Plan, of at
least the value of such holder's interest in the estate's interest in such
property;

c. for the sale, subject to Section 363(k) of the
Bankruptcy Code, of any property that is subject to the liens securing such
claims, free and clear of such liens, with such liens to attach to the proceeds
of such sale, and the treatment of such liens on proceeds under clause (a) and
(b) of this subparagraph; or

d. the realization by such holders of the "indubitable
equivalent" of such Claims.

2. With respect to a class of unsecured claims, the Plan
provides:

a. that each holder of a claim of such class receive or
retain on account of such claim property of a value, as of the effective date
of the Plan, equal to the allowed amount of such claim; or

b. the holder of any claim or interest that is junior to
the claims of such class shall not receive or retain under the Plan on account
of such junior claim or interest any property.

3. With respect to a class of equity interests, the Plan
provides:

a. that each holder of an equity interest of such class
receive or retain on account of such interest property of a value, as of the
effective date of the Plan, equal to the greatest of the allowed amount of any
fixed

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<PAGE> 73
liquidation preference to which such holder is entitled, any fixed redemption
price to which such holder is entitled or the value of such interest; or

b. that the holder of any interest that is junior to the
interests of such class shall not receive or retain under the Plan on account
of such junior interest any property.

In the event that one or more classes of impaired Claims reject the
Plan, the Bankruptcy Court shall determine at the Confirmation Hearing whether
the Plan is fair and equitable with respect to, and does not discriminate
unfairly against, any rejecting impaired Class of Claims. For the reasons set
forth above, Grant believes the Plan does not discriminate unfairly against,
and is fair and equitable with respect to, each impaired Class of Claims.

E. ACCEPTANCE OF THE PLAN

As a condition to Confirmation, the Bankruptcy Code requires that each
class of impaired claims or interests vote to accept the Plan, except under
certain circumstances. See "Overview of the Plan -- Voting Procedures and
Requirements" and "-- Confirmation Without Acceptance of All Impaired Classes."
A plan is accepted by an impaired class of claims if holders of at least
two-thirds in dollar amount and more than one-half in number of allowed claims
of that class vote to accept the plan. A plan is accepted by an impaired class
of interests if holders of at least two-thirds of the number of shares in such
class vote to accept the plan. Only those holders of claims or interests who
actually vote count in these tabulations. Holders of claims who fail to vote
are not counted as either accepting or rejecting a plan or for purposes of
determining the number of votes or amount of claims and interests required to
accept a plan.

In addition to this voting requirement, section 1129 of the Bankruptcy
Code requires that a plan be accepted by each holder of a claim or interest in
an impaired class or that the plan otherwise be found by the bankruptcy court
to be in the best interests of each holder of a claim or interest in such
class. See "-- Best Interests Test." Also, each impaired class must accept the
plan for the plan to be confirmed without application of the "fair and
equitable" and "unfair discrimination" tests in section 1129(b) of the
Bankruptcy Code discussed below.

F. CONFIRMATION WITHOUT ACCEPTANCE BY ALL IMPAIRED CLASSES

The Bankruptcy Code contains provisions for Confirmation of the Plan
even if the Plan is not accepted by all impaired classes, as long as at least
one impaired Class of Claims, not counting insiders of the Debtor, has accepted
it. These so-called "cramdown" provisions are set forth in section 1129 of the
Bankruptcy Code.

A plan may be confirmed under the cramdown provisions if, in addition
to satisfying all other requirements of section 1129(a) of the Bankruptcy Code,
it (1) "does not discriminate unfairly" and (2) is "fair and equitable," with
respect to each class of Claims or Interests that is impaired under, and has
not accepted, the Plan. As used by the Bankruptcy Code, the phrases
"discriminate unfairly" and "fair and equitable" have specific meanings unique
to bankruptcy law.

In general, the cramdown standard requires that a dissenting class
receive full compensation for its allowed claims or interests before any junior
class receives any distribution. More specifically, section 1129(b) of the
Bankruptcy Code provides that a plan can be confirmed if: (1) with respect to a
class of unsecured claims, either (a) each impaired unsecured creditor in such
class shall receive property of a value equal to the amount of its allowed
claim or (b) the holders of claims and interests that are junior to the claims
of the dissenting class shall not receive any property under the plan; or, (2)
with respect to a class of interests, either (a) each holder of an interest of
such class shall receive or retain on account of such interest property of a
value equal to the greater of the allowed amount of any fixed liquidation
preference to which such holder is entitled, any fixed redemption price to
which such holder is entitled or the value of such interest or (b) the holder
of any interest that is junior to the interest of such class shall not receive
or retain any property on account of such junior interest.

The requirement that a plan not "discriminate unfairly" means, among
other things, that a dissenting class must be treated substantially equally
with respect to other classes of equal rank. The "fair and equitable" standard,
also known as the "absolute priority rule," requires, among other things, that
unless a dissenting unsecured class of claims or interests receives full
compensation for its allowed claims or allowed interests, no holder of claims
or interests in any

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<PAGE> 74
junior class may receive or retain any property on account of such claims or
interests. With respect to a dissenting class of secured claims, the "fair and
equitable" standard requires, among other things, that holders of such Secured
Claims either (1) retain their liens and receive deferred cash payments with a
value as of the plan's effective date equal to the value of their interest in
property of the estate or (2) otherwise receive the indubitable equivalent of
these secured claims. The "fair and equitable" standard has also been
interpreted to prohibit any class senior to a dissenting class from receiving
under a plan more than 100% of its allowed claims.

In the event that any impaired Class is determined to have rejected
the Plan in accordance with section 1126 of the Bankruptcy Code, the Debtor may
seek to confirm the Plan as to any such Class under the cramdown provisions of
section 1129 of the Bankruptcy Code. Alternatively, the Debtor may modify or
revoke the Plan in accordance with Sections 13.2 or 13.3 of the Plan.

G. BEST INTERESTS TEST

Notwithstanding acceptance of the Plan by each impaired class, for the
Plan to be confirmed, the Bankruptcy Court must determine that the Plan is in
the best interests of each holder of a Claim or Interest who is in an impaired
Class and has not voted to accept the Plan. Accordingly, if an impaired class
does not unanimously accept the Plan, the best interests test requires the
Bankruptcy Court to find that the Plan provides to each member of such impaired
Class a recovery on account of the Class member's Claim or Interest that has a
value, as of the Effective Date, at least equal to the value of the
distribution that each such member would receive if the Debtor were liquidated
under chapter 7 of the Bankruptcy Code on such date.

To estimate what members of each impaired Class of unsecured creditors
and equity security holders would receive if the Debtor were liquidated, the
Bankruptcy Court must first determine the aggregate dollar amount that would be
generated from the Debtor's assets if the chapter 11 cases were converted to
chapter 7 cases under the Bankruptcy Code and the assets were liquidated by a
trustee in bankruptcy (the "Liquidation Value"). The Liquidation Value would
consist of the net proceeds from the disposition of the assets of the Debtor
and would be augmented by any cash held by the Debtor.

The Liquidation Value of the Debtor's assets available to general
creditors would be reduced by the costs and expenses of the liquidation, as
well as other administrative expenses of the Debtor's Estate. The Debtor's
costs of liquidation under chapter 7 would include the compensation of a
trustee or trustees, as well as counsel and other professionals retained by the
trustee, disposition expenses, all unpaid expenses incurred by the Debtor
during the Chapter 11 Cases (such as compensation for attorneys and
accountants) that are allowed in the chapter 7 proceedings, litigation costs
and claims against the Debtor arising from its business operations during the
pendency of the Chapter 11 Cases and chapter 7 liquidation proceedings. These
costs, expenses and claims would be paid in full out of the Debtor's
liquidation proceeds before the balance would be made available to pay
creditors. In a chapter 7 liquidation, the distinctions between Claims in
Classes 2, 3 and 4 and Classes 5 and 6 would be eliminated.

Once the percentage recoveries in liquidation of priority claimants,
secured creditors, general unsecured creditors and equity security holders are
ascertained, the value of the distribution available out of the Liquidation
Value is compared with the value of the property offered to each of the classes
of Claims and Interests under the Plan to determine if the Plan is in the best
interests of each creditor and equity security holder class. Attached hereto as
Exhibit 5 is a Comparative Analysis of the Plan versus Liquidation (the
"Liquidation Analysis"), which was compiled by the Debtor's management based on
estimates of liquidation values. Based on the estimated liquidation recovery of
$42,724,000, the following percentage amounts would be available for
distribution to each Class of Claims and Interests if liquidation were to occur
in lieu of the Plan:

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<PAGE> 75
<TABLE>
<CAPTION>
Estimated Percentage
Recovery In A Liquidation
Other Than Under the Plan
-------------------------
<S> <C>
Class 1 -- Priority Claims 100%
Class 2 -- Foothill Claim 100%
Class 3 -- Assigned Secured Claims 100%
Class 4 -- Other Secured Claims 100%
Class 5 -- General Unsecured Claims Over $500 0%
Class 6 -- General Unsecured Claims of $500 and Under 0%
Class 7 -- Interests of holders of Old $2.4375 Preferred Stock 0%
Class 8 -- Interests of holders of Old Junior Preferred Stock 0%
Class 9 -- Interests of holders of Old Common Stock 0%
Class 10 -- Interests in the Debtor Not Otherwise Classified 0%
Class 11 -- Subordinated Unsecured Claims 0%
</TABLE>

Reference is made to the Liquidation Analysis for a description of the
procedures followed, the factors considered and the assumptions and
qualifications used in the preparation thereof. In addition, the Debtor
estimates that only about 40% of Allowed Administrative Claims would be paid in
liquidation.

In contrast, the Plan provides for payment in full of all
Administrative Claims, Priority Tax Claims and Other Priority Claims, and
Secured Claims. The Plan also provides for an estimated recovery by all holders
of general unsecured claims and preferred equity security holders. The Debtor
estimates that holders of general allowed unsecured claims will receive about
50% of the amount of their allowed claim, and that those holders electing
Credits will receive the full amount of their allowed claim. In addition,
holders of Class 7 and 8 Interests will receive Rights under the Plan. See
"Overview of the Plan -- Summary of Classes and Treatment of Claims and
Interests."

Due to the numerous uncertainties and time delays associated with
liquidation under chapter 7 of the Bankruptcy Code, it is not possible to
predict with certainty the outcome of any chapter 7 liquidation of the Debtor
or the timing of any distribution to creditors. However, as the Liquidation
Analysis and the foregoing discussion demonstrate, the Debtor has concluded
that a complete liquidation of the Debtor under chapter 7 of the Bankruptcy
Code would result in a lesser distribution to creditors and preferred
shareholders than that provided for in the Plan.

H. FEASIBILITY

Section 1129(a)(11) of the Bankruptcy Code requires that GGI and Newco
be able to perform their respective obligations under the Plan and that
confirmation is not be likely to be followed by the liquidation, or the need
for further financial reorganization, of Newco or GGI (except as provided in
the Plan). For purposes of determining whether the Plan meets this requirement,
the Proponents analyzed Newco's future prospects and its ability to meet its
obligations under the Plan. The Debtor believes that GGI and Newco shall be
able to meet their obligations under the Plan and that Confirmation shall
likely not be followed by the liquidation or further financial reorganization
of Newco.

The feasibility of the Plan is demonstrated by the forecasted
financial statements described in the attached Exhibit 4. These forecasted
financial statements project Newco's financial position as of the Effective
Date and for each of the five subsequent years. The forecasted financial
statements are based upon assumptions that, when considered on an overall basis
for the indicated forecast period, are considered reasonable by the Debtor.

I. COMPLIANCE WITH APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE

Section 1129(a)(1) of the Bankruptcy Code requires that the Plan
comply with the applicable provisions of the Bankruptcy Code. During the course
of negotiations among the Debtor, its creditor constituencies and its
representatives, various legal issues, including Claim classification and
treatment issues, were raised. The Debtor has carefully considered each of
these issues in the development and formulation of the Plan and believe that
the Plan complies with all applicable provisions of the Bankruptcy Code.

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XVII. ADDITIONAL INFORMATION

Grant is subject to the information requirements of the Exchange Act
and in accordance therewith files reports and other information with the SEC.
Such reports and other information so filed can be inspected and copied at the
Public Reference Room of the SEC at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the public reference facilities maintained by the
SEC at 7 World Trade Center, 13th Floor, New York, New York 10048 at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The SEC
maintains a web site on the Internet which contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC and that is located at "http://www.sec.gov."

Any statements contained herein concerning the provisions of any
document are not necessarily complete, and in each instance reference is made
to the copy of such document for the full text thereof. Each such statement is
qualified in its entirety by such reference. Certain documents referred to
herein have not been attached as exhibits because of the impracticability of
furnishing copies thereof to all of the Debtor's creditors and equity security
holders. All of the exhibits to the Plan and to this Disclosure Statement are
available for inspection at the offices of Grant Geophysical, Inc., 16850 Park
Row, Houston, Texas 77084. To review such exhibits, contact Jay Jones, Esq.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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XVIII. RECOMMENDATION AND CONCLUSION

For all the reasons set forth in this Disclosure Statement, the Debtor
and EALP believe that Confirmation and consummation of the Plan is preferable
to all other alternatives. Consequently, the Debtor and EALP urge all holders
of Claims and Interests to vote to ACCEPT the Plan, and to duly complete and
return their ballots such that they shall be ACTUALLY RECEIVED on or before
4:00 p.m. Eastern Time on September 8, 1997.

Dated: Wilmington, Delaware GRANT GEOPHYSICAL, INC.
August 4, 1997 a Delaware corporation

By: /s/ Larry E. Lenig, Jr.
----------------------------------
Larry E. Lenig, Jr.
President and Chief Operating
Officer

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EXHIBIT 1

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

IN RE: ) CHAPTER 11
)
GRANT GEOPHYSICAL, INC., ) CASE NO. 96-1936 (HSB)
)
DEBTOR. )

SECOND AMENDED PLAN OF REORGANIZATION
OF
GRANT GEOPHYSICAL, INC.

David S. Kurtz C. Robert Bunch
Timothy R. Pohl KING & PENNINGTON, L.L.P.
Kathleen M. Boege 3100 South Tower, Pennzoil Place
JONES, DAY, REAVIS & POGUE 711 Louisiana Street
77 West Wacker Houston, Texas 77002
Chicago, Illinois 60601-1692 (713) 225-8400
(312) 782-3939
Counsel for the Debtor
Counsel for Elliott Associates, L.P.
Laura Davis Jones
Scott D. Cousins
Neil B. Glassman YOUNG, CONAWAY, STARGATT & TAYLOR
BAYARD HANDELMAN & MURDOCH, P.A. Rodney Square North, 11th Floor
902 Market Street, 13th Floor P. O. Box 391
Wilmington, Delaware 19899 Wilmington, Delaware 19899-0391
(302) 655-5000 (302) 571-6600

Co-Counsel for Elliott Associates, L.P. Co-Counsel for the Debtor

Christopher Fuller
SCOTT, DOUGLASS
& MCCONNICO, L.L.P.
600 Congress, Suite 1500
Austin, Texas 78701
(512) 495-6300

