GRANT GEOPHYSICAL INC, S-1, 1997-12-24

GRANT GEOPHYSICAL INC
S-1, 1997-12-24
OIL & GAS FIELD EXPLORATION SERVICES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1997

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------

GRANT GEOPHYSICAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 1382 76-0548468
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
ORGANIZATION)
</TABLE>

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

16850 PARK ROW
HOUSTON, TEXAS 77084
(281) 398-9503
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

<TABLE>
<S> <C>
LARRY E. LENIG, JR. JONATHAN D. POLLOCK
PRESIDENT AND CHIEF EXECUTIVE OFFICER ELLIOTT ASSOCIATES, L.P.
GRANT GEOPHYSICAL, INC. 712 FIFTH AVE.
16850 PARK ROW NEW YORK, NEW YORK 10011
HOUSTON, TEXAS 77084 (212) 506-2999
(281) 398-9503
</TABLE>

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENTS FOR SERVICE)
------------------------

COPY TO:

CHRISTOPHER M. KELLY, ESQ.
JONES, DAY, REAVIS & POGUE
901 LAKESIDE AVENUE
CLEVELAND, OHIO 44114-1116
(216) 586-3939

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==================================================================================================================
AMOUNT PROPOSED MAXIMUM, PROPOSED MAXIMUM,
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE(1) REGISTRATION FEE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par 3,459,414 $5.00 $17,297,070.00 $5,102.64
value........................
==================================================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(a) under the Securities Act of 1933.

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

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF SUCH STATE.

SUBJECT TO COMPLETION, DATED DECEMBER 24, 1997
SUBSCRIPTION OFFERING PROSPECTUS
3,459,414 SHARES

[GRANT GEOPHYSICAL, INC. LOGO]
COMMON STOCK
------------------------
THE RIGHT TO SUBSCRIBE FOR SHARES OF COMMON STOCK PURSUANT TO THIS SUBSCRIPTION
OFFERING
WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON , 1998.
------------------------

Elliott Associates, L.P. ("Elliott") and Westgate International, L.P.
("Westgate," and together with Elliott, the "Selling Stockholders") are hereby
offering for sale 3,459,414 shares of Common Stock, par value $.001 per share
(the "Common Stock"), of Grant Geophysical, Inc. (the "Company") in a
subscription offering (the "Subscription Offering") to Eligible Subscribers. The
Subscription Offering is being made pursuant to the Second Amended Plan of
Reorganization (the "Plan") of the Company's predecessor, GGI Liquidating
Corporation ("GGI"). The Company will not receive any proceeds from the sale of
Common Stock offered pursuant to the Subscription Offering.

PURSUANT TO THE PLAN, THE COMPANY IS REQUIRED (IN MOST CIRCUMSTANCES) TO
OFFER 4,750,000 SHARES OF COMMON STOCK TO CERTAIN HOLDERS OF CLAIMS AND OTHER
INTERESTS UNDER THE PLAN FOR AN AGGREGATE PURCHASE PRICE OF $23,750,000. THE
PLAN ALSO AUTHORIZED THE OFFERING OF SHARES OF COMMON STOCK OF A SUCCESSOR
COMPANY ON ECONOMICALLY EQUIVALENT TERMS. THE PLAN PROVIDES, HOWEVER, THAT
ELLIOTT OR ITS AFFILIATES MAY PAY THE ENTIRE PURCHASE PRICE TO GGI, REPRESENTING
THE TOTAL ANTICIPATED PROCEEDS OF SUCH OFFERING, AND THEN CONDUCT A SUBSCRIPTION
OFFERING AND RETAIN THE PROCEEDS THEREFROM, WHICH ELLIOTT HAS ELECTED TO DO. SEE
"SUBSCRIPTION PROCEDURES -- SUBSCRIPTION RIGHTS; ELIGIBLE SUBSCRIBERS." BECAUSE
ELLIOTT AND CERTAIN OF ITS AFFILIATES, AS INTEREST HOLDERS UNDER THE PLAN, WERE
ENTITLED TO PURCHASE 1,290,586 SHARES OF COMMON STOCK IN AN OFFERING BY THE
COMPANY, THE SELLING STOCKHOLDERS ARE OFFERING THE BALANCE OF SUCH SHARES OF
COMMON STOCK TO THE ELIGIBLE SUBSCRIBERS PURSUANT TO THIS SUBSCRIPTION OFFERING.

Rights to subscribe for shares of Common Stock are nontransferable and will
expire if not exercised on or prior to 5:00 p.m., Eastern Standard Time, on
, 1998 (such time on such date being hereinafter called the
"Expiration Date"). Subscribers must make payment for shares prior to the
Expiration Date.

Eligible Subscribers may subscribe in the Subscription Offering at $5.00 per
share (the "Subscription Purchase Price") only for such number of shares as such
Eligible Subscriber is entitled to purchase in the Subscription Offering
pursuant to the Plan. NO PERSON IS REQUIRED TO SUBSCRIBE FOR SHARES OF COMMON
STOCK IN THE SUBSCRIPTION OFFERING.

A Subscription Exercise Notice accompanies this Subscription Offering
Prospectus. Each Eligible Subscriber who wishes to subscribe for shares of
Common Stock in the Subscription Offering must complete and execute a
Subscription Exercise Notice, indicating the number of shares of Common Stock
subscribed for. The Subscription Exercise Notice delivered to each Eligible
Subscriber sets forth the maximum number of shares of Common Stock that such
Eligible Subscriber is entitled to purchase in the Subscription Offering. Each
Eligible Subscriber must remit full payment with the Subscription Exercise
Notice by certified check or bank draft drawn upon a United States bank or wire
transfer in an amount equal to the product of the Subscription Purchase Price
and the number of shares of Common Stock subscribed for. See "Subscription
Procedures -- Exercise of Rights to Purchase Common Stock."

Eligible Subscribers must deliver the Subscription Exercise Notice, together
with payment, in person, to the Subscription Agent, or by using the enclosed
return envelope. Subscription Exercise Notices, once delivered, may not be
amended, modified or rescinded, unless permitted by the Selling Stockholders in
their sole discretion, to correct immaterial irregularities. Each Eligible
Subscriber will receive as many shares of Common Stock as are permitted to be
purchased by such Eligible Subscriber as set forth in the Plan provided that
such subscriber complies with the terms and conditions set forth herein. See
"Subscription Procedures."

In connection with the Subscription Offering, the Company has not made an
application to list the Common Stock on any securities exchange or to admit the
Common Stock for trading in the National Association of Securities Dealers
Automated Quotation System. See "Risk Factors -- No Public Market."

Any questions regarding the procedures for subscribing for Common Stock may
be directed to the Subscription Agent, ( ) - .
------------------------
SEE "RISK FACTORS" ON PAGE 10 FOR A DISCUSSION OF
CERTAIN MATTERS THAT SHOULD BE CONSIDERED BY ELIGIBLE SUBSCRIBERS.
------------------------
THIS SUBSCRIPTION OFFERING PROSPECTUS AND THE RELATED SUBSCRIPTION EXERCISE
NOTICE CONTAIN IMPORTANT INFORMATION. ELIGIBLE SUBSCRIBERS ARE URGED TO READ
THIS SUBSCRIPTION OFFERING PROSPECTUS AND THE RELATED SUBSCRIPTION EXERCISE
NOTICE CAREFULLY BEFORE DECIDING WHETHER TO EXERCISE THEIR RIGHTS TO SUBSCRIBE
FOR SHARES OF COMMON STOCK PURSUANT TO THE SUBSCRIPTION OFFERING.
THESE SECURITIES HAVE NOT 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 PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION OFFERING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
SUBSCRIPTION PROCEEDS TO SELLING
PURCHASE PRICE STOCKHOLDERS(1)
---------------------- ----------------------
<S> <C> <C>
Per Share................................................................... $5.00 $5.00
Total(2).................................................................... $17,297,070.00 $17,297,070.00
</TABLE>

- ---------------
(1) All expenses of issuance and distribution, estimated to be $ , will
be paid by the Company.

(2) Assumes all Eligible Subscribers exercise their subscription rights in full.

, 1998
<PAGE> 3

[THIS PAGE INTENTIONALLY LEFT BLANK]

2
<PAGE> 4

SUMMARY

The following summary is qualified in its entirety by and should be read in
conjunction with the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Subscription Offering
Prospectus. Unless otherwise indicated, the information set forth herein
reflects the recent acquisition (the "Acquisition") of Solid State Geophysical
Inc. ("Solid State") by Grant. As used herein, the term "GGI" refers to GGI
Liquidating Corporation; the term "Grant" refers to Grant Geophysical, Inc., a
newly formed corporation that purchased substantially all of the assets and
assumed certain liabilities of GGI in connection with the consummation of the
Plan, together with Grant's consolidated subsidiaries; and the term "Company"
refers to the combined operations of Grant and Solid State and their respective
consolidated subsidiaries. Unless the context otherwise requires, the pro forma
information contained herein gives effect to the consummation of the Plan, the
issuance of the Subordinated Note (as defined herein) and the Acquisition as if
they were completed as of January 1, 1996 for the statement of operations data
and September 30, 1997 for the balance sheet data. All currency amounts
contained herein are, unless otherwise specifically indicated, stated in U.S.
dollars and conform to United States generally accepted accounting principles.
Eligible Subscribers (as defined herein) should carefully consider the
information set forth under "Risk Factors."

THE COMPANY

The Company is a leading provider of seismic data acquisition services in
land and transition zone environments in selected markets, including the United
States, Canada, Latin America and the Far East. Through its predecessors,
including GGI and Solid State, the Company has participated in the seismic data
acquisition services business in the United States and Latin America since the
1940s, the Far East since the 1960s and Canada since the 1970s. The Company has
conducted operations in each of these markets, as well as in the Middle East and
Africa, in the past three years. The Company's seismic data acquisition services
typically are provided on an exclusive contract basis to domestic and
international oil and gas companies and seismic data marketing companies. The
Company also owns interests in certain multi-client seismic data covering
selected areas in the United States and Canada that is marketed broadly on a
non-exclusive basis to oil and gas companies.

According to industry sources, on a pro forma basis after giving effect to
the Acquisition, as of November 30, 1997, the Company is the third largest land
seismic data acquisition company operating in the western hemisphere, based on
the number of seismic data acquisition crews in operation. As of November 30,
1997, on a pro forma basis after giving effect to the Acquisition, the Company
was operating 20 seismic data acquisition crews, consisting of 17 land and three
transition zone crews, comprising approximately 27,370 seismic recording
channels. All of the Company's seismic data acquisition crews are capable of
performing three dimensional ("3D") and two dimensional ("2D") seismic surveys
in land environments, and four crews are equipped to perform surveys in
transition zone environments. Transition zone environments include swamps,
marshes and shallow water areas that require specialized equipment and must be
surveyed with minimal disruption to the natural environment. Three transition
zone crews employ remote digital seismic data recording systems, which are used
primarily to perform surveys in certain logistically challenging areas, such as
highly populated regions where cable-based recording systems are impractical.
The Company has over 20 years of experience operating in transition zone
environments.

As of November 30, 1997, on a pro forma basis after giving effect to the
Acquisition, the Company was operating a total of seven crews in the United
States, consisting of five land and two transition zone crews, five land crews
in Latin America, six land crews in Canada, and two crews in the Far East,
consisting of one land and one transition zone crew. An additional transition
zone crew is scheduled to begin operations in the Far East during February 1998.
For the nine months ended September 30, 1997, on a pro forma basis after giving
effect to the consummation of the Plan, the issuance of the Subordinated Note
and the Acquisition, the Company's total revenues were $136.0 million, with
39.6% from Latin America, 36.2% from the United States, 11.1% from Canada, 6.6%
from Africa and the Middle East and 6.5% from the Far East. As of November 30,
1997, on a pro forma basis after giving effect to the Acquisition, the Company
estimates that its total backlog was approximately $138.3 million, with
approximately 77.5% of such amount expected to be completed in 1998. On a pro
forma basis after giving effect to the Acquisition, the Company has committed
approximately $11 million to capital spending during the fourth quarter of 1997
and plans to commit approximately $20 million to capital spending in 1998 to
upgrade and expand its seismic data acquisition equipment.

3
<PAGE> 5

THE REORGANIZATION AND THE ACQUISITION

In December 1996, GGI filed a voluntary petition for relief under chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code"). In connection
with its reorganization, GGI replaced its senior management, disposed of
unprofitable operations and developed the Plan, which was consummated on
September 30, 1997 (the "Effective Date") with Grant's purchase of substantially
all of the assets and assumption of certain liabilities of GGI.

In December 1997, Grant completed the acquisition of Solid State, a leading
provider of land seismic data acquisition services in Canada. The Company
believes that the combined operations of Grant and Solid State will expand its
market presence and enhance the Company's ability to compete more effectively
for projects in its selected markets. The Company also believes that the
Acquisition will increase management and operating depth, mitigate the effects
of seasonality and create operating efficiencies by consolidating operations,
increasing overall crew utilization and reducing capital expenditures. As of the
date of the Acquisition, Solid State was operating a total of nine land crews,
consisting of six crews in Canada, two crews in the United States and one crew
in Bolivia, comprising approximately 9,500 seismic recording channels.

THE INDUSTRY

Technical advances in the seismic services industry have increased the
probability of oil and gas exploration success and improved the delineation of
subsurface geological structures, which have in turn lowered overall exploration
and development costs and increased worldwide demand for seismic services. In
addition, the industry is experiencing growing demand for non-exclusive
multi-client seismic data due to the high cost and risk of drilling exploration
wells and the relatively high cost of acquiring and processing 3D seismic data.
Multi-client data allows numerous oil and gas companies to purchase the same
seismic data, thereby expanding the overall market for such data while lowering
the price charged to each customer.

BUSINESS STRATEGY

The Company's objectives are to strengthen its position as an established
provider of land and transition zone seismic data acquisition and related
services, increase revenue and revenue predictability and improve cash flow and
profitability. To achieve these objectives, the Company is pursuing the
following business strategies:

Upgrade and Expand Seismic Services in Selected Growth Markets. The Company
plans to upgrade and expand its seismic data acquisition services in growing
markets where it has significant operating experience, including the United
States, particularly in the Gulf Coast, mid-continent and West Texas regions,
Canada, Latin America and the Far East. The Company believes that its experience
in these markets provides it with certain advantages over its competitors,
including lower mobilization costs, well established customer relationships and
familiarity with country specific socio-political dynamics. In 1998, the
Company's primary expansion focus will be on the Far East, where the Company
perceives sustainable long-term growth opportunities due to the exploration
potential and growing demand for oil and gas in the region.

4
<PAGE> 6

accountability, implementing additional procedures designed to control costs,
improving revenue predictability, increasing contractual weather downtime
protection and improving bidding practices. Management believes that the
Acquisition is consistent with this strategy in that it will mitigate the
effects of seasonality and create operating efficiencies by consolidating
operations, increasing overall crew utilization and reducing capital
expenditures. In addition, the Company has adopted policies to focus its
operations primarily in regions where it has significant operating experience
and will undertake certain higher-risk contracts only on a term or cost-plus
basis. These policies are intended to reduce the financial risks associated with
operations in certain geographic areas.

Acquire Complementary Seismic Data Acquisition and Processing
Businesses. The Company regularly evaluates potential acquisitions of seismic
data acquisition and processing businesses in an effort to expand and strengthen
its activities in its selected markets. The United States and Canadian markets
are served by a large number of seismic data acquisition companies, and the
Company believes that it can improve its competitive position by acquiring
complementary competitors. The Company believes that its utilization of the
crews and equipment of such acquired competitors would increase the Company's
capacity and further enable the Company to deploy crews and equipment to
international locations, which have historically yielded higher profit margins.
In addition, the Company believes that the acquisition of a seismic data
processing business would complement its existing services and thereby improve
its competitive position with existing and potential customers. Management
believes that entry into the seismic data processing business would be
accomplished best through the acquisition of an established seismic data
processing company.

Expand Selected Multi-Client Data Acquisition Activities. The Company plans
to increase its investment in non-exclusive multi-client data for licensing to
multiple oil and gas companies. Increased demand by oil and gas companies for
larger and higher cost 3D surveys has resulted in significant growth in the use
of multi-client data in active oil and gas producing regions. This increased
demand has expanded the market for such data and lowered the overall risk to
seismic data acquisition companies that acquire, process and own such data.
Recently, the Company entered into an agreement with a third party that
specializes in creating and marketing multi-client surveys. The Company intends
to conduct thorough marketing and cost analyses to determine the market demand
and funding requirements for such projects and obtain significant customer
commitments before initiating such projects, thereby reducing the overall
investment risk associated with such projects. For 1998, the Company has
budgeted approximately $16 million, before customer commitments, for
multi-client data acquisition projects.

Invest in Leading Technology. The Company believes that growth in demand
for geophysical services will continue to be associated with new technologies.
The Company intends to periodically upgrade its seismic data acquisition
equipment to maintain technological capabilities comparable or superior to those
of its competitors. In addition, the Company intends to expand its use of
innovative seismic data acquisition techniques, including three-component 3D and
time-lapse 3D, or 4D, seismic data acquisition services, which are experiencing
growing market demand.

THE SUBSCRIPTION OFFERING

Common Stock Offered by the
Selling Stockholders..... 3,459,414 shares

Common Stock Outstanding
after the Subscription
Offering................. 14,390,055 shares

Use of Proceeds............ The Company will not receive any proceeds from the
sale of the Common Stock offered hereby.

5
<PAGE> 7

SUBSCRIPTION PROCEDURES

The Subscription Offering is being effected pursuant to the Plan, which was
confirmed by the United States Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court") on September 15, 1997 and became effective on the
Effective Date.

SUBSCRIPTION RIGHTS; ELIGIBLE SUBSCRIBERS

This Subscription Offering Prospectus and a Subscription Exercise Notice,
which contain information concerning the Subscription Offering, are being mailed
to each Eligible Subscriber.

The Plan provides that only Eligible Subscribers have the right to
participate in the Subscription Offering. Eligible Subscribers' rights to
purchase Common Stock are nontransferable, will not be evidenced by
certificates, and will expire on the Expiration Date. NO PERSON IS REQUIRED TO
PURCHASE ANY SHARES OF COMMON STOCK IN THE SUBSCRIPTION OFFERING.

EXERCISE OF RIGHTS TO PURCHASE COMMON STOCK

Each Eligible Subscriber who wishes to exercise rights to purchase shares
of Common Stock must properly complete, duly execute and deliver the
accompanying Subscription Exercise Notice indicating the number of shares of
Common Stock subscribed for, together with a certified check or bank draft drawn
upon a United States bank or wire transfer in an amount equal to the product of
the Subscription Purchase Price and the number of shares sought to be
subscribed. The Subscription Exercise Notice delivered to each Eligible
Subscriber sets forth the maximum number of shares of Common Stock that such
Eligible Subscriber is entitled to purchase in the Subscription Offering. The
Subscription Exercise Notice, together with full payment for shares subscribed
for, may be delivered, in person, to the Subscription Agent or be mailed in the
enclosed return envelope. Subscription Exercise Notices, once delivered, may not
be amended, modified or rescinded, unless permitted by the Selling Stockholders
in their sole discretion, to correct immaterial irregularities.

WHETHER HAND DELIVERED OR MAILED, SUBSCRIPTION EXERCISE NOTICES AND PAYMENT
MUST BE RECEIVED BY 5:00 P.M. EASTERN STANDARD TIME ON , 1998.
Failure of such receipt by the expiration time for any reason, will be deemed a
waiver and release by the Eligible Subscriber of any rights the Eligible
Subscriber may have to purchase shares of Common Stock in the Subscription
Offering. An executed Subscription Exercise Notice, once delivered cannot be
amended, modified or rescinded by an Eligible Subscriber. All determinations as
to proper completion, due execution, timeliness, eligibility and other matters
affecting the validity or effectiveness of any attempted exercise of rights to
purchase shares of Common Stock shall be made by the Selling Stockholders, whose
determination shall be final and binding. The Selling Stockholders, in their
sole discretion, may waive any defect or irregularity, or permit a defect or
irregularity to be corrected within such time as they may determine or reject
the purported exercise of any rights to purchase shares of Common Stock subject
to any such defect or irregularity. Deliveries required to be received by the
Subscription Agent in connection with a purported exercise of rights to purchase
shares of Common Stock will not be deemed to have been so received or accepted
until actual receipt thereof by the Subscription Agent shall have occurred and
any defects or irregularities shall have been waived or cured within such time
as the Selling Stockholders may determine in their sole discretion. Neither the
Selling Stockholders nor the Subscription Agent will have any obligation to give
notice to any Eligible Subscriber of any defect or irregularity in connection
with any purported exercise thereof or incur any liability as a result of any
failure to give such notice.

Questions regarding subscription procedures may be directed to the
Subscription Agent, ( ) - .

SUBSCRIPTION AGENT

The Subscription Agent with respect to the Subscription Offering is
(the "Subscription Agent"). The address and telephone number of the
Subscription Agent are set forth in "Subscription Procedures -- Subscription
Agent" and in the Subscription Exercise Notice.

6
<PAGE> 8

PURCHASE PRICE

The Subscription Purchase Price will be $5.00 per share.

THE SUBSCRIPTION PURCHASE PRICE IS NOT INTENDED, AND MUST NOT BE CONSTRUED,
AS AN APPRAISAL OR RECOMMENDATION OF ANY KIND AS TO THE ADVISABILITY OF
PURCHASING SHARES OF COMMON STOCK. THE SUBSCRIPTION PURCHASE PRICE WAS
DETERMINED IN CONNECTION WITH THE CONFIRMATION OF THE PLAN BY THE BANKRUPTCY
COURT AND SHOULD NOT BE CONSIDERED AS AN INDICATION OF THE CURRENT LIQUIDATION
VALUE OF THE COMPANY OR THE PRICE AT WHICH THE COMMON STOCK WILL TRADE AFTER
COMPLETION OF THE SUBSCRIPTION OFFERING, AND THE SUBSCRIPTION PURCHASE PRICE IS
NOT INTENDED, AND MUST NOT BE CONSTRUED, TO EXPRESS AN OPINION AS TO THE VALUE
OF COMMON STOCK OFFERED HEREBY.

SETTLEMENT FOR SHARES; DELIVERY OF CERTIFICATES

As promptly as practicable following the Expiration Date, the Subscription
Agent will mail, or cause to be mailed, to each Eligible Subscriber that has
sought to exercise such rights to purchase shares of Common Stock, a written
statement specifying the number of shares of Common Stock validly and
effectively subscribed for, together with a stock certificate representing the
shares of Common Stock so purchased.

RISK FACTORS

An investment in the Common Stock involves certain risks that Eligible
Subscribers should carefully evaluate prior to exercising their subscription
rights. See "Risk Factors."

7
<PAGE> 9

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The following summary historical financial data, except for operating data,
for GGI is presented below as of the end of each of the years in the three-year
period ended December 31, 1996 and the nine months ended September 30, 1997 and
is derived from the consolidated financial statements of GGI, which have been
audited by KPMG Peat Marwick LLP, independent certified public accountants. This
data should be read in conjunction with such consolidated financial statements
and notes thereto. The summary balance sheet data of Grant at September 30, 1997
is derived from the consolidated financial statements of Grant, which have been
audited by KPMG Peat Marwick LLP, independent certified public accountants. The
selected summary financial data, except for operating data, for the nine-month
period ended September 30, 1996 has been derived from the unaudited consolidated
financial statements of GGI, which include all adjustments, consisting of normal
recurring adjustments, that the Company considers necessary for a fair
presentation of its financial position and results of operation for this period.

The summary pro forma statement of operations data for the Company for the
year ended December 31, 1996 and for the nine months ended September 30, 1997
give effect to the consummation of the Plan, the issuance of the Subordinated
Note and the Acquisition as if they were completed as of January 1, 1996. The
pro forma selected balance sheet data at September 30, 1997 gives effect to the
consummation of the Plan, the issuance of the Subordinated Note and the
Acquisition as if they were completed at September 30, 1997. Solid State's
fiscal year end is August 31. For pro forma purposes, the statement of
operations data for Solid State has been adjusted to reflect the period December
1, 1995 through November 30, 1996 and December 1, 1996 through August 31, 1997
to combine with GGI's year ended December 31, 1996 and nine months ended
September 30, 1997.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
-------------------------------------------------- ----------------------------------------
GGI THE COMPANY GGI THE COMPANY
------------------------------------ PRO FORMA ------------------------- PRO FORMA
1994 1995 1996 1996(3) 1996 1997 1997(3)
---------- ---------- ---------- ----------- ---------- ---------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Revenues............ $ 73,691 $ 91,996 $ 105,523 $ 138,155 $ 80,925 $ 92,705 $ 135,997
Expenses:
Operating
expenses........ 53,132 69,046 136,326(1) 169,563 83,243(4) 71,006 107,438
Selling, general
and
administrative
expenses........ 7,810 8,527 17,865(2) 20,638 8,948(5) 6,473 8,872
Depreciation and
amortization.... 12,079 9,424 11,500 17,522 8,237 8,432 14,785
Asset
impairment...... 9,911 -- 5,802 5,802 -- -- --
-------- ------- -------- ------- -------- ------- -------
Total
expenses...... 82,932 86,997 171,493 213,525 100,428 85,911 131,095
-------- ------- -------- ------- -------- ------- -------
Operating income
(loss)........ (9,241) 4,999 (65,970) (75,370) (19,503) 6,794 4,902
Other income
(deductions):
Interest expense,
net............. (3,384) (3,522) (7,522) (8,022) (4,426) (3,758) (5,084)
Reorganization
costs........... -- -- (412) -- -- (3,543)(6) --
Other............. 1,380 2,076 (502) (152) 26 2,266(7) 2,077
-------- ------- -------- ------- -------- ------- -------
Total other
income
(deductions)... (2,004) (1,446) (8,436) (8,174) (4,400) (5,035) (3,007)
-------- ------- -------- ------- -------- ------- -------
Income (loss)
before income
taxes......... (11,245) 3,553 (74,406) (83,544) (23,903) 1,759 1,895
Income tax
expense........... 193 391 1,621 1,025 945 2,184 1,701
-------- ------- -------- ------- -------- ------- -------
Net income (loss)... $ (11,438) $ 3,162 $ (76,027) $ (84,569) $ (24,848) $ (425) $ 194
======== ======= ======== ======= ======== ======= =======
Net loss applicable
to common stock... $ (16,696) $ (2,096) $ (82,390) $ (85,619) $ (30,185) $ (425) $ (676)
======== ======= ======== ======= ======== ======= =======
</TABLE>

8
<PAGE> 10

<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1997
------------------------
GRANT THE COMPANY
ACTUAL PRO FORMA
-------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash...................................................................... $ 5,939 $ 5,625
Working capital........................................................... (24,039) (9,284)
Total assets.............................................................. 82,849 148,766
Long-term debt, including current portion................................. 10,149 67,280
Stockholders' equity...................................................... 19,571 49,668
</TABLE>

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

(1) Operating expenses for the year ended December 31, 1996 include costs of
operations in excess of planned costs in Peru ($23.0 million) and Nigeria
($2.5 million). Operations in both locations have been discontinued. Also
included in operating expenses are costs incurred in the United States
relating to the unsuccessful deployment of a proprietary data acquisition
system ($12.1 million) and a writedown of certain deferred costs, prepaid
expenses and other assets ($5.6 million).

(2) Selling, general and administrative expenses for the year ended December 31,
1996 include a reserve for doubtful accounts of $5.5 million, severance
costs of $423,000, the write-off of deferred costs of a proprietary data
acquisition system of $823,000 and legal fees of $367,000.

(3) Pro forma after giving effect to the consummation of the Plan, the issuance
of the Subordinated Note and the Acquisition, as if they were completed as
of January 1, 1996 for the statement of operations data and September 30,
1997 for the balance sheet data.

(4) Operating expenses for the nine months ended September 30, 1996 include
costs of operations in excess of planned costs in Peru ($10.7 million) and
Nigeria ($285,000). Operations in both locations have been discontinued.
Also included in operating expenses are costs incurred in the United States
relating to the unsuccessful deployment of a proprietary data acquisition
system ($4.2 million).

(5) Selling, general and administrative expenses for the nine months ended
September 30, 1996 include a reserve for doubtful accounts of $1.3 million.

(6) Reorganization costs for the nine months ended September 30, 1997 are costs
associated with GGI's Reorganization.

(7) Other income (deductions) for the nine months ended September 30, 1997
relate to the settlement of a long-standing dispute between GGI's Brazilian
subsidiary and a former customer.

(8) In addition, GGI on an actual and the Company on a pro forma basis was
leasing 1,600 seismic recording channels at December 31, 1996 and September
30, 1996 and was leasing 1,500 seismic recording channels at September 30,
1997.

9
<PAGE> 11

RISK FACTORS

Eligible Subscribers should consider carefully the following factors, as
well as the other information provided elsewhere in this Subscription Offering
Prospectus before deciding whether to subscribe for shares of Common Stock. See
"Disclosure Regarding Forward-Looking Statements."

RECENT INSOLVENCY AND REORGANIZATION OF GGI; RECENT OPERATING LOSSES OF SOLID
STATE

GGI sought protection under chapter 11 of the Bankruptcy Code in December
1996. In the bankruptcy, previous investors in, and unsecured lenders to, GGI
incurred substantial losses. From 1992 to 1994 and in 1996, GGI had significant
operating losses, including a net loss of approximately $76 million in 1996. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements of GGI and the notes
thereto, included elsewhere in this Subscription Offering Prospectus.

In connection with GGI's reorganization, Grant was formed in September 1997
to acquire certain assets and assume certain liabilities of GGI. Former senior
management of GGI has been replaced since the commencement of its reorganization
in December 1996, and the Company's current senior management has concentrated
on formulating and refining the Company's business strategy. Since the
consummation of the Plan, the Company has no meaningful financial performance
history.

Solid State reported revenues of Cdn $47.7 million and Cdn $68.7 million
for its fiscal years ended August 31, 1996 and 1997, respectively, and a net
loss of Cdn $12.1 million and Cdn $5.5 million for fiscal years 1996 and 1997,
respectively. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Impact of Solid State Acquisition." Management of
Solid State has disclosed in a note to its fiscal 1997 financial statements that
material uncertainties exist that may affect Solid State's ability to continue
as a going concern. The auditors of Solid State, Price Waterhouse, Chartered
Accountants, have noted this significant doubt on the Company's ability to
continue as a going concern in comments appended to their auditors' report dated
October 31, 1997. There can be no assurance that the financial performance of
Solid State will improve in future periods. If Solid State's financial
performance does not so improve, the Company's results of operations and
financial condition could be adversely affected.

SUBSTANTIAL LEVERAGE

As a result of the indebtedness incurred under the Credit Facility (as
defined herein),the Subordinated Note and in connection with the Acquisition, as
well as the assumption of the existing debt of Grant and Solid State, the
Company is highly leveraged. As of September 30, 1997, on a pro forma basis
after giving effect to the consummation of the Plan, the issuance of the
Subordinated Note and the Acquisition, the Company's consolidated long-term
indebtedness, including the current portion of long-term debt, was approximately
$67.3 million, approximately 39.9% of which was at variable rates of interest,
and has increased to approximately $72.8 million as of December 1997. See
"Capitalization," and "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."
Payments of interest on and principal of such pro forma consolidated long-term
indebtedness will materially decrease funds available to the Company to finance
capital expenditures and operations. Subject to compliance with various
financial and operating covenants and restrictions contained in the Company's
existing debt instruments, the Company and its subsidiaries may incur additional
indebtedness from time to time.

The degree to which the Company is leveraged could have important
consequences to holders of Common Stock, including, without limitation: (i) a
substantial portion of the Company's cash flow from operations must be dedicated
to the payment of interest and principal on its indebtedness, (ii) the Company's
leverage position will substantially increase its vulnerability to economic
downturns and may limit its ability to withstand competitive pressures, (iii)
the Company's ability to obtain additional financing for working capital,
capital expenditures, acquisitions and general corporate and other purposes may
be impaired and (iv) a portion of the Company's borrowings is at variable rates
of interest which subject the Company to fluctuations in interest rates.

10
<PAGE> 12

RESTRICTIONS IMPOSED BY THE TERMS OF THE COMPANY'S INDEBTEDNESS

The terms and conditions of the Company's outstanding debt instruments
impose, and the terms and conditions of future debt instruments of the Company
may impose, restrictions on the Company that affect, among other things, its
ability to incur debt, pay dividends or make distributions, make acquisitions,
create liens, sell assets and make certain investments.

In 1996 and 1997, Solid State failed to comply with certain financial
covenants under certain agreements relating to its outstanding indebtedness. In
addition, certain other debt agreements of the Company contain cross-default
provisions under which a failure to comply with any covenant in one agreement
could become a default under such other debt agreements. Solid State has
obtained waivers of certain covenants and events of default under certain of its
outstanding debt instruments. Solid State has not, however, obtained waivers
under all such debt instruments under which it may be in default. The Company
believes that it will be able to obtain such waivers and to comply with such
covenants in 1998 and the foreseeable future. There can be no assurance,
however, that these debt holders will not accelerate such indebtedness and
demand immediate payment of the outstanding amount of such indebtedness. Such
acceleration and demand by debt holders would have a significant adverse effect
upon the Company's financial condition.

The ability of the Company to comply with the terms of its debt instruments
can be affected by events beyond its control, including events and changes in
the competitive environment, which could impair the Company's operating
performance. There can be no assurance that the Company will be able to comply
with the provisions of its debt instruments, including the Credit Facility.
Breach of any of these covenants or the failure to fulfill the obligations
thereunder and the lapse of any applicable grace periods could result in an
event of default pursuant to which holders of such indebtedness could declare
all amounts outstanding under such debt instruments to be due and payable
immediately. Any such declaration under a debt instrument is likely to result in
an event of default under the other debt instruments of the Company, if any,
then outstanding. There can be no assurance that the assets or cash flows of the
Company would be sufficient to repay in full borrowings under its outstanding
debt instruments, whether upon maturity or in the event of acceleration upon an
event of default, or that the Company would be able to refinance or restructure
the payments of such indebtedness. The Company's ability to meet its debt
obligations will depend upon its ability to execute its business strategy, which
includes successfully integrating the business of Solid State into its existing
operations and other factors, many of which are not within the Company's
control.

DEPENDENCE UPON ENERGY INDUSTRY SPENDING

Demand for the Company's services depends upon the level of expenditures by
oil and gas companies for exploration, production and development activities.
These activities depend in part on current and expected oil and gas prices, the
cost of exploring for, producing and delivering oil and gas, the sale and
expiration dates of leases and concessions for oil and gas exploration in the
United States, Canada and other countries, the discovery rate of new oil and gas
reservoirs, domestic and international political, regulatory and economic
conditions and the ability of oil and gas companies to obtain capital. In
addition, a decrease in oil and gas expenditures could result from such factors
as unfavorable tax and other legislation or uncertainty concerning national
energy policies.

Since reaching a high in 1981, the number of companies providing seismic
data acquisition services has declined dramatically. Beginning in 1982, a sharp
decline in oil and gas prices led to a worldwide reduction in oil and gas
exploration activities. This decline resulted in a significant reduction in the
overall demand for seismic data acquisition services. Notwithstanding recent
increases in oil and gas exploration activity, no assurance can be given that
current levels of exploration activity will be maintained or that demand for the
Company's services will reflect the level of such activity. Decreases in
exploration activity would have a significant adverse effect upon the demand for
the Company's services and the Company's results of operations.

CAPITAL INTENSIVE BUSINESS; RISK OF TECHNOLOGICAL OBSOLESCENCE

Seismic data acquisition is a capital intensive business. The development
of seismic data acquisition equipment has been characterized by rapid
technological advancements in recent years, and the Company expects

11
<PAGE> 13

this trend to continue. There can be no assurance that manufacturers of seismic
data acquisition equipment will not develop new systems that have competitive
advantages over systems now in use that either render the Company's current
equipment obsolete or require the Company to make significant capital
expenditures to maintain its competitive position. The Company has committed
approximately $11 million to capital expenditures in the fourth quarter of 1997
and intends to commit approximately $20 million to capital expenditures in 1998
to upgrade and expand its seismic data acquisition equipment. The Company
intends to continually maintain and periodically upgrade its seismic data
acquisition equipment as often as necessary to maintain its competitive
position. Such upgrades may require large expenditures of capital in addition to
the Company's other capital expenditures. For 1998, the Company has also
budgeted approximately $16 million, before customer commitments, for
multi-client data acquisition activities. There can be no assurance that the
Company will have the necessary capital or that financing will be available on
favorable terms for any such future expenditures. The inability of the Company
to access the capital necessary to maintain and upgrade its seismic data
acquisition equipment and perform such multi-client data acquisition activities
may have a material adverse effect upon the Company's competitive position and
the demand for its services.

OPERATING RISKS; INSURANCE; HIGH FIXED COSTS

The Company's seismic data acquisition activities involve operating under
extreme weather and other hazardous conditions. Accordingly, these operations
are subject to risks of loss to property and injury to personnel from fires,
adverse weather and accidental explosions. Although the Company carries
insurance against these risks in amounts that it considers adequate, the Company
may not be able to obtain insurance against certain risks or for certain
equipment located from time to time in certain areas of the world.

Because of the high fixed costs involved in the major components of the
Company's business, downtime due to reduced demand, weather interruptions,
equipment failures, hazardous conditions or other causes can result in
significant operating losses. In recent years, GGI's contracts for seismic data
acquisition projects were predominately on a turnkey or on a combination
turnkey/term basis. Under the turnkey method, payments for data acquisition
projects are based upon the amount of data collected. Consequently, the Company
bears substantially all of the risk of business interruption caused by inclement
weather and other hazards. Under the term method, the customer pays a periodic
fee during the term of the project, thereby shifting certain risks of business
interruption to the customer. The Company also contracts for its services on a
cost-plus basis, which provides that the costs of a project plus a percentage
fee are borne by the customer. The Company plans to attempt to increase the
percentage of its term and cost-plus basis contracts in order to reduce the
financial risks associated with these operations; however, there can be no
assurance that such contracts will be widely acceptable to the Company's
customers or that competitors will not offer their services on a turnkey basis.

COMPETITION FOR SEISMIC BUSINESS

The land and transition zone seismic data acquisition business is highly
competitive. Competitive factors include price, crew experience, equipment and
crew availability, technological expertise, performance and reputation for
dependability. Certain of the Company's major competitors operate more seismic
data acquisition crews than the Company, provide integrated seismic data
acquisition, processing and interpretation services, have substantially greater
financial resources than the Company, are subsidiaries or divisions of major
industrial enterprises having far greater resources than the Company or have
more extensive relationships with major domestic and international oil and gas
companies. Such resources and relationships may enable these competitors to
maintain technological and certain other advantages that may provide them with
an advantage over the Company in bidding for contracts.

RELIANCE ON SIGNIFICANT CUSTOMERS AND PROJECTS

As is the case for many service companies in the oil and gas industry, a
relatively small number of customers or a limited number of significant projects
may account for a large percentage of the Company's net sales in any given year.
Moreover, such customers and projects may, and often do, vary from year to year.
During 1996 and the first nine months of 1997, GGI's five largest customers
accounted for approximately 42.3% and 53.0%, respectively, of GGI's net sales.
In the first nine months of 1997, the five largest customers of the Company, on
a

12
<PAGE> 14

pro forma basis after giving effect to the Acquisition, accounted for
approximately 55.3% of the Company's net sales. Although GGI and Solid State
have had long-term relationships with numerous customers, continuation of these
relationships is dependent on the customers' needs for the Company's services
and the customers' ongoing satisfaction with the price, quality, dependability
and availability of the Company's services. The loss or inability of the Company
to obtain such significant projects in the future could have a material impact
on the operating results of the Company.

RISKS INHERENT IN INTERNATIONAL OPERATIONS

Approximately 60.1% and 55.5% of GGI's revenues in 1996 and in the first
nine months of 1997, respectively, were derived from operations outside the
United States and Canada. On a pro forma basis after giving effect to the
Acquisition, the Company's revenues derived from operations outside the United
States and Canada for the year ended December 31, 1996 and the nine months ended
September 30, 1997, were approximately 49.8% and 52.7%, respectively. As a
result, the Company is subject to certain risks inherent in doing business
internationally. In addition to unpredictable operating risks, such risks
include the possibility of unfavorable changes in tax or other laws, partial or
total expropriation, the disruption of operations from labor and political
disturbances, insurrection or war, the effect of partial local ownership
requirements in certain countries, currency exchange rate fluctuations and
restrictions on currency repatriation.

To minimize currency risks, the Company generally denominates its contracts
in U.S. dollars, Canadian dollars or other currencies that it believes to be
stable. The Company's operations in certain areas outside the United States and
Canada may, however, require the Company to denominate contracts in currencies
other than U.S. dollars or Canadian dollars. While the Company employs certain
policies intended to reduce the risk associated with exchange rate fluctuations,
there can be no assurance that such policies will be effective or that
fluctuations in the value of non-U.S. or Canadian currencies will not materially
affect the Company's revenues in the future. The Company presently does not use
derivatives or forward foreign currency exchange rate hedging contracts, but may
elect to do so in the future.

The Company also obtains insurance against war, expropriation, confiscation
and nationalization when such insurance is available and when management
considers it advisable to do so. Such coverage is not always available, and when
available, is subject to unilateral cancellation by the insuring companies on
short notice. In addition, the Company's international operations may be in part
dependent upon foreign governmental funding of projects. Significant changes in
the level of foreign governmental funding of these projects could have an
unfavorable impact on the operating results of the Company.

DEPENDENCE ON KEY PERSONNEL

The Company believes that its success will depend to a significant extent
upon the continued services of certain key executive officers and operating
personnel. The Company has entered into employment agreements with certain of
its key executive officers. See "Management -- Employment Agreements." The
Company also depends on the services of professionals such as engineers,
geologists and geophysicists. The loss of the services of certain key executive
officers and operating personnel or the loss or shortage of a significant number
of professionals could have a material adverse effect on the Company. The
Company does not maintain key employee insurance on any of its personnel.

NO PUBLIC MARKET

The Common Stock will constitute a new issue of securities with no
established trading market. In connection with the Subscription Offering, the
Company has not made an application to list the Common Stock on any securities
exchange or to admit the Common Stock for trading in the National Association of
Securities Dealers Automated Quotation System, and there can be no assurance
that the Company will apply for such listing or admission in the future. Neither
the Subscription Agent nor any other person is obligated, or has committed, to
make a market in the Common Stock. Prior to the Subscription Offering, there has
been no public market for the Common Stock, and there can be no assurance as to
the development or continuation of any active trading market for the Common
Stock, or the ability of Eligible Subscribers to sell their Common Stock. The
Subscription

13
<PAGE> 15

Purchase Price in the Subscription Offering was determined in connection with
the confirmation of the Plan by the Bankruptcy Court and may not be indicative
of the price at which the Common Stock will trade after completion of the
Subscription Offering.

INVESTMENT IN MULTI-CLIENT DATA LIBRARY

The Company has a significant investment in multi-client data that is
marketed broadly on a non-exclusive basis to oil and gas companies. Solid State
has in the past experienced significant losses in connection with the
acquisition of multi-client data, as a result of substantially underestimating
the cost of acquiring such multi-client data. The Company intends to expand its
multi-client data acquisition and marketing efforts in the future. Although the
Company will attempt to obtain commitments for a majority of the costs of these
surveys, future data licensing to multiple customers may not enable the Company
to fully recoup its costs. Furthermore, even if the Company obtains commitments,
the Company may not be able to fully recoup its acquisition costs if it
substantially underestimates the cost of these efforts. Factors affecting the
Company's ability to recoup its costs include adverse environmental or
regulatory requirements, the inability or delay in obtaining permits, and other
technological, industry or general economic developments, as well as the
ultimate oil and gas prospectivity of the area surveyed, any of which could
render all or portions of the Company's library of multi-client data obsolete or
otherwise impair its value. In addition, revenues generated by licensing of
multi-client data are typically less predictable from period to period than are
revenues from surveys performed on an exclusive contract basis for customers.
For 1998, the Company has budgeted approximately $16 million, before customer
commitments, for multi-client acquisition projects.

ENVIRONMENTAL AND OTHER REGULATIONS

The Company's operations are subject to a variety of foreign, federal,
state and local laws and regulations, including laws and regulations relating to
the protection of human health and the environment. Violation of these laws and
regulations may result in civil and even criminal penalties. The Company
currently is required to invest financial and managerial resources to comply
with such laws, regulations and related permit requirements in its operations
and anticipates that it will continue to do so in the future. The Company's
seismic data acquisition contracts typically require customers to obtain all
necessary permits. Conversely, the acquisition of multi-client data may require
the Company to obtain required permits. Failure to obtain required permits in a
timely manner may result in crew downtime and operating losses. Although neither
GGI's nor Grant's cost of complying with governmental laws and regulations has
been significant to date, there can be no assurance that environmental laws and
regulations will not change in the future or that the Company will not incur
significant costs in the future performance of its operations. The modification
of existing laws or regulations or the adoption of new laws or regulations
curtailing oil and gas exploration or imposing more stringent restrictions on
seismic data acquisition operations could adversely affect the Company.

ACQUISITION OF SOLID STATE AND FUTURE ACQUISITIONS

The Acquisition is the first acquisition made by Grant. Although the
Company's management believes Solid State's business and customer base should
complement Grant's operations, there can be no assurance that the Company will
successfully integrate the business of Solid State into its existing operations
and effectively manage the increased size of the Company or that such activities
will not require a disproportionate amount of management's attention. The
Company's failure to successfully integrate Solid State's business into its
existing operations, or the occurrence of unexpected costs or liabilities in
connection with Solid State's operations, could have a material adverse effect
on the Company's results of operations and financial condition. See
"-- Restrictions Imposed by the Terms of the Company's Indebtedness."

The Company is actively seeking other strategic acquisitions that will
provide additional and complementary products, equipment and services.
Nevertheless, there can be no assurance that attractive acquisitions will be
available to the Company at reasonable prices or that the Company will
successfully integrate the operations and assets of any acquired business with
its own or that the Company's management will be able to manage effectively the
increased size of the Company or operate a new line of business. Any inability
on the part of the Company to integrate and manage acquired businesses could
have a material adverse effect on the Company's

14
<PAGE> 16

results of operations and financial condition. The Company may be required to
raise substantial additional funds to finance future acquisitions. There can be
no assurance that the Company will be able to obtain any such financing or that,
if available, such financing will be on terms acceptable to the Company. See "--
Substantial Leverage." Depending upon the circumstances of a particular
acquisition, the Company may fund an acquisition through the issuance of Common
Stock or other equity securities, or, to the extent permitted by the Credit
Facility and any future debt instruments with additional borrowed funds.
Acquisitions may result in potentially dilutive issuances of equity securities,
increased depreciation and amortization expense, increased interest expense,
increased financial leverage or decreased operating income, any of which could
have a material adverse effect on the Company's operating results. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

POTENTIAL LIABILITY UNDER THE PLAN

Although GGI's bankruptcy proceedings resulted in the consummation of the
Plan on September 30, 1997, the Bankruptcy Court has retained jurisdiction over
disputes arising under the Plan. On December 11, 1997, certain Eligible
Subscribers commenced a lawsuit in the Bankruptcy Court against GGI, Grant,
Elliott, Westgate and SSGI (as defined herein) alleging various claims related
to the Plan and the Acquisition. If not resolved in the Company's favor, this
lawsuit, and the potential for other lawsuits related to the Plan, could have a
material and adverse effect on the Company's business, reputation, operating
results and financial condition. See "Business -- Legal Proceedings."

CONCENTRATION OF OWNERSHIP

The Selling Stockholders currently hold all of the issued and outstanding
shares of Common Stock. After the consummation of the Subscription Offering, the
Selling Stockholders will hold approximately 76% of the issued and outstanding
shares of Common Stock, assuming all Eligible Subscribers exercise their
subscription rights in full. Westgate also holds all of the issued and
outstanding shares of Preferred Stock (as defined herein) of the Company. The
terms of the Preferred Stock permit Westgate to designate two directors to the
Board of Directors of the Company and to vote on certain extraordinary matters
presented for a stockholder vote. As a result of such voting power, the Selling
Stockholders have the ability to elect all of the directors of the Company who
will control the management and affairs of the Company, as well as the ability
to control the outcome of other matters that may be submitted to a stockholder
vote from time to time. The voting power held by the Selling Stockholders may
also have the effect of discouraging certain types of transactions involving an
actual or potential change of control of the Company. See "The Company,"
"Selling Stockholders" and "Certain Relationships and Related Transactions."

NONCOMPARABILITY OF HISTORICAL FINANCIAL INFORMATION

As a result of the consummation of the Plan and the Acquisition and in each
case, the transactions contemplated thereby, the financial condition and results
of operations of the Company will not be comparable to the financial condition
or results of operations reflected in the historical financial statements of GGI
and Solid State contained in this Subscription Offering Prospectus. See
"Unaudited Pro Forma Financial Information," "Selected Consolidated Historical
Financial Data" and the consolidated financial statements of GGI, Grant and
Solid State and notes thereto, included elsewhere in this Subscription Offering
Prospectus.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Common Stock in the marketplace, whether by
purchasers in the Subscription Offering or other stockholders of the Company,
purchasers in any future public offering or other stockholders of the Company,
or the perception that such sales could occur, may adversely affect the market
price of the Common Stock. See "Shares Eligible for Future Sale."

Following the Subscription Offering, the Selling Stockholders will
beneficially own approximately 76% of the issued and outstanding Common Stock,
assuming that all Eligible Subscribers exercise their subscription rights in
full. A decision by the Selling Stockholders to sell shares could adversely
affect the market price of the

15
<PAGE> 17

Common Stock. The Company and the Selling Stockholders have entered into a
Registration Rights Agreement (as defined herein), which requires the Company to
effect a registration statement, covering some or all of the Selling
Stockholders' shares, subject to certain terms and conditions. See "Certain
Relationships and Related Transactions -- Registration Rights Agreement."

Upon completion of the Subscription Offering, the shares of Common Stock
purchased by Eligible Subscribers will be freely tradeable without restriction
or further registration under the Securities Act.

NO DIVIDENDS

The Company currently does not intend to pay any cash dividends on the
Common Stock. The Company currently intends to retain any earnings for support
of its working capital, repayment of indebtedness, capital expenditures and
general corporate purposes. The Credit Facility contains restrictions on the
Company's ability to pay dividends or make other distributions. The Credit
Facility provides that the Company may not declare any dividends or make any
other payments or distributions except in certain limited circumstances. See
"Dividend Policy" and "-- Restrictions Imposed by the Terms of the Company's
Indebtedness."

16
<PAGE> 18

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Subscription Offering Prospectus includes statements that contain
"forward-looking" information (as defined in the Private Securities Litigation
Reform Act of 1995). Words such as "anticipate," "expect," "estimate," "project"
and similar expressions are intended to identify such forward-looking
statements. Forward-looking statements may be made by management in written
material such as press releases, portions of "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and "Risk
Factors" contained in this Subscription Offering Prospectus.

Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Such forward-looking statements are
subject to certain risks, uncertainties and assumptions, including without
limitation those identified below and under "Risk Factors." Should one or more
of these risks or uncertainties materialize, or should any of the underlying
assumptions prove incorrect, actual results of current and future operations may
vary materially from those anticipated, estimated or projected. Prospective
purchasers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates.

Among the factors that will have a direct bearing on the Company's results
of operations and the oil and gas services industry in which it operates are the
effects of rapidly changing technology; the presence of competitors with greater
financial resources; risks associated with the Acquisition, including failure to
successfully manage the Company's growth and integrate the business operations
of Solid State; operating risks inherent in the oil and gas services industry;
regulatory uncertainties; potential liability under the Plan; worldwide
political stability and economic conditions and other risks associated with
international operations, including foreign currency exchange risk; and the
Company's successful execution of internal operating plans. See "Risk Factors."

17
<PAGE> 19

THE COMPANY

BACKGROUND

The Company was incorporated in Delaware in September 1997, and is the
successor to several seismic data acquisition companies. Solid State was
incorporated in Alberta, Canada in 1985. The Company's predecessor companies
have been active in the seismic data acquisition services business in the United
States and Latin America since the 1940s, the Far East since the 1960s and
Canada since the 1970s. Additionally, the Company has significant operating
experience in the Middle East and West Africa.

THE REORGANIZATION

In 1996, GGI experienced a deteriorating financial condition and liquidity
crisis precipitated by several factors, including an overly rapid and
under-financed expansion in United States and Latin America, significant costs
related to the unsuccessful development of a proprietary seismic data recording
system and poor operational results in the United States and certain
international markets. On December 6, 1996 (the "Petition Date"), GGI filed a
voluntary petition for relief with the Bankruptcy Court under chapter 11 of the
Bankruptcy Code.

In connection with its reorganization, GGI replaced its senior management
team, disposed of unprofitable operations, continued to operate as a
debtor-in-possession and developed the Plan, which was confirmed by the
Bankruptcy Court on September 15, 1997 and was consummated on the Effective
Date. The Plan provided that Elliott or an affiliate of Elliott would (i)
purchase substantially all of the assets of GGI for $47.5 million in cash (the
"Cash Purchase Price"), (ii) assume certain debts and long-term lease
commitments of GGI not exceeding $15.1 million and (iii) assume certain other
liabilities of GGI.

In connection with the consummation of the Plan, the Selling Stockholders
satisfied certain claims against GGI in the amount of approximately $12.7
million. In addition, Westgate purchased certain claims against GGI that were
assumed by Grant, in the principal amount of approximately $6.9 million. The
Selling Stockholders also purchased certain claims against GGI, in the principal
amount of approximately $5.6 million.

In exchange for the satisfaction or cancellation of certain claims against
GGI, Grant issued 19,571.162 shares of cumulative pay-in-kind preferred stock,
$0.001 par value per share (the "Preferred Stock"). The Preferred Stock provides
for dividends payable annually in additional shares of Preferred Stock at a rate
of 10.5% per annum, the right to designate two members of the board of directors
of Grant and the right to vote on certain extraordinary matters presented for a
stockholder vote. See "Description of Capital Stock -- Preferred Stock." On
December 18, 1997 Grant exchanged 9,571.162 shares of Preferred Stock held by
Elliott, together with accrued dividends thereon, for a subordinated note (the
"Subordinated Note") in the aggregate principal amount of approximately $9.8
million. The Subordinated Note bears interest at the rate of 10.5% per annum and
matures on March 31, 1999. See "Certain Relationships and Related
Transactions -- Selling Stockholders." On December , 1997, the Selling
Stockholders purchased 9.5 million shares of Common Stock for an amount equal to
the remainder of the Cash Purchase Price, which included the cancellation of
such claims against GGI. In addition, upon consummation of the Subscription
Offering, Elliott is entitled to receive 237,500 shares of Common Stock pursuant
to the Plan. See "Certain Relationships and Related Transactions -- Selling
Stockholders."

THE ACQUISITION

As of November 20, 1997, Elliott held 5,963,565 shares, or 40.9%, and
Westgate held 3,341,544 shares, or 22.9% of the outstanding shares of common
stock of Solid State ("Solid State Stock"). In connection with the Acquisition,
the Selling Stockholders transferred their shares of Solid State Stock to Grant
in exchange for 4,652,555 shares of Common Stock. SSGI Acquisition Corporation
("SSGI"), a corporation organized under the laws of Alberta, Canada and a wholly
owned subsidiary of Grant, commenced a cash tender offer for all of the
outstanding shares of Solid State Stock not held by SSGI or its affiliates (the
"Tender Offer"). Grant subsequently contributed the shares of Solid State Stock
to SSGI.

To consummate the Tender Offer and the Acquisition, on December 19, 1997,
Elliott advanced approximately $15.8 million to Grant (the "Acquisition
Financing") under a term note pursuant to the Credit Facility.

18
<PAGE> 20

Upon the expiration of the Tender Offer on December 19, 1997, SSGI held
approximately 99% of the outstanding shares of Solid State Stock. On December
23, 1997, because SSGI acquired over 90% of the outstanding shares of Solid
State Stock not already held by SSGI or its affiliates pursuant to the Tender
Offer, SSGI qualified to exercise its statutory right under Canadian law to
acquire the remaining shares of Solid State Stock on the same terms and at the
same price as the Tender Offer. On December 23, 1997 after exercising these
statutory rights, Solid State became an indirect wholly owned subsidiary of the
Company.

The Company's principal executive offices are located in Houston, Texas.
The Company's address is 16850 Park Row, Houston, Texas 77084, and its telephone
number is (281) 398-9503.

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of the shares of
Common Stock sold by the Selling Stockholders in the Subscription Offering.

DIVIDEND POLICY

The Company currently intends to retain all future earnings for use in the
operations of its business and does not anticipate paying any cash dividends in
the foreseeable future. The declaration and payment in the future of any cash
dividend will be at the discretion of the Company's Board of Directors and will
depend upon, among other things, the earnings, capital requirements and
financial position of the Company, existing and/or future loan covenants and
general economic conditions. The Credit Facility provides that the Company may
not declare any dividends or make any other payments or distributions except in
certain limited circumstances. See "Risk Factors -- No Dividends."

CAPITALIZATION

The following table sets forth as of September 30, 1997, the cash and cash
equivalents, debt and equity capitalization of Grant and its subsidiaries on an
actual consolidated basis and of the Company on a pro forma basis after giving
effect to the consummation of the Plan, the issuance of the Subordinated Note
and the Acquisition as if they were completed on September 30, 1997. This
information should be read in conjunction with "Unaudited Pro Forma Financial
Information," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the consolidated financial statements of GGI, Grant
and Solid State, including the notes thereto, included elsewhere in this
Subscription Offering Prospectus.

<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1997
-----------------------
GRANT THE COMPANY
ACTUAL PRO FORMA
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents............................................ $ 5,939 $ 5,625
======= =======
Current portion of long-term debt and notes payable.................. 3,940 23,797
Long-term debt, excluding current indebtedness:
Subordinated Note.................................................. -- 9,571
Other........................................................... 6,209 33,912
------- -------
Total long-term debt............................................ $ 6,209 $ 43,483
------- -------
Stockholders' equity:
Preferred Stock.................................................... 19,571 10,000
Common Stock....................................................... -- 15
Paid-in capital.................................................... -- 47,439
Accumulated deficit................................................ -- (7,786)
------- -------
Total stockholders' equity...................................... 19,571 49,668
------- -------
Total capitalization............................................ $29,720 $ 116,948
======= =======
</TABLE>

19
<PAGE> 21

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma consolidated financial information (the
"Unaudited Pro Forma Financial Information") is based on the historical
financial statements of GGI, Grant and Solid State and has been prepared to
illustrate the effects of the consummation of the Plan, the issuance of the
Subordinated Note and the Acquisition.

The unaudited pro forma consolidated balance sheet as of September 30, 1997
gives effect to the consummation of the Plan, the issuance of the Subordinated
Note and the Acquisition as if they were completed as of September 30, 1997. The
unaudited pro forma condensed consolidated statements of operations for the year
ended December 31, 1996 and for the nine months ended September 30, 1997 give
effect to the consummation of the Plan, the issuance of the Subordinated Note
and the Acquisition as if they were completed as of January 1, 1996.

Solid State's fiscal year end is August 31. For pro forma purposes, the
statement of operations data for Solid State has been adjusted to reflect the
period December 1, 1995 through November 30, 1996 and December 1, 1996 through
August 31, 1997 to combine with GGI's year ended December 31, 1996 and nine
months ended September 30, 1997. For pro forma purposes, the statement of
operations data for Solid State has been translated from Canadian dollars into
U.S. dollars using the average exchange rates prevailing during the respective
periods, and statement of financial position has been translated using exchange
rates as of September 30, 1997.

The Unaudited Pro Forma Financial Information does not purport to represent
the actual results of operations of the Company had the transactions and events
assumed therein in fact occurred on the date specified, nor is it necessarily
indicative of the results of operations that may be achieved in the future. The
Unaudited Pro Forma Financial Information is based on certain assumptions and
adjustments described in the notes hereto and should be read in conjunction
therewith. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the consolidated financial statements of GGI, Grant
and Solid State and the notes thereto, included elsewhere in this Subscription
Offering Prospectus.

20
<PAGE> 22

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

<TABLE>
<CAPTION>
PRO FORMA
AT SEPTEMBER 30, 1997
-----------------------------
PLAN,
GRANT SOLID STATE SUBORDINATED NOTE
AT SEPTEMBER 30, AT AUGUST 31, AND ACQUISITION THE
1997 1997 ADJUSTMENTS COMPANY
---------------- ------------- ----------------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS:

Current assets:
Cash and cash equivalents.................. $ 5,618 $ 547 $ 392(a) $ 5,304
(485)(b)
15,800(f)
(15,738)(g)
(830)(h)
Restricted cash............................ 321 -- -- 321
Accounts receivable........................ 16,771 12,128 -- 28,899
Inventories................................ 530 49 -- 579
Prepaid expenses........................... 1,924 722 -- 2,646
Work-in-progress costs..................... 1,339 716 -- 2,055
------- ------- ------- --------
Total current assets..................... 26,503 14,162 (861) 39,804
Property, plant and equipment.............. 32,528 25,460 -- 57,988
Multi-client data.......................... -- 11,345 -- 11,345
Goodwill................................... 21,012 -- 13,398(g) 35,999
1,589(e)
Other assets............................... 2,806 824 -- 3,630
------- ------- ------- --------
Total assets............................. $ 82,849 $51,791 $ 14,126 $148,766
======= ======= ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Notes payable, current portion of long-term
debt and capital lease obligations....... $ 3,940 $31,907 $ (12,050)(i) $ 23,797
Accounts payable........................... 5,820 10,689 -- 16,509
Accrued expenses........................... 4,131 2,783 -- 6,914
Due to GGI in the form of cash............. 34,783 -- (33,953)(h) --
(830)(h)
Income taxes payable....................... 1,868 -- -- 1,868
------- ------- ------- --------
Total current liabilities................ 50,542 45,379 (46,833) 49,088
Long-term debt and capital lease obligations,
excluding current portion.................. 6,209 -- (147)(a) 33,912
15,800(f)
12,050(i)
Other liabilities and deferred credits....... 6,527 -- -- 6,527
Subordinated Note............................ -- -- 9,571(i) 9,571
------- ------- ------- --------
Total liabilities........................ $ 63,278 $45,379 $ (9,559) $ 99,098
Minority interest............................ -- -- 2,340(c) --
(2,340)(g)
Stockholders' equity:
Preferred Stock............................ 19,571 -- (9,571)(i) 10,000
Common Stock............................... -- 18,127 392(a) 15
147(a)
(6,754)(c)
10(h)
5(d)
(11,912)(d)
Additional paid-in capital................. -- -- 33,943(h) 47,439
11,907(d)
1,589(e)
Accumulated deficit........................ -- (11,715) 4,414(c) (7,786)
(485)(b)
------- ------- ------- --------
Total stockholders' equity............... 19,571 6,412 23,685 49,668
------- ------- ------- --------
Total liabilities and stockholders'
equity................................. $ 82,849 $51,791 $ 14,126 $148,766
======= ======= ======= ========
</TABLE>

21
<PAGE> 23

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
------------------------------------------------------------------------
PRO FORMA
DECEMBER 31, 1996
HISTORICAL ---------------------------------
----------------------------------- PLAN,
GGI SOLID STATE SUBORDINATED NOTE
DECEMBER 31, NOVEMBER 30, AND ACQUISITION THE
1996 1996 ADJUSTMENTS COMPANY
---------------- --------------- ----------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................... $ 105,523 $ 32,632 $ -- $ 138,155
Expenses:
Operating expenses................... 136,326 33,237 -- 169,563
Selling, general and administrative
expenses........................... 17,865 2,288 485(b) 20,638
Depreciation and amortization........ 11,500 4,572 1,450(j) 17,522
Asset impairment..................... 5,802 -- -- 5,802
------- ------- ------- -------
Total costs and expenses........... 171,493 40,097 1,935 213,525
------- ------- ------- -------
Operating income (loss)............ (65,970) (7,465) (1,935) (75,370)
Other expenses:
Interest expense, net................ (7,522) (3,015) 2,515(k) (8,022)
Reorganization costs................. (412) -- 412(l) --
Other................................ (502) 350 -- (152)
------- ------- ------- -------
Total other expenses............... (8,436) (2,665) 2,927 (8,174)
------- ------- ------- -------
Income (loss) before income
taxes............................ (74,406) (10,130) 992 (83,544)
Income tax expense..................... 1,621 (596) --(m) 1,025
------- ------- ------- -------
Net income (loss)...................... $ (76,027) $ (9,534) $ 992 $ (84,569)
======= ======= ======= =======
Net income (loss) applicable to common
stock................................ $ (82,390) $ (9,534) $ (58) $ (85,619)
======= ======= ======= =======
Income (loss) per common share:
Net income (loss).................... $ (5.17) $ (1.77) $ -- $ (5.88)
Dividend requirement on Preferred
Stock.............................. (0.43) -- -- (0.07)
------- ------- ------- -------
Net loss per common share.............. $ (5.60) $ (1.77) $ -- $ (5.95)
======= ======= ======= =======
Weighted average common shares
outstanding
Primary.............................. 14,699,824 5,379,790 -- 14,390,055
Fully diluted........................ 14,699,824 6,939,460 -- 14,390,055
OTHER FINANCIAL DATA:
Capital expenditures................... $ 25,799 $ 6,829 -- $ 32,628
OPERATING DATA (AT PERIOD END):
Seismic crews in operation............. 14 8 -- 22
Seismic recording channels owned....... 17,430(n) 8,540 -- 25,970(n)
</TABLE>

See notes to unaudited pro forma financial statements.

22
<PAGE> 24

<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------------------------------------------------
PRO FORMA
SEPTEMBER 30, 1997
HISTORICAL ---------------------------------
-------------------------------- PLAN,
GGI SOLID STATE SUBORDINATED NOTE
SEPTEMBER 30, AUGUST 31, AND ACQUISITION THE
1997 1997 ADJUSTMENTS COMPANY
---------------- ------------ ----------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................. $ 92,705 $ 43,292 $ -- $ 135,997
Expenses:
Operating expenses..................... 71,006 36,432 -- 107,438
Selling, general and administrative
expenses............................. 6,473 2,399 -- 8,872
Depreciation and amortization.......... 8,432 5,266 1,087(j) 14,785
------------ ------------ ------- ------------
Total costs and expenses............. 85,911 44,097 1,087 131,095
------------ ------------ ------- ------------
Operating income (loss).............. 6,794 (805) (1,087) 4,902
Other expense:
Interest expense, net.................. (3,758) (2,484) 1,158(k) (5,084)
Reorganization costs................... (3,543) -- 3,543(l) --
Other.................................. 2,266 (189) -- 2,077
------------ ------------ ------- ------------
Total other expenses................. (5,035) (2,673) 4,701 (3,007)
------------ ------------ ------- ------------
Income (loss) before income taxes.... 1,759 (3,478) 3,614 1,895
Income tax expense....................... 2,184 (483) --(m) 1,701
------------ ------------ ------- ------------
Net income (loss)........................ (425) (2,995) 3,614 194
------------ ------------ ------- ------------
Net income (loss) applicable to common
stock.................................. $ (425) $ (2,995) $ 2,744 $ (676)
============ ============ ======= ============
Income (loss) per common share:
Net income (loss)...................... $ (0.02) $ (0.25) $ -- $ 0.01
Dividend requirement on Preferred
Stock................................ -- -- -- (0.06)
------------ ------------ ------- ------------
Net loss per common share................ $ (0.02) $ (0.25) $ -- $ (0.05)
============ ============ ======= ============
Weighted average common shares
outstanding
Primary................................ 21,826,940 12,193,784 -- 14,390,055
Fully diluted.......................... 21,826,940 13,433,430 -- 14,390,055
OTHER FINANCIAL DATA:
Capital expenditures..................... $ 4,154 $ 10,661 -- $ 14,815
OPERATING DATA (AT PERIOD END):
Seismic crews in operation............... 13 7 -- 20
Seismic recording channels owned......... 17,870(n) 8,892 -- 26,762(n)
</TABLE>

See notes to unaudited pro forma financial statements.

23
<PAGE> 25

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS

ADJUSTMENTS FOR THE CONSUMMATION OF THE PLAN, THE ISSUANCE OF THE SUBORDINATED
NOTE AND THE ACQUISITION

Pro forma adjustments have been made to record certain transactions related
to the Plan, the issuance of the Subordinated Note in exchange for 9,571.162
shares of Preferred Stock, the transfer of shares of Solid State stock to Grant
by the Selling Stockholders, which has been accounted for as an exchange of
ownership interest between entities under common control (as-if-pooling) and the
acquisition of the unaffiliated minority interest of Solid State which has been
accounted for as a purchase. The excess of the purchase price over the
historical book value of the net assets acquired has been allocated on a
preliminary basis.

(a) Adjustment to record the exercise of 320,000 stock options ($392,000)
by Solid State employees and the exercise of 125,000 Warrants
($147,320) by the Selling Stockholders prior to the Acquisition.

(b) Adjustment to record the payment of certain employment contract
termination payments in the amount of $485,915.

(c) Adjustment to record the minority interest of Solid State before the
Acquisition, which includes the equity of Solid State at September 30,
1997 added to (a) above reduced by (b) above and multiplied by the
minority ownership percentage (.361813).

(d) Adjustment to record the contribution by the Selling Stockholders of
their ownership (9,305,109 shares) in Solid State in exchange for
4,652,555 shares of Common Stock, which includes the equity of Solid
State at September 30, 1997 added to (a) above reduced by (b) above
and multiplied by the Selling Stockholders' ownership percentage
(.638187).

(e) Adjustment to record the Selling Stockholders' basis in Solid State in
excess of the carrying value.

(f) Adjustment to record the funding from the Selling Stockholders for the
purchase of the minority interest in Solid State in the form of a
$15.800 million term note under the Credit Facility.

(g) Adjustment to record the purchase of the minority interest in Solid
State, including financial, advisory, legal and accounting fees of
approximately $1.8 million. Goodwill is calculated as the difference
between the purchase price, including the acquisition costs and the
carrying value of the minority interests calculated in (c) above.

(h) Adjustment to record the payment by the Selling Stockholders to Grant
of $33.953 million in exchange for 9,499,998 shares of Common Stock
and the subsequent payment by Grant to GGI of $34.783 million, the
balance of which will be funded from the existing cash ($830,000).

(i) Adjustment to record the exchange by the Selling Stockholders of
9,571.162 shares of Preferred Stock with a liquidation value of $9.571
million, which matures on March 31, 1999 and to record the
reclassification of certain debt instruments from the Selling
Stockholders totaling $12.050 million as the Company has agreements
from the Selling Stockholders to refinance these instruments on a
long-term basis.

(j) Adjustment to record amortization of goodwill created in the
reorganization of Grant and the acquisition of the minority interest
in Solid State. The amortization period for the Grant and Solid State
goodwill is 30 years ($700,000 per annum) and 20 years ($757,000 per
annum), respectively.

(k) Adjustment to record interest expense for debt held by GGI, which was
not assumed by Grant under the Plan ($4.707 million for the twelve
month period and $2.976 million for the nine month period), and record
interest expense for the 10.5% Subordinated Note and the term note
referred to in (f) above.

(l) Adjustment to remove reorganization costs.

(m) Income tax expense has not been recorded as a result of the benefits
available from a non-capital loss carryforward of Grant.

(n) In addition, Grant was leasing 1,600 seismic recording channels at
December 31, 1996 and September 30, 1996 and was leasing 1,500 seismic
recording channels at September 30, 1997.

24
<PAGE> 26

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA

The following selected financial data, except for Operating Data, for GGI
is presented below as of the end of each of the years in the five-year period
ended December 31, 1996 and the nine-months ended September 30, 1997 is derived
from the consolidated financial statements of GGI, which have been audited by
KPMG Peat Marwick LLP, independent certified public accountants. This data
should be read in conjunction with such consolidated financial statements and
notes thereto. The selected balance sheet data of Grant at September 30, 1997 is
derived from the consolidated financial statements of Grant, which have been
audited by KPMG Peat Marwick LLP, independent certified public accountants. The
selected financial data, except for operating data, for the nine-month period
ended September 30, 1996 have been derived from the unaudited consolidated
financial statements of GGI, which include all adjustments, consisting of normal
recurring adjustments, that the Company considers necessary for a fair
presentation of its financial position and results of operations for this
period.

<TABLE>
<CAPTION>
GGI
------------------------------------------------------------------------------------------
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------------------------- ------------------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ----------- ----------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues.................. $ 90,556 $ 69,255 $ 73,691 $ 91,996 $ 105,523 $ 80,925 $ 92,705
Expenses:
Operating expenses...... 66,042 53,678 53,132 69,046 136,326 83,243 71,006
Selling, general and
administrative
expense............... 12,337 13,375 7,810 8,527 17,865 8,948 6,473
Depreciation and
amortization.......... 14,617 13,078 12,079 9,424 11,500 8,237 8,432
Asset impairment........ 19,363 3,339 9,911 -- 5,802 -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total expenses........ 112,359 83,470 82,932 86,997 171,493 100,428 85,911
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income
(loss).............. (21,803) (14,215) (9,241) 4,999 (65,970) (19,503) 6,794
Other income (deductions):
Interest expense, net... (2,244) (3,020) (3,384) (3,522) (7,522) (4,426) (3,758)
Reorganization costs.... -- -- -- -- (412) -- (3,543)
Other................... (4,331) 425 1,380 2,076 (502) 26 2,266
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total other income
(deductions)........ (6,575) (2,595) (2,004) (1,446) (8,436) (4,400) (5,035)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes........ (28,378) (16,810) (11,245) 3,553 (74,406) (23,903) 1,759
Income tax expense........ 1,508 143 193 391 1,621 945 2,184
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss) from
continuing operations... $ (29,886) $ (16,953) $ (11,438) $ 3,162 $ (76,027) $ (24,848) $ (425)
========== ========== ========== ========== ========== ========== ==========
Net loss applicable to
common stock............ $ (44,581) $ (29,669) $ (16,696) $ (2,096) $ (82,390) $ (30,185) $ (425)
========== ========== ========== ========== ========== ========== ==========
INCOME (LOSS) PER COMMON
SHARE -- ASSUMING NO AND
FULL DILUTION:
Net income (loss)......... $ (2.51) $ (1.40) $ (0.92) $ 0.25 $ (5.17) $ (1.85) $ (0.02)
Dividend requirement on
$2.4375 preferred stock
of GGI.................. (0.44) (0.43) (0.42) (0.42) (0.43) (0.39) --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net loss per common
share................... $ (2.95) $ (1.83) $ (1.34) $ (0.17) $ (5.60) $ (2.24) $ (0.02)
========== ========== ========== ========== ========== ========== ==========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Primary................. 11,929,074 12,145,100 12,470,704 12,535,352 14,699,824 13,455,767 21,826,940
Fully diluted........... 11,929,074 12,145,100 12,484,093 12,571,984 14,699,824 13,455,767 21,826,940
</TABLE>

25
<PAGE> 27

<TABLE>
<CAPTION>
GGI GRANT
-------------------------------------------------------------- -------
AT DECEMBER 31, AT SEPTEMBER 30,
--------------------------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash.................................. $ 5,969 $ 2,992 $ 3,670 $ 1,147 $ 6,772 $ 437 $ 5,939
Working capital....................... (243) 4,585 3,022 8,033 22,421 (32,452) (24,039)
Total assets.......................... 118,548 70,745 61,609 86,932 70,123 105,982 82,849
Long-term debt, including current
portion............................. 33,320 15,859 19,412 27,219 589 56,199 10,149
Stockholders' equity (deficit)........ 60,689 37,774 26,399 29,715 (34,213) 15,692 19,571
</TABLE>

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

(1) In addition, Grant was leasing 1,600 seismic recording channels at December
31, 1996 and September 30, 1996 and was leasing 1,500 seismic recording
channels at September 30, 1997.

26
<PAGE> 28

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the
consolidated financial statements and the notes thereto included elsewhere in
this Subscription Offering Prospectus.

GENERAL

The Company's business activities involve land and transition zone seismic
data acquisition in selected markets worldwide, including the United States,
Canada, Latin America and the Far East. The Company generally acquires seismic
data on an exclusive contract basis for oil and gas companies on (i) a turnkey
basis, which provides a fixed fee for each project, (ii) a term basis, which
provides for a periodic fee during the term of the project or (iii) a cost-plus
basis, which provides that the costs of a project plus a percentage fee are
borne by the customer. In addition, the Company acquires and owns certain
multi-client seismic data that is marketed broadly on a non-exclusive basis to
oil and gas companies.

Beginning in 1994, GGI concentrated on expanding its contract land and
transition zone seismic data acquisition services internationally. This
expansion coincided with an increase in demand for seismic data acquisition
services, particularly within the United States and Latin America. During the
two years ending December 31, 1996, GGI's revenues from United States operations
increased 51% from $27.8 million in 1994 to $42.1 million in 1996. Over this
same period, GGI expanded its international operations, particularly in Latin
America, realizing an increase in Latin American revenues from $15.6 million in
1994 to $57.1 million in 1996. This rapid expansion and the resulting need for
working capital put a tremendous strain on GGI's capital resources. In addition,
GGI began development of a proprietary data recording system in 1994 intended to
replace an older recording system used in transition zone areas. GGI's
management believed that the system would have relatively low development and
manufacturing costs when compared to third party systems. Problems with software
design and hardware availability, however, resulted in numerous delays and
substantial cost overruns. Moreover, the completed system did not meet
performance expectations. Consequently, the Company's projects were delayed due
to the development problems associated with the proprietary data recording
system and had to be conducted utilizing less appropriate equipment, resulting
in significant losses. GGI also incurred significant losses in Peru during 1996
as a result of its inability to accurately estimate production capabilities and
operating costs. During 1996, Peruvian operations had revenues of approximately
$27.5 million and operating losses of approximately $19.8 million, including
losses related to the shutdown of its operations in and withdrawal of equipment
and personnel from the country. During late 1995 and all of 1996, GGI
experienced liquidity problems, which became severe by the second half of 1996.

In December 1996, GGI filed for protection under the United States
Bankruptcy Code and began its reorganization under the supervision of the
Bankruptcy Court. The filing was precipitated by the factors described above,
including a rapid and under-financed expansion in the United States and Latin
American markets, which contributed to poor operational results in these
markets. These factors impaired GGI's ability to service its indebtedness,
finance its existing capital expenditure requirements and meet its working
capital needs. In addition, GGI was unable to raise additional equity, causing a
disproportionate reliance on debt financing and equipment leasing. In connection
with its reorganization, GGI replaced its senior management, disposed of
unprofitable operations, operated as debtor in possession and developed the
Plan, which was confirmed by the Bankruptcy Court on September 15, 1997 and
consummated on the Effective Date with Grant's purchase of substantially all of
the assets and assumption of certain liabilities of GGI.

In December 1997, Grant, through SSGI, a wholly owned Canadian subsidiary,
acquired all of the outstanding shares of Solid State Stock. In connection with
the Acquisition, the Selling Stockholders exchanged their shares of Solid State
Stock for shares of Common Stock. On December 23, 1997, Solid State became a
wholly owned subsidiary of the Company.

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reducing capital expenditures. As of November 30, 1997, on a pro forma basis
after giving effect to the Acquisition, the Company was operating 20 seismic
data acquisition crews, consisting of 17 land and three transition zone crews
and comprising approximately 27,370 recording channels. According to industry
sources, on a pro forma basis after giving effect to the Acquisition, as of
November 30, 1997, the Company is the third largest land seismic data
acquisition company operating in the western hemisphere, based on the number of
seismic data acquisition crews in operation.

RESULTS OF OPERATIONS OF GGI

Nine Months Ended September 30, 1997 Compared to Nine Months Ended September
30, 1996

Revenues. GGI's consolidated revenues increased $11.8 million, or 15%, from
$80.9 million in the nine months ended September 30, 1996 to $92.7 million in
the comparable period for 1997. This increase was the result of increased
seismic data acquisition crew activity in the United States and the Far East.
During the nine months ended September 30, 1997, GGI's seismic data acquisition
capacity, measured by seismic recording channels, increased by approximately 3%,
from 17,430 to 17,870 seismic recording channels.

Revenues from United States seismic data acquisition operations increased
$6.4 million, or 18%, from $34.9 million in the nine months ended September 30,
1996, to $41.3 million in the comparable period for 1997. This increase was
primarily attributable to two transition zone crews operating along the Gulf
Coast. From time to time during each period, GGI operated as many as seven
seismic crews in the United States.

GGI's crew activity in Latin America declined from 1996 to 1997, although
revenues increased $658,000, or 2%, to $42.5 million in the nine months ended
September 30, 1997 compared with the same period in 1996. From time to time
during 1996, GGI operated as many as nine seismic crews in the region, including
four in Peru, two in Colombia and one in each of Bolivia, Brazil and Ecuador. In
late 1996 and the first quarter of 1997, GGI completed operations in both
Bolivia and Peru. Equipment and personnel from these locations were redeployed
in Colombia, Ecuador, Guatemala and the United States. During the first nine
months of 1997, GGI's Latin American operations consisted of as many as five
land seismic data acquisition crews operating in Colombia, Ecuador, Brazil and
Guatemala.

Revenues from the Far East increased $5.6 million, or 174%, from $3.2
million in the nine months ended September 30, 1996, to $8.9 million in the
comparable period in 1997. GGI mobilized and operated one land seismic data
acquisition crew in Bangladesh during the nine months ended September 30, 1996.
In the nine months ended September 30, 1997, GGI operated this land crew and
also mobilized a transition zone crew during the first and second quarters,
which began operations in Bangladesh in July 1997.

Expenses. GGI's consolidated operating expenses decreased $12.2 million, or
15%, from $83.2 million for the nine months ended September 30, 1996 to $71.0
million for the same period in 1997. Operating expenses as a percentage of
revenues decreased from 103% in the nine months ended September 30, 1996 to 77%
in the comparable period for 1997. During the nine months ended September 30,
1996, GGI experienced significant cost overruns, which increased operating
expenses on several crews operating in the United States. Most notable were
higher than anticipated costs incurred by a transition zone crew as a result of
adverse weather conditions and costs associated with the unsuccessful deployment
of a proprietary recording system. The proprietary recording system was
abandoned in November 1996. Also during the nine months ended September 30,
1996, GGI's Peruvian operations experienced significantly higher than originally
projected crew costs primarily due to a combination of modified job parameters
that were not accurately reflected in the turnkey contract price and a lack of
effective crew oversight.

Selling, general and administrative expenses decreased $2.4 million, or
28%, from $8.9 million for the nine months ended September 30, 1996 to $6.5
million for the same period in 1997. Selling, general and administrative
expenses decreased as a percentage of revenue from 11% in 1996 to 7% in 1997.
This decrease was the result of an increase in consolidated revenue, a cost
reduction at the corporate offices beginning in the fourth quarter of 1996 and a
reduction in foreign overhead due to the sale of the GGI's operations in
Nigeria.

Depreciation and amortization increased $195,000, or 2%, from $8.2 million
for the nine months ended September 30, 1996 to $8.4 million for the same period
in 1997. This slight increase was the result of

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<PAGE> 30

depreciation on equipment that was converted from leased to owned equipment
during the nine months ended September 30, 1997.

Other Income (Deductions). Interest expense, net, decreased $668,000, or
15%, from $4.4 million for the nine months ended September 30, 1996 to $3.8
million for the same period in 1997. This was the result of a decrease in the
use of foreign credit facilities in Latin America, which was partially offset by
increased interest expense in the United States.

Reorganization costs of $3.5 million related to charges incurred in
connection with GGI's reorganization, which was completed in September 1997.
There were no comparable charges for the nine months ended September 30, 1996.

Other income of $2.3 million was the result of the settlement of a
longstanding dispute between one of GGI's Brazilian subsidiaries and a former
customer relating to services rendered on contracts dating back to 1983. In
settlement of all claims, GGI received payment, net of related costs and
expenses, of approximately $2.4 million in July 1997.

Tax Provision. The income tax provision in both periods consisted of income
taxes in foreign countries. The increase from the nine months ended September
30, 1996 compared with the same period in 1997 is a result of higher taxable
income in Colombia and Ecuador. No provision for United States federal income
tax was made in either period as GGI had net losses available for carryforward.

Year Ended December 31, 1996 Compared to the Year Ended December 31, 1995

Revenues. GGI's consolidated revenues increased $13.5 million, or 15%, from
$92.0 million in 1995 to $105.5 million in 1996. This increase resulted from
significant growth in GGI's international operations in Latin America and
Bangladesh, which growth was offset partially by a reduction in revenues from
the United States and Nigeria. During 1996, GGI's seismic data acquisition
capacity, measured by seismic recording channels, increased by approximately
41%, from 12,320 to 17,430 seismic recording channels.

Revenues from United States data acquisition operations decreased $5.8
million, or 12%, to $42.1 million in 1996 when compared with 1995. This
reduction was principally the result of several factors experienced during the
fourth quarter of 1996, including a severe shortage of operating funds, which
caused major disruptions on many domestic crews and resulted in lower revenues.
Additionally, GGI's proprietary data recording system, which operated for four
months in 1996, experienced lower than anticipated production performance, which
led to crew disruptions and delays causing further loss of revenues. GGI's
inability to adequately fund the crew operating the proprietary recording system
resulted in the suspension of the system's use in November 1996. Furthermore, a
transition zone crew, operating along the coast of Louisiana, was hampered by
severe weather and the frequent failure of leased equipment, which, combined
with the Company's liquidity problems, resulted in the postponement of the
survey.

Revenues from international operations increased $19.3 million, or 44%,
from $44.1 million in 1995, to $63.4 million in 1996. This increase was
primarily the result of significant increases in seismic operations in Latin
America and, to a lesser extent, in the Far East, which increases were partially
offset by a reduction in revenues from Nigeria.

Latin American revenue during 1996 increased $31.6 million, or 124%, from
$25.5 million in 1995, to $57.1 million in 1996. During 1996, GGI operated one
crew in each of Bolivia, Brazil and Ecuador, two crews in Colombia and four
crews in Peru. In 1995, crew activity consisted of one crew during the fourth
quarter in Bolivia, one crew in Brazil, one to two crews in Colombia and three
crews in Peru. The most significant revenue increases in 1996 occurred in
Colombia and Peru, where revenues increased $8.2 million, or 181%, to $12.7
million, and $13.8 million, or 100%, to $27.5 million, respectively. Due to
significant operating losses incurred in Peru during 1996, GGI discontinued
operations in Peru and moved the seismic equipment from its Peruvian crews to
other GGI crews.

Revenues from the Far East increased 49%, or $1.8 million, from $3.6
million in 1995, to $5.4 million in 1996. In 1996, crew activity consisted
primarily of one transition zone crew in operation for the entire year in

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<PAGE> 31

Bangladesh, as compared to 1995, when GGI operated one crew in Indonesia and
mobilized the Bangladesh crew in the fourth quarter.

Revenues from Nigeria decreased 94%, or $13.3 million, from $14.2 million
in 1995, to $904,000 in 1996. GGI operated three crews during most of 1995 in
Nigeria, but completed two of these three contracts in the fourth quarter of
1995 and the remaining contract in the first quarter of 1996. Although GGI
participated in bidding 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 GGI at the
time, GGI sold its Nigerian operation as of December 1996. GGI had no revenues
from the Middle East during 1996. Middle East revenue in 1995, totaling
$786,000, was the result of various rental contracts for equipment and personnel
that expired in July 1995.

Expenses. GGI's consolidated operating expenses increased $67.3 million, or
97%, from $69.0 million in 1995 to $136.3 million in 1996. Operating expenses as
a percentage of revenues increased to 129% in 1996 from 75% in 1995. This
increase was due to higher than anticipated operating costs principally in the
United States, Peru and Nigeria, accelerated amortization of prepaid and
deferred costs associated with certain ongoing operations, and the write-down of
certain other GGI assets as a result of a comprehensive review of GGI's
operations.

In the United States, adverse weather conditions and the repeated breakdown
of a leased recording system combined to increase operating expenses by
approximately $7.7 million on one transition zone crew. The slow development and
late deployment of GGI's proprietary recording system also affected operations
in the United States in 1996. The proprietary recording system was originally
planned to be completed and operational by early 1996, but completion was
delayed until the summer of 1996. As a result, several contracts that were
priced and bid with the expectation that the proprietary recording system would
be employed were performed with other, less appropriate equipment. This resulted
in operating losses on such contracts of approximately $3.0 million. When the
proprietary recording system was finally deployed in July 1996, the system's
production performance was well below anticipated levels, causing additional
operating expenses of approximately $1.4 million. The late deployment and poor
performance of the proprietary recording system caused a general equipment
shortage during most of 1996, resulting in a shuffling of equipment between
GGI's crews, which caused inefficiencies and higher than anticipated operating
expenses.

In Peru, actual operating expenses exceeded planned costs by approximately
$23.0 million, primarily due to a combination of modified job parameters that
were not accurately reflected in the turnkey contract price and a general lack
of effective crew oversight. In Nigeria, GGI continued to incur certain
operating expenses despite a lack of crew activity during most of the year.
These operating expenses exceeded expectations by $2.7 million and were
primarily related to standby costs incurred while pursuing new contracts.

Selling, general and administrative expenses increased $9.3 million, or
110%, from $8.5 million in 1995 to $17.9 million in 1996. Selling, general and
administrative expenses increased as a percentage of revenue to 17% in 1996 from
9% in 1995. This increase was primarily attributable to allowances and charges
incurred at the corporate headquarters that resulted in an increase in corporate
overhead of approximately $6.8 million, including an increase in the reserve for
doubtful trade accounts of approximately $5.5 million for 1996 compared to no
increase in the reserve for 1995. Other significant one time or unusual items
incurred in 1996 included severance costs of $423,000, a write-off of the
proprietary data recording system startup costs of $824,000, and legal fees and
settlements of $367,000.

Depreciation and amortization expenses increased $2.1 million, or 22%, from
$9.4 million in 1995, to $11.5 million in 1996. This increase was principally
due to the increased level of depreciable assets. Additions to fixed assets
during 1995 and 1996 were approximately $14.9 million and $26.0 million,
respectively.

At December 31, 1996, GGI recorded a special charge for asset impairment of
$5.8 million. Management considered this special charge to be necessary
following an assessment of events and changes in circumstances that clearly
indicated that the carrying value of certain assets was not recoverable. This
charge related solely to the write-down of the carrying value of the proprietary
recording system discussed previously.

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<PAGE> 32

Other Income (Deductions). Interest expense, net, increased $4.0 million,
or 114%, from $3.5 million in 1995, to $7.5 million in 1996. The increase in
interest expense, net, was the result of $1.1 million of interest paid on
financing of additional equipment purchases, $921,000 related to increased
domestic working capital borrowings, $589,000 attributable to new financing
evidenced by subordinated convertible debentures and $950,000 of interest
attributable to an increased usage of foreign lines of credit.

Other income (deductions) for 1996 consisted primarily of foreign exchange
losses of $251,000 and a $198,000 loss on the sale of the Venezuelan and
Nigerian subsidiaries. Other income (deductions) for 1995 included a $1.2
million gain on an insurance settlement and a $212,000 gain on the sale of
miscellaneous fixed assets.

Tax Provision. The income tax provisions in both periods consisted of
income taxes in foreign countries. No provision for United States federal income
taxes was made in either period as GGI had net operating losses available to
offset domestic taxable income.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues. GGI's consolidated revenues increased $18.3 million, or 25%, from
$73.7 million in 1994, to $92.0 million in 1995. The revenue growth during 1995
was primarily due to an increase in GGI's seismic services in the United States,
which was offset slightly by a decrease in revenues from GGI's international
operations. During 1995, GGI's seismic data acquisition capacity, measured by
seismic recording channels, decreased by approximately 2%, from 12,520 to 12,320
seismic recording channels.

Revenues from United States data acquisition operations increased $20.1
million, or 72%, from $27.8 million in 1994, to $47.8 million in 1995. Revenues
from international operations decreased $1.8 million, or 4%, from $45.9 million
in 1994, to $44.1 million in 1995, primarily due to the completion of Middle
East operations in August 1994 and reduced activity in the Far East and Nigeria
during 1995. These decreases were partially offset by a significant increase in
Latin American operations during 1995.

Revenues from Latin America increased $9.9 million, or 63%, from $15.6
million in 1994, to $25.5 million in 1995. This increase was primarily the
result of mobilizing three seismic crews into Peru during March, April and May
of 1995 to accommodate market demand. These crews had operated in Bolivia and
Colombia during 1994.

Revenues from the Far East declined by $2.4 million, or 40%, from $6.0
million in 1994, to $3.6 million in 1995, due primarily to lower crew
utilization in the region. GGI operated two crews in the region throughout the
majority of 1994, with one crew operating under a sizable contract. During 1995,
GGI again operated two crews; however, the contracted jobs were of a shorter
duration and lower value. In addition, operations in Bangladesh were temporarily
suspended due to political unrest, but were resumed shortly thereafter.

Revenues from Nigerian operations decreased $1.3 million, or 8%, from $15.5
million in 1994, to $14.2 million in 1995. By October 31, 1995, two of GGI's
crews had completed all of their contractual backlog and were demobilized. GGI
continued to operate a third crew in Nigeria for all of 1995. Middle East
operations in 1994 consisted of one transition zone crew in Abu Dhabi that was
demobilized in August 1994. No revenue from seismic services was generated in
the Middle East during 1995, although revenue was received from ongoing
equipment rental contracts with local seismic contractors. The Abu Dhabi office
was closed in August 1995.

Expenses. GGI's consolidated operating expenses increased $15.9 million, or
30%, from $53.1 million in 1994, to $69.0 million in 1995. Operating expenses as
a percentage of revenue increased to 75% in 1995 from 72% in 1994. The increase
in operating expenses resulted primarily from increased seismic data acquisition
activity in the United States and Latin America. The increase in expenses as a
percentage of revenues was primarily a result of higher direct operating
expenses in Nigeria during 1995. Operating efficiencies achieved during 1994
were not repeated during 1995 due to a lack of available funding and equipment
shortages and difficult terrain encountered on certain surveys.

Selling, general and administrative expenses increased $717,000, or 9%,
from $7.8 million in 1994, to $8.5 million in 1995, but decreased as a
percentage of revenue to 9% in 1995, from 11% in 1994, principally due to a
significant increase in revenue without a comparable increase in overhead.
One-time charges relating to the

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<PAGE> 33

termination of a proposal to reclassify GGI's preferred stock and increased
overhead costs in Peru and the United States contributed to the increase in
these expenses during 1995.

Depreciation and amortization expenses decreased $2.7 million, or 22%, from
$12.1 million in 1994, to $9.4 million in 1995. This decrease was principally
attributable to a reduced level of depreciable assets resulting from a special
charge for asset impairment recorded in December 1994.

Other Income (Deductions). Interest expense, net, increased by $138,000, or
4%, from $3.4 million in 1994, to $3.5 million in 1995. Demobilization costs for
two crews in Nigeria, coupled with a lack of working capital, contributed to the
increased usage of foreign lines of credit in Nigeria during the third and
fourth quarter of 1995, which contributed to the increase in interest expense in
1995.

Other income (deductions) for 1995 consisted primarily of a $1.2 million
gain on an insurance recovery and a $212,000 gain on the sale of miscellaneous
fixed assets. Other income (deductions) for 1994 resulted from the recovery of
approximately $664,000 in bad debt and a non-recurring royalty income item of
$500,000.

Tax Provision. The income tax provision in both periods consisted of income
taxes in foreign countries. No provision for United States federal income taxes
was made in either period as GGI had net operating losses available to offset
domestic taxable income.

SEASONALITY

GGI's land and transition zone seismic data acquisition activities were
traditionally seasonal in nature, with decreased revenues experienced during the
first quarter of each year due to the effects of weather conditions in the
United States and delays by customers in committing their annual geophysical
expenditure budgets to specific projects. The Company believes that the
Acquisition will help mitigate this traditional seasonality due to Solid State's
Canadian operations, which generally experience a peak during the first quarter
of the year, primarily due to favorable ground conditions in Canada.

IMPACT OF SOLID STATE ACQUISITION

The Company believes that the Acquisition will increase management and
operating depth, mitigate the effects of seasonality and create operating
efficiencies by consolidating operations, increasing overall crew utilization
and reducing capital expenditures. Solid State, however, has incurred operating
losses in two of its most recent three fiscal years and has experienced
significant net losses in each of its most recent three fiscal years after
accounting for costs and charges for interest, income taxes and asset
writedowns. Aggregate net losses during this three-year period totaled Cdn $21.6
million on aggregate contract revenues of Cdn $171.6 million. See the
consolidated financial statements of Solid State and notes thereto, included
elsewhere in this Subscription Offering Prospectus.

The losses experienced by Solid State were primarily the result of
specific, identifiable events. The most significant loss incurred by Solid State
during this three-year period related to a 1996 multi-client data project in
southern Louisiana. On this project, Solid State incurred a loss of
approximately Cdn $10.0 million. This loss primarily resulted from materially
underestimating costs associated with working in swamp, marsh and river
environments where Solid State had very limited operating experience. The
collection of such multi-client data was completed in 1997; however, such data
was written down to an estimated net realizable value in fiscal 1996. In fiscal
1997, Solid State incurred losses of approximately Cdn $5.5 million primarily
related to a turnkey project for an oil company in Venezuela. A combination of
limited operating experience in the jungle environment, combined with a lack of
sufficient organizational infrastructure, resulted in poor productivity and
substantially increased costs. This project was completed in November 1997 and
the equipment and permanent personnel relocated to Solid State's core Canadian
operations. The losses associated with the Venezuelan project were recognized in
Solid State's fiscal 1997 results.

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under such other debt agreements. Solid State has obtained waivers of certain
covenants and events of default under certain of its outstanding debt
instruments. Solid State has not, however, obtained waivers under all such debt
instruments under which it may be in default. The Company believes that it will
be able to obtain such waivers and to comply with such covenants in 1998 and the
foreseeable future. There can be no assurance, however, that these debt holders
will not accelerate such indebtedness and demand immediate payment of the
outstanding amount of such indebtedness. Such acceleration and demand by debt
holders would have a significant adverse effect upon the Company's financial
condition.

Management of the Company believes that the operating difficulties outside
of Canada that have impacted Solid State's financial results in the past three
years have been satisfactorily addressed and are less likely to reoccur in
future periods. However, because of conditions that may impair Solid State's
ability to continue as a going concern, Price Waterhouse, chartered accountants
for Solid State, has supplemented its opinion on Solid State's fiscal 1997
financial statements. There can be no assurance that the operations of Solid
State that are being purchased in the Acquisition will not incur significant
operating losses in future periods.

LIQUIDITY AND CAPITAL RESOURCES

The Company's internal sources of liquidity are its cash balances ($5.7
million at September 30, 1997, on a pro forma basis after giving effect to the
consummation of the Plan, the issuance of the Subordinated Note and the
Acquisition) and cash flow from operations ($19.7 million of operating income
plus depreciation for the nine months ended September 30, 1997, on a pro forma
basis after giving effect to the consummation of the Plan, the issuance of the
Subordinated Note and the Acquisition). External sources include the unutilized
portion of the Credit Facility ($4.2 million at December 17, 1997), equipment
financing and trade credit. The Credit Facility provides for a $5 million
revolving credit facility, which currently provides for borrowings at an
interest rate per annum of the prime rate plus 2%, secured by substantially all
of the Company's worldwide assets. The Credit Facility limits the Company from
taking, without the consent of the lender, certain actions, including creating
indebtedness in excess of specified amounts and declaring and paying dividends.
The Credit Facility matures on March 31, 1999. In addition to its borrowing
under the Credit Facility, the Company periodically enters into equipment
financing agreements with sellers of seismic data acquisition equipment to pay
all or a portion of the purchase price of such equipment and regularly utilizes
normal trade credit in connection with certain of its purchases of goods and
services to support its ongoing field crew activities.

