20-F

Compagnie Générale de Géophysique

Annual Report 2005

Form 20-F

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

o REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2005

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

OR

o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                   to                   

Commission File Number 001-14622

Compagnie Générale de Géophysique

(Exact name of registrant as specified in its charter)

General Company of Geophysics

(Translation of registrant’s name into English)

Republic of France

(Jurisdiction of incorporation or organization)

1, rue Léon Migaux

91300 Massy

France

(33) 1 64 47 3000

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
American Depositary Receipts representing Ordinary Shares, nominal value €2 per share	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

7¹/2% Senior Notes due 2015

(Title of class)

         Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

         17,081,680 Ordinary Shares, nominal value €2 per share

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

   Yes þ                      No o

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes    þ             No    o

         If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes    o             No    þ

         Note — checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those sections.

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ         Accelerated filer o         Non-accelerated filer o

         Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o                  Item 18 þ

         If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes    o             No    þ

PRESENTATION OF INFORMATION

      In this annual report, references to “United States” or “U.S.” are to the United States of America, references to “U.S. dollars”, “$” or “U.S.$” are to United States dollars, references to “France” are to the Republic of France, references to “Norway” are to the Kingdom of Norway, references to “NOK” are to Norwegian kroner and references to “euro” or “€ ” are to the single currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty Establishing the European Union.

      As our shares are listed on the New York Stock Exchange (in the form of American Depositary Shares), we are required to file an annual report on Form 20-F with the SEC including our annual financial statements reconciled to accounting principles generally accepted in the United States (“U.S. GAAP”).

      We adopted International Financial Reporting Standards (“IFRS”) as adopted by the European Union as our primary accounting principles as of January 1, 2005. For the years ended December 31, 2001, 2002, 2003 and 2004, we prepared our consolidated financial statements in accordance with French generally accepted accounting principles (“French GAAP”).

      The differences between IFRS and U.S. GAAP as they relate to the CGG group, and the reconciliation of net income and shareholders’ equity to U.S. GAAP, are described in note 31 to our consolidated financial statements.

      Unless otherwise indicated, statements in this annual report relating to market share, ranking and data are derived from management estimates based, in part, on independent industry publications, reports by market research firms or other published independent sources. Any discrepancies in any table between totals and the sums of the amounts listed in such table are due to rounding.

      As used in this annual report “CGG”, “we”, “us” and “our” means Compagnie Générale de Géophysique and its subsidiaries, except as otherwise indicated.

FORWARD-LOOKING STATEMENTS

      This annual report includes forward-looking statements, including, without limitation, certain statements made in the sections entitled “Business” and “Operating and Financial Review and Prospects.” We have based these forward-looking statements on our current views and assumptions about future events.

      These forward-looking statements are subject to risks, uncertainties and assumptions we have made, including, among other things:

• changes in international economic and political conditions, and in particular in oil and gas prices;

• our ability to reduce costs;

• our ability to finance our operations on acceptable terms;

• the timely development and acceptance of our new products and services;

• the effects of competition;

• political, legal and other developments in foreign countries;

• the timing and extent of changes in exchange rates for non-U.S. currencies and interest rates;

• the accuracy of our assessment of risks related to acquisitions, projects and contracts, and whether these risks materialize;

• our ability to integrate successfully the businesses or assets we acquire, including Exploration Resources ASA (“Exploration Resources”);

• our ability to sell our seismic data library;

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• our ability to access the debt and equity markets during the periods covered by the forward-looking statements, which will depend on general market conditions and on our credit ratings for our debt obligations; and

• our success at managing the risks of the foregoing.

      We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this annual report might not occur.

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TABLE OF CONTENTS

		Page
PART I
Item 1:	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	5
Item 2:	OFFER STATISTICS AND EXPECTED TIMETABLE	5
Item 3:	KEY INFORMATION	5
Item 4:	INFORMATION ON THE COMPANY	16
Item 5:	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	32
Item 6:	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	48
Item 7:	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	58
Item 8:	FINANCIAL INFORMATION	60
Item 9:	THE OFFER AND LISTING	60
Item 10:	ADDITIONAL INFORMATION	63
Item 11:	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	83
Item 12:	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	84
PART II
Item 13:	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	85
Item 14:	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITYHOLDERS AND USE OF PROCEEDS	85
Item 15:	CONTROL AND PROCEDURES	85
Item 16A:	AUDIT COMMITTEE FINANCIAL EXPERT	85
Item 16B:	CODE OF ETHICS	85
Item 16C:	PRINCIPAL ACCOUNTANT FEES AND SERVICES	86
Item 16D	EXEMPTIONS FROM THE LISTING STANDARDS OF AUDIT COMMITTEES	86
Item 16E:	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	87
PART III
Item 17:	FINANCIAL STATEMENTS	88
Item 18:	FINANCIAL STATEMENTS	88
Item 19:	EXHIBITS	88
EX-1.1: ENGLISH TRANSLATION TO THE ARTICLES OF ASSOCIATION
EX-4.15: PURCHASE AGREEMENT
EX-4.16: REGISTRATION RIGHTS AGREEMENT
EX-4.17: SINGLE CURRENCY TERM FACILITY AGREEMENT
EX-4.18: AMENDMENT AND RESTATEMENT ACCESSION AND NOVATION AGREEMENT
EX-4.19: UNDERWRITING AGREEMENT
EX-4.20: PURCHASE AGREEMENT
EX-4.21: REGISTRATION RIGHTS AGREEMENT
EX-4.22: TERM CREDIT FACILITY
EX-8: SUBSIDIARIES OF THE REGISTRANT
EX-12.1: CERTIFICATION
EX-12.2: CERTIFICATION
EX-13.1: CERTIFICATION
EX-13.2: CERTFICATION

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PART I

Item 1:     IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

      Not applicable.

Item 2:     OFFER STATISTICS AND EXPECTED TIMETABLE

      Not applicable.

Item 3:     KEY INFORMATION

Selected Financial Data

      The tables below set forth our selected consolidated financial and operating data:

• as of and for each of the two years in the period ended December 31, 2005 in accordance with IFRS; and

• as of and for each of the five years in the period ended December 31, 2005 in accordance with U.S. GAAP.

      The selected data included below should be read in conjunction with, and is qualified in its entirety by reference to, our consolidated financial statements and “Operating and Financial Review and Prospects” included elsewhere in this annual report. The selected financial data for each of the years in the two-year period ended December 31, 2005 have been derived from our audited consolidated financial statements prepared in accordance with IFRS, which differ in certain respects from U.S. GAAP.

      We adopted IFRS as our primary accounting principles from January 1, 2005, and our first consolidated financial statements under IFRS are those as of and for the year ended December 31, 2005. Pursuant to proposed SEC regulations regarding the applicable periods to be presented under a comprehensive set of accounting principles, we present restated financial statements under IFRS as of and for the year ended December 31, 2004.

      The differences between IFRS and U.S. GAAP as they relate to the CGG group, and the reconciliation of net income and shareholders’ equity to U.S. GAAP are described in Note 31 to our consolidated financial statements.

	At December 31,
	2005			2004
	(in millions euros
	except for number
	of shares and
	operational data)
Amounts in accordance with IFRS:
Statement of Operations Data:
Operating revenues		869.9			687.4
Other revenues from ordinary activities		1.9			0.4
Cost of operations		(670.0	)		(554.0	)
Gross profit		201.8			133.8
Research and development expenses, net		(31.1	)		(28.8	)
Selling, general and administrative expenses		(91.2	)		(78.6	)
Other revenues (expenses)		(4.4	)		19.3
Operating income		75.1			45.7
Cost of financial debt, net		(42.3	)		(27.8	)
Variance on derivative on convertible bonds		(11.5	)		(23.5	)
Other financial income (loss)		(14.5	)		0.8
Income taxes		(26.6	)		(10.9	)
Equity in income of affiliates		13.0			10.3
Net loss		(6.8	)		(5.4	)
Attributable to minority interests		(1.0	)		(1.0	)

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		At December 31,
		2005			2004
		(in millions euros
		except for number
		of shares and
		operational data)
Attributable to shareholders
Net income (loss) per share:			(7.8	)		(6.4	)
	Basic(1)		(0.64	)		(0.55	)
	Diluted(1)		(0.64	)		(0.55	)
Balance sheet:
Cash and cash equivalents			112.4			130.6
Working capital(3)			154.1			116.4
Property, plant & equipment, net			480.1			204.1
Multi-client surveys			93.6			124.5
Total assets			1,565.1			971.2
Financial debt(4)			400.3			249.6
Shareholders’ equity			698.5			393.2
Other financial historical data and other ratios:
ORBDA(5)			229.5			172.8
Capital expenditures (Property, plant & equipment)(6)			125.1			49.8
Capital expenditures for multi-client surveys			32.0			51.1
Net financial debt(7)			297.2			121.8
Financial debt(4)/« ORBDA »(5)			1.7	x		1.4	x
Net indebtedness(7)/« ORBDA »(5)			1.3	x		0.7	x
« ORBDA »(5)/ Net financial expenses			5.4	x		6.2	x

	At December 31,
	2005		2004			2003		2002		2001
	(in millions euros except for number
	of shares and operational data)
Amounts in accordance with US gaap:
Statement of Operations Data:
Operating revenues		860.8		709.5			645.6		719.0		795.0
Operating income		61.9		55.0			42.7		81.9		48.6
Net income (loss)		8.3		(20.2	)		3.1		15.1		9.3
Per share amounts:
Basic common stock holder(1)		0.69		(1.73	)		0.27		1.29		0.80
Diluted common stock holder(2)		0.67		(1.73	)		0.26		1.29		0.80
Balance sheet:
Total assets		1,573.8		975.8			924.2		1,036.8		1,008.0
Financial debt(4)		416.7		266.5			232.4		307.8		279.5
Shareholders’ equity		689.5		372.2			413.4		431.0		456.4
Operational data (end of period):
Land teams in operations		11		8			12		14		12
Operational Streamers(8)		46		39			42		42		48
Data processing centers		27		26			26		26		26

(1)

Basic (under IFRS and US GAAP) and Diluted (under IFRS) per share amounts have been calculated on the basis of 12,095,925 issued and outstanding shares in 2005 and 11,681,406 issued and outstanding shares in 2004. Basic per share amounts under US GAAP have been calculated on the basis of 11,680,718 issued and outstanding shares in 2003 and 2002 and 11,609,393 issued and outstanding shares in 2001.

(2)

Diluted per share amounts under US GAAP have been calculated on the basis of 12,378,209 issued and outstanding shares in 2005, 11,681,406 issued and outstanding shares in 2004, 11,760,630 issued and outstanding shares in 2003, 11,680,718 issued and outstanding shares in 2002 and 11,609,393 issued and

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	outstanding shares in 2001. In 2002 and 2001, the effects of stock options were not dilutive (as a result of applying the treasury stock method).
(3)	Consists of trade accounts and notes receivable, inventories and work-in-progress, tax assets, other current assets and assets held for sale less trade accounts and notes payable, accrued payroll costs, income tax payable, advance billings to customers, current provisions and other current liabilities.
(4)	“Financial debt” means total financial debt, including current maturities, capital leases and accrued interest but excluding bank overdrafts
(5)	A discussion of « ORBDA » (Operating Result Before Depreciation and Amortization, previously denominated “Adjusted EBITDA”), including a reconciliation to net cash provided by operating activities, is found in “Item 5 Operating and Financial Review and Prospects — Liquidity and Capital Resources.”
(6)	“Capital expenditures” is defined as purchases of property, plant and equipment plus equipment acquired under capital lease.

The following table presents a reconciliation of capital expenditures to purchases of property, plant and equipment and equipment acquired under capital lease for the periods indicated:

	For the year
	ended
	December 31,
	2005		2004
	(in € millions)
Purchase of Property, Plant and Equipment		107.7		41.1
Equipment acquired under capital lease		17.4		8.7
Capital expenditures		125.1		49.8

(7)	“Net financial debt” means bank overdrafts, financial debt including current portion (including capital lease debt) net of cash and cash equivalents.
(8)	Data at December 31, 2005 include Exploration Resources’ streamers.

Exchange Rates

      The following table sets forth, for the periods and dates indicated, certain information concerning the exchange rates for the euro expressed in U.S. dollars per euro. Information concerning the U.S. dollar exchange rate is based on the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the “Noon Buying Rate”). Such rates are provided solely for convenience and no representation is made that French francs or euro were, could have been, or could be, converted into U.S. dollars at these rates or at any other rate. Such rates were not used by us in the preparation

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of our audited consolidated financial statements included elsewhere in this annual report. The Noon Buying Rate on May 1, 2006 was U.S.$26.07 per euro.

	Dollars per Euro Exchange Rate
Year ended December 31,	Period-end		High		Low		Average(1)
2001		0.89		0.95		0.84		0.90
2002		1.05		1.05		0.86		0.95
2003		1.26		1.26		1.04		1.14
2004		1.35		1.36		1.18		1.24
2005		1.18		1.35		1.17		1.24

Month
November 2005	—	1.21	1.17	—
December 2005	—	1.20	1.17	—
January 2006	—	1.23	1.20	—
February 2006	—	1.21	1.19	—
March 2006	—	1.22	1.19	—
April 2006	—	1.26	1.21	—

(1) The annual average rate is the average of the Noon Buying Rates on the last day of each month.

      U.S. dollar translations included for convenience throughout this annual report for dates other than the last day of the periods presented above have been made at the Noon Buying Rates on such dates.

Capitalization and Indebtedness

      Not applicable.

Reasons for the Offer and Use of Proceeds

      Not applicable.

Risk Factors

Risks Related to Our Business

     Our results of operations can be significantly affected by currency fluctuations.

      As a company that derives a substantial amount of its revenue from sales internationally, we are subject to risks relating to fluctuations in currency exchange rates. Over 80% of our operating revenues in 2004 and 2005 and approximately two-thirds of our operating expenses were denominated in currencies other than the euro. These included the U.S. dollar and, to a significantly lesser extent, other non-euro Western European currencies, principally the British pound and the Norwegian kroner. In addition, a significant portion of our revenues that were invoiced in euros related to contracts that were effectively priced in U.S. dollars, as the U.S. dollar often serves as the reference currency when bidding for contracts to provide geophysical services. Our exposure to fluctuations in the euro/ U.S. dollar exchange rate has increased considerably over the last few years due to increased sales outside of Europe.

      Fluctuations in the exchange rate of the euro against such other currencies, particularly the U.S. dollar, have had in the past and can be expected in future periods to have a significant effect upon our results of operations. Since we participate in competitive bids for data acquisition contracts that are denominated in U.S. dollars, a depreciation of the U.S. dollar against the euro harms our competitive position against that of other companies whose costs and expenses are denominated in U.S. dollars. For financial reporting purposes, such depreciation negatively affects our reported results of operations since U.S. dollar-denominated earnings that are converted to euros are stated at a decreased value. While we attempt to reduce the risks associated with such exchange rate

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fluctuations through our hedging policy, we cannot assure you that we will be effective or that fluctuations in the value of the currencies in which we operate will not materially adversely affect our results in the future.

     We have had losses in the past and we cannot assure that we will be profitable in the future

      Due to the accounting treatment under IFRS of our 7.75% subordinated convertible bonds due 2012 denominated in U.S. dollars, we recorded net losses (attributable to shareholders) in 2004 and 2005 of €6.4 million and € 7.8 million, respectively, although absent this item, our net income would have been positive. We cannot assure that we will be profitable in the future.

     We are subject to risks related to our international operations that could harm our business and results of operations.

      With operations worldwide, and with a majority of our revenues derived outside of the United States and Western Europe, including emerging markets, our business and results of operations are subject to various risks inherent in international operations. These risks include:

• instability of foreign economies and governments;

• risks of war, seizure, renegotiation or nullification of existing contracts; and

• foreign exchange restrictions, sanctions and other laws and policies affecting trade and investment.

      While we carry insurance against political risks associated with such operations, in amounts we consider appropriate in accordance with industry practices, we cannot assure you that we will not be subject to material adverse developments with respect to our international operations or that our coverage will be adequate to cover us for any losses arising from such risks.

      We and certain of our subsidiaries and affiliated entities also conduct business in countries known to experience government corruption and in countries subject to U.S. government sanctions. We are committed to doing business in accordance with all laws and our code of ethics but there is a risk that we, our subsidiaries or affiliated entities or their respective officers, directors, employees and agents may take action in violation of applicable laws, including the Foreign Corrupt Practices Act of 1977 or laws administered by the U.S. Office of Foreign Assets Control. Any such violations could result in substantial civil and/or criminal penalties and might adversely affect our business and results of operations or financial condition.

      The nature of our business is subject to significant ongoing operating risks for which we may not have adequate insurance or for which we may not be able to procure adequate insurance on economical terms, if at all.

     Future businesses and technologies that we may acquire may be difficult to integrate, disrupt our business, dilute stockholder value or divert management attention.

      An aspect of our current business strategy is to seek new businesses, technologies and products to broaden the scope of our existing and planned product lines and technologies. For example, we acquired several manufacturers of seismic products in 2004 in order to expand Sercel’s product line. We also believe that the seismic industry should continue to consolidate with the goal of exploiting synergies and promoting the emergence of seismic operators possessing larger financial and technological bases, a vision that we have pursued through our acquisition of Exploration Resources in September 2005. Although we regularly explore opportunities with respect to possible acquisitions of businesses, technologies or products, we do not currently have any understandings, commitments or agreements relating to any such material transactions. Future transactions of this type could result in the incurrence of debt and contingent liabilities and an increase in amortization expenses related to goodwill and other intangible assets, which could have a material adverse effect upon us.

      Risks we could face with respect to recent and future acquisitions include:

• difficulties in the integration of the operations, technologies, products and personnel of the acquired company;

• diversion of management’s attention away from other business concerns; and

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• expenses of any undisclosed or potential liabilities of the acquired company.

      The risks associated with acquisitions could have a material adverse effect upon our business, financial condition and results of operations. We cannot assure that we will be successful in consummating future acquisitions on favorable terms, if at all.

     Our acquisition of Exploration Resources exposes us to additional risks and requires additional investments.

      We believe that the acquisition of Exploration Resources presents a number of potential risks. Our integration of Exploration Resources is a challenging process to which our Group gives particular importance. The acquisition of Exploration Resources will also increase our exposure to risks relating to the offshore seismic data acquisition market, both in exclusive and multi-client surveys. We are making significant investments in connection with the modernization of certain of Exploration Resources’ vessels, and there can be no assurance as to the future financial returns on these investments. We also plan to invest, depending on opportunities, in the development of high resolution seabed seismic acquisition technologies belonging to Multiwave, a subsidiary of Exploration Resources. These technologies are relatively recent, and the market for the providers of such services is not yet mature. The effectiveness and profitability of these technologies remain to be determined.

     We invest significant amounts of money in acquiring and processing seismic data for multi-client surveys and for our data library without knowing precisely how much of the data we will be able to sell or when and at what price we will be able to sell the data.

      We invest significant amounts in acquiring and processing seismic data that we own. By making such investments, we assume the risk that:

• we may not fully recover the costs of acquiring and processing the data through future sales. The amounts of these data sales are uncertain and depend on a variety of factors, many of which are beyond our control. In addition, the timing of these sales can vary greatly from period to period. Technological or regulatory changes or other developments could also adversely affect the value of the data;

• the value of our multi-client data could be significantly adversely affected if any material adverse change occurred in the general prospects for oil and gas exploration, development and production activities in the areas where we acquire multi-client data; and

• any reduction in the market value of such data will require us to write down its recorded value, which could have a significant adverse effect on our results of operations.

     Our working capital needs are difficult to forecast and may vary significantly which could result in additional financing requirements that we may not be able to obtain at all or on satisfactory terms.

      It is difficult for us to predict with certainty our working capital needs. This is due primarily to working capital requirements related to our marine seismic acquisition business and related to the development and introduction of new lines of geophysical equipment products. For example, under specific circumstances, we may extend the length of payment terms we grant to our customers or increase substantially our inventories. We may therefore be subject to significant and rapid increases in our working capital needs that we may have difficulty financing on satisfactory terms or at all due to limitations in our existing debt agreements.

     Technological changes and new products and services are frequently introduced in our market, and our technology could be rendered obsolete by these introductions or we may not be able to develop and produce new and enhanced products on a cost-effective and timely basis.

      Technology changes rapidly in our industry, and new and enhanced products are frequently introduced in the market for our products and services, particularly in our equipment manufacturing and data processing and geosciences sectors. Our success depends to a significant extent upon our ability to develop and produce new and enhanced products and services on a cost-effective and timely basis in accordance with industry demands. While we commit substantial resources to research and development, we cannot assure you that we will not encounter

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resource constraints or technical or other difficulties that could delay our introduction of new and enhanced products and services in the future. In addition, our continuing development of new products inherently carries the risk of obsolescence with respect to our older products. We cannot assure you that new and enhanced products and services, if introduced, will gain market acceptance or will not be adversely affected by technological changes or product or service introductions by one of our competitors.

     We depend on proprietary technology.

      Our results of operations depend in part upon our proprietary technology. We rely on a combination of patents, trademarks and trade secret laws to establish and protect our proprietary technology. We hold or have applied for 144 patents, in various countries, for products and processes. These patents last between four and twenty years, depending on the date of filing and the protection accorded by each country. In addition, we enter into confidentiality and license agreements with our employees, customers and potential customers and limit access to and distribution of our technology. However, we cannot assure you that actions we take to protect our proprietary rights will be adequate to deter the misappropriation or independent third party development of our technology. Although we have not been involved in any material litigation regarding our intellectual property rights or the possible infringement of intellectual property rights of others, we cannot assure you that such litigation will not be brought in the future. In addition, the laws of certain foreign countries do not protect proprietary rights to the same extent as either the laws of France or the laws of the United States, which may limit our ability to pursue third parties that misappropriate our proprietary technology.

     We depend on attracting and retaining qualified employees to develop our business know-how.

      Our results of operations depend in part upon our business know-how. We believe that development of our know-how depends in large part on our ability to attract and retain highly skilled and qualified personnel. We compete with other seismic products and services companies and, to a lesser extent, the oil industry majors and national oil companies for skilled geophysical and seismic personnel, particularly in times, such as the present, when demand for seismic services is relatively high. A limited number of such skilled personnel is available, and demand from other companies may limit our ability to fill our human resources needs. Any inability of ours in the future to hire, train and retain a sufficient number of qualified employees could impair our ability to manage and maintain our business and to develop and protect our know-how.

     We rely on significant customers, so the loss of a single or a few customers could have a material adverse impact on our business.

      A relatively small number of clients account for a significant percentage of our revenues. During 2005, our two largest clients accounted for 9.8% and 4.4% of our operating revenues, respectively. During 2004, our two largest clients accounted for 6.8% and 5.4% of our operating revenues, respectively. The loss of a substantial amount of the business of any of these clients could have a material adverse effect on our operating revenues and our business.

     The nature of our business is subject to significant ongoing operating risks for which we may not have adequate insurance or for which we may not be able to procure adequate insurance on economical terms, if at all.

      Our seismic data acquisition activities, particularly in deepwater marine areas, are often conducted under harsh weather and other hazardous conditions and are subject to risks of loss from business interruption, delay or equipment destruction. We carry insurance against the destruction of or damage to our seismic equipment and against business interruption for our data processing activities in amounts we consider appropriate in accordance with industry practice. However, we cannot assure you that our insurance coverage will be adequate in all circumstances or against all hazards, or that we will be able to maintain adequate insurance coverage in the future at commercially reasonable rates or on acceptable terms.

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     Compliance with internal controls procedures and evaluations and attestation requirements will require significant efforts and resources and may result in the identification of significant deficiencies or material weaknesses.

      Beginning in fiscal year 2006, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required, as a foreign private issuer to perform an evaluation of our internal controls over financial reporting and have our independent auditors publicly disclose their conclusions regarding such evaluation. We are establishing procedures in order to comply with Section 404 in the timeframe permitted under the regulations of the Securities and Exchange Commission, although as of the date of this filing we have not yet finalized these procedures. We expect that establishing procedures and ensuring compliance with these requirements will be a substantial and time-consuming process. If we fail to complete these procedures and the required evaluation in a timely manner, or if our independent auditors cannot attest to our evaluation in a timely manner, we could be subject to regulatory review and penalties which may result in a loss of public confidence in our internal controls. In addition, we may uncover significant deficiencies or material weaknesses in our internal controls. Measures taken by us to remedy these issues may require significant efforts, dedicated time and expenses, as well as the commitment of significant managerial resources. Each of these circumstances may have an adverse impact on our business, financial condition and results of operations or on our share price.

Risks Related to our Industry

     We depend on capital expenditures by the oil and gas industry, and reductions in such expenditures have had, and may in the future have, a material adverse impact on our business.

      Demand for our products and services has historically been dependent upon the level of capital expenditures by oil and gas companies for exploration, production and development activities. These expenditures are significantly influenced by oil and gas prices and by expectations regarding future oil and gas prices. Oil and gas prices may fluctuate based on relatively minor changes in the supply and demand for oil and gas, expectations regarding future supply and demand for oil and gas and certain other factors beyond our control. Lower or volatile oil and gas prices tend to limit the demand for our services and products.

      Factors affecting the prices of oil and gas include:

• level of demand for oil and gas;

• worldwide political, military and economic conditions, including political developments in the Middle East, economic growth levels and the ability of OPEC to set and maintain production levels and prices for oil;

• level of oil and gas production;

• policies of governments regarding the exploration for and production and development of oil and gas reserves in their territories; and

• global weather conditions.

      Although oil and gas prices are currently at or near historical highs, which generally increases demand for our products and services, the markets for oil and gas historically have been volatile and are likely to continue to be so in the future.

      We believe that global geopolitical uncertainty or uncertainty in the Middle Eastern producing regions (where we are particularly active) could lead oil companies to suddenly delay or cancel current geophysical projects. Any events that affect worldwide oil and gas supply, demand or prices or that generate uncertainty in the market could reduce exploration and development activities and negatively affect our operations. We cannot assure you as to future oil and gas prices or the resulting level of industry spending for exploration, production and development activities.

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     We are subject to intense competition, which could limit our ability to maintain or increase our market share or to maintain our prices at profitable levels.

      Most of our contracts are obtained through a competitive bidding process, which is standard for the industry in which we operate. While no single company competes with us in all of our segments, we are subject to intense competition with respect to each of our segments. We compete with large, international companies as well as smaller, local companies. In addition, we compete with major service providers and government-sponsored enterprises and affiliates. We are subject to particularly intense competition in the land seismic acquisition market, notably from Chinese companies that have entered the market and have expanded their international market share. Some of our competitors operate more data acquisition crews than we do and have substantially greater financial and other resources. These and other competitors may be better positioned to withstand and adjust more quickly to volatile market conditions, such as fluctuations in oil and gas prices and production levels, as well as changes in government regulations. In addition, if geophysical service competitors increase their capacity in the future (or fail to reduce capacity if demand decreases), the excess supply in the seismic services market could apply downward pressure on prices.

     We have high levels of fixed costs that will be incurred regardless of our level of business activity.

      Our business has high fixed costs, and downtime or low productivity due to reduced demand, weather interruptions, equipment failures or other causes could result in significant operating losses.

     Our land and marine seismic acquisition activities may vary significantly during the year.

      Our land and marine seismic acquisition activities are partially seasonal, depending on whether they are operated in the Northern or Southern Hemisphere for weather conditions reasons, or because they depend on our important customers’ decision to invest, such decision itself relying on internal budget consideration: reluctance to take early in the year firm commitments on specific projects which will significantly impact their annual exploration budget; to the contrary, acceleration of orders by year-end to use the remaining portion of the exploration budget.

      The offshore data acquisition business is, by nature, exposed to non productive interim period — repairs, transit period from one operation zone to another during which there is usually no revenue recognition.

Risks Related to our Indebtedness

     Our substantial debt could adversely affect our financial health and prevent us from fulfilling our obligations.

      We have a significant amount of debt. As of December 31, 2005, our total financial debt, consolidated total assets and shareholders’ equity were €409.6 million, €1,565.1 million and € 698.5 million, respectively.

      Our substantial debt could have important consequences. In particular, it could:

• increase our vulnerability to general adverse economic and industry conditions;

• require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate;

• place us at a competitive disadvantage compared to our competitors that have less debt; and

• limit, along with the financial and other restrictive covenants of our indebtedness, among other things, our ability to borrow additional funds.

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      Failing to comply with restrictive covenants in our loan agreements or the indenture relating to our senior notes could result in an event of default that, if not cured or waived, could result in the acceleration of our outstanding debt and other financial obligations or otherwise have a material adverse effect on us.

     Our debt agreements contain restrictive covenants that may limit our ability to respond to changes in market conditions or pursue business opportunities.

      As of December 31, 2005, we had a total financial debt of €409.6 million and total shareholders’ equity of € 698.5 million. The indenture governing the notes and our syndicated credit facilities contain restrictive covenants limiting our ability and the ability of certain of our subsidiaries to:

• incur or guarantee additional indebtedness or issue preferred shares;

• pay dividends or make other distributions;

• purchase equity interests or redeem subordinated indebtedness early;

• create or incur certain liens;

• create or incur restrictions on the ability to pay dividends or make other payments to us;

• enter into transactions with affiliates;

• issue or sell capital stock of subsidiaries;

• engage in sale-and-leaseback transactions; and

• sell assets or merge or consolidate with another company.

      Complying with the restrictions contained in some of these covenants requires us to meet certain ratios and tests, notably with respect to consolidated interest coverage, total assets, net debt, equity and net income. The requirement that we comply with these provisions may negatively affect our ability to react to changes in market conditions, take advantage of business opportunities we believe to be desirable, obtain future financing, fund needed capital expenditures, finance its equipment purchases, significantly increase research and development expenditures, or withstand a continuing or future downturn in our business.

     If we are unable to comply with the restrictions and covenants in the indenture governing the notes and our debt agreements, there could be a default under the terms of these agreements, which could result in an acceleration of payment of funds that we have borrowed.

      If we are unable to comply with the restrictions and covenants in the indenture governing the notes or in our current or future debt agreements, there could be a default under the terms of these agreements. Our ability to comply with these restrictions and covenants, including meeting our financial ratios and tests, may be affected by events beyond our control. As a result, we cannot assure you that we will be able to comply with these restrictions and covenants or meet these tests. In the event of a default under these agreements, our lenders could terminate their commitments to lend to us or accelerate the loans and declare all amounts borrowed due and payable. Borrowings under other debt instruments that contain cross-acceleration or cross-default provisions may also be accelerated and become due and payable. If any of these events occur, we cannot assure you that our assets would be sufficient to repay in full all of our indebtedness, including the notes, or that we would be able to find alternative financing. Even if we could obtain alternative financing, we cannot assure you that it would be on terms that are favorable or acceptable to us.

     Despite current debt levels, we and our subsidiaries may still be able to incur substantially more debt.

      We and our subsidiaries may be able to incur substantial additional debt (including secured debt) in the future. As of December 31, 2005 we had no outstanding borrowings under our U.S. $60 million syndicated credit facility, and had availability under all other credit facilities of €9.4 million. In addition, in order to partially finance the conversion of both the C-Orion and the Geo-Challenger into 3-D vessels and to purchase new marine streamers, although we had € 112.4 million of short term or available deposits as of December 31, 2005, we may

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need to borrow additional amounts in the future to meet our anticipated working capital and capital expenditure needs or to pursue attractive business opportunities. If new debt is added to our and our subsidiaries’ current debt levels, the related risks that we, and they, now face could intensify.

     To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

      Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures will partly depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

      We cannot assure you that our business will generate sufficient cash flow from operations, that we will realize operating improvements on schedule, that we will find purchasers for the assets we intend to sell or that future borrowings will be available to us in an amount sufficient to enable us to service and repay our indebtedness or to fund our other liquidity needs. If we are unable to satisfy our debt obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot assure you that any refinancing or debt restructuring would be possible, that any assets could be sold or, if sold, the timing of the sales and the amount of proceeds realized from those sales, or that additional financing could be obtained on acceptable terms.

     Our results could be affected by changes in interest rates.

      Our sources of liquidity include credit facilities with financial institutions charging variable interest rates over the course of drawdown periods of from one to twelve months. As a result, our interest expenses could increase if short-term interest rates increase.

     Holders of ADSs may be subject to additional risks related to holding ADSs rather than shares.

      ADS holders may lose some or all of the value of a dividend or other distribution arising form their interest in us because of the depositary’s need to effect further transactions to transfer such value to ADS holders. For example, the depositary may be unable to convert a foreign currency into dollars when the applicable exchange rates are fluctuating, thereby reducing the value of the ultimate distribution to ADS holders. Also, there can be no assurance that the depository can convert any currency at a specified exchange rate or sell any property, rights, shares or other securities at a specified price, or that any of such transactions can be completed within a specified time period, all of which may reduce the value of ADS holders of the original transaction.

      ADS holders may not receive voting materials in time to instruct the depository to vote on matters that come before holders of the underlying shares. ADS holders, or those who holds ADSs through brokers, dealers or other third parties, may not have the opportunity to exercise a right to vote at all. ADS holders may not receive copies of all reports from us or from the depository. ADS holders may need to visit the depository’s offices to inspect any reports issued.

      We and the depository may amend or terminate the deposit agreement without ADS holders’ consent in a manner that could prejudice ADS holders.

      You may not be able to effect claims or enforce judgments against us or our directors or officers for violations of the U.S. securities laws. We are a société anonyme under the laws of France. A majority of our directors and officers are no-U.S. residents. A substantial portion of our assets and the assets of our directors and officers are, and we expect will continue to be, located outside the United States. Consequently, you may not be able to effect service of process within the United States upon us or most of these persons, enforce judgments against us or them in the United States courts or enforce or obtain judgments in French courts against us or these persons predicated upon the securities laws of the United States.

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Item 4:     INFORMATION ON THE COMPANY

History and Development of the Company

      We were established in 1931 to market geophysical techniques for appraising underground geological resources. Since that time, we have gradually come to specialize in seismic techniques adapted to exploration for and production of oil and gas, while continuing to carry on other geophysical activities. Compagnie Générale de Géophysique is the parent company of the CGG group. We are a société anonyme incorporated under the laws of the Republic of France and operating under the French Code de commerce. Our registered office is 1, rue Léon Migaux, 91300 Massy, France. Our telephone number is (33) 1 64 47 3000.

      Over the course of the last three years, we completed numerous acquisitions and dispositions which are described under “Operating and Financial Review and Prospects — Acquisitions and Dispositions” in Item 5, and elsewhere in this annual report.

Business Overview

      We believe we are a leading international provider of geophysical services and manufacturer of geophysical equipment. We provide geophysical services principally to oil and gas companies that use seismic imaging to help explore for, develop and manage oil and gas reserves by:

• identifying new areas where subsurface conditions are favorable for the accumulation of oil and gas;

• determining the size and structure of previously identified oil and gas fields; and

• optimizing development and production of oil and gas reserves (reservoir management).

      We sell our geophysical equipment primarily to other geophysical service companies.

      Our operations are organized into two main segments: Services and Products. Services accounted for approximately 57% and 64% and Products accounted for approximately 43% and 36% of our consolidated revenues for the year ended December 31, 2004 and for the year ended December 31, 2005, respectively. We generate revenues (by location of customers) on a worldwide basis. For the year ended December 31, 2004, approximately 30% of our consolidated revenues were from the Americas, 40% from the Middle East and the Asia-Pacific region, 20% from Europe and CIS, and 10% from Africa. For the year ended December 31, 2005, approximately 34% of our consolidated revenues were from the Americas, 34% from the Middle East and Asia-Pacific region, 22% from Europe and CIS and 10% from Africa.

Industry Conditions

      Overall demand for geophysical services and equipment is dependent upon spending by oil and gas companies for exploration, production development and field management activities. This spending depends in part on present and expected future oil and gas prices.

      We believe that the medium-term outlook for the geophysical services sector, particularly the offshore segment, and the demand for the geophysical products is fundamentally positive for a number of reasons:

• Economic growth, particularly in more active regions such as Asia (notably China and India), is generating increased energy demand and leading to higher energy prices and increased exploration efforts;

• The need to replace depleting reserves and maximize the recovery of oil in existing reservoirs should encourage capital expenditures by companies engaged in exploration and production, which we expect will benefit the seismic industry;

• The scope of application of geophysical services has considerably increased over the last several years as a result of significant research and development efforts. Geophysical services can now potentially be applied to the entire sequence of exploration, development and production as opposed to exploration only. This is particularly true with technologies such as 4D (time lapse seismic data); and

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• Finally, the depth and duration of the contraction in the geophysical sector between 1999 and 2004 may have increased awareness among geophysical service providers of the risks related to market overcapacity.

Business Strategy

      We intend to continue to strengthen our competitive position in the global geophysical services and products markets by capitalizing on growth opportunities resulting from both the application of new technologies in every sector of the oil and gas business — from exploration to production and reservoir management — and from our diversified geographic presence.

      To achieve our objective, we have adopted the following strategies:

     Focus on Growth Areas for Geophysical Services

      We believe that the continued development and enhancement of our proprietary seismic data recording equipment and software will help us to remain among the leading providers of 3D land seismic surveys. We believe that our proprietary equipment and software provide us with a competitive advantage in specific growth markets, such as data acquisition in transition zones and difficult terrain, where recent technological advances have made seismic acquisition more feasible. We intend to focus on developing our technological capabilities in emerging markets for geophysical services, such as reservoir appraisal and production monitoring. We believe that, due to our extensive international experience, we also have a competitive advantage in certain geographic markets such as Europe, Africa, the Middle East and Latin America, where we have been operating longer than many of our competitors and where we have developed partnerships with local seismic acquisition companies in several countries in these regions. We also believe that we have unique experience and expertise in complex land acquisition projects.

      Our acquisition of Exploration Resources in September 2005 following our previous significant acquisition of marine seismic assets from Aker Geo in 2001 fits within the strategy we defined in 1999 to strengthen our position in the marine seismic segment.

      We also intend to maintain our position in the marine seismic market for non-exclusive data by developing our non-exclusive data library. We believe that a strong position in this market segment enhances our global competitive position and may provide opportunities for continuing future sales. In developing our non-exclusive data library, we carefully select survey opportunities in order to maximize our return on investment. In 2005, for example, we carried out several feasibility studies for permanent seismic monitoring, most notably in Brazilian basins. We also intend to apply the latest advances in depth imaging technology to a selected part of our existing library.

      Given the growing importance of geophysics in reservoir characterization, we intend to further develop the synergies between our data processing and reservoir services. This approach places us in a better position to meet the requirements of our clients with an extensive range of integrated services. We also intend to increase our processing capability in developing disciplines, such as applications relating to reservoir description and monitoring, including 3D pre-stack depth imaging, multi-component and 4D studies. We also plan to continue promoting and developing our dedicated processing centre services within our clients’ offices and to develop our regional centers.

     Develop Technological Synergies for Products and Capitalize on New Generation Equipment

      We believe Sercel is the leading producer of land, marine and subsea geophysical equipment, particularly in difficult terrain. We plan to continue developing synergies among the technologies available within Sercel and to capitalize fully on our position as a market leader. Through internal expenditures on research and development, we seek to improve existing products and maintain an active new product development program in all segments of the geophysical equipment market (land, marine and ocean-bottom).

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     Develop and Utilize Innovative Technology

      We believe that growth in demand for geophysical services will continue to be driven in part by the development of new technologies. We expect multi-component (3C/4C) surveys and time-lapse (4D) surveys to become increasingly important for new production-related applications, particularly in the marine sector, and expect specialized recording equipment for difficult terrain to become more important in land seismic data acquisition, particularly in transition zones and shallow water. We believe that to remain competitive, geophysical services companies will need to combine advanced data acquisition technology with consistently improving processing capacity in order to reduce further delivery times for seismic services. Our strategy is to take advantage of our leading technology and our ability to integrate our full range of services to enhance our position as a market leader in:

• land and transition zone seismic data acquisition systems and know-how;

• innovative marine or subsea acquisition systems and services;

• seismic data processing and reservoir services; and

• manufacturing of land, marine and subsea data acquisition equipment.

      In this respect, we intend to continue our high level of research and development investment to reinforce our technological leadership.