Dated August 5, 1997 Special Counsel for the Debtor

<PAGE> 79
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION,COMPUTATION OF TIME AND GOVERNING LAW . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1.1 "Administrative Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1.3 "Allowed Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1.4 "Allowed . . . Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.5 "Allowed . . . Claim Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.6 "Allowed Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.7 "Assigned Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.8 "Ballots" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.9 "Bankruptcy Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.10 "Bankruptcy Court" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.11 "Bankruptcy Rules" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.12 "Bar Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.13 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.14 "Capital Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.15 "Cash" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.16 "Chapter 11 Case" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.17 "Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.18 "Class" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.19 "Class 5 Cash Distribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.20 "Class 5 Disbursement Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.21 "Class 5 Rights" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.22 "Class 7 Rights" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.23 "Class 8 Rights" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.24 "Confirmation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.25 "Confirmation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.26 "Confirmation Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.27 "Contingent LC Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.28 "Credit" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.29 "DIP Financing Facility" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.30 "DIP Financing Facility Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.31 "DIP Financing Orders" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.32 "Disbursing Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.33 "Disclosure Statement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.34 "Disputed Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.35 "Disputed Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.36 "Distribution Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.37 "Distribution Record Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.38 "Document Reviewing Centers" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.39 "EALP" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.40 "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.41 "Eligible Class 5 Claim Holder" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.42 "Equipment Purchase Options" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.43 "Estate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.44 "File," "Filed" or "Filing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.45 "Final Distribution Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.1.46 "Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.47 "Foothill" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.48 "Foothill Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.49 "Forum Financial Purchase Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.50 "GECC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.51 "GECC Lease Assumption Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.52 "General Unsecured Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.53 "GGI" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.54 "Green Tree Purchase Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.55 "Impaired . . ." . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.56 "Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.57 "Macha Purchase Options" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.58 "Master Ballots" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.59 "Newco" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.60 "Newco Asset Purchase Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.61 "Newco Asset Purchase Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.62 "Newco Bylaws" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.63 "Newco Cash Payment Deadline" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.64 "Newco Certificate of Incorporation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.65 "Newco Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.66 "Newco Common Stock Registration Rights Agreement" . . . . . . . . . . . . . . . . . . . . . 6
1.1.67 "Newco Credit Facility" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.68 "Newco Credit Facility Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.69 "Newco Credit Facility Documents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.70 "Nynex" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.71 "Nynex Lease Assumption Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.72 "Official Committee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.73 "Old $2.4375 Preferred Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.74 "Old Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.75 "Old Junior Preferred Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.76 "Old Preferred Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.77 "Old Serial Preferred Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.78 "Old Series A Preferred Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.79 "Other Identified Secured Claims" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.80 "Oyo" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.81 "Oyo Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.82 "Petition Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.83 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.84 "Postpetition Secured Claims" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.85 "Priority Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.86 "Priority Tax Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.87 "Professional" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.88 "Pro Rata" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.89 "Registration Statement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.90 "Reorganization Investment Yield" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.91 "Rights" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.92 "Rights Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.93 "Rights Exercise Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.94 "Rights Exercise Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.95 "Rights Expiration Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.96 "Rights Offering" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.97 "Rights Offering Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.98 "Schedules" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.99 "Scrip Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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1.1.100 "Secured Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.101 "Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.102 "Stipulation of Amount and Nature of Claim" . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.103 "Subordinated Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.104 "TIAA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.105 "TIAA Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.106 "TIAA Mortgage" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.107 "Third-Party Disbursing Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.108 "Unimpaired Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.109 "Unsecured Creditors Trust" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.110 "Voting Instructions" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.111 "Westgate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.112 "Winthrup Resources Purchase Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2 Rules of Interpretation, Computation of Time and Governing Law . . . . . . . . . . . . . . . . . . . 10
1.2.1 Rules of Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2.2 Computation of Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE II. UNCLASSIFIED CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1 Administrative Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1.2 Bar Date for Administrative Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1.3 Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Priority Tax Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 DIP Financing Facility Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Postpetition Secured Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.5 Exercise of Equipment Purchase Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE III. CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS . . . . . . . . . . . . . . . . . . 12
3.1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.2 Classification and Treatment of Claims and Interests . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2.1 Class 1 - Priority Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2.2 Class 2 - Foothill Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2.3 Class 3 - Assigned Secured Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.3.1 TIAA Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.4 Class 4 - Other Identified Secured Claims . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.4.1 The Input/Output Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.4.2 The Madeleine Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.4.3 The Fairfield Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.5 Class 5 - General Unsecured Claims Over $500 . . . . . . . . . . . . . . . . . . . . . . . 15
3.2.5.1 Rights Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2.5.2 Class 5 Cash Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2.5.3 Claim Reduction Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2.5.4 Credit Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2.6 Class 6 - General Unsecured Claims of $500 or Less . . . . . . . . . . . . . . . . . . . . 15
3.2.7 Class 7 - Interests of holders of Old $2.4375 Preferred Stock . . . . . . . . . . . . . . . 15
3.2.8 Class 8 - Interests of holders of Old Junior Preferred Stock . . . . . . . . . . . . . . . 16
3.2.9 Class 9 - Interests of holders of Old Common Stock . . . . . . . . . . . . . . . . . . . . 16
3.2.10 Class 10 - Interests in the Debtor Not Otherwise Classified . . . . . . . . . . . . . . . . 16
3.2.11 Class 11 - Subordinated Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.3 Special Provision Regarding Unimpaired Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.4 Accrual of Postpetition Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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ARTICLE IV. ACCEPTANCE OR REJECTION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1 Voting Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.2 Acceptance by Impaired Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3 Presumed Acceptance of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.4 Deemed Non-Acceptance of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.5 Non-Consensual Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE V. MEANS FOR IMPLEMENTATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Purchase of Debtor's Assets by Newco, Assumption of Liabilities by Newco, Liquidation of GGI . . . . 18
5.1.1 Purchase of Assets and Assumption of Liabilities by Newco . . . . . . . . . . . . . . . . . 18
5.1.1.1 Purchase of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1.1.2 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1.1.3 Assignment of Leases and Contracts . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1.1.4 Payment by Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1.2 Certain Assigned Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1.2.1 Assignment of GECC Master Lease Agreement . . . . . . . . . . . . . . . . . . . . . 18
5.1.2.2 Assignment of Nynex Master Lease Agreement . . . . . . . . . . . . . . . . . . . . 18
5.1.2.3 Assignment of the Oyo Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1.3 Liquidation of GGI; Final Order and Dissolution . . . . . . . . . . . . . . . . . . . . . . 19
5.2 The Restructuring Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2.1 Cancellation of Capital Stock; Surrender of Securities and
Other Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2.2 GGI's Obligations Under the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2.3 Capitalization of Newco, Issuance of Securities and Related
Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2.3.1 Formation of Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2.3.2 Issuance of the Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2.3.3 Capitalization of Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2.3.4 EALP Guaranty of Rights Offering . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2.3.5 Newco Common Stock Registration Rights Agreement . . . . . . . . . . . . . . . . . 20
5.2.4 Establishment of New Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2.5 Name Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Procedures for Exercise of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Corporate Governance, Directors and Officers, Employment-Related
Agreements and Compensation Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.4.1 Newco Certificate of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . 21
5.4.2 Newco Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.4.3 Employment, Retirement, Indemnification and Other Agreements and
Incentive Compensation Programs; Retiree Health and Welfare Benefits . . . . . . . . . . . 22
5.4.4 Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.5 Sources of Cash for Plan Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.6 Releases and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.6.1 Releases by the Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.6.1.1 Avoidance Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.6.1.2 Other Released Claims and Causes of Action . . . . . . . . . . . . . . . . . . . . 22
5.6.1.3 Claims and Causes of Action Not Released or Purchased
by Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.6.2 Releases by Holders of Claims or Interests . . . . . . . . . . . . . . . . . . . . . . . . 23
5.6.2.1 Holders of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.6.2.2 Holders of Certain Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.6.2.3 Release of Official Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.6.3 Injunction Related to Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.6.4 Limitation on Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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5.7 Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.8 Effectuating Documents; Further Transactions; Exemption
from Certain Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE VI. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES . . . . . . . . . . . . . . . . . . . . . . . 25
6.1 Executory Contracts and Unexpired Leases to be Rejected; Bar Date for Rejection Damages . . . . . . 25
6.1.1 Rejections Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.1.2 Bar Date for Rejection Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.2 Executory Contracts and Unexpired Leases to be Assumed and Assigned; Cure of Defaults . . . . . . . 25
6.2.1 Assumptions Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.2.2 Cure of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.3 Special Executory Contract and Unexpired Lease Matters . . . . . . . . . . . . . . . . . . . . . . . 26
6.3.1 Existing Employment, Retirement and Other Agreements and Incentive Compensation Programs . 26
6.3.2 Indemnification Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.4 Executory Contracts and Unexpired Leases Entered Into and Other Obligations Incurred
After the Petition Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE VII. PROVISIONS GOVERNING DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1 Distributions for Claims and Interests Allowed as of the Effective Date . . . . . . . . . . . . . . 28
7.2 Distributions by Disbursing Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.2.1 Disbursing Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3 Delivery of Distributions and Undeliverable or Unclaimed Distributions . . . . . . . . . . . . . . . 28
7.3.1 Delivery of Distributions in General . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3.2 Undeliverable Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3.2.1 Holding and Investment of Undeliverable Distributions . . . . . . . . . . . . . . . 28
7.3.2.2 After Distributions Become Deliverable . . . . . . . . . . . . . . . . . . . . . . 28
7.3.2.3 Failure to Claim Undeliverable Distributions . . . . . . . . . . . . . . . . . . . 29
7.4 Distribution Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.5 Means of Cash Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.6 Timing and Calculation of Amounts to be Distributed . . . . . . . . . . . . . . . . . . . . . . . . 29
7.6.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.6.2 Distributions to Holders of Claims in Class 5 . . . . . . . . . . . . . . . . . . . . . . . 29
7.6.3 Distributions of Rights and Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.6.4 Compliance with Tax Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.7 Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.8 Surrender of Cancelled Debt Instruments or Securities . . . . . . . . . . . . . . . . . . . . . . . 31
7.8.1 Surrender of Capital Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.8.2 Lost, Stolen, Mutilated or Destroyed Capital Stock Certificates . . . . . . . . . . . . . . 31
7.8.3 Failure to Surrender Canceled Capital Stock Certificates . . . . . . . . . . . . . . . . . 31

ARTICLE VIII. PROCEDURES FOR RESOLVING DISPUTED CLAIMS AND DISPUTED INTERESTS . . . . . . . . . . . . . . . . . . 32
8.1 Prosecution of Objections to Claims and Interests . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.1.1 Prior to the Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.1.2 After the Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2 Treatment of Disputed Claims or Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2.1 No Payments on Account of Disputed Claims or Interests . . . . . . . . . . . . . . . . . . 32
8.2.2 Resolution or Estimation of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.3 Distributions on Account of Disputed Claims or Interests Once
They Are Allowed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.4 Claims Not Filed Prior to the Bar Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>

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<PAGE> 84
<TABLE>
<S> <C> <C> <C>
ARTICLE IX. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN . . . . . . . . . . . . . . . . . 33
9.1 Conditions to Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.2 Conditions to Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.3 Waiver of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.4 Effect of Nonoccurrence of Conditions to Effective Date . . . . . . . . . . . . . . . . . . . . . . 34

ARTICLE X. CONFIRMABILITY AND SEVERABILITY OF PLAN AND CRAMDOWN . . . . . . . . . . . . . . . . . . . . . . . . 35
10.1 Confirmability and Severability of a Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.2 Cramdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE XI. INJUNCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE XII. RETENTION OF JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE XIII. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.1 Limitation of Liability in Connection with the Plan, Disclosure Statement
and Related Documents and Related Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.2 Payment of Statutory Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.3 Modification of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.4 Revocation of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.5 Severability of Plan Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.8 Legal Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.9 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.10 Service of Documents on the Debtor or GGI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>

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<PAGE> 85
TABLE OF EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NAME
------- ----
<S> <C>
A The Newco Asset Purchase Agreement*

B Newco Certificate of Incorporation*

C Newco Bylaws*

D List of Assets Retained by GGI

E Newco Common Stock Registration Rights Agreement*

F Exclusive Schedule of Executory Contracts and Unexpired Leases
to be Assumed and Assigned

G Exclusive List of Employment, Retirement and other Agreements
and Incentive Compensation Programs to be Assumed and Assigned

H Scrip Agreement

I GGI Creditors Trust and Disbursement Agreement*
</TABLE>

___________________

* These Exhibits will not be distributed to creditors or shareholders
with the Plan. All such Exhibits are summarized in the Disclosure
Statement. In addition, all such Exhibits have been filed with the
Court and are available upon request to counsel for the Debtors. All
such Exhibits are available for review at the Document Reviewing
Centers.

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<PAGE> 86
INTRODUCTION

Grant Geophysical, Inc., a Delaware corporation (the "Debtor") and
Elliott Associates, L.P. ("EALP," and collectively with the Debtor, the
"Proponents") jointly propose the following plan of reorganization for the
satisfaction of the Debtor's outstanding creditor claims and equity interests.
Reference is made to the Debtor's disclosure statement, distributed
contemporaneously with the Plan (the "Disclosure Statement"), for a discussion
of the Debtor's history, businesses, properties, results of operations and
projections for future operations, and for a summary and analysis of the Plan
and certain related matters.

ALL HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTOR ARE
ENCOURAGED TO READ THE PLAN AND THE DISCLOSURE STATEMENT IN THEIR ENTIRETY
BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. SUBJECT TO CERTAIN RESTRICTIONS
AND REQUIREMENTS SET FORTH IN THE PLAN, THE PROPONENTS RESERVE THE RIGHT TO
ALTER, AMEND, MODIFY, REVOKE OR WITHDRAW THE PLAN PRIOR TO ITS CONSUMMATION.

ARTICLE I.

DEFINED TERMS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW

1.1 DEFINED TERMS

As used in the Plan, capitalized terms and phrases have the meanings
set forth below. Any term used in the Plan that is not defined herein, but
that is used in the Bankruptcy Code or the Bankruptcy Rules, shall have the
meaning assigned to that term in the Bankruptcy Code or the Bankruptcy Rules.

1.1.1 "ADMINISTRATIVE CLAIM" means a Claim for costs and expenses of
administration allowed under sections 503(b), 507(b) or 1114(e)(2) of the
Bankruptcy Code, including: (a) the actual and necessary costs and expenses
incurred after the Petition Date of preserving the Estate and operating the
business of the Debtor (such as wages, salaries or commissions for services and
payments for goods or other services); (b) compensation for legal, financial
advisory, accounting and other services and reimbursement of expenses awarded
or allowed under sections 330(a) or 331 of the Bankruptcy Code; and (c) all
fees and charges assessed against the Estate under chapter 123 of title 28,
United States Code, 28 U.S.C. Sections 1911-1930.

1.1.2 "AFFILIATE" means the Debtor or any corporation, limited
liability company or partnership in which the Debtor directly or indirectly
owns 50% or more of the equity interest of such entity.

1.1.3 "ALLOWED CLAIM" means:

1.1.3.1 a Claim that has been listed by the Debtor in its
Schedules as other than disputed, contingent or unliquidated and as to
which the Debtor or the Official Committee has not timely Filed an
objection thereto;

1.1.3.2 a Claim that either is not a Disputed Claim or has
been allowed by a Final Order if a proof of Claim has been filed by
the Bar Date or has otherwise been deemed timely Filed under
applicable law; or

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1.1.3.3 a Claim that is allowed: (a) in any Stipulation of
Amount and Nature of Claim executed prior to the Confirmation Date and
approved by the Bankruptcy Court; or (b) in any Stipulation of Amount
and Nature of Claim executed on or after the Confirmation Date.

1.1.4 "ALLOWED . . . CLAIM" means an Allowed Claim in the particular
Class(es) or categories described.

1.1.5 "ALLOWED . . . CLAIM AMOUNT" means the amount of an Allowed
Claim in the particular Class(es) or categories described.

1.1.6 "ALLOWED INTEREST" means an Interest: (a) that is registered
as of the Distribution Record Date in a stock register that is maintained by or
on behalf of the Debtor and (b) either (i) is not a Disputed Interest or (ii)
has been allowed by a Final Order.

1.1.7 "ASSIGNED LIABILITIES" means the Claims against, and
liabilities of, the Debtor to Oyo, GECC, Nynex and TIAA as described in
Sections 3.2.3, 5.1.2, the Contingent LC Liabilities and certain unearned
revenue and other liabilities and deferred credits on the Debtor's balance
sheet (which are approximately $8.5 million as of April 30, 1997).

1.1.8 "BALLOTS" means the ballots accompanying the Disclosure
Statement upon which holders of Impaired Claims or Impaired Interests entitled
to vote on the Plan shall indicate their acceptance or rejection of the Plan in
accordance with the Voting Instructions.

1.1.9 "BANKRUPTCY CODE" means title 11 of the United States Code, as
now in effect or hereafter amended.

1.1.10 "BANKRUPTCY COURT" means the United States District Court
having jurisdiction over the Chapter 11 Case and, to the extent of any
reference made pursuant to 28 U.S.C. Section 157, the bankruptcy unit of such
United States District Court.

1.1.11 "BANKRUPTCY RULES" means, collectively, the Federal Rules of
Bankruptcy Procedure and the general and local rules of the Bankruptcy Court,
as now in effect or hereafter amended.

1.1.12 "BAR DATE" means the bar date for Filing proofs of Claim
established by an order of the Bankruptcy Court.

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

1.1.14 "CAPITAL STOCK" means, collectively, the Old Common Stock, the
Old Preferred Stock, the Old Serial Preferred Stock, the Old Series A Preferred
Stock, and any other Interest(s) in the Debtor not otherwise classified in
Classes 7, 8 or 9.

1.1.15 "CASH" means cash and cash equivalents.

1.1.16 "CHAPTER 11 CASE" means the case commenced by the Debtor under
chapter 11 of the Bankruptcy Code.

1.1.17 "CLAIM" means a claim (as defined in section 101(5) of the
Bankruptcy Code) against the Debtor.

1.1.18 "CLASS" means a class of Claims or Interests, as described in
Article III below.

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1.1.19 "CLASS 5 CASH DISTRIBUTION" means the Cash of GGI obtained
from Newco pursuant to Section 5.1 and the Newco Asset Purchase Agreement and
remaining after GGI makes all payments provided for in Sections 2.1, 2.2,
2.3, 2.4, 2.5, 3.2.1, 3.2.2, 3.2.4, 3.2.6, 5.1.3 and 6.2.2, which shall
be distributed to holders of Allowed Class 5 Claims pursuant to Section 3.2.5.
A segregated disbursement account for Class 5 shall be established upon the
payment of the Newco Asset Purchase Proceeds.

1.1.20 "CLASS 5 DISBURSEMENT ACCOUNT" means the trust account of the
Third-Party Disbursing Agent, established for the holders of Class 5 Claims,
into which the Class 5 Cash Distribution shall be deposited. No creditors
other than those whose Claims are classified in Class 5 shall have claims to
such funds.

1.1.21 "CLASS 5 RIGHTS" means the Rights to purchase, in the
aggregate, 475,000 shares of Newco Common Stock, for an aggregate purchase
price of $2,375,000 ($5.00 per share) or shares of stock of any successor to
Newco on economically equivalent terms, to be issued and distributed to
Eligible Class 5 Claim Holders in accordance with the provisions of Section
3.2.5.

1.1.22 "CLASS 7 RIGHTS" means the Rights to purchase, in the
aggregate, 4,255,000 shares of Newco Common Stock, for an aggregate purchase
price of $21,275,000 ($5.00 per share) or shares of stock of any successor to
Newco on economically equivalent terms, to be issued and distributed to holders
of Allowed Class 7 Interests in accordance with the provisions of Section
3.2.7.

1.1.23 "CLASS 8 RIGHTS" means the Rights to purchase, in the
aggregate, 20,000 shares of Newco Common Stock, for an aggregate purchase price
of $100,000 ($5.00 per share) or shares of stock of any successor to Newco on
economically equivalent terms, to be issued and distributed to holders of
Allowed Class 8 Interests in accordance with the provisions of Section 3.2.8.

1.1.24 "CONFIRMATION" means the entry of the Confirmation Order.

1.1.25 "CONFIRMATION DATE" means the date on which the Bankruptcy
Court enters the Confirmation Order on its docket, within the meaning of
Bankruptcy Rules 5003 and 9021.

1.1.26 "CONFIRMATION ORDER" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.

1.1.27 "CONTINGENT LC LIABILITIES" means the reimbursement
obligations of the Debtor to Wells Fargo Bank, N.A. and the Home Insurance
Company.

1.1.28 "CREDIT" means the nontransferable instrument to be
distributed in accordance with Section 3.2.5.4 to each Eligible Class 5 Claim
Holder electing to receive a Credit, which instrument shall entitle the holder
thereof to receive credit from Newco against the contract price for certain
services to be provided to such holder by Newco, in accordance with the terms
and conditions of the form of Scrip Agreement attached hereto as Exhibit H,
which shall provide, among other things, that the Credit is nontransferable and
that the use of the Credit shall be limited to 20% of the contract price per
contract of such Eligible Class 5 Claim Holder with Newco.

1.1.29 "DIP FINANCING FACILITY" means the postpetition credit
facility extended by Foothill to the Debtor under section 364 of the Bankruptcy
Code in accordance with the terms and conditions set forth in the DIP Financing
Orders.

1.1.30 "DIP FINANCING FACILITY CLAIM" means any and all amounts owed
to Foothill under the DIP Financing Facility.

1.1.31 "DIP FINANCING ORDERS" means (a) the Joint Stipulation and
Agreed Order Authorizing Interim Financing, Granting Senior Liens and Priority
Administrative Expense Status, Providing for

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<PAGE> 89
Adequate Protection, Modifying Automatic Stay, and Authorizing the Debtor to
Enter into Agreements with Foothill Capital Corporation, entered on December 6,
1996, (b) the Joint Stipulation and Agreed Order Authorizing Final Financing,
Granting Senior Liens and Priority Administrative Expense Status, Providing for
Adequate Protection, Modifying Automatic Stay, and Authorizing the Debtor to
Enter into Agreement with Foothill Capital Corporation, entered on February 4,
1997 and (c) the Order Authorizing Debtor to Enter into First Amendment to
Final Financing Order, entered on April 9, 1997.

1.1.32 "DISBURSING AGENT" means GGI, in its capacity as Disbursing
Agent, or any Third-Party Disbursing Agent.

1.1.33 "DISCLOSURE STATEMENT" means the Disclosure Statement of even
date herewith, as amended, modified or supplemented (and all exhibits or
schedules annexed thereto or referenced therein), which relates to the Plan,
and which shall be prepared and distributed in accordance with sections 1125
and 1126(b) of the Bankruptcy Code and Bankruptcy Rule 3018.