The Company's principal uses of liquidity will be to provide working
capital, finance capital expenditures, make principal and interest payments
required by the terms of its indebtedness and fund expenses associated with the
implementation of its business strategy. Because of the traditionally longer
period required to collect receivables and the high costs associated with
equipping and operating crews outside of the United States and Canada, the
Company requires significant levels of working capital to fund its international
operations. These operations accounted for 53% of total revenues for the nine
months ended September 30, 1997, on a pro forma basis after giving effect to the
Acquisition.

The Company's capital expenditures, on a pro forma basis after giving
effect to the Acquisition, for the year ended December 31, 1996 were $32.6
million and for the nine months ended September 30, 1997 were $14.8 million.
Capital expenditures are used primarily by the Company to purchase seismic data
acquisition equipment. In the period from October 1, 1997 to December 31, 1997,
Grant committed approximately $11 million to capital expenditures, and the
Company intends to commit approximately $20 million to capital expenditures in
1998. For 1998, the Company has also budgeted approximately $16 million, before
customer commitments, for multi-client data acquisition activities. The 1997
capital spending commitments made to date by Grant have been financed primarily
through the issuance of short-term promissory notes to the sellers of equipment.
The Company intends to finance its fiscal 1998 capital spending program from a
combination of its operating cash flow, seller-provided financing and other
external sources. There can be no assurance that financing will be available or
will be available on terms acceptable to the Company.

At September 30, 1997, on a pro forma basis after giving effect to the
consummation of the Plan, the issuance of the Subordinated Note and the
Acquisition, the Company had total indebtedness (exclusive of trade credit and
accrued liabilities) of approximately $67.3 million, which has increased to
approximately $72.8

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million as of December 1997. In aggregate, the Selling Stockholders are the
holders of approximately $42.9 million of such indebtedness. As of December 15,
1997, the accrued interest on such indebtedness was approximately $1.1 million.
The Company's pro forma total indebtedness is comprised of $16.6 million of
advances under the Credit Facility (including $800,000 of revolving advances and
$15.8 million under a term loan used to complete the Acquisition), $16.7 million
of loans, primarily for working capital, advanced to Solid State by Elliott
prior to the date of the Acquisition including working capital loans of $4.5
million made to Solid State by the Selling Stockholders, the $9.6 million
Subordinated Note issued to Elliott, $3.8 million of advances under a bank
revolving credit facility advanced to Solid State prior to the completion of the
Acquisition (the "Solid State Revolver"), $7.2 million of remaining balances
under term loans made by a bank to Solid State prior to the completion of the
Acquisition (the "Solid State Term Loans") and $18.9 million of combined loans
and capitalized leases incurred for the purpose of financing capital
expenditures (the "Equipment Loans").

A significant amount of the Company's outstanding indebtedness presently
matures on March 31, 1999. The Company is currently exploring various
alternatives to refinance all or a significant portion of its indebtedness,
including the amounts due on March 31, 1999. However, there can be no assurance
that such indebtedness can be refinanced or can be refinanced on terms
acceptable to the Company. Absent new financing or a renewal and extension of a
significant portion of the maturing indebtedness, it is highly unlikely that the
Company's sources of liquidity would be sufficient to pay all maturing
indebtedness and continue adequately to fund the Company's working capital and
capital expenditure requirements and expenses associated with the implementation
of its business strategy. In such event, the Company's business would be
adversely affected.

FOREIGN EXCHANGE GAINS AND LOSSES

The Company conducts a substantial portion of its business in currencies
other than the U.S. dollar or Canadian dollar, particularly various Latin
American currencies, and its operations are subject to fluctuations in foreign
currency exchange rates. Accordingly, certain of the Company's international
contracts could be significantly affected by fluctuations in exchange rates,
particularly in Brazil and Columbia. The Company's international contracts
require payment in U.S. dollars, Canadian dollars, various local currencies or a
combination thereof. Payments in local currencies typically are indexed to
inflationary tables and generally are used for local expenses. The Company
attempts to structure the majority of its international contracts to be billed
and paid at a certain U.S. dollar conversion rate. Additionally, the Company's
foreign subsidiaries periodically enter into local currency debt to pay expenses
incurred locally. The Company presently does not use any derivatives or forward
foreign currency exchange rate hedging arrangements, but may elect to do so in
the future.

GGI's operating results were negatively impacted by foreign exchange losses
of approximately $98,000 during the nine months ended September 30, 1997, and
$251,000 during 1996. Foreign exchange gains positively impacted operating
results in 1995 and 1994 by approximately $102,000 and $121,000, respectively.

EFFECT OF INFLATION

Current economic conditions indicate that the costs of exploration and
production for oil and gas are increasing. The oil and gas industry historically
has experienced periods of rapid cost increases within short periods of time as
demand for drilling rigs, drilling pipe and other materials and supplies
increases. The oil and gas industry is currently experiencing such increases in
demand, which have historically lead to rapid increases in

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<PAGE> 36

costs. Increases in exploration and production costs could lead to a decrease in
such activities by oil and gas companies, which would have an adverse effect on
the demand for the Company's services.

RECENT ACCOUNTING PRONOUNCEMENTS

In February 1997, the Financial Accounting Standards Board (the "FASB")
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. Grant will adopt SFAS 128 in the quarter ended
December 31, 1997. Management does not believe that the implementation of SFAS
128 will have a material effect on its financial statements.

In December 1997, the Company will be required to adopt Statement of
Financial Accounting Standards No. 129, Disclosure of Information about Capital
Structure ("SFAS 129"). SFAS 129 requires that all entities disclose in summary
form within the financial statements the pertinent rights and privileges of the
various securities outstanding. An entity is to disclose within the financial
statements the number of shares issued upon conversion, exercise, or
satisfaction of required conditions during at least the most recent annual
fiscal period and any subsequent interim period presented. Other special
provisions apply to preferred and redeemable stock. The Company will adopt SFAS
129 in the quarter ended December 31, 1997.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income ("SFAS 130"), which establishes
standards for reporting and display of comprehensive income and its components.
The components of comprehensive income refer to revenues, expenses, gains and
losses that are excluded from net income under current accounting standards,
including foreign currency translation items, minimum pension liability
adjustments and unrealized gains and losses on certain investments in debt and
equity securities. SFAS 130 requires that all items that are recognized under
accounting standards as components of comprehensive income be reported in a
financial statement displayed in equal prominence with other financial
statements; the total or other comprehensive income for a period is required to
be transferred to a component of equity that is separately displayed in a
statement of financial position at the end of an accounting period. SFAS 130 is
effective for both interim and annual periods beginning after December 15, 1997.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"). SFAS 131 establishes standards for the way public enterprises are
to report information about operating segments in annual financial statements
and requires the reporting of selected information about operating segments in
interim financial reports issued to stockholders. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. SFAS 131 is effective for periods beginning after December 15, 1997.

35
<PAGE> 37

BUSINESS

OVERVIEW

The Company is a leading provider of seismic data acquisition services in
land and transition zone environments in selected markets, including the United
States, Canada, Latin America and the Far East. In September 1997, Grant
purchased substantially all of the assets and certain of the liabilities of GGI,
and in December 1997, completed the acquisition of Solid State, a leading
provider of land seismic data acquisition services in Canada. Through its
predecessors, including GGI and Solid State, the Company has participated in the
seismic data acquisition services business in the United States and Latin
America since the 1940s, the Far East since the 1960s and Canada since the
1970s. The Company has conducted operations in each of these markets, as well as
in the Middle East and Africa, in the past three years. The Company's seismic
data acquisition services typically are provided on an exclusive contract basis
to domestic and international oil and gas companies and seismic data marketing
companies. The Company also owns interests in certain multi-client seismic data
that is marketed broadly on a non-exclusive basis to oil and gas companies.

According to industry sources, on a pro forma basis after giving effect to
the Acquisition, as of November 30, 1997, the Company is the third largest land
seismic data acquisition company in the western hemisphere, based on the number
of seismic data acquisition crews in operation. As of November 30, 1997, on a
pro forma basis after giving effect to the Acquisition the Company was operating
20 seismic data acquisition crews, consisting of 17 land and three transition
zone crews, comprising approximately 27,370 recording channels, which use
sophisticated equipment to perform specialized 3D and 2D seismic surveys. All of
the Company's seismic data acquisition crews are capable of performing surveys
in land environments, and four are equipped to perform surveys in transition
zone environments. Transition zone environments include swamps, marshes and
shallow water areas that require specialized equipment and must be surveyed with
minimal disruption to the natural environment. Three transition zone crews
employ remote digital seismic data recording systems, which are used primarily
to perform surveys in certain logistically challenging areas, such as highly
populated regions where cable-based recording systems are impractical. The
Company has over 20 years of experience operating in transition zone
environments.

The Company believes that the combined operations of Grant and Solid State
will expand its market presence and enhance the Company's ability to compete
more effectively for projects in its selected markets. The Company believes that
the Acquisition will increase management and operating depth, mitigate the
effects of seasonality and create operating efficiencies by consolidating
operations, increasing overall crew utilization and reducing capital
expenditures. As of the date of the Acquisition, Solid State was operating a
total of nine land crews consisting of six crews in Canada, two crews in the
United States and one in Bolivia.

As of November 30, 1997, on a pro forma basis after giving effect to the
Acquisition, the Company was operating a total of seven crews in the United
States, consisting of five land and two transition zone crews, five land crews
in Latin America, six land crews in Canada and two crews in the Far East,
consisting of one land and one transition zone crew. An additional transition
zone crew is scheduled to begin operations in the Far East during February 1998.
For the nine months ended September 30, 1997, on a pro forma basis after giving
effect to the Acquisition, the Company's total revenues were $135.9 million,
with approximately 39.6% from Latin America, 36.2% from the United States, 11.1%
from Canada, 6.6% from Africa and 6.5% from the Far East. As of November 30,
1997, on a pro forma basis after giving effect to the Acquisition, the Company
estimates that its total backlog was approximately $138 million, with
approximately 77.5% of such amount expected to be completed in 1998.

BUSINESS STRATEGY

The Company's objectives are to strengthen its position as an established
provider of land and transition zone seismic data acquisition and related
services, increase revenue and revenue predictability, and improve cash flow and
profitability. To achieve these objectives, the Company is pursuing the
following business strategies:

36
<PAGE> 38

including the United States, particularly in the Gulf Coast, Mid-Continent and
West Texas regions, Canada, Latin America and the Far East. The Company believes
that its experience in these markets provides it with certain advantages over
its competitors, including lower mobilization costs, well established customer
relationships and familiarity with country specific socio-political dynamics. In
1998, the Company's primary expansion focus will be on the Far East, where the
Company perceives sustainable long-term growth opportunities due to the
exploration potential and growing demand for oil and gas in the region.

Improve Operating Efficiency and Reduce Operating Risk. The Company
continually refines its operating procedures and acquires seismic data
acquisition equipment aimed at increasing the overall efficiency of its seismic
data acquisition crews. The Company also intends to increase overall efficiency
by expanding crew level accountability, implementing additional procedures
designed to control costs, improving revenue predictability, increasing
contractual weather downtime protection and improving bidding practices.
Management believes that the Acquisition is consistent with this strategy in
that it will mitigate the effects of seasonality and create operating
efficiencies by consolidating operations, increasing overall crew utilization
and reducing capital expenditures. In addition, the Company has adopted policies
to focus its operations primarily in regions where it has significant operating
experience and will undertake certain higher-risk contracts only on a term or
cost-plus basis. These policies are intended to reduce the financial risks
associated with operations in certain geographic areas. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Seasonality."

Acquire Complementary Seismic Data Acquisition and Processing
Businesses. The Company regularly evaluates potential acquisitions of seismic
data acquisition and seismic data processing businesses to expand and strengthen
its activities in its selected markets. The United States and Canadian markets
are served by a large number of seismic data acquisition companies, and the
Company believes that it can improve its competitive position by acquiring
complementary competitors. The Company believes that its utilization of the
crews and equipment of such acquired competitors would increase the Company's
capacity and further enable the Company to deploy crews and equipment to
international locations, which have historically yielded higher profit margins.
In addition, the Company believes that the acquisition of a seismic data
processing business would complement its existing services and thereby improve
its competitive position with existing and potential customers. Management
believes that entry into the seismic data processing business would be
accomplished best through the acquisition of an established seismic data
processing company.

Expand Selected Multi-Client Data Acquisition Activities. The Company plans
to increase its investment in non-exclusive multi-client data for licensing to
multiple oil and gas companies. Increased demand by oil and gas companies for
larger and higher cost 3D surveys has resulted in significant growth in the use
of multi-client data in active oil and gas producing regions. This increased
demand has expanded the market for such data and lowered the overall risk to
seismic data acquisition companies that acquire, process and own such data.
Recently, the Company entered into an agreement with a third party that
specializes in creating and marketing multi-client surveys. The Company
anticipates expenditures of approximately $16 million, before customer
commitments, for multi-client data acquisition projects in 1998. The Company
intends to conduct thorough marketing and cost analyses to determine the market
demand and funding requirements for such projects and obtain significant
customer commitments before initiating such products thereby reducing the
overall investment risk associated with such projects. See "Risk
Factors -- Investment in Multi-Client Data Library."

37
<PAGE> 39

THE INDUSTRY

Oil and gas companies regularly use seismic data acquisition services to
image and identify underground geological structures likely to trap
hydrocarbons, both to aid in the exploration for and development of new
hydrocarbon reservoirs and to enhance production from existing reservoirs.
Seismic data has been used in the exploration for oil and gas since the late
1920s, and the application of seismic technology frequently has led to
significant discoveries of new oil and gas reservoirs. Seismology encompasses
the generation and recording of reflected or refracted seismic energy that, when
computer processed, produces 3D images or 2D cross sections of the earth's
subsurface structure. The computer processed seismic data is used by
geoscientists to identify geological characteristics favorable for the
accumulation of oil and gas and to evaluate the potential for commercial
production of oil and gas. More recently, seismic data has been used to monitor
and optimize the production of existing oil and gas reservoirs. During the last
fifty years, seismology has become the leading method used by oil and gas
companies to identify and image underground geological structures favorable for
hydrocarbon accumulation. Recent advances in seismic data acquisition
techniques, coupled with improvements in computer technology, have resulted in
an increased demand for seismic data acquisition services in both the
exploration for and development of new reservoirs and the further development of
existing reservoirs.

Land seismic data acquisition services companies acquire seismic data in
land and transition zone environments by deploying thousands of seismic sensors,
called geophones, over a portion of the area to be covered by the survey. An
energy source, such as a small explosive charge or mechanical vibrating unit, is
used to generate seismic energy that moves through the earth's subsurface and is
reflected by various underlying rock layers to the surface, where it is detected
by the geophones. For 2D seismic data acquisition, the typical configuration of
geophones and energy sources is a single line with an energy source and small
groups or strings of geophones placed at even intervals every few hundred feet
along the line. A geophone string typically consists of six to twelve geophones
connected by a cable. For 3D seismic data acquisition the typical configuration
is generally a grid of perpendicular lines spaced a few hundred to a few
thousand feet apart, with geophone strings spaced at intervals every few hundred
feet along one set of parallel lines and energy sources spaced at intervals
every few hundred feet along the perpendicular lines. Recording configurations
must be carefully designed to provide optimal imaging of the targeted subsurface
structures, while taking into account surface obstructions such as oil and gas
wells and pipelines, or restricted areas where permits to enter cannot be
obtained.

As many as six geophone strings are connected to a field recording box,
which collects the seismic data from those geophones. The electrical output of
each geophone string becomes the electrical input for one recording channel, or
"trace," of seismic data. Once the geophones and field recording boxes are
deployed over a portion of the survey area, an energy source is activated, the
reflected seismic energy is detected by the geophones, and the signals from the
geophones are collected and digitized by the field recording boxes. These boxes
in turn transmit the seismic data by cable, radio telemetry or through hand-held
data collection units to a central recording system. The geophones and field
recording boxes from one end of the single recording line in the case of 2D
seismic data, or an area of multiple recording lines in the case of 3D seismic
data, are then removed and relocated elsewhere in the survey area. The seismic
energy source is again activated and the entire process is repeated, moving a
few hundred feet at a time, until the entire survey area is covered.

Historically, the acquisition of 2D seismic data was the principal seismic
data acquisition technique. However, with the advancement and miniaturization of
seismic data recording equipment and the improvement of computer technology in
the past ten years, high-density surveys, or 3D seismic data, which provide a
much more comprehensive subsurface image has become the industry standard.
Recent technical advances in seismic data acquisition and computer processing
have also resulted in the acquisition of higher-resolution surveys using
three-component geophones, known as 3C-3D, which permit the recording of shear
wave information, in addition to conventional vertical profile seismic data. In
addition, the industry is increasingly utilizing time-lapse 3D, or 4D, seismic
data acquisition techniques, where surveys are periodically reacquired to
monitor and optimize production of existing reservoirs.

38
<PAGE> 40

industry is experiencing growing demand for non-exclusive multi-client seismic
data due to the high cost and risk of drilling exploration wells and the
relatively high cost of acquiring and processing 3D seismic data. Multi-client
data allows numerous oil and gas companies to purchase the same seismic data,
thereby expanding the overall market for such data while lowering the price
charged each customer.

LAND AND TRANSITION ZONE SEISMIC DATA ACQUISITION

A seismic data acquisition crew typically consists of a surveying crew that
lays out the lines to be recorded and marks the sites for energy source or
geophone placement and equipment location, an explosives or mechanical vibrating
or compressed air unit crew, and a recording crew that lays out the geophones
and field recording boxes, directs shooting operations and records the seismic
energy reflected from subsurface structures. A land seismic data acquisition
crew utilizing an explosives unit is supported by several drill crews, generally
furnished by third parties under short-term contracts. Drill crews operate in
advance of the seismic data acquisition crew and bore shallow holes for small
explosive charges that, when detonated, produce the necessary seismic impulse.
In locations where conditions dictate or where the use of explosives is
precluded due to regulatory, topographical or ecological factors, a mechanical
vibrating unit or compressed air unit is substituted for explosives as the
seismic energy source. The Company also employs specialized crew mobilization
equipment to improve productivity in certain applications, including helicopters
for rugged terrain or in agricultural areas, small water craft for transition
zone applications, and man-portable equipment in jungle and other environments
where vehicular access is limited. Depending on the size of the seismic survey,
the location and other logistical factors, a typical land seismic data
acquisition crew operated by the Company may involve from as few as 30 to as
many as 1,500 employees.

One of the challenges inherent in land seismic data acquisition is
operating in challenging logistical environments without disrupting the
sensitive ecosystems in which surveys are frequently located. The Company
currently operates three seismic crews that employ remote digital seismic
equipment, which can be deployed without the use of conventional seismic cables,
thereby allowing access to such environments. Remote digital seismic equipment,
which uses radio signals to transmit data, is typically used in transition zone
and other logistically challenging environments such as highly populated regions
with numerous topographic obstructions and areas where conventional cable-based
recording systems are impractical. The Company has over 20 years of experience
operating in transition zone environments in the Gulf Coast region of the United
States, the Far East and Africa.

Once recorded by the seismic data acquisition crew, seismic data is
computer processed to enhance the recorded signal by reducing noise and
distortion and improving resolution to produce a representation of the survey
site's subsurface structures. The Company presently does not perform seismic
data processing services, although it plans to initiate such services in the
future. See " -- Business Strategy -- Acquire Complementary Seismic Data
Acquisition and Processing Businesses."

The Company markets its seismic data acquisition services from its Houston
and Calgary corporate offices and its regional and international administrative
centers by personnel whose duties include technical, supervisory or executive
responsibilities. The Company works closely with its clients to plan seismic
data acquisition projects in accordance with their specifications. Contracts are
executed with oil and gas companies on either a turnkey, term or cost-plus
basis. Turnkey contracts provide for payments from customers based upon the
amount of data collected. Term contracts provide that the customer is
responsible for a periodic fee during the term of the project. Cost-plus basis
contracts provide that the costs of a project plus a percentage fee are borne by
the customer, which significantly reduces the Company's risk of a cost overrun.
In addition, the Company's contracts typically specify the amount of weather and
other downtime risk that will be borne by the Company.

Contracts are usually awarded on a competitive bid basis. Contracts for
seismic data acquisition services outside the United States are typically
denominated in U.S. dollars, Canadian dollars or other currencies that the
Company believes to be stable. The Company's operations in certain areas outside
the United States and Canada may, however, require the Company to denominate
contracts in the local currency or partially in U.S. dollars and partially in
the currency of the country of operation. In such contracts, the local currency
is usually used to pay local crew-related expenses. See "Risk Factors -- Risks
Inherent in International Operations" and "Manage-

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<PAGE> 41

ment's Discussion and Analysis of Financial Condition and Results of
Operations -- Foreign Exchange Gains and Losses."

MARKETS

The Company is presently active in the United States, Canada, Latin America
and the Far East and has conducted activities in the Middle East and West Africa
within the last three years. The following table sets forth the Company's
revenues by geographic area, on a pro forma basis after giving effect to the
Acquisition, for the periods shown:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------- -------------
1994 1995 1996 1997
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
United States.................. $ 27,791 $ 51,079 $ 53,406 $ 49,172
Canada......................... 21,790 16,796 15,824 15,123
Latin America.................. 25,544 32,623 60,688 53,894
Far East....................... 6,032 3,621 5,412 8,871
Africa and Middle East......... 25,509 19,346 2,746 8,937
-------- -------- -------- ---------
$106,666 $123,465 $138,076 $ 135,997
======== ======== ======== =========
</TABLE>

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

See Note 5 of notes to the consolidated financial statements of Grant and GGI
and Note 11 of notes to the consolidated financial statements of Solid State for
additional geographic information.

BACKLOG

The Company's backlog for seismic data acquisition services represents the
revenues anticipated to be received by the Company in connection with
commitments for contracted services received from its customers. As of November
30, 1997, the Company estimates that its total backlog was approximately $138
million, with approximately 77.5% of such amount expected to be completed in
1998, as compared to a total backlog of approximately $100 million as of
December 31, 1996. Most of the Company's contracts are terminable by the
customer upon relatively short notice and, in some cases, without penalty. The
Company's backlog as of any particular date is not indicative of the likely
operating results for any succeeding period, and there can be no assurance that
the amount of backlog will ultimately be realized as revenue.

CAPITAL EXPENDITURES AND TECHNOLOGY

The Company's ability to compete and maintain a significant market position
in the land seismic data acquisition business is partially driven by its ability
to provide technology comparable to that of its primary competitors.
Accordingly, the Company continually maintains and periodically upgrades its
seismic data acquisition equipment to maintain its competitive position. The
Company's capital expenditure commitments for this purpose in the fourth quarter
of 1997 were approximately $11 million and are anticipated to be approximately
$20 million in 1998. Capital expenditures in 1998 will be used principally to
upgrade and expand its seismic data acquisition equipment. In addition, the
Company anticipates expenditures of approximately $16 million, before customer
commitments, for multi-client data acquisition projects in 1998.

In connection with its capital expenditure program, the Company focuses its
efforts on developing operating procedures and acquiring equipment that will
enhance the efficiency of its seismic data acquisition crews and reduce the time
required to complete projects. The Company's strategic plan does not contemplate
the development of proprietary seismic data acquisition equipment, but instead
relies on the use of third-party equipment suppliers to provide such equipment,
although certain equipment will be customized to the Company's specifications to
enhance operating efficiency. Certain of the equipment, processes and techniques
used by the Company are subject to the patent rights of others, and the Company
holds non-exclusive licenses with respect to a number of such patents. While the
Company regards as beneficial its access to third-party technology through

40
<PAGE> 42

licensing, the Company believes that substantially all presently licensed
technology could be replaced without significant disruption to the business.

LICENSING OF MULTI-CLIENT DATA

The Company presently owns a small library of multi-client seismic data
that is licensed to oil and gas companies on a non-exclusive basis and has an
interest in certain multi-client data that is owned by third-parties. At
September 30, 1997, on a pro forma basis after giving effect to the Acquisition,
such data had a book value of approximately $11.3 million. This data was
previously acquired by GGI and Solid State in three principal areas: southern
Louisiana, New Mexico and western Canada. The Company plans to expand its
acquisition of multi-client seismic data by conducting additional surveys that
are partially or wholly funded by multiple customers. For 1998, the Company has
budgeted approximately $16 million, before customer commitments, for
multi-client data acquisition projects.

In October 1997, Grant entered into an agreement with Millennium Seismic,
Inc. ("Millennium") to develop, market and regularly conduct non-exclusive
seismic surveys. Millennium has significant experience in the planning,
development and sale of multi-client surveys in the United States. Under the
agreement with Millennium, all surveys developed and acquired will be owned by
the Company, and Millennium will receive payments based on the revenues obtained
through licensing the acquired data.

Factors considered when determining whether to undertake a multi-client
survey include the availability of customer commitments to offset a percentage
of the survey cost, the number of potential customers for the completed data,
the location to be surveyed, the probability and timing of future lease,
concession, exploration and development activity in the area, and the
availability, quality and price of competing data. Although the Company
anticipates obtaining commitments for a substantial majority of the cost of any
future multi-client data survey and conducts thorough market and cost analyses
to determine the market demand and necessary funding prior to undertaking a
project, the Company still may not be able to fully recoup its costs if it
substantially underestimates the cost or market demand for such multi-client
project.

CUSTOMERS AND PROJECTS

The Company's customers consist of domestic and international oil and gas
companies and seismic data marketing companies. As is the case for many service
companies in the oil and gas industry, a relatively small number of customers or
a limited number of significant projects may account for a large percentage of
the Company's net sales in any given year. Moreover, such customers and projects
may, and often do, vary from year to year. During 1996 and the first nine months
of 1997, GGI's five largest customers accounted for approximately 42.3% and
53.0%, respectively, of GGI's net sales. In the first nine months of 1997, on a
pro forma basis after giving effect to the Acquisition, the five largest
customers of the Company accounted for approximately 55.3% of the Company's net
sales. Although GGI and Solid State have had long-term relationships with
numerous customers, the continuation of these relationships is primarily
dependent on the customers' needs for the Company's services and the customers'
ongoing satisfaction with the price, quality, dependability and availability of
the Company's services. See "Risk Factors -- Reliance on Significant Customers
and Projects."

COMPETITION

The acquisition of seismic data for the oil and gas industry is highly
competitive worldwide. However, as a result of changing technology and increased
capital requirements, the seismic industry has consolidated substantially since
the late 1980s, thereby reducing the number of competitors. The Company's
principal competitors in North America are Western Atlas, Inc. ("Western
Atlas"), Veritas DGC, Inc. ("Veritas"), Geco-Prakla, a subsidiary of
Schlumberger Limited, and several regional competitors. In Latin America and the
Far East, the Company competes with Western Atlas, Compagnie General de
Geophysique, Inc. ("CGG"), Geco-Prakla, and several other local competitors.
Competition is based primarily on price, crew availability, prior performance,
technology, safety, quality, dependability and the contractor's expertise in the
particular area where the survey is to be conducted.

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<PAGE> 43

EMPLOYEES

As of November 30, 1997 the Company employed approximately 475 full-time
personnel worldwide and approximately 1,400 auxiliary field personnel on
temporary contracts. None of the Company's employees is subject to collective
bargaining agreements. The Company considers its relations with its employees to
be good.

PROPERTIES

The Company owns a 30,000 square foot building and storage yard in Houston,
Texas which serves as its corporate headquarters, warehouse and staging
facility. The Company also owns its office, staging and repair facility located
on a two acre tract in New Iberia, Louisiana. In Calgary, Alberta, Canada, the
Company owns an 18,000 square foot building and storage yard that serves as the
Company's Canadian headquarters. In addition, the Company leases office,
warehouse and storage space in areas throughout the world as may be required
from time to time to support the Company's operations.

ENVIRONMENTAL MATTERS/GOVERNMENTAL REGULATION

The Company's domestic operations are subject to a variety of federal,
state and local laws and regulations relating to the protection of human health
and the environment, the violation of which may result in civil or criminal
penalties. The Company invests financial and managerial resources to comply with
such laws and regulations and management believes that it is in compliance in
all material respects with applicable environmental laws and regulations.
Although such environmental expenditures by the Company historically have not
been significant, there can be no assurance that these laws and regulations will
not change in the future or that the Company will not incur significant costs in
the future performance of its operations. The Company is not involved in any
legal proceedings concerning environmental matters and is not aware of any
claims or potential liability concerning environmental matters that could have a
material adverse impact on the Company's business or consolidated financial
condition.

The Company's operations outside of the United States are subject to
similar environmental regulation in a number of foreign locations, including
Canada, Latin America, and the Far East. Management believes that the Company is
in material compliance with the existing environmental requirements of these
foreign governmental bodies. The Company has not incurred any significant
environmental cost in connection with the performance of its foreign operations;
however, any regulatory changes that impose additional environmental
restrictions or requirements on the Company or its customers could adversely
affect the Company through increased operating costs and decreased demand for
the Company's services.

LEGAL PROCEEDINGS

On December 11, 1997, certain Eligible Subscribers, acting through an "ad
hoc" committee (the "Plaintiffs") commenced a lawsuit in the Bankruptcy Court
against Grant, GGI, Elliott, Westgate and SSGI. The lawsuit alleges that (i) GGI
and Elliott breached their obligations under the Plan by seeking to complete the
Acquisition prior to commencing the Subscription Offering, (ii) the Acquisition
and the certain related transactions are unfair to Eligible Subscribers because
they dilute the value of the Common Stock to be issued under the Subscription
Offering and impair the Company's equity value and (iii) the Acquisition and
certain related transactions could and should have been, but were not,
adequately disclosed in the disclosure statement filed with the Bankruptcy Court
regarding the Plan. The Plaintiffs have requested (i) compensatory and punitive
damages in an unstated amount and (ii) revocation of the Plan.

In addition, the Plaintiffs sought to enjoin completion of the Acquisition
and certain related transactions pending a trial on the merits. This request for
injunctive relief was denied by the Bankruptcy Court on December 16, 1997, and
was denied on appeal by the United States District Court for the District of
Delaware on December 19, 1997. Currently, a pre-trial conference on the lawsuit
is scheduled for January 21, 1998; however, no trial date has been set. The
Company believes that all claims by the Plaintiffs are without merit and plans
to vigorously defend the lawsuit. If not resolved in the Company's favor, this
lawsuit, and the potential for other lawsuits related to the Plan, could have a
material adverse effect on the Company's business, reputation, operating results
and financial condition.

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<PAGE> 44

The Company is also involved in or threatened with other various legal
proceedings from time to time arising in the ordinary course of business.
Management of the Company does not believe that any liabilities resulting from
any such current proceedings will have a material adverse effect on its
consolidated operations or financial position.

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<PAGE> 45

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The name, age and current principal position of each director and executive
officer of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------- ----- ------------------------------------------
<S> <C> <C>
Jonathan D. Pollock 34 Chairman of the Board and Director
Larry E. Lenig, Jr. 49 President, Chief Executive Officer and
Director
Mitchell L. Peters 42 Senior Vice President
Michael P. Keirnan 46 Chief Financial Officer, Treasurer and
Secretary
Barry K. Burt 48 Vice President -- International Operations
D. Hugh Fraser 50 Vice President -- United States Operations
J. Kelly Elliott 67 Director
Donald G. Russell 66 Director
</TABLE>

Executive officers are elected by and serve at the discretion of the Board
of Directors until their successors are duly elected and qualified. There are no
family relationships between or among any directors or executive officers of the
Company.

JONATHAN D. POLLOCK has served as Chairman of the Board and a Director of
Grant since September 30, 1997. Mr. Pollock has served as Portfolio Manager with
Stonington Management Corporation, the management company of Elliott and
Westgate since 1989. Mr. Pollock is also a director of Tatham Offshore, Inc., a
director and Chairman of Horizon Offshore, Inc. and a director and Chairman of
Horizon Barge and Towing, Inc.

LARRY E. LENIG, JR. has served as President, Chief Executive Officer and a
director of Grant since September 30, 1997, and President and Chief Operating
Officer of GGI from January 1997 until September 30, 1997. From 1993 through
1996, Mr. Lenig was engaged in private consulting to a variety of energy and
energy services companies and financial institutions. Mr. Lenig served as
President and Chief Operating Officer and a director of Digicon Inc., a seismic
services company, from 1989 until 1993.

MITCHELL L. PETERS has served as Senior Vice President of Grant since
December 1997 and has served as President and Chief Executive Officer of Solid
State since 1985. Mr. Peters is also a director of Nortech Geomatics Inc.

MICHAEL P. KEIRNAN has served as Vice President and Chief Financial Officer
of Grant since September 30, 1997, and was Vice President and Chief Financial
Officer of GGI from February 1997 until September 30, 1997. From March 1996
until February 1997, Mr. Keirnan served as Manager of Treasury Operations of
Gundle/SLT Environmental, Inc. Mr. Keirnan also served as Controller and
Treasurer of GGI from 1993 through March 1996 and held other senior financial
management positions with GGI since 1988.

BARRY K. BURT has served as Vice President -- International Operations of
Grant since September 30, 1997, and was Vice President -- International
Operations of GGI from December 1996 until September 30, 1997. From 1986 through
December 1996, Mr. Burt held a variety of management positions with GGI in
international operations.

D. HUGH FRASER has served as Vice President -- United States Operations of
Grant since September 30, 1997, and was Vice President -- United States
Operations of GGI from January 1992 until September 30, 1997. From 1986 through
January 1992, Mr. Fraser was an area manager of United States operations with
GGI.

J. KELLY ELLIOTT has served as director of Grant since September 30, 1997.
Until that time, Mr. Elliott was Chairman of the Board of GGI beginning on
November 20, 1996. He previously served as Chairman of the Board of GGI from
June 1993 through November 1995. Mr. Elliott has served as Chairman, President,
and Chief Executive Officer of Sigma Electronics, Inc., an electronics and
manufacturing company since 1991. Mr. Elliott is also a director of Tescorp,
Inc., a cable-manufacturing company. Mr. Elliott has no affiliation with Elliott
or Westgate.

DONALD G. RUSSELL has served as a director of Grant since September 30,
1997 and a director of GGI from February 1997 until September 30, 1997 and from
July 1993 through November 1995. Mr. Russell has served as Chairman of the Board
and Chief Executive Officer of Sonat Exploration Company, an oil and gas
exploration company, since 1988, and a director of Sonat, Inc. since 1994.

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<PAGE> 46

COMPENSATION OF DIRECTORS

Each nonemployee director of the Company will be paid a monthly retainer of
$1,000 and $500 for each board or committee meeting attended by such director.
Under the Incentive Plan (as defined below), each nonemployee director of the
Company will receive 3,000 restricted shares of Common Stock on the date that
such director is first elected (after the adoption of the Incentive Plan) and
again upon the date of each subsequent reelection to the board of directors.
Nonemployee directors are also eligible to receive other Awards under the
Incentive Plan. See "-- 1997 Equity and Performance Incentive Plan."

COMPENSATION OF EXECUTIVE OFFICERS

The Company was organized in September 1997 and did not conduct any
operations or have any employees before the Effective Date. As a result, the
Company does not have any executive officers with respect to whom disclosure of
executive compensation is required under the Securities Act or the rules and
regulations promulgated thereunder.

EMPLOYMENT AGREEMENTS

Grant and Solid State have entered into employment agreements (the
"Employment Agreements") with Larry E. Lenig, Jr. and Mitchell L. Peters (the
"Executive Officers"), respectively. The Employment Agreements have an initial
term through December 31, 2000 and provide for annual base salaries of $180,000
for Mr. Lenig and Cdn $230,000 for Mr. Peters. Mr. Lenig's Employment Agreement
also provides for an annual bonus based on the Company's performance. The
Employment Agreements provide generally that, if the Executive Officer is
terminated for any reason other than for "cause" (as defined in the Employment
Agreements), the Company must: (i) in Mr. Lenig's case, make base salary
payments for the remainder of his Employment Agreement's term, and (ii) in Mr.
Peters' case, make a payment equal to two-times his base salary in effect as of
the date of termination. Each of Mr. Lenig and Mr. Peters has agreed pursuant to
the Employment Agreements not to compete with the Company by engaging in any
"competing business" (as defined in the Employment Agreements) for a period of
24 months following termination of employment or, in Mr. Lenig's case, 24 months
following the term of his agreement.

1997 EQUITY AND PERFORMANCE INCENTIVE PLAN

The 1997 Equity and Performance Incentive Plan (the "Incentive Plan) was
adopted by the Board of Directors and approved by Grant's stockholders in
December 1997. A total of one million shares of Common Stock has been reserved
for issuance under the Incentive Plan. The Incentive Plan provides for the grant
to officers (including officers who are also directors), employees, consultants
and nonemployee directors of the Company and its subsidiaries, of "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code of
1986 (the "Code"), nonstatutory stock options, stock appreciation rights and
restricted shares and deferred shares of Common Stock (collectively, the
"Awards"). The Incentive Plan is not a qualified deferred compensation plan
under Section 401(a) of the Code and is not subject to the provisions of the
Employee Retirement Income Security Act of 1974.

The Incentive Plan is required to be administered by the Board of Directors
or by a committee of the Board of Directors consisting of at least two
nonemployee directors. The Board of Directors or its designated committee will
select the employees and nonemployee directors to whom Awards may be granted and
the type of Award to be granted and determine, as applicable, the number of
shares to be subject to each Award, the exercise price and the vesting. In
making such determinations, the Board of Directors or its designated committee
will take into account the employee's present and potential contributions to the
success of the Company and other relevant factors. As of the date of the
Subscription Offering Prospectus, no Awards have been granted under the Plan.

401(k) PLAN

The Company has assumed GGI's defined contribution retirement plan, which
complies with Section 401(k) of the Code (the "401(k) Plan"). The 401(k) Plan
was adopted by GGI in January of 1989 and assigned to the Company as of the
Effective Date. Substantially all U.S. based employees of the Company and its
subsidiaries with at least six months of continuous service are eligible to
participate and may contribute from 1% to 15% of their annual compensation.
Under the 401(k) Plan, the Company may provide matching contributions of a
discretionary percentage, as determined by the Board of Directors, of an
employee's contributions.

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<PAGE> 47

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

SELLING STOCKHOLDERS

In connection with the consummation of the Plan, the Selling Stockholders
satisfied certain claims of Foothill Capital Corporation against GGI (the
"Foothill Claim") in the amount of approximately $12.7 million. In addition,
Westgate purchased certain claims of Oyo Geospace Corporation against GGI (the
"Oyo Claim") that were assumed by Grant, in the principal amount of
approximately $6.9 million, and the Selling Stockholders purchased certain
claims of Madeleine L.L.C. against GGI (the "Madeleine Claim"), in the amount of
approximately $5.6 million. The Selling Stockholders' satisfaction of the
Foothill Claim was credited against the cash obligation under the Cash Purchase
Price. In exchange for the satisfaction of the Foothill Claim and the
cancellation of the Oyo Claim, Grant issued 19,571.162 shares of Preferred
Stock, to the Selling Stockholders. The Preferred Stock provides for dividends
payable in additional shares of Preferred Stock at a rate of 10.5% per annum,
the right to designate two members of the board of directors of Grant and the
right to vote on certain extraordinary matters presented for a stockholder vote.
On December 19, 1997, Grant exchanged 9,571.162 shares of Preferred Stock held
by Elliott for the Subordinated Note. Elliott loaned $10.2 million to the
Company on November 26, 1997, under a demand promissory note (the "Promissory
Note"), with interest at a rate per annum equal to the prime rate plus 2%. On
December , 1997, the Selling Stockholders and Grant paid the remainder of the
Cash Purchase Price, approximately $34.8 million, which included the
satisfaction of the Madeleine Claim and the cancellation of the Promissory Note.
In addition, upon consummation of the Subscription Offering, Elliott is entitled
to receive 237,500 shares of Common Stock pursuant to the Plan.

Elliott is a Delaware limited partnership and Westgate is a Cayman Islands
limited partnership, each of which invests and trades in a wide range of United
States and non-United States equity and debt securities and other financial and
investment interests, instruments and property. The general partners of Elliott
are Paul E. Singer and Braxton Associates, L.P., which was formed by Mr. Singer
in 1975. Elliott commenced operations in 1977, and its limited partners include
pension plans, corporations, family groups, individuals and a substantial
investment by Mr. Singer and his family. The general partner of Westgate is
Hambledon, Inc., a corporation controlled by Braxton Associates, L.P. Elliott
and Westgate are each managed by Stonington Management Corporation, a
corporation controlled by Mr. Singer. Jonathan D. Pollock, Chairman of the Board
and a director of the Company, is also a Portfolio Manager with Stonington
Management Corporation.

LOAN AND SECURITY AGREEMENT

On October 1, 1997, Grant and Elliott entered into the Credit Facility
under which the Company may borrow up to an aggregate principal amount of $5
million in revolving loans. The Company is required to pay interest on the
outstanding principal balance of revolving loans at a rate per annum equal to
the prime rate plus 2%. The term of the Credit Facility runs through March 31,
1999 at which time all obligations of the Company under the Credit Facility are
due and payable. Elliott has also advanced the Acquisition Financing under a
$15.8 million term note pursuant to the Credit Facility. The revolving loans and
any term notes under the Credit Facility are secured by all of the Company's
assets and a pledge by the Company of certain notes and all the outstanding
shares of capital stock of its subsidiaries. Each subsidiary of the Company has
executed a guaranty in favor of Elliott, each of which guarantees payment of all
the Company's obligations owed to Elliott under the Credit Facility. Each
subsidiary has pledged its assets in favor of Elliott to secure its obligations
under its respective guaranty.

REGISTRATION RIGHTS AGREEMENT

On September 19, 1997, the Selling Stockholders and the Company entered
into a Registration Rights Agreement, as amended (the "Registration Rights
Agreement"). Pursuant to the Registration Rights Agreement, stockholders holding
at least 25% of the Registrable Securities (as defined below) have the right to
require, or "demand," to register such Registrable Securities. Such demand
rights are subject to the condition that the Company would not be required to
effect more than five demand registrations and no more than three demands within
any twelve-month period. Such holders also have the right to participate, or
"piggyback," in equity offerings, if the Company proposes to register any of its
equity securities under the Securities Act for its own account or for the
account of other stockholders, subject to reduction of the size of such offering
on the advice of the underwriters. "Registrable Securities" is defined in the
Registration Rights Agreement as all shares of Common Stock issued to the
Selling Stockholders in connection with the Plan or the Acquisition and any
equity

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<PAGE> 48

securities of the Company issued or distributed in respect thereof by way of any
rights offering, stock dividend, stock split or other distribution,
recapitalization or reclassification and any equity securities acquired upon
exercise or conversion of any such securities. The Company is required to pay
all expenses in connection with such 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
Registration Rights Agreement are transferable to transferees of Registrable
Securities. The Company is registering the Common Stock offered by the Selling
Stockholders in connection with the Subscription Offering pursuant to the
Registration Rights Agreement.

SOLID STATE AND THE ACQUISITION

Prior to the Tender Offer, the Selling Stockholders held an aggregate of
9,305,109 shares (representing approximately 63.8% of the fully diluted shares)
of Solid State Stock. In connection with the Acquisition, the Principal
Stockholders transferred their shares of Solid State Stock to Grant in exchange
for 4,652,555 shares of Common Stock. Grant subsequently contributed the shares
of Solid State Stock to SSGI prior to the completion of the Tender Offer. In
connection with the Tender Offer, the Selling Stockholders advanced the
Acquisition Financing to enable SSGI to consummate the Tender Offer (the
"Acquisition Financing"). As a result of the Acquisition, Grant, through SSGI,
assumed $36.4 million of debt of Solid State (the "Solid State Debt") of which
$16.7 million is held by Elliott, which includes approximately $4.5 million
working capital loan made to Solid State by the Selling Stockholders and
approximately $12.2 million loaned to Solid State by Elliott under various
promissory notes.

In April 1996, the Selling Stockholders acquired 266,100 shares of Solid
State Stock at an approximate price of $1.80 per share. On April 23, 1996, Solid
State Geophysical Corp., a U.S. subsidiary of Solid State (the "U.S.
Subsidiary") issued to the Selling Stockholders a $2 million 8% Convertible
Debenture due April 30, 2001, convertible into 1,141,667 shares of Solid State
Stock. In addition, the Selling Stockholders loaned the U.S. Subsidiary $3
million due December 31, 1996 pursuant to a secured loan agreement, with
interest at 18% per annum. Such loans, and all other loans (described below) by
the Selling Stockholders to the U.S. Subsidiary, were guaranteed by Solid State.
As part of these transactions, the Selling Stockholders received warrants to
acquire 110,000 shares of Solid State Stock at an exercise price of Cdn $2.76
per share.

On October 16, 1996, the Selling Stockholders subscribed for 3,044,444
shares of Solid State Stock at a price of Cdn $1.35 per share for aggregate
proceeds of $3 million. In addition, pursuant to a secured loan agreement, the
Selling Stockholders advanced $9 million to the U.S. Subsidiary. The loan was
due October 31, 1999, and required Solid State to use its best efforts to
complete a rights offering to raise at least $4 million to pay down the loan by
January 31, 1997. Upon such repayment, the interest rate was to be reduced from
18% to 15%. The proceeds were used for working capital and to retire the April
23, 1996 loans. As part of the transaction, the Selling Stockholders received
125,000 warrants to acquire shares of Solid State Stock at an exercise price of
Cdn $1.65 per share and the warrants issued as part of the April 23, 1996
transaction were canceled.

On December 12, 1996, each of Richard Anderson, a nominee of Elliott
serving on the board of Solid State, and Michael Latina, an officer of Elliott
and a director of Solid State, were awarded options to acquire 20,000 shares of
Solid State Stock at an exercise price of Cdn $1.00 per share. In January 1997,
Elliott granted to Mitchell Peters, as an incentive, an option to acquire
546,285 shares of Solid State Stock owned by Elliott at an exercise price of Cdn
$0.92 per share after payment to Elliott of Cdn $50,000 for the option, such
option to be exercisable commencing February 1998. In addition, in connection
with the Tender Offer, Elliott has agreed to repurchase such option from Mr.
Peters upon taking up any shares under the Tender Offer for an aggregate
consideration of Cdn $1,359,415.30, representing the difference in the Tender
Offer price and exercise price multiplied by 546,285, less Cdn $50,000. In
connection with the Acquisition, Grant assumed Elliott's obligation to
repurchase such option.

In January 1997, Elliott and Westgate subscribed for 4,459,565 and
1,410,000 shares, respectively, at Cdn $0.92 per share. Aggregate proceeds of $4
million were used to retire indebtedness to Westgate and to reimburse expenses
of the Selling Stockholders.

On October 31, 1997, the Selling Stockholders exercised their warrants to
acquire 125,000 shares of Solid State Stock. The proceeds from the issuance of
the warrants were applied by Solid State to reduce the consolidated indebtedness
owed by Solid State to Elliott.

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<PAGE> 49

As of November 30, 1997, the U.S. Subsidiary has outstanding to Elliott
approximately $4.5 million under a loan agreement, which matures on March 31,
1999 and approximately $12.2 million under various promissory notes, all of
which bear interest at 15% per annum. The maturities of such promissory notes
have been extended to March 31, 1999.

OTHER

The Company 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.

SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS

As of the date of this Subscription Offering Prospectus, Elliott owned
7,076,278 shares of Common Stock, representing 50% of the outstanding shares of
Common Stock. Westgate owned 10,000 shares of Preferred Stock and 7,076,277
shares of Common Stock, representing 100% of the outstanding shares of Preferred
Stock and 50% of the outstanding shares of Common Stock, respectively, and no
director, officer, or other person known to the Company owned any shares of the
Company's capital stock. Each of Elliott and Westgate has sole voting and
dispositive power with respect to their shares.

SUBSCRIPTION PROCEDURES

The following discussion of the Subscription Offering does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
the provisions of the Plan and the accompanying Subscription Exercise Notice,
which are incorporated herein by reference and is filed as an exhibit to the
Registration Statement of which this Subscription Offering Prospectus is a part.
See "Additional Information."

SUBSCRIPTION RIGHTS; ELIGIBLE SUBSCRIBERS

This Subscription Offering Prospectus and a Subscription Exercise Notice,
which contain information concerning the Subscription Offering, is being mailed
to each Eligible Subscriber.

The Plan provides that (i) Eligible Class 5 Claim Holders; (ii) Eligible
Class 7 Interest Holders; and (iii) Eligible Class 8 Interest Holders, each as
defined in the Plan (collectively, the "Eligible Subscribers") have the right to
participate in the Subscription Offering. Each Eligible Subscriber's right to
purchase Common Stock is nontransferable, will not be evidenced by certificates,
and will expire on the Expiration Date. The Plan provides that subscription
rights shall represent the right to purchase, in the aggregate 4,750,000 shares
of Common Stock, for an aggregate purchase price of $23,750,000. The Eligible
Subscribers are divided into the following three groups: (i) Eligible Class 5
Interest Holders that have the right to purchase, in the aggregate, 475,000
shares of Common Stock, for an aggregate purchase price of $2,375,000, (ii)
Eligible Class 7 Claim Holders that have the right to purchase, in the
aggregate, 4,255,000 shares of Common Stock, for an aggregate purchase price of
$21,275,000 and (iii) Eligible Class 8 Interest Holders that have the right to
purchase, in the aggregate, 20,000 shares of Common Stock, for an aggregate
purchase price of $100,000. NO PERSON IS REQUIRED TO PURCHASE ANY SHARES OF
COMMON STOCK IN THE SUBSCRIPTION OFFERING.

Pursuant to the Plan, the Company is required to conduct a subscription
offering of 4,750,000 shares of Common Stock to certain holders of claims and
other interests under the Plan for an aggregate purchase price of $23,750,000.
The Plan also authorized the offering of shares of common stock of a successor
company on economically equivalent terms. The Plan provides, however, that
Elliott or its affiliates may pay the entire purchase price to GGI, representing
the total anticipated proceeds of such offering, and then conduct a subscription
offering and retain the proceeds therefrom, which Elliott has elected to do.
Because Elliott and certain of its affiliates, as interest holders under the
Plan, were entitled to purchase 1,290,586 shares of Common Stock in an offering
by the Company, the Selling Stockholders are offering the balance of such shares
of Common Stock to the Eligible Subscribers pursuant to the Subscription
Offering. The Company is registering such shares of Common Stock pursuant to the
Registration Rights Agreement.

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<PAGE> 50

EXERCISE OF RIGHTS TO PURCHASE COMMON STOCK

Each Eligible Subscriber who wishes to exercise rights to purchase shares
of Common Stock must properly complete, duly execute and deliver the
accompanying Subscription Exercise Notice indicating the number of shares of
Common Stock subscribed for, together with a certified check or bank draft upon
a United States bank or wire transfer in an amount equal to the product of the
Subscription Purchase Price and the number of shares sought to be subscribed.
The Subscription Exercise Notice delivered to each Eligible Subscriber sets
forth the maximum number of shares of Common Stock that such Eligible Subscriber
is entitled to purchase in the Subscription Offering. The Subscription Exercise
Notice, together with full payment for shares subscribed for, may be delivered
to the Subscription Agent or be mailed in the enclosed return envelope.
Subscription Exercise Notices, once delivered, may not be amended, modified or
rescinded, unless permitted by the Selling Stockholders in their sole
discretion, to correct immaterial irregularities.

WHETHER HAND DELIVERED OR MAILED, SUBSCRIPTION EXERCISE NOTICES AND PAYMENT
MUST BE RECEIVED BY 5:00 P.M. EASTERN STANDARD TIME ON , 1998.
Failure of such receipt by the expiration time for any reason, will be deemed a
waiver and release by the Eligible Subscriber of any rights the Eligible
Subscriber may have to purchase shares in the Subscription Offering. An executed
Subscription Exercise Notice, once delivered cannot be amended, modified or
rescinded by an Eligible Subscriber. All determinations as to proper completion,
due execution timeliness, eligibility and other matters affecting the validity
or effectiveness of any attempted exercise of subscription rights shall be made
by the Selling Stockholders, whose determination shall be final and binding. The
Selling Stockholders in their sole discretion may waive any defect or
irregularity, or permit a defect or irregularity to be corrected within such
time as they may determine or reject the purported exercise of any rights to
purchase shares of Common Stock subject to any such defect or irregularity.
Deliveries required to be received by the Subscription Agent in connection with
a purported exercise of rights to purchase shares of Common Stock will not be
deemed to have been so received or accepted until actual receipt thereof by the
Subscription Agent shall have occurred and any defects or irregularities shall
have been waived or cured within such time as the Selling Stockholders may
determine in their sole discretion. Neither the Selling Stockholders nor the
Subscription Agent will have any obligation to give notice to any Eligible
Subscriber of any defect or irregularity in connection with any purported
exercise thereof or incur any liability as a result of any failure to give such
notice.

Questions or requests regarding subscription procedures or related matters
may be directed to the Subscription Agent, ( ) - .

has been appointed as Subscription Agent for the
Subscription Offering. Delivery of Subscription Exercise Notices and any other
required documents, questions or requests, whether hand delivered or mailed,
should be directed to the Subscription Agent as follows:

Telephone:

Delivery to other than the above address will not constitute a valid
delivery.

PURCHASE PRICE

The Subscription Purchase Price will be $5.00 per share.

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<PAGE> 51

SETTLEMENT FOR SHARES; DELIVERY OF CERTIFICATES

As promptly as practicable following the Expiration Date, the Subscription
Agent will mail, or cause to be mailed, to each Eligible Subscriber that has
sought to exercise rights to purchase shares of Common Stock, a written
statement specifying the number of shares of Common Stock validly and
effectively subscribed for, together with a stock certificate representing the
shares of Common Stock so purchased.

Although it is anticipated that the Closing Date and delivery of the stock
certificates will occur as soon as practicable after the expiration of the
Subscription Offering, there can be no assurance that delays will not occur.
Subscribers may not be able to sell the shares purchased until certificates are
delivered.

SELLING STOCKHOLDERS

All of the 3,459,414 shares of Common Stock being offered hereby are being
offered by the Selling Stockholders. Prior to the Subscription Offering, all of
the shares of Common Stock of the Company have been owned by the Selling
Stockholders, with Elliott and Westgate holding 7,076,278 and 7,076,277 shares,
respectively. See "Certain Relationships and Related Transactions -- Selling
Stockholders." Assuming all Eligible Subscribers exercise their subscription
rights in full, following the Subscription Offering, Elliott and Westgate,
respectively, will hold 5,465,321 and 5,465,320 shares of Common Stock
(including 237,500 shares of Common Stock that the Selling Stockholders are
entitled to receive upon consummation of the Subscription Offering pursuant to
the Plan), which will constitute approximately 76% in aggregate of the
outstanding shares of Common Stock. Pursuant to the Registration Rights
Agreement, the Company is responsible for the expenses of the Subscription
Offering.

DESCRIPTION OF CAPITAL STOCK

The Company has and will have upon completion of the Subscription Offering
authorized capital stock consisting of 25 million shares of Common Stock, par
value $0.001 per share, and 20,000 shares of Preferred Stock, par value $0.001
per share.

COMMON STOCK

All outstanding shares of Common Stock are fully paid and nonassessable.
All holders of Common Stock have full voting rights and are entitled to one vote
for each share held of record on all matters submitted to a vote of the
stockholders. Votes may not be cumulated in the election of directors.
Stockholders have no preemptive or subscription rights other than the
subscription rights offered to Eligible Subscribers pursuant to the Plan and
this Subscription Offering. The Common Stock is neither redeemable nor
convertible, and there are no sinking fund provisions. Holders of Common Stock
are entitled to dividends when, as and if declared by the Board of Directors
from funds legally available therefor and are entitled, upon liquidation, to
share ratably in all assets remaining after payment of liabilities. See
"Dividend Policy." The rights of holders of Common Stock will be subject to any
preferential rights of any Preferred Stock that is issued and outstanding or
that may be issued in the future.

PREFERRED STOCK

Holders of Preferred Stock have dividend and liquidation preferences to
holders of Common Stock and all other outstanding capital stock of the Company
and have the right to approve the issuance of any parity or senior securities.
Dividends on Preferred Stock accrue at an annual rate of 10.5% and are
cumulative and payable annually in additional shares of Preferred Stock. The
Preferred Stock is redeemable by the Company at the Company's option at any time
at a price per share equal to 100% of the liquidation value of $1,000 per share,
plus accrued and unpaid dividends. The Company must also redeem the Preferred
Stock upon a Change in Control (as defined in the Certificate of Incorporation)
of the Company, in whole or in part, at the option of the holders of Preferred
Stock, at a redemption price per share equal to 105% of the liquidation value
plus accrued and unpaid dividends to the date of redemption. The Preferred
Stock, voting separately as a class, is entitled to elect two directors to the
Board of Directors of the Company. In addition, upon default by the Company in
its obligations

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<PAGE> 52

under the terms of the Preferred Stock, the Board of Directors of the Company
shall be increased by two and the holders of the Preferred Stock shall have the
right to elect directors to fill such new directorships. Holders of Preferred
Stock are also entitled to vote as a class on certain extraordinary matters,
such as amendments to the Certificate of Incorporation or the issuance of parity
or senior securities, reclassification of junior securities to parity or senior
securities, the authorization of consolidations, mergers or the sale or
disposition of substantially all of the Company's assets or the authorization of
the sale or other disposition of properties or assets exceeding 25% of the
economic value of the Company. The holders of Preferred Stock do not have any
other voting rights, except as otherwise required by law.

LIMITATIONS ON LIABILITY OF DIRECTORS AND INDEMNIFICATION OF DIRECTORS AND
OFFICERS

The Certificate of Incorporation limits the liability of directors to the
extent allowed by the Delaware General Corporation Law. Specifically, directors
will not be held liable to the Company or its stockholders for an act or
omission in such capacity as a director, except for liability as a result of (i)
a breach of the duty of loyalty to the Company or its stockholders, (ii) actions
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) payment of an improper dividend or improper
repurchase of the Company's stock under Section 174 of the Delaware General
Corporation Law, or (iv) actions or omissions pursuant to which the director
will receive an improper personal benefit.

The principal effect of the limitation of liability provision is that a
stockholder is unable to prosecute an action for monetary damages against a
director of the Company unless the stockholder can demonstrate one of the
specified bases for liability. This provision, however, does not eliminate or
limit director liability arising in connection with causes of action brought
under the federal securities laws.

The Certificate of Incorporation does not eliminate the directors' duty of
care. The inclusion of this provision in the Certificate of Incorporation may,
however, discourage or deter stockholders or management from bringing a lawsuit
against directors for a breach of their fiduciary duties, even though such an
action, if successful, might otherwise have benefited the Company and its
stockholders. This provision should not affect the availability of equitable
remedies such as injunction or rescission based upon a director's breach of the
duty of care. The affirmative vote of the holders of two-thirds or more of the
outstanding voting stock of the Company will be required to amend this
provision.

The Certificate of Incorporation and By-laws provide that the Company is
generally required to indemnify its directors and officers for all judgments,
fines, settlements, legal fees and other expenses incurred in connection with
pending or threatened legal proceedings because of the director's or officer's
position with the Company or another entity that the director serves at the
Company's request, subject to certain conditions, and to advance funds to its
directors and officers to enable them to defend against such proceedings. To
receive indemnification, the director or officer must have been successful in
the legal proceeding or acted in good faith and in what was reasonably believed
to be a lawful manner and in the Company's best interest. The affirmative vote
of the holders of two-thirds or more of the outstanding voting stock of the
Company will be required to amend this provision.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Subscription Offering, the Selling Stockholders will
own approximately 76% of the outstanding Common Stock, assuming all Eligible
Subscribers exercise their subscription rights in full.

Upon completion of the Subscription Offering, the Company will have
14,390,055 shares of Common Stock outstanding. Of these shares, the 3,459,414
shares of Common Stock sold in the Subscription Offering will be freely
tradeable in the public market without restriction by persons other than
affiliates of the Company. The remaining 10,930,641 shares of Common Stock
outstanding will be "restricted securities" within the meaning of Rule 144 under
the Securities Act ("Rule 144"). Consequently, such shares may not be resold
unless they are registered under the Securities Act or resold pursuant to an
applicable exemption from registration under the Securities Act, such as Rule
144.

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<PAGE> 53

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least one year is, entitled to sell, within any three-month period, a
number of shares of Common Stock which does not exceed the greater of 1% of the
number of then-outstanding shares of the Common Stock or the average weekly
trading volume of the Common Stock during the four calendar weeks preceding the
date on which notice of the sale is filed with the Securities and Exchange
Commission (the "Commission"). Sales under Rule 144 also may be subject to
certain manner of sale provisions, notice requirements and the availability of
current public information about the Company. Any person (or persons whose
shares are aggregated) who is not deemed to have been an affiliate of the
Company at any time during the three months preceding a sale, and who has
beneficially owned shares within the definition of "restricted securities" under
Rule 144 for at least two years, is entitled to sell such shares under Rule
144(k) without regard to the volume limitation, manner of sale provisions,
public information requirements or notice requirements.

Prior to the Subscription Offering, there has been no public market for the
Common Stock and no prediction can be made as to the effect, if any, that sales
of shares of Common Stock or the availability of such shares for sale will have
on the market price of the Common Stock prevailing from time to time.
Nevertheless, sales of substantial amounts of Common Stock in the open market
could adversely affect prevailing market prices. The Company has not made an
application to list the Common Stock on any securities exchange or to admit the
Common Stock for trading in the National Association of Securities Dealers
Automated Quotation System.

EXPERTS

The consolidated financial statements of GGI as of December 31, 1995 and
1996 and for each of the three years in the period ended December 31, 1996 and
the nine month period ended September 1997 and the consolidated balance sheet of
Grant at September 30, 1997 have been included in this Subscription Offering
Prospectus in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein, and upon the authority
of said firm as experts in accounting and auditing.

The report of KPMG Peat Marwick LLP covering the December 31, 1996
financial statements of GGI contains an explanatory paragraph that states that
GGI's recurring losses from operations and net capital deficiency raise
substantial doubt about the entity's ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty.

The consolidated financial statements of Solid State for each of the three
years ended August 31, 1997 and for each of the years in the period ended August
31, 1997 included in this Subscription Offering Prospectus have been so included
in reliance on the report of Price Waterhouse, independent accountants, given on
the authority of said firm as experts in auditing and accounting.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement (which
term shall encompass any amendment thereto) on Form S-1 under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Common Stock
offered hereby. This Subscription Offering Prospectus, which constitutes a part
of the Registration Statement, does not contain all of the information set forth
in the Registration Statement, certain items of which are omitted from the
Subscription Offering Prospectus as permitted by the rules and regulations
promulgated by the Commission. For further information with respect to the
Company and the Common Stock offered in the Subscription Offering, reference is
hereby made to the Registration Statement and the exhibits thereto. Statements
made in this Subscription Offering Prospectus as to the provisions of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such statement as to a contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.

The Registration Statement and the exhibits thereto, as well as any such
reports and other information to be filed by the Company with the Commission,
may be inspected and copied at the public reference facilities of the

52
<PAGE> 54

Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at 7 World Trade Center, Suite 1300, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material can be obtained from the public reference
section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, the Commission maintains a Web site at
http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company.

The Company intends to furnish its shareholders with annual reports
containing audited consolidated financial statements and quarterly reports
containing unaudited condensed consolidated financial information for the first
three quarters of its fiscal year.

53
<PAGE> 55

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

<TABLE>
<CAPTION>
GRANT GEOPHYSICAL, INC. PAGE
----
<S> <C>
Independent Auditors Report:
GGI Liquidating Corporation......................................................... F-2
Grant Geophysical, Inc.............................................................. F-3
Consolidated Balance Sheets:
GGI Liquidating Corporation as of December 31, 1995 and 1996........................ F-4
Grant Geophysical, Inc. as of September 30, 1997.................................... F-4
Consolidated Statement of Operations:
GGI Liquidating Corporation for the years ended December 31, 1994, 1995 and 1996 and
for the nine month period ended September 30, 1996 (unaudited) and 1997.......... F-5
Consolidated Statement of Stockholders' Equity:
GGI Liquidating Corporation for the years ended December 31, 1993, 1994, 1995 and
1996............................................................................. F-6
Grant Geophysical, Inc. as of September 30, 1997.................................... F-6
Consolidated Statement of Cash Flows:
GGI Liquidating Corporation for the years ended December 31, 1994, 1995 and 1996 and
for the nine month period ended September 30, 1996 (unaudited) and 1997.......... F-7
Notes to Consolidated Financial Statements............................................ F-9
</TABLE>

<TABLE>
<CAPTION>
SOLID STATE GEOPHYSICAL INC. PAGE
----
<S> <C>
Auditors' Report -- Chartered Accountants............................................. F-34
Comments by Auditors for U.S. Readers on Canada -- U.S. Reporting
Difference -- Chartered Accountants................................................. F-34
Consolidated Balance Sheet............................................................ F-35
Consolidated Statement of Operations and (Deficit) Retained Earnings.................. F-36
Consolidated Statement of Changes in Financial Position............................... F-37
Notes to Consolidated Financial Statements............................................ F-38
</TABLE>

F-1
<PAGE> 56

INDEPENDENT AUDITORS' REPORT

The Board of Directors
GGI Liquidating Corporation

We have audited the accompanying consolidated balance sheets of GGI
Liquidating Corporation (a debtor-in-possession as of December 31, 1996)
(formerly Grant Geophysical, Inc.) and subsidiaries as of December 31, 1995 and
1996, and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for each of the years in the three-year period
ended December 31, 1996 and the nine month period ended September 30, 1997. In
connection with our audit of the consolidated financial statements, we have also
audited the financial statement schedule as listed in the accompanying index.
These consolidated financial statements and the financial statement schedule are
the responsibility of GGI Liquidating Corporation's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial positions of GGI
Liquidating Corporation and subsidiaries as of December 31, 1995 and 1996, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1996, and the nine month period ended
September 30, 1997, in conformity with generally accepted accounting principles.
Also in our opinion, the related financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

The accompanying consolidated financial statements and financial statement
schedule have been prepared assuming that GGI Liquidating Corporation will
continue as a going concern which contemplates among other things, the
realization of assets and liquidation of liabilities in the ordinary course of
business. As discussed in Note 1 to the consolidated financial statements, GGI
Liquidating Corporation (the Petitioning Company) filed a voluntary petition for
reorganization under chapter 11 of the United States Bankruptcy Code on December
6, 1996. The chapter 11 case of the Petitioning Company is administered by the
United States Bankruptcy Court for the District of Delaware (the "Court"). The
Petitioning Company is operating the business as debtor-in-possession which
requires certain of its actions to be approved by the Court. In September 1997
the Court approved the "Second Amended Plan of Reorganization" (the "Plan")
filed by GGI Liquidating Corporation. The Plan was consummated on September 30,
1997, with the purchase by Grant Geophysical, Inc. of substantially all of the
assets and the assumption of certain liabilities of GGI Liquidating Corporation.
GGI Liquidating Corporation is currently in liquidation and will distribute all
of its assets pursuant to the Plan. Upon the completion of its asset
distribution, GGI Liquidating Corporation will dissolve and cease to exist. The
consolidated financial statements and financial statement schedule do not
include any adjustments relating to the recoverability and classification of
reported asset amounts or the amounts and classification of liabilities that
might result from the Plan and the distribution of assets pursuant thereto.

/s/ KPMG Peat Marwick LLP
Houston, Texas
December 22, 1997

F-2
<PAGE> 57

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholder
Grant Geophysical, Inc.

We have audited the accompanying consolidated balance sheet of Grant
Geophysical, Inc. and subsidiaries as of September 30, 1997. This consolidated
financial statement is the responsibility of Grant Geophysical, Inc.'s
management. Our responsibility is to express an opinion on this consolidated
financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the financial position of Grant Geophysical,
Inc. and subsidiaries as of September 30, 1997, in conformity with generally
accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Houston, Texas
December 22, 1997

F-3
<PAGE> 58

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
GGI
--------------------
DECEMBER 31, GRANT
---------------------- SEPTEMBER 30,
1995 1996 1997
-------- --------- -------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................ $ 1,047 $ 6,772 $ 5,618
Restricted cash...................................................................... 100 -- 321
Accounts receivable:
Trade (net of allowance for doubtful accounts of $2,344, and $5,711 at December 31,
1995 and 1996, respectively, and $0 at September 30, 1997)........................ 37,069 19,471 15,017
Other.............................................................................. 1,826 996 1,754
Inventories.......................................................................... 1,417 503 530
Prepaids............................................................................. 3,347 1,411 1,924
Work in process...................................................................... 6,772 1,071 1,339
------- ------- -------
Total current assets........................................................... 51,578 30,224 26,503
Property, plant and equipment:
Land................................................................................. 231 231 231
Buildings and improvements........................................................... 1,692 1,397 1,116
Plant facilities and store fixtures.................................................. 2,723 1,703 259
Machinery and equipment.............................................................. 88,573 90,892 30,922
------- ------- -------
Total property, plant and equipment............................................ 93,219 94,223 32,528
Less accumulated depreciation........................................................ 61,565 56,555 --
------- ------- -------
Net property, plant and equipment.............................................. 31,654 37,668 32,528
Deferred costs......................................................................... 334 -- --
Restricted cash........................................................................ 315 321 --
Goodwill............................................................................... -- -- 21,012
Other assets........................................................................... 3,051 1,910 2,806
------- ------- -------
Total assets................................................................... $ 86,932 $ 70,123 $82,849
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable, current portion of long-term debt and capital lease obligations....... $ 18,430 $ 589 $ 3,940
Accounts payable..................................................................... 19,241 3,975 5,820
Accrued expenses..................................................................... 5,643 3,051 4,131
Due to GGI........................................................................... 34,783
Foreign income taxes payable......................................................... 231 188 1,868
------- ------- -------
Total current liabilities...................................................... 43,545 7,803 50,542
Pre-petition liabilities subject to chapter 11 case.................................... -- 90,244 --
Long-term debt and capital lease obligations, excluding current portion................ 8,789 -- 6,209
Unearned revenue....................................................................... 4,074 6,031 3,191
Other liabilities and deferred credits................................................. 809 258 3,336
Commitments and contingencies.......................................................... -- -- --
Stockholders' equity (deficit):
$2.4375 Convertible exchangeable preferred stock, $.01 par value. Authorized
2,300,000 shares; issued and outstanding 2,157,000 and 2,300,000 shares at December
31, 1995 and 1996, respectively, none issued and outstanding at September 30, 1997.
(liquidating preference $25 per share, aggregating $57,500,000).................... 22 23 --
Series A Convertible preferred stock, $.01 par value. Authorized 75,000 shares; none
issued and outstanding............................................................. -- -- --
Junior preferred stock, $100 par value. Authorized 15,000 shares; issued and
outstanding 14,904 shares at December 31, 1995 and 1996, none at September 30,
1997............................................................................... 1,490 1,490 --
Serial preferred stock, $100 par value. Authorized 250,000 shares; none issued and
outstanding........................................................................ -- -- --
Common stock, $.001 par value. Authorized 100 shares; issued and outstanding 1 share
at September 30, 1997 none authorized, issued and outstanding at December 31, 1995
and 1996........................................................................... -- -- --
Common stock, $.002 par value. Authorized 40,000,000 shares; issued and outstanding
12,234,151 and 20,641,765 shares at December 31, 1995 and 1996, respectively, none
issued and outstanding at September 30, 1997....................................... 24 41 --
Cumulative pay-in-kind preferred stock, $.001 par value. Authorized 20,000 shares;
issued and outstanding 19,571 shares at September 30, 1997 none authorized, issued
and outstanding at December 31, 1995 and 1996; liquidating preference of $1,000 per
share.............................................................................. -- -- 19,571
Additional paid-in capital........................................................... 112,122 124,203 --
Accumulated deficit.................................................................. (83,943) (159,970) --
------- ------- -------
Total stockholders' equity (deficit)........................................... 29,715 (34,213) 19,571
------- ------- -------
Total liabilities and stockholders' equity..................................... $ 86,932 $ 70,123 $82,849
======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 59

GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
GGI
-------------------------------------------------------------------
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- -------------------------
1994 1995 1996 1996 1997
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues........................ $ 73,691 $ 91,996 $ 105,523 $ 80,925 $ 92,705
Expenses:
Direct operating expenses..... 53,132 69,046 136,326 83,243 71,006
Other operating expenses...... 7,810 8,527 17,865 8,948 6,473
Depreciation and
amortization............... 12,079 9,424 11,500 8,237 8,432
Special charge for asset
impairment................. 9,911 -- 5,802 -- --
----------- ----------- ----------- ----------- -----------
Total costs and
expenses............ 82,932 86,997 171,493 100,428 85,911
----------- ----------- ----------- ----------- -----------
Operating
income/(loss)....... (9,241) 4,999 (65,970) (19,503) 6,794
Other income (deductions):
Interest expense.............. (3,561) (3,635) (7,558) (4,460) (4,037)
Reorganization costs.......... -- -- (412) -- (3,543)
Interest income............... 177 113 36 34 279
Other......................... 1,380 2,076 (502) 26 2,266
----------- ----------- ----------- ----------- -----------
Total other
deductions.......... (2,004) (1,446) (8,436) (4,400) (5,035)
----------- ----------- ----------- ----------- -----------
Income (loss) before
income taxes........ (11,245) 3,553 (74,406) (23,903) 1,759
Income tax expense.............. 193 391 1,621 945 2,184
----------- ----------- ----------- ----------- -----------
Net income (loss)..... $ (11,438) $ 3,162 $ (76,027) $ (24,848) $ (425)
========== ========== ========== ========== ==========
Net loss applicable to
common stock........ $ (16,696) $ (2,096) $ (82,390) $ (30,185) $ (425)
========== ========== ========== ========== ==========
INCOME (LOSS) PER COMMON
SHARE -- ASSUMING NO AND FULL
DILUTION:
Net income (loss)............... $ (0.92) $ 0.25 $ (5.17) $ (1.85) $ (0.02)
Dividend requirement on $2.4375
preferred stock............... (0.42) (0.42) (0.43) (0.39) --
----------- ----------- ----------- ----------- -----------
Net loss per common share....... $ (1.34) $ (0.17) $ (5.60) $ (2.24) $ (0.02)
========== ========== ========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Primary....................... 12,470,704 12,535,352 14,699,824 13,455,767 21,826,940
Fully diluted................. 12,484,093 12,571,984 14,699,824 13,455,767 21,826,940
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 60

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
GGI
--------------------------------------------------------------------------------------------
$2.4375
CONVERTIBLE SERIES A
EXCHANGEABLE CONVERTIBLE JUNIOR CUMULATIVE ADDITIONAL
PREFERRED PREFERRED PREFERRED PAY-IN-KIND COMMON PAID-IN ACCUMULATED
STOCK STOCK STOCK PREFERRED STOCK STOCK CAPITAL DEFICIT
------------ ----------- --------- --------------- ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at December
31, 1993........... $ 22 $ -- $ 1,490 $ -- $ 24 $111,905 $ (75,667)
Net loss........... -- -- -- -- -- (11,438)
Restricted common
stock issued
under the
Incentive Stock
Option Plan...... -- -- -- -- -- 62 --
Proceeds from sale
of 11,500 shares
under the
Incentive Stock
Option Plan...... -- -- -- -- -- 1 --
--- ---- ------ ------ --- -------- --------
Balances at December
31, 1994........... 22 -- 1,490 -- 24 111,968 (87,105)
Net income......... -- -- -- -- -- -- 3,162
Restricted common
stock issued
under the
Incentive Stock
Option Plan...... -- -- -- -- -- 86 --
Proceeds from sale
of 15,000 shares
under the
Incentive Stock
Option Plan...... -- -- -- -- -- 11 --
Restricted common
stock issued
under the
Employee
Retirement
Savings Plan..... -- -- -- -- -- 57 --
--- ---- ------ ------ --- -------- --------
Balances at December
31, 1995........... 22 -- 1,490 -- 24 112,122 (83,943)
Net loss........... -- -- -- -- -- -- (76,027)
Common stock issued
in connection
with obtaining
equipment and
short- and
long-term
financing........ -- -- -- -- -- 389 --
Issuance of 143,000
shares of $2.4375
Convertible
exchangeable
preferred stock,
net of non-cash
issuance costs of
$171,000......... 1 -- -- -- -- 1,372 --
Issuance of 70,000
shares of Series
A convertible
preferred
stock............ -- 1 -- -- -- 6,999 --
Conversion of
convertible
debentures....... -- -- -- -- 7 2,767 --
Conversion of
Series A
convertible
preferred
stock............ -- (1) -- -- 9 (8) --
Proceeds from the
exercise of
200,000
warrants......... -- -- -- -- 1 150 --
Restricted common
stock issued
under the
Incentive Stock
Option Plan...... -- -- -- -- -- 129 --
Proceeds from sale
of 125,000 shares
under the Incentive
Stock Option
Plan............... -- -- -- -- -- 145 --
Restricted common
stock issued
under the
Employee
Retirement
Savings Plan..... -- -- -- -- -- 138 --
--- ---- ------ ------ --- -------- --------
Balances at December
31, 1996........... $ 23 $ -- $ 1,490 $ -- $ 41 $124,203 $(159,970)

TOTAL
STOCKHOLDERS'
EQUITY (DEFICIT)
-----------------
<S> <<C>
Balances at December
31, 1993........... $ 37,774
Net loss........... (11,438)
Restricted common
stock issued
under the
Incentive Stock
Option Plan...... 62
Proceeds from sale
of 11,500 shares
under the
Incentive Stock
Option Plan...... 1
--------
Balances at December
31, 1994........... 26,399
Net income......... 3,162
Restricted common
stock issued
under the
Incentive Stock
Option Plan...... 86
Proceeds from sale
of 15,000 shares
under the
Incentive Stock
Option Plan...... 11
Restricted common
stock issued
under the
Employee
Retirement
Savings Plan..... 57
--------
Balances at December
31, 1995........... 29,715
Net loss........... (76,027)
Common stock issued
in connection
with obtaining
equipment and
short- and
long-term
financing........ 389
Issuance of 143,000
shares of $2.4375
Convertible
exchangeable
preferred stock,
net of non-cash
issuance costs of
$171,000......... 1,373
Issuance of 70,000
shares of Series
A convertible
preferred
stock............ 7,000
Conversion of
convertible
debentures....... 2,774
Conversion of
Series A
convertible
preferred
stock............ --
Proceeds from the
exercise of
200,000
warrants......... 151
Restricted common
stock issued
under the
Incentive Stock
Option Plan...... 129
Proceeds from sale
of 125,000 shares
under the Incentive
Stock Option
Plan............... 145
Restricted common
stock issued
under the
Employee
Retirement
Savings Plan..... 138
--------
Balances at December
31, 1996........... $ (34,213)
</TABLE>

<TABLE>
<CAPTION>
GRANT
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning
balances........... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
Common stock, one
share issued....... -- -- -- -- -- -- -- --
Cumulative preferred
stock Issued....... $ -- $ -- $ -- $19,571 $ -- $ -- $ -- $ 19,571
--- ---- ------ ------ --- -------- -------- --------
Balances at
September 30, 1997 $ -- $ -- $ -- $19,571 $ -- $ -- $ -- $ 19,571
=== ==== ====== ====== === ======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 61

GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
GGI
-------------------------------------------------------
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------ ----------------------
1994 1995 1996 1996 1997
-------- -------- -------- ----------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income -- (loss)....................... $(11,438) $ 3,162 $(76,027) $ (24,848) $ (425)
Adjustments to reconcile net income/(loss)
to net cash provided by (used in)
operating activities:
Special charge for asset impairment..... 9,911 -- 5,802 -- --
Provision for doubtful accounts......... 14 -- 5,511 -- --
Depreciation and amortization expense... 12,079 9,424 11,500 8,237 8,432
Deferred costs amortization............. 5,824 12,550 29,528 18,595 --
Loss on sale of subsidiaries............ -- -- 198 -- --
(Gain) -- loss on the sale of fixed
assets................................ (10) (212) (25) (13) 39
Gain on insurance claim................. -- (1,247) -- -- --
Exchange loss (gain).................... (121) (102) 251 (4) 98
Other non-cash items.................... 61 191 328 330 225
Changes in assets and liabilities, excluding
effects of divestitures:
(Increase) decrease in:
Accounts receivable........................ (4,046) (14,828) 13,346 4,320 2,375
Inventories................................ -- 27 914 179 (27)
Prepaids................................... (1,747) (1,701) 1,228 (732) (538)
Work-in-process............................ (5,242) (18,439) (24,969) (24,969) (268)
Other assets............................... (589) (521) 1,846 (192) (1,031)
Increase (decrease) in:
Accounts payable........................... 1,659 10,637 9,328 1,024 3,143
Accrued expenses........................... (619) 1,046 5,059 1,398 830
Foreign income taxes payable............... (2) 122 390 135 1,767
Other liabilities and deferred credits..... (2,564) 2,650 7,973 1,511 (2,320)
Change in pre-petition liabilities subject to
Chapter 11 case:
Accounts payable........................ -- -- -- -- (2,226)
Accrued expenses........................ -- -- (125) -- (1,732)
Foreign income tax payable.............. -- -- -- -- (194)
Other liabilities and deferred
credits............................... -- -- (1,402) -- (3,622)
-------- -------- -------- -------- --------
Total cash provided by (used in)
operating activities............. 3,170 2,759 (9,346) (15,029) 4,526
-------- -------- -------- -------- --------
Cash flows from (used in) investing
activities:
Capital expenditures, net.................. (9,697) (13,757) (10,339) (9,546) (6,751)
Proceeds from the sale of assets........... 13 255 25 13 20
Proceeds from the sale of
subsidiaries/businesses................. 880 -- 39 -- --
Insurance proceeds from arson damage, net
of losses incurred...................... -- 1,351 -- -- --
</TABLE>

(Continued on next page)

F-7
<PAGE> 62

GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES. SEE NOTE
17.

See accompanying notes to consolidated financial statements.

F-8
<PAGE> 63

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1995, 1996, SEPTEMBER 30, 1997

(1) BASIS OF PRESENTATION

Effective September 30, 1997, Grant Geophysical, Inc. ("Grant"), which was
formerly known as Grant Acquisition Corporation, acquired substantially all of
the assets and assumed certain liabilities of GGI Liquidating Corporation
("GGI"), which was formerly known as Grant Geophysical, Inc. As of September 30,
1997, Elliott Associates L.P. ("Elliott") and Westgate International, L.P.
("Westgate") own all of the issued and outstanding common and preferred stock of
Grant. The general partners of Elliott are Paul E. Singer and Braxton
Associates, L.P. The general partner of Westgate is Hambledon, Inc., a
corporation controlled by Braxton Associates, L.P. Elliott and Westgate are each
managed by Stonington Management Corporation, a corporation controlled by Mr.
Singer. For financial statement purposes, the purchase of GGI's assets by Grant
was accounted for as a purchase acquisition. The effects of the acquisition have
been reflected in Grant's assets and liabilities at that date. As a result,
Grant's consolidated balance sheet as of September 30, 1997 is presented on
Grant's new basis of accounting, while the consolidated balance sheets as of
December 31, 1995 and 1996 and the consolidated statements of operations and
cash flows for the three-years ended December 31, 1996 and the nine-months ended
September 30, 1996 (unaudited) and 1997 are presented on GGI's historical cost
basis of accounting. Because of the recent acquisition and related adjustment of
assets and liabilities to fair value as of September 30, 1997, the carrying
value of Grant's financial assets and liabilities approximates fair value.

On December 6, 1996, (the "Petition Date") GGI filed for protection under
the United States Bankruptcy Code and began its reorganization under the
supervision of the Bankruptcy Court. The reorganization was precipitated by
several factors, including overly rapid and underfinanced expansion in the
United States and Latin American markets, costs related to the development of a
proprietary data recording system and poor operational results in the United
States and certain international markets. These factors impaired GGI's ability
to service its indebtedness, finance its existing capital expenditure
requirements and meet its working capital needs. In addition, GGI was unable to
raise additional equity, causing a disproportionate reliance on debt financing
and equipment leasing. In connection with the reorganization, GGI replaced its
senior management, disposed of unprofitable operations and developed a plan of
Reorganization (the "Plan"), which was consummated on September 30, 1997 (the
"Effective Date") with the purchase by Grant of substantially all of the assets
and the assumption certain liabilities of GGI. GGI is currently in liquidation
and will distribute all of its assets pursuant to the Plan. Upon the completion
of its asset distribution, GGI will dissolve and cease to exist.

Grant was incorporated in Delaware in September 1997. Grant has several
wholly owned subsidiaries incorporated in the United States and certain foreign
jurisdictions and has established branch operations in various foreign
jurisdictions. Grant provides the petroleum industry with land and transition
zone seismic data acquisition services. Grant operates seismic crews in areas of
oil and gas exploration in the United States, Latin America and the Far East.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going Concern Considerations -- GGI

The accompanying financial statements of GGI have been prepared on a going
concern basis, which contemplates the realization of assets and the liquidation
of liabilities in the ordinary course of business. As described earlier, GGI is
in the process of distributing its assets pursuant to the Plan and will be
dissolved. The consolidated financial statements do not include any adjustments
relating to the recoverability and classification of reported asset amounts or
the amounts and classification of liabilities that may result from the Plan and
the distribution of assets pursuant thereto.

F-9
<PAGE> 64

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Principles of Consolidation

Each of the consolidated financial statements include the accounts of GGI
or Grant and all of their respective majority-owned subsidiaries. All
significant intercompany accounts and transactions are eliminated in
consolidation.

Revenues

Revenues from data acquisition are recognized based on contractual rates
set forth in the related contract. If the contract only provides a rate for the
completed service, revenue and any unearned revenue recorded is recognized based
on the percentage of the work effort completed compared with the total work
effort involved in the contract.

Cash and Cash Equivalents

For purposes of the consolidated statement of cash flows, all highly liquid
debt instruments purchased with an original maturity of three months or less are
considered to be cash equivalents. Investments in Federal agency securities were
$701,000, at December 31, 1995. There were no such investments at December 31,
1996 or September 30, 1997.

Restricted Cash

At December 31, 1995 and 1996, and September 30, 1997, restricted cash
included three certificates of deposit totaling $415,000, $321,000 and $321,000,
respectively, which are pledged as collateral for letters of credit.

Inventories

Inventories, which consist primarily of miscellaneous supplies, are stated
at lower of cost or market. Cost is determined using the specific identification
method.

Work in Process

Expenses related to the work in progress of seismic crews are deferred and
recognized over the performance of the contract.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Plant and equipment under
capital leases are stated at the present value of future minimum lease payments
at the inception of the lease.

Depreciation is provided principally by the straight-line method over the
estimated useful lives of the various classes of assets as follows:

<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Buildings and improvements............................................ 5-10
Data processing equipment............................................. 3-5
Office equipment...................................................... 5-10
Seismic exploration and transportation equipment...................... 3-10
</TABLE>

F-10
<PAGE> 65

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Plant and equipment held under capital leases are amortized by the
straight-line method over the shorter of the lease term or estimated useful life
of the asset. Expenditures for maintenance and repairs are charged to
operations. Betterments and major renewals are capitalized.

Capitalized Software Costs

Capitalized software costs consist of certain expenses incurred to
internally develop software. Capitalization of cost begins upon the
establishment of the software's technological feasibility. The establishment of
technological feasibility and the ongoing assessment of recoverability of
capitalized software development costs requires considerable judgment by
management with respect to certain external factors, including, but not limited
to anticipated future gross revenue, estimated economic life and changes in
software and hardware technologies.

At December 31, 1995, GGI had capitalized approximately $717,000 of
software development costs which were included in property, plant and equipment.
At December 31, 1996, in conjunction with GGI's evaluation of the recoverability
of its asset carrying values, $760,000 carrying value of capitalized software
was written off. See Note 4.

Multi-Client Data Library

The costs incurred in acquiring and processing multi-client seismic data
owned by Grant are capitalized. During the twelve month period beginning with
the initiation of acquisition of each multi-client survey, costs are amortized
based on revenues from such survey as a percentage of total estimated revenues
to be realized from such survey. Thereafter, amortization of remaining
capitalized costs is provided at the greater of the percentage of realized
revenues to total estimated revenues or straight line over four years.

On a quarterly basis, management estimates the residual value of each
survey, and additional amortization is provided if the remaining revenues
reasonably expected to be obtained from any survey are less than the carrying
value of such survey.

At September 30, 1997 Grant did not have any unamortized costs related to
multi-client seismic data.

Asset Impairment

In the fourth quarter of 1995, GGI adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." This standard requires that
long-lived assets and certain identifiable intangibles held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. During the
fourth quarter of 1994, GGI reviewed the quantity and age of its data
acquisition equipment to ensure the carrying amount of these assets were
recoverable. While still usable, rapid technological changes which had occurred
during the preceding three years and a resultant demand for new advanced
technology equipment by GGI's customers made it unlikely that the carrying value
of certain equipment prior to the write down was recoverable from expected
future cash flows. Accordingly, GGI recorded a $9,911,000 special charge for
asset impairment during 1994. Adoption of SFAS No. 121 did not materially affect
GGI's consolidated results of operations or financial position at December 31,
1995. At December 31, 1996, as a result of this review, a $5,802,000 charge for
asset impairment was recorded during the fourth quarter of 1996. See Note 4.

Long-lived assets and certain identifiable intangibles are written down to
their current fair value whenever events or changes in circumstances indicate
that the carrying amount of these assets are not recoverable. These events or
changes in circumstances may include but are not limited to a significant change
in the extent in which an assets is used, a significant decrease in the market
value of the asset, or a projection or forecast that

F-11
<PAGE> 66

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

demonstrates continuing losses associated with an asset. If an impairment is
determined, the asset is written down to its current fair value and a loss is
recognized.

Goodwill

Goodwill, which represents the excess of purchase price over fair value of
net assets acquired, is amortized on a straight-line basis over the expected
periods to be benefited. Goodwill will be amortized over thirty years. Grant
assesses the recoverability of this intangible asset by determining whether the
amortization of the goodwill balance over its remaining life can be recovered
through undiscounted future operating cash flows of the acquired operation. The
amount of goodwill impairment, if any, is measured based on projected discounted
future operating cash flows using a discount rate reflecting the Grant's average
cost of funds. The assessment of the recoverability of goodwill will be impacted
if estimated future operating cash flows are not achieved.

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.

Reorganization Costs

Reorganization costs consist of professional fees and similar types of
expenditures directly related to GGI's chapter 11 proceeding, and are expensed
as incurred. During 1996 and the nine months ended September 30, 1997, GGI had
incurred approximately $412,000 and $3,543,000 of reorganization costs.

Foreign Exchange Gains and Losses

In an effort to mitigate foreign exchange rate fluctuations, the majority
of international contracts are billed and paid at a certain U.S. Dollar rate.
Foreign currency transaction gains and losses are included in Other
income/deductions. Grant does not presently use derivatives or forward foreign
exchange hedging contracts.

Income Taxes

The Financial Accounting Standards Board issued SFAS No. 109, "Accounting
for Income Taxes." Under the asset and liability method of SFAS No. 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under SFAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

Post Employment Benefits

GGI adopted SFAS No. 112 effective January 1, 1994. SFAS No. 112 requires
companies to account for benefits to former or inactive employees after
employment but before retirement on the accrual basis of accounting.
Post-employment benefits include every form of benefit provided to former or
inactive employees, their beneficiaries and covered dependents. Benefits
include, but are not limited to, salary continuation, supplemental unemployment
benefits, severance benefits, disability-related benefits (including workers'
compensation), job training and counseling, and continuation of benefits such as
health care benefits and life insurance

F-12
<PAGE> 67

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

coverage. Adoption of SFAS No. 112 did not materially affect GGI's consolidated
results of operations or financial position.

Income (Loss) Per Common Share

GGI's income (loss) per common share is computed based upon the weighted
average number of common shares outstanding during each 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 common shares for the period if that market price is
higher than the average market price used in computing primary earnings per
share. The income (loss) is adjusted for undeclared, unpaid cumulative preferred
stock dividends in calculating net income (loss) attributable to the common
shareholder.

Stock Based Compensation

In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation" which establishes a fair value
method for accounting for stock-based compensation plans either through
recognition or disclosure. Grant has elected to continue to follow the intrinsic
value method of accounting prescribed by Accounting Principles Board Opinion No.
25 "Accounting for Stock Issued to Employees", where compensation costs are not
recognized in Grant's stock option plans.

However, had GGI adopted SFAS No. 123 for options granted after January 1,
1995, GGI's net loss and net loss per common share for the years ended December
31, 1995 and 1996 would have been increased as follows (in thousands, except per
share amounts):

<TABLE>
<CAPTION>
GGI
-------------------------------------------------
1995 1996
---------------------- ----------------------
AS AS
REPORTED PRO FORMA REPORTED PRO FORMA
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net loss.......................... $ (2,096) $ (2,215) $(82,390) $ (82,612)
Net loss per common share......... $ (0.17) $ (0.18) $ (5.60) $ (5.62)
</TABLE>

For purposes of determining compensation costs using the provisions of SFAS
123, the fair value of option grants were determined using the Black-Scholes
option-valuation model. The key input variables used in valuing the options
were: risk-free interest rate of 8.5%; dividend yield of zero; stock price
volatility of 70%; expected option lives of four years.

Pursuant to the Plan, GGI's capital stock was canceled on the Effective
Date. As a result, GGI's Amended 1989 Long-Term Incentive Plan was also
canceled. Therefore, the effect of SFAS No. 123 for the nine months ended
September 30, 1997 has not been presented.

Reclassifications

Certain amounts previously reported have been reclassified in order to
ensure comparability between the periods reported.

Recent Accounting Pronoucements

In February 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 128, "Earnings per Share." SFAS No. 128 specifies the compilation,
presentation and disclosure requirements for earnings per share for entities
with publicly held common stock or potential common stock. Grant will adopt SFAS
No. 128 for the

F-13
<PAGE> 68

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

quarter ended December 31, 1997. Management does not believe that the
implementation of SFAS No. 128 will have a material effect on its financial
statements.

In December 1997, Grant will be required to adopt Statement of Financial
Accounting Standards No. 129, Disclosure of Information about Capital Structure
("SFAS 129"). SFAS 129 requires that all entities disclose in summary form
within the financial statement the pertinent rights and privileges of the
various securities outstanding. An entity is to disclose within the financial
statement the number of shares issued upon conversion, exercise, or satisfaction
of required conditions during at least the most recent annual fiscal period and
any subsequent interim period presented. Other special provisions apply to
preferred and redeemable stock. Grant will adopt SFAS 129 in the fourth quarter
of 1997.

In June 1997, the FASB issued "Disclosures about Segments of an Enterprise
and Related Information" ("SFAS 131"). SFAS No. 131 regarding disclosures about
segments of an enterprise and related information. SFAS No. 131 establishes
standards for reporting information about operating segments in annual financial
statements and requires the reporting of selected information about operating
segments in interim financial reports issued to stockholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. SFAS No. 131 is effective for periods
beginning after December 15, 1997. The Grant will adopt SFAS No. 131 for the
fiscal year ending December 31, 1998.

(3) PRE-PETITION LIABILITIES SUBJECT TO GGI'S CHAPTER 11 CASE

As a result of GGI's chapter 11 reorganization proceedings, all
pre-petition liabilities of GGI outstanding at December 31, 1996 were classified
as pre-petition liabilities subject to chapter 11 case. The terms and amounts

F-14
<PAGE> 69

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

due are subject to the conditions of the Plan confirmed on September 15, 1997.
GGI's secured and unsecured debt at December 31, 1996 was as follows (dollars in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31, 1996
------------------------------------
PRE-PETITION
ACCRUED
AMOUNT INTEREST TOTAL
------- ------------ -------
<S> <C> <C> <C>
SECURED DEBT:
Revolving line of credit, 12.7%-14.7%(A)........... $11,774 $ -- $11,774
Equipment notes payable, 7.3%-12.0%(A)............. 16,594 557 17,151
Other notes payable, 10.7%-15.0%(A)................ 5,560 302 5,862
Capital lease obligations, 9.0%-27.0%(A)........... 8,971 198 9,169
Other Claims....................................... 1,662 -- 1,662
------- ------ -------
$44,561 $1,057 $45,618
======= ====== =======
UNSECURED DEBT:
Convertible Debentures, 8%(A)...................... $ 350 $ -- $ 350
Other notes payable, 6%-22%(A)..................... 11,266 158 11,424
Capital lease obligations, 12%-37%(A).............. 687 37 724
Trade Accounts Payable............................. 23,718 -- 23,718
Accrued Expenses................................... 2,956 -- 2,956
Other liabilities and deferred credits............. 5,454 -- 5,454
------- ------ -------
44,431 195 44,626
------- ------ -------
Total...................................... $88,992 $1,252 $90,244
======= ====== =======
</TABLE>

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

On February 4, 1997, the Court approved a Financing Order that authorized
GGI 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 GGI 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 was $7,000,000 through September 30, 1997 when the
Amended Financing Order expired. A $125,000 fee was paid to the Lender. Interest
accrued at prime plus 3.75% on the advance funds and prime plus 7.25% on the
overadvance funds. Pursuant to the Plan, all loans made under the Financing
Order were paid in full on September 30,1997.

On August 22, 1996, GGI amended a two-year term loan agreement with a
secured lender to increase the principal amount to $5,000,000. Interest on such
debt at the rate of 13.5% has been accruing since the petition date. Pursuant to
the Plan, this loan is required to be paid on December 31, 1997.

Agreements with certain lenders and lessors have been reached and pursuant
to the Plan, GGI is making payments of adequate protection in varying amounts.
Pursuant to the Plan, each of these loans and leases is included in the
liabilities assumed by Grant (see Note 9) or are required to be paid in full on
December 31, 1997.

On March 27, 1996, GGI issued $3,000,000 of its 8% Convertible Debentures
("Debentures") due December 31, 1999. The Debentures were convertible, at the
option of the purchaser, into shares of GGI's Common Stock at a conversion price
of 80% of the five day average low trading price prior to the conversion

F-15
<PAGE> 70

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

election of the Common Stock, provided that such 80% figure was increased to
100% if the Debentures were converted within 45 days of the Closing Date. As of
December 31, 1996, approximately $2,650,000 of the Debentures had been converted
into 3,400,261 shares of GGI's Common Stock. The remaining amount is an
unsecured debt of GGI which will receive the recovery, if any, afforded to
allowed unsecured creditors pursuant to the Plan.

GGI borrowed an aggregate of $3,149,000 from Westgate and Elliott for
working capital purposes. This amount remained outstanding at December 31, 1996.
The remaining amount is an unsecured debt of GGI which will receive the
recovery, if any, afforded to allowed unsecured creditors pursuant to the Plan.

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 $7,667,000
for the year ended December 31, 1996. Interest expense for the nine months ended
September 30, 1997, has been accrued at the negotiated contractual rates.