     Emphasize Client Service

      We believe it is important to operate in close proximity to our clients to develop a better understanding of their individual needs and to add measurable value to their business processes. We respond to these needs by creating new products or product enhancements that improve the quality of data and reduce the data delivery time to clients. We believe that our regional multi-client and dedicated data processing centers in our clients’ offices provide us with an advantage in identifying contract opportunities, optimizing service to clients and developing products responsive to new market demands, such as seismic techniques applied to reservoir management. We believe that we are well positioned to benefit from the industry trend towards increased outsourcing that is leading oil and gas companies to place greater emphasis on relationships and service quality, including health, safety and protection of the environment, in their selection of third party service providers, including geophysical services providers. We plan to continue implementing our strategy towards service to clients through:

• tailoring our data acquisition operations to meet specific client demands;

• expanding regional multi-client and dedicated on-site processing centers;

• recruiting and training customer-oriented service staff;

• organizing client training seminars focused on our products and services;

• developing easy access to our multi-client data library through the increasing application of e-business technologies;

• developing corporate contracts with our main clients; and

• gaining access to new data acquisition markets, such as subsea and newly opening territories.

     Provide Integrated Services

      We are committed to providing clients with a full array of seismic data services, from acquisition and processing to data interpretation and management. We believe that integration of compatible technology and equipment increases the accuracy of data acquisition and processing, enhances the quality of our client service and thereby improves productivity in oil and gas exploration and production. Our clients increasingly seek integrated solutions to better evaluate known reserves and improve the ratio of recoverable hydrocarbons from producing fields. We are continuing to develop our ability to provide geosciences solutions through a combination

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of various exploration and production services, including technical data management, reservoir characterization and interpretation of well information.

Operating Revenues Data

     Revenues by Activity

      The following table sets forth our consolidated operating revenues by activity, and the percentage of total consolidated operating revenues represented thereby, for the periods indicated:

	Year ended December 31,
	2005			2004
	(in € millions, except percentages)
Land SBU		119.8	14%		77.3	11%
Offshore SBU		319.5	37%		205.8	30%
Processing & Reservoir SBU		113.0	13%		105.0	15%
Services		552.3	64%		393.3	56%
Products		317.6	36%		299.4	44%
Total		869.9	100%		687.5	100%

     Revenues by Region (by location of customers)

      The following table sets forth our consolidated operating revenues by region, and the percentage of total consolidated operating revenues represented thereby, for the periods indicated:

	Year ended December 31,
	2005			2004
	(in € millions, except percentages)
Americas		291.7	34%		207.7	30%
Asia-Pacific/ Middle East		297.3	34%		274.5	40%
Europe and CIS		190.3	22%		138.2	20%
Africa		90.6	10%		67.0	10%
Total		869.9	100%		687.5	100%

Services

      Our services are organized into the following three Strategic Business Units (“SBUs”) for increased efficiency: Land SBU, Offshore SBU and Processing & Reservoir SBU. We have also established a network of country managers responsible for promoting our entire spectrum of products and services in our main markets, focusing on providing comprehensive solutions to client problems. We believe that our capacity to provide integrated geophysical services is a significant competitive advantage that will help us to implement all components of our strategy.

Land SBU

      We are a significant land seismic contractor outside North America, particularly in difficult terrain. At December 31, 2005, we had 12 land crews performing specialized 3D and 2D seismic surveys, all of which were recording data. Revenues from our Land SBU accounted for approximately 11% and 14% of our revenues in 2004 and 2005, respectively.

     Land Seismic Acquisition

      Land seismic acquisition includes all seismic surveying techniques where the recording sensor is either in direct contact with, or in close proximity to, the ground. Our Land SBU offers integrated services, including the

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acquisition and on site processing of seismic data on land, in transition zones and on the ocean floor (seabed surveys).

     Description of Activity

      Seismic surveying on land is carried out by installing geophones linked to digital recorders that are used to receive the signals from reflected acoustical waves. Vibroseismic vehicles are the preferred method of generating acoustical waves since the frequency of the waves they emit can be precisely modulated by a computerized system and is less susceptible to noise or error. In difficult terrain or transition zones, however, other methods of generating acoustical waves must be utilized, such as explosives or air guns.

      Seismic surveying in transition zones and on the sea-bed is carried out by laying cables or other stationary measuring devices on the ocean floor. Ocean-bottom cables allow seismic surveys to be conducted in areas not accessible to marine vessels, such as shallow water or the area around drilling platforms. Ocean-bottom cables also provide high quality seismic data because they are in direct contact with the ocean floor.

      Our land seismic crews are equipped with advanced proprietary equipment and software used in each stage of the land seismic acquisition process, including:

• the Sercel 408UL seismic data recorders, which feature 24-bit digital recording technology;

• Geoland quality control software, which is used to verify that the location of field data points during a survey corresponds to their theoretical position;

• the Sercel VE 432 vibrator electronic control system, used to synchronies and verify the emission of acoustical waves by vibrators; and

• Geocluster software, used for on-site processing and quality control of acquired data.

      We believe that our proprietary equipment and software enable us to offer high quality, fully integrated land seismic services. We have pioneered real-time positioning of geophones and seismic sources, quality control of positioning during land surveys, and on-site processing, which together increase the accuracy and efficiency of such surveys.

      One of the challenges inherent in land acquisition surveys is gathering data without disrupting the sensitive ecosystems in which such surveys are frequently located. We have developed a strong position in environmentally sensitive zones, such as mountainous regions, tropical forests and swamps, by following a strict policy of preserving the natural environment to the extent possible. We have designed shallow draft boats and ultra-light drilling equipment to facilitate operations in such sensitive zones. This equipment can be transferred safely and rapidly from one area to another. We also work in conjunction with the local community at site locations, hiring local employees and obtaining necessary local authorizations to alleviate potential opposition to our operations.

      The difficulty of access to survey sites is a major factor in determining the number of personnel required to carry out a survey and the cost of a survey. Fully staffed land or transition zone areas range in size from 40 to 3,000 members (principally composed of local employees in the latter case), and the cost of a survey can range from several hundred thousand to several million dollars per month, depending on the size of the team and the type and difficulty of the study.

      We work closely with our clients to plan surveys in accordance with their specifications. This provides us with a competitive advantage in being selected to carry out surveys, whether such surveys are awarded based on competitive bids or directly negotiated agreements with clients. We regularly conduct land acquisition surveys for national and international oil companies.

      We have developed partnerships with local seismic acquisition companies in several countries (Kazakhstan, Indonesia and Libya). We bring to these partnerships our international expertise, technical know-how, equipment and experienced key personnel as needed, while local partners provide their logistical resources, equipment and knowledge of the environment and local market.

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      In Saudi Arabia, our land seismic acquisition activities are conducted through Arabian Geophysical & Surveying Co. (“Argas”), a joint venture owned 49% by us and 51% by TAQA , our local partner.

     Restructuring

      In 2003, our land acquisition business unit went through a period of intense competition that led us to reassess our presence in certain geographical land acquisition markets and to launch a restructuring program to substantially lower fixed costs in our land acquisition unit. This program is now fully implemented and our land acquisition business has broken even since the second quarter of 2005.

     Business Development Strategy

      Our strategy for the Land SBU is to:

• focus our presence in certain geographic markets, such as Europe, Africa and the Middle East, where we believe we have a competitive advantage and where we will operate through a joint venture organized with a regional partner Industrialization & Energy Services Company (TAQA). On March 27, 2006, the Group signed a Memorandum of Understanding with TAQA, its long term Saudi Partner in ARGAS. By this Agreement TAQA will acquire 49% of the capital of CGG Ardiseis, a newly formed CGG subsidiary dedicated to Land & Shallow Water Seismic Data Acquisition in the Middle East. CGG will hold the remaining 51%. CGG Ardiseis, whose headquarters are located in Dubai, will provide its clients with the whole range of CGG Land and Shallow Water Acquisition Services, focusing on Eye-D, the latest CGG technology for full 3D seismic imaging. As part of the Agreement, CGG Ardiseis activities in the Gulf Cooperation Council (GCC) countries will be exclusively operated by ARGAS (Arabian Geophysical and Surveying Company), which is 51% owned by TAQA and 49% by CGG. The transaction is expected to be closed before the end of first half 2006.

• continue to promote our expertise in harsh environments, sensitive areas (in terms of environmental or community concerns), shallow water and transition zones, and in management of complex projects where barriers to entry are higher and pricing competition less intense; and

• develop partnerships with local seismic acquisition companies to better leverage our technological know-how and to mitigate our risk exposure.

Offshore SBU

      We provide a full range of 3D marine seismic services, principally in the Gulf of Mexico, the North Sea and off the coasts of West Africa and Brazil as well as in the Asia-Pacific region. The capacity to both acquire and process marine seismic data is an important element of our overall strategy to maintain and develop our leading position in marine seismic data acquisition and processing. We expanded our offshore capabilities substantially in September 2005, when we acquired Exploration Resources, a Norwegian provider of marine seismic acquisition services. Revenues from our Offshore SBU accounted for approximately 30% and 37% of our revenues in 2004 and 2005, respectively, with Exploration Resources included in our results for the last four months of 2005.

     Description of Activity

      Marine seismic surveys are conducted through the deployment of submersible cables (streamers) and acoustic sources (airguns) from marine vessels. Such streamers are each up to 10 kilometers long and carry hydrophone groups normally spaced 12.5 meters apart along the length of the streamer. The recording capacity of a vessel is dependent upon the number of streamers it tows and the number of acoustic sources it carries, as well as the configuration of its data recording system. By increasing the number of streamers and acoustic sources used, a marine seismic operator can perform large surveys more rapidly and efficiently.

      Exploration Resources provides marine seismic services to the global oil and gas industry with a focus on towed seismic data acquisition, multi-client seismic services and “4C/4D” seabed operations. Exploration Resources’ activities consist of delivering 2D and 3D seismic surveys, as well as seabed surveys through its subsidiary Multiwave.

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      Each of the six seismic acquisition vessels we operated prior to the Exploration Resources acquisition is equipped with modern integrated equipment and software and has the capacity to conduct 3D surveys. Our vessels can deploy between six and 10 streamers up to 10 kilometers long and are equipped with on board processing capability. In September 2005, we expanded our capacity from five seismic vessels to six with a technological upgrade of one of our source vessels, the Laurentian, into a 3D seismic vessel. We own two of our vessels and operate the other four through time charters.

      Exploration Resources owned three seismic vessels equipped for 2D studies (Princess, Duke and Venturer) and two vessels equipped for 3D studies (C-Orion and Search). In addition, it charters the Geo Challenger, a cable vessel currently being converted to 3D, on a long-term basis and the Pacific Titan, a vessel equipped for 2D studies, on a short-term basis. Search is currently chartered to TGS Nopec under a contract that runs until October 1, 2006. The 2D vessels Princess, Duke and Venturer were still partly chartered until April 2006 to Fugro Geoteam, a subsidiary of Fugro N.V., as part of a strategic alliance with Exploration Resources existing prior to our acquisition. In this framework, the parties agreed that Exploration Resources would supply the vessel, marine crew, technical support, insurance and seismic equipment, while Fugro Geoteam supplied the geophysical services, seismic personnel and operational support. Profits were then divided, with Exploration Resources receiving 60% to 85% and Fugro Geoteam receiving 15% to 40%, after agreed deductibles related to operational and capital costs.

      The C-Orion was launched as a 3D vessel with 8 streamers in early 2006 and the Geo Challenger will be converted to a 3D vessel with twelve streamers in the first half of 2006, increasing to nine the number of CGG vessels with 3D capability. The four remaining 2D vessels will be used for 2D surveys or, where possible, as source vessels for more complex operations, which have higher margins, such as for 4D, high-resolution, and wide azimuth.

      The additional vessels increase our fleet management flexibility considerably. For instance, when demand for exclusive surveys increases (as is currently the case), we are able to meet demand while continuing to devote a portion of our fleet to enhancing our multi-client library. With more vessels, we also increase our geographical coverage and can minimize unproductive time by reducing vessels’ transit between areas of operation.

      In addition to the seven vessels that are part of the Exploration Resources fleet, we operate six vessels, of which we own two, we operate two under renewable time charters with Louis Dreyfus Armateurs (“LDA”), one of the largest shipowners in France, we operate one under time charter indirectly in partnership with LDA, and we operate one under time charter with Tech Marine International Ltd. (“TMI”). Time charters allow us to change vessels in order to keep pace with market developments and provide us with the security of continued access to vessels without the significant investment required for ownership. LDA and TMI also supply crews for the three vessels each (other than persons directly involved in seismic data acquisition and ship management). Rieber Shipping AS, one of the largest ship managers in Norway, undertakes the ship management of the Exploration Resources fleet.

      Marine seismic acquisition requires advanced navigation equipment for positioning vessels, acoustic sources and streamers and specialized techniques for safe and rapid deployment and retrieval of acoustic sources and streamers. Most of the vessels operated by CGG are fitted with a full complement of modern integrated equipment and software, including onboard computer equipment running our GeovecteurPlus software, used to process seismic data.

     Seabed

      Exploration Resources’ subsidiary, Multiwave, is a Norwegian seismic company specializing in seabed seismic operations and electromagnetic seabed logging (“EM SBL”). Seabed seismic generally is a more recent process than towed seismic and generally does not compete with towed seismic. Seabed seismic operations are most often used in areas where conventional streamer acquisition is impossible. The method can also be more effective in certain types of seismic applications, such as the monitoring of existing production fields to optimize reservoir recovery rates. Seabed seismic collection is based on laying recording cables on the seabed either permanently or as a mobile system that can be re-used in other areas. The data collection may take place through

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multiple components (3C) adapted to seabed environments, resulting in greater accuracy than conventional towed seismic, or through permanent systems that permit continuous monitoring over time (4C/4D).

      EM SBL is a complementary data acquisition method allowing for remote identification of hydrocarbon filled layers in deepwater areas. There are only two independent providers of this patented technology, ElectroMagnetic GeoServices and OHM. Multiwave has a service agreement with ElectroMagnetic GeoServices for EM SBL projects.

      The market for seabed services is still developing, and we have until now had limited experience in it. By acquiring Exploration Resources, however, we have obtained strong know-how and experience in the fields of seabed seismic and EM SBL. We will continue to offer these services under the Multiwave name.

     Multi-client Library

      Exclusive contract surveys generally provide for us to be paid a fixed fee per square kilometer of data acquired. When we acquire marine seismic data on an exclusive basis, the customer directs the scope and extent of the survey and retains ownership of the data obtained. In regions where there is extensive petroleum exploration, such as Brazil, the Gulf of Mexico, West Africa, the Mediterranean Sea and the North Sea, we also undertake multi-client (or non-exclusive) surveys whereby we retain ownership of the seismic data. This enables us to provide multiple companies access to the data by way of license. As a result, we have the potential to obtain multiple and higher revenues, while our customers who license the data have the opportunity to pay lower prices. Exploration Resources also regularly conducted non-exclusive surveys that could later be sold to one or more customers. Exploration Resources’ multi-client library represented close to 111,000 kilometers of 2D data at the time of acquisition.

      Our policy is generally to require a minimum share of the estimated cost of each multi-client survey to be covered by pre-commitments from clients prior to commencement. We treat these multi-client projects as investments. In determining whether to undertake multi-client surveys, we consider factors that include the availability of initial participants to underwrite a share of the costs to acquire such data, the location to be surveyed, the probability and timing of any future lease concessions and development activity in the area and the availability, quality and price of competing data. Once the surveys are completed, our customers may license the resulting data through “after-sales”.

      Non-exclusive survey production accounted for approximately 5% of our fleet utilization in 2005 down from 15% in 2004 and 58% in 2003, a result of sharply increased demand for exclusive surveys in 2004 and inadequate fleet capacity. See “Risk Factors — Risks Related to Our Business — We invest significant amounts of money in acquiring and processing seismic data for multi-client surveys and for our data library without knowing precisely how much of the data we will be able to sell or when and at what price we will be able to sell the data.” Within the multi-client survey market, pre-commitment sales have decreased in 2005 while after-sales have benefited from increased customer demand. For each year ended 2005, 2004, 2003 and 2002, our multi-client revenues (both pre-commitments and after-sales) have exceeded our investments in our multi-client library.

     Business Development Strategy

          Strengthening of our position in the marine segment

      Our acquisition of Exploration Resources following our previous significant acquisition of marine seismic assets from Aker Geo in 2001 fits within the strategy we defined in 1999 to strengthen our position in the marine seismic segment.

      We believe that marine seismic services constitute one of the essential pillars of a firm presence in the seismic sector. We undertook our task of strategic repositioning by means of a co-operative partnership with Louis Dreyfus Armateurs begun in 1995, which continued in 1997 with the launch of the Alizé vessel. The crisis in the seismic industry since 1999 led to overcapacity in the marine market, which resulted in a significant erosion of margins until mid-2004, when the rapid increase of demand for seismic services absorbed available capacity and today continues to create a favorable outlook for the sector in the medium term.

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          Industrial consolidation

      During the period 1999-2004, our objective to reposition ourselves in the marine sector and the persistence of overcapacity in that sector led us to the conclusion that industrial consolidation was the preferred way to achieve our goals in the context of an improved market. The alternative would have been to add net capacity to an already imbalanced market, thereby contributing to the erosion of margins and increasing exposure to contractual risks. In addition, the financial difficulties of certain participants within the sector provided opportunities for consolidation on economically attractive terms. Although market conditions have improved considerably, our strategic preference remains for steps that foster industry consolidation, as we believe this is the best guarantor of rational behavior in the sector throughout the economic cycle.

      The acquisition of Exploration Resources fits squarely within our strategy, as it both promotes industry consolidation and strengthens our presence in the three segments of the marine market.

          Marine 3D segment

      The addition to our 3D fleet of the Exploration Resources vessels Search, C-Orion and Geo Challenger, with a potential total of 26 streamers, represents an increase of almost 70% over our 2005 operational capacity prior to our acquisition of Exploration Resources and not including the conversion of the Laurentian (a vessel we charter) to six streamers completed in 2005. We decided on this substantial increase in capacity at what we believe is the beginning of a favorable cycle for the sector. We believe that the capacity increase places us in the first tier of offshore seismic services companies, together with Western Geco and PGS.

          Marine 2D segment

      Exploration Resources’ four 2D vessels (including the Pacific Titan which is on short-term charter) provide us with 2D resources at a time of favorable developments in the marine 2D segment.

      Historically, 2D was typically limited to pre-exploration efforts, as clients wished to have a rudimentary 2D image of an entire area in order to rapidly identify zones that justified 3D imaging. This limited the strategic importance and value added of 2D. This situation has changed profoundly, particularly with the development of high-resolution marine acquisition projects, as well as of 4D surveys at both the surface and the seabed levels. These techniques, which we believe are destined for the promising application of seismic services to production fields, require significant support from 2D vessels as source boats (boats from which sound waves are emitted to be recorded by companion ships or seabed installations). The possession of a mixed 2D/3D fleet thus becomes a strategic advantage and an essential factor in a company’s credibility with oil company clients.

          Seabed segment

      With the acquisition of Exploration Resources and its seabed specialized subsidiary, Multiwave, we have significantly increased our expertise in the seabed segment, which we believe is in the early stages of development. Multiwave has in recent years developed recognized experience in the engineering and operational management of highly technical projects in the emerging field of subsea geophysics, both seismic and electro-magnetic, covering both the use of permanent instrumentation in production fields and the more traditional method of using recoverable instruments to perform a study.

Processing & Reservoir SBU

      We provide seismic data processing and reservoir services through our network of 30 data processing centers and reservoir teams located around the world. Revenues from our Processing & Reservoir SBU accounted for approximately 15% of our revenues in 2004 and for 13% in 2005, respectively.

     Description of Activity

      Our seismic data processing operations transform seismic data acquired in the field into 2D cross-sections or 3D images of the earth’s subsurface using Geocluster, our proprietary seismic software. These images are then interpreted by geophysicists and geologists for use by oil and gas companies in evaluating prospective areas,

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selecting drilling sites and managing producing reservoirs. We process seismic data acquired by our own land and marine acquisition crews as well as seismic data acquired by non-affiliated third parties. Marine seismic data has been a significant source of the growth in demand for our data processing services and represents over two-thirds of our operating revenues generated in our processing centers. In addition, we reprocess previously processed data using new techniques to improve the quality of seismic images.

      Beyond conventional processing and reprocessing, we are also increasingly involved in reservoir-applied geophysics, an activity that encompasses large integrated reservoir studies from reprocessing to full reservoir simulation. It also includes advanced technology studies such as reservoir characterization, stratigraphic inversion and stochastic reservoir modeling. In 2001, we were awarded contracts to operate dedicated 4D processing centers for BP and Shell. These contracts have been regularly extended since then.

      While our reservoir teams mainly operate from Houston (covering South American projects), London and Massy, France, we also provide seismic data processing (conventional and reservoir-oriented) services through a large network of international and regional data processing centers located around the world. We operate six international processing centers located in Massy, London, Oslo, Houston, Kuala Lumpur and Calgary. Five of these centers are linked by high-speed fiber optic connections, and all of our centers have access to powerful high-performance computers. We complement our network of international centers with regional multi-client centers and dedicated centers that bring processing facilities within our clients’ premises. Sixteen of our data processing centers are “dedicated” centers that are located in our clients’ offices. We believe that these dedicated centers are responsive to the trend among oil and gas companies to outsource processing work while providing our clients with a high level of service. These centers enable our geoscientists to work directly with clients and tailor our services to meet individual clients’ needs.

      The deployment of new technologies developed by our research and development teams and improved project management methods have increased our efficiency in time and depth migrations. The expertise in 4D that we acquired in the North Sea, in particular through our 4D dedicated centers in Aberdeen, has now been exported to the Gulf of Mexico, where this activity is growing.

      Our geographical presence was strengthened in Southeast Asia with the opening of the Kuala Lumpur hub in 2004, equipped with new computer facilities, which is becoming one of our major regional hubs, and is enabling us to increase our reach throughout the Asia-Pacific region.

      Each of the principal computers used at our centers is leased for a period of approximately two years, permitting us to upgrade to more advanced equipment at the time of renewal. In 2005, we had more than 10,000 PC clusters worldwide, an average real-time computer capacity representing more than 65 teraflops, compared to approximately 40 in 2004, 30 in 2003 and approximately 15 in 2002. Our delivery time has decreased in recent years, enabling delivery of data to clients within the same timeframe as work performed directly onboard marine vessels. We believe that, with the combined capacity of our centers located in Massy and London, we have one of the largest computing capacities of any privately-owned facility in Europe.

     IT and Data Management

      We compete in the data management market through sales of PetroVision, a software designed to manage and permit instant retrieval of large quantities of geological, geophysical, well and production data.

     Processing Software Development and Sales

      We sell Geocluster, our proprietary processing software, to the oil and gas industry as well as to scientific and university research centers. This software is currently available on most modern platforms in the market, including Linux platforms. Our other proprietary software products include:

• Geovista, a set of software products used to produce accurate images of geological structures and showing depth;

• Stratavista, advanced software used to determine specific rock properties from stratigraphic inversion of seismic data;

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• WaveVista, a depth migration service based on wave equations;

• VectorVista, designed to provide greater understanding of seismic data acquired with multi-component techniques; and

• ChronoVista, a set of software products used to produce accurate images of geological structures over time.

     Business Development Strategy

      Our strategy for the Processing & Reservoir SBU is to:

• use our expertise in fractured reservoirs to develop our processing activity in the Middle East;

• develop and promote our high technology expertise, regional experience and flexibility with the ultimate goal of providing our clients with solutions that are innovative, adapted and geared towards reservoir solutions; and

• consolidate our presence in our markets and further expand our activities through our network of processing centers, the quality of our personnel and our innovative technology.

Products

      We conduct our equipment development and production operations through Sercel and its subsidiaries. We believe Sercel is the market leader in the development and production of seismic acquisition systems and specialized equipment in the land and offshore seismic markets. Sercel is operated as an independent division and makes most of its sales to purchasers other than CGG. Sercel currently operates eight seismic equipment manufacturing facilities, located in Nantes, Saint Gaudens and Toulon in France, Houston, Sydney, Singapore, Alfreton in England and Calgary. In China, Sercel operates its activities through Sercel-JunFeng Geophysical Equipment Co Ltd, based in Hebei (China), in which Sercel acquired a 51% stake in the capital in 2004 and through Xian-Sercel a manufacturing joint venture with XPEIC (Xian Petroleum Equipment Industrial Corporation), in which Sercel holds a 40% interest. In addition, two sites in Massy and Brest (France) are dedicated to borehole tools and submarine acoustic instrumentation, respectively.

      Revenues from our Products segment accounted for approximately 43% and 36% of our consolidated operating revenues in 2004 and 2005, respectively.

     Description of Activity

      Sercel offers and supports worldwide a complete range of geophysical equipment for seismic data acquisition, including seismic recording equipment and seismic sources, and provides its clients with integrated solutions. Sercel’s principal product line is seismic recording equipment, particularly the 408UL 24-bit recording systems.

      In November 1999, Sercel launched the 408UL seismic data recording system, the 408UL. The 408UL offers greater operating flexibility than any other previous generation system due to:

• clusters of ultra-light acquisition modules allowing total flexibility of configuration;

• the option of mixing different communication media (cable, radio, micro-wave, laser, fiber-optic) to form a true network allowing the user to define data routing and hence avoid obstacles in the field; and

• an architecture fully supported by a new generation of object-oriented software.

      The 408UL is one of the industry’s most advanced systems, and at the end of the year 2005, the installed base reached more than 785,000 channels. Sercel, seeking to provide users with systems well-adapted to various environments, developed the 408UL system on the basis of an upgradeable architecture. In 2002, Sercel expanded its family of 408UL products with the ULS version for transition zone environment and in 2003 with the digital sensor unit (DSU) featuring three component digital sensors based on the MicroElectroMechanicalSystem (MEMS). In November 2005, at the Society of Exploration Geophysicists convention in Houston, Sercel

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announced the launch of 428 XL, the new generation of land seismic acquisition systems. The 428 XL offers enhanced possibilities in high density and multi-component land acquisition.

      Sercel is also a market leader for vibroseismic vehicles. Sercel’s latest vibrators, called Nomad, offer high reliability and unique ergonomic features. Nomad is available with either normal tires or a tracked drive system. The track drive system allows Nomad vibrators to operate in terrain not accessible to vehicles with tires. In sand dunes or arctic conditions this can improve crew productivity. During the geophysical European congress held in Paris, France on June 2004, Sercel launched the Nomad 90, which is capable of exerting a peak force 90,000 pounds.

      In addition to recording systems, Sercel develops and produces a complete range of geophysical equipment for seismic data acquisition and other ancillary geophysical products as a result of the acquisition of Mark Products in September 2000, which specialized in the manufacture of geophones, cables and connectors. The acquisition of a 51% stake in Sercel-JunFeng Geophysical Equipment Co Ltd, based in Hebei, China, in January 2004 reinforced our manufacturing capabilities for geophone, cables and connectors, as well as our presence on the Chinese seismic market.

      The Seal, our marine seismic data recording system, capitalizes on the 408 architecture and on our many years of experience in streamer manufacturing. The Seal is the currently sole system with integrated electronics. Sercel has recently developed, among other products, an innovative solid streamer cable for marine seismic data acquisition that is designed to reduce downtime due to adverse weather conditions and thereby increase data acquisition productivity. Sercel has also expanded its marine product range with ocean- bottom cable. In November 2005, Sercel launched the Sentinel solid streamer, a new product in its Seal line that is the outcome of the technological synergies realized in recent acquisitions. Sercel has already received several firm orders for the new Sentinel.

      Sercel significantly expanded its product range and increased its market share in the seismic equipment industry with the acquisitions of GeoScience Corporation in December 1999, Mark Product in 2000 and continued its expansion in 2003 and 2004. In October 2003, Sercel acquired Sodera S.A., a leading provider of air gun sources used mainly in marine seismic data acquisition. In January 2004, Sercel acquired a division of Thales Underwater Systems Pty Ltd. that develops and manufactures surface marine seismic acquisition systems, particularly solid streamers, and seabed marine seismic acquisition systems. Both Thales’ seismic equipment business and Sercel-JunFeng have been consolidated within the CGG group from January 2004. In addition, through the acquisitions of Createch and Orca in 2004, Sercel is continuing its expansion while strengthening its position in two areas with perceived growth potential: sea-floor seismic systems and borehole seismic tools.

      As a result of these acquisitions, Sercel is a market leader in the development and production of both marine and land geophysical equipment. It is a global provider for the seismic acquisition industry with a balanced industrial position in terms of both product range and geographical presence.

     Business Development Strategy

      Our strategy for the Products segment is to:

• use the business acquisitions made in 2003 and 2004 to expand Sercel’s range of products or improve existing technology and strengthen its leading position in the geophysical equipment market; and

• maintain Sercel’s leading position in the seismic data equipment market by capitalizing on growth opportunities resulting from the strength of its current product base, the application of new technologies in all of its products as well as from its diversified geographical presence.

Backlog

      Backlog for our Services segment represents the revenues we expect to receive from commitments for contract services we have with our customers and, in connection with the acquisition of multi-client data, represents the amount of pre-sale commitments for such data. Backlog for our Products segment represents the total value of orders we have received but not yet fulfilled.

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      Backlog estimates are based on a number of assumptions and estimates, including assumptions as to exchange rates between the euro and the U.S. dollar and estimates of the percentage of completion contracts. Contracts for services are occasionally modified by mutual consent and in certain instances are cancelable by the customers on short notice without penalty. Consequently, our backlog as of any particular date may not be indicative of our actual operating results for any succeeding period.

      Our total backlog (Services and Products) as of March 1, 2006, stood at U.S.$990 million, of which U.S.$760 million was for Services and U.S.$230 million was for Products, excluding intra-group sales, up 108% from U.S.$475 million as of March 1, 2005, of which U.S.$350 million was for Services and U.S.$125 million was for Products, excluding intra-group sales.

Seasonality

      Our land and marine seismic acquisition activities are seasonal in nature. We generally experience decreased revenues in the first quarter of each year due to the effects of weather conditions in the Northern Hemisphere and to the fact that our principal clients are generally not prepared to fully commit their annual exploration budget to specific projects during that period.

      We have historically experienced higher levels of activity in our equipment manufacturing operations in the fourth quarter as our clients seek to fully deploy annual budgeted capital.

Intellectual Property

      We continually seek the most effective and appropriate protection for our products, processes and software and, as a general rule, will file for patent, copyright or other statutory protection whenever possible. Our patents, trademarks, service marks, copyrights, licenses and technical information collectively represent a material asset to our business. However, no single patent, trademark, copyright, license or piece of technical information is of material importance to our business when taken as a whole. As of December 31, 2005, we held 144 patents in respect of different products and processes worldwide. The duration of these patents varies from four to 20 years, depending upon the date filed and the duration of protection granted by each country.

Competition

     General

      Most contracts are obtained through a competitive bidding process, which is standard for the industry in which we operate. Important factors in awarding contracts include service quality, technological capacity, performance, reputation, experience of personnel, customer relations and long-standing relationships, as well as price. While no single company competes with us in all of our segments, we are subject to intense competition with respect to each of our segments. We compete with large, international companies as well as smaller, local companies. In addition, we compete with major service providers and government-sponsored enterprises and affiliates. Some of our competitors operate more data acquisition crews than we do and have substantially greater financial and other resources.

     Land

      The land seismic market is extremely fragmented and characterized by intense price competition. The entrance of a significant number of Chinese competitors seeking to expand their international market share beginning in 2000 has driven down prices in this sector and decreased the market share of established participants. In addition, certain very active services markets, such as China and Russia, are not practically accessible to international services providers like us. The most significant service providers in land are Western Geco and BGP. We believe that price is the principal basis of competition in this market, although relationships with local service providers are important, as is experience in unusual terrain. Volume in the land seismic market increased by almost 20% in 2005 with a positive, but moderate, impact on market prices.

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     Offshore

      The offshore sector has five leading participants: Western Geco, PGS, CGG, Veritas and Fugro. From 1999 to mid-2004, the offshore market experienced excess supply, which put downward pressure on prices. Because of the high fixed costs in this sector, excess supply has not been reduced by operators but rather channeled into multi-client libraries. With supply flat since 2003, however, and demand increasing gradually until mid-2004 and then more rapidly, prices have recovered significantly in this market. The market upturn was confirmed in the second half of 2005 with a continuous increase of exclusive volumes and sales from the multi-client existing libraries.

     Processing

      The processing sector is led by Western Geco, CGG and Veritas. This market is characterized by greater client loyalty than the acquisition sector, as evidenced by the presence of processing centers on client premises. Processing capacity has multiplied in recent years as a result of improvements in computing technology. This increase in computing power has allowed improved processing and the use of more complex and accurate algorithms.

     Products

      Our principal competitor for the manufacture of seismic survey equipment is Input/ Output Inc. The market for seismic survey equipment is highly competitive and is characterized by continual and rapid technological change. We believe that technology is the principal basis for competition in this market, as oil and gas companies have increasingly demanded new equipment for activities such as reservoir management and data acquisition in difficult terrain. Oil and gas companies have also become more demanding with regard to the quality of data acquired. Other competitive factors include price and customer support services.

Organizational Structure

      We are the parent company of the CGG group. Our principal subsidiaries are as follows:

	Jurisdiction of		% of
Subsidiary	Organization	Head office	interest
Sercel S.A.	France	Carquefou, France		100.0
CGG Marine SAS	France	Massy, France		100.0
CGG Americas, Inc.	United States	Houston, Texas, United States		100.0
CGG Marine Resources Norge A/ S	Norway	Hovik, Norway		100.0
Companía Mexicana de Geofisica	Mexico	Mexico City, Mexico		100.0
CGG do Brasil Participaçoes Ltda	Brazil	Rio de Janeiro, Brazil		100.0
Exploration Resources ASA	Norway	Oslo, Norway		100.0
Sercel Inc.	United States	Tulsa, Oklahoma, United States		100.0

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Property, Plant and Equipment

      The following table sets forth certain information as of December 31, 2005 relating to our principal properties.

				Lease
			Owned/	expiration
Location	Type of facilities	Size	Leased	date
Paris, France	Executive offices for the CGG group	725 m2	Leased		2009
Massy, France	Principal administrative offices for the CGG group	9,174 m2	Owned
Massy, France	Data processing centre	7,371 m2	Owned
London, England	Data processing centre	2,320 m2	Leased		2011
Redhill, England	Administrative offices	2,095 m2	Leased		2010
Houston, Texas, U.S.A.	Offices of CGG Americas, Inc.	6,905 m2	Leased		2007
Houston, Texas, U.S.A.	Offices and manufacturing premises of Sercel	24,154 m 2	Owned
Cairo, Egypt	Data processing center	2,653 m2	Leased		2013
Kuala Lumpur, Malaysia	Data processing center and administrative offices	1,152 m2	Leased		2008
Perth, Australia	Data processing center	429 m2	Leased		2008
Calgary, Canada	Administrative offices and data processing center	1,764 m2	Leased		2013
Rio de Janeiro, Brazil	Offices of CGG Do Brazil	326 m2	Leased		2010
Oslo, Norway	Data processing center CGG Norge	1,431 m2	Leased		2008
	Offices of CGG Marine Resources Norge AS	243 m2	Leased		2008
Bergen, Norway	Offices of Exploration Resources AS and Multiwave AS	992 m2	Leased		2009
Mexico City, Mexico	Registered office of CMG	570 m2	Leased		2006
Caracas, Venezuela	Administrative offices	315 m2	Leased		2007
	Processing activities	1,394 m2	Leased		2006
Carquefou, France	Sercel factory. Activities include research and development relating to, and manufacture of, seismic data recording equipment	23,318 m 2	Owned
Saint Gaudens, France	Sercel factory. Activities include research and development relating to, and manufacture of, geophysical cables, mechanical equipment and borehole seismic tools	16,000 m 2	Owned
Sydney, Australia	Activities include research and development relating to, and manufacture and marketing of, marine streamers	7,096 m2	Leased		2006
Xu Shui, China	Activities include research and development relating to, and manufacture of geophones	59,247 m 2	Leased		2053
Calgary, Canada	Manufacture of geophysical cables	8,357 m2	Owned
Alfreton, England	Manufacture of geophysical cables	5,665 m2	Owned
Singapore	Manufacture of geophysical cables	5,595 m2	Owned

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      We also lease other offices worldwide to support our operations. We believe that our existing facilities are adequate to meet our current requirements.

      The following table provides certain information concerning the 3D seismic vessels operated by the Offshore SBU during 2005:

			Year added		Charter				Number of			Vessel length
Vessel name	Year built		to fleet		expires		2D/3D		streamers			(in meters)
CGG Föhn		1985		1985		2008		3D		8	(1)		84.5
CGG Harmattan		1993		1993		2008		3D		8	(1)		96.5
CGG Alizé		1999		1999		2007		3D		10			100.0
Laurentian		1983		2003		2008		3D		6			84.4
CGG Amadeus		1999		2001		N/A		3D		8			87.0
CGG Symphony		1999		2001		N/A		3D		10			120.7
Search(2)		1982		2005		N/A		3D		6			98.5
C-Orion(2)		1979		2005		N/A		3D		8			81.0
Geo Challenger(2)		1999		2005		2010		3D		12 planned	(3)		96.4
Princess(2)		1985		2005		N/A		2D		1-2	(4)		76.2
Duke(2)		1983		2005		N/A		2D		1			66.7
Venturer(2)		1986		2005		N/A		2D		1-4	(4)		89.5
Pacific Titan(2)		1982		2005		2006		2D		1-4	(4)		64.5

Notes:

(1)	In high-resolution mode.
(2)	Vessel in the Exploration Resources fleet.
(3)	Following conversion to be completed in the first half of 2006.
(4)	One streamer if long or multistreamer mode for shorter streamers.

Environmental Matters and Safety

      Our operations are subject to a variety of laws and regulations relating to environmental protection. We invest financial and managerial resources to comply with such laws and regulations. Although such expenditures historically have not been material to us, and we believe that we are in compliance in all material respects with applicable environmental laws and regulations, the fact that such laws and regulations are changed frequently prevents us from predicting the cost of impact of such laws and regulations on our future operations. We are not involved in any legal proceedings concerning environmental matters and are not aware of any claims or potential liability concerning environmental matters that could have a material adverse impact on our business or consolidated financial condition.

      Efforts to improve safety and environmental performance over the last few years continued as some procedures were strengthened and others implemented to increase awareness among personnel and subcontractors, including obligatory regular meetings in the field and onboard. A comprehensive Health, Safety and Environment management system, placing particular emphasis on risk management, has been established to cover all activities and is being continuously adapted for each segment.

Legal Proceedings

      From time to time we are involved in legal proceedings arising in the normal course of our business. We do not expect that any of these proceedings, either individually or in the aggregate, will result in a material adverse effect on our consolidated financial condition or results of operations.

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Item 5:     OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Operating Results

      The following operating and financial review and prospects should be read in connection with our consolidated annual financial statements and the notes thereto included elsewhere in this annual report, which have been prepared in accordance with IFRS.

      We adopted IFRS as our primary accounting principles from January 1, 2005, and our first consolidated financial statements under IFRS are those for the year ended at December 31, 2005. They include comparative information for the year ended December 31, 2004 using IFRS as used as of and for the year ended December 31, 2005.

      As permitted by release No. 33-8567 — First-time application of International Financial Reporting Standards — issued by the U.S. Securities and Exchange Commission (the “SEC”), we are filing for our first year of reporting under IFRS in this Annual Report on Form 20-F for the fiscal year ended December 31, 2005 two years rather than three years of statements of income, changes in shareholders’ equity and cash flows prepared in accordance with IFRS, with appropriate related disclosure required by this SEC release concerning exceptions to IFRS and reconciliation to previous generally accepted accounting principles applied by us.

      International Financial Reporting Standards differ in certain significant respects from accounting principles generally accepted in the United States (“U.S. GAAP”). Note 31 (“Reconciliation to US GAAP”) to our consolidated annual financial statements describes the principal differences between IFRS and U.S. GAAP as they relate to us, and reconciles net income and shareholders’ equity to U.S. GAAP as of and for the period ended December 31, 2005 and 2004.