1.1.34 "DISPUTED CLAIM" means, for the purpose of receiving
distributions pursuant to the Plan:

1.1.34.1 a Claim as to which, if no proof of Claim has
been Filed by the Bar Date or has otherwise been deemed timely Filed
under applicable law and such Claim has been scheduled by the Debtor
in its schedule of liabilities as other than disputed, contingent or
unliquidated, the Debtor or the Official Committee has Filed an
objection by the date of the first distribution under Article VII; or

1.1.34.2 a Claim as to which, if a proof of Claim has
been Filed by the Bar Date or has otherwise been deemed timely Filed
under applicable law, an objection has been timely Filed by the Debtor
or any other party in interest and such objection has not been
withdrawn on or before any date fixed by the Plan or order of the
Bankruptcy Court for Filing such objections and such objection has not
been ruled upon by a Final Order. For the purpose of receiving
distributions pursuant to the Plan, a Claim or Claims asserted in a
proof of Claim shall be considered a Disputed Claim to the extent that
an objection is timely Filed to any portion of such Claim or Claims.

1.1.35 "DISPUTED INTEREST" means any Interest as to which the Debtor
has listed in its Schedules as disputed, interposed a timely objection or
request for estimation in accordance with the Bankruptcy Code and the
Bankruptcy Rules or any Interest otherwise disputed by the Debtor in accordance
with applicable law, which objection, request for estimation or dispute has not
been withdrawn or ruled upon by a Final Order.

1.1.36 "DISTRIBUTION DATE" means the last Business Day of the
calendar quarter ending not less than 30 days following the Newco Cash Payment
Deadline and the last Business Day of each calendar quarter thereafter, through
and including the Final Distribution Date.

1.1.37 "DISTRIBUTION RECORD DATE" means the close of business on the
Business Day immediately preceding the Effective Date.

1.1.38 "DOCUMENT REVIEWING CENTERS" means (a) Scott, Douglass, Luton
& McConnico, L.L.P., 600 Congress, #1500, Austin, Texas 78701; (b) King &
Pennington, L.L.P., 3100 South Tower, Pennzoil Plaza, 711 Louisiana Street,
Houston, Texas 77002; (c) Jones, Day, Reavis & Pogue, 77 West Wacker, Chicago,
Illinois 60601-1692; (d) Grant Geophysical, Inc., 16850 Park Row, Houston,
Texas 77084 and (e) Young, Conaway, Stargatt & Taylor, Rodney Square North,
11th Floor, P.O. Box 391, Wilmington Delaware 19899-0391.

1.1.39 "EALP" means Elliott Associates, L.P., a Delaware limited
partnership.

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<PAGE> 90
1.1.40 "EFFECTIVE DATE" means a Business Day, as determined by the
EALP and the Debtor, after all conditions to the Effective Date set forth in
Section 9.2 have been satisfied or waived (if available) pursuant to and
subject to Sections 9.3 and 9.4.

1.1.41 "ELIGIBLE CLASS 5 CLAIM HOLDER" means any holder of an Allowed
Class 5 Claim as of the Effective Date.

1.1.42 "EQUIPMENT PURCHASE OPTIONS" means, collectively, (a) the
Macha Purchase Options, (b) the Green Tree Purchase Option, (c) the Forum
Financial Purchase Option and (d) the Winthrup Resources Purchase Option.

1.1.43 "ESTATE" means the estate created for the Debtor in its
Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.

1.1.44 "FILE," "FILED" OR "FILING" means file, filed or filing with
the Bankruptcy Court in the Chapter 11 Case.

1.1.45 "FINAL DISTRIBUTION DATE" means the date the Disbursing Agent
makes a final distribution to holders of Allowed Claims and Interests as
provided in Articles VII and VIII below, which shall be the first Distribution
Date occurring after the date all Disputed Claims have been resolved by Final
Order.

1.1.46 "FINAL ORDER" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction, as entered on the docket in
the Chapter 11 Case, which has not been reversed, stayed, modified or amended,
and as to which the time to appeal or seek certiorari has expired, and no
appeal or petition for certiorari has been timely taken, or as to which any
appeal that has been or may be taken or any petition for certiorari that has
been or may be filed has been dismissed or resolved by the highest court to
which the order or judgment was appealed or from which certiorari was sought.

1.1.47 "FOOTHILL" means Foothill Capital Corporation, a California
corporation.

1.1.48 "FOOTHILL CLAIM" means, collectively, all of the Claims of
Foothill, but excluding any DIP Financing Facility Claims.

1.1.49 "FORUM FINANCIAL PURCHASE OPTION" means the option of the
Debtor to purchase assets leased to the Debtor pursuant to that certain
Amendment to Master Lease Agreement No. 3300 with Forum Financial Group, Inc.,
on the terms and conditions set forth therein, which was approved by the
Bankruptcy Court prior to Confirmation; provided, however, that EALP or Newco
shall pay any amounts required to be paid to Forum Financial Group, Inc. to the
extent that the Equipment Purchase Option exceeds what the Debtor would be
required to pay on account of Forum's Secured Claim or required secured
financing payments.

1.1.50 "GECC" means General Electric Capital Corporation.

1.1.51 "GECC LEASE ASSUMPTION ORDER" means the Joint Stipulation and
Agreed Order Authorizing Assumption of Master Lease Agreement with GECC as
Lessor and Grant Geophysical, Inc. as Lessee, Approving Sublease to 3-D
Geophysical, Inc. and Providing for Payment of Arrearages and Additional Rent
to Cure Lease, which was entered by the Bankruptcy Court on May 27, 1997.

1.1.52 "GENERAL UNSECURED CLAIM" means any Claim which is not an
Administrative Claim, Priority Claim, Priority Tax Claim, Subordinated Claim or
Secured Claim.

1.1.53 "GGI" means the Debtor on and after the Effective Date.

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<PAGE> 91
1.1.54 "GREEN TREE PURCHASE OPTION" means the option of the Debtor to
purchase assets leased to the Debtor pursuant to that certain Lease With Green
Tree Vendor Services Corporation, on the terms and conditions set forth
therein, which was approved by the Bankruptcy Court prior to Confirmation.

1.1.55 "IMPAIRED . . ." means, when used with reference to a Claim or
Interest, a Claim or Interest that is impaired within the meaning of section
1124 of the Bankruptcy Code.

1.1.56 "INTEREST" means, collectively, the rights of holders of
Capital Stock, including redemption rights, dividend rights and liquidation
preferences.

1.1.57 "MACHA PURCHASE OPTIONS" means the options of the Debtor to
purchase the equipment leased to the Debtor pursuant to that certain Master
Equipment Purchase Agreement between the Debtor and Macha Equipment Corporation
and that certain Master Equipment Lease Agreement between the Debtor and Macha
International, Inc., on the terms and conditions set forth therein, which were
approved by the Bankruptcy Court prior to Confirmation.

1.1.58 "MASTER BALLOTS" means the master ballots accompanying the
Disclosure Statement upon which the acceptance or rejection of the Plan by
holders of Impaired Claims and Interests shall be indicated in accordance with
the Voting Instructions.

1.1.59 "NEWCO" means a corporation incorporated under the laws of
the State of Delaware formed and controlled by EALP, in which substantially all
of the assets of the Debtor shall be vested, and to which certain explicitly
specified liabilities of the Debtor shall be assigned, pursuant to Article 5
and the Newco Asset Purchase Agreement.

1.1.60 "NEWCO ASSET PURCHASE AGREEMENT" means that certain Asset
Purchase Agreement by and between the Debtor and Newco, a copy of which is
appended hereto as Exhibit A.

1.1.61 "NEWCO ASSET PURCHASE PROCEEDS" means $47.5 million in Cash to
be paid to GGI pursuant to Section 5.1.1.4 and the Newco Asset Purchase
Agreement.

1.1.62 "NEWCO BYLAWS" means the Bylaws of Newco, which shall be
substantially in the form set forth in Exhibit C.

1.1.63 "NEWCO CASH PAYMENT DEADLINE" means the earlier of (a) the
Rights Expiration Date and (b) December 31, 1997.

1.1.64 "NEWCO CERTIFICATE OF INCORPORATION" means the Certificate of
Incorporation of Newco, which shall be in substantially the form set forth in
Exhibit B.

1.1.65 "NEWCO COMMON STOCK" means the 9,737,500 shares of Common
Stock of Newco to be issued and outstanding (including treasury stock)
immediately after the Effective Date, which shares shall be authorized, fully
prepaid and nonassessable, pursuant to the Newco Certificate of Incorporation.

1.1.66 "NEWCO COMMON STOCK REGISTRATION RIGHTS AGREEMENT" means that
certain agreement to be entered into on the Effective Date by Newco and EALP or
an affiliate of EALP designated by EALP, which shall be substantially in the
form set forth in Exhibit E.

1.1.67 "NEWCO CREDIT FACILITY" means the facility providing for not
less than $5 million in working capital to be provided to Newco pursuant to the
terms and conditions of the Newco Credit Facility Agreement.

1.1.68 "NEWCO CREDIT FACILITY AGREEMENT" means the agreement to be
entered into on the Effective Date by and between Newco and EALP or a third
party acceptable to EALP, pursuant to which

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<PAGE> 92
EALP or such third party will provide Newco with the Newco Credit Facility on
terms and conditions mutually acceptable to EALP and Newco.

1.1.69 "NEWCO CREDIT FACILITY DOCUMENTS" means the Newco Credit
Facility Agreement and all documents executed in connection therewith.

1.1.70 "NYNEX" means Nynex Credit Corporation.

1.1.71 "NYNEX LEASE ASSUMPTION ORDER" means the Stipulation Assuming
Lease, Providing Adequate Protection and Adequate Assurance of Future
Performance and Modifying Automatic Stay, which was entered by the Bankruptcy
Court on May 27, 1997.

1.1.72 "OFFICIAL COMMITTEE" means the Official Committee of Unsecured
Creditors appointed in the Chapter 11 Case pursuant to section 1102 of the
Bankruptcy Code or any successor appointed by the Official Committee to
administer the distributions as provided in the Plan.

1.1.73 "OLD $2.4375 PREFERRED STOCK" means the $2.4375 Convertible
Exchangeable Preferred Stock issued by the Debtor and outstanding immediately
prior to the Effective Date.

1.1.74 "OLD COMMON STOCK" means the common stock issued by the Debtor
and outstanding immediately prior to the Effective Date.

1.1.75 "OLD JUNIOR PREFERRED STOCK" means the Junior Preferred Stock
issued by the Debtor and outstanding immediately prior to the Effective Date.

1.1.76 "OLD PREFERRED STOCK" means, collectively, the Old $2.4375
Preferred Stock and Old Junior Preferred Stock.

1.1.77 "OLD SERIAL PREFERRED STOCK" means the Serial Preferred Stock
authorized but unissued by the Debtor immediately prior to the Effective Date.

1.1.78 "OLD SERIES A PREFERRED STOCK" means the Series A Convertible
Preferred Stock authorized but unissued by the Debtor immediately prior to the
Effective Date.

1.1.79 "OTHER IDENTIFIED SECURED CLAIMS" means, collectively, the
Secured Claims against the Debtor held by Input/Output, Inc., Madeleine, L.L.C.
and Fairfield Industries, Inc.

1.1.80 "OYO" means Oyo Geospace Corporation.

1.1.81 "OYO OBLIGATIONS" means the obligations of the Debtor to Oyo
pursuant to the Stipulation and Order Concerning Adequate Protection and
Related Matters for Secured Claim of Oyo Geospace Corporation, which was
entered by the Bankruptcy Court on April 29, 1997.

1.1.82 "PETITION DATE" means December 6, 1996.

1.1.83 "PLAN" means this chapter 11 plan of reorganization of Grant
Geophysical, Inc. and all Exhibits annexed hereto or referenced herein, as the
same may be amended, modified or supplemented.

1.1.84 "POSTPETITION SECURED CLAIMS" means the Claims of (a) Leica,
Inc., (b) Macha Equipment Corporation other than Claims arising out of the
exercise of the Macha Purchase Options and (c) GeoSpace Canada Inc.

1.1.85 "PRIORITY CLAIM" means a Claim that is entitled to priority in
payment pursuant to section 507(a) of the Bankruptcy Code and that is not an
Administrative Claim or a Priority Tax Claim.

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<PAGE> 93
1.1.86 "PRIORITY TAX CLAIM" means a Claim of a governmental unit that
is entitled to priority in payment pursuant to section 507(a)(8) of the
Bankruptcy Code.

1.1.87 "PROFESSIONAL" means any professional employed in the Chapter
11 Case pursuant to sections 327 or 1103 of the Bankruptcy Code and the
professionals seeking compensation or reimbursement of expenses in connection
with the Chapter 11 Case pursuant to section 503(b)(4) of the Bankruptcy Code.

1.1.88 "PRO RATA" means:

1.1.88.1 so that with respect to an Allowed Class 5
Claim, the ratio of (i)(a) the amount of the Cash to be distributed on
account of a particular Allowed Class 5 Claim to (b) the amount of
such Allowed Class 5 Claim, is the same as the ratio of (ii)(a) the
amount of the Cash to be distributed on account of all Allowed Class 5
Claims to (b) the aggregate amount of Allowed Class 5 Claims;

1.1.88.2 so that, with respect to an Eligible Class
5 Claim Holder, the ratio of (i)(a) the number of Class 5 Rights to be
distributed on account of a particular Eligible Class 5 Claim Holder's
Claim to (b) the amount of such Eligible Class 5 Claim Holder's Claim,
is the same as the ratio of (ii)(a) the number of Class 5 Rights to be
distributed on account of all Eligible Class 5 Claim Holders' Claims
to (b) the aggregate amount of Eligible Class 5 Claim Holders' Claims.

1.1.88.3 so that, with respect to an Allowed Class 7
Interest, the ratio of (i)(a) the number of Class 7 Rights to be
distributed on account of a particular Allowed Class 7 Interest to (b)
the amount of such Allowed Class 7 Interest, is the same as the ratio
of (ii)(a) the number of Class 7 Rights to be distributed on account
of all Allowed Class 7 Interests to (b) the number of all Allowed
Class 7 Interests;

1.1.88.4 so that, with respect to an Allowed Class 8
Interest, the ratio of (i)(a) the number of Class 8 Rights to be
distributed on account of a particular Allowed Class 8 Interest to (b)
the amount of such Allowed Class 8 Interest, is the same as the ratio
of (ii)(a) the number of Class 8 Rights to be distributed on account
of all Allowed Class 8 Interests to (b) the number of all Allowed
Class 8 Interests;

1.1.88.5 when used with reference to distributions
of the Reorganization Investment Yield, the ratio, as of the date upon
which the distribution of the Reorganization Investment Yield is made,
of (i) (a) the portion of the Reorganization Investment Yield to be
distributed to the Holder of an Allowed Claim pursuant to Articles VII
and VIII of the Plan to (b) the aggregate amount of the Reorganization
Investment Yield is the same as the ratio of (ii) (a) the Allowed
Amount of such Claim to (b) the sum of the aggregate amount of the
Claims which are Disputed and the aggregate amount of Claims on
account of which distributions are undeliverable.

1.1.89 "REGISTRATION STATEMENT" means that certain registration
statement relating to the Rights and the stock available to be purchased
thereunder, which will be filed by Newco or any successor to Newco with the
United States Securities and Exchange Commission pursuant to Section 5 of the
Securities Act.

1.1.90 "REORGANIZATION INVESTMENT YIELD" means the net yield earned
by the Disbursing Agent from the investment of Cash held pending distribution
pursuant to the Plan, which investment shall be in a manner mutually acceptable
to GGI and the Official Committee.

1.1.91 "RIGHTS" means the uncertificated, nontransferable rights,
exercisable to purchase, in the aggregate, 4,750,000 shares of Newco Common
Stock for an aggregate purchase price of $23,750,000 ($5.00 per share) or
shares of stock of any successor to Newco on economically equivalent terms.

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<PAGE> 94
1.1.92 "RIGHTS AGENT" means any entity designated by Newco or any
successor to Newco to act as Newco's or such successor's agent in connection
with the Rights Offering.

1.1.93 "RIGHTS EXERCISE NOTICE" means the form of exercise notice
which will provide for the exercise of the Rights by each holder thereof.

1.1.94 "RIGHTS EXERCISE PERIOD" means the period commencing as soon
as is practicable following the later of the (a) the Effective Date and (b) the
effective date of the Registration Statement, and concluding on the Rights
Expiration Date.

1.1.95 "RIGHTS EXPIRATION DATE" means the date occurring 45 days
after the commencement of the Rights Exercise Period.

1.1.96 "RIGHTS OFFERING" means the issuance of Rights to holders of
certain Claims and Interests as set forth under Section 5.3.

1.1.97 "RIGHTS OFFERING COMMON STOCK" means the stock that is subject
to purchase upon the exercise of the Rights.

1.1.98 "SCHEDULES" means, collectively, the: (a) schedules of assets
and liabilities and the statements of financial affairs, if any, Filed by the
Debtor in the Chapter 11 Case, pursuant to section 521 of the Bankruptcy Code
and the Bankruptcy Rules; and (b) schedule of unliquidated, disputed or
contingent Claims, as required by any local rule of the Bankruptcy Court, as
such requirements may be modified by any order of the Bankruptcy Court.

1.1.99 "SCRIP AGREEMENT" means the Scrip Agreement, in substantially
the form appended hereto as Exhibit H, to be entered into by and between Newco
and each Eligible Class 5 Claim Holder who elects to receive a Credit under the
Plan.

1.1.100 "SECURED CLAIM" means a Claim that is secured by a lien on
property in which the Estate has an interest or that is subject to setoff under
section 553 of the Bankruptcy Code, to the extent of the value of the Claim
holder's interest in the Estate's interest in such property or to the extent of
the amount subject to setoff, as applicable, as determined pursuant to section
506(a) of the Bankruptcy Code.

1.1.101 "SECURITIES ACT" means the Securities Act of 1933, 15 U.S.C.
Sections 77a-77aa, as now in effect or hereafter amended.

1.1.102 "STIPULATION OF AMOUNT AND NATURE OF CLAIM" means a
stipulation or other document that the Debtor (or after the Effective Date the
Official Committee) has sent or may send to a holder of a Claim that states the
Debtor's or Official Committee's position regarding the amount or nature of the
holder's Claim and requests such holder's agreement with the Debtor's or
Official Committee's position.

1.1.103 "SUBORDINATED CLAIM" means (a) a Claim for any fine, penalty
or forfeiture, or for multiple, exemplary or punitive damages, to the extent
that such claim does not constitute compensation for the Claim holder's actual
pecuniary loss, (b) any Claim by any subsidiary or Affiliate of the Debtor, (c)
claims subordinated pursuant to Section 8.4 and (d) any Claim subordinated
pursuant to section 510 of the Bankruptcy Code by an order of the Bankruptcy
Court.

1.1.104 "TIAA" means the Teachers Insurance and Annuity Association of
America.

1.1.105 "TIAA CLAIM" means, collectively, the Claims of the TIAA.

1.1.106 "TIAA MORTGAGE" means that each mortgage executed by the Debt
or in favor of TIAA.

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<PAGE> 95
1.1.107 "THIRD-PARTY DISBURSING AGENT" means any entity designated by
the Debtor or GGI to act as a Disbursing Agent. The Disbursing Agent for Class
5 shall be designated by the Official Committee.