(4) SPECIAL CHARGE FOR ASSET IMPAIRMENT

In accordance with SFAS No. 121, GGI continually performed an evaluation of
asset groups and their respective future cash flows. During the fourth quarter
of 1994, GGI reviewed the quantity and age of its data acquisition equipment to
ensure the carrying amount of these assets were recoverable. While still usable,
rapid technological changes which had occurred during the preceding three years
and a resultant demand for new advanced technology equipment by GGI's customers
made it unlikely that the carrying value of certain equipment prior to the write
down was recoverable from expected future cash flows. Accordingly, GGI recorded
a $9,911,000 special charge for asset impairment during 1994. The majority of
the 1994 impairment, approximately 75%, related to assets located in Nigeria.
The remainder was associated with equipment in the Middle East, Far East and
United States, which was deemed to be overvalued due to the decline in demand
for that equipment's technology.

As a result of this evaluation at December 31, 1996, GGI reduced the
carrying value of a proprietary data recording system which was not expected to
generate future cash flows adequate to support current carrying values.
Accordingly, a $5,802,000 charge for asset impairment was recorded during the
fourth quarter of 1996.

F-16
<PAGE> 71

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(5) SUMMARY OF OPERATIONS

A summary of operations by geographical area follows (dollars in
thousands):

<TABLE>
<CAPTION>
GGI
--------------------------------------------------
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
-------------------------------- SEPTEMBER 30,
1994 1995 1996 1997
------- ------- -------- -------------
<S> <C> <C> <C> <C>
Total revenues:
U.S.................................. $27,791 $47,849 $ 42,074 $41,267
Middle East.......................... 8,725 786 -- --
Africa............................... 15,500 14,208 904 --
Colombia............................. 5,557 4,535 12,722 19,797
Peru................................. -- 13,719 27,490 2,696
Other Latin America.................. 10,086 7,278 16,921 20,074
Far East............................. 6,032 3,621 5,412 8,871
------- ------- -------- -------
$73,691 $91,996 $105,523 $92,705
======= ======= ======== =======
Operating income/(loss):
United States........................ $(1,112) $ 4,575 $(35,920) $(1,924)
Middle East.......................... (1,182) 285 (144) --
Africa............................... (6,164) 1,130 (4,281) --
Europe............................... (617) (821) (922) --
Colombia............................. (346) (271) (94) 4,750
Peru................................. 106 1,205 (19,804) 4
Other Latin America.................. 439 (714) (4,744) 1,619
Far East............................. (365) (390) (61) 2,345
------- ------- -------- -------
$(9,241) $ 4,999 $(65,970) $ 6,794
======= ======= ======== =======
Foreign currency exchange
gains/(losses):
Africa............................... $ (80) $ 265 $ 15 $ --
Europe............................... (26) (8) (16) --
Middle East.......................... (21) (13) -- --
Colombia............................. (63) 99 (26) (182)
Peru................................. (6) 2 (2) --
Other Latin America.................. 324 (184) (197) (6)
Far East............................. (7) (59) (25) 90
------- ------- -------- -------
$ 121 $ 102 $ (251) $ (98)
======= ======= ======== =======
</TABLE>

F-17
<PAGE> 72

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
GGI
-------------------
DECEMBER 31, GRANT
------------------- SEPTEMBER 30,
1995 1996 1997
------- ------- -------------
<S> <C> <C> <C>
Identifiable assets:
U.S................................................ $42,738 $36,956 $35,570
Europe and the Middle East......................... 567 41 --
Africa............................................. 15,536 -- --
Peru............................................... 11,722 10,354 --
Colombia........................................... 4,507 9,233 8,099
Brazil............................................. 2,036 7,271 7,191
Other Latin America................................ 5,277 1,803 4,245
Far East........................................... 2,107 2,701 5,154
Other.............................................. 136 136 --
------- ------- -------
Total identifiable assets....................... 84,626 68,495 60,259
Corporate assets................................... 2,306 1,628 1,578
------- ------- -------
$86,932 $70,123 $61,837
======= ======= =======
</TABLE>

In fiscal 1994 and 1995, revenues from a nationalized oil company totaled
approximately $8,902,000 (12%) and $10,048,000 (11%), respectively. Revenues
from a U.S. based international oil company were approximately $12,683,000 (14%)
and $20,233,000 (19%) for the years ended December 31, 1995 and 1996,
respectively. For the nine months ended September 30, 1997, revenues from three
oil companies, one domestic and two international, were approximately
$14,008,000 (15%), $9,925,000 (11%), $8,896,000 (10%).

(6) DIVESTITURES

During the fourth quarter of 1996, GGI sold the stock of its Venezuela
subsidiary and also entered into an agreement to sell the stock of its Nigeria
subsidiary. The sale of the Nigeria subsidiary was finalized in April 1997.
Proceeds from these sales totaled approximately $380,000. Other than a $198,000
loss recognized on these sales in 1996, these transactions did not have a
significant impact on GGI's operating results.

F-18
<PAGE> 73

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(7) PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment follows:

<TABLE>
<CAPTION>
ACCUMULATED
GGI COST DEPRECIATION
------------------------------------------------------ ------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
December 31, 1995
Land................................................ $ 231 $ --
Buildings and improvements.......................... 1,692 345
Plant facilities and store fixtures................. 2,723 1,766
Machinery and equipment............................. 88,573 59,454
------- -------
$93,219 $61,565
======= =======
December 31, 1996
Land................................................ $ 231 $ --
Buildings and improvements.......................... 1,397 202
Plant facilities and store fixtures................. 1,703 1,041
Machinery and equipment............................. 90,892 55,312
------- -------
$94,223 $56,555
======= =======
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATED
GRANT COST DEPRECIATION
------------------------------------------------------ ------- -----------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
September 30, 1997
Land................................................ $ 231 $--
Buildings and improvements.......................... 1,116 --
Plant facilities and store fixtures................. 259 --
Machinery and equipment............................. 30,922 --
------- --
$32,528 $--
======= ==
</TABLE>

(8) INCOME TAXES

The composition of the income tax expense follows (dollars in thousands):

<TABLE>
<CAPTION>
GGI
----------------------------------------
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------ SEPTEMBER 30,
1994 1995 1996 1997
---- ---- ------ -------------
<S> <C> <C> <C> <C>
Current:
State....................................... $ -- $ -- $ -- $ --
Federal..................................... -- -- --
Foreign..................................... 193 391 1,621 2,184
Deferred:
State....................................... -- -- -- --
Federal..................................... -- -- --
Foreign..................................... -- -- -- --
---- ---- ------ ------
Income tax expense....................... $193 $391 $1,621 $ 2,184
==== ==== ====== ======
</TABLE>

F-19
<PAGE> 74

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At December 31, 1996, GGI had net operating losses ("NOLs") of
approximately $173,000,000 available for carryforward for U.S. Federal income
tax purposes. The NOLs, if unused, will expire between 1997 and 2011. Since GGI
will in accordance with the Plan, be liquidated, approximately $151,000,000 of
these NOLs will not be used and will expire at such time as GGI ceases to exist.

The portion of GGI's NOLs, which existed prior to July 1991 and expire
between 1997 and 2006 are subject to annual utilization limitations imposed by
section 382 of the Internal Revenue Code. Based on the ownership changes to
date, the NOLs would be limited by a minimum of $23,000,000.

Grant acquired approximately $23,000,000 of GGI NOLs on the Effective Date.
The NOLs, if unused, will expire between 1997 and 2011. Grant's NOLs will
decrease the income tax expense of Grant only if Grant generates income which
would be subject to U.S. Federal income tax.

In addition, future utilization of Grant's U.S. NOLs acquired on the
Effective Date will be restricted due to the change of ownership resulting from
the Plan. Based on current valuations, Grant's U.S. NOLs acquired on the
Effective Date would be limited to approximately $704,000 annually.

The total income tax expense is different from the amount computed by
applying the U.S. Federal income tax rate to income before income taxes. The
reasons for these differences were as follows (dollars in thousands):

<TABLE>
<CAPTION>
GGI
-----------------------------------------------
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------- SEPTEMBER 30,
1994 1995 1996 1997
------- ------ -------- -------------
<S> <C> <C> <C> <C>
U.S. Federal income tax expense (benefit)
at statutory rate........................ $(3,823) $1,208 $(25,298) $ 616
Increases (reductions) in taxes from:
Foreign income tax rate more (less) than
U.S. rate on foreign income.............. 1,987 110 4,712 741
Losses of the U.S. return group from which
no benefit is expected................... 2,029 -- 22,207 827
Utilization of prior year losses for which
no benefit was recognized................ -- (927) -- --
------- ------ -------- ------
Income tax expense recorded................ $ 193 $ 391 $ 1,621 $ 2,184
======= ====== ======== ======
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are presented
below (dollars in thousands):

<TABLE>
<CAPTION>
GGI
---------------------
DECEMBER 31, GRANT
--------------------- SEPTEMBER 30,
1995 1996 1997
-------- -------- -------------
<S> <C> <C> <C>
Deferred tax asset:
Plant and equipment, principally due to
differences in depreciation................. $ 1,890 $ 3,841 $ 5,042
Allowance for doubtful accounts and other
accruals.................................... -- 3,042 --
Net operating loss carryforwards............... 36,519 58,795 8,026
Less valuation allowance....................... (38,409) (65,678) (13,068)
-------- -------- --------
Net deferred tax asset......................... $ -- $ -- $ --
======== ======== ========
</TABLE>

F-20
<PAGE> 75

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The valuation allowance for deferred tax assets as of January 1, 1995 was
$39,039,000. The net change in the total valuation allowance for the years ended
December 31, 1995, 1996 and the nine months ended September 30, 1997 was a
decrease of $630,000, an increase of $27,269,000, and a decrease of $54,120,000,
respectively.

(9) NOTES PAYABLE, LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

A summary of notes payable, long-term debt, and capital lease obligations
was as follows (dollars in thousands):

<TABLE>
<CAPTION>
GGI
---------------
DECEMBER 31, GRANT
--------------- SEPTEMBER 30,
1995 1996 1997
------- ---- -------------
<S> <C> <C> <C>
Revolving lines of credit:
15.0%, due February 20, 1996......................... $ 1,750 $ -- $ --
11.0%, due February 17, 1997......................... 8,045 -- --
Equipment notes payable -- 6.93%-12%, due 1996-1999.... 5,178 -- 1,576
Other notes payable -- 10.0% to 34.0%,
due 1996-2005........................................ 6,579 589 1,559
Capital lease obligations -- 10.0% to 28.0%,
due 1996-2000........................................ 5,667 -- 7,014
------- ---- -------
Total long term debt................................... 27,219 589 10,149
Less current portion................................... 18,430 589 3,940
------- ---- -------
Notes payable, long-term debt and capital lease
obligations, excluding current portion............ $ 8,789 $ -- $ 6,209
======= ==== =======
</TABLE>

At the Petition Date all of GGI's notes payable, long-term debt and capital
lease obligations were reclassified to Pre-Petition Liabilities Subject to
Chapter 11 Case (see Note 3). At December 31, 1996, other notes payable
consisted of a revolving line of credit maintained by a foreign subsidiary.

At September 30, 1997 total long-term debt consisted of $7,745,620 of
obligations assumed by Grant pursuant to the Plan that had previously been
classified as Pre-Petition Liabilities subject to Chapter 11 Case and $2,403,094
of obligations incurred by GGI subsequent to the Petition Date and also assumed
by Grant.

On October 1, 1997, Grant and Elliott entered into a credit facility
providing for a revolving loan facility under which Grant may borrow up to an
aggregate principal amount of $5 million. Grant is required to pay interest on
the outstanding principal balance of revolving loans at a rate per annum equal
to the prime rate plus 2%. On December 18, 1997, the credit facility was amended
to provide for a term loan of $15.8 million in addition to the revolving loans.
The proceeds of the term loan were used by Grant to purchase all of the stock of
Solid State Geophysical, Inc. not already owned by Grant (see Note 18). The term
of the credit facility runs through March 31, 1999 at which time all obligations
of Grant under the credit facility are due and payable. The loans under the
credit facility are secured by all of Grant's assets and a pledge by Grant of
certain notes and all the outstanding shares of capital stock of its
subsidiaries. Each subsidiary of Grant has executed a guaranty in favor of
Elliott, each of which guarantees payment of all Grant's obligations owed to
Elliott under the credit facility. Each subsidiary has pledged its assets in
favor of Elliott to secure its obligations under its respective guaranty. The
credit facility contains restrictions which, among other things, prohibit
Grant's right to pay dividends and limits its right to borrow money, purchase
fixed assets or engage in certain types of transactions without the consent of
the lender.

F-21
<PAGE> 76

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On November 26, 1997 Grant borrowed $10,200,000 from Elliott pursuant to a
demand loan. The loan bears interest at an annual interest rate equal to the
prime rate plus 2% per annum payable on the date any principal amount is paid.
The proceeds were used to reduce the remaining cash obligation under the
purchase price. The note will be converted into Grant Common Stock on December
31, 1997.

On December 19, 1997 Elliot and Westgate exchanged 9,571.162 shares of
preferred stock with a liquidation value of $9,571,162 plus accrued dividends,
for a subordinated note which bears interest at an annual rate of 10.5%.

(10) LEASES

The future minimum rental payments for Grant's various noncancelable
operating leases at September 30, 1997 were as follows (dollars in thousands):

<TABLE>
<CAPTION>
MINIMUM RENTALS OF
GRANT'S MINIMUM RENTALS
SUBSIDIARIES OF GRANT
------------------ ----------------------
OPERATING OPERATING
LEASES LEASES
------------------ ----------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
1997.................................... $ 3 $ 272
1998.................................... -- 893
1999.................................... -- 612
2000.................................... -- 445
2001.................................... -- 205
---- ------
-- 2,427
Less amount representing interest....... -- --
---- ------
Present value of future minimum lease
payments........................... $ 3 $2,427
==== ======
</TABLE>

The total rental expenses for each of the periods was as follows (dollars
in thousands):

<TABLE>
<CAPTION>
GGI
- ----------------------------------------------
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
- ---------------------------- SEPTEMBER 30,
1994 1995 1996 1997
- ------ ------ ------ -------------
<S> <C> <C> <C>
$2,758 $1,880 $2,089 $ 830
</TABLE>

(11) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments.

Cash and short-term financial instruments

The carrying amount approximates fair value due to the short maturity of
these instruments.

Long-term notes receivable

The fair value has been estimated using the expected future cash flows
discounted at market interest rates which approximate its carrying value.

F-22
<PAGE> 77

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Long-term debt

The fair value of GGI's and Grant's long-term debt has been estimated based
on quoted market prices for the same or similar issues, or on the current rates
offered to GGI and Grant for debt of the same remaining maturities.

As a result of the Plan of reorganization certain long-term debt claims
against GGI at December 31, 1996 will be settled at less than 100 percent of
their value. However, distributions under the Plan have not been completed, and
until such time as such distributions are completed, the fair value of these
claims will continue to be uncertain.

(12) EMPLOYEE BENEFIT PLANS

Incentive Stock Option Plan

On November 1, 1996, GGI's Amended 1989 Long-Term Incentive Plan was
amended to increase the shares of common stock reserved to cover the granting of
options to purchase shares of Common Stock ("Options"), issuing of shares of
Common Stock which are subject to vesting requirements or other restrictions
("Restricted Stock") and issuing of Stock Appreciation Rights ("SAR") to
employees to 2,803,930 shares.

GGI options were awarded at an option price determined by the Board of
Directors, which was not less than 100% of fair market value or 110% of fair
market value for employees already owning more than 10% of the voting power of
all classes of stock. The options were exercisable either by the purchase of
shares at the option price or as stock appreciation rights by which the employee
received cash or stock equivalent in value of the difference between the option
price and the market value of the stock at the exercise date. These options were
to expire ten years from the date of grant and were exercisable as defined by
the stock option plan. No stock appreciation rights were granted. Transactions
for Options under the plan are summarized as follows:

<TABLE>
<CAPTION>
SHARES OPTION PRICE
-------- ------------
<S> <C> <C>
Outstanding, December 31, 1993:
14,500 $0.10
212,000 0.938-1.125
108,750 7.00
-------
335,250
Granted.......................................... 70,000 1.313-2.500
Exercised........................................ (11,500) 0.10
------- ----------
Outstanding, December 31, 1994:
3,000 $0.10
262,000 0.938-1.313
20,000 2.50
108,750 7.00
-------
393,750
Granted.......................................... 150,000 2.31
Exercised........................................ (15,000) 0.10-0.938
------- ----------
</TABLE>

F-23
<PAGE> 78

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
SHARES OPTION PRICE
------- ----------
<S> <C> <C>
Outstanding, December 31, 1995:
250,000 $0.938-131
170,000 2.310-2.50
108,750 7.00
-------
528,750
Granted.......................................... 784,000 2.219-2.688
Exercised........................................ (125,000) 1.125-1.313
Canceled......................................... (125,000) 0.938-1.313
Canceled......................................... (700,000) 2.219-2.688
Canceled......................................... (45,000) 7.00
Outstanding, December 31, 1996..................... 254,000 $2.219-2.688
Outstanding, December 31, 1996..................... 63,750 7.00
==========
Exercisable, December 31, 1996..................... 56,000 $2.310
Exercisable, December 31, 1996..................... 63,750 $7.00
==========
</TABLE>

Additionally, a plan amendment was approved, effective January 1, 1996, by
the stockholders which permitted current and former non-employee directors of
GGI to participate in the plan solely for the purpose of receiving Restricted
Stock of GGI in lieu of part or all of the directors' fees. The shares of
Restricted Stock were automatically issued on the first day of each calendar
quarter following a calendar quarter of service. The fair market value of the
Restricted Stock was deemed to be the closing price of the common stock on the
last trading day of the preceding calendar quarter. In 1996, 1995 and 1994,
40,055, 41,711, and 28,108 shares, respectively, of Restricted Stock were
issued. The charges to income totaled $127,000, $103,000, and $62,000 in 1996,
1995 and 1994, respectively.

At December 31, 1996, 1,974,306 shares were available for future grants.

All options to acquire GGI's common stock and all stock appreciation rights
were canceled in connection with the Plan.

1997 Equity and Performance Incentive Plan

The 1997 Equity and Performance Incentive Plan (the "Incentive Plan") was
adopted by the Board of Directors and approved by Grant's stockholders in
December 1997. A total of one million shares of Grant Common Stock has been
reserved for issuance under the Incentive Plan. The Incentive Plan provides for
the grant to officers (including officers who are also directors), employees,
consultants and nonemployee directors of Grant and its subsidiaries, of
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the "Code"), nonstatutory stock options, stock
appreciation rights and restricted shares and deferred shares of Grant Common
Stock (collectively, the "Awards"). The Incentive Plan is not a qualified
deferred compensation plan under Section 401(a) of the Code and is not subject
to the provisions of the Employee Retirement Income Security Act of 1974.

F-24
<PAGE> 79

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

account the employee's present and potential contributions to the success of
Grant and other relevant factors. As of the date of the Subscription Offering
Prospectus, no Awards have been granted under the Plan.

Employee Retirement Savings Plan

GGI established a defined contribution plan covering substantially all U.S.
employees whereby participants may elect to contribute between 1% and 15% of
their annual salary. Participants may not make contributions in excess of $9,500
per year (as adjusted annually by the cost of living adjustment factor). On the
Effective Date, GGI assumed and assigned the plan to Grant. Under the plan, the
employer may contribute, on a discretionary basis, one-half of the participant's
contribution percentage up to 6% (limited to 3% of any employee's annual
salary). Beginning in August 1995, a portion of GGI's employer contribution was
made in the form of GGI common stock. The plan was amended in June of 1997 to
eliminate the employer's option to contribute common stock so that discretionary
contributions may be made only in the form of cash. Contributions made by GGI
for the years ended December 31, 1994, 1995, and 1996 totaled $93,000, $154,000,
which included 24,466 shares of GGI Common Stock with a market value of $56,838,
and 58,395 shares of GGI Common Stock with a market value of $138,000,
respectively. For the nine months ended September 30, 1997, no discretionary
contributions were made by GGI to the plan. At December 31, 1995 and 1996, the
plan held 24,466 and 82,861 shares, respectively, of GGI Common Stock. Due to
the cancellation of GGI's Common Stock on the Effective Date, the plan
administrator reduced the carrying value of the shares held by the plan to zero
and the trustee returned the certificates to GGI.

Other Postretirement Benefits

GGI sponsored a defined contribution postretirement plan which, pursuant to
the Plan, was assumed by GGI and assigned to Grant on the Effective Date. The
Plan provides medical coverage for eligible retirees and their dependents (as
defined in the plan). GGI and Grant adopted SFAS No. 106 -- "Employers'
Accounting for Postretirement Benefits Other Than Pensions" requiring companies
to account for these. The following sets forth the plan's funded status
reconciled with the amount shown in the consolidated statement of operations on
an accrual basis rather than a pay-as-you-go (cash) basis as follows:

<TABLE>
<CAPTION>
GGI
-------------------------
DECEMBER 31, GRANT
------------------------- SEPTEMBER 30,
1994 1995 1996 1997
----- ----- ----- -------------
<S> <C> <C> <C> <C>
Accumulated postretirement benefit obligation:
Retirees and dependents..................... $ (18) $ (16) $ (17) $ (17)
Fully eligible active plan participants..... (11) (27) (42) (48)
Other active plan participants.............. (138) (211) (308) (366)
----- ----- ----- -----
(167) (254) (367) (431)
Unrecognized net loss (gain)................ (65) (19) 17 17
Unrecognized transition obligation.......... 133 126 118 113
----- ----- ----- -----
Accrued postretirement benefit cost...... $ (99) $(147) $(232) $(301)
===== ===== ===== =====
</TABLE>

F-25
<PAGE> 80

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Net periodic postretirement benefit cost included the following components:

<TABLE>
<CAPTION>
GGI
-------------------------------------------
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------- SEPTEMBER 30,
1994 1995 1996 1997
----- ----- ----- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Service cost -- benefits attributed to service
during the period........................... $ 32 $ 41 66 $ 52
Interest cost on accumulated postretirement
benefit obligation.......................... 12 13 21 20
Amortization of transition obligation over 20
years....................................... 7 7 7 5
Amortization of gain.......................... (1) (2) -- --
Other amortizations........................... 11 -- -- --
----- ----- ----- -----
Net periodic postretirement benefit cost.... $ 61 $ 59 $ 94 $ 77
===== ===== ===== =====
</TABLE>

For measurement purposes, a 12% annual rate of increase in the per capita
cost of medical benefits was assumed for the years ended 1994 and 1995, with a
7.25% and 7.25% assumed annual rate for the year ended 1996 and the nine months
ended September 30, 1997, respectively; the rate was assumed to decrease
gradually to 5% for 2001 and remain at that level thereafter. The medical cost
trend rate assumption has a significant effect on the amounts reported. To
illustrate, increasing the assumed medical cost trend rates by 1% point in each
year would increase the accumulated postretirement benefit obligations as of
December 31, 1994, 1995, 1996 and September 30, 1997 by approximately $22,000,
$43,000, $56,000 and $60,600, respectively, and the aggregate of the service and
interest cost components of net periodic postretirement benefit cost for the
years ended December 31, 1994, 1995, 1996 and the nine months ended September
30, 1997 by $7,000, $10,000, $15,000, and $12,900 respectively.

The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% for December 31, 1995, 1996 and
September 30, 1997. A rate of 8.5% was used for 1994.

(13) STOCKHOLDERS' EQUITY (DEFICIT)

GGI

General

On the Effective Date, the capital stock of GGI was deemed to be cancelled,
extinguished and retired. Except for the holders of GGI's $2.4375 Convertible
Exchangeable Preferred Stock (the "2.4375 Preferred") and the Junior Preferred
Stock, no holders of any GGI equity security will receive any cash or other
distribution under the plan, and the holders of such securities have no further
claims against GGI or rights relating to such securities other than the rights,
if any, provided by the Plan.

$2.4375 Convertible Exchangeable Preferred Stock

GGI had authorized 2,300,000 shares of $2.4375 Preferred ($0.01 par value,
$25.00 liquidation preference, of which 2,157,000 was outstanding through March
20, 1996. The remaining 143,000 shares were issued on March 20, 1996. The
purchaser of the remaining shares was entitled to all unpaid, undeclared
dividends in arrears through March 31, 1996, totaling $1,220,000. The $2.4375
Preferred bore annual cumulative dividends of $2.4375 per share accruing from
July 26, 1991, payable quarterly on each March 31, June 30, September 30 and
December 31, commencing September 30, 1991. It was convertible at any time at
the option of the holder, unless previously redeemed, into Common Stock ($.002
par value) of GGI at the initial conversion rate of 2.739726

F-26
<PAGE> 81

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

shares of Common Stock for each share of $2.4375 Preferred. It was exchangeable,
at the option of GGI, in whole but not in part, on any dividend payment date
commencing September 30, 1993, for GGI's 9 3/4% Convertible Subordinated
Debentures (the "Subordinated Debentures") due 2016, at the rate of $25.00
principal amount of subordinated debentures for each share of $2.4375 preferred
stocks provided that all accumulated and unpaid dividends through the date of
exchange have been paid. Pursuant to the Plan, the $2.4375 Preferred was
canceled and the holders thereof are entitled to purchase shares of Grant Common
Stock as described above.

Series A Convertible Preferred Stock

GGI had authorized 75,000 shares of Series A Convertible Preferred Stock,
$0.01 par value. A total of 70,000 shares were issued in May 1996, all of which
have been converted into 4,428,404 shares of GGI Common Stock by December 31,
1996. Pursuant to the Plan all Series A Convertible Preferred Stock was
cancelled.

Junior Preferred Stock

GGI had authorized 15,000 shares and had issued and outstanding 14,904
shares of nonvoting, redeemable Junior Preferred Stock with a $100 par value.
The shares were redeemable at any time by GGI upon 30-day written notice to
holders of such shares. No dividends were declared or paid on the Junior
Preferred Stock. Pursuant to the Plan, the Junior Preferred Stock was canceled
and the holders thereof are entitled to purchase shares of Grant Common Stock as
described above.

Serial Preferred Stock

GGI had authorized 250,000 shares of Serial Preferred Stock, $100 par
value, none of which were issued and outstanding. Pursuant to the Plan, all
Serial Preferred Stock was canceled.

Dividends in Arrears

The quarterly dividend payments for the periods of 1993 through December 6,
1996 and one quarterly dividend payment for 1992 on the $2.4375 preferred stock
were deferred by GGI's Board of Directors.

As of December 31, 1995 and 1996, preferred dividends in arrears on the
$2.4375 Preferred amounted to approximately $17,088,000 and $23,451,000,
respectively.

Pursuant to the Plan all unpaid dividends were canceled.

Common Stock (dollars in thousands)

<TABLE>
<CAPTION>
COMMON STOCK
---------------------
SHARES AMOUNT
---------- ------
<S> <C> <C>
Balance, December 31, 1993..................................... 12,113,366 $ 24
Restricted common stock issued (Note 12)..................... 28,108 --
Stock options exercised...................................... 11,500 --
---------- ---
Balance, December 31, 1994..................................... 12,152,974 24
Restricted common stock issued (Note 12)..................... 41,711 --
Restricted common stock issued under the Employee Retirement
Savings Plan (Note 12).................................... 24,466 --
Stock options exercised...................................... 15,000 --
---------- ---
</TABLE>

F-27
<PAGE> 82

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
COMMON STOCK
---------------------
SHARES AMOUNT
----------- ------
<S> <C> <C>
Balance, December 31, 1995..................................... 12,234,151 24
Warrants exercised........................................... 200,000 1
Conversion of debentures..................................... 3,400,261 7
Conversion of Series A Preferred Stock....................... 4,428,404 9
Payment in connection with equipment and short- and long-term 155,499 --
financing (Note 15).......................................
Restricted common stock issued (Note 12)..................... 40,055 --
Restricted common stock issued under the Employee Retirement 58,395 --
Savings Plan (Note 12)....................................
Stock options exercised...................................... 125,000 --
---------- ---
Balance, December 31, 1996..................................... 20,641,765 $ 41
========== ===
</TABLE>

Pursuant to the Plan, all GGI common stock was canceled.

GRANT

Cumulative Preferred Stock

Grant has authorized 20,000 shares of cumulative pay-in-kind preferred
stock (the "Grant Preferred Stock"), par value $0.001 per share, with a
liquidation preference of $1,000 per share of which 10,000 are outstanding.
Dividends shall accrue and be cumulative from September 30, 1997, the date on
which such shares were issued. Dividends shall accrue at an annual rate of 10.5%
of the liquidation value and be payable annually on September 30 of each year.
Dividend interest shall accrue on dividends not paid on the dividend payment
date at a rate of 12.5% annually. Dividend payments or dividend interest shall
be paid by issuing shares of cumulative preferred stock with an aggregate
liquidation preference equal to the amount of such dividends or dividend
interest. Upon the occurrence of a change in control the Grant Preferred Stock
is redeemable at the option of the holder at a redemption price equal to 105% of
the liquidation value plus accrued and unpaid dividends and interest. Grant may
redeem at any time for cash the Grant Preferred Stock for 100% of the
liquidation value plus accrued and unpaid dividends and interest.

Common Stock

At September 30, 1997, Grant has authorized 100 shares of common stock, par
value $.001 per share, of which one share is issued and outstanding. The changes
in common stock are as follows (dollars in thousands).

<TABLE>
<CAPTION>
COMMON STOCK
-----------------
GRANT SHARES AMOUNT
---------------------------------------------------------- ------ ------
<S> <C> <C>
Balance September 30, 1997................................ 1 $ --
</TABLE>

(14) CONTINGENCIES

GGI and Grant are involved in various claims and legal actions arising in
the ordinary course of business. Other than the Plan and actions commenced
pursuant thereto or in connection therewith, management of GGI and management of
Grant are of the opinion that none of the claims and actions are likely to have
a material impact on GGI's or Grant's financial condition.

F-28
<PAGE> 83

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Court generally has jurisdiction over all of GGI's property, as defined
in section 541 of the Bankruptcy Code, held on the Petition Date or acquired
thereafter. GGI may not engage in transactions except pursuant to the Plan
without prior approval of the Court.

GGI and Grant are subject 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, GGI 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. GGI
believes the tax authority's claim is without merit. Moreover, such assessment
was not filed as a claim in GGI's chapter 11 case. As a result, GGI has made no
provision for payment on the assessment. GGI intends to vigorously protest any
attempted enforcement of the assessment; however, there can be no assurances
regarding the outcome of any such protest.

(15) RELATED PARTY TRANSACTIONS

During 1996, GGI entered into an exclusive agreement with Macdonald & King,
Incorporated, a financial services firm, for the purpose of assisting GGI in
securing additional sources of financing including equipment financing and short
and long-term financing. Mr. William C. Macdonald, a former director of GGI, is
the Chairman of the Board and sole shareholder of Macdonald & King,
Incorporated. Pursuant to the terms of the agreement, GGI issued 155,499 shares
of GGI Common Stock with a market value of approximately $388,748 to Macdonald &
King, Incorporated in connection with financing obtained by GGI prior to Mr.
Macdonald's resignation from GGI's Board of Directors effective August 8, 1996.

On March 20, 1996, GGI issued 143,000 shares of GGI's $2.4375 Preferred to
Westgate, an affiliate of Elliott, a holder of more than 5% of the $2.4375
Preferred, for an aggregate purchase price of $1,573,000. Westgate subsequently
sold its shares of $2.4375 Preferred to Liverpool Limited Partners, who also is
an affiliate of Elliott.

In November 1996, GGI borrowed an aggregate of $3,149,000 from Westgate and
Elliott for working capital purposes. The borrowings are in the form of
unsecured promissory notes and remain outstanding at December 31, 1996, and are
classified in pre-petition liabilities subject to the chapter 11 case.

See the discussion of debt financing with Elliott in Notes 3 and 9.

See discussion of the Subscription Offering, the acquisition of Solid State
and the Tender Offer for the Minority Interest in Solid State in Note 19.

F-29
<PAGE> 84

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(16) OTHER INCOME (DEDUCTIONS)

Other Income (Deductions) consisted of the following (amounts in
thousands):

<TABLE>
<CAPTION>
GGI
------------------------------------------------------
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------- ----------------------
1994 1995 1996 1996 1997
------ ------ ----- ----------- ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Gain (loss) on the sale of fixed assets...... $ 10 $ 212 $ 25 $-- $ (67)
Net gain (loss) on foreign exchange.......... 121 102 (251) 26 (98)
Loss on sale of subsidiaries................. (198) -- --
Foreign credit insurance..................... (137) (73) (8) -- --
Recovery of bad debts........................ 664 -- -- -- --
Gain on insurance settlement................. -- 1,247 -- -- 11
Nonrecurring royalty income.................. 500 -- -- -- --
Legal settlements............................ -- -- -- -- 2,359(a)
Miscellaneous................................ 222 588 (70) -- 61
------ ------ ----- --- ------
Total................................... $1,380 $2,076 $(502) $26 $2,266
====== ====== ===== === ======
</TABLE>

- ---------------
(a) On July 15, 1997, GGI'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, GGI
received payment, net of related costs and expenses, of approximately
$2,359,000.

(17) SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES

Non Cash investing and financing activities consisted of the following
(amounts in thousands):

<TABLE>
<CAPTION>
GGI
---------------------------------------------------------
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------- -----------------------
1994 1995 1996 1996 1997
------ ------ ------- ----------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH PAID FOR INTEREST AND TAXES WAS AS
FOLLOWS:
Taxes, net of refunds.................... $1,044 $ 968 $ 3,496 $ 2,717 2,037
Interest, net of amounts capitalized..... 3,704 3,524 6,106 4,849 3,742
NONCASH INVESTING AND FINANCING ACTIVITIES:
Property, plant and equipment debt
additions............................. 5,899 8,106 19,718 18,901 1,483
Property, plant and equipment debt
payments.............................. 7,133 6,942 4,258 3,386 3,102
Debenture conversion..................... -- -- 2,774 -- --
Fair value of divestitures, net of cash
held.................................. -- -- 493 -- --
Receivables acquired in connection with
divestitures.......................... -- -- 255 -- --
</TABLE>

F-30
<PAGE> 85

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(18) THE PLAN

On September 30, 1997, in connection with the Plan, Grant agreed to
purchase substantially all of the assets of GGI for $47.5 million in cash,
assume certain debts and long-term lease commitments of GGI and assume certain
other liabilities of GGI.

Concurrent with the consummation of the Plan on September 30, 1997, Elliott
satisfied certain claims against GGI in the amount of approximately $12.7
million which was credited against the cash obligation under the purchase price
with GGI. In addition Westgate purchased certain debts assumed by Grant in the
purchase, in the principal amount of approximately $6.8 million. In exchange for
the funding of this repayment, Grant issued to Elliott and Westgate 19,571
shares of Grant Preferred Stock, liquidation amount $1,000 per share. The
remainder of the cash obligation under the purchase price at September 30, 1997,
is recorded as a non-interest bearing payable to GGI in the amount of
$34,783,000, which, pursuant to the Plan, is required to be paid by December 31,
1997. The funding for the settlement of the payable to GGI will be provided by
Elliott and Westgate for which Grant will issue 9,499,998 common shares.

The acquisition has been accounted for as a purchase effective as of
September 30, 1997. The effect of which is reflected in the financial statement
balances of Grant at that date.

(19) SUBSEQUENT EVENTS (UNAUDITED)

In November 1997, Grant, through SSGI Acquisition Corp., a wholly owned
Canadian subsidiary ("SSGI"), initiated a tender offer for all of the
outstanding common shares, not held by SSGI or its affiliates, of Solid State
Geophysical, Inc. ("Solid State"), a Canadian-based land seismic data
acquisition company. Solid State operates a total of nine land crews, consisting
of two crews in the United States, six in Canada and one in Bolivia. On November
20, 1997, Elliott held 5,963,565 shares, or 40.9%, and Westgate held 3,341,544
shares, or 22.9%, of the outstanding common shares of Solid State ("Solid State
Stock"). In connection with SSGI's tender offer for Solid State, Elliott and
Westgate transferred their shares of Solid State Stock to SSGI in exchange for
4,652,554 shares of Grant Common Stock and agreed to loan Grant $15.8 million to
enable SSGI to pay for shares tendered in the tender offer and costs incurred in
connection with such tender offer. Upon the expiration of the Tender Offer on
December 19, 1997, SSGI held approximately 99% of the outstanding shares of
Solid State Stock. On December 23, 1997, because SSGI acquired over 90% of the
outstanding shares of Solid State Stock not already held by SSGI or its
affiliates pursuant to the Tender Offer, SSGI qualified to exercise its
statutory right under Canadian law to acquire the remaining shares of Solid
State Stock on the same terms and at the same price as the Tender Offer. On
December 23, 1997 after exercising these statutory rights, Solid State became an
indirect wholly owned subsidiary of the Company.

The transfer of the shares of Solid State Stock to SSGI by Elliott and
Westgate will be accounted for as an exchange of ownership interests between
entities under common control and as such the assets and liabilities transferred
will be accounted for at historical cost in a manner similar to a
pooling-of-interests. The acquisition of the unaffiliated minority interest
under the tender offer will be accounted for under the purchase method of
accounting at the date of acceptance. The general partners of Elliott are Paul
E. Singer and Braxton Associates, L.P. The general partner of Westgate is
Hambledon, Inc., a corporation controlled by Braxton Associates, L.P. Elliott
and Westgate are each managed by Stonington Management Corporation, a
corporation controlled by Mr. Singer.

F-31
<PAGE> 86

GRANT GEOPHYSICAL, INC. AND SUBSIDIARIES
AND
GGI LIQUIDATING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Common Stock, for an aggregate purchase price of $23,750,000. The Eligible
Subscribers are divided into the following three groups: (i) Eligible Class 5
Interest Holders that have the right to purchase, in the aggregate, 475,000
shares of Grant Common Stock, for an aggregate purchase price of $2,375,000,
(ii) Eligible Class 7 Claim Holders that have the right to purchase, in the
aggregate, 4,255,000 shares of Grant Common Stock, for an aggregate purchase
price of $21,275,000 and (iii) Eligible Class 8 Interest Holders that have the
right to purchase, in the aggregate, 20,000 shares of Grant Common Stock, for an
aggregate purchase price of $100,000.

Pursuant to the Plan, the Company is required to conduct a subscription
offering of 4,750,000 shares of Grant Common Stock to certain holders of claims
and other interests under the Plan for an aggregate purchase price of
$23,750,000. The Plan also authorized the offering of shares of common stock of
a successor company on economically equivalent terms. The Plan provides,
however, that Elliott or its affiliates may pay the entire purchase price to
GGI, representing the total anticipated proceeds of such offering, and then
conduct a subscription offering and retain the proceeds therefrom, which Elliott
has elected to do. Because Elliott and certain of its affiliates, as interest
holders under the Plan, were entitled to purchase 1,290,586 shares of Grant
Common Stock in an offering by the Company, the Selling Stockholders are
offering the balance of such shares of Grant Common Stock to the Eligible
Subscribers pursuant to the Subscription Offering. The Company is registering
such shares of Grant Common Stock pursuant to the Registration Rights Agreement.

On December 19, 1997, in connection with the Acquisition, the Selling
Stockholders transferred their shares of Solid State Stock to Grant in exchange
for 4,652,555 shares of Common Stock.

On December 11, 1997, certain Eligible Subscribers, acting through an "ad
hoc" committee (the "Plaintiffs") commenced a lawsuit in the Bankruptcy Court
against Grant GGI, Elliott, Westgate and SSGI. The lawsuit alleges that (i) GGI
and Elliott breached their obligations under the Plan by seeking to complete the
Acquisition prior to commencing the Subscription Offering, (ii) the Acquisition
and the certain related transactions are unfair to Eligible Subscribers because
they dilute the value of the Common Stock to be issued under the Subscription
Offering and impair the Company's equity value and (iii) the Acquisition and
certain related transactions could and should have been, but were not,
adequately disclosed in the disclosure statement filed with the Bankruptcy Court
regarding the Plan. The Plaintiffs have requested (i) compensatory and punitive
damages in an unstated amount and (ii) revocation of the Plan.

F-32
<PAGE> 87

GGI LIQUIDATING CORPORATION
SUPPLEMENTARY FINANCIAL INFORMATION
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE MOUNTS)

Quarterly financial information of GGI is summarized as follows:

<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER(2) QUARTER(3) YEAR ENDED
------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
1995
Revenues.................................... $18,406 $20,712 $ 24,763 $ 28,115 $ 91,996
Operating income............................ 296 2,037 1,484 1,182 4,999
Net income.................................. 40 1,083 1,713 326 3,162
Net income/(loss) applicable to common
stock..................................... (1,275) (231) 398 (988) (2,096)
INCOME/(LOSS) PER COMMON SHARE -- ASSUMING
NO AND FULL DILUTION:
Net income/(loss) per common share.......... $ (0.10) $ (0.01) $ 0.03 $ (0.08) $ (0.17)
======= ======= ======= ======== ========
1996
Revenues.................................... $27,808 $26,951 $ 26,166 $ 24,598 $105,523
Operating income/(loss)..................... 1,060 955 (21,518) (46,467) (65,970)
Net loss.................................... (572) (621) (23,655) (51,179) (76,027)
Net loss applicable to common stock......... (3,106)(1) (2,023) (25,056) (52,205) (82,390)
LOSS PER COMMON SHARE -- ASSUMING NO AND
FULL DILUTION:
Net loss per common share................... $ (0.25) $ (0.15) $ (1.72) $ (2.70) $ (5.60)
======= ======= ======= ======== ========
</TABLE>

- ---------------
(1) Includes $1,220 cumulative adjustment for the prior unpaid, undeclared
dividends associated with the issuance of 143,000 shares of GGI's $2.4375
Preferred.

(2) Includes $8,374 recognition of anticipated contract losses in 1996.

(3) Includes $5,802 special charge for asset impairment (see Note 4 of Notes to
the Consolidated Financial Statements), $5,511 reserve for accounts
receivable determined to be uncollectible, $2,700 demobilization charge for
closed operations, $1,206 related to future estimated contract losses and
$412 of reorganization costs.

F-33
<PAGE> 88

October 31, 1997, except for Note 17 which is
as at November 27, 1997

AUDITORS' REPORT

To the Directors of

Solid State Geophysical Inc.

We have audited the consolidated balance sheets of Solid State Geophysical
Inc. as at August 31, 1996 and 1997 and the consolidated statements of
operations and (deficit) retained earnings and changes in financial position for
the years ended August 31, 1995, 1996 and 1997. These financial statements are
the responsibility of the Solid State Geophysical Inc.'s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of Solid State Geophysical Inc. as
at August 31, 1996 and 1997 and the results of its operations and the changes in
its financial position for the years ended August 31, 1995, 1996 and 1997 in
accordance with Canadian generally accepted accounting principles.

/s/ Price Waterhouse
Chartered Accountants
Calgary, Alberta

October 31, 1997, except for Note 17 which is
as at November 27, 1997

COMMENTS BY AUDITORS FOR U.S. READERS
ON CANADA-U.S. REPORTING DIFFERENCE

In the United States, reporting standards for auditors require the addition
of an explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by conditions and events that cast substantial doubt on
Solid State Geophysical Inc.'s ability to continue as a going concern, such as
those described in Note 1 to the financial statements. Our report to the
directors dated October 31, 1997, except for note 17, which is as at November
17, 1997, is expressed in accordance with Canadian reporting standards which do
not permit a reference to such events and conditions in the auditors' report
when these are adequately disclosed in the financial statements.

/s/ Price Waterhouse
Chartered Accountants
Calgary, Alberta

F-34
<PAGE> 89

SOLID STATE GEOPHYSICAL INC.

CONSOLIDATED BALANCE SHEET
(IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
AUGUST 31,
---------------------------
1996 1997
----------- -----------
<S> <C> <C>
ASSETS
Current assets
Cash........................................................... $ 308,000 $ 740,000
Accounts receivable............................................ 8,016,000 16,203,000
Income taxes recoverable....................................... 463,000 428,000
Work-in-progress............................................... 430,000 989,000
Multi-client data, current portion (Notes 1 and 4)............. 5,978,000 2,454,000
Prepaid expenses, deposits and other........................... 1,169,000 1,200,000
Discontinued operations (Note 3)............................... 133,000 --
------------ ------------
16,497,000 22,014,000
Multi-client data, less current portion (Notes 1 and 4).......... 5,723,000 13,213,000
Other non-current assets (Note 3)................................ 1,527,000 1,137,000
Property and equipment (Note 5).................................. 31,638,000 35,161,000
Deferred exchange loss........................................... 26,000 234,000
Goodwill (Note 3)................................................ 189,000 --
------------ ------------
$55,600,000 $71,759,000
============ ============

LIABILITIES
Current liabilities
Bank indebtedness (Note 6)..................................... $ 5,788,000 $ 5,235,000
Accounts payable and accrued liabilities....................... 17,290,000 18,605,000
Advances on contracts.......................................... 2,101,000 --
Promissory notes (Note 7)...................................... 2,600,000 11,109,000
Long-term debt -- current portion.............................. 8,054,000 9,028,000
Discontinued operations (Note 3)............................... 180,000 --
------------ ------------
36,013,000 43,977,000
Long-term debt (Note 7).......................................... 14,526,000 18,693,000
Deferred income taxes............................................ 988,000 --
------------ ------------
51,527,000 62,670,000
------------ ------------

SHAREHOLDERS' EQUITY
Capital stock (Note 8)........................................... 14,758,000 24,469,000
Deficit.......................................................... (10,685,000) (15,380,000)
------------ ------------
4,073,000 9,089,000
------------ ------------
$55,600,000 $71,759,000
============ ============
</TABLE>

Contingencies (Notes 1 and 16)

F-35
<PAGE> 90

SOLID STATE GEOPHYSICAL INC.

CONSOLIDATED STATEMENT OF OPERATIONS
AND (DEFICIT) RETAINED EARNINGS
(IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
---------------------------------------------
1995 1996 1997
----------- ------------ ------------
<S> <C> <C> <C>
CONTRACT REVENUE.................................. $48,357,000 $ 45,503,000 $ 77,999,000
Third party costs................................. 19,507,000 18,213,000 32,089,000
------------ ------------ -----------
NET CONTRACT REVENUE.............................. 28,850,000 27,290,000 45,910,000
Costs of sales.................................... 20,384,000 21,250,000 33,262,000
------------ ------------ -----------
GROSS PROFIT CONTRACT............................. 8,466,000 6,040,000 12,648,000
------------ ------------ -----------
DATA LIBRARY REVENUE.............................. 773,000 14,891,000 3,919,000
Amortization of data library...................... 476,000 20,694,000 4,784,000
------------ ------------ -----------
GROSS (LOSS) PROFIT DATA LIBRARY.................. 297,000 (5,803,000) (865,000)
------------ ------------ -----------
COMBINED GROSS PROFIT............................. 8,763,000 237,000 11,783,000
------------ ------------ -----------
General and administrative expenses............... 2,256,000 2,980,000 3,948,000
Restructuring costs and other..................... -- 873,000 231,000
------------ ------------ -----------
2,256,000 3,853,000 4,179,000
------------ ------------ -----------
EARNINGS (LOSS) BEFORE DEPRECIATION, INTEREST AND
DISCONTINUED OPERATIONS......................... 6,507,000 (3,616,000) 7,604,000
Depreciation and amortization..................... 5,968,000 5,856,000 8,974,000
------------ ------------ -----------
EARNINGS (LOSS) BEFORE INTEREST AND DISCONTINUED
OPERATIONS, WRITE-DOWN AND TAXES................ 539,000 (9,472,000) (1,370,000)
Interest
Short-term obligations....................... 109,000 953,000 1,993,000
Long-term debt............................... 1,066,000 1,714,000 2,057,000
------------ ------------ -----------
1,175,000 2,667,000 4,050,000
------------ ------------ -----------
(636,000) (12,139,000) (5,420,000)
INCOME TAX PROVISION (RECOVERY)
Current......................................... (250,000) (414,000) 69,000
Deferred........................................ 250,000 -- (915,000)
------------ ------------ -----------
-- (414,000) (846,000)
------------ ------------ -----------
LOSS BEFORE DISCONTINUED OPERATIONS AND WRITE-DOWN
OF DISCONTINUED OPERATIONS ASSETS............... (636,000) (11,725,000) (4,574,000)
Write-down of discontinued operations assets to
recoverable amount (Note 3)..................... 3,349,000 -- --
------------ ------------ -----------
(3,985,000) (11,725,000) (4,574,000)
Discontinued operations (Note 3).................. (938,000) (242,000) (121,000)
------------ ------------ -----------
NET LOSS.......................................... (4,923,000) (11,967,000) (4,695,000)
Retained earnings (deficit) at beginning of
year............................................ 6,205,000 1,282,000 (10,685,000)
------------ ------------ -----------
Retained earnings (deficit) at end of year........ $ 1,282,000 $(10,685,000) $(15,380,000)
============ ============ ===========
Loss per share before discontinued operations
(Note 8)........................................ $ (0.80) $ (2.34) $ (0.42)
============ ============ ===========
Loss per share after discontinued operations (Note
8).............................................. $ (0.98) $ (2.39) $ (0.44)
============ ============ ===========
</TABLE>

F-36
<PAGE> 91

SOLID STATE GEOPHYSICAL INC.

CONSOLIDATED STATEMENT OF CHANGES IN
FINANCIAL POSITION
(IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
----------------------------------------------
1995 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
CASH PROVIDED BY (USED IN) CONTINUING OPERATING
ACTIVITIES
Loss before discontinued operations and
write-down of assets..................... $ (636,000) $(11,725,000) $ (4,574,000)
Charges (credits) to income not affecting
cash
Amortization of data library............. 476,000 20,694,000 4,784,000
Depreciation and amortization............ 5,968,000 5,856,000 8,974,000
Gain on disposal of fixed assets......... (54,000) (134,000) (325,000)
Deferred income taxes.................... 250,000 -- (915,000)
------------ ------------ ------------
6,004,000 14,691,000 7,944,000
Changes in working capital balances related
to operations............................ 10,924,000 1,168,000 (9,528,000)
------------ ------------ ------------
16,928,000 15,859,000 (1,584,000)
FINANCING ACTIVITIES
Promissory notes -- net.................... -- 2,600,000 8,509,000
Proceeds of long-term debt................. 12,839,000 11,007,000 19,777,000
Repayment of long-term debt................ (7,940,000) (5,193,000) (14,636,000)
Capital stock
Issued for options....................... -- 20,000 311,000
Issued for repayment of debt............. -- -- 3,989,000
Issued for cash.......................... -- -- 5,338,000
Deferred exchange gain (loss).............. 121,000 (100,000) (208,000)
------------ ------------ ------------
5,020,000 8,334,000 23,080,000
------------ ------------ ------------
INVESTING ACTIVITIES
Sale of operations of a subsidiary (Note
3)....................................... -- 2,275,000 177,000
Preferred shares acquired on sale of
operations of a subsidiary (Note 3)...... -- (1,441,000) --
Proceeds from disposal of fixed assets..... 91,000 698,000 3,476,000
Acquisition of fixed assets................ (10,888,000) (11,025,000) (15,770,000)
Data library............................... (7,680,000) (21,643,000) (8,439,000)
Other...................................... (200,000) 4,000 213,000
------------ ------------ ------------
(18,677,000) (31,132,000) (20,343,000)
------------ ------------ ------------
DISCONTINUED OPERATIONS (NOTE 3)
Operating activities....................... 126,000 (12,000) (121,000)
Financing activities....................... (188,000) 19,000 --
Investing activities....................... (898,000) (148,000) (47,000)
------------ ------------ ------------
(960,000) (141,000) (168,000)
------------ ------------ ------------
Change in cash.................................. 2,311,000 (7,080,000) 985,000
Cash (bank indebtedness less cash), beginning of
year.......................................... (711,000) 1,600,000 (5,480,000)
------------ ------------ ------------
Cash (bank indebtedness less cash), end of
year.......................................... $ 1,600,000 $ (5,480,000) $ (4,495,000)
============ ============ ============
</TABLE>

F-37
<PAGE> 92

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1997

(1) CORPORATE FINANCING, OPERATIONS AND BASIS OF FINANCIAL PRESENTATION

These financial statements have been prepared on the basis that Solid State
Geophysical Inc. ("Solid State") will be able to complete major projects in
progress and generate sufficient timely cash flow to pay its liabilities in the
normal course of business. At August 31, 1997, Solid State had negative working
capital of $21,963,000 which amount includes $9,028,000, representing the
current portion of long-term debt due over the next twelve month period.

See Note 7 for details on debt covenant violations, postponement of certain
principal payments and extension of promissory note repayment dates.

Solid State's liquidity problems arose primarily from cost overruns
relating to a multi-client library acquisition, losses relating to the Nortech
operations which were sold and losses from performing certain large non-Canadian
data acquisition contracts for clients. Continued purchase of property, plant
and equipment was also a major factor in debt incurred.

Solid State had a loss for the year before discontinued operations of
$4,574,000; cash flow from continuing operations before changes in working
capital of $7,944,000 (before expenditures on the data library of $8,439,000)
and shareholders' equity, at year end, of $9,089,000.

The recovery of the data library and certain other assets is dependent upon
future occurrences. The amounts recorded for such assets are subject to
significant management estimates (see Notes 3 and 4).

Funding for Solid State's commitments must be provided by future data
library sales, normal operations, additional financing or the issue of share
capital. (See Note 17 for funds advanced after August 31, 1997.)

On August 30, 1997, Solid State's wholly-owned subsidiary, Nortech Surveys
(Canada) Inc. was wound up into Solid State.

(2) ACCOUNTING POLICIES

The consolidated financial statements of Solid State have been prepared in
accordance with Canadian generally accepted accounting principles. The
significant accounting policies used in these consolidated financial statements
are:

Basis of consolidation

The consolidated financial statements include the accounts of Solid State;
Solid State Geophysical Corp. (a United States company); and Solid State
International Ingenieria, C.A. (a Venezuelan company).

Revenue recognition and work-in-progress

Solid State recognizes revenue on fixed price contracts on the basis of
percentage complete. Revenue on hourly rate contracts is recognized in the
period earned. Start-up costs, inventory and other costs related to contracts
not sufficiently underway to warrant revenue recognition are carried as
work-in-progress and charged to expense as revenue is recognized.
Work-in-progress is valued at the lower of cost and net realizable value.
Anticipated losses on contracts are recorded when reasonably determinable.

Multi-client data library

Solid State collects certain seismic data for its own account which it
resells to clients on a non-transferrable, non-exclusive basis. During the
period beginning with the initiation of each multi-client survey to the
completion of the survey, total estimated costs are amortized based on revenues
from such survey as a percentage of total estimated revenues to be realized from
such survey. After the survey is completed, amortization of remaining

F-38
<PAGE> 93

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

capitalized costs is provided at the greater of the percentage of realized
revenues to total estimated revenues or over a period not to exceed four years.
Solid State periodically reviews the carrying value of multi-client data to
assess whether there has been a permanent impairment of value and records losses
in periods when the total estimated costs exceed total estimated sales or in
periods when it is determined that sales would not be sufficient to cover the
carrying value of the asset.

Depreciation

Property and equipment are depreciated on the straight-line basis to
reflect the estimated useful life of the related assets (Note 5).

Income taxes

Solid State prepares its financial statements on the deferred income tax
allocation basis. A provision is made for all income taxes currently payable as
well as for those deferred to future years as a result of timing differences
between income for income tax purposes and for accounting purposes arising
primarily from the difference between amounts claimed for fixed assets for
income tax purposes and depreciation recorded for accounting purposes.

Foreign currency translation

Transaction amounts denominated in foreign currencies are translated to
Canadian dollar equivalents at exchange rates prevailing at the transaction
dates. Carrying values of monetary assets and liabilities reflect the exchange
rates at the balance sheet date. Translation gains and losses, except those
related to long-term debt, are included in earnings. Gains and losses related to
long-term debt are deferred and amortized over the remaining term of the debt.
The operations of foreign subsidiaries are considered to be integrated and
accordingly, the monetary assets and liabilities are translated at the rate of
exchange at the balance sheet date. Revenue and expenses of the foreign
subsidiaries are translated at the exchange rate prevailing at the date of the
transaction.

Use of estimates

Solid State's policy is to amortize data library costs based upon the
anticipated revenues Solid State expects to realize over a period not to exceed
four years from the date of project completion or the end of any exclusive use
period. It is reasonably possible that those estimates of anticipated revenues,
the remaining estimated economic life of the data library, or both will be
reduced significantly in the near term due to competitive pressures. As a
result, the carrying amount of the data library costs may be reduced materially
in the near term.

(3) OTHER NON-CURRENT ASSETS

In July 1996, the operations of Nortech Surveys (Canada) Inc. were sold for
$2,275,000 and the operations were presented as discontinued operations. There
was no gain or loss recorded on the sale.

Part of the proceeds on sale was $1,263,000 of preferred shares of Nortech
Geomatics Inc. These shares have the right to receive quarterly cumulative
dividends at a rate equal to 80% of the prime interest rate, are non-voting,
have mandatory redemption of $200,000 per year and under certain conditions may
be converted into a one year promissory note. Under certain conditions these
shares may be converted into common shares after

F-39
<PAGE> 94

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2003. $206,000 of preferred shares were redeemed in 1997. In fiscal 1997,
$629,000 of the preferred shares were converted into Common shares, which Solid
State intends to sell.

The ability of Solid State to liquidate its investment in Common shares on
a timely basis is dependent on the ability of Nortech Geomatics Inc. to become a
public company.

The following summarizes the results of Nortech's operations over the last
three fiscal periods and are reflected in the Consolidated Statement of
Operations and Deficit as a one line item -- Discontinued Operations:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Net revenues........................... $5,674,000 $3,595,000 $ --
Expenses
Operating and interest costs......... 5,989,000 3,607,000 121,000
Amortization......................... 623,000 230,000 --
---------- ---------- ----------
6,612,000 3,837,000 121,000
---------- ---------- ----------
Net loss............................... $ (938,000) $ (242,000) $ (121,000)
========== ========== ==========
</TABLE>

In addition to the loss shown above, $3,349,000 of the proprietary
engineering and system development costs and certain survey equipment included
in property and equipment related to the Nortech operations were written down to
their net recoverable amounts in 1995. In April 1994, Solid State acquired all
the outstanding shares of Seismoven C.A., a Venezuelan company, for
consideration of $270,000 (U.S. $200,000). The acquisition was accounted for
using the purchase method with the majority of the purchase consideration being
allocated to goodwill. Subsequent to acquisition, the Corporation's name was
changed to Solid State Internacional Ingenieria, C.A. The goodwill related to
this investment was expensed in 1997.

(4) MULTI-CLIENT DATA

Atchafalaya Bay

Work commenced on the Atchafalaya Bay project in late fiscal 1995 and the
project was 77% complete at August 31, 1996. In 1996, as part of a series of
transactions to enable completion of the project, Solid State sold its ownership
in this data bank, and retained an interest in the future revenues from the
project in return for completing the project.

Prior to the sale of its ownership interest, Solid State had a revenue
sharing agreement with another third party. Under this other revenue sharing
basis the first U.S. $10,500,000 went to Solid State, between $10,500,000 and
$13,000,000 revenue was split as follows: 73.7% to Solid State and 26.3% to the
other party. Revenue above $13,000,000 was shared 50/50. The other party's share
of this revenue sharing agreement was purchased by Solid State in conjunction
with its sale of the data library and the negotiation of its retained interest
in future revenues.

As at August 31, 1996, all anticipated losses related to the Atchafalaya
Bay project were recognized. The resultant net book value of $7,841,000
represented management's estimate of net future proceeds from data sales.

During the year ended August 31, 1997, Solid State spent an additional
$8,715,000 on this project achieving completion. Processing of the data is
anticipated to be completed in November 1997. Amortization of $3,815,000
resulted in a net book value at August 31, 1997 of $12,741,000 which represents
management's estimate of net future proceeds from data sales attributable to
Solid State. This estimate is supported by a current market valuation of the
project done by a data library valuer using the most likely undiscounted cash
flow model.

Solid State's share of revenues for the year ended August 31, 1997 was
$3,728,000. Total costs for the project are estimated to be $32,836,000,
including $3,188,000 of depreciation.

F-40
<PAGE> 95

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The net revenue sharing arrangement, which is in U.S. dollars which was
converted to Canadian dollars at an average rate of $0.727 as at August 31, 1997
(closing rate $0.721), with the Atchafalaya Bay Data library owner is as
follows:

<TABLE>
<CAPTION>
CANADIAN RECORDED IN REVENUE TO
DOLLAR AUGUST 31,
SALES -------------------------
REVENUE SHARING BASIS REVENUE OWNER SOLID STATE 1996 1997
- -------------------------- ----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
First................... $11,414,000 $ -- $11,414,000 $8,882,000 $2,532,000
Next.................... 4,601,000 3,405,000 1,196,000 -- 1,196,000
----------- ----------- ----------- ---------- ----------
Sales to date............. 16,015,000 3,405,000 12,610,000 8,882,000 3,728,000
----------- ----------- ----------- ---------- ----------
Next.................... 7,405,000 5,480,000 1,925,000 -- --
Next.................... 8,280,000 -- 8,280,000 -- --
Next.................... 11,501,000 8,051,000 3,450,000 -- --
----------- ----------- ----------- ---------- ----------
Future sales.............. 27,186,000 13,531,000 13,655,000 -- --
----------- ----------- ----------- ---------- ----------
$43,201,000 $16,936,000 $26,265,000 $8,882,000 $3,728,000
=========== =========== =========== ========== ==========
</TABLE>

The revenue sharing basis in U.S. dollars is $8,394,000, $3,334,000,
$5,366,000, $6,000,000 and $8,334,000, respectfully, for the amounts shown in
the Canadian dollar Sales Revenue column.

Realization of these sales is dependent upon the availability of land in
the data area, petroleum discoveries or anticipated discoveries in that area and
general petroleum industry economics.

Canadian

No significant additions were made to the Canadian data library in the year
ended August 31, 1997. Amortization of $969,000 was recorded. As at August 31,
1997, the net book value was $2,926,000.

Recovery of these costs is dependent upon future sales which are influenced
by the availability of land in the data area, petroleum discoveries or
anticipated discoveries in that area and general petroleum industry economics.

Other

Certain financing agreements require all proceeds from the data library
sales to be applied against the specified debt (see Note 7).

F-41
<PAGE> 96

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
UNITED
CANADA STATES TOTAL
---------- ----------- -----------
<S> <C> <C> <C>
COST
Balance as at September 1, 1995.................... $3,886,000 $ 4,874,000 $ 8,760,000
Additions.......................................... 5,214,000 19,246,000 24,460,000
--------- ---------- ----------
Balance as at September 1, 1996.................... $9,100,000 $24,120,000 $33,220,000
========= ========== ==========
Balance, as at September 1, 1996................... $9,100,000 $24,120,000 $33,220,000
Additions.......................................... 35,000 8,715,000 8,750,000
--------- ---------- ----------
Balance as at August 31, 1997...................... $9,135,000 $32,835,000 $41,970,000
========= ========== ==========
ACCUMULATED AMORTIZATION
Balance as at September 1, 1995.................... $ 964,000 $ -- $ 964,000
Amortization for the year.......................... 4,276,000 16,279,000 20,555,000
--------- ---------- ----------
Balance as at September 1, 1996.................... $5,240,000 $16,279,000 $21,519,000
========= ========== ==========
ACCUMULATED AMORTIZATION
Balance as at September 1, 1996.................... $5,240,000 $16,279,000 $21,519,000
Amortization for the year.......................... 969,000 3,815,000 4,784,000
--------- ---------- ----------
Balance as at August 31, 1997...................... $6,209,000 $20,094,000 $26,303,000
========= ========== ==========
NET BOOK VALUE AS AT AUGUST 31, 1996
Current portion.................................... $1,454,000 $ 4,524,000 $ 5,978,000
Non-current portion................................ 2,406,000 3,317,000 5,723,000
--------- ---------- ----------
$3,860,000 $ 7,841,000 $11,701,000
========= ========== ==========
NET BOOK VALUE AS AT AUGUST 31, 1997
Current portion.................................... $ 917,000 $ 1,537,000 $ 2,454,000
Non-current portion................................ 2,009,000 11,204,000 13,213,000
--------- ---------- ----------
$2,926,000 $12,741,000 $15,667,000
========= ========== ==========
</TABLE>

F-42
<PAGE> 97

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
CANADA UNITED STATES TOTAL
---------- ------------- -----------
<S> <C> <C> <C>
FOR THE YEAR ENDED AUGUST 31, 1995
Revenues........................................... $ 773,000 $ -- $ 773,000
Amortization....................................... 476,000 -- 476,000
--------- ---------- ----------
Gross profit....................................... $ 297,000 $ -- $ 297,000
========= ========== ==========
FOR THE YEAR ENDED AUGUST 31, 1996
Revenues........................................... $6,009,000 $ 8,882,000 $14,891,000
Amortization....................................... 4,276,000 16,418,000 20,694,000
--------- ---------- ----------
Gross profit (loss)................................ $1,733,000 $ (7,536,000) $(5,803,000)
========= ========== ==========
FOR THE YEAR ENDED AUGUST 31, 1997
Revenues........................................... $ 191,000 $ 3,728,000 $ 3,919,000
Amortization....................................... 969,000 3,815,000 4,784,000
--------- ---------- ----------
Gross loss......................................... $ (778,000) $ (87,000) $ (865,000)
========= ========== ==========
</TABLE>

(5) PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
AUGUST 31, 1996
-----------------------------------------------
ACCUMULATED NET BOOK
COST DEPRECIATION VALUE
----------- --------------- -----------
<S> <C> <C> <C>
Land............................................. $ 275,000 $ -- $ 275,000
Building......................................... 659,000 69,000 590,000
Recording equipment.............................. 42,329,000 16,507,000 25,822,000
Survey equipment................................. 2,235,000 1,429,000 806,000
Drilling equipment............................... 2,783,000 1,206,000 1,577,000
Vehicles (including boats)....................... 2,318,000 1,673,000 645,000
Office equipment................................. 653,000 408,000 245,000
Radio equipment.................................. 434,000 301,000 133,000
----------- ----------- -----------
51,686,000 21,593,000 30,093,000
Equipment under capital lease.................... 2,339,000 794,000 1,545,000
----------- ----------- -----------
$54,025,000 $22,387,000 $31,638,000
=========== =========== ===========
</TABLE>

F-43
<PAGE> 98

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
AUGUST 31, 1997
------------------------------------------------------------
DEPRECIATION
TERMS IN ACCUMULATED NET BOOK
YEARS COST DEPRECIATION VALUE
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Land................................... -- $ 275,000 $ -- $ 275,000
Building............................... 20 681,000 108,000 573,000
Recording equipment.................... 2 - 7 51,809,000 22,430,000 29,379,000
Survey equipment....................... 3 - 5 2,251,000 1,737,000 514,000
Drilling equipment..................... 2 - 3 3,309,000 2,146,000 1,163,000
Vehicles (including boats)............. 3 - 5 2,606,000 2,080,000 526,000
Office equipment....................... 5 880,000 532,000 348,000
Radio equipment........................ 2 - 4 593,000 387,000 206,000
----- ----------- ----------- -----------
62,404,000 29,420,000 32,984,000
Equipment under capital lease.......... 3 - 5 3,239,000 1,062,000 2,177,000
----- ----------- ----------- -----------
$65,643,000 $30,482,000 $35,161,000
===== =========== =========== ===========
</TABLE>

Property and equipment are pledged as security pursuant to long-term debt
(see Note 7).

(6) OPERATING LOANS

Solid State and its subsidiaries have operating lines of credit of
$5,100,000 which were fully utilized at August 31, 1997. The credit facilities
are secured by assignments of receivables and bear interest at prime plus 0.75%
(6.5% at August 31, 1996; 5.5% -- 1997). (See Note 7 regarding covenant
violations).

(7) PROMISSORY NOTES AND LONG-TERM DEBT

<TABLE>
<CAPTION>
AUGUST 31,
---------------------------
1996 1997
----------- -----------
<S> <C> <C>
PROMISSORY NOTES
Promissory note bearing interest at 18% with interest due
quarterly commencing July 1, 1996 and principal due and payable
December 31, 1996. Secured by future Multi-client data sales
($1,900,000 U.S.). ............................................. $ 2,600,000 $ --
Promissory note bearing interest at 15% with interest commencing
February 10, 1997 and $1,000,000 U.S. of $2,000,000 U.S.
principal due May 10, 1997 and balance due August 10, 1997, all
extended to November 30, 1997. Secured by future Multi-client
data sales ($2,000,000 U.S.). .................................. -- 2,777,000
Promissory note bearing interest at 15% with interest commencing
February 19, 1997 and $1,000,000 U.S. of $2,000,000 U.S.
principal due May 19, 1997 and balance due August 19, 1997, all
extended to November 30, 1997. Secured by future Multi-client
data sales ($2,000,000 U.S.). .................................. -- 2,777,000
Promissory note bearing interest at 15% with interest commencing
July 2, 1997 and balance due August 15, 1997, extended to
November 30, 1997. Secured by future Multi-client data sales
($3,000,000 U.S.). ............................................. -- 4,166,000
Promissory note bearing interest at 15% with interest commencing
July 22, 1997 and balance due August 15, 1997, extended to
November 30, 1997. Secured by future Multi-client data sales
($1,000,000 U.S.). ............................................. -- 1,389,000
----------- -----------
$ 2,600,000 $11,109,000
=========== ===========
</TABLE>

F-44
<PAGE> 99

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
AUGUST 31,
---------------------------
1996 1997
----------- -----------
<S> <C> <C>
LONG-TERM DEBT
Demand non-revolving loan bearing interest at prime plus 1.75%
(6.5%) repayable in consecutive monthly installments of $12,500
until January 1, 2002. ........................................ $ 917,000 $ 663,000
Demand non-revolving loan bearing interest at lender's U.S. dollar
cost of funds plus 1.75% repayable in consecutive monthly
installments of $13,750 U.S. until January 1, 2002
(1996 -- $1,054,500 U.S.; $728,800 U.S.). ..................... 1,443,000 1,012,000
Demand non-revolving loan bearing interest at lender's U.S. dollar
cost of funds plus 1.75% repayable in consecutive monthly
installments of $13,125 U.S. until January 1, 2002
(1996 -- $974,900 U.S.; $695,600 U.S.). ........................ 1,334,000 966,000
Demand non-revolving loan bearing interest at prime plus 1.75%
(6.5%) repayable in consecutive monthly installments of $63,333
until January 1, 2002. ......................................... 4,475,000 3,357,000
Demand non-revolving loan bearing interest at lender's U.S. dollar
cost of funds plus 1.75% repayable in consecutive monthly
installments of $53,083 U.S. until January 1, 2002
(1996 -- $3,510,000 U.S.; $2,813,400 U.S.). .................... 4,803,000 3,906,000
Conditional sales agreement repayable in sixty equal monthly
installments of $89,437 U.S., with interest commencing October
16, 1996. Secured by related equipment. Effective interest rate
of 10.471% ($3,703,000 U.S.) -- renegotiated 1996 CSA, adding
additional equipment (including consolidation of the following
CSA). .......................................................... 5,782,000 5,141,000
Obligations under capital lease, secured by related equipment,
repayable in equal monthly installments of $19,012 U.S.,
including interest (consolidated into CSA $5,141,000). ......... 655,000 --
Convertible debenture bearing interest at 8% with interest due
quarterly commencing July 1, 1996 and failing the exercise of
conversion rights, principle due April 30, 2001. The debenture
was convertible into 1,141,667 common shares of the Corporation
(convertible at $2.40 per share, closing price at date of grant
was $2.76). Repaid with proceeds of financing in October
1996. .......................................................... 2,737,000 --
Obligations under capital lease, secured by related equipment,
repayable in monthly installments of $52,000 (1996 -- $36,000),
including interest at approximately 7.5%........................ 414,000 1,061,000
Conditional sales agreement repayable in 12 monthly installments
of $18,219 U.S. with interest commencing November 26, 1997.
Secured by related equipment. Effective interest rate of 10.746%
($71,347 U.S.). ................................................ -- 99,000
Conditional sales agreement repayable with a principle payment of
$150,000 U.S. June 30, 1997; two monthly installments of
$250,000, including interest commencing June 30, 1996;
twenty-eight monthly installments of $127,050 U.S., including
interest until December 31, 1999. Secured by related equipment.
Effective interest rate of 10.746% ($3,592,566 U.S.). .......... -- 4,988,000
Conditional sales agreement repayable in twenty four equal monthly
installments of $23,309 U.S., including interest, with interest
commencing September 30, 1997. Secured by related equipment.
Effective interest rate of 10.746% ($503,855 U.S.). ............ -- 700,000
</TABLE>

F-45
<PAGE> 100

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
AUGUST 31,
---------------------------
1996 1997
----------- -----------
<S> <C> <C>
Promissory note bearing interest at 18% commencing October 17,
1996 (15% interest ($4,197,000 U.S.) effective February 24,
1997). Interest due quarterly commencing January 1, 1997, due
October 1999 with minimal annual payments of $1,380,000
($1,000,000 U.S.). Secured by future multi- client data sales.
$4,000,000 U.S. ($5,400,000 Cdn.) converted to equity February
24, 1997. ...................................................... $ -- $ 5,828,000
Other............................................................. 20,000 --
----------- -----------
22,580,000 27,721,000
Less: Current portion............................................. 8,054,000 9,028,000
----------- -----------
$14,526,000 $18,693,000
=========== ===========
</TABLE>

In 1997, Solid State postponed certain principal repayments.

At August 31, 1997, the Company was in violation of certain debt covenants
with its main banker. These violations were waived to October 31, 1997. The bank
retains the right to demand all loans after this date if there are covenant
violations. Certain promissory note and conditional sales agreement repayment
dates were not adhered to.

The demand non-revolving loans are secured by fixed and floating charge
debentures over all of the assets of Solid State, subsidiaries and specific
charges on property and equipment.

In certain debt agreements, there are cross-default provisions under which
a default in one agreement could become a default under such other agreements.

Principal repayments are as follows:

F-46
<PAGE> 101

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) CAPITAL STOCK

Authorized share capital is comprised of unlimited common shares and
preferred shares.

<TABLE>
<CAPTION>
SHARES BOOK VALUE
---------- -----------
<S> <C> <C>
Total common shares outstanding September 1, 1993.................. 2,800,000 $ 800,000
Common shares issued in accordance with initial public offering.... 2,000,000 12,238,000
Common shares issued upon acquisition of Nortech Surveys (Canada)
Inc. (Note 3).................................................... 200,000 1,700,000
---------- ----------
Total common shares outstanding August 31, 1994 and 1995........... 5,000,000 14,738,000
Common shares issued in accordance with a rights offering in March
1996............................................................. 6,520 20,000
---------- ----------
Common shares outstanding August 31, 1996.......................... 5,006,520 14,758,000
Common shares issued to specified shareholders for debt, net of
issue costs less related deferred tax............................ 3,044,444 4,044,000
Common shares issued to specified shareholders for cash, net of
issue costs less related deferred tax............................ 5,869,565 5,356,000
Common shares issued under options................................. 215,000 311,000
---------- ----------
Common shares outstanding August 31, 1997.......................... 14,135,529 $24,469,000
========== ==========
</TABLE>

Earnings per share for the year ended August 31, 1997 have been calculated
using the weighted average shares outstanding of 10,787,000 (1995 -- 5,000,000;
1996 -- 5,003,000).

Fully diluted earnings per share for 1997, 1996 and 1995 would have been
anti-dilutive.

(9) STOCK OPTIONS AND SHARES RESERVED

At August 31, 1997, Solid State had options to purchase 952,000 Common
shares outstanding, of which 325,000 expired subsequent to the year end. Prices
ranged from $1.00 to $6.50. During 1996, 505,000 options were granted. In 1997,
670,000 options were granted to purchase Common shares at between $0.95 and
$1.80. All options expire on or before December 31, 2000. Grant prices were
equal to or greater than fair market value at the dates of grant and to date
215,000 stock options have been exercised. They were warrants outstanding to
purchase 125,000 Common Shares at $1.65 per share.

(10) INCOME TAXES

Reconciliation of expected income tax provision to recorded income tax
provision:

<TABLE>
<CAPTION>
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Expected income tax (recovery) at
(1995 -- 44.34%; 1996 -- 44.53%;
44.62%)............................ $(2,144,000) $(3,357,000) $(2,418,000)
Future benefit of tax losses in
subsidiaries not recognized........ 1,219,000 2,943,000 1,572,000
Assets written off with no tax
basis.............................. 925,000 -- --
---------- ---------- ----------
Income taxes (recovery) per financial
statements......................... $ -- $ (414,000) $ (846,000)
========== ========== ==========
</TABLE>

Solid State can defer future income taxes by claiming allowable income tax
deductions in excess of those provided in the accounting records.

F-47
<PAGE> 102

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Solid State does not anticipate repatriating income from foreign operations
and accordingly, has not provided for any possible future repatriation taxation.
At August 31, 1997, there was not a material amount in income which could be
repatriated.

Solid State has unclaimed research and development expenditures and
noncapital losses carried forward for income tax purposes of $1,489,000 and
$3,900,000 respectively, which resulted from operations in a Canadian
subsidiary. There are non-North American foreign subsidiaries with approximately
$4,400,000 of non-capital tax losses for accounting carried forward. The U.S.
subsidiary has non-capital accounting losses carried forward of approximately
$8,600,000 as at August 31, 1997, which may be claimable in future years. The
potential benefits of these items have not been reflected in the consolidated
financial statements. Realization of these losses is dependent upon taxable
income being earned in each jurisdiction that has the tax losses. Solid State
has non-capital losses of $2,762,000 resulting from its Canadian operations of
which $703,000 has a potential unrecorded benefit. The amount of tax losses
available is subject to normal audit by the various tax authorities which may
result in changes to the losses.

F-48
<PAGE> 103

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(11) SEGMENTED INFORMATION

Solid State operates in two business segments with both domestic and
foreign contracts.

Industry segments

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31
--------------------------------------------
1995 1996 1997
----------- ------------ -----------
<S> <C> <C> <C>
NET REVENUES FROM CUSTOMERS OUTSIDE THE ENTERPRISE
Seismic acquisition.............................. $28,850,000 $ 27,290,000 $45,910,000
Data library..................................... 773,000 14,891,000 3,919,000
----------- ----------- -----------
TOTAL.............................................. $29,623,000 $ 42,181,000 $49,829,000
=========== =========== ===========
OPERATING LOSS BEFORE RESTRUCTURING AND OTHER
COSTS, INTEREST AND WRITE-DOWN
Seismic acquisition.............................. $ 242,000 $ (2,796,000) $ (274,000)
Data library..................................... 297,000 (5,803,000) (865,000)
----------- ----------- -----------
TOTAL.............................................. $ 539,000 $ (8,599,000) $(1,139,000)
=========== =========== ===========
IDENTIFIABLE ASSETS
Seismic acquisition.............................. $40,032,000 $ 42,325,000 $55,035,000
Data library..................................... 7,797,000 11,701,000 15,667,000
Corporate........................................ -- 1,441,000 1,057,000
Discontinued operations.......................... 3,925,000 133,000 --
----------- ----------- -----------
TOTAL.............................................. $51,754,000 $ 55,600,000 $71,759,000
=========== =========== ===========
CAPITAL EXPENDITURES
Seismic acquisition.............................. $10,888,000 $ 11,025,000 $15,770,000
Data library..................................... 7,680,000 21,643,000 8,439,000
Discontinued operations.......................... 898,000 148,000 47,000
----------- ----------- -----------
TOTAL.............................................. $19,466,000 $ 32,816,000 $24,256,000
=========== =========== ===========
DEPRECIATION AND AMORTIZATION
Seismic acquisition.............................. $ 5,968,000 $ 5,856,000 $ 8,974,000
Data library..................................... 476,000 20,694,000 4,784,000
----------- ----------- -----------
TOTAL.............................................. $ 6,444,000 $ 26,550,000 $13,758,000
=========== =========== ===========
DISCONTINUED OPERATIONS
Operating loss................................... $ (938,000) $ (242,000) $ (121,000)
=========== =========== ===========
TOTAL INDUSTRY SEGMENTS
Net revenue from customers outside the
enterprise.................................... $29,623,000 $ 42,181,000 $49,829,000
=========== =========== ===========
SEGMENTED OPERATING INCOME (LOSS) BEFORE THE
FOLLOWING........................................ $ 539,000 $ (8,599,000) $(1,139,000)
Interest expense................................. (1,175,000) (2,667,000) (4,050,000)
Restructuring costs.............................. -- (873,000) (231,000)
Write-down of fixed assets....................... (3,349,000) -- --
Income tax recovery.............................. -- 414,000 846,000
Discontinued operations loss..................... (938,000) (242,000) (121,000)
----------- ----------- -----------
Net loss........................................... $(4,923,000) $(11,967,000) $(4,695,000)
=========== =========== ===========
</TABLE>

F-49
<PAGE> 104

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Geographic segments

<TABLE>
<CAPTION>
AUGUST 31, 1995
-------------------------------------------------------------------
MIDDLE EAST
SOUTH UNITED AND
CANADA AMERICAN STATES OTHER TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net contract revenue*........... $16,461,000 $ 28,000 $ 9,016,000 $ 4,118,000 $29,623,000
Earnings (loss) before
interest**.................... 1,748,000 (154,000) (1,867,000) 812,000 539,000
Identifiable assets............. 25,100,000 16,606,000 4,475,000 1,648,000 47,829,000
</TABLE>

<TABLE>
<CAPTION>
AUGUST 31, 1996
-------------------------------------------------------------------
MIDDLE EAST
SOUTH UNITED AND
CANADA AMERICAN STATES OTHER TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net contract revenue*........... $22,053,000 $ 5,687,000 $14,445,000 $ (4,000) $42,181,000
Earnings (loss) before
interest...................... 283,000 587,000 (8,928,000) (541,000) (8,599,000)
Identifiable assets............. 25,521,000 1,490,000 27,951,000 505,000 55,467,000
</TABLE>

<TABLE>
<CAPTION>
AUGUST 31, 1997
-------------------------------------------------------------------
MIDDLE EAST
SOUTH UNITED AND
CANADA AMERICAN STATES OTHER TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net contract revenue*........... $20,046,000 $10,818,000 $12,312,000 $ 6,653,000 $49,829,000
Earnings (loss) before
interest...................... 2,260,000 (3,749,000) (704,000) 1,054,000 (1,139,000)
Identifiable assets............. 27,016,000 13,238,000 25,434,000 6,071,000 71,759,000
</TABLE>

- ---------------
* Includes Data Library sales.

** Before write-down of fixed assets ($3,349,000 -- 1995, nil -- 1996 and 1997),
financial restructuring costs and discontinued operations.

As at August 31, (1995 -- 42%; 1996 -- 43%) 1997, approximately 59% of
identifiable foreign assets are represented by accounts receivable, multi-client
data and work-in-progress. The balance, represented by property and equipment,
is readily transferrable from country to country as contracts are negotiated.

(12) ECONOMIC DEPENDENCE

Solid State operates in several countries. These operations are dependent
upon the level of oil and gas exploration and development. Solid State operates
for several customers, the only customers that accounted for more than 10% of
the net contract revenue during the year ended August 31, 1996 were two
customers accounting for $4,204,000 of South American net contract revenues and
$5,815,000 of Canadian net contract revenues and during the year ended August
31, 1997 one customer accounted for $6,218,000 of South American net contract
revenues.

(13) FINANCIAL INSTRUMENTS

a) Fair value of financial assets and liabilities

Solid State's financial instruments are substantially all cash, accounts
receivable, income taxes receivable, accounts payable, promissory notes and
long-term debt. The book value for all financial instruments, including
$16,937,000 of promissory notes and long-term debt, approximates their fair
value. The $16,937,000 of long-term debt and promissory notes which are at 15%
were negotiated during the year and there was additional borrowings secured by
promissory notes subsequent to the year end with interest at 15%.

F-50
<PAGE> 105

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

b) Interest rate risk

At August 31, 1997, Solid State had $15,139,000 of debt with variable
interest rates based upon bank prime rates. For each one percentage change in
interest rates, interest expense would change by $151,000.

c) Credit risk

A substantial portion of Solid State's receivables are with customers in
the oil and gas business and are subject to normal industry credit risks.
Accounts receivable in Venezuela with a national oil company are factored, with
Solid State paying an annual fee of 29% and having a contingent liability for
any receivables not ultimately collected. The amount received on factoring has
been recorded as a loan and included in current liabilities.

d) Foreign currency risk

$33,749,000 of Solid State's promissory notes and long-term debt is
repayable in U.S. dollars. This amount is hedged only by operations conducted in
U.S. dollars. For each $0.01 change in the Canadian dollar relative to the U.S.
dollar, the debt will change by approximately $470,000.

(14) RELATED PARTY TRANSACTIONS

During 1997, two creditors became the major shareholders ("investors") of
Solid State. At August 31, 1996, these creditors were owed money under two lines
of credit; one for $2,600,000 with interest at 18% and one for $2,737,000 with
interest at 8% and convertible into 1,146,667 Common shares of Solid State.
Subsequent to August 31, 1996, a further $2,877,000 ($2,100,000 U.S.) was
advanced to Solid State with interest at 18% to bring the total of these loans
to $5,480,000.

On October 16, 1996, Solid State completed a $16,440,000 ($12,000,000 U.S.)
equity/debt financing. The financing was as follows:

<TABLE>
<CAPTION>
DESCRIPTION Cdn. U.S.
---------------------------------------------------------- ----------- -----------
<S> <C> <C>
3,044,444 Common shares (before net expenses of
$66,000)................................................ $ 4,110,000 $ 3,000,000
Secured loans with interest at 18% until a private
placement was completed and 15% thereafter;
Secured by data libraries; repayments from proceeds of
the data libraries revenues..........................
Minimum annual repayments of $1,370,000 ($1,000,000
U.S.) for the first two years and any balance in
October 1999......................................... 6,850,000 5,000,000
Proceeds from a private placement were to be used to
retire this loan..................................... 5,480,000 4,000,000
----------- -----------
$16,440,000 $12,000,000
=========== ===========
</TABLE>

F-51
<PAGE> 106

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The proceeds of the October 16, 1996, financing were used as follows:

<TABLE>
<CAPTION>
DESCRIPTION CDN. U.S.
---------------------------------------------------------- ----------- -----------
<S> <C> <C>
To repay convertible debt owing to the specified
investors............................................... $ 2,740,000 $ 2,000,000
To repay term debt owing to the specified investors....... 5,480,000 4,000,000
To repay related interest and legal costs to the specified
investors............................................... 330,000 240,000
To pay trade debt and interest in arrears on two
conditional sales agreements with a major equipment
supplier................................................ 1,645,000 1,200,000
To retire a conditional sales agreement with a major
supplier................................................ 655,000 479,000
To repay trade debt with Canadian and U.S. suppliers...... 4,385,000 3,200,000
For general working capital requirements.................. 1,205,000 881,000
----------- -----------
$16,440,000 $12,000,000
=========== ===========
</TABLE>

In February 1997, the investors purchased an additional 5,869,565 shares
for $5,356,000 net of expenses at which time they became the majority
shareholders of the Corporation.

In July 1997, an investor lent $5,600,000 ($4,000,000 U.S.) to Solid State
with interest at 15%.

At August 31, 1997, $16,937,000 ($12,198,000 U.S.) was owed to an investor
with interest at 15%.

Interest incurred during the year on the related party loans was $1,972,000
(1996 -- $339,000).

At August 31, 1997, the investors had 2 out of 4 directors on Solid State's
Board of Directors and were providing assistance for working capital (see Note
17).

(15) COMMITMENTS

In addition to the data library costs at August 31, 1997, Note 4, Solid
State had cash cost commitments to complete these programs estimated in the
amount of $227,000.

(16) CONTINGENCIES

Legal items relating to permitting and other business matters which were
incurred in the normal course of business were outstanding at August 31, 1997.
In most cases, any liability would be passed onto third parties.

(17) SUBSEQUENT EVENTS

Subsequent to the year end the following occurred:

(a) A shareholder advanced an additional $6,245,000 ($4,500,000 U.S.)
with interest at 15%.

(b) The major investors advised Solid State that they were considering
a take-over bid to acquire the minority Common shares at a price of $3.00
per share in cash. On November 27, 1997, the price was amended to $3.50 in
an offer to the minority shareholders.

(d) The due dates for the promissory notes indicated in Note 7 were
extended from November 30, 1997 to January 15, 1998.

(e) 125,000 warrants were exercised to purchase Common shares for
proceeds of $147,320 and 320,000 options were exercised to purchase shares
for proceeds of $392,000.

F-52
<PAGE> 107

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(18) PRIOR YEAR AMOUNTS

Certain prior year amounts have been reclassified to conform with the
current year's presentation.

(19) CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES

These financial statements have been prepared in accordance with Canadian
generally accepted accounting principles (GAAP). In certain aspects GAAP as
applied in the United States differs from Canadian GAAP.

Canadian balance sheet

Under Canadian GAAP, foreign exchange gains and losses resulting from
long-term monetary items of the reporting company are deferred and amortized
over the lives of those monetary items. Under U.S. GAAP these gains and losses
would be expensed in the period.

<TABLE>
<CAPTION>
AUGUST 31
-----------------------------
1996 1997
------------ ------------
<S> <C> <C>
Deferred exchange loss (per financial statements)............. $ 26,000 $ 234,000
------------ ------------
Deferred exchange loss (per U.S. GAAP)........................ $ -- $ --
============ ============
</TABLE>

Under U.S. GAAP the multi-client data, current portion would be grouped
with multi-client data, less current portion.

<TABLE>
<CAPTION>
AUGUST 31
---------------------------
1996 1997
----------- -----------
<S> <C> <C>
Current assets (per financial statements)....................... $16,497,000 $22,014,000
Less: multi-client data, current portion........................ (5,978,000) (2,454,000)
----------- -----------
Current assets (per U.S. GAAP).................................. $10,519,000 $19,560,000
=========== ===========
Multi-client data, less current portion (per financial
statements)................................................... $ 5,723,000 $13,213,000
Add: multi-client data, current portion......................... 5,978,000 2,454,000
----------- -----------
Multi-client data (per U.S. GAAP)............................... $11,701,000 $ 15,667,00
=========== ===========
</TABLE>

The current portion of long-term debt under U.S. GAAP in 1997 would be
reduced by $1,074,000, which would reduce the current portion of the promissory
note to its minimal annual payment of $1,380,000 in 1998 rather than being the
total amount of the multi-client data, current portion. The 1997 working capital
would have been reduced by $1,380,000.

F-53
<PAGE> 108

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Under U.S. GAAP debt covenants, violations must be waived for a full year
to classify the debt as long-term. Bank debt did not have covenants waived for
one year. This debt and the remaining long-term debt has been reclassified as
current.

<TABLE>
<CAPTION>
AUGUST 31,
1997
-----------
<S> <C>
Current liabilities (per financial statements)................................ $43,977,000
Add: Long-term portion of debt................................................ 18,693,000
-----------
Current liabilities (per U.S. GAAP)........................................... $62,670,000
===========
</TABLE>

Conditional sales agreements are supplier financing contracts.

Statement of changes in shareholders' equity

For U.S. reporting, the information contained in the consolidated statement
of operations and (deficit) retained earnings and Note 8, Capital stock, would
be combined to develop a complete statement of changes in shareholders' equity.

For U.S. reporting, the proceeds from the convertible debenture issued in
1996 would have been split between debt and shareholders' equity with the
majority of the amount going to shareholders' equity being determined by the
difference between the conversion price for the shares and the trading price of
the shares at the date of grant.

<TABLE>
<CAPTION>
AUGUST 31,
-----------------------------
1996 1997
------------ ------------
<S> <C> <C>
Additional paid-in capital (per U.S. GAAP).................... $ 637,000 $ 637,000
============ ============
Deficit (per financial statements)............................ $(10,685,000) $(15,380,000)
Additional foreign exchange expense........................... (26,000) (234,000)
Additional financing cost..................................... (53,000) (73,000)
Additional loss on extinguishment of debt..................... -- (564,000)
------------ ------------
Deficit (per U.S. GAAP)....................................... $(10,764,000) $(16,251,000)
============ ============
</TABLE>

Consolidated statements of operations

For U.S. reporting, net amounts billed to customers for reimbursable costs
would have reduced revenues from those reported in the financial statements and
resulted in changed costs of sales with no change in gross margins.

F-54
<PAGE> 109

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
---------------------------------------------
1995 1996 1997
----------- ------------ ------------
<S> <C> <C> <C>
Contract revenue (per financial statements)..... $48,357,000 $ 45,503,000 $ 77,999,000
Data library revenue (per financial 773,000 14,891,000 3,919,000
statements)...................................
------------ ------------ ------------
49,130,00 60,394,000 81,918,000
Reimbursable and third party revenue (7,265,000) (12,663,000) (13,218,000)
adjustments...................................
------------ ------------ ------------
Contract revenues (per U.S. GAAP)............... $41,865,000 $ 47,731,000 $ 68,700,000
============ ============ ============
Costs of sales (per financial statements)....... $20,384,000 $ 21,250,000 $ 33,262,000
Amortization data bank (per financial 476,000 20,694,000 4,784,000
statements)...................................
------------ ------------ ------------
20,860,000 41,944,000 38,046,000
Reimbursable and third party cost adjustments... 12,242,000 5,550,000 18,871,000
------------ ------------ ------------
Cost of sales (per U.S. GAAP)................... $33,102,000 $ 47,494,000 $ 56,917,000
============ ============ ============
</TABLE>

There is no significant difference in accounting for deferred taxes between
Canadian and U.S. GAAP. Under Canadian GAAP, the deferral method is used for
accounting for income taxes whereas under U.S. GAAP the asset and liability
approach is used. No deferred tax asset has been recorded for the tax losses
carried forward because valuation allowances were provided against all losses.

In Canada, earnings (loss) per share is calculated based on the weighted
average number of shares outstanding during the period. For U.S. GAAP, earnings
(loss) per share would be calculated using common stock equivalents outstanding
during the period. The weighted average number of shares outstanding gives
approximately the same loss per share as using common stock equivalent because
any potential conversions for common share equivalents would have the effect of
decreasing loss per share and therefore, would not be converted for purposes of
the calculation.

<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
--------------------------------------------
1995 1996 1997
----------- ------------ -----------
<S> <C> <C> <C>
Net loss as reported............................. $(4,923,000) $(11,967,000) $(4,695,000)
Additional foreign exchange income (loss)........ 121,000 (100,000) (208,000)
Additional financing cost........................ -- (53,000) (20,000)
Additional loss on extinguishment of debt........ -- -- (564,000)
----------- ------------ -----------
Net loss in accordance with U.S. GAAP............ $(4,802,000) $(12,120,000) $(5,487,000)
=========== ============ ===========
Net loss per share............................... $ (0.96) $ (2.42) $ (0.51)
----------- ------------ -----------
Weighted average number of shares outstanding.... 5,000,000 5,003,000 10,787,000
=========== ============ ===========
</TABLE>

Consolidated statement of changes in financial position

The statement of changes in financial position is substantially the same as
the statement of cash flows prepared under U.S. GAAP, except for the following
differences:

For the U.S. GAAP, additional disclosure for cash interest and taxes paid
would be made:

<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
----------------------------------------
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Interest paid.................................. $1,108,000 $2,379,000 $3,593,000
---------- ---------- ----------
Taxes paid (recovered)......................... $1,046,000 $ (201,000) $ 107,000
========== ========== ==========
</TABLE>

F-55
<PAGE> 110

SOLID STATE GEOPHYSICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For U.S. GAAP, cash provided by (used in) operating activities would
include operating activities from discontinued operations.

<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
-----------------------------------------
1995 1996 1997
---------- ----------- ----------
<S> <C> <C> <C>
Cash provided by continuing operating
activities before changes in working capital
balances related to operations (as
reported)................................... $6,004,000 $14,691,000 $7,944,000
Discontinued operations....................... 126,000 (12,000) (121,000)
---------- ----------- ----------
Cash provided by operating activities before
changes in working capital balances related
to operations in accordance with U.S.
GAAP........................................ $6,130,000 $14,679,000 $7,823,000
========== =========== ==========
</TABLE>

Under U.S. GAAP, the following would not have been disclosed in the cash
flow statement but would have been disclosed in a separate supplementary
schedule of non-cash financing and investing activities.

In 1997, there was one non-cash financing activity which was Common shares
valued at $3,989,000 issued to repay debt included in the statement of changes
in financial position.

In 1996 there was a non-cash investing activity which was the receipt of
$1,441,000 preferred shares on the sale of assets of a subsidiary.

In 1995, 1996 and 1997, there was the purchase of property and equipment
for the execution of capital leases and notes of $1,679,000, $6,662,000, and
$7,178,000 respectively, which would have affected financing and investing
activities.

For U.S. GAAP, bank indebtedness of 1995 -- $1,105,000; 1996 -- $5,788,000;
and 1997 -- $5,235,000; would have been shown as a financing activity. Cash
would be shown as 1995 -- $2,705,000; 1996 -- $308,000; and 1997 -- $740,000.

<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
-------------------------------------------
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Financing activities as reporting........... $ 5,020,000 $ 8,334,000 $23,080,000
Change in bank indebtedness................. (304,000) 4,683,000 (553,000)
Change in proceeds of long-term debt........ (1,679,000) (6,662,000) (7,178,000)
---------- ----------- -----------
Financing activities in accordance with U.S.
GAAP...................................... $ 3,037,000 $ 6,355,000 $15,349,000
========== =========== ===========
Investing activities as reported............ $18,677,000 $31,132,000 $20,343,000
Fixed assets purchased using supplier
debt...................................... (1,679,000) (6,662,000) (7,178,000)
---------- ----------- -----------
Investing activities in accordance with U.S.
GAAP...................................... $16,998,000 $24,470,000 $13,165,000
---------- ----------- -----------
Change in cash as reported.................. $ 2,311,000 $(7,080,000) $ 985,000
Change in bank indebtedness................. (304,000) 4,683,000 (553,000)
---------- ----------- -----------
Change in cash in accordance with U.S.
GAAP...................................... $ 2,007,000 $(2,397,000) $ 432,000
========== =========== ===========
</TABLE>

F-56
<PAGE> 111

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER
CONTAINED HEREIN OTHER THAN THOSE CONTAINED IN THIS SUBSCRIPTION OFFERING
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. THIS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS SUBSCRIPTION
OFFERING PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary................................. 3
Risk Factors............................ 10
Disclosure Regarding Forward-Looking
Statements............................ 17
The Company............................. 18
Use of Proceeds......................... 19
Dividend Policy......................... 19
Capitalization.......................... 19
Unaudited Pro Forma Financial
Information........................... 20
Unaudited Pro Forma Combined Balance
Sheet................................. 21
Unaudited Pro Forma Combined Statement
of Operations......................... 22
Selected Consolidated Historical
Financial Data........................ 25
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ 27
Business................................ 36
Management.............................. 44
Certain Relationships and Related
Transactions.......................... 46
Security Ownership of Management and
Principal Stockholders................ 48
Subscription Procedures................. 48
Selling Stockholders.................... 50
Description of Capital Stock............ 50
Shares Eligible for Future Sale......... 51
Experts................................. 52
Additional Information.................. 52
Index to Financial Statements and
Financial Statement Schedule.......... F-1
</TABLE>

3,459,414 SHARES

[GRANT GEOPHYSICAL, INC. LOGO]

COMMON STOCK

SUBSCRIPTION OFFERING PROSPECTUS
, 1998
<PAGE> 112

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is a list of the estimated expenses to be incurred by the
Company in connection with the issuance and distribution of the Common Stock
being registered hereby.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................... $5,102.64
National Association of Securities Dealers, Inc. filing fee............... $ *
Transfer Agent's and Registrar's fees..................................... $ *
Printing and engraving costs.............................................. $ *
Accounting fees and expenses.............................................. $ *
Legal fees and expenses (not including Blue Sky).......................... $ *
Blue Sky fees and expenses................................................ $ *
Miscellaneous expenses.................................................... $ *
--------
Total................................................................ $ *
</TABLE>

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

* To be provided by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law (the "DGCL") makes
provision for the indemnification of officers and directors of corporations in
terms sufficiently broad to indemnify the officers and directors of the
Registrant under certain circumstances from liabilities (including reimbursement
of expenses incurred) arising under the Securities Act of 1933, as amended (the
"Securities Act").