Factors affecting our results of operations

      We divide our businesses into two segments, geophysical services and geophysical products (seismic data acquisition equipment produced by our Sercel subsidiaries).

      We organize our geophysical services business development into two geographical areas: the Western hemisphere, which includes the Americas and the Eastern hemisphere, which includes Europe, Eastern European countries, Africa and Asia-Pacific. We also divide services into three strategic business units, or SBUs:

• the Land SBU for land and shallow water seismic acquisition activities;

• the Offshore SBU for marine seismic acquisition and multi-client library sales; and

• the Processing & Reservoir SBU for seismic data processing, data management and reservoir studies.

      Our Products segment, which we conduct through Sercel Holding S.A. and its subsidiaries, is made up of our manufacturing and sales activities for seismic data acquisition equipment, both on land and offshore.

      Overall demand for geophysical services is dependent upon spending by oil and gas companies for exploration, production development and field management activities. We believe the level of spending by such companies depends on their perception of the relationship between proven future reserves and expected future energy consumption.

      After many years of strong growth, the geophysical market in 1999, following a sharp drop in the price of oil, experienced a deep recession, which we believe resulted in a reduction of more than 40% in industry revenues compared to 1998. The geophysical services market (particularly the offshore segment) has improved since 1999 in terms of both volumes of sales and prices, gradually until mid-2004, and then more rapidly.

      We believe that two principal factors contributed to the slow recovery from 1999 to mid-2004 of geophysical services despite increasing oil and gas prices. First, global geopolitical uncertainty, particularly following the events of September 11, 2001 and the conflict in Iraq in 2003, harmed the confidence and visibility that are essential to our main clients’ long-term decision-making processes. As a consequence, they delayed or cancelled many projects. Second, geophysical service providers have generally not reacted efficiently to the difficult

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industry environment and have, in particular, failed to adjust their capacity in response to reduced demand, leading to continuing excess supply pushing down prices.

      We believe that during 2004, oil and gas companies (including both the major multinational oil companies and the national oil companies) and the large oil and gas consuming nations suddenly perceived a growing and potentially lasting imbalance between the supply of and demand for hydrocarbons. A rapid rise in world consumption requirements, particularly in China and India, resulted in demand in hydrocarbons growing more rapidly than anticipated. At the same time, the excess production capacity of OPEC appeared to have reached historical lows, focusing attention on existing production capacities and available reserves. These market pressures from the both the supply and demand sides consequently produced a sharp rise in oil and gas prices.

      The recognition of an imbalance between hydrocarbon supply and demand has led the oil and gas industry to significantly increase capital expenditures in exploration and production. The seismic services market generally benefits from this spending since seismic services are an important element in the search for new reserves and extraction of more oil from existing reservoirs.

      Nevertheless, our belief that the seismic industry should eventually consolidate remains unchanged. We believe that the benefit of such consolidation would be to exploit synergies and to promote the emergence of increasingly global seismic operators possessing larger financial and technological bases.

     Acquisitions and disposals

      On February 14, 2005, we ended our cooperation agreements with PT Alico, an Indonesian company. On that date, PT Alico, which was fully consolidated in our accounts until 2004 as a consequence of our contractual relationship with them, was excluded from our scope of consolidation. Under our agreements with PT Alico, we indemnified them against certain specific risks. This liability is limited and was accrued in our financial statements as of December 31, 2004. The liability will expire on June 30, 2006, at which date we will have no further commitment to PT Alico or its shareholders.

      On July 27, 2005, we established a new company in Russia, CGG Vostok, which will undertake seismic services. CGG Vostok is part of our consolidated group from the date of its creation.

      On August 29, 2005, we acquired a controlling stake of approximately 60% of Exploration Resources ASA (“Exploration Resources”), a Norwegian provider of marine seismic acquisition services (see further description in Item 4), at a purchase price of approximately NOK 340 per share corresponding to a premium of 8.3% over the last stock price of Exploration Resources’ shares on the Oslo Stock Exchange before the transaction was announced.

      We acquired, in a series of transactions, the remaining shares of Exploration Resources by the end of October 2005 for an average price, excluding fees, of NOK 338.27 per share: first by open market purchases; second, in a combined mandatory offer followed by a squeeze-out; third, by mutual agreements with the members of Exploration Resources’ management that held stock-options; and finally by agreement with the minority shareholders of Multiwave Geophysical Company ASA (“Multiwave”), Exploration Resources’ subsidiary focusing on seabed acquisition, who owned Exploration Resources shares as a consequence of the merger of Multiwave with Exploration Seismic AS, a wholly owned subsidiary of Exploration Resources.

      The total cost to us of the acquisition was €303.3 million, including €8.6 million related to acquisition fees and including the price of the shares acquired in October 2005. The reassessment of Exploration Resources’ net assets, along with our evaluation of the seismic business’s economic prospects, led us primarily to increase the book value of the vessels (by € 115 million at September 1, 2005) and to record corresponding deferred tax liabilities. The vessels were valued using combined valuation methods and, particularly, the present value of cash flows that we expect the vessels to generate.

      We have included Exploration Resources in our consolidated financial statements from September 1, 2005.

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     Revenues and backlog

      Our operating revenues for the year ended December 31, 2005, including Exploration Resources’ operating revenues from September 1, 2005, increased 27% to €869.9 million from € 687.4 million for the year ended December 31, 2004. Expressed in U.S. dollars, our consolidated operating revenues for the year ended December 31, 2005 increased 26% to U.S.$1,081.0 million from U.S.$854.8 million for the year ended December 31, 2004. The increase resulted primarily from our Offshore SBU, in which revenues increased 55% in euros (55% in U.S. dollar terms) between the year ended December 31, 2005 and the year ended December 31, 2004, and from our Land SBU, in which revenues increased 55% in euros (55% in U.S. dollar terms) between the year ended December 31, 2005 and the year ended December 31, 2004.

      Our backlog for our Services and Products segments, as of March 1, 2006 was U.S.$990 million (U.S.$760 million for Services and U.S.$230 million for Products excluding intra-group sales), increasing by 108% compared to U.S.$475 million (U.S.$350 million for Services and U.S.$125 million for Products excluding intra-group sales), as of March 1, 2005.

     Foreign Exchange Fluctuations

      As a company that derives a substantial amount of its revenue from sales internationally, our results of operations are affected by fluctuations in currency exchange rates.

      In order to present trends in our business that may be obscured by currency fluctuations, we have translated certain euro amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations into U.S. dollars. See “Trend Information — Currency Fluctuations”.

     10⁵/8% Senior Notes due 2007

      On January 26, 2005, we redeemed U.S.$75 million principal amount of our outstanding 10⁵/8 % senior notes due 2007. We paid an early redemption premium of 5.3125% of the aggregate principal amount of notes redeemed (U.S.$4.0 million) plus accrued and unpaid interest. The total cost to us of the redemption was therefore U.S.$79 million plus accrued interest of U.S$1.3 million.

      On May 31, 2005, using the net proceeds from our issuance of 7¹/2% senior notes due 2015 described below, we redeemed the remaining U.S.$150 million principal amount of our outstanding 10⁵/8 % senior notes due 2007. We paid an early redemption premium of 5.3125% of the aggregate principal amount of notes redeemed (U.S.$8.0 million) plus accrued and unpaid interest. The total cost to us of the redemption was therefore U.S.$158 million plus accrued interest of U.S $0.7 million.

     7¹/2% Senior Notes due 2015

      On April 28, 2005, we issued U.S.$165 million aggregate principal amount of 7¹/2 % senior notes due 2015 guaranteed by certain subsidiaries in a private placement to certain eligible investors. The notes contain a customary covenant package, with limitations on the incurrence of indebtedness, restricted payments and asset sales, among others.

      We used the net proceeds from the offering to redeem and pay accrued interest on all of the remaining outstanding U.S.$150 million aggregate principal amount of our 10⁵/8 % senior notes due 2007, on May 31, 2005.

      On February 3, 2006, we issued an additional $165 million of our 7¹/2 % senior notes due 2015 issued in April 2005 in a private placement to certain eligible investors. The notes were issued at a price of 103.25% of their principal amount. The net proceeds from the notes were used mainly to repay on February 10, 2006, the $140.3 million remaining under our $375 million bridge credit facility described below and used to finance the acquisition of Exploration Resources.

     U.S.$375 million Bridge Credit Facility due 2006

      On September 1, 2005, we entered into a single currency U.S.$375 million term credit facility, which was amended on September 30, 2005, with Crédit Suisse, Paris Branch and BNP Paribas as arrangers, with a maturity

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date at September 1, 2006 and with the option (upon our request and upon approval of a majority of the lenders) to extend it for a further six months. We used the proceeds from this credit facility to fund our purchase of Exploration Resources shares and repaid the facility on December 23, 2005 with the proceeds of our share capital in December 2005 and our issuance of 7¹/2 % senior notes due 2015 in February 2006.

      The credit facility carried interest at a graduated rate beginning with a base margin, depending on the credit rating assigned by either Moody’s or Standard & Poor’s to our outstanding U.S.$165 million 7¹/2% senior notes due 2015 (4.25% at BB-/ Ba3 or higher, 5.25% at B+/ B1, 5.75% at B/ B2 and 6.25% at B-/ B3 or lower), over US$ LIBOR until March 1, 2006.

     U.S$85 million convertible bonds due 2012

      The terms of our U.S.$85 million convertible bonds due 2012 were amended by our general meeting of bondholders held on November 2, 2005, as approved by a general meeting of our shareholders held on November 16, 2005 in order to provide bondholders with the opportunity to redeem their convertible bonds before maturity and receive an additional cash payment. The early conversion period was open from November 17 to November 18, 2005, inclusive. At the conclusion of the conversion period, 11,475 convertible bonds due 2012 were converted, leading to the issuance of 1,147 500 new shares. 2,525 convertible bonds remain outstanding with a nominal value of $15.3 million. We paid a total premium of $10.4 million (€ 8.9 million) to the bondholders who converted their bonds.

     Share Capital Increase

      On December 16, 2005 we completed a share capital increase by way of preferential subscription rights. We issued 4,099,128 new shares of our common stock bearing rights from January 1, 2005, bringing our total share capital at that date to 17,079,718 ordinary shares with a par value of € 2 per share. We used the net proceeds of the share capital increase to repay approximately U.S.$234.7 million under our U.S.$375 million bridge credit facility used to finance the acquisition of Exploration Resources.

     Renewed and new time charters agreements

      We renewed the time charter party agreement of our seismic vessel, the Laurentian, in April 2005 with modified contractual conditions. As a result, it was qualified as a capital lease and was reported as such in our financial statements at and for the six months ended June 30, 2005. The total lease obligation is U.S.$27.8 million (€23.6 million) over its three-year term plus a residual value of U.S.$7.3 million (€6.2 million). The net present value of future lease payments under the capital lease is U.S.$16.8 million (€14.2 million) and the remaining part of the obligation is accounted for as operating expenses over the duration of the agreement. This amount, less the estimated residual value of U.S.$7.3 million (€6.2 million) will be depreciated over the duration of the agreement. Likewise, the time charter party agreement of the Geochallenger seismic vessel, included in Exploration Resources’ assets at September 1, 2005, has been accounted for as a capital lease. The total lease obligation is U.S.$48,8 million (€41,4 million) over its five-year term plus a residual value of NOK 230 million (€30 million). The net present value of future lease payments under the capital lease is U.S.$54.8 million (€46.5 million) and the remaining part of the obligation is accounted for as operating expenses over the duration of the agreement. This amount, less the estimated residual value of NOK 230 million (€ 30 million) will be depreciated over the duration of the agreement.

Critical Accounting Policies

      Our significant accounting policies, which we have applied consistently, are fully described in note 1 to our consolidated financial statements included elsewhere in this document. However, certain of our accounting policies are particularly important to the portrayal of our financial position and results of operations, and these are described below. As we must exercise significant judgment when we apply these policies, their application is subject to an inherent degree of uncertainty.

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     Operating revenues

      Operating revenues are recognized when they can be measured reliably, and when it is likely that the economic benefits associated with a transaction will flow to the relevant entity, which is at the point that such revenues have been realized or are considered realizable. For contracts where the percentage on completion method of accounting is being applied, revenues are only recognized when the costs incurred for the transaction and the cost to complete the transaction can be measured reliably and such revenues are considered earned and realizable.

          •   Multi-client surveys

      Multi-client surveys consist of seismic surveys to be licensed to customers on a non-exclusive basis. All costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized into the multi-client surveys. The value of our multi-client library is stated on our balance sheet at the aggregate of those costs less accumulated amortization or at fair value if lower. We review the library for potential impairment of our independent surveys on an ongoing basis.

      Revenues related to multi-client surveys result from (i) pre-commitments and (ii) licenses after completion of the surveys (“after-sales”).

      Pre-commitments — Generally, we obtain commitments from a limited number of customers before a seismic project is completed. These pre-commitments cover part or all of the survey area blocks. In return for the commitment, the customer typically gains the right to direct or influence the project specifications, advance access to data as it is being acquired, and favorable pricing. We record payments that we receive during periods of mobilization as advance billing in the balance sheet in the line item “Advance billings to customers”.

      We recognize pre-commitments as revenue when production is begun based on the ratio of project cost incurred during that period to total estimated project cost. We believe this ratio to be generally consistent with the physical progress of the project.

      After sales — Generally, we grant a license entitling non-exclusive access to a complete and ready for use, specifically-defined portion of our multi-client data library in exchange for a fixed and determinable payment. We recognize after sales revenue upon the client executing a valid license agreement and having been granted access to the data. Within thirty days of execution and access, the client may exercise our warranty that the medium on which the data is transmitted (a magnetic cartridge) is free from technical defects. If the warranty is exercised, we will provide the same data on a new magnetic cartridge. The cost of providing new magnetic cartridges is negligible.

      After sales volume agreements — We enter into customer arrangements in which we agree to grant licenses to the customer for access to a specified number of blocks of the multi-client library. These arrangements typically enable the customer to select and access the specific blocks for a limited period of time. We recognize revenue when the blocks are selected and the client has been granted access to the data. Within thirty days of execution and access, the client may exercise our warranty that the medium on which the data is transmitted (a magnetic cartridge) is free from technical defects. If the warranty is exercised, we will provide the same data on a new magnetic cartridge. The cost of providing new magnetic cartridges is negligible.

          •   Exclusive surveys

      In exclusive surveys, we perform seismic services (acquisition and processing) for a specific customer. We recognize proprietary/contract revenues as the services are rendered. We evaluate the progress to date, in a manner generally consistent with the physical progress of the project, and recognize revenues based on the ratio of the project cost incurred during that period to the total estimated project cost. We believe this ratio to be generally consistent with the physical progress of the project.

      The billings and the costs related to the transits of seismic vessels at the beginning of the survey are deferred and recognized over the duration of the contract by reference to the technical stage of completion.

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      In some exclusive survey contracts and a limited number of multi-client survey contracts, we are required to meet certain milestones. We defer recognition of revenue on such contracts until all milestones that provide the customer a right of cancellation or refund of amounts paid have been met.

          •   Other geophysical services

      Revenues from our other geophysical services are recognized as the services are performed and, when related to long-term contracts, using the performance method of recognizing income.

          •   Equipment sales

      We recognize revenues on equipment sales upon delivery to the customer. Any advance billings to customers are recorded in current liabilities.

          •   Software and hardware sales

      We recognize revenues from the sale of software and hardware products following acceptance of the product by the customer at which time we have no further significant vendor obligations remaining. Any advance billings to customers are recorded in current liabilities.

      If an arrangement to deliver software, either alone or together with other products or services, requires significant production, modification, or customization of software, the entire arrangement is accounted for as a production-type contract, i.e. using the percentage of completion method.

      If the software arrangement provides for multiple deliverables (e.g. upgrades or enhancements, post-contract customer support such as maintenance, or services), the revenue is allocated to the various elements based on specific objective evidence of fair value, regardless of any separate allocations stated within the contract for each element. Each element is appropriately accounted for under the applicable accounting standard.

      Maintenance revenues consist primarily of post contract customer support agreements and are recorded as advance billings to customers and recognized as revenue on a straight-line basis over the contract period.

     Multi-client surveys

      Multi-client surveys consist of seismic surveys to be licensed to customers on a non-exclusive basis. All costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized into the multi-client surveys. The value of our multi-client library is stated on our balance sheet at the aggregate of those costs less accumulated amortization or at fair value if lower. We review the library for potential impairment of our independent surveys on an ongoing basis.

      We amortize the multi-client surveys over the period during which the data is expected to be marketed using a pro-rata method based on recognized revenues as a percentage of total estimated sales (such estimation relies on the historical sales track record).

      In this respect, we use three different sets of parameters depending on the area or type of surveys considered:

— Gulf of Mexico surveys are amortized on the basis of 66.6% of revenues. Starting at time of data delivery, a minimum straight-line depreciation scheme is applied on a three-year period, should total accumulated depreciation from the 66.6% of revenues amortization method be below this minimum level;

— Rest of the world surveys: same as above except depreciation is 83.3% of revenues and straight-line depreciation is over a five-year period from data delivery; and

— Long term strategic 2D surveys are amortized on the basis of revenues according to the above area split and straight-line depreciation on a seven-year period from data delivery.

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     Development costs

      Expenditures on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding are recognized in the income statement as expenses as incurred and are presented as “Research and development expenses — net”.

      Expenditure on development activities, whereby research finding are applied to a plan or design for the production of new or substantially improved products and processes, are capitalized if:

— the project is clearly defined, and costs are separately identified and reliably measured,

— the product or process is technically and commercially feasible,

— we have sufficient resources to complete development, and

— the intangible asset is likely to generate future economic benefits, either because it is useful to us or through an existing market for the intangible asset itself or for its products.

      Expenditures capitalized include the cost of materials, direct labor and an appropriate proportion of overhead. Other development expenditures are recognized in the income statement as expenses as incurred and are presented as “Research and development expenses — net”.

      Capitalized development expenditures are stated at cost less accumulated amortization and impairment losses.

      We amortize capitalized developments costs over 5 years.

      Research & development expenses in our income statement represent the net cost of development costs that are not capitalized, of research costs, offset by government grants acquired for research and development.

     Impairment

      In accordance with IAS 36 “Impairment of assets”, the carrying amounts of our assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, we estimate the asset’s recoverable amount. Factors we consider important by that could trigger an impairment review include the following:

— significant underperformance relative to expected operating results based upon historical and/or projected data,

— significant changes in the manner of our use of the acquired assets or the strategy for our overall business, and

— significant negative industry or economic trends.

      The recoverable amount of tangible and intangible assets is the greater of their net fair value less costs to sell and value in use.

      For cash generating units comprised of goodwill, assets that have an indefinite useful life or intangible assets that are not yet available for use, we estimate the recoverable amount at each balance sheet date.

      We determine the recoverable amounts by estimating future cash flows expected from the assets or from the cash generating units, discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

      We recognize an impairment loss whenever the carrying amount of an asset exceeds its recoverable amount. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

      Impairment losses are recognized in the income statement. Impairment losses recognized in respect of a group of non independent assets allocated to a cash-generating unit are allocated first to reduce the carrying

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amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

     Onerous contracts

      We recognize a provision for onerous contracts corresponding to our estimates of the excess of the unavoidable costs of meeting the obligations under the contract over the economic benefits expected to be received under the contract estimated by the Group.

     Convertible bonds

      As our $85 million 7.75% subordinated bonds due 2012 convertible into new ordinary shares or redeemable into new shares and/or existing shares and/or in cash issued in 2004 are denominated in U.S. dollars and convertible into new ordinary shares denominated in Euros, the embedded conversion option has been bifurcated and accounted separately within non-current liabilities. The conversion option and the debt component were initially recognized at fair value on issuance. The amount of the debt component to be recorded within the financial statements has been discounted at the rate of 10.75%, the rate borne by comparable indebtedness without a conversion option. As a result, we have bifurcated the embedded conversion option by € 10.5 million at the issuance of the bonds as “Other non-current assets”. The discounting of the bonds at issuance is accounted for as “Cost of financial debt” until the maturity of the bonds.

      Changes in the fair value of the embedded derivative are recognized in the consolidated income statement in the line item “Variance on derivative convertible bonds”. The fair value of the embedded derivative has been determined using a binomial model.

Year ended December 31, 2005 compared with year ended December 31, 2004

     Revenues by Activity

      The following table sets forth our consolidated operating revenues by activity (excluding intra-group sales), and the percentage of total consolidated operating revenues represented thereby, during each of the periods indicated:

	Year ended December 31,
	2005			2004
	(in million of euros,
	except percentages)
Land SBU		119.8	14%		77.3	11%
Offshore SBU		319.5	37%		205.7	30%
Processing and Reservoir SBU		113.0	13%		105.0	15%
Services		552.3	64%		388.0	56%
Products		317.6	36%		299.4	44%
Total		869.9	100%		687.4	100%

     Operating Revenues

      Our consolidated operating revenues for the year ended December 31, 2005 increased 27% to €869.9 million from € 687.4 million for 2004. Expressed in U.S dollars, our consolidated operating revenues increased 26% to U.S.$1,081.0 million from U.S.$854.8 million. The increase was attributable to our Services segment, particularly to our Offshore SBU (which included Exploration Resources’ results for part of 2005) and our Land SBU.

          Services

      Operating revenues for our Services segment (excluding intra-group sales) for the year ended December 31, 2005 increased 42% to €552.3 million from € 388.0 million for 2004. Expressed in U.S. dollars, operating revenues increased 42% to U.S.$686.2 million from U.S.$482.5 million. This increase was primarily attributable

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to our Offshore SBU (which included Exploration Resources’ results of operations from September 1, 2005) and, to a lesser extent, to our Land SBU.

      Land SBU. Operating revenues for our Land SBU for the year ended December 31, 2005 increased 55% to €119.8 million from € 77.3 million for 2004. Expressed in U.S. dollars, operating revenues increased 55% to U.S.$148.8 million from U.S.$95.8 million. The increase is principally attributable to weak results in 2004 and reflects a better filling of capacity in this SBU after its restructuring in 2003, with a strong level of orders spread over 2005.

      For 2005, 17 crews on average were in operation compared to 12 crews on average for 2004.

      Offshore SBU. Operating revenues for our Offshore SBU increased 55% to €319.5 million for the year ended December 31, 2005 from €205.8 for 2004. In U.S. dollar terms, operating revenues increased 55% to U.S.$397.1 million from U.S.$256.2 million. This increase is principally due to: low exclusive sales results in 2004, with notably low price levels in the first half of 2005; a high level of multi-client survey after-sales in 2005; and Exploration Resources’ contribution to operating revenues from September 1, 2005 of € 28.8 million (U.S.$35.8 million), which represented 9.0% of operating revenues for the year ended December 31, 2005.

      Exclusive sales increased 90% to €185.8 million for the year ended December 31, 2005 compared to €97.9 million for 2004. Exclusive contracts accounted for 58% of our Offshore sales for the year ended December 31, 2005 compared to 48% for 2004 as we shifted more resources toward exclusive contracts, due to price increases since the first half of 2004 and as we increased production capacity in the second half of 2005 with the upgrade of the vessel Laurentian and the acquisition of Exploration Resources. Multi-client data sales increased 24% to €133.7 million for the year ended December 31, 2005 from €107.9 million for 2004 primarily due to a strong level of after-sales. Pre-commitment sales decreased 7% to €36.3 million for the year ended December 31, 2005 from €39.0 million for 2004 due to a mix of services more oriented towards exclusive surveys. After-sales increased by 41% to €97.4 million for the year ended December 31, 2005 from € 68.9 million for 2004 due to high demand for existing data in the Gulf of Mexico and Brazil.

      Processing and Reservoir SBU. Operating revenues for our Processing and Reservoir SBU increased 8% to €113.0 million for the year ended December 31, 2005 from € 105.0 million for 2004. In U.S. dollar terms, operating revenues increased 8% to U.S.$140.4 million from U.S.$130.4 million due to a dynamic market with strong demand for high quality imagery.

          Products

      Operating revenues for our Products segment for the year ended December 31, 2005 increased 21% to €378.8 million from € 313.6 million for 2004. Expressed in U.S. dollar terms, revenues increased 21% to U.S.$468.8 million for the year ended December 31, 2005 from U.S.$389.9 million in the year ended December 31, 2004. The overall increase was primarily due to stronger demand for Seal marine recording systems or system upgrades from various customers including our own Services segment. Demand for land equipment grew moderately as a result of an increase in demand during the second half of 2005 following a mild decrease in the first half of the year. The high demand for marine equipment came largely from our Services segment in the last quarter of 2005.

      Excluding intra-group sales, operating revenues increased 6% to €317.6 million for the year ended December 31, 2005 from € 299.4 million for 2004. Expressed in U.S. dollar terms, revenues excluding intra-group sales increased 6% to U.S.$394.8 million for the year ended December 31, 2005 from U.S.$372.3 million for 2004, since a large part of Products sales was dedicated to Services segment, thus eliminated in consolidation.

     Operating Expenses

      Cost of operations, including depreciation and amortization, increased 21% to €670.0 million for the year ended December 31, 2005 from € 554.0 million for 2004, due to broader production capacities both in the Services segment, with an extended offshore fleet, and in the Products segment. As a percentage of operating revenues, cost of operations decreased to 77% for the year ended December 31, 2005 from 81% for 2004. Gross

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profit increased 51% to €201.8 million for the year ended December 31, 2005 from € 133.8 million for 2004 for the reasons discussed above.

      Depreciation expense increased for the year ended December 31, 2005 by 16% to €76.3 million from €65.5 million for 2004, mainly due to depreciation of Exploration Resources vessels from September 1, 2005. Multi-client surveys depreciation was €69.6 million for the year ended December 31, 2005 compared with € 66.5 million for 2004.

      Research and development expenditures, net of government grants, increased 8% to €31.1 million for the year ended December 31, 2005 from €28.8 million for 2004 due to new equipment development efforts in our Products segment. Research and development expenditures in the Services segment are presented net of a research tax credit of € 2.5 million for the year ended December 31, 2005.

      Selling, general and administrative expenses increased 16% to €91.2 million for the year ended December 31, 2005 from € 78.6 million for 2004. As a percentage of operating revenues, selling, general and administrative costs decreased to 10% for the year ended December 31, 2005 compared to 11% for 2004.

      Other expenses totaled €4.4 million for the year ended December 31, 2005 compared to € 19.3 million of other income for 2004.

      Other expenses for the year ended December 31, 2005 included primarily:

— €2.9 million expense related to the application of our hedging policy (a €0.9 million expense in the Services segment, a €3.6 million expense in the Products segment and a € 1.6 million elimination on hedging on intra-group sales of equipment); and

— a € 1.0 million net loss on fixed assets sold or written-off.

      Other income for the year ended December 31, 2004, included primarily:

— a € 7.9 million gain on the sale of PGS shares (at the corporate level);

— a €1.8 million of insurance proceeds related to the seismic vessel the CGG Mistral (in the Services segment);

— a € 2.2 million gain on the sale of a building (in the Services segment); and

— a € 4.5 million income related to the application of our hedging policy (in Products segment).

     Operating Income

      Operating income increased 64% to €75.1 million for the year ended December 31, 2005 compared to € 45.7 million for 2004. The increase was principally attributable to our Services segment.

      Operating income from our Services segment was €25.2 million for the year ended December 31, 2005 compared to a loss of € 19.8 million for 2004. This increase was primarily due to the improved profitability in our Offshore SBU, which experienced higher market prices, a higher level of after-sales and greater capacity following our acquisition of Exploration Resources, and to the firm recovery of the Land SBU.

      Operating income from our Products segment was €79.8 million for the year ended December 31, 2005 compared to € 64.5 million for 2004. This increase was primarily due to a higher volume of sales and improved gross margins.

     Cost of Financial Debt, Net

      Net cost of financial debt increased 52% to €42.3 million for the year ended December 31, 2005 from €27.8 million 2004. This increase was primarily due to the €9.4 million financial cost of the early redemption of our 10⁵/8% bonds due 2007 in 2005 and interest and fees of € 14.2 million under our U.S.$375 million bridge credit facility.

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     Variance on derivative on convertible bonds

      The variance in the fair value of the conversion option embedded in our 7.75% U.S.$85 million convertible bonds due 2012 resulted in an aggregate other financial expense of €11.5 for the year ended December 31, 2005 and of € 23.5 million for 2004.

      The increase in the value of the derivative of €11.5 million includes a €6.3 million increase related to the 11,475 bonds converted into shares in November 2005 and a €5.2 million increase related to the 2,525 bonds remaining outstanding at December 31, 2005. The increase in the value of the derivative is mainly due to the strengthening of the U.S. dollar against the euro and the increase in our share price, being acknowledged that, as regards the derivative related to the bonds effectively converted in November 2005, the value was reduced by the time-component as a result of the conversion in shares, for an amount of € 8.9 million.

     Other Financial Income

      Other financial expenses were €14.5 million for the year ended December 31, 2005 compared to other financial income of €0.8 million for 2004. The other financial expenses for the year ended December 31, 2005 include a €12.6 expense related to the early conversion of 11,475 convertible bonds, which included the premium of U.S.$10.4 million (€8.9 million) paid to the bondholders who converted their bonds and the write-off of remaining issuance fees of € 3.7 million at the date of conversion.

     Equity in Income of Affiliates

      Equity in income of affiliates accounted for under the equity method increased to €13.0 million for the year ended December 31, 2005 from €10.3 million for 2004. Equity in income from Argas, our joint venture in Saudi Arabia, increased to €12.7 million for the year ended December 31, 2005 from € 10.4 million for 2004.

     Income Taxes

      Income taxes increased to €26.6 million for the year ended December 31, 2005 from € 10.9 million for 2004.

      The expectation of positive tax results at CMG, our Mexican subsidiary, (confirmed by the earning of taxable income in 2005), led us at December 31, 2005 to recognize a deferred tax asset and income of €2.4 million, representing CMG’s net operating loss carryforwards. Likewise, Sercel Inc.’s positive tax planning led us in 2004 to recognize a deferred tax asset and income of € 10.4 million representing Sercel Inc.’s net operating loss carryforwards.

      The increase in tax expense, excluding the non-recurring deferred tax income, is mainly due to higher tax expenses in the United States and in the United Kingdom due to the increased revenues in those countries.

      We are not subject to a worldwide taxation system, and the income tax paid in foreign countries, primarily based on revenues, does not generate comparable tax credits in France, our country of consolidated taxation.

     Net Loss

      For the year ended December 31, 2005 we had a net loss of €7.8 million compared to a net loss of € 6.4 million for the year ended December 31, 2004.

Liquidity and Capital Resources

      Our principal capital needs are for the funding of ongoing operations, capital expenditures (particularly repairs and improvements to our seismic vessels), investments in our multi-client data library and acquisitions (such as, most recently, Exploration Resources).

     Operations

      For the year ended December 31, 2005, our net cash provided by operating activities, before changes in working capital, was €204.0 million compared to € 149.7 million for 2004. This increase was primarily due to the

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increase in our operating income. Changes in working capital for the year ended December 31, 2005 had a negative impact of €21.6 million compared to a negative impact of € 22.8 million for 2004.

     Investing Activities

      During the year ended December 31, 2005, we incurred purchases of tangible and intangible assets of €117.1 million compared to €44.4 million for 2004. In addition, we entered into €17.4 million of new capital leases primarily related to the vessel Laurentian for the year ended December 31, 2005 compared with € 8.7 million for the year ended December 31, 2004.

      We also invested €32.0 million in our multi-client library during the year ended December 31, 2005, primarily for 2D data acquisition in Libya and depth reprocessing of our existing Gulf of Mexico 3D library. As of December 31, 2005, the net book value of our marine multi-client data library was €93.6 million compared to €124.5 million as of December 31, 2004 due to intensive depreciation of surveys linked to high volume of after-sales. We invested € 51.1 million in our multi-client library during the year ended December 31, 2004.

      We acquired all of the shares of Exploration Resources for a net investment of € 265.8 million corresponding to the price we paid for the shares less the cash held by Exploration Resources at the acquisition date.

      Acquisition capital expenditures in 2004 of €27.9 million consisted primarily of the acquisition of Thales Underwater Systems for €21.7 million, Hebei JunFeng Geophysical Co. Ltd for €9.8 million, Orca Instrumentation for €1.3 million and Createch Industrie for € 1.9 million.

      Proceeds from sales of assets in 2004 primarily correspond to the sale of our PGS shares for € 17.2 million.

     Financing Activities

      Net cash provided by financing activities for the year ended December 31, 2005 was €193.4 million, resulting principally from our U.S.$375 million bridge credit facility entered on September 1, 2005 to acquire Exploration Resources. This bridge facility was drawn in the amount of U.S.$375 million in October 2005, then partially repaid on December 23, 2005 in the amount of U.S.$34.7 million with the proceeds of our share capital increase on December 16, 2005. The bridge facility remained drawn as of December 31, 2005 by €118.9 million (U.S.$140.3 million). We also redeemed our outstanding 10⁵/8% senior notes due 2007 prior to maturity in aggregate principal amount of U.S.$225 million (U.S.$75 million on January 26, 2005 and U.S.$150 million on May, 31, 2005) and issued U.S.$165 million aggregate principal amount of 7¹/2 % senior notes due 2015 on April 28, 2005.

      Net debt was €297.0 million as of December 31, 2005 and € 121.8 million as of December 31, 2004. The ratio of net debt to equity increased to 43% as of December 31, 2005 from 31% at December 31, 2004. Excluding foreign exchange rate effect, the increase in net debt was mainly related to the Exploration Resources’ acquisition, corresponding approximately to the sum of the acquired debt and the debt incurred for the acquisition of the shares of Exploration Resources.

      “Net debt” is the amount of bank overdrafts, plus current portion of financial debt, plus financial debt, less cash and cash equivalents. The following table presents a reconciliation of net debt to financing items of the balance sheet at December 31, 2005 and at December 31, 2004:

	December 31,			December 31,
	2005			2004
	(in million of euros)
Bank overdrafts		9.3			2.8
Current portion of financial debt		157.9			73.1
Financial debt		242.4			176.5
Less cash and cash equivalents		(112.4	)		(130.6	)
Net debt		297.2			121.8

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      ORBDA for the year ended December 31, 2005 was €229.5 million compared to € 172.8 million for the corresponding period in 2004.

      “ORBDA” (Operating Result Before Depreciation and Amortization is defined as operating income (loss) excluding non-recurring revenues (expenses) plus depreciation, amortization and additions (deductions) to valuation allowances of assets and add-back of dividends received from equity companies. ORBDA is presented as additional information because our syndicated credit facility dated March 12, 2004 requires us to respect a maximum ratio of consolidated net debt to ORBDA. The maximum permitted ratio of consolidated net debt to ORBDA under the syndicated credit facility is 2.50 on the 12 months period preceding December 31, 2005 and 2.00 on the following 12 months periods. If we fail to meet this ratio and do not obtain waivers, we may be unable to borrow under such facility and may be compelled to repay amounts outstanding thereunder. Either the inability to borrow or the requirement to repay borrowed sums may have a negative effect on our liquidity and, consequently, may increase our vulnerability to general adverse economic and industry trends or limit our flexibility in adapting to such trends. ORBDA is not a measure of financial performance under IFRS or U.S. GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with IFRS or U.S. GAAP.

      The following table presents a reconciliation of ORBDA to “Net cash provided by operating activities” for the periods indicated:

	Year ended
	December 31,
	2005			2004
	(in million of
	euros)
ORBDA		229.5			172.8
Other financial income (expense) — net		(26.0	)		(22.7	)
Income tax paid		(31.7	)		(17.0	)
Non-recurring gains (losses)		(0.5	)		3.0
Increase (decrease) in other long-term liabilities		6.7			(3.5	)
Expense and income calculated on stock-option		0.4			0.5
Less net gain on sale of asset		1.6			(11.5	)
Other non-cash items		27.5			21.4
(Increase) decrease in trade accounts and notes receivables		(24.3	)		(26.8	)
(Increase) decrease in inventories and work in progress		(45.2	)		(16.4	)
(Increase) decrease in other current assets		(3.1	)		17.4
Increase (decrease) in trade accounts and notes payables		38.8			9.0
Increase (decrease) in other current liabilities		1.0			(5.5	)
Impact of changes in exchange rate		11.2			(0.5	)
Less variation of current assets allowance included above		(3.5	)		6.7
Net cash provided by operating activities according to cash-flow statement		182.4			126.9

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      The following table sets forth our contractual obligations as of December 31, 2005:

	Payments due by period
	Less
	than						After
	1 year		1-3 years		4-5 years		5 years		Total
	(in million of euros)
Long-term debt (Note 12)		135.7		17.7		10.1		147.3		310.8
Capital Lease Obligations		23.8		32.2		14.5		30.1		100.6
Operating Leases		51.6		43.2		10.3		0.8		105.9
Other Long-term Obligations (bond interest)		11.5		23.0		23.0		47.2		104.7
Total Contractual Obligations		222.6		116.1		57.9		225.4		622.0

     Off-Balance Sheet Arrangements

      We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Research and development

      Our ability to compete effectively and maintain a significant market position in our industry depends to a substantial extent upon our continued technological innovation. We have focused on rationalizing our research and development activities both to reduce costs and to focus our research and development efforts primarily on reservoir characterization, multi-component seabed seismic processing techniques, structural imaging and advanced seismic recording equipment. Our research and development teams, totaling approximately 320 employees, are divided among operating divisions. Sercel has strong research capabilities, especially in underwater acoustic transmission, oceanographic metrology and borehole electronics for area studies. We also access new sources of information or technology by entering into strategic alliances with equipment manufacturers, oil and gas companies, universities, such as Bergen university, or other clients or by acquiring technology under license from others. We have historically entered into and continue to pursue common research programs with the Institut Français du Pétrole, an agency of the French government.

      While the market for our products and services is subject to continual and rapid technological changes, development cycles from initial conception through introduction can extend over several years. Our efforts have resulted in the development of numerous inventions, new processes and techniques, many of which have been incorporated as improvements to our product lines (as further developed in item 4). During 2004 and 2005, our research and development expenditures incurred (including capitalized costs and excluding grants received) were €35.5 million, and €43.5 million, respectively, of which approximately 5.6%, and 3.9%, respectively, was funded by French governmental research entities, such as the Fonds de Soutien aux Hydrocarbures (which funding is to be repaid to such organizations from sales of products or services developed with such funds).

      We have budgeted €45 million for research and development expenditures in 2006, including both expensed and capitalized costs, of which we expect to receive approximately €[4] million from the Agence Nationale de Valorisation de la Recherche.

Trend information

     Currency Fluctuations

      Certain changes in operating revenues set forth in U.S. dollars in this Annual Report on Form 20-F were derived by translating revenues recorded in euros at the average rate for the relevant period. Such information is presented in light of the fact that most of our revenues are denominated in U.S. dollars while our consolidated financial statements are presented in euros. Such changes are presented only in order to assist in an understanding of our operating revenues but are not part of our reported financial statements and may not be indicative of changes in our actual or anticipated operating revenues.

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      As a company that derives a substantial amount of its revenue from sales internationally, we are subject to risks relating to fluctuations in currency exchange rates. In the year ended December 31, 2005 and the year ended December 31, 2004, about 90% of our operating revenues and approximately two-thirds of our operating expenses were denominated in currencies other than euros. These included U.S. dollars and, to a significantly lesser extent, other non-Euro Western European currencies, principally British pounds and Norwegian kroner. In addition, a significant portion of our revenues that were invoiced in euros related to contracts that were effectively priced in U.S. dollars, as the U.S. dollar often serves as the reference currency when bidding for contracts to provide geophysical services.

      Fluctuations in the exchange rate of the euro against such other currencies, particularly the U.S. dollar, have had in the past and can be expected in future periods to have a significant effect upon our results of operations. Since we participate in competitive bids for data acquisition contracts that are denominated in U.S. dollars, an appreciation of the U.S. dollar against the euro improves our competitive position against that of other companies whose costs and expenses are denominated in U.S. dollars. For financial reporting purposes, such appreciation positively affects our reported results of operations since U.S. dollar-denominated earnings that are converted to euros are stated at an increased value. An appreciation of the euro against the U.S. dollar has the opposite effect. As a result, the Group’s sales and operating income are exposed to the effects of fluctuations in the value of the euro versus the U.S. dollar. In addition, our exposure to fluctuations in the euro/ U.S. dollar exchange rate has considerably increased over the last few years due to increased sales outside of Europe.