1.1.108 "UNIMPAIRED CLAIM" means a Claim that is not impaired within
the meaning of section 1124 of the Bankruptcy Code.

1.1.109 "UNSECURED CREDITORS TRUST" means the trust to be established
pursuant to the GGI Creditors Trust and Disbursement Agreement dated as of the
Confirmation Date by and among GGI, EALP and the Official Committee and the
Trustee named therein, which will be in form and substance satisfactory to the
Debtor and the Official Committee and which will be approved by the Bankruptcy
Court pursuant to the Confirmation Order.

1.1.110 "VOTING INSTRUCTIONS" means the instructions for voting on the
Plan contained in the section of the Disclosure Statement entitled "Voting and
Confirmation of the Plan -- Voting Procedures and Requirements" and
accompanying the Ballots and the Master Ballots.

1.1.111 "WESTGATE" means Westgate International, L.P.

1.1.112 "WINTHRUP RESOURCES PURCHASE OPTION" means the option of the
Debtor to purchase assets leased to the Debtor pursuant to that certain New
Lease Agreement with Winthrup Resources Corporation, on the terms and
conditions set forth therein, which was approved by the Bankruptcy Court prior
to Confirmation.

1.2 RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW

1.2.1 RULES OF INTERPRETATION

For purposes of the Plan: (a) whenever from the context it is
appropriate, each term, whether stated in the singular or the plural, shall
include both the singular and the plural; (b) any reference in the Plan to a
contract, instrument, release, indenture or other agreement or document being
in a particular form or on particular terms and conditions means that such
document shall be substantially in such form or substantially on such terms and
conditions; (c) any reference in the Plan to an existing document or Exhibit
Filed or to be Filed means such document or Exhibit, as it may have been or may
be amended, modified or supplemented; (d) if the Plan's description of the
terms of an Exhibit is inconsistent with the terms of the Exhibit, the terms of
the Exhibit shall control; (e) unless otherwise specified, all references in
the Plan to Articles, Sections, Clauses and Exhibits are references to
Articles, Sections, Clauses and Exhibits of or to the Plan; (f) the words
"herein" and "hereto" refer to the Plan in its entirety rather than to a
particular portion of the Plan; (g) captions and headings to Articles and
Sections are inserted for convenience of reference only and are not intended to
be a part of or to affect the interpretation of the Plan; and (h) the rules of
construction set forth in section 102 of the Bankruptcy Code shall apply, to
the extent such rules are not inconsistent with any other provision in this
Section 1.2.1, provided however that no documents or Exhibits to the Plan shall
be modified after the Confirmation Date except with the written consent of the
Official Committee, which shall not be unreasonably withheld.

1.2.2 COMPUTATION OF TIME

In computing any period of time prescribed or allowed by the Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply.

1.2.3 GOVERNING LAW

Except to the extent that the Bankruptcy Code or Bankruptcy Rules are
applicable, and subject to the provisions of any contract, instrument, release,
indenture or other agreement or document entered into

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<PAGE> 96
in connection with the Plan, the rights and obligations arising under the Plan
shall be governed by, and construed and enforced in accordance with, the laws
of the State of Delaware, without giving effect to the principles of conflicts
of law thereof.

ARTICLE II.

UNCLASSIFIED CLAIMS

In accordance with section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims, as described below in Article
II, have not been classified.

2.1 ADMINISTRATIVE CLAIMS

2.1.1 IN GENERAL

Subject to the provisions of Sections 2.1.2 and 2.1.3 below with
respect to the Administrative Claims bar date and Professionals, respectively,
as soon as practicable after the Newco Cash Payment Deadline, each holder of an
Allowed Administrative Claim shall receive Cash equal to the amount of such
Allowed Administrative Claim, unless such holder and the Debtor or GGI agree to
other terms or a Final Order of the Bankruptcy Court provides for other terms;
provided, however, that Allowed Administrative Claims representing obligations
incurred in the ordinary course of business, including Administrative Claims of
governmental units for taxes, shall be assigned to Newco on the Effective Date
pursuant to Section 5.1.1.2 and the Newco Asset Purchase Agreement, and paid,
performed or settled by Newco when due in accordance with the terms and
conditions of the particular agreements governing such obligations, without the
need for holders of such Claims to comply with Section 2.1.2 below.

2.1.2 BAR DATE FOR ADMINISTRATIVE CLAIMS

Requests for payment of Administrative Claims must be Filed and served
on the Debtor or GGI no later than 30 days after the Effective Date. Holders
of Administrative Claims that are required to File and serve a request for
payment of such Claims and that do not File and serve a request by such date
shall be forever barred from asserting such Claims against the Debtor, GGI or
their respective property. Objections to such requests must be Filed and
served on GGI and the requesting party no later than 30 days after the date on
which the applicable request for payment was Filed.

2.1.3 PROFESSIONALS

Professionals or other entities requesting compensation or
reimbursement of expenses pursuant to sections 327, 328, 330, 331, 503(b) or
1103 of the Bankruptcy Code for services rendered before the Effective Date
(including compensation requested pursuant to section 503(b)(4) of the
Bankruptcy Code by any Professional or other entity for making a substantial
contribution in the Chapter 11 Case) shall File and serve on GGI, the Official
Committee, counsel for GGI and counsel for the Official Committee an
application for final allowance of compensation and reimbursement of expenses
no later than 30 days after the Effective Date, unless such Filing and service
deadline is extended by the Bankruptcy Court. Objections to applications of
Professionals or other entities for compensation or reimbursement of expenses
must be Filed and served on GGI, the Official Committee, counsel for GGI and
Counsel for the Official Committee, and the requesting Professional or other
entity no later than 30 days after the date on which the applicable application
for compensation or reimbursement was Filed.

2.2 PRIORITY TAX CLAIMS

Pursuant to section 1129(a)(9)(C) of the Bankruptcy Code, unless
otherwise agreed by the holder of a Priority Tax Claim and the Debtor or GGI,
as soon as practicable after the Newco Cash Payment

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<PAGE> 97
Deadline, each holder of an Allowed Priority Tax Claim shall receive Cash equal
to the amount of such Allowed Priority Tax Claim in full and final satisfaction
of such Claims.

2.3 DIP FINANCING FACILITY CLAIMS

Notwithstanding anything else contained in the Plan or the
Confirmation Order, or any amendments thereto, and notwithstanding the
confirmation of the Plan, the holder of the DIP Financing Facility Claim, which
is a secured Administrative Claim, shall be entitled to all of the liens,
protections, benefits, and priorities granted under the DIP Financing Orders.
All such liens, protections, benefits, and priorities shall continue until the
DIP Financing Facility Claim is indefeasibly paid in full, which secured
Administrative Claim, by reason of the DIP Financing Orders, (a) is allowed and
payable in its entirety, (b) includes principal, accrued but unpaid interest
and attorneys' fees, costs, and expenses through the date of full and
indefeasible payment of the DIP Financing Facility Claim (subject to the terms
and conditions in the DIP Financing Orders regarding attorneys' fees and
expenses), and (c) is secured by reason of the first, valid, prior, and
perfected liens and security interest granted under, or in connection with the
Foothill Loan Documents (as defined in the DIP Financing Orders) and confirmed
by the DIP Financing Orders (except as otherwise provided under the DIP
Financing Orders and the Ratification and Amendment Agreement, as defined
therein.) All payments of the DIP Financing Facility Claim through the
Effective Date shall be deemed to have been indefeasibly paid. All amounts
owing with respect to the DIP Financing Facility Claim as of the Effective Date
shall be paid in full in Cash on the Effective Date.

2.4 POST-PETITION SECURED CLAIMS

As soon as practicable after the Newco Cash Payment Deadline, each
holder of a Postpetition Secured Claim shall receive Cash equal to the amount
of such Claims, in full and final satisfaction of such Claim.

2.5 EXERCISE OF EQUIPMENT PURCHASE OPTIONS

As soon as practicable after the Newco Cash Payment Deadline, GGI
shall exercise the Equipment Purchase Options. All payments required to be
made upon exercise of the Equipment Purchase Options shall be made by GGI.
Title to all assets purchased by GGI pursuant to the Equipment Purchase Options
shall automatically be transferred to, and shall vest in, Newco, pursuant to
Section 5.1.1.1 and the Newco Asset Purchase Agreement, without any further
action by the Debtor, GGI, Newco or any other party.

ARTICLE III.

CLASSIFICATION AND TREATMENT OF
CLASSIFIED CLAIMS AND INTERESTS

All Claims and Interests, except Administrative Claims and Priority
Tax Claims, are placed in the Classes described below. A Claim or Interest is
classified in a particular Class only to the extent that the Claim or Interest
qualifies within the description of that Class and is classified in other
Classes only to the extent that any remainder of the Claim or Interest
qualifies within the description of such other Classes. A Claim or Interest is
also classified in a particular Class only to the extent that such Claim or
Interest is an Allowed Claim or Allowed Interest in that Class and has not been
paid, released or otherwise satisfied prior to the Effective Date.

3.1 SUMMARY
<TABLE>
<CAPTION>
<S> <C>
Class Status
Class 1 - Priority Claims Unimpaired - not entitled to vote
Class 2 - Foothill Claim Unimpaired - not entitled to vote
</TABLE>

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<PAGE> 98
<TABLE>
<CAPTION>
Class Status
<S> <C>
Class 3 - Assigned Secured Claims Impaired - entitled to vote

Class 4 - Other Secured Claims Unimpaired - not entitled to vote

Class 5 - General Unsecured Claims Over Impaired - entitled to vote
$500

Class 6 - General Unsecured Claims of Impaired - entitled to vote
$500 and Under

Class 7 - Interests of holders of Old Impaired - entitled to vote
$2.4375 Preferred Stock

Class 8 - Interests of holders of Old Impaired - entitled to vote
Junior Preferred Stock
Class 9 - Interests of holders of Old Impaired - deemed to have rejected the
Common Stock Plan

Class 10 - Interests in the Debtor Not Impaired - deemed to have rejected the
Otherwise Classified Plan

Class 11 - Subordinated Unsecured Claims Impaired - deemed to have rejected the
Plan
</TABLE>

3.2 CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

3.2.1 CLASS 1 - PRIORITY CLAIMS

Classification: Class 1 consists of all Priority Claims.

Treatment: As soon as practicable after the Newco Cash
Payment Deadline, each holder of an Allowed Class 1 Claim shall
receive Cash equal to the amount of such Claim, unless the holder of
such Claim and GGI agree to a different treatment. Any Allowed Class
1 Claim not due and owing on the Newco Cash Payment Deadline will be
paid in full in Cash by GGI when such Claim becomes due and owing.

Voting: Class 1 is unimpaired and the holders of Claims in
Class 1 are not entitled to vote to accept or reject the Plan.

3.2.2 CLASS 2 - FOOTHILL CLAIMS

Classification: Class 2 consists of all Foothill Claims.

Treatment: All payments of the Foothill Claim made prior to
the Effective Date shall be deemed to be paid indefeasibly. Any
portion of the Foothill Claim unpaid as of the Effective Date shall be
paid in full in Cash on the Effective Date. Notwithstanding anything
else contained in the Plan or the Confirmation Order, or any
amendments thereto, and notwithstanding the confirmation of the Plan,
Foothill, as the holder of the Foothill Claim, shall be entitled to
all of the liens, protections, benefits, and priorities granted to it
or confirmed by the DIP Financing Orders. All such liens,
protections, benefits, and priorities granted to Foothill in the DIP
Financing Orders shall continue until the Foothill Claim is
indefeasibly paid in full, which Claim, by reason of the DIP Financing
Orders (i) is payable in its entirety, (ii) includes unpaid principal
and accrued but unpaid interest to the date of indefeasible payment of
the Foothill Claim, and (iii) is secured by reason of the first,
valid, prior, and perfected liens and security interest granted under
or in

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<PAGE> 99
connection with, the Foothill Loan Documents (as defined in the DIP
Financing Orders) and confirmed by the DIP Financing Orders (except as
otherwise provided under the DIP Financing Orders and the Ratification
and Amendment Agreement, as defined therein).

Voting: Class 2 is unimpaired and the holder of Claims in
Class 2 is not entitled to vote to accept or reject the Plan.

3.2.3 CLASS 3 - ASSIGNED SECURED CLAIMS

Classification: Class 3 consists of the TIAA Claim.

Treatment: The Debtor's liabilities arising out the TIAA
Claim shall be assigned to and assumed by Newco pursuant to Section
5.1.1.2 and the Newco Asset Purchase Agreement, on the terms and
conditions, set forth below:

3.2.3.1 TIAA Claim. The holder of the TIAA Claim shall
receive, in full and final satisfaction of such Claim, (a) as soon as
practicable after the Newco Cash Payment Deadline, Cash equal to the
aggregate amount of prepetition and postpetition arrearages (exclusive
of any penalties, default interest or other charges) from Newco and
(b) deferred Cash payments by Newco equal to the amount of principal
and interest due under the TIAA Mortgage. TIAA shall retain the liens
securing the TIAA Claim to secure such deferred Cash payments, and
shall have no claims against GGI or the funds paid by Newco pursuant
to Section 5.1.1.4.

Voting: Class 3 is impaired and the holders of Allowed Claims
in Class 3 are entitled to vote to accept or reject the Plan.

3.2.4 CLASS 4 - OTHER IDENTIFIED SECURED CLAIMS

Classification: Class 4 consists of Other Identified Secured
Claims.

Treatment: As soon as practicable after the Newco Cash
Payment Deadline, each holder of an Allowed Class 4 Claim shall
receive Cash in an amount equal to such Allowed Class 4 Claim.
Allowed Class 4 Claims shall include all interest, fees, and expenses
accrued under the respective contractual provisions for each such
Claim through the date such Claim is actually paid. Other Identified
Secured Claims are the following:

3.2.4.1 The Input/Output Claim. The holder of the Claims of
Input/Output, Inc. shall receive, as soon as practicable after the
Newco Cash Payment Deadline, Cash equal to the allowed amount of such
Claims (which do not include obligations under leases of Input/Output
designated for assumption or rejection under the Plan.)

3.2.4.2 The Madeleine Claim. The holder of the Claims of
Madeleine, L.L.C. shall receive as soon as practicable after the Newco
Cash Payment Deadline, Cash equal to the allowed amount of such
Claims.

3.2.4.3 The Fairfield Claim. The holder of the Claims of
Fairfield Industries, Inc., shall receive, as soon as practicable
after the Newco Cash Payment Deadline, Cash equal to $168,175 in full
and final satisfaction of such Claims.

Voting: Class 4 is unimpaired and the holders of Claims in
Class 4 are not entitled to vote to accept or reject the Plan.

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<PAGE> 100
3.2.5 CLASS 5 - GENERAL UNSECURED CLAIMS OVER $500

Classification: Class 5 consists of all General Unsecured
Claims that exceed $500 in amount.

Treatment:

3.2.5.1 Rights Offering. On the commencement of the Rights
Exercise Period, and subject to the provisions of Section 5.3, each
Eligible Class 5 Claim Holder shall receive its Pro Rata share of the
Class 5 Rights. Any Class 5 Rights distributed pursuant to this
Section 3.2.5.1 must be exercised in accordance with the provisions of
Section 5.3. Holders of Allowed Class 5 Claims that are not Eligible
Class 5 Claim Holders shall not receive any Rights.

3.2.5.2 Class 5 Cash Distribution. As soon as practicable
after the Newco Cash Payment Deadline, each holder of an Allowed Class
5 Claim, in full and final satisfaction of such Claim, shall receive a
Pro Rata share of the Class 5 Cash Distribution.

3.2.5.3 Claim Reduction Option. Any holder of an Allowed
Class 5 Claim may elect on its Ballot to reduce all of such holder's
Claims in the aggregate to $500 and receive the same treatment as
Allowed Claims in Class 6, which means that such holder shall not
receive any Class 5 Rights. Any creditor electing the treatment
provided for in Class 6 shall be deemed to have aggregated all of such
holder's Claims into a single Claim.

3.2.5.4 Credit Option. Any Eligible Class 5 Claim Holder may
elect on its Ballot to receive Credits in the amount of such holder's
Allowed Class 5 Claim in lieu of the Class 5 Cash Distribution;
provided however that the aggregate amount of Credits shall not exceed
$2 million. If the aggregate amount of Allowed Claims of Eligible
Class 5 Claim Holders electing the Credits exceeds $2 million,
Eligible Class 5 Claim Holders that elect to receive the Credits shall
receive a proportionate share of Credits and the Class 5 Cash
Distribution (based on the amount of Claim not satisfied by the
Credits). The Class 5 Cash Distribution that would have been
distributed to Eligible Class 5 Claim Holders that elect to receive
Credits, if they had not elected to receive Credits, shall be
distributed to Newco.

Voting: Class 5 is impaired and the holders of Allowed Class
5 Claims are entitled to vote to accept or reject the Plan.

3.2.6 CLASS 6 - GENERAL UNSECURED CLAIMS OF $500 OR LESS

Classification: Class 6 consists of all General Unsecured
Claims that are $500 or less in amount, provided that no Claims that
are the result of a split of a Claim amongst different holders shall
be classified in Class 6 and all such Claims shall be classified in
Class 5.

Treatment: As soon as practicable after the Newco Cash
Payment Deadline, each holder of an Allowed Class 6 Claim shall
receive, the full amount of such Allowed Claim in Cash.

3.2.7 CLASS 7 - INTERESTS OF HOLDERS OF OLD $2.4375 PREFERRED STOCK

Classification: Class 7 consists of the Interests of holders
of Old $2.4375 Preferred Stock.

Treatment: On the commencement of the Rights Exercise Period,
and subject to the provisions of Section 5.3, each holder of an
Allowed Class 7 Interest shall receive, in full and final satisfaction
of such Interest, a Pro Rata share of the Class 7 Rights. Any Class 7
Rights distributed pursuant to this Section 3.2.7 must be exercised in
accordance with the provisions of

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<PAGE> 101
Section 5.3. EALP, Westgate and any of their respective affiliates
that hold Allowed Class 7 Interests shall exercise the Rights
distributed to such holders.

Voting: Class 7 is impaired and the holders of Allowed Class
7 Interests are entitled to vote to accept or reject the Plan.

3.2.8 CLASS 8 - INTERESTS OF HOLDERS OF OLD JUNIOR PREFERRED STOCK

Classification: Class 8 consists of the Interests of holders
of Old Junior Preferred Stock.

Treatment: On the commencement of the Rights Exercise Period,
and subject to the provisions of Section 5.3, each holder of an
Allowed Class 8 Interest shall receive, in full and final satisfaction
of such Interest, a Pro Rata share of the Class 8 Rights. Any Class 8
Rights distributed pursuant to this Section 3.2.8 must be exercised in
accordance with the provisions of Section 5.3.

Voting: Class 8 is impaired and the holders of Allowed Class
8 Interests are entitled to vote to accept or reject the Plan.