As permitted by the DGCL, the Registrant's Certificate of Incorporation
(the "Charter") provides that, to the fullest extent permitted by the DGCL, no
director shall be liable to the Registrant or to its stockholders for monetary
damages for breach of his fiduciary duty as a director. Delaware law does not
permit the elimination of liability (i) for any breach of the director's duty of
loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or stock redemptions
or repurchases or (iv) for any transaction from which the director derives an
improper personal benefit. The effect of this provision in the Charter is to
eliminate the rights of the Registrant and its stockholders (through
stockholders' derivative suits on behalf of the Registrant) to recover monetary
damages against a director for breach of fiduciary duty as a director thereof
(including breaches resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (i)-(iv), inclusive, above. These
provisions will not alter the liability of directors under federal securities
laws.

The Registrant's Bylaws (the "Bylaws") provide that the Registrant may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Registrant) by reason of the fact that he is or was a director,
officer, employee or agent of the Registrant or is or was serving at the request
of the Registrant as a director, officer, employee or agent of another
corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Registrant, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful.

The Bylaws also provide that the Registrant may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Registrant to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted under similar
standards, except that no

II-1
<PAGE> 113

indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the Registrant unless and
only to the extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine upon application
that despite the adjudication of liability but in view of all the circumstances
of the case, such person if fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.

The Bylaws also provide that to the extent a director or officer of the
Registrant has been successful in the defense of any action, suit or proceeding
referred to in the previous paragraphs or in the defense of any claim, issue, or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith; that
indemnification provided for in the Bylaws shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
Registrant may purchase and maintain insurance on behalf of a director or
officer of the Registrant against any liability asserted against him or incurred
by him in any such capacity or arising out of his status as such whether or not
the Registrant would have the power to indemnify him against such liabilities
under such Bylaws.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On September 30, 1997, the Company issued 9,785,581 shares of Preferred
Stock to each of Elliott and Westgate in exchange for an aggregate of
$19,571,162 in cash and/or satisfaction of indebtedness of the Company.

In connection with the consummation of the Plan, on September 30, 1997, the
Company issued one share of Common Stock to Elliott in exchange for $1.00. On
December 19, 1997, the Company effected a two-to-one stock split in the form of
a stock dividend of shares to Elliott.

On December 18, 1997, Grant exchanged 9,571.162 shares of Preferred Stock
held by Elliott, together with accrued dividends thereon, for the Subordinated
Note.

On December 19, 1997, in connection with the Acquisition, the Selling
Stockholders transferred their shares of Solid State Stock to Grant in exchange
for 4,652,555 shares of Common Stock.

The foregoing transactions were effected pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits. The following Exhibits are filed herewith and made a part
hereof:

II-2
<PAGE> 114

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
----------------------------------------------------------------------------------
<C> <S>
10.2 First Amendment to Loan and Security Agreement between Grant and Elliott, dated
December 19, 1997.
10.3 Demand Promissory Note from Grant to Elliott, dated November 26, 1997.
10.4 Subordinated Promissory Note from Grant to Elliott, dated December 18, 1997.
10.5* Stock Purchase Agreement among the Company, Elliott and Westgate, dated December
19, 1997.
10.6 Restated and Amended Employment Agreement between Grant and Larry E. Lenig, Jr.,
dated October 1, 1997.
10.7 Executive Employment Agreement between Solid State and Mitchell L. Peters, dated
November 24, 1997.
10.8* Grant Geophysical, Inc. Equity and Performance Incentive Plan.
10.9 Loan Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary, dated
October 16, 1996.
10.10 Form of Promissory Note from the U.S. Subsidiary to Elliott.
10.11 Letter Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary,
dated June 17, 1997.
10.12 Letter Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary,
dated September 4, 1997.
10.13 Letter Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary,
dated October 17, 1997.
10.14 Letter Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary,
dated November 30, 1997.
10.15 Letter Agreement between Elliott and Mitchell L. Peters, dated November 24, 1997.
21.1* Subsidiaries of the Company.
23.1* Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of Price Waterhouse, Chartered Accountants.
24.1 Powers of Attorney.
</TABLE>

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

* To be filed by amendment.

(b) Financial Statement Schedules.

All schedules have been omitted because they are not applicable, not
required or the required information is included in the financial statements and
notes thereto.

ITEM 17. UNDERTAKINGS

(a) Acceleration of Effectiveness. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Company pursuant to the
foregoing provisions or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by

II-3
<PAGE> 115

controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

(b) Rule 430A Prospectuses. The undersigned Registrant hereby undertakes
that:

(1) For the purpose of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.

(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide public offering thereof.

II-4
<PAGE> 116

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the company has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunder duly authorized, in the City of Houston, State of Texas,
on December 23, 1997.

GRANT GEOPHYSICAL, INC.

By: /s/ LARRY E. LENIG, JR.

------------------------------------
Larry E. Lenig, Jr.
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------- ------------------------------------------------- ------------------
<S> <C> <C>

/s/ LARRY E. LENIG, JR. President, Chief Executive Officer and Director December 23, 1997
- -------------------------------- (Principal Executive Officer)
Larry E. Lenig, Jr.

* Chief Financial Officer, Treasurer and Secretary December 23, 1997
- -------------------------------- (Principal Financial Officer)
Michael P. Keirnan

* Controller December 23, 1997
- -------------------------------- (Principal Accounting Officer)
Charles Ackerman

Chairman of the Board and Director
- --------------------------------
Jonathan D. Pollock

* Director December 23, 1997
- --------------------------------
J. Kelly Elliott

* Director December 23, 1997
- --------------------------------
Donald G. Russell
</TABLE>

* The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of the Company and which have been filed
with the Securities and Exchange Commission on behalf of such officers and
directors.

By: /s/ LARRY E. LENIG, JR.

---------------------------------------------------------
Larry E. Lenig, Jr.
as Attorney-in-Fact

II-5
<PAGE> 117

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ ----------------------------------------------------------------------------------
<C> <S>
2.1 GGI's Second Amended Plan of Reorganization under chapter 11 of the Bankruptcy
Code.
2.2 Offer to Purchase for Cash all of the Common Shares of Solid State not already
held by or on behalf of SSGI or its Affiliates at a price of Cdn $3.50 per Common
Share by SSGI.
3.1(i) Restated Certificate of Incorporation of the Company.
3.1(ii) Amended and Restated By-Laws of the Company.
4.1* Specimen Certificate for the Common Stock, par value $.001, of the Company.
4.2 Registration Rights Agreement between Grant and Elliott, dated September 19, 1997.
4.3 Amendment No. 1 to Registration Rights Agreement between Grant and Elliott, dated
October 1, 1997.
4.4 Amendment No. 2 to Registration Rights Agreement between Grant and Elliott, dated
December 17, 1997.
5.1* Opinion of Jones, Day, Reavis & Pogue as to the validity of the securities being
offered.
10.1 Loan and Security Agreement between Grant and Elliott, dated October 1, 1997.
10.2 First Amendment to Loan and Security Agreement between Grant and Elliott, dated
December 19, 1997.
10.3 Demand Promissory Note from Grant to Elliott, dated November 26, 1997.
10.4 Subordinated Promissory Note from Grant to Elliott, dated December 18, 1997.
10.5* Stock Purchase Agreement among the Company, Elliott and Westgate, dated December
19, 1997.
10.6 Restated and Amended Employment Agreement between Grant and Larry E. Lenig, Jr.,
dated October 1, 1997.
10.7 Executive Employment Agreement between Solid State and Mitchell L. Peters, dated
November 24, 1997.
10.8* Grant Geophysical, Inc. Equity and Performance Incentive Plan.
10.9 Loan Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary, dated
October 16, 1996.
10.10 Form of Promissory Note from the U.S. Subsidiary to Elliott.
10.11 Letter Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary,
dated June 17, 1997.
10.12 Letter Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary,
dated September 4, 1997.
10.13 Letter Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary,
dated October 17, 1997.
10.14 Letter Agreement among Elliott, Westgate, Solid State and the U.S. Subsidiary,
dated November 30, 1997.
10.15 Letter Agreement between Elliott and Mitchell L. Peters, dated November 24, 1997.
21.1* Subsidiaries of the Company.
23.1* Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of Price Waterhouse, Chartered Accountants.
24.1 Powers of Attorney.
</TABLE>

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

* To be filed by amendment.

<PAGE> 1

Exhibit 2.1

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 REORGANIZATON
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
Neil B. Glassman Scott D. Cousins
BAYARD HANDELMAN & MURDOCH, P.A. YOUNG, CONAWAY, STARGATT
902 Market Street, 13th Floor & TAYLOR
Wilmington, Delaware 19899 Rodney Square North, 11th Floor
(302) 655-5000 P. O. Box 391
Wilmington, Delaware 19899-0391
Co-Counsel for Ellioitt Associates, L.P. (302) 571-6600

Co-Counsel for the Debtor

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

Special Counsel for the Debtor

Dated August 5, 1997
<PAGE> 2

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
</TABLE>

- ii -

<PAGE> 3

<TABLE>
<S> <C>
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
</TABLE>

- iii -

<PAGE> 4

<TABLE>
<S> <C> <C>
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
</TABLE>

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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
</TABLE>

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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
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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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TABLE OF EXHIBITS

EXHIBIT NAME
------- ----

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*

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

* 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> 9

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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<PAGE> 10

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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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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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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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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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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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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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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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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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> 20

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

Class Status
Class 1 - Priority Claims Unimpaired - not entitled to vote
Class 2 - Foothill Claim Unimpaired - not entitled to vote

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<PAGE> 21

<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> 22

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> 23

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> 24

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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<PAGE> 25

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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<PAGE> 26

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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<PAGE> 27

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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<PAGE> 28

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

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.

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

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 shall assume and assign to Newco each of the
executory contracts

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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

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 forever barred from asserting any such claim
against

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<PAGE> 40

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

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.

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

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.

8.2.2 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

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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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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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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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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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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.

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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]

- 38 -

<PAGE> 47

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

- 39 -

<PAGE> 48

ELLIOTT ASSOCIATES, L.P.

By: /s/ Paul E. Singer
-------------------------------------
Paul E. Singer
General Partner

- 40 -

<PAGE> 1
Exhibit 2.2

This document is important and requires your immediate attention. If you are in
any doubt as to how to deal with it, you should consult your investment dealer,
stock broker, bank manager, lawyer or other professional adviser.

OFFER TO PURCHASE FOR CASH
All of the Common Shares of
SOLID STATE GEOPHYSICAL INC.
not already held by or on behalf of
SSGI ACQUISITION CORP. or its affiliates
at a price of
Cdn. $3.50 per Common Share
by
SSGI ACQUISITION CORP.

THE OFFER IS CONDITIONAL UPON, AMONG OTHER THINGS, AT LEAST 90% OF THE
COMMON SHARES OF SOLID STATE GEOPHYSICAL INC. ("SOLID STATE") ON A FULLY-DILUTED
BASIS TO WHICH THE OFFER RELATES BEING VALIDLY DEPOSITED AND NOT WITHDRAWN. THE
CONDITIONS OF THE OFFER ARE DESCRIBED IN SECTION 6 OF THE OFFER.

THE OFFER WILL BE OPEN FOR ACCEPTANCE UNTIL 6:00 P.M. (CALGARY TIME) ON
DECEMBER 19, 1997, UNLESS EXTENDED OR WITHDRAWN.

THE BOARD OF DIRECTORS OF SOLID STATE RECOMMENDS THAT SHAREHOLDERS OF
SOLID STATE ACCEPT THE OFFER. SEE THE DIRECTORS' CIRCULAR.

Shareholders of Solid State wishing to accept the Offer must properly
complete and sign the accompanying Letter of Acceptance and Transmittal, or a
manually executed photocopy thereof, and deposit it, together with certificates
representing their Common Shares and all other documents required by the Letter
of Acceptance and Transmittal at any office of the Depositary, Montreal Trust
Company of Canada, listed in the Letter of Acceptance and Transmittal in
accordance with the instructions in the Letter of Acceptance and Transmittal.
Shareholders of Solid State wishing to accept the Offer and whose certificates
representing Common Shares are not immediately available may do so by following
the instructions set forth under the sub-heading "Procedure for Guaranteed
Delivery" in Section 3 of the Offer.

Questions and requests for assistance may be directed to Midland Walwyn
Capital Inc., in Canada, or to the Depositary. Additional copies of this
document and the Letter of Acceptance and Transmittal and the Notice of
Guaranteed Delivery may be obtained without charge on request from such persons
at their respective offices shown in the Letter of Acceptance and Transmittal.

Shareholders whose Common Shares are registered in the name of a
nominee should contact their broker, investment dealer, bank, trust company or
other nominee for assistance in depositing Common Shares.

THE DEALER MANAGER FOR THE OFFER IS:

Midland Walwyn Capital Inc.

November 27, 1997

<PAGE> 2

NOTICE TO SHAREHOLDERS IN THE UNITED STATES

THIS OFFER IS MADE BY SSGI ACQUISITION CORP., AN ALBERTA CORPORATION,
FOR COMMON SHARES OF SOLID STATE AND WHILE THE OFFER IS SUBJECT TO THE
DISCLOSURE REQUIREMENTS OF CANADA, SHAREHOLDERS SHOULD BE AWARE THAT THESE
REQUIREMENTS ARE DIFFERENT FROM THOSE OF THE UNITED STATES.

THE ENFORCEMENT BY SHAREHOLDERS OF CIVIL LIABILITIES UNDER U.S.
SECURITIES LAWS MAY BE AFFECTED ADVERSELY BY THE FACT THAT SSGI ACQUISITION
CORP. AND SOLID STATE ARE INCORPORATED OR ORGANIZED UNDER THE LAWS OF CANADA,
THAT SOME OR ALL OF THEIR OFFICERS AND DIRECTORS ARE RESIDENTS OF CANADA, AND
THAT ALL OR A SUBSTANTIAL PORTION OF THE ASSETS OF SSGI ACQUISITION CORP. AND
SOLID STATE AND SAID PERSONS MAY BE LOCATED OUTSIDE THE UNITED STATES.

SHAREHOLDERS SHOULD BE AWARE THAT SSGI ACQUISITION CORP. OR ITS
AFFILIATES, DIRECTLY OR INDIRECTLY, MAY BID FOR OR MAKE PURCHASES OF COMMON
SHARES DURING THE PERIOD OF THE OFFER, AS PERMITTED BY APPLICABLE LAWS OR
REGULATIONS OF CANADA OR ITS PROVINCES OR TERRITORIES.

THE OFFER HAS NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR
MERITS OF THE OFFER NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

2
<PAGE> 3

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
SUMMARY 4

OFFER TO PURCHASE

1. The Offer......................................................... 7
2. Definitions....................................................... 7
3. Manner and Time of Acceptance ..................................... 9
4. Extension of the Expiry Time ...................................... 10
5. Variation of the Offer ............................................ 11
6. Conditions ........................................................ 11
7. Withdrawal of Deposited Common Shares ............................. 13
8. Payment for Deposited Common Shares ............................... 14
9. Return of Common Shares ........................................... 15
10. Changes in Capitalization, Distribution and Liens ................. 15
11. Mail Service Interruption ......................................... 16
12. Notice ............................................................ 16
13. Acquisition of Common Shares Not Deposited Under the Offer ........ 17
14. Market Purchases .................................................. 17
15. Miscellaneous Additional Terms .................................... 17

CIRCULAR

1. The Offeror, Grant, Elliott and Westgate .......................... 19
2. Solid State ....................................................... 20
3. Prior Dealings, Contracts and Arrangements ........................ 20
4. Background to the Offer, Fairness of the Offer, Purpose for the
Offer and Plans for Solid State ................................... 21
5. ScotiaMcLeod Valuation and Fairness Opinion ....................... 23
6. Special Committee Review and Recommendation of the Board of
Directors ......................................................... 25
7. Prior Valuations .................................................. 26
8. Acquisition of Common Shares Not Deposited Under the Offer ........ 26
9. Canadian Federal Income Tax Considerations ........................ 28
10. Effect of the Offer on the Market for Common Shares and Stock
Exchange Listings ................................................. 31
11. Ownership of and Prior Trading in the Securities of Solid State ... 31
12. Price Ranges and Volume of Trading for the Common Shares .......... 33
13. Dividend Policy ................................................... 34
14. Material Changes .................................................. 34
15. Source of Funds ................................................... 34
16. Acceptance of the Offer ........................................... 34
17. Commitments to Acquire Common Shares of Solid State ............... 34
18. Soliciting Dealer Group and Depositary ............................ 34
19. Statutory Rights .................................................. 35
20. Miscellaneous ..................................................... 35

CONSENT OF OSLER, HOSKIN & HARCOURT 36

CONSENT OF SCOTIAMcLEOD INC. 37

APPROVAL AND CERTIFICATE 38

SCHEDULE "A" A-1
</TABLE>

3
<PAGE> 4

SUMMARY

THE FOLLOWING IS ONLY A SUMMARY OF CERTAIN PROVISIONS OF THE ATTACHED OFFER AND
CIRCULAR AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THOSE DOCUMENTS. THE
TERMS USED WITH INITIAL CAPITALS ARE AS DEFINED IN THE OFFER. SEE "DEFINITIONS"
UNDER SECTION 2 OF THE OFFER.

THE OFFER

THE OFFEROR IS OFFERING, UPON THE TERMS AND SUBJECT TO THE CONDITIONS
OF THE OFFER, TO PURCHASE ALL OF THE COMMON SHARES OF SOLID STATE NOT ALREADY
HELD BY OR ON BEHALF OF THE ACQUIRING SHAREHOLDERS, FOR $3.50 CASH PER COMMON
SHARE. THE OFFER WILL BE OPEN FOR ACCEPTANCE UNTIL 6:00 P.M., CALGARY TIME, ON
DECEMBER 19, 1997, UNLESS THE OFFER IS EXTENDED OR WITHDRAWN. THE OFFER MAY BE
EXTENDED AT THE OFFEROR'S SOLE DISCRETION.

ACCEPTANCE

Shareholders wishing to accept the Offer must deposit certificates
representing their Common Shares, together with a properly completed and duly
signed Letter of Acceptance and Transmittal, or a manually executed photocopy
thereof, and all other documents required by the Letter of Acceptance and
Transmittal, at any of the offices of the Depositary specified in the Letter of
Acceptance and Transmittal on or prior to the Expiry Time or request their
broker, investment dealer, bank, trust company or other nominee to do so.

A holder of Common Shares wishing to accept the Offer and whose
certificates representing Common Shares are not immediately available may do so
by following the instructions set forth under the sub-heading "Procedure for
Guaranteed Delivery" in Section 3 of the Offer.

CONDITIONS

The conditions of the Offer are described in Section 6 of the Offer,
and include a minimum deposit condition of 90% of the Common Shares on a
fully-diluted basis to which the Offer relates.

WITHDRAWAL RIGHTS

All deposits of Common Shares pursuant to the Offer are irrevocable,
except as provided in Section 7 of the Offer. Any Common Shares deposited in
acceptance of the Offer may be withdrawn by following the procedure set out in
Section 7 of the Offer at any time before 12:00 midnight, local time, on
December 18, 1997 and, if not taken up and paid for by the Offeror, may be
withdrawn by following the procedure set out in Section 7 of the Offer at any
time after 12:00 midnight, local time, on January 11, 1998.

PAYMENT

Subject to satisfaction or waiver of the conditions to the Offer,
payment for Common Shares accepted for purchase shall be made promptly after the
Expiry Time. See Section 8 of the Offer.

BACKGROUND TO THE OFFER

AFTER DISCUSSIONS in early September, 1997 with an independent director
of the Board and discussions with the Chief Executive Officer of Solid State in
late September 1997, Elliott and Westgate announced on September 29, 1997 that
they were considering acquiring all of the Common Shares which they did not own

4
<PAGE> 5

pursuant to a take-over bid or other acquisition transaction. On November 26,
1997, Elliott announced its intention to cause an indirect subsidiary to make
the Offer at a price of $3.50 per share. See Section 4 of the Circular.

PURPOSE FOR THE OFFER AND PLANS FOR SOLID STATE

The purpose of the Offer is to make Solid State a wholly-owned
subsidiary of the Offeror by having the Offeror acquire all of the Common Shares
not already held by or on behalf of the Acquiring Shareholders.

If permitted by applicable law, subsequent to the completion of the
Offer or any subsequent acquisition transaction, the Offeror will apply to The
Toronto Stock Exchange to delist the Common Shares from trading on such exchange
and will apply to the relevant Canadian securities regulatory authorities for
orders declaring that Solid State is no longer a "reporting issuer" for purposes
of the relevant Canadian securities legislation. The effect of these actions
will be that Solid State will no longer be required to publicly file or provide
to security holders financial information or timely disclosure with respect to
its affairs.

Further, upon the acquisition of the Common Shares, Grant intends to
pursue the integration of the business and operations of Solid State with the
business and operations of Grant. Grant also plans to consider various
alternatives of refinancing the significant debt which Solid State has incurred.

SCOTIAMCLEOD VALUATION AND FAIRNESS OPINION

The Special Committee of the Board of Directors of Solid State retained
ScotiaMcLeod to provide a formal valuation of the Common Shares in accordance
with OSC Policy 9.1 and CVMQ Policy Q-27 and to provide its opinion as to the
fairness of the Offer, from a financial point of view, to Shareholders other
than Elliott and Westgate.

In the ScotiaMcLeod Valuation and Fairness Opinion, ScotiaMcLeod
determined that as at August 31, 1997, the fair market value of the Common
Shares was in the range of $2.80 to $3.60 per Common Share and that the Offer
was fair, from a financial point of view, to Shareholders other than Elliott and
Westgate. SHAREHOLDERS ARE URGED TO READ THE SCOTIAMCLEOD VALUATION AND
FAIRNESS OPINION, ATTACHED AS SCHEDULE "A", IN ITS ENTIRETY.

SPECIAL COMMITTEE REVIEW AND RECOMMENDATION OF THE BOARD OF DIRECTORS

On September 29, 1997, the Board of Directors of Solid State
constituted a Special Committee to review and consider all matters and documents
relevant to the proposed offer and to recommend to the Board of Directors of
Solid State whether such proposal was fair to Shareholders other than Elliott
and Westgate. The Special Committee is comprised of J. Richard Harris, who is
not an officer, employee or insider of Solid State (except by virtue of being a
director of Solid State) or of the Acquiring Shareholders.

The Special Committee has had several meetings with representatives of
ScotiaMcLeod, reviewed the ScotiaMcLeod Valuation and Fairness Opinion and the
Offer and presented a report to the Board of Directors containing its
conclusions and recommendations. The Special Committee concluded that the Offer
and the consideration to be received thereunder are fair to the shareholders of
Solid State other than Elliott and Westgate. The Special Committee recommended
that the Board of Directors recommend acceptance of the Offer.

5
<PAGE> 6

voting in respect of the Offer) determined that the Offer is fair to
Shareholders other than Elliott and Westgate. AS SET FORTH IN THE DIRECTORS'
CIRCULAR, THE BOARD OF DIRECTORS RECOMMENDS THAT ALL SHAREHOLDERS OTHER THAN
ELLIOTT AND WESTGATE ACCEPT THE OFFER.

ACQUISITION OF COMMON SHARES NOT DEPOSITED UNDER THE OFFER

The purpose of the Offer is to acquire all of the Common Shares not
already held by the Offeror. If the Offeror acquires under the Offer at least
90% of the Common Shares on a fully-diluted basis other than Common Shares held
on the date hereof by or on behalf of the Acquiring Shareholders, the Offeror
currently intends to acquire the Common Shares not deposited under the Offer
pursuant to the compulsory acquisition provisions of Part 16 of the Act.

If such statutory right of compulsory acquisition in respect of the
Common Shares is not available, or if such minimum deposit condition is not
satisfied and the Offeror waives such condition to the Offer, or if the Offeror
elects not to proceed under such provisions, the Offeror currently intends to
initiate such corporate actions or proceedings as may be legally available in
order to acquire, directly or indirectly, all of the Common Shares on a
fully-diluted basis not already held by or on behalf of the Acquiring
Shareholders, with or without the consent of the holders thereof, or to
terminate the holders' interests therein. See "Acquisition of Common Shares Not
Deposited Under the Offer" in the Circular.

The Offeror reserves the right, following the Expiry Time, to purchase
additional Common Shares in the open market or otherwise to the extent permitted
by applicable law.

CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The sale of Common Shares under the Offer will be a disposition for
Canadian purposes and may give rise to tax consequences to the depositing
Shareholder. See "Canadian Federal Income Tax Considerations" in the Circular.

DEPOSITARY

Montreal Trust Company of Canada is acting as depositary in
Canada under the Offer. The Depositary will receive deposits of Common Shares
and accompanying documentation at the offices specified in the Letter of
Acceptance and Transmittal. The Depositary will also be responsible for giving
certain notices, if required, and for making payment for all Common Shares
purchased by the Offeror under the Offer.

SOLICITING DEALER GROUP

Midland Walwyn Capital Inc. has been retained to act as Dealer Manager
for the Offer in Canada. Midland Walwyn Capital Inc. will form a soliciting
dealer group comprising members of the Investment Dealers Association of Canada
and members of Canadian stock exchanges to solicit acceptances of the Offer in
Canada.

6
<PAGE> 7

OFFER TO PURCHASE

TO: HOLDERS OF COMMON SHARES OF SOLID STATE GEOPHYSICAL INC.

1. THE OFFER

The Offeror hereby offers, subject to the terms and conditions set
forth in this Offer, in the Circular and in the related Letter of Acceptance and
Transmittal and Notice of Guaranteed Delivery, to purchase all of the Common
Shares of Solid State not held already by or on behalf of the Offeror or the
Acquiring Shareholders, at a price of $3.50 cash per Common Share.

THE OFFER IS MADE ONLY FOR THE COMMON SHARES AND IS NOT MADE FOR ANY
STOCK OPTIONS OR OTHER RIGHTS, IF ANY, TO PURCHASE COMMON SHARES. ANY HOLDER OF
STOCK OPTIONS WHO WISHES TO ACCEPT THE OFFER FOR THE UNDERLYING COMMON SHARES
MUST EXERCISE SUCH OPTIONS IN ORDER TO OBTAIN CERTIFICATES REPRESENTING COMMON
SHARES AND DEPOSIT SUCH COMMON SHARES IN ACCORDANCE WITH THE OFFER.

The Circular, which is incorporated into and forms part of the Offer,
contains important information and should be read carefully before making a
decision with respect to the Offer.

All currency amounts stated in this Offer, including the Summary
preceding it and the Circular, are, unless otherwise specifically indicated,
stated in Canadian dollars. All references to days in this Offer and the
Circular are, unless otherwise specifically indicated, to calendar days.

2. DEFINITIONS

In this Offer, including the Summary preceding it and the Circular,
unless the subject matter or context is inconsistent therewith, the following
terms shall have the following meanings:

(a) "Acquiring Shareholders" means collectively, the Offeror,
Elliott, Westgate, Grant and their respective affiliates and
associates;

(b) "Act" means the Business Corporations Act (Alberta);

(d) "Board of Directors" means the board of directors of Solid
State;

(e) "Circular" means the attached Circular;

(f) "Common Shares" means the issued and outstanding common shares
of the Company, including those issued pursuant to exercise of
options;

(g) "CVMQ Policy Q-27" means Policy Q-27 of the Commission des
valeurs mobilieres du Quebec, as amended;

(h) "Dealer Manager" means Midland Walwyn Capital Inc.;

(i) "Depositary" means Montreal Trust Company of Canada;

7
<PAGE> 8

(j) "Directors' Circular" means the Directors' Circular dated
November 27, 1997 distributed by Solid State to its
Shareholders in respect of the Offer;

(k) "Dollars" or "$" or "Canadian dollars" means lawful money of
Canada and "US Dollars" or "U.S. $" or "United States dollars"
means lawful money of the United States of America;

(l) "Eligible Institution" means a Canadian chartered bank, a
trust company in Canada, a member of a recognized stock
exchange in Canada or a member of the Securities Transfer
Agents Medallion Program (STAMP), or some other entity
acceptable to the Depositary;

(m) "Elliott" means Elliott Associates, L.P., a Delaware limited
partnership;

(n) "Expiry Time" means 6:00 p.m., Calgary time, on December 19,
1997, or such later time and date or times and dates as may be
fixed by the Offeror from time to time pursuant to Section 4
of the Offer;

(o) "Grant" means Grant Geophysical, Inc., a Delaware corporation;

(p) "Letter of Acceptance and Transmittal" means a letter of
acceptance and transmittal in the form accompanying the Offer
and Circular or a copy thereof;

(q) "Notice of Guaranteed Delivery" means a notice of guaranteed
delivery in the form accompanying the Offer and Circular or a
copy thereof;

(r) "Offer" means the offer made hereby by the Offeror to purchase
Common Shares not already held by or on behalf of Acquiring
Shareholders;

(s) "Offer Period" means the period commencing on November 27,
1997 and ending on the Expiry Time;

(t) "Offeror" means SSGI Acquisition Corp., a corporation
incorporated under the laws of Alberta;

(u) "OSC Policy 9.1" means Policy 9.1 of the Ontario Securities
Commission, as amended;

(v) "ScotiaMcLeod" means ScotiaMcLeod Inc.;

(w) "ScotiaMcLeod Valuation and Fairness Opinion" means the
valuation report and fairness opinion of ScotiaMcLeod dated
November 25, 1997, a copy of which is included as Schedule "A"
to the Circular;

(x) "SEC" means the United States Securities and Exchange
Commission;

(y) "Shareholder" or "Shareholders" means a holder or holders of
Common Shares;

(z) "Special Committee" means the special committee of the Board
of Directors comprised of J. Richard Harris, formed to
consider the Offer; and

(aa) "Westgate" means Westgate International, L.P., a Cayman
Islands limited partnership.

8
<PAGE> 9

Unless otherwise defined herein or unless the context otherwise
requires, any term used herein which is defined in the Act shall have the
meaning herein given to such term in the Act.

3. MANNER AND TIME OF ACCEPTANCE

The Offer will be open for acceptance, unless withdrawn or extended at
the Offeror's sole discretion, until the Expiry Time.

In order for a Shareholder to accept the Offer, the certificate(s)
representing the Common Shares of such Shareholder, together with a properly
completed and duly signed Letter of Acceptance and Transmittal or a manually
executed photocopy thereof and all other documents required by the Letter of
Acceptance and Transmittal, must be received by the Depositary at or prior to
the Expiry Time at one of the offices listed in the Letter of Acceptance and
Transmittal.

Except as otherwise provided in the instructions to the Letter of
Acceptance and Transmittal, the signature on the Letter of Acceptance and
Transmittal must be guaranteed by an Eligible Institution. If a Letter of
Acceptance and Transmittal is signed by a person other than the registered
holder of the certificate(s) deposited therewith, the certificate(s) must be
endorsed or be accompanied by an appropriate share transfer power of attorney
duly and properly completed by the registered holder, with the signature on the
endorsement panel or share transfer power of attorney guaranteed by an Eligible
Institution. The Offer will be deemed to be accepted only if the Depositary has
actually received these documents at or prior to the Expiry Time.

Shareholders who cannot comply on a timely basis with the foregoing
procedures for acceptance of the Offer may nevertheless accept the Offer by
following the procedures for guaranteed delivery set forth below.

PROCEDURE FOR GUARANTEED DELIVERY

If a Shareholder wishes to deposit Common Shares pursuant to the Offer
and (i) the certificates representing such Common Shares are not immediately
available, or (ii) such Shareholder cannot deliver the certificates representing
such Common Shares and all other required documents to one of the offices of the
Depositary specified in the Letter of Acceptance and Transmittal at or prior to
the Expiry Time, such Common Shares may nevertheless be deposited under the
Offer, provided that all of the following conditions are met:

(i) such deposit is made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, or an executed facsimile thereof, is received by the
Depositary at its principal office in Toronto at or prior to
the Expiry Time; and

(iii) the certificates representing such deposited Common Shares in
proper form for transfer, together with a properly completed
and duly executed Letter of Acceptance and Transmittal, or a
manually executed photocopy thereof, covering such Common
Shares with any required signature guarantees and any other
required documents, are received by the Depositary at its
principal office in Toronto prior to 5:00 p.m., Toronto time,
on or before the third trading day on The Toronto Stock
Exchange after the Expiry Time. Delivery to any office of the
Depositary other than its principal office in Toronto does not
constitute delivery for the purpose of satisfying a guaranteed
delivery.

9
<PAGE> 10

The Notice of Guaranteed Delivery may be delivered by hand, mailed or
transmitted by facsimile transmission to the Depositary only at its principal
office in Toronto and must include a guarantee by an Eligible Institution in the
form set forth in the Notice of Guaranteed Delivery.

GENERAL

In all cases, payment for Common Shares deposited and accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates representing Common Shares, a properly completed and
duly signed Letter of Acceptance and Transmittal, or a manually signed photocopy
thereof covering such Common Shares, with the signatures guaranteed in
accordance with the transmittal instructions set out therein, and any other
required documents.

THE METHOD OF DELIVERY OF CERTIFICATES REPRESENTING COMMON SHARES AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE PERSON DEPOSITING
THE SAME. THE OFFEROR RECOMMENDS THAT SUCH DOCUMENTS BE DELIVERED BY HAND TO THE
DEPOSITARY AND A RECEIPT OBTAINED OR, IF MAILED, THAT REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED BE USED AND THAT PROPER INSURANCE BE OBTAINED.
SHAREHOLDERS WHOSE COMMON SHARES ARE REGISTERED IN THE NAME OF A NOMINEE SHOULD
CONTACT THEIR BROKER, INVESTMENT DEALER, BANK, TRUST COMPANY OR OTHER NOMINEE
FOR ASSISTANCE IN DEPOSITING COMMON SHARES.

All questions as to the validity, form, eligibility (including timely
receipt) and acceptance of any Common Shares deposited pursuant to the Offer,
including the propriety and effect of the execution of the Letter of Acceptance
and Transmittal and/or Notice of Guaranteed Delivery, will be determined by the
Offeror in its sole discretion. Depositing Shareholders agree that such
determinations shall be final and binding. The Offeror reserves the absolute
right to reject any and all deposits which it determines not to be in proper
form or which, in the opinion of its counsel, may be unlawful to accept under
the laws of any jurisdiction. The Offeror reserves the absolute right to waive
any defect or irregularity in the deposit of any Common Shares. There shall be
no obligation on the Offeror, the Depositary or any other person to give notice
of any defects or irregularities in any deposit and no liability shall be
incurred by any of them for failure to give any such notice. The Offeror's
interpretation of the terms and conditions of this Offer (including the
Circular, the Letter of Acceptance and Transmittal and the Notice of Guaranteed
Delivery) will be final and binding.

The deposit of Common Shares pursuant to the procedures herein will
constitute a binding agreement between the depositing Shareholder and the
Offeror upon the terms and subject to the conditions of the Offer, including the
depositing Shareholder's representation and warranty that (i) such Shareholder
has full power and authority to deposit, sell, assign and transfer without
restriction the Common Shares being deposited, (ii) the deposit of such Common
Shares complies with applicable securities laws, and (iii) when such Common
Shares are taken up and paid for by the Offeror, the Offeror will acquire good
and marketable title thereto free and clear of all liens, restrictions, charges,
encumbrances, claims and equities of any nature whatsoever.

The Offeror reserves the right to permit Shareholders to accept the
Offer in a manner other than that set out above.

4. EXTENSION OF THE EXPIRY TIME

This Offer is open for acceptance until, but not after, the Expiry
Time.
The Offeror expressly reserves the right, in its sole discretion,
at any time while the Offer is open for acceptance (or as otherwise permitted
by applicable law), to extend the period of time during which the Offer

10
<PAGE> 11

is open by giving written notice or other notice confirmed in writing to the
Depositary at its principal office in Toronto, Ontario as set forth under
Section 5 of the Offer.

If the Offeror varies the terms of the Offer by extending the Expiry
Time in the manner set forth above, the Offeror will, forthwith after giving
written notice of such extension to the Depositary, inform The Toronto Stock
Exchange and make a public announcement of the extension, which public
announcement shall indicate the approximate number of Common Shares deposited to
date and shall be made not later than 9:00 a.m., Toronto time, on the next day
after the previously scheduled Expiry Time which is not a Saturday, Sunday or
statutory holiday in Alberta, Canada.

Unless expressly stated at the time of any such extension, an extension
of the Expiry Time shall not constitute a waiver by the Offeror of any of its
rights under Section 6 of the Offer.

Notwithstanding the foregoing, the Expiry Time may not be extended by
the Offeror if all of the terms and conditions of the Offer have been complied
with or waived by the Offeror unless the Offeror first takes up and pays for all
Common Shares validly deposited thereunder and not withdrawn.

5. VARIATION OF THE OFFER

The Offeror expressly reserves the right, in its sole discretion, from
time to time during the period of time the Offer is open for acceptance (or
otherwise as permitted by applicable law), to vary the terms of the Offer by
written notice, or other notice confirmed in writing, to the Depositary at its
principal office in Toronto, Ontario.

Unless expressly stated at the time of any such variation, a variation
of the Offer shall not constitute a waiver by the Offeror of any of its rights
set forth in Section 6 of the Offer.

If the terms of the Offer are varied, the Offeror will thereafter,
except as otherwise permitted by applicable law, cause the Depositary to give a
written notice of variation (a "Notice of Variation") to all registered holders
of Common Shares at their respective addresses shown on the securities register
of the Company, in the manner indicated in Section 12 of the Offer.

Subject to, or unless otherwise permitted by, applicable law, where the
terms of the Offer are varied, except for a variation consisting solely of a
waiver of a condition provided for in Section 6 of the Offer, the Offer shall
not expire before 10 days after the Notice of Variation in respect of such
variation has been given to registered holders of the Common Shares.

During any extension of the Offer or subsequent to any variation in the
terms of the Offer, all Common Shares previously deposited and not taken up and
paid for or withdrawn will remain subject to the Offer and may be accepted for
purchase by the Offeror, subject to any withdrawal rights described in Section 7
of the Offer.

6. Conditions

Notwithstanding any other provision of the Offer, the Offeror reserves
the right to withdraw or terminate the Offer and shall not be required to take
up and pay for, or may extend the period of time during which the Offer is open
and postpone taking up and paying for, any Common Shares deposited under the
Offer unless all of the following conditions are satisfied:

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<PAGE> 12

(a) at least 90% of the Common Shares on a fully-diluted basis to
which the Offer relates have been deposited under the Offer
and not withdrawn;

(b) no action, suit or proceeding shall have been taken before or
by any domestic or foreign court or tribunal or governmental
agency or other regulatory authority or administrative agency
or commission by any elected or appointed public official or
private person (including, without limitation, any individual,
corporation, firm, group or other entity) in Canada or
elsewhere, whether or not having the force of law, and no law,
regulation or policy shall have been proposed, enacted,
promulgated or applied:

(i) to cease trade, enjoin, prohibit or impose material
limitations or conditions on the purchase by, or the
sale to, the Offeror of Common Shares or the right of
the Offeror to own or exercise full rights of
ownership of Common Shares, or

(ii) which, in the sole judgment of the Offeror, acting
reasonably in the circumstances, if the Offer were
consummated would materially and adversely affect
Solid State;

(c) there shall not exist any prohibition at law against the
Offeror making the Offer or taking up and paying for 100% of
the Common Shares under the Offer;

(d) there shall not have occurred (and there shall not have been
generally disclosed, if not previously disclosed generally and
not disclosed to the Offeror in writing) any change (or any
condition, event or development involving a prospective
change) in the business, assets, capitalization, financial
condition, licenses, permits, rights, privileges or
liabilities, whether contractual or otherwise, of Solid State
or any of its subsidiaries considered as a whole which, in the
sole judgement of the Offeror, is materially adverse;

(e) the Offeror shall not have become aware of any untrue
statement of material fact, or an omission to state a material
fact that is required to be stated or that is necessary to
make a statement not misleading in the light of the
circumstances in which it was made and at the date it was made
(after giving effect to all subsequent filings in relation to
all matters covered in earlier filings) in any document filed
by or on behalf of Solid State with any securities commission
or similar securities regulatory authority in any of the
provinces of Canada prior to November 27, 1997, including
without limitation any annual information form, financial
statement, material change report or management proxy circular
or in any document so filed or released by Solid State to the
public on or following November 27, 1997;

(f) the Offeror shall have determined, in its sole judgement, that
no legal impediment exists, whether arising under law or
regulation, or by actions of a court or an administrative
agency, and that no proceedings are pending before a court or
administrative agency, that have the consequence (or would, if
successful, have the consequence) of preventing or adversely
affecting the ability of the Offeror to effect a subsequent
acquisition transaction on the basis described in "
Acquisition of Common Shares Not Deposited Under the Offer" in
the Offering Circular (including pursuant to the exemptions
described therein); and

(g) during the time the Offer is outstanding, there shall not have
occurred any change in the general economic, financial,
currency exchange or securities market conditions in Canada or
the United States or any part thereof which, in the sole
judgment of the Offeror, has or may have a material adverse
effect on the value of Solid State.

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<PAGE> 13

The foregoing conditions are for the exclusive benefit of the Offeror
and may be asserted at any time, regardless of the circumstances giving rise to
such assertion (including any action or inaction by the Offeror). The Offeror,
in its sole discretion, may waive any of the foregoing conditions in whole or in
part at any time and from time to time, before and after the Expiry Time,
without prejudice to any of the rights which the Offeror may have. The failure
by the Offeror at any time to exercise or assert any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be exercised or asserted at any time and from
time to time. Any determination by the Offeror concerning the events described
in this Section 6 will be final and binding upon all parties.

Any waiver of a condition or the withdrawal of the Offer shall be
effective upon written notice or other notice confirmed in writing to that
effect given by the Offeror to the Depositary at its principal office in
Toronto. The Offeror, forthwith after giving any such notice, shall make a
public announcement of such waiver or withdrawal. If the Offer is withdrawn, the
Offeror shall not be obligated to take up or pay for any Common Shares deposited
under the Offer and the Depositary will promptly return all certificates for
deposited Common Shares and Letters of Acceptance and Transmittal and Notices of
Guaranteed Delivery and related documents to the parties by whom they were
deposited at the Offeror's expense.

7. WITHDRAWAL OF DEPOSITED COMMON SHARES

All deposits of Common Shares pursuant to the Offer are irrevocable
(subject to applicable law) provided that any Common Shares deposited in
acceptance of the Offer may be withdrawn by or on behalf of the depositing
Shareholder:

(a) at any time before 12:00 midnight, local time, on December 18,
1997;

(b) at any time before the expiration of the tenth day after the
date upon which either:

(i) a notice of change relating to a change which has
occurred in the information contained in the Offer,
which change is one that would reasonably be expected
to affect the decision of a holder of Common Shares
to accept or reject the Offer (other than a change
that is not within the control of the Offeror or of
any affiliate of the Offeror) is mailed, delivered or
otherwise properly communicated, in the event that
such change occurs before the Expiry Time or after
the Expiry Time but before the expiry of all rights
of withdrawal in respect of the Offer, or

(ii) a notice of variation concerning a variation in the
terms of the Offer (other than a variation consisting
of an increase in the consideration offered for the
Common Shares where the time for deposit is not
extended for a period greater than 10 days or a
variation consisting solely of the waiver of a
condition of the Offer) is mailed, delivered or
otherwise properly communicated,

but only if such deposited Common Shares have not been taken
up by the Offeror at the time of the notice, subject to
abridgement of that period pursuant to such orders as
may be granted by Canadian courts or securities
regulatory authorities; and

(c) at any time after 12:00 midnight, local time, on January 11,
1998, provided that such Common Shares have not been taken up
and paid for by the Offeror prior to the receipt by the
Depositary of the notice of withdrawal in respect of such
Common Shares.

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<PAGE> 14

Withdrawal of Common Shares deposited must be effected by notice of
withdrawal, which must be made by the depositing Shareholder or such
Shareholder's agent and must be actually received by the Depositary within the
applicable time limits indicated above at the office at which such Common Shares
were deposited. Any such notice of withdrawal must be in writing (which includes
telegraphic communication or notice by facsimile or other electronic means that
produces a printed copy) and must be signed by the person who signed the Letter
of Acceptance and Transmittal (or Notice of Guaranteed Delivery) which
accompanied the certificates for the Common Shares which are to be withdrawn.
Any such notice must also specify: (i) the name of the person who deposited the
Common Shares to be withdrawn; (ii) the number of Common Shares to be withdrawn;
(iii) the names(s) of the registered holder(s) of the Common Shares that have
been delivered or otherwise identified to the Depositary; and (iv) if the
certificates representing the Common Shares have been delivered to the
Depositary, the certificate number shown on each certificate evidencing Common
Shares to be withdrawn. Any signature on the withdrawal notice must be
guaranteed by an Eligible Institution, in the same manner as the Letter of
Transmittal and Acceptance or Notice of Guaranteed Delivery, unless deposited
for the account of an Eligible Institution. There shall be no obligation on the
Offeror, the Depositary or any other person to give notice of any defects or
irregularities in any notice of withdrawal and no liability shall be incurred by
any of them for failure to give notice of any such defects.

All questions as to the validity, form and eligibility (including
timely receipt) of notices of withdrawal shall be determined by the Offeror in
its sole discretion. Depositing Shareholders agree such determinations shall be
final and binding.

If the Offeror extends the Offer, is delayed in taking up or paying for
Common Shares or is unable to take up or pay for Common Shares for any reason,
then, without prejudice to the Offeror's rights hereunder, deposited Common
Shares may be retained by the Depositary on behalf of the Offeror and may not be
withdrawn except to the extent that depositing Shareholders are entitled to
withdrawal rights as set forth in this Section 7 or pursuant to any applicable
law.

Any Common Shares withdrawn will be deemed not validly deposited for
the purposes of the Offer, but may be redeposited at any subsequent time at or
prior to the Expiry Time by following any of the procedures described in Section
3 of the Offer.

In addition to the foregoing rights of withdrawal, Shareholders in
certain provinces of Canada are entitled to statutory rights of rescission in
certain circumstances. See "Statutory Rights" in the Circular.

8. PAYMENT FOR DEPOSITED COMMON SHARES

Where all the terms and conditions attached to the Offer have been
complied with or waived, the Offeror will take up and pay for Common Shares
validly deposited under the Offer (and not withdrawn pursuant to Section 7 of
the Offer) within all time periods prescribed by applicable law.

Subject to applicable law, the Offeror may, in its discretion, at any
time before the Expiry Time if the applicable rights to withdraw any deposited
Common Shares have expired, take up and pay for all such Common Shares then
deposited under the Offer provided the Offeror agrees to take up and pay for all
additional Common Shares validly deposited thereafter and prior to the Expiry
Time.

Subject to applicable law, the Offeror expressly reserves the right, in
its sole discretion, to delay taking up or paying for any Common Shares or to
terminate the Offer and not take up or pay for any Common Shares if any
condition specified in Section 6 of the Offer is not satisfied or waived, by
giving written notice or other notice confirmed in writing to that effect to the
Depositary at its principal office in Toronto, Ontario. The Offeror also
expressly reserves the right, in its sole discretion, to delay taking up and
paying for Common

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<PAGE> 15

Shares in order to comply, in whole or in part, with any applicable
law. For the purposes of the Offer, the Offeror shall be deemed to have taken up
and to have accepted for payment Common Shares validly deposited and not
withdrawn pursuant to the Offer (and thereby purchased such Common Shares) if,
as and when the Offeror shall give the Depositary written notice or other notice
confirmed in writing to that effect.

The Offeror will pay for Common Shares validly deposited under the
Offer and not withdrawn by providing the Depositary with a sufficient amount of
Canadian dollars (by bank transfer or other means satisfactory to the
Depositary) for transmittal to Shareholders. Under no circumstances will
interest be paid by the Offeror or the Depositary to any Shareholder on the
purchase price of the Common Shares purchased by the Offeror, regardless of any
delay in making such payment. The Depositary will act as the agent of persons
who have deposited Common Shares in acceptance of the Offer for the purposes of
receiving payment from the Offeror and transmitting payment to such persons.
Receipt of payment by the Depositary will be deemed to constitute receipt of
payment by persons depositing Common Shares.

Unless otherwise directed by the Letter of Acceptance and Transmittal,
settlement will be made by the Depositary issuing or causing to be issued a
cheque in the name of the registered holder of the Common Shares so deposited.
Unless the depositing Shareholder instructs the Depositary to hold the cheque
for pick-up by checking the appropriate box in the Letter of Acceptance and
Transmittal, cheques will be forwarded by first class mail, postage prepaid, to
such persons at the address specified in the Letter of Acceptance and
Transmittal or, if no address is therein specified, cheques will be forwarded to
the address of the holder as shown on the securities register of the Company.

DEPOSITING SHAREHOLDERS WILL NOT BE OBLIGATED TO PAY BROKERAGE
COMMISSIONS OR TRANSFER CHARGES, IF ANY.

9. RETURN OF COMMON SHARES

If any deposited common Shares are not taken up and paid for by the
Offeror pursuant to the terms and conditions of the Offer for any reason, or if
certificates are submitted for more Common Shares than are deposited,
certificates for Common Shares not taken up and paid for by the Offeror will be
returned, without expense to the depositing Shareholder, by forwarding
certificates representing such Common Shares by first class mail, postage
prepaid, to the address of the depositing Shareholder specified in the Letter of
Acceptance and Transmittal or, if no such address is specified, then to the
address of such Shareholder as shown on the securities register of the Company,
promptly following the Expiry Time or withdrawal or termination of the Offer.

10. CHANGES IN CAPITALIZATION, DISTRIBUTION AND LIENS

If, on or after the date of the Offer, the Company should subdivide,
consolidate or otherwise change any of the Common Shares or its capitalization,
or should disclose that it has taken any such action or intends to take any such
action, then the Offeror may, in its sole discretion, make such adjustments as
it deems appropriate to reflect such subdivision, consolidation or other change
in the purchase price and the other terms of the Offer, as the case may be
(including, without limitation, the type of securities offered to be purchased
and the amounts payable therefor).

Common Shares acquired pursuant to the Offer shall be transferred by
the Shareholder and acquired by the Offeror free and clear of all liens,
restrictions, charges, encumbrances, claims and equities but together with all
rights and benefits arising therefrom, including the right to all dividends,
distributions, payments, securities, rights, assets or other interests
(collectively "Interests") which may be accrued, declared, paid, issued,
distributed, made or transferred on or after the date of the Offer on, or in
respect of, the Common

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<PAGE> 16

Shares. If, notwithstanding such acquisition of Common Shares by the Offeror
pursuant to the Offer, any Interests are received by or made payable to or to
the order of a depositing Shareholder, such Interests will be received and held
by the depositing Shareholder for the account of the Offeror and shall be
forthwith remitted and transferred by the depositing Shareholder to the
Depositary for the account of the Offeror, together with all necessary
assignments or endorsements in respect thereof. Pending such remittance, the
Offeror will be entitled to all rights and privileges as owner of any such
Interest, and may withhold the entire purchase price payable by the Offeror
pursuant to this Offer or deduct from the purchase price payable by the Offeror
pursuant to this Offer the amount or value thereof, as determined by the Offeror
in its sole discretion.

11. MAIL SERVICE INTERRUPTION

Notwithstanding the provisions of this Offer or the Letter of
Acceptance and Transmittal or the Notice of Guaranteed Delivery, cheques,
certificates and any other relevant documents need not be mailed by the
Depositary if the Offeror determines, in its sole discretion, that delivery
thereof by mail may be delayed. Persons entitled to cheques which are not mailed
for the foregoing reason may take delivery thereof at the office of the
Depositary at which the Common Shares in respect of which the cheque is being
issued were deposited, upon application to the Depositary until such time as the
Offeror has determined, in its sole discretion, that delivery by mail will no
longer be delayed. Notwithstanding Section 8 of the Offer, cheques not mailed
for the foregoing reason will be conclusively deemed to have been delivered on
the first day upon which they are available for delivery to the depositing
Shareholder at the appropriate office of the Depositary. Notice of any
determination made by the Offeror that mail service may be delayed shall be
given in accordance with Section 12 of the Offer.

12. Notice

Without limiting any other lawful method of giving notice, any notice
to be given to Shareholders by the Offeror or the Depositary pursuant to this
Offer will be deemed to have been properly given if it is mailed by first class
mail, postage prepaid, to the registered holders of the Common Shares at their
respective addresses as shown on the securities register of the Company. These
provisions apply notwithstanding any accidental omission to give notice to any
one or more Shareholders and notwithstanding any interruption of mail services
following mailing. In the event of any interruption of mail service following
mailing, the Offeror intends to make reasonable efforts to disseminate the
notice by other means, such as publication or delivery by courier. Except as
otherwise required or permitted by applicable law, if post offices in Canada are
not open for the deposit of mail, any notice which the Offeror, the Depositary
may give or cause to be given under this Offer will be deemed to have been
properly given and to have been received by Shareholders to whom the Offer is
made if it is given to The Toronto Stock Exchange for dissemination through
their facilities, or if it is published once in the nationally circulated
edition of The Globe and Mail.

The Offer, the Circular, the Letter of Acceptance and Transmittal and
the Notice of Guaranteed Delivery will be mailed or couriered to registered
holders of Common Shares and to each director of Solid State and the Offeror
will use its reasonable efforts to furnish such documents to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
securities register of the Company, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmission to beneficial owners of Common Shares when such list or listing is
received.

Wherever the Offer calls for documents to be delivered to the
Depositary, such documents will not be considered delivered unless and until
they have been physically received at one of the addresses noted for the
Depositary in the Letter of Acceptance and Transmittal, except that wherever the
Offer calls for documents to be delivered to a particular office of the
Depositary, such documents will not be considered

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<PAGE> 17

delivered unless and until they have been physically received at that particular
office at the address noted in the Letter of Acceptance and Transmittal.

13. ACQUISITION OF COMMON SHARES NOT DEPOSITED UNDER THE OFFER

If, within 120 days after the date hereof, the Offer has been accepted
by the holders of not less than 90% of the Common Shares on a fully-diluted
basis, other than Common Shares held on the date hereof by or on behalf of the
Acquiring Shareholders, then the Offeror currently intends to acquire the Common
Shares held by those Shareholders who have not accepted the Offer pursuant to
the provisions of Part 16 of the Act on the same terms and at the same price
that the Offeror acquired Common Shares from holders of Common Shares who
accepted the Offer. See "Acquisition of Common Shares Not Deposited Under the
Offer" in the Circular and, for a discussion of the tax consequences to
Shareholders who dispose of their Common Shares pursuant to the provisions of
Part 16 of the Act, see "Canadian Federal Income Tax Considerations" in the
Circular.

If such statutory right of compulsory acquisition in respect of the
Common Shares is not available or if the minimum deposit condition is not
satisfied and the Offeror waives such condition to the Offer, or if the Offeror
elects not to proceed under such provisions, the Offeror currently intends to
initiate such corporate actions or proceedings as may be legally available to
acquire all of the Common Shares with or without the consent of the
Shareholders, or to terminate their interests therein. See "Acquisition of
Common Shares Not Deposited Under the Offer" in the Circular.

14. MARKET PURCHASES

The Offeror has no present intention of acquiring any Common Shares
while the Offer is outstanding other than as described in the Circular or the
Offer. However, the Offeror reserves the right to, and may, acquire, or cause an
affiliate to acquire, beneficial ownership of Common Shares by making purchases
through the facilities of The Toronto Stock Exchange, subject to applicable law,
at any time prior to the Expiry Time. In no event will the Offeror make any such
purchases of Common Shares until the third business day following the date of
the Offer or at a price in excess of that offered pursuant to the Offer.

The aggregate number of Common Shares acquired in this manner will not
exceed 5% of the outstanding Common Shares on the date hereof and the Offeror
will issue and file a press release forthwith after the close of business of The
Toronto Stock Exchange on each day on which Common Shares have been purchased.
Any Common Shares so purchased will count in any determination as to whether the
minimum deposit condition specified in paragraph 6(a) of the Offer has been
satisfied.

15. MISCELLANEOUS ADDITIONAL TERMS

The following additional terms apply to the Offer.

(a) The provisions of the accompanying Circular and the Letter of
Acceptance and Transmittal and the Notice of Guaranteed
Delivery form part of the Offer and should be read carefully
before making a decision with respect to the Offer. The
Offeror shall, in its sole discretion, be entitled to make a
final and binding determination of all questions relating to
the interpretation of the Offer, the Circular and the Letter
of Acceptance and Transmittal and the Notice of Guaranteed
Delivery.

(b) The Offeror reserves the right to transfer to one or more
affiliates the right to purchase all or any portion of the
Common Shares deposited pursuant to the Offer but any such
transfer

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<PAGE> 18

will not relieve the Offeror of its obligations under the
Offer and will in no way prejudice the rights of persons
depositing Common Shares to receive payment for Common Shares
validly deposited and accepted for payment pursuant to the
Offer.

(c) The Offer and all contracts resulting from the acceptance of
the Offer shall be governed by, and construed in accordance
with, the laws of the Province of Alberta and the laws of
Canada applicable therein.

(d) The Offer is only being made to, and deposits will only be
accepted from or on behalf of, Shareholders in jurisdictions
in which the making or acceptance of the Offer would be in
compliance with the laws of such jurisdictions. The Offeror
may, in its sole discretion, take such action as it may deem
necessary to extend the Offer to Shareholders in any
jurisdiction in which the making or acceptance of the Offer
would otherwise fail to comply with the laws of such
jurisdiction.

(e) NO BROKER, DEALER OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF THE
OFFEROR OTHER THAN AS SET FORTH IN THE OFFER, AND, IF ANY SUCH
INFORMATION OR REPRESENTATION IS GIVEN OR MADE, IT MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED.

Dated: November 27, 1997

SSGI ACQUISITION CORP.

By: (Signed) Jon Pollock
President

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<PAGE> 19

CIRCULAR

This Circular is furnished in connection with the Offer, dated November
27, 1997, made by the Offeror, to purchase, on the terms and subject to the
conditions set out therein, all of the Common Shares of Solid State not held by
the Offeror or its affiliates, for $3.50 per Common Share in cash. The terms and
provisions of the Offer are incorporated into and form part of this Circular,
and the Offer and the Circular together constitute the take-over bid circular of
the Offeror. Shareholders should refer to the Offer for details of the terms and
conditions of the Offer, including details as to payment and withdrawal rights.
Defined terms used in the Offer are used herein with the same meaning unless the
context otherwise requires. All currency amounts stated in dollars herein are in
Canadian dollars unless otherwise specifically stated.

Except as otherwise indicated, the information concerning Solid State
contained in the Offer and this Circular has been taken from or based upon
publicly available documents and records on file with Canadian securities
administrators and other public sources. Although the Offeror has no knowledge
that would indicate that any statements contained herein relating to Solid State
or taken from or based on such documents and records are untrue or incomplete,
neither the Offeror nor its officers or directors assumes any responsibility for
the accuracy or completeness of the information relating to Solid State or
contained in such documents and records, or for any failure by Solid State to
disclose events which may have occurred or may affect the significance or
accuracy of any such information but which are unknown to the Offeror.

1. THE OFFEROR, GRANT, ELLIOTT AND WESTGATE

The Offeror was incorporated under the laws of Alberta on October,
1997. The Offeror's registered office is at 1900, 333-7th Avenue S.W., Calgary,
Alberta, T2P 2Z1. To date the Offeror has not engaged in any activities other
than those incidental to its organization and those relating to the making of
the Offer. The Offeror is subject to a unanimous shareholders agreement which
vests the powers of the directors of the Offeror in the shareholder of the
Offeror.

The Offeror is a wholly-owned subsidiary of Grant, a Delaware
corporation incorporated on September 30, 1997. Grant is a service company
providing geophysical data acquisition services to the oil and gas industry in
both U.S. and international markets. Grant acquired its business on September
30, 1997 from a predecessor corporation that had filed for bankruptcy in late
1996. Elliott, a significant lender to the predecessor corporation, owns as of
November 28, 1997 all of the issued and outstanding common shares of Grant.

Elliott is a Delaware limited partnership and Westgate is a Cayman
Islands limited partnership, each of which invests and trades in a wide range of
United States and non-United States equity and debt securities and other
financial and investment interests, instruments and property. Elliott commenced
operations in 1977 and its investors include pension plans, corporations, family
groups and individuals, including a substantial investment by the general
partner and his family. The general partners of Elliott are Mr. Paul E. Singer
and Braxton Associates, L.P., which was formed by Mr. Singer in 1975. As of
January 1, 1997, Elliott's total capital was approximately U.S.$597 million.
Westgate is managed by Martley International, Inc., a Delaware corporation
principally owned by Mr. Singer and a trust for certain of his family members.
As of November 20, 1997, Elliott held 5,963,565 Common Shares and Westgate held
3,341,544 Common Shares. Prior to acquiring Common Shares under the Offer, the
Common Shares held by Elliott and Westgate will be transferred to the Offeror
for additional shares of Grant. Elliott's executive offices are located at 712
Fifth Avenue, 36th Floor, New York, New York, 10019. Westgate's executive
offices are located at c/o Midland Bank Trust Corporation (Cayman) Limited, Mary
Street, Cayman Islands.

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<PAGE> 20

2. SOLID STATE

Solid State was incorporated under the Act on January 7, 1985, as Solid
State Exploration Ltd. On June 30, 1993, the Company completed a reorganization
of its share capital and also changed its name from Solid State Exploration Ltd.
to Solid State Geophysical Inc., removed the restrictions limiting the number of
shareholders to not more than fifty and the restrictions on the transfer of
shares of the Company on June 30, 1993. On July 6, 1993, Solid State adopted new
by-laws consistent with those of a public company.

Solid State is a service company providing geophysical data acquisition
services to the oil and gas, and mining industries in both the Canadian and
international markets. The Company markets its geophysical data acquisition
services from its offices in Calgary, Alberta; Houston, Texas; and Santa Cruz,
Bolivia.

The holders of Common Shares are entitled to one vote per Common Share
at all meetings of Shareholders. As at the close of business on November 20,
1997, there were 14,260,529 Common Shares outstanding. In addition, as at the
close of business on November 20, 1997, the directors, officers and employees of
Solid State and certain other persons had a beneficial interest in 627,000
Common Shares through vested options.

Solid State's registered and executive offices are located at 7309
Flint Road South, Calgary, S.E., Alberta, T2H 1G3 and its telephone number is
(403) 255-9388.

3. PRIOR DEALINGS, CONTRACTS AND ARRANGEMENTS

Except as otherwise disclosed in this Circular, including under
"Ownership of and Prior Trading in the Securities of Solid State" and described
below, there are no: (i) material business relationships between the Offeror or
its affiliates and Solid State; (ii) arrangements or agreements made or
currently proposed to be made between the Offeror or its affiliates and any of
the directors or senior officers of Solid State, including arrangements or
agreements with respect to compensation for loss of office or as to their
remaining in or retiring from office if the Offer is successful; or (iii)
contracts, arrangements or understandings, formal or informal, between the
Offeror or its affiliates and any Shareholder or any other person with respect
to any Common Shares in relation to the Offer. Solid State has entered into a
new employment agreement with Mitchell L. Peters respecting his ongoing
employment with Solid State. The new employment agreement has an initial term
through December 31, 2000 and provides for an annual base salary of $230,000.
The new employment agreement provides generally that, if Mr. Peters is
terminated for any reason other than for "cause" (as defined in the employment
agreement), Solid State must make a payment equal to two-times his annual base
salary in effect as of the date of termination. Mr. Peters has agreed pursuant
to the new employment agreement not to compete with Solid State by engaging in
any "competing business" (as defined in the employment agreement) for a period
of 24 months following termination of employment. During such period, Mr. Peters
shall be entitled to receive compensation at a per annum rate equal to 50% of
his annual base salary. In connection with signing of the new employment
agreement, Mr. Peters agreed to forego payments under his prior employment
agreement with Solid State, other than his right to receive $690,000 on a change
of control in Solid State and his right to exercise options previously granted
to him. Under the new employment agreement, Mr. Peters will also be entitled to
receive an initial award of options under Grant's 1997 Equity and Performance
Incentive Plan equal to 75% of the initial award to Grant's chief executive
officer. The employment agreement also provides for participation by Mr. Peters
in other plans of Solid State and for other perquisites.

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4. BACKGROUND TO THE OFFER, FAIRNESS OF THE OFFER, PURPOSE FOR THE OFFER
AND PLANS FOR SOLID STATE

Background to the Offer

In early September 1997, representatives of Elliott met with J. Richard
Harris, an independent member of the Board of Directors, to discuss various
options available to Elliott, including the possibility of Elliott pursuing a
going private transaction with respect to Solid State. Mr. Harris was requested
to consider retaining an independent valuer to undertake preliminary valuation
work, with a view to determining whether a going private transaction might be
feasible. On September 26, 1997, representatives of Elliott met with Mitchell
Peters, the President and Chief Executive Officer of the Company and with
counsel to Solid State, at which meeting the options available to Elliott and
Westgate were discussed. On September 29, 1997, Elliott and Westgate publicly
announced that they were considering making a take-over bid or other acquisition
proposal to acquire all the Common Shares which they did not own. Elliott and
Westgate further requested the Board of Directors to form a special committee of
the directors and to retain an independent advisor to prepare a valuation of
Solid State in accordance with OSC Policy 9.1 and CMVQ Policy Q-27.

In response to the commencement by Elliott and Westgate of a potential
offer, the Board of Directors formally constituted the Special Committee on
September 29, 1997. The Special Committee is comprised of J. Richard Harris, who
is not an officer, employee or insider of Solid State (except by virtue of being
a director of Solid State) or of the Acquiring Shareholders. The Special
Committee was given the mandate to review and consider all matters and documents
relevant to the proposed offer and to recommend to the Board of Directors
whether such proposal was fair to the holders of Common Shares other than
Elliott and Westgate.

By letter dated as of October 9, 1997, ScotiaMcLeod was engaged by the
Special Committee to provide a formal valuation of the Common Shares as required
by OSC Policy 9.1 and CVMQ Policy Q-27. See "ScotiaMcLeod Valuation and Fairness
Opinion".

The Special Committee has had several meetings with ScotiaMcLeod,
reviewed the ScotiaMcLeod Valuation and Fairness Opinion and the Offer and
presented a report to the Board of Directors containing its conclusions and
recommendations. Representatives of Elliott met on several occasions with
representatives of ScotiaMcLeod and the Special Committee to respond to
inquiries concerning Elliott.

On November 14, 1997, Elliott was advised that ScotiaMcLeod had
established a range of values for the Common Shares of between $2.80 and $3.60.
On November 25, 1997, Elliott advised the Board of Directors that it intended to
cause an indirect subsidiary of Elliott to make a take-over bid at $3.50 per
share in cash. The Special Committee concluded that the Offer and the
consideration to be received thereunder are fair to the shareholders of Solid
State other than Elliott and Westgate. The Special Committee recommended that
the Board of Directors recommend the acceptance of the Offer.

After considering the report of the Special Committee, the Board of
Directors (with Messrs. Anderson and Latina not participating at the meeting in
the deliberations regarding the Offer and abstaining from voting in respect of
the Offer) determined that the Offer is fair to Shareholders other than Elliott
and Westgate.

AS SET FORTH IN THE DIRECTORS' CIRCULAR, THE BOARD OF DIRECTORS
RECOMMENDS THAT ALL SHAREHOLDERS OTHER THAN ELLIOTT AND WESTGATE ACCEPT THE
OFFER.

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<PAGE> 22

Fairness of the Offer

The Offeror believes that the Offer is fair to Shareholders other than
the Acquiring Shareholders based upon, among other things, the following
factors:

(a) Shareholders other than the Offeror will receive a premium
over the historical trading prices of the Common Shares prior
to the announcement of the Offer. On September 26, 1997, the
day prior to the date Elliott and Westgate announced on
September 29, 1997 that they were considering making an offer
for all the Common Shares at $3.00 per share, the closing
price of the Common Shares on The Toronto Stock Exchange was
$2.55;

(b) the consideration to be paid pursuant to the Offer is cash and
is in the upper end of the range of values established by
ScotiaMcLeod;

(c) the opinion of ScotiaMcLeod is that the consideration to be
paid pursuant to the Offer is fair, from a financial point of
view, to Shareholders other than Elliott and Westgate and the
Special Committee and the Board of Directors have determined
that the Offer is fair to Shareholders other than Elliott and
Westgate and the Board of Directors has recommended that
Shareholders other than Elliott and Westgate accept the Offer;
and

(d) if a significant number of Common Shares are taken up and paid
for under the Offer but no subsequent acquisition transaction
is completed, the liquidity of the secondary market for the
Common Shares may be significantly reduced and, if the Common
Shares are not then listed for trading on an organized
exchange, the ability of shareholders to dispose of Common
Shares will be adversely affected.

Purpose for the Offer

The purpose of the Offer is to make Solid State a wholly-owned
subsidiary of the Offeror by having the Offeror acquire all of the Common Shares
not already held by the Acquiring Shareholders. The Offeror believes that the
Offer provides shareholders an opportunity to realize value on their investment.
By consolidating the shareholdings of Solid State in one owner, Grant and its
shareholders can pursue the integration of the business and operations of Solid
State with the business and operations of Grant and the refinancing of the
significant debt which Solid State has incurred. In addition, as a non-public
company, Solid State would avoid the expenses associated with financial and
other ongoing reporting obligations applicable to public companies in Canada.

As discussed in "Acquisition of Common Shares Not Deposited Under the
Offer", assuming the Offer is successful, the Offeror's current intention is to
acquire compulsorily Common Shares not deposited under the Offer. If such
statutory right of acquisition is not available or if the minimum deposit
condition is not satisfied and the Offeror waives such condition to the Offer,
or if the Offeror elects not to proceed under such provisions, then the Offeror
currently intends to cause a special meeting of Shareholders to be called to
consider one or more corporate transactions for purposes of acquiring, directly
or indirectly, all of the Common Shares in accordance with applicable law. The
exact timing and details of any such acquisition would necessarily depend upon a
variety of factors, including the number of Common Shares acquired pursuant to
the Offer. It is possible that, as a result of delays in the Offeror's ability
to effect such a compulsory acquisition, information hereafter obtained by the
Offeror, changes in economic or market conditions or in the affairs of the
Company, or other currently unforeseen circumstances, such a compulsory
acquisition may not be proposed, or that an assessment of the Offeror's
alternatives may result in no such corporate transaction being proposed or any
such corporate transaction being delayed or abandoned or

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<PAGE> 23

proposed on different terms. The Offeror expressly reserves the right not to
propose a compulsory acquisition or corporate transaction involving the Company
or to propose a corporate transaction on terms other than those described
herein. Specifically, the Offeror reserves the right: (i) to propose that the
consideration in a corporate transaction consist of cash or securities or a
combination of cash and securities; and (ii) to propose that the consideration
in a corporate transaction have a value more or less than the amount offered
under the Offer.

If permitted by applicable law, subsequent to the completion of the
Offer or any subsequent acquisition transaction, the Offeror will apply to The
Toronto Stock Exchange to delist the Common Shares from trading on such exchange
and will apply to the relevant Canadian securities regulatory authorities for
orders declaring that the Company is no longer a "reporting issuer" for purposes
of the relevant Canadian securities legislation. The effect of these actions
will be that the Company will no longer be required to publicly file or provide
to security holders or others financial information or timely disclosure with
respect to its affairs.

If the Offeror decides to waive the minimum deposit condition to the
Offer and not propose a compulsory acquisition or corporate transaction
involving the Company, or proposes a corporate transaction but cannot promptly
obtain any required approval, the Offeror will evaluate its other alternatives.
Such alternatives could include, to the extent permitted by applicable law,
purchasing additional Common Shares in the open market, in privately negotiated
transactions, in another take-over bid or otherwise, or taking no further action
to acquire additional Common Shares. Any additional purchases of Common Shares
could be at a price greater or less than the price to be paid for Common Shares
under the Offer and could be for cash or other consideration. Alternatively, the
Offeror may sell or otherwise dispose of any or all of the Common Shares
acquired pursuant to the Offer or otherwise. Such transactions may be effected
on terms and at prices then determined by the Offeror, which may vary from the
price paid for Common Shares under the Offer.

Plans for Solid State

If the Offeror acquires all of the Common Shares, it is expected that
certain changes will be effected to allow additional nominees of the Acquiring
Shareholders to become members of the Board of Directors of Solid State.
Further, upon the acquisition of the Common Shares, Grant intends to pursue the
integration of the business and operations of Solid State with the business and
operations of Grant. Grant also plans to consider various alternatives of
refinancing the significant debt which Solid State has incurred.

5. SCOTIAMCLEOD VALUATION AND FAIRNESS OPINION

Under the provisions of certain provincial securities laws respecting
takeover bids where the takeover bid is an "insider bid", a valuation of the
offeree corporation must be prepared by a qualified independent valuer, based on
methodologies that are appropriate in the circumstances, that arrives at an
opinion as to a value or range of values for the securities to be acquired
pursuant to the takeover bid. OSC Policy 9.1 and CVMQ Policy Q-27 also require
that such valuation must be prepared under the supervision of an independent
committee of directors.

Appointment of Independent Financial Advisor

The Special Committee initially contacted ScotiaMcLeod regarding a
potential advisory assignment on September 30, 1997 and ScotiaMcLeod was
formally engaged by the Special Committee through an agreement between Solid
State (on behalf of the Special Committee) and ScotiaMcLeod (the "Engagement
Agreement") dated as of October 9, 1997. The terms of the Engagement Agreement
provide that ScotiaMcLeod is to be paid $300,000 for the ScotiaMcLeod Valuation
and Fairness Opinion. In addition,

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<PAGE> 24

ScotiaMcLeod is to be reimbursed for its reasonable out-of-pocket expenses and
to be indemnified by Solid State in certain circumstances. ScotiaMcLeod consents
to the inclusion of the ScotiaMcLeod Valuation and Fairness Opinion in its
entirety and a summary thereof in the Circular and to the filing thereof, as
necessary, with the securities commissions or similar regulatory authorities in
each province of Canada.

ScotiaMcLeod, established in 1921, is one of Canada's leading
investment banking firms with operations in all facets of corporate and
government finance, mergers and acquisitions, equity and fixed income sales and
trading, investment research and investment management. The opinion expressed in
the ScotiaMcLeod Valuation and Fairness Opinion is the opinion of ScotiaMcLeod
as a firm. The form and content of the ScotiaMcLeod Valuation and Fairness
Opinion have been approved for release by a committee of ScotiaMcLeod's
directors and other professionals, all of whom are experienced in valuation and
fairness opinion matters.

Neither ScotiaMcLeod, nor any of its affiliates is an insider,
associate or affiliate (as those terms are defined in the Securities Act
(Ontario) (the "Act") ) of Solid State or the Offeror or any of their respective
associates or affiliates. ScotiaMcLeod has not been engaged to provide any
financial advisory services nor has it participated in any financing involving
the Offeror or any of their respective associates or affiliates, within the past
two years. There are no understandings, agreements or commitments between
ScotiaMcLeod and the Acquiring Shareholders with respect to any future business
dealings. ScotiaMcLeod may, in the future, in the ordinary course of its
business, perform financial advisory or investment banking services for the
Acquiring Shareholders. The compensation of ScotiaMcLeod under the Engagement
Agreement does not depend in whole or in part on the conclusions reached in the
ScotiaMcLeod Valuation and Fairness Opinion or the successful outcome of the
Offer.

In preparing the ScotiaMcLeod Valuation and Fairness Opinion,
ScotiaMcLeod made several assumptions, including that all disclosure provided in
the Circular with respect to Solid State, its subsidiaries and affiliates and
the Offer is accurate in all material respects.

Valuation of the Common Shares

For the purposes of the ScotiaMcLeod Valuation and Fairness Opinion,
ScotiaMcLeod defined fair market value as the highest price available in an open
and unrestricted market between the informed and prudent parties, acting at
arm's length and under no compulsion to act, expressed in terms of money or
money's worth without any downward adjustment to reflect the liquidity of the
Common Shares held by the minority Shareholders, the effect of the Offer or that
the Common Shares held by the minority Shareholders do not form part of a
controlling interest.

Solid State's North American and international geophysical data
acquisition businesses were valued on the capitalization of forecast 1998
earnings before interest, taxes, depreciation and amortization ("EBITDA")
approach, with a lower capitalization multiple being given to the international
operations to reflect the historical lack of profitability and increased level
of risk in international operations. Solid State's proprietary data banks were
valued on a discounted cash flow basis and the Atchafalaya Bay data bank was
separately appraised by an expert independent consultant. To confirm the
reasonableness of the values derived under the capitalization of the EBITDA
approach, ScotiaMcLeod also reviewed the current and historical trading prices
to those of selected comparable companies, analysed the capitalization of Solid
State's anticipated 1998 cash flow from operations, reviewed comparable merger
and acquisition transactions and reviewed industry benchmarks for valuing
seismic data acquisition companies. The results from these additional analyses
were consistent with those derived from the capitalization of EBITDA approach.

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<PAGE> 25

Elliott and Westgate have advised ScotiaMcLeod that in the event Solid
State is privatized, Elliott and Westgate plan to integrate the business and
operations of Solid State with the business and operations of Grant and
refinance the significant debt Sold State has incurred. Elliott and Westgate
have advised that as a non-public company, Solid State would avoid the expenses
associated with financial and on-going reporting obligations applicable to
public companies in Canada. Other than the aforementioned integration and
reduction in expenses, Elliott and Westgate have advised ScotiaMcLeod that in
the event Solid State is privatized, it does not expect to realize any other
material benefits that would not otherwise accrue to a similar buyer in the
circumstances.

The ScotiaMcLeod Valuation is not amenable to partial analysis or
summary description. Selecting portions of the analyses and of the factors
considered, without considering all factors and analyses together, could create
a misleading view of the process employed by ScotiaMcLeod in arriving at its
valuation conclusions. In arriving at the fair market value range, ScotiaMcLeod
has considered the results of all analyses undertaken and placed a greater
reliance on the capitalization of forecast 1998 EBITDA approach in arriving at
its conclusions.

Given all of these factors, the valuation methodology applied, the
scope of review undertaken and subject to the assumptions and limitations noted
in the ScotiaMcLeod Valuation and Fairness Opinion, ScotiaMcLeod is of the
opinion that as at August 31, 1997, the fair market value of the Common Shares
was in the range of $2.80 to $3.60 per Common Share. ScotiaMcLeod is not aware
of any fact or circumstance that would render its conclusion as to such fair
market value inapplicable as at the date hereof.

Fairness Opinion

In assessing the fairness of the Offer, ScotiaMcLeod considered a
number of factors, primarily the fact that the Offer Price is at the upper end
of the range of value as determined by the ScotiaMcLeod Valuation and Fairness
Opinion.

Based on the ScotiaMcLeod Valuation and subject to all the matters set
out in the ScotiaMcLeod Valuation and Fairness Opinion, ScotiaMcLeod is of the
opinion that, as of November 25, 1997, the date of the ScotiaMcLeod Valuation
and Fairness Opinion, the Offer is fair, from a financial point of view, to the
Shareholders other than Elliott and Westgate.

THE FOREGOING IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE SCOTIAMCLEOD VALUATION AND FAIRNESS OPINION ATTACHED AS
SCHEDULE "A" TO THIS CIRCULAR. SHAREHOLDERS ARE URGED TO READ THE SCOTIAMCLEOD
VALUATION AND FAIRNESS OPINION IN ITS ENTIRETY.

6. SPECIAL COMMITTEE REVIEW AND RECOMMENDATION OF THE BOARD OF DIRECTORS

The Special Committee had several meetings with representatives of
ScotiaMcLeod, reviewed the ScotiaMcLeod Valuation and Fairness Opinion and the
Offer and presented a report to the Board of Directors containing its
conclusions and recommendations. The Special Committee concluded that the Offer
and the consideration to be received thereunder are fair to Shareholders other
than Elliott and Westgate. The Special Committee recommended that the Board of
Directors recommend the acceptance of the Offer.

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<PAGE> 26

AS SET FORTH IN THE DIRECTORS' CIRCULAR, THE BOARD OF DIRECTORS
RECOMMENDS THAT ALL SHAREHOLDERS OTHER THAN ELLIOTT AND WESTGATE ACCEPT THE
OFFER.

7. PRIOR VALUATIONS

The Offeror has reviewed its own records and consulted with Solid
State, Elliott, Westgate and Grant in respect of "prior valuations" as such
expression is defined in OSC Policy 9.1 and CVMQ Policy Q-27. The Offeror is not
aware of any such "prior valuations."

8. ACQUISITION OF COMMON SHARES NOT DEPOSITED UNDER THE OFFER

Compulsory Acquisition and Appraisal Rights

If, within 120 days after the date hereof, the Offer has been accepted
by the holders of not less than 90% of the Common Shares on a fully diluted
basis, other than the Common Shares held on the date hereof by or on behalf of
the Acquiring Shareholders, then the Offeror currently intends, pursuant to the
provisions of Part 16 of the Act, to acquire all the Common Shares, including
Common Shares represented by convertible or exercisable securities or options,
held by each Shareholder who did not accept the Offer and any person who
subsequently acquires any Common Shares from such a holder (each such holder and
each such person, a "dissenting offeree") on the same terms and at the same
price (the "Offer Price") for which the Common Shares were acquired under the
Offer.

To exercise this statutory right, the Offeror must give notice (the
"Offeror's Notice") to the dissenting offerees and to the Director of its
exercise of such right to acquire not later than the earlier of 60 days from the
Expiry Time and 180 days from the date of the Offer. Within 20 days after giving
the Offeror's Notice, the Offeror must pay to the Company the Offer Price for
the Common Shares not acquired under the Offer, to be held in trust for the
dissenting offerees. Within 20 days after receipt of the Offeror's Notice, each
dissenting offeree must send the certificates representing the Common Shares
held by such dissenting offeree to the Company and may elect either to transfer
those Common Shares to the Offeror on the terms on which the Offeror acquired
such Common Shares under the Offer or to demand payment of the fair value of
those Common Shares by so notifying the Offeror and by applying to the Court of
Queen's Bench of Alberta to fix that value, within 60 days after the date of the
mailing of the Offeror's Notice. If the dissenting offeree fails to notify the
Offeror and apply to the Court of Queen's Bench of Alberta within the applicable
60-day period, the dissenting offeree will be deemed to have elected to transfer
his Common Shares to the Offeror on the same terms (including the offer price)
as the Offeror acquired the Common Shares under the Offer. If a dissenting
offeree has elected to demand payment of fair value of the Common Shares, the
Offeror also has the right to apply to the Court of Queen's Bench of Alberta to
fix the fair value of the Common Shares of that dissenting offeree.

THE FOREGOING IS ONLY A SUMMARY OF THE RIGHT OF COMPULSORY ACQUISITION
WHICH MAY BECOME AVAILABLE TO THE OFFEROR. THE SUMMARY IS NOT INTENDED TO BE
COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY THE PROVISION OF PART 16 OF THE
ACT. SHAREHOLDERS SHOULD REFER TO PART 16 OF THE ACT FOR THE FULL TEXT OF THE
RELEVANT STATUTORY PROVISIONS, AND THOSE WHO WISH TO BE BETTER INFORMED ABOUT
THESE PROVISIONS SHOULD CONSULT THEIR LEGAL ADVISORS. THE SECTIONS IN PART 16 OF
THE ACT ARE COMPLEX AND MAY REQUIRE STRICT ADHERENCE TO NOTICE AND TIMING
PROVISIONS, FAILING WHICH SUCH RIGHTS MAY BE LOST OR ALTERED.

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<PAGE> 27

Subsequent Acquisition Transactions

If the statutory right of compulsory acquisition described above is not
available or if the minimum deposit condition is not satisfied and the Offeror
waives such condition to the Offer, or if the Offeror elects not to proceed
under such provisions, then, depending on the number of Common Shares acquired
pursuant to the Offer, the Offeror currently intends to cause a special meeting
of Shareholders to be called to consider an amalgamation, statutory arrangement
or other transaction (each, a "Subsequent Acquisition Transaction") involving
the Offeror and/or an affiliate of the Offeror, Solid State and the Shareholders
for the purposes of enabling the Offeror to acquire all of the Common Shares not
deposited under the Offer in accordance with applicable law. In particular, in
such circumstances, the Offeror currently intends to propose an amalgamation of
Solid State with an affiliate of the Offeror pursuant to which Shareholders who
do not deposit their Common Shares under the Offer would have their Common
Shares exchanged on the amalgamation for redeemable preference shares of the
amalgamated corporation (the "Preference Shares"), which Preference Shares will
be redeemed for cash consideration equal to the purchase price under the Offer.
The exact timing and details of any such acquisition would necessarily depend
upon a variety of factors, including the number of Common Shares acquired
pursuant to the Offer. The Offeror intends that the Shares acquired by it
pursuant to the Offer will be counted as part of any minority approval in
connection with any such transaction. In any amalgamation, statutory arrangement
or other transaction, the holders of Common Shares may have the right to dissent
under the Act and to be paid fair value for their Common Shares, with such fair
value to be determined by a court.

Each type of Subsequent Acquisition Transaction described above, would
be a "going private transaction" within the meaning of OSC Policy 9.1 and CVMQ
Policy Q-27 and the regulations to securities legislation in certain of the
provinces of Canada (collectively the "Regulations"), if such Subsequent
Acquisition Transaction would result in the interest of a holder of Common
Shares (the "affected securities") being terminated without the consent of the
holder and without the substitution therefor of an interest of equivalent value
in a participating security of Solid State, a successor to the business of Solid
State or a person who controls Solid State or, in the case of OSC Policy 9.1 and
CVMQ Policy Q-27, a person who controls a successor to the business of Solid
State.

OSC Policy 9.1, CVMQ Policy Q-27 and the Regulations provide that,
unless exempted, a corporation proposing to carry out a going private
transaction is required to prepare a valuation of the affected securities (and
any non-cash consideration being offered therefor) and provide to the holders of
the affected securities a summary of such valuation. The ScotiaMcLeod Valuation
and Fairness Opinion attached hereto as Schedule "A" and the summary contained
in the Circular, may satisfy these requirements with respect to the Common
Shares.

OSC Policy 9.1, and CVMQ Policy Q-27 would also require in respect of
this Offer, in addition to any other required securityholder approval, in order
to complete a going private transaction, the approval of a simple majority of
the votes cast by "minority" holders of the affected securities be obtained. In
relation to the Offer and any Subsequent Acquisition Transaction which
constitutes a going private transaction (within the meaning of OSC Policy 9.1
and CVMQ Policy Q-27), the "minority" holders will be, unless an exemption is
available or discretionary relief is granted by the Ontario Securities
Commission and Commission des valeurs mobilieres du Quebec, as required, all
holders of Common Shares other than the Offeror, its directors and senior
officers and any associate or affiliate of the Offeror and its directors and
senior officers and any person or company acting jointly or in concert with the
Offeror or any of its directors or senior officers in connection with the Offer
or the subsequent going private transaction. However, OSC Policy 9.1 and CVMQ
Policy Q-27 also provide that the Offeror may treat Common Shares acquired
pursuant to the Offer as "minority" shares and to vote them, or to consider them
voted, in favour of such going private transaction if the consideration per
security in the going private transaction is at least equal in value to the
consideration

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paid under the Offer. The Offeror currently intends that the consideration under
any Subsequent Acquisition Transaction proposed by it would be identical to the
consideration under the Offer.

In addition, under OSC Policy 9.1 and CVMQ Policy Q-27, if, following
the Offer, the Offeror and its affiliates are the registered holders of 90% or
more of the Common Shares at the time the Subsequent Acquisition Transaction is
initiated, the requirement for minority approval would not apply to the
transaction if a statutory dissent and appraisal remedy is available to the
minority shareholders or if a substantially equivalent enforceable right is made
available to the minority shareholders.

In the event a going private transaction or another Subsequent
Acquisition Transaction were to be consummated, holders of Common Shares, under
section 184 of the Act, may have the right to dissent and demand payment of the
fair value of such Common Shares. This right, if the statutory procedures are
complied with, could lead to a judicial determination of the fair value required
to be paid to such dissenting holders for their Common Shares. The fair value of
Common Shares so determined could be more or less than the amount paid per
Common Share pursuant to the Subsequent Acquisition Transaction or the Offer.
Any such judicial determination of the fair value of the Common Shares could be
based upon considerations other than, or in addition to, the market price of the
Common Shares.

Judicial Developments

Prior to the pronouncement of OSC Policy 9.1 and CVMQ Policy Q-27,
Canadian courts had, in a few instances, granted preliminary injunctions to
prohibit transactions which constituted "going private transactions" within the
meaning of OSC Policy 9.1 and CVMQ Policy Q-27. The Offeror has been advised
that more recent legislative enactments and notices and judicial decisions
indicate a willingness to permit "going private transactions" to proceed subject
to compliance with requirements intended to ensure procedural and substantive
fairness to the minority shareholders.

Shareholders should consult their legal advisors for a determination of
their legal rights with respect to any transaction which may constitute a going
private transaction.

9. CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

In the opinion of Osler, Hoskin & Harcourt, Canadian counsel to the
Offeror, the following is a summary of the principal Canadian federal income tax
considerations generally applicable to Shareholders who dispose of their Common
Shares pursuant to the Offer or pursuant to the transactions described under
"Acquisition of Common Shares Not Deposited Under the Offer--Compulsory
Acquisition and Appraisal Rights" or "Acquisition of Common Shares Not Deposited
Under the Offer--Subsequent Acquisition Transactions" . The following summary is
applicable only to Shareholders who, for purposes of the Tax Act, are or are
deemed to be resident in Canada, hold their Common Shares as capital property
and deal at arm's length with the Offeror and the Company. Common Shares will
generally constitute capital property to a Shareholder unless the Shareholder
holds such Common Shares in the course of carrying on a business of trading or
dealing in securities or otherwise as part of a business of buying and selling
securities or has acquired such Common Shares in a transaction or transactions
considered to be an adventure in the nature of trade. Certain Shareholders whose
Common Shares might not otherwise qualify as capital property may be entitled to
obtain such qualification by making the election permitted by subsection 39(4)
of the Tax Act.

This summary is based upon the current provisions of the Income Tax
Act (Canada) (the "Tax Act"), the regulations thereunder and counsel's
understanding of the current published administrative and assessing policies of
Revenue Canada. This summary is not exhaustive of all Canadian federal income
tax considerations. This summary also takes into account all specific proposals
to amend the Tax Act and the

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regulations thereunder publicly announced by the Minister of Finance (Canada)
prior to the date hereof. This summary does not otherwise take into account or
anticipate changes in the law or administrative practices, whether by way of
judicial decision or governmental or legislative action, nor does it take into
account provincial, territorial or foreign tax legislation or considerations.

This summary is of a general nature only and is not intended to be, nor
should it be construed to be, legal or tax advice generally or to any particular
Shareholder. Shareholders should consult their own tax advisers with respect to
their particular tax positions. A Shareholder who is, as defined under the Tax
Act, a "specified financial institution", or is otherwise a "financial
institution" subject to special provisions of the Tax Act applicable to income,
gain or loss arising from "mark-to-market property", should consult its own tax
advisors as the following summary does not apply to such a Shareholder.

The Offer

A Shareholder whose Common Shares are taken up and paid for under the
Offer will realize a capital gain (or capital loss) to the extent that the
proceeds received for such Common Shares, net of any reasonable costs of
disposition, exceed (or are less than) the adjusted cost base to such
Shareholder of such Common Shares. A Shareholder will generally be required to
include, in computing income for the year in which the disposition occurs,
three-quarters of the amount of any resulting capital gain (the "taxable capital
gain") and will generally be entitled to deduct three-quarters of the amount of
any resulting capital loss (the "allowable capital loss") against taxable
capital gains realized by the Shareholder in the year in which the disposition
occurs, and against net taxable capital gains realized in any of the three
preceding taxation years or in any future taxation year to the extent and in the
circumstances prescribed in the Tax Act. In the case of a Shareholder that is a
corporation, the amount of any capital loss otherwise determined on the
disposition of its Common Shares may in certain circumstances be reduced by the
amount of dividends previously received on such Common Shares to the extent and
under the circumstances prescribed in the Tax Act. Similar rules may apply where
a corporation is a member of a partnership or a beneficiary of a trust that owns
Common Shares, and under proposed amendments to the Tax Act, these rules will be
extended to certain other circumstances in which a partnership or a trust owns
Common Shares.

In addition to any other tax payable by a corporation, the Tax Act
imposes a refundable tax of 6 2/3% on certain investment income, including
amounts in respect of taxable capital gains, earned by a Canadian controlled
private corporation.

Capital gains realized by an individual or a trust, other than certain
specified trusts, may give rise to alternative minimum tax under the Tax Act.

Compulsory Acquisition

As described under "Acquisition of Common Shares Not Deposited Under
the Offer -- Compulsory Acquisition and Appraisal Rights" in the Circular, the
Offeror may, in certain circumstances, acquire Common Shares not deposited under
the Offer pursuant to the compulsory acquisition provisions of Part 16 of the
Act. A Shareholder whose Common Shares are acquired by the Offeror pursuant to
such compulsory acquisition provisions will realize a capital gain (or capital
loss) generally calculated in the manner, and subject to the treatment, as
described above.

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<PAGE> 30

Subsequent Acquisition Transactions

As described under "Acquisition of Common Shares Not Deposited Under
the Offer -- Subsequent Acquisition Transactions" in the Circular, if the
compulsory acquisition provisions are not available or are not utilized, the
Offeror will consider other means of acquiring, directly or indirectly, all of
the Common Shares of the Company not deposited under the Offer by way of a
Subsequent Acquisition Transaction. The tax treatment of such a transaction to a
Shareholder will depend upon the exact manner in which the transaction is
carried out and may be substantially the same as, or materially different than,
described above. Shareholders should consult their own tax advisers for advice
with respect to the potential income tax consequences to them of having their
Common Shares acquired pursuant to such a transaction.

In particular, in such circumstances, the Offeror currently intends to
propose an amalgamation of the Company and an affiliate of the Offeror pursuant
to which Shareholders who do not deposit their Common Shares under the Offer
will have their Common Shares exchanged on the amalgamation for Preference
Shares, which Preference Shares will forthwith be redeemed for cash
consideration equal to the purchase price paid under the Offer. If such an
amalgamation is implemented, a Shareholder will realize neither a capital gain
nor a capital loss as a result of the disposition of Common Shares in exchange
for Preference Shares. The aggregate cost to the Shareholder of the Preference
Shares received on the exchange will be equal to the aggregate adjusted cost
base of such Shareholder's Common Shares immediately before the amalgamation.

Upon the redemption of Preference Shares under the amalgamation, the
Shareholder thereof will be deemed to have received a taxable dividend (subject
to the potential application of subsection 55(2) of the Tax Act to Shareholders
that are corporations as described below) equal to the amount, if any, by which
the redemption price of the Preference Shares exceeds their paid-up capital for
the purposes of the Tax Act. In the case of a Shareholder who is an individual
(other than certain trusts), any such deemed dividend will be included in
computing the Shareholder's income and will be subject to the gross-up and
dividend tax credit rules normally applicable to taxable dividends received from
taxable Canadian corporations. In the case of a Shareholder that is a
corporation, any such deemed dividend will be included in computing the
Shareholder's income and will generally be deductible in computing taxable
income. To the extent that such a deduction is available, certain corporations
may be liable to pay a 331/3% refundable tax under Part IV of the Act in respect
of such deemed dividend. Under subsection 55(2) of the Tax Act, a Shareholder
that is a corporation may be required to recognize all or a portion of the
dividend otherwise deemed to have been received upon the redemption of the
Preference Shares as proceeds of disposition in the computation of the capital
gain (or capital loss) resulting from the redemption.

A Shareholder whose Preference Shares are redeemed will be regarded as
having disposed of such shares on the redemption and will realize a capital gain
(or capital loss) to the extent that the difference between the redemption price
and the amount of any deemed dividend exceeds (or is less than) the adjusted
cost base thereof to the Shareholder. The treatment of any such capital gain (or
capital loss) will be the same as described above under "The Offer".

As discussed under "Acquisition of Common Shares Not Deposited Under
the Offer -- Subsequent Acquisition Transactions" in the Circular, a Shareholder
who dissents with respect to an amalgamation is entitled to receive payment
equivalent to the fair value of the Shareholder's Common Shares. Under the
current published administrative practice of Revenue Canada, any such payments
received from the amalgamated corporation will be treated as proceeds of
disposition (rather than a deemed dividend) giving rise to a capital gain (or
capital loss). Because of uncertainties as to whether and to what extent an
amount paid to a dissenting Shareholder will be treated as proceeds of
disposition or as the payment of a dividend, dissenting Shareholders should
consult their own tax advisors in this regard. The calculation and tax

30
<PAGE> 31

treatment of any such capital gain (or capital loss) will be generally the same
as described under subparagraph (i) above.

As an alternative to the amalgamation discussed above, the Offeror may
propose an arrangement, consolidation, reclassification or other transaction,
the tax consequences of which may differ from those arising on the sale of
Common Shares under the Offer. No opinion is expressed as to the tax
consequences of any such transaction to a Shareholder. Shareholders should
consult their own tax advisors in such circumstances.

10. EFFECT OF THE OFFER ON THE MARKET FOR COMMON SHARES AND STOCK EXCHANGE
LISTINGS

The purchase of Common Shares by the Offeror pursuant to the Offer will
reduce the number of Common Shares that might otherwise trade publicly, as well
as the number of Shareholders and, depending on the number of Common Shares
purchased under the Offer, could adversely affect the liquidity and market value
of the remaining Common Shares held by the public.

The rules and regulations of The Toronto Stock Exchange establish
certain criteria which, if not met, could lead to the delisting of the Common
Shares from such exchange. Among such criteria are the number of holders of
Common Shares, the number of Common Shares publicly held and the aggregate
market value of the Common Shares publicly held. Depending upon the number of
Common Shares purchased pursuant to the Offer, it is possible that the Common
Shares would fail to meet the criteria for continued listing on these exchanges.
If this were to happen, the Common Shares could be delisted and this could, in
turn, adversely affect the market or result in a lack of an established market
for such Common Shares.

As discussed in "Background to the Offer, Fairness of the Offer,
Purpose of the Offer and Plans for Solid State", if permitted by applicable law,
subsequent to the completion of the Offer or any subsequent acquisition
transaction, the Offeror will apply to The Toronto Stock Exchange to delist the
Common Shares from trading on such exchange.