      We attempt to match foreign currency revenues and expenses in order to balance our net position of receivables and payables denominated in foreign currencies. For example, charter costs for our four vessels, as well as our most important computer hardware leases, are denominated in U.S. dollars. Nevertheless, during the past five years such dollar-denominated expenses have not equaled dollar-denominated revenues principally due to personnel costs payable in euros.

      We do not enter into forward foreign currency exchange contracts for trading purposes.

      In order to improve the balance of our net position of receivables and payables denominated in foreign currencies, we maintain a portion of our financing in U.S. dollars. At December 31, 2005 and 2004, our total outstanding long-term debt denominated in U.S. dollars was U.S.$454.9 million (€385.6 million at the December 31, 2004 exchange rate) and U.S.$307.8 million (€ 226.0 million at the December 31, 2002 exchange rate), respectively, representing 97% and 92%, respectively, of our total financial debt outstanding at such dates.

      In addition, to be protected against the reduction in value of future foreign currency cash flows, we follow a policy of selling U.S. dollars forward at average contract maturity dates that we attempt to match with future net U.S. dollar cash flows (revenues less costs in U.S. dollars) expected from firm contract commitments, generally over the ensuing six months. As of December 31, 2005 and 2004, we had U.S.$183.6 million (with a euro equivalent-value of €152.4 million) and U.S.$127 million (euro equivalent-value of € 101.9 million), respectively, of notional amounts outstanding under euro/ U.S. dollar forward exchange contracts and other foreign exchange currency hedging instruments.

      We do not enter into forward foreign currency exchange contracts for trading purposes.

     Inflation

      Inflation has not had a material effect on our results of operations during the periods presented. We operate in, and receive payments in the currencies of, certain countries with historically high levels of inflation, such as Mexico, Brazil and Venezuela. We attempt to limit such risk by, for example, indexing payments in the local currency against, principally, the U.S. dollar exchange rate at a certain date to account for inflation during the contract term.

     Income Taxes

      We conduct the majority of our field activities outside of France and pay taxes on income earned or deemed profits in each foreign country pursuant to local tax rules and regulations. We do not receive any credit in respect

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of French taxes for income taxes paid by foreign branches and subsidiaries. Net tax expenses in recent periods were attributable to activities, principally in land acquisition, carried on outside of France.

      We have significant tax loss carryforwards that are available to offset future taxation on income earned in certain OECD countries. We recognize tax assets if budget estimates also indicate enough profits for the following years to use carryforward losses.

     Seasonality

      Our land and marine seismic acquisition activities are seasonal in nature. We generally experience decreased revenues in the first quarter of each year due to the effects of weather conditions in the Northern Hemisphere. Also, our principal clients are generally not prepared to fully commit their annual exploration budget to specific projects during the first quarter of the year. We have historically experienced higher levels of activity in our equipment manufacturing operations in the fourth quarter as our clients seek to fully deploy annual budgeted capital.

Recently issued U.S. accounting pronouncements

     FASB Interpretation No. 47 “Accounting for Conditional Asset Retirement Obligations”

      In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (“FIN 47”). FIN 47 clarifies that an entity must record a liability for a “conditional” asset retirement obligation if the fair value of the obligation can be reasonably estimated. The adoption of FIN 47 did not have a material effect on our financial condition or results of operations.

     SFAS No. 151, “Inventory Costs an amendment of ARB No. 43, Chapter 4”

      In November 2004, the FASB issued SFAS No. 151, “Inventory Costs an amendment of ARB No. 43, Chapter 4.” SFAS No. 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and requires the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. We do not expect the adoption of SFAS No. 151 to have a material effect on our consolidated financial position or results of operations.

Subsequent Events

      On March 13, 2006, CGG Marine Resources Norge AS concluded a medium term financing agreement for U.S.$26.5 million with a bank. The purpose of this agreement is to finance the acquisition of newly-developed “Sentinel” streamers for the Offshore business. This financing is guaranteed by a pledge on the equipment.

      On March 27, 2006, we signed a Memorandum of Understanding with Industrialization & Energy Services Company (TAQA), our long term Saudi Partner in Argas. Under this Agreement TAQA will acquire 49% of the capital of CGG Ardiseis, a newly formed CGG subsidiary dedicated to land & shallow water seismic data acquisition in the Middle East. We will hold the other 51%. CGG Ardiseis, whose headquarters are located in Dubai, will provide its clients with a complete range of CGG land and shallow water acquisition services, focusing on Eye-D, the latest CGG technology for full 3D seismic imaging. CGG Ardiseis activities in the Gulf Cooperation Council countries will be exclusively operated by Argas, which is 51% owned by TAQA and 49% by CGG.

      On March 29, 2006, Exploration Resources concluded a credit facility of U.S.$70 million. The proceeds from this credit facility will finance seismic equipment for the vessels “C-Orion” and “Geo-Challenger” and the conversion of the “Geo-Challenger” from a cable laying vessel to a 3D seismic vessel.

      On March 31, 2006, the Norwegian government decided not to award production licenses on blocks where the survey Moere is located. As this decision changes our previous estimate of future sales, this € 4.6 million survey will be fully depreciated at March 31, 2006.

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Item 6:     DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

     Board of Directors

      Under French law, the Board of Directors determines our business strategy and monitors business implementation. Subject to the specific powers granted by the ordinary general shareholders’ meeting, the Board of Directors deals with any issues relating to our affairs. In particular, the Board of Directors prepares and presents our year-end accounts to our ordinary general shareholders’ meeting. Our Board of Directors consists of between six and 15 members elected by our shareholders. Under French law, a director may be an individual or a legal entity for which an individual is appointed as permanent representative.

      Our statuts (memorandum and articles of association) provide that each director is elected for a six-year term by the ordinary general shareholders’ meeting. There is no obligation for directors to be French nationals. According to French corporate law, a physical person may simultaneously hold the office of director in no more than five sociétés anonymes whose registered offices are located on French territory, subject to certain exceptions. Each director will be required to own at least 100 of our shares, beginning on the date of our general shareholders’ meeting in 2007 to approve our 2006 financial statements.

      Directors are required to comply with applicable law and our statuts. Under French law, directors are responsible for actions taken by them that, inter alia, are contrary to the company’s interests and may be held liable for such actions both individually and jointly with the other directors.

      The following table sets forth the names of our current directors, their positions, the dates of their initial appointment as directors and the expiration dates of their current term.

		Initially		Term
Name	Position	appointed		expires
Robert Brunck(1)	Chairman of the Board and		1998		2008
	Chief Executive Officer
Olivier Appert(2)	Director		2003		2008
Rémi Dorval(3)	Director		2005		2010
Jean Dunand(3)	Director		1999		2007
Gérard Friès(1)	Director		2002		2008
Yves Lesage(3)	Director		1988		2009
John MacWilliams(1)	Director		1999		2011
Christian Marbach(1)	Director		1995		2007
Robert Semmens(2)(3)	Director		1999		2011
Daniel Valot(2)	Director		2001		2006

Notes:

(1)	Member of Strategic Planning Committee.
(2)	Member of Appointment-Remuneration Committee.
(3)	Member of Audit Committee.

      Mr. Brunck, 56, has been our Chairman and Chief Executive Officer since May 1999. Mr. Brunck was our Vice Chairman and President from September 1998 to May 1999 and was our President and Chief Operating Officer from February 1995 to September 1998. Mr. Brunck was Vice President of Administration and Development from 1991 to 1995 and Chief Financial Officer from 1989 to 1991. He is a member of the Supervisory Board of Sercel Holding S.A., Chairman of the Board of Directors of CGG Americas, Director of the Ecole Nationale Supérieure de Géologie, Director of the Bureau of Geological and Mining Research, Director of the Conservatoire National des Arts et Métiers, Director of the Groupement des Entreprises Parapétrolières et Paragazières and Chairman of Armines.

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      Mr. Appert, 56 has been Chairman and Chief Executive Officer of the French Petroleum Institute (Institut Français du Pétrole, or IFP) since April 2003. Mr. Appert was President for long-term co-operation and energy policy analysis within the International Energy Agency since October 1999. He is also a Director of Technip and of the Institut de Physique du Globe de Paris.

      Mr. Dorval, 55, has been Vice-Chairman and Chief Executive Officer of Soletanche-Bachy Entreprise since June 1997. Mr. Dorval is Director, Vice Chairman and President of Solétanche Bachy France, Chairman of Forsol, a Director of Solétanche S.A., Solmarine, SHPIC, Sol-Expert International, Sepicos Perfosol, Solétanche Bachy GmbH, Bachy Soletanche Holdings, Rodio Inc. and Nicholson. He is also Director, Chairman and Chief Executive Officer of SolData and permanent representative of Solétanche Bachy France in the economic group SB Mat.

      Mr. Dunand, 66, was Financial and Legal Director of ISIS from 1999 to December 2001 and was Deputy General Manager (Russia and CIS) of Total Exploration-Production from 1994 to 1999.

      Mr. Friès, 50, has been Senior Executive Vice President of IFP since September 2001. Mr. Friès was Vice President of the Geoscience Research Centre of Totalfina Exploration UK plc from 1999 to September 2001 and was a Director of Elf Gabon from 1997 to 1999. Mr. Friès is a Director of ISIS Développement, a member of the Board of Malmaison Resources Inc., Beicip Inc., IFP Technologies Canada Inc. and a member of the Supervisory Board of Beicip-Franlab.

      Mr. Lesage, 68, has been CGG Honorary Chairman since May 1999. Mr. Lesage was Chairman and Chief Executive Officer of CGG from January 1995 to May 1999. He was Chairman, President and Chief Executive Officer of Sogerap from 1994 to 1995.

      Mr. MacWilliams, 50, is a Partner of The Tremont Group LLC. He has been a Partner of The Beacon Group LLC since 1993. Mr. MacWilliams is a director of Alliance Resource Partner L.P., Soft Switching Technologies Inc. and Smart Synch, Inc.

      Mr. Marbach, 68, Ingénieur Général des Mines, was Advisor to the General Management of Suez-Lyonnaise des Eaux from 1996 to 2000. Before that time, Mr. Marbach was Chairman and Chief Executive Officer of Coflexip and Coflexip Stena Offshore from 1991 to 1996. Mr. Marbach is a member of the Supervisory Board of Lagardère, a Director of Erap, Supervisor of Sofinnova and President of Oseo-Services, previously the Small and Medium Size Business Agency (Agence des PME), a private sector group.

      Mr. Semmens, 48, is an independent consultant and was Managing Director of The Beacon Group LLC from 1993 to 2000. Mr. Semmens is a Director of Mach Gen Holdings LLC and a member of the Supervisory Board of Sercel Holding S.A.

      Mr. Valot, 61, has been Chairman and Chief Executive Officer of Technip since December 2001 and was Chairman and Chief Executive Officer of Technip from 1999 to December 2001. Mr. Valot was President of Total Exploration and Production, and was a member of the Total Group Executive Committee from 1995 to 1999. Mr. Valot is Chairman of Technip Italy and a Director of Technip Far East, IFP, SCOR and SCOR VIE and is a permanent representative of Technip on the Board of Directors of Technip France.

     Executive Officers

      Under French law and our current statuts, the Chairman and Chief Executive Officer has full executive authority to manage our affairs. The Board of Directors has the power to appoint and remove, at any time, the Chairman and Chief Executive Officer. Under French law and our current statuts, the Chairman and Chief Executive Officer, where those functions are exercised by the same person, has full power to act on our behalf and to represent us in dealings with third parties, subject only to (i) the corporate purpose of the company, (ii) those powers expressly reserved by law to the Board of Directors or our shareholders and (iii) limitations that the Board of Directors may resolve, such limitations not being binding on third parties. The Chairman and Chief Executive Officer determines and is responsible for the implementation of the goals, strategies and budgets for our different businesses, which are reviewed and monitored by the Board of Directors. In accordance with French corporate law, our current statuts provide for the election by the Board of Directors of one person to assume the position of

49

Chairman and Chief Executive Officer or the division of such functions between two different persons. In its session of May 15, 2002, the Board of Directors decided that Mr. Brunck would assume the position of Chairman and Chief Executive Officer until the expiry of his term as a director, unless otherwise decided by the Board. Our current statuts provide that the Board of Directors may appoint up to five Presidents and Chief Operating Officers (Directeurs Généraux Délégués) upon proposal of the Chief Executive Officer, whether or not this person is also the Chairman of the Board. On September 7, 2005, our Board of Directors named Thierry Le Roux and Christophe Pettenati-Auziere to this position.

      The following table sets forth the names of our current executive officers who serve as members of our Executive Committee, their current positions with us and the first dates as of which they served as our executive officers. We employ our executive officers under standard employment services agreements that have no fixed term.

Executive Committee (Comité Exécutif)

		Executive
Name	Current position	officer since
Robert Brunck	Chairman and Chief Executive Officer		1989
Thierry Le Roux	Group President and Chief Financial Officer		1995
Christophe Pettenati-Auzière	President, Geophysical Services		1997
Gérard Chambovet	Senior Executive Vice President, Technology, Planning & Control and Communication		1995
Michel Ponthus	Senior Executive Vice President, Legal Affairs and Human Resources and Secretary General		1995

Presidents:

      Mr. Le Roux, 52, was appointed Group President and Chief Financial Officer in September 2005. Before that time, he had been Senior Executive Vice President of our Products segment since October 1998. Mr. Le Roux was Executive Vice President of CGG’s Geophysical Equipment operations from March 1995 to October 1998. He was Business Development Manager from 1992 to 1995 and Far East Manager from 1984 to 1992. Mr. Le Roux is Chairman of Sercel S.A., Chairman of the Board of Sercel Inc., Chairman of the Board of Hebei Sercel-Jungfeng Geophysical Prospecting Equipment Co. Ltd, Chairman of the Supervisory Board of Sercel Holding, a Director of CGG Americas Inc., Chairman of the Board of Sercel England, a Director of Sercel Singapore Private Ltd., a Director of INT. Inc. and permanent representative of Sercel Holding on the Board of Tronic’s Microsystems S.A.

      Mr. Pettenati-Auzière, 53, was appointed President, Geophysical Services in September 2005 after serving as Senior Executive Vice President, Services since January 2004. Until that time, he had been Senior Executive Vice President, Strategy, Planning and Control since January 2001. Mr. Pettenati-Auzière was Senior Executive Vice President of our Offshore SBU from July 1999 to January 2001, Vice President of Business Development and Investor Relations from December 1998 to July 1999 and Vice President of Seismic Acquisition from April 1997 to December 1998. He was Executive Vice President of International Operations for Coflexip from 1990 to 1996. Mr Pettenati-Auziere is a Director of CGG Americas, a Director and Chairman of the Board of CGG Marine Resources Norge, a member of the Management Committee of VS Fusion, LLC, a member of the Management Committee of Geomar and Chairman of the Board of CGG Ardiseis FZCO.

Senior Executive Vice Presidents:

      Mr. Chambovet, 53, was appointed Senior Executive Vice President, Technology, Planning & Control and Communication in January 2004. Until that time, he had been Senior Executive Vice President of our Services segment since October 1998. Mr. Chambovet was Executive Vice President of our Acquisition Product line from March 1995 to October 1998 and was Manager of our data processing center in Massy, France from 1987 to 1995.

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      Mr. Ponthus, 59, was appointed Senior Executive Vice President, Legal Affairs & Human Resources and Secretary General in September 2005. Before that time, he was Senior Executive Vice President, Finance and Human Resources, and Chief Financial Officer since October 1998. Mr. Ponthus was our Chief Financial Officer from March 1995 to October 1998 and prior to joining CGG, Mr. Ponthus was Administrative and Financial Vice President of Petitjean Industries from 1990 to 1995.

      The following table sets forth the names of the executive officers who, together with the Executive Committee, constitute the Group Management Committee, their current positions, and the dates as of which they were first appointed.

Group Management Committee (Comité de Direction du Groupe)

		Executive
Name	Current position	officer since
Luc Benoît-Cattin	Executive Vice President, Offshore SBU		2003
Guillaume Cambois	Executive Vice President, Data Processing & Reservoir SBU		2001
Stéphane-Paul Frydman	Group Controller, Treasurer and Deputy Chief Financial Officer		2003
Dominique Robert	Executive Vice President, Land SBU		2000
Pascal Rouiller	Executive Vice President for Equipment and Chief Executive Officer, Sercel Group		1997

      Mr. Benoît-Cattin, 42, was appointed Executive Vice President of our Offshore SBU in January 2005. Before that time, he had been Vice President, Services since June 2002. Prior to joining CGG, Mr. Benoit-Cattin was Executive Vice President for oil and heat transfer businesses in the Pechiney Group from January 1998 to May 2002 and Advisor to the French Minister of Industry, in charge of energy and nuclear issues from June 1995 to May 1997.

      Mr. Cambois, 41, has been Executive Vice President, Processing & Reservoir SBU, since July 2001. Mr. Cambois was Vice President, Processing SBU Technology from 1999 to 2001, Manager of the Calgary processing centre from 1998 to 1999 and Manager of Research and Development of the Houston processing centre from 1995 to 1998.

      Mr. Frydman, 42, was appointed Group Controller and Treasurer in September 2005 and has been Deputy Chief Financial Officer of the CGG Group since January 2004. Before that time, he had been Vice President in charge of corporate financial affairs reporting to the Chief Financial Officer since December 2002. Prior to joining CGG, Mr. Frydman was an Investor Officer of Butler Capital Partners, a private equity firm, from April 2000 to November 2002, and Industrial Advisor to the French Minister of the Economy and Finances from June 1997 to March 2000.

      Mr. Robert, 54, has been Executive Vice President of our Land SBU since December 2000. Mr. Robert was Chief Operating Officer of Flagship from January 2000 to December 2000 and Vice President of the Asia-Pacific Region from September 1995 to January 2000.

      Mr. Rouiller, 52, was appointed Executive Vice President for Equipment and Chief Executive Officer of Sercel in September 2005 after serving as Chief Operating Officer of the Sercel Group since December 1999. Mr. Rouiller was Vice President of our Product segment from October 1995 to December 1999 and Vice President for the Asia-Pacific region from May 1992 to September 1995.

Compensation

      The aggregate compensation of our executive officers, including the Chairman and Chief Executive Officer and both Presidents, includes both a fixed element and a bonus element. The bonus due to the general management for a given fiscal year is paid during the first semester of the next fiscal year. With this bonus, the aggregate compensation may substantially vary from one year to another.

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      The aggregate compensation as a group of the executive officers (including the Chairman and Chief Executive Officer and both Presidents) who were members of the Group Management Committee paid in fiscal year 2005 was € 3,026,274, including the 2005 bonus and benefits in kind but excluding directors’ fees. The amount of the bonus of the members of the Group Management Committee (except for the Chairman and Chief Executive Officer and both Presidents, for whom additional criteria are also taken into consideration) depends upon the achievement of commercial and financial targets for items such as consolidated net income, operating income and free cash flow of our various activities and upon satisfaction of certain individual qualitative objectives.

      The aggregate compensation paid to Mr. Brunck, Chairman and Chief Executive Officer, in fiscal year 2005 was €384,205 of fixed compensation and €238,550, representing his 2004 bonus. The amount of his bonus depends upon the achievement of commercial and financial targets for items such as progression of revenues, operating income, consolidated net income and free cash flow of our various activities for the considered fiscal year. Evolution of the market price of CGG shares is also taken into consideration. Completion of certain individual qualitative objectives is also part of the bonus calculation. Mr. Brunck will be paid his 2005 bonus of €333,000 in the first half of 2006. In addition, Mr. Brunck received € 39,216.55 in his capacity as a director in 2005.

      The aggregate compensation of Mr. Thierry Le Roux, Group President and Chief Financial Officer, in fiscal year 2005 was €288,100 plus a bonus of €125,000 for fiscal year 2004 paid during the first semester of 2005. The bonus for fiscal year 2005 is € 159,000 and will be paid during the first half of 2006.

      The aggregate compensation of Mr. Christophe Pettenati-Auziere, President of Geophysical Services in fiscal year 2005 was €280,700 plus a bonus of €90,000 for fiscal year 2004 paid during the first semester of 2005. The bonus for fiscal year 2005 is € 140,700 and will be paid during the first half of 2006.

      The amount of the Presidents’ bonus depends upon the achievement of commercial and financial targets for items such as progression of revenues, operating income, consolidated net income and free cash flow of our various activities for the considered fiscal year. Operational performance of each segment is taken in consideration. Evolution of the market price of CGG shares is also taken into account. Completion of certain individual qualitative objectives is also part of the bonus calculation.

      In addition to the compensation discussed above, a supplemental pension and retirement plan for the members of the Group Management Committee and the Management Board of Sercel was implemented in December 2004. A contribution of €2,050,972 was paid in 2005 within the scope of this plan for the members of the Group Management Committee, including € 1,282,728 for the Chairman and Chief executive Officer and both Presidents.

      Directors as a group received aggregate compensation of € 315,000 in February 2006 for services provided in their capacity as directors during fiscal year 2005. No amounts were set aside or accrued by us or our subsidiaries to provide pension, retirement or similar benefits to directors. Directors’ service contracts do not provide for benefits upon termination.

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      The following table sets forth the amounts CGG and our subsidiaries paid to directors of CGG, in their capacity as directors, for the year ended December 31, 2005:

	Amount paid to
	CGG directors
Name	for 2005
	(in €)
Robert Brunck(1)		39,216.55
Olivier Appert		24,249.47
Patrick de la Chevardière(2)		2,534.64
Rémi Dorval		23,235.10
Jean Dunand		35,641.60
Gérard Friès		31,355.82
Yves Lesage		30,879.70
John J. MacWilliams		22,564,61
Christian Marbach		27,777.03
Robert F. Semmens(3)		55,183.85
Andrew Sheiner(4)		1,775.15
Daniel Valot		20,586.46

Notes:

(1)	Mr. Brunck does not receive any compensation as member of the Supervisory Board of Sercel Holding or as Chairman of the Board of Directors of CGG Americas.
(2)	Resigned from the Board on March 8, 2005.
(3)	Includes €40,183.85 paid by CGG to Mr. Semmens as a director and € 15,000 paid by Sercel Holding to Mr. Semmens as a member of the Supervisory Board.
(4)	Resigned from the Board on March 7, 2005.

      As of March 31, 2006, our directors and executive officers held an aggregate of 20,147 ordinary shares of CGG. As of March 31, 2006, our directors and executive officers held options to purchase an aggregate of 337,115 ordinary shares. As of March 31, 2006, none of our directors and executive officers held, on an individual basis, shares and options representing 1% or more of our outstanding capital.

Board Practices

      Pursuant to the standards set forth in the report of the working committee chaired by Mr. Daniel Bouton, President of the Société Générale, to promote better corporate governance standards in listed companies (the Bouton Report), we believe that five of our directors do not have any relationship with CGG, the group or its management that could impair their freedom of judgment and thus qualify as independent. Those directors are Mr. Dorval, Mr. Dunand, Mr. Marbach, Mr. Semmens and Mr. Valot. We also believe that the position of Mr. Semmens as a member of the Supervisory Board of our subsidiary Sercel Holding S.A. does not impair his independence. Our Board of Directors reviews, on an annual basis, the qualification of directors as independent pursuant to the Bouton Report criteria.

      The corporate governance rules of the New York Stock Exchange differ from the regulations and recommendations applicable in France, especially those governing the definition of director independence and the role and operation of the Board’s committees. As a non-U.S. listed company, we are exempted from many of these corporate governance rules, which are applicable to U.S. listed companies. For example, our Board has not formally determined which of its directors meet NYSE independence standards, and non-management directors do not meet regularly. Our Appointment-Remuneration Committee is not made up exclusively of independent directors, and the Board’s internal charter does not address committee purposes and responsibilities in the manner specified by the NYSE rules applicable to nominating, compensation and audit committees. However, our Audit Committee members meet the independence test for audit committee members established by the SEC, and we believe that they also meet the definition of “independence” under the NYSE rules.

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     Strategic Planning Committee

      The Strategic Planning Committee is charged with studying our strategic plans and our planned financial transactions. The Strategic Planning Committee customarily meets before each Board meeting and more often if necessary. During 2005, the Strategic Planning Committee met six times. The average meeting attendance rate of committee members was close to 71%.

      In 2005, the Committee was consulted by management with respect to the acquisition of Exploration Resources and was kept regularly informed of its integration post-acquisition. The Committee was also consulted regarding

• the proposed modification of the terms and conditions of our 7.75% subordinated convertible bonds due 2012 before the modification was proposed to bondholders’ and shareholders’ meetings in November 2005 and

• our share capital increase in December 2005.

     Audit Committee

      The Audit Committee is chaired by Mr. Dunand. The other members are Mr. Dorval, Mr. Lesage and Mr. Semmens. The Audit Committee is responsible for assisting the Board of Directors and undertaking preparatory work for the Board, particularly by reviewing our financial statements with management and our statutory auditors.

          Responsibilities

      The principal responsibilities of the Audit Committee are as follows:

• Reviewing and discussing with management and our statutory auditors the consistency and appropriateness of the accounting methods we adopt to prepare our corporate and consolidated financial statements;

— Reviewing and discussing with management and our statutory auditors the consolidation perimeter and requesting, when necessary, all appropriate explanations;

— Reviewing and discussing with management and our statutory auditors our draft annual, semi-annual and quarterly financial statements together with the notes to them, and especially off-balance sheet arrangements;

— Reviewing and discussing with management and our statutory auditors the quality, comprehensiveness, accuracy and veracity of the financial statements;

— Receiving reports from our statutory auditors on their review, including any comments and suggestions they may have made in the scope of their audit; and

— Raising any financial or accounting question that the Committee deems important.

• Reviewing our annual report on Form 20-F and our “document de reference” filed with the French securities market regulator.

• In consultation with our statutory auditors, our internal auditors and management, reviewing the structure of our internal control procedures and the way in which they operate, notably those procedures relating to the preparation and treatment of accounting and financial information used to prepare our financial statements, to assess and manage risks, to comply with the principal regulations applicable to us. The Committee reviews the comments and observations made by the statutory auditors on our internal control procedures.

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• With respect to internal audit, reviewing and discuss with management particularly:

— its organization and operation,

— its activities and the responsibilities proposed in the scope of the internal audit plan approved by the general management and presented to the Committee.

• Reviewing and discussing with management and, when appropriate, our statutory auditors the transactions directly or indirectly binding the Group and its executive officers.

• With respect to external audit:

— Reviewing and discussing with the statutory auditors their annual audit plan,

— Meeting, if necessary, with the statutory auditors outside the presence of management,

— Ensuring the independence of the statutory auditors by managing the procedure for selection of the auditors. The Committee submits its choice to the Board of Directors, which, pursuant to law, must submit the appointment of auditors to a vote at a shareholders’ meeting,

— Discussing the extent and results of the audit work with the statutory auditors and management and reviewing the amount of auditors’ fees regularly with management. The Committee has sole authority to authorize performance of non-audit services by our auditors or members of their network.

• Overseeing the anonymous handling of any report concerning a possible internal control problem or any problem of an accounting or financial nature.

• Finally, the management of the company must report to the committee any suspected fraud of a significant amount so that the committee may proceed with any verification that it deems appropriate.

      Sessions of the Audit Committee are open to the members of the Executive Committee, the Deputy Chief Financial Officer, our external auditors (in order to report on their audit reviews) and the Senior Vice-President, Internal Audit (in order to review important assignments).

      The Audit Committee customarily meets before each Board meeting. In addition, the members of the Audit Committee are systematically invited to attend Strategic Committee meetings.

          2005 Activities

      During 2005, the Audit Committee reviewed drafts of the annual consolidated financial statements for 2004 and the interim financial statements for 2005 before these were presented to the Board and provided to the Board its recommendations concerning these financial statements. The Committee reviewed the May and November 2005 versions of our “Transition to IFRS” disclosure before they were published. The Audit Committee also reviewed the accounting treatment and the related purchase accounting of the Exploration Resources acquisition. In addition, the statutory auditors reported to the Audit Committee on their work and the scope of their audit. The Audit Committee reviewed the group 2006 budget.

      With respect to internal control, our audit committee was informed of certain weaknesses in Exploration Resources’ internal controls as well as actions being implemented to correct them. Exploration Resources have been demerged from its former majority shareholder in March 2005 but the former majority shareholder continued to keep Exploration Resources books until our acquisition. Our analysis of the book keeping procedures revealed that they were not aligned with CGG’s internal controls, in particular with regard to the IFRS and associated deadlines. The preparation of our 2005 financial statements in accordance with IFRS required CGG to intervene and supervise local practices. An action plan is being implemented during the first six months of 2006 in order to improve local practices and reinforce internal control.

      The Audit Committee examined the work to be performed by the statutory auditors in the scope of their audit on the 2005 financial statements and approved their fee estimates for this work. In compliance with the Audit Committee’s procedures providing for its prior approval of non-audit services provided by the members of

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our auditors’ network, the Audit Committee reviewed the services so performed in 2005 and approved them as necessary.

      The Audit Committee reviewed the activities of the internal audit team, which acts on the basis of a plan established by the Executive Committee and presented to the Audit Committee. This plan is established in light of perceived operational and financial risks and with the goal of systematically reviewing each Strategic Business Unit every three years.

      It reviewed regularly multi-client surveys, analyzing in particular the sales average coverage rate in order to evaluate the fair value of surveys as recorded on the balance sheet.

      The Audit Committee was also kept regularly informed on the development of two of our major projects during 2005: (i) the transition to IFRS and (ii) the assessment of internal control procedures pursuant to section 404 of the Sarbanes-Oxley Act.

      Finally, the Audit Committee reviewed the independence of some of our directors before the annual determination by the Board of Directors.

      As previously disclosed in our annual report on Form 20-F for the year ended December 31, 2003 and our report on Form 6-K dated May 13, 2004, the management of the company informed the Audit Committee of a letter dated May 4, 2004 addressed by a former senior financial officer of our Services segment to one of our external auditors containing allegations relating to CGG and its subsidiaries and affiliated entities, principally with respect to certain of our overseas operations. The Audit Committee recommended that an independent investigation of the allegations be conducted by outside counsel in order to determine their truthfulness, their possible impact on our consolidated financial statements and possible violations by CGG and its subsidiaries and affiliated entities of the laws governing their activities.

      Following completion of the independent investigation, the Audit Committee informed the Board of Directors of the conclusions of the investigation, including the existence of irregularities in one of our contractually controlled overseas entities and related books and records and internal control weaknesses. The Audit Committee concluded that these matters were not material to the consolidated results of operations but recommended measures to be implemented by us to further improve our internal controls, each of which we have implemented. These include changing the frequency with which overseas personnel in certain countries rotate, further enhancing the enforcement of the code of ethics and reinforcing the supervision of internal auditors in certain countries. It had already been decided in 2003 to close the overseas entity concerned as part of the land restructuring program and terminated the co-operation agreements with such entity in February 2005. After having been informed of the independent investigation initiated by the Audit Committee, the statutory auditors have performed the work they have deemed necessary, which included considering the work performed and conclusions reached by external advisers hired by the Audit Committee. Based on the work performed, the statutory auditors concurred with the conclusions reached by the Audit Committee.

      Subsequent to discussions beginning in January 2005 and the satisfactory conclusion in April 2005 of the French market authority’s (Autorité des marchés financiers) review of these matters, the company then initiated a similar process with the Securities and Exchange Commission with respect to these matters and informed the Department of Justice of our contact with the SEC. We understand that the SEC and DOJ are considering what type of follow-up will be appropriate. To date, the follow-up has consisted of a limited number of telephone inquiries from the SEC shortly after we commenced discussions with them, to which we believe we have responded in full.

     Appointment-Remuneration Committee

      The purpose of the Appointment-Remuneration Committee is:

• to propose to the Board of Directors:

— the implementation of stock option plans and employee shareholding plans ;

— the remuneration of the executive officers (“mandataires sociaux”);

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— the appointment of directors, executive officers (“mandataires sociaux”) or members of Board committees.

• To be kept informed of the remuneration of the members of the Executive Committee.

      In 2005, this Committee met four times, with an average meeting attendance rate of approximately 85%. The Committee met to decide on

• the remuneration of the Chairman and Chief Executive Officer,

• the amount of the directors’ remuneration and the adoption of new guidelines governing its allocation,

• the proposal to be made to the Board for the appointment of a new director,

• the reorganization of the management structure through the appointment of two Presidents (“Directeurs Généraux Délégués”) and the determination of their respective remuneration and

• the evaluation process of the Board of Directors to be implemented in 2006.

      The work of the Committee is recorded in minutes and is reported by its Chairman to the next meeting of the Board of Directors.

Employees

      As of December 31, 2005, we had 3,952 permanent employees worldwide, as well as several thousand auxiliary field personnel on temporary contracts. Of the total, 2,222 are involved in our Services segment and 1,730 in our Products segment. We have never experienced a material work stoppage and consider our relations with our employees to be good. We believe that our highly educated and experienced staff constitutes one of our most valuable assets. We permanently employ more than 2,000 technicians and persons holding engineering degrees and have developed a significant in-house training program.

      In accordance with French law for employees employed under French contracts, we, and each of our French subsidiaries have an Employee Representation Committee (Comité d’Entreprise) consisting of representatives elected by our employees. The Employee Representation Committee reports regularly to employees, represents employees in relations with management, is consulted on significant matters relating to employee working conditions and is regularly informed of economic developments.

      Our total workforce has increased from 3,185 at December 31, 2003 to 3,669 at December 31, 2004 and to 3,952 at December 31, 2005. This increase in the size of our workforce is mainly attributable to the growth of both our geophysical product and service activities, as well as our acquisition of Exploration Resources. We are preparing for the future by improving our management training program, putting increased emphasis on strengthening the technical and personal skills of our employees.

Share Ownership

      In accordance with French law, we are authorized annually by our shareholders at the extraordinary general meeting to issue ordinary shares for sale to our employees and employees of our affiliates who elect to participate in our Group Employee Savings Plan (Plan d’Epargne Entreprise Groupe) instituted in 1997 (the “Group Plan”). Our shareholders, at the extraordinary general meeting held on May 12, 2005, renewed our authorization to issue up to 500,000 ordinary shares in sales to employees and affiliates who participate in the Group Plan. We may offer ordinary shares pursuant to the Group Plan at a price neither higher than the average market price for the 20 business days preceding the date on which the Board of Directors set the commencement date for the offering nor lower than 80% of such average market price. As of December 31, 2005, CGG group employees held 35,000 ordinary shares, corresponding to 0.2% of our share capital, through the Group Plan.

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      Pursuant to resolutions adopted by our Board of Directors on January 18, 2000, March 14, 2001, May 15, 2002 and May 15, 2003, our Board of Directors has granted options to certain of our employees, executive officers and directors to subscribe for an aggregate of 795,000 ordinary shares. This total has been adjusted pursuant to French law and the terms of the options to total 852,812 options. Options with respect to 617,881 ordinary shares remained outstanding as of March 31, 2006. The following table sets forth certain information relating to these stock options plans as of March 31, 2006:

			Options exercised		Options
	Options		(ordinary shares)		outstanding at		Exercise price
Date of Board of Directors’	initially		at March 31,		March 31,		per ordinary
resolution	granted(1)		2006		2006(2)		share(1)		Expiration date
January 18, 2000(3)		231,000		121,266		99,121		€ 45.83		January 17, 2008
March 14, 2001(4)		256,000		53,884		207,412		€ 65.39		March 13, 2009
May 15, 2002(5)		138,100		10,999		131,249		€ 39.92		May 14, 2010
May 15, 2003(6)		169,900		1,500		180,099		€ 14.53		May 14, 2011
Total		795,000		187,649		617,881

Notes:

(1)	Pursuant to French law and the terms of the stock option plans, the numbers of options granted and the exercise price were adjusted following our share capital increase in December 2005.
(2)	The stock option plans provide for the cancellation of the options if the holder is no longer our employee, director or executive officer.
(3)	Options under the 2000 plan could not be exercised before January 2003.
(4)	Options under the 2001 plan vest by one-fifth each year from March 2001 and could not be exercised before March 14, 2004.
(5)	Options under the 2002 plan vest by one-fifth each year from May 2002 and could not be exercised before May 16, 2005.
(6)	Options under the 2003 plan vest by one-fourth each year from May 2003 and cannot be exercised before May 16, 2006.

      At the extraordinary general shareholders’ meeting held on May 12, 2005, a new stock option plan was approved by shareholders whereby options to purchase up to 7% of our share capital outstanding on the date of allocation may be granted in one or several allocations by the Board of Directors to certain of our employees and executive officers during the 38-month period following the plan’s approval. The Board has not allocated any stock options pursuant to such shareholders’ resolution.

Item 7:     PRINCIPAL SHAREHOLDERS

Major Shareholders

      The table below sets forth certain information with respect to (i) entities known to us or ascertained from public filings to beneficially own a significant percentage of our voting securities and (ii) the total number of shares of our common stock (called ordinary shares) owned by our directors and officers as a group, as of March 31, 2006, December 31, 2005, 2004 and 2003.

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Identity of Person or Group

	March 31,						December 31,				December 31,				December 31,
	2006						2005				2004				2003
					% of				% of				% of				% of
	Number of		% of		voting		% of		voting		% of		voting		% of		voting
	shares		shares		rights		shares		rights		shares		rights		shares		rights
The Beacon Group		—		—		—		—		—		15.21		25.51		15.21		20.99
EBPF-Financière de l’Echiquier		—		—		—		—		—		4.58		3.84		5.05		4.43
Fidelity International Limited		1,895,903		11.05		10.18		10.31		9.50		—		—		—		—
Institut Français du Pétrole		1,402,622		8.18		15.07		8.21		15.13		12.01		12.94		12.30		10.79
Total Chimie		—		—		—		—		—		—		—		4.02		7.05
Public		13,856,842		80.77		74.75		81.48		75.37		68.20		57.71		63.42		56.74

      Our statuts provide that each ordinary share that is fully paid and has been held in registered form by the same shareholder for a period of at least two consecutive years will entitle such shareholder to two votes at meetings of shareholders. As of December 31, 2005, IFP had held 1,402,622 fully paid ordinary shares in registered form for two consecutive years, giving IFP 15.07% of the voting power of the outstanding ordinary shares as of such date. Other than in this respect, our ordinary shares carry identical voting rights. Our statuts provide that fully paid ordinary shares may be held in either registered form or bearer form at the option of the shareholder. Substantially all ordinary shares held by shareholders other than IFP are presently held in bearer form.

      On March 18, 2005, CGG Investors LLC and GF Ltd. Transaction Partnership LP (“The Beacon Group”) sold all the 1,777,071 ordinary shares they owned, representing 15.21% of our total share capital, by means of a private placement in Europe.

      An extraordinary general meeting of our shareholders was held on November 16, 2005 and approved a change to the terms and conditions of our 7.75% subordinated convertible bonds due 2012 to grant the bondholders a right to a cash payment upon immediate conversion of their bonds. The proposed change was approved at a general meeting of the bondholders held on November 2, 2005. This right was exercisable during a period of two calendar days, November 17 and 18, 2005, and holders of approximately U.S.$70 million in principal amount (out of a total of U.S.$85 million outstanding) of convertible bonds converted, receiving an aggregate of 1,147,500 new shares of our common stock and U.S.$10.5 million in cash. On April 5, 2006, a general meeting of the bond holders approved a new change to the terms and conditions of these bonds to grant the bondholders a right to a cash payment of 819.45 USD per convertible bond upon conversion of their bonds. Such option would be exercisable on May 12, 2006 only, provided our shareholders in the general meeting to be held on May 11, 2006, approve such change to the terms and conditions of the bonds.

      On December 16, 2005, we completed a share capital increase by way of preferential subscription rights. We issued 4,099,128 new shares of our common stock bearing rights from January 1, 2005, bringing our total share capital at that date to 17,079,718 ordinary shares, par value € 2 per share. We used the net proceeds to repay approximately U.S.$235 million under our U.S.$375 million bridge credit facility, which facility was used to finance the acquisition of Exploration Resources.

      See “Item 9: The offer and Listing — Offer and Listing Details” for information regarding holdings of our shares in the United States.