3.2.9 CLASS 9 - INTERESTS OF HOLDERS OF OLD COMMON STOCK

Classification: Class 9 consists of the Interests of holders
of Old Common Stock.

Treatment: The holders of Class 9 Interests shall not receive
or retain any property under the Plan on account of such Interests.

Voting: Class 9 is impaired and because no distribution of
property will be made to holders of Class 9 Interests, nor will such
holders retain any property, Class 9 is deemed to not have accepted
the Plan.

3.2.10 CLASS 10 - INTERESTS IN THE DEBTOR NOT OTHERWISE CLASSIFIED

Classification: Class 10 consists of the Interests in the
Debtor that are not otherwise classified in Classes 7, 8 or 9,
including, without limitation, Old Series A Preferred Stock, Old
Serial Preferred Stock and all options, warrants or any other right to
purchase or receive Old Common Stock or Old Preferred Stock.

Treatment: The holders of Class 10 Interests shall not
receive or retain any property under the Plan on account of such
Interests.

Voting: Class 10 is impaired and because no distribution of
property will be made to holders of Class 10 Interests, nor will such
holders retain any property, Class 10 is deemed not to have accepted
the Plan.

3.2.11 CLASS 11 - SUBORDINATED CLAIMS

Classification: Class 11 consists of all Subordinated Claims.

Treatment: The holders of Class 11 Claims shall not receive
or retain any property under the Plan on account of such Claims.

Voting: Class 11 is impaired and because no distribution of
property will be made to holders of Class 11 Claims, nor will such
holders retain any property, Class 11 is deemed to have rejected the
Plan.

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3.3 SPECIAL PROVISION REGARDING UNIMPAIRED CLAIMS

Except as otherwise provided in the Plan, nothing shall affect the
Debtor's or GGI's rights and legal and equitable defenses in respect of any
Unimpaired Claim, including but not limited to all rights in respect of legal
and equitable defenses to setoffs or recoupments against Unimpaired Claims.

3.4 ACCRUAL OF POSTPETITION INTEREST

No holder of a Priority Tax Claim, a Priority Claim or an Allowed
Claim (other than a holder of an Administrative Claim based on liability
incurred by the Debtor in the ordinary course of business that is entitled to
interest pursuant to the terms and conditions of the agreements giving rise to
such Administrative Claim) will be entitled to any payments or additional
distributions on account of postpetition interest in respect of such Claims.

ARTICLE IV.

ACCEPTANCE OR REJECTION OF THE PLAN

4.1 VOTING CLASSES

Each holder of an Allowed Class 3, 5 or 6 Claim or an Allowed Class 7
or 8 Interest shall be entitled to vote to accept or reject the Plan.

4.2 ACCEPTANCE BY IMPAIRED CLASSES

An Impaired Class of Claims shall have accepted the Plan if (i) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims
actually voting in such Class have voted to accept the Plan and (ii) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of more than one-half in number of the Allowed Claims actually
voting in such Class have voted to accept the Plan. An Impaired Class of
Interests shall have accepted the Plan if the holders (other than any holder
designated under section 1126(e) of the Bankruptcy Code) of at least two-thirds
in amount of the Allowed Interests actually voting in such Class have voted to
accept the Plan.

4.3 PRESUMED ACCEPTANCE OF PLAN

Classes 1, 2 and 4 are unimpaired under the Plan, and, therefore,
conclusively are presumed to have accepted the Plan pursuant to section 1126(f)
of the Bankruptcy Code.

4.4 DEEMED NON-ACCEPTANCE OF PLAN

Holders of Class 11 Claims and Class 9 and 10 Interests shall not
receive or retain any property under the Plan on account of their Claims or
Interests, and therefore, Classes 9, 10 and 11 are deemed not to have accepted
the Plan pursuant to Section 1126(g) of the Bankruptcy Code.

4.5 NON-CONSENSUAL CONFIRMATION

The Proponents will seek Confirmation of the Plan under section
1129(b) of the Bankruptcy Code in view of the deemed non-acceptance by Classes
9, 10 and 11. In the event that any Impaired Class of Claims or Interests does
not accept the Plan in accordance with section 1126 of the Bankruptcy Code, the
Proponents hereby request that the Bankruptcy Court confirm the Plan in
accordance with section 1129(b)

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of the Bankruptcy Code. The Proponents reserve the right to modify the Plan to
the extent, if any, that Confirmation pursuant to section 1129(b) of the
Bankruptcy Code requires modification.

ARTICLE V.

MEANS FOR IMPLEMENTATION OF THE PLAN

5.1 PURCHASE OF DEBTOR'S ASSETS BY NEWCO, ASSUMPTION OF LIABILITIES BY
NEWCO, LIQUIDATION OF GGI

5.1.1 PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES BY NEWCO

5.1.1.1 Purchase of Assets. On the Effective Date, pursuant
to this Section 5.1.1.1 and the Newco Asset Purchase Agreement, all
assets of the Estate other than as specifically set forth on Exhibit D
to the Plan, including without limitation all Cash of the Debtor, any
right of the Debtor to any future credits from any third party, any
assets purchased upon GGI's exercise of the Equipment Purchase Options
and all claims and rights of action not released pursuant to Sections
5.6.1.1 and 5.6.1.2 or retained by GGI pursuant to Section 5.6.1.3,
shall be purchased by, and shall vest in, Newco, free and clear of all
Claims, Interests, liens and charges arising prior to the Effective
Date, other than as specifically set forth in Sections 5.1.1.2 and
5.7. Assets of the Estate listed on Exhibit D shall vest in GGI.

5.1.1.2 Assumption of Liabilities. On the Effective Date,
pursuant to this Section 5.1.1.2 and the Newco Asset Purchase
Agreement, all Assigned Liabilities and all Administrative Claims
representing obligations incurred in the ordinary course of the
Debtor's business shall be assigned to and assumed by Newco. Except
as noted elsewhere in the Plan, no other liabilities of the Estate
shall be assigned to and assumed by Newco.

5.1.1.3 Assignment of Leases and Contracts. Pursuant to
Section 6.2, on the Effective Date, all executory contracts and
unexpired leases listed on Exhibit F shall be assumed and assigned to
Newco.

5.1.1.4 Payment by Newco. Pursuant to this Section 5.1.1.4
and the Newco Asset Purchase Agreement, Newco shall pay GGI
$47,500,000 in Cash, which shall be paid not later than the Newco
Cash Payment Deadline; provided however that Newco shall pay GGI that
portion of such Cash necessary to allow GGI to satisfy its obligations
under Sections 2.3 and 3.2.2 on the Effective Date; provided further
that EALP shall be obligated to make such payments and assume the
liabilities in Section 5.1.1.2 if Newco fails to do so. At the
Confirmation hearing, the Debtor, Newco, EALP, and the Official
Committee shall advise the Bankruptcy Court of the amount of such
funds that shall initially be paid directly to the Unsecured Creditors
Trust on the Newco Cash Payment Deadline.

5.1.2 CERTAIN ASSIGNED LIABILITIES

5.1.2.1 Assignment of GECC Master Lease Agreement.
Notwithstanding anything contained in the Plan, the terms of the GECC
Lease Assumption Order are expressly incorporated herein by reference.
All obligations of the Debtor under the GECC Lease Assumption Order
shall be, on the Effective Date, assigned to Newco pursuant to Section
5.1.1.2 and the Newco Asset Purchase Agreement, and neither the
Debtor, GGI, nor any funds paid by Newco to GGI or the Disbursing
Agent shall be subject to claims arising therefrom.

5.1.2.2 Assignment of Nynex Master Lease Agreement.
Notwithstanding anything contained in the Plan, the terms of the Nynex
Lease Assumption Order are expressly incorporated

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herein by reference. All obligations of the Debtor under the Nynex
Lease Assumption Order shall be, on the Effective Date, assigned to
Newco pursuant to Section 5.1.1.2 and the Newco Asset Purchase
Agreement, and neither the Debtor, GGI, nor any funds paid by Newco to
GGI or the Disbursing Agent shall be subject to claims arising
therefrom.

5.1.2.3 Assignment of the Oyo Obligations. Notwithstanding
anything contained in the Plan, the Oyo Obligations are expressly
incorporated herein by reference shall be, on the Effective Date,
assumed by and assigned to Newco pursuant to Section 5.1.1.2 and the
Newco Asset Purchase Agreement, and neither the Debtor, GGI, nor any
funds paid by Newco to GGI or the Disbursing Agent shall be subject to
claims arising therefrom.

5.1.3 LIQUIDATION OF GGI; FINAL ORDER AND DISSOLUTION

GGI will continue to exist after the Effective Date with only the
powers of corporations under the general corporation law of Delaware that are
necessary to implement the provisions of the Plan relating to (i) distributions
pursuant to Section 7.2, (ii) claim objections pursuant to Section 8.1 or (iii)
such other duties pursuant to the Plan with the agreement of the Official
Committee or as ordered by the Bankruptcy Court; its business purpose will be
to conduct an orderly distribution of the proceeds of the sale of its assets;
it will not engage in new business or incur liabilities except in connection
with the foregoing business purpose. Except as otherwise provided in the Plan
or the Confirmation Order, on and after the Effective Date, all property of the
Estate of the Debtor not vested in or assigned to Newco or released pursuant to
this Plan, and any property acquired by the Debtor or GGI under or in
connection with the Plan, including the right to receive the Newco Asset
Purchase Proceeds, shall vest in GGI. On and after the Effective Date, GGI
shall distribute its assets to holders of Allowed Claims and Interests as set
forth in this Plan (subject to the provisions for distributions in Article VII)
and only the Official Committee may compromise or settle any Claims or
Interests without supervision or approval by the Bankruptcy Court and free of
any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than
restrictions expressly imposed by the Plan or the Confirmation Order. Without
limiting the foregoing, GGI may pay the charges that it incurs on or after the
Effective Date for Professionals' fees, disbursements, expenses or related
support services without application to the Bankruptcy Court upon written
notice to the Committee (any dispute with respect to which shall be resolved by
the Bankruptcy Court). GGI shall not take any actions not contemplated in this
Plan absent the consent of the Official Committee or an order of the Bankruptcy
Court. As soon as practicable after the Final Distribution Date, GGI shall
file a request for entry of a final decree concluding this Chapter 11 Case.
Upon entry of the final decree, GGI shall be deemed dissolved and shall cease
to exist for any purpose without any further corporate action.

5.2 THE RESTRUCTURING TRANSACTIONS

5.2.1 CANCELLATION OF CAPITAL STOCK; SURRENDER OF SECURITIES AND
OTHER DOCUMENTATION

On the Effective Date, the Capital Stock (whether issued and
outstanding or held in the treasury of the Debtor immediately prior to the
Effective Date) shall be deemed to be cancelled, extinguished, retired and of
no further force and effect, in all events without any further action on the
part of the Debtor, GGI, the holders of Capital Stock, EALP, Newco or any other
entity. The holders of such canceled securities and other documentation shall
have no rights arising from or relating to such securities or other
documentation, or the cancellation thereof, except the rights provided pursuant
to the Plan; provided, however, that no distribution under the Plan shall be
made to or on behalf of any holder of any Allowed Claim or Allowed Interest
evidenced by such canceled securities or other documentation unless or until
such securities or documentation are received by the Disbursing Agent pursuant
to Section 7.8 below.

5.2.2 GGI'S OBLIGATIONS UNDER THE PLAN

From and after the Effective Date, GGI will perform the obligations of
the Debtor under the Plan.

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5.2.3 CAPITALIZATION OF NEWCO, ISSUANCE OF SECURITIES AND RELATED
DOCUMENTATION

5.2.3.1 Formation of Newco. On the Effective Date, EALP
shall cause Newco to be formed in accordance with Delaware law and to
comply with all of EALP's and Newco's obligations under the Plan and
the Newco Asset Purchase Agreement, including making the payments
thereunder. Newco shall issue the Newco Common Stock.

5.2.3.2 Issuance of the Rights. On the commencement of the
Rights Exercise Period, the Rights shall be issued to holders of
Claims and Interests as set forth in Sections 3.2.5, 3.2.7 and
3.2.8.

5.2.3.3 Capitalization of Newco. EALP or any affiliate of
EALP designated by EALP shall (i) receive 4,750,000 shares of Newco
Common Stock in exchange for capitalizing Newco with $23,750,000
($5.00 per share) and (ii) receive 237,500 shares of Newco Common
Stock as compensation for EALP's obligations set forth in Section
5.2.3.4. Newco's capitalization may, however, be in any structure
determined by EALP, provided that Newco and EALP shall continue to be
obligated to make the payments set forth in Section 5.1.1.4.

5.2.3.4 EALP Guaranty of Rights Offering. EALP or an
affiliate of EALP designated by EALP shall purchase for Cash all
Rights Offering Shares not purchased by recipients of the Rights under
the Plan.

5.2.3.5 Newco Common Stock Registration Rights Agreement. On
the Effective Date, EALP or any affiliate of EALP designated by EALP
and Newco shall be deemed to have entered into the Newco Common Stock
Registration Rights Agreement without further action on the part of
Newco, EALP, the Debtor, GGI or any other party.

5.2.4 ESTABLISHMENT OF NEW CREDIT FACILITY

On the Effective Date, Newco shall enter into the New Credit Facility
by entering into the New Credit Facility Documents.

5.2.5 NAME CHANGE

Immediately after the Effective Date, Newco shall change its name to
Grant Geophysical, Inc. and GGI shall change its name to GGI Liquidating
Corporation.

5.3 PROCEDURES FOR EXERCISE OF RIGHTS

5.3.1 Rights may be exercised by the respective holders thereof at
any time during the Rights Exercise Period. Each Right shall entitle the
holder thereof to purchase one share of the Rights Offering Common Stock at a
price equivalent to the price at which EALP acquires shares of Newco Common
Stock pursuant to Section 5.2.3.3. All Rights that are to be exercised by an
individual holder must be exercised concurrently. Any exercise of Rights shall
be irrevocable after the Rights Expiration Date.

5.3.2 In order for an exercise of the Rights to be valid and
effective, the holder of the Rights seeking to effect such an exercise must
have been the holder of the Allowed Claim or Allowed Interest on account of
which the Rights were issued and must deliver to the Rights Agent prior to the
Rights Expiration Period a properly completed and duly executed Rights Exercise
Notice which (i) indicates the number of Rights sought to be exercised and (ii)
is accompanied by a certified check or bank draft drawn upon a United States
bank or wire transfer in an amount equal to the product of the Rights exercise
price and the number of Rights sought to be exercised. The foregoing items
will not be deemed to have been timely delivered to the Rights Agent (and thus
the attempted exercise of the Rights will not be valid or effective) unless
they are actually received by the Rights Agent, at the address specified
therefor in the

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instructions (the "Exercise Instructions") accompanying the form of Rights
Exercise Notice to be provided pursuant to Section 5.3.3 below, prior to the
Rights Expiration Date and are completed and executed in conformity with the
Exercise Instructions.

5.3.3 In order to facilitate the exercise of the Rights, the Rights
Agent will mail, on the date upon which the Rights Exercise Period commences,
to each Eligible Class 5 Claim Holder or the holder of an Allowed Class 7 or 8
Interest, a Rights Exercise Notice together with the Exercise Instructions
(which will include instructions for the proper completion and due execution of
the Rights Exercise Notice and timely delivery thereof, together with
instructions for the payment of the applicable aggregate exercise price for the
Rights sought to be exercised, to the Rights Agent and may specify other
requirements relating to the valid and effective exercise of the Rights). All
determinations as to proper completion, due execution timeliness, eligibility
and other matters affecting the validity or effectiveness of any attempted
exercise of any Rights shall be made by the Rights Agent, whose determination
shall be final and binding. The Rights Agent in its sole discretion may waive
any defect or irregularity, or permit a defect or irregularity to be corrected
within such time as it may determine or reject the purported exercise of any
Right subject to any such defect or irregularity. Deliveries required to be
received by the Rights Agent in connection with a purported exercise of Rights
will not be deemed to have been so received or accepted until actual receipt
thereof by the Rights Agent shall have occurred and any defects or
irregularities shall have been waived or cured within such time as the Rights
Agent may determine in its sole discretion. Neither the Debtor nor the Rights
Agent will have any obligation to give notice to any holder of a Right of any
defect or irregularity in connection with any purported exercise thereof or
incur any liability as a result of any failure to give any such notice.

5.3.4 As promptly as practicable following the Rights Expiration
Date, the Rights Agent will mail, (or cause to be mailed) to each holder of
Rights that has sought to exercise Rights, a written statement specifying the
number of Rights that were validly and effectively exercised by such holder and
the number of shares of stock purchased upon such exercise of such Rights,
together with a stock certificate representing the shares of stock so
purchased.

5.4 CORPORATE GOVERNANCE, DIRECTORS AND OFFICERS, EMPLOYMENT-RELATED
AGREEMENTS AND COMPENSATION PROGRAMS

5.4.1 NEWCO CERTIFICATE OF INCORPORATION AND BYLAWS

As of the Effective Date, the Newco Certificate of Incorporation and
the Newco Bylaws shall be substantially in the forms of Exhibits B and C,
respectively. The Newco Certificate of Incorporation shall, among other
things: (i) prohibit the issuance of nonvoting equity securities, to the extent
required by section 1123(a) of the Bankruptcy Code; and (ii) authorize the
issuance of Newco Common Stock in amounts not less than the amounts necessary
to permit the distributions thereof required or contemplated by the Plan.
After the Effective Date, Newco may amend and restate the Newco Certificate of
Incorporation or Newco Bylaws as permitted by applicable law.

5.4.2 NEWCO DIRECTORS AND OFFICERS

Subject to any requirement of Bankruptcy Court approval pursuant to
section 1129(a)(5) of the Bankruptcy Code, the initial directors of Newco will
consist of directors designated by EALP prior to Confirmation. Subject to any
requirement of Bankruptcy Court approval pursuant to section 1129(a)(5) of the
Bankruptcy Code, the initial chief executive officer and chairman of Newco
shall be designated by EALP prior to Confirmation. The other officers of Newco
will be named prior to Confirmation. All directors of Newco shall serve until
their successors are duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Newco Certificate
of Incorporation and Bylaws. Each officer of Newco will serve from and after
the Effective Date until his or her successor is duly appointed and qualified
or until their earlier death, resignation or removal in accordance with the
terms of the Certificate of Incorporation and Bylaws.

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5.4.3 EMPLOYMENT, RETIREMENT, INDEMNIFICATION AND OTHER AGREEMENTS
AND INCENTIVE COMPENSATION PROGRAMS; RETIREE HEALTH AND
WELFARE BENEFITS

5.4.3.1 As of the Effective Date, Newco shall have the
authority to (i) enter into employment, retirement, indemnification
and other agreements with its active directors, officers and employees
and (ii) implement retirement income plans, welfare benefit plans and
other incentive plans in which directors, officers and other active
employees of Newco may be eligible to participate. Such agreements
and plans may include equity, bonus and other incentive plans. The
Disclosure Statement contains information as to the compensation to be
paid to insiders who are the subject of any such agreements, plans or
programs currently intended to be implemented.