11. OWNERSHIP OF AND PRIOR TRADING IN THE SECURITIES OF SOLID STATE

As of November 26, 1997 an aggregate of 9,305,109 Common Shares
(representing approximately 64% of the outstanding Common Shares of Solid State
on a fully diluted basis, excluding out of the money options) are held by
Elliott and Westgate, which securities will be transferred to the Offeror prior
to the completion of the Offer. Each of Michael Latina, an officer of an
affiliate of Elliott and a director of Solid State, and Richard Anderson, a
nominee of Elliott on the board of directors of Solid State who also provides
consulting services to Elliott, has an option to acquire from Solid State 20,000
Common Shares at an exercise price of $1.00 per share. Except as discussed
above, no Common Shares are beneficially owned directly or indirectly, nor is
control or direction exercised thereover by the Offeror or any director or
officer of the Offeror, and to the knowledge of the Offeror, after reasonable
inquiry, no Common Shares are beneficially owned, directly or indirectly, nor is
control or direction exercised thereover by, any associate of the Offeror's
directors or officers, by any person or company holding more than 10% of the
common shares of the Offeror or by any person or company acting jointly or in
concert with the Offeror.

As at the close of business on November 20, 1997, there were 14,260,529
Common Shares outstanding. In view of the 9,305,109 Common Shares held by or on
behalf of the Acquiring Shareholders, there are 5,582,420 Common Shares on a
fully diluted basis that are eligible for deposit under the Offer (5,275,420
Common Shares excluding out of the money options).

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<PAGE> 32

To the knowledge of the Offeror, directors and officers of Solid State
and associates of such directors and officers, as a group beneficially own
directly or indirectly, or exercise control or direction over 757,465 Common
Shares, representing 5.3% of the Common Shares. As at the close of business on
November 20, 1997, the directors, officers and employees of Solid State and
certain other persons had beneficial interest in 627,000 Common Shares through
vested options (320,000 Common Shares excluding out of the money options).

To the knowledge of the Offeror, after reasonable inquiry, none of the
Offeror or its affiliates (including Grant and Elliott), Westgate, the Offeror's
directors or officers or their respective associates, any person or company
holding more than 10% of the common shares of the Offeror or by any person or
company acting jointly in concert with the Offeror has traded in any securities
of Solid State during the 12 months preceding the date of the Offer except as
follows:

In April 1996, Elliott and Westgate acquired 191,100 and 75,000 Common
Shares respectively at an approximate price of US$1.80. On April 23, 1996, a
U.S. subsidiary of Solid State issued to Elliott and Westgate in proportions of
two-thirds and one-third respectively a US$2,000,000 8% Convertible Debenture
due April 30, 2001, convertible into 1,141,667 Common Shares. In addition,
Westgate loaned a U.S. subsidiary of Solid State US$3,000,000 due December 31,
1996 pursuant to a secured loan agreement, with interest at 18% per annum. Such
loans, and all other loans by Elliott and Westgate to the U.S. subsidiary of
Solid State described below, were guaranteed by Solid State. As part of this
transaction, Elliott and Westgate received warrants to acquire 70,000 and 35,000
Common Shares respectively at an exercise price of $2.76.

On October 16, 1996, Elliott subscribed for 3,044,444 Common Shares at
a price of $1.35 for aggregate proceeds of US$3,000,000. In addition, pursuant
to a secured loan agreement Elliott and Westgate (in the proportions two-thirds
and one-third respectively) advanced US$9,000,000 to a U.S. subsidiary of Solid
State. The loan was due October 31, 1999, and required Solid State to use its
best efforts to complete a rights offering to raise at least US$4,000,000 to pay
down the loan by January 31, 1997. Upon such repayment, the interest rate was to
be reduced from 18% to 15%. The proceeds were used for working capital and to
retire the April 1996 loans. As part of the transaction, Elliott and Westgate
received 75,000 and 50,000 warrants to acquire Common Shares at an exercise
price of $1.65 and the warrants issued as part of the April 1996 transaction
were cancelled.

On December 2, 1996, each of Richard Anderson, a nominee of Elliott on
the board of Solid State who also provides consulting services to Elliot, and
Michael Latina, an officer of an affiliate of Elliott and a director of Solid
State, were awarded options to acquire 20,000 Common Shares at an exercise price
of $1.00 per share.

In January, 1997, Solid State was advised by its financial advisors
that a rights offering would not be successful and was abandoned. On January 31,
1997, Westgate sold its interest in the October 16, 1996 loan to Elliott. In
addition, Elliott and Westgate subscribed for 4,459,565 and 1,410,000 Common
Shares respectively at $0.92 per share. Aggregate proceeds of US$4,000,000 were
used to retire indebtedness to Westgate and to reimburse expenses of Elliott and
Westgate.

In January 1997, Elliott granted to Mitchell Peters, as an incentive,
an option to acquire 546,285 Common Shares at an exercise price of $0.92 per
share after payment to Elliott of $50,000 for the option, such option to be
exercisable commencing February 1998. In addition, in connection with the
take-over bid, Elliott has agreed to repurchase such option from Mr. Peters upon
taking up any shares under the Offer for an aggregate consideration of
$1,359,415.30, representing the difference in the Offer price and exercise price
multiplied by 546,285, less $50,000.

On February 10, 1997, Elliott loaned U.S.$2,000,000 to Solid State
under a promissory note due as to U.S.$1,000,000 on each of May 10 and August
10, with interest at 15% per annum. On February 19, 1997,

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<PAGE> 33

Elliott advanced a further U.S.$2,000,000 to a U.S. subsidiary of Solid State
under a promissory note due as to U.S.$1,000,000 on each of May 19 and August
19, 1997. On May 13, 1997 the May 10 and May 19 maturities were extended to June
15, 1997. On June 17, 1997, the June 15 maturities were extended to August 15,
1997.

On July 2, 1997, Elliott loaned a U.S. subsidiary of Solid State
U.S.$3,000,000 under a promissory note due August 15, 1997, with interest
at 15% per annum.

On July 22, 1997, Elliott loaned a U.S. subsidiary of Solid State
U.S.$1,000,000 under a promissory note due August 15, 1997, with interest at 15%
per annum.

Between September 4 and September 12, 1997, Elliott loaned a U.S.
subsidiary of Solid State U.S.$2,000,000 under a promissory note due November
30, 1997, with interest at 15% per annum. In addition, maturities on all loans
except the October 16, 1996 loan were extended to November 30, 1997.

On October 17, 1997, Elliott loaned a U.S. subsidiary of Solid State
U.S.$2,500,000 under a promissory note due November 30, 1997, with interest at
15% per annum.

On October 31, 1997, Elliott and Westgate exercised their warrants to
acquire 75,000 and 50,000 Common Shares respectively. The proceeds from the
issuance of the warrants was applied by Solid State to reduce the consolidated
indebtedness owing by Solid State to Elliott and Westgate.

12. PRICE RANGES AND VOLUME OF TRADING FOR THE COMMON SHARES

The Common Shares are listed and traded on The Toronto Stock Exchange
in Canada. The following table sets forth, for the periods indicated, the
reported high and low prices and the volume of trading of the Common Shares on
The Toronto Stock Exchange for the periods set forth below:

The Toronto Stock Exchange
--------------------------

Period High Low Volume
- ------ ---- --- ------
<S> <C> <C> <C>
1996
October ......................... $1.61 $1.00 128,203
November ......................... 1.40 .85 662,200
December ......................... 1.10 .90 1,614,300

1997
January ......................... $2.50 $1.00 799,373
February ......................... 1.95 1.60 94,600
March ............................ 2.65 1.40 276,913
April ............................ 2.74 1.90 334,817
May .............................. 3.40 2.25 463,603
June ............................. 3.75 2.50 401,465
July ............................. 3.30 2.75 476,521
August ........................... 3.15 2.40 380,738
September ........................ 3.00 2.00 283,019
October .......................... 3.00 2.50 792,734
November (to November 24) ........ 2.80 2.55 214,600
</TABLE>

The intention of Elliott and Westgate to consider making an offer for
all the Common Shares at a price of $3.00 per share was announced on September
29, 1997. The closing price of the Common Shares on The Toronto Stock Exchange
on the last full trading day before this announcement was $2.55 per Common
Share.

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<PAGE> 34

On November 25, 1997, the day prior to the announcement of Elliott that it
intended to cause an indirect subsidiary to make the Offer at $3.50 per share,
the closing price of the Common Shares on The Toronto Stock Exchange was $2.95.
Shareholders are urged to obtain a current market quotation.

13. DIVIDEND POLICY

The Company has never paid any dividends on any of the Common Shares
and there is no present intention of changing this policy. To the knowledge of
the Offeror, there are currently no contractual restrictions on the Company's
present or future ability to pay dividends.

14. MATERIAL CHANGES

Except as set forth below, the Offeror is not aware of any information
which indicates that any material change has occurred in the affairs of the
Company since the date of the last available published financial statements of
the Company for the year ended August 31, 1997, which financial statements
accompany the Directors' Circular.

In a September 11, 1997 press release, Solid State announced that
Elliott had recently advanced an additional US $2 million in support of the
Corporation's ongoing capital requirements. See also Section 11 of the Circular
for other transactions involving Elliott and Westgate and Solid State.

15. SOURCE OF FUNDS

The Offeror estimates that if, pursuant to the Offer, it acquires all
of the Common Shares not already held by or on behalf of the Offeror or its
affiliates, the total amount of funds required to purchase such Common Shares
will be approximately $20.5 million, including related fees and expenses under
the Offer estimated at $2 million. Elliott and Westgate have committed to
provide the Offeror with all funds necessary to acquire the Common Shares
pursuant to the Offer, which they will provide out of currently available funds.

16. ACCEPTANCE OF THE OFFER

As disclosed in the Directors' Circular, the directors and officers of
Solid State and, to the knowledge of such directors and officers after
reasonable inquiry, their respective associates, intend to deposit all Common
Shares owned by them under the Offer. Except as disclosed above, the Offeror has
no knowledge regarding whether any other Shareholders will accept the Offer.

17. COMMITMENTS TO ACQUIRE COMMON SHARES OF SOLID STATE

No Common Shares are subject to any commitments made by the Offeror,
its associates or affiliates, or, to the best of the knowledge of the directors
and officers of the Offeror after reasonable inquiry, by any directors or
officers of the Offeror or their respective associates except pursuant to the
Offer.

18. SOLICITING DEALER GROUP AND DEPOSITARY

Pursuant to an agreement with the Offeror, Midland Walwyn Capital Inc.
may form a soliciting dealer group comprising members of the Investment Dealers
Association of Canada and members of the stock exchanges in Canada to solicit
deposits of Common Shares (such group, the "Soliciting Dealer Group"). Each
member of the Soliciting Dealer Group, including Midland Walwyn Capital Inc., is
referred to herein as a "Soliciting Dealer". The Offeror will pay each
Soliciting Dealer whose name appears in the appropriate space

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<PAGE> 35

on the Letter of Acceptance and Transmittal accompanying a deposit of Common
Shares a solicitation fee of $.03 for each such Common Share deposited and taken
up by the Offeror under the Offer, subject to a minimum fee of $85 and a maximum
fee of $1,200 per selling Shareholder, provided that the minimum fee shall only
be payable in respect of deposits of 2,500 Common Shares or more. The Dealer
Manager will also be reimbursed by the Offeror for their reasonable
out-of-pocket expenses (including reasonable counsel fees) and will be
indemnified against certain liabilities, including liabilities under securities
laws, and expenses in connection with the Offer.

The Offeror has engaged Montreal Trust Company of Canada to act as
Depositary for the receipt of certificates in respect of Common Shares and
related Letters of Acceptance and Transmittal and Notices of Guaranteed Delivery
deposited under the Offer and for the payment for Common Shares purchased by the
Offeror pursuant to the Offer. The Depositary will receive reasonable and
customary compensation from the Offeror for its services in connection with the
Offer, will be reimbursed for certain out-of-pocket expenses and will be
indemnified against certain liabilities, including liabilities under securities
laws, and expenses in connection therewith.

No broker, investment dealer, bank, trust company or fiduciary shall be
the agent of the Offeror or the Depositary or the Dealer Manager for the
purposes of the Offer.

19. STATUTORY RIGHTS

Securities legislation in certain of the provinces and territories of
Canada provides Shareholders with. in addition to any other rights they may have
at law, rights of rescission or to damages, or both, if there is a
misrepresentation in a circular or a notice that is required to be delivered to
the Shareholders. However, such rights must be exercised within prescribed time
limits. Shareholders should refer to the applicable provisions of the securities
legislation of their province or territory for particulars of those rights or
consult with a lawyer.

20. MISCELLANEOUS

The Offer is only being made to, and deposits will only be accepted
from or on behalf of, Shareholders in jurisdictions in which the making or
acceptance of the Offer would be in compliance with the laws of such
jurisdictions. The Offeror may, in its sole discretion, take such action as it
may deem necessary to extend the Offer to Shareholders in any jurisdiction in
which the making or acceptance of the Offer would otherwise fail to comply with
the laws of such jurisdiction.

Shareholders in the United States or other jurisdiction should be aware
that disposition of the Common Shares may have tax consequences both in the
United States or such other jurisdictions, as applicable, and in Canada. Such
consequences for investors who are resident in, or citizens of, the United
States or such other jurisdictions, as applicable, may not be described fully
herein.

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<PAGE> 36

CONSENT OF OSLER, HOSKIN & HARCOURT

TO: The Board of Directors of SSGI Acquisition Corp.

We hereby consent to the reference to our opinion contained under
"Canadian Federal Income Tax Considerations" in the Circular accompanying the
Offer dated November 27, 1997 made by SSGI Acquisition Corp. to the holders of
Common Shares of Solid State Geophysical Inc.

Toronto, Ontario (Signed) Osler, Hoskin & Harcourt
November 27, 1997

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<PAGE> 37

CONSENT OF SCOTIAMcLEOD INC.

TO: The Board of Directors of SSGI Acquisition Corp.

We hereby consent to the inclusion of the ScotiaMcLeod Valuation and
Fairness Opinion dated November 25, 1997 addressed to the Special Committee of
the Board of Directors of Solid State Geophysical Inc. ("Solid State") in the
Circular accompanying the Offer dated November 27, 1997 made by SSGI Acquisition
Corp. to the holders of Common Shares of Solid State and to all references
thereto and a summary thereof contained in the Circular, and to the conclusions
thereof contained in the Circular. We also consent to the filing of the
ScotiaMcLeod Valuation and the Fairness Opinion with regulatory authorities in
accordance with the applicable securities laws and policies.

Calgary, Canada (Signed)ScotiaMcLeod Inc.
November 27, 1997

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<PAGE> 38

APPROVAL AND CERTIFICATE

The contents of the Offer and the Circular have been approved and the
sending, communication or delivery thereof to the Shareholders of Solid State
Geophysical Inc. has been authorized by the board of directors of the Offeror.
The foregoing contains no untrue statement of a material fact and does not omit
to state a material fact that is required to be stated or that is necessary to
make a statement not misleading in light of the circumstances in which it was
made. In addition, the foregoing does not contain any misrepresentation likely
to affect the value or the market price of the Common Shares which are the
subject of the Offer.

DATED: November 27, 1997

SSGI ACQUISITION CORP.

Jon Pollock

(Signed) Jon Pollock
President

On behalf of the Board of Directors

F.R. Allen

(Signed) F.R. Allen
Director

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<PAGE> 39

SCHEDULE "A"

November 25, 1997

The Special Committee of the
Board of Directors
Solid State Geophysical Inc.
7309 Flint Road S.E.
Calgary, Alberta
T2H 1G3

To the Special Committee:

ScotiaMcLeod Inc. ("SMI") understands that Elliott Associates, L.P. ("Elliott")
and Westgate International, L.P. ("Westgate") announced, on September 29, 1997,
their intention to consider pursuing a take-over bid or other acquisition
transaction (the "Proposed Offer") to acquire all of the issued and outstanding
common shares of Solid State Geophysical Inc. ("Solid State") not owned by
Elliott and Westgate (the "Minority Common Shares") for cash consideration of
$3.00 per common share. On November 25, 1997, Elliott and Westgate announced
plans to offer to acquire the Minority Common Shares, which Offer is being made
by an affiliate of Elliott (the "Offeror") for cash consideration of $3.50 per
common share (the "Offer").

The terms of the Offer are more fully described in the take-over circular (the
"Take-Over Circular") to be mailed to all Solid State shareholders.

A. ENGAGEMENT OF SCOTIAMCLEOD

On September 29, 1997, the Board of Directors of Solid State ("the Board")
appointed a Special Committee (the "Special Committee") consisting of Mr. J.
Richard Harris, an independent director, to review and consider the Proposed
Offer and to report to the Board thereon. The mandate of the Special Committee
included obtaining a valuation and an opinion as to whether the Proposed Offer
was fair, from a financial point of view, to Solid State shareholders other than
Elliott and Westgate (the "Minority Shareholders"). On September 30, 1997 the
Special Committee contacted SMI to discuss the possibility of engaging SMI to
provide financial advisory services to the Special Committee, including the
preparation and delivery of a report as to the fair market value of the common
shares of Solid State (the "Valuation") and, in the event an offer was made to
the Minority Shareholders, an opinion as to the fairness, from a financial point
of view (the "Fairness Opinion"), of such offer to the Minority Shareholders.

SMI understands that the Special Committee engaged independent legal counsel,
and in consultation with such counsel, engaged two independent consultants to
assist it in its deliberations. The Special Committee and legal counsel met with
SMI and inquired as to

A-1

<PAGE> 40

its independence, capabilities and expertise in providing financial advisory
services, including the preparation and delivery of the Valuation and Fairness
Opinion.

SMI was engaged by the Special Committee pursuant to an engagement agreement
between SMI and Solid State (on behalf of the Special Committee) dated as of
October 9, 1997 (the "Engagement Agreement") and commenced its review of Solid
State. Under the terms of the Engagement Agreement, Solid State has agreed to
compensate SMI $300,000 for its services, to reimburse it for its reasonable
out-of-pocket expenses and to indemnify it in certain circumstances. The fee
payable to SMI is not contingent in whole or in part upon the success of the
Offer nor is it dependent on the conclusion reached by SMI in the Valuation or
the Fairness Opinion.

The Valuation has been prepared to comply with relevant Canadian securities
legislation and policies, specifically Ontario Securities Commission Policy 9.1
and Quebec Securities Commission Policy Q-27. As required by such legislation
and policies, the Valuation has been based upon assumptions considered necessary
and valuation techniques and methodologies that were considered appropriate in
the circumstances. As required by the relevant policies, the fair market value
range determined for Solid State Common Shares has not been adjusted downward to
reflect the fact that the Minority Common Shares do not form part of a
controlling interest.

B. CREDENTIALS OF SCOTIAMCLEOD

SMI, established in 1921, is one of Canada's leading investment banking firms
with operations in all facets of corporate and government finance, mergers and
acquisitions, equity and fixed income sales and trading, investment research and
investment management. SMI is a member of the Investment Dealers Association of
Canada, the Securities Industry Association Inc. of the United States, all
leading stock exchanges in Canada and the New York Stock Exchange in the United
States. SMI is a leading provider of financial services in the areas of debt and
equity capital market financing, mergers, acquisitions, divestitures,
restructurings, valuations and fairness opinions.

The opinion expressed herein is the opinion of SMI as a firm. The form and
content of the Valuation and Fairness Opinion have been approved for release by
a committee of its directors and other professionals of SMI, all of whom are
experienced in valuation and fairness opinion matters.

C. INDEPENDENCE OF SCOTIAMCLEOD

SMI is not an insider, associate or affiliate (as such terms are defined in the
relevant securities legislation) of Solid State, the Offeror, Elliott or
Westgate and neither SMI or any of its affiliates is an advisor to the Offeror,
Elliott or Westgate in respect of the Offer. Neither SMI nor its affiliates have
acted as an underwriter or a financial advisor to the Offeror, Elliott,
Westgate, Solid State or their affiliates or associates.

There are no understandings or agreements between SMI and Elliott, Westgate,
Solid State or their affiliates or associates with respect to future business
dealings between them.

A-2

<PAGE> 41

D. SCOPE OF REVIEW

In preparing the Valuation, SMI has reviewed and relied upon, among other
things, the following:

a) certain publicly available information related to the business, operations
and financial condition of Solid State, including the audited financial
statements for each of the fiscal years ended August 31, 1995 through 1997;

b) Solid State's 1998 budget and estimate for first quarter of fiscal 1999, as
prepared by Solid State's senior management;

c) a forecast of Solid State's Canadian proprietary data bank revenues for the
periods ending August 31, 1998, 1999 and 2000;

d) detailed information provided by Solid State's senior management and
confirmed by Price Waterhouse, Solid State's external auditors, regarding
Solid State's tax pool balances as at August 31, 1997;

e) tax returns for Solid State for the fiscal periods ended February 25, 1997,
August 31, 1996 and August 31, 1995;

f) minutes from meetings of the Board of Directors of Solid State during the
period July 1995 to September 1997;

g) interviews and discussions with Solid State's senior management with regard
to Solid State, its operations and future prospects;

h) interviews and discussions with members of the Board of Directors of Solid
State and the Special Committee;

i) interviews with the Special Committee's legal counsel regarding certain
legal matters;

j) interviews and discussions with Price Waterhouse;

k) interviews and discussions with certain major customers of Solid State;

l) discussions with certain competitors of Solid State;

m) discussions with certain suppliers of Solid State;

n) certain publicly available information related to the business, operations,
financial performance and stock trading histories of Solid State and other
selected public geophysical service companies in Canada and the United
States;

o) the appraisal of Atchafalaya Bay 3-D Transition Zone Seismic Data Bank
prepared by Daniel Johnston & Co., Inc. ("Johnston") dated March, 1997 and
an updated appraisal dated October, 1997;

p) the appraisal of Atchafalaya Bay License prepared by Johnston, dated
November 3, 1997;

q) the appraisal of seismic equipment prepared by R. T. Clarke Companies Inc.
dated October 30, 1997;

r) the appraisal of real estate by Warren Nelson Realty Inc. dated October 29,
1997;

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<PAGE> 42

s) the appraisal of vehicle fleet by Jim Pattison Lease dated October 30,
1997;

t) certain publicly available information with respect to recent transactions
involving the sale of geophysical service companies of a comparable nature
considered to be relevant by SMI in the circumstances;

u) final drafts of the Take-Over Circular and the Directors' Circular; as well
as press releases related to the Proposed Offer and the Offer;

v) a certificate of representation dated November 25, 1997 from an authorized
representative of Solid State attesting to the accuracy and completeness of
the information provided to SMI and other conditions as provided for in the
Engagement Agreement; and

w) such other information, investigations and analyses as SMI considered
necessary or appropriate in the circumstances to complete the Valuation.

E. KEY ASSUMPTIONS AND LIMITATIONS

SMI conducted such analyses, investigations, research and testing of assumptions
as were considered by it to be appropriate in the circumstances for the purpose
of preparing the Valuation and the Fairness Opinion. SMI was granted full access
to Solid State management and was not, to the best of its knowledge, denied
access to any information within the possession of Solid State, the Offeror,
Elliott or Westgate which might be material to the Valuation or the Fairness
Opinion.

SMI has relied upon, and has assumed the completeness, accuracy and fair
representation of all financial and other information, data, advice, opinions
and representations obtained by us from public sources , the final drafts of the
Take-Over Circular and Directors' Circular or provided to us by the Offeror,
Elliott, Westgate or Solid State or its advisors or otherwise pursuant to our
engagement (the "Information") and the Valuation and Fairness Opinion herein is
conditional upon such completeness, accuracy and fairness. Subject to the
exercise of professional judgment and except as expressly described herein, we
have not attempted to verify independently the accuracy or completeness of the
Information. A representative of senior management of Solid State has
represented to us, in a certificate delivered November 25, 1997, amongst other
things, that the Information provided to us by or on behalf of Solid State is
complete and correct at the date the Information was provided to us and that
since the date of the Information, there has been no material change, financial
or otherwise, in the position of Solid State, or in its assets, liabilities
(contingent or otherwise), business or operations and there has been no change
of any material fact which is of a nature as to render the Information untrue or
misleading in any material respect.

The Valuation and the Fairness Opinion are rendered on the basis of securities
markets, economic and general business and financial conditions prevailing as at
the date hereof and the condition and prospects, financial and otherwise, of
Solid State as they were reflected in the information and documents reviewed by
us and as they were represented to us in our discussions with senior management
of Solid State. In our analyses and in connection with the preparation of the
Valuation and the Fairness Opinion, we made numerous assumptions with respect to
industry performance, general business, market

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<PAGE> 43

and economic conditions and other matters, many of which are beyond the control
of Solid State. It should be noted that all financial information presented is
expressed in Canadian dollars unless otherwise stated.

F. VALUATION

INTRODUCTION

Solid State is an Alberta company incorporated on January 7, 1985. Solid State
has wholly-owned subsidiaries incorporated in the United States and Venezuela.
Solid State also has operations in Bolivia, which are conducted through the
Venezuelan subsidiary. Solid State provides seismic data acquisition services,
both in land and transition zones, to domestic and international customers in
the oil and gas industry. Solid State also has a modest North American
proprietary seismic data bank. Solid State markets its seismic data acquisition
services from its offices in Calgary, Alberta; Houston, Texas; and Santa Cruz,
Bolivia.

The authorized share capital of Solid State consists of an unlimited number of
common shares (the "Common Shares") and an unlimited number of preferred shares,
all of no par value. As at the date hereof, 14,260,529 Common Shares and 627,000
options to purchase Common Shares are issued and outstanding.

Elliott's and Westgate's direct ownership of the Common Shares is described in
Table 1.

TABLE 1
COMMON SHARE OWNERSHIP

PERCENT OF
SHARES
NUMBER OUTSTANDING
------ -----------
<S> <C> <C>
Elliott 5,963,565 41.8%
Westgate 3,341,544 23.5
--------- ----
Total 9,305,109 65.3%
========= ====
</TABLE>

Directors, management and other insiders currently own 757,465 Common Shares
representing 5.3% of the outstanding Common Shares and 245,000 options to
acquire Common Shares.

BUSINESS OVERVIEW

The geophysical service industry is comprised of two principal segments -
seismic data acquisition and seismic data processing. The seismic data
acquisition segment can be further categorized based on operating location to
include data acquisition in land, transition zones and marine environments. Some
industry participants acquire data on a contract basis only for clients, while
others acquire data for their own account for subsequent resale to third
parties. Seismic data owned by an industry participant is often referred to as a
proprietary data bank. The industry is highly cyclical in nature, and reacts to
oil and gas industry activity levels. It is also seasonal, especially in Canada,
where the

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<PAGE> 44

land being surveyed is often only accessible in the winter. Solid State operates
in the land and transition zone data acquisition segments only.

Seismic data is one of the principal sources of information used by
geoscientists to map potential or existing oil and gas formations and the
geological structures that affect them. Seismic crews acquire seismic data by
deploying a network of electronic cables to which electronic receivers
(geophones) are attached. Once the network is deployed, an energy source, such
as vibroseis (through the usage of large vehicles which possess the ability to
vibrate the ground beneath them) or dynamite, is used to generate seismic waves
into the earth which reflect off subsurface geological formations and
reverberate back to the geophones. The geophones transmit the seismic waves to
the central recording device. Each geophone requires a separate channel in the
recording system. Generally, the higher the resolution of the data to be
acquired, the more channels are required to conduct the survey. Once the data
has been recorded it can be processed and interpreted.

Historically, two dimensional surveys ("2D") were the standard technique to
acquire seismic data. 2D seismic can be visualized as a single vertical plane of
subsurface information. With recent increases in computer processing capability
and enhanced recording resolution, seismic surveys are now being conducted in
three dimensions ("3D"). 3D surveys can be visualized as a cube of subsurface
information. The use of 3D surveys has allowed better resolution and definition
of subsurface structures, which in turn has had the effect of reducing finding
costs and increasing both exploration and development successes, thus causing
growth in demand for geophysical services. To increase the efficiency of
reserves exploitation, companies are now employing four dimensional seismic
surveys ("4D") utilizing repetitive 3D surveys over periods of time to analyze
reservoir performance. Solid State is equipped to provide 2D, 3D and 4D seismic
data acquisition services.

The seismic data acquisition industry is very competitive. As companies have
access to similar technologies, competition is based on price, service and
quality. As a result, companies seek to distinguish themselves through
geographic focus, service quality, size and area of expertise (i.e. focus on
land, transition zones or marine seismic data acquisition services). Certain
competitors have tried to differentiate themselves by developing proprietary
recording systems, vertical integration with third party contractors and by
bundling services, including data processing. Solid State has approximately 30
competitors in North America. Certain of the prominent North American firms also
have a significant presence internationally. Solid State operates in Canada, the
United States and internationally. Solid State has developed a reputation for
delivering quality data on time and on budget.

Solid State has a client base of over 75 companies that range in size from
junior exploration companies to fully integrated multinationals companies. From
fiscal 1992 to fiscal 1997, Solid State completed over 1,050 projects for
approximately 325 customers. In fiscal 1997 and 1996, Solid State's three
largest customers accounted for 35% and 43% of revenues, respectively.

Since its initial public offering in 1993, Solid State has expanded rapidly both
in the United States and internationally by increasing its crew count from five
to ten. Net revenues have increased approximately two and a half times and total
assets have

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<PAGE> 45

increased approximately four times. Solid State has kept abreast of
technological change through a significant investment in equipment. Net capital
expenditures for fixed assets totaling $ 33.4 million have been made over the
last three years.

In 1995, Solid State began a program of acquiring proprietary seismic data banks
for its own account, with the goal of reselling such data to third parties over
time. The most significant proprietary data bank was a transition zone survey
conducted in Atchafalaya Bay, Louisiana (the "Atchafalaya Bay Data Bank") along
the Gulf Coast of Mexico.

RECENT DEVELOPMENTS

Solid State's expansion into international operations, proprietary data bank
acquisitions and an investment in a related industry participant did not meet
management expectations and significant losses were incurred. The losses
increased indebtedness and led to a liquidity crisis.

Solid State has recently undertaken a number of recapitalization initiatives and
business combination investigations. Solid State's attempts to raise new public
equity were unsuccessful and discussions with third parties regarding potential
business combinations did not proceed beyond a preliminary stage.

Activity in the geophysical survey industry is currently at record high levels.
As at August 31, 1997, Solid State had a consolidated gross revenue backlog of
$130.1 million. This backlog consists of written orders or verbal commitments
believed by Solid State to be firm orders. Orders and commitments are subject to
industry conditions and, as a consequence, may be varied or modified. Management
anticipates that $84.0 million of the current backlog will be completed by
August 31, 1998. The international component of the backlog is represented by a
large, multi-year, multi-crew contract in Bolivia with a major multinational oil
company.

FINANCIAL HIGHLIGHTS

During fiscal 1997, Solid State's net revenues increased from $27.3 million to
$45.9 million due to strong industry conditions, higher crew efficiency and
better deployment of assets. Gross margins from the seismic data acquisition
segment improved overall from 22% in fiscal 1996 to 28% in fiscal 1997. However,
net cash flow from operations fell from $14.7 million to $7.9 million and
significant losses were recorded during the year, principally due to
unprofitable operations in Venezuela.

Solid State had a working capital deficiency of $22.0 million and total
indebtedness, including capital leases (conditional sales agreements), of $44.0
million as at August 31, 1997. Shareholders' equity as at August 31, 1997 was
$9.1 million. The $44.0 million of indebtedness was made up of bank loans of
$15.1 million, capital leases of $12.0 million and $16.9 million of loans from
Elliott and Westgate. Solid State is in technical default under certain loan
covenants which default has been waived to date by Solid State's main banker,
and is in arrears on payments relating to certain capital leases.

The following table provides a summary of Solid State's financial performance
over the last five years.

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<PAGE> 46

TABLE 2
SOLID STATE GEOPHYSICAL INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION

YEAR ENDED AUGUST 31
-----------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(audited)
(thousands, except per share data)

<S> <C> <C> <C> <C> <C>
OPERATIONS
Contract revenue $ 77,999 $ 45,503 $ 48,357 $ 48,941 $ 36,501
Net contract revenue 45,910 27,290 28,850 30,485 18,661
ross profit - contract 12,648 6,040 8,466 13,020 8,715
Data bank revenue 3,919 14,891 773 737 -
Data bank profit (loss) (865) (5,803) 297 249 -
Combined gross profit 11,783 237 8,763 13,269 8,715
EBITDA(1) 7,835 (2,743) 6,507 11,379 7,455
EBIT(2) (1,139) (8,599) 539 7,560 5,025
Net (loss) earnings (4,695) (11,967) (4,923) 3,692 2,504
Cash flow from operations 7,944 14,691 6,004 8,681 5,746
Net (Loss) earnings per share $ (0.44) $ (2.39) $ (0.98) $ 0.80 $ 0.89

FINANCIAL POSITION
Assets $ 71,759 $ 55,600 $ 51,754 $ 45,679 $ 18,340
Liabilities 62,670 51,527 35,734 24,736 15,027
Shareholders' equity 9,089 4,073 16,020 20,943 3,313
Working capital (deficiency) (21,963) (19,516) (2,934) 586 (3,069)
Property and equipment 35,161 31,638 29,961 29,085 11,513
Long-term debt 18,693 14,526 11,683 8,924 4,352

<FN>
NOTES:
- ------
(1) Earnings before interest, taxes, depreciation and amortization.
(2) Earnings before interest and taxes.
</TABLE>

VALUATION METHODOLOGY

The Valuation has been prepared with an effective date of August 31, 1997 (the
"Effective Date"). Solid State's senior management, the Offeror, Elliott and
Westgate have represented to SMI that they are not aware of any material changes
since that date which have not been disclosed to SMI and which would materially
affect the Valuation, favourably or unfavourably. SMI has satisfied itself
through interviews with senior management and a review of available information
that there have been no significant changes in Solid State's operations or
financial position since the Effective Date to the date hereof.

For purposes of the Valuation, fair market value is defined as the highest price
available in an open and unrestricted market between informed and prudent
parties, acting at arm's length and under no compulsion to act, expressed in
terms of money or money's worth without any downward adjustment to reflect the
liquidity of the Minority Common

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<PAGE> 47

Shares, the effect of the Offer or the fact that the Minority Common Shares do
not form part of a controlling interest.

The Valuation is based on the going-concern methodology. Various approaches were
considered including capitalization approaches, the discounted cash flow
approach and the comparable transactions approach. Based on the cyclical nature
of the geophysical industry and on valuation practices within the industry, the
capitalization of earnings before interest, taxes, depreciation and amortization
("EBITDA") approach was selected as the most appropriate method of valuing the
data acquisition component of Solid State's business activity.

In addition, SMI considered and applied a modest weighting to the capitalization
of cash flow approach. The discounted cash flow approach was considered and
rejected as inappropriate as the level of volatility in industry activity makes
forecasting future cash flow beyond one to two years a highly subjective and
speculative exercise.

SOLID STATE VALUATION

Solid State's geophysical data acquisition business consists primarily of the
domestic and United States activities (the "North America Operations") and the
international activities (the "International Operations"). These business
activities were valued based on the capitalization of EBITDA approach. Solid
State's proprietary data banks were valued on a discounted cash flow basis.
Other assets and liabilities were valued based on the methodology deemed most
appropriate in the circumstances.

DATA ACQUISITION OPERATIONS

The capitalization of EBITDA approach ascribes an enterprise value for the
business based on the capitalization of forecast EBITDA. Enterprise value is
defined as the market capitalization of public equity plus interest-bearing debt
less cash and cash-equivalents. This capitalization approach produces a value
for the business being valued before giving effect to the manner in which it has
been financed.

1998 Forecast EBITDA

Solid State's management has forecast a 1998 EBITDA of $10.8 million for North
American Operations and $6.5 million for International Operations. Corresponding
1997 EBITDA was $9.8 million for North American Operations and a loss of $1.1
million for International Operations. The turnaround in International Operations
is due to the termination of loss generating activities in Venezuela and the
impact of profitable operations in Bolivia.

While Solid State has failed to meet its budgets in the recent past, the
shortfalls have resulted from data bank write-offs, principally the Atchafalaya
Bay Data Bank due to prior cost overruns, the fixed price contract in Venezuela
and Solid State's investment and subsequent divestiture in Nortech (refer to
page 11). As Solid State is no longer pursuing proprietary data bank
acquisitions and its only current area of international activity (Bolivia) is
based on a term contractual arrangement, SMI is of the view that the 1998 EBITDA
forecasts are reasonable. SMI has reviewed the 1998 budget and its

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<PAGE> 48

assumptions with senior management and has reviewed Solid State's backlog
reports for 1998.

EBITDA Multiples Selection

SMI reviewed current public market trading multiples for comparable companies
located in Canada and the United States. In particular, SMI analyzed enterprise
value to EBITDA multiples. Comparable companies were selected after a thorough
review of available alternatives in Canada and the United States. The comparable
companies selected include: Enertec Resource Services Inc. and Venture Seismic
Ltd. in Canada; and 3-D Geophysical Inc., Dawson Geophysical Company and Eagle
Geophysical Inc. in the United States. While the universe of comparable
companies to Solid State is modest, it nonetheless allows a market based value
comparison.

In determining the appropriate range of EBITDA capitalization multiples for
Solid State, SMI considered Solid State's relative position compared to a group
of comparable companies identified with respect to, among other things, the
following factors:

(a) mix of services within the geophysical service industry;
(b) geographic diversification;
(c) market capitalization;
(d) track record and growth prospects;
(e) perceived quality of assets; and
(f) debt levels.

As at November 12, 1997, the date at which SMI delivered its valuation
conclusions to the Special Committee, the enterprise value to 1998 forecast
EBITDA capitalization multiples of comparable companies ranged from 3.1x to 5.5x
with an average of 4.5x. The multiple range for Solid State was adjusted down
from the upper end of the comparable range to reflect Solid State's greater than
average historic difficulties, high leverage levels and lower incremental growth
after 1998, and was adjusted upward to reflect the fact that the multiples for
comparable companies represent minority traded share prices. A summary of the
comparable companies analysis is included in Appendix 1.

With respect to Solid State's International Operations, the capitalization
multiples selected were adjusted downwards from North American Operations
multiples to reflect the Solid State's historical lack of profitability, less
continuity in contracts, and the increased level of risk present in
International Operations.

SMI concluded that enterprise value to 1998 forecast EBITDA multiples of 4.25x
to 5.25x for North American Operations and 3.20x to 3.50x for International
Operations were appropriate for purposes of the Valuation.

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<PAGE> 49

TABLE 3
DATA ACQUISITION OPERATIONS
VALUATION SUMMARY

MULTIPLE RANGE VALUE RANGE
1998 -------------- -----------------
EBITDA LOW HIGH LOW HIGH
------ ---- ----- ---- -----
(thousands) (thousands)

<S> <C> <C> <C> <C> <C>
North American Operations $10,818 4.25x 5.25x $45,977 $56,795
International Operations $ 6,471 3.20x 3.50x 20,707 22,649
------- -------
TOTAL $66,684 $79,444
======= =======
</TABLE>

OTHER ASSETS

The value of certain of Solid State's assets are not captured by the
capitalization of EBITDA valuation approach as the assets in question are
outside the data acquisition business. For such other assets, the valuation
methodology utilized is as set out below.

Canadian Proprietary Data Bank

Solid State incurred approximately $5.0 million of costs in obtaining its
Canadian proprietary data banks in 1996 and 1997. Canadian proprietary data bank
revenues were $0.2 million in 1997 and $6.0 million in 1996. Net cash flow
generated in 1997 and 1996 was $0.2 million and $1.1 million, respectively.
Solid State's Canadian proprietary data banks have been valued at $2.1 million
to $2.6 million, based on management's estimate of future net revenues,
discounted at a rate considered appropriate by SMI.

Atchafalaya Bay Data Bank and Non-Exclusive License

The Atchafalaya Bay Data Bank is Solid State's only United States proprietary
data bank. While Solid State sold the Atchafalaya Bay Data Bank in March 1996,
it retained an interest in future revenues, calculated by prescribed formula, as
well as the Atchafalaya Bay non-exclusive license (the "Atchafalaya Bay
License") to process and examine the Atchafalaya Bay Data Bank data. The
Atchafalaya Bay Data Bank has been valued at $10.6 million to $12.1 million and
the Atchafalaya Bay License has been valued at $1.0 million to $1.1 million
based on independent appraisals prepared by Johnston, dated October 1997 and
November 7, 1997, respectively.

SMI has had extensive discussions with Johnston to review its valuation
methodology and appraisal conclusion. Johnston, after discussion with the
Atchafalaya Data Bank owner and after taking into account oil and gas industry
activity and prior revenue earned on the Atchafalaya Bay Data Bank, estimated
the future revenues of the Atchafalaya Bay Data Bank and then discounted such
revenues at an appropriate discount rate.

Investments - Nortech Geomatics Inc.

On March 31, 1994, Solid State bought Nortech Surveys (Canada) Inc. ("Nortech")
for $1.9 million. Due to continuing losses and additional on-going investments
in research and development, Solid State sold the assets of Nortech during 1996
for $2.3 million. Part of the consideration received by Solid State for Nortech
was $1.3 million of

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<PAGE> 50

convertible preferred shares (the "Preferred Shares") of Nortech Geomatics Inc.
("Nortech Geomatics"). The Preferred Shares have the right to receive quarterly
cumulative dividends at a rate of 80% of the prime interest rate and have a
mandatory redemption of $0.2 million per year and, under certain conditions, may
be converted into a one year promissory note or converted into common shares of
Nortech Geomatics. In 1997, $0.6 million were converted into common shares and
$0.2 million were redeemed. The Preferred Shares and common shares of Nortech
Geomatics have been ascribed a value at $0.9 million to $1.1 million based on
discussions with senior management and ongoing plans to bring the company to the
public capital markets.

Cash

As at August 31, 1997 Solid State had a cash balance of $0.7 million.

TABLE 4
OTHER ASSETS
VALUATION SUMMARY

VALUE RANGE
----------------------
LOW HIGH
------- -------
(thousands)

<S> <C> <C>
Canadian proprietary data banks $ 2,090 $ 2,613
Atchafalaya Bay Data Bank 10,553 12,080
Atchafalaya Bay License 1,041 1,389
Investment - Nortech Geomatics 910 1,137
Cash 740 740
------- -------
TOTAL - OTHER ASSETS $15,334 $17,957
======= =======
</TABLE>

LIABILITIES

Solid State's long-term debt of $9.9 million and operating credit of $5.2
million is currently held by a Canadian financial institution. Solid State is in
technical default under certain lending covenants associated with such long-term
debt which default has been waived to date by Solid State's main banker. As at
August 31, 1997, and to the date of this report, all interest and principal
payments due under agreements with this lender have been made on a timely basis.
The lending bank has a floating first charge on all assets except the
proprietary data banks and certain leased equipment.

Solid State obtains its seismic data acquisition equipment from a single vendor
under conditional sales agreements. Payments to the vendor amounting to
approximately $10.9 million are currently in arrears.

As at August 31, 1997, Solid State had incurred loans totaling $16.9 million
from Elliott and Westgate to fund working capital deficiencies and to complete
the Atchafalaya Bay Data Bank. The indebtedness is evidenced by promissory
notes, is due on November 30, 1997, and bears interest at 15% per annum.
Subsequent to year end, an additional $6.2

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<PAGE> 51

million was advanced under similar terms. The promissory notes are secured by
future revenues from proprietary data banks including Atchafalaya Bay Data Bank.

TABLE 5
SOLID STATE GEOPHYSICAL INC.
VALUATION SUMMARY

VALUE RANGE
-------------------------
LOW HIGH
-------- --------
(thousands)

<S> <C> <C> <C>
Data Acquisition Operations (see Table 3) $ 66,684 $ 79,444
Other Assets (see Table 4) 15,334 17,957
Liabilities (44,065) (44,065)
-------- --------
Total $ 37,953 $ 53,336
======== ========
Common Shares outstanding 14,261
======
PER COMMON SHARE $ 2.66 $ 3.74
======== ========

</TABLE>

CONFIRMATION OF VALUATION CONCLUSIONS

In order to confirm the reasonableness of the values derived under the
capitalization of EBITDA approach, SMI performed a number of additional
analyses. The results obtained from the additional analyses, as described below,
supported the Valuation conclusions.

Review of Public Market Equity Trading Values

SMI has given consideration to the historic and current trading levels for Solid
State in relation to the Offer, as well as relative to The TSE Oil and Gas
Service Industry Index.

SOLID STATE GEOPHYSICAL INC.
NOVEMBER 10, 1995 TO NOVEMBER 25, 1997

DAILY CLOSING
SHARE PRICE

Offer Price of $3.50 per Common Share.

Closing share price of $2.55 on The TSE on September 26,
1997, the last day the shares traded prior to announcement of
Proposed Offer.

Note: the closing share price on November 25,1997 on The TSE, the last
trading day prior to announcement of the Offer, was $2.95.

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<PAGE> 52

SOLID STATE GEOPHYSICAL INC. VS THE TSE OIL & GAS SERVICE INDEX
NOVEMBER 10, 1995 TO NOVEMBER 25, 1997

RELEASED - NOVEMBER 10, 1995 - 100%

SSS TOGS
<S> <C> <C>
10-Nov-95
10-Jan-96
10-Mar-96
10-May-96
10-Jul-96
10-Sep-96
10-Nov-96
10-Jan-97
10-Mar-97
10-May-97
10-Jul-97
10-Sep-97
10-Nov-97

</TABLE>

Closing share price of $2.55 on The TSE on Sept. 26, 1997, the last trading day
immediately prior to announcement of Proposed Offer.

Note: The closing share price on November 25, 1997 on The TSE, the last trading
day prior to announcement of the Offer, was $2.95.

The closing price of the common shares on The Toronto Stock Exchange on
September 26, 1997, the last day the shares traded prior to the announcement of
the Proposed Offer, was $2.55. In assessing the fair market value of the
Minority Common Shares, the current stock market price is not necessarily
considered representative as share market prices typically reflect minority
interest position trades and not the fair market value of a controlling
interest. In addition, the announcement of the Proposed Offer by Elliott and
Westgate may have affected the normal course trading price of the common shares
since that time.

Capitalization of Cash Flow Approach

The capitalization of cash flow approach was reviewed to confirm the
reasonableness of the capitalization to EBITDA valuation conclusion. Multiples
of enterprise value to forecast 1998 cash flow were reviewed for the comparable
companies referred to above. The values derived from the capitalization of
forecast cashflow support the value conclusion of the principal approach.

Review of Recent Transactions Approach

In order to confirm the reasonableness of the values derived under the principal
valuation approach, SMI has reviewed recent mergers and acquisition transactions
in the geophysical industry over the last two years. Where details relating to
purchase price and the underlying financial statements were available, SMI
analyzed these transactions and utilized the valuation parameters so derived to
test the value conclusion derived from the principal valuation approach. The
average multiple at which these transactions were completed was not inconsistent
with that derived from the principal approach.

Review of Industry Benchmarks Approach

SMI reviewed the valuation conclusion utilizing industry benchmarks for the
geophysical services industry. Industry benchmarks supported the value
conclusion of the principal approach.

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<PAGE> 53

G. APPRAISAL REMEDY

In connection with the Offer or a subsequent acquisition transaction, Minority
Shareholders may in certain circumstances have the right to dissent. There can
be no assurance that a court of law, in its determination of fair value for the
Minority Common Shares, would arrive at the same result as the Valuation as it
may require or have access to different information, use different underlying
assumptions, and give different weight to the variety of considerations to be
made in any valuation.

H. PRIOR VALUATIONS

The management of Solid State, Elliott and Westgate have represented to SMI that
there have been no prior valuations or appraisals respecting Solid State as a
corporation or its material assets prepared by independent parties, nor any
material prior valuations or appraisals prepared by non-independent parties in
the last twenty four months, except for the fixed asset appraisals and
appraisals of the Atchafalaya Bay Data Bank and the Atchafalaya Bay License. The
appraisals were updated for the purposes of this Valuation.

SMI is aware that Jefferies & Company, Inc. ("Jefferies") has been engaged by
Elliott and Westgate to advise on privatization matters. Elliott, Westgate and
Jefferies have represented that work conducted by such advisor does not
constitute a prior valuation under relevant Canadian securities laws.

I. DISTINCTIVE VALUE TO ELLIOTT AND WESTGATE

In the event that the Offer is successful, the privatization of Solid State may
result in the realization of certain benefits by Elliott and Westgate. Elliott
and Westgate have advised SMI that in the event Solid State is privatized,
Elliott and Westgate plan to integrate the business and operations of Solid
State with the business and operations of Grant Geophysical Inc. ("Grant") and
refinance the significant debt Solid State has incurred. Elliott currently owns
100% of Grant. Elliott and Westgate have advised that as a non-public company,
Solid State would avoid the expenses associated with financial and on-going
reporting obligations applicable to public companies in Canada. Other than the
aforementioned integration and reduction in expenses, Elliott and Westgate have
advised SMI that in the event Solid State is privatized, it does not expect to
realize any other material benefits that would not otherwise accrue to a similar
buyer in the circumstances.

J. RANGE OF VALUE CONCLUSION

The valuation opinion presented herein is not amenable to partial analysis or
summary description (refer to "Key Assumptions and Limitations"). Selecting
portions of the analyses and of the factors considered, without considering all
factors and analyses together, could create a misleading view of the process
employed by SMI in arriving at its valuation conclusions. In arriving at the
fair market value range, SMI has considered the results of all analyses
undertaken and placed a greater reliance on the principal approach in arriving
at its conclusions.

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<PAGE> 54

Given all of these factors, the valuation methodology applied, the scope of
review undertaken and subject to the assumptions and limitations noted herein,
SMI is of the opinion that as at August 31, 1997, the fair market value of the
Minority Common Shares was in the range of $2.80 to $3.60 per Common Share. SMI
is not aware of any fact or circumstance that would render its conclusion as to
such fair market value inapplicable as at the date hereof.

K. FAIRNESS OPINION

As part of our engagement, SMI has been requested to provide an opinion as to
whether the Offer is fair, from a financial point of view, to the Minority
Shareholders. ScotiaMcLeod determined that the Offer is at the upper end of the
range of the fair market value of the Common Shares. The Offer represents a
premium of approximately 30% to the 20 day weighted average closing price of
$2.69 per common shares prior to the announcement of the Offer.

Based on the Valuation and subject to all of the foregoing, SMI is of the
opinion that, as at November 25, 1997, the Offer is fair, from a financial point
of view, to the Minority Shareholders of Solid State.

Yours truly,

ScotiaMcLeod Inc.

SCOTIAMCLEOD INC.

<PAGE> 55

APPENDIX 1

SOLID STATE GEOPHYSICAL INC.
COMPARABLE COMPANIES ANALYSIS
(THOUSANDS EXCEPT PER SHARE AMOUNTS)

Fully
Diluted Net Enterprise 1998E
Share Market Debt/ Value ------------------- Debt/
Price(1) Cap. (Cash)(2) (EV)(3) EBITDA(4) CFFO(5) EV/EBITDA EV/CFFO Debt(6) EBITDA
-------- ------ --------- ----------- --------- ------- --------- ------- ------- ------
(a) (b) (c) (d)=(b)+(c) (e) (f) (d)/(e) (d)/(f) (g)

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CANADIAN
Enertec Resource Services(6) $17.30 $136,047 ($4,686) $131,361 $24,100 $17,500 5.5x 7.5x $2,816 0.1x
Venture Seismic Ltd.(7) $8.38 $44,840 ($8,264) $36,576 $8,643 $6,426 4.2x 5.7x $5,593 0.6x
---- ---- ----
CANADA - AVERAGE 4.9x 6.6x 0.4x

UNITED STATES(7)
3-D Geophysical Inc. $7.13 $85,395 $8,314 $93,709 $23,616 $16,245 4.0x 5.8x $14,388 0.6x
Dawson Geophysical $22.75 $96,956 ($1,254) $95,702 $18,304 $15,210 5.2x 6.3x $5,071 0.3x
Eagle Geophysical $19.00 $174,696 ($68,848) $105,848 $34,647 $30,738 3.1x 3.4x $16,577 0.5x
---- ---- ----

U.S. - AVERAGE 4.1x 5.2x 0.5x

NORTH AMERICAN - AVERAGE 4.4x 5.7x 0.4x

SOLID STATE GEOPHYSICAL $3.00 $44,288 $43,325 $87,613 $17,289 $11,906 5.1x 7.4x $44,065 2.5x

<FN>
Notes:
- --------------------------------------------------------------------------------
(1) As of November 12, 1997. Solid State's share price consistent with the
Proposed Offer price.
(2) Net Debt/(Cash) equals bank debt plus notes payable plus current and long
term debt less cash and cash equivalents.
(3) Enterprise value equals fully diluted market capitalization plus net debt.
(4) EBITDA equals earnings before interest, taxes, depreciation and
amortization.
(5) CFFO equals cash flow from operations excluding changes in working capital
related to operations.
(6) Canadian dollars.
(7) US dollars.
</TABLE>

<PAGE> 56

THE DEPOSITARY IS:

MONTREAL TRUST COMPANY OF CANADA

BY MAIL

151 Front Street West
8th Floor
Toronto, Ontario
M5J 2N1

Attention: Special Projects
Telephone: (416) 981-9633
Facsimile: (416) 981-9600
Toll Free: 1-800-639-0802

BY HAND OR COURIER

Toronto Montreal Calgary

151 Front Street West 1800 McGill College Avenue 600,530-8th Avenue S.W.
8th Floor 8th Floor Calgary, Alberta
Toronto, Ontario Montreal, Quebec T2P 3S8
M5J 2N1 H3A 3K9

THE DEALER MANAGER IS:

MIDLAND WALWYN CAPITAL INC.

Toronto Calgary

Corporate Client Services Suite 1400
BCE Place 639-5th Avenue S.W.
Suite 400 Calgary, Alberta
181 Bay Street T2P 0M9
Toronto, Ontario
M5J 2V8 Attention: Pat Walsh
Telephone: (403) 231-7322
Attention: Shaun Darchiville
Telephone: 1-800-378-8839

<PAGE> 1
Exhibit 3.1(i)

RESTATED CERTIFICATE OF INCORPORATION
OF
GRANT GEOPHYSICAL, INC.
(UNDER SECTIONS 242 AND 245 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE)

Grant Geophysical, Inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:

1. The original Certificate of Incorporation was filed with the
Secretary of State on September 18, 1997 under the name "Grant Acquisition
Corporation," and a Certificate of Amendment was filed on October 1, 1997.

2. This Restated Certificate of Incorporation restates, integrates and
further amends the Corporation's Certificate of Incorporation, as amended, to
read in its entirety as follows:

FIRST. The name of the corporation is Grant Geophysical, Inc. (the
"Company").

SECOND. The address of the Company's registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name of the company's registered agent at such address is The Corporation
Trust Company.

THIRD. The purpose of the Company is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DGCL").

FOURTH. The Company is authorized to issue 25,020,000 shares of capital
stock, consisting of 25,000,000 shares of common stock, par value $0.001 per
share ("Common Stock"), and 20,000 shares of cumulative pay-in-kind preferred
stock, par value $0.001 per share ("Cumulative Preferred Stock").

DIVISION A
----------
Common Stock

Subject to the terms of the Cumulative Preferred Stock, the holders of
Common Stock will be entitled to one vote on each matter submitted to a vote at
a meeting of stockholders for each share of Common Stock held of record by such
holder as of the record date for such meeting.

<PAGE> 2

DIVISION B
----------
Preferred Stock

The express terms of the Cumulative Preferred Stock are set forth
below:

1. LIQUIDATION VALUE. The initial liquidation preference of the
Cumulative Preferred Stock shall be $1,000 per share or right (the "Liquidation
Value").

2. RANK. The Cumulative Preferred Stock shall, with respect to dividend
rights and rights on liquidation, winding up and dissolution, rank (i) senior to
both the Common Stock and to all classes and series of stock of the Company now
or hereafter authorized, issued or outstanding that by their terms expressly
provide that they are junior to the Cumulative Preferred Stock or that do not
specify their rank (collectively with the Common Stock, the "Junior
Securities"); (ii) on a parity with each other class of capital stock issued by
the Company after the date hereof the terms of which specifically provide that
such class or series will rank on a parity with the Cumulative Preferred Stock
as to dividend distributions and distributions upon the liquidation, winding up
and dissolution of the Company (collectively referred to as "Parity
Securities"); PROVIDED, HOWEVER, that any such Parity Securities that were not
approved by the holders of Cumulative Preferred Stock in accordance with Section
8(b) hereof shall be deemed to be Junior Securities and not Parity Securities;
and (iii) junior to each other class of capital stock issued by the Company
after the date hereof the terms of which have been approved by the holders of
the Cumulative Preferred Stock in accordance with Section 8(b) hereof and that
specifically provide that such class or series will rank senior to the
Cumulative Preferred Stock as to dividend distributions and distributions upon
the liquidation, winding up and dissolution of the Company (collectively
referred to as "Senior Securities").

3. DIVIDENDS. (a) The holders of shares of the Cumulative Preferred
Stock shall be entitled to receive, out of funds legally available therefor,
dividends at the annual rate of 10.5% of the Liquidation Value (equivalent to
$105 per share per annum). Such dividends shall be cumulative and shall accrue
and be payable (except as provided in Section 3(d) hereof) on September 30 of
each calendar year (the "Dividend Payment Date"), to holders of record at the
close of business on the date specified by the Board of Directors at the time
such dividend is declared (the "Record Date"), in preference to dividends on the
Junior Securities, commencing on the Dividend Payment Date next succeeding the
Specific Issue Date for such shares of Cumulative Preferred Stock. Any such
Record Date shall be not less than 10 days and not more than 30 days prior to
the relevant Dividend Payment Date. Dividend payments with respect to shares of
Cumulative Preferred Stock (including any shares of Cumulative Preferred Stock
issued as dividends and any applicable Dividend Interest) shall be made in
additional shares of Cumulative Preferred Stock. Dividend payments or Dividend
Interest shall be paid by issuing shares of Cumulative Preferred Stock (or
fractions thereof) with an aggregate Liquidation Preference equal to the amount
of such dividends or Dividend Interest. All dividends and Dividend Interest paid
with respect to shares of Cumulative Preferred Stock pursuant to this Section 3
shall be issued pro rata to the holders entitled thereto. All such shares of
Cumulative Preferred Stock issued as a dividend or in payment of Dividend
Interest with respect to the Cumulative Preferred Stock will thereupon be duly
authorized, validly issued, fully paid and nonassessable.

<PAGE> 3

(b) Dividends shall accrue and be cumulative from the date such shares
of Cumulative Preferred Stock are issued (the "Specific Issue Date"). In the
case of shares of Cumulative Preferred Stock issued in payment of dividends or
Dividend Interest, dividends shall accrue and be cumulative from the date on
which such dividend or Dividend Interest is paid or was due to be paid.

(c) Each fractional share of Cumulative Preferred Stock outstanding
shall be entitled to a ratably proportionate amount of all dividends and
Dividend Interest accruing with respect to each outstanding share of Cumulative
Preferred Stock pursuant to paragraph (a) of this Section 3, and all such
dividends with respect to such outstanding fractional shares shall be cumulative
and shall accrue (whether or not declared), and shall be payable in the same
manner and at such times as provided for in paragraph (a) of this Section 3 with
respect to dividends on each outstanding share of Cumulative Preferred Stock.

(d) Accrued but unpaid dividends for any past dividend periods may be
declared by the Board of Directors and paid on any date fixed by the Board of
Directors, whether or not a regular Dividend Payment Date, to holders of record
on the books of the Company on such record date as may be fixed by the Board of
Directors, which record date shall be not less than 10 days and not more than 30
days prior to the payment date thereof. Holders of Cumulative Preferred Stock
will not be entitled to any dividends in excess of the full cumulative dividends
provided for herein except as provided in the next sentence. If any dividend is
not paid on the Dividend Payment Date therefor, interest shall accrue on such
unpaid dividend at the rate of 12.5% per annum compounded annually (which may be
adjusted in accordance with the provisions of Section 3(g)) ("Dividend
Interest") from the date of such Dividend Payment Date to the date such dividend
is paid. Dividends payable on the Cumulative Preferred Stock for the first
annual dividend period following the Specific Issue Date for such shares (or any
other dividend payable for a period less than a full annual period) shall be
computed on the basis of a 360-day year and the actual number of days elapsed.

(e)(i) So long as any shares of the Cumulative Preferred Stock are
outstanding, the Company shall not make any payment on account of, or set apart
for payment money for a sinking or other similar fund for, the purchase,
redemption or retirement of, any Junior Securities or any warrants, rights,
calls or options exercisable for or convertible into any Junior Securities,
whether directly or indirectly, and whether in cash, obligations or shares of
the Company or other property (other than dividends or distributions payable in
additional shares of Junior Securities to holders of Junior Securities), and
shall not permit any corporation or other entity directly or indirectly
controlled by the Company to purchase or redeem any Junior Securities or any
warrants, rights, calls or options exercisable for or convertible into any
Junior Securities.

(ii) So long as any shares of the Cumulative Preferred Stock are
outstanding, the Company shall not declare, pay or set apart for payment any
dividend or make any distribution or payment on any Parity Securities, or make
any payment on account of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or retirement of, Parity Securities
or any warrants, rights, calls or options exercisable for or convertible into
any Parity Securities, whether directly or indirectly, and whether in cash,
obligations or shares of the Company or other property, and shall not permit any
corporation or other entity directly or

<PAGE> 4

indirectly controlled by the Company to purchase or redeem any Parity Securities
or any warrants, rights, calls or options exercisable for or convertible into
any Parity Securities, unless prior to or at the time of such declaration,
payment, setting apart for payment, purchase, redemption, retirement or
distribution, as the case may be, the Company (i) shall have issued all shares
of Cumulative Preferred Stock representing all accumulated, accrued and unpaid
dividends and Dividend Interest on the outstanding shares of Cumulative
Preferred Stock and shall have made provision for the issuance of shares with
respect to the then current annual dividend and (ii) shall have set aside funds
necessary for the redemption of 100% of the Liquidation Value including shares
of Cumulative Preferred Stock representing accumulated, accrued and unpaid
dividends and Dividend Interest to the date of such declaration, payment,
setting apart for payment, purchase, redemption, retirement or distribution,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares of Cumulative Preferred Stock, so as to be and to
continue to be available therefor.

(f) Whenever dividends on the Cumulative Preferred Stock are in
arrears, the Company shall not declare dividends on or make any other
distribution in respect of any Parity Securities, except dividends paid pro rata
on the Cumulative Preferred Stock and all other capital stock ranking on a
parity as to dividends and on which dividends are payable in arrears.

(g) In the event (i) the Company fails to declare and pay any dividend
on any shares of Cumulative Preferred Stock in whole or in part in respect of
any periods in which such dividend is payable (ii) the Company fails to redeem
the Cumulative Preferred Stock in accordance with the provisions of Section 5
hereof, (iii) the Company or any Subsidiary of the Company defaults in the
payment of interest on any Indebtedness having an aggregate outstanding
principal amount of at least $1 million when the same becomes due and payable,
and such default continues for a period of 30 days, (iv) any principal payment
due in respect of Indebtedness of the Company or any Subsidiary of the Company
is not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default (other than, in the case
of clauses (iii) and (iv) of this Section 3(g), any default, non-payment or
acceleration in respect of Indebtedness incurred in connection with the
acquisition of the assets or capital stock of another Person and owing to such
Person or an affiliate of such Person and arising as a result of disputes
related to such transaction which at least two-thirds of the members of the
Board of Directors of the Company shall have determined to be appropriate for
the Company to contest in such manner notwithstanding such default, non-payment
or acceleration), (v) the Company or any Subsidiary of the Company (A) commences
a voluntary case, (B) consents to the entry of an order for relief against it in
an involuntary case, (C) consents to the appointment of a custodian of it or for
any substantial part of its property or (D) makes a general assignment for the
benefit of its creditors, in each case within the meaning of any Bankruptcy Law,
(vi) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (x) is for relief against the Company or any Subsidiary of
the Company in an involuntary case, (y) appoints a custodian of the Company or
any Subsidiary of the Company or for any substantial part of its property or (z)
orders the winding up or liquidation of the Company or any Subsidiary of the
Company, in each case which remains unstayed and in effect for 60 days, or (vii)
the Company breaches any other covenant or agreement set forth in this Article
Fourth and such breach shall continue for 30 days after receipt of notice
thereof by the Company from any holder of Cumulative Preferred Stock, the
holders of shares of Cumulative Preferred Stock shall be entitled to receive
dividends at the annual rate of

<PAGE> 5

12.5% per share and Dividend Interest shall be calculated at a rate of 15% per
annum. Such increased dividend and Dividend Interest rate shall accrue from the
date of such breach and shall continue until such time as all dividends (and
Dividend Interest) accumulated and accrued on the Cumulative Preferred Stock
shall have been paid in full through the immediately preceding Dividend Payment
Date and any such other breach shall have been cured, as the case may be.

4. LIQUIDATION PREFERENCE. (a) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Company, the holders of shares of Cumulative Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Company available for
distribution to its stockholders an amount in cash equal to 100% of the
Liquidation Value for each share outstanding, plus an amount equal to all
accumulated, accrued and unpaid dividends and Dividend Interest to the date of
liquidation, dissolution or winding up (including an amount equal to a prorated
dividend from the last Dividend Payment Date immediately prior to such
liquidation, dissolution or winding up date), before any payment shall be made
or any assets distributed to the holders of any of the Junior Securities. If the
assets of the Company are not sufficient to pay in full the liquidation payments
payable to the holders of outstanding shares of the Cumulative Preferred Stock
and all Parity Securities, then the holders of all such shares shall share
ratably in such distribution of assets in accordance with the amount which would
be payable on such distribution if the amounts to which the holders of
outstanding shares of Cumulative Preferred Stock and the holders of outstanding
shares of such Parity Securities are entitled were paid in full.

(b) For the purposes of this Section 4, neither the voluntary sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with any one or more
other corporations shall be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Company, unless such voluntary sale,
conveyance, exchange or transfer shall be in connection with a plan of
liquidation, dissolution or winding up of the Company.

5. REDEMPTION.

(a) REDEMPTION UPON CHANGE IN CONTROL. Upon the occurrence of a Change
in Control, the Cumulative Preferred Stock shall be redeemable at the option of
the holders thereof, in whole or in part, at a redemption price per share equal
to 105% of the Liquidation Value plus accumulated, accrued and unpaid dividends
and Dividend Interest to the date of redemption (including an amount equal to a
prorated dividend from the last Dividend Payment Date immediately prior to the
redemption date). The Company shall redeem the number of shares specified in the
holders' notices of election to redeem pursuant to section 6(b) hereof on the
date fixed for redemption.

(b) OPTIONAL REDEMPTION BY THE COMPANY. (i) The Company may, at its
option, redeem at any time for cash, out of any source of funds legally
available therefor, in the manner provided in Section 6 hereof, (A) all, but not
less than all, of the shares of the Cumulative Preferred Stock, at a redemption
price per share equal to 100% of the Liquidation Value plus accumulated, accrued
and unpaid dividends and Dividend Interest to the date of redemption (including
an amount equal

<PAGE> 6

to a prorated dividend from the last Dividend Payment Date immediately prior to
the redemption date) or (B) provided that all of the holders of shares of
Cumulative Preferred Stock consent in writing, a number of shares of Cumulative
Preferred Stock at a redemption price of 100% of the aggregate Liquidation Value
thereof plus accumulated, accrued and unpaid dividends and Dividend Interest
thereon to the date of redemption (including an amount equal to a prorated
dividend from the last Dividend Payment Date immediately prior to the redemption
date), pro rata to all holders of Cumulative Preferred Stock; PROVIDED, HOWEVER,
that in the event a Change in Control has occurred prior to a redemption
pursuant to this Section 5(b)(i), the redemption price per share shall be the
greater of (A) the redemption price calculated above and (B) the consideration
calculated in accordance with Section 5(a) hereof.

(ii) A holder of Cumulative Preferred Stock to be redeemed pursuant to
Section 5(b)(i) hereof and which is also not subject to the provisions of
Section 5(a) hereof shall be entitled to receive with respect to the sum of the
Liquidation Value of each share of Cumulative Preferred Stock plus accumulated,
accrued and unpaid dividends and Dividend Interest to the date of redemption
(including an amount equal to the prorated dividend from the last Dividend
Payment Date immediately prior to the redemption date), at the option of such
holder, (x) cash in an amount equal to such sum or (y) such number of shares of
Common Stock or fractions thereof equal to such sum based on the Current Market
Price of the Common Stock as of the close of business on the date fixed for
redemption. The Company shall at all times reserve and keep available, free from
liens, charges and security interests and not subject to any preemptive rights,
for issuance such number of its authorized but unissued shares of Common Stock
as will from time to time be sufficient to permit the redemption payment option
set forth in clause (y) above and shall take all action required to increase the
authorized number of shares of Common Stock if necessary to permit such
redemption.

6. PROCEDURE FOR REDEMPTION. (a) In the event that the Company shall
redeem shares of Cumulative Preferred Stock pursuant to Section 5(b) hereof,
notice of such redemption shall be mailed by first-class mail, postage prepaid,
and mailed not less than 30 days nor more than 60 days prior to the redemption
date to the holders of record of the shares to be redeemed at their respective
addresses as they shall appear in the records of the Company; PROVIDED, HOWEVER,
that failure to give such notice or any defect therein or in the mailing thereof
shall not affect the validity of the proceeding for the redemption of any shares
so to be redeemed except as to the holder to whom the Company has failed to give
such notice or except as to the holder to whom notice was defective. Each such
notice shall state: (i) the redemption date; (ii) the number of shares of
Cumulative Preferred Stock outstanding to be redeemed; (iii) the redemption
price and form of consideration and (iv) the place or places where certificates
for such shares are to be surrendered for payment of the redemption price.

(b) If a Change in Control Triggering Event should occur, then, in any
one or more of such events the Company shall give written notice by first-class
mail, postage prepaid, to each holder of Cumulative Preferred Stock at its
address as it appears in the records of the Company, which notice shall describe
such Change in Control Triggering Event and shall state the date on which the
Change in Control shall take place, and shall be mailed within 10 days following
the occurrence of the Change in Control Triggering Event. Such notice shall also
set forth (in addition to the information required by the next succeeding
paragraph): (i) each holder's right to

<PAGE> 7

require the Company to redeem shares of Cumulative Preferred Stock held by such
holder as a result of such Change in Control; (ii) the redemption price and
(iii) the procedures to be followed by such holder in exercising its right of
redemption, including the place or places where certificates for such shares are
to be surrendered for payment of the redemption price. In the event a holder of
shares of Cumulative Preferred Stock shall elect to require the Company to
redeem any or all of such shares of Cumulative Preferred Stock, such holder
shall deliver a written notice stating such holder's election and specifying the
number of shares to be redeemed pursuant to Section 5(a) hereof and specifying a
date no earlier than 30 days after the date of such holder's notice on which
such shares will be redeemed.

In the case of any redemption pursuant to Section 5(a) hereof, the
notice by the Company shall describe the Change in Control, including a
description of the Surviving Person and, if applicable, the effect of the Change
in Control on the Common Stock. The notice shall be accompanied by (i) the
consolidated balance sheet of the Company and its Subsidiaries as of the end of
the most recent fiscal year of the Company for which such information is
available and the related consolidated statements of income and cash flows for
such fiscal year, in each case setting forth the comparative figures for the
preceding fiscal year, accompanied by an opinion of independent public
accountants of nationally recognized standing selected by the Company as to the
fair presentation in accordance with generally accepted accounting principles of
such financial statements, and (ii) a consolidated balance sheet of the Company
and its Subsidiaries as of the end of the most recent fiscal quarter of the
Company for which such information is available and the related consolidated
statements of income and cash flows for such quarter and for the portion of the
Company's fiscal year ended at the end of such fiscal quarter, in each case
setting forth in comparative form the figures for the corresponding quarter and
the corresponding portion of the Company's preceding fiscal year.

(c) Notice by the Company having been mailed as provided in Section
6(a) hereof, or notice of election having been mailed by the holders as provided
in Section 6(b) hereof, and provided that on or before the applicable redemption
date funds necessary for such redemption shall have been set aside by the
Company, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of the shares so called for or entitled to redemption, so
as to be and to continue to be available therefor, then, from and after the
redemption date (unless the Company defaults in the payment of the redemption
price, in which case such rights shall continue until the redemption price is
paid), dividends (and Dividend Interest thereon) on the shares of Cumulative
Preferred Stock so called for or entitled to redemption shall cease to accrue,
and said shares shall no longer be deemed to be outstanding and shall not have
the status of shares of Cumulative Preferred Stock, and all rights of the
holders thereof as stockholders of the Company (except the right to receive the
applicable redemption price and any accumulated, accrued and unpaid dividends
and Dividend Interest from the Company to the date of redemption) shall cease.
Upon surrender of the certificates for any shares so redeemed (properly endorsed
or assigned for transfer, if the Board of Directors of the Company shall so
require and a notice by the Company shall so state), such shares shall be
redeemed by the Company at the applicable redemption price as aforesaid. In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate or certificates shall be issued representing the unredeemed
shares without cost to the holder thereof.

<PAGE> 8

7. REACQUIRED SHARES. No shares of Cumulative Preferred Stock acquired
by the Company by reason of redemption, purchase or otherwise shall be reissued,
and all such shares shall be canceled, retired and eliminated from the shares
which the Company shall be authorized to issue.

8. VOTING RIGHTS.

Except as otherwise provided by law or this Section 8, the holders of
Cumulative Preferred Stock shall not have any voting rights:

(a) VOTING RIGHTS UPON DEFAULT.

(i) If at any time (A) the Company fails to declare and pay
any dividend on any shares of Cumulative Preferred Stock in whole or in
part in respect of any periods in which such dividend is payable, (B)
the Company fails to redeem the Cumulative Preferred Stock in
accordance with the provisions of Section 5 hereof, (C) the Company or
any Subsidiary of the Company defaults in the payment of interest on
any Indebtedness having an aggregate outstanding principal amount of at
least $1 million when the same becomes due and payable, and such
default continues for a period of 30 days, (D) any principal payment
due in respect of Indebtedness of the Company or any Subsidiary of the
Company is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default
(other than, in the case of clauses (C) and (D) of this Section
8(a)(i), any default, non-payment or acceleration in respect of
Indebtedness incurred in connection with the acquisition of the assets
or capital stock of another Person and owing to such Person or an
affiliate of such Person and arising as a result of disputes related to
such transaction which at least two-thirds of the members of the Board
of Directors of the Company shall have determined to be appropriate for
the Company to contest in such manner notwithstanding such default,
non-payment or acceleration), (E) the Company or any Subsidiary of the
Company (1) commences a voluntary case, (2) consents to the entry of an
order for relief against it in an involuntary case, (3) consents to the
appointment of a custodian of it or for any substantial part of its
property or (4) makes a general assignment for the benefit of its
creditors, in each case within the meaning of any Bankruptcy Law, (F) a
court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (x) is for relief against the Company or any
Subsidiary of the Company in an involuntary case, (y) appoints a
custodian of the Company or any Subsidiary of the Company or for any
substantial part of its property or (z) orders the winding up or
liquidation of the Company or any Subsidiary of the Company, in each
case which remains unstayed and in effect for 60 days, or (G) the
Company breaches of any other covenant or agreement set forth in this
Article Fourth and such breach shall continue for 30 days after receipt
of notice thereof by the Company from any holder of Cumulative
Preferred Stock, then (subject to any limitation or prohibition set
forth in this Certificate of Incorporation or the By-Laws) the number
of directors constituting the Board of Directors shall, without further
action, be increased by two and, in addition to any other rights to
elect directors which the holders of Cumulative Preferred Stock may
have, the holders of all then outstanding shares of Cumulative
Preferred Stock, voting separately as a class and to the exclusion of
the holders of all other classes of stock

<PAGE> 9

of the Company, shall be entitled to elect the directors of the Company
to fill such newly created directorships.

(ii) Whenever such voting rights shall have vested as
aforesaid, such right may be exercised initially either at a special
meeting of the holders of Cumulative Preferred Stock, called as
hereinafter provided, at any annual meeting of stockholders held for
the purpose of electing directors, or by the written consent of the
holders of Cumulative Preferred Stock without a meeting pursuant to
Section 228 of the DGCL and thereafter at such annual meeting or by
written consent. Such voting rights shall continue until such time as
all dividends (and Dividend Interest) accumulated, accrued on the
Cumulative Preferred Stock shall have been paid in full through the
immediately preceding Dividend Payment Date and any such other breach
shall have been cured, as the case may be, at which time such voting
right of the holders of Cumulative Preferred Stock shall terminate,
subject to revesting in the event of (x) each and every subsequent
failure of the Company for the requisite period of time (if any) to
fully pay dividends or (y) the recurrence of any such other breach.

(iii) At any time after such voting power shall have been so
vested in shares of Cumulative Preferred Stock and such right shall not
already have been exercised by written consent as aforesaid, the
Secretary of the Company may, and upon the written request of the
holders of record of at least 10% of the outstanding shares of
Cumulative Preferred Stock (addressed to the Secretary of the Company
at the principal office of the Company) shall, call a special meeting
of the holders of Cumulative Preferred Stock for the election of the
directors to be elected by them as herein provided. Such call shall be
made by notice to each holder by first-class mail, postage prepaid at
its address as it appears in the records of the Company, and such
notice shall be mailed at least 10 days but no more than 20 days before
the date of the special meeting, or as required by law. Such meeting
shall be held at the earliest practicable date upon the notice required
for special meetings of stockholders at the place designated by the
Secretary of the Company. If such meeting shall not be called by a
proper officer of the Company within 15 days after receipt of such
written request by the Secretary of the Company, then the holders of
record of at least 10% of the shares of Cumulative Preferred Stock then
outstanding may call such meeting at the expense of the Company, and
such meeting may be called by such holders upon the notice required for
special meetings of stockholders and shall be held at the place
designated in such notice. Any holder of Cumulative Preferred Stock
that would be entitled to vote at any such meeting shall have access to
the stock books of the Company for the purpose of causing a meeting of
holders of Cumulative Preferred Stock to be called pursuant to the
provisions of this clause (iii).

<PAGE> 10

elected by the holders of Cumulative Preferred Stock, and the absence
of a quorum or quorums of the holders of capital stock entitled to
elect such other directors shall not prevent the election of the
directors to be elected by the holders of Cumulative Preferred Stock,
and (y) in the absence of a quorum of the holders of Cumulative
Preferred Stock, a majority of the holders of Cumulative Preferred
Stock present in person or by proxy shall have the power to adjourn the
meeting for the election of directors which such holders are entitled
to elect, from time to time, without notice (except as required by law)
other than announcement at the meeting, until a quorum shall be
present.

(v) The term of office of any director elected by the holders
of Cumulative Preferred Stock pursuant to Section 8(a)(i) hereof in
office at any time when the aforesaid voting rights are vested in the
holders of Cumulative Preferred Stock shall terminate upon the election
of his successor at any meeting of stockholders held for the purpose of
electing directors. Upon any termination of the aforesaid voting rights
in accordance with Section 8(a)(ii) hereof, the term of office of the
directors elected by the holders of Cumulative Preferred Stock pursuant
to Section 8(a)(i) hereof then in office thereupon shall terminate and
upon such termination the number of directors constituting the Board of
Directors, without further action, shall be reduced by two, subject
always to the increase of the number of directors pursuant hereto in
case of the future right of the holders of Cumulative Preferred Stock
to elect directors as provided herein.

(vi) In case of a vacancy occurring in the office of any
director so elected pursuant to Section 8(a)(i) hereof, the holders of
a majority of the Cumulative Preferred Stock then outstanding may, at a
special meeting of the holders or by written consent as provided above,
elect a successor to hold office for the unexpired term of such
director.

(vii) Any director elected by the holders of Cumulative
Preferred Stock pursuant to Section 8(a)((i) and Section 8(a)(vi) the
voting rights set forth herein may be removed, with or without cause,
by the holders of a majority of the Cumulative Preferred Stock then
outstanding, at a special meeting of the holders or by written consent
as provided above.

(b) VOTING RIGHTS ON EXTRAORDINARY MATTERS. In addition to any vote or
consent of stockholders required by law, the approval of the holders of
two-thirds of the outstanding shares of Cumulative Preferred Stock, voting as a
class, shall be required (i) to amend this Certificate of Incorporation to
increase the authorized number of shares of Cumulative Preferred Stock or to
authorize the creation or issuance (including the issuance of additional shares
of Cumulative Preferred Stock other than in payment of dividends on outstanding
shares of Cumulative Preferred Stock), or the increase in the authorized amount,
of any Parity Securities or Senior Securities, or to authorize the creation or
issuance of securities convertible into or exchangeable for, or options,
warrants or other rights to acquire, any Cumulative Preferred Stock, Parity
Securities or Senior Securities, (ii) to reclassify any series of Junior
Securities to Senior Securities or Parity Securities, (iii) to amend, repeal or
change any of the provisions of this Certificate of Incorporation in any manner
that would alter or change the powers, preferences or special rights of the
shares of Cumulative Preferred Stock so as to affect them adversely, including
without limitation changing the voting percentage required for approval by the
holders of Cumulative Preferred Stock of the foregoing matters, (iv) otherwise
to restrict the rights, preferences or privileges of the Cumulative

<PAGE> 11

Preferred Stock, (v) to authorize the consolidation or merger of the Company
with or into another Person (whether or not the Company is the Surviving
Person), or the sale, assignment, transfer, lease, conveyance or other disposal
of all or substantially all of its properties or assets in one or more related
transactions to another Person, or (vi) to authorize the sale, assignment,
lease, transfer, conveyance or other disposal, in a single transaction or series
of related transactions, of properties or assets exceeding 25% of the Economic
Value of the Company calculated as of the most recent practicable date. For
purposes of the foregoing clause (vi), the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of related transactions) of
properties or assets of one or more Subsidiaries of the Company which, if all
properties and assets of such Subsidiaries were held directly by the Company,
would constitute a transfer of 25% or more of the Economic Value of the Company,
shall be deemed to be the transfer of properties and assets of the Company
exceeding 25% of the Economic Value of the Company.

(i) On the Issue Date, the number of directors constituting
the Board of Directors shall, without further action, be increased by
two and the holders of all outstanding shares of Cumulative Preferred
Stock, voting separately as a class and to the exclusion of the holders
of all other classes of stock of the Company, shall be entitled to
elect the directors of the Company to fill such newly created
directorships.

(ii) The right to elect directors as described in Section
8(c)(i) hereof may be exercised initially either at a special meeting
of the holders of Cumulative Preferred Stock, called as hereinafter
provided in Section 8(c)(iii) hereof, at any annual meeting of
stockholders held for the purpose of electing directors, or by the
written consent of the holders of Cumulative Preferred Stock without a
meeting pursuant to Section 228 of the DGCL and thereafter at such
annual meeting or by written consent. Such voting rights shall continue
until such time as all outstanding shares of Cumulative Preferred Stock
shall have been redeemed or otherwise retired.

(iii) The Secretary of the Company may, and upon the written
request of the holders of record of at least 10% of the outstanding
shares of Cumulative Preferred Stock (addressed to the Secretary of the
Company at the principal office of the Company) shall, call a special
meeting of the holders of Cumulative Preferred Stock for the election
of the directors to be elected by them as herein provided. Such call
shall be made by notice to each holder by first-class mail, postage
prepaid at its address as it appears in the records of the Company, and
such notice shall be mailed at least 10 days but no more than 20 days
before the date of the special meeting, or as required by law. Such
meeting shall be held at the earliest practicable date upon the notice
required for special meetings of stockholders at the place designated
by the Secretary of the Company. If such meeting shall not be called by
a proper officer of the Company within 15 days after receipt of such
written request by the Secretary of the Company, then the holders of
record of at least 10% of the shares of Cumulative Preferred Stock then
outstanding may call such meeting at the expense of the Company, and
such meeting may be called by such holders upon the notice required for
special meetings of stockholders and shall be held at the place

<PAGE> 12

designated in such notice. Any holder of Cumulative Preferred Stock
that would be entitled to vote at any such meeting shall have access to
the stock books of the Company for the purpose of causing a meeting of
holders of Cumulative Preferred Stock to be called pursuant to the
provisions of this Section 8(c)(iii).

(iv) At any meeting held for the purpose of electing directors
at which the holders of Cumulative Preferred Stock shall have the right
to elect directors as provided in this Section 8(c), the presence in
person or by proxy of the holders of a majority of the then outstanding
shares of Cumulative Preferred Stock shall be required and be
sufficient to constitute a quorum of such class for the election of
directors by such class. At any such meeting or adjournment thereof,
(x) the absence of a quorum of the holders of Cumulative Preferred
Stock shall not prevent the election of directors other than the
directors to be elected by the holders of Cumulative Preferred Stock,
and the absence of a quorum or quorums of the holders of capital stock
entitled to elect such other directors shall not prevent the election
of the directors to be elected by the holders of Cumulative Preferred
Stock, and (y) in the absence of a quorum of the holders of Cumulative
Preferred Stock, a majority of the holders of Cumulative Preferred
Stock present in person or by proxy shall have the power to adjourn the
meeting for the election of directors which such holders are entitled
to elect, from time to time, without notice (except as required by law)
other than announcement at the meeting, until a quorum shall be
present.

(v) The term of office of any director elected by the holders
of Cumulative Preferred Stock pursuant to Section 8(c)(i) hereof in
office at any time shall terminate upon the election of his successor
at the next annual meeting of stockholders held for the purpose of
electing directors.

(vi) In case of a vacancy occurring in the office of any
director so elected pursuant to Section 8(c)(i) hereof, the holders of
a majority of the Cumulative Preferred Stock then outstanding may, at a
special meeting of the holders or by written consent as provided above,
elect a successor to hold office for the unexpired term of such
director.

(vii) Any director elected by the holders of Cumulative
Preferred Stock pursuant to Section 8(c)((i) and Section 8(c)(vi) the
voting rights set forth herein may be removed, with or without cause,
by the holders of a majority of the Cumulative Preferred Stock then
outstanding, at a special meeting of the holders or by written consent
as provided above.

9. CERTAIN COVENANTS. Any holder of Cumulative Preferred Stock may
proceed to protect and enforce its rights by any available remedy by proceeding
at law or in equity to protect and enforce any such rights, whether for the
specific enforcement of any provision in this Article Fourth or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

<PAGE> 13

10. DEFINITIONS. For the purposes of this Article Fourth, the following
terms shall have the meanings indicated:

"affiliate" shall have the meaning ascribed to such term in Rule 12b-2
promulgated under the Exchange Act or any successor provision. The terms
"affiliated" and "non-affiliated" shall have meanings correlative to the
foregoing.

"Bankruptcy Law" shall mean any Federal, state or foreign law for the
relief of debtors or relating to bankruptcy or insolvency.

"Change in Control" shall mean (a) the acquisition, other than from the
Company, by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of the directors, but excluding, for
this purpose, any such acquisition by (i) the Company or any of its
Subsidiaries, (ii) any employee benefit plan (or related trust) of the Company
or its Subsidiaries, (iii) any corporation with respect to which, following such
acquisition, more than 30% of the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by individuals
and entities who were the beneficial owners of voting securities of the Company
immediately prior to such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors or (iv) Elliott Associates, L.P.,
Westgate International, L.P. or any of their respective affiliates; or

(b) individuals who, as of the Issue Date, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; PROVIDED, HOWEVER, that any
individual becoming a director subsequent to the Issue Date whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the incumbent Board of
Directors shall be considered as though such individual were a member of such
incumbent Board of Directors; or

(c) approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which all or
substantially all the individuals and entities who were the respective
beneficial owners of the voting securities of the Company immediately prior to
such reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 30% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of the
corporation resulting from such reorganization, merger or consolidation; or

(d) the sale or other disposition of all or substantially all the
assets or property of the Company in one transaction or series of related
transactions.

"Change in Control Triggering Event" shall mean (a) the filing of a
Schedule 13D with the Securities and Exchange Commission reporting the public
announcement of, or the receipt by the

<PAGE> 14

Company in any other manner of notice of, an event referred to in clause (a) of
the above definition of Change in Control; (b) the occurrence of an event
referred to in clause (b) of the above definition of Change in Control; or (c)
the execution of a definitive agreement providing for the consummation of a
transaction referred to in clauses (c) or (d) of the above definition of Change
in Control.

"Current Market Price," when used with reference to shares of Common
Stock or other securities on any date, shall mean the closing price per share of
Common Stock or such other securities on such date and, when used with reference
to shares of Common Stock or other securities for any period, shall mean the
average of the daily closing prices per share of Common Stock or such other
securities for such period. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Stock or such other securities are not listed or admitted to
trading on the New York Stock Exchange, as reported, in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock or such
other securities are listed or admitted to trading or, if the Common Stock or
such other securities are not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or such other system then in use, or, if on any such date the
Common Stock or such other securities are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock or such other securities
selected by the Board of Directors of the Company. If the Common Stock or such
other securities are not publicly held or so listed or publicly traded, "Current
Market Price" shall mean the fair market value per share of Common Stock or of
such other securities as determined by an independent investment banking firm
with an established national reputation as a valuer of equity securities
selected by the Company and acceptable to the holders (in their sole discretion)
of a majority of the shares of Cumulative Preferred Stock outstanding at the
time.

"Dividend Interest" shall have the meaning set forth in Section 3(d)
hereof.

"Economic Value of the Company" as of any date shall mean (a) the sum
of the products resulting from multiplying the number of shares of each class of
capital stock of the Company outstanding on such date by the Current Market
Price of a share of such class of capital stock plus (b) the aggregate principal
amount of all indebtedness of the Company and its Subsidiaries on such date less
(c) the aggregate amount of all cash and cash equivalents of the Company and its
Subsidiaries on such date.

"Exchange Act" shall mean the Securities Exchange Act of 1934.

"Indebtedness" shall mean, with respect to any Person at any date, (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance

<PAGE> 15

with customary practices), (b) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (c) all obligations
of such Person as lessee under any lease of property which obligations are
required in accordance with generally accepted accounting principles to be
capitalized on a balance sheet of such Person, and (d) all liabilities acquired
by any lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for payment thereof.

"Issue Date" shall mean the first date on which shares of Cumulative
Preferred Stock are issued.

"Junior Securities" shall have the meaning set forth in Section 2
hereof.

"Parity Securities" shall have the meaning set forth in Section 2
hereof.

"Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.

"Specific Issue Date" have the meaning set forth in Section 3(b)
hereof.

"Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.

"Surviving Person" shall mean the continuing or surviving Person of a
merger, consolidation or other corporate combination, the Person receiving a
transfer of all or a substantial part of the properties and assets of the
Company, or the Person consolidating with or merging into the Company in a
merger, consolidation or other corporate combination in which the Company is the
continuing or surviving Person, but in connection with which the Cumulative
Preferred Stock or Common Stock of the Company is exchanged or converted into
the securities of any other Person or the right to receive cash or any other
property.

"Voting Equity" shall mean any Voting Securities, securities of the
Company convertible into Voting Securities, and options, warrants or other
rights to acquire Voting Securities.

"Voting Securities" shall mean the Common Stock and any other
securities of the Company having the voting power under ordinary circumstances
with respect to the election of directors of the Company.

FIFTH. The By-Laws of the Company may be amended or repealed (after
adoption by the sole director identified herein) only by the stockholders.

SIXTH. Section 1. NUMBER, ELECTION, AND TERMS OF DIRECTORS. The number
of the Directors of the Company shall be fixed by, or in the manner provided in,
the By-Laws of the Company. Election of Directors of the Company need not be by
written ballot unless requested by the Chairman of the Board or by the holders
of a majority of the Company's common stock and

<PAGE> 16

present in person or represented by proxy at a meeting of the stockholders at
which Directors are to be elected.

Section 2. NO CUMULATIVE VOTING. Holders of shares of common stock
of the Company shall not be entitled to cumulative voting rights in the election
of directors.

SEVENTH. The provisions of Section 203 of the DGCL or any statute of
like tenor or effect that is hereafter enacted shall not apply to the Company.

EIGHTH. To the full extent permitted by the DGCL or any other
applicable law currently or hereafter in effect, no Director of the Company will
be personally liable to the company or its stockholders for or with respect to
any acts or omissions in the performance of his or her duties as a Director of
the Company. Any repeal or modification of this Article Eighth will not
adversely affect any right or protection of a Director of the Company existing
prior to such repeal or modification.

NINTH. Each person who is or was or had agreed to become a Director or
officer of the company, and each such person who is or was serving or who had
agreed to serve at the request of the Board or an officer of the Company as an
employee or agent of the Company or as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or other entity,
whether for profit or not for profit (including the heirs, executors,
administrators, or estate of such person), will be indemnified by the Company to
the full extent permitted by the DGCL or any other applicable law as currently
or hereafter in effect. The right of indemnification provided in this Article
Ninth (a) will not be exclusive of any other rights to which any person seeking
indemnification may otherwise be entitled or any contract approved by a majority
of the entire Board (whether or not the Directors approving such contract are or
are to be parties to such contract or similar contracts), and (b) will be
applicable to matters otherwise within its scope whether or not such matters
arose or arise before or after the filing of this Certificate of Incorporation.
Without limiting the generality or the effect of the foregoing, the Company may
adopt By-Laws, or enter into one or more agreements with any person, which
provide for indemnification greater or different than that provided in this
Article Ninth or the DGCL. Any amendment or repeal of, or adoption of any
provision inconsistent with, this Article Ninth will not adversely affect any
right or protection existing hereunder, or arising out of facts occurring, prior
to such amendment, repeal, or adoption and no such amendment, repeal, or
adoption, will affect the legality, validity, or enforceability of any contract
entered into or right granted prior to the effective date of such amendment,
repeal, or adoption.

TENTH. The books of the company may be kept (subject to any requirement
of the DGCL) outside the State of Delaware at such place or places as may be
designated form time to time by the Board or in the By-Laws of the Company.

<PAGE> 17

IN WITNESS WHEREOF, the foregoing Restated Certificate of
Incorporation, having been duly adopted by the stockholders of the Corporation
in a written consent of stockholders pursuant to Section 228 of the General
Corporation Law of the State of Delaware, has been duly signed by Larry E.
Lenig, Jr., the President and Chief Executive Officer of the Corporation, and
attested by Michael Keirnan, the Secretary of the Corporation, this 17th day of
December, 1997.

GRANT GEOPHYSICAL, INC.

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

Attest: /s/ Michael Keirnan
-------------------------
Michael Keirnan
Secretary

<PAGE> 1
Exhibit 3.1(ii)

AMENDED AND RESTATED
BY-LAWS
OF
GRANT GEOPHYSICAL, INC.
(f/k/a/ GRANT ACQUISITION CORPORATION)

AS EFFECTIVE ON OCTOBER 1, 1997

ARTICLE I
---------

STOCKHOLDERS

Section 1.1. ANNUAL MEETINGS. An annual meeting of
stockholders shall be held for the election of directors at such date, time and
place either within or without the State of Delaware as may be designated by the
Board from time to time. Any other proper business may be transacted at the
annual meeting.

Section 1.2. SPECIAL MEETINGS. Except as otherwise provided in
the Certificate of Incorporation, special meetings of stockholders may be called
at any time by the Chairman of the Board or a majority of the Board, and shall
be called by the President or the Secretary at the request in writing of
stockholders owning a majority of the outstanding common stock of the
Corporation. Such request shall be sent to the President and the Secretary and
shall state the purpose or purposes of the proposed meeting. No business may be
transacted at a special meeting other than the business stated in the notice of
the meeting.

Section 1.3. NOTICE OF MEETINGS. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the written
notice of any meeting shall be given not less than ten nor more than sixty days
before the date of the meeting to each stockholder entitled to vote at such
meeting. If mailed, such notice shall be deemed to be given when deposited in
the United States mail, postage prepaid, directed to the stockholder at his
address as it appears on the records of the Corporation.

Section 1.4. ADJOURNMENTS. Any meeting of stockholders, annual
or special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.

<PAGE> 2

Section 1.5. QUORUM. At each meeting of stockholders, except
where otherwise provided by law or the Certificate of Incorporation of the
Corporation, the holders of a majority of the outstanding shares of common
stock, present in person or represented by proxy, shall constitute a quorum. In
the absence of a quorum the stockholders so present may, by majority vote,
adjourn the meeting from time to time in the manner provided by Section 1.4 of
these By-Laws until a quorum shall attend.

Section 1.6. ORGANIZATION. Meetings of stockholders shall be
presided over by the Chairman of the Board, or in his absence by the President,
or in his absence by a chairman designated by the Board, or in the absence of
such designation, by a chairman chosen at the meeting. The Secretary shall act
as secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting.

Section 1.7. VOTING; PROXIES. Unless otherwise provided in the
Certificate of Incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of capital stock
held by him. Each stockholder entitled to vote at a meeting of stockholders may
authorize another person or persons to act for him by proxy, but no such proxy
shall be voted or acted upon after three years from its date, unless the proxy
provides for a longer period. A duly executed proxy shall be irrevocable if it
states that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or another duly
executed proxy bearing a later date with the Secretary of the Corporation.
Unless otherwise provided in the Certificate of Incorporation, at all meetings
of stockholders where directors are to be elected a plurality of the votes cast
by the holders of shares entitled to vote thereon shall be sufficient. Unless
otherwise provided in the Certificate of Incorporation or the Delaware General
Corporation Law (the "DGCL"), all other questions and matters brought before a
meeting of stockholders shall be decided by the vote of the holders of a
majority of the outstanding shares of common stock entitled to vote thereon and
present in person or by proxy at the meeting.

Section 1.8. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF
RECORD. In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than sixty nor less than ten days before the date of such meeting, nor more than
sixty days prior to any other action unless otherwise provided in the
Certificate of Incorporation. If no record date is fixed: (i) the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; and (ii) the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board adopts
the resolution relating thereto. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.

-2-

<PAGE> 3

Section 1.9. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The
Secretary shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.

Section 1.10. ACTION WITHOUT A MEETING. Unless otherwise
provided in the Certificate of Incorporation, any action required or permitted
to be taken at any annual or special meeting of stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed and
dated by the holders of outstanding capital stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all outstanding shares entitled to vote thereon were
present and voted. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing and who were entitled to vote
thereon.

ARTICLE II
----------

BOARD
-----

Section 2.1. POWERS; NUMBER; QUALIFICATIONS. The business and
affairs of the Corporation shall be managed by or under the direction of the
Board, except as may be otherwise provided by the DGCL or in the Certificate of
Incorporation. Except as set forth in the Certificate of Incorporation, the
number of Directors shall be fixed from time to time by a vote of a majority of
the Board. Directors need not be stockholders.

Section 2.2. REMOVAL. Except as set forth in the Certificate
of Incorporation, any Director or the entire Board may be removed, with or
without cause, by the holders of a majority of the shares of common stock then
outstanding.

Section 2.3. REGULAR MEETINGS. Regular meetings of the Board
may be held at such places within or without the State of Delaware and at such
times as the Board may from time to time determine, and if so determined notice
thereof need not be given.

Section 2.4. SPECIAL MEETINGS. Special meetings of the Board
may be held at any time or place within or without the State of Delaware
whenever called by the Chairman of the Board, by the President, or by a majority
of the directors. No less than 24 hours' notice thereof shall be given by the
person or persons calling the meeting.

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<PAGE> 4
Section 2.5. TELEPHONIC MEETINGS PERMITTED. Unless otherwise
restricted by the Certificate of Incorporation or these By-Laws, members of the
Board, or any committee designated by the Board, may participate in a meeting of
the Board or of such committee, as the case may be, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this by-law shall constitute presence in person at such meeting.

Section 2.6. QUORUM; VOTE REQUIRED FOR ACTION. At all meetings
of the Board a majority of the entire Board shall constitute a quorum for the
transaction of business. The vote of a majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board unless the
Certificate of Incorporation or these ByLaws shall require a vote of a greater
number and/or a vote by separate classes of directors. If at any meeting of the
Board a quorum shall not be present, the members of the Board present may
adjourn the meeting from time to time until a quorum shall attend.