Related Party Transactions

      We provide geophysical services and equipment to oil and gas exploration and production subsidiaries of the Total Group pursuant to contracts entered into on an arm’s-length basis. Total Chimie, which was until 2004 one of our major shareholders, is a member of the Total Group. Aggregate operating revenues to this group totaled € 23.1 million in 2004.

      Louis Dreyfus Armateurs (“LDA”) provides ship management services for a portion of our fleet. Charter parties associated with these services are concluded on an arm’s length basis. Debt to LDA was € 6.0 million as of

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December 31, 2005. Total net charges paid throughout the year for the provision of ship management services were €0.8 million, and the future commitments for such services to LDA were € 23.3 million.

      LDA and the Group own Geomar, a company accounted for under the equity method. Geomar is the owner of the CGG Alizé seismic vessel. LDA has a 51% controlling stake and we have a 49% stake in Geomar. We paid €8.8 million to Geomar during the year 2005, while future charter party amounts due to Geomar were €12.0 million as of December 31, 2005. Debt to Geomar was € 0.9 million as of December 31. 2005.

      The sales of geophysical products from Sercel to Argas, our 49% owned affiliate, were € 8.1 million, representing 0.9% of the Group revenues in 2005. These transactions were concluded on an arm’s length basis.

      Sales of geophysical products from Sercel to Xian Peic, our 40% owned affiliate, were € 2.9 million, representing 0.3% of Group revenues in 2005. These transactions were concluded on an arm’s length basis.

Interests of Experts and Counsel

      None.

Item 8:     FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

      Reference is made to Item 18 for a list of all financial Statements and notes thereto filed as a part of this annual report.

Item 9:     THE OFFER AND LISTING

Offer and Listing Details

      The trading market for our ordinary shares is the Premier Marché of Euronext Paris S.A., where the ordinary shares have been listed since 1981. American Depositary Shares, or ADSs, representing ordinary shares have been traded on the New York Stock Exchange since May 1997. Each ADS represents one-fifth of one ordinary share. The ADSs are evidenced by American Depositary Receipts, or ADRs, issued by The Bank of New York, as Depositary, and are traded under the symbol “GGY”. The Bank of New York has advised us that as of December 31, 2005, there were 3,552,160 ADSs outstanding, representing 710,432 ordinary shares, which are held of record by five registered holders. On the basis of this information, the ADSs held on such date in the United States represented approximately 4.15% of our outstanding ordinary shares. Our by-laws provide that fully paid ordinary shares may be held in either registered or bearer form at the option of the shareholder.

     Price Information on Euronext Paris.

      The tables below set forth, for the periods indicated, the reported high and low prices for the outstanding ordinary shares on Euronext Paris.

      The table below indicates the high and low market prices for our most recent six months:

	Price per Share(1)
	High		Low
	(€)
2006
March		121.30		102.30
February		114.90		97.30
January		107.00		75.25
2005
December		81.40		73.65
November		76.40		64.78
October		89.00		68.00

Note:

(1) Source: Euronext Paris.

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      The table below indicates the quarterly high and low market prices for our two most recent financial years and the first quarter of 2006:

	Price per Share(1)
	High		Low
	(€)
2006
First Quarter		121.30		75.25
2005
First Quarter		72.40		50.20
Second Quarter		71.65		59.60
Third Quarter		86.90		69.00
Fourth Quarter		89.00		64.78
2004
First Quarter		39.80		29.70
Second Quarter		50.95		36.10
Third Quarter		56.50		38.11
Fourth Quarter		54.40		43.32

Note:

(1) Source: Euronext Paris.

      The table below indicates the high and low market prices for the five most recent financial years:

	Price per Share(1)
	High		Low
	(€)
2005		89.00		50.20
2004		56.50		29.70
2003		32.30		9.11
2002		50.05		13.35
2001		83.00		30.00

Note:

(1) Source: Euronext Paris.

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     Price Information on the NYSE

      The table below sets forth, for the periods indicated, the high and low sale prices for the ADSs representing our ordinary shares on the New York Stock Exchange:

      The table below indicates the high and low market prices for our most recent six months and the first quarter of 2006:

	High		Low
	(U.S.$)
2006
March		29.27		24.88
February		26.50		23.26
January		26.17		18.33
2005
December		20.70		17.65
November		19.90		16.63
October		21.14		16.57

      The table below indicates the quarterly high and low market prices for our two most recent financial years:

	High		Low
	(U.S.$)
2006
First Quarter		29.27		18.33
2005
First Quarter		19.40		13.35
Second Quarter		18.29		15.03
Third Quarter		20.96		16.50
Fourth Quarter		21.14		16.57
2004
First Quarter		10.20		7.47
Second Quarter		12.41		8.65
Third Quarter		13.82		9.30
Fourth Quarter		14.05		11.28

      The table below indicates the yearly high and low market prices on a yearly basis for the five most recent financial years:

	High		Low
	(U.S.$)
2005		21.14		13.35
2004		14.05		7.47
2003		7.62		2.12
2002		9.00		2.50
2001		142/5		519/20

     Trading on Euronext Paris

      Official trading of listed securities on Euronext Paris is transacted through stockbrokers and other financial intermediaries, and takes place continuously on each business day from 9:00 a.m. through 5:25 p.m., with a pre-opening session from 7:15 a.m. through 9:00 a.m. during which transactions are recorded but not executed. Any trade effected after the close of a stock exchange session is recorded, on the next Euronext Paris trading day, at the closing price for the relevant security at the end of the previous day’s session. Euronext Paris publishes a daily Official Price List that includes price information concerning listed securities. Euronext Paris has introduced

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continuous trading during trading hours by computer for most listed securities. Shares listed on Euronext Paris are placed in one of three categories depending on the issuer’s market capitalization. Our outstanding ordinary shares are listed on the Eurolist by Euronext Paris in the category known as Continu, which includes the most actively traded shares.

Plan of Distribution

      Not applicable.

Markets

      Our ordinary shares are listed on Eurolist by Euronext Paris. American Depositary Receipts representing our ordinary shares are listed on the New York Stock Exchange. Our 7¹/2 % Senior Notes due 2015 are listed on the Euro MTF market of the Luxembourg Stock Exchange.

Selling Shareholders

      Not applicable.

Dilution

      Not applicable.

Expenses of the Issue

      Not applicable.

Item 10:     ADDITIONAL INFORMATION

Share Capital

      Not applicable.

Memorandum and By-laws

      Our company is a société anonyme, a form of limited liability company, established under the laws of France, and we are registered with the Trade Register of Evry, France under the number 969 202 241 RCS Evry. Our financial year begins on January 1 and ends on December 31 of each calendar year. The following paragraphs set forth information concerning our share capital and provide related descriptions of certain provisions of our by-laws (statuts), and applicable French law. This information and description do not purport to be complete and are qualified in their entirety by reference to our by-laws.

     Object and Purposes

      Under Article 2 of our statuts, our object is:

• to develop and operate, in any form and under any conditions whatsoever, any and all businesses relating to the geophysical surveying of soil and subsoil in any and all countries, on behalf of third parties or ourselves;

• to participate directly or indirectly in any business, firm or company whose object would be likely to promote our object; and

• generally, to engage in any commercial, industrial, mining, financial, personal or real property activities relating directly or indirectly to the above objects without limitation or reserve.

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     Directors

      For a further description of the Board of Directors’ powers under French law and our statuts, see “Item 6: Directors, Senior Management and Employees.”

          Transaction with Interested Directors

      French corporate law provides for prior approval and control of transactions entered into between, directly or indirectly, us and our directors, Chief Executive Officer, Presidents and, or any entity in which any of these persons is at the same time an owner, partner with unlimited liability, managing director, member of the supervisory board or an executive officer, unless the transaction is entered into in the ordinary course of business and under normal terms and conditions. Transactions entered into between us and one of our shareholders who holds, directly or indirectly, more than 10% of our voting rights, or with an entity controlling such a shareholder, are also considered related party transactions requiring the prior approval of our board of directors.

      The interested party has the obligation to inform our board of directors as soon as it is aware of the existence of the related party transaction, and a majority of our disinterested directors must approve the transaction.

      If a related party transaction is pre-approved by the majority of our disinterested directors, our chairman must then report the authorized transaction to our statutory auditors within one month following the entering into of this transaction. The auditors must then prepare a special report on the transaction to be submitted to our shareholders at their next general meeting, during which our shareholders would consider the transaction for ratification (any interested shareholder would be excluded from voting). If the transaction is not ratified by the shareholders, such absence of ratification would normally and except in the case of fraud have no impact on the validity of the transaction, but the shareholders may in turn hold the board of directors or interested representative of the company liable for any damages suffered as a result thereof.

      Any related party transaction concluded without the prior consent of a majority of our disinterested directors can be voided by a court, if we incur a loss as a result. In addition, an interested related party may be held liable on this basis.

          Power to Decide Upon the Compensation of Directors, Chairman and Chief Executive Officer

      Under our statuts, the shareholders’ meeting may provide for the payment to the directors of an annual fixed sum for their attendance at board meetings (jetons de présence). The amount of such compensation remains unchanged until further decision by the shareholder’s meeting. The Board of Directors allocates this amount between its members in the manner it deems appropriate.

      Under our statuts, the Board of Directors has authority to determine the compensation of its chairman as well as of its Chief Executive Officer, Presidents and Chief Operating Officers.

          Borrowing Powers Exercisable by the Directors

      Under French company law and our statuts, directors other than legal entities are forbidden to take out loans from CGG in any form whatsoever or to have CGG grant them an overdraft in current account or otherwise. It is also forbidden to have CGG stand as surety for them or back their commitments in respect of third parties. This prohibition also applies to chief operating officers and to permanent representatives of legal-entity directors. It also applies to the spouses, lineal forebearers or descendants of the persons referred to in this paragraph and also to any trustee.

      Also, under article L.225-43 of the French Commercial Code, directors and executive officers may not borrow money or obtain a guarantee from the company. Any such loan or guarantee would be void and may not be relied upon by third parties.

          Retirement of Directors Under an Age Limit Requirement

      Under our statuts, the Chairman of the Board’s term of office ends, at the latest, after the annual Ordinary Shareholders’ Meeting following the date on which he reaches the age of 65. However, the Board of Directors

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may further extend the office of the Chairman, one or more times for a total period not to exceed three years. Our statuts also provide that when the offices of Chairman and Chief Executive Officer are held by the same person, the Chief Executive Officer’s term of office ends on the same date as that of the Chairman.In accordance with article L.225-19 of the French Commercial Code, no more than one-third of the members of the Board of Directors may be more than 70 years old, unless the statuts of the company provide otherwise. Our statuts do not contain any provisions contrary to this limitation.

          Number of Shares Required for a Director’s Qualification

      Under our statuts, throughout his term of office, each director must own at least one share. Nethertheless, at its meeting on March 8, 2006, the Board of Directors decided that each director shall own, as from our general shareholders’ meeting in 2007 to approve the 2006 financial statements, at least one hundred shares of the company.

     Share Capital

      As of March 31, 2006, our issued share capital amounts to €34,310,734, divided into 17,155,367 shares of the same class with a nominal value of €2 per share. The shares are fully paid. Pursuant to our statuts, fully paid shares may be held either in registered or in bearer form at the option of the shareholder. The statuts also allow us to avail ourselves of a procedure known as titres au porteur identifiables by which we may request Euroclear France to disclose the name, nationality, address and the number of shares held by the holders of any of our securities which have, or may in the future have, voting rights. See “Form, Holding and Transfer of Shares.”

     Dividend and Liquidation Rights

      We may only distribute dividends out of our “distributable profits”, plus any amounts held in our reserve which the shareholders decide to make available for distribution, other than those reserves which are specifically required by law. “Distributable profits” consist of our unconsolidated net profit in each fiscal year, as increased or reduced by any profit or loss carried forward from prior years, less any contributions to the reserve accounts pursuant to law.

      Under French law, before dividends may be paid with respect to any fiscal year, we must contribute a minimum of 5% of our annual unconsolidated net income to a legal reserve fund, until it reaches an amount equal to 10% of our outstanding share capital. The legal reserve is distributable only upon our liquidation.

      Our statuts provide that the general shareholders’ meeting, either on a recommendation from the board of directors or on its own initiative, may allocate all or part of our distributable profits, if any, to one or more special or general reserves or to keep such profits as retained earnings to be carried forward to the next fiscal year. Any remaining distributable profits are distributed to shareholders as dividends in proportion to their holdings. However, except in the case of a decrease in share capital which aims to offset losses, no distribution may be made to shareholders when the shareholders’ equity is or would become, as a result of the distribution, less than the amount of the share capital increased by amounts held in reserve accounts pursuant to law. The methods of payment of dividends are determined by the annual general meeting of shareholders or by the board of directors in the absence of a decision by the shareholders. According to our statuts, the general meeting has the power to give each shareholder the option of receiving all or part of its dividend payment in either cash or shares.

      If we have earned distributable profits since the end of the preceding fiscal year, as shown on an interim income statement certified by our auditors, the board of directors has the authority, without the approval of shareholders, to distribute interim dividends to the extent of such distributable profits for the period covered by the interim income statement.

      Subject to the statement above regarding interim dividends, the payment of dividends is fixed at the ordinary general meeting of shareholders at which the annual accounts are approved, upon the recommendation of the board of directors. Under French law, dividends are normally distributed to shareholders in proportion to their respective holdings. Dividends are payable to all holders of shares, except for treasury stock, issued and outstanding on the date of the shareholders’ meeting approving the distribution of dividends or, in the case of

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interim dividends, on the date of the board of directors’ meeting approving the distribution of interim dividends. We must make annual dividend payments within nine months of the end of our fiscal year, unless otherwise authorized by a court order. Dividends not claimed within five years of the date of payment revert to the French State.

      Our board of directors may, at any time and for any reason, propose to an extraordinary general meeting of shareholders the early dissolution of the company and we may be placed in liquidation in compliance with the relevant provisions of the French company law. If the company is liquidated, those of its assets remaining after payment of our debts, liquidation expenses and all of our remaining obligations will be distributed first to repay in full the nominal value of the shares, and the surplus, if any, will be distributed among the shareholders in proportion to the nominal value of their shareholdings.

     Changes in Share Capital

          Increases in the Share Capital

      We may increase our share capital either:

• by issuing additional shares (either ordinary or preferred shares) or securities giving access, immediately or in the future, to a portion of our share capital; or

• by increasing the nominal value of our existing shares.

      We may issue additional shares:

• for cash;

• for assets contributed in kind;

• upon the conversion of preferred shares, debt securities or other debt instruments previously issued;

• upon the conversion of ordinary shares into preferred shares;

• as a result of a merger or a split;

• by the capitalization of reserves, retained earnings or issuance premiums;

• for cash credits payable by the company; or

• for any combination of the preceding items.

      We may increase our share capital only with the approval of the shareholders at an extraordinary general meeting, following a report of the board of directors. However, when a capital increase takes place through capitalization of reserves, retained earnings or issuance premiums, the general meeting at which the decision to increase the capital is taken follows the quorum and majority requirements of ordinary general meetings. Increases effected by an increase in the nominal value of shares require unanimous approval of the shareholders, unless effected by capitalization of reserves, retained earnings or issuance premiums. See “Attendance and Voting at Shareholders’ Meetings.”

      The shareholders may delegate to the board of directors (i) the decision to increase the share capital or (ii) after authorizing the increase in share capital, the right to carry out any such increase. The board of directors may further delegate this right to the chief executive officer. Each time the shareholders decide on a share capital increase or decide to delegate to the board of directors the decision to increase the share capital or the right to carry out a capital increase, they must also determine in a separate resolution whether or not to proceed with a capital increase reserved for employees of the company and its subsidiaries or whether to delegate to the board of directors the right to carry out such reserved capital increase.

      At a meeting held on May 12, 2005 our shareholders authorized the board of directors to increase our share capital, through one or more issuances of securities, by up to an aggregate nominal amount of € 23,000,000. This authorization is effective for a period not to exceed 26 months. Our shareholders have preferential rights to subscribe for such the additional securities. At the same meeting, our shareholders accepted to withdraw the

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shareholders’ preferential subscription rights in respect of a second authorization to increase our share capital, through one or more issuances of securities, by up to an aggregate nominal amount of €23,000,000. This second authorization is also effective for the same period of time. Capital increases made pursuant to both authorizations may not exceed an aggregate nominal amount of €23,000,000. The authorization giving our shareholders preferential rights to subscribe for the additional securities have been used in 2005 up to an amount of € 8,198,256 for our capital increase (see “Item 7: Principal Shareholders — Identity of Person or Group”).

          Decreases in Share Capital

      An extraordinary general meeting of shareholders also has the power to authorize and implement a reduction in share capital which may be effected either:

• by decreasing the nominal value of our outstanding shares; or

• by reducing the number of our outstanding shares.

      The number of outstanding shares may be reduced either by an exchange of shares or by the repurchase and cancellation of shares.

      According to French company law, any decrease in our share capital requires approval by the shareholders entitled to vote at an extraordinary general meeting. In the case of a capital reduction, other than a reduction to absorb losses and a reduction pursuant to a program of acquisition of shares, all holders of shares must be offered the possibility to participate in such a reduction. See “Acquisition of our own Shares”. All holders of shares in a given class of shares must be treated equally unless each affected shareholder agrees otherwise. Our creditors may oppose a capital reduction during the 20-day period following the registration with the Registry of Commerce of the minutes of the shareholders’ meeting approving the capital reduction. Upon a creditor’s request, the Tribunal de Commerce may order us to reimburse our creditors or guarantee our debt.

     Preferential Rights to Subscribe

      According to French law, our current shareholders have preferential rights on a pro rata basis to subscribe (droit préferentiel de souscription) for any issue of additional shares to be subscribed in cash or by set-off of cash debts and to subscribe to any issue of other securities which may either directly or indirectly result in, or carry rights to subscribe for, additional shares issued by us. An extraordinary shareholders’ meeting may decide to withdraw the shareholders’ preferential right to subscribe, either in respect of any specific issue of securities, or more generally, with respect to an authorization by the extraordinary general meeting, to issue shares or other equity securities, for a duration not to exceed 26 months or 18 months in the case of an authorization given for an issue of securities to identified persons or categories of persons. Shareholders may also individually waive their preferential right to subscribe in respect of any offering. French law requires that the board of directors and our independent auditors present reports that specifically address any proposal to waive preferential subscription rights. In the event of a waiver, the issue of securities must be completed within the period prescribed by law. Preferential rights to subscribe, if not previously waived, are tradable during the subscription period relating to a particular offering of shares and may be quoted on Euronext Paris. In the event that the preferential rights of shareholders are withdrawn, the shareholders’ meeting has the power to grant, or to authorize the board of directors to grant, existing shareholders a non-transferable priority right (délai de priorité) to subscribe for new shares issued during a minimum period of three trading days.

     Attendance and Voting at Shareholders’ Meetings

          General

      In accordance with French law, general shareholders’ meetings may be ordinary or extraordinary. Ordinary general meetings of shareholders are required for matters such as:

• the election, replacement and removal of directors;

• the appointment of statutory auditors;

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• the approval of annual accounts;

• more generally, all decisions which do not require the approval of the extraordinary general meeting of the shareholders.

• the declaration of dividends or the authorization for dividends to be paid in shares.

      Extraordinary general meetings of shareholders are required for approval of all matters and decisions involving:

• changes in our statuts (including changing our corporate purposes);

• increasing or reducing our share capital;

• change of nationality of the company, subject to certain conditions as described in article L.225-97 of the French Commercial Code;

• extending or abridging the duration of the company;

• mergers and spin-offs;

• creation of a new class of shares;

• issuance of debt securities;

• authorization of notes or other securities giving access, immediately or in the future, to a portion of our share capital;

• transformation of our company into another legal form; and

• voluntary liquidation of our company before the end of its statutory term.

          Annual Ordinary Meetings

      Our Board of Directors must convene the annual ordinary general meeting of shareholders each year for approval of the annual accounts. This meeting must be held within six months of the end of our fiscal year, unless such time is extended by an order of the President of the Tribunal de Commerce pursuant to a request. Other ordinary or extraordinary meetings may be called at any time during the year. Meetings of shareholders may be convened by the board of directors or, in the circumstances prescribed by law, if the board of directors fails to call such a meeting, by our statutory auditors or by an administrator appointed by the President of the Tribunal de Commerce. Any of the following may request the President of the Tribunal de Commerce to appoint an administrator:

• one or several shareholders holding in the aggregate at least 5% of our share capital;

• any interested parties in cases of emergency;

• the workers’ committee in case of emergency; or

• an association of holders of shares who have held the shares in registered form held for at least two years and holding, in the aggregate, at least 1% of our voting rights.

          Notice of Shareholders’ Meetings

      French law requires that a preliminary notice (avis de réunion) of a general meeting of a listed company be published in the Bulletin des Annonces Légales Obligatoires (“BALO”) at least 30 days before the date set for the meeting. A copy of the preliminary notice must first be sent to the Autorité des marchés financiers (the “AMF”), the self-regulatory organization that has general regulatory authority over the French regulated exchanges, with an indication of the date of its publication in the BALO. The preliminary notice of a general meeting must state the details of the company and information about the voting process and the meeting, the matters to be discussed at the meeting and the draft of the resolutions to be discussed. The agenda of the meeting and the draft of the resolutions to be discussed, such as described in the preliminary notice, may be modified

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between the date of publication of the preliminary notice and that of the publication of the notice actually calling the general meeting (avis de convocation). Within 10 days of publication, additional resolutions to be submitted for approval by the shareholders at the meeting may be proposed to the board of directors by:

• one or more shareholders holding, in the aggregate, a certain percentage of our share capital (0.5% to 4% determined on the basis of a statutory formula relating to capitalization); or

• a duly authorized association of shareholders who have held their shares in registered form for at least two years and holding, in the aggregate, at least 1% of our voting rights.

      The board of directors must submit these resolutions to a vote of the shareholders.

      At least 15 days before the date set for any general meeting on first call, and at least six days before any second call, we must send a notice (avis de convocation) by mail to all holders of registered shares who have held such shares for more than one month prior to the date of the notice. Notice of the meeting must also be given by publication in a journal authorized to publish legal announcements in the local administrative department (département) in which we are registered as well as in the BALO, with prior notice having been given to the AMF. Such a notice must include the details of the company, as well as a description of the type, agenda, place, date and time of the meeting and other information about the voting process. With the sole exception of removal and replacement of directors (which may be discussed at any meeting), any matter which does not appear on the agenda may not be discussed at the meeting.

          Attendance and Voting at Shareholders’ Meetings

      Attendance and exercise of voting rights at both ordinary and extraordinary general meetings of shareholders are subject to certain conditions. A shareholder does not need to have a minimum number of shares in order to be able to attend or be represented at an extraordinary general meeting. Any statutory provision to the contrary is null and void. In order to participate in any general meeting, a holder of registered shares must have paid up its shares and have its shares registered in his name or in the name of the accredited financial intermediary referred to in article L. 228-1 of the French Commercial Code in a shareholder account maintained by us or on our behalf at least five days prior to the meeting. Similarly, a holder of bearer shares must obtain from the accredited financial intermediary (intermédiaire financier habilité) with whom such holder has deposited its shares a certificate indicating the number of bearer shares the holder owns and stating that these shares are blocked in the account held by the intermediary in the holder’s name until the date of the meeting (certificat d’immobilisation). This certificate must be deposited at the place specified in the notice of the meeting at least five days before the meeting convenes.

          Proxies and Votes by Mail

      Subject to the foregoing, all shareholders have the right to participate in general meetings, either in person, by a proxy or by mail and, subject only to any applicable laws, may vote according to the number of shares they hold. Proxies may be granted by a shareholder to:

• his or her spouse;

• another shareholder;

• in the case of a non-French resident person, to the relevant intermediary;

• in the case of a corporation, to a legal representative;

• in the case of an employee, to the representative of the shareholding employees pursuant to article L.225-106 of the French Commercial Code.

      Alternatively, the shareholder may send us a proxy in blank without nominating any representative.

      In the last case, the chairman of the shareholders’ meeting will vote the shares with respect to which such blank proxy has been given in favor of all resolutions proposed by the board of directors and against all others. We will send proxy forms to any shareholder on request, provided such request is received by the company at

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least six days before the date of the relevant general meeting. In order to be counted, we must receive proxy forms at our registered office or at such other address indicated in the notice convening the meeting prior to the date of the relevant general meeting. With respect to voting by mail, we must send our shareholders a form of such vote and we must receive the form at least three days prior to the date of the relevant general meeting.

          Quorum

      Under French law, a quorum requires the presence in person or voting by mail or by proxy of shareholders representing, in the aggregate, not less than:

• 20% of the shares entitled to vote (in the case of an ordinary general meeting convened on first call, an extraordinary general meeting convened on second call or an extraordinary general meting convened on first call, if deciding upon any capital increase by capitalization of reserves, retained earnings or share premium); or

• 25% of the shares entitled to vote (in the case of any other extraordinary general meeting convened on first call).

      No quorum is required in the case of an ordinary general meeting convened on second call or an extraordinary general meeting convened on second call, if deciding upon any capital increase by capitalization of reserves, retained earnings or share premium.

      If a quorum is not present at any meeting on first call, the meeting is adjourned and reconvened, and in the case of an extraordinary general meeting, for a date not more than two months later. When an ordinary general meeting is reconvened, only questions which were on the agenda of the adjourned meeting may be discussed and voted upon.

      Any shareholder may also, if the Board of Directors or its Chairman allows at the time of the convocation to a general meeting, attend the meeting via video-conference or by means of electronic telecommunication or tele-transmission subject to, and in accordance with, the conditions laid down by the legislation or the regulations then in force. This shareholder is then considered to be present at the meeting when calculating the quorum and the majority.

          Majority

      At an ordinary general meeting or an extraordinary general meeting deciding upon any capital increase by capitalization of reserves, retained earnings or share premium, a simple majority of votes cast by the shareholders present or represented at such meeting is required to pass a resolution. At any other extraordinary general meeting, a two-thirds majority of votes cast is required to pass a resolution. A unanimous vote, however, is required to increase the liabilities of shareholders. Abstention from voting by those present or represented by proxy or voting by mail is viewed as a vote against the resolutions submitted to a vote.

      Our statuts provide that, as from May 22, 1997, each share that is fully paid and has been held in registered form by the same shareholder for a period of at least two consecutive years will entitle such shareholder to two votes. In the event of capital increases effected by a free attribution of shares, as a result of the incorporation of reserves, retained earnings or issuance premiums, the shares attributed by reason of and proportionately to the ownership of shares holding double voting rights are immediately granted double voting rights as if they themselves had fulfilled the requirements therefore. Under French company law, shares that have to be transferred pursuant to laws and regulations applicable to cross-shareholdings, as well as shares held by entities controlled directly or indirectly by us, are not entitled to voting rights. In the latter case, the shares do not count for quorum or majority purposes.

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     Acquisition of our own Shares

      Under French law, our company may not issue shares to itself either directly or through a financial intermediary acting on our behalf. However, exceptionally, we may, either directly or through a financial intermediary acting on our behalf, purchase our shares:

(1)	to reduce our share capital (albeit not to absorb losses), canceling the shares we purchase, with our shareholders’ approval at an extraordinary general meeting;
(2)	to provide shares to our employees under a profit sharing plan or stock option plan; or
(3)	in the context of a share repurchase program that allows us to acquire up to 10% of our share capital for a maximum period of 18 months. To acquire shares in the context of a share repurchase program, we must first obtain our shareholders’ approval at an ordinary general meeting and make public a description of such program prior to its launch.

      We may not repurchase under either (2) or (3) above an amount of shares that would result in our company holding, directly or through a person acting on our behalf, more than 10% of our outstanding share capital, without canceling the said 10% first. In addition, we may not cancel more than 10% of our outstanding share capital over any 24-month period.

      We must hold any shares we repurchase in registered form. These shares also must be fully paid up. Shares repurchased by us are deemed outstanding under French law but are not entitled to dividends or voting rights and we may not ourselves exercise preferential subscription rights. Such shares do not count for quorum or majority purposes. The shareholders, at an extraordinary general meeting, may decide not to take such shares into account in determining the preferential rights to subscribe attached to the other shares (if such a decision is not taken, these rights must be either sold on the market before the end of the subscription period or distributed to the other shareholders on a pro rata basis.)

      A direct subsidiary is generally prohibited by French law from holding shares in its parent and, in the event it becomes a holder of shares, such subsidiary must transfer such shares within one year following the date on which it becomes the holder thereof. An indirect subsidiary may only acquire shares if such subsidiary demonstrates a business purpose for holding the shares but in no event will it be entitled to vote such shares.

      At the shareholders’ meeting to be held on May 12, 2005, our shareholders renewed the existing authorization to acquire up to 10 percent of our share capital through purchases of shares and to resell shares so acquired for the 18 months following the date of such meeting. As required at the time by article 241-2 of the General Regulation (Règlement Général) of the Autorité des Marchés Financiers, on April 12, 2005, we filed a note d’information with the AMF with respect to our share acquisition program.

      Under such authorization, we are allowed to carry out transactions on our shares with the following objectives:

• to support liquidity of our shares through a liquidity contract entered into with an investment service provider in compliance with the Code of Practice of the Association Française des Entreprises d’Investissement,

• to deliver shares in the scope of securities giving access, immediately or in the future, to shares by redemption, conversion, exchange, presentation of a warrant or by any other means, in particular in the scope of the redemption or payment of the interests due with respect to the bonds convertible into new shares, redeemable in cash and/ or into new and/ or existing shares with interest payable in cash and/ or in new and/ or existing shares issued pursuant to the first resolution of the extraordinary general meeting held on October 29, 2004,

• to deliver, immediately or in the future, shares in exchange in the scope of external growth, in accordance with the conditions to be defined by the Autorité des marchés financiers,

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• to allocate shares to employees and officers of the company or affiliated companies within the meaning of article L.225-180 of the French Commercial Code, especially in the scope of options to purchase shares of the company,

• cancel the shares through a capital reduction, subject to a decision of, or an authorization, by the extraordinary general meeting.

      The general meeting approved a maximum purchase price would be €120. The maximum number of shares that we are entitled to hold is 10% of our share capital as of December 31, 2004, after deduction of 2,970 shares acquired under previous authorizations, i.e. 1,165,251 shares, for a maximum investment amount of € 139,830,120.

      The shares may be acquired on one or several occasions, by any method, including by agreement, by stock market purchase, by purchasing blocks of shares or by an offer to buy, may take place at any time, including during a take-over bid.

      This authorization was granted for a period of 18 months from May 12, 2005 and cancelled and replaced the authorization granted to the board of directors by the general meeting held on May 13, 2004.

      During fiscal year 2005, we implemented the share repurchase plans authorized by our shareholders in May 2004 and May 2005 with the sole aim to support liquidity of our shares through a liquidity contract entered into with an investment service provider in compliance with the Code of Practice of the Association Française des Entreprises d’Investissement.

      On May 16, 2003 we entered into a liquidity contract with CIC Securities in compliance with the Code of Practice of the Association Française des Entreprises d’Investissement. This liquidity contract was terminated on October 31, 2005.

      As from November 1, 2005 we entered into a liquidity contract with Rothschild & Cie Banque in compliance with the Code of Practice of the Association Française des Entreprises d’Investissement, approved by the AMF in its decision of March 22, 2005 published in the Bulletin des Annonces Légales Obligatoires of April 1st, 2005. This contract has been concluded for one year and is renewable by tacit agreement. Upon implementation of this contract, we allocated € 9,250,000 and 2,700 shares to the liquidity account (which corresponds to our share in the liquidity account for the liquidity contract with CM-CIC Securities).

      During fiscal year 2005, CIC Securities, then Rothschild, have:

— purchased, in 2005, 309,488 CGG shares at an average weighed price of € 71.44; and

— sold, in 2005, 267,258 CGG shares at an average weighed price of € 72.03.

      As of December 31, 2005, the Company held 42,500 shares in relation to this contract for a net book value of € 3,240,692.20. We did not hold directly any shares except for shares held pursuant to this contract.

     Trading in Our Own Shares

      Under European Commission Regulation Number 2273/2003 of December 22, 2003 applicable in France since October 13, 2004, trades by a company in its own shares are deemed valid when the following conditions are met:

• each trade must not be made at a price higher than the higher of the price of the last independent trade and the highest current independent bid on Euronext Paris;

• if we carry out the purchase of our own shares through derivative financial instruments, the exercise price of those derivative financial instruments must not be above the higher of the last independent trade and the highest current independent bid; and

• the trade must not account for more than 25% of the average daily trading volume on Euronext Paris in the shares during the twenty trading days immediately preceding the trade.

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      However, there are two periods during which we are not permitted to trade in our own securities: the 15-day period before the date on which we make our consolidated annual accounts public, and the period beginning on the date on which we become aware of information that, if disclosed, would have a significant impact on the market price of our securities and ending on the date this information is made public.

      We must file a report with the AMF every six months as well as at termination of the liquidity arrangement containing the assessment of such arrangement. Such report is then posted on the AMF website, as well as on our website. In addition, we must also file with the AMF a monthly report containing details of all transactions relating to our shares that we may have carried out during the month.

     Form, Holding and Transfer of Shares

      Form of Shares. Our statuts provides that our fully paid shares may be held in either registered or bearer form at the option of the shareholder. We may avail ourselves of the procedure known as titres au porteur identifiables, according to which we are entitled to request Euroclear France to disclose the name, nationality, address and the number of shares held by holders of those securities of ours which have, or which may in the future acquire, voting rights.

      Holding of Shares. In accordance with French law concerning dematerialization of securities, the ownership rights of holders of shares are represented not by share certificates but rather by book entries. According to our statuts, registered shares are entered into an account held by us or by a representative nominated by us, while shares in bearer form are placed in an account held by an accredited financial intermediary (intermédiaire financier habilité).

      We maintain a share account with Euroclear France in respect of all shares in registered form, which, in France, is administered by BNP Paribas Securities Services, acting on our behalf as our agent. Shares held in registered form are inscribed in the name of each shareholder (either directly, or, at the shareholder’s request, through such shareholder’s accredited financial intermediary) in separate accounts maintained by BNP Paribas Securities Services on our behalf. Each shareholder account shows the name of the holder and the number of shares held and, in the case of shares inscribed through an accredited financial intermediary, shows that they are so held. BNP Paribas Securities Services, as a matter of course, issues confirmations to each registered shareholder as to holdings of shares inscribed in the shareholder’s accounts, but these confirmations do not constitute documents of title.

      Shares held in bearer form are held and inscribed on the shareholder’s behalf in an account maintained by an accredited financial intermediary with Euroclear France separately from our share account with Euroclear France. Each accredited financial intermediary maintains a record of shares held through it and will issue certificates of inscription in respect thereof. Shares held in bearer form may only be transferred effected through accredited financial intermediaries and Euroclear France. As noted above, our statuts allow us to request from Euroclear France details concerning the identity of the holders of shares in bearer form at any time.

      Transfer of Shares. Our statuts do not contain any restrictions relating to the transfer of shares. An owner of shares resident outside France may trade such shares on Euronext Paris. Should such owner (or the broker or other agent) require assistance in this connection, an accredited financial intermediary should be contacted.

      Prior to any transfer of shares held in registered form on Euronext Paris, such shares must be converted into bearer form and, accordingly, must be registered in an account maintained by an accredited financial intermediary. A shareholder may initiate a transfer by giving instructions (through an agent if appropriate) to the relevant accredited financial intermediary. For dealings on Euronext Paris an impôt sur les opérations de bourse, or a tax assessed on the price at which the securities were traded, is payable at a rate of 0.3% on the portion of the transaction up to and including €153,000 and at a rate of 0.15% on the portion of the transaction over €153,000 as well as for any prorogation. Such stock exchange stamp duty is subject to rebate of €23 per transaction and a maximum assessment of € 610 per transaction. However, non-residents of France are not required to pay this tax. In addition, a fee or commission is payable to the French broker involved in the transaction regardless of whether the transaction occurs within or outside France. No registration duty would normally be payable in France on the

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transfer of our shares unless a transfer instrument has been executed in France. See “Taxation on Sale or Disposal of Shares or ADSs”.

     Requirements for Holdings Exceeding Certain Percentages

      The French company law provides that any individual or entity, who acting alone or in concert with others, acquires more than 5%, 10%, 15%, 20%, 25%, 33¹/3%, 50%, 66²/3 %, 90% or 95% of our outstanding shares or voting rights thereof or whose shareholding falls below any such percentage must notify us within five (5) trading days of the date such threshold was crossed of the number of shares it holds and of the voting rights attached thereto. Such individual or entity must also notify the AMF within five (5) trading days of the date such threshold was crossed.

      In order to permit holders of our shares to give the notice required by law, we must publish in the BALO, not later than 15 calendar days after our annual ordinary general meeting of shareholders, information with respect to the total number of voting rights available as of the date of such meeting. In addition, if we are aware of a change in the number of available votes by at least 5% in the period between two annual ordinary general meetings, we must publish in the BALO, within 15 calendar days of such change, the number of voting rights then available and provide the AMF with a written notice. The AMF publishes in a weekly notice (avis) the total number of voting rights so notified by all listed companies, mentioning the date each such number was last updated.

      If any person fails to comply with the legal notification requirement, the shares or voting rights in excess of the relevant threshold will be deprived of voting rights for all shareholders’ meeting until the end of a two-year period following the date on which the owner thereof complies with the notification requirements. In addition, any shareholder who fails to comply with the above requirements may have all or part of its voting rights (and not only with respect to the shares in excess of the relevant threshold) suspended for up to five years by the Tribunal de Commerce at the request of our chairman, any shareholder or the AMF, and may be subject to criminal penalties.

      French law imposes additional reporting requirements on persons who acquire more than 10% or 20% of our outstanding shares or voting rights. These persons must file a report with us and the AMF within 10 trading days of the date they cross the threshold. In the report, the acquirer must specify its intentions for the following 12-month period, including whether or not it intends to continue its purchases, to acquire control of our company or to seek nomination to our board of directors. The AMF makes the notice public. The acquirer must also publish a press release stating its intentions in a financial newspaper of national circulation in France. The acquirer may only amend its stated intentions in case of significant changes in its own situation or shareholders, or in our situation. Upon any change of intention, it must file a new report. Failure to comply with the notification requirements or to abide by the stated intentions may result in the acquirer being deprived of all or part of its voting rights, for a period of up to five years, by the Tribunal de Commerce, at our request or that of the AMF or one of our shareholders.

      In addition to the provisions of French company law our statuts provide that any shareholder who directly or indirectly acquires ownership or control of shares representing 1% or any multiple thereof of our share capital or voting rights, or whose shareholding falls below any such limit, must inform us within five (5) trading days of the crossing of the relevant threshold, of the number of shares then owned by such shareholder. Failure to comply with these notification requirements may result, at the request, recorded in the minutes of the general meeting, of one or several shareholders holding at least 1% of the capital, in the shares in excess of the relevant threshold being deprived of voting rights for all shareholder meetings until the end of a two-year period following the date on which the owner thereof has complied with such notification requirements.

      Compulsory Tender. General Regulation of the AMF provide that a shareholder, acting alone, or shareholders acting in concert, as these terms are defined in article L.233-10 of the French Commercial Code, who come to own more than one-third of the voting rights or share capital of a French company listed on a regulated securities exchange in France must immediately notify the AMF, and submit a compulsory tender for all the shares of capital and all securities giving access to the share capital or voting rights of such company. The tender must be submitted on terms acceptable to the AMF. The acquisition of control of a private company, the

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principal asset of which is a one-third or more interest in a company listed on a regulated market in France, is treated as a direct acquisition of such interest.

      In addition, the same obligation applies to any shareholder acting alone or shareholders acting in concert who, owning between one-third and 50% of the voting rights or share capital of a French company listed on a regulated market in France, increase their interest by more than 2% of the existing total number of shares or voting rights over a maximum period of twelve consecutive months.

      The AMF is vested with the power to grant relief from the obligation to tender for all of the shares of the target company and may consider certain exemptions when petitioned for such relief by the acquiring shareholders. These exemptions primarily concern previous control of the target company or a commitment to divest within a given period.