5.4.3.2 From and after the Effective Date, pursuant to
section 1129(a)(13) of the Bankruptcy Code, to the extent obligated to
do so, Newco shall pay all retiree benefits (as defined in section
1114(a) of the Bankruptcy Code) of the Debtor at the level established
pursuant to subsection (e)(1)(B) or (g) of section 1114 of the
Bankruptcy Code, at any time prior to Confirmation, in accordance with
the contract or program giving rise to such benefits.

5.4.4 CORPORATE ACTION

The distribution of Cash pursuant to the Plan; the adoption,
execution, delivery and implementation of all contracts, leases, instruments,
releases and other agreements or documents related to any of the foregoing; the
adoption, execution and implementation of employment, retirement and
indemnification agreements, incentive compensation programs, retirement income
plans, welfare benefit plans and other employee plans and related agreements;
and the other matters provided for under the Plan involving action to be taken
by or required of the Debtor, GGI, EALP or Newco will occur and be effective as
provided herein, and will be authorized and approved in all respects and for
all purposes without any requirement of further action by stockholders,
directors or partners of the Debtor, GGI, EALP or Newco.

5.5 SOURCES OF CASH FOR PLAN DISTRIBUTIONS

5.6 RELEASES AND RELATED MATTERS

5.6.1 RELEASES BY THE DEBTOR

5.6.1.1 Avoidance Actions. As of the Effective Date, the
Debtor, GGI and the Official Committee (to the extent applicable) will
be deemed to have released and waived all causes of action of the
Debtor arising under sections 544, 547, 548, 549 or 550 of the
Bankruptcy Code except with respect to claims against any entity in
Peru or claims resulting from the Debtor's operations in Peru.

5.6.1.2 Other Released Claims and Causes of Action. As of
the Effective Date, for good and valuable consideration, the adequacy
of which is hereby confirmed, the Debtor, GGI and the Official
Committee (to the extent applicable) will be deemed to forever
release, waive and discharge all claims, counterclaims, obligations,
suits, judgments, damages, demands, debts, rights, causes of action
and liabilities whatsoever in connection with or related to the
Debtor, the Chapter 11 Case or the Plan (other than the rights of the
Debtor, GGI or the Official Committee to enforce the Plan and its
implementation and the contracts, instruments, releases and other
agreements or documents delivered thereunder), whether liquidated or
unliquidated, fixed or contingent, matured or unmatured, known or
unknown, foreseen or unforeseen, then existing or thereafter arising,
in law, equity or otherwise that are based in whole or in part on any
act,

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omission, transaction, event or other occurrence taking place on or
prior to the Effective Date in any way relating to the Debtor, the
parties released pursuant to this Section 5.6.1.2, the Chapter 11 Case
or the Plan, and that may be asserted by or on behalf of a Debtor or
its Estate against (i) the Debtor's current officers and directors,
(ii) the current and former officers, directors and shareholders of
EALP, Westgate and Newco, (iii) the respective current and former
agents, employees, consultants, advisors, attorneys, accountants and
other representatives of the Debtor, EALP, Westgate or Newco
(including the respective current and former members and professionals
of the foregoing) acting in such capacity, (iv) Foothill and
Foothill's current and former employees, officers, directors, agents,
advisors, attorneys and representatives, (v) Oyo, Input/Output, Inc.
and the Official Committee, and their respective predecessors in
interest and (vi) EALP, Westgate and their respective affiliates;
provided, however, that the Debtor shall not release the persons
identified in subclauses (i)-(v) of this Section 5.6.1.2 from any
claims with respect to (a) any loan, advance or similar receivable due
the Debtor from such person or (b) any contractual obligation owed by
such person to the Debtor.

5.6.1.3 Claims and Causes of Action Not Released or Purchased
by Newco. Any and all claims or causes of action (other than released
pursuant to Sections 5.6.1.1 and 5.6.1.2) (i) against any entity in
Peru or Claims resulting from the Debtor's operations in Peru (whether
for affirmative recovery or as a defense to a Claim by any such
entity) or (ii) the successful prosecution of which would result in no
affirmative recovery but rather a Secured Claim becoming a General
Unsecured Claim, shall not be released but shall be preserved for the
benefit of, and shall vest in, GGI, subject to disposition as agreed
to among GGI and the Official Committee. Newco may appear and object
with respect to the Official Committee's resolution of claims of or
against entities in Peru or arising out of the Debtor's operations in
Peru or defenses thereto if Newco believes that any such proposed
resolution will negatively impact Newco's business or important
business relationships.

5.6.2 RELEASES BY HOLDERS OF CLAIMS OR INTERESTS

5.6.2.1 Holders of Claims. As of the Effective Date, to the
fullest extent permitted by applicable law, in consideration for the
obligations of the Debtor and GGI under the Plan and the Cash, Rights,
contracts, instruments, releases and other agreements or documents to
be delivered in connection with the Plan, each holder of a Claim that
is Impaired under the Plan will be deemed to forever release, waive
and discharge all claims, demands, debts, rights, causes of action and
liabilities (other than the right to enforce the Debtor's or GGI's
obligations under the Plan and the contracts, instruments, releases
and other agreements and documents delivered thereunder or right of
setoff or recoupment, if any), whether liquidated or unliquidated,
fixed or contingent, matured or unmatured, known or unknown, foreseen
or unforeseen, then existing or thereafter arising, that are based in
whole or in part on any act, omission or other occurrence taking place
on or prior to the Effective Date in any way relating to their Claims
against the Debtor, the Chapter 11 Case or the Plan against (i) the
Debtor, EALP, Westgate and Newco, (ii) the current and former
officers, directors and shareholders of the Debtor, EALP, Westgate and
Newco or (iii) their respective affiliates, agents, advisors,
attorneys and representatives (including the respective current and
former officers, directors, employees, shareholders and professionals
of the foregoing), acting in such capacity.

5.6.2.2 Holders of Certain Interests. As of the Effective
Date, to the fullest extent permissible under applicable law, in
consideration for the obligations of the Debtor and GGI under the
Plan, the Rights, contracts, instruments, releases or other agreements
or documents to be delivered in connection with the Plan, each entity
that has held, holds or may hold an Interest classified in Classes 7
or 8 will be deemed to forever release, waive and discharge all
claims, demands, debts, rights, causes of action and liabilities
(other than the right to enforce the Debtor's or GGI's obligations
under the Plan and the contracts, instruments, releases and other
agreements and documents delivered thereunder), whether liquidated or
unliquidated, fixed or contingent,

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matured or unmatured, known or unknown, foreseen or unforeseen, then
existing or thereafter arising, that are based in whole or in part on
any act, omission or other occurrence taking place on or prior to the
Effective Date in any way relating to their Interests in the Debtor,
the Chapter 11 Case or the Plan against: (i) the Debtor, EALP,
Westgate and Newco, (ii) the current or former officers, directors and
shareholders of the Debtor, EALP, Westgate and Newco or (iii) their
respective affiliates, agents, advisors, attorneys and representatives
(including the respective current and former directors, officers,
employees, shareholders and professionals of the foregoing), acting in
such capacity.

5.6.2.3 Release of Official Committee. As of the Effective
Date, to the fullest extent permissible under applicable law, in
consideration for the contracts, instruments, releases or other
agreements or documents to be delivered in connection with the Plan,
each entity that has held, holds or may hold a Claim or Interest which
is Impaired will be deemed to forever release, waive and discharge all
claims, counterclaims, demands, debts, rights, causes of action and
liabilities, whether liquidated or unliquidated, fixed or contingent,
matured or unmatured, known or unknown, foreseen or unforeseen, then
existing or thereafter arising, that are based in whole or in part on
any act, omission or other occurrence taking place on or prior to the
Effective Date in any way relating to their Claims against or
Interests in the Debtor, the Chapter 11 Case or the Plan against the
Official Committee, its agents, advisors, attorneys and
representatives (including the respective current and former
directors, officers, employees, shareholders and professionals of the
foregoing), acting in such capacity.

5.6.3 INJUNCTION RELATED TO RELEASES

As further provided in Section 11.1, as of the Effective Date, and
subject to the provisions of the Confirmation Order, the prosecution, whether
directly, derivatively or otherwise, of any claim, counterclaim, demand, debt,
right, cause of action, liability or interest released or terminated pursuant
to the Plan shall be enjoined.

5.6.4 LIMITATION ON RELEASES

Notwithstanding the provisions of this Section 5.6, if and to the
extent that the Bankruptcy Court concludes that the Plan cannot be confirmed
with any portion of the releases set forth in the Plan, then the Plan may be
confirmed with that portion excised so as to give effect as much as possible to
the foregoing releases without precluding confirmation of the Plan.

5.7 RELEASE OF LIENS

Except as otherwise provided in the Plan or in any contract,
instrument, indenture or other agreement or document created in connection with
the Plan, on the Effective Date, all mortgages, deeds of trust, liens or other
security interests against the property of the Estate shall be released, and
all the right, title and interest of any holder of such mortgages, deeds of
trust, liens or other security interests shall revert to Newco and its
successors and assigns; provided that liens securing Postpetition Secured
Claims and Other Identified Secured Claims shall continue against their
respective property until such Claims are paid in full as set forth in the
Plan, and provided further that such liens shall automatically be released
without any further action by any party upon such payment. Funds paid by Newco
to GGI pursuant to Section 5.1.1.4 shall not be subject to any claims or liens
by Newco, Newco's creditors or shareholders or the holders of obligations
assigned to or assumed by Newco.

5.8 EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS; EXEMPTION FROM CERTAIN
TRANSFER TAXES

The Chairman of the Board, Chief Executive Officer and any Executive
Vice President or Vice President of the Debtor or GGI shall be authorized to
execute, deliver, file or record such contracts, instruments, releases and
other agreements or documents and to take such actions as may be necessary or

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appropriate to effectuate and further evidence the terms and conditions of the
Plan (with the written consent of the Official Committee if such action would
have any effect on the Class 5 Cash Distribution). The Secretary or any
Assistant Secretary of the Debtor or GGI shall be authorized to certify or
attest to any of the foregoing actions. Pursuant to section 1146(c) of the
Bankruptcy Code: (1) the issuance, distribution, transfer or exchange of the
Rights; (2) the creation, modification, consolidation or recording of any
mortgage, deed of trust or other security interest, the securing of additional
indebtedness by such means or by other means in furtherance of, or in
connection with, the Plan or the Confirmation Order; (3) the making, assignment
or recording of any lease or sublease; or (4) the making, delivery or recording
of any deed or other instrument of transfer under, in furtherance of, or in
connection with, the Plan, including any merger agreements or agreements of
consolidations, deeds, bills of sale, assignment or other instruments of
transfer executed in connection with the Plan, the Confirmation Order or any
transaction contemplated in Sections 5.1, 5.2 and 5.3 above, or any
transactions arising out of, contemplated by or in any way related to the
foregoing, shall not be subject to any document recording tax, stamp tax,
conveyance fee, intangibles or similar tax, mortgage tax, stamp act, real
estate transfer tax, mortgage recording tax or other similar tax or
governmental assessment, and the appropriate state or local governmental
officials or agents shall be, and hereby are, directed to forego the collection
of any such tax or governmental assessment and to accept for filing and
recordation any of the foregoing instruments or other documents without the
payment of any such tax or governmental assessment.

ARTICLE VI.

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

6.1 EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE REJECTED; BAR DATE FOR
REJECTION DAMAGES

6.1.1 REJECTIONS GENERALLY

Except as otherwise provided in the Plan, including Section 6.2 below,
or in any contract, instrument, release, or other agreement or document entered
into in connection with the Plan, on the Effective Date, pursuant to section
365 of the Bankruptcy Code, the Debtor shall reject each executory contract and
unexpired lease entered into by the Debtor prior to the Petition Date that has
not previously: (a) expired or terminated pursuant to its own terms or (b)
been assumed or rejected pursuant to section 365 of the Bankruptcy Code. The
Confirmation Order shall constitute an order of the Bankruptcy Court approving
the rejections described in this Section 6.1.1, pursuant to section 365 of the
Bankruptcy Code, as of the Effective Date.

6.1.2 BAR DATE FOR REJECTION DAMAGES

If the rejection of an executory contract or unexpired lease pursuant
to Section 6.1.1 above gives rise to a Claim by the other party or parties to
such contract or lease, such Claim shall be forever barred and shall not be
enforceable against the Debtor, GGI, its successor or properties unless (a) a
Stipulation of Amount and Nature of Claim has been entered into and approved by
the Bankruptcy Court with respect to the rejection of such executory contract
or unexpired lease or (b) a proof of Claim is Filed and served on GGI and the
Official Committee and counsel for GGI and the Official Committee within 30
days after the Effective Date or such earlier date as established by the
Bankruptcy Court.

6.2 EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED AND ASSIGNED;
CURE OF DEFAULTS

6.2.1 ASSUMPTIONS GENERALLY

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and unexpired leases listed on Exhibit F to the Plan; provided, however, that
Newco reserves the right, at any time prior to the Effective Date, to amend
Exhibit F (a) to delete any executory contract or unexpired lease listed
therein, thus providing for its rejection pursuant to Section 6.1.1 above or
(b) to add any executory contract or unexpired lease thereto, thus providing
for its assumption pursuant to this Section 6.2.1. Each contract and lease
listed on Exhibit F shall be assumed and assigned only to the extent that any
such contract or lease constitutes an executory contract or unexpired lease.
Listing a contract or lease on Exhibit F shall not constitute an admission by
the Debtor, GGI or Newco that such contract or lease is an executory contract
or unexpired lease or that the Debtor, GGI or Newco has any liability
thereunder. The Confirmation Order shall constitute an order of the Bankruptcy
Court approving such assumptions and assignments, pursuant to section 365 of
the Bankruptcy Code, as of the Effective Date.

6.2.2 CURE OF DEFAULTS

Any monetary amounts by which each executory contract and unexpired
lease to be assumed pursuant to the Plan is in default shall be satisfied,
pursuant to section 365(b)(1) of the Bankruptcy Code, at the option of GGI:
(a) by payment of the default amount in Cash as soon as practicable after the
Newco Cash Payment Deadline or (b) on such other terms as are agreed to by the
parties to such executory contract or unexpired lease; provided however that
Newco shall assume the Debtor's cure obligation under (i) the Stipulated Order
Resolving (1) Motion to Compel Debtor to Timely Perform Obligations with
Respect to Equipment Leases and to Compel Debtor to Decide Whether to Assume or
Reject Equipment Leases and (2) Motion for Relief from Automatic Stay filed by
Leasing Associates, Inc. - H1 and entered by the Court on March 24, 1997, (ii)
the Stipulated Order Resolving Motion to Compel Assumption or Rejection of
Lease and for Adequate Protection filed by GE Capital Fleet Services, Inc. and
entered by the Court on June 26, 1997 (iii) the TIAA Mortgage and (iv)
unexpired leases of the Debtor with Input/Output, Inc. that are assumed
pursuant to Section 6.2.1; and provided further that the aggregate amount of
cure payments required to be paid in excess of $200,000 (excluding those
specifically designated to be paid by Newco), shall be paid by Newco. If there
is a dispute regarding: (i) the amount of any cure payments; (ii) the ability
of Newco to provide "adequate assurance of future performance" (within the
meaning of section 365 of the Bankruptcy Code) under the contract or lease to
be assumed; or (iii) any other matter pertaining to assumption, the cure
payments required by section 365(b)(1) of the Bankruptcy Code shall be made
following the entry of a Final Order resolving the dispute and approving the
assumption.

6.3 SPECIAL EXECUTORY CONTRACT AND UNEXPIRED LEASE MATTERS

6.3.1 EXISTING EMPLOYMENT, RETIREMENT AND OTHER AGREEMENTS AND
INCENTIVE COMPENSATION PROGRAMS

The employment, retirement and other agreements and incentive
compensation programs that are listed on Exhibit G to the Plan are treated as
executory contracts under the Plan and, on the Effective Date, shall be assumed
and assigned to Newco pursuant to sections 365 and 1123 of the Bankruptcy Code,
and neither the Debtor, GGI nor their assets shall be subject to any claims
thereunder.

6.3.2 INDEMNIFICATION OBLIGATIONS

To the extent any indemnification obligation of the Debtor existing as
of the Petition Date to any current officer or director of the Debtor
constitutes an executory contract, the Debtor shall be deemed to have assumed
and assigned to Newco such executory contract as of the Effective Date pursuant
to section 365 of the Bankruptcy Code, and neither the Debtor, GGI nor their
assets shall be subject to any claims thereunder.

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6.4 EXECUTORY CONTRACTS AND UNEXPIRED LEASES ENTERED INTO AND OTHER
OBLIGATIONS INCURRED AFTER THE PETITION DATE

Executory contracts and unexpired leases entered into and other
obligations incurred after the Petition Date by the Debtor shall be assigned to
Newco and shall be performed by Newco in the ordinary course of its business,
and neither the Debtor, GGI nor their assets shall be subject to any claims
thereunder, unless such contract or lease is listed on Exhibit D to the Plan.
Accordingly, such executory contracts, unexpired leases and other obligations
shall survive and remain unaffected except for such assignment by entry of the
Confirmation Order.

ARTICLE VII.

PROVISIONS GOVERNING DISTRIBUTIONS

7.1 DISTRIBUTIONS FOR CLAIMS AND INTERESTS ALLOWED AS OF THE EFFECTIVE
DATE

7.1.1 Except as otherwise provided in Sections 2.3 and 3.2.2,
distributions to be made on account of Claims or Interests that are Allowed as
of the Effective Date shall be made as soon as practicable after the Newco Cash
Payment Deadline. Distributions shall be deemed made as soon as practicable
after the Newco Cash Payment Deadline if made on the Newco Cash Payment
Deadline or as promptly thereafter as practicable, but in any event no later
than 30 days after the Newco Cash Payment Deadline or such later date when the
applicable conditions of Sections 6.1.3 (regarding cure payments for executory
contracts and unexpired leases being assumed); 7.3.2 (regarding undeliverable
distributions); 7.6.6.2 (regarding arrangements for the satisfaction and
payment of tax obligations relating to distributions of Cash or securities
pursuant to the Plan); or 5.2 and 7.8 (regarding surrender of canceled debt
instruments and securities) are satisfied. Distributions on account of Claims
or Interests that are Allowed after the Effective Date shall be made pursuant
to Sections 7.6 and 8.3 below.

7.1.2 On the Newco Cash Payment Deadline, Newco shall pay the Newco
Asset Purchase Proceeds in three wire installments: an amount necessary to pay
the GGI expenses provided in Section 7.2.1 (the "GGI Expense Portion"), an
amount necessary to pay or reserve for all claims to be paid by the Debtor
other than those classified in Class 5 (the "GGI Trustee Portion") and an
amount equal to the remaining balance (the "Unsecured Creditors Trust
Portion"). The GGI Expense Portion and the GGI Trustee Portion shall be in
amounts designated at the Confirmation hearing. The Unsecured Creditors Trust
Portion shall be not less than $10 million.