Section 2.7. ORGANIZATION. Meetings of the Board shall be
presided over by the Chairman of the Board, or in his absence by the President,
or in their absence by the chairman chosen at the meeting. The Secretary shall
act as secretary of the meeting, or the chairman of the meeting may appoint any
person to act as secretary of the meeting.

Section 2.8. ACTION WITHOUT MEETING. Unless otherwise
restricted by the Certificate of Incorporation or these By-Laws, any action
required or permitted to be taken at any meeting of the Board, or of any
committee thereof, may be taken without a meeting, if all members of the Board
or committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or the
committee.

ARTICLE III
-----------

COMMITTEES
----------

Section 3.1. COMMITTEES. The Board may, by resolution passed
by a majority of the entire Board, designate an Executive Committee consisting
of one or more directors of the Corporation, who shall meet when deemed
necessary. The Executive Committee shall have and may exercise all the powers
and authority of the Board in the management of the business and affairs of the
Corporation, at any time when the entire Board is not in session, and may
authorize the seal of the Corporation, if any, to be affixed to all papers which
may require it; but such Executive Committee shall not have power or authority
in reference to any matter which may not be lawfully delegated to a committee
under the DGCL. The Executive Committee shall have the authority to declare a
dividend, authorize the issuance of stock and adopt a certificate of ownership
and merger pursuant to Section 253 of the DGCL. The Board may from time to time,
by resolution passed by a majority of the entire Board, designate one or more
other committees, each committee to consist of one or more of the directors of
the Corporation and to have such powers and authority of the Board as shall be
stated in such resolution. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of a committee, the

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<PAGE> 5

member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board to act at the meeting in place of any such absent or
disqualified member.

Section 3.2. COMMITTEE RULES. Unless the Board otherwise
provides, each committee designated by the Board may make, alter and repeal
rules for the conduct of its business. In the absence of a provision by the
Board or a provision in the rules of such committee to the contrary, a majority
of the entire authorized number of members of such committee shall constitute a
quorum for the transaction of business, the vote of a majority of the members
present at a meeting at the time of such vote if a quorum is then present shall
be the act of such committee, and in other respects each committee shall conduct
its business in the same manner as the Board conducts its business pursuant to
Article II of these By-Laws.

ARTICLE IV
----------

OFFICERS
--------

Section 4.1. OFFICERS; ELECTION; QUALIFICATION; TERM OF
OFFICE; RESIGNATION; REMOVAL; VACANCIES. At the time of the annual meeting of
stockholders in each year or as soon thereafter as is practicable, the Board
shall elect a Chairman of the Board, a President, a Treasurer and a Secretary,
and it may, if it so determines, elect one or more Vice Presidents and one or
more assistant officers and may give any of them such further designations or
alternate titles as it considers desirable. Each such officer shall hold office
until his successor is elected and qualified or until his earlier death,
resignation or removal. Any officer may resign at any time upon written notice
to the Board or to the Chairman of the Board or the President or the Secretary
of the Corporation. Such resignation shall take effect at the time specified
therein, and unless otherwise specified therein no acceptance of such
resignation shall be necessary to make it effective. The Board may remove any
officer with or without cause at any time. Any such removal shall be without
prejudice to the contractual rights of such officer, if any, with the
Corporation, but the election or appointment of an officer shall not of itself
create contractual rights. Any number of offices may be held by the same person.
Any vacancy occurring in any office of the Corporation by death, resignation,
removal or otherwise may be filled for the unexpired portion of the term by the
Board at any regular or special meeting.

Section 4.2. CHAIRMAN OF THE BOARD. The Chairman of the Board
shall preside at all meetings of the Board and of the stockholders at which he
shall be present. He shall also perform all duties incident to the office of
Chairman of the Board, and such other duties as, from time to time, may be
assigned to him by the Board or as may be provided by law.

Section 4.3. PRESIDENT. In the absence of the Chairman of the
Board, the President shall preside at all meetings of the stockholders at which
he shall be present, and in the absence of the Chairman of the Board, he shall
preside at all meetings of the Board at which he shall be present. The
President, at the request of the Chairman of the Board or in his protracted
absence or during his inability to act, shall perform the duties of the Chairman
of the Board and when so acting shall have the powers of the Chairman of the
Board. He shall perform all duties incident to the office of President of a
corporation, and such other duties as, from time to time, may be assigned to him
by the Board or the Chairman of the Board or as may be provided by law.

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<PAGE> 6

Section 4.4. VICE PRESIDENTS. The Vice President or Vice
Presidents shall have such powers and perform such duties as may be assigned to
him or them by the Board, the Chairman of the Board or the President or as may
be provided by law.

Section 4.5. SECRETARY. The Secretary shall record all the
proceedings of the meetings of the stockholders and the Board and any committees
in a book to be kept for that purpose; he shall see that all notices are duly
given in accordance with the provisions of these By-Laws or as required by law;
he shall be custodian of the records of the Corporation; he may affix the
corporate seal, if any, to any document the execution of which, on behalf of the
Corporation, is duly authorized, and when so affixed may attest the same; and,
in general, he shall perform all duties incident to the office of Secretary of a
corporation, and such other duties as, from time to time, may be assigned to him
by the Board, the Chairman of the Board or the President or as may be provided
by law.

Section 4.6. TREASURER. The Treasurer shall have charge of and
be responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit or cause to be deposited, in the name of the
Corporation, all funds or other valuable effects in such banks, trust companies
or other depositaries as shall, from time to time, be selected by or under
authority of the Board; and, in general, he shall perform all the duties
incident to the office of Treasurer of a corporation, and such other duties as
may be assigned to him by the Board, the Chairman of the Board or the President
or as may be provided by law. If required by the Board, he shall give a bond for
the faithful discharge of his duties, with such surety or sureties as the Board
may determine.

Section 4.7. OTHER OFFICERS. The Board may from time to time
elect such other officers, agents or employees, and may delegate to them such
powers and duties as it may deem desirable.

ARTICLE V
---------

INDEMNIFICATION
---------------

Section 5.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Corporation shall indemnify, to the fullest extent now or hereafter permitted by
law, any Director or officer who was or is a party or is threatened to be made a
party to, or is involved in, any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereafter, a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a Director or officer
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a Director, officer, partner, trustee,
employee or agent or in any other capacity while serving as a Director, officer,
partner, trustee, employee or agent, against all expense, liability and loss
(including attorneys' fees, judgments, fines, excise taxes or penalties and
amounts paid or to be paid in settlement with respect to any action, suit or
proceeding, whether criminal, administrative or investigative) actually and
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a Director,
officer, partner, trustee, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators, provided, however, that, except
as provided in Section 5.4, the Corporation shall

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<PAGE> 7

indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board.

Section 5.2. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The
Corporation may indemnify any employee or agent of the Corporation to an extent
greater than that required by law only if and to the extent that the Directors
may, in their discretion, so determine.

Section 5.3. ADVANCEMENT OF EXPENSES. Expenses, including
attorneys' fees, incurred by a Director or officer of the Corporation in
defending any proceeding referred to in Section 5.1, shall be paid by the
Corporation, in advance of the final disposition of such proceeding upon receipt
of an undertaking by or on behalf of the Director or officer to repay such
amount if it shall ultimately be determined that he or she is not entitled to be
indemnified by the Corporation as authorized in this Article V; which
undertaking may be secured or unsecured, at the discretion of the Corporation.

Section 5.4. PROCEDURES AND PRESUMPTIONS UNDER THIS ARTICLE.
If a claim under Section 5.1 is not paid in full by the Corporation within
thirty days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required undertaking, if any is required, has
been tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the DGCL for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the DGCL, nor an actual
determination by the Corporation (including its Board, independent legal
counsel, or its stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.

Section 5.5. INDEMNIFICATION PROVIDED IN THIS ARTICLE NOT
EXCLUSIVE. The indemnification and advancement of expenses provided under this
Article V shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
law, the Certificate of Incorporation, these By-Laws, any agreement, vote of
stockholders or of disinterested Directors or otherwise, both as to action in
their official capacity and as to action in another capacity while holding such
office.

Section 5.6. ARTICLE DEEMED A CONTRACT. This Article V shall
be deemed to be a contract between the Corporation and each Director or officer
of the Corporation who serves in such capacity or who serves at the request of
the Corporation as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, at any time while this
Article V is in effect, and any repeal, amendment or other modification of this
Article V shall not affect any rights or

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<PAGE> 8

obligations then existing with respect to any state of facts then or theretofore
existing or any action, suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of facts.

Section 5.7. DEFINITION OF "CORPORATION." For the purposes of
this Article V, references to the "Corporation" include any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger as well as the resulting or surviving corporation so
that any person who is or was a director, officer, employee, partner, trustee or
agent of such a constituent corporation or is or was serving at the request of
such constituent corporation as a director, officer, employee, partner, trustee
or agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of this Article
with respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had continued.

Section 5.8. SAVINGS CLAUSE. If this Article V or any portion
thereof shall be invalidated or found unenforceable on any ground by any court
of competent jurisdiction, then the Corporation shall nevertheless indemnify
each Director and officer of the Corporation against all expense, liability and
loss (including attorneys' fees, judgments, fines, excise taxes, penalties and
amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative) to the full extent
permitted by any applicable portion of this Article V that shall not have been
invalidated or found unenforceable, or by any other applicable law.

Section 5.9. INSURANCE. The Corporation may maintain
insurance, at its expense, to protect itself and any Director, officer, employee
or agent of the Corporation or individual serving at the request of the
Corporation as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, against any such
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the DGCL.

ARTICLE VI
----------

STOCK
-----

Section 6.1. CERTIFICATES. Every holder of stock in the
Corporation shall be entitled to have a certificate signed by or in the name of
the Corporation by the Chairman of the Board, the President or a Vice President,
and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary, of the Corporation, certifying the number of shares owned by him in
the Corporation. Any or all of the foregoing signatures may be facsimiles. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.

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<PAGE> 9

Section 6.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES;
ISSUANCE OF NEW CERTIFICATES. The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by it, alleged to have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be lost, stolen or destroyed.
The Corporation may, as a condition precedent to the issuance of such new
certificate of stock, require the owner of the lost, stolen or destroyed
certificate, or his legal representative, to give the Corporation a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of such certificate or the
issuance of such new certificate.

Section 6.3. REGISTERED STOCKHOLDERS. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by the
laws of Delaware.

ARTICLE VII
-----------

MISCELLANEOUS
-------------

Section 7.1. FISCAL YEAR. The fiscal year of the Corporation
shall end upon the last day of December, or otherwise shall be as determined by
the Board from time to time.

Section 7.2. SEAL. The Corporation may have a corporate seal
which shall have the name of the Corporation inscribed thereon and shall be in
such form as may be approved from time to time by the Board. The corporate seal,
if any, may be used by causing it or a facsimile thereof to be impressed or
affixed or in any other manner reproduced.

Section 7.3. WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS,
DIRECTORS AND COMMITTEES. Whenever notice is required to be given by law or
under any provision of the Certificate of Incorporation or these By-Laws, a
written waiver thereof, signed by the person entitled to notice, whether before
or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of Incorporation or these By-Laws.

Section 7.4. INTERESTED DIRECTORS; QUORUM. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation, partnership,
association or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the

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<PAGE> 10

Board or committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purpose, if: (i) the
material facts as to his relationship or interest and as to the contract or
transaction are disclosed or are known to the Board or the committee, and the
Board or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his relationship or interest and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (iii) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board, a committee thereof
or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board or of a committee
which authorizes the contract or transaction.

Section 7.5. FORM OF RECORDS. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.

Section 7.6. AMENDMENT OF BY-LAWS. These By-Laws may be
altered or repealed, and new By-Laws made, as provided by the Certificate of
Incorporation of the Corporation.

Section 7.7. CERTAIN DEFINED TERMS. Terms used herein with
initial capital letters that are not otherwise defined are used herein as
defined in the Certificate of Incorporation.

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<PAGE> 1
Exhibit 4.2

COMMON STOCK
REGISTRATION RIGHTS AGREEMENT

THIS COMMON STOCK REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into as of this 19th day of September, 1997, between GRANT ACQUISITION
CORPORATION, a Delaware corporation (the "Company"), and ELLIOTT ASSOCIATES,
L.P., a Delaware limited partnership (the "Purchaser").

WHEREAS, pursuant to a subscription dated September 19, 1997 (the
"Subscription"), Purchaser has purchased one share of the Company's Common
Stock;

WHEREAS, pursuant to the Plan of Reorganization of Grant Geophysical,
Inc., a Delaware corporation (the "Plan") approved by the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") in Case
No. 96-1936 (HSB), Purchaser may purchase certain other shares of Common Stock;

WHEREAS, to induce Purchaser to purchase such shares of Common Stock,
the Company has agreed to provide the registration rights set forth in this
Agreement;

WHEREAS, the execution and delivery of this Agreement is contemplated
by the Plan approved by the Bankruptcy Court;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:

1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:

"Affiliate" shall mean any Person that directly or indirectly
controls, is controlled by, or is under common control with, such
Person. A Person shall be deemed to control another Person if such
Person owns 5% or more of any equity interest in the "controlled"
Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the "controlled"
Person, whether through ownership of stock or partnership interests, by
contract, agreement or understanding (whether oral or written), or
otherwise.

"Common Stock" shall mean the Common Stock, par value $.001
per share, of the Company.

"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

"Holders" shall mean Purchaser, any Affiliate of Purchaser
(other than the Company) and any ransferees of Purchaser who are
holders of record of shares of

<PAGE> 2

any Registrable Shares, and any combination of them, and the term
"Holder" shall mean any such person.

"NASD" shall have the meaning set forth in Section 5(a)(xv)
hereof.

"Other Holders" shall mean Persons who are holders of record
of equity securities of the Company who subsequent to the date hereof
acquire more than 5% of the outstanding shares of Common Stock pursuant
to a transaction with the Company and to whom the Company grants
registration rights pursuant to a written agreement and in accordance
with the terms hereof.

"Person" shall mean any individual, corporation, association,
partnership, group (as defined in Section 13(d)(3) of the Exchange
Act), limited liability company, joint venture, business trust or
unincorporated organization, or a government or any agency or political
subdivision thereof.

"Registrable Shares" shall mean (i) any Common Stock issued to
Purchaser pursuant to the Subscription or the Plan, and (ii) any equity
securities of the Company issued or distributed after the date hereof
in respect of the Common Stock referred to in clause (i) above by way
of any stock dividend, stock split or other distribution,
recapitalization or reclassification, and any equity securities of the
Company acquired by a Holder upon exercise or conversion of any such
securities. As to any particular Registrable Share, such Registrable
Share shall cease to be a Registrable Share when (x) it shall have been
sold, transferred or otherwise disposed of or exchanged pursuant to a
registration statement under the Securities Act or (y) it shall have
been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act.

"Registration Expenses" shall have the meaning set forth in
Section 7(b) hereof.

"SEC" shall mean the Securities and Exchange Commission or any
successor agency thereto.

"Securities Act" shall mean the Securities Act of 1933, as
amended.

2. INCIDENTAL REGISTRATIONS

(a) RIGHT TO INCLUDE REGISTRABLE SHARES. Each time the Company
shall determine to file a registration statement under the Securities Act in
connection with the proposed offer and sale for cash of any equity securities
(other than (i) by a registration on Form S-4, Form S-8, or any successor form
thereto, (ii) pursuant to Section 4 hereof, or (iii) debt securities which are
convertible into equity securities (or an offering of equity securities in an
amount not in excess of 5% of the number of shares of Common Stock outstanding
at such time in connection with the offering of debt securities) either by it or
by any holders of its outstanding equity securities, the Company will give
prompt written notice of its determination to each Holder and of such Holder's

2
<PAGE> 3

rights under this Section 2, at least 30 days prior to the anticipated filing
date of such registration statement. Upon the written request of each Holder
made within 21 days after the receipt of any such notice from the Company (which
request shall specify the Registrable Shares intended to be disposed of by such
Holder), the Company will use its best efforts to effect the registration under
the Securities Act of all Registrable Shares which the Company has been so
requested to register by the Holders thereof, to the extent required to permit
the disposition of the Registrable Shares so to be registered; PROVIDED, that
(i) if, at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to proceed with the proposed registration of the securities to be sold by
it, the Company may, at its election, give written notice of such determination
to each Holder of Registrable Shares and thereupon shall be relieved of its
obligation to register any Registrable Shares in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), and (ii) if such registration involves an underwritten
offering, all Holders of Registrable Shares requesting to be included in the
Company's registration must sell their Registrable Shares to the underwriters on
the same terms and conditions as apply to the Company, with such differences,
including any with respect to indemnification and liability insurance, as may be
customary or appropriate in combined primary and secondary offerings. If a
registration requested pursuant to this Section 2(a) involves an underwritten
public offering, any Holder of Registrable Shares requesting to be included in
such registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to
register such securities in connection with such registration. No registration
effected under this Section 2 shall relieve the Company of its obligations to
effect registrations upon request under Section 4 hereof.

(b) PRIORITY IN INCIDENTAL REGISTRATION. If a registration
pursuant to this Section 2 involves an underwritten offering and the managing
underwriter or underwriters in good faith advises the Company in writing that,
in its opinion, the number of securities requested and otherwise proposed to be
included in such registration exceeds the largest number which can be sold in
such offering without having an adverse effect on such offering (including the
price at which such securities can be sold), the Company will include in such
registration, to the extent of the number which the Company is so advised can be
sold in such offering, (i) if the registration is a primary registration on
behalf of the Company, (x) first, the securities proposed to be registered by
the Company, (y) second, the Registrable Shares pro rata in accordance with the
numbers of securities requested to be included by all Holders of Registrable
Shares, and (z) third, securities of other Persons requested to be included in
such registration pro rata in accordance with the numbers of other securities
proposed to be registered by the other Persons, and (ii) if the registration is
a secondary registration on behalf of other Persons, the Registrable Shares and
securities of the other Persons included in such registration pro rata in
accordance with the numbers of securities requested to be included by the
holders of Registrable Shares and the numbers of other securities proposed to be
registered by the other Persons. The Company will not grant any registration
rights having priorities that conflict or are otherwise inconsistent with this
Section 2(b).

3
<PAGE> 4

3. HOLDBACK AGREEMENTS. (a) If any registration of Registrable
Shares shall be in connection with an underwritten public offering, the Holders
agree not to effect any public sale or distribution (except in connection with
such public offering), of any equity securities of the Company, or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company (in each case, other than as part of such underwritten public
offering), during the 90-day period (or such lesser period as the managing
underwriter or underwriters may permit) beginning on the effective date of such
registration, if, and to the extent, the managing underwriter or underwriters of
any such offering determines such action is necessary or desirable to effect
such offering, provided that each Holder has received the written notice
required by Section 2(a) hereof; PROVIDED, FURTHER, that each Holder shall not
be obligated to comply with such restrictions arising as a result of an
underwritten public offering subject to Section 2 hereof more than once in any
twelve-month period.

(b) If any registration of Registrable Shares shall be in
connection with any underwritten public offering, the Company agrees not to
effect any public sale or distribution (except in connection with such public
offering or pursuant to registrations on Form S-8 or any successor form thereto)
of any of its equity securities or of any security convertible into or
exchangeable or exercisable for any of its equity securities (in each case other
than as part of such underwritten public offering) during the 90-day period (or
such lesser period as the managing underwriter or underwriters may permit)
beginning on the effective date of such registration, and the Company also
agrees to use its best efforts to cause each member of the management of the
Corporation who holds any equity security and each other holder of 5% or more of
the outstanding shares of any equity security, or of any security convertible
into or exchangeable or exercisable for any equity security, of the Company
purchased from the Company (at any time other than in a public offering) to
agree not to effect any public sale or distribution of any equity securities of
the Company (except in connection with such offering) or any security
convertible into or exchangeable or exercisable for any equity security of the
Company (in each case, other than as part of such underwritten offering), during
the 90-day period (or such lesser period as the managing underwriter or
underwriters may permit) beginning on the effective date of such registration.

4. REGISTRATION ON REQUEST.

(a) REQUEST BY HOLDERS. Upon the written request of the
Holders of at least 25% of the Registrable Shares that the Company effect the
registration under the Securities Act of all or part of such Holders'
Registrable Shares, and specifying the amount (which shall not be less than 10%
of the outstanding Registrable Shares in the aggregate) and intended method of
disposition thereof, the Company will promptly give notice of such requested
registration to all other Holders of Registrable Shares and, as expeditiously as
possible, use its best efforts to effect the registration under the Securities
Act of: (i) the Registrable Shares which the Company has been so requested to
register by Holders of at least 25% of the Registrable Shares; and (ii) all
other Registrable Shares which the Company has been requested to register by any
other Holder thereof by written request received by the Company within 21 days
after the giving of such written notice by the Company (which request shall
specify the intended method of disposition of such

4
<PAGE> 5

Registrable Shares); PROVIDED, HOWEVER, that the Company shall not be required
to effect more than three registrations during any twelve-month period pursuant
to this Section 4; PROVIDED, FURTHER, that the Company shall not be obligated to
file a registration statement relating to a registration request under this
Section 4 (other than on Form S-3 or any similar short-form registration
statement) within a period of three months after the effective date of any other
registration statement of the Company other than registration statements on Form
S-3 (or any similar short-form registration statement) or any successor or
similar forms; PROVIDED, FURTHER, that in no event shall the Company be required
to effect more than five registrations pursuant to this Section 4. Promptly
after the expiration of the 21-day period referred to in clause (ii) above, the
Company will notify all the Holders to be included in the registration of the
other Holders and the number of shares of Registrable Shares requested to be
included therein. The Holders initially requesting a registration pursuant to
this Section 4 may, at any time prior to the effective date of the registration
statement relating to such registration, revoke such request by providing a
written notice to the Company revoking such request; PROVIDED, HOWEVER, that, in
the event the Holders shall have made a written request for a demand
registration (i) which is subsequently withdrawn by the Holders after the
Company has filed a registration statement with the SEC in connection therewith
which has been declared effective by the SEC or (ii) which is not declared
effective solely as a result of the failure of Holders to take all actions
reasonably required in order to have the registration and the related
registration statement declared effective by the SEC, then, in any such event,
such demand registration shall be counted as a demand registration for purposes
of this Section 4(a).

(b) REGISTRATION STATEMENT FORM. If any registration requested
pursuant to this Section 4 which is proposed by the Company to be effected by
the filing of a registration statement on Form S-3 (or any successor or similar
short-form registration statement) shall be in connection with an underwritten
public offering, and if the managing underwriter or underwriters shall advise
the Company in writing that, in its opinion, the use of another form of
registration statement is of material importance to the success of such proposed
offering, then such registration shall be effected on such other form.

(c) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 4 will not be deemed to have been effected unless it
has become effective under the Securities Act and has remained effective for 270
days or such shorter period as all the Registrable Shares included in such
registration have actually been sold thereunder. In addition, if within 180 days
after it has become effective, the offering of Registrable Shares pursuant to
such registration is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court, such
registration will be deemed not to have been effected for purposes of this
Section 4.

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<PAGE> 6

an adverse effect on such offering (including the price at which such securities
can be sold), then the Company will include in such registration to the extent
of the number which the Company is so advised can be sold in such offering (i)
first, Registrable Shares requested to be included in such registration by any
Holder pro rata among such Holders on the basis of the number of Registrable
Shares requested to be included by such Holders, and (ii) second, securities of
the Company proposed by the Company to be sold for its own account. If this
Section 4 is applicable in connection with any such registration, no securities
other than Registrable Shares or securities of the Company proposed by the
Company to be sold for its own account shall be covered by such registration.
The Company will not grant any registration rights having priorities that
conflict or are otherwise inconsistent with this Section 4(d).

(e) ADDITIONAL RIGHTS. If the Company at any time grants to
any other holders of equity securities of the Company any rights to request the
Company to effect the registration of any such shares of equity securities on
terms more favorable to such holders than the terms set forth in this Section 4
and in Section 5 hereof, the terms of this Section 4 and of Section 5 hereof
shall be deemed amended or supplemented to the extent necessary to provide the
Holders such more favorable rights and benefits. In no event shall the Company
grant to any Person any registration rights on terms which conflict with or are
otherwise inconsistent with the rights of the Holders as set forth in Section 2
and this Section 4.

5. REGISTRATION PROCEDURES.

(a) If and whenever the Company is required by the provisions
of Sections 2 or 4 hereof to use its best efforts to effect or cause the
registration of Registrable Shares, the Company shall as expeditiously as
possible:

(i) prepare and, in any event within 60 days after the end of
the period within which a request for registration may be given to the
Company, file with the SEC a registration statement with respect to
such Registrable Shares and use its best efforts to cause such
registration statement to become effective; PROVIDED that before filing
such registration statement, the Company will furnish to one counsel
selected by the Holders of a majority of the Registrable Shares covered
by such registration statement copies of the registration statement,
which will be subject to the review and comment of such counsel;

(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period not in excess of 270 days and to
comply with the provisions of the Securities Act, the Exchange Act and
the rules and regulations promulgated thereunder with respect to the
disposition of all the securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the Holders thereof set forth in such registration
statement; PROVIDED, that (A) before filing any such amendments or
supplements thereto, the Company will furnish to one counsel selected
by the Holders of a majority of the Registrable Shares covered by such
registration statement copies of all documents proposed

6
<PAGE> 7

to be filed, which documents will be subject to the review and comment
of such counsel and, (B) the Company will notify each Holder of
Registrable Shares covered by such registration statement of any stop
order issued or threatened by the SEC, any other order suspending the
use of any preliminary prospectus or of the suspension of the
qualification of the registration statement for offering or sale in any
jurisdiction, and take all reasonable actions required to prevent the
entry of such stop order, other order or suspension or to remove it if
entered;

(iii) furnish to each Holder and each underwriter, if
applicable, of Registrable Shares covered by such registration
statement such number of copies of the registration statement and of
each amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and
summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as each Holder of Registrable
Shares covered by such registration statement may reasonably request in
order to facilitate the disposition of the Registrable Shares by such
Holder;

(iv) use its best efforts to register or qualify such
Registrable Shares covered by such resignation statement under the
state securities or blue sky laws of such jurisdictions as each Holder
of Registrable Shares covered by such registration statement and, if
applicable, each underwriter, may reasonably request, and do any and
all other acts and things which may be reasonably necessary to
consummate the disposition in such jurisdictions of the Registrable
Shares owned by such Holder, except that the Company shall not for any
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this
clause (iv), it would not be obligated to be so qualified, or to
consent to general service of process in any jurisdiction;

(v) use its best efforts to cause such Registrable Shares
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the Holders thereof to consummate the disposition
of such Registrable Shares;

(vi) if, at any time when a prospectus relating to the
Registrable Shares is required to be delivered under the Securities
Act, any event shall have occurred as the result of which any such
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
immediately give written notice thereof to each Holder and the managing
underwriter or underwriters, if any, of such Registrable Shares and
prepare and furnish to each such Holder a reasonable number of copies
of an amended or supplemental prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Registrable Shares,
such prospectus shall not include an untrue

7
<PAGE> 8

statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading;

(vii) use its best efforts to list such Registrable Shares on
any securities exchange on which similar securities of the Company are
then listed, and enter into customary agreements including a listing
application and indemnification agreement in customary form, provided
that the applicable listing requirements are satisfied, and provide a
transfer agent and registrar for such Registrable Shares covered by
such registration statement not later than the effective date of such
registration statement;

(viii) enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions
as each Holder of Registrable Shares being sold or the underwriter or
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Shares, including
customary indemnification and opinions;

(ix) use its best efforts to obtain a "cold comfort" letter or
letters from the Company's independent public accountants in customary
form and covering matters of the type customarily covered by "cold
comfort" letters as the Holders of at least 25% of the Registrable
Shares being sold or the underwriters retained by such Holders shall
reasonably request;

(x) make available for inspection by representatives of any
Holder of Registrable Shares covered by such registration statement, by
any underwriter participating in any disposition to be effected
pursuant to such registration statement and by any attorney, accountant
or other agent retained by such Holders or any such underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries' officers, directors and
employees to supply all information and respond to all inquiries
reasonably requested by such Holders or any such representative,
underwriter, attorney, accountant or agent in connection with such
registration statement;

(xi) promptly prior to the filing of any document which is to
be incorporated by reference into the registration statement or the
prospectus (after initial filing of the registration statement),
provide copies of such document to counsel to the Holders of
Registrable Shares covered by such registration statement and to the
managing underwriter or underwriters, if any, make the Company's
representatives available for discussion of such document and make such
changes in such document prior to the filing thereof as counsel for
such Holders or underwriters may reasonably request;

(xii) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable after the effective
date of the registration statement, an earnings statement which shall
satisfy the provisions of Section 11(a) of the Securities Act and the
rules and regulations promulgated thereunder;

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<PAGE> 9

(xiii) use its best efforts to provide a CUSIP number for all
Registrable Shares not later than the effective date of the applicable
registration statement, and provide the applicable transfer agents with
printed certificates for the Registrable Shares which are in a form
eligible for deposit with the Depository Trust Company;

(xiv) notify counsel for the Holders of Registrable Shares
included in such registration statement and the managing underwriter or
underwriters, if any, immediately and confirm the notice in writing,
(A) when the registration statement, or any post-effective amendment to
the registration statement, shall have become effective, or any
supplement to the prospectus or any amendment prospectus shall have
been filed, (B) of the receipt of any comments from the SEC and (C) of
any request of the SEC to amend the registration statement or amend or
supplement the prospectus or for additional information; and

(xv) cooperate with each seller of Registrable Shares and each
underwriter, if any, participating in the disposition of such
Registrable Shares and their respective counsel in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").

(b) Each Holder of Registrable Shares hereby agrees that, upon
receipt of any notice from the Company of the happening of any event of the type
described in Section 5(a)(vi) hereof, such Holder shall forthwith discontinue
disposition of such Registrable Shares covered by such registration statement or
related prospectus until such Holder's receipt of the copies of the supplemental
or amended prospectus contemplated by Section 5(a)(vi) hereof, and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Shares at the
time of receipt of such notice. In the event the Company shall give any such
notice, the period mentioned in Section 5(a)(ii) hereof shall be extended by the
number of days during the period from and including the date of the giving of
such notice pursuant to Section 5(a)(vi) hereof and including the date when such
Holder shall have received the copies of the supplemental or amended prospectus
contemplated by Section 5(a)(vi) hereof. If for any other reason the
effectiveness of any registration statement filed pursuant to Section 4 hereof
is suspended or interrupted prior to the expiration of the time period regarding
the maintenance of the effectiveness of such Registration Statement required by
Section 5(a)(ii) hereof so that Registrable Shares may not be sold pursuant
thereto, the applicable time period shall be extended by the number of days
equal to the number of days during the period beginning with the date of such
suspension or interruption to and ending with the date when the sale of
Registrable Shares pursuant to such registration statement may be recommenced.

(c) Each Holder hereby agrees to provide the Company, upon
receipt of its request, with such information about such Holder to enable the
Company to comply with the requirements of the Securities Act and to execute
such certificates as the Company may reasonably request in connection with such
information and otherwise to satisfy any requirements of law.

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<PAGE> 10

6. UNDERWRITTEN REGISTRATIONS.

Subject to the provisions of Sections 2, 3 and 4 hereof, any
of the Registrable Shares covered by a registration statement may be sold in an
underwritten offering at the discretion of the Holder thereof. In the case of an
underwritten offering pursuant to Section 2 hereof, the managing underwriter or
underwriters that will administer the offering shall be selected by the Company,
provided, that such managing underwriter or underwriters is reasonably
satisfactory to the Holders of a majority of the Registrable Shares to be
registered. In the case of any underwritten offering pursuant to Section 4
hereof, the managing underwriter or underwriters that will administer the
offering shall be selected by the Holders of a majority of the Registrable
Shares to be registered, provided, that such underwriters are reasonably
satisfactory to the Company.

7. EXPENSES.

(a) The fees, costs and expenses of all registrations in
accordance with Section 2 and Section 4 hereof shall be borne by the Company,
subject to the provisions of Section 7(b) hereof.

(b) The fees, costs and expenses of registration to be borne
as provided in Section 7(a) hereof shall include, without limitation, all
expenses incident to the Company's performance of or compliance with this
Agreement, including without limitation all SEC and stock exchange or NASD
registration and filing fees and expenses, reasonable fees and expenses of any
"qualified independent underwriter" and its counsel as may be required by the
rules of the NASD, fees and expenses of compliance with securities or blue sky
laws (including without limitation reasonable fees and disbursements of counsel
for the underwriters, if any, or for the selling Holders, in connection with
blue sky qualifications of the Registrable Shares), rating agency fees, printing
expenses (including expenses of printing certificates for Registrable Shares and
prospectuses), messenger, telephone and delivery expenses, the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange or national market system on which similar securities
issued by the Company are then listed, fees and disbursements of counsel for the
Company and all independent certified public accountants (including the expenses
of any annual audit, special audit and "cold comfort" letters required by or
incident to such performance and compliance), securities laws liability
insurance (if the Company decides to obtain such insurance), the fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (including, without limitation, expenses relating to "road shows" and
other marketing activities), the reasonable fees of one counsel for the Holders
in connection with each such registration retained by the Holders of a majority
of the Registrable Shares being registered, the reasonable fees and expenses of
any special experts retained by the Company in connection with such
registration, and fees and expenses of other persons retained by the Company
(but not including any underwriting discounts or commissions or transfer taxes,
if any, attributable to the sale of Registrable Shares by such Holders)
(collectively, "Registration Expenses").

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<PAGE> 11

8. INDEMNIFICATION.

(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Securities Act pursuant
to Sections 2 or 4 hereof, the Company will, and it hereby does, indemnify and
hold harmless, to the extent permitted by law, each of the Holders of any
Registrable Shares covered by such registration statement, each Affiliate of
such Holder and their respective directors and officers or general and limited
partners (and the directors, officers, general and limited partners, affiliates
and controlling Persons thereof), each other Person who participates as an
underwriter in the offering or sale of such securities and each other Person, if
any, who controls such Holder or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with the Company's
consent, which consent shall not be unreasonably withheld) to which any
Indemnified Party may become subject under the Securities Act, state securities
or blue sky laws, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof, whether or
not such Indemnified Party is a party thereto) or expenses arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(iii) any violation by the Company of any federal, state or common law rule or
regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration, and the
Company will reimburse such Indemnified Party for any legal or any other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, liability, action or proceeding; PROVIDED, that the
Company shall not be liable to any Indemnified Party in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information with respect to such Holder furnished to the Company by such
Holder specifically for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Indemnified Party and shall survive the transfer of
such securities by such Holder.

(b) INDEMNIFICATION BY THE HOLDERS AND UNDERWRITERS. The
Company may require, as a condition to including any Registrable Shares in any
registration statement filed in accordance with Sections 2 or 4 hereof, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holders of such Registrable Shares or any underwriter to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section 8(a)
hereof) the Company with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any amendment or supplement,
if such statement or alleged statement or

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<PAGE> 12

omission or alleged omission was made in reliance upon and in conformity with
written information with respect to the Holders of the Registrable Shares being
registered or such underwriter furnished to the Company by such Holders or such
underwriter specifically for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement,
or a document incorporated by reference into any of the foregoing; PROVIDED,
that no such Holder shall be liable for any indemnity claims in excess of the
amount of net proceeds received by such Holder from the sale of Registrable
Shares. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any of the Holders, or any
of their respective Affiliates, directors, officers or controlling Persons, and
shall survive the transfer of such securities by such Holder.

(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 8, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; PROVIDED, that the failure of the
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 8, except to the extent
that the indemnifying party is actually materially prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation; PROVIDED that the indemnified party shall have the right to
employ counsel to represent the indemnified party and its respective controlling
persons, directors, officers, general or limited partners, employees or agents
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the indemnified party against such indemnifying party
under this Section 8 if (i) the employment of such counsel shall have been
authorized in writing by such indemnifying party in connection with the defense
of such action, (ii) the indemnifying party shall not have promptly employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action or counsel, or (iii) any indemnified party shall have reasonably
concluded that there may be defenses available to such indemnified party or its
respective controlling persons, directors, officers, employees or agents which
are in conflict with or in addition to those available to an indemnifying party;
PROVIDED, HOWEVER, that the indemnifying party shall not be obligated to pay for
more than the expenses of one firm of separate counsel for the indemnified party
(in addition to the reasonable fees and expenses of one firm serving as local
counsel). No indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.

(d) CONTRIBUTION. If the indemnification provided for in this
Section 8 shall for any reason be unavailable to any indemnified party under
Section 8(a) or 8(b) hereof or is

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<PAGE> 13

insufficient to hold it harmless in respect of any loss, claim, damage or
liability, or any action in respect of any loss, claim, damage or liability, or
any action in respect thereof referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the indemnified party and indemnifying party or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the indemnified party
and indemnifying party with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. Notwithstanding any
other provision of this Section 8(d), no Holder of Registrable Shares shall be
required to contribute an amount greater than the dollar amount of the net
proceeds received by such Holder with respect to the sale of any such
Registrable Shares. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

(e) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding subdivisions of this Section 8 (with appropriate
modifications) shall be given by the Company and each Holder of Registrable
Shares with respect to any required registration or other qualification of
securities under any federal or state law or regulation or governmental
authority other than the Securities Act.

(f) NON-EXCLUSIVITY. The obligations of the parties under this
Section 8 shall be in addition to any liability which any party may otherwise
have to any other party.

9. RULE 144. The Company covenants that it will file in a
timely manner the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations promulgated thereunder (or,
if the Company is not required to file such reports, it will, upon the request
of any Holder of Registrable Shares, make publicly available such information),
and it will take such further action as any Holder of Registrable Shares may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Shares without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
Holder of Registrable Shares, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.

10. LIMITED LIABILITY. Notwithstanding any other provision of
this Agreement, neither the general partners, limited partners or managing
directors, or any directors or officers of any general or limited partners, nor
any future general partners, limited partners or managing directors, if any, of
the Holders shall have any personal liability for performance of any obligation
of the Holders under this Agreement.

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<PAGE> 14

11. ASSIGNABILITY. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the parties hereto other than the Company shall also be for the benefit of
and enforceable by any subsequent Holder of any Registrable Shares. The Company
may not assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the Holders of a majority of the
Registrable Shares. Any purported assignment in violation of this Section 11
shall be void.

12. NOTICES. Any and all notices, designations, consents,
offers, acceptances or any other communications shall be given in writing by
either (a) personal delivery to and receipted for by the addressee or (b)
telecopy or registered or certified mail which shall be addressed, in the case
of the Company, to: Grant Acquisition Corporation, at its principal offices or,
in the case of Holders, to the address or addresses thereof appearing on the
books of the Company or of the transfer agent and registrar for its Common
Stock.

All such notices and communications shall be deemed to have
been duly given and effective: when delivered by hand, if personally delivered;
two business days after being deposited in the mail, postage prepaid, if mailed;
and when receipt acknowledged, if telecopied.

13. NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the Holders in this Agreement.

14. SPECIFIC PERFORMANCE. The Company acknowledges that the
rights granted to the Holders in this Agreement are of a special, unique and
extraordinary character, and that any breach of this Agreement by the Company
could not be compensated for by damages. Accordingly, if the Company breaches
its obligations under this Agreement, the Holders shall be entitled, in addition
to any other remedies that they may have, to enforcement of this Agreement by a
decree of specific performance requiring the Company to fulfill its obligations
under this Agreement. The Company consents to personal jurisdiction in any such
action brought in the United States District Court for the Southern District of
New York or any such other court and to service of process upon it in the manner
set forth in Section 12 hereof.

15. SEVERABILITY. If any provision of this Agreement or any
portion thereof is finally determined to be unlawful or unenforceable, such
provision or portion thereof shall be deemed not to be a part of this Agreement
and any portion of such invalidated provision that is not invalidated by such a
determination, shall remain in full force and effect.

16. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.

14
<PAGE> 15

17. DEFAULTS. A default by any party to this Agreement in such
party's compliance with any of the conditions or covenants hereof or performance
of any of the obligations of such party hereunder shall not constitute a default
by any other party.

18. AMENDMENTS, WAIVERS. This Agreement may not be amended,
modified or supplemented and no waivers of or consents to departures from the
provisions hereof may be given unless consented to in writing by the Company and
the holders of a majority of the Registrable Shares; PROVIDED, HOWEVER, that no
such amendment, supplement, modification or waiver shall deprive any Holder of
any rights under Sections 2 or 4 hereof without the consent of such Holder.

19. CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.

20. ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.

21. ENTIRE AGREEMENT. This Agreement, together with the Stock
Purchase Agreement, contains the entire agreement among the parties hereto with
respect to the transactions contemplated herein and understandings among the
parties relating to the subject matter hereof. Any and all previous agreements
and understandings between or among the parties hereto regarding the subject
matter hereof (other than the Stock Purchase Agreement) are, whether written or
oral, superseded by this Agreement.

22. GOVERNING LAW. This Agreement is made pursuant to and
shall be construed in accordance with the laws of the State of New York, without
regard to that state's conflicts of laws principles. The parties hereto submit
to the non-exclusive jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Agreement.

15
<PAGE> 16

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective authorized officers as of the date
aforesaid.

GRANT ACQUISITION CORPORATION

By /s/ Jon Pollock
----------------------------------------------
Name: Jon Pollock
Title: President

ELLIOTT ASSOCIATES, L.P.

By /s/ Jon Pollock
----------------------------------------------
Name: Jon Pollock
Title: Portfolio Manager

<PAGE> 1
Exhibit 4.3

AMENDMENT NO. 1 TO
COMMON STOCK
REGISTRATION RIGHTS AGREEMENT

THIS AMENDMENT NO. 1 TO COMMON STOCK REGISTRATION RIGHTS
AGREEMENT (this "Amendment") is entered into as of this 1st day of October,
1997, between GRANT GEOPHYSICAL, INC. (formerly Grant Acquisition Corporation),
a Delaware corporation (the "Company"), ELLIOTT ASSOCIATES, L.P., a Delaware
limited partnership (the "Purchaser") and WESTGATE INTERNATIONAL, L.P., a
Delaware limited partnership ("Westgate").

WHEREAS, the Company and the Purchaser are parties to a Common
Stock Registration Rights Agreement dated September 19, 1997 (the "Agreement")
pursuant to which the Company granted to the Purchaser certain registration
rights with respect to Registrable Shares (as defined in the Agreement);

WHEREAS, pursuant to subscriptions dated September 29, 1997
(the "Second Subscriptions"), Purchaser and Westgate have purchased, in the
aggregate, Nineteen thousand five hundred seventy-one and 162/1000ths
(19,571.162) shares of the Company's Cumulative Pay-in-Kind Preferred Stock,
$.001 par value per share (the "Preferred Stock");

WHEREAS, the Purchaser and Westgate have conditioned the
Second Subscriptions on the shares of Preferred Stock (and Preferred Stock
Rights) being considered Registrable Shares under the Agreement;

NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto agree as follows:

1. DEFINITIONS. Capitalized terms used herein and not
defined are used as defined in the Agreement.

2. AMENDMENTS.

(a) The definition of "Registrable Shares" in Section 1 of the
Agreement is hereby amended and restated in its entirety to read as follows:

"Registrable Shares" shall mean (i) any Common Stock issued to
Purchaser pursuant to the Subscription or the Plan; (ii) any Preferred
Stock issued to Purchaser or Westgate pursuant to the Second
Subscriptions; (iii) any Preferred Stock issued with respect to
dividends and Dividend Interest (paid or accrued but unpaid) on the
Preferred Stock referred to in clause (ii); (iv) any Common Stock
issued with respect to the Preferred Stock pursuant to Section 5(b)(ii)
of the terms of the Preferred Stock set forth in Article Fourth of the

1
<PAGE> 2

Company's Certificate of Incorporation, as amended on the date hereof;
and (v) any equity securities of the Company issued or distributed
after the date hereof in respect of the stock referred to in clauses
(i), (ii), (iii) and (iv) above by way of any stock dividend, stock
split or other distribution, recapitalization or reclassification, and
any equity securities of the Company acquired by a Holder upon exercise
or conversion of any such securities. As to any particular Registrable
Share, such Registrable Share shall cease to be a Registrable Share
when (x) it shall have been sold, transferred or otherwise disposed of
or exchanged pursuant to a registration statement under the Securities
Act or (y) it shall have been distributed to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act.

(b) The definition of "Holders" in Section 1 of the Agreement
is hereby amended and restated in its entirety to read as follows:

"Holders" shall mean Purchaser, Westgate, any Affiliate of
Purchaser or Westgate (other than the Company) and any transferees of
Purchaser or Westgate who are holders of record of shares of any
Registrable Shares, and any combination of them, and the term "Holder"
shall mean any such person.

(b) PRIORITY IN INCIDENTAL REGISTRATION. If a registration
pursuant to this Section 2 involves an underwritten offering and the
managing underwriter or underwriters in good faith advises the Company
in writing that, in its opinion, the number of securities requested and
otherwise proposed to be included in such registration exceeds the
largest number which can be sold in such offering without having an
adverse effect on such offering (including the price at which such
securities can be sold), the Company will include in such registration,
to the extent of the number which the Company is so advised can be sold
in such offering, (i) if the registration is a primary registration on
behalf of the Company (w) first, the securities proposed to be
registered by the Company, (x) second, the Registrable Shares which are
shares of Common Stock pro rata in accordance with the number of such
securities requested to be included by all Holders of Registrable
Shares, (y) third, the Registrable Shares which are shares of Preferred
Stock, pro rata in accordance with the numbers of such securities
requested to be included by all Holders of Registrable Shares, and (z)
fourth, securities of other Persons requested to be included in such
registration pro rata in accordance with the numbers of other
securities proposed to be registered by the other Persons, and (ii) if
the registration is a secondary registration on behalf of other
Persons, the Registrable Shares and securities of the other Persons
included in such registration pro rata in accordance with the numbers
of securities requested to be included by the holders of Registrable

2
<PAGE> 3

Shares and the number of other securities proposed to be registered by
the other Persons. The Company will not grant any registration rights
having priorities that conflict or are otherwise inconsistent with this
Section 2(b).

(d) Section 4(d) of the Agreement is hereby amended and
restated in its entirety to read as follows:

(d) PRIORITY IN REQUESTED REGISTRATIONS. If a requested
registration pursuant to this Section 4 involves an underwritten
offering and the managing underwriter or underwriters in good faith
advises the Company in writing that, in its opinion, the number of
securities requested to be included in such registration (including
securities of the Company which are not Registrable Shares) exceeds the
largest number of securities which can be sold in such offering without
having an adverse effect on such offering (including the price at which
such securities can be sold), then the Company will include in such
registration to the extent of the number which the Company is so
advised can be sold in such offering (i) first, Registrable Shares
which are shares of Common Stock requested to be included in such
registration by any Holder pro rata among such Holders on the basis of
the number of such Registrable Shares requested to be included by such
Holder, (ii) second, Registrable Shares which are shares of Preferred
Stock requested to be included in such registration by any Holder pro
rata among such Holders on the basis of the number of such Registrable
Shares requested to be included by such Holders, and (iii) third,
securities of the Company proposed by the Company to be sold for its
own account. If this Section 4 is applicable in connection with any
such registration, no securities other than Registrable Shares or
securities of the Company proposed by the Company to be sold for its
own account shall be covered by such registration. The Company will not
grant any registration rights having priorities that conflict or are
otherwise inconsistent with this Section 4(d).

3. CONSENT. Purchaser hereby consents to the provisions hereof
amending its rights and granting rights to Westgate.

4. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.

3
<PAGE> 4

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

GRANT GEOPHYSICAL, INC.
(formerly Grant Acquisition Corporation)

By /s/ Jon Pollock
---------------------------------------
Name: Jon Pollock
Title: Chairman

ELLIOTT ASSOCIATES, L.P.

By /s/ Jon Pollock
---------------------------------------
Name: Jon Pollock
Title: Portfolio Manager

WESTGATE INTERNATIONAL, L.P.

By /s/ Jon Pollock
---------------------------------------
Name: Jon Pollock
Title: Portfolio Manager

<PAGE> 1
Exhibit 4.4

AMENDMENT NO. 2 TO
COMMON STOCK
REGISTRATION RIGHTS AGREEMENT

THIS AMENDMENT NO. 2 TO COMMON STOCK REGISTRATION RIGHTS
AGREEMENT (this "Amendment") is entered into as of this 17th day of December,
1997, among GRANT GEOPHYSICAL, INC., a Delaware corporation (the "Company"),
ELLIOTT ASSOCIATES, L.P., a Delaware limited partnership (the "Purchaser") and
WESTGATE INTERNATIONAL, L.P., a Delaware limited partnership ("Westgate").

WHEREAS, the Company and the Purchaser are parties to a Common
Stock Registration Rights Agreement dated September 19, 1997, as amended by
Amendment No. 1 to Common Stock Registration Rights Agreement, dated October 1,
1997 (the "Agreement"), pursuant to which the Company granted to the Purchaser
and Westgate certain registration rights with respect to Registrable Shares (as
defined in the Agreement);

WHEREAS, pursuant to that certain Stock Purchase Agreement,
dated December 18, 1997, among the Company, the Purchaser and Westgate (the
"Stock Purchase Agreement"), the Purchaser and Westgate have exchanged, in the
aggregate, 9,305,109 shares of the Common Stock of Solid State Geophysical, Inc.
for an aggregate of 4,652,555 shares of the Company's Common Stock; and

WHEREAS, the Purchaser and Westgate have conditioned the Stock
Purchase Agreement on such shares of the Company's Common Stock issued pursuant
to the Stock Purchase Agreement being considered Registrable Shares under the
Agreement;

NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto agree as follows:

1. DEFINITIONS. Capitalized terms used herein and not
defined are used as defined in the Agreement.

2. AMENDMENTS.

(a) The definition of "Registrable Shares" in Section 1 of the
Agreement is hereby amended and restated in its entirety to read as follows:

"Registrable Shares" shall mean (i) any Common Stock issued to
Purchaser or Westgate pursuant to the Subscription or in connection
with the Plan or the Stock Purchase Agreement; (ii) any Preferred Stock
issued to Purchaser or Westgate pursuant to the Second Subscriptions;
(iii) any Preferred Stock issued with respect to dividends and Dividend
Interest (paid or accrued

1
<PAGE> 2

but unpaid) on the Preferred Stock referred to in clause (ii); (iv) any
Common Stock issued with respect to the Preferred Stock pursuant to
Section 5(b)(ii) of the terms of the Preferred Stock set forth in
Article Fourth of the Company's Certificate of Incorporation, as
amended on the date hereof; and (v) any equity securities of the
Company issued or distributed after the date hereof in respect of the
stock referred to in clauses (i), (ii), (iii) and (iv) above by way of
any stock dividend, stock split or other distribution, recapitalization
or reclassification, and any equity securities of the Company acquired
by a Holder upon exercise or conversion of any such securities. As to
any particular Registrable Share, such Registrable Share shall cease to
be a Registrable Share when (x) it shall have been sold, transferred or
otherwise disposed of or exchanged pursuant to a registration statement
under the Securities Act or (y) it shall have been distributed to the
public pursuant to Rule 144 (or any successor provision) under the
Securities Act.

3. CONSENT. Each of the Purchaser and Westgate hereby consent
to the provisions hereof amending its rights and granting rights to Westgate.

4. COUNTERPARTS. This Amendment may be executed in one
or more counterparts, each of which shall be deemed an original and all of
which, together, shall constitute one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

2
<PAGE> 3

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

GRANT GEOPHYSICAL, INC.

By: /s/ Larry E. Lenig, Jr.
------------------------------------------
Name: Larry E. Lenig, Jr.
Title: President and Chief Executive Officer

ELLIOTT ASSOCIATES, L.P.

By: /s/ Paul Singer
------------------------------------------
Name: Paul Singer
Title: General Partner

WESTGATE INTERNATIONAL, L.P.

By: Martly International, Inc, attorney-in-fact

By: /s/ Paul Singer
-------------------------------------
Name: Paul Singer
Title: President

<PAGE> 1
Exhibit 10.1

LOAN AND SECURITY AGREEMENT

DATED AS OF OCTOBER 1, 1997

BETWEEN

GRANT GEOPHYSICAL, INC.

AND

ELLIOTT ASSOCIATES, L.P.

<PAGE> 2

TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C> <C>
1. DEFINITIONS............................................................................................ 1
1.1 General Terms............................................................................. 1
1.2 Accounting Terms.......................................................................... 9
1.3 Others Defined in New York Uniform Commercial Code........................................ 9

2. CREDIT................................................................................................. 10
2.1 Revolving Loans........................................................................... 10
2.2 Prepayments and Terminations.............................................................. 10
2.3 Statements................................................................................ 11
2.4 Interest.................................................................................. 11
2.5 Method for Making Payments................................................................ 11
2.6 Term of This Agreement.................................................................... 12
2.7 Closing Fee............................................................................... 12

3. REPORTING REQUIREMENTS................................................................................. 12
3.1 Financial Reports......................................................................... 12
3.2 Verification of Accounts.................................................................. 12
3.3 Account Covenants......................................................................... 12
3.4 Collection of Accounts and Payments....................................................... 13
3.5 Appointment of Lender as Borrower's Attorney-in-Fact...................................... 13
3.6 Instruments and Chattel Paper............................................................. 13
3.7 Equipment Warranties...................................................................... 13
3.8 Equipment Records......................................................................... 13
3.9 Safekeeping of Equipment and Real Property................................................ 14

4. CONDITIONS OF ADVANCES................................................................................. 14
4.1 Initial Advances.......................................................................... 14
4.2 All Revolving Loans....................................................................... 15

5. COLLATERAL............................................................................................. 16
5.1 Security Interest......................................................................... 16
5.2 Pledge and Deposit........................................................................ 16
5.3 Grant of License to Use Intangibles....................................................... 17
5.4 Processing, Sale, Collections, Etc........................................................ 17
5.5 Preservation of Collateral and Perfection of Security Interests Therein................... 17
5.6 Termination of Security Interest and Liens................................................ 18
5.7 Reasonable Care........................................................................... 18
5.8 Borrower to Remain Liable................................................................. 18
5.9 Appraisals................................................................................ 18
5.10 Maintenance of Collateral................................................................. 19
</TABLE>

-i-

<PAGE> 3

TABLE OF CONTENTS
(continued)

<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----

<S> <C> <C>
6. REPRESENTATIONS AND WARRANTIES......................................................................... 19
6.1 Corporate Existence....................................................................... 19
6.2 Corporate Authority....................................................................... 19
6.3 Binding Effect............................................................................ 19
6.4 Financial Data............................................................................ 19
6.5 Collateral................................................................................ 19
6.6 Chief Place of Business................................................................... 20
6.7 Other Corporate Names..................................................................... 20
6.8 Tax Liabilities........................................................................... 20
6.9 Margin Security........................................................................... 20
6.10 Survival of Warranties.................................................................... 20
6.11 Litigation and Proceedings................................................................ 20
6.12 Other Agreements.......................................................................... 20
6.13 Compliance with Laws and Regulations; Environmental Matters............................... 20
6.14 Patents, Trademarks and Licenses.......................................................... 21
6.15 Pension and Welfare Plans................................................................. 21

7. AFFIRMATIVE COVENANTS.................................................................................. 21
7.1 Financial Statements...................................................................... 21
7.2 Books, Records and Inspections............................................................ 23
7.3 Taxes..................................................................................... 23
7.4 Lender's Costs and Expenses............................................................... 24
7.5 Borrower's Liability Insurance............................................................ 24
7.6 Borrower's Property and Business Insurance................................................ 24
7.7 Employee Benefits Plans................................................................... 24
7.8 Environmental Matters..................................................................... 24
7.9 Use of Proceeds........................................................................... 25
7.10 Cash Management System.................................................................... 25

8. NEGATIVE COVENANTS..................................................................................... 25
8.1 Encumbrances.............................................................................. 25
8.2 Indebtedness.............................................................................. 26
8.3 Consolidations, Mergers or Acquisitions................................................... 26
8.4 Investments or Loans...................................................................... 26
8.5 Guarantees................................................................................ 26
8.6 Disposal of Property...................................................................... 26
8.7 Capital Investment Limitations............................................................ 27
8.8 Dividends and Stock Redemptions........................................................... 27
8.9 Issuance of Stock......................................................................... 27

</TABLE>

-ii-

<PAGE> 4

TABLE OF CONTENTS
(continued)

<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C> <C>
8.10 Amendment of Certificate of Incorporation or By-Laws; Corporate
Name; Places of Business.................................................................. 27
8.11 Lease Limitations......................................................................... 28
8.12 Transactions with Subsidiaries and Affiliates............................................. 28
8.13 Other Agreements.......................................................................... 28

9. EVENTS OF DEFAULT, RIGHTS AND REMEDIES OF LENDER....................................................... 28
9.1 Events of Default......................................................................... 28
9.2 Rights and Remedies Generally............................................................. 31
9.3 Entry Upon Premises and Access to Information............................................. 31
9.4 Sale or Other Disposition of Collateral by Lender......................................... 31
9.5 Waiver of Demand.......................................................................... 32
9.6 Endorsement by Lender; Setoff............................................................. 32

10. MISCELLANEOUS.......................................................................................... 32
10.1 Waiver.................................................................................... 32
10.2 Taxes..................................................................................... 33
10.3 Costs and Attorneys' Fees................................................................. 33
10.4 Expenditures by Lender.................................................................... 33
10.5 Assignments; Participations............................................................... 33
10.6 Reliance by Lender........................................................................ 33
10.7 Parties................................................................................... 33
10.8 Severability.............................................................................. 34
10.9 Application of Payments................................................................... 34
10.10 Marshalling; Payments Set Aside........................................................... 34
10.11 Section Titles............................................................................ 34
10.12 Notices................................................................................... 34
10.13 Equitable Relief.......................................................................... 35
10.14 Indemnification........................................................................... 36
10.15 Counterparts.............................................................................. 36
10.16 Prior Agreements.......................................................................... 36
10.17 Successors and Assigns.................................................................... 36
10.18 Continuing Agreement...................................................................... 37
10.19 Filing of Financing Statement............................................................. 37
10.20 Computations.............................................................................. 37
10.21 CHOICE OF LAW............................................................................. 37
10.22 PERSONAL JURISDICTION..................................................................... 37
10.23 WAIVER OF JURY TRIAL...................................................................... 38
</TABLE>

-iii

<PAGE> 5

EXHIBITS
--------

EXHIBIT A -- Form of Revolving Note (Section 2.1(A))

EXHIBIT B -- Form of Signature Authorization Certificate (Section 1.1)

EXHIBIT C -- Form of Patent Security Agreement (Section 4.1(B)(x))

EXHIBIT D -- Form of Lock Box Agreement (Section 4.1(B)(xi))

EXHIBIT E -- Form of Stock Pledge Agreement (Section 4.1(B)(xii))

EXHIBIT F -- Form of Guaranty and Security Agreement (Section 4.1(B)(xiii))

-iv-

<PAGE> 6

SCHEDULES
---------

SCHEDULE 2.2(B) -- Foreign Bank Accounts

SCHEDULE 3.7 -- Permitted Rentals

SCHEDULE 5.2 -- Pledges Notes and Pledged Interests

SCHEDULE 6.5 -- Liens, Claims, Security Interests and
Encumbrances Against the Collateral

SCHEDULE 6.7 -- Other Corporate Names; Fictitious Names

SCHEDULE 6.11 -- Pending Litigation

SCHEDULE 7.1(H) -- Location of Collateral, Etc.

SCHEDULE 7.10 -- Secondary Disbursement Accounts

SCHEDULE 8.2 -- Permitted Indebtedness

-v-

<PAGE> 7

LOAN AND SECURITY AGREEMENT
---------------------------

This Loan and Security Agreement and all Exhibits and
Schedules attached hereto and hereby made a part hereof (as the same may from
time to time be amended, modified, supplemented or restated, the "AGREEMENT"),
is made as of this 1st day of October, 1997, by and between GRANT GEOPHYSICAL,
INC., a Delaware corporation, with its principal place of business and chief
executive office at 16850 Park Row, Houston, Texas 77084 ("BORROWER"), and
ELLIOTT ASSOCIATES, L.P., a Delaware limited partnership, with its chief
executive office at 712 Fifth Avenue, New York, New York 10019 ("LENDER").

W I T N E S E T H:
------------------

WHEREAS, Borrower desires to borrow an aggregate principal
amount of up to Five Million and No/100 Dollars ($5,000,000.00) from Lender, and
Lender is willing to make certain loans to Borrower of up to such amount upon
the terms and conditions set forth herein; and

WHEREAS, Lender is willing to extend credit to Borrower only
upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the terms and conditions
contained herein, and of any loans or extensions of credit heretofore, now or
hereafter made to or for the benefit of Borrower by Lender, the parties hereto
hereby agree as follows:

1. DEFINITIONS.
-----------

1.1 GENERAL TERMS. When used herein, the following terms shall
have the following meanings:

"ACCOUNT DEBTOR" shall mean the party who is obligated on or
under an Account.

"ACCOUNTS" shall mean all present and future rights of
Borrower to payment for goods sold or leased or for services rendered,
which are not evidenced by instruments or chattel paper, and whether or
not they have been earned by performance.

"AFFILIATE" shall mean any Person (i) that directly or
indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with Borrower, (ii) that
directly or beneficially owns or holds 5% or more of any class of the
voting stock of Borrower or (iii) 5% or more of the voting stock (or in
the case of a person which is not a corporation, 5% or more of the
equity interest) of which is owned directly or beneficially or held by
Borrower.

"AGREEMENT" shall have the meaning set forth in the PREAMBLE
hereof.

<PAGE> 8

"AUTHORIZED OFFICER" shall mean at any time an individual
whose signature has been certified to Lender on behalf of Borrower
pursuant to a Signature Authorization Certificate actually received by
Lender at such time and whose authority has not been revoked prior to
such time in the manner prescribed in such Certificate.

"BASE RATE" shall mean at any time and from time to time the
rate of interest per annum announced by The Chase Manhattan Bank as its
prime lending rate at New York, New York, which rate shall not
necessarily be the lowest rate of interest that The Chase Manhattan
Bank charges its customers.

"BORROWER" shall have the meaning set forth in the PREAMBLE
hereof.

"BUSINESS DAY" shall mean a day (other than a Saturday or
Sunday) on which banks are open for business in New York, New York.

"CAPITALIZED LEASE OBLIGATIONS" means any amount payable with
respect to any lease of any tangible or intangible property (whether
real, personal or mixed), however denoted, which either (i) is required
by GAAP to be reflected as a liability on the face of the balance sheet
of the lessee thereunder or (ii) based on actual circumstances existing
and ascertainable, either at the commencement of the term of such lease
or at any subsequent time at which any property becomes subject
thereto, can be anticipated to impose on such lessee substantially the
same economic risks and burdens, having regard to such lessee's
obligations and the lessor's rights thereunder both during and at the
termination of such lease, as would be imposed on such lessee by any
lease which is required to be so reflected or by the ownership of the
leased property.

"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 ET SEQ., any
amendments thereto, any successor statutes, and any regulations or
guidance promulgated thereunder.

"CLOSING DATE" shall mean the date of this Agreement.

"CLOSING FEE" shall have the meaning set forth in SUBSECTION
2.7 hereof.

"CODE" shall have the meaning set forth in SUBSECTION 1.3
hereof.

"COLLATERAL" shall mean all real and personal property and/or
interests in property now owned or hereafter acquired by Borrower in or
upon which a security interest, lien or mortgage is granted to Lender
(or to any agent, trustee or other party acting on Lender's behalf) by
Borrower, whether under this Agreement, the other Financing Agreements,
or any other documents, instruments or writings executed by Borrower
and delivered to Lender.

"COLLECTING BANK" shall have the meaning set forth in
SUBSECTION 3.4 hereof.

"CONCENTRATION ACCOUNT" shall have the meaning set forth in
SUBSECTION 7.10 hereof.

<PAGE> 9

"CONTAMINANT" shall mean any solid waste, pollutant, hazardous
substance, Hazardous Material, toxic substance, hazardous waste,
special waste, petroleum (including natural gas) or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls (PCBs), or any
constituent of any such substance or waste, and includes but is not
limited to these terms as defined in federal, state or local laws or
regulations.

"DAMAGES AND COSTS" shall mean all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive
damages, economic damages, consequential damages, treble damages,
intentional, willful or wanton injury, damage or threat to the
environment, natural resources or public health or welfare, costs and
expenses (including, without limitation, attorney, expert and
consulting fees and costs of investigation, feasibility or Remedial
Action studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past,
present or future.

"DEBT SERVICE" shall mean, for any period of Borrower, all
amounts due and owing by Borrower during such period, whether of
principal or interest, and whether a scheduled payment or a mandatory
prepayment, with respect to any and all indebtedness for borrowed
money.

"DEFAULT" means any event which, with lapse of time or notice
or lapse of time and notice, will constitute an Event of Default if it
continues uncured.

"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" shall
mean all Requirements of Law derived from or relating to CERCLA; the
Clean Water Act, as amended, 33 U.S.C. Section 125, ET SEQ.; the Clean
Air Act, as amended, 42 U.S.C. Section 7401, ET SEQ.; OSHA; RCRA; any
so-called "Superfund" or "Superlien" law or any other federal, state,
local and foreign Requirements of Law relating to health and safety,
pollution or protection of the environment, including without
limitation, Requirements of Law relating to reclamation of land and
waterways and Requirements of Law relating to emissions, discharges,
releases and threatened releases of Contaminants into the environment
(including without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Contaminants, or otherwise relating
to worker health and safety or public health and safety, in each case
material to the ownership or operation of the Property.

"ENVIRONMENTAL LIEN" shall mean a Lien in favor of any
Governmental Authority for any (i) liabilities under any Environmental,
Health or Safety Requirements of Law, or (ii) damages arising from, or
costs incurred by such governmental entity in response to, a Release or
threatened Release of a Contaminant into the environment.

"EQUIPMENT" shall mean any and all of Borrower's now owned or
hereafter acquired machinery, equipment, furniture, furnishings,
fixtures and all tangible personal property similar to any of the
foregoing (other than "INVENTORY" as hereinafter defined), together
with tools, dies, jigs, molds, machine parts, and motor vehicles of
every kind and description, and all improvements, accessions and
appurtenances thereto, and any proceeds, including insurance proceeds
and condemnation awards.

<PAGE> 10

"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, any amendments thereto, any successor statutes, and any
regulations or guidance promulgated thereunder.

"EVENT OF DEFAULT" shall mean the occurrence or existence of
any one or more of the events described in SUBSECTION 9.1 hereof.

"EXCESS CASH FLOW PAYMENT" shall mean a payment by Borrower to
Lender under SUBSECTION 2.2(B)(I) hereof of an amount equal to the cash
balance of all collected funds in Borrower's Concentration Account
minus $200,000. Such amount shall be determined at 12:00 p.m. New York
time on October 3, 1997 and at 12:00 p.m. New York time on every Friday
thereafter (if any such Friday is not a Business Day then such amount
shall be determined at 12:00 p.m. on the preceding Thursday).

"FINANCING AGREEMENTS" shall mean all agreements, instruments
and documents, including, without limitation, security agreements, loan
agreements, notes, mortgages, deeds of trust, subordination agreements,
guarantees, pledges, powers of attorney, consents, assignments,
contracts, notices, leases, financing statements and all other written
matter whether heretofore, now, or hereafter executed by or on behalf
of Borrower and delivered to Lender in connection with the extension by
Lender to Borrower of the Total Facility, together with all agreements
and documents referred to therein or contemplated thereby.

"FOREIGN BANK ACCOUNTS" shall mean the accounts set forth on
SCHEDULE 2.2(B).

"FOREIGN EXCESS CASH FLOW PAYMENT" shall mean a payment in
United States dollars by Borrower to Lender under SUBSECTION 2.2(B)(II)
hereof of an amount equal to (i) the sum of each amount in any Foreign
Bank Account or (ii) such lesser amount as Borrower shall determine.
Such amount shall be determined at any time upon Lender's request
during the occurrence and continuation of an Event of Default. Borrower
shall be responsible for paying any taxes, fees, costs or other charges
in connection with making such Foreign Excess Cash Flow Payment.

"GAAP" shall mean generally accepted accounting principles
which are consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and the Board of the American
Institute of Certified Public Accountants in existence as of the date
hereof.

"GENERAL INTANGIBLES" shall mean all now owned or hereafter
acquired choses in action, causes of action and all other intangible
personal property of Borrower of every kind and nature (other than
Accounts), including, without limitation, corporate or other business
records, inventions, applications, patents, patent applications,
service marks, trademarks, trademark applications, trade names, trade
secrets, goodwill, registrations, copyrights, licenses, franchises,
customer lists, tax refund claims, rights and claims against carriers
and shippers, rights to indemnification, proceeds of insurance covering
the lives of key employees on which Borrower is beneficiary, and any
letter of credit, guarantee, security interest or other security held
by or granted to Borrower to secure payment by an Account Debtor.

<PAGE> 11

"GOODS" shall have the meaning assigned to such term under the
Code.

"GOVERNMENTAL AUTHORITY" shall mean any nation or government,
any federal, state, local or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

"HAZARDOUS MATERIAL" shall mean any chemical, substance,
material, object, condition, waste or combination thereof which is or
may be hazardous to human health or safety or to the environment due to
its radioactivity, ignitability, corrosivity, reactivity, explosivity,
toxicity, carcinogenicity, infectiousness or other harmful or
potentially harmful properties or effects, including, without
limitation, all of those chemicals, substances, materials, objects,
conditions, wastes or combinations thereof which are now or become
listed, defined or regulated in any manner by any federal, state or
local law based upon, directly or indirectly, such properties or
effects.

"INDEBTEDNESS" shall mean, with respect to any Person, as of
the date of determination thereof, (i) all of such Person's
indebtedness for borrowed money, (ii) all indebtedness of such Person
or any other Person secured by any Lien with respect to any property or
asset owned or held by such Person, regardless whether the indebtedness
secured thereby shall have been assumed by such Person, (iii) all
indebtedness of other Persons which such Person has directly or
indirectly guaranteed (whether by discount or otherwise), endorsed
(otherwise than for collection or deposit in the ordinary course of
business), discounted with recourse to such Person or with respect to
which such Person is otherwise directly or indirectly liable,
including, without limitation, indebtedness in effect guaranteed by
such Person through any agreement (contingent or otherwise) to (A)
purchase, repurchase or otherwise acquire such indebtedness or any
security therefor, (B) provide funds for the payment or discharge of
such indebtedness or any other liability of the obligor of such
indebtedness (whether in the form of loans, advances, stock purchases,
capital contribution or otherwise), (C) maintain the solvency of any
balance sheet or other financial condition of the obligor of such
indebtedness, or (D) make payment for any products, materials or
supplies or for any transportation or services regardless of the
nondelivery or nonfurnishing thereof, if in any such case the purpose
or intent of such agreement is to provide assurance that such
indebtedness will be paid or discharged or that any agreements relating
thereto will be complied with or that the holders of such indebtedness
will be protected against loss in respect thereof, (iv) all of such
Person's Capitalized Lease Obligations and (v) all actual or contingent
reimbursement obligations with respect to letters of credit issued for
such Person's account.

"INDEMNIFIED MATTERS" shall have the meaning set forth in
SUBSECTION 10.14 hereof.

"INDEMNITEES" shall have the meaning set forth in SUBSECTION
10.14 hereof.

"INTELLECTUAL PROPERTY" shall mean all of Borrower's past,
present and future: trade secrets and other proprietary information;
trademarks, trade names, service marks, business names, designs, logos,
indicia, and/or other source and/or business identifiers and the
goodwill of the business relating thereto and all registrations which
have heretofore been or may hereafter be issued thereon throughout the
world; copyrights (including, without

<PAGE> 12

limitation, copyrights for computer programs) and copyright
registrations which have heretofore been or may hereafter be issued
throughout the world and all tangible property embodying the
copyrights; unpatented inventions (whether or not patentable); patent
applications and patents; license agreements related to any of the
foregoing set forth in this definition and income therefrom; books,
records, writings, computer tapes or disks, flow diagrams,
specification sheets, source codes, object codes and other physical
manifestations, embodiments or incorporations of the foregoing set
forth in this definition; the right to sue for all past, present and
future infringements of any of the foregoing set forth in this
definition; and all common law and other rights throughout the world in
and to all of the foregoing set forth in this definition.

"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986 and the regulations promulgated thereunder, as amended from
time to time, and any successor statute and/or regulations.

"INVENTORY" shall mean any and all goods, including, without
limitation, goods in transit, wheresoever located, whether now owned or
hereafter acquired by Borrower, which are held for sale or lease,
furnished under any contract of service or held as raw materials, work
in process or supplies, and all materials used or consumed in
Borrower's business, and shall include such property the sale or other
disposition of which has given rise to Accounts and which has been
returned to or repossessed or stopped in transit by Borrower.

"IRS" shall mean the Internal Revenue Service and any
successor department or agency.

"LENDER" shall have the meaning set forth in the PREAMBLE
hereof.

"LIABILITIES" shall mean all of Borrower's liabilities,
obligations, and Indebtedness to Lender of any and every kind and
nature, whether heretofore, now or hereafter owing, arising, due or
payable and howsoever evidenced, created, incurred, acquired, or owing,
whether primary, secondary, direct, contingent, fixed or otherwise
(including obligations of performance) and whether arising or existing
under written agreement, oral agreement or operation of law, including
without limitation all of Borrower's indebtedness and obligations to
Lender under this Agreement, the Revolving Note and any Financing
Agreement.

"LIEN" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, collateral deposit arrangement, security
interest, encumbrance for the payment of money, lien (statutory or
other), preference, right of setoff, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title
retention agreement, the interest of a lessor under a capital lease,
any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement (other
than a financing statement filed by a "true" lessor pursuant to Section
9-408 of the Code) naming the owner of the asset to which such Lien
relates as debtor, under the Code or other comparable law of any
jurisdiction.

"LOCK BOX" shall have the meaning set forth in SUBSECTION 3.4
hereof.

<PAGE> 13

"LOCK BOX AGREEMENT" shall have the meaning set forth in
SUBSECTION 3.4 hereof.

"LOSS" shall have the meaning set forth in SUBSECTION 9.1(F)
hereof.

"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
upon (i) the business, assets or other properties, liabilities or
condition (financial or otherwise) results of operations or prospects
of Borrower, (ii) the ability of Borrower to repay the Liabilities,
(iii) any material aspect of the benefits provided to Lender with
respect to the Collateral or financial accommodations provided under
this Agreement or any of the other Financing Agreements, or (iv) the
ability of Borrower to perform or cause to be performed any material
obligation under this Agreement or any of the other Financing
Agreements to which it is a party.

"MATURITY DATE" shall have the meaning set forth in SUBSECTION
2.6 hereof.

"MAXIMUM REVOLVING FACILITY" shall have the meaning set forth
in SUBSECTION 2.1 of this Agreement.

"MONTHLY REPORT" shall have the meaning set forth in
SUBSECTION 3.1(A) hereof.

"OSHA" shall mean the Occupational Safety and Health Act, 29
U.S.C. Section 551 ET SEQ., any amendments thereto, any successor
statutes and any regulations or guidance promulgated thereunder.

"PAYROLL ACCOUNT" shall have the meaning set forth in
SUBSECTION 7.10 hereof.

"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any Person succeeding to the functions thereof.

"PENSION PLAN" shall mean a "pension plan," as such term is
defined in ERISA, that is subject to Title IV of ERISA (other than a
multiemployer plan) and to which Borrower or any Subsidiary or
Affiliate of Borrower may have any liability, including any liability
by reason of having been a substantial employer within the meaning of
section 4063 of ERISA at any time during the preceding five years, or
by reason of being deemed to be a contributing sponsor under section
4069 of ERISA.

"PERMIT" shall mean any permit, approval, authorization,
license, variance, or permission required from a Governmental Authority
under an applicable Requirement of Law.

"PERSON" shall mean any person, employee, individual,
corporation, partnership, trust, sole proprietorship, joint venture, or
any Governmental Authority.

"PLEDGED NOTES" shall have the meaning set forth in SUBSECTION
5.2 hereof.

"PLEDGED STOCK" shall have the meaning set forth in SUBSECTION
5.2 hereof.

<PAGE> 14

"PRIMARY DISBURSEMENT ACCOUNT" shall have the meaning set
forth in SUBSECTION 7.10 hereof.

"PROPERTY" shall mean any real or personal property, plant,
building, facility, structure, underground storage tank, equipment or
unit, or other asset owned, leased or operated by Borrower (including
any surface water thereon or adjacent thereto, and soil and groundwater
thereunder).

"RCRA" shall mean the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 ET SEQ., and any successor statute, and any
regulations or guidance promulgated thereunder.

"RELEASE" shall mean any release, spill, emission, leaking,
pumping, pouring, emptying, escaping, injection, deposit, dumping,
disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment or into or out of any Property, including the
movement of Contaminants through or in the air, soil, surface water,
groundwater or Property.

"REMEDIAL ACTION" shall mean actions to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize
the further Release of Contaminants; or (iii) investigate and determine
the nature and extent of a Release of a Contaminant and to design a
remedial response and (iv) post-remedial investigation, monitoring,
operation and maintenance and care.

"REPORTABLE EVENT" shall mean any of the events described in
Section 4043 of ERISA or the regulations thereunder for which the
thirty-day notice requirement has not been waived by the PBGC.

"REQUIREMENTS OF LAW" shall mean any federal, state or local
law, rule or regulation, Permit, order, license, decree, guidance,
directive or other binding determination of any Governmental Authority.

"REVOLVING LOANS" shall have the meaning set forth in
SUBSECTION 2.1 hereof.

"REVOLVING NOTE" shall have the meaning set forth in
SUBSECTION 2.1 hereof.

"SECONDARY DISBURSEMENT ACCOUNT" shall have the meaning set
forth in SUBSECTION 7.10 hereof.

"SIGNATURE AUTHORIZATION CERTIFICATE" shall mean a certificate
substantially in the form attached hereto as EXHIBIT B now or hereafter
executed on behalf of Borrower and delivered to Lender.

"STOCK PLEDGE AGREEMENT" shall have the meaning set forth in
SUBSECTION 5.2 hereof.

<PAGE> 15

"SUBSIDIARY" shall mean any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time stock of any other
class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned by Borrower.

"TERMINATION EVENT" shall mean (i) a Reportable Event with
respect to any Benefit Plan, (ii) the withdrawal of Borrower or any
ERISA Affiliate from a Benefit Plan during a plan year in which
Borrower or such ERISA Affiliate was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (iii) the imposition of an
obligation arising under Section 4041 of ERISA on Borrower or any ERISA
Affiliate to provide affected parties with a written notice of intent
to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA, (iv) the PBGC's institution of proceedings to
terminate a Benefit Plan, (v) any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of
or the appointment of a trustee to administer any Benefit Plan or (vi)
the partial or complete withdrawal of Borrower or any ERISA Affiliate
from a Multiemployer Plan.

"TOTAL FACILITY" shall mean the amount of $5,000,000.

"WELFARE PLAN" shall mean a "welfare plan," as such term is
defined in ERISA.

1.2 ACCOUNTING TERMS. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the
meanings customarily given them in accordance with GAAP in existence as
of the date hereof.

1.3 OTHERS DEFINED IN NEW YORK UNIFORM COMMERCIAL CODE. All
other terms contained in this Agreement (and which are not otherwise
specifically defined herein) shall have the meanings provided by the Uniform
Commercial Code of the State of New York (the "CODE") to the extent the same are
used or defined therein.

2. CREDIT.

2.1 REVOLVING LOANS. Subject to the provisions of SECTION 4
below, after execution of the Financing Agreements, Lender shall advance to
Borrower, on a revolving credit basis, Revolving Loans ("REVOLVING LOANS") in
such aggregate amounts as Borrower may from time to time request but not
exceeding at any one time outstanding $5,000,000 (the "MAXIMUM REVOLVING
FACILITY"). Borrower shall have the right to repay and reborrow any of the
Revolving Loans; PROVIDED, HOWEVER, that it shall be a condition precedent to
any reborrowing that as of the date of any reborrowing all of the conditions to
borrowing set forth in this Agreement shall be satisfied and all representations
and warranties made herein shall be true and correct in all respects as of the
date of any reborrowing. Each advance to Borrower shall be in integral multiples
of $25,000 and shall, on the day of such advance, be deposited, in immediately
available funds, in such account as Borrower may, from time to time, designate.
Borrower's Liabilities in connection with the Revolving Loans shall be evidenced
by and payable in accordance with the terms of a note (the "REVOLVING NOTE") of
even date herewith in the form attached hereto as EXHIBIT A and shall become
immediately due and

<PAGE> 16

payable as provided in SUBSECTION 9.1 hereof and, without notice or demand, upon
termination of this Agreement pursuant to SUBSECTION 2.6 hereof.

2.2 PREPAYMENTS AND TERMINATIONS.

(A) OPTIONAL PREPAYMENTS. Borrower may prepay the Revolving
Loans without premium or penalty in whole or in part, provided that (i) Borrower
shall give Lender not less than one (1) Business Day's prior notice thereof,
specifying the Revolving Loans to be prepaid and the date and amount of
prepayments, (ii) each partial prepayment shall be made in a principal amount of
$25,000 or an integral multiple thereof and (iii) if such prepayment prepays all
Revolving Loans in full and is accompanied by the termination in whole of all
Revolving Loans, Borrower shall pay Lender accrued interest on the Revolving
Loans to the date of prepayment. Amounts repaid pursuant to this SUBSECTION
2.2(A) may be reborrowed subject to SUBSECTION 2.1.

(B) MANDATORY PREPAYMENTS:

(i) EXCESS CASH FLOW. Borrower agrees to automatically make an
Excess Cash Flow Payment, if any, by 1:00 p.m. on October 3, 1997 and
by 1:00 p.m. on every Friday thereafter (if any such Friday is not a
Business Day then any payment required to be made on such day shall be
made by 1:00 p.m. on the preceding Thursday). Any Excess Cash Flow
Payments shall be applied to reduce the principal amount of the
Revolving Loans then outstanding; PROVIDED, HOWEVER, that if the amount
of any Excess Cash Flow Payment exceeds the principal amount of the
Revolving Loans then outstanding, the amount by which such Excess Cash
Flow Payment exceeds the amount equal to the sum of the principal
amount of the Revolving Loans then outstanding plus any interest and
fees then owing to Lender shall be deducted from such Excess Cash Flow
Payment. Amounts repaid pursuant to this SUBSECTION 2.2(B)(I) may be
reborrowed subject to SUBSECTION 2.1.

(ii) FOREIGN EXCESS CASH FLOW. In the event of the occurrence
and continuation of an Event of Default, Lender may require Borrower to
make one or more Foreign Excess Cash Flow Payments on such date or
dates as Lender shall determine. Any Foreign Excess Cash Flow Payment
shall be applied to reduce the principal amount of the Revolving Loans
then outstanding. Amounts repaid pursuant to this SUBSECTION 2.2(B)(II)
shall reduce the Maximum Revolving Facility by such amounts and may not
be reborrowed.

(C) TERMINATIONS. Borrower may terminate the Revolving Loans
without premium or penalty in whole or in part (but if in part, then in an
aggregate amount not less than $25,000 or such greater amount that is an
integral multiple of $25,000), provided that the Revolving Loans may not be
reduced to an amount less than the principal amount of the Revolving Loans then
outstanding. Any termination of the Revolving Loans pursuant to this SUBSECTION
2.2(C) may not be reinstated.

2.3 STATEMENTS. Lender shall render statements of account to
Borrower setting forth (i) all loans and advances made by Lender to Borrower
pursuant to this Agreement, (ii) all payments made by Borrower on all such loans
and advances and (iii) all other appropriate debits and credits as provided in
this Agreement, including, without limitation, all fees, charges, expenses and
interest. Each such statement shall be subject to subsequent adjustment by
Lender but shall, absent

<PAGE> 17

manifest errors or omissions, be presumed correct and binding upon Borrower and
shall constitute an account stated unless, within ten (10) days after receipt of
any statement from Lender, Borrower shall deliver to Lender written objection
thereto specifying the error or errors, if any, contained in such statement.

2.4 INTEREST. Borrower shall pay to Lender interest on the
outstanding principal balance of each of the Revolving Loans at the rate of two
percent (2%) per annum in excess of the Base Rate. Interest on all Revolving
Loans shall be payable monthly in arrears not later than the last day of each
calendar month. Interest on all Revolving Loans shall be computed on the basis
of a 360-day year for the actual number of days elapsed. Following the
occurrence and during the continuance of an Event of Default, Borrower shall pay
to Lender interest on its Liabilities from the date of an Event of Default until
such Event of Default has been cured or waived at the per annum rate of five
percent (5%) in excess of the rate applicable to the Liabilities. If any payment
of interest owing pursuant to this agreement falls due on a day that is not a
Business Day, then such due date shall be extended to the next following
Business Day, and additional interest and fees shall accrue and be payable for
the period of such extension. In no contingency or event whatsoever will
interest charged on the Revolving Loans, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction, in a final determination, deems
applicable to the Revolving Loans. In the event that such a court determines
that Lender has received interest under the Revolving Loans in excess of the
highest rate applicable to the Revolving Loans, any such excess interest
collected by Lender is deemed to have been a repayment of principal and will be
so applied.

2.5 METHOD FOR MAKING PAYMENTS. The receipt of any wire
transfer of funds, check or other payment by Borrower shall be immediately
applied to provisionally reduce the Liabilities, but shall not be considered a
payment on account unless such wire transfer is of immediately available federal
funds and is made to the appropriate deposit account of Lender or unless and
until such check or other item of payment is honored when presented for payment.
For interest calculation purposes, all checks, wire transfers and other items of
payment to Lender shall be deemed to have been paid to Lender one (1) Business
Day after the date Lender actually receives such wire transfer of immediately
available federal funds, or one (1) Business Day after Lender actually receives
possession of such check or other payment. This calculation shall apply
irrespective of Borrower's Liabilities to Lender. If such check or item of
payment is not honored when presented for payment, then Borrower shall be deemed
not to have made such payment, and interest shall be recalculated accordingly.
Anything to the contrary contained herein notwithstanding, any wire transfer,
check or other item of payment received by Lender after 1:00 p.m. New York time
shall be deemed to have been received by Lender as of the opening of business on
the immediately following Business Day.

2.6 TERM OF THIS AGREEMENT. The term for this Agreement shall
be from the date hereof until March 31, 1999 (the "MATURITY DATE") and shall not
be renewable without the prior written consent of Lender. Upon the effective
date of termination of this Agreement, all of the Liabilities shall become
immediately due and payable without notice or demand. Notwithstanding the
termination of this Agreement, until all of the Liabilities under this Agreement
and the other Financing Agreements shall have been fully paid and satisfied and
all financing arrangements between Borrower and Lender shall have been
terminated, all of Lender's rights and remedies under this Agreement shall
survive, Lender shall be entitled to retain its security interest in and to all
existing and future

<PAGE> 18

Collateral and Borrower shall continue to remit collections of Accounts,
proceeds thereof and proceeds from the sales of other assets as provided herein.

2.7 CLOSING FEE. Borrower shall pay to Lender a closing fee in
the amount of $100,000 (the "CLOSING FEE") at the time specified in SUBSECTION
4.1(A).

3. REPORTING REQUIREMENTS.

3.1 FINANCIAL REPORTS. Borrower shall submit to Lender, not
later than the 10th day of each month a monthly report ("MONTHLY REPORT") signed
by an Authorized Officer of Borrower, which Monthly Report shall include a
detailed aging (by total) of Borrower's Account and any book overdraft. Upon the
request of Lender, Borrower agrees to submit to Lender, within a reasonable
period of time after such request, any and all financial statements,
information, documents, reports, ledgers or papers so requested.

3.2 VERIFICATION OF ACCOUNTS. Lender shall have the right, at
any time or times hereafter, in the name of a nominee of Lender, to verify the
validity, amount or any other matter relating to any Accounts, by mail,
telephone, telegraph or otherwise.

3.3 ACCOUNT COVENANTS. Borrower shall promptly, but in any
event within two Business Days, upon Borrower's learning thereof: (i) inform
Lender in writing, of any material delay in Borrower's performance of any of its
obligations to any Account Debtor or of any assertion of any claims, offsets or
counterclaims by any Account Debtor; and (ii) furnish to and inform Lender of
all material adverse information relating to the financial condition of any
Account Debtor.

3.4 COLLECTION OF ACCOUNTS AND PAYMENTS. Borrower shall
establish a lock box ("LOCK BOX") at Southwest Bank of Texas pursuant to a Lock
Box Agreement substantially in the form of EXHIBIT D hereto (the "LOCK BOX
AGREEMENT"), to which all Account Debtors shall directly remit all payments on
Accounts.

3.5 APPOINTMENT OF LENDER AS BORROWER'S ATTORNEY-IN-FACT.
Borrower hereby irrevocably designates, makes, constitutes and appoints Lender
(and all persons designated by Lender) as Borrower's true and lawful
attorney-in-fact, and authorizes Lender, in Borrower's or Lender's name,
following the occurrence of an Event of Default, to (i) demand payment of
Borrower's Accounts; (ii) enforce payment of Borrower's Accounts by legal
proceedings or otherwise; (iii) exercise all of Borrower's rights and remedies
with respect to proceedings brought to collect a Borrower Account; (iv) sell or
assign any Borrower Account upon such terms, for such amount and at such time or
times as Lender deems advisable, subject to SUBSECTIONS 9.2 and 9.4; (v) settle,
adjust, compromise, extend or renew a Borrower Account; (vi) discharge and
release any Borrower Account; (vii) prepare, file and sign Borrower's name on
any proof of claim in bankruptcy or other similar document against an Account
Debtor; (viii) notify the post office authorities to change the address for
delivery of Borrower's mail to an address designated by Lender, and open and
deal with all mail addressed to Borrower; (ix) do all acts and things which are
necessary, in Lender's sole discretion, to fulfill Borrower's obligations under
this Agreement; (x) take control in any manner of any item of payment or
proceeds thereof; (xi) have access to any lockbox or postal box into which
Borrower's mail is deposited; (xii) endorse Borrower's name upon any chattel
paper, document,

<PAGE> 19

instrument, invoice, or similar document or agreement relating to any Borrower
Account or any goods pertaining thereto; and (xiii) sign Borrower's name on any
verification of Accounts and notices thereof to Account Debtors.

3.6 INSTRUMENTS AND CHATTEL PAPER. Promptly upon Borrower's
receipt thereof, Borrower shall deliver or cause to be delivered to Lender, with
appropriate endorsement and assignment to create a security interest in, with
full recourse to Borrower, and possession in Lender, all chattel paper and
instruments which Borrower now owns or may at any time or times hereafter
acquire.

3.7 EQUIPMENT WARRANTIES. With respect to all Equipment of
Borrower, Borrower warrants that (i) it is owned by Borrower; (ii) it is not
subject to any lien or security interest whatsoever except for the security
interest granted to Lender hereunder and except as specifically permitted
herein; and (iii) it is in good condition and repair and, except for the
permitted rentals set forth in SCHEDULE 3.7, it is currently used or usable in
Borrower's business.

3.8 EQUIPMENT RECORDS. Borrower shall at all times hereafter
keep correct and accurate records itemizing and describing the kind, type and
age of Equipment, Borrower's cost therefor and accumulated depreciation thereof,
and retirements, sales, or other dispositions thereof, all of which records
shall be available during Borrower's usual business hours on demand to any of
Lender's officers, employees or agents.

3.9 SAFEKEEPING OF EQUIPMENT AND REAL PROPERTY. Lender shall
not be responsible for: (i) the safekeeping of the Equipment; (ii) any loss or
damage to the Equipment; (iii) any diminution in the value of the Equipment; or
(iv) any act or default of any repairman, bailee or any

other Person with respect to the Equipment. As between Borrower and Lender, all
risk of loss, damage, destruction or diminution in value of the Equipment shall
be borne by Borrower.

4. CONDITIONS OF ADVANCES.

Notwithstanding any other provisions contained in this
Agreement, the making of any advance provided for in this Agreement shall be
conditioned upon the following:

4.1 INITIAL ADVANCES. Lender's obligation to make the initial
Revolving Loan is, in addition to the conditions precedent set forth in
SUBSECTION 4.2, subject to the satisfaction of each of the following conditions
precedent:

(A) FEES AND EXPENSES. Borrower shall have paid all fees owed
to Lender and reimbursed Lender for all expenses due and payable hereunder on or
before the date of such initial advances including, but not limited to, Lender's
counsel fees provided for in SUBSECTIONS 7.4 and 10.3 and the Closing Fee
provided for in SUBSECTION 2.7.

(B) DOCUMENTS. Lender shall have received all of the
following, each duly executed and delivered and dated the date hereof or such
earlier date as shall be satisfactory to Lender, in form and substance
satisfactory to Lender:

<PAGE> 20

(i) FINANCING AGREEMENTS. The Revolving Note and such
Financing Agreements as Lender may require. Financing statements shall
have been filed in all jurisdictions that Lender deems necessary or
advisable.

(ii) RESOLUTIONS. Certified copies of resolutions of
Borrower's Board of Directors authorizing or ratifying the execution,
delivery and performance of this Agreement, the Revolving Note and the
Financing Agreements to which Borrower is a party and any other
documents provided for herein or therein to be executed by Borrower.

(iii) CONSENTS. Certified copies of all documents evidencing
any necessary corporate action, consents and governmental approvals, if
any, with respect to this Agreement, the Revolving Note and the
Financing Agreements and any other documents provided for herein or
therein to be executed by Borrower.

(iv) INCUMBENCY AND SIGNATURES. A certificate of the Secretary
or an Assistant Secretary of Borrower certifying the names of the
officer or officers of Borrower authorized to sign this Agreement, the
Revolving Note and the Financing Agreements, together with a sample of
the true signature of each such officer. Lender may conclusively rely
on each such certificate until formally advised by a like certificate
of any changes therein.

(v) FINANCIAL STATEMENTS. With respect to the predecessor
corporation of Borrower, as existing prior to the Closing Date, the
financial statements described in SUBSECTION 7.1(A) hereof for the
month ended August 31, 1997 and the financial statements described in
SUBSECTION 7.1(B) hereof for the fiscal year ended December 31, 1996.

(vi) CONSTITUTIVE DOCUMENTS. Certified copies of Borrower's
Certificate of Incorporation and by-laws, and good standing
certificates, and, if applicable, tax certificates, for all states
where the nature and extent of the business transacted by Borrower or
the ownership of Borrower's assets makes such qualification necessary.

(vii) REPORTS. An initial Monthly Report.

(viii) FORMS UCC-1 AND UCC-2; TERMINATION STATEMENTS. Forms
UCC-1 and UCC-2 from Borrower covering the Collateral, to the extent
applicable, together with such termination statements and other
documents as Lender deems necessary or appropriate, shall have been
filed in all jurisdictions that Lender deems necessary or advisable.

(ix) INSURANCE CERTIFICATES. Certificates from Borrower's
insurance carriers evidencing that all required insurance coverage is
in effect, each with a long form loss payee endorsement designating
Lender as loss payee or additional insured thereunder.

(x) PATENT SECURITY AGREEMENT. A Patent Security Agreement
substantially in the form of EXHIBIT C from Borrower.

(xi) LOCK BOX AGREEMENT. A Lock Box Agreement substantially in
the form of EXHIBIT D executed by Lender, Borrower and Southwest Bank
of Texas.

<PAGE> 21

(xii) STOCK PLEDGE AGREEMENT. A Stock Pledge Agreement
substantially in the form of EXHIBIT E from Borrower.

(xiii) GUARANTY AND SECURITY AGREEMENTS. A Guaranty and
Security Agreement from each Subsidiary in favor of Lender substantially in the
form of EXHIBIT F.

(xiv) OTHER. Such other documents as Lender may request.

4.2 ALL REVOLVING LOANS. Lender's obligation to make the
initial Revolving Loan and each subsequent Revolving Loan is subject to the
following conditions precedent that:

(A) BORROWER'S WRITTEN REQUEST. Lender shall have received, by
1:00 p.m. (New York time) on the Business Day on which an advance is to be made,
a telephonic request (promptly thereafter confirmed by Borrower in writing,
including telecopy) from an Authorized Officer of Borrower for an advance in a
specific amount.

(B) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing.

(C) REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in SECTION 6 hereof, the Revolving Note
and all Financing Agreements are correct on and as of the date of each Loan,
before and after giving effect to such Loan, as though made on and as of such
date, except to the extent such representations relate solely to an earlier
date.

(D) OTHER REQUIREMENTS. Lender shall have received, in form
and substance satisfactory to Lender, all certificates, orders, authorities,
consents, affidavits, schedules, instruments, security agreements, financing
statements, mortgages and other documents which are provided for hereunder, or
which Lender may at any time reasonably request.

5. COLLATERAL.

5.1 SECURITY INTEREST. To secure payment and performance of
its Liabilities, Borrower hereby grants, conveys, mortgages, hypothecates,
pledges, sets over, transfers and assigns to Lender, and grants to Lender a
continuing lien upon and security interest in, all of Borrower's property,
wherever located, whether now or hereafter existing, owned, licensed, leased (to
the extent of Borrower's leasehold interest therein), consigned (to the extent
of Borrower's ownership interest therein), arising or acquired including,
without limitation, all of Borrower's: (i) Accounts, contract rights, General
Intangibles (including without limitation Borrower's Intellectual Property), tax
refunds, chattel paper, instruments, notes, letters of credit, documents,
documents of title; (ii) Inventory; (iii) Equipment; (iv) all of Borrower's
deposit accounts (general or special) including, without limitation, any blocked
accounts, lock box accounts, payroll accounts, disbursement accounts and all
other bank accounts and all deposits therein with and credits and other claims
against Lender, or any other financial institution with which Borrower maintains
deposits; (v) all of Borrower's now owned or hereafter acquired monies, and any
and all other property and interests in property of Borrower now or hereafter
coming into the actual possession, custody or control of Lender or any agent or
affiliate of Lender in any way or for any purpose (whether for safekeeping,
deposit, custody,

<PAGE> 22

pledge, transmission, collection or otherwise); (vi) all insurance proceeds of
or relating to any of the foregoing; (vii) all insurance proceeds relating to
any key man life insurance policy covering the life of any officer or director
of Borrower; (viii) all of Borrower's books and records relating to any of the
foregoing; (ix) all actions with respect to preferential transfers, fraudulent
conveyances and other avoidance power claims and any recoveries of cash or
proceeds of property representing recoveries under 11 U.S.C. Sections 544, 547,
548, 549, 550 or 553; and (x) all accessions and additions to, substitutions
for, and replacements, products and proceeds of any of the foregoing.