Material Contracts

      The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by us or our subsidiaries within the two years immediately preceding the date of this document and are, or may be, material:

Subscription Agreement, dated 27 September 2004, by and among us, Onex Partners LP, Onex American Holdings II LLC, Onex US Principals LP, CGG Executive Investco, LLC and Onex Corporation

      In accordance with this agreement, we sold U.S.$84,980,000 7.75% convertible subordinated bonds due 2012 to Onex Partners and its affiliated entities and related co-investors, which bonds are convertible into new ordinary shares of our company and are redeemable in cash or, in certain circumstances, at our option at maturity, for new and/or existing ordinary shares of our company. At our option, we may also pay interest on the bonds in new and/or existing ordinary shares of our company.

Registration Rights Agreement, dated 27 September 2004, by and among us, Onex Partners LP, Onex American Holdings II LLC, Onex US Principals LP and CGG Executive Investco, LLC

      This agreements provided certain registration rights to certain subscribers of our U.S.$84,980,000 7.75% convertible subordinated bonds due 2012. We provide for the registration with the Securities and Exchange Commission under certain circumstances of ordinary shares of our company into which the convertible subordinated bonds are convertible.

Purchase Agreement dated April 21, 2005 by and among us, certain of our subsidiaries acting as original guarantors, Credit Suisse First Boston (Europe) Limited, BNP Paribas Securities Corp, RBC Capital Markets Corporation Natexis Banques Populaires.

      In accordance with this agreement, we sold U.S.$165,000,000 of our 7¹/2 % Senior Notes due 2015 to the initial purchasers for resale pursuant to Rule 144A and Regulation S under the Securities Act. CGG Americas Inc., CGG Canada Ltd, CGG Marine Resources Norge ASA, Sercel Inc., Sercel Canada Ltd. and Sercel Australia Pty Ltd. are acting as original guarantors.

Registration Rights Agreement dated April 28, 2005 by and among us, certain of our subsidiaries acting as original guarantors, Credit Suisse First Boston (Europe) Limited, BNP Paribas Securities Corp, RBC Capital Markets Corporation and Natexis Banques Populaires.

      This agreements provided certain registration rights to the holders of our U.S.$165,000,000 7¹/2 % Senior Notes due 2015. We fulfilled our obligations under this agreement in a registered exchange offer that expired on November 4, 2005.

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Single currency term facility agreement dated September 1, 2005 by and among us, certain of our subsidiaries, Credit Suisse First Boston International and BNP Paribas.

      On September 1, 2005, we signed a single term facility agreement of up to U.S.$375,000,000 with Credit Suisse First Boston International and BNP Paribas acting as arrangers and agents. The purpose of this agreement was to finance the acquisition of Exploration Resources ASA. CGG Americas Inc., CGG Canada Ltd, CGG Marine Resources Norge ASA, Sercel Inc., Sercel Canada Ltd. and Sercel Australia Pty Ltd. are acting as original guarantors.

Amendment and restatement accession and novation agreement dated September 30, 2005 relating to US$375,000,000 Single Currency Term Facility Agreement originally dated 1 September 2005 between, among others, us, certain of our subsidiaries acting as original guarantors, Credit Suisse First Boston International and BNP Paribas.

      On September 30, 2005, we signed an amendment and restatement accession and novation agreement to the Single Currency Facility Agreement dated September 1, 2005. The purpose of this agreement was to transfer 45% of the shares held by us in Exploration Resources ASA and the corresponding indebtedness under the facility to CGG Americas Inc.

Underwriting Agreement dated November 15, 2005 by and among us, BNP Paribas, Credit Suisse First Boston (Europe) limited and RBC Capital Markets Corporation.

      In accordance with this agreement, the underwriters agreed to subscribe or procure subscribers for up to 4,327,776 of our newly issued ordinary shares at a purchase price of € 51 per share in transaction exempt from Securities Act registration.

Purchase Agreement dated January 27, 2006 by and among us, certain of our subsidiaries acting as original guarantors, Credit Suisse Securities (Europe) Limited and BNP Paribas Securities Corp.

      In accordance with this agreement, we sold U.S.$165,000,000 of our 7¹/2 % Senior Notes due 2015 to the initial purchasers for resale pursuant to Rule 144A and Regulation S under the Securities Act. CGG Americas Inc., CGG Canada Ltd, CGG Marine Resources Norge ASA, Sercel Inc., Sercel Canada Ltd. and Sercel Australia Pty Ltd. are acting as original guarantors.

Registration Rights Agreement dated February 3, 2006 by and among us, certain of our subsidiaries acting as original guarantors, Credit Suisse Securities (Europe) Limited and BNP Paribas Securities Corp.

      This agreements provided certain registration rights to the holders of our U.S.$165,000,000 of our 7¹/2 % Senior Notes due 2015 issued on February 3, 2006.

Long term facility agreement dated March 29, 2006 by and among Exploration Investment Resources II AS,

DnB NOR Bank ASA and certain banks and financial institutions.

      On March 29, 2006, we signed a long term facility agreement of up to U.S.$70,000,000 to finance the acquisition of certain seismic equipment and the conversion of one of our seismic vessel.

Exchange Controls

Ownership of ADSs or shares by Non-French Persons

      Under French law, there is no limitation on the right of non-resident or foreign shareholders to own or to exercise their voting rights attached to the securities they hold in a French company.

      Pursuant to the French Monetary and Financial Code as implemented by Decree No. 2003-196 dated March 7, 2003, administrative authorization is no longer required of non-European residents prior to acquiring a controlling interest in a French company/with exceptions regarding sensitive economic areas such as defense, public health, etc. However a notice (déclaration administrative) must be filed with the French Ministry of the

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Economy for the acquisition of an interest in us by any person not residing in France or any group of non-French residents acting in concert or by any foreign controlled resident if such acquisition would result in (i) the acquisition of a controlling interest in us or (ii) the increase of a controlling interest in us unless such person not residing in France or group of non-French residents already controls more than two-thirds of our share capital or voting rights prior to such increase. Under existing administrative rulings, ownership of 20% or more of a French listed company’s share capital or voting rights is regarded as a controlling interest, but a lower percentage might be held to be a controlling interest in certain circumstances (depending upon such factors as the acquiring party’s intentions, the ability of the acquiring party to elect directors or financial reliance by the company concerned on the acquiring party).

      Violation of this administrative notice requirement are sanctioned by a fine up to € 750.

     Exchange Controls

      Under current French exchange control regulations, there are no limitations on the amount of payments that may be remitted by us to non-residents. Laws and regulations concerning foreign exchange control do require, however, that all payments or transfers of funds (including payments of dividends to foreign shareholders) made by a French resident to a non-resident be handled by an accredited intermediary. In France, all registered banks and substantially all credit establishments are accredited intermediaries.

Taxation

      The following summarizes the material French tax and U.S. federal income tax consequences to U.S. Holders (as defined below) of the ownership and disposal of ADSs.

      For the purposes of this discussion, a U.S. Holder means a beneficial owner of ADSs that is:

• an individual who is a citizen or resident of the United States for U.S. federal income tax purposes;

• a corporation, or other entity treated as a corporation, created or organized in or under the laws of the United States or of any State thereof;

• an estate the income of which is subject to United States federal income taxation regardless of its source; or

• a trust if a court within the United States is able to exercise primary supervision over the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or the trust has elected to be treated as a domestic trust for U.S. federal income tax purposes.

      This discussion is not a complete description of all of the tax consequences of the ownership or disposition of ADSs. The summary assumes that each obligation in the deposit agreement between The Bank of New York and us (the “Deposit Agreement”) and any related agreement will be performed in accordance with its terms and is based on the current tax laws of the Republic of France and the United States, including the U.S. Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing and proposed Treasury Regulations, Internal Revenue Service (“IRS”) rulings and judicial opinions as well as the Convention between the United States and the Republic of France for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital dated August 31, 1994 (the “Treaty”), all as currently in effect and all subject to change, possibly with retroactive effect.

      Your individual circumstances may affect the tax consequences of the ownership or disposition of ADSs to you, and your particular facts or circumstances are not considered in the discussion below.

      For purposes of the Treaty, French tax law and the Code, U.S. owners of ADSs will be treated as owners of the corresponding number of our shares underlying those ADSs held by The Bank of New York as depositary (the “Depositary”). There are currently no procedures available for holders that are not U.S. residents to claim tax treaty benefits in respect of dividends received on ADSs or shares registered in the name of a nominee. Such holders should consult their own tax advisor about the consequences of owning and disposing of ADSs.

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      This discussion summary is not intended to apply to holders of ADSs in particular circumstances, such as:

• investors that own (directly or indirectly) 10% or more of our voting stock;

• banks;

• dealers in securities or currencies;

• traders in securities who elect to apply a mark-to-market method of accounting;

• financial institutions;

• regulated investment companies;

• real estate investment trusts;

• tax-exempt organizations;

• insurance companies;

• persons holding ADSs as part of a hedging, straddle, conversion or other integrated transaction;

• U.S. Holders who hold ADSs other than as capital assets;

• persons whose functional currency is not the U.S. dollar;

• certain U.S. expatriates;

• individual retirement accounts and other tax-deferred accounts;

• partners in partnerships;

• persons subject to the U.S. alternative minimum tax; and

• persons who acquired ADSs pursuant to an employee stock option or otherwise as compensation.

      You should consult your own tax advisor regarding the French and United States federal, state and local and other tax consequences of the purchase, ownership and disposition of ADSs in the light of your particular circumstances, including the effect of any state, local or other national laws. In particular, you should confirm whether you are eligible for the benefits of the Treaty with your advisor and should discuss any possible consequences of failing to be so eligible. You should also consult your tax advisor in the event that you become entitled to receive any dividend that is approved to be paid.

      The U.S. federal income tax treatment of a partner in a partnership that holds ADSs will depend on the status of the partner and the activities of the partnership. Holders that are partnerships should consult their tax advisers concerning the U.S. federal income tax consequences to their partners of the ownership and disposition of ADSs by the partnership.

     French Taxation

      The following describes the material French tax consequences of owning and disposing of ADSs relevant to U.S. Holders which do not hold their ADSs in connection with a permanent establishment or fixed base through which a holder carries on business or performs personal services in France. The statements relating to French tax laws set out below are based on the laws in force as at the date hereof, and are subject to any changes in applicable French tax laws or in any applicable double taxation conventions or treaties with France occurring after such date.

      This discussion is intended only as a descriptive summary and does not purport to be a complete analysis or list of all potential tax effects of the purchase or ownership of ADSs.

     Taxation of Dividends

      France generally imposes a 25% withholding tax on dividends distributed in cash or in the form of shares by a French corporation (such as our company) to shareholders who are not residents of France for French tax

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purposes. However, the Treaty generally reduces the withholding tax rate to 15% on dividends paid in cash or in the form of shares to an Eligible U.S. Holder (as defined below).

      Under the Treaty, an “Eligible U.S. Holder” is a U.S. Holder whose ownership of ADSs is not attributable to a permanent establishment or fixed base in France and who is:

• an individual or other non-corporate holder; or

• a corporation that does not own, directly or indirectly, 10% or more of the capital of our company,

      provided in each case that such holder:

• is a resident of the United States under the Treaty;

• is entitled to Treaty benefits under the limitation on benefits provisions in Article 30 of the Treaty; and

• complies with the procedural rules to obtain Treaty benefits described below under “Taxation of Dividends — Procedure to Obtain Treaty Benefits”.

     Taxation of Dividends — Procedure to Obtain Treaty Benefits

      Eligible U.S. Holders must follow certain procedures in order to be eligible for the 15% dividend withholding tax under the Treaty.

      An Eligible U.S. Holder who wishes to obtain a reduced withholding rate at source must:

• complete a certificate (the “Certificate”) as provided under Schedule III to the administrative instruction of 14 February 2005 referenced BOI 4 J-1-05;

• have it certified by the U.S. financial institution that is in charge of the administration of the ADSs of that Eligible U.S. Holder; and

• file it with us or the French person in charge of the payment of dividends on our shares underlying the ADSs, such as the French paying agent, in the case of our shares, or with the Depositary in the case of ADSs,

before the date of payment of the relevant dividend. However, if an Eligible U.S. Holder is not able to complete, have certified and file the Certificate before the date of payment of the dividend, that Eligible U.S. Holder may still benefit from the reduced 15% withholding tax rate if the U.S. financial institution that is in charge of the administration of that Holder’s ADSs or underlying shares provides us or the French paying agent with certain information with respect to that Eligible U.S. Holder and his or her holding of the ADSs or the underlying shares before the date of payment of the relevant dividend.

      If either of the procedures described above has not been followed before a dividend payment date or is not available to an Eligible U.S. Holder, our company or the French paying agent will withhold tax from the dividend at the normal French rate of 25%, and the Eligible U.S. Holder will be entitled to claim a refund of the excess withholding tax by filing a form RF1 A E.U. no. 5052 with the Depositary or the French paying agent early enough to enable them to forward that application to the French tax authorities before December 31 of the year following the calendar year in which the related dividend was paid.

      The Depositary will provide to all U.S. Holders of ADSs the applications or certificates, together with instructions, and will arrange for the filing with the French tax authorities of all applications and certificates completed by U.S. Holders of ADSs and returned to the Depositary in sufficient time to effect the filing.

      The Certificate, the form RF1 A E.U. no. 5052 and their respective instructions are available at the center for non-resident taxation (centre des impôts des non-résidents) (9, rue d’Uzès, 75094 Paris Cedex 2, France).

     Taxation on Sale or Disposal of ADSs

      Subject to the provisions of any relevant double tax treaty, persons who are not French residents for the purpose of French taxation (as well as, under certain conditions, foreign states, international organizations and

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certain foreign public bodies) and who have held not more than 25%, directly or indirectly, of the dividend rights (bénéfices sociaux) of our company at any time during the preceding five years, are not generally subject to any French income tax or capital gains tax on any sale or disposal of ADSs.

      If a transfer of listed shares is evidenced by a written agreement, such share transfer agreement is, in principle, subject to registration formalities and therefore to a 1.1% registration duty assessed on the higher of the purchase price or the market value of the shares (subject to a maximum assessment of € 4,000 per transfer). However, under certain circumstances, no duty is due if such written share transfer agreement is executed outside France.

     French Estate and Gift Taxes

      Pursuant to “The Convention Between the United States of America and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritance and Gifts”, a transfer of ADSs by gift or by reason of the death of a U.S. Holder will not be subject to French gift or inheritance tax, unless (i) the donor or the transferor is domiciled in France at the time of making the gift or at the time of his or her death, or (ii) the ADSs were used in, or held for use in, the conduct of a business through a permanent establishment or fixed base in France. In such a case, the French gift or inheritance tax may be credited against the U.S. gift or inheritance tax. This tax credit is limited to the amount of the U.S. gift or inheritance tax due on the ADSs.

     French Wealth Tax

      The French wealth tax (impôt de solidarité sur la fortune) does not generally apply to a U.S. Holder who is a resident of the United States as defined in the provisions of the Treaty, unless the ADSs form part of the business property of a permanent establishment or fixed base in France.

United States Taxation

      The following summary assumes that we are not a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes, which we believe to be the case. Our possible status as a PFIC must be determined annually and therefore may be subject to change. If we were to be a PFIC in any year, materially adverse consequences could result for U.S. Holders.

      THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING THE ADSs, INCLUDING THEIR ELIGIBILITY FOR THE BENEFITS OF THE TREATY, THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.

     Dividends

      General. Distributions paid on our shares out of current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), before reduction for any French withholding tax paid by us with respect thereto, will generally be taxable to a U.S. Holder as foreign source dividend income in the year in which the distribution is received (which, in the case of a U.S. Holder of ADSs, will be the year of receipt by the Depositary), and will not be eligible for the dividends received deduction allowed to corporations. Distributions in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder’s basis in the ADSs and thereafter as capital gain. However, we do not maintain calculations of its earnings and profits in accordance with U.S. federal income tax accounting principles. U.S. Holders should therefore assume that any distribution by us with respect to our Ordinary Shares will constitute ordinary dividend income. U.S. Holders should consult their own tax advisors with respect to the appropriate U.S. federal income tax treatment of any distribution received from us.

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      For taxable years that begin before December 31, 2008, dividends paid by us will be taxable to a non-corporate U.S. Holder at the special reduced rate normally applicable to capital gains, provided either we qualify for the benefits of the Treaty or the ADSs are considered to be readily tradable on the NYSE. A U.S. Holder will be eligible for this reduced rate only if it has held the ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date. A U.S. Holder will not be able to claim the reduced rate for any year in which we are treated as a PFIC. See “Passive Foreign Investment Company Status” below.

      Foreign Currency Dividends. Dividends paid in euro will be included in income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the dividends are received by the Depositary, regardless of whether the euro are converted into U.S. dollars at that time. If dividends received in euro are converted into U.S. dollars on the day they are received by the Depositary, the U.S. Holder generally will not be required to recognize foreign currency gain or loss in respect of the dividend income.

     Effect of French Withholding Taxes

      As discussed above under “Taxation — French Taxation — Taxation of Dividends”, under French domestic law, dividends paid by us to a non-resident shareholder are subject to a 25% withholding tax. Under the Treaty, however, the rate of withholding tax applicable to Eligible U.S. Holders is reduced to a maximum of 15%. Please see “Taxation — French Taxation — Taxation of Dividends — Procedure to Obtain Treaty Benefits” for the procedure to claim the avoir fiscal and reduced rate of withholding tax under the Treaty.

      An Eligible U.S. Holder will generally be entitled, subject to certain limitations, to a credit against its U.S. federal income tax liability, or a deduction in computing its U.S. federal taxable income, for any French tax withheld from a dividend. Eligible U.S. Holders will not be entitled to a foreign tax credit for the amount of any French taxes withheld in excess of the 15% maximum rate, and with respect to which the holder can obtain a refund from the French taxing authorities. For purposes of the foreign tax credit limitation, foreign source income is classified in one of several “baskets”, and the credit for foreign taxes on income in any basket is limited to U.S. federal income tax allocable to that income. Dividends paid by us generally will constitute foreign source income in the “passive income” basket. If a U.S. Holder receives a dividend from us that qualifies for the reduced rate described above under “United States Taxation-Dividends-General”, the amount of the dividend taken into account in calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. In certain circumstances, a U.S. Holder may be unable to claim foreign tax credits (and may instead be allowed deductions) for foreign taxes imposed on a dividend if the U.S. Holder has not held the ADSs for at least 16 days in the 31-day period beginning 15 days before the ex dividend date.

      U.S. Holders that are accrual basis taxpayers, and who do not otherwise elect, must translate French taxes into U.S. Dollars at a rate equal to the average exchange rate for the taxable year in which the taxes accrue, while all U.S. Holders must translate taxable dividend income into U.S. Dollars at the spot rate on the date received. This difference in exchange rates may reduce the U.S. dollar value of the credits for French taxes relative to the U.S. Holder’s U.S. federal income tax liability attributable to a dividend. However, cash basis and electing accrual basis U.S. Holders may translate French taxes into U.S. Dollars using the exchange rate in effect on the day the taxes were paid. Any such election by an accrual basis U.S. Holder will apply for the taxable year in which it is made and all subsequent taxable years, unless revoked with the consent of the IRS.

     Exchange of ADSs for Shares

      No gain or loss will be recognized upon the exchange of ADSs for the U.S. Holder’s proportionate interest in our ordinary shares. A U.S. Holder’s tax basis in the withdrawn shares will be the same as the U.S. Holder’s tax basis in the ADSs surrendered, and the holding period of the shares will include the holding period of the ADSs.

     Sale or other Disposition

      Upon a sale or other disposition of ADSs (other than an exchange of ADSs for shares), a U.S. Holder generally will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any,

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between the amount realized on the sale or other disposition and the U.S. Holder’s adjusted tax basis in the ADSs. This capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period in the ADSs exceeds one year. Any gain or loss will generally be U.S. source.

     Passive Foreign Investment Company Status

      A foreign corporation will be a PFIC in any taxable year in which either (i) 75% or more of its gross income consists of certain specified types of “passive” income or (ii) the average percentage of its assets (by value) that produce or are held for the production of passive income is at least 50%. We do not expect that we will be a PFIC in 2006, but our possible status as a PFIC must be determined annually and therefore we might become a PFIC in future years.

      If we were a PFIC in any taxable year during which a U.S. Holder owned ADSs and the U.S. Holder had not made a mark to market or qualified electing fund election, the U.S. Holder would generally be subject to special rules (regardless of whether we continued to be a PFIC) with respect to (i) any “excess distribution” (generally, any distributions received by the U.S. Holder on ADSs in a taxable year that are greater than 125% of the average annual distributions received by the U.S. Holder in the three preceding taxable years or, if shorter, the U.S. Holder’s holding period for the ADSs and (ii) any gain realized on the sale or other disposition of ADSs. Under these rules (a) the excess distribution or gain would be allocated ratably over the U.S. Holder’s holding period, (b) the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which we are a PFIC would be taxed as ordinary income, and (c) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. If we were a PFIC, a U.S. Holder of ADSs would generally be subject to similar rules with respect to distributions to us by, and dispositions by us of the stock of, any direct or indirect subsidiaries of ours that were also PFICs. A U.S. Holder who beneficially owns an interest in a PFIC is generally required to file an annual information return on IRS Form 8621 describing the distributions received from and any gain realized upon the disposition of a beneficial interest in the PFIC. Additionally, dividends paid by us would not be eligible for the special reduced rate of tax described above under “United States Taxation-Dividends-General”. U.S. Holders should consult their tax advisers regarding the potential application of the PFIC regime.

     Backup Withholding and Information Reporting

      Payments of dividends and other proceeds with respect to ADSs by a U.S. paying agent or other U.S. intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable regulations. Backup withholding may apply to these payments if the U.S. Holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to report all interest and dividends required to be shown on its U.S. federal income tax returns. Certain U.S. Holders (including, among others, corporations) are not subject to backup withholding. U.S. Holders should consult their tax advisers as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.

Dividends and Paying Agents

      Not applicable.

Statement by Experts

      Not applicable.

Documents on Display

      We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) applicable to foreign private issuers. In accordance with the Exchange Act, we electronically file or submit reports, including annual reports on Form 20-F and interim reports on Form 6-K, and other information with the Securities and Exchange Commission. You may obtain these reports and other information

82

by sending a written request to Compagnie Générale de Géophysique, 1, rue Léon Migaux, 91300 Massy, France, Attention: Investor Relations Officer, Telephone: (33) 1 64 47 3000.

      You can inspect and copy these reports, and other information, without charge, at the Public Reference Room of the Commission located at 450 Fifth Street, N.W., Washington, D.C. 20549. You can also obtain copies of these materials at prescribed rates from the Public Reference Room of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or by calling the Commission at 1-800-SEC-0330. The Commission also maintains a web site at http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the Commission.

      In addition, you can inspect material filed by us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which American Depositary Shares representing shares of our common stock are listed. As a foreign private issuer, we are not subject to the proxy rules under Section 14 or the short-swing insider profit disclosure rules under Section 16 of the Exchange Act.

Subsidiary Information

      Not applicable.

Item 11:     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

      Because we operate internationally, we are exposed to general risks linked to operating abroad. The table below provides information about our market sensitive financial instruments and constitutes a “forward-looking statement”. Our major market risk exposures are changing interest rates and currency fluctuations.

Interest Rate Risk

      Our policy is to manage interest rates through use of a combination of fixed and floating rate debt. Our exposure to interest rate fluctuations is reduced to the extent that the main part of our financial debt at December 31, 2005 consisted of a bond issue maturing in November 2015 and bearing a fixed interest rate and of a bridge facility bearing a variable interest rate, which was repaid on February 10, 2006. A large part of our sources of liquidity also consists of long-term credit facilities and capital leases of various durations with fixed interest rates. However, our sources of liquidity include credit facilities with financial institutions charging variable interest rates over the course of drawdown periods of from one to twelve months. We may also use interest rate swaps to adjust interest rate exposures when appropriate based upon market conditions.

Foreign Exchange Rate Risk

      As a company that derives a substantial amount of its revenue from sales internationally, we are subject to risks relating to fluctuations in currency exchange rates. In each of the years ended December 31, 2005 and 2004, about 90% of our operating revenues and approximately two-thirds of our operating expenses were denominated in currencies other than the euro. These included the U.S. dollar and, to a significantly lesser extent, other non-euro Western European currencies, principally the British pound and the Norwegian kroner. In addition, a significant portion of our revenues that were invoiced in euros related to contracts that were effectively priced in U.S. dollars, as the U.S. dollar often serves as the reference currency when bidding for contracts to provide geophysical services. Our exposure to fluctuations in the euro/ U.S. dollar exchange rate has increased considerably over the last few years due to increased sales outside of Europe.

      We attempt to match foreign currency revenues and expenses in order to balance our net position of receivables and payables denominated in foreign currencies. We also seek to improve the balance of our net position of receivables and payables denominated in foreign currencies by maintaining a portion of our financing in U.S. dollars. In addition, our policy generally is to hedge major foreign currency cash exposures through foreign exchange forward contracts or other foreign exchange currency hedging instruments. These contracts are entered into with major financial institutions, thereby minimizing the risk of credit loss. All instruments are entered into for non-trading purposes. See “Item 5: Operating and Financial Review and Prospects — Trend Information — Currency Fluctuations” above.

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Credit Risk and Counter-Party Risk

      We seek to minimize our counter-party risk by entering into hedging contracts only with highly rated commercial banks or financial institutions and by distributing the transactions among the selected institutions. Although our credit risk is the replacement cost at the then-estimated fair value of the instrument, we believe that the risk of incurring losses is remote and those losses, if any, would not be material. Our receivables and investments do not represent a significant concentration of credit risk due to the wide variety of customers and markets in which we sell our services and products and our presence in many geographic areas. During 2005, our two largest clients accounted for 9.8% and 4.4% of our operating revenues, respectively. During 2004, our two largest clients accounted for 6.8% and 5.4% of our operating revenues, respectively.

      The table below presents principal amounts and related weighted average interest rates by year of maturity for our debt obligations and our foreign exchange forward contracts, all of which mature in one year or less and their fair value as of December 31, 2005:

																						Fair
Carrying value	2006			2007			2008			2009			2010			Thereafter			Total			Value
	(in € millions)
Debt
U.S. dollar		11.3			13.5			18.4			9.6			6.7			177.2			236.7			238.8
Average fixed rate		5.3	%		5.3	%		5.3	%		5.2	%		5.7	%		7.7	%		7.1	%
U.S. dollar		132.8			6.2			5.0			3.1			1.7			0.0			148.8			148.8
Average variable rate		8.2	%		5.0	%		5.1	%		5.2	%		5.4	%		0.0	%		7.9	%
Euro		3.5			0.8			0.0			0.0			0.0			0.0			4.3			4.4
Average fixed rate		6.2	%		1.7	%		0.0	%		0.0	%		0.0	%		0.0	%		6.2	%
Euro		7.5			0.0			0.0			0.0			0.0			0.0			7.5			7.5
Average variable rate		2.5	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		2.5	%
Other currencies		0.8			0.0			0.0			0.0			0.0			0.0			0.8			0.8
Average fixed rate		8.1	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		8.1	%
Other currencies		0.1			0.1			0.1			0.0			0.0			0.0			0.3			0.3
Average variable rate		6.4	%		6.4	%		6.4	%		0.0	%		0.0	%		0.0	%		6.4	%
Foreign Exchange — Firm commitments
Forward sales (in U.S.$)		183.6																					(4.2	)
U.S. dollars average rate/€		1.2042
Forward sales (in GBP)		6.5																					(0.5	)
GBP average rate/U.S.$		1.8871

Item 12:     DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

      Not applicable.

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PART II

Item 13:     DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

      Not applicable.

Item 14:     MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITYHOLDERS AND USE OF PROCEEDS

      Not applicable.

Item 15:     CONTROLS AND PROCEDURES

      As of the end of the period covered by this report, we carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in 17 CFR 240.13a-15(e) and 240.15d-15(e)), under the supervision of our management, including our Chief Executive Officer and our Chief Financial Officer. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that such controls and procedures are effective to ensure that information required to be disclosed in reports filed with or submitted to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Exchange Act and its rules and forms.

      There has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Nevertheless, following our acquisition of Exploration resources, our audit committee was informed of certain weaknesses in Exploration Resources’ internal controls as well as actions being implemented to correct them. Exploration Resources have been demerged from its former majority shareholder in March 2005 but the former majority shareholder continued to keep Exploration Resources books until our acquisition. Our analysis of the book keeping procedures revealed that they were not aligned with CGG’s internal controls, in particular with regard to the IFRS and associated deadlines. The preparation of our 2005 financial statements in accordance with IFRS required CGG to intervene and supervise local practices. An action plan is being implemented during the first six months of 2006 in order to improve local practices and reinforce internal control.

      Pursuant to section L.225-37 of the French commercial code, as amended by a French financial law (the Loi de Sécurité Financière) enacted on August 1, 2003, our Chairman of the Board must deliver a report to the annual general meeting of our shareholders on the conditions of preparation and organization of the meeting of our board of directors, on the limitations placed on the authority of the Chief Executive Officer as well as the internal control procedures put in place by CGG. This report for 2005 informed our shareholders of the internal control procedures that we have put in place in order to circumvent identified risks resulting from our activities and the risks of errors or fraud, particularly in accounting and finance. It describes the existing control environment, i.e. our values with respect to integrity and ethics, the organization of our corporate governance committees, the functions of our disclosure committee and the way we delegate powers and determine areas of responsibility. It also describes the procedures put in place to identify and assess our major risks, whether internal or external. It gives details on our control procedures, particularly those applied to financial information, so as to ensure reliability of financial reporting. A self-assessment process of internal control procedures currently existing within our group has been implemented.

Item 16A:     AUDIT COMMITTEE FINANCIAL EXPERT

      Pursuant to section 407 of the Sarbanes Oxley Act of 2002, Mr. Dunand was appointed Financial Expert of the Audit Committee by a Board resolution dated December 10, 2003. Mr. Dunand is “independent”, as that term is defined by the listing standards of the New York Stock Exchange.

Item 16B:     CODE OF ETHICS

      The Board of Directors has adopted a code of ethics that applies to our Chief Executive Officer, our Chief Financial Officer, other senior financial officers (including our principal accounting officer), the members of the

85

Group Management Committee and the Disclosure Committee to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by us and compliance with applicable governmental rules and regulations. A copy of this code of ethics is filed as an exhibit to this annual report.

Item 16C:     PRINCIPAL ACCOUNTANT FEES AND SERVICES

	December 31,
	2005				2004
	Ernst & Young		Mazars & Guerard		Ernst & Young		Mazars & Guerard
	(in € thousands)
Audit Fees(a)		938		670		647		507
Audit-Related Fees(b)		1,019		484		677		150
Tax Fees(c)		280		5		346		—
All Other Fees(d)		10		—		21		—
Total		2,247		1,159		1,691		657

(a)	Audit fees are the aggregate fees billed by our independent auditors for the audit of the individual and consolidated annual and semi-annual financial statements and the provision of services that are normally provided by our independent auditors in connection with statutory and regulatory filings or engagements.
(b)	Audit-related fees are the aggregate fees billed by our independent auditors for services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “audit fees”. They include consultations relating to accounting principles and internal controls.
(c)	Tax fees are the aggregate fees billed by our independent auditors for services rendered by our auditors for tax compliance, tax advice, and tax planning. They include assistance when dealing with local authorities, advice regarding tax audit and litigation, expatriate taxation and tax advice relating to mergers and acquisitions.
(d)	All other fees are the aggregate fees billed by our independent auditors other than the services reported in paragraphs (a) through (c) of this item. They include training services as well as general and specific advice.

      In December 2003, the Board of Directors and the audit committee adopted an audit and non-audit services pre-approval policy. This policy requires the Audit Committee to pre-approve the audit and non-audit services performed by the independent auditors in order to assure that they do not impair the auditors’ independence from us.

      Pursuant to this policy, a list of proposed services is pre-approved, on an annual basis, without consideration of specific case-by-case services by the Audit Committee. Unless a type of service has received such general pre-approval, it will require specific pre-approval by the Audit Committee or by any person to whom the audit committee has delegated pre-approval authority. In addition, any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval by the Audit Committee. The services list and the cost levels are reviewed annually by the Audit Committee.

      The annual audit services engagement terms and fees as defined under paragraph (a) of this item are subject to the specific pre-approval of the Audit Committee.

Item 16D:     EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

      Not applicable.

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Item 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

	Total
	number of
	shares								Maximum number
	purchased as		Total number		Average				of shares that may
	part of the		of shares		price paid		Total amount		yet be purchased
	programs		purchased		per share		paid		under the program
January, 2005(a)		14,729		14,729	€	54.20	€	798,295		1,707,268
February, 2005(a)		14,479		14,479	€	64.12	€	928,407		1,707,268
March 2005(a)		12,328		12,328	€	66.58	€	820,800		1,707,268
April, 2005(b)		17,799		17,799	€	64.39	€	1,145,994		1,703,033
May, 2005(b)		7,374		7,374	€	62.57	€	461,362		1,706,999
June, 2005(b)		8,097		8,097	€	68.57	€	555,244		1,705,919
July, 2005(b)		18,503		18,503	€	71.10	€	1,315,628		1,705,369
August, 2005(b)		12,827		12,827	€	81.07	€	1,039,949		1,704,794
September, 2005(b)		13,550		13,550	€	83.60	€	1,132,725		1,707,134
October, 2005(b)		18,866		18,866	€	78.18	€	1,474,879		1,705,469
November, 2005(b)		103,673		103,673	€	69.47	€	7,202,062		1,704,469
December, 2005(b)		67,262		67,262	€	77.19	€	5,191,760		1,662,969
TOTAL		309,487		309,487	€	71.30	€	22,067,105

(a)	Shares purchased as part of the 2005 program approved by the shareholders’ meeting of May 12, 2005 for a period of 18 months, authorizing purchases of shares up to 10% of our common stock at a maximum price of € 120 per share; this program replaced the previous program announced on May 13, 2004.
(b)	Shares purchased as part of the 2004 program approved by the shareholders’ meeting of May 13, 2004 for a period of 18 months, authorizing purchases of shares up to 10% of our common stock at a maximum price of € 80 per share; this program replaced the previous program announced on April 23, 2003.

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PART III

Item 17:     FINANCIAL STATEMENTS

      Not applicable.

Item 18:     FINANCIAL STATEMENTS

      The following audited financial statements of CGG and related schedules, together with the report of Barbier Frinault & Autres Ernst & Young, and Mazars & Guerard , are filed as part of this Annual Report:

	Page
Report of Independent Auditors		F-1
Consolidated Financial Statements:
Consolidated Balance Sheets as at December 31, 2005 and 2004		F-2
Consolidated Statements of Operations for the years ended December 31, 2005 and 2004		F-3
Consolidated Statements of Cash Flows for the years ended December 31, 2005 and 2004		F-4
Consolidated Statements of Changes in Shareholders’ Equity December 31, 2005 and 2004		F-5
Notes to the Consolidated Financial Statements		F-7

      The following financial statements of Arabian Geophysical & Surveying Company Limited (Argas) and related schedules, together with the report of Ernst & Young, are filed as part of this Annual Report.

	Page
Report of Independent Auditors		F-69
Financial Statements:
Balance Sheet as at December 31, 2005, 2004 and 2003		F-70
Statement of Income for the years ended December 31, 2005, 2004 and 2003		F-71
Statement of Cash Flows for the years ended December 31, 2005, 2004 and 2003		F-72
Statement of Changes in Partners’ Equity for the year ended December 31, 2005		F-73
Notes to the Financial Statements		F-74

Item 19:     EXHIBITS

      The following instruments and documents are included as Exhibits to this Annual Report. Exhibits incorporated by reference are so indicated.

Exhibit No			Exhibit
	1	.1*	English translation of the Articles of Association (statuts) of the Registrant.
	2	.1	Indenture dated as of April 28, 2005 between the Registrant and JP Morgan Chase Manhattan Bank as Trustee, which includes the form of the 71/2% Senior Notes due 2015 as an exhibit thereto.(1)
	4	.1	2000 Stock Option Plan(2)
	4	.2	2001 Stock Option Plan(3)
	4	.3	2002 Stock Option Plan(2)

88

Exhibit No			Exhibit
	4	.4	2003 Stock Option Plan(4)
	4	.5	Lease dated as of April 2, 1991 for the Registrant’s data processing center in London, England.(5)
	4	.6	Leases dated as of November 8, 1991 and December 13, 1996 for the Registrant’s data processing center in Houston, Texas, USA.(5)
	4	.7	Lease dated as of September 1, 1996 for Sercel’s factory in Tulsa, Oklahoma, USA.(5)
	4	.8	Time charter agreement dated as of March 1, 1996 for CGG Föhn, as amended on July 1, 1996.(5)
	4	.9	Time charter agreement dated as of May 7, 1996 for CGG Harmattan, as amended on July 1, 1996.(5)
	4	.10	Time charter agreement dated as of December 22, 1997 for CGG Alizé.(6)
	4	.11	Mixed Capital Company Contract dated November 26, 2003 by and among Sercel SA, the Committee of the Hebei JunFeng Prospecting Equipment Company, the Dongfang Geological Prospecting Limited Liability Company, and the Xian General Factory for Oil Prospecting Equipment(7)
	4	.12	Revolving Credit Facility Agreement dated March 12, 2004 by and among us, Sercel SA, CGG Marine, Natexis Banques Populaires and certain banks and financial institutions(7)
	4	.13	Subscription Agreement, dated 27 September 2004, by and among us, Onex Partners LP, Onex American Holdings II LLC, Onex US Principals, LP, CGG Executive Investco, LLC and Onex Corporation (we have requested that the Commission grant confidential treatment for certain portions of this document)(8)
	4	.14	Registration Rights Agreement, dated 27 September 2004, by and among us, Onex Partners LP, Onex American Holdings II LLC, Onex US Principals, LP and CGG Executive Investco, LLC (8)
	4	.15*	Purchase Agreement dated April 21, 2005 by and among us, certain of our subsidiaries acting as original guarantors, Credit Suisse First Boston (Europe) Limited, BNP Paribas Securities Corp, RBC Capital Markets Corporation Natexis Banques Populaires.
	4	.16*	Registration Rights Agreement dated April 28, 2005 by and among us, certain of our subsidiaries acting as original guarantors, Credit Suisse First Boston (Europe) Limited, BNP Paribas Securities Corp, RBC Capital Markets Corporation and Natexis Banques Populaires.
	4	.17*	Single currency term facility agreement dated September 1, 2005 by and among us, certain of our subsidiaries, Credit Suisse First Boston International and BNP Paribas.
	4	.18*	Amendment and restatement accession and novation agreement dated September 30, 2005 related to US$375 million single currency term facility agreement originally dated September 1, 2005 between, among others us, certain of our subsidiaries and Credit Suisse First Boston International and BNP Paribas.
	4	.19*	Underwriting Agreement dated November 15, 2005 by and among us, BNP Paribas, Credit Suisse First Boston (Europe) limited and RBC Capital Markets Corporation.
	4	.20*	Purchase Agreement dated January 27, 2006 by and among us, certain of our subsidiaries acting as original guarantors, Credit Suisse Securities (Europe) Limited and BNP Paribas Securities Corp.
	4	.21*	Registration Rights Agreement dated February 3, 2006 by and among us, certain of our subsidiaries acting as original guarantors, Credit Suisse Securities (Europe) Limited and BNP Paribas Securities Corp.
	4	.22*	U.S.$70 million Term Credit Facility, dated March 29, 2006, by and among Exploration Investment Resources II AS, DnB NOR Bank ASA and certain banks and financial institutions.
	8*		Subsidiaries of the Registrant
	11		Code of Ethics(9)

89

Exhibit No			Exhibit
	12	.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
	12	.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
	13	.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (10 U.S.C. § 1350)
	13	.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (10 U.S.C. § 1350)

Notes:

*	Filed herewith.
(1)	Incorporated by reference to the Registrant’s Registration Statement on Form F-4 (SEC File No. 333- 126556), dated September 21, 2005, as amended.
(2)	Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2002, dated May 14, 2003.
(3)	Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2001, dated May 3, 2002.
(4)	Incorporated by reference to the Registrant’s Report on Form 6-K, dated September 3, 2003.
(5)	Incorporated by reference to the Registrant’s Registration Statement on Form F-1 (SEC File No. 333-06800), dated April 16, 1997, as amended.
(6)	Incorporated by reference to the Registrant’s Registration Statement on Form F-3 (SEC File No. 333-11074), dated November 3, 1999, as amended.
(7)	Incorporated by reference to the Registrant’s Report on Form 6-K, dated May 13, 2004.
(8)	Incorporated by reference to the Registration’s Report on Form 6-K, dated November 16, 2004.
(9)	Incorporated by reference to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2004, dated April 18, 2005.