GGI shall hold the GGI Trustee Portion in a trust account for the
benefit of all creditors. The Unsecured Creditors Trust shall be for the
benefit only of Class 5 Claims. The Official Committee will appoint the
initial Trustee for the Unsecured Creditors Trust and such Trustee or the Trust
Committee will choose any successor Trustee or members of the Trust Committee
without any further order of the Bankruptcy Court.

GGI as trustee shall pay claims only after providing the Unsecured
Creditors Trust five (5) business days notice of the amount, calculation, and
recipient of such payment. The Unsecured Creditors Trust then has the
opportunity to object; if no objection is filed within five (5) business days,
the payment can be made; if an objection is filed, it shall be resolved by the
Bankruptcy Court; provided however that GGI shall make the payment to the
deadline otherwise provided herein unless the Bankruptcy Court shall order
otherwise by such time.

As soon as reasonably possible after the receipt by GGI of the Newco
Asset Purchase Proceeds, GGI as trustee shall adjust its reserves to equal the
amount of all claims remaining to be paid by the Debtor that are not Class 5
Claims. The difference between this number and the original GGI Trustee
Portion shall be, as soon as reasonably possible, paid to the Unsecured
Creditors Trust for distribution in accordance

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with the terms of that trust. After any claims are disallowed that were
previously reserved for by GGI as trustee, GGI as trustee shall pay the amount
of reserves freed by such disallowance to the Unsecured Creditors Trust.

The Unsecured Creditors Trust and/or the Official Committee shall have
the right to conduct audits at the expense of the Unsecured Creditors Trust to
assure the implementation of this plan and the transactions contemplated in the
Plan and the Exhibits. The powers and duties of the Official Committee may be
exercised by the Unsecured Creditor Trust.

7.1.3 From and after the Newco Cash Payment Deadline, Cash to be
distributed on account of Claims allowed as of the Effective Date shall be held
pending distribution in trust in segregated bank accounts in the name of the
Disbursing Agent for the benefit of the holders of such Claims. The Disbursing
Agent shall invest such cash in a manner consistent with the Disbursing Agent's
investment and deposit guidelines. Distributions of Cash on account of each
Claim allowed as of the Effective Date shall include a Pro Rata share of the
Reorganization Investment Yield from such investment of Cash.

7.2 DISTRIBUTIONS BY DISBURSING AGENTS

7.2.1 DISBURSING AGENTS

Except as provided in Section 7.3.2 below, the Disbursing Agents
shall make all distributions of Cash and Rights required to be distributed
under the applicable provisions of the Plan. The Disbursing Agents may employ
or contract with other entities to assist in or make the distributions required
by the Plan. The Disbursing Agents shall serve without bond, and shall
receive, without further Bankruptcy Court approval, reasonable compensation for
distribution services rendered pursuant to the Plan and reimbursement of
reasonable out-of-pocket expenses incurred in connection with such services
from GGI on terms acceptable to GGI and the Official Committee; provided,
however, that GGI shall not or spend or incur liabilities of more than $5000
per month, including salaries, wages and directors' fees, acting as a
Disbursing Agent without either (i) consent of the Official Committee or (ii)
approval of the Bankruptcy Court.

7.3 DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS

7.3.1 DELIVERY OF DISTRIBUTIONS IN GENERAL

Distributions to holders of Allowed Claims or Allowed Interests shall
be made at the addresses set forth in the Schedules (or, if different, on
proofs of claim) or other records of the Debtor or GGI at the time of the
distribution.

7.3.2 UNDELIVERABLE DISTRIBUTIONS

7.3.2.1 Holding and Investment of Undeliverable
Distributions. If the distribution to any holder of an Allowed Claim
or Allowed Interest is returned to a Disbursing Agent as
undeliverable, no further distributions shall be made to such holder
unless and until the Disbursing Agent is notified in writing of such
holder's then-current address. Undeliverable distributions shall
remain in the possession of the Disbursing Agent pursuant to this
Section 7.3.2.1 until such time as a distribution becomes deliverable.
Undeliverable Cash shall be held in trust in segregated bank accounts
in the name of the Disbursing Agent for the benefit of the potential
claimants of such funds, and shall be accounted for separately.

7.3.2.2 After Distributions Become Deliverable. On each
Distribution Date, the applicable Disbursing Agent will make all
distributions that become deliverable to holders of Allowed Claims
during the preceding quarter. Each such distribution will include, a
Pro Rata share of the Reorganization Investment Yield.

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7.3.2.3 Failure to Claim Undeliverable Distributions. Any
holder of an Allowed Claim that does not assert a claim pursuant to
the Plan for an undeliverable distribution within one year after the
Effective Date shall have its claim for such undeliverable
distribution discharged and shall be forever barred from asserting any
such claim for an undeliverable distribution against GGI or its
respective property. In such case: any Cash held for distribution on
account of such claims for undeliverable distributions shall be held
and distributed by the Disbursing Agent in accordance with Section
7.6.2. Any holder of an Allowed Claim or Interest entitled to receive
Rights that does not assert a claim for an undeliverable distribution
by the Rights Expiration Date shall be forever barred from asserting a
claim for such undeliverable distribution against GGI, Newco or EALP.
Rights with respect to any such Claims or Interest shall be cancelled.
Nothing contained in the Plan shall require the Debtor, GGI or any
Disbursing Agent to attempt to locate any holder of an Allowed Claim
or Allowed Interest.

7.4 DISTRIBUTION RECORD DATE

As of the close of business on the Distribution Record Date, the
transfer registers for the Capital Stock maintained by the Debtor, or its
agents, shall be closed. The Disbursing Agents and their respective agents
shall have no obligation to recognize the transfer of any Capital Stock
occurring after the Distribution Record Date, and shall be entitled for all
purposes herein to recognize and deal only with those holders of record as of
the close of business on the Distribution Record Date.

7.5 MEANS OF CASH PAYMENTS

Cash payments made pursuant to the Plan shall be in U.S. dollars by
checks drawn on a domestic bank selected by the Disbursing Agent, or by wire
transfer from a domestic bank, at the option of the Disbursing Agent. Cash
payments of $1,000,000.00 or more to be made pursuant to the Plan will, to the
extent requested in writing no later than five days prior to the Distribution
Record Date, be made by wire transfer from a domestic bank. Cash payments to
foreign creditors may be made, at the option of the Disbursing Agent, in such
funds and by such means as are necessary or customary in a particular foreign
jurisdiction.

7.6 TIMING AND CALCULATION OF AMOUNTS TO BE DISTRIBUTED

7.6.1 IN GENERAL

On the Effective Date (or on such later date as is prescribed by
Section 3.2 hereof), subject to Section 7.6.2 below, to the extent that the
Plan provides for distributions on account of Allowed Claims or Allowed
Interests in the applicable Class, each holder of an Allowed Claim or Allowed
Interest shall receive the full amount of the distributions that the Plan
provides for Allowed Claims or Allowed Interests in the applicable Class. On
each Distribution Date, distributions shall also be made, pursuant to Sections
7.3 above and 8.3 below, respectively, to (a) holders of Claims or Interests to
whom a distribution has become deliverable during the preceding quarter and (b)
to holders of Disputed Claims or Disputed Interests in any such Class whose
Claims or Interests were Allowed during the preceding quarter. Such quarterly
distributions shall also be in the full amount that the Plan provides for
Allowed Claims or Allowed Interests in the applicable Class.

7.6.2 DISTRIBUTIONS TO HOLDERS OF CLAIMS IN CLASS 5

7.6.2.1 As soon as practicable after the Newco Cash Payment
Deadline, the Third-Party Disbursing Agent shall make initial
distributions of Cash to the holders of Allowed Claims in Class 5.
The amount of the Cash to be distributed to holders of Allowed Claims
in Class 5 on such date shall be calculated as if each Disputed Claim
in Class 5 were an Allowed Claim in the amount of the Claim as Filed.
Pursuant to Sections 8.1.2 and 8.3 below, (a) beginning on the first
Distribution Date, the Third-Party Disbursing Agent shall make
distributions of Cash, to holders

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of Disputed Claims whose Claims become Allowed Claims during the
preceding quarter and thus are entitled to receive Cash, (b) all fees
and expenses of the Third-Party Disbursing Agent with respect to
distributions to holders of Class 5 Claims shall be paid out of the
funds in the Class 5 Disbursement Account and (c) all costs incurred
by the Official Committee in connection with the resolution of
Disputed Claims after the Effective Date shall be paid out of the
funds in the Class 5 Disbursement Account. Such distributions shall
be calculated pursuant to the provisions set forth in this Section
7.6.2.1.

7.6.2.2 On each Distribution Date, each holder of a
previously Allowed Claim in Class 5 that is entitled to receive Cash
pursuant to Section 3.2.5 shall receive an additional distribution of
Cash on account of such Claim equal to: (i) the amount of Cash that
such holder would be entitled to receive under the Plan as if such
Claim had become an Allowed Claim on such Distribution Date, minus
(ii) the aggregate amount of Cash previously distributed on account of
such Claim. Each such additional distribution shall also include, on
the basis of the amount then being distributed, a Pro Rata share of
the Reorganization Investment Yield, from the date such amounts would
have been due had such claim initially been paid 100% of the
distribution on account of the Allowed Amount of such Claim, to the
date such distribution is made, net of any taxes paid or payable by
the Disbursing Agent and properly attributable to such share of the
Reorganization Investment Yield.

7.6.3 DISTRIBUTIONS OF RIGHTS AND STOCK

Notwithstanding any other provision of the Plan, only whole numbers of
Rights or shares of Newco Common Stock (or stock of any successor to Newco)
shall be issued or transferred, as the case may be, pursuant to the Plan. When
any distribution on account of an Allowed Claim or Allowed Interest pursuant to
the Plan would otherwise result in the issuance or transfer of a number of
Rights or shares of stock that is not a whole number, the actual distribution
of shares of such securities shall be rounded to the next higher or lower whole
number as follows: (a) fractions of 1/2 or greater shall be rounded to the
next higher whole number and (b) fractions of less than 1/2 shall be rounded
to the next lower whole number. The total number of Rights or shares of stock
to be distributed to a Class of Claims or Interests shall be adjusted as
necessary to account for the rounding provided for in this Section 7.6.3.2. No
consideration shall be provided in lieu of fractional securities that are
rounded down.

7.6.4 COMPLIANCE WITH TAX REQUIREMENTS

7.6.4.1 In connection with the Plan, to the extent
applicable, the Disbursing Agent shall comply with all tax withholding
and reporting requirements imposed on it by any governmental unit, and
all distributions pursuant to the Plan shall be subject to such
withholding and reporting requirements. The Disbursing Agent shall be
authorized to take any and all actions that may be necessary or
appropriate to comply with such withholding and reporting
requirements.

7.6.4.2 Notwithstanding any other provision of the Plan: (i)
each holder of an Allowed Claim or Interest that is to receive a
distribution of Cash or Rights pursuant to the Plan shall have sole
and exclusive responsibility for the satisfaction and payment of any
tax obligations imposed by any governmental unit, including income,
withholding and other tax obligations, on account of such
distribution; and (ii) no distribution shall be made to or on behalf
of such holder pursuant to the Plan unless and until such holder has
made arrangements satisfactory to the Disbursing Agent for the payment
and satisfaction of such tax obligations. Any Cash or Rights to be
distributed pursuant to the Plan shall, pending the implementation of
such arrangements, be treated as an undeliverable distribution
pursuant to Section 7.3.2 above.

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7.7 SETOFFS

Except with respect to claims of the Debtor or GGI released pursuant
to the Plan or any contract, instrument, release, or other agreement or
document created in connection with the Plan, the Debtor or GGI may, pursuant
to section 553 of the Bankruptcy Code or applicable nonbankruptcy law, set off
against any Allowed Claim and the distributions to be made pursuant to the Plan
on account of such Claim (before any distribution is made on account of such
Claim), the claims, rights and causes of action of any nature that the Debtor
or GGI may hold against the holder of such Allowed Claim; provided, however,
that neither the failure to effect such a setoff nor the allowance of any Claim
hereunder shall constitute a waiver or release by the Debtor or GGI of any such
claims, rights and causes of action that the Debtor or GGI may possess against
such holder.

7.8 SURRENDER OF CANCELLED DEBT INSTRUMENTS OR SECURITIES

Subject to the provisions of Section 7.8.2 below, as a condition
precedent to receiving any distribution pursuant to the Plan on account of an
Allowed Claim or Allowed Interest evidenced by the instruments, securities or
other documentation canceled pursuant to Section 5.2.1 above, the holder of
such Claim or Interest shall tender the applicable instruments, Old Preferred
Stock or other documentation evidencing such Claim or Interest to the
Disbursing Agent pursuant to a letter of transmittal furnished by the
Disbursing Agent. Any Rights to be distributed pursuant to the Plan on account
of any such Claim or Interest shall, pending such surrender, be treated as an
undeliverable distribution pursuant to Section 7.3.2 above.

7.8.1 SURRENDER OF CAPITAL STOCK CERTIFICATES

Except as provided in Section 7.8.2 below for lost, stolen, mutilated
or destroyed Capital Stock certificates, each holder of an Allowed Claim or
Allowed Interest evidenced by Capital Stock certificate shall tender such
Capital Stock certificate to the Disbursing Agent in accordance with written
instructions to be provided in a letter of transmittal to such holders by the
Disbursing Agent as promptly as practicable following the Effective Date. Such
letter of transmittal shall specify that delivery of such Capital Stock
certificates will be effected, and risk of loss and title thereto will pass,
only upon the proper delivery of such Capital Stock certificates with the
letter of transmittal in accordance with such instructions. Such letter of
transmittal shall also include, among other provisions, customary provisions
with respect to the authority of the holder of the applicable Capital Stock
certificate to act and the authenticity of any signatures required on the
letter of transmittal. All surrendered Capital Stock certificates shall be
marked as canceled and delivered to GGI.

7.8.2 LOST, STOLEN, MUTILATED OR DESTROYED CAPITAL STOCK CERTIFICATES

In addition to any requirements under the applicable certificate or
articles of incorporation or bylaws of the Debtor, any holder of an Interest
evidenced by a Capital Stock certificate that has been lost, stolen, mutilated
or destroyed shall, in lieu of surrendering such Capital Stock certificate,
deliver to the Disbursing Agent: (a) evidence satisfactory to the Disbursing
Agent of the loss, theft, mutilation or destruction; and (b) such indemnity as
may be required by the Disbursing Agent to hold the Disbursing Agent harmless
from any damages, liabilities or costs incurred in treating such individual as
a holder of a Capital Stock certificate. Upon compliance with this Section
7.8.2 by a holder of an Interest evidenced by a Capital Stock certificate, such
holder shall, for all purposes under the Plan, be deemed to have surrendered
the Capital Stock certificate.

7.8.3 FAILURE TO SURRENDER CANCELED CAPITAL STOCK CERTIFICATES

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GGI, Newco or EALP or their respective property. In such case, Rights held for
distribution on account of such Interest shall be disposed of pursuant to the
provisions set forth in Section 7.3.2 above.

ARTICLE VIII.

PROCEDURES FOR RESOLVING DISPUTED CLAIMS
AND DISPUTED INTERESTS

8.1 PROSECUTION OF OBJECTIONS TO CLAIMS AND INTERESTS

8.1.1 PRIOR TO THE EFFECTIVE DATE

8.1.2 AFTER THE EFFECTIVE DATE

After the Effective Date, the Official Committee (or any duly
authorized representative thereof) shall have the exclusive authority to file
objections, or to settle, compromise, withdraw or litigate to judgment
objections to Claims; provided however that (a) GGI and the Official Committee
shall retain the authority to File objections to Administrative Claims and, if
upon request the Official Committee refuses to object, other Claims, and
litigate to judgment such objections, and GGI shall be responsible for all
fees, costs and expenses which it incurs with respect to such activities; (b)
the Official Committee (or any duly authorized representative thereof) shall
give Newco at least ten (10) business days written notice before Filing an
objection, or before settling, compromising or withdrawing any objection; (c)
Newco may object to any such objection, settlement or compromise relating to a
Claim that Newco reasonably believes would negatively impact Newco's operations
or relationships with key vendors or other third parties, and Newco shall be
responsible for all fees, costs and expenses which it incurs with respect to
such objection; and (d) any proposed objection, settlement, compromise or
withdrawal objected to by Newco shall be adjudicated by the Bankruptcy Court.
Any and all fees, costs and expenses incurred by the Official Committee or its
representatives in connection with any and all objections, settlements or
litigation of any Disputed Claim under this Section 8.1.2 shall be paid on a
monthly basis out of the funds held by the Disbursing Agent for distribution to
holders of Allowed Class 5 Claims and neither GGI, EALP or Newco shall have any
liability for payment of such fees, costs and expenses. The Official Committee
may, in its discretion, establish a reserve from the Class 5 Cash Distribution
for such fees, costs and expenses.

8.2 TREATMENT OF DISPUTED CLAIMS OR INTERESTS

8.2.1 NO PAYMENTS ON ACCOUNT OF DISPUTED CLAIMS OR INTERESTS

8.2.2 RESOLUTION OR ESTIMATION OF CLAIMS

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appeal relating to any such objection. If the Bankruptcy Court estimates any
contingent or unliquidated Claim, that estimated amount will constitute either
the Allowed Amount of such Claim or a maximum limitation on such Claim, as
determined by the Bankruptcy Court. If the estimated amount constitutes a
maximum limitation on such Claim, GGI or the Official Committee, as the case
may be, may elect to pursue any supplemental proceedings to object to any
ultimate payment on account of such Claim. All of these Claims objection,
estimation and resolution procedures are cumulative and not necessarily
exclusive of one another. In addition to seeking estimation of Claims as
provided in this Section 8.2.2, subject to the provisions of Section 8.1.2
above, the Debtor or the Official Committee, as the case may be, may resolve or
adjudicate any Disputed Claim in the manner in which the amount of such Claim
and the rights of the holder of such Claim would have been resolved or
adjudicated if the Chapter 11 Case had not been commenced. Claims may be
subsequently compromised, settled, withdrawn or resolved by the Debtor, GGI or
the Official Committee pursuant to Section 8.1 above.

8.3 DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS OR INTERESTS ONCE THEY ARE
ALLOWED

On each Distribution Date, the Disbursing Agent shall make all
distributions on account of any Disputed Claim or Disputed Interest that has
become an Allowed Claim or Allowed Interest during the preceding quarter. Such
distributions shall be made pursuant to the provisions of the Plan governing
the applicable Class. Holders of Disputed Claims or Disputed Interests that
are ultimately allowed shall also be entitled to receive, on the basis of the
amount ultimately allowed, a Pro Rata share of the Reorganization Investment
Yield.

8.4 CLAIMS NOT FILED PRIOR TO THE BAR DATE

Unless otherwise provided in a Final Order of the Bankruptcy Court,
any Claim (including a Secured Claim) for which a proof of claim is not filed
prior to the Bar Date shall be deemed disallowed and/or subordinated to all
Allowed Claims. The holder of a Claim which is disallowed and/or subordinated
pursuant to this Section 8.4 shall not receive any distribution on account of
such Claim.