5.2 PLEDGE AND DEPOSIT. In order to secure the full and
complete payment and performance by Borrower of its Liabilities, Borrower hereby
pledges and grants to Lender a continuing lien and security interest in (i) all
of the notes described in SCHEDULE 5.2 hereto, including any amendment,
modification, renewal or replacement of any such notes (the "PLEDGED NOTES"),
and (ii) pursuant to a Stock Pledge Agreement between Borrower and Lender
("STOCK PLEDGE AGREEMENT"), (a) all of the outstanding shares of capital stock
of each Subsidiary currently or hereafter owned by Borrower (the "PLEDGED
STOCK"), (b) any securities, dividends or distributions and any other right or
property at any time and from time to time receivable or otherwise distributed
in respect of or in exchange for any or all of the Pledged Stock and any other
property substituted or exchanged therefor, and (c) any and all proceeds of the
foregoing. Borrower shall deliver to Lender the certificates representing the
Pledged Stock endorsed in blank or accompanied by appropriate instruments of
transfer or assignment in blank, and the Pledged Notes, duly endorsed in blank.
Lender shall not have any duty to assure that all certificates representing the
Pledged Stock or instruments representing the Pledged Notes have been delivered
to it or any obligation whatsoever with respect to the care, custody or
protection of any certificates or instruments which may be delivered to it
except only to exercise the same care in physically safekeeping such
certificates or instruments as it would exercise in the ordinary course of its
own business. Lender shall not be obligated to preserve or protect any rights
with respect to the Pledged Stock or Pledged Notes or to receive or give any
notice with respect thereto whether or not Lender is deemed to have knowledge of
such matters.

5.3 GRANT OF LICENSE TO USE INTANGIBLES. Solely for the
purpose of enabling Lender to exercise its rights and remedies hereunder at such
time as Lender shall be lawfully entitled to exercise such rights and remedies,
Borrower hereby grants to Lender an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to Borrower) to
use, assign, license or sublicense any of the General Intangibles (including
without limitation the Intellectual Property), now owned or hereafter acquired
by Borrower, and wherever the same may be located, including in such license
access to all media in which any of the licensed items may be recorded or stored
and to all computer programs used for the compilation or printout thereof.

5.4 PROCESSING, SALE, COLLECTIONS, ETC. Until the occurrence
of an Event of Default and thereafter until such time as Lender shall notify
Borrower of the revocation of such power and authority, Borrower (i) may, in the
ordinary course of its business, at its own expense, sell, lease or furnish
under contracts of service any of the Inventory normally held by Borrower for
such purpose, and use and consume, in the ordinary course of its business, any
raw materials, work in process or materials normally held by Borrower for such
purpose, (ii) may, subject to the provisions of SUBSECTION 3.4, at its own
expense, endeavor to collect, as and when due, all amounts due with respect to
any of the nontangible Collateral, including the taking of such action with
respect to such

<PAGE> 23

collection as Lender may reasonably request or, in the absence of such request,
as Borrower may deem advisable, and (iii) may grant, subject to SUBSECTION 5.5,
in the ordinary course of business, to any party obligated on any of the
nontangible Collateral, any rebate, refund or allowance to which such Person may
be lawfully entitled, and may accept, in connection therewith, the return of
Goods, the sale or lease of which shall have given rise to such nontangible
Collateral.

5.5 PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY
INTERESTS THEREIN. Borrower shall execute and deliver to Lender, concurrently
with the execution of this Agreement, and at any time or times hereafter at the
request of Lender, all financing statements or other documents (and pay the cost
of filing or recording the same in all public offices deemed necessary by
Lender), as Lender may request, in a form satisfactory to Lender, to perfect and
keep perfected the security interest in the Collateral granted by Borrower to
Lender or to otherwise protect and preserve the Collateral and Lender's security
interest therein or to enforce Lender's security interest in the Collateral.
Should Borrower fail to do so, Lender is authorized to sign any such financing
statements as Borrower's agent. Borrower further agrees that a carbon,
photographic or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement.

5.6 TERMINATION OF SECURITY INTEREST AND LIENS. Lender's
security interest and other Liens in, on and to the Collateral shall terminate
when all the Liabilities have been finally and fully and indefeasibly paid and
performed, at which time Lender shall reassign and redeliver (or cause to be
reassigned and redelivered) to Borrower, or to such Person as Borrower shall
designate, against receipt, such of the Collateral (if any) assigned by Borrower
to Lender as shall not have been sold or otherwise applied by Lender pursuant to
the terms hereof and shall still be held by it hereunder, together with
appropriate instruments of reassignment and release. Any such reassignment shall
be without recourse upon or representation or warranty by Lender and shall be at
Borrower's cost and expense.

5.7 REASONABLE CARE. Lender shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral in its
possession if it takes such action for that purpose as Borrower requests in
writing, but Lender's failure to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of Lender
to preserve or protect any rights with respect to such Collateral against prior
parties, or to do any act with respect to the preservation of such Collateral
not so requested by Borrower, shall be deemed a failure to exercise reasonable
care in the custody or preservation of such Collateral.

5.8 BORROWER TO REMAIN LIABLE. Borrower hereby expressly
agrees that, anything herein to the contrary notwithstanding, it shall remain
liable under each contract, agreement, interest or obligation assigned to Lender
hereunder to observe and perform all of the conditions and obligations to be
observed and performed by Borrower thereunder, all in accordance with and
pursuant to the terms and provisions thereof. Lender shall not have any duty,
responsibility, obligation or liability under any such contract, agreement,
interest or obligation by reason of or arising out of the assignment thereof to
Lender or the granting to Lender of a security interest therein or Lender's
receipt of any obligation pursuant hereto, nor shall Lender be required or
obligated in any manner to perform or fulfill any of Borrower's obligations
thereunder or pursuant thereto, or to make any payment, or to make any inquiry
as to the nature or sufficiency of any payment received by it or the sufficiency
of any performance of any party under any such contract, agreement, interest or

<PAGE> 24
obligation, or to present or file any claim, or to take any action to collect or
enforce any performance or the payment of any amounts which may have been
assigned to it, in which it may have been granted a security interest or to
which it may be entitled at any time.

5.9 APPRAISALS. At any time and from time to time, Lender, in
its sole discretion, may conduct or have conducted by a reputable appraiser
acting on Lender's behalf, at Borrower's expense, one or more appraisals of
Borrower's Property and Borrower's Equipment (or any part thereof); PROVIDED,
HOWEVER, that so long as no Event of Default exists, Borrower shall only be
required to pay for one such appraisal within any twelve-month period.

5.10 MAINTENANCE OF COLLATERAL. Borrower hereby covenants at
all times to keep all of its Inventory, Equipment and other Goods (as
applicable) in good repair and condition and in good working or running order.

6. REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants that as of the date of the
execution of this Agreement, and continuing so long as any of the Liabilities
remain outstanding, and (even if there shall be no Liabilities of Borrower
outstanding) so long as this Agreement remains in effect:

6.1 CORPORATE EXISTENCE. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified as a foreign corporation and
is in good standing in all states where the nature and extent of the business
transacted by it or the ownership of its assets makes such qualification
necessary, except for those jurisdictions in which the failure so to qualify
would not have a Material Adverse Effect.

6.2 CORPORATE AUTHORITY. The execution and delivery by
Borrower of this Agreement and of all the other Financing Agreements and the
performance of Borrower's obligations hereunder and thereunder: (i) are within
Borrower's corporate powers; (ii) are duly authorized by Borrower's Board of
Directors and, if necessary, Borrower's stockholders; (iii) are not in
contravention of the terms of Borrower's Certificate of Incorporation, or
By-Laws, or of any indenture, agreement or undertaking to which Borrower is a
party or by which Borrower or any of its property is bound; (iv) does not, as of
the execution hereof, require any consent, registration or approval of any
Governmental Authority; (v) does not contravene any contractual or governmental
restriction binding upon Borrower; and (vi) will not, except as contemplated
herein, result in the imposition of any lien, charge, security interest or
encumbrance upon any property of Borrower under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other agreement or
instrument to which Borrower is a party or by which it or its respective
property may be bound or affected.

6.3 BINDING EFFECT. This Agreement, the Revolving Note and all
of the Financing Agreements are the legal, valid and binding obligations of
Borrower and are enforceable against Borrower in accordance with their terms.

6.4 FINANCIAL DATA. All financial statements relating to
Borrower that have been furnished to Lender have been prepared in accordance
with GAAP applied on a consistent basis and

<PAGE> 25

fairly present the financial condition of Borrower as at such dates and the
results of its operations for the periods then ended.

6.5 COLLATERAL. Except as disclosed on SCHEDULE 6.5 attached
hereto, except as contemplated herein, and except for liens of current taxes not
yet due and payable, all of the applicable Collateral is and will continue to be
owned by Borrower, has been fully paid for and is free and clear of all security
interests, liens, claims, and encumbrances. Borrower has good and indefeasible
title to its assets, including the Collateral, free of all Liens.

6.6 CHIEF PLACE OF BUSINESS. As of the execution hereof, the
principal place of business and chief executive office of Borrower is located at
16850 Park Row, Houston, Texas. If any change in location occurs, Borrower shall
notify Lender thereof in accordance with SUBSECTION 8.10 hereof. As of the
execution hereof, the books and records of Borrower and all chattel paper and
all records of account are located at the principal place of business and chief
executive office of Borrower, and if any change in such location occurs,
Borrower shall notify Lender thereof in accordance with SUBSECTION 8.10 hereof.

6.7 OTHER CORPORATE NAMES. Except as disclosed on SCHEDULE 6.7
attached hereto, Borrower has not used any corporate or fictitious names in the
past five years other than the corporate name shown on Borrower's Certificate of
Incorporation.

6.8 TAX LIABILITIES. Borrower has filed all federal, state and
local tax reports and returns required by any law or regulation to be filed by
it or them except for extensions duly obtained, and have either duly paid all
taxes, duties and charges indicated due on the basis of such returns and
reports, or made adequate provision for the payment thereof, and the assessment
of any material amount of additional taxes in excess of those paid and reported
is not reasonably expected by Borrower.

6.9 MARGIN SECURITY. Borrower does not own any margin
security, and none of the loans advanced hereunder will be used for the purpose
of purchasing or carrying any margin securities or for the purpose of reducing
or retiring any indebtedness which was originally incurred to purchase any
margin securities or for any other purpose not permitted by Regulation U of the
Board of Governors of the Federal Reserve System.

6.10 SURVIVAL OF WARRANTIES. All representations and
warranties contained in this Agreement, the Revolving Note and the Financing
Agreements shall survive the execution and delivery of this Agreement.

6.11 LITIGATION AND PROCEEDINGS. Except as disclosed on
SCHEDULE 6.11 attached hereto, no judgments, orders, decrees, rulings, writs or
injunctions are outstanding against Borrower nor is there now pending or
threatened, any litigation, investigations, contested claim, or governmental
proceeding by or against Borrower except judgments, orders, decrees, rulings,
writs or injunctions and pending or threatened litigation, investigations,
contested claims and governmental proceedings which would not have a Material
Adverse Effect.

<PAGE> 26

6.12 OTHER AGREEMENTS. Borrower is not in default under any
contract, lease, or commitment to which it is a party or by which it is bound
which could cause a Material Adverse Effect. Borrower knows of no dispute
regarding any contract, lease, or commitment which could have a Material Adverse
Effect.

6.13 COMPLIANCE WITH LAWS AND REGULATIONS; ENVIRONMENTAL
MATTERS.

(A) GENERAL COMPLIANCE. The execution and delivery by Borrower
of this Agreement and the other Financing Agreements to which it is a party and
the performance of Borrower's obligations hereunder and thereunder are not in
contravention of any law or laws. Borrower is in compliance with all laws,
orders, regulations and ordinances of all federal, foreign, state and local
governmental authorities relating to the business, operations and the assets of
Borrower, including, without limitation, Regulations G, T and X of the Board of
Governors of the Federal Reserve System, except for laws, orders, regulations
and ordinances the violation of which could not have a Material Adverse Effect.

(B) ENVIRONMENTAL COMPLIANCE. The Property and operations of
Borrower comply in all respects with all applicable Environmental, Health and
Safety Requirements of Law. None of Borrower's properties or assets has ever
been used by Borrower or, to the best of Borrower's knowledge, by previous
owners or operators, in the disposal of, or to produce, store, handle, treat,
release or transport, any Hazardous Material. None of Borrower's present or past
Property is listed or proposed for listing on the National Priorities List
pursuant to CERCLA or on the Comprehensive Environmental Response Compensation
Liability Information System List or any similar state list of sites requiring
Remedial Action. To the best of Borrower's knowledge, no Environmental Lien has
attached to any Property of Borrower. Borrower has not received any notice or
claim to the effect that it is or may be liable to any Person as a result of the
Release or threatened Release of a Contaminant into the environment.

(C) SURVIVABILITY. No time limitation shall apply to any
representations or warranties Borrower has made in this SUBSECTION 6.13.

6.14 PATENTS, TRADEMARKS AND LICENSES. Borrower possesses
adequate assets, licenses, permits, patents, patent applications, copyrights,
service marks, trademarks, trade names, government approvals or other
authorizations and other rights that are necessary for Borrower to continue to
conduct its business as heretofore conducted by it.

6.15 PENSION AND WELFARE PLANS. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement, no steps have been taken to terminate any Pension Plan, and
no contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a lien under Section 302(f) of ERISA. No condition exists or
event or transaction has occurred with respect to any Pension plan that could
result in the incurrence by Borrower of any material liability, fine or penalty.
Borrower has no contingent liability with respect to any post-retirement benefit
under a Welfare Plan, other than liability for continuation coverage described
in Part 6 of title I of ERISA.

<PAGE> 27

7. AFFIRMATIVE COVENANTS.

Borrower covenants and agrees that, so long as any of the
Liabilities remain outstanding, and (even if there shall be no Liabilities
outstanding) so long as this Agreement remains in effect:

7.1 FINANCIAL STATEMENTS. Except as otherwise expressly
provided for herein, Borrower shall keep proper books of record and account in
which full and true entries will be made of all dealings or transactions of or
in relation to the business and affairs of Borrower in accordance with GAAP
consistently applied, and Borrower shall cause to be furnished to Lender:

(A) MONTHLY. As soon as practicable after the end of each
month and in any event within thirty (30) days after the end of such month, a
consolidated balance sheet of Borrower and its Subsidiaries as of the end of
such month and a consolidated operating statement for such month prepared by
Borrower for internal use including a statement of cash flow;

(B) ANNUAL. On or before the 90th day after each of Borrower's
fiscal years:
(i) a copy of an unqualified annual audit report of Borrower
prepared in conformity with GAAP, duly certified by independent
certified public accountants of recognized standing selected by
Borrower with Lender's consent, together with a certificate from such
accountants to the effect that, in making the examination necessary for
the signing of such annual audit report by such accountants, (x) they
have not become aware of any Default or Event of Default that has
occurred and is continuing or, if they have become aware of any such
event, describing it and the steps, if any, being taken to cure it and
(y) they are aware that Lender is relying upon such accountants'
certification of such annual audit reports and they authorize such
reliance;

(ii) copies of all operating statements for such fiscal year
prepared by Borrower for internal use, including, without limitation,
statements of cash flow and other similar data showing comparisons,
where applicable, with the corresponding projections in the annual
budget as Lender may reasonably request;

(C) LETTERS FROM ACCOUNTANTS AND CONSULTANTS. As soon as
practicable and in any event within ten (10) Business Days of delivery to
Borrower, a copy of (i) the "Management Letter" prepared by Borrower's
independent certified public accountants in connection with the financial
statements referred to in SUBSECTION 7.1(B) above and (ii) to the extent that
such letters may from time to time be issued by Borrower's independent certified
public accountants or other management consultants, any letter issued by
Borrower's independent certified public accountants or other management
consultants with respect to recommendations relating to Borrower's financial or
accounting systems or controls;

(D) DEFAULT NOTICES. As soon as practicable (but in any event
not more than two (2) Business Days after the President or Chief Financial
Officer or any Authorized Officer of Borrower obtains knowledge of the
occurrence of an event or the existence of a circumstance giving rise to a
Default or an Event of Default), notice of any and all Defaults or Events of
Default hereunder;

<PAGE> 28

(E) ACCOUNT DEBTORS LIST. At the request of Lender, names,
addresses and phone numbers of Borrower's Account Debtors;

(F) REPORTS TO SEC AND TO SHAREHOLDERS. Promptly upon the
filing or making thereof, copies of each filing and report made by Borrower with
or to any securities exchange or the Securities and Exchange Commission, and of
each material communication from Borrower to its shareholders generally;

(G) INSURANCE REPORTS. (i) On or before the 90th day after the
close of each of Borrower's fiscal years, a certificate signed by an Authorized
Officer that summarizes the property, casualty, liability and "key-man" life
insurance policies carried by Borrower, and that certifies that Lender is the
loss payee of all property and casualty insurance policies (such certificate to
be in form and substance satisfactory to Lender), and (ii) written notification
of any cancellation or material change in any such insurance by Borrower within
two (2) Business Days after receipt of any notice (whether formal or informal)
of such cancellation or change by any of its insurers;

(H) LOCATION; NOTICE OF MOVEMENT OF GOODS, CHANGE OF ADDRESS
AND CHANGE OF NAME. Borrower's chief executive office, principal place of
business, corporate offices, all warehouses and premises where Collateral is
stored or located, and the locations of all of its books and records concerning
the Collateral are set forth on SCHEDULE 7.1(H). Borrower shall deliver to
Lender a revised and updated SCHEDULE 7.1(H) on the first Business Day of each
January, April, July and October until termination of this Agreement pursuant to
SUBSECTION 2.6 of this Agreement; and

(I) OTHER INFORMATION. With reasonable promptness, such other
business or financial data as Lender may reasonably request.

All financial statements delivered to Lender pursuant to the
requirements of this SUBSECTION 7.1 (except where otherwise expressly indicated)
shall be prepared in accordance with GAAP in effect as of the date hereof
consistently applied, except for changes therein with which the certified public
accountants issuing the opinion on the financial statements delivered pursuant
to SUBSECTION 7.1(B) hereof have previously concurred in writing. Together with
each delivery of financial statements required by SUBSECTIONS 7.1(A) and (B)
above, Borrower shall deliver to Lender a certificate of an Authorized Officer
stating that there exists no Default or Event of Default, or, if any Default or
Event of Default exists, specifying the nature and the period of existence
thereof and what action Borrower proposes to take with respect thereto.

7.2 BOOKS, RECORDS AND INSPECTIONS. Borrower shall maintain
complete and accurate books and records. Lender, or any Person designated by
Lender in writing, shall have the right, from time to time hereafter during
reasonable business hours to inspect Borrower's books and records and to make
such verification concerning the Collateral as Lender may consider reasonable
under the circumstances.

7.3 TAXES. Borrower shall pay or cause to be paid all license
fees, bonding premiums, real and personal property taxes, assessments and
charges and all of Borrower's franchise, income, unemployment, use, excise, old
age benefit, withholding, sales and other taxes and other governmental charges
assessed against Borrower or payable by Borrower when due, provided that

<PAGE> 29

Borrower shall have the right to contest in good faith, by appropriate
proceedings promptly initiated and diligently conducted, the validity, amount or
imposition of any such tax, assessment or charge, and upon such good faith
contest to delay or refuse payment thereof, if Borrower establishes adequate
reserves to cover such contested taxes, assessments or charges.

7.4 LENDER'S COSTS AND EXPENSES. Borrower shall reimburse
Lender on demand for all reasonable expenses and fees paid or incurred in
connection with the documentation, negotiation and closing of the Revolving
Loans, including, without limitation, appraisals performed in connection with
this transaction, lien search, filing and recording fees and the reasonable fees
and expenses of Lender's attorneys and paralegals, whether such expenses and
fees are incurred prior to or after the date hereof. Borrower shall pay on
demand all out-of-pocket costs and expenses (including reasonable attorneys'
fees and legal expenses) incurred by Lender in connection with the
enforcement (including attempts to vacate an automatic stay) of this Agreement,
the Revolving Note, the Financing Agreement and any such instruments or
documents provided for herein or delivered in connection herewith.

7.5 BORROWER'S LIABILITY INSURANCE. Borrower shall maintain,
at its expense, such public liability and third party property damage insurance
in such amounts and with such deductibles as is customarily maintained by
companies similarly situated.

7.6 BORROWER'S PROPERTY AND BUSINESS INSURANCE. Borrower
shall, at its expense, keep and maintain its assets and business insured against
loss or damage by fire, theft, burglary, pilferage, loss in transit, explosion,
spoilage and all other hazards and risks ordinarily insured against by other
owners or users of such properties in similar businesses in an amount at least
equal to the lesser of (i) the outstanding principal balance of Borrower's
Liabilities or (ii) the full insurable value of all such property. All such
policies of insurance shall be in form and substance reasonably satisfactory to
Lender. Borrower shall direct all insurers under such policies of insurance to
pay all proceeds of insurance policies directly to Lender. After the occurrence
of any Default or any Event of Default, Borrower shall irrevocably make,
constitute and appoint Lender (and all officers, employees or agents designated
by Lender) as Borrower's true and lawful attorney-in-fact for the purpose of
making, settling and adjusting claims under all such policies of insurance,
endorsing the name of Borrower on any check, draft, instrument or other item of
payment received by Borrower or Lender pursuant to any such policies of
insurance and for making all determinations and decisions with respect to such
policies of insurance. If Borrower, at any time or times hereafter, shall fail
to obtain or maintain any of the policies of insurance required above or to pay
any premium in whole or in part relating thereto, then Lender, without waiving
or releasing any obligation or Event of Default by Borrower hereunder, may at
any time or times thereafter (but shall be under no obligation to do so) obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which Lender deems advisable, and costs and expenses
incurred by Lender in connection with Lender's obtaining and maintaining such
policies shall constitute additional Liabilities secured by this Agreement.

7.7 EMPLOYEE BENEFITS PLANS. Borrower shall maintain each
Pension Plan in compliance with all applicable requirements of law and
regulations.

<PAGE> 30

7.8 ENVIRONMENTAL MATTERS. Borrower shall use its best efforts
to conduct its businesses so as to comply in all respects with all Requirements
of Law and all restrictive covenants; PROVIDED, HOWEVER, that nothing contained
in this SUBSECTION 7.8 shall prevent Borrower from contesting, diligently and in
good faith by appropriate legal proceedings, any such law, regulation,
interpretation thereof or application thereof. Borrower shall not, nor shall it
permit any Person to, dispose of any Hazardous Material into or onto, or (except
in accordance with applicable law) from, any real property owned or operated by
Borrower, nor shall Borrower allow any lien imposed pursuant to any
Environmental, Health and Safety Requirements of Law to be imposed or to remain
on such real property, except as contested in good faith by appropriate
proceedings and for which adequate reserves have been established and are being
maintained on its books in accordance with GAAP.

7.9 USE OF PROCEEDS. Borrower shall use the proceeds of the
Revolving Loans for general working capital purposes.

7.10 CASH MANAGEMENT SYSTEM. Borrower shall maintain, at its
expense, (i) at Southwest Bank of Texas, (a) a concentration account
("CONCENTRATION ACCOUNT") in which Borrower shall deposit all monies and funds
received by Borrower including, without limitation, all payments constituting
proceeds of Collateral and payments on Accounts received pursuant to SUBSECTION
3.4 and the Lock Box Agreement, (b) a payroll account ("PAYROLL ACCOUNT") which
Borrower shall use for payroll purposes only and (c) a disbursement account
("PRIMARY DISBURSEMENT ACCOUNT") which Borrower shall use to make general
disbursements for its business purposes; and (ii) such other disbursement
accounts at such other banks as set forth on SCHEDULE 7.10 ("SECONDARY
DISBURSEMENT ACCOUNTS") which Borrower shall use to make other disbursements for
its business purposes. The Payroll Account, the Primary Disbursement Account and
the Secondary Disbursement Accounts shall be funded by the Concentration Account
at any appropriate time and in such amounts that are equal to Borrower's then
outstanding checks written against such accounts. Upon the occurrence and
continuation of an Event of Default, Borrower agrees that upon written notice to
Southwest Bank of Texas from Lender, Borrower's authorization to use funds in or
transfer funds out of the Concentration Account shall be suspended and amounts
on deposit in the Concentration Account shall be immediately wire transferred to
Lender pursuant to SUBSECTION 2.5 hereof.

8. NEGATIVE COVENANTS.

Borrower covenants and agrees that so long as any of the
Liabilities remain outstanding, and (even if there shall be no Liabilities
outstanding) so long as this Agreement remains in effect (unless Lender shall
give its prior written consent thereto):

8.1 ENCUMBRANCES. Except as set forth on SCHEDULE 6.5 hereto,
or contemplated herein, Borrower will not create, incur, assume or suffer to
exist any security interest, mortgage, pledge, lien or other encumbrance of any
nature whatsoever on any of its assets, including, without limitation, the
Collateral, other than: (i) liens securing the payment of taxes, either not yet
due or the validity of which is being contested in good faith by appropriate
proceedings, and as to which Borrower shall, if appropriate under GAAP have set
aside on its books and records adequate reserves; (ii) deposits under workmen's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the

<PAGE> 31

repayment of borrowed money) or to secure indemnity, performance or other
similar bonds for the performance of bids, tenders or contracts (other than for
the repayment of borrowed money) or to secure statutory obligations or surety or
appeal bonds, or to secure indemnity, performance or other similar bonds in the
ordinary course of business; (iii) the liens and security interests in favor of
Lender; (iv) purchase money liens for equipment not to exceed $10,000,000 per
annum; and (v) other liens and encumbrances on property, which do not, in
Lender's reasonable determination, (x) impair the use of such property, or (y)
lessen the value of such property for the purposes for which the same is held by
Borrower.

8.2 INDEBTEDNESS. Except as set forth on SCHEDULE 8.2 hereto,
Borrower shall not incur, create, assume, become or be liable in any manner with
respect to, or permit to exist, any obligations or Indebtedness, except (i) the
Liabilities pursuant to the Financing Agreements, (ii) trade obligations and
normal accruals and other expenses, including, but not limited to, operating
leases permitted pursuant to this Agreement, incurred in the ordinary course of
business not yet past due and payable, or with respect to which Borrower is
contesting in good faith the amount or validity thereof by appropriate
proceedings, and then only to the extent that Borrower has set aside on its
books adequate reserves therefor, if appropriate under GAAP, (iii) indebtedness
in respect of Capitalized Lease Obligations permitted pursuant to this
Agreement, (iv) purchase money liens for Equipment not to exceed $10,000,000 per
year and (v) bonds and letters of credit for explosives, road use, permits and
performance. Except as otherwise permitted by this Agreement, Borrower shall not
pay any obligations or indebtedness before the same are due.

8.3 CONSOLIDATIONS, MERGERS OR ACQUISITIONS. Borrower shall
not be a party to any merger, consolidation or exchange of stock, or purchase or
otherwise acquire all or substantially all of the assets or stock of any class
of, or any partnership or joint venture interest in, any other Person, or sell,
transfer, convey or lease all or any substantial part of its assets, or sell or
assign, with or without recourse, any receivables (other than for collection of
delinquent Accounts in the ordinary course of business), except for a merger of
any Subsidiary into, or transfer of substantially all of its assets to,
Borrower.

8.4 INVESTMENTS OR LOANS. Borrower shall not make or permit to
exist investments or loans in or to any other Person, except (i) investments in
short-term direct obligations of the United States Government, (ii) investments
in negotiable certificates of deposit issued by any bank satisfactory to Lender,
in its sole discretion, payable to the order of Borrower or to bearer and
delivered to Lender and (iii) investments in commercial paper rated A-1 by
Moody's Investors, Inc. or P-1 by Standard & Poors Corp.

8.5 GUARANTEES. Except as contemplated herein, Borrower shall
not guarantee, endorse or otherwise in any way become or be responsible for
obligations of any other Person, whether by agreement to purchase the
Indebtedness of any other Person or through the purchase of goods, supplies or
services, or maintenance of working capital or other balance sheet covenants or
conditions, or by way of stock purchase, capital contribution, advance or loan
for the purpose of paying or discharging any Indebtedness or obligation of such
other Person or otherwise, except endorsements of negotiable instruments for
collection in the ordinary course of business.

<PAGE> 32

8.6 DISPOSAL OF PROPERTY. Borrower shall not sell, lease,
transfer or otherwise dispose of any of its properties, assets or rights to any
Person except for (i) sales of Inventory to customers in the ordinary course of
business, (ii) sales of Equipment in the ordinary course of business in an
aggregate amount not to exceed $2,000,000 per year and (iii) sales or licenses
of data, information or reports obtained in the ordinary course of business or
in conjunction with that certain agreement with Millennium Seismic, Inc., dated
as of September 5, 1997, to customers in the ordinary course of business. Except
as set forth on SCHEDULE 6.5 hereto, Borrower shall not, without Lender's prior
written consent, sell, lease, grant a security interest in or otherwise dispose
of or encumber the Equipment, or any part thereof. In the event any of the
Equipment is sold, transferred or otherwise disposed of as herein provided, (x)
and (a) such sale, transfer or disposition is effected without replacement of
the Equipment so sold, transferred or disposed of or (b) such Equipment is
replaced by Equipment leased by Borrower, Borrower shall, subject to the prior
rights, if any, of the persons listed on SCHEDULE 6.5 hereto, deliver all of the
net cash proceeds of any such sale, transfer or disposition to Lender, which
proceeds shall be applied to the repayment of Borrower's Liabilities, or (y)
such sale, transfer or disposition is made in connection with the purchase by
Borrower of replacement Equipment, Borrower shall, subject to the prior rights,
if any, of the persons listed on SCHEDULE 6.5 hereto, use the proceeds of such
sale, transfer or disposition to finance the purchase by Borrower of replacement
Equipment and shall deliver to Lender written evidence of the use of the
proceeds for such purchase. Except as set forth on SCHEDULE 6.5 hereto, all
replacement Equipment purchased by Borrower shall be free and clear of all
liens, claims and encumbrances, except for Lender's security interests, liens,
claims and encumbrances.

8.7 CAPITAL INVESTMENT LIMITATIONS. Borrower shall not, in any
fiscal year, purchase, invest in or otherwise acquire additional real estate,
machinery, equipment or other fixed assets which, in the aggregate, on a
consolidated basis, cost Borrower more than $12,000,000 (which amount includes,
without limitation, any purchase money liens for Equipment by Borrower).

8.8 DIVIDENDS AND STOCK REDEMPTIONS. Borrower shall not,
without the prior written consent of Lender, directly or indirectly, (i) redeem,
purchase or otherwise retire any of its shares of capital stock, (ii) declare or
pay any dividends in any fiscal year on any class or classes of stock, (iii)
return capital to its stockholders or (iv) make any other distribution on or in
respect of any shares of any class of capital stock other than a dividend of
common stock or common stock rights with respect to common stock distributed on
a pro rata basis to Borrower's shareholders.

8.9 ISSUANCE OF STOCK. Borrower shall not issue or distribute
any capital stock or other securities for consideration or otherwise except for
(i) a public or private issuance of common stock, including issuances to new
officers, (ii) stock dividends permitted under SUBSECTION 8.8 and (iii) any
issuance pursuant to Borrower's stock option plan.

8.10 AMENDMENT OF CERTIFICATE OF INCORPORATION OR BY-LAWS;
CORPORATE NAME; PLACES OF BUSINESS. Borrower shall not amend its Certificate of
Incorporation or By-Laws without the prior written consent of Lender. Borrower
shall not make any change to the location of its principal place of business or
chief executive office unless prior to the effective date of such change in
location, Borrower delivers to Lender such financing statements executed by
Borrower which Lender may request to reflect such change in location. Borrower
shall deliver such other documents

<PAGE> 33

and instruments as Lender may request in connection with such change in name or
location within ten (10) days of the effectiveness of such change or Lender's
request therefor.

8.11 LEASE LIMITATIONS. Borrower's consolidated annual
financial obligations whether for rental payments, principal payments, interest
payments, service charges or otherwise, under all leases, lease purchase
agreements, conditional sales contracts, purchase money security arrangements
and other similar agreements, other than any of the foregoing that are not
recorded or are not required under GAAP to be recorded on Borrower's balance
sheet, will not exceed $10,000,000 per year.

8.12 TRANSACTIONS WITH SUBSIDIARIES AND AFFILIATES. Borrower
shall not (i) enter into any transaction, including, without limitation, the
purchase, sale or exchange of property or the rendering of any service to any
Subsidiary or Affiliate except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's business and upon fair and reasonable
terms no less favorable to Borrower than Borrower would obtain in a comparable
arm's-length transaction with an unaffiliated person or corporation or (ii)
invest, loan money to or contribute to the capital of any Subsidiary or
Affiliate except in the ordinary course of and pursuant to the reasonable
requirements of Borrower's business.

8.13 OTHER AGREEMENTS. Borrower shall not enter into any
agreement containing any provision which would be violated or breached by the
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection herewith or which
would violate or breach any provision hereof or of any such instrument or
document.

9. EVENTS OF DEFAULT, RIGHTS AND REMEDIES OF LENDER.

9.1 EVENTS OF DEFAULT. If any of the following events ("EVENTS
OF DEFAULT") shall occur:

(A) Borrower fails to pay any of its Liabilities when such
Liabilities are due or are declared due;

(B) Borrower fails or neglects to perform, keep or observe any
of its covenants, conditions or agreements contained in any of the
subsections of this Agreement;

(C) any warranty or representation now or hereafter made by
Borrower in connection with this Agreement, the Revolving Note or the
Financing Agreements is untrue or incorrect in any material respect
when made, or any schedule, certificate, statement, report, financial
data, notice, or writing furnished at any time by Borrower to Lender is
untrue or incorrect in any material respect, on the date as of which
the facts set forth therein are stated or certified;

(D) there shall be entered against the Borrower one or more
judgments or decrees in excess of $500,000 in the aggregate at any one
time outstanding for Borrower, excluding those judgments or decrees (i)
that shall have been stayed, vacated or bonded,

<PAGE> 34

(ii) that shall have been outstanding less than thirty (30)
days from the entry thereof, (iii) for and to the extent to which
Borrower is insured and with respect to which the insurer specifically
has assumed responsibility in writing, (iv) for and to the extent to
which Borrower is otherwise indemnified, if the terms of such
indemnification are satisfactory to Lender or (v) that, in Lender's
determination, could not have a Material Adverse Effect;

(E) a notice of lien, levy, or assessment is filed or recorded
with respect to all or a substantial part of the assets of Borrower by
the United States of America, or any department, agency or
instrumentality thereof, or by any state, county, municipality or other
governmental agency or any taxes or debts owing at any time or times
hereafter to any one or more of them become a lien upon all or a
substantial part of the Collateral and such lien, levy or assessment is
not discharged or released within ten (10) days of the notice or
attachment thereof, provided that this SUBSECTION 9.1(E) shall not
apply to any liens, levies, or assessments which relate to current
taxes not yet due and payable;

(F) there shall occur any uninsured loss, theft, substantial
damage or destruction of any item or items of Collateral ("LOSS") if
the amount of such Loss together with the amount of all other Losses of
Borrower occurring in the same fiscal year, exceeds $2,000,000 and, in
Lender's determination, could have a Material Adverse Effect;

(G) all or any part of Borrower's Collateral with an appraised
value greater than $1,000,000 is attached, seized, subjected to a writ
or distress warrant, or is levied upon, or comes within the possession
of any receiver, trustee, custodian or assignee for the benefit of
creditors and on or before the sixtieth (60th) day thereafter such
assets are not returned to Borrower and/or such writ, distress warrant
or levy is not dismissed, stayed or lifted;

(H) a proceeding under any bankruptcy, reorganization,
arrangement of debt, insolvency, readjustment of debt or receivership
law or statute is filed by or against Borrower, Borrower makes an
assignment for the benefit of creditors or Borrower takes any corporate
action to authorize any of the foregoing and, in the case of an
involuntary proceeding filed against Borrower, such proceeding is not
discharged or dismissed within forty-five (45) days;

(I) Borrower voluntarily or involuntarily dissolves or is
dissolved, terminates or is terminated;

(J) Borrower becomes insolvent or fails generally to pay its
debts as they become due;

(K) Borrower is enjoined, restrained, or in any way prevented
by the order of any court or any administrative or regulatory agency
from conducting all or any material part of its business affairs;

(L) a breach by Borrower shall occur under any of its other
Financing Agreements and such breach continues for more than the
applicable grace period, if any, contained therein;

<PAGE> 35

(M) a breach by Borrower shall occur under any agreement,
document or instrument (other than an agreement, document or instrument
evidencing the lending of money) involving an exposure to Borrower in
excess of $1,000,000, whether heretofore, now or hereafter existing
between Borrower and any other Person, and such breach continues
unwaived for more than thirty (30) days after such breach first occurs,
provided that such grace period shall not apply, and an Event of
Default shall be deemed to have occurred
promptly upon such breach, if such breach may not, in Lender's sole
determination, be cured by Borrower during such thirty (30) day grace
period;

(N) Borrower shall fail to make any payment due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) on any other obligation for borrowed money in excess of
$1,000,000 in principal and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such indebtedness; or any other default under
any agreement or instrument relating to any indebtedness or any other
event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument; or any such
indebtedness shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled required prepayment) prior
to the stated maturity thereof;

(O) Borrower or any other Person shall institute steps to
terminate a Pension Plan if, as a result of such termination, Borrower
could be required to make a contribution to such Pension Plan in excess
of $1,000,000, or a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a lien under section 302(f) of
ERISA.

(P) With respect to any Pension Plan, (i) a contribution
failure occurs sufficient to give rise to a lien in an amount in excess
of $1,000,000 enforceable by the PBGC under Section 302(f)(1) of ERISA
that is not discharged within ten days of receipt of notice thereof, or
(ii) there shall exist a deficiency of more than $2,000,000 in the
Pension Plan assets available to satisfy the benefits guaranteeable
under ERISA with respect to such Pension Plan, and steps are undertaken
to terminate such Pension Plan or such Pension Plan is terminated or
Borrower or any Subsidiary or Affiliate of Borrower withdraws from or
institutes steps to withdraw form such Pension Plan or any Reportable
Event with respect to such Pension Plan shall occur; or

(Q) since October 1, 1997, there shall have occurred any event
which could have a Material Adverse Effect;

then Lender may (i) terminate Lender's obligation to make advances to Borrower
pursuant to SUBSECTION 2.1 hereof without notice to Borrower and/or (ii) declare
any or all of the Liabilities to be immediately due and payable, whereupon such
portion of or all of the Liabilities shall become immediately due and payable,
except that if an Event of Default described in SUBSECTION 9.1(H) above shall
exist or occur, all of the Liabilities shall automatically, without notice of
any kind, be immediately due and payable.

9.2 RIGHTS AND REMEDIES GENERALLY. In the event of the
occurrence of an Event of Default, Lender shall have, in addition to any other
rights and remedies contained in this

<PAGE> 36

Agreement or in any of the other Financing Agreements, all of the rights and
remedies of a secured party under the Code or other applicable laws, all of
which rights and remedies shall be cumulative, and none exclusive, to the extent
permitted by law. In addition to all such rights and remedies, the sale, lease
or other disposition of the Collateral, or any part thereof, by Lender after an
Event of Default may be for cash, credit or any combination thereof, and Lender
may purchase all or any part of the Collateral at public or, if permitted by
law, private sale, and in lieu of actual payment of such purchase price, may set
off the amount of such purchase price against the Liabilities then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. Lender may, in its sole discretion, cause the Collateral to remain on
Borrower's premises, at Borrower's expense, pending sale or other disposition of
the Collateral. Lender shall have the right to conduct such sales on Borrower's
premises, at Borrower's expense, or elsewhere, on such occasion or occasions as
Lender may see fit. In addition to all such rights and remedies, in the event of
the occurrence of an Event of Default, Lender may, (i) in the name of Borrower,
or otherwise, demand, collect, receive and receipt for, compound, compromise,
settle and give acquittance for, and prosecute and discontinue any suits, causes
of action or proceedings in respect of any or all of the Collateral and (ii) at
the sole option of Lender, elect to retain all or any part of the Collateral in
satisfaction of the Liabilities.

9.3 ENTRY UPON PREMISES AND ACCESS TO INFORMATION. In the
event of the occurrence of an Event of Default, Lender shall have the right to
(i) enter upon the premises of Borrower where the Collateral is located (or is
believed to be located) without any obligation to pay rent to Borrower, or any
other place or places where the Collateral is believed to be located and kept,
and render the Collateral unusable or remove the Collateral therefrom to the
premises of Lender or any agent of Lender, for such time as Lender may desire,
in order effectively to collect or liquidate the Collateral, (ii) without being
responsible for loss or damage, and being under no obligation to protect or
maintain from loss or damage, hold, store, keep idle, use, lease, operate or
otherwise use or permit the use of the Collateral or any part thereof for such
time and upon such terms as Lender may deem to be commercially reasonable and/or
(iii) require Borrower to assemble the Collateral and make it available to
Lender at a place or places to be designated by Lender. In the event of the
occurrence of an Event of Default, Lender shall have the right to obtain access
to Borrower's data processing equipment, computer hardware and software relating
to the Collateral and to use all of the foregoing and the information contained
therein in any manner Lender deems appropriate; and Lender shall have the right
to notify post office authorities to change the address for delivery of
Borrower's mail to an address designated by Lender and to receive, open and deal
with all mail addressed to Borrower.

9.4 SALE OR OTHER DISPOSITION OF COLLATERAL BY LENDER. Any
notice required to be given by Lender of a sale, lease or other disposition or
other intended action by Lender with respect to any of the Collateral which is
deposited in the United States registered mail, postage prepaid and duly
addressed to Borrower at the address specified in SUBSECTION 10.12 below, at
least ten (10) Business Days prior to such proposed action shall constitute fair
and reasonable notice to Borrower of any such action. The net proceeds realized
by Lender upon any such sale or other disposition, after deduction for the
expense of retaking, holding, preparing for sale, selling or the like and the
reasonable attorneys' fees and legal expenses incurred by Lender in connection
therewith, shall be applied as provided herein toward satisfaction of Borrower's
Liabilities including, without limitation, the Liabilities described in
SUBSECTIONS 7.4 and 10.3 of this Agreement. Lender shall

<PAGE> 37

account to Borrower for any surplus realized upon such sale or other
disposition, and Borrower shall remain liable for any deficiency. The
commencement of any action, legal or equitable, or the rendering of any judgment
or decree for any deficiency shall not affect Lender's security interest in
and lien against the Collateral until the Liabilities are fully paid. Borrower
agrees that Lender has no obligation to preserve rights to the Collateral
against any other parties.

9.5 WAIVER OF DEMAND. Demand, presentment, protest and notice
of nonpayment are hereby waived by Borrower. Borrower also waives the benefit of
all valuation, appraisal and exemption laws.

9.6 ENDORSEMENT BY LENDER; SETOFF. Borrower agrees that, if at
any time any Event of Default or Default shall have occurred and be continuing:

(A) Lender or the holder of the Revolving Note, in its sole
discretion, may take control of and is authorized to endorse Borrower's name to
any item of payment for or proceeds of Collateral, and apply to the payment of
the Liabilities any and all balances, credits, deposits, accounts or moneys of
Borrower then or thereafter with Lender or such holder; and

(B) Without limitation of SUBSECTION 9.6(A), Lender is hereby
authorized, without notice to Borrower, (i) to set off against and to
appropriate and apply to the payment of the Liabilities (whether matured or
unmatured, fixed or contingent or liquidated or unliquidated) any and all
amounts which Lender is obligated to pay over to Borrower (whether matured or
unmatured, and, in the case of deposits, whether general or special, time or
demand and however evidenced) and (ii) pending any such action, to the extent
necessary, to hold such amounts as Collateral to secure such Liabilities and to
dishonor any and all checks and other items drawn against any deposits so held
as Lender in its sole discretion may elect.

10. MISCELLANEOUS.

10.1 WAIVER. Lender's failure, at any time or times hereafter,
to require strict performance by Borrower of any provision of this Agreement
shall not waive, affect or diminish any right of Lender thereafter to demand
strict compliance and performance therewith. Any suspension or waiver by Lender
of an Event of Default by Borrower under this Agreement or any of the other
Financing Agreements shall not suspend, waive or affect any other Event of
Default by Borrower under this Agreement or any of the other Financing
Agreements, whether the same is prior or subsequent thereto and whether of the
same or of a different kind or character. None of the undertakings, agreements,
warranties, covenants and representations of Borrower contained in this
Agreement or any of the other Financing Agreements and no Event of Default by
Borrower under this Agreement or any of the other Financing Agreements shall be
deemed to have been suspended or waived by Lender unless such suspension or
waiver is in writing signed by an officer of Lender, and directed to Borrower
specifying such suspension or waiver.

10.2 TAXES. All payments by Borrower of principal of, and
interest on, the Liabilities and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority.

<PAGE> 38

10.3 COSTS AND ATTORNEYS' FEES. Borrower agrees to pay on
demand all out-of-pocket costs and expenses of Lender (including the reasonable
fees and out-of-pocket expenses of counsel for Lender and of local counsel, if
any, who may be retained by said counsel) in connection with the preparation,
execution, delivery and administration of this Agreement, the Revolving Note,
the Financing Agreements and all other instruments or documents provided for
herein or delivered or to be delivered hereunder or in connection herewith, and
all out-of-pocket costs and expenses (including reasonable attorneys' fees and
legal expenses) incurred by Lender in connection with the enforcement (including
attempts to vacate an automatic stay) of this Agreement, the Revolving Note, the
Financing Agreement and any such instruments or documents or any collateral
security.

10.4 EXPENDITURES BY LENDER. In the event Borrower shall fail
to pay taxes, insurance, assessments, costs or expenses which Borrower is, under
any of the terms hereof, required to pay, or fails to keep Borrower's Collateral
free from other security interests, liens or encumbrances, except as permitted
herein, Lender may, in its sole discretion, make expenditures for any or all of
such purposes, and the amount so expended, together with interest thereon at the
rate prescribed in SUBSECTION 2.4 above, shall be part of Borrower's
Liabilities, payable on demand and secured by the Collateral.

10.5 ASSIGNMENTS; PARTICIPATIONS. Lender shall have the right
to assign all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of the Revolving Loans and the
Revolving Note) and the Financing Agreements. Upon any such assignment, (a) the
assignee shall become a party hereto and, to the extent of such assignment, have
all rights and obligations of Lender hereunder and under the Financing
Agreements and (b) Lender shall, to the extent of such assignment, relinquish
its rights and be released from its obligations hereunder and under the
Financing Agreements. Borrower hereby agrees to execute and deliver such
documents, and to take such other actions, as Lender may request to accomplish
the foregoing. Borrower hereby consents to the disclosure of any information
obtained in connection herewith by Lender, to any assignee or potential
assignee.

10.6 RELIANCE BY LENDER. All covenants, agreements,
representations and warranties made herein by Borrower shall, notwithstanding
any investigation by Lender, be deemed to be material to and to have been relied
upon by Lender.

10.7 PARTIES. Whenever in this Agreement there is reference
made to any of the parties hereto, such reference shall be deemed to include,
wherever applicable, a reference to the successors and assigns of Borrower and
each Subsidiary and the successors and assigns of Lender. Notwithstanding
anything herein to the contrary, Borrower may not assign or otherwise transfer
its rights or obligations under this Agreement without the prior written consent
of Lender.

10.8 SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
be invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.

<PAGE> 39

10.9 APPLICATION OF PAYMENTS. Notwithstanding any contrary
provision contained in this Agreement or in any of the other Financing
Agreements, Borrower irrevocably waives the right to direct the application of
any and all payments at any time or times hereafter received by Lender from
Borrower or with respect to any of the Collateral, and Borrower hereby
irrevocably agrees that Lender shall have the continuing exclusive right to
apply and reapply any and all payments received at any time or times hereafter,
whether with respect to the Collateral or otherwise, against the Liabilities in
such manner as Lender may deem advisable, notwithstanding any entry by Lender
upon any of its books and records; PROVIDED, HOWEVER, payments applied by Lender
in connection with the Revolving Loan shall be applied in an order from the
first to the last of the outstanding advances made thereunder.

10.10 MARSHALLING; PAYMENTS SET ASIDE. Lender shall be under
no obligation to marshall any assets in favor of Borrower or any other party or
against or in payment of any or all of the Liabilities. To the extent that
Borrower makes a payment or payments to Lender or Lender enforces its security
interests or exercises its rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

10.11 SECTION TITLES. The section titles contained in this
Agreement shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties.

10.12 NOTICES. Except as otherwise expressly provided herein,
any notice required or desired to be served, given or delivered hereunder shall
be in writing, and shall be deemed to have been validly served, given or
delivered (i) three (3) Business Days after deposit in the United States
registered mails, with proper postage prepaid, (ii) when sent after receipt of
confirmation if sent by telecopy or other similar facsimile transmission, (iii)
one (1) Business Day after deposit with a reputable overnight courier with all
charges prepaid or (iv) when delivered, if hand delivered by messenger, all of
which shall be properly addressed to the party to be notified and sent to the
address or number indicated as follows:

(i) If to Lender at:

Elliott Associates, L.P.
712 Fifth Avenue, 36th Floor
New York, New York 10019
Attn: Jon Pollock
Telecopy: (212) 974-2092
Telephone: (212) 506-2999

<PAGE> 40

with copies to:

Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, Illinois 60601-1692
Attn: Timothy R. Pohl
Telecopy: (312) 782-8585
Telephone: (312) 269-4394

(ii) If to Borrower at:

Grant Geophysical, Inc.
16850 Park Row
Houston, Texas 77084
Attn: Larry E. Lenig
Telecopy: (281) 398-9996
Telephone: (281) 647-5201

with copies to:

King & Pennington, L.L.P.
3100 South Tower, Pennzoil Place

700 Louisiana Street
Houston Texas 77002
Attn: C. Robert Bunch
Telecopy: (713) 225-8488
Telephone: (713) 225-8406

or to such other address or number as each party designates to the other in the
manner herein prescribed.

10.13 EQUITABLE RELIEF. Borrower recognizes that, in the event
Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy at law may prove to be inadequate
relief to Lender; therefore, Borrower agrees that Lender, if Lender so requests,
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.

10.14 INDEMNIFICATION. Borrower agrees to defend, protect,
indemnify and hold harmless Lender and each of its officers, directors,
employees, attorneys, consultants and agents (collectively called the
"INDEMNITEES") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for and consultants of such
Indemnitees in connection with any investigative, administrative or judicial

<PAGE> 41

proceeding, whether or not such Indemnitees shall be designated a party
thereto), which may be imposed on, incurred by, or asserted against such
Indemnitees (whether direct, indirect, or consequential and whether based on any
federal or state laws or other statutory regulations, including, without
limitation, securities, environmental and commercial laws and regulations, under
common law or at equitable cause or on contract or otherwise, including any
Damages and Costs under Environmental, Health or Safety Requirements of Law or
common law principles, arising from or in connection with the past, present or
future operations of Borrower or its predecessors in interest, or the past,
present of future environmental condition of the Property, the presence of
asbestos containing materials at the Property, or the Release or threatened
Release of any Contaminant into the environment from the Property) in any manner
relating to or arising out of this Agreement or the other Financing Agreements,
or any act, event or transaction related or attendant thereto, the agreements of
Lender contained herein, the making of the Revolving Loan, the management of
such loans or the Collateral (including any liability under any Requirements of
Law) or the use or intended use of the proceeds of such loans hereunder
(collectively, the "INDEMNIFIED MATTERS"); provided that Borrower shall have no
obligation to any Indemnitee hereunder with respect to Indemnified Matters to
the extent that any of such losses, claims, damages, liabilities or related
expenses are found in a final judgment by a court of competent jurisdiction to
have arisen from the willful misconduct or gross negligence of such Indemnitee.
To the extent that the undertaking to indemnify, pay and hold harmless set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees. This
indemnification shall survive the extinguishment of the Liabilities and the
termination of this Agreement.

10.15 COUNTERPARTS. This Agreement and any amendment or
supplement hereto or any waiver granted in connection herewith may be executed
in any number of counterparts and by the different parties on separate
counterparts and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Agreement.

10.16 PRIOR AGREEMENTS. The terms and conditions set forth in
this Agreement shall supersede all prior agreements, discussions,
correspondence, memoranda and understandings (whether written or oral) of
Borrower and Lender concerning or relating to the subject matter of this
Agreement.

10.17 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon Borrower, Lender and their respective successors and assigns, and shall
inure to the benefit of Borrower, Lender, and Lender's successors and assigns.
Borrower shall have no right to assign its rights or delegate its duties under
this Agreement.

10.18 CONTINUING AGREEMENT. This Agreement shall in all
respects be a continuing Agreement and shall remain in full force and effect
until the Revolving Loans shall have finally expired or terminated, and Borrower
shall have made final payment in full of all Liabilities.

10.19 FILING OF FINANCING STATEMENT. At Lender's option, this
Agreement, or a carbon, photographic or other reproduction of this Agreement or
of any Uniform Commercial Code

<PAGE> 42

financing statement covering the Collateral or any portion thereof shall be
sufficient as a Uniform Commercial Code financing statement and may be filed as
such.

10.20 COMPUTATIONS. Where the character or amount of any asset
or liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for
purposes of this Agreement such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
on a consolidated basis by Borrower in accordance with GAAP applied on a basis
consistent with GAAP as GAAP is in effect as of the date of the first financial
statements delivered pursuant to SUBSECTION 7.1.

10.21 CHOICE OF LAW. LENDER AND BORROWER HEREBY ACCEPT THIS
AGREEMENT AT NEW YORK, NEW YORK BY SIGNING AND DELIVERING IT THERE. ANY DISPUTE
BETWEEN LENDER AND BORROWER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR THE OTHER FINANCING AGREEMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS AND NOT THE CONFLICTS OF LAW PROVISIONS OF THE STATE OF NEW YORK.

10.22 PERSONAL JURISDICTION.

(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION
10.22(B), LENDER AND BORROWER AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY FINANCING AGREEMENT OR
SUBSIDIARY DOCUMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK
COUNTY, NEW YORK, BUT LENDER AND BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY,
NEW YORK. BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.

(B) OTHER JURISDICTIONS. BORROWER AGREES THAT LENDER SHALL
HAVE THE RIGHT TO PROCEED AGAINST BORROWER OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE LENDER TO REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT
LIMITATION, THE REAL PROPERTY) OR ANY OTHER SECURITY FOR THE LIABILITIES, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF LENDER. BORROWER
AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY LENDER TO REALIZE ON PROPERTY OF BORROWER, COLLATERAL (INCLUDING,
WITHOUT LIMITATION, THE REAL PROPERTY) OR ANY OTHER SECURITY FOR THE
LIABILITIES, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF

<PAGE> 43

LENDER. BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT IN WHICH LENDER HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION
10.22.

10.23 WAIVER OF JURY TRIAL. BORROWER AND LENDER WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, BETWEEN LENDER AND BORROWER ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT OR ANY FINANCING AGREEMENT OR SUBSIDIARY
DOCUMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. BORROWER AND LENDER
HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT EITHER MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

[The remainder of this page is intentionally left blank.]

<PAGE> 44

IN WITNESS WHEREOF, this Loan and Security Agreement has been
duly executed as of the day and year first above written.

BORROWER:

GRANT GEOPHYSICAL, INC., a
Delaware corporation

By: /s/ Larry E. Lenig, Jr.
------------------------------
Name: Larry E. Lenig, Jr.
----------------------------
Title: President
---------------------------

LENDER:

ELLIOTT ASSOCIATES, L.P., a
Delaware limited partnership

By: /s/ Jonathan D. Pollock
------------------------------
Name: Jonathan D. Pollock
----------------------------
Title: Portfolio Manager
---------------------------

<PAGE> 1
Exhibit 10.2

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

This First Amendment to Loan and Security Agreement, dated as
of December 19, 1997 (this "AGREEMENT"), is by and between GRANT GEOPHYSICAL,
INC., a Delaware corporation (herein called the "BORROWER"), and ELLIOTT
ASSOCIATES, L.P., a Delaware limited partnership (herein called the "LENDER").

W I T N E S S E T H:

WHEREAS, the parties hereto are parties to that certain Loan
and Security Agreement dated as of October 1, 1997 (as amended and modified from
time to time, the "SECURED LOAN AGREEMENT"; capitalized terms used but not
otherwise defined herein shall have the meanings as set forth in the Secured
Loan Agreement); and

WHEREAS, the Borrower and the Lender desire to amend the
Secured Loan Agreement to (i) create a $15,800,000 term loan facility, the
proceeds of which will be used to fund a cash tender offer for all the
outstanding shares of common stock of Solid State Geophysical, Inc. not held by
Borrower or any Affiliate and (ii) modify certain terms and conditions of the
Secured Loan Agreement with respect to the creation of such term loan facility;

NOW, THEREFORE, in consideration of the foregoing recitals,
the actions contemplated therein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

SECTION 1. AMENDMENTS TO SECURED LOAN AGREEMENT

On the date this Agreement becomes effective, after
satisfaction by the Borrower of each of the conditions set forth in Section 4
hereof:

1.1 THE DEFINITION OF "LIABILITIES" AND SUBSECTIONS 2.4, 4.2,
7.4, 10.5, 10.9, 10.14 AND 10.18 of the Secured Loan Agreement hereby are
amended by (i) replacing each reference in such subsections to "Revolving
Loan(s)" to "Loan(s)" and (ii) replacing each reference in such subsections to
"Revolving Note(s)" to Note(s)."

1.2 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
amended by adding a new definition of "DEBT OFFERING" to such subsection as
follows:

"DEBT OFFERING" shall mean any issuance by Borrower, whether
public or private, of debt securities, excluding borrowings by Borrower
under commercial bank or similar facilities or debt securities issued
to Lender or any Affiliate thereof.

1.3 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
amended by adding a new definition of "LOANS" to such subsection as follows:

"LOANS" shall mean, collectively, the Revolving Loans and the
Term Loan.

1
<PAGE> 2

1.4 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
further amended by adding a new definition of "NOTES" to such subsection as
follows:

"NOTES" means, collectively, the Revolving Notes and the Term
Note.

1.5 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
further amended by adding a new definition of "TERM LOAN" to such subsection as
follows:

"TERM LOAN" has the meaning set forth in SECTION 2.8.

1.6 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
further amended by adding a new definition of "TERM NOTE" to such subsection as
follows:

"TERM NOTE" has the meaning set forth in SECTION 2.8.

1.7 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
further amended by deleting the reference to "$5,000,000" in the definition of
"TOTAL FACILITY" and replacing it with "$20,800,000".

1.8 SUBSECTION 2.2(A) of the Secured Loan Agreement hereby is
amended by deleting such subsection in its entirety and replacing it as follows:

(A) OPTIONAL PREPAYMENTS. Borrower may prepay the Loans
without premium or penalty in whole or in part, provided that (i)
Borrower shall give Lender not less than one (1) Business Day's prior
notice thereof, specifying the Loans to be prepaid and the date and
amount of prepayments, (ii) each partial prepayment shall be made in a
principal amount of $25,000 or an integral multiple thereof, (iii)
prepayments on the Term Loan will be applied to the outstanding
principal amount of the Term Loan in the inverse order of maturity,
until reduced to zero and (iv) if such prepayment prepays all Revolving
Loans in full and is accompanied by the termination in whole of all
Revolving Loans or if such prepayment prepays the Term Loan in full,
Borrower shall pay Lender accrued interest on such Loans to the date of
prepayment. Amounts repaid on Revolving Loans pursuant to this
SUBSECTION 2.2(A) may be reborrowed subject to SUBSECTION 2.1.

1.9 SUBSECTION 2.2(B) of the Secured Loan Agreement hereby is
amended by deleting such subsection in its entirety and replacing it as follows:

(B) MANDATORY PREPAYMENTS:

2
<PAGE> 3

Loans then outstanding; PROVIDED, HOWEVER, that if the amount of any
Excess Cash Flow Payment exceeds the principal amount of the Revolving
Loans then outstanding, such excess will be applied to reduce the Term
Loan in the inverse order of maturity, until reduced to zero; PROVIDED,
FURTHER, HOWEVER, that if the amount of any Excess Cash Flow Payment
exceeds the principal amount of the Revolving Loans then outstanding
and the principal amount of the Term Loan then outstanding, such excess
plus any interest and fees then owing to Lender shall be deducted from
such Excess Cash Flow Payment. Amounts repaid pursuant to this
SUBSECTION 2.2(B)(I) (to the extent such amounts prepay Revolving
Loans) may be reborrowed subject to SUBSECTION 2.1.

(ii) FOREIGN EXCESS CASH FLOW. In the event of the occurrence
and continuation of an Event of Default, Lender may require Borrower to
make one or more Foreign Excess Cash Flow Payments on such date or
dates as Lender shall determine. Any Foreign Excess Cash Flow Payment
shall be applied to reduce the principal amount of the Revolving Loans
then outstanding, until reduced to zero and then to the Term Loan in
the inverse order of maturity, until reduced to zero. Amounts repaid
pursuant to this SUBSECTION 2.2(B)(II) (to the extent such amounts
prepay Revolving Loans) shall reduce the Maximum Revolving Facility by
such amounts and may not be reborrowed.

(iii) DEBT OFFERING PROCEEDS. Upon Borrower's receipt of
proceeds from any Debt Offering, Borrower agrees to pay to Lender from
such proceeds an amount equal to the outstanding amount of the Term
Loan. Amounts repaid pursuant to this SUBSECTION 2.2(B)(III) may not be
reborrowed.

1.10 SECTION 2 of the Secured Loan Agreement hereby is amended
by adding a new Subsection 2.8 to such section as follows:

2.8 TERM LOAN. Subject to the provisions of SECTION 4 below,
on December 17, Lender will make a term loan to Borrower (the "TERM
LOAN") in the original principal amount of $15,800,000. The Liabilities
in connection with the Term Loan will be evidenced by and payable in
accordance with the terms of a promissory note (the "TERM NOTE") made
in favor of Lender, dated as of December 17, 1997, and in the form of
EXHIBIT G. The Term Loan is payable in full on the Maturity Date.
Notwithstanding anything in the Term Note or this Agreement to the
contrary, the Liabilities in connection with the Term Loan become
immediately due and payable as provided in SUBSECTION 9.1 and, without
notice or demand, upon termination of this Agreement under SUBSECTION
2.6. No portion of the Term Loan that has been repaid may be
reborrowed.

1.11 SECTION 7.9 of the Secured Loan Agreement hereby is
amended by deleting such subsection in its entirety and replacing it as follows:

7.9 USE OF PROCEEDS. Borrower shall use the proceeds of the
Revolving Loans for general working capital purposes. Borrower shall
use the proceeds of the Term Loan solely to fund a cash tender offer by
a subsidiary of Borrower for all of the outstanding

3
<PAGE> 4

shares of common stock of Solid State Geophysical, Inc. not held by
Borrower or any Affiliate thereof and to cover the costs and expenses
incurred in connection with such cash tender offer.

SECTION 2. AMENDMENT TO RELATED DOCUMENTS

2.1 AMENDMENT TO EXHIBITS. On the date this Agreement becomes
effective, EXHIBIT 1 hereto will be added as Exhibit G to the Secured Loan
Agreement.

2.2 AMENDMENT AND REAFFIRMATION OF GUARANTY. On the date this
Agreement becomes effective, each Guaranty and Security Agreement dated as of
the Closing Date (the "GUARANTIES"), and made by each Subsidiary in favor of
Lender will be reaffirmed pursuant to the First Consent and Reaffirmation of
Guaranty and Security Agreement executed by each Subsidiary in favor of the
Lender substantially in the form of EXHIBIT 2 hereto (the "REAFFIRMATION OF
GUARANTIES").

SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Lender to enter into this Agreement and to make
all future Loans under the Secured Loan Agreement, as amended hereby, the
Borrower represents and warrants to the Lender that:

(a) DUE AUTHORIZATION, ETC. The execution, delivery
and performance by the Borrower of this Agreement is within
its corporate powers, have been duly authorized by all
necessary corporate action (including, without limitation,
shareholder approval), have received all necessary consents
and governmental approval (if any shall be required), and does
not and will not contravene or conflict with any requirement
of law or contractual obligation binding upon such entity.
This Agreement and the Term Note (as defined below) are the
legal, valid and binding obligations of the Borrower and the
Reaffirmation of Guaranties are the legal, valid and binding
obligation of each Subsidiary a party thereto, enforceable
against the Borrower and each Subsidiary, respectively, in
accordance with their respective terms.

(b) CERTAIN AGREEMENTS. On the date hereof, all
representations and warranties of the Borrower set forth in
the Secured Loan Agreement and the Financing Agreements are
true and correct in all material respects, without any waiver
or modification thereof and no default of any party exists
under any Financing Agreement.

SECTION 4. CONDITIONS TO EFFECTIVENESS

The obligation of the Lender to make the amendments
contemplated by this Agreement and the effectiveness thereof, are subject to the
following:

4
<PAGE> 5

(a) NO DEFAULT. As of the date hereof, no Default or
Event of Default under the Secured Loan Agreement has occurred
and is continuing or will result from the amendments set forth
herein.

(b) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Borrower contained in
this Agreement and the Secured Loan Agreement, as amended
hereby, and the Financing Agreements, as amended hereby, shall
be true and correct as of the date hereof.

(c) DOCUMENTS. The Lender shall have received all of
the following, each duly executed and dated the date hereof
(or such earlier date as shall be satisfactory to the Lender)
in form and substance satisfactory to the Lender:

(i) FIRST AMENDMENT. This Agreement.

(ii) TERM NOTE. The Term Note dated as of
the date of this Amendment (the "TERM NOTE"), made by
Borrower in favor of Lender in the original principal
amount of $15,800,000, substantially in the form of
EXHIBIT 1 hereto.

(iii) REAFFIRMATION OF GUARANTIES. The First
Reaffirmation of Guaranty from each Subsidiary,
substantially in the form of EXHIBIT 2 hereto.

(iv) SECRETARY'S CERTIFICATE. A certificate
of the Secretary of the Borrower as to (i) no
amendments or modifications to the Borrower's
Certificate of Incorporation or By-Laws since October
1, 1997 and (ii) resolutions of the Board of
Directors of the Borrower authorizing or ratifying
the execution, delivery and
performance of this Agreement.

(v) CONSENTS, ETC. Certified copies of all
documents evidencing any necessary corporate action,
consents and governmental approvals (if any) with
respect to this Agreement or any other document
provided for hereunder.

(vi) OTHER. Such other documents as Borrower
may reasonably request.

SECTION 5. MISCELLANEOUS

5.1 CAPTIONS. The recitals to this Agreement (except for
definitions) and the section captions used in this Agreement are for convenience
only, and shall not affect the construction of this Agreement.

5
<PAGE> 6

5.2 GOVERNING LAW; SEVERABILITY. THIS AGREEMENT SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES. WHEREVER POSSIBLE EACH PROVISION OF THIS
AGREEMENT SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT SHALL BE PROHIBITED BY OR
INVALID UNDER SUCH LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF
SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH
PROVISION OR THE REMAINING PROVISIONS OF THIS AGREEMENT.

5.3 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Agreement.

5.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Borrower and the Lender and their respective successors and assigns,
and shall inure to the sole benefit of the Borrower and the Lender and the
successors and assigns of the Borrower and the Lender. The Borrower shall have
no right to assign its rights or delegate its duties under this Agreement.

5.5 REFERENCES. From and after the date hereof, each reference
in the Secured Loan Agreement or any other Financing Agreement to "this
Agreement," "hereunder," "hereof," "herein," or words of like import, and each
reference in the Secured Loan Agreement or any other Financing Agreement to
another Financing Agreement to the Secured Loan Agreement or to any term,
condition or provision contained "thereunder," "thereof," "therein," or words of
like import, shall mean and be a reference to the Secured Loan Agreement or such
other Financing Agreement, as applicable (or such term, condition or provision,
as applicable), as amended, supplemented or otherwise modified by this Agreement
and the Reaffirmation of Guaranties, as applicable.

5.6 CONTINUED EFFECTIVENESS. Notwithstanding anything
contained herein, the terms of this Agreement are not intended to and do not
serve to effect a novation as to the Secured Loan Agreement, any Revolving Note,
the Guaranies or any of the Financing Agreements provided to furnish security
therefor. The parties hereto expressly do not intend to extinguish the Secured
Loan Agreement, any Revolving Note, the Guaranties or any Financing Agreement.
Instead, it is the express intention of the parties hereto to reaffirm the
indebtedness created under the Secured Loan Agreement, which is evidenced by the
Revolving Note and reaffirm that such indebtedness is secured by the various
Financing Agreements. The Secured Loan Agreement, as amended hereby, the
Revolving Note, and all other Financing Agreements, as amended, remain in full
force and effect.

5.7 COSTS, EXPENSES AND TAXES. The Borrower affirms and
acknowledges that SUBSECTION 10.3 of the Secured Loan Agreement applies to this
Agreement and the transactions and agreements and documents contemplated
hereunder.

6
<PAGE> 7

Delivered at New York, New York, as of the day and year first
above written.

<S> <C>

GRANT GEOPHYSICAL, INC., a Delaware
corporation

By: /s/ Larry E. Lenig, Jr.
-------------------------------------------
Name: Larry E. Lenig, Jr.
Title: President and Chief Executive Officer

ELLIOTT ASSOCIATES, L.P., a Delaware
limited partnership

By: /s/ Paul Singer
-------------------------------------------
Name: Paul Singer
Title: General Partner

</TABLE>

<PAGE> 1
Exhibit 10.3

DEMAND PROMISSORY NOTE

$10,200,000 New York, New York
November 26, 1997

On demand, Borrower promises to pay to the order of Lender, at its
offices, the principal amount of TEN MILLION TWO HUNDRED THOUSAND DOLLARS AND NO
CENTS ($10,200,000.00), together with interest (calculated on the basis of a
year of 360 days for the actual number of days elapsed) on the daily unpaid
principal balance hereof from the date hereof to the date of payment hereunder
at a rate per annum equal to the Interest Rate on the earlier of (i) the date of
demand of payment, or (ii) the Interest Period Termination Date. After the
earlier of demand or the Interest Period Termination Date, the unpaid principal
and accrued interest on the principal amount outstanding hereunder shall, until
paid, bear interest at a rate per annum equal to the Default Interest Rate. In
no event shall the interest rate hereon exceed the highest rate permitted by
law.

Upon demand of payment of the unpaid principal balance hereof together
with the accrued interest thereon, at the option of Lender, all sums owed
hereunder shall become immediately due and payable, in addition to any other
rights and remedies Lender may have pursuant to law, this Note, or any other
instruments or agreements, which rights and remedies shall be cumulative.

No delay or omission on the part of Lender in exercising any right or
remedy hereunder or in connection herewith shall operate as a waiver of such
right or remedy or of any other right or remedy hereunder or in connection
herewith. Any waiver of Lender's rights or remedies hereunder or in connection
herewith must be in writing and signed by Lender. A waiver on any one occasion
shall not be construed as a bar to or waiver of any such right or remedy on a
future occasion.

Borrower shall reimburse Lender on demand for any resulting loss or
expense incurred by Lender as a result of Borrower's repayment or prepayment of
the unpaid principal balance hereof together with the interest thereon prior to
the Interest Period Termination Date, other than any repayment or prepayment
pursuant to a demand by Lender for payment prior to the Interest Period
Termination Date.

Borrower represents that (i) it has legal power and right to execute
and deliver this Note and to perform and observe the provisions of this Note;
(ii) by executing and delivering this Note and by performing and observing the
provisions of this Note, Borrower will not violate any existing provision of its
certificate of incorporation, or bylaws or any applicable law or violate or
otherwise become in default under any existing contract, including any
agreements for borrowed money or otherwise evidencing or relating to any
Indebtedness, or other obligation binding upon Borrower; (iii) the officer or
officers executing and delivering this Note on behalf of Borrower have been duly
authorized to do so; and (iv) this Note, when executed, is legally binding upon
Borrower in every respect.

<PAGE> 2

Borrower waives presentment, demand, notice, protest, and all other
demands and notices in connection with delivery, acceptance, performance,
default, or enforcement of this Note. Borrower understands and agrees that this
Note is subject to and shall be governed by and according to the laws of the
State of New York.

Borrower hereby irrevocably and unconditionally (i) submits for itself
and its property in any legal action or proceeding relating to this Note, or for
recognition and enforcement of any judgment in respect therefor, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern or Eastern Districts of
New York and appellate courts from any thereof; (ii) consents that any such
action or proceeding may be brought in such courts, and waives any objection
that it may now or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same; (iii) agrees that
service of process in any such action or proceeding may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, to Borrower at its address specified herein or
pursuant hereto; and (iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.

For the purposes of this Note:

"BORROWER" means GRANT GEOPHYSICAL, INC., a Delaware
corporation, and its successors and assigns; PROVIDED, HOWEVER, that
Borrower may not assign or otherwise transfer any of its rights under
this Note without the express written consent of Lender.

"DEFAULT INTEREST RATE" means that fixed rate per annum
(calculated on the basis of a year of 360 days for the actual number of
days elapsed) equal to the Interest Rate plus two percent (2%) per
annum.

"INDEBTEDNESS" shall mean for any Person (i) all obligations
to repay borrowed money, direct or indirect, incurred, assumed, or
guaranteed, (ii) all obligations for the deferred purchase price of
capital assets excluding trade payables, (iii) all obligations under
conditional sales or other title retention agreements, and (iv) and all
lease obligations which have been or should be capitalized on the books
of such Person.

"INTEREST RATE" means a fluctuating rate per annum which shall
at all times be equal to the sum of (i) the Prime Rate in effect from
time to time, PLUS (ii) 2% per annum. Interest hereunder shall be paid
on the date any principal amount hereof is payable.

"INTEREST PERIOD TERMINATION DATE" means that date determined
by Lender and mutually agreed upon by Lender and Borrower which is the
last day of the period selected in order to determine the Interest Rate
and which shall not be more than 45 days from the date hereof.

-2-

<PAGE> 3

"LENDER" means ELLIOTT ASSOCIATES, L.P., a Delaware limited
partnership with its main office located at 712 Fifth Avenue, 36th
Floor, New York, New York 10019, and its successors and assigns.

"PERSON" means any natural person, corporation (which shall be
deemed to include business trust), association, limited liability
company, partnership, joint venture, political entity, or political
subdivision thereof.

"PRIME RATE" means the "Prime Rate" as reported by The Wall
Street Journal in its column entitled "Money Rates", such rate being
the base rate on corporate loans posted by at least 75% of the nation's
30 largest banks.

BORROWER, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN LENDER AND BORROWER ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN BORROWER AND
LENDER IN CONNECTION WITH THIS NOTE OR ANY OTHER AGREEMENT, INSTRUMENT OR
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS
RELATED THERETO.

IN WITNESS WHEREOF, Borrower has duly executed and delivered this Note
on the date first above written.

BORROWER:

GRANT GEOPHYSICAL, INC.

By: /s/ Larry E. Lenig, Jr.
--------------------------------
Name: Larry E. Lenig, Jr.
Title: President

-3-

<PAGE> 1
Exhibit 10.4

SUBORDINATED PROMISSORY NOTE

New York, New York
$9,786,114.35 December 18, 1997

FOR VALUE RECEIVED, the undersigned, Grant Geophysical, Inc.,
a Delaware corporation (the "Maker"), promises to pay to the order of Elliott
Associates L.P., a Delaware limited partnership, ("Payee"), the principal amount
of NINE MILLION SEVEN HUNDRED EIGHTY-SIX THOUSAND ONE HUNDRED FOURTEEN DOLLARS
AND THIRTY-FIVE CENTS ($9,786,114.35), together with interest (calculated on the
basis of a year of 360 days and based upon the number of days actually elapsed)
on the daily unpaid principal balance hereof from the date hereof at a rate per
annum equal to 10.5% per annum. Interest shall accrue from the date hereof and
the principal balance hereof and all accrued but unpaid interest thereon shall
be due and payable on March 31, 1999. Maker shall have the right to prepay the
principal amount of this Note, in whole or in part, at any time, without premium
or penalty.

If any amount of principal or interest payable hereunder is
not paid when due (whether at stated maturity, by acceleration or otherwise),
the then entire outstanding principal balance hereof, together with all overdue
interest, shall at the Payee's option (exercised then or thereafter)
automatically and immediately accrue interest until such default is cured,
payable on demand, at a rate per annum equal to the lesser of (i) 2% per annum
above the interest rate otherwise in effect, or (ii) the maximum interest rate
permitted under applicable law.

No delay or omission on the part of Payee in exercising any
right or remedy hereunder or in connection herewith shall operate as a waiver of
such right or remedy or of any other right or remedy hereunder or in connection
herewith. Any waiver of Payee's rights or remedies hereunder or in connection
herewith must be in writing and signed by Payee. A waiver on any one occasion
shall not be construed as a bar to or waiver of any such right or remedy on a
future occasion.

Maker represents that (i) it has legal power and right to
execute and deliver this Note and to perform and observe the provisions of this
Note; (ii) by executing and delivering this Note and by performing and observing
the provisions of this Note, Maker will not violate any existing provision of
its certificate of incorporation or bylaws or any applicable law or violate or
otherwise become in default under any existing contract, including any
agreements for borrowed money or otherwise evidencing or relating to any
Indebtedness, or other obligation binding upon Maker; (iii) the officer or
officers executing and delivering this Note on behalf of Maker have been duly
authorized to do so; and (iv) this Note, when executed, is legally binding upon
Maker in every respect. For purposes of this Note "Indebtedness" shall mean (i)
all obligations to repay borrowed money, direct or indirect, incurred, assumed,
or guaranteed, (ii) all obligations for the deferred purchase price of capital
assets excluding trade payables, (iii) all obligations under conditional sales
or other title retention agreements, and (iv) and all lease obligations which
have

<PAGE> 2

been or should be capitalized on the books of any person, corporation,
association, limited liability company, partnership, joint venture, or political
entity or subdivision.

Maker shall be in default under this Note upon the occurrence
of any of the following events of default ("Events of Default"):

(a) Maker shall fail to pay any principal of, or interest on,
this Note when the same becomes due and payable; or

(b) any representation or warranty made by Maker (or any of
its officers) under or in connection with this Note shall prove to have been
incorrect in any material respect when made; or

(c) Maker shall fail to perform or observe any term, covenant
or agreement contained in this Note on its part to be performed or observed; or

(d) Maker shall fail to pay any principal of or premium or
interest on any Indebtedness which is outstanding in a principal amount of at
least $1,000,000 (or its equivalent, if in any other currency) in the aggregate
of Maker when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the agreement,
instrument or document relating to such Indebtedness; or any other event shall
occur or condition shall exist under any agreement, instrument or document
relating to any such Indebtedness and shall continue after the applicable grace
period, if any, specified in such agreement, instrument or document, if the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased,
or an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated maturity thereof; or

(e) Maker shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against Maker seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its property)
shall occur; or Maker shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or

(f) any judgment or order for the payment of money in excess
of $500,000 (or its equivalent, if in any other currency) shall be rendered
against Maker and either (i) enforcement

<PAGE> 3

proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

(g) Maker shall incur or suffer to exist any Indebtedness
other than the Senior Debt (as defined below).

then, and in any such event, the Payee may, by notice to Maker, declare this
Note, all interest thereon and all other amounts payable under this Note to be
forthwith due and payable, whereupon this Note, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Maker; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to Maker of the nature referred to in
clause (e) above, this Note, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
Maker.

By its acceptance of this Note, Payee agrees that the payment
of the principal, interest and other sums due or to become due on this Note is
hereby expressly subordinated in right of payment to the prior payment in full
of any note which secures any loan or similar financing entered into by the
Maker under or pursuant to agreements, instruments or documents entered into by
Maker prior to the date hereof (the "Senior Debt").

This Note shall bind Maker and its successors and assigns, and
the benefits hereof shall inure to the benefit of Payee and its successors and
assigns. All references herein to the "Maker" and "Payee" shall be deemed to
apply to the Maker and Payee, respectively, and to their respective successors
and assigns.

Maker waives presentment, demand, notice, protest, and all
other demands and notices in connection with delivery, acceptance, performance,
default, or enforcement of this Note. Maker understands and agrees that this
Note is subject to and shall be governed by and according to the laws of the
State of New York.

Maker hereby irrevocably and unconditionally (i) submits for
itself and its property in any legal action or proceeding relating to this Note,
or for recognition and enforcement of any judgment in respect therefor, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern or Eastern Districts of
New York and appellate courts from any thereof; (ii) consents that any such
action or proceeding may be brought in such courts, and waives any objection
that it may now or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same; (iii) agrees that
service of process in any such action or proceeding may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, to Maker at its address specified herein or pursuant
hereto; and (iv) agrees that nothing herein shall affect the right to effect
service of process in

<PAGE> 4

any other manner permitted by law or shall limit the right to sue in any other
jurisdiction.

MAKER, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, BETWEEN PAYEE AND MAKER ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN MAKER AND
PAYEE IN CONNECTION WITH THIS NOTE OR ANY OTHER AGREEMENT, INSTRUMENT OR
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS
RELATED THERETO.

IN WITNESS WHEREOF, Maker has duly executed and delivered this
Note on the date first above written.

MAKER:

GRANT GEOPHYSICAL, INC.

By: /s/ Larry E. Lenig, Jr.
------------------------------------
Name: Larry E. Lenig, Jr.
Title: President

<PAGE> 1
Exhibit 10.6

RESTATED AND AMENDED
EMPLOYMENT AGREEMENT

THIS RESTATED AND AMENDED EMPLOYMENT AGREEMENT (the "Agreement") dated
as of October 1, 1997 (the "Effective Date"), by and between GRANT GEOPHYSICAL,
INC., a Delaware corporation ("Company"), and LARRY E. LENIG, JR., a resident of
Houston, Texas ("Lenig").

WITNESSETH:

WHEREAS, Lenig and Grant Geophysical, Inc. as debtor-in-possession (the
"Employer") entered into that certain Employment Agreement as of January 28,
1997 (the "Prior Agreement"); and

WHEREAS, the Company will, pursuant to a plan of reorganization (the
"Plan") for the Employer, purchase substantially all of the assets of and assume
certain liabilities of the Employer; and

WHEREAS, upon the consummation of its purchase of the Employer's
assets, the Company desires to retain the services of Lenig as an employee for a
period of time, and the parties desire to formalize such employment relationship
and the obligations of the parties upon the termination of such employment; and

WHEREAS, the parties wish to evidence the retention of Lenig by the
Company pursuant to a Restated and Amended Employment Agreement in the form
hereof.

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

1. EMPLOYMENT. The Company hereby employs Lenig, and Lenig hereby accepts
employment by the Company, upon the terms and conditions set forth in the
Agreement.

2. TERM. (a) Subject to the termination provisions of Section 6 and the
extension provisions of Section 2(b), the term of Lenig's employment under this
Agreement will be the period commencing on the Effective Date and ending on
December 31, 2000.

(b) EXTENSION TERMS. For each year in which the Company's financial
results entitle Lenig to a bonus pursuant to Section 4(b) of this Agreement, the
term of this Agreement shall be extended for one additional year unless Lenig
notifies the Company that the term shall not be extended.

3. DUTIES OF LENIG. During the term hereof, Lenig shall perform the duties of
the president and chief executive officer of the Company, and such other
executive duties with the Company as may be assigned to him by the board of
directors or the Chairman of the Board of the Company and as

<PAGE> 2

are not inconsistent with the provisions hereof, and if elected, shall, without
additional compensation except as set forth herein, serve as a director of the
Company (or on any of its committees) or as an officer or director of any of its
subsidiaries. Lenig agrees, during the term hereof, to devote his best efforts
and skills to the business and interests of the Company, and will use his good
faith efforts to further enhance and develop the best interests and welfare of
the Company.

4. COMPENSATION AND BENEFITS. For and in consideration of the performance by
Lenig of the services, terms, conditions, covenants and promises herein recited,
the Company agrees and promises to pay to Lenig at the times and in the manner
herein stated, the following:

(a) SALARY. As part of the consideration for the services to be
performed by Lenig hereunder during the employment period, Lenig shall receive,
as gross salary before any withholding of whatever sort, the amount of $180,000
per year, such amount to be payable in the manner and on the timetable in which
the Company's payroll is customarily handled. The compensation payable pursuant
to this subparagraph is referred to herein as "base salary".

(b) BONUS. Each year (beginning with January 1, 1998) during the term
hereof, Lenig shall be entitled to receive a cash bonus (the "Bonus") if the
Company's income before provision for income tax (based on audited financial
statements of the Company) meets or exceeds the "target level" for such year.
The target level for such year shall be set by the Board of Directors not later
than December 15 of the immediately preceding year, taking into account the
Company's markets, demand for the services offered by the Company and such other
factors as may be reasonable in the circumstances. The target level shall be
promptly communicated in writing to Lenig. The Bonus shall be calculated as a
percentage of Lenig's base salary as follows:

<TABLE>
<CAPTION>
% of Target Bonus as a %
Level Achieved of Base Salary
-------------- --------------
<S> <C> <C>
90% 40%
100% 50%
125% 100%
</TABLE>

The Bonus in respect of any year, if earned, shall be paid immediately
following completion of the Company's audit for such year and shall, if earned,
be payable notwithstanding the termination of Lenig's employment.

(c) For purposes of this Agreement, "cause" means that Lenig shall have
(1) committed an intentional act of fraud, embezzlement or theft in connection
with his duties or in the course of his employment with the Company, (2)
intentionally or wrongfully damaged property of the company, (3) intentionally
or wrongfully disclosed secret processes or confidential information of the
Company, (4) intentionally violated the provisions of Section 8(b), or (5)
willfully failed or refused to follow the lawful and proper directives of the
board of directors of the Company, consistent with Lenig's position and within
his power to do so, after receipt by Lenig of a resolution duly adopted by the
board and specifying in reasonable detail the alleged failure or refusal and
after a reasonable opportunity for Lenig to cure the alleged failure or refusal.
For purposes of this

<PAGE> 3

Agreement, an act or omission on the part of Lenig shall not be deemed
"intentional," if it was due to an error in judgment or negligence, but shall be
deemed "intentional" if done by Lenig not in good faith and without reasonable
belief that the act or omission was in the best interests of the Company.

(d) BENEFITS. In addition to the above compensation, the Company shall
provide Lenig with the following benefits:

(i) participation, for Lenig and his dependents, in any
present or future disability, health, dental or other insurance or
welfare benefit plan generally available to all employees of the
Company;

(ii) participation in any pension plan, deferred compensation
plan or any other employee benefit plan which the board of directors
elects to make available generally to employees of the Company during
the employment period;

(iii) reasonable periods of vacation with pay, aggregating
four weeks during each fiscal year of the Company; provided, however,
that such vacation shall not accrue or accumulate from year to year;

(iv) the Company shall pay for or reimburse Lenig for all
reasonable out-of-pocket expenses incurred by him in furtherance of the
business activities of the Company which, but for the benefit of the
Company, would not have been incurred by Lenig; and

(v) the Company shall pay to Lenig an automobile allowance of
$600 per month, before withholding of any sort, if applicable, which
amount shall be paid to Lenig no less frequently than monthly.

The parties acknowledge that Lenig shall have no right to receive any
compensation except at the time, in the amounts and in the manner herein
provided.

5. OBLIGATIONS OF THE COMPANY UPON DEATH OF LENIG. In the event of Lenig's death
during the term of this Agreement, the Company shall:

(a) make payment of any and all base salary and Bonus earned by Lenig
through the date of his death and not theretofore paid;

(b) make payment pursuant to Section 4(d)(iv) hereof of any and all
expenses incurred by Lenig through the date of his death and not theretofore
reimbursed;

(c) notwithstanding any provision thereof, honor the exercise by the
proper person or persons of any stock options vested at the date of Lenig's
death or stock purchase agreements which Lenig was a party to by his heirs,
successors-in-interest or legal representatives for a period equal to the lesser
of (i) the then remaining term, without regard to any provision triggered by
Lenig's death, of the stock options or stock purchase agreements or (ii) three
years.

<PAGE> 4

The payments to be made under this Section 5 shall be made to Lenig's heirs or
assigns under his will duly probated, or, in the event Lenig dies intestate, to
the administrator duly appointed by any court having jurisdiction of Lenig's
estate, or under the laws of descent and distribution.

6. TERMINATION OF EMPLOYMENT.

(a) At any time without cause the Company may terminate, upon 30 days
prior written notice, the employment of Lenig at a date earlier than the
expiration of the term hereof.

(b) At any time the Company may terminate the employment of Lenig for
cause, as defined in Section 4(c) hereof, upon notice from the Company to Lenig
in accordance with the provision of such section.

(d) The employment of Lenig shall also terminate upon:

(i) the death of Lenig;

(ii) the voluntary resignation of Lenig other than for good reason
(as defined below), in which event Lenig shall only be entitled
to any and all base salary and Bonus earned by Lenig through the
date of his resignation, plus all amounts payable pursuant
to paragraph 4(d)(iv), and no other compensation shall be payable
to Lenig after the date of such voluntary resignation pursuant to
the terms of this Agreement except in accordance with paragraph 7
hereof.

(e) For the purposes hereof, the phrase "for good reason" means any of
the following: (a) the Company's material breach of this Agreement; (b) the
assignment of Lenig without his consent to a position, responsibilities, or
duties of a materially lesser status or degree of responsibility that his
position, responsibilities, or duties at the Effective Date; or (c) the
requirement by the Company that Lenig be based anywhere other than the Company's
principal executive offices, in either case without Lenig's consent.

7. EFFECT OF TERMINATION BY THE COMPANY. In the event that the Company
terminates the employment of Lenig pursuant to paragraph 6(a), or Lenig resigns
pursuant to paragraph 6(c), prior to the expiration of the term hereof, the
Company shall:

(a) make payment of any and all base salary and Bonus earned by Lenig
through the date of such termination and not theretofore paid;

(b) continue to make base salary compensation payments for the
remainder of the term hereof (including any extension pursuant to Section 2(b)
hereof) at 100% of the most recent base salary rate in effect, payable in equal
monthly installments and continue to allow Lenig to participate in any health,
life and welfare benefit plans offered to employees of the Company on the same
basis as if Lenig were still a full-time employee of the Company;

<PAGE> 5

(c) notwithstanding any provision thereof, honor the exercise by Lenig,
his heirs, successors-in-interest or legal representatives of any stock options
or stock purchase agreements vested as of the date of the termination for a
period equal to the lesser of (i) the then remaining term of the stock options
or stock purchase agreements (without regard to any provision triggered by
Lenig's termination) or (ii) three years.

(d) make payment pursuant to paragraph 4(d)(iv) hereof of any and all
expenses incurred by Lenig through the date of termination and not theretofore
reimbursed;

(e) make all payments pursuant to paragraph 8 hereof on the dates which
such amounts are payable under such paragraph.

8. COVENANT NOT TO COMPETE.

(a) This covenant between Lenig and the Company is being executed and
delivered by the parties in consideration of the covenants of the Company
contained in this Agreement and for other good and valuable consideration,
receipt of which is hereby acknowledged.

(b) Provided that the Company is in compliance with all of its
obligations to Lenig under paragraph 7 hereof, Lenig agrees that during the
period set forth in paragraph 7(b) above plus a period of 24 months or if
Lenig's employment is terminated pursuant to paragraph 6(c) or 6(d)(ii), then
for a period of 24 months following termination, neither Lenig nor any of his
Affiliates (defined below) shall, directly or indirectly, for himself or on
behalf of any other person, corporation, firm, partnership, association or any
other entity (whether as an individual, agent, servant, employee, employer,
officer, director, shareholder, investor, principal, consultant or in any other
capacity) (i) engage or participate in any "competing business" (defined below)
anywhere in the "restricted territories" (defined below); (ii) induce any
customers of the Company or any of its subsidiaries to patronize any competing
business; (iii) canvass, solicit or accept any similar business from any
customer of the Company or any of its subsidiaries; or (iv) request or advise
any customers of the Company or any of its subsidiaries to withdraw, curtail or
cancel such customer's business with the Company or any of its subsidiaries;
provided, however, that this Section 8(b) shall not prohibit Lenig and his
Affiliates from purchasing or holding in the aggregate, equity interests of up
to 2% in any business entity or person in competition, directly or indirectly,
with the company or any of its subsidiaries.

(c) The term "competing business" shall be defined to mean any business
in competition with the business or businesses conducted or planned to be
conducted pursuant to a written strategic plan by the Company or its
subsidiaries upon the date of termination of this Agreement or Lenig's
employment hereunder or in any manufacturing business, the products or services
of which, at the date hereof or at any time during the term of this Agreement,
are sold or licensed by or marketed by the Company or its subsidiaries in any
state of the United States, any province of Canada or any foreign countries in
which the Company or its subsidiaries regularly transact business on the date on
which the employment period terminated. The term "restricted territories," shall
be defined to mean any geographical area located anywhere in the world.

<PAGE> 6

(d) The parties hereto recognize and agree that this Agreement is
necessary and essential to protect the business conducted by the Company and
that the area and duration of the covenants contained herein are in all aspects
reasonable and necessary to protect the Company, and do not unduly oppress or
restrict the occupational future of Lenig.

(e) In addition to all other amounts payable to Lenig herein, the
Company shall compensate Lenig during each of the final 24 months of the
covenant not to compete contained herein at a per annum rate equal to 50% of the
base salary rate in effect immediately prior to the termination of Lenig's
employment, payable on a current basis in equal installments not less frequently
than monthly. During such 24 month period, Lenig shall be entitled to
participate in the health and life insurance plans offered to employees of the
Company on the same basis as if Lenig were still a full time employee of the
Company.

(f) If any court determines that any provision of the covenant not to
compete contained herein, or any part thereof is invalid or unenforceable, the
remainder of such covenant not to compete shall not thereby be affected and
shall be given full effect, without regard to the invalid provisions. If any
court determines any provision of the covenant not to compete, or any part
thereof, is unenforceable because of the duration or geographic scope of such
provision, the parties agree that such court shall have the power to reduce the
duration or geographic scope of such provision, as the case may be, and the
parties agree to request the court to exercise such power, and in its amended
form, such provision shall be enforceable and shall be enforced.

(g) If, pursuant to an action initiated by Lenig, a court has limited
the scope of the non-compete as contemplated in paragraph (f) above, and
following such limitation, Lenig engages in a competing business as originally
defined, then the Company's obligation to continue to make payments or provide
benefits to or to permit the exercise of stock options or stock purchase
agreements by Lenig shall terminate.

(h) for the purposes of this Agreement, the term "Affiliate" means any
person or entity that, directly or indirectly, controls, is controlled by, or is
under common control with, the person in question. "Affiliate" shall be deemed
not to include any adult children of Lenig solely by virtue of their status as
Lenig's children. The provisions of this paragraph 8 shall survive the
termination of this Agreement.

9. CONFIDENTIAL INFORMATION. Lenig acknowledges and agrees that his employment
by the Company under this Agreement necessarily involves his understanding of
and access to certain trade secrets and confidential information pertaining to
the business of the Company and its subsidiaries, and Lenig agrees that at all
times after the date hereof, both during and following his employment with the
Company, he will not disclose to any unauthorized third party any of the trade
secrets or confidential information pertaining to the business of the Company
and its subsidiaries, and will not remove or retain, without the express written
consent of the board of directors of Company, except in the normal conduct of
his duties under this Agreement, any figures, calculations, letters, papers,
documents, instruments, drawings, designs, or copies thereof, or any other
confidential information of any type or description; provided, however, that
after reasonable measures have been taken to maintain confidentiality (such as
the execution of confidentiality agreements) and after reasonable notice to the
Company specifying the information involved and

<PAGE> 7

the manner and extent of the proposed disclosure thereof, any disclosure of such
information may be made to the extent required by applicable law, regulation, or
judicial or regulatory process. The provisions of this paragraph shall survive
the termination of this Agreement.

10. INVENTIONS. Lenig agrees that any invention, improvements, developments or
discoveries (whether or not patentable) that he may conceive, make or invent
during the course of his services pursuant to this Agreement (whether
individually or jointly with any person or persons) relating to or useful by the
business of the Company and its subsidiaries shall be the sole, exclusive and
absolute property of the Company and its subsidiaries as the case may be. Lenig
will immediately disclose any such invention, improvement, development or
discovery to the Company and will, at any time, at the Company's request and
without additional compensation, execute and deliver patent papers covering such
invention, improvement, developments or discoveries as well as any papers which
may be considered necessary or helpful by the Company in the prosecution of
applications for patents thereon or which may relate to any litigation or
controversy in connection therewith. All expenses incident to the filing of such
applications, the prosecution thereof, and the conduct of any such litigation
shall be borne by Company. The provisions of this paragraph shall survive the
termination of this Agreement.

11. MISCELLANEOUS.

(a) The undersigned parties to this Agreement warrant and represent
that they have the power and authority to enter into this Agreement in the
names, titles and capacities herein stated.

(b) A waiver by either party of any of the terms and conditions of this
Agreement in any instance shall not be deemed or construed to be a waiver of
such term or condition for the future, or of any subsequent breach thereof, or
of any other term and condition of the Agreement.

(c) This Agreement constitutes the entire agreement between the parties
respecting the matters contained herein, and there are no representations,
warranties, agreements or commitments between the parties hereto except as set
forth herein. This Agreement may be amended only by an instrument in writing
executed by the undersigned parties.

(d) Any and all notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been given when personally
delivered or deposited in the United States mails, certified or registered mail,
postage prepaid and addressed as follows:

If to Lenig: Larry E. Lenig, Jr.
131 Plantation
Houston, TX 77024

If to the Company: Grant Geophysical, Inc.
16850 Park Row
Houston, TX 77084
Attn: Chairman of the Board

Either party may change by notice the address to which notices to it are to be
addressed.

<PAGE> 8

(e) This Agreement shall be construed in accordance with and governed
by the laws of the State of Delaware.

Lenig may not assign, transfer or convey this Agreement. This
Agreement and all of the Company's rights and obligations hereunder may be
assigned or transferred by it, in whole but not in part, to and shall be binding
upon and inure to the benefit of any "successor" of the Company but such
assignment by the company shall not relieve it of any of its obligations
hereunder. As used herein, the term "successor" shall mean only any person,
firm, corporation or other business entity which at anytime by reorganization,
merger, consolidation, transfer, divestiture or otherwise shall have acquired
all or substantially all of the assets of the Company or to which the Company
shall have transferred all of the assets of the Company or to which the Company
shall have transferred all or substantially all of its assets. Any such
successor shall be deemed to be substituted for all purposes as the "Company"
hereunder.

(g) If any provision of this Agreement, as applied to either party or
to any circumstances, shall be adjudged by a court of competent jurisdiction to
be void or unenforceable, the same shall in no way effect any other provision of
this Agreement or the validity or enforceability of this Agreement.

This Agreement supersedes all employment agreements presently in effect between
the Company and Lenig, and the parties hereby terminate all such agreements,
provided however, that the provisions of Section 3.1(b) and Section 3.2 of the
Prior Agreement shall survive and become an obligation of Company to the extent,
but only to the extent, that the Employer fails to pay Lenig the amount of
$350,000 which the parties hereto agree has been earned by and is due and
payable to Lenig pursuant to Section 3.2 of the Prior Agreement on or before
December 31, 1997. In the event that Employer fails to make all of such payment,
the Company shall promptly pay Lenig, upon notification by Lenig, of nonpayment
by the Employer. To the extent that Company is required to and does pay Lenig
all or any portion of the $350,000 pursuant to Section 3.2 of the Prior
Agreement and to the extent that Company does not otherwise receive a credit for
such payments against its obligations to make payments to the Employer pursuant
to the Plan, Company shall be subrogated to Lenig's right to receive such
amounts under Section 3.2 of the Prior Agreement from the Employer.

IN WITNESS WHEREOF, the parties have executed this Agreement as of October 1,
1997.

GRANT GEOPHYSICAL, INC.

By: /s/ Jon Pollock
---------------------------

/s/ Larry E. Lenig, Jr.
------------------------------
Larry E. Lenig, Jr.