90

SIGNATURES

      The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Compagnie Générale de Géophysique

(Registrant)

/s/     Thierry Le Roux

Group President and Chief Financial Officer

Date: May 9, 2006

91

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COMPAGNIE GENERALE DE GEOPHYSIQUE

BARBIER FRINAULT & AUTRES
ERNST & YOUNG
41, rue Ybry
92576 Neuilly-sur-Seine cedex MAZARS & GUERARD
MAZARS
Le Vinci – 4, allée de l’Arche
92075 La Defense cedex

Report of independent auditors

To the Board of Directors and Shareholders of Compagnie Générale de Géophysique, S.A.:

      We have audited the accompanying consolidated balance sheets of Compagnie Générale de Géophysique, S.A. as of December 31, 2005 and 2004 and the related consolidated statements of operations, changes in shareholders’ equity and cash flows for each of the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Compagnie Générale de Géophysique, S.A. at December 31, 2005 and 2004, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with International Financial Reporting Standards as adopted by the European Union.

      International Financial reporting Standards vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 31 to the consolidated financial statements.

Neuilly-sur-Seine and Paris La Défense, April 26, 2006 except for the note 31 for which the date is May 9, 2006

BARBIER FRINAULT & AUTRES
ERNST & YOUNG

/s/ Pascal MACIOCE
  Pascal MACIOCE MAZARS & GUERARD


/s/ Philippe CASTAGNAC
  Philippe CASTAGNAC

F-1

COMPAGNIE GENERALE DE GEOPHYSIQUE

CONSOLIDATED BALANCE SHEETS

			December 31,
	Notes		2005			2004
			(amounts in
			millions of euros)
ASSETS
Cash and cash equivalents		12		112.4			130.6
Trade accounts and notes receivable, net		3		297.5			196.8
Inventories and work-in-progress, net		4		139.5			86.8
Income tax assets				10.1			4.2
Other current assets, net		5		41.5			48.7
Assets held for sale				3.5
Total current assets				604.5			467.1
Deferred tax assets		23		31.6			31.5
Investments and other financial assets, net		7		15.3			12.5
Investments in companies under equity method		8		44.4			30.8
Property, plant and equipment, net		9		480.1			204.1
Goodwill and intangible assets, net		10		389.2			225.2
Total non-current assets				960.6			504.1
TOTAL ASSETS				1,565.1			971.2
LIABILITIES AND SHAREHOLDERS’ EQUITY
Bank overdrafts		12		9.3			2.8
Current portion of financial debt		12		157.9			73.1
Trade accounts and notes payables				178.5			98.3
Accrued payroll costs				57.8			47.6
Income taxes payable				29.3			24.0
Advance billings to customers				19.5			13.2
Provisions — current portion		15		17.7			14.2
Other current liabilities		11		35.2			22.8
Total current liabilities				505.2			296.0
Deferred tax liabilities		23		56.9			26.7
Provisions — non-current portion		15		18.4			16.0
Financial debt		12		242.4			176.5
Derivative on convertible bonds		12		11.3			33.9
Other non-current liabilities		16		20.7			19.8
Total non-current liabilities				349.7			272.9
Common stock: 28,938,836 shares authorized and 17,081,680 shares with a € 2 nominal value issued and outstanding at December 31, 2005; 11,682,218 at December 31, 2004		14		34.2			23.4
Additional paid-in capital				372.3			173.4
Retained earnings				291.0			214.5
Treasury shares				(1.1	)		1.8
Net loss for the period — Attributable to the Group				(7.8	)		(6.4	)
Income and expense recognized directly in equity				(1.4	)		3.7
Cumulative translation adjustment				11.3			(17.2	)
Total shareholders’ equity				698.5			393.2
Minority interests				11.7			9.1
Total shareholders’ equity and minority interests				710.2			402.3
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				1,565.1			971.2

The accompanying notes are an integral part of the consolidated financial statements

F-2

COMPAGNIE GENERALE DE GEOPHYSIQUE

CONSOLIDATED STATEMENTS OF OPERATIONS

				December 31,
		Notes		2005			2004
				(in millions of euros,
				except per share data)
Operating revenues			18		869.9			687.4
Other income from ordinary activities			18		1.9			0.4
Total income from ordinary activities					871.8			687.8
Cost of operations					(670.0	)		(554.0	)
Gross profit			18		201.8			133.8
Research and development expenses — net			19		(31.1	)		(28.8	)
Selling, general and administrative expenses					(91.2	)		(78.6	)
Other revenues (expenses) — net			20		(4.4	)		19.3
Operating income			18		75.1			45.7
Expenses related to financial debt					(45.8	)		(30.0	)
Income provided by cash and cash equivalents					3.5			2.2
Cost of financial debt, net			21		(42.3	)		(27.8	)
Variance on derivative on convertible bonds					(11.5	)		(23.5	)
Other financial income (loss)			22		(14.5	)		0.8
Income (loss) of consolidated companies before income taxes					6.8			(4.8	)
Income taxes			23		(26.6	)		(10.9	)
Net loss from consolidated companies					(19.8	)		(15.7	)
Equity in income of affiliates					13.0			10.3
Net loss					(6.8	)		(5.4	)
Attributable to:
Shareholders					(7.8	)		(6.4	)
Minority interests					1.0			1.0
Weighted average number of shares outstanding					12,095,925			11,681,406
Dilutive potential shares from stock-options(1)					270,789			108,631
Dilutive potential shares from convertible bonds(1)					252,500			233,333
Dilutive weighted average number of shares outstanding adjusted when dilutive					12,095,925			11,681,406
Net loss per share
	— Basic				(0.64	)		(0.55	)
	— Diluted(1)				(0.64	)		(0.55	)

(1) Stock-options and convertible bonds have an anti-dilutive effect at December 31, 2005 and at December 31, 2004; as a consequence, potential shares linked to those instruments are not taken into account in the adjusted dilutive weighted average number of shares, nor in the calculation of diluted loss per share.

The accompanying notes are an integral part of the consolidated financial statements

F-3

COMPAGNIE GENERALE DE GEOPHYSIQUE

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Year
	Notes		2005			2004
			(amounts in
			millions of euros)
OPERATING
Net loss				(6.8	)		(5.4	)
Depreciation and amortization				76.3			65.5
Multi-client surveys amortization		10		69.6			66.5
Variance on provisions				6.7			(3.5	)
Cancellation of expense & income calculated on stock-option				0.4			0.5
Cancellation of net gain (loss) on disposal of fixed assets				1.6			(11.5	)
Equity in income of affiliates,				(13.0	)		(10.3	)
Dividends received from affiliates				4.5			4.8
Other non-cash items		27		27.5			21.4
Net cash including net cost of financial debt and income taxes				166.8			128.0
Less net cost of financial debt				42.3			27.8
Less income taxes expenses				26.6			10.9
Net cash excluding net cost of financial debt and income taxes				235.7			166.7
Income taxes paid		27		(31.7	)		(17.0	)
Net cash before changes in working capital				204.0			149.7
— change in trade accounts and notes receivables				(24.3	)		(26.8	)
— change in inventories and work-in-progress				(45.2	)		(16.4	)
— change in other current assets				(3.1	)		17.4
— change in trade accounts and notes payable				38.8			9.0
— change in other current liabilities				1.0			(5.5	)
Impact of changes in exchange rate on financial items				11.2			(0.5	)
Net cash provided by operating activities				182.4			126.9
INVESTING
Total capital expenditures (including variation of fixed assets suppliers, excluding multi-client surveys)		9 et 10		(117.1	)		(44.4	)
Investments in multi-client surveys		10		(32.0	)		(51.1	)
Proceeds from disposals tangible & intangible				3.6			6.9
Total net proceeds from financial assets				0.9			17.2
Acquisition of investments, net of cash & cash equivalents acquired		2		(265.8	)		(27.9	)
Variation in loans granted				0.8			0.1
Variation in subsidies for capital expenditures				(1.3	)		(0.4	)
Variation in other non-current financial assets				(0.2	)		(1.2	)
Net cash from investing activities				(411.1	)		(100.8	)
FINANCING
Repayement of long-term debt				(391.7	)		(16.5	)
Total issuance of long-term debt				461.1			73.7
Reimbursement on leasing				(13.5	)		(11.9	)
Change in short-term loans				(4.1	)		(0.6	)
Financial expenses paid		27		(62.6	)		(29.1	)
Net proceeds from capital increase:
— from shareholders				207.3			—
— from minority interest of integrated companies				—			—
Dividends paid and share capital reimbursements:
— to shareholders				—			—
— to minority interest of integrated companies				(0.2	)		—
Acquisition/disposal of from treasury shares				(2.9	)		2.0
Net cash provided by financing activities				193.4			17.6
Effect of exchange rates on cash				17.1			(9.5	)
Net increase (decrease) in cash and cash equivalents				(18.2	)		34.2
Cash and cash equivalents at beginning of year				130.6			96.4
Cash and cash equivalents at end of period		12		112.4			130.6

The accompanying notes are an integral part of the consolidated financial statements

F-4

COMPAGNIE GENERALE DE GEOPHYSIQUE

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

														Income and												Total
														expense												shareholders’
	Number of				Additional									recognized			Cumulative			Total						equity and
	shares		Share		paid-in			Retained			Treasury			directly in			translation			shareholders’			Minority			minority
	issued		capital		capital			earnings			shares			equity			adjustment			equity			interest			interest
	(amounts in millions of euros)
Balance at January 1, 2004		11,680,718		23.4		292.7			94.7			(0.8	)		9.2			—			419.2			8.8			428.0
Capital increase		1,500		—		—
Net income									(6.4	)											(6.4	)		1.0			(5.4	)
Cost of share-based payment									0.5												0.5						0.5
Operations on treasury shares												2.6									2.6						2.6
Financial instruments: variance and transfer to income statement(1)															(1.2	)					(1.2	)					(1.2	)
Financial assets: variance and transfer to income statement(2)															(4.3	)					(4.3	)					(4.3	)
Foreign currency translation: variance and transfer to income statement (3)																		(17.2	)		(17.2	)		(0.7	)		(17.9	)
Income and expense recognized directly in equity(1)+(2)+(3)															(5.5	)		(17.2	)		(22.7	)		(0.7	)		(23.4	)
Others(a)						(119.3	)		119.3												—						—
Balance at December 31, 2004		11,682,218		23.4		173.4			208.1			1.8			3.7			(17.2	)		393.2			9.1			402.3
Capital increase		4,251,962		8.5		199.1															207.6						207.6
Conversion of convertible bonds		1,147,500		2.3		54.0			28.9												85.2						85.2
Net income									(7.8	)											(7.8	)		1.0			(6.8	)
Cost of share-based payment									0.4												0.4			(0.2	)		0.2
Operations on treasury shares												(2.9	)								(2.9	)					(2.9	)
Financial instruments: variance and transfer to income statement(1)															(5.7	)					(5.7	)					(5.7	)
Foreign currency translation: variance and transfer to income statement (2)																		28.5			28.5			1.8			30.3
Income and expense recognized directly in equity(1)+(2)															(5.7	)		28.5			22.8			1.8			24.6
Others(a)						(54.2	)		53.6						0.6						—						—
Balance at December 31, 2005		17,081,680		34.2		372.3			283.2			(1.1	) (b)		(1.4	)		11.3			698.5			11.7			710.2

(a)	Transfer of additional paid-in-capital to retained earnings.
(b)	Includes 42,500 treasury shares acquired in the frame of a liquidity contract.

F-5

Statement of incomes and expenses attributable to shareholders

	December 31,
	2005			2004
	(amounts
	in millions
	of euros)
Net income		(7.8	)		(6.4	)
— Variance in fair value of available-for-sale investments		—			(4.3	)
— Variance in fair value of hedging instruments		(5.7	)		(1.2	)
— Variance in foreign currency translation adjustment		28.5			(17.2	)
Incomes and expenses recognized directly in equity for the period		15.0			(29.1	)

See notes to consolidated financial statements

F-6

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Compagnie Générale de Géophysique, S.A. (“the Company”) and its subsidiaries (together, the “Group”) is a global participant in the geophysical services industry, providing a wide range of seismic data acquisition, processing and interpretation services as well as related processing and interpretation software to clients in the oil and gas exploration and production business. It is also a global manufacturer of geophysical equipment.

      Pursuant to European regulation n° 1606/2002 dated July 19, 2002, the accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and its interpretations adopted by the International Accounting Standards Board (IASB) at December 31, 2005. They include comparative information for the comparable period of 2004 using the same standards.

      According to general provisions of IFRS 1 — First-time adoption of International Financial Reporting Standards, the Group has opted to apply the following options and exemptions as follows:

— Business combinations (IFRS 3): the Group has opted not to restate business combinations that occurred before January 1, 2004,

— Measurement of certain items of property, plant and equipment at fair value (IAS 16): the Group has opted not to reassess property, plant and equipment and intangible assets at fair value. Property, plant and equipment are maintained at historical cost,

— Actuarial gains and losses on pension and other post-employment benefit plans (IAS 19): cumulative unrecognized actuarial gains and losses on pension and other post-employment benefits plans at January 1, 2004 have been recognized in shareholders’ equity in the opening balance sheet,

— Cumulative translation adjustments: the accumulated total of translation adjustments at January 1, 2004 has been reversed against consolidated reserves,

— Only stock option plans issued after November 7, 2002 and not fully vested as of January 1, 2005 are accounted for in accordance with IFRS2.

      Moreover, the Group applied early application starting from January 1, 2004 of the following standards:

— Financial instruments: the Group elect the option to apply standards IAS 32 and 39 from January 1, 2004;

      Note 30 “Transition to IFRS” describes the reclassifications and the restatements between French GAAP and IFRS, and reconciles net income and equity to IFRS in 2004.

      International Financial Reporting Standards differ in certain significant respects from accounting principles generally accepted in the United States (“U.S. GAAP”). Note 31 “Reconciliation to US GAAP” describes the principal differences between IFRS and U.S. GAAP as they relate to the Group, and reconciles net income and shareholders’ equity to U.S. GAAP as of and for the period ended December 31, 2005.

      When preparing consolidated financial statements according to IFRS, some items in the balance sheet, in the income statement and in disclosures are assessed by the Group’s management based on estimates and hypothesis. Actual figures may differ from estimated figures.

Critical Accounting Policies

      Our significant accounting policies, which we have applied consistently are fully described below. However, certain of our accounting policies are particularly important to the portrayal of our financial position and results of operations. As we must exercise significant judgment when we apply these policies, their application is subject to an inherent degree of uncertainty.

F-7

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     1 — Basis of consolidation

      Our consolidated financial statements include the accounts of CGG and all majority-owned subsidiaries.

      We use the equity method for investments in which our ownership interest ranges from 20% to 50% and we exercise significant influence over operating and financial policies. We may account for certain investments where the Group’s ownership is below 20% using the equity method when we exercise significant influence (Board membership or equivalent) over the business.

      All inter-company transactions and accounts are eliminated in consolidation.

      Our consolidated financial statements are reported in euros.

     2 — Foreign currency

      The financial statements of all of our foreign subsidiaries are maintained in the local currency, which is the functional currency, with the exception of the financial statements of subsidiaries operating in Norway (including notably some subsidiaries of Exploration Resources), in Malaysia and Venezuela. In those subsidiaries, the functional currency is the U.S. dollar, the currency in which they primarily conduct their business. Goodwill attributable to foreign subsidiaries is accounted for in the functional currency of the applicable entities.

      When translating the foreign currency financial statements of foreign subsidiaries to euro, year-end exchange rates are applied to balance sheet items, while average annual exchange rates are applied to income statement items. Adjustments resulting from this process are recorded in a separate component of shareholders’ equity. With respect to foreign affiliates accounted for using the equity method, the effects of exchange rates changes on the net assets of the affiliate are recorded in a separate component of shareholders’ equity.

      Transactions denominated in currencies other than the functional currency of a given entity are recorded at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies other than the functional currency are re-evaluated at year-end exchange rates and any resulting unrealized exchange gains and losses are included in income.

     3 — Business combinations

      Business combinations after January 1, 2004 are accounted for in accordance with IFRS. Assets and liabilities acquired are recognized at their fair value at the date of acquisition. The remaining difference between the fair value of assets and liabilities acquired and the consideration tendered in an acquisition is recorded as goodwill and allocated to the cash generating units.

     4 — Operating revenues

      Operating revenues are recognized when they can be measured reliably, and when it is likely that the economic benefits associated with the transaction will flow to the entity, which is at the point that such revenues have been realized or are considered realizable. For contracts where the percentage on completion method of accounting is being applied, revenues are only recognized when the costs incurred for the transaction and the cost to complete the transaction can be measured reliably and such revenues are considered earned and realizable.

          • Multi-client surveys

      Multi-client surveys consist of seismic surveys to be licensed to customers on a non-exclusive basis. All costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized into the multi-client surveys. The value of our multi-client library is stated on our balance sheet at the aggregate of those costs less accumulated amortization or at fair value if lower. We review the library for potential impairment of our independent surveys on an ongoing basis.

F-8

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Revenues related to multi-client surveys result from (i) pre-commitments and (ii) licenses after completion of the surveys (“after-sales”).

      Pre-commitments — Generally, we obtain commitments from a limited number of customers before a seismic project is completed. These pre-commitments cover part or all of the survey area blocks. In return for the commitment, the customer typically gains the right to direct or influence the project specifications, advance access to data as it is being acquired, and favorable pricing. The Company records payments that it receives during periods of mobilization as advance billing in the balance sheet in the line item “Advance billings to customers”.

      The Company recognizes pre-commitments as revenue when production is begun based on the ratio of project cost incurred during that period to total estimated project cost. The Company believes this ratio to be generally consistent with the physical progress of the project.

      After sales — Generally, we grant a license entitling non-exclusive access to a complete and ready for use, specifically defined portion of our multi-client data library in exchange for a fixed and determinable payment. We recognize after sales revenue upon the client executing a valid license agreement and having been granted access to the data. Within thirty days of execution and access, the client may exercise our warranty that the medium on which the data is transmitted (a magnetic cartridge) is free from technical defects. If the warranty is exercised, the Company will provide the same data on a new magnetic cartridge. The cost of providing new magnetic cartridges is negligible.

      After sales volume agreements — We enter into a customer arrangement in which we agree to grant licenses to the customer for access to a specified number of blocks of the multi-client library. These arrangements typically enable the customer to select and access the specific blocks for a limited period of time. We recognize revenue when the blocks are selected and the client has been granted access to the data. Within thirty days of execution and access, the client may exercise our warranty that the medium on which the data is transmitted (a magnetic cartridge) is free from technical defects. If the warranty is exercised, the Company will provide the same data on a new magnetic cartridge. The cost of providing new magnetic cartridges is negligible.

          • Exclusive surveys

      In exclusive surveys, we perform seismic services (acquisition and processing) for a specific customer. We recognize proprietary/contract revenues as the services are rendered. We evaluate the progress to date, in a manner generally consistent with the physical progress of the project, and recognize revenues based on the ratio of the project cost incurred during that period to the total estimated project cost. We believe this ratio to be generally consistent with the physical progress of the project.

      The billings and the costs related to the transits of seismic vessels at the beginning of the survey are deferred and recognized over the duration of the contract by reference to the technical stage of completion.

      In some exclusive survey contracts and a limited number of multi-client survey contracts, the Company is required to meet certain milestones. The Company defers recognition of revenue on such contracts until all milestones that provide the customer a right of cancellation or refund of amounts paid have been met.

          • Other geophysical services

      Revenues from our other geophysical services are recognized as the services are performed and, when related to long-term contracts, using the proportional performance method of recognizing revenues.

          • Equipment sales

      We recognize revenues on equipment sales upon delivery to the customer. Any advance billings to customers are recorded in current liabilities.

F-9

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

          • Software and hardware sales

      We recognize revenues from the sale of software and hardware products following acceptance of the product by the customer at which time we have no further significant vendor obligations remaining. Any advance billings to customers are recorded in current liabilities.

      If an arrangement to deliver software, either alone or together with other products or services, requires significant production, modification, or customization of software, the entire arrangement is accounted for as a production-type contract, i.e. using the percentage of completion method.

      If the software arrangement provides for multiple deliverables (e.g. upgrades or enhancements, post-contract customer support such as maintenance, or services), the revenue is allocated to the various elements based on specific objective evidence of fair value, regardless of any separate allocations stated within the contract for each element. Each element is appropriately accounted for under the applicable accounting standard.

      Maintenance revenues consist primarily of post contract customer support agreements and are recorded as advance billings to customers and recognized as revenue on a straight-line basis over the contract period.

     5 — Cost of financial debt

      Cost of financial debt is expensed in the income statement on the period in which it is borne, regardless of the use of funds borrowed.

      Cost of financial debt includes expenses related to financial debt, composed of bonds, the debt component of convertible bonds, bank loans, capital-lease obligations and other financial borrowings, net of income provided by cash and cash equivalents.

     6 — Income taxes

      Income taxes includes all tax based on taxable profit.

     7 — Intangible and tangible assets

      In accordance with IAS 16 “Property, Plant and equipment” and IAS 38 “Intangible assets” only items for which cost can be reliably measured and for which the future economic benefits are likely to flow to us are recorded in our consolidated financial statements.

          • Property, plant and equipment

      Property, plant and equipment are valued at historical cost less accumulated depreciation and impairment losses. Depreciation is generally calculated over the following useful lives:

— equipments and tools:	3 to 10 years
— vehicles:	3 to 5 years
— seismic vessels:	12 to 30 years
— buildings for industrial use:	20 years
— buildings for administrative and commercial use:	20 to 40 years

      Starting from September 1, 2005, the date at which we acquired Exploration Resources, we harmonized the useful life of our vessels to 30 years. The impact of this change in estimate for the period through December 31, 2005 is a minor depreciation of € 0.8 million.

      Depreciation expense is determined using the straight-line method.

F-10

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Fixed assets acquired through finance lease arrangements or long-term rental arrangements that transfer substantially all the risks and rewards associated with the ownership of the asset to us or tenant are capitalized.

      We include residual value, if significant, when calculating the depreciable amount. We segregate tangible assets into their separate components if there is a significant difference in their expected useful lives, and depreciate them accordingly.

          • Lease agreements

      Assets under a capital lease agreement or a long-term lease agreement that transfers substantially all the risks and rewards incidental to ownership to the Group are accounted for as fixed assets at the commencement of the lease term, at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability and the finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Assets under capital lease are depreciated over the shorter of its useful life and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

      Rent payments under operating leases are recognized as operating expenses over the lease term.

          • Goodwill

      Goodwill is determined according to 3 — Business Combinations. Upon transition to IFRS, goodwill is no longer amortized in accordance with IFRS 3 “Business combinations”.

          • Multi-client surveys

      Multi-client surveys consist of seismic surveys to be licensed to customers on a non-exclusive basis. All costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized into the multi-client surveys (including transit costs when applicable). The value of our multi-client library is stated on our balance sheet at the aggregate of those costs less accumulated amortization or at fair value if lower. We review the library for potential impairment of our independent surveys on an ongoing basis.

      We amortize the multi-client surveys over the period during which the data is expected to be marketed using a pro-rata method based on recognized revenues as a percentage of total estimated sales (such estimation relies on the historical sales track record). In this respect, we use three different sets of parameters depending on the area or type of surveys considered:

— Gulf of Mexico surveys are amortized on the basis of 66.6% of revenues. Starting at time of data delivery, a minimum straight-line depreciation scheme is applied on a three-year period, should total accumulated depreciation from the 66.6% of revenues amortization method be below this minimum level;

— Rest of the world surveys: same as above except depreciation is 83.3% of revenues and straight-line depreciation is over a five-year period from data delivery; and

— Long term strategic 2D surveys are amortized on the basis of revenues according to the above area split and straight-line depreciation on a seven-year period from data delivery.

F-11

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

          • Development costs

      Expenditures on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding are recognized in the income statement as expenses as incurred and are presented as “Research and development expenses — net”.

      Expenditures on development activities, whereby research finding are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized if:

— the project is clearly defined, and costs are separately identified and reliably measured,

— the product or process is technically and commercially feasible,

— we have sufficient resources to complete development, and

— the intangible asset is likely to generate future economic benefits, either because it is useful to us or through an existing market for the intangible asset itself or for its products.

      The expenditures capitalized include the cost of materials, direct labor and an appropriate proportion of overhead. Other development expenditures are recognized in the income statement as expenses as incurred and are presented as “Research and development expenses — net”.

      Capitalized development expenditures are stated at cost less accumulated amortization and impairment losses.

      We amortize capitalized developments costs over 5 years.

      Research & development expenses in our income statement represent the net cost of development costs that are not capitalized, of research costs, offset by government grants acquired for research and development.

          • Impairment

      In accordance with IAS 36 “Impairment of assets”, the carrying amounts of our assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, we estimate the asset’s recoverable amount. Factors we consider important by that could trigger an impairment review include the following:

— significant underperformance relative to expected operating results based upon historical and/or projected data,

— significant changes in the manner of our use of the acquired assets or the strategy for our overall business, and

— significant negative industry or economic trends.

      The recoverable amount of tangible and intangible assets is the greater of their net fair value less costs to sell and value in use.

      For cash generating units comprised of goodwill, assets that have an indefinite useful life or intangible assets that are not yet available for use, we estimate the recoverable amount at each balance sheet date.

      We determine the recoverable amounts by estimating future cash flows expected from the assets or from the cash generating units, discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

      We recognize an impairment loss whenever the carrying amount of an asset exceeds its recoverable amount. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

F-12

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Impairment losses are recognized in the income statement. Impairment losses recognized in respect of a group of non independent assets allocated to a cash-generating unit are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

          • Assets held for sale

      Assets classified as assets held for sale correspond to assets for which the net book value will be recovered by a sale rather than by its use in operations. Assets held for sale are valued at the lower of historical cost and net realizable value.

     8 — Investments and other financial assets

      Investments and other financial assets include investments in non-consolidated entities and loans and non-current receivables.

          • Investments in non-consolidated entities

      In accordance with IAS 39 “Financial instruments”, we classify investments in non-consolidated companies as available-for-sale and therefore present them on the balance sheet at their fair value. The fair value for listed securities is their market price at the balance sheet date. If a reliable fair value cannot be established, securities are valued at historical cost. We account for changes fair value directly in shareholders’ equity.

          • Loans and non-current receivables

      Loans and non-current receivables are accounted for at amortized cost.

          • Impairment

      We examine non-consolidated securities and other financial assets at each balance sheet date to detect any objective evidence of impairment. Where this is the case, we record an impairment loss.

      Where there is objective evidence of impairment of a financial asset (for instance in case of significant and prolonged decline of the value of the asset) we record an irreversible impairment provision. This provision can only be released upon the sale of the relevant financial asset.

     9 — Treasury shares

      We value treasury shares at their cost, as a reduction of shareholders’ equity. Proceeds from the sale of treasury shares are included in shareholders’ equity and have no impact on the income statement.

     10 — Inventories

      We value inventories are at the lower of cost (including direct production costs where applicable) and net realizable value.

      We calculate the cost of inventories on a weighted average price basis for our Products segment and on a first-in first-out basis for our Services segment.

     11 — Provisions

      We record a provision when the Group has a present obligation (legal or constructive) as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

F-13

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

          • Onerous contracts

      We record a provision for onerous contracts equal to the excess of the unavoidable costs of meeting the obligations under the contract over the economic benefits expected to be received under it, as estimated by the Group.

          • Pension, post-employment benefits and other post-employment benefits

          • Defined contribution plans

      We record obligations for contributions to defined contribution pension plans as an expense in the income statement as incurred.

          • Defined benefit plans

      Our net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets is deducted. We perform the calculation by using the projected unit credit method.

      When the benefits of a plan are increased, the portion of the increased benefit relating to past service by employees is recognized as an expense in the income statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in the income statement.

      We record actuarial gains and losses that arise subsequent to January 1, 2004 directly in equity.

     12 — Financial debt

      Financial debt is accounted for:

— As at the date of issuance, at the fair value of the consideration received, less issuance fees and/or issuance premium;

— subsequently, at amortized cost, corresponding to the amount at which is assessed the financial debt at its initial accounting, less repayments in nominal and increased or decreased of the accumulated amortization of all differences between this original amount and the amount at maturity; differences between initial amount and the amount at maturity are amortized according to the method of effective interest rate.

          • Convertible bonds

      As the $85 million 7.75% subordinated bonds due 2012 convertible into new ordinary shares or redeemable into new shares and/or existing shares and/or in cash issued in 2004 are denominated in U.S. dollars and convertible into new ordinary shares denominated in Euros, the embedded conversion option has been bifurcated and accounted separately within non-current liabilities. The conversion option and the debt component were initially recognized at fair value on issuance. The amount of the debt component to be recorded within the financial statements has been discounted at the rate of 10.75%, the rate borne by comparable indebtedness without a conversion option. As a result, we bifurcated the embedded conversion option by € 10.5 million at the issuance as “Other non-current assets”. The discounting of the debt at the issuance is accounted for as “Cost of financial debt” until the maturity of the convertible bonds.

      Changes of the fair value of the embedded derivative are recognized in the consolidated income statement in the line item “Variance on derivative convertible bonds”. The fair value of the embedded derivative has been determined using a binomial model.

F-14

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     13 — Financial instruments

      We use derivative financial instruments to hedge our exposure to foreign exchange fluctuations (principally U.S. dollars) from operational, financing and investment activities. In accordance with our treasury policy, we do not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments in “Other financial income (loss)”.

      Exchange gains or losses on foreign currency financial instruments that represent the efficient portion of an economic hedge of a net investment in a foreign subsidiary are reported as translation adjustments in shareholder’s equity under the line item “Cumulative translation adjustments”, the inefficient portion being recognized in the income statement. The cumulative value of foreign exchange gains and losses recognized directly in equity will be transferred to income statement when the net investment is sold or lost.

      Derivative financial instruments are stated at fair value.

      The gain or loss on reassessment to fair value is recognized immediately in the income statement. However, where derivatives qualify for hedge accounting, recognition of any resulting gain or loss is as follows (cash flow hedges), we account for changes in the fair value of the effective hedged amount in shareholder’s equity. The ineffective portion is recorded in “Other financial income (loss)”.

     14 — Cash-flows statement

      The cash flows of the period are presented in the cash flow statement within three activities: operating, investing and financing activities:

          • Operating activities

      Operating activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities.

          • Investing activities

      Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. When a subsidiary is acquired, a separate item, corresponding to the consideration paid net of cash and cash equivalents held par the subsidiary at the date of acquisition, provides the cash out of the acquisition.

          • Financing activities

      Financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of the entity. They include financial expenses cashed out.

          • Cash and cash equivalents

      Cash and cash equivalents are liquid investments that are readily convertible to known amounts of cash in less than three months.

     15 — Stock-options

      We include stock-options granted to employees in the financial statements using the following principles: the stock option’s fair value is determined on the grant date and is recognized in personnel costs on a straight-line basis over the period between the grant date and the end of the vesting period. We calculate stock option fair value using the Black-Scholes model.

F-15

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     16 — Grants

      Government grants, including non-monetary grants at fair value, are not recognized until there is reasonable assurance that the entity will comply with the conditions attaching to them and that the grants will be received.

      Government grants are recognized as income over the periods necessary to match them with the related costs which they are intended to compensate. They are presented as a reduction of the corresponding expenses in the item “Research and development expenses, net” in the income statement.

      Refundable grants are presented in the balance sheet as “Other non-current liabilities”.

NOTE 2 — ACQUISITIONS AND DIVESTITURES

     For the year ended December 31, 2005

      On February 14, 2005, we ended our cooperation agreements with PT Alico, an Indonesian company. On that date, PT Alico, which was fully consolidated in our accounts until 2004 as a consequence of our contractual relationship with them, was excluded from our scope of consolidation. Under our agreements with PT Alico, we indemnified them against certain specific risks. This liability is limited and was accrued in the financial statements at December 31, 2004 and at December 31, 2005. The liability will expire on June 30, 2006, at which date we will have no further commitment to PT Alico or its shareholders.

      On July 27, 2005, we funded a new fully owned company in Russia named CGG Vostok. This company will undertake seismic services activities and is consolidated.

      On August 29, 2005, we acquired a controlling stake of approximately 60% of Exploration Resources ASA (“Exploration Resources”), a Norwegian provider of marine seismic acquisition services, at a purchase price of approximately NOK 340 per share corresponding to a premium of 8.3% over the last stock price of Exploration Resources’ shares before the notice of the operation (NOK 314).

      We continued to acquire shares of Exploration Resources until we acquired the totality by the end of October 2005 for an average price excluding fees of NOK 338.27 per share: first by acquisitions on the market; then in a combined mandatory offer followed by a squeeze-out; then by mutual agreements with the management of Exploration Resources that held stock-options; eventually in a specific agreement with the minority shareholders of Multiwave Geophysical Company ASA (“Multiwave”), Exploration Resources’s subsidiary focusing on seabed acquisition, as a consequence of the merger of this entity with Exploration Seismic AS, a fully owned subsidiary of Exploration Resources.

      The total cost to us of the acquisition was €303.3 million, including €8.6 million related to acquisition fees and including the price of the shares acquired in October 2005. The reassessment of Exploration Resources’ net assets, along with a seismic business economic perspective, led us primarily to increase the book value of the vessels (by € 115 million at September 1, 2005) and to recognize the corresponding deferred tax liabilities. The vessels were valued using combined valuation methods of which, particularly, the present value of cash flows that will be generated by the vessels.

F-16

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      On the basis of these elements, the purchase accounting for Exploration Resources at historical rates is as follows:

		(in million of euros)
Total acquisition of Exploration Resources shares			294.7
Acquisition fees			8.6
Total acquisition price			303.3
	Cash and cash equivalents acquired		37.5
	Fair value of fixed assets acquired		195.1
	Deferred tax liabilities net assumed		(32.9	)
	Other assets and liabilities acquired		(73.5	)
Preliminary fair value of net assets acquired			126.2
Preliminary goodwill			177.1

      The reassessment of Exploration Resources’ assets resulted in a preliminary goodwill of € 177.1 million. As the purchase accounting has not been finalized at December 31, 2005, the allocation of the purchase price is subject to change.

      The results of Exploration Resources are included in our consolidated financial statements from
September 1, 2005.

      Since the date of acquisition, Exploration Resources contributed €28.8 million to the consolidated operating revenues of CGG Group and €6.4 million to the net consolidated income of CGG Group. If the business combination would have occur at the beginning of the year, the loss for the Group would have been €21.5 million euros, mainly due to interest expense linked to the financing of the acquisition and the operating revenues would have been € 932.1 million.

For the year ended December 31, 2004

      On January 2, 2004, Sercel acquired the seismic equipment business of Thales Underwater Systems Pty Ltd. (TUS). This business includes the development and manufacturing of surface marine seismic acquisition systems, particularly solid streamers, and seabed marine seismic acquisition systems. The transaction was achieved with an immediate payment of €21.7 million subject to a possible price adjustment which may entail an additional payment in 2005 and/or 2006 based on revenues. The reassessment of TUS’s assets led to the recognition of contractual rights by €11.9 million and of development costs by €8.9 million. As a result of this reassessment, the final goodwill amounted to € 8.2 million.

      On January 8, 2004, Sercel acquired a 51% majority ownership in Hebei JunFeng Geophysical Co. Ltd., a provider of geophones and seismic cables for the Chinese seismic market. Hebei JunFeng Geophysical Co. Ltd., located in the Hebei province, was originally created by BGP, the largest Chinese geophysical services contractor. The consideration for the transaction was €9.8 million and generated goodwill of € 0.5 million. BGP will remain shareholder of the company along with the management, the employees and XPEIC, a Chinese geophysical equipment company.

      On February 19, 2004, Sercel acquired Orca Instrumentation, a French company that develops and markets marine acquisition systems and underwater data transmission systems. The consideration for the transaction amounted to €1.3 million. As a result of the reassessment of Orca’s assets, which led to the recognition of development costs by €0.6 million, the final goodwill amounted to € 0.2 million.

      On March 3, 2004, Sercel completed the acquisition of Createch Industrie, a French company specialized in borehole measurement tools, borehole seismic tools and permanent borehole sensors. The consideration for the transaction amounted to € 1.9 million. The reassessment of Createch’s assets resulted in the recognition of

F-17

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

contractual rights of €0.4 million and of development costs of €1.5 million and the final goodwill amounted to € 0.6 million.

      On September 23, 2004, the liquidation of Kantwell Overseas Shipping Co, which had owned the seismic vessel the CGG Mistral (which sank in December 2002), was completed.

      In October and November 2004, CGG sold 467,753 shares of the Norwegian company Petroleum Geo Services (“PGS”) for €17.2 million; the gain was € 7.9 million before and after tax and was booked as “Other Revenues and Expenses”. After this sale, CGG does not own any share of PGS.

NOTE 3 — TRADE ACCOUNTS AND NOTES RECEIVABLE

      Analysis of trade accounts and notes receivables by maturity is as follows:

	December 31
	2005			2004
	(in millions
	of euros)
Trade accounts and notes receivable gross — current portion		240.0			159.4
Less: allowance for doubtful accounts		(6.2	)		(4.4	)
Trade accounts and notes receivables net — current portion		233.8			155.0
Trade accounts and notes receivable gross — long term portion		12.0			13.1
Less: allowance for doubtful accounts		—			—
Trade accounts and notes receivables net — long term portion		12.0			13.1
Recoverable costs and accrued profit on billed		51.7			28.7
Total accounts and notes receivables		297.5			196.8

      In the geophysical services segment, customers are generally large national or international oil and gas companies, which management believes reduces potential credit risk. In the geophysical products segment, a significant portion of sales is paid by irrevocable letters of credit.

      The Group maintains an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. Credit losses have not been material for the periods presented and have consistently been within management’s expectations.

      Recoverable costs and accrued profit not billed comprise amounts of revenue recognized under the percentage of completion method on contracts for which billings had not been presented to the contract owners. Such unbilled accounts receivable are generally billed over the 30 or 60 days following the project commencement.

      The long-term receivables as of December 31, 2005 amounted to €11.3 million for the geophysical services segment and to €0.7 million for the geophysical products segment. The long-term receivables as of December 31, 2004 amounted to €9.6 million for the geophysical services segment and to € 3.5 million for the geophysical products segment.

F-18

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTE 4 — INVENTORIES AND WORK IN PROGRESS

      Analysis of Inventories and work-in-progress is as follows:

	December 31, 2005							December 31, 2004
			Valuation							Valuation
	Cost		Allowance			Net		Cost		Allowance			Net
	(in millions of euros)
Geophysical services
— Consumables and spares parts		23.1		(1.1	)		22.0		18.6		(1.0	)		17.6
— Work in progress		7.6		—			7.6		5.4		—			5.4
Geophysical products
— Raw materials and spare parts		45.4		(6.9	)		38.5		27.4		(6.1	)		21.3
— Work in progress		51.0		(5.7	)		45.3		34.9		(4.6	)		30.3
— Finished goods		30.1		(4.0	)		26.1		16.0		(3.8	)		12.2
Inventories and work in progress		157.2		(17.7	)		139.5		102.3		(15.5	)		86.8

      The variation of Inventories and work in progress is as follows:

	December 31,			December 31,
Variation of the period	2005			2004
	(in millions of euros)
Balance at beginning of period		86.8			62.4
Variations		46.6			9.5
Movements in valuation allowance		(1.3	)		6.9
Change in consolidation scope		1.1			7.5
Change in exchange rates		4.3			(1.5	)
Others		2.0			2.0
Balance at end of period		139.5			86.8

      The additions and deductions in valuation allowances for inventories and work-in-progress are presented in the statement of operations as “Cost of sales”.