ARTICLE IX.

CONDITIONS PRECEDENT TO CONFIRMATION AND
CONSUMMATION OF THE PLAN

9.1 CONDITIONS TO CONFIRMATION

The Bankruptcy Court will not enter the Confirmation Order unless and
until each of the following conditions will have been satisfied or waived:

9.1.1 The Confirmation Order shall be in form and substance
satisfactory to the Proponents.

9.1.2 All documents necessary to effectuate the
transactions described in the Plan consistent with the Plan, including
the Newco Asset Purchase Agreement and Newco Credit Facility
Documents, shall be in form and substance reasonably acceptable to
GGI, Newco, EALP and the Official Committee.

9.2 CONDITIONS TO EFFECTIVE DATE

The Plan shall not be consummated and the Effective Date shall not
occur unless and until each of the following conditions has been satisfied or
duly waived (if available) pursuant to Section 9.3 below:

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<PAGE> 119
9.2.1 Either (a) the Confirmation Order shall have become a
Final Order or (b) no stay of the Confirmation Order shall be in
effect and no other relief has been entered nor any facts exist that
would render the doctrine of "mootness" inapplicable as a matter of
law.

9.2.2 There shall be no injunction or court order
restraining consummation of the transactions contemplated by the Plan
and there shall not have been adopted any law or regulation making all
or any portion of such transactions illegal.

9.2.3 There shall have been no material adverse change in
the Debtor's financial or operational condition since June 23, 1997;
provided that this condition shall expire on September 30, 1997.

9.3 WAIVER OF CONDITIONS

The conditions to Confirmation and the Effective Date may be waived in
whole or in part by the Proponents at any time, without notice, an order of the
Bankruptcy Court or any further action other than proceeding to Confirmation
and consummation of the Plan. The failure to satisfy or waive any condition
may be asserted by the Proponents regardless of the circumstances giving rise
to the failure of such condition to be satisfied. The failure of the
Proponents to exercise any of the foregoing rights shall not be deemed a waiver
of any other rights and each such right shall be deemed an ongoing right that
may be asserted at any time.

9.4 EFFECT OF NONOCCURRENCE OF CONDITIONS TO EFFECTIVE DATE

Each of the conditions to Confirmation and the Effective Date must be
satisfied or duly waived, as provided above, within 30 days after the
Confirmation Date, which date may only be extended by the mutual consent of
Proponents and the Official Committee. If such mutual consent cannot be
obtained, such time period may only be extended by order of the Bankruptcy
Court. If each condition to the Effective Date has not been satisfied or duly
waived pursuant to Section 9.3 above, within 30 days after the Confirmation
Date or such later date agreed to by the Proponents and the Official Committee
or as ordered by the Bankruptcy Court, then upon motion by any party in
interest made before the time that each of such conditions has been satisfied
or duly waived and upon notice to such parties in interest as the Bankruptcy
Court may direct, the Confirmation Order shall be vacated by the Bankruptcy
Court; provided, however, that, notwithstanding the filing of such motion, the
Confirmation Order may not be vacated if each of the conditions to the
Effective Date is either satisfied or duly waived before the Bankruptcy Court
enters an order granting such motion. If the Confirmation Order is vacated
pursuant to this Section 9.4, the Plan shall be deemed null and void in all
respects, and the assumptions or rejections of executory contracts and
unexpired leases pursuant to Sections 6.1 and 6.2 above, and nothing contained
in the Plan shall (1) constitute a waiver or release of any Claims by or
against, or any Interests in, the Debtor or (2) prejudice in any manner the
rights of the Debtor. Notwithstanding anything in this Plan to the contrary,
the Effective Date shall occur and all documents shall be executed and become
binding on the proponents not later than thirty (30) days following the
Confirmation Date if the conditions to Effective Date are satisfied or waived.
If such conditions are not satisfied or waived at that time, the Effective Date
and execution of documents shall occur on the first Business Day after such
satisfaction or waiver.

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<PAGE> 120
ARTICLE X.

CONFIRMABILITY AND SEVERABILITY OF PLAN AND CRAMDOWN

10.1 CONFIRMABILITY AND SEVERABILITY OF A PLAN

The Proponents reserve the right to modify, revoke or withdraw the
Plan, pursuant to Sections 13.3 and 13.4 below. A determination by the
Bankruptcy Court that the Plan is not confirmable pursuant to section 1129 of
the Bankruptcy Code shall not limit or affect the Proponents' ability to modify
the Plan to satisfy the confirmation requirements of section 1129 of the
Bankruptcy Code.

10.2 CRAMDOWN

The Proponents hereby request Confirmation of the Plan under section
1129(b) of the Bankruptcy Code if any Impaired Class does not accept the Plan
in accordance with section 1126 of the Bankruptcy Code. The Proponents reserve
the right to modify the Plan to the extent, if any, that Confirmation pursuant
to section 1129(b) of the Bankruptcy Code requires modification.

ARTICLE XI.

INJUNCTION

11.1 Except as provided in the Plan or Confirmation Order, as of
the Effective Date, all entities that have held, currently hold or may hold a
Claim or other debt or liability or an Interest or other right of an equity
security holder are permanently enjoined from taking any of the following
actions on account of any such Claims, debts or liabilities or Interests or
rights: (a) commencing or continuing in any manner any action or other
proceeding against GGI, the Official Committee, Newco or EALP or their
respective property; (b) enforcing, attaching, collecting or recovering in any
manner any judgment, award, decree or order against GGI, the Official
Committee, Newco or EALP or their respective property; (c) creating, perfecting
or enforcing any lien or encumbrance against GGI, the Official Committee, Newco
or EALP or their respective property; and (d) commencing or continuing any
action, in any manner, in any place that does not comply with or is
inconsistent with the provisions of the Plan. As of the Effective Date, all
entities that have held, currently hold or may hold a claim, demand, debt,
right, cause of action or liability that is released pursuant to the Plan are
permanently enjoined from taking any of the following actions on account of
such released claims, demands, debts, rights, causes of action or liabilities:
(a) commencing or continuing in any manner any action or other proceeding; (b)
enforcing, attaching, collecting or recovering in any manner any judgment,
award, decree or order; (c) creating, perfecting or enforcing any lien or
encumbrance; and (d) commencing or continuing any action, in any manner, in any
place that does not comply with or is inconsistent with the provisions of the
Plan. By accepting distributions pursuant to the Plan, each holder of an
Allowed Claim and Allowed Interest receiving distributions pursuant to the Plan
will be deemed to have specifically consented to the injunctions set forth in
this Section 11.1.

ARTICLE XII.

RETENTION OF JURISDICTION

12.1 Notwithstanding the entry of the Confirmation Order and the
occurrence of the Effective Date, the Bankruptcy Court shall retain such
jurisdiction over the Chapter 11 Case after the Effective Date to the fullest
extent permitted by applicable law, including, without limitation, jurisdiction
to:

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<PAGE> 121
12.1.1 Allow, disallow, determine, liquidate, classify,
estimate or establish the priority or secured or unsecured status of
any Claim or Interest, including the resolution of any request for
payment of any Administrative Claim, the resolution of any objections
to the allowance or priority of Claims or Interests and the resolution
of any dispute as to the treatment necessary to Reinstate a Claim
pursuant to the Plan;

12.1.2 Grant or deny any applications for allowance of
compensation or reimbursement of expenses authorized pursuant to the
Bankruptcy Code or the Plan, for periods ending on or before the
Effective Date;

12.1.3 Resolve any matters related to the assumption or
rejection of any executory contract or unexpired lease to which the
Debtor is a party or with respect to which the Debtor may be liable,
and to hear, determine and, if necessary, liquidate any Claims arising
therefrom;

12.1.4 Ensure that distributions to holders of Allowed
Claims or Allowed Interests are accomplished pursuant to the
provisions of the Plan;

12.1.5 Decide or resolve any motions, adversary proceedings,
contested or litigated matters and any other matters and grant or deny
any applications involving the Debtor or GGI that may be pending on
the Effective Date;

12.1.6 Enter such orders as may be necessary or appropriate
to implement or consummate the provisions of the Plan and all
contracts, instruments, releases, indentures and other agreements or
documents created in connection with the Plan, the Disclosure
Statement or the Confirmation Order;

12.1.7 Resolve any case, controversies, suits or disputes
that may arise in connection with the consummation, interpretation or
enforcement of the Plan or the Confirmation Order, including the
release and injunction provisions set forth in and contemplated by the
Plan and the Confirmation Order, or any entity's rights arising under
or obligations incurred in connection with the Plan or the
Confirmation Order;

12.1.8 Modify the Plan before or after the Effective Date
pursuant to section 1127 of the Bankruptcy Code or modify the
Disclosure Statement, the Confirmation Order or any contract,
instrument, release, indenture or other agreement or document created
in connection with the Plan, the Disclosure Statement or the
Confirmation Order; or remedy any defect or omission or reconcile any
inconsistency in any Bankruptcy Court order, the Plan, the Disclosure
Statement, the Confirmation Order or any contract, instrument,
release, indenture or other agreement or document created in
connection with the Plan, the Disclosure Statement or the Confirmation
Order, in such manner as may be necessary or appropriate to consummate
the Plan, to the extent authorized by the Bankruptcy Code;

12.1.9 Issue injunctions, enter and implement other orders
or take such other actions as may be necessary or appropriate to
restrain interference by any entity with consummation, implementation
or enforcement of the Plan or the Confirmation Order;

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

12.1.11 Determine any other matters that may arise in
connection with or relating to the Plan, the Disclosure Statement, the
Confirmation Order or any contract, instrument, release, indenture or
other agreement or document created in connection with the Plan, the
Disclosure Statement or the Confirmation Order, except as otherwise
provided in the Plan; and

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<PAGE> 122
12.1.12 Enter an order concluding the Chapter 11 Case.

ARTICLE XIII.

MISCELLANEOUS PROVISIONS

13.1 LIMITATION OF LIABILITY IN CONNECTION WITH THE PLAN, DISCLOSURE
STATEMENT AND RELATED DOCUMENTS AND RELATED INDEMNITY

13.1.1 The Proponents and their officers, directors, members, agents
and representatives shall neither have nor incur any liability to any entity,
including, specifically any holder of a Claim or Interest, for any act taken or
omitted to be taken in connection with or related to the formulation,
preparation, dissemination, implementation, Confirmation or consummation of the
Plan, the Disclosure Statement, the Confirmation Order or any contract,
instrument, release or other agreement or document created or entered into, or
any other act taken or omitted to be taken in connection with the Plan, the
Disclosure Statement or the Confirmation Order, including solicitation of
acceptances of the Plan.

13.1.2 GGI and Newco shall indemnify each Proponent and their
officers, directors, members, agents and representatives, and shall hold each
Proponent and their officers, directors, members, agents and representatives
harmless from, and reimburse each Proponent for, any and all losses, costs,
expenses (including attorneys' fees and expenses), liabilities and damages
sustained by a Proponent and their officers, directors, members, agents and
representatives arising from any liability described in this Section 13.1.

13.2 PAYMENT OF STATUTORY FEES

All fees payable pursuant to section 1930 of title 28 of the United
States Code, as determined by the Bankruptcy Court at the Plan Confirmation
hearing pursuant to section 1128 of the Bankruptcy Code, shall be paid on or
before the Effective Date.

13.3 MODIFICATION OF THE PLAN

Subject to the restrictions on modifications set forth in section 1127
of the Bankruptcy Code and any applicable notice requirements, the Proponents
reserve the right to alter, amend or modify the Plan before its substantial
consummation. In the event that EALP fails to close or to proceed with the
transactions set forth herein, the Debtor reserves the right to find any other
entity to act as a substitute for EALP in forming and funding Newco and
ensuring that Newco takes the steps necessary to consummate the transactions
contemplated in the Plan. If the Plan is modified to provide that such
substitute entity rather than EALP forms and funds Newco, all classes of Claims
will receive the same cash distributions and other treatment under the Plan,
provided, however there is no assurance, and the Debtor considers it unlikely,
that holders of any Interests, including holders of Interests in Old Preferred
Stock, will receive any distribution on account of such Interests under a plan
based on such substitute entity's formation and funding of Newco and, further,
in the Debtor's opinion, it is likely that there will be no Rights Offering to
the holders of any Claims or Interests under such a modified plan.

13.4 REVOCATION OF THE PLAN

The Proponents reserve the right to revoke or withdraw the Plan prior
to the Confirmation Date. If the Debtor revokes or withdraws the Plan, or if
Confirmation does not occur, then the Plan shall be null and void in all
respects, and nothing contained in the Plan shall: (1) constitute a waiver or
release of any Claims by or against, or any Interests in, the Debtor; or (2)
prejudice in any manner the rights of the Debtor.

- 37 -
<PAGE> 123
13.5 SEVERABILITY OF PLAN PROVISIONS

If, prior to Confirmation, any term or provision of the Plan is held
by the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy
Court, at the request of the Proponents, shall have the power to alter and
interpret such term or provision to make it valid or enforceable to the maximum
extent practicable, consistent with the original purpose of the term or
provision held to be invalid, void or unenforceable, and such term or provision
shall then be applicable as altered or interpreted. Notwithstanding any such
holding, alteration or interpretation, the remainder of the terms and
provisions of the Plan will remain in full force and effect and will in no way
be affected, impaired or invalidated by such holding, alteration or
interpretation. The Confirmation Order shall constitute a judicial
determination and shall provide that each term and provision of the Plan, as it
may have been altered or interpreted in accordance with the foregoing, is valid
and enforceable pursuant to its terms.

13.6 SATISFACTION OF UNCLASSIFIED SECURED CLAIMS

To the extent that a Secured Claim is not otherwise classified in the
Plan and is not a Class 11 Claim, such Claim shall be paid by GGI; provided,
however, that if the collateral for such Secured Claim has not been transferred
to Newco, such Claim shall be satisfied by the return or abandonment of such
collateral to the holder of such Claim.

13.7 SUCCESSORS AND ASSIGNS

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

13.8 LEGAL EFFECT

Subject to the terms and conditions set forth herein, this Plan
creates a binding contract between the Proponents and holders of Claims and
Interests.

13.9 EXHIBITS

Because certain of the Exhibits referred to in the Plan are extremely
voluminous, these Exhibits are not being served with copies of the Plan and the
Disclosure Statement. All Exhibits are available for review at the Document
Reviewing Centers.

[Remainder of page intentionally left blank]

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<PAGE> 124
13.10 SERVICE OF DOCUMENTS ON THE DEBTOR OR GGI AND EALP

Any pleading, notice or other document required by the Plan or
Confirmation Order to be served on or delivered to the Debtor or GGI shall be
sent by first class U.S. mail, postage prepaid, to:

GRANT GEOPHYSICAL, INC.
16850 Park Row
Houston, Texas 77084
Attention: Larry E. Lenig, Jr.

with copies to:

SCOTT, DOUGLASS & McCONNICO, L.L.P.
600 Congress Avenue, Suite 1500
Austin, Texas 78701
Attention: Christopher Fuller, Esq.

and

KING & PENNINGTON, L.L.P.
3100 South Tower, Pennzoil Place
711 Louisiana Street
Houston, Texas 77002
Attention: C. Robert Bunch, Esq.

and

JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Attention: Timothy R. Pohl, Esq.

and

ANDREWS & KURTH L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Attention: James Donnell, Esq.

Wilmington, Delaware
August 4, 1997

Respectfully submitted,

GRANT GEOPHYSICAL, INC.,
a Delaware corporation

By: /s/ Larry E. Lenig, Jr.
--------------------------------------
Larry E. Lenig, Jr.
President and Chief Operating Officer

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<PAGE> 125
ELLIOTT ASSOCIATES, L.P.

By: /s/ Paul E. Singer
-------------------------------------
Paul E. Singer
General Partner

- 40 -

<PAGE> 1

EXHIBIT 11.01

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
COMPUTATION OF INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
------------------------------
1997 1996
------------ ------------
(UNAUDITED)
<S> <C> <C>
COMPUTATION OF LOSS PER COMMON SHARE:
Net loss .............................................. $ (137) $ (1,193)
Dividend requirement on $2.4375 preferred stock ....... (3,936)
------------ ------------
Net loss applicable to common stock ................... $ (137) $ (5,129)
============ ============

LOSS PER COMMON SHARE--ASSUMING
NO AND FULL DILUTION:
Net loss .............................................. $ (0.01) $ (0.09)
Dividend requirement on $2.4375 preferred stock ....... (0.31)
============ ============

Net loss per common share ............................. $ (0.01) $ (0.40)
============ ============

COMPUTATION OF WEIGHTED AVERAGE COMMON SHARES--
PRIMARY AND FULLY DILUTED:
Weighted average number of common shares outstanding .. 21,634,143 12,480,518
Common shares issuable for warrants and under incentive
stock option plan .................................. 890,250
Less shares assumed repurchased with proceeds ......... (485,960)
------------ ------------
21,634,143 12,884,808
============ ============

</TABLE>

<PAGE> 1

EXHIBIT 11.02

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
(DEBTOR IN POSSESSION)
COMPUTATION OF INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
JUNE 30,
------------------------------
1997 1996
---- ----
<S> <C> <C>
COMPUTATION OF LOSS PER COMMON SHARE:
Net income (loss) ..................................... $ 139 $ (621)
Dividend requirement on $2.4375 preferred stock ....... 0 (1,402)
------------ ------------
Net income (loss) applicable to common stock .......... $ 139 $ (2,023)
============ ============

LOSS PER COMMON SHARE--ASSUMING
NO AND FULL DILUTION:
Net income (loss) ..................................... $ 0.01 $ (0.05)
Dividend requirement on $2.4375 preferred stock ....... (0.10)
------------ ============
Net income (loss) per common share .................... $ 0.01 $ (0.15)
============ ============

COMPUTATION OF WEIGHTED AVERAGE COMMON SHARES--
PRIMARY AND FULLY DILUTED:
Weighted average number of common shares outstanding .. 22,035,860 12,666,545
Common shares issuable for warrants and under incentive
stock option plan .................................. 890,250
Less shares assumed repurchased with proceeds ......... (500,035)
------------ ------------
22,035,860 13,056,760
============ ============
</TABLE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,489
<SECURITIES> 0
<RECEIVABLES> 20,716
<ALLOWANCES> 1,624
<INVENTORY> 530
<CURRENT-ASSETS> 27,267
<PP&E> 95,805
<DEPRECIATION> 60,447
<TOTAL-ASSETS> 65,290
<CURRENT-LIABILITIES> 14,494
<BONDS> 0
0
1,513
<COMMON> 44
<OTHER-SE> (34,270)
<TOTAL-LIABILITY-AND-EQUITY> 65,290
<SALES> 0
<TOTAL-REVENUES> 67,169
<CGS> 51,820
<TOTAL-COSTS> 61,567
<OTHER-EXPENSES> 215
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,703
<INCOME-PRETAX> 1,534
<INCOME-TAX> 1,671
<INCOME-CONTINUING> (137)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (137)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)

</TABLE>