<PAGE> 1
Exhibit 10.7
EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of November 24, 1997 (the "Effective Date"), by and between
SOLID STATE GEOPHYSICAL INC., having its head office at 7309 Flint Road S.E.,
Calgary, Alberta, T2H 1G3 (the "Company"), and MITCHELL L. PETERS, residing at
123 Woodpark Terrace S.W., Calgary, Alberta T2H 6E7 ("Peters").

RECITALS:
---------

A. Peters has served as the President and Chief Executive Officer of
the Company since January 1985.

B. Grant Geophysical, Inc., a Delaware corporation ("Grant"), will
directly or indirectly acquire all of the outstanding shares of capital stock of
the Company (the "Acquisition").

C. Upon the consummation of the Acquisition, the Company desires to
retain the services of Peters as a full-time employee for a period of time.

D. The Company and Peters wish to formalize their employment
relationship and obligations upon the termination of such employment.

NOW, THEREFORE, in consideration of the covenants, agreements and
payments set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and Peters
hereby agree as follows:

ARTICLE I.
EMPLOYMENT
----------

1.1 Subject to the consummation of the Acquisition, the Company and Peters
hereby agree that the employment relationship between Peters and the Company as
evidenced by the Executive Employment Agreement dated the 1st day of April, 1994
and as amended the 1st day of January, 1997 is mutually terminated and the
Company shall have no obligation and Peters shall not be entitled to any
payments or benefits whatsoever under such agreement subject only to Peters'
right and entitlement to be paid the sum of CN $690,000 (less withholding)
representing 3 years' salary, and to exercise options previously granted to
Peters to purchase capital stock of the Company.

1.2 The Company hereby employs Peters, and Peters hereby accepts full-time
employment with the Company commencing on the date of the consummation of the
Acquisition, and, subject to the terms and conditions of this Agreement,
continuing until December 31, 2000.

1.3 On December 31, 2000 and on each anniversary thereof, the term of this
Agreement shall be extended for one additional year unless the Company or Grant
notifies Peters, or Peters notifies the

<PAGE> 2

Company and Grant, prior to the end of such term that the term of this Agreement
shall not be extended.

ARTICLE II.
DUTIES
------

2.1 During the term hereof, Peters shall perform the duties of the President and
Chief Executive Officer of the Company, with responsibility for short-term and
long-term growth of the Company and adding value to the Company and such other
executive duties with the Company as may be assigned to him by the board of
directors of the Company or Grant's chief executive officer and that are not
inconsistent with the provisions hereof.

2.2 Peters shall accept without additional compensation, such office or offices
to which he may be elected or appointed, as the case may be, by the board of
directors of the Company, the board of directors of Grant or Grant's chief
executive officer, including without limitation, (a) Senior Vice President of
Grant, responsible for marketing development in Europe, Africa and the Middle
East; (b) a director of the Company or Grant (or on any of their respective
committees); or (c) an officer or director of any subsidiary of the Company or
Grant.

2.3 Peters shall devote his full time and best efforts and skills to the
business, best interests and welfare of the Company, and will use his best
efforts to further enhance and develop the overall business, best interests and
welfare of Grant and its subsidiaries as a whole.

2.4 In performing his duties under this Agreement, Peters shall report directly
to the board of directors of the Company and Grant's chief executive officer and
shall act in accordance with the reasonable and lawful directions and policies
of the board of directors of the Company and Grant's chief executive officer;
provided, however, if a conflict arises between the board of directors of the
Company and Grant's chief executive officer, Peters shall act in accordance with
such instructions of the board of directors of the Company.

ARTICLE III.
COMPENSATION AND BENEFITS
-------------------------

3.1 As part of the consideration for the services to be performed by Peters
hereunder during the employment period, Peters shall receive, as gross salary
before any withholding of whatever sort, the amount of CN $230,000 per year,
such amount to be payable by the Company in equal monthly installments and in a
manner and on a timetable in which the Company's payroll is customarily handled.
The compensation payable pursuant to this Article is referred to herein as "base
salary."

3.2 The board of directors of the Company and Grant's chief executive officer
shall annually review Peters' base salary, taking into account Peters'
performance of his employment duties and the overall performance of the Company
and Grant, and consider in their sole discretion an increase in Peters' base
salary.

3.3 In addition to base salary, during the term of his employment hereunder,
Peters shall be entitled to receive an initial award under Grant's 1997 Equity
and Performance Incentive Plan (or any successor plan thereto), equal to 75% of
the initial award granted to Grant's Chief Executive Officer.

<PAGE> 3
3.4 Peters shall also be entitled to participate in any cash bonus program
(subject to such program's terms and conditions) sponsored by the Company or
Grant, as determined by the board of directors of the Company or the board of
directors of Grant, respectively.

3.5 In addition to base salary, the Company shall provide Peters, during the
term of his employment hereunder, with the following benefits:

(a) participation, for Peters and his dependents, in any
present or future disability, health, dental or other insurance or
welfare benefit plan generally available to all employees of the
Company;

(b) participation in any pension plan, deferred compensation
plan or any other employee benefit plan which the board of directors of
the Company elects to make available generally to employees of the
Company during the employment period;

(c) reasonable periods of vacation with pay, aggregating five
weeks during calendar year 1998 and six weeks during each calendar year
thereafter; provided, however, that such vacation shall not accrue or
accumulate from year to year;

(d) the Company shall pay for or reimburse Peters for all
reasonable out-of-pocket expenses actually incurred by him in
furtherance of the business activities of the Company which, but for
the benefit of the Company, would not have been incurred by Peters;

(e) the Company shall provide to Peters and pay for (i) a
membership and reasonable membership dues in a health club; (ii) a
membership and reasonable membership dues in a dinner/luncheon club;
(iii) a membership and reasonable membership dues in a country club
located within a 200 mile radius of the Peters' principal residence;
and (iv) an automobile, plus reimbursement of reasonable and actually
incurred expenses associated with leasing, operating and insuring the
same; and

(f) in the event that the Company elects from time to time,
with the approval of its board of directors, to place "key man"
insurance on the life of Peters, the Company shall at such times
provide at its cost similar insurance in the same sum to be made
payable to the benefit of those dependants of Peters as he may direct.

The parties acknowledge that Peters shall have no right to receive any
compensation except at the time, in the amounts and in the manner herein
provided.

3.6 In the event of Peters' death during the term of his employment hereunder,
the Company shall make payment of any and all base salary earned by Peters
through the date of his death and not previously paid and shall make payment of
all reasonable expenses actually incurred by Peters in accordance with Article
3.5(d) through the date of his death and not previously reimbursed. Payments
made to Peters' heirs or assigns, executor or administrator shall operate as a
complete release of the Company from the obligations under this Article.

<PAGE> 4

ARTICLE IV.
TERMINATION OF EMPLOYMENT
-------------------------

4.1 At any time, without cause, the Company may upon 30 days' prior written
notice, terminate the employment of Peters.

4.2 At any time the Company may immediately terminate the employment of Peters
for "cause," as defined below, upon written notice, and no other compensation
shall be payable to Peters after the date of such termination pursuant to the
terms of this Agreement except in accordance with Article VI hereof.

4.3 For purposes of this Agreement, "cause" means that Peters shall have: (a)
committed an intentional act of fraud, embezzlement or theft in connection with
his duties or in the course of his employment with the Company; (b)
intentionally and wrongfully damaged property of the Company, Grant, or any of
their respective subsidiaries; (c) intentionally and wrongfully disclosed secret
processes or confidential information of the Company, Grant, or any of their
respective subsidiaries; (d) intentionally violated the provisions of Article
VI; (e) breached any of his material covenants (including any of the covenants
in Articles VI, VII or VIII) contained in this Agreement, or (f) willfully
failed or refused to follow the lawful and proper directives of the board of
directors of the Company or Grant's chief executive officer, consistent with
Peters' position and within his power to do so, after receipt by Peters of a
resolution duly adopted by the board of directors of the Company or notice by
Grant's chief executive officer, specifying in reasonable detail the alleged
failure or refusal and after a reasonable opportunity for Peters to cure the
alleged failure or refusal. For purposes of this Agreement, an act or omission
on the part of Peters shall not be deemed "intentional," if it was due to an
error in judgment or negligence, but shall be deemed "intentional" if done by
Peters not in good faith and without reasonable belief that the act or omission
was in the best interests of the Company, Grant or their respective
subsidiaries.

4.4 At any time Peters may terminate his employment, upon 30 days' prior written
notice, for "good reason," as defined below.

4.5 For the purposes of this Agreement "good reason" means any of the following:
(a) the Company's material breach of this Agreement; (b) any reduction in
Peters' base salary or any material and adverse change to the benefits set forth
in Article 3.5; (c) the requirement by the Company or Grant that Peters be
permanently based anywhere other than Calgary, Alberta, Canada; or (d) the
Company or Grant materially diminishes Peters' responsibilities, title or
offices from those in effect at the date of this Agreement; provided that in
each of (a) - (d) of this Article 4.5, such action is taken without Peters'
consent.

4.6 The employment of Peters shall immediately terminate on the death of Peters,
or upon the voluntary resignation of Peters other than for good reason, in which
event Peters shall only be entitled to any and all base salary earned by Peters
through the date of his death or voluntary resignation, plus all reasonable
expenses actually incurred by Peters in accordance with Article 3.5(d) prior to
such death or voluntary resignation, and no other compensation shall be payable
to Peters after the date of such death or voluntary resignation pursuant to the
terms of this Agreement except, in the case of voluntary resignation, payments
pursuant to Article VI hereof.

<PAGE> 5

ARTICLE V.
PAYMENTS TO BE MADE ON TERMINATION
----------------------------------

5.1 In the event that the Company terminates Peters' employment for cause or
Peters voluntarily resigns for other than good reason, the Company shall within
30 days of termination of employment:

(a) make payment of any and all base salary earned by Peters
through the date of such termination of employment and not previously
paid;

(b) make payment of any and all reasonable expenses actually
incurred by Peters in accordance with Article 3.5(d) through the date
of termination of employment and not previously reimbursed; and

5.2 In the event that the Company terminates the employment of Peters without
cause, Peters terminates his employment for good reason prior to the expiration
of the term hereof, or upon the expiration of the term hereof, the Company
shall, within 30 days of termination of employment:

(a) make payment of any and all base salary earned by Peters
through the date of termination of employment and not previously paid;

(b) shall pay to Peters, a lump sum retiring allowance equal
to 200% of the base salary in effect as of the date of termination of
employment, less required withholdings;

(c) make payment of any and all reasonable expenses actually
incurred by Peters in accordance with Article 3.5(d) through the date
of termination of employment and not previously reimbursed; and

(d) make all payments pursuant to Article VI on the dates
which such amounts are due and payable under such Article.

5.3 For purposes of this Agreement the phrase "termination of employment" shall
mean (a) with respect to termination by the Company without cause or the
resignation of Peters for good reason, 30 days after the date of notice by the
Company or Peters, respectively, or (b) with respect to termination by the
Company for cause, resignation by Peters other than for good reason or the death
of Peters, the date of such termination, resignation or death, respectively.

5.4 The Company agrees that under Article 5.2 Peters shall have no obligation to
mitigate and there shall be no reduction of any amounts payable to Peters under
Article 5.2 on account thereof.

<PAGE> 6

ARTICLE VI.
COVENANT NOT TO COMPETE
-----------------------

6.1 Peters and the Company acknowledge that this covenant is being executed and
delivered by the parties in consideration of the covenants of the Company
contained in this Agreement and for other good and valuable consideration, the
receipt of which is hereby acknowledged.

6.2 Peters and the Company agree that for a period of 24 months following
termination of employment and regardless of the reason of such termination,
neither Peters nor any of his Affiliates (defined below) shall, directly or
indirectly, for himself or on behalf of any other person, corporation, firm,
partnership, limited liability company, association or any other entity (whether
as an individual, agent, servant, employee, employer, officer, director,
shareholder, partner, member, investor, principal, consultant or in any other
capacity): (a) engage or participate in any "competing business"anywhere in the
"restricted territories"; (b) induce any customers of the Company, Grant or any
of their respective subsidiaries to patronize any competing business; (c)
canvass, solicit or accept any competing business from any customer of the
Company, Grant or any of their respective subsidiaries; (d) engage, suggest or
assist in or influence the engagement or hiring by any competing business of any
employee of the Company, Grant or any of their respective subsidiaries or
otherwise cause or encourage any employee to terminate his or her employment
with the Company, Grant or any of their respective subsidiaries; or (e) request
or advise any customers of the Company, Grant or any of their respective
subsidiaries to withdraw, curtail or cancel such customer's business with the
Company, Grant or any of their respective subsidiaries. This Article 6.2 shall
not prohibit Peters and his Affiliates from purchasing or holding in the
aggregate, equity interests of up to 5% (or 10% if such equity interests are
listed on a national securities exchange or are regularly quoted in an
over-the-counter market by one or more members of the National Association of
Securities Dealers or similar organization) in any business entity or person in
competition, directly or indirectly, with the Company, Grant or any of their
respective subsidiaries.

6.3 The term "competing business" shall be defined to mean any business in
competition with the business or businesses conducted or planned to be conducted
(as set forth in any business plans memoranda or other documents existing at the
date of termination of employment) by the Company, Grant or their respective
subsidiaries as of the date of termination of employment, or in any business,
the products or services of which, at the date hereof or at any time during the
term of this Agreement, are sold or licensed by or marketed by the Company,
Grant or their respective subsidiaries.

6.4 The term "restricted territories," shall be defined to mean (x) the United
States, Canada, Bolivia, Brazil, Indonesia, Ecuador, Guatemala, Bangladesh,
Columbia, Peru, Venezuela, Trinidad and Yemen and (y) all of the specific
clients, whether within or outside of the geographic areas described in (x)
above, with which the Company, Grant or any of their respective subsidiaries had
any contact or for which the Company, Grant or any of their respective
subsidiaries had any responsibility (whether indirect, direct or supervisory) at
the time of termination of his employment or at any time during the two years
prior to his termination.

6.5 Peters and the Company recognize and expressly agree that this Agreement is
necessary and essential to protect the business conducted by the Company, Grant
and their respective subsidiaries, and that the area and duration of the
covenants contained herein are in all aspects reasonable and

<PAGE> 7

necessary to protect the Company, Grant and their respective subsidiaries, and
do not unduly oppress or restrict the occupational future of Peters upon
termination of his employment.

6.6 In addition to all other amounts payable to Peters herein and in
consideration of the covenants set forth in this Article VI, the Company shall
(a) compensate Peters for the 24 months of the non-competition period set forth
in Article 6.2 at a per annum rate equal to 50% of his base salary in effect
immediately prior to the termination of Peters' employment, payable on a current
basis in equal installments not less frequently than monthly, and (b) during
such 24 month period, Peters shall be entitled to participate in the health and
life insurance plans offered to employees of the Company on the same basis as if
Peters were a full-time employee of the Company.

6.7 If any court determines that any provision of the covenant not to compete
contained herein, or any part thereof is invalid or unenforceable, the remainder
of such covenant not to compete shall not thereby be affected and shall be given
full effect, without regard to the invalid provisions. If any court determines
any provision of the covenant not to compete, or any part thereof, is
unenforceable because of the duration or geographic scope of such provision the
parties agree that such court shall have the power to reduce the duration or
geographic scope of such provision, as the case may be, and the parties agree to
request the court to exercise such power, and in its amended form, such
provision shall be enforceable as between the parties.

6.8 If, pursuant to an action initiated by Peters, a court has limited the scope
of the non-compete as contemplated in Article 6.7 above, and following such
limitation, Peters engages in a competing business as originally defined, then
the Company's or Grant's obligation to continue to make payments or provide
benefits to or to permit the exercise of stock options or stock purchase
agreements by Peters shall terminate.

6.9 For the purposes of this Agreement, the term "Affiliate" means any person or
entity that, directly or indirectly, controls, is controlled by, or is under
common control with, the person or entity in question. "Affiliate" shall be
deemed not to include any adult children of Peters solely by virtue of their
status as Peters' children.

6.10 The provisions of this Article VI shall survive the termination of this
Agreement.

ARTICLE VII.
TRADE SECRETS AND CONFIDENTIAL INFORMATION
------------------------------------------

7.1 Peters acknowledges and agrees that in the performance of his duties of
employment, he will be brought into frequent contact, either in person, by
telephone or through the mails, with existing and potential clients of the
Company, Grant or their respective subsidiaries. Peters also agrees that trade
secrets and confidential information of the Company, Grant or their respective
subsidiaries, more fully described in Article 7.2 below, gained by Peters during
his association with the Company, Grant or their respective subsidiaries, have
been developed by the Company, Grant or their respective subsidiaries through
substantial expenditures of time, effort and money and constitute valuable and
unique property of the Company, Grant or their respective subsidiaries, as the
case may be. Peters further understands and agrees that the foregoing makes it
necessary for the protection of the business of the Company, Grant and their
respective subsidiaries that Peters not compete with the Company, Grant or their
respective subsidiaries during his employment and not compete with the Company,

<PAGE> 8

Grant or their respective subsidiaries for a reasonable period thereafter, as
further provided in this Agreement.

7.2 Peters will keep in strict confidence, and will not, directly or indirectly,
at any time during his employment or thereafter, disclose, furnish, disseminate,
make available or, except in the course of performing his duties of employment
hereunder, use any trade secrets or confidential business information of the
Company, Grant or their respective subsidiaries or their respective clients,
without limitation as to when or how Peters may have acquired such information.
Such confidential information shall include, without limitation, the Company's,
Grant's or their respective subsidiaries', client lists, client information,
terms of client contracts, any listing of names, addresses or telephone numbers,
pricing policies, financial statements, projections, marketing plans or
strategies, new business developments or plans, business acquisition plans and
business methods. Peters specifically acknowledges that all such confidential
information, whether reduced to writing, electronic media of any form, or
maintained in the mind or memory of Peters and whether compiled by the Company,
Grant or their respective subsidiaries and/or Peters, derives independent
economic value from not being readily known to or ascertainable by proper means
by others who can obtain economic value from its disclosure or use, that
reasonable efforts have been made by the Company, Grant and their respective
subsidiaries to maintain the secrecy of such information, that such information
is the sole property of the Company, Grant or their respective subsidiaries, as
the case may be, and that any retention and use of such information by Peters
during his employment with the Company (except in the course of performing his
duties and obligations hereunder) or after the termination of his employment
shall constitute a misappropriation of the Company's, Grant's or their
respective subsidiaries' trade secrets.

7.3 Upon termination of his employment, Peters will immediately return to the
Company, Grant or any of their respective subsidiaries, in good condition, all
property of the Company, Grant or any of their respective subsidiaries, as the
case may be, including without limitation, the originals and all copies of all
promotional materials, client lists, client information and all other materials
related to the Company's, Grant's or any of their respective subsidiary's
business. In the event that such items are not so returned, the Company and
Grant will have the right to recover such property in addition to the right to
charge Peters for all damages, costs, attorney's fees and other expenses
incurred in searching for, taking, removing and/or recovering such property.

7.4 The provisions of this Article VII shall survive the termination of this
Agreement.

ARTICLE VIII.
INVENTIONS
----------

8.1 Peters hereby assigns and agrees to assign to the Company, its successors,
assigns or nominees, all of his rights to any discoveries, inventions and
improvements, whether patentable or not, made, conceived or suggested, either
solely or jointly with others, by Peters while in the Company's employ, whether
in the course of his employment with the use of the Company's, Grant's or any of
their respective subsidiary's time, material or facilities or that is in any way
within or related to the existing or contemplated scope of the Company's,
Grant's or any of their respective subsidiary's, business. Any discovery,
invention or improvement relating to any subject matter with which the Company,
Grant or their respective subsidiaries were concerned during Peters' employment
and made, conceived or suggested by Peters, either solely or jointly with
others, within

<PAGE> 9

two years following termination of Peters' employment under this Agreement or
any successor agreements shall be irrebuttably presumed to have been so made,
conceived or suggested in the course of such employment with the use of the
Company's, Grant's or any of their respective subsidiary's time, materials or
facilities. Upon request by the Company or Grant with respect to any such
discoveries, inventions or improvements, Peters will execute and deliver to the
Company, at any time during or after his employment, all appropriate documents
for use in applying for, obtaining and maintaining such domestic and foreign
patents as the Company or Grant may desire, and all proper assignments therefor,
when so requested, at the expense of the Company, but without further or
additional consideration.

8.2 The provisions of this Article VIII shall survive the termination of this
Agreement.

ARTICLE IX.
NOTICE
------

9.1 Any notice required or permitted to be given hereunder shall be in writing
and may be given by facsimile transmission, mailing by prepaid postage in the
United States or Canadian mails or delivery of the same to such parties at the
following addresses:

If to Peters: Mitchell L. Peters
123 Woodpark Terrace S.W.
Calgary, Alberta
T2H 6E7
Facsimile: (403) 251-4598

If to the Company: Solid State Geophysical Inc.
Attn: Chairman of the Board
7309 Flint Road South East
Calgary, Alberta
T2H 1G3
Facsimile: (403) 255-9475

with a copy to: Grant Geophysical, Inc.
Attn: Chairman of the Board
16850 Park Row
Houston, TX 77084
Facsimile: (281) 398-9996

9.2 Any notice shall be deemed to be delivered on the first business day
following the date on which it was delivered or if mailed, shall be deemed to be
delivered on the third day following the date on which it was mailed, or if
faxed, shall be deemed to be delivered on the date it was faxed.

9.3 Either party may change the address to which notices to it are to be
addressed by notice to the other parties.

<PAGE> 10

ARTICLE X.
GENERAL
-------

10.1 The Company and Peters warrant and represent that they have the power and
authority to enter into this Agreement in the names, titles and capacities
herein stated.

10.2 A waiver by either party of any of the terms and conditions of this
Agreement in any instance shall not be deemed or construed to be a waiver of
such term or condition for the future, or of any subsequent breach thereof, or
of any other term and condition of the Agreement; provided, however, that any
waiver by the Company shall be of no effect whatsoever unless Grant has
consented in writing to such waiver.

10.3 This Agreement constitutes the entire agreement between the parties
respecting the matters contained herein, and there are no representations,
warranties, agreements or commitments between the parties hereto except as set
forth herein. This Agreement may be amended only by an instrument in writing
executed by the undersigned parties; provided, however, that such amendment
shall be of no effect whatsoever unless Grant has consented in writing to such
amendment.

10.4 This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware, United States of America.

10.5 The Company shall reimburse Peters or his estate for all reasonable legal
costs, charges, disbursements, fees and expenses actually incurred by him in
respect of independent legal counsel obtained by him solely in connection with
the negotiation and execution of this Agreement, together with an amount equal
to any income taxes by any governmental authority imposed on Peters solely in
respect of such reimbursement. Notwithstanding anything to the contrary
contained in this Article, the Company shall not be responsible and Peters shall
not be entitled to reimbursement for any legal costs, charges, disbursements,
fees or expenses whatsoever incurred by Peters after the Effective Date.

10.6 If any provision of this Agreement, as applied to either party or to any
circumstances, shall be adjudged by a court of competent jurisdiction to be void
or unenforceable, the same shall in no way effect any other provision of this
Agreement or the validity or enforceability of this Agreement.

10.7 Peters acknowledges and agrees that the remedy at law available to the
Company, Grant or their respective subsidiaries for breach of any of Peters'
obligations under this Agreement would be inadequate. Peters therefore agrees
that, in addition to any other rights or remedies that the Company, Grant or
their respective subsidiaries may have at law or in equity, temporary and
permanent injunctive relief may be granted in any proceeding which may be
brought to enforce any provision of this Agreement, without the necessity of
proof of actual damage.

10.8 Peters expressly acknowledges and agrees that Grant and its subsidiaries
shall be deemed and considered to be third-party beneficiaries of this Agreement
for all purposes.

10.9 Peters may not assign, transfer or convey this Agreement. This Agreement
and all of the Company's rights and obligations hereunder may be assigned or
transferred by it, in whole but not in part, to and shall be binding upon and
inure to the benefit of Grant or any "successor" of the

<PAGE> 11

Company but such assignment by the Company shall not relieve it of any of its
obligations hereunder. As used herein, the term "successor" shall mean only any
person, firm, corporation or other business entity which at any time by
reorganization, merger, consolidation, transfer, divestiture or otherwise shall
have acquired all or substantially all of the assets of the Company or to which
the Company shall have transferred all of the assets of the Company or to which
the Company shall have transferred all or substantially all of its assets. Any
such successor shall be deemed to be substituted for all purposes as the
"Company" hereunder.

IN WITNESS WHEREOF, the parties have executed this Agreement the day of November
1997.

SOLID STATE GEOPHYSICAL INC.

By: /s/ J. Richard Harris
---------------------------------
Name: J. Richard Harris
Title: Chairman of the Board

By: /s/ Shari Pusch
---------------------------------
Name: Shari Pusch
Title: Secretary

/s/ Mitchell L. Peters
------------------------------------
MITCHELL L. PETERS
/s/ Michael A. Deaver
- --------------------------------
Witness

<PAGE> 1
Exhibit 10.9

LOAN AGREEMENT
--------------

This LOAN AGREEMENT is entered into as of October 16, 1996, by
and among ELLIOTT ASSOCIATES, L.P., a Delaware limited partnership with offices
at 712 Fifth Avenue, New York, New York 10019 ("Elliott"); WESTGATE
INTERNATIONAL, L.P., a Cayman Islands limited partnership with offices at c/o
Midland Bank Trust Corporation (Cayman) Limited, Mary Street, Grand Cayman,
Cayman Islands, BWI ("Westgate"); SOLID STATE GEOPHYSICAL INC., a corporation
organized under the laws of Alberta, Canada, with offices located at 7309 Flint
Road S.E., Calgary, Alberta T2H 163 ("Parent"); and SOLID STATE GEOPHYSICAL
CORP., a Colorado corporation with offices at 7338 South Alton Way, Unit K,
Englewood, Colorado 80112 ("Borrower"). Elliott and Westgate are referred to
collectively hereinafter as the "Lenders."

W I T N E S S E T H:
- - - - - - - - - -

WHEREAS, Borrower and Parent desire to enter into certain
financing transactions with Lenders and Lenders desire to enter into such
transactions with Borrower and Parent as more specifically described herein; and

WHEREAS, contemporaneously with the execution of this Loan
Agreement, shares of common stock of Parent are being issued to Elliott in a
private placement in the aggregate amount equivalent to $3,000,000 pursuant to a
Subscription Agreement of even date among Parent and Lenders (the "Subscription
Agreement"); and

WHEREAS, the Parent is to make a rights offering to its
shareholders to produce proceeds equivalent to $4,000,000 (the "Rights
Offering");

NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, Borrower, Parent and Lenders hereby agree as
follows:

SECTION I: DEFINITIONS

1.1 DEFINITIONS. The following words shall have the following
meanings when used in this Loan Agreement. Terms not otherwise defined in this
Loan Agreement shall have the meanings attributed to such terms in the New York
Uniform Commercial Code (as amended from time to time). All references to dollar
amounts shall mean amounts in lawful money of the United States of America.

"ATCHAFALAVA DATA BANK" means the seismic data relating to the
Louisiana Accounts.

<PAGE> 2

"CANADIAN DATA BANK" means the seismic data relating to the
Canadian Accounts.

"CANADIAN ACCOUNTS" shall mean all presently existing and
hereafter arising accounts, contract rights and all other
forms of obligations arising out of the sale of assets and/or
the rendition of services, in each case related to the
gathering of seismic data in Canada pursuant to the agreements
described on Schedule 1.1 and also at the Doig River and
Dawson Creek locations.

"CHANGE OF CONTROL" shall mean (i) a substantial change in the
senior management of Parent; (ii) in excess of one-half of the
current members of the board of directors of Parent ceasing to
serve as directors over any twelve-month period; or (iii) any
person, or any persons acting together which, if U.S. law were
applicable, would constitute a group" for purposes of Section
13(d) of the U.S. Securities Exchange Act (excluding the
Parent and Borrower themselves), together with any affiliates
thereof, shall beneficially own (as defined in Rule 13d-3
under such Act) at least 50% of the total voting power of all
classes of capital stock of Parent or Borrower entitled to
vote generally in the election of directors.

"CLOSING DATE" shall mean the date of the Closing hereunder,
as provided in Section 6.4 below.

"DOLLARS" or "$" means U.S. dollars, unless otherwise
specified.

"EVENT OF DEFAULT" means and includes any of the Events of
Default set forth in Section 7.1.

"EXISTING DEBENTURE" means the subordinated convertible
debenture dated April 23, 1996 and issued in the name of
Lenders.

"EXISTING NOTES" means the two promissory notes from Borrower
to Westgate dated April 23, 1996 and September 16, 1996, and
payable on December 31, 1996 in the aggregate outstanding
principal amount of $4,000,000.

"HK BANK" shall mean Hongkong Bank of Canada.

"INDEBTEDNESS" means and includes without limitation all
Loans, and all other loans, advances, principal, interest,
premiums, fees, guaranties, obligations, debts, liabilities,
covenants and duties owing by Borrower and/or Parent to
Lenders (as well as all claims by Lenders against Borrower
and/or Parent relating to or arising from the transactions
contemplated by this Loan Agreement) of any kind, nature, or
description (i) whether now or hereafter existing, direct or
indirect, voluntary or involuntary, due or not due, absolute
or contingent, liquidated or unliquidated, (ii) whether
Borrower and/or Parent may be liable individually or jointly
with others, (iii) whether Borrower and/or Parent may be
obligated as a guarantor, surety, or otherwise, (iv) whether
recovery upon such Indebtedness may be or hereafter may become
barred by any statute of limitations, (v) whether such
Indebtedness may be or hereafter may become otherwise
unenforceable,

<PAGE> 3

and (vi) whether pursuant to or evidenced by this Loan
Agreement or the Related Documents, by any note or other
instrument, or by any other agreement between Lenders and
Borrower and/or Parent, irrespective of whether for the
payment of money.

"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any Person under any provision of the bankruptcy laws
of Canada, the United States or any province or state thereof,
as amended, or under any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, formal or
informal moratoria, compositions, extensions generally with
its creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.

"LOAN" or "LOANS" means and includes any and all loans and
financial accommodations from Lenders to Borrower and/or
Parent related to or arising out of the loan transactions
contemplated by this Loan Agreement, whether now or hereafter
existing, and however evidenced, including without limitation
the Senior Secured Debt Facility.

"LOAN AGREEMENT" means this Loan Agreement as this Loan
Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Loan
Agreement from time to time.

"LOUISIANA ACCOUNTS" means all presently existing and
hereafter arising accounts, contract rights, and all other
forms of obligations owing to Borrower pursuant to the Asset
Purchase Agreement dated February 23, 1996 between Ceco-Prakla
and Borrower, as the same may be amended or modified, arising
out of the sale of assets and/or the rendition of services by
Borrower or Parent (the "Geco- Prakla Agreement").

"MATURITY DATE" means October 30, 1999 or such other date as
may be mutually agreed upon in writing by all of the parties
hereto as the date for repayment in full of the Senior Secured
Debt Facility (subject to required prepayments under certain
circumstances).

"NEW NOTES" means the two promissory notes of even date from
Borrower to Lenders payable in the aggregate outstanding
principal amount of $9,000,000, in the forms of Exhibits A-1
and A-2 annexed.

"PERMITTED LIENS" shall have the meaning set forth in Section
4.1(e).

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

"RELATED DOCUMENTS" means and includes without limitation all
promissory notes, debentures, credit agreements, loan
agreements, guaranties, security agreements, lockbox

<PAGE> 4

agreements, assignments, collateral assignments and all other
instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the
Indebtedness.

"RIGHTS OFFERING" shall have the meaning ascribed thereto in
the Subscription Agreement.

"SECURITY AGREEMENT" means and includes without limitation any
agreements, promises, covenants, arrangements, understandings
or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a
Security Interest.

"SECURITY INTEREST" means and includes without limitation any
type of collateral security, whether in the form of a lien,
charge, mortgage, deed of trust, assignment, pledge, chattel
mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien or title retention
contract, lease or consignment intended as a security device,
or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.

"SENIOR SECURED DEBT FACILITY" shall mean the loan facility
described in Section 2.2.

"SOLVENT" means, with respect to any Person on a particular
date, that on such date (i) at fair valuations, all of the
assets of such Person are greater than the sum of the debts,
including contingent liabilities, of such Person, (ii) the
present fair salable value of the assets of such person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute
and matured, (iii) such Person does not intend to, and does
not believe that it will, incur additional debts beyond such
Person's ability to pay as such debts mature, and (iv) such
Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such
Person's assets would constitute unreasonably small capital
after giving due consideration to the prevailing practices in
the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount that, in
light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to
become an actual or matured liability.

SECTION 2:
SENIOR SECURED DEBT FACILITY: TERMS OF PAYMENT

2.1 Preamble. Borrower has requested that Lenders provide to
it loans and other financial accommodations and, subject to the terms and
conditions hereof and the Related Documents, Lenders have agreed to make such
loans to Borrower for such purposes as provided for herein. Borrower understands
and agrees that: (i) in granting, renewing, or extending any loan under this
Loan Agreement, Lenders are relying upon Borrower's and Parent's

<PAGE> 5

representations, warranties, and agreements, as set forth in this Loan
Agreement, and (ii) all such loans shall be and shall remain subject to
the terms and conditions of this Loan Agreement.

2.2 SENIOR SECURED DEBT FACILITY; ADVANCES AND REPAYMENTS.

(a) Senior Secured Debt Facility. On the date hereof,
Elliott agrees to lend to Borrower the sum of $5,400,000, and
Westgate agrees to lend to Borrower the sum of $3,600,000,
disbursed in accordance with the terms hereof and the terms of
the New Notes, which amounts (collectively, the "Senior
Secured Debt Amount") shall be repaid on the Maturity Date.
Simultaneously herewith, Lenders shall deliver the Senior
Secured Debt Amount by wire transfer to an account designated
by Borrower, and the Borrower shall deliver to Lenders the New
Notes duly executed and the documents required under Section
6. The Senior Secured Debt Amount shall be increased to
provide for the funding of Lenders' fees and costs incurred in
connection herewith which are unpaid as of the Closing Date.
The loan made pursuant to this subsection shall be referred to
in this Loan Agreement as the "Senior Secured Debt Facility."

(b) Mandatory Prepayments.

Until the New Notes are paid in full:

(i) Within five (5) days after Borrower's
(or Parent's) receipt of any proceeds with respect to
the Louisiana Accounts (excluding the $625,000 of
Louisiana Accounts owed to Borrower by Texaco with
respect to which Westgate previously released its
security interest) or Canadian Accounts, Borrower
and/or Parent shall pay over such proceeds to Lenders
as a prepayment under the New Notes.

(ii) On each anniversary hereof, Borrower
shall pay to Lenders (on a proportionate basis) the
aggregate sum of the excess, if any, of (A)
$1,000,000 over (B) the aggregate sum paid to Lenders
under the preceding clause (i) during the preceding
twelve-month period (excluding from such aggregate
sum referred to in this subclause (B) for purposes of
this clause (ii) only, all proceeds of Louisiana
Accounts and/or Canadian Accounts created prior to
the Closing Date but collected thereafter), which
payments shall be applied to the outstanding
principal balance of the New Notes.

(iii) Within five (5) days after the closing
of the Rights Offering, Borrower and/or Parent shall
pay to Lenders (on a proportionate basis) an amount
equal to all of the net proceeds thereof, which
payment shall be applied to the outstanding principal
balance of the New Notes.

(c) Use of Proceeds. Borrower shall use the proceeds
of the Senior Secured Debt Facility (i) first for the
immediate re-payment of the entire outstanding principal

<PAGE> 6

amount under the Existing Notes, together with accrued
interest and applicable fees, payable as of the Closing Date
and (ii) the balance for purposes of working capital for
Borrower and Parent, to pay down debt and to fund maintenance
capital expenditures and for the payment of all fees and
expenses as provided in Section 3.

2.3 INTEREST ON SENIOR SECURED DEBT FACILITY.

(a) Interest. The outstanding principal balance of the New
Notes shall initially bear interest at a rate equal to eighteen percent
(18%) per annum. After completion of the Rights Offering (and provided
that at least $4,000,000 in proceeds is raised by Parent in the Rights
Offering), the principal balance of the Indebtedness shall thereafter
bear interest at the rate of fifteen percent (15%) per annum. Interest
shall be calculated on the basis of a year consisting of 365 days and
paid for the actual number of days elapsed. Interest due under this
subsection 2.3(a) shall be payable quarterly, in arrears, on each July
1, October 1, January 1 and April 1.

(b) Overdue Interest; Default Rate. Overdue interest shall
itself bear interest at eighteen percent (18%) per annum, both before
and after the applicable Maturity Date.

2.4 TERM. This Loan Agreement shall be effective upon the
execution and delivery hereof by Borrower, Parent and Lenders, and shall
continue in full force and effect hereafter until all Indebtedness of Borrower
to Lenders has been repaid in full or this Loan Agreement is terminated by
Lenders as otherwise provided for herein. Notwithstanding the foregoing, Lenders
shall have the right to terminate their obligations hereunder immediately and
without notice upon the occurrence and continuance of an Event of Default. On
the date of termination, all Indebtedness shall become immediately due and
payable without notice or demand. No termination of this Loan Agreement,
however, shall relieve or discharge Borrower or Parent of their duties,
Indebtedness, or covenants hereunder, and Lenders' continuing security interest
in any collateral shall remain in effect until all Indebtedness has been
discharged.

2.5 PARTICIPATION RIGHT. Lenders shall have the following
rights with respect to any sale or issuance of any debt securities (including,
without limitation convertible debt securities) or any loan or similar financing
obtained by Parent or its subsidiaries in one transaction or a series of related
transactions in excess of $500,000 for a period of three (3) years from the date
hereof. Parent shall give the Lenders written notice of any such proposal to
issue debt securities or obtain financing and shall provide with such notice
copies of the applicable unsigned letter of intent or commitment letter, with
the economic terms of the transaction specified. Each Lender shall have three
(3) business days from receipt of such notice to deliver a written notice to
Parent that such Lender wishes to enter into such transaction, in whole or in
part, in lieu of the applicable third party(ies). Failure by such Lender to
respond within such period shall be deemed an irrevocable waiver of its rights
pursuant to this Section. If such Lender exercises such right, it must close the
transactions contemplated by the proposed issuance within thirty (30) business
days of the exercise of its right hereunder, provided that neither Parent nor
any of its subsidiaries delays such closing in any way. If such Lender fails to
close the transaction for any reason other than a breach by Parent or any of its
subsidiaries of its obligations hereunder, such Lender's right shall terminate
as to that transaction.

<PAGE> 7

SECTION 3: FEES AND EXPENSES

With respect to the Senior Secured Debt Facility, Borrower
shall assume and pay to Lenders upon demand all ordinary and necessary costs and
expenses incurred by Lenders in connection with the preparation and negotiation
of loan documents, the creation of the Senior Secured Debt Facility, due
diligence and the protection, administration and enforcement of Lenders' rights
granted under this Loan Agreement and the Related Documents, including without
limitation the following: (a) $2,000 for expenditures incurred in connection
with the further investigation of Borrower and Parent on behalf of the Lenders,
(b) all closing costs, fees and disbursements, and (c) all reasonable fees and
expenses of Lenders' legal counsel. Borrower and Parent shall further be
responsible for and reimburse Lenders or pay for all expenses pursuant to
Section 8.4 below. If not paid on demand or if mutually agreed upon, the amount
of such fees and expenses shall be added to the principal amount of the New
Notes. In the event the Borrower or Parent elects not to consummate the
transactions contemplated by this Loan Agreement and the Related Documents,
Borrower and/or Parent shall nevertheless reimburse Lenders for reasonable fees
and expenses of Lender's legal counsel, due diligence and other costs and
expenses incurred through the date on which Lenders are informed of such
election by Borrower and/or Parent.

SECTION 4: BORROWER'S AND PARENT'S
REPRESENTATIONS AND WARRANTIES

4.1 REPRESENTATIONS AND WARRANTIES. Borrower and Parent,
jointly and severally, represent and warrant to Lenders (and their successors
and assigns), as of the date of this Loan Agreement, that:

(a) Organization. The Borrower is, and shall at all
times hereafter be, a corporation which is duly organized,
validly existing, and in good standing under the laws of
Colorado. The Parent is, and shall at all times hereafter be,
a corporation which is duly organized, validly existing, and
in good standing under the laws of Alberta. Each of Borrower
and Parent has the full power and authority to own its
properties and to transact the business in which it is
presently engaged or presently proposes to engage. Each of
Borrower, Parent and each of Parent's other direct and
indirect subsidiaries is duly qualified as a foreign
corporation and is in good standing in all jurisdictions and
territories in which the failure to so qualify would have a
material adverse effect on its business or financial
condition.

(b) Authorization. The execution, delivery, and
performance of this Loan Agreement and all Related Documents
and the transactions contemplated hereby and thereby by each
of Borrower and Parent have been duly authorized by all
necessary action by Borrower and Parent; do not require the
consent or approval of any other Person, regulatory or
judicial authority or governmental body which has not been
obtained (excluding HK Bank and Input/Output Inc.); and do not
conflict with, result in

<PAGE> 8

a breach or violation of, or constitute a default under (i)
any provision of its articles of incorporation or
organization, or bylaws, or (subject to the required consent
of HK Bank and Input/Output Inc.) any agreement or other
instrument binding upon Borrower and Parent or (ii) any law,
governmental regulation, court decree, or order applicable to
Borrower or Parent.

(c) Financial Information. The financial statements
of Parent included within Parent's Annual Report for 1995
(audited) and subsequent third quarter report (unaudited)
dated May 31, 1996 present fairly Parent's financial condition
as of the dates of such statements, and contain no material
misstatements or omissions, and there has been no material
adverse change in Parent's financial condition subsequent to
such third quarter financial statements except as disclosed on
Schedule 4.1(o). Such financial statements have been prepared
in accordance with generally accepted accounting principles
consistently applied. Neither Borrower nor Parent has any
material contingent obligations except as disclosed in such
financial statements. Borrower's most recent public securities
filings have been delivered to Lenders and are true, accurate
and complete.

(d) Legal Effect. This Loan Agreement constitutes,
and any instrument or agreement required hereunder to be given
by Borrower or Parent when delivered will constitute, legal,
valid and binding obligations of Borrower and Parent,
enforceable against them in accordance with their respective
terms, subject to applicable bankruptcy and insolvency laws.

(e) Properties. Except for (a) liens for unpaid taxes
that are not yet due and payable, (b) purchase money security
interests and liens of lessors under capitalized leases, so
long as each such security interest or lien only secures the
purchase price of the asset, (c) liens and security interests
set forth on the attached Schedule 4. 1(e), (clauses (a), (b)
and (c) collectively hereinafter referred to as "Permitted
Liens"), each of Borrower and Parent owns and has good title
to all of its properties free and clear of all Security
Interests, liens, claims and other encumbrances, and has not
executed any security documents or financing statements
relating to such properties. All of Borrower's and Parent's
properties are titled in their legal names. Neither Borrower
nor Parent has used, or filed a financing statement (or other
evidence of a lien, charge or Security Interest) under, any
other names in any jurisdiction or territory for at least the
last five (5) years, other than "Solid State Exploration Ltd."

(f) Litigation and Claims. No litigation or claim
(including those for unpaid taxes) against Borrower and Parent
is pending or threatened, and no other event has occurred
which may materially adversely affect Borrower's or Parent's
financial condition or properties, other than litigation,
claims, or other events, if any, that are described on
Schedule 4. 1(f) annexed hereto.

<PAGE> 9

(g) Taxes. All tax returns and reports of Borrower
and Parent that are or were required to be filed, have been
filed, and all taxes, assessments and other governmental
charges have been paid in full.

(h) Lien Priority. Except for Permitted Liens,
neither Borrower nor Parent has entered into or granted any
Security Agreements, or permitted the filing or attachment of
any Security Interests on or affecting the Atchafalaya or
Canadian Data Bank or the Louisiana Accounts or Canadian
Accounts that would be prior or that may in any way be
superior to Lenders' Security Interests and rights in and to
such Collateral. At Closing, HK Bank shall subordinate to
Lenders all of its rights with regard to the Atchafalaya and
Canadian Data Banks and the Louisiana Accounts and Canadian
Accounts.

(i) Insolvency. Upon the closing under the
Subscription Agreement of even date, each of Borrower and
Parent will be Solvent. No transfer of property is being made
by Borrower or Parent and no obligation is being incurred by
Borrower or Parent in connection with the transactions
contemplated by this Loan Agreement or Related Documents with
the intent to hinder, delay, or defraud either present or
future creditors of Borrower or Parent.

(j) Investment Company Act/PUHCA. Neither Borrower
nor Parent is an "investment company" or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended. Neither
Borrower nor Parent is a "holding company," or a "subsidiary
company" of a "holding company or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company,"
within the meaning of the Public Utility Holding Company Act
of 1935, as amended.

(k) Regulations G, T and U. Neither Borrower nor
Parent is engaged principally, or as one of its important
activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T and U of the Board of Governors of
the Federal Reserve System).

(l) Environmental Compliance. Borrower and Parent are
in compliance in all material respects with all applicable
environmental laws and regulations.

(m) Location of aces and Records. The chief place of
business of Borrower and Parent, respectively, and the offices
where Borrower and Parent keep their records concerning their
business activities are located only at the principal offices
described in the first paragraph of this Loan Agreement.

(n) Information. All information heretofore or
contemporaneously herewith furnished by Borrower or Parent to
Lenders for the purposes of or in connection with this Loan
Agreement or any transaction contemplated hereby is, and all
information

<PAGE> 10

hereafter furnished by or on behalf of Borrower or Parent to
Lenders will be, true and accurate in every material respect
on the date as of which such information is dated or
certified. None of such information is or will be incomplete
by omitting to state any material fact necessary to make such
information not misleading. None of such information would
constitute a "material fact" or "material change" within the
meaning of applicable Alberta securities legislation with
respect to Parent that has not been generally disclosed.

(o) No Material Adverse Change. Since August 31,
1995, there has been no material adverse change in Borrower's,
Parent's or their affiliates' business, operations or
prospects, except as disclosed in Schedule 4. 1(o).

(p) No Event of Default. There will exist no Event of
Default upon the execution and delivery of this Loan
Agreement, and no facts or circumstances currently exist which
with notice or the passage of time or both would constitute an
Event of Default.

(q) Collected Accounts. Since July 2, 1996, Borrower
and Parent have made no sales giving rise to, and have
collected no monies with respect to, the Louisiana Accounts
and Canadian Accounts.

(r) No Canadian Activities. Borrower (i) does not
carry on business principally in Canada, or (ii) operate an
oil or gas well in Canada or extract petroleum or natural gas
from a natural accumulation thereof in Canada, or (iii)
extract minerals from a mineral resource in Canada.

4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
APPLICATION. Borrower and Parent understand and agree that
Lenders are relying upon the above representations and
warranties in making Loans hereunder. Borrower and Parent
further agree that the foregoing representations and
warranties shall be continuing in nature and shall remain in
full force and effect until such time as the Loans and the New
Notes shall be paid in full, or until this Loan Agreement
shall be terminated in the manner provided above whichever is
the last to occur.

SECTION 5: BORROWER'S AND PARENT'S COVENANTS

5.1 AFFIRMATIVE COVENANTS. Each of Borrower and Parent
covenants and agrees with Lenders that, while this Loan Agreement is in effect,
each shall:

(a) Information on Adverse Changes. Upon Lenders'
request, promptly inform Lenders in writing of (i) all
material adverse changes in Borrower's or Parent's financial
condition, (ii) all litigation and claims and all threatened
litigation and claims and all matters affecting Borrower or
Parent which could materially adversely affect the

<PAGE> 11

financial condition of Borrower or Parent, and (iii) any
event, occurrence or other matter which has had a materially
adverse effect or which could have a materially adverse effect
on the Atchafalaya and Canadian Data Banks, the Louisiana
Accounts or the Canadian Accounts. Borrower and Parent shall
assist Lenders in any litigation involving Lenders with
respect to any of the Louisiana Accounts or Canadian Accounts.

(b) Financial Records. Maintain its books and records
in accordance with generally accepted accounting principles,
applied on a consistent basis, and permit Lenders to examine
and audit Borrower's and Parent's books and records at
Lenders' discretion.

(c) Financial Statements. If requested by Lenders,
furnish Lenders with, as soon as available, but in no event
later than thirty (30) days after the end of each month,
Borrower's and Parent's balance sheet, profit and loss
statement and accounts receivable aging report each for the
period ended, prepared and certified as correct to the best
knowledge and belief by Borrower's and Parent's chief
financial officer or other officer or person acceptable to
Lenders. All financial reports required to be provided under
this Loan Agreement shall be prepared in accordance with
generally accepted accounting principles, applied on a
consistent basis, and certified by Borrower and Parent as
being true and correct.

(d) Additional Information. Furnish such additional
information and statements, lists of assets and liabilities,
agings of receivables and payables, schedules, budgets,
forecasts, tax returns, and other reports with respect to
Borrower's and Parent's financial condition and business
operations as Lenders may reasonably request from time to
time.

(e) Insurance. Maintain, or cause to be maintained,
fire and other risk insurance, public liability insurance, and
such other insurance as Lenders may reasonably require in
accordance with industry standards with respect to Borrower's
and Parent's properties and operations, in form, amounts,
coverages and with insurance companies reasonably acceptable
to Lenders. Borrower and Parent, upon request of Lenders, will
deliver to Lenders from time to time the policies or
certificates of insurance in form satisfactory to Lenders,
including stipulations that coverages will not be cancelled or
diminished without at least ten (10) days prior written notice
to Lenders.

(f) Insurance Reports. Furnish to Lenders, upon their
request, reports on each existing insurance policy showing
such information as Lenders may reasonably request, including
without limitation, the following: (i) the name of the
insurer; (ii) the risks insured; (iii) the amount of the
policy; (iv) the properties insured; (v) the then current
property values on the basis of which insurance has been
obtained, and the manner of determining those values; and (vi)
the expiration date of the policy.

<PAGE> 12

(g) Other Agreements. Comply with all material terms
and conditions of all other agreements, whether now or
hereafter existing, between Borrower (and/or Parent or other
affiliate) and any other party and notify Lenders immediately
in writing of any material default in connection with any
other such agreements.

(h) Loan Proceeds. Use all Loan proceeds solely as
provided for herein.

(i) Taxes, Charges and Liens.

(i) Pay and discharge when due all of their
indebtedness and obligations, including without
limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature,
imposed upon Borrower or Parent, or their properties,
income, or profits, prior to the date on which
penalties would attach, and all lawful claims that,
if unpaid, might become a lien or charge upon any of
Borrower's or Parent's properties, income, or
profits. Provided, however, Borrower and Parent will
not be required to pay and discharge any such
assessment, tax, charge, levy, lien or claim so long
as (A) the legality of the same shall be promptly
contested in good faith by appropriate proceedings,
and (B) Borrower or Parent shall have established on
its books adequate reserves with respect to such
contested assessment, tax, charge, levy, lien, or
claim in accordance with generally accepted
accounting practices. Borrower and Parent, upon
demand of Lenders, will furnish to Lenders evidence
of payment of the assessments, taxes, charges,
levies, liens and claims and will authorize the
appropriate governmental official to deliver to
Lenders at any time a written statement of any
assessments, taxes, charges, levies, liens and claims
against Borrower's or Parent's properties, income, or
profits.

(ii) Take all reasonable steps necessary to
remove all claims of liens (excluding Permitted
Liens) against the Atchafalaya and Canadian Data
Banks, Louisiana Accounts and Canadian Accounts or
any part thereof or any rights or interests therein.

(iii) Promptly file all tax returns and
reports which are overdue as of the date hereof, if
any, in all applicable jurisdictions and promptly
provide Lenders with a copy thereof together with
evidence of such filing and payment of all taxes
shown to be due on such tax returns.

(j) Performance. Perform and comply with all terms,
conditions, and provisions set forth in this Loan Agreement,
the Related Documents and all other instruments and agreements
between Borrower and/or Parent and Lenders in a timely manner,
and promptly notify Lenders if Borrower or Parent learns of
the occurrence of any event which constitutes an Event of
Default under this Loan Agreement.

<PAGE> 13

(k) Operations. Substantially maintain its present
executive and management personnel; conduct its business
affairs in a reasonable and prudent manner and in compliance
with all applicable foreign, federal, provincial, state and
municipal laws, ordinances, rules and regulations respecting
its properties, charters, businesses and operations; and
maintain any registration, if required, and all licenses,
permits, approvals and other regulatory matters, if any, on a
current basis and in good standing.

(l) Inspection. Permit employees or agents of Lenders
at their discretion to inspect the Atchafalaya Bay, Louisiana
project and all of the sites listed on Schedule 1.1.

(m) Additional Assurances. Make, execute and deliver
to Lenders such promissory notes, Security Agreements,
financing statements, instruments, documents and other
agreements as Lenders or their attorneys may reasonably
request to evidence and secure (as contemplated herein or in
any of the Related Documents) the Loans and to perfect all
Security Interests entered into by Borrower or Parent in favor
of Lender.

(n) Notice of Default. Immediately (and in no event
later than two (2) days thereafter) notify Lenders in writing
of any default for nonpayment or any other default or event of
default or notice thereof under any agreements or instruments
representing material indebtedness of Borrower or Parent or
any security interest therein, including without limitation
this Agreement or any Related Document.

(o) Lenders' Designee to Parent's Board of Directors.
Use its best efforts to cause the two persons nominated by the
Lenders to continue to be elected as directors of Parent in
accordance with Section 6.3 hereof.

5.2 NEGATIVE COVENANTS. Each of Borrower and Parent, jointly
and severally, covenants and agrees with Lenders that while this Loan Agreement
is in effect (unless the entire Indebtedness is simultaneously repaid in full),
neither shall without the prior written consent of lenders which may be withheld
for any reason in their sole discretion, or as otherwise provided for herein:

(a) Continuity of operations. (i) Engage in any
business activities substantially different than those in
which it is presently engaged, (ii) cease operations,
liquidate, merge or consolidate with any other entity, (iii)
pay any dividends on Parent's stock or purchase or retire any
of Parent's or Borrower's outstanding shares or alter or amend
Borrower's or Parent's capital structure (except pursuant to
the Rights Offering), or (iv) sell or otherwise dispose of any
material equity interest in Borrower.

(b) Dispositions. Sell, transfer or dispose of (i)
all or substantially all of Borrower's or Parent's assets or
(ii) any of Borrower's or Parent's material assets, except for
fair value as determined in an arm's length transaction.

<PAGE> 14

(c) Account Collections. Take any action or make any
statements which would in any way impede or delay the payment
or collection of the Louisiana Accounts or Canadian Accounts.

(d) Indebtedness to HK Bank. Accept any new secured
advances from HK Bank in excess of Cdn$2 million until the
Indebtedness is paid in full.

(e) Liens and Judgments. Except for Permitted Liens,
permit or suffer any claim, lien, charge, mortgage, deed of
trust or other encumbrances to attach to any of Borrower's or
Parent's assets or allow any judgment to be levied or any
other action to be instituted against Borrower or Parent,
unless there is a good faith dispute by Borrower or Parent as
to the validity of the lien or other encumbrance and Borrower
or Parent gives Lenders written notice thereof and deposits
with Lenders monies or a surety bond which Lenders determine
is an adequate reserve or bond therefor.

SECTION 6: CONDITIONS PRECEDENT; CLOSING

6.1 DELIVERY OF DOCUMENTS. In addition to any other conditions
precedent set forth herein or in any Related Document, Lenders' obligations to
make any Loan is subject to, in addition to delivery of this executed Loan
Agreement, the New Notes and payment of all loan fees and costs and expenses of
Lenders (including reasonable attorneys' fees), delivery of the following
documents:

(a) Assignments of Accounts. The duly executed
Assignment of Louisiana Accounts and Assignment of Canadian
Accounts, dated of even date herewith, in the forms annexed
hereto as Exhibits B-1 and B-2.

(b) Additional Security. The duly executed Security
Agreement in the form of Exhibit C.

(c) Debt Restructuring. Written confirmation from HK
Bank and Input/Output Inc. with respect to the restructuring
of outstanding debt on terms satisfactory to Lenders.

(d) Resolutions, Articles, By-Laws and Amendments to
Charters. Certified Board of Directors resolutions authorizing
the transactions contemplated hereby and under the Related
Documents, certified articles of incorporation and by-laws,
certificate of incumbency and a good standing certificate for
Borrower and Parent.

(e) Approvals and Consents. Approval of all necessary
governmental or regulatory agencies and exchanges (domestic or
foreign) which may have jurisdiction over (i) Borrower or
Parent or (ii) Lenders or their ability to enforce their
rights under

<PAGE> 15

this Loan Agreement or any of the Related Documents, and all
necessary consents of third parties.

(f) Opinions of Borrower's and Parent's Counsel. A
favorable opinion of Alberta, Colorado and New York counsel
for Borrower and Parent in form and substance acceptable to
Lenders regarding such matters as organization, authority and
execution, validity, perfection and enforcement of obligations
and security interests, regulatory approvals, and absence of
conflicts.

(g) Document Certification. Certification by Borrower
and Parent to Lenders that each agreement, document and
instrument delivered to Lenders in connection with its due
diligence with respect hereto, from whatever source, is a true
and correct copy of the original and has not been materially
amended or modified since the date of such delivery to Lender,
except to the extent such amendment or modification has been
furnished to Lenders.

(h) Warrants. Issuance by Parent to Lenders of
warrants ("Warrants") to purchase 125,000 common shares of
Parent at Cdn$1 .65 per share (such Warrants to replace
105,000 warrants previously issued to Lenders, which
previously issued warrants shall be delivered for cancellation
on the Closing Date).

(i) Subsection Closing. The consummation of the
transactions contemplated by the Subscription Agreement of
even date among Lenders and Parent.

(j) No Material Adverse Change. Absence of any
material adverse change affecting Borrower, Parent, their
subsidiaries, their businesses or the market price of the
Parent's stock.

(k) Guaranty. Execution and delivery to Lenders by
Parent of the Guaranty in the form annexed as Exhibit D.

(l) Canadian Security Agreements. Execution and
delivery to Lenders of the General Security Agreement annexed
as Exhibit E by Parent.

6.2 CONSENT OF HK BANK. In addition to the satisfaction of the
conditions precedent set forth in Section 6.1 above, and any condition precedent
set forth in any Related Document, Lenders' obligations to make any Loan is
subject to the written consent of HK Bank to this Loan Agreement and the
transactions contemplated hereby, including HK Bank's subordination of any lien
with respect to the Atchafalaya and Canadian Data Banks, Louisiana Accounts and
Canadian Accounts.

6.3 LENDERS' DESIGNEE TO PARENT'S BOARD OF DIRECTORS. In
addition to the satisfaction of the conditions precedent set forth in Sections
6. 1 and 6.2 above, and any condition precedent set forth in any Related
Document, Lenders' obligations to make any Loan

<PAGE> 16

is subject to Parent's acceptance of Lenders' nomination of one (1) individual,
reasonably acceptable to Parent, to the Board of Directors of Parent (which
person shall occupy a new sixth directorship). Parent shall use its best efforts
to procure that the person thereby nominated pursuant to this Section 6.3 shall
be elected as a Director as soon as reasonably practicable after being nominated
and to procure that such person and the person previously nominated by Lenders
shall not be removed from the Board except for cause or until the later of (i)
the repayment in full of the Loans or (ii) the date upon which the Lenders
collectively own less than 20% of the outstanding common stock of Parent. Until
the next annual meeting (scheduled for February 1997), the Parent shall have six
directors. One of the directors, to be designated by Lenders, shall not stand
for re-election and the Parent shall thereafter have no more than five (5)
directors (provided that such number may be increased to six (6) after the
Indebtedness is repaid in full). Lenders shall be entitled to select a
replacement for either of their two nominees who dies or becomes incapacitated
while the conditions referred to in this Section 6.3 remain in effect.

6.4 CLOSING. The Closing hereunder (the "Closing") shall be
held at the offices of Lender's counsel promptly upon satisfaction of the
foregoing conditions precedent (unless all parties agree to a different date
and/or place), provided that Lenders may in their discretion elect to terminate
this Agreement if (i) Borrower and Parent have not satisfied such conditions
prior to October 15, 1996 or (ii) Borrower and/or Parent otherwise delay the
Closing after such conditions are satisfied.

SECTION 7: EVENTS OF DEFAULT AND REMEDIES

7.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default under this Loan Agreement:

(a) Default on Indebtedness. Failure of Borrower or
Parent to make any payment when due on the Loans or failure of
Borrower or Parent to pay the entire outstanding balance due
hereunder on the Maturity Date.

(b) Other Defaults. Failure of Borrower or Parent to
comply with or to perform when due any term, obligation,
covenant or condition contained in this Loan Agreement or in
any of the Related Documents, or failure of Borrower or Parent
to comply with or to perform any other term, obligation,
covenant or condition contained in any other agreement between
Lenders and Borrower and/or Parent. If any failure, other than
a failure to pay money, is curable and if Borrower or Parent,
as applicable, has not been given a notice of a similar
breach, it may be cured (and no Event of Default will have
occurred) if Borrower or Parent, after receiving written
notice from Lenders demanding cure of such failure, cures the
failure within ten (10) days.

(c) Default in Favor of Third Parties. Any material
default by Borrower, Parent or any affiliate or subsidiary of
Borrower or Parent (which extends beyond any

<PAGE> 17

applicable cure period) under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other
agreement in favor of any creditor or person that may
materially affect any of Borrower's or Parent's property or
their ability to repay the Loans or perform Borrower's or
Parent's respective obligations under this Loan Agreement or
any of the Related Documents, including, without limitation,
any uncured default under any agreement giving rise to the
Louisiana Accounts or Canadian Accounts.

(d) False Statements. Any warranty, representation,
or statement made or furnished to Lenders by or on behalf of
Borrower or Parent under this Loan Agreement or the Related
Documents is false or misleading in any material respect,
either now or at the time made or furnished.

(e) Defective Collateralization. This Loan Agreement
or any of the Related Documents ceases to be in full force and
effect (including failure of any Security Agreement to create
a valid and perfected Security Interest) at any time and for
any reason, or any person shall seek to materially limit,
modify or revoke such agreement.

(f) Insolvency. The dissolution or termination of
Borrower's or Parent's existence as a going business,
Insolvency of Borrower or Parent, appointment of a receiver
for any part of Borrower's or Parent's property, or any
assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any Insolvency Proceeding by
or against Borrower or Parent.

(g) Creditor Proceedings. Commencement of
foreclosure, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower
or Parent against the collateral securing any or all of the
Indebtedness, including, without limitation, a garnishment,
attachment, levy or the like.

(h) Sale of Collateral. The sale or transfer, without
the Lenders' prior written consent which may be withheld for
any reason m Lenders' sole discretion, of all or any material
part of the collateral securing the Indebtedness (except in
the ordinary course of business).

(i) Material Adverse Change. Lenders shall have
determined in good faith (which determination shall be
conclusive) that (i) a material adverse change has occurred in
the business, operations or financial condition of Borrower
and/or Parent, (ii) the prospect of payment or performance of
any obligation or agreement of Borrower and/or Parent
hereunder or under the New Notes is materially impaired, or
(iii) a material adverse change has occurred in the condition
or value of the collateral securing the Indebtedness
(including, without limitation, the Louisiana Accounts or
Canadian Accounts).

<PAGE> 18

(j) Change of Control. Borrower or Parent undergoes a
"Change of Control" without the prior written consent of
Lenders (which may be withheld in their discretion). A "Change
of Control" shall not be a curable default.

(k) Delisting. Parent's common stock ceases to be
listed on the Toronto Stock Exchange.

(l) Directors. Either of Lenders' designees on the
Parent's board of directors is removed or the number of
Parent's directors exceeds six (6) before the next annual
meeting or five (5) thereafter.

(m) Rights Offering. Parent's failure to raise at
least $4,000,000 in proceeds from the Rights Offering on or
prior to January 15, 1997 and to prepay at least $4,000,000 to
Lenders within five (5) days after the Closing thereof.

7.2 EFFECT OF AN EVENT OF DEFAULT. If any Event of Default
shall occur, all commitments and obligations of Lenders under this Loan
Agreement or the Related Documents or any other agreement between Lenders on the
one hand, and Borrower and/or Parent, on the other hand, immediately will
terminate and, at Lender's option, all Loans immediately will become due and
payable, all without notice of any kind to Borrower or Parent, except that in
the case of an Event of Default of the type described in subsection 7.1(f)
above, such acceleration shall be automatic and not optional. Upon the
occurrence of any Event of Default and at any time thereafter, Lenders may, at
their option, but without any obligation to do so, and in addition to any other
right Lenders may have, do any one or more of the following without notice to
Borrower or Parent: (a) institute appropriate proceedings to enforce the
performance of this Loan Agreement; (b) withhold further disbursement of any
Loan hereunder; (c) expend funds necessary to remedy the Event of Default; (d)
take possession of the Atchafalaya or Canadian Data Banks, the Louisiana
Accounts or the Canadian Accounts or any proceeds and records thereof; (e)
accelerate maturity of the New Notes and/or Indebtedness and demand payment of
all sums due thereunder; (f) bring an action on the New Notes and/or
Indebtedness; (g) foreclose on any other collateral securing the Indebtedness in
any manner available under law; and (h) exercise any other right or remedy which
it has under the New Notes or Related Documents, or which is otherwise available
at law or in equity or by statute.

SECTION 8: MISCELLANEOUS PROVISIONS

8.1 ENTIRE AGREEMENT; AMENDMENTS. This Loan Agreement,
together with the Related Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth in this Loan Agreement. No
alteration of or amendment to this Loan agreement shall be effective unless
given in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.

8.2 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THE VALIDITY
OF THIS LOAN AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND

<PAGE> 19

ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, U.S.A. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY AGREE (1) THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT MAY BE TRIED
AND LITIGATED IN THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK CITY AND THAT
THE PARTIES SHALL BE SUBJECT TO THE JURISDICTION OF SUCH COURTS AND (2) THAT
SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, SHALL CONSTITUTE
PERSONAL SERVICE. EACH OF BORROWER, PARENT AND LENDERS WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 8.2. BORROWER, PARENT AND LENDERS HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS LOAN AGREEMENT, THE RELATED DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING WITHOUT LIMITATION
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWER, PARENT AND LENDERS REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

8.3 CAPTION HEADINGS. Caption headings in this Loan Agreement
are for convenience purposes only and are not to be used to interpret or define
the provisions of this Loan Agreement.

8.4 COSTS AND EXPENSES. Borrower and Parent agree to pay upon
demand all of Lenders' out-of-pocket expenses, including reasonable attorney's
fees incurred in connection with the enforcement of this Loan Agreement or the
Related Documents. Lenders may pay someone else to help collect the Loans and to
enforce this Loan Agreement, and Borrower and Parent will pay that amount. This
includes, subject to any limits under applicable law, Lenders' attorneys'
reasonable fees and legal expenses, whether or not there is a lawsuit, including
reasonable attorneys' fees for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Borrower and Parent also will pay any court
costs, in addition to all other sums provided by law.

8.5 NOTICES. All notices required to be given under this Loan
Agreement shall be given in writing and shall be effective when actually
delivered or three (3) days after being deposited in the United States or
Canadian mail, first class, postage prepaid, addressed to the party to whom the
notice is to be given or, if via facsimile, when sent via facsimile transmission

<PAGE> 20

to the party to whom the notice is to be given and confirmation of such
transmission has been received, at the address and/or facsimile number shown
below:

If to Borrower: Solid State Geophysical Corp.
7338 South Alton Way, Unit K
Englewood, Colorado 80112
Facsimile No: (303) 770-8948

If to Parent: Solid State Geophysical Inc.
7309 Flint Road S.E.
Calgary, Alberta T2H 1G3
Attn: Mr. Mitchell Peters, President
Facsimile No: (403) 255-9388

in each case with
a copy to: Rodger D. Conner, Esq.
Conner & Conner
#2, 838-5th Street
Canmore, Alberta T0L 0M0
Facsimile No: (403) 678-2533

If to Elliott: Elliott Associates, L.P.
712 Fifth Avenue
New York, New York 10019
Facsimile No: (212) 974-2092
Attn: Jon Pollock

If to Westgate: c/o Midland Bank Trust
Corporation (Cayman) Limited
Mary Street
Grand Cayman, Cayman Islands, BWI
Facsimile No: (809) 949-7634

in each case with
a copy to: Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue, 18th
Floor New York, New York 10176
Facsimile No: (212) 986-8866
Attn: Martin D. Sklar, Esq.

Any party may change its address for notices under this Loan Agreement by giving
formal written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Borrower and
Parent agree to keep Lenders informed at all times of their current addresses.

<PAGE> 21

8.6 SEVERABILITY. If a court of competent jurisdiction funds
any provision of this Loan Agreement to be invalid or unenforceable as to any
person or circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Loan Agreement
in all other respects shall remain valid and enforceable and such offending
provision shall not be affected in any other jurisdiction.

8.7 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained by or on behalf of Borrower or Parent shall bind its successors and
assigns and shall inure to the benefit of Lenders, their successors and assigns.
Borrower and Parent shall not, however, have the right to assign their rights
under this Loan Agreement or the Related Documents or any interest herein or
therein, without the prior written consent of Lenders which may be withheld for
any reason in Lenders' sole discretion. This Loan Agreement shall be freely
assignable by Lenders, in whole or in part.

8.8 SURVIVAL. All warranties, representations, and covenants
made by Borrower and/or Parent in this Loan Agreement or in any certificate or
other instrument delivered by Borrower or Parent to Lenders under this Loan
Agreement shall be considered to have been relied upon by Lenders and will
survive the making of the Loan and delivery to Lenders of the Related Documents
as provided in Section 4.2 above, regardless of any investigation made by
Lenders or on Lenders' behalf.

8.9 TIME IS OF THE ESSENCE. Time is of the essence in the
performance of this Loan Agreement.

8.10 INDEMNITY. In addition to the payment of expenses
pursuant to Section 3, except to the extent caused directly by Lenders' gross
negligence or wilful misconduct, Borrower and Parent agree to indemnify, pay and
hold Lenders and the officers, partners, directors, employees, agents and
affiliates of Lenders (collectively, the "indemnitees") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel) that may be imposed on, incurred by, or asserted
against any indemnitee, in any manner relating to or arising out of the Loans,
this Loan Agreement, any Related Document or any other agreements executed and
delivered by Borrower or Parent in connection herewith or the use or intended
use of the proceeds of any Loan or in connection with or arising out of any
investigation, proceeding or litigation, whether or not such indemnitee is a
party hereto or thereto. This indemnification shall survive the satisfaction and
payment of the Indebtedness and termination of this Loan Agreement.

8.11 WAIVER. Lenders shall not be deemed to have waived any
rights under this Loan Agreement unless such waiver is given in writing and
signed by Lenders. No delay or omission on the part of Lenders in exercising any
right shall operate as a waiver of such right or any other right. A waiver by
Lenders of a provision of this Loan Agreement shall not prejudice or

<PAGE> 22

constitute a waiver of Lenders' right otherwise to demand strict compliance with
that provision or any other provision of this Loan Agreement. No prior waiver by
Lenders, nor any course of dealing between Lenders and Borrower or Parent shall
constitute a waiver of any of Lenders' rights or of any obligations of Borrower
or Parent as to any future transactions. Whenever the consent of Lenders is
required under this Loan Agreement, the granting of such consent by Lenders in
any instance shall not constitute continuing consent in subsequent instances
where such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lenders.

8.12 CONSTRUCTION. Borrower and Parent agree that any
ambiguities in this Loan Agreement or any Related Document shall not be
construed against Lenders merely because such documents were drafted primarily
by Lenders' counsel, Borrower and Parent having been fully represented by
counsel.

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

SOLID STATE GEOPHYSICAL CORP.,
A COLORADO CORPORATION

By: /s/ Mitchell L. Peters
-------------------------------------
Name: Mitchell L. Peters
Title: President

SOLID STATE GEOPHYSICAL INC.,
AN ALBERTA CORPORATION

By: /s/ Mitchell L. Peters
-------------------------------------
Name: Mitchell L. Peters
Title: President

ELLIOTT ASSOCIATES, L.P., A
DELAWARE LIMITED PARTNERSHIP

By: /s/ Paul E. Singer
-------------------------------------
Name: Paul E. Singer
Title: General Partner

<PAGE> 23

WESTGATE INTERNATIONAL, L.P.,
A CAYMAN ISLANDS LIMITED PARTNERSHIP

By: MARTLEY INTERNATIONAL, INC.,
as Attorney-in-Fact

By: /s/ Paul E. Singer
------------------------------
Paul E. Singer, President

<PAGE> 1

Exhibit 10.10

A promissory note to Elliott in the following form was executed by the U.S.
Subsidiary on the following dates in the principal amount and with the maturity
date as shown:

Date Principal Amount Maturity Date*
- ---- ---------------- --------------

February 10, 1997 $2,000,000 August 10, 1997
February 19, 1997 2,000,000 August 19, 1997
July 2, 1997 3,000,000 August 15, 1997
July 22, 1997 1,000,000 August 15, 1997
September 4, 1997 2,000,000 November 30, 1997
October 17, 1997 2,500,000 November 30, 1997

*The February 10, 1997 and February 19, 1997 promissory notes required that
one-half of the principal be paid on May 10, 1997 and May 19, 1997,
respectively. All other promissory notes required all of the principal to be
paid on the maturity date as shown.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

PROMISSORY NOTE
---------------

U.S. $________________ Dated: _________________

FOR VALUE RECEIVED, the undersigned, SOLID STATE GEOPHYSICAL
CORP., a corporation organized under the laws of Colorado ("Maker"), promises to
pay on each Maturity Date (as defined below) to the order of ELLIOTT ASSOCIATES,
L.P. a Delaware limited partnership ("Lender"), with offices at 712 Fifth
Avenue, New York, New York 10019, in lawful money of the United States of
America, the aggregate principal amount of ______________________ Dollars
($____________), together with interest on the aggregate unpaid principal
balance hereof from time to time outstanding from the date hereof until paid in
full. All loans and all payments of principal shall be recorded by the Lender in
its records. Capitalized terms used herein shall, unless otherwise defined
herein, have the meanings ascribed thereto in the Loan Agreement (as it may be
amended from time to time, the "Loan Agreement") among, inter alia, Maker and
Lender dated October 16, 1996.

VARIABLE PRINCIPAL AMOUNT. The principal amount hereof may
(but only if Lender agrees in its sole discretion) be increased from time to
time in connection with loans made by Lender for accrued interest, fees and
expenses, and shall be reduced by all prepayments made hereunder.

PAYMENT; INTEREST. The sum of $________*, together with
accrued but unpaid interest thereon and any reimbursable fees and expenses,
shall be due and payable on ___________* and the remaining $_________* of
principal, together with accrued but unpaid interest thereon and any
reimbursable fees and expenses, shall be due and payable on _____________*
(each a "Maturity Date"). Maker will pay Lender all amounts due hereunder at
Lender's address shown above or at such other place as Lender may designate in
writing. If the day upon which a payment is to be made is a Saturday, Sunday or
legal holiday in New York City, such payment shall be made on the next
succeeding business day.

All principal amounts outstanding hereunder shall bear
interest at an interest rate equal to fifteen percent (15%) per annum. Interest
shall be calculated on the basis of a year consisting of 365 days and paid for
the actual number of days elapsed. Unless otherwise agreed or required by
applicable law, payments will be applied first to any unpaid collection

<PAGE> 2

costs, then to due and unpaid interest and fees and any remaining amount to
principal. Overdue interest shall itself bear interest at fifteen percent (15%)
per annum until paid.

OPTIONAL PREPAYMENT. Maker may pre-pay without penalty all or
a portion of the amount owed hereunder, in amounts of at least $100,000.

TAXES. All payments by the Maker of principal of, and interest
on this Note shall be made free and clear of and without deduction for any
present or future income, excise, stamp or franchise taxes and other taxes,
fees, duties, withholdings or other charges of any nature whatsoever imposed by
any taxing authority, but excluding franchise taxes and taxes imposed on or
measured by the Lender's net income or receipts (such non-excluded items being
called "Taxes"). In the event that any withholding or deduction from any payment
to be made by the Maker hereunder is required in respect of any Taxes pursuant
to any applicable law, rule or regulation, then the Maker will:

(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;

(b) promptly forward to the Lender an official receipt or
other documentation satisfactory to the Lender evidencing such
payment to such authority; and

(c) pay to the Lender such additional amount or amounts as is
necessary to ensure that the net amount actually received by
the Lender will equal the full amount the Lender would have
received had no such withholding or deduction been required.

Moreover, if any present or future taxes, fees, duties, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, including
franchise taxes and taxes imposed on or measured by the Lender's net income or
receipts ("Further Taxes") are directly or indirectly asserted against the
Lender with respect to any payment of any additional amount described in clause
(c) and received by the Lender hereunder, the Lender may pay such Further Taxes
and the Maker will promptly pay to the Lender, at the time interest is paid,
such additional amounts (including all penalties, interest or expenses) that the
Lender specifies as necessary to preserve the after-tax yield that the Lender
would have received if such Taxes or Further Taxes had not been imposed.

If the Maker fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Maker shall indemnify the
Lender for any incremental Taxes, interest or penalties that may become payable
by Lender as a result of any such failure. If the Lender subsequently receives a
refund or rebate or becomes entitled to a credit with respect to any Taxes in
respect of which an additional amount has been paid to Lender, the Lender will
pay the amount of any such

<PAGE> 3

refund, rebate or credit to the Maker to the extent that such rebate or credit,
as applicable, does not exceed the additional amounts paid by the Maker to the
Lender.

DEFAULT. Maker will be in default if Maker breaches any
representation, warranty or covenant hereunder. Maker fails to pay any amounts
when due or an Event of Default occurs under the Loan Agreement.

LENDER'S RIGHTS. Upon any default hereunder, in addition to
Lender's rights under the Loan Agreement upon default (which rights shall apply
hereto), Lender may declare the entire unpaid principal balance on this Note and
all accrued and unpaid interest immediately due, without notice, and then Maker
will pay that amount. Lender may hire or pay someone else to help collect this
Note if Maker does not pay. Maker also will pay Lender the costs of any such
collection. This includes, subject to any limits under applicable law, Lender's
reasonable attorneys' fees and legal expenses whether or not there is a lawsuit,
including reasonable attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals and any anticipated post- judgment collection services. If
not prohibited by applicable law, Maker also will pay any court costs, in
addition to all other sums provided by law.

COLLATERAL; LOAN AGREEMENT. This Note is secured by (i) the
Assignments of Louisiana Accounts Receivable and Canadian Accounts Receivable by
Maker and Parent in favor of Lender; and (ii) the Security Agreement between
Maker and Lender, each dated October 16, 1996. This Note is also guaranteed by
the Parent, pursuant to the Guarantee dated October 16, 1996, which Guaranty is
secured by a General Security Agreement dated October 16, 1996, governed by
Alberta law.

SAVINGS CLAUSE. In no event shall the amount of interest paid
hereunder exceed the maximum rate of interest on the unpaid principal balance
hereof allowable by applicable law. If any sum is collected in excess of the
applicable maximum rate, the excess collected shall be applied to reduce the
principal debt. If the interest actually collected hereunder is still in excess
of the applicable maximum rate, the interest rate shall be reduced so as not to
exceed the maximum amount allowable under law.

GENERAL PROVISIONS. The validity of this Note, its
construction, interpretation, and enforcement, and the rights of the parties
hereto shall be determined under, governed by, and construed in accordance with
the internal laws of the State of New York. The parties hereby irrevocably and
unconditionally agree to be subject to the non-exclusive jurisdiction of the
state and federal courts in New York, New York. Lender may delay or forego
enforcing any of its rights or remedies under this Note without losing them.
Maker and any other person who signs, guarantees or endorses this Note, to the
extent allowed by law, waive presentment, demand for payment, protest, notice of
dishonor and all other notices whatsoever. Upon any change in the terms of this
Note, and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may renew,

<PAGE> 4

extend (repeatedly and for any length of time) or modify the loan evidenced
hereby, or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender's security interest in any collateral; and take
any other action deemed necessary by Lender without the consent of or notice to
anyone. LENDER AND MAKER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION,
PROCESSING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR MAKER AGAINST THE OTHER.

PRIOR TO SIGNING THIS NOTE, MAKER HAS READ AND UNDERSTANDS ALL
THE PROVISIONS OF THIS NOTE. MAKER AGREES TO THE TERMS OF THIS NOTE AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS NOTE.

SOLID STATE GEOPHYSICAL CORP.,
a Colorado corporation

By:
------------------------------------------
Name:
Title:
Address: Suite 150
3200 Wilcrest
Houston, Texas 77042

<PAGE> 1
Exhibit 10.11

[ELLIOTT LETTERHEAD]

June 17, 1997

VIA FACSIMILE/MAIL
- ------------------

SOLID STATE GEOPHYSICAL CORP.
3200 Wilcrest, Suite 150
Houston, Texas 77042

SOLID STATE GEOPHYSICAL INC
7309 Flint Road S.E.
Calgary, Alberta T2H 163
Canada

Attention: Mitch Peters

RE: EXTENSION OF PROMISSORY NOTES
-----------------------------

Dear Mitch:

We refer to the two $2,000,000 Promissory Notes dated February 10, 1997
and February 19, 1997, respectively (the "Notes"), from Solid State Geophysical
Corp., a Colorado corporation, to Elliott Associates, L.P. ("Lender").

Lender hereby agrees that the first Maturity Date under each of the
Notes shall be further extended from June 15, 1997 until August 15, 1997.

All other terms of the Notes and all other agreements among the parties
referenced herein shall remain in full force and effect.

Very truly yours,

ELLIOTT ASSOCIATES, L.P.

By: /s/ Paul E. Singer
-----------------------------
Paul E. Singer
General Partner

cc: Rodger Conner, Esq. (via fax/mail)

<PAGE> 1

Exhibit 10.12

[SOLID STATE LETTERHEAD]

September 4, 1997

Elliott Associates, L.P.
712 Fifth Avenue, 36th Floor
New York, New York 10019

Westgate International, L.P.
c/o Midland Bank Trust Corporation (Cayman) Limited
Mary Street
Grand Cayman, Cayman Islands
BWI

Re: New Loan

Dear Sirs:

We refer to the Loan Agreement ("Loan Agreement") dated as of
October 16, 1996, by and among Elliott Associates, L.P., a Delaware limited
partnership ("Elliott"), Westgate International, L.P., a Cayman Islands limited
partnership ("Westgate"), Solid State Geophysical Inc., an Alberta corporation
("Parent") and Solid State Geophysical Corp., a Colorado corporation
("Subsidiary") and to the documents related thereto.

At the request of Subsidiary, Elliott has agreed to
simultaneously herewith advance to Subsidiary an additional U.S. $2,000,000 (the
"New Loan") as evidenced by the Promissory Note annexed hereto. U.S. $1,000,000
of the New Loan is being advanced simultaneously herewith, while the other U.S.
$1,000,000 will be advanced at Elliott's discretion, and Elliott may refuse to
make all or part of such advance for any reason or for no reason. The New Loan
is an expansion of the Senior Secured Debt Facility referred to in the Loan
Agreement and constitutes "Indebtedness" thereunder, under the July 2, 1997
letter agreement among the parties hereto (the "July Agreement"), and under the
Guaranty.

The parties have also agreed to extend to November 30, 1997
the maturity date under the two U.S. $2,000,000 Promissory Notes dated February
10, 1997 and February 19, 1997, the U.S. $3,000,000 Promissory Note dated July
2, 1997 and the U.S. $1,000,000 Promissory Note dated July 22, 1997, each from
Subsidiary to Elliott, such extension to be effective as of August 15, 1997.

Each of the Subsidiary and Parent repeats each of the
representations and warranties contained in the Loan Agreement, Security
Agreement, Parent Guaranty and General Security

<PAGE> 2

Agreement as if made on the date hereof including, when applicable, as to the
New Loan and this Agreement, except as disclosed in the Disclosure Schedule
annexed to the July Agreement.

Subsidiary and Parent agree to deliver the following documents
within 15 days:

(i) Legal opinions of Colorado, Texas and Canadian
counsel addressed to Elliott relating to the New Loan
in a form similar to those delivered at the first
closing under the Loan Agreement.

(ii) Consent of the Hongkong Bank of Canada to the
application of all funds raised from the issuance of
securities by the Parent (or any affiliates) to
reduction of the Indebtedness (including without
limitation the New Loan), as described in the July
Agreement; and

(iii) Consent of Input/Output, Inc. to the application of
certain funds raised from the issuance of securities
by the Parent (or any affiliates) to reduction of the
Indebtedness (including without limitation the New
Loan) after payment to Input/Output, Inc. of certain
funds, as described in the July Agreement.

We agree to reimburse Westgate and Elliott for all reasonable
costs and expenses in connection with the preparation and negotiation of the
documents for the New Loan.

This letter agreement shall be governed by the internal laws
of the State of New York, U.S.A.

Kindly acknowledge your agreement with the foregoing by
signing below.

Respectfully yours,

Accepted and Agreed To:

SOLID STATE GEOPHYSICAL CORP. WESTGATE INTERNATIONAL, L.P.

/s/ Mitchell L. Peters By: MARTLEY INTERNATIONAL, INC.
Mitchell L. Peters, President & Director as Attorney-In-Fact

/s/ Shari J. Pusch /s/ Paul E. Singer
Shari J. Pusch, Secretary-Treasurer --------------------------------
Paul E. Singer, President

SOLID STATE GEOPHYSICAL INC. ELLIOTT ASSOCIATES, L.P.

/s/ Mitchell L. Peters By: /s/ Paul E. Singer
Mitchell L. Peters, President & CEO --------------------------------
Paul E. Singer, General Partner

/s/ Shari J. Pusch
Shari J. Pusch, Secretary

<PAGE> 1

Exhibit 10.13

[SOLID STATE LETTERHEAD]

October 17, 1997

Elliott Associates, L.P.
712 Fifth Avenue, 36th Floor
New York, New York 10019

Westgate International, L.P.
c/o Midland Bank Trust Corporation (Cayman) Limited
Mary Street
Grand Cayman, Cayman Islands
BWI

Re: New Loan

Dear Sirs:

At the request of Subsidiary, Elliott has agreed to
simultaneously herewith advance to Subsidiary an additional U.S. $2,500,000 (the
"New Loan") as evidenced by the Promissory Note annexed hereto. The New Loan is
a further expansion of the Senior Secured Debt Facility referred to in the Loan
Agreement and constitutes "Indebtedness" thereunder, under the July 2, 1997
letter agreement among the parties hereto (the "July Agreement"), and under the
Guaranty. The maturity date for the New Loan shall be November 30, 1997.

Each of the Subsidiary and Parent repeats each of the
representations and warranties contained in the Loan Agreement, Security
Agreement, Parent Guaranty and General Security Agreement as if made on the date
hereof including, when applicable, as to the New Loan and this Agreement, except
as disclosed in the Disclosure Schedule annexed to the September 4, 1997 letter
agreement among the parties.

Subsidiary and Parent are delivering the following documents
simultaneously herewith:

<PAGE> 2

(i) Consent of the Hongkong Bank of Canada to the
application of all funds raised from the issuance of
securities by the Parent (or any affiliates) to
reduction of the Indebtedness (including without
limitation the New Loan), as described in the July
Agreement; and

(ii) Consent of Input/Output, Inc. to the application of
certain funds raised from the issuance of securities
by the Parent (or any affiliates) to reduction of the
Indebtedness (including without limitation the New
Loan) after payment to Input/Output, Inc. of certain
funds, as described in the July Agreement.

Subsidiary and Parent also agree to deliver to Elliott within
15 days legal opinions of Colorado, Texas and Canadian counsel addressed to
Elliott relating to the New Loan in a form similar to those delivered at the
first closing under the Loan Agreement.

We agree to reimburse Westgate and Elliott for all reasonable
costs and expenses in connection with the preparation and negotiation of the
documents for the New Loan.

This letter agreement shall be governed by the internal laws
of the State of New York, U.S.A.

Kindly acknowledge your agreement with the foregoing by
signing below.

Respectfully yours,

Accepted and Agreed To:

SOLID STATE GEOPHYSICAL CORP. WESTGATE INTERNATIONAL, L.P.

/s/ Mitchell L. Peters By: MARTLEY INTERNATIONAL, INC.,
Mitchell L. Peters, President & Director as Attorney-In-Fact

/s/ Shari J. Pusch /s/ Paul E. Singer
Shari J. Pusch, Secretary-Treasurer --------------------------------
Paul E. Singer, President

SOLID STATE GEOPHYSICAL INC. ELLIOTT ASSOCIATES, L.P.

/s/ Mitchell L. Peters By: /s/ Paul E. Singer
Mitchell L. Peters, President & CEO --------------------------------
Paul E. Singer, General Partner

/s/ Shari J. Pusch
Shari J. Pusch, Secretary

<PAGE> 1
Exhibit 10.14

[ELLIOTT LETTERHEAD]

November 30, 1997

SOLID STATE GEOPHYSICAL INC.
SOLID STATE GEOPHYSICAL CORP.
7309 Flint Road, S.E.
Calgary, Alberta T2H 1G3

Attention: Mitchell Peters, President

RE: NOTE EXTENSION
--------------

Dear Mitch:

We refer to the six (6) Promissory Notes dated February 10, 1997,
February 19, 1997, July 2, 1997, July 22, 1997, September 4, 1997 and October
17, 1997, executed by Solid State Geophysical Corp., in the aggregate amount of
U.S. $12,500,000, payable to Elliott Associates, L.P. ("Elliott") on November
30, 1997 (collectively, the "Notes").

Elliott hereby agrees to extend the Maturity Date under each of the
Notes to January 15, 1998.

Elliott reserves all of its other rights and remedies and nothing
contained herein shall constitute a waiver or modification of any of Elliott's
other rights under the Notes, the October 16, 1996 Loan Agreement, the Guaranty
of Solid State Geophysical Inc. or any related documents or agreement.

Very truly yours,

ELLIOTT ASSOCIATES, L.P.

By: /s/ Jon Pollock
-------------------------------
Name: Jon Pollock
Title: Portfolio Manager
ACCEPTED:

SOLID STATE GEOPHYSICAL INC.

By: /s/ M.L. Peters
----------------------------------
Name: M.L. Peters
Title: President & CEO

SOLID STATE GEOPHYSICAL CORP.

By: /s/ M.L. Peters
----------------------------------
Name: M.L. Peters
Title: President

<PAGE> 1
Exhibit 10.15

[ELLIOTT LETTERHEAD]

November 24, 1997

Mr. Mitchell L. Peters
President and Chief Executive
Officer
Solid State Geophysical Inc.
7309 Flint Road South East
Calgary, Alberta
T2H 1G3

Dear Mr. Peters:

In January, 1997, Elliott Associates, L.P. ("Elliott") granted an option (the
"Option") to you to acquire from Elliott, commencing on and after January 31,
1998, 546,285 common shares of Solid State Geophysical Inc. ("Solid State") at
an exercise price of Cdn. $0.92 per share after payment to Elliott of Cdn.
$50,000 for the Option. Elliott has announced that it and Westgate
International, L.P. are considering making a take-over bid for all the issued
and outstanding common shares of Solid State Geophysical Inc. which they do not
already own. Elliott hereby offers to purchase from you the Option for Cdn.
$1,359,415.30, representing the difference between the proposed offer price
under the take-over bid of Cdn. $3.50 and the exercise price of the option of
Cdn. $0.92, multiplied by 546,285 less the Cdn. $50,000 fee for the Option.
Elliott's agreement to purchase the Option is subject to Elliott or an affiliate
acquiring common shares of Solid State under a take-over bid for all the common
shares of Solid State. Elliott agrees to purchase the Option forthwith upon
the acquisition of common shares of Solid State under such a take-over bid.
Elliott's right to purchase the Option shall be assignable by Elliott to any
affiliate of Elliott. If you are in agreement with the foregoing, please sign
and return a duplicate copy of this letter to Elliott.

Yours truly,

ELLIOTT ASSOCIATES, L.P.

/s/ Jonathan D. Pollock
-----------------------------

Accepted and agreed to this 24th day of November, 1997.

/s/ Mitchell L. Peters
- --------------------------
Mitchell L. Peters

<PAGE> 1

Exhibit 23.2

The Board of Directors
GGI Liquidating Corporation

We consent to the use of our report included herein and to the
reference to our firm under the heading "Experts" in the prospectus.

Our report dated April 4, 1997, contains an explanatory paragraph that states
that the Company has suffered recurring losses from operations and has a net
capital deficiency, which raise substantial doubt about its ability to continue
as a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of that uncertainty. In September
1997 the Court approved the "Second Amended Plan of Reorganization" (the
"Plan") filed by GGI Liquidating Corporation. The Plan was consummated on
September 30, 1997, with the purchase by Grant Geophysical, Inc. of
substantially all of the assets and the assumption of certain liabilities of GGI
Liquidating Corporation. GGI Liquidating Corporation is currently in liquidation
and will distribute all of its assets pursuant to the Plan.

/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP

Houston, Texas
December 23, 1997

<PAGE> 1
Exhibit 23.3

The Board of Directors
Grant Geophysical, Inc.

We consent to the use of our report included herein and to the
reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP

Houston, Texas
December 23, 1997

<PAGE> 1
Exhibit 23.4

[PRICE WATERHOUSE LETTERHEAD]

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus of Grant Geophysical, Inc.
constituting part of this Registration Statement on Form S-1 of our report
dated October 31, 1997, except for Note 17 which is as at November 27, 1997
relating to the financial statements of Solid State Geophysical Inc., which
appears in such Prospectus. We also consent to the use in such Prospectus of
our Comments by Auditors for U.S. readers on Canadian - U.S. Reporting
Differences dated October 31, 1997, except for Note 17 which is as at November
27, 1997. We also consent to the references to us under the headings "Experts"
in such Prospectus.

/s/ Price Waterhouse

Price Waterhouse

CHARTERED ACCOUNTANTS
DECEMBER 23, 1997

<PAGE> 1
Exhibit 24.1

DIRECTOR OF
GRANT GEOPHYSICAL, INC.

REGISTRATION STATEMENT ON FORM S-1

POWER OF ATTORNEY

The undersigned director of Grant Geophysical, Inc., a
Delaware corporation (the "Corporation"), hereby constitutes and appoints
Jonathan D. Pollock and Larry E. Lenig, Jr. and each of them, with full power of
substitution and resubstitution, as attorneys-in-fact or attorney-in-fact of the
undersigned, for him and in his name, place and stead, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933 (the
"Securities Act") one or more Registration Statement(s) on Form S-1 relating to
the registration of the offering for sale of the Common Stock, $.001 par value
per share of the Corporation, with any and all amendments, supplements and
exhibits thereto, including pre-effective and post-effective amendments or
supplements or any additional registration statement filed pursuant to Rule 462
promulgated under the Securities Act, with full power and authority to do and
perform any and all acts and things whatsoever that any of said attorneys or
their substitutes may deem necessary or desirable, in his or their sole
discretion, with any such act or thing being hereby ratified and approved in all
respects without any further act or deed whatsoever.

EXECUTED as of December 17, 1997.

/s/ J. Kelly Elliott
- -----------------------------
J. Kelly Elliott
Director

<PAGE> 2

DIRECTOR OF
GRANT GEOPHYSICAL, INC.

REGISTRATION STATEMENT ON FORM S-1

POWER OF ATTORNEY

EXECUTED as of December 17, 1997.

/s/ Donald G. Russell
- -----------------------------
Donald G. Russell
Director

<PAGE> 3

DIRECTOR AND OFFICER OF
GRANT GEOPHYSICAL, INC.

REGISTRATION STATEMENT ON FORM S-1

POWER OF ATTORNEY

The undersigned director and officer of Grant Geophysical,
Inc., a Delaware corporation (the "Corporation"), hereby constitutes and
appoints Jonathan D. Pollock with full power of substitution and resubstitution,
as attorney-in-fact of the undersigned, for him and in his name, place and
stead, to sign and file with the Securities and Exchange Commission under the
Securities Act of 1933 (the "Securities Act") one or more Registration
Statement(s) on Form S-1 relating to the registration of the offering for sale
of the Common Stock, $.001 par value per share of the Corporation, with any and
all amendments, supplements and exhibits thereto, including pre-effective and
post-effective amendments or supplements or any additional registration
statement filed pursuant to Rule 462 promulgated under the Securities Act, with
full power and authority to do and perform any and all acts and things
whatsoever that said attorney or his substitutes may deem necessary or
desirable, in his sole discretion, with any such act or thing being hereby
ratified and approved in all respects without any further act or deed
whatsoever.

EXECUTED as of December 17, 1997.

/s/ Larry E. Lenig, Jr.
- -----------------------------
Larry E. Lenig, Jr.
President, Chief Executive Officer and Director
(Principal Executive Officer)

<PAGE> 4

OFFICER OF
GRANT GEOPHYSICAL, INC.

REGISTRATION STATEMENT ON FORM S-1

POWER OF ATTORNEY

The undersigned officer of Grant Geophysical, Inc., a Delaware
corporation (the "Corporation"), hereby constitutes and appoints Jonathan D.
Pollock and Larry E. Lenig, Jr. and each of them, with full power of
substitution and resubstitution, as attorneys-in-fact or attorney-in-fact of the
undersigned, for him and in his name, place and stead, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933 (the
"Securities Act") one or more Registration Statement(s) on Form S-1 relating to
the registration of the offering for sale of the Common Stock, $.001 par value
per share of the Corporation, with any and all amendments, supplements and
exhibits thereto, including pre-effective and post-effective amendments or
supplements or any additional registration statement filed pursuant to Rule 462
promulgated under the Securities Act, with full power and authority to do and
perform any and all acts and things whatsoever that any of said attorneys or
their substitutes may deem necessary or desirable, in his or their sole
discretion, with any such act or thing being hereby ratified and approved in all
respects without any further act or deed whatsoever.

EXECUTED as of December 17, 1997.

/s/ Michael P. Keirnan
- -----------------------------
Michael P. Keirnan
Chief Financial Officer, Treasurer and Secretary
(Principal Financial Officer)

<PAGE> 5

GRANT GEOPHYSICAL, INC.

REGISTRATION STATEMENT ON FORM S-1

POWER OF ATTORNEY

Grant Geophysical, Inc., a Delaware corporation (the
"Corporation"), hereby constitutes and appoints Jonathan D. Pollock and Larry E.
Lenig, Jr. and each of them, with full power of substitution and resubstitution,
as attorneys-in-fact or attorney-in-fact of the Corporation, for it and in its
name, place and stead, to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933 (the "Securities Act") one or more
Registration Statement(s) on Form S-1 relating to the registration of the
offering for sale of the Common Stock, $.001 par value per share of the
Corporation, with any and all amendments, supplements and exhibits thereto,
including pre-effective and post-effective amendments or supplements or any
additional registration statement filed pursuant to Rule 462 promulgated under
the Securities Act, with full power and authority to do and perform any and all
acts and things whatsoever that any of said attorneys or their substitutes may
deem necessary or desirable, in his or their sole discretion, with any such act
or thing being hereby ratified and approved in all respects without any further
act or deed whatsoever.

EXECUTED as of December 17, 1997.

GRANT GEOPHYSICAL, INC.

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

<PAGE> 6

OFFICER OF
GRANT GEOPHYSICAL, INC.

REGISTRATION STATEMENT ON FORM S-1

POWER OF ATTORNEY

EXECUTED as of December 17, 1997.

/s/ Charles Ackerman
- -----------------------------
Charles Ackerman
Controller
(Chief Accounting Officer)