NOTE 5 — OTHER CURRENT ASSETS

	December 31,
	2005		2004
	(in millions
	of euros)
Social and tax assets		16.0		5.5
Fair value of financial instruments		—		8.9
Other miscellaneous receivables		11.6		18.9
Supplier prepayments		3.7		8.2
Assets of retirement indemnity plans		1.8		—
Prepaid expenses(a)		8.4		7.2
Other current assets		41.5		48.7

(a) includes principally prepaid rent, vessels charters.

F-19

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTE 6 — ASSETS VALUATION ALLOWANCE

      Details of valuation allowances recorded against assets are as follows:

	December 31, 2005
			Additions/
	Balance at		Deductions						Balance
	beginning		charged in						at end
	of year		income			Others(a)			of period
	(in millions of euros)
Trade accounts and notes receivables		4.4		2.3			(0.5	)		6.2
Inventories and work-in-progress		15.4		1.3			1.0			17.7
Tax assets		—		—			0.3			0.3
Other current assets		0.7		0.7			—			1.4
Loans receivables and other investments		2.0		(0.7	)		—			1.3
Total assets valuation allowance		22.5		3.6			0.8			26.9

(a) includes the effects of exchange rates changes and changes in the scope of consolidation.

	December 31, 2004
			Additions/
	Balance at		Deductions						Balance
	beginning		charged						at end
	of year		in income			Others(a)			of period
	(in millions of euros)
Trade accounts and notes receivables		3.9		(0.1	)		0.6			4.4
Inventories and work-in-progress		22.7		(6.9	)		(0.4	)		15.4
Other current assets		0.6		0.1			—			0.7
Loans receivables and other investments		2.0		0.2			(0.2	)		2.0
Total assets valuation allowance		29.2		(6.7	)		(0,0	)		22.5

(a) includes the effects of exchange rates changes and changes in the scope of consolidation.

NOTE 7 — INVESTMENTS AND OTHER FINANCIAL ASSETS

	December 31,
	2005		2004
	(in millions
	of euros)
Other financial investments:
Unconsolidated investments		3.7		2.8
Loans and advances(a)		7.3		6.3
Other		4.3		3.4
Total		15.3		12.5

(a) includes loans and advances to companies accounted for under the equity method at December 31, 2005 for €6.6 million, and at December 31, 2004 for € 5.8 million.

F-20

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Unconsolidated investments included in « Other financial investments » are presented as follows:

	December 31,
	2005		2004
	(in millions
	of euros)
Tronic’s Microsystems SA		3.5		2.6
Other investments in unconsolidated companies		0.2		0.2
Total investments in unconsolidated companies		3.7		2.8

      The Group’s shareholding in Tronic’s Microsystems S.A. was 14.70% at December 31, 2005 and 12.45% at December 31, 2004.

NOTE 8 — INVESTMENTS IN COMPANIES UNDER EQUITY METHOD

      The variation of “Investments in companies under equity method” is as follows:

	December 31,
	2005			2004
	(in millions
	of euros)
Balance at beginning of period		30.8			27.0
Equity in income		13.0			10.3
Dividends received during the period, reduction in share capital		(4.5	)		(4.8	)
Changes in exchange rates		4.6			(1.7	)
Balance at end of period		43.9			30.8

      Investments in companies under equity method are comprised of:

	December 31,
	2005			2004
	(in millions
	of euros)
Argas		36.5			23.7
Geomar		5.5			5.6
JV Xian Peic/ Sercel Limited		2.4			2.2
VS Fusion LLC		(0.5	)		(0.7	)
Investments in companies under the equity method		43.9			30.8

      Investments in companies under the equity method are presented at December 31, 2005 in the balance sheet as “Investments in companies under the equity method” by €44.4 million in assets and as “Provisions — non-current portion” by € 0.5 million in liabilities.

F-21

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      The net contribution to equity of affiliates accounted for under the equity method is as follows:

	December 31,
	2005			2004
	(in millions
	of euros)
Argas		32.2			19.4
Geomar		(0.2	)		—
JV Xian Peic/ Sercel Limited		0.8			0.6
VS Fusion LLC		(0.5	)		(0.7	)
Total		32.3			19.3

      The key figures relating to Argas’s financial statements are as follows:

	2005		2004
	(in millions
	of euros)
Current assets		57.5		41.9
Fixed assets		33.5		23.7
Current liabilities		3.5		5.7
Non current liabilities		8.7		2.6
Gross revenue		76.3		70.0
Operating profit		19.6		21.6
Income from continuing operations before extraordinary items and cumulative effect of change in accounting principle		20.4		21.3
Net income		20.4		21.3

NOTE 9 — PROPERTY, PLANT AND EQUIPMENT

      Analysis of “Property, plant and equipment” is as follows:

	December 31, 2005							December 31, 2004
			Accumulated							Accumulated
	Gross		depreciation			Net		Gross		depreciation			Net
	(amounts in millions of euros)
Land		4.7		(0.2	)		4.5		4.4		(0.2	)		4.2
Buildings		60.3		(29.6	)		30.7		53.1		(25.4	)		27.7
Machinery & equipment		457.0		(295.9	)		161.1		339.7		(259.3	)		80.4
Vehicles & vessels		373.1		(104.3	)		268.8		159.2		(79.0	)		80.2
Other tangible assets		35.8		(25.9	)		9.9		33.1		(23.6	)		9.5
Assets under constructions		5.1		—			5.1		2.1		—			2.1
Total Property, plant and equipment		936.0		(455.9	)		480.1		591.6		(387.5	)		204.1

      In addition, seismic equipments no longer in use and held to be sold were reclassified as “Assets held for sale” for €3.5 million at December 31, 2005. The seismic equipments were sold in February 2006 for € 5.0 million.

F-22

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Included in Property, plant and equipment are land, buildings and geophysical equipment recorded under capital leases as follows:

	December 31, 2005							December 31, 2004
			Accumulated							Accumulated
	Gross		depreciation			Net		Gross		depreciation			Net
	(amounts in millions of euros)
Land and buildings under capital leases		5.9		(0.2	)		5.7		5.9		(0.1	)		5.8
Geophysical equipment and vessels under capital leases		101.7		(25.5	)		76.2		30.7		(22.1	)		8.6
Other tangible assets under capital leases		0.5		(0.5	)		—		0.2		(0.1	)		0.1
Total Property, plant and equipment under capital lease		108.1		(26.2	)		81.9		36.9		(22.4	)		14.5

      In 2005, the time charter party agreement of the seismic vessel “Geochallenger” has been qualified as a capital lease. The total lease obligation is U.S.$36.2 million (€30.7 million) over 5 years plus a residual value amounting to NOK 230 million (€30 million). Part of this lease obligation is operating expenses and the net present value of the future lease payments under capital lease (including the residual value) is only U.S.$54.8 million (€ 46.5 million).

      In April 2005, the time charter party agreement of the seismic vessel “Laurentian” has been renewed with modified contractual conditions. As a result, it has been qualified as a capital lease. The total lease obligation is U.S.$27.8 million (€23.6 million) over 3 years plus a residual value amounting to U.S.$7.3 million (€6.2 million). Part of this lease obligation is operating expenses and the net present value of the future lease payments under capital lease (including the residual value) is only U.S.$16.8 million (€ 14.2 million).

      In 2004, the seismic vessels “Föhn” and “Harmattan” and one chase boat were included in purchases of assets recorded under capital leases for a total amount of € 8.7 million.

      Depreciation of assets recorded under capital leases is determined on the same basis as assets owned and is included in depreciation expense.

      Included in assets recorded under capital leases are land and buildings of one of the Group’s French offices in Massy, which were sold under a sale and leaseback agreement in 1990. The assets are maintained at their original cost and the buildings continue to be depreciated over their initial estimated useful lives.

	December 31,
Variation of the period	2005			2004
	(in millions
	of euros)
Balance at beginning of period		204.1			215.8
Acquisitions		107.7			41.1
Acquisitions through capital lease		17.4			8.7
Depreciation		(67.9	)		(58.0	)
Disposals		(6.0	)		(1.9	)
Changes in exchange rates		35.2			(8.9	)
Change in consolidation scope		195.1			8.8
Other		(5.5	)		(1.5	)
Balance at end of period		480.1			204.1

      The change in consolidation scope corresponds to the acquisition of Exploration Resources.

F-23

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Reconciliation of acquisitions with the cash-flow statement and capital expenditures in note 18 is as follows:

	December 31, 2005
	(in millions of euros)
Acquisitions of tangible assets (excluding capital lease) — see above		107.7
Development costs capitalized — see note 19		8.1
Additions in other tangible assets (excluding non-exclusive surveys) — see note 10		2.3
Variance of fixed assets suppliers		(1.0	)
Total purchases of tangible and intangible assets according to cash-flow statement		117.1
Acquisitions through capital lease — see above		17.4
Increase in multi-clients surveys — see note 10		32.0
Less variance of fixed assets		1.0
Capital expenditures according to note 18		167.5

Repairs and maintenance expenses

      Repairs and maintenance expenses included in cost of operations amounted to €22.5 million in 2005 and € 18.3 million in 2004.

NOTE 10 — GOODWILL AND INTANGIBLE ASSETS

      Analysis of Goodwill and Intangible assets is as follows:

	December 31, 2005							December 31, 2004
			Accumulated							Accumulated
	Gross		depreciation			Net		Gross		depreciation			Net
	(amounts in millions of euros)
Goodwill of consolidated subsidiaries		252.9		—			252.9		62.5		—			62.5
Multi-clients surveys		568.4		(474.8	)		93.6		510.8		(386.3	)		124.5
Development costs capitalized		29.2		(3.9	)		25.3		19.9		(1.6	)		18.3
Software		25.9		(19.5	)		6.4		24.8		(17.4	)		7.4
Other intangible assets		19.6		(8.6	)		11.0		17.7		(5.2	)		12.5
Total Goodwill and Intangible assets		896.0		(506.8	)		389.2		635.7		(410.5	)		225.2

F-24

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

	December 31,
Variation of the period	2005			2004
	(in millions
	of euros)
Balance at beginning of period		225.2			217.3
Additions in goodwill		177.1			0.2
Increase in multi-clients surveys		32.0			51.1
Development costs capitalized		8.2			4.6
Others acquisitions		2.3			1.7
Depreciation on multi-client surveys		(69.6	)		(66.5	)
Other depreciation		(8.4	)		(7.8	)
Disposals		—			(0.9	)
Changes in exchange rates		22.4			(8.4	)
Change in consolidation scope		—			33.1
Other		0.1			0.8
Balance at end of period		389.2			225.2

      The additions in goodwill in 2005, corresponds to the preliminary goodwill of the acquisition of Exploration Resources ; this goodwill has been allocated, based on business plans, to cash generated units SBU Offshore and SBU Processing for U.S.$183.6 million and U.S.$32.4 million respectively.

      The result of the different impairment tests performed as of December 31, 2005 and 2004 is that no impairment charge was recorded in either year.

      In 2005, the main impairment tests that were performed for the following cash generating units were as follows:

— the Product segment level: test of the net book value of the goodwill

— the Offshore SBU: test of the historical multi-client library net book value and of the tangible assets net book value, which results notably from the 2001 Aker purchase accounting, from the assets acquired in 2005 Exploration Resources purchase accounting and of the goodwill, corresponding mainly to the goodwill booked from Exploration Resources purchase accounting in 2005

— the Processing SBU: test of the goodwill, corresponding mainly to the goodwill booked from Exploration Resources purchase accounting in 2005

— the Land SBU level: test of the net book value of assets.

      For the tests of Products segment, the Offshore SBU and the Processing SBU, the recoverable value was determined based on discounted expected cash-flows with the following parameters:

• forecasted cash-flows estimated in 5-years business plans deemed on the basis of the average medium term exchange rate € 1 equals U.S.$1.25; and

• discount ratios corresponding to the respective sector weighted average cost of capital (WACC):

— 8.83% for the Product segment (corresponding to a pre-tax rate of 13.62%);

— 8.29% for the multi-client library (corresponding to a pre-tax rate of 12.09%);

— 8.44% for the whole Offshore SBU (corresponding to a pre-tax rate of 19.82%); and

— 8.67% for the Processing SBU (corresponding to a pre-tax rate of 14.45%).

F-25

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      For the test of the Land SBU, the recoverable value was determined by an assessment of the market value of the long-term assets by an independent expert.

NOTE 11 — OTHER CURRENT LIABILITIES

      The analysis of other current liabilities is as follows:

	December 31,
	2005		2004
	(in millions
	of euros)
Deferred income		10.6		3.9
Value added tax and other taxes payable		12.9		7.7
Fair value of financial instruments		4.7		—
Other liabilities		7.0		11.2
Other current liabilities		35.2		22.8

NOTE 12 — FINANCIAL DEBT

      Analysis of long-term debt by type is as follows:

	December 31, 2005						December 31, 2004
			Non-						Non-
	Current		current		Total		Current		current		Total
	(in millions of euros)
Outstanding bonds		—		146.3		146.3		55.1		154.9		210.0
Bank loans		135.9		28.8		164.7		5.3		6.6		11.9
Capital lease obligations		20.1		67.3		87.4		9.8		15.0		24.8
Sub-total		156.0		242.4		398.4		70.2		176.5		246.7
Accrued interest		1.9						2.9
Total		157.9						73.1

      Analysis of financial debt by currency is as follows:

	December 31,
	2005		2004
	(in millions
	of euros)
Euro		11.8		18.7
U.S. dollar		385.6		226.0
Other currencies		1.0		2.0
Total		398.4		246.7

F-26

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Analysis of financial debt by interest rate is as follows:

	December 31,
	2005		2004
	(in millions
	d’euros)
Variable rates (effective rate December 31, 2005: 7.60%, 2004: 2.76%)		156.6		15.4
Fixed rates (effective rate December 31, 2005: 7.06%, 2004: 11.07%)		241.8		231.3
Total		398.4		246.7

      Variable interest rates generally are based on inter-bank offered rates of the related currency. The weighted average interest rate on bank overdrafts was 7.81% and 9.17% at December 31, 2005 and 2004 respectively.

      The impact of hedging instruments has not been considered in the above two tables.

Outstanding Bonds

     High Yield bonds (10⁵/8% Senior Notes, maturity 2007)

      On November 17, 2000, the Company issued U.S.$170 million aggregate principal amount of 10⁵/8 % Senior Notes due 2007 in the international capital markets. The net proceeds (approximately U.S.$164.9 million) was used to repay a portion of outstanding indebtedness under the existing syndicated credit facility and to fund the cash portion of the purchase price of two marine seismic vessels and certain seismic data from an affiliate of Aker (U.S.$25 million). A standard covenant package is attached to the bond, with a main incurrence test of coverage of interest expense by cash flow from operations. The Group was in compliance with the bond covenants on the date of issue, and at December 31, 2004.

      On February 5, 2002, the Company issued in addition to the bonds issued on November 2000, bonds in a total principal amount of U.S.$55 million, with a maturity date in 2007 and with an annual fixed rate of 10⁵/8 %.

      On January 26, 2005, the Company partially redeemed its 10⁵/8 % Senior Notes, up to a principal amount of U.S.$75 million. According to the indenture governing those notes, a premium representing 5.3125% of the total redemption amount, (U.S.$4.0 million) plus accrued interest were paid. The total cost of such redemption for the Company was therefore U.S.$79 million plus accrued interest of U.S.$1.3 million.

      On May 31, 2005, the Company became liable for the remaining $150 million of 10⁵/8% Senior Notes due 2007. According to the indenture governing those notes, a premium representing 5.3125% of the total redemption amount, (U.S.$8.0 million). The premium and the write-off of the remaining deferred issuance cost linked to this redemption as well as the overlapped interests on the month of May 2005 amounted to € 9.4 million and were recognized in the income statement as “Cost of financial debt” for the year ended December 31, 2005.

     High Yield bonds (7¹/2% Senior Notes, maturity 2015)

      On April 28, 2005, the Company issued U.S.$165 million of 7¹/2% Senior Notes due 2015. The net proceeds were used to redeem and pay accrued interest on all outstanding aggregate principal of our existing 10⁵/8 % Senior Notes due 2007, on May 31, 2005 (see above).

      Those bonds include some covenants, specifically on capital expenditures, additional indebtedness subscriptions, pledges arrangements, sales and lease-back transactions, issuance and sale of equity instruments and dividends payments by certain subsidiaries of the Group.

      All those covenant are complied with as at December 31, 2005.

F-27

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     Convertible bonds (7.75%, due 2012)

      On November 4, 2004 the Company issued 14,000 subordinated bonds in favor of Onex Partners LP, Onex American Holdings II LLC, Onex US Principals LP and CGG Executive Invesco, LLC, with maturity of 2012, in a total nominal amount of U.S.$84,980,000, convertible into new ordinary shares or redeemable in new shares and/or existing shares and/or in cash (the “Bonds”), at an interest rate of 7.75%.

      The terms of the convertible bonds were amended as approved by the General Meeting of bondholders held on November 2, 2005, and approved by a General Meeting of CGG shareholders held on November 16, 2005. The early conversion period was open from November 17 to November 18 2005, inclusive. At the conclusion of the conversion period, 11,475 convertible bonds due 2012 were converted, leading to the issuance of 1,147,500 new shares. 2,525 convertible bonds remain outstanding representing a nominal value of $15.3 million. The Group paid a total premium of $10.4 million (€8.9 million) to the bondholders who converted its bonds. This premium has been recognized as a charge under the line item “Other financial income (loss)” in the income statement for the year ended December 31, 2005. In addition, the write-off of the deferred issuance costs linked to this redemption amounted to € 3.7 million and has been recognized as a charge under the line item “Other financial income (loss)” in the income statement for the year ended December 31, 2005.

      A component of our convertible bonds due 2012 denominated in US dollars constitutes an embedded derivative as the shares to be issued upon conversion are denominated in Euro. A portion of the issuance proceeds was deemed to relate to the fair value of the derivative on issuance and subsequent changes in fair value of the derivative are recorded through earnings. The allocation of a portion of the proceeds to the derivative created a discount on issuance that is being amortized to earnings over the life of the bonds.

      The fair value of the embedded derivative has been determined using a binomial model. The fair value increased from €10.4 million at the initial recognition of the debt to €33.9 million at December 31, 2004, then to € 11.3 million at December, 31, 2005.

      The variance on 2005 fiscal year corresponds, on one hand, to the increase in the value of the derivative of €11.5 million and, on the other hand, to the reclassification of € 34.1 million in reserves for the portion of the derivative related to the bonds that were early converted on November 17, 2005.

      The global increase in the value of the derivative of €11.5 million covers a €6.3 million increase in the value of the derivative related to the 11 475 bonds effectively converted in shares in November 2005 and a €5.2 million increase in the value of the derivative related to the 2 525 convertible bonds outstanding at December 31, 2005. Those increases in the value of the derivative are mainly explained by the strengthening of the US dollar against the Euro and the increase in the CGG share price, being acknowledged that, as regards the derivative related to the bonds effectively converted in November 2005, the value was reduced by the time-component as a result of the conversion in shares, for an amount of € 8.9 million.

      This resulted in aggregate expense of €11.5 in the year ended December 31, 2005 and of € 23.5 million in the year ended December 31, 2004, accounted for as “Variance on derivative on convertible bonds” in the income statement.

      The main assumptions used for the year-end valuation are an implicit volatility of 27% and a credit-risk premium of 4.5% at December 31, 2004 and an implicit volatility of 37% and a credit-risk premium of 3.4% at December 31, 2005.

      The indenture of the Bonds states that, in case of fundamental change (shares or American depositary shares ceasing to be listed on the New York Stock Exchange, sale of a substantial part of the assets of the Company, liquidation or dissolution of the Company, change of control of the Company), any bondholder may require the Company to redeem its Bonds and to pay, in addition to the principal amount of the Bonds, an amount equal to the amount of basic interest at a rate of 7.75% that would have accrued on the Bonds until maturity for a maximum period of five years. This provision may trigger a payment by the Company of a maximum of

F-28

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

U.S.$6 million in additional interest. At December 31, 2004 and at December 31, 2005, no expense related to this clause was booked since its realization is unlikely.

Bank loans

      At December 31, 2005, € 153.3 million of bank loans were secured by tangible assets and receivables.

      At December 31, 2005, the Group had €9.2 million available in unused short-term credit lines and overdraft facilities and € 50.9 million in unused long-term credit lines.

     U.S.$375 million bridge loan (used credit line and presented as bank loans — current portion)

      On September 1, 2005, we entered into a single currency U.S.$375 million term credit facility, which was amended on September 30, 2005, with Crédit Suisse, Paris Branch and BNP Paribas as arrangers, with a maturity date at September 1st, 2006 with the option (upon our request and upon approval of a majority of the lenders) to extend it for a further six months. The use of proceeds for this credit facility was to fund our initial purchase of approximately 60% of Exploration Resources shares, our continuing purchases of Exploration Resources shares, our mandatory offer for the purchase of the remaining Exploration Resources shares and the “squeeze out” of remaining shareholders.

      The credit facility bears interest at a graduated rate beginning with a base margin, depending on the credit rating assigned by either Moody’s or Standard & Poor’s to our outstanding U.S.$165 million 7¹/2% senior notes due 2015 (4.25% at BB-/ Ba3 or higher, 5.25% at B+/ B1, 5.75% at B/ B2 and 6.25% at B-/ B3 or lower), over US$ LIBOR until March 1t, 2006, plus 0.50% from March 1, 2006 until June 1, 2006, plus 1.00% from June 1, 2006 until September 1st, 2006 plus 2.00% from September 1, 2006 until the repayment. The interest expense represents € 10.4 million on the year ended December 31, 2005.

      In order to comply with the conditions of the acquisitions of Exploration Resources shares noted above, we obtained waivers from the lenders under our U.S.$60 million syndicated credit facility dated March 12, 2004 of the negative pledge and any other relevant provisions thereunder, as well as amendments to the financial covenants (see below).

      As a consequence of the capital increase dated December 16, 2005, we repaid, on December 23, 2005, $234.7 million of the $375 million which had been drawn on this credit facility. The unamortized portion of the deferred expenditures linked to this redemption amounted to €3.8 million and were recognized in the income statement as “Cost of financial debt” at December 31, 2005. At December 31, 2005, we have drawn down $140.3 million (€118.9 million), which was effectively repaid on February 10, 2006 as stated note 28 “Post-closing events”.

      We agreed to maintain some provisions under the bridge loan agreement: those were respected at December 31, 2005 and were invalid and void from February 10, 2006.

     Syndicated credit facility (unused long-term credit line)

      On March 12, 2004, CGG, CGG Marine and Sercel signed a revolving credit facility agreement of U.S.$60 million with banks and financial institutions acting as lenders. The purpose of this agreement was notably to replace the multi currency facility agreement dated September 15, 1999 as amended on August 31, 2000, which was cancelled.

      This credit facility agreement requires that certain ratios should be respected. Those ratios have been recently modified when the U.S.$375 million credit facility agreement was signed on September 1, 2005 (see

F-29

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

above), by a waiver dated August 31, 2005 and approved by the lenders. The new ratios to be respected, calculated from consolidated financial statements of the Group are the followings:

(a)	the ratio of net debt over equity should not exceed 2.50;
(b)	the ratio of net debt over Adjusted EBITDA (ORBDA) should not exceed (i) 2.00 on the 12 months periods ending December 31, 2003, June 30, 2004 and December 31, 2004, (ii) 1.75 on the 12 months periods ending June 30, 2005, (iii) 2.50 on the 12 months period preceding December 31, 2005 and (iv) 2.00 on the following 12 months periods; and
(c)	the ratio of net debt (in USD at closing rate) over cash-flow from operations on a rolling 12 months period calculated at average rate of the period should not exceed (i) 4.00 on the 12 months periods ending December 31, 2003 and June 30, 2004, (ii) 3.75 on the 12 months periods ending December 31, 2004, (iii) 3.50 on the 12 months period ending June 30, 2005, (iv) 3.00 on the following 12 months periods.

      The ratios calculated at December 31, 2005 met the conditions required.

      The lenders were granted a lien on the accounts receivable of CGG, CGG Marine and Sercel S.A. The facility has a term of three years and will begin amortizing after March 11, 2006, one year from its final maturity.

NOTE 13 — FINANCIAL INSTRUMENTS

Foreign currency exposure management

      The reporting currency for the Group’s consolidated financial statements is the euro. However, as a result of having primarily customers, which operate in the oil and gas industry, more than 90% of the Group’s operating revenues are denominated in currencies other than the euro, primarily the U.S. dollar.

      As a result, the Group’s sales and operating income are exposed to the effects of fluctuations in the value of the euro versus the U.S. dollar. A strengthening of the euro compared to the U.S. dollar has a negative effect on the Group’s net sales and operating income denominated in U.S. dollars when translated to euro, while a weakening of the euro has a positive effect. In addition, the Group’s exposure to fluctuations in the euro/ U.S. dollar exchange rate has considerably increased over the last few years due to increased sales outside of Europe.

      In order to improve the balance of its net position of receivables and payables denominated in foreign currencies, the Group maintains a portion of its financing in U.S. dollars. At December 31, 2005 and at December 31, 2004, the Group’s financial debt denominated in U.S. dollars amounted to U.S.$454.9 million (€385.6 million) and U.S.$307.8 million (€ 226.0 million), respectively.

      In addition, to protect against the reduction in the value of future foreign currency cash flows. the Group follows a policy of selling U.S. dollars forward at average contract maturity dates that the Group attempts to match with future net U.S. dollar cash flows (revenues less costs in U.S. dollars) to be generated by firm contract commitments in its backlog generally over the ensuing six months. A similar policy, to a lesser extent, is carried out with respect to contracts denominated in British pounds. This foreign currency risk management strategy has enabled the Group to reduce, but not eliminate, the positive or negative effects of exchange movements with respect to these currencies.

F-30

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Details of forward exchange contracts are as follows:

		December 31,
		2005		2004
Forward sales of U.S. dollars against euros
Notional amount (in millions of US$)			183.6		127.0
	— of which forward sales qualifying as cash-flow hedges		183.6		108.4
	— of which forward sales not qualifying as cash-flow hedges		—		18.6
Weighted average maturity			91 days		96 days
Weighted average forward U.S.$/ Euro exchange rate			1.2048		1.2453
Forward sales of U.S. dollars against British pounds
Notional amount (in millions of US$)			6.5		—
	— of which forward sales qualifying as cash-flow hedges		6.5		—
	— of which forward sales not qualifying as cash-flow hedges		—		—
Weighted average maturity			90 days		—
Weighted average forward U.S.$/£ exchange rate			1.8871		—

      Effect of forward exchange contracts on financial statement are as follows:

Interest rate risk management

	December 31,			December 31,
	2005			2004
	(in millions of euros)
Carrying value of forward exchange contracts		(4.7	)		8.9
Fair value of forward exchange contracts		(4.7	)		8.9
Gains recognized in profit and loss		—			4.5
Losses recognized in profit and loss		(2.9	)		—
Gains recognized directly in equity		—			3.7
Losses recognized directly in equity		(5.6	)		—

      No interest rate cap agreement was subscribed during 2005 and there is no outstanding former agreement at December 31, 2005.

Fair value information

      The carrying amounts and fair values of the Group’s financial instruments are as follows:

		December 31, 2005						December 31, 2004
		Carrying			Fair			Carrying		Fair
		amount			value			amount		value
		(in millions of euros)
Cash and cash equivalents			112.4			112.4			130.6		130.6
Bank overdraft facilities			9.3			9.3			2.8		2.8
Bank loans, vendor equipment
financing and shareholder loans:
	— Variable rate		156.6			156.6			15.4		15.4
	— Fixed rate		241.8			244.0			231.7		254.8
Forward currency exchange contracts			(4.1	)		(4.1	)		8.7		8.7

F-31

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      The Group considers the carrying value for loans receivable and other investments. trade accounts and notes receivable. other receivables. trade accounts and notes payable and other current liabilities to be the most representative estimate of fair value.

      For bank loans with fixed interest rates, the fair values have been estimated using discounted cash flow analysis based on the Group’s incremental borrowing rates for similar types of borrowing arrangements. For variable-rate bank loans, vendor equipment financing and the shareholder loans, fair values approximate carrying values.

      The market value of forward sales is assessed based on forward rates, available on financial market for similar maturities.

NOTE 14 — COMMON STOCK AND STOCK OPTION PLANS

      The Company’s share capital at December 31, 2005 consisted of 17,081,680 shares, each with a nominal value of € 2.

Dividend rights

      Dividends may be distributed from the statutory retained earnings, subject to the requirements of French law and the Company’s articles of incorporation. Retained earnings available for distribution amounted to € 399.8 million at December 31, 2005.

Issued Shares

      In 2005, CGG issued 5.399.462 fully paid shares related to the following operations:

— 152.834 fully paid shares related to stock options exercised for which the company received net proceeds of € 8.2 million;

— 1.147.500 fully paid ordinary shares issued on the conversion of 11,475 convertibles bonds out of the convertible bonds issued on November 4, 2004 with maturity date 2012 and;

— 4.099.128 fully paid ordinary shares issued on the capital increase completed between November 21, 2005 and December 2, 2005 at a share price of €51 for which the company received gross proceeds of €209.1 million. The fees and costs related to this transaction amounted to € 9.4 million.

Stock options

      Pursuant to various resolutions adopted by the Board of Directors, the Group has granted options to purchase Ordinary Shares to certain employees, executive officers and directors of the Group.

      Stock-options granted on 1997 expired on May 4, 2005. Options granted under the provisions of the 2000 option plan which expires eight years from the date of grant cannot be generally exercised before 2003 and the options to subscribe 1,000 shares or more cannot be exercised before January 18, 2005. Options granted under the provisions of the 2001 option plan, which expires eight years from the date of grant, are vested by one fifth each year from March 2001 and cannot be generally exercised before 2004 and the options to subscribe 1,000 shares or more cannot be exercised before January 18, 2005. The exercise price for each option is the average fair market value for the common stock during the 20 trading days ending on the trading day next preceding the date the option is granted. Options granted under the 2002 option plan, which expires eight years from the date of grant, are vested by one fifth each year from May 2002 and cannot be generally exercised before 2005. Moreover, options to subscribe 1,000 shares or more cannot be exercised before May 15, 2006.

F-32

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Following the capital increase of December 2005, the stock options were adjusted as follows:

	Adjustment of		Exercise price		Adjusted
Date of stock options	number of options		before adjustment (€)		exercise price (€)
January 18, 2000		9.387		49.90		45.83
March 14, 2001		21.376		71.20		65.39
May 15, 2002		11.466		43.47		39.92
May 15, 2003		15.583		15.82		14.53
Total		57.812

      Information related to options outstanding at December 31, 2005 is summarized below:

			Options
Date of Board of			outstanding at		Exercise price				Remaining
Directors’ Resolution	Options granted		Dec. 31. 2005		per share (€)		Expiration date		duration
January 18. 2000		231.000		124.736		45.83		January 17, 2008		24.5 months
March 14. 2001		256.000		251.463		65.39		March 13, 2009		38.5 months
May 15. 2002		138.100		135.400		39.92		May 14, 2010		52.5 months
May 15. 2003		169.900		180.235		14.53		May 14, 2011		64.5 months
Total		795.000		691.834

      In addition, there was a 100,000 options plan dated May 5, 1997 expiring on maturity date May 4, 2005. At January 1, 2005, there were 56,662 outstanding unexercised options at an exercise price of € 61.03. At the expiration date, 54,520 options were exercised over the accumulated duration of the plan, thus 14,432 options became void definitely due to its expiration.

      A summary of the Company’s stock option activity, and related information for the years ended December 31 follows:

	December 31,
	2005						2004
				Weighted						Weighted
				average						average
	Number of			exercise			Number of			exercise
	options			price			options			price
	(weighted average exercise price in euro)
Outstanding-beginning of year		809.050			48.95	€		815.673			48.86	€
Granted		—			—			—			—
Adjustments followings the capital increase		57.812			43.45	€		—			—
Exercised		(152.834	)		53.86	€		(1.500	)		15.82	€
Forfeited		(22.194	)		55.61	€		(5.123	)		44.39	€
Outstanding-end of year		691.834			43.63	€		809.050			48.95	€
Exercisable-end of year		376.199			58.90	€		56.662			61.03	€

F-33

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTE 15 — PROVISIONS FOR LIABILITIES AND CHARGES

      Detail of provisions for liabilities and charges is as follows:

	Balance at													Balance at
	31 December,				Deductions			Deductions						31 December,
	2004		Additions		(used)			(non used)			Others(a)			2005
	(in millions of euros)
Provisions for contacts losses		4.7		2.8		(3.8	)		—			0.4			4.1
Provisions for restructuring costs		1.0		0.3		(0.5	)		—			—			0.8
Provisions for litigations		5.4		5.0		(1.8	)		—			(0.3	)		8.3
Provisions for exchange losses		—		—		—			—			—			—
Others provisions		3.1		3.8		(2.1	)		(0.2	)		(0.1	)		4.5
Total short-term provisions		14.2		11.9		(8.2	)		(0.2	)		—			17.7
Customers Guarantee provisions		3.4		3.8		(2.3	)		—			0.1			5.0
Retirement indemnity provisions		11.0		1.3		(0.6	)		—			0.1			11.8
Others provisions		1.6		0.4		(1.1	)		—			0.2			1.1
Negative value of investments in companies under the equity method		—		—		—			—			0.5			0.5
Total long-term provisions		16.0		5.5		(4.0	)		—			0.9			18.4
Total provisions		30.2		17.4		(12.2	)		(0.2	)		0.9			36.1

(a) includes the effects of exchange rates changes and acquisitions and divestitures

Negative value of investments in companies under the equity method

      The negative value of VSF, a company accounted under the equity method, is presented at December 31, 2005 as “Provisions — non-current portion” by € 0.5 million.

Retirement indemnity provisions

      The Group records retirement indemnity provisions based on the following actuarial assumptions:

• historical staff turnover and standard mortality schedule;

• age of retirement between 60 and 65 years old; and

• actuarial rate and average rate of increase in future compensation.

      In addition, a supplemental pension and retirement plan was implemented in December 2004 for the members of the Group’s Management Committee and members of the management board of Sercel Holding; a contribution on this pension plan was paid for € 2.1 million in 2005.

F-34

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      The status of the retirement indemnity plans is as follows:

		December 31,
		2005			2004
		(in millions
		of euros)
Accumulated benefit obligation (unvested)			11.4			8.7
Projected benefit obligation			14.5			13.2
Effect of changes in discount rates			—			—
			15.0			13.2
Service cost			1.6			0.6
Interest expense			0.7			0.5
Amortization of loss arising from change in discount rate			(0.2	)		(0.3	)
Net expense of the year			2.1			0.8
Benefit payments			(0.4	)		(0.2	)
Consolidation scope entries & currency translation			0.1			0.3
Net changes			1.8			0.9
Fair value of plan assets			5.0			2.2
Contributions paid			2.6			0.4
Expected return on plan assets			0.2			0.1
Consolidation scope entries & currency translation			—			—
Net changes			2.8			0.5
Net liability at end of the year			11.8			11.0
Net asset at end of the year			1.8			—
Key assumptions used in estimating the Group’s retirement
	obligations are:
	Discount rate		4.25	%		4.00	%
	Average rate of increase in future compensation		3.00	%		3.00	%
	Average expected return on assets		4.00	%		5.50	%

NOTE 16 — OTHER NON-CURRENT LIABILITIES

	December 31,
	2005		2004
	(in millions
	of euros)
Research and development subsidies		5.5		6.8
Profit sharing scheme		15.2		13.0
Other non-current liabilities		20.7		19.8

NOTE 17 — CONTRACTUAL OBLIGATIONS. COMMITMENTS AND CONTINGENCIES

Contractual obligations

      The Group leases primarily land, buildings and geophysical equipment under capital lease agreements expiring at various dates during the next five years. These capital lease commitments include the sale-leaseback agreement with respect to the Group’s head office in Massy, for which we committed in June 2005 to exercise the purchase option in 2006.

F-35

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      We renewed the time charter party agreement of our seismic vessel, the Laurentian, in April 2005 with modified contractual conditions. As a result, it was qualified as a capital lease and was reported as such at June 30, 2005. The total lease obligation is U.S.$27.8 million (€23.6 million) over its three-year term plus a residual value of U.S.$7.3 million (€6.2 million). The net present value of future lease payments under the capital lease is U.S.$16.8 million (€14.2 million) and the remaining part of the obligation is accounted for as operating expenses over the agreement duration. This amount, less the estimated residual value of U.S.$7.3 million (€6.2 million) will be depreciated over the agreement duration. Likewise, the time charter party agreement of the Geochallenger seismic vessel, included in Exploration Resources’ assets at September 1, 2005, has been accounted for as a capital lease. The total lease obligation is U.S.$36.2 million (€30.7 million) over its five-year term plus a residual value of NOK 230 million (€30 million). The net present value of future lease payments under the capital lease is U.S.$54.8 million (€46.5 million) and the remaining part of the obligation is accounted for as operating expenses over the agreement duration. This amount will be depreciated over the agreement duration. Since April 1999, the Group has been operating the seismic vessel Alizé under a long-term charter agreement signed on December 31, 1998, valid for a period of eight years. In 2004, three lease agreements regarding two seismic vessels (“Föhn” and “Harmattan”) and one chase boat were qualified as capital leases and recorded as such for a total amount of € 8.7 million in the balance sheet.

      Other lease agreements relate primarily to operating leases for offices, computer equipment and other items of personal property.

      Rental expense was €59.6 million in 2005 and € 61.2 million in 2004.

      The following table presents payments in future periods relating to contractual obligations as of December 31, 2005:

	Payments due by period
	Less than						After
	1 year		1-3 years		4-5 years		5 years		Total
	(in million of euros)
Long-term debt (Note 12)		135.7		17.7		10.1		147.3		310.8
Capital Lease Obligations		23.8		32.2		14.5		30.1		100.6
Operating Leases		51.6		43.2		10.3		0.8		105.9
Other Long-term Obligations (bond interest)		11.5		23.0		23.0		47.2		104.7
Total Contractual Obligations		222.6		116.1		57.9		225.4		622.0

      The reconciliation between capital lease obligations and capital lease debt is presented below:

	Less than						After
	1 year			1-5 years			5 years			Total
	(in millions of euros)
Capital Lease Obligations		23.8			46.7			30.1			100.6
Discounting		(3.7	)		(9.4	)		(0.1	)		(13.2	)
Capital lease debt (see note 12)		20.1			37.3			30.0			87.4

F-36

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Other commitments

      Outstanding commitments at December 31, 2005 include the following:

	2005		2004
	(in millions
	of euros)
Guarantees issued in favor of clients		82.4		83.0
Guarantees issued in favor of banks		26.3		13.7
Notes receivable discounted		—		—
Other guarantees(a)		14.2		13.3
Total		122.9		110.0

(a) Other guarantees relate primarily to guarantees issued by the Company on behalf of subsidiaries and affiliated companies in favor of customs or other governmental administrations.

      The guarantees issued in favor of clients relates mainly to the guarantees issued by the Company to support bids made at the subsidiaries level.

      The increase in guarantees in favor of banks relates mainly to new credit facilities entered into.

      Other guarantees represent essentially the guarantees given to the Libyan customs authorities for the temporary admission of our seismic vessels in Libyan waters.

      The only significant commitment for capital expenditures at December 31, 2005 was the process of conversion of the “Geo-Challenger” from a cable laying vessel to a 3D seismic vessel for approximately U.S.$27 million (€ 22.8 million).

      The duration of the guarantees is as follows:

	Due date
	Less than						After
	1 year		1-3 years		4-5 years		5 years		Total
	(in millions of euros)
Guarantees issued in favor of clients		69.0		4.5		8.9		—		82.4
Guarantees issued in favor of banks		20.0		4.5		1.8		—		26.3
Other guarantees		14.2		—		—		—		14.2
Total		103.2		9.0		10.7		—		122.9

      In addition, the Group’s agreements for the disposal of certain activities contain customary, reciprocal warranties and indemnities.

      The Group has no off-balance sheet obligations under IFRS that are not described above.

Legal proceedings, claims and other contingencies

      The Group is a defendant in a number of legal proceedings arising in the ordinary course of business and has various unresolved claims pending. The outcome of these lawsuits and claims is not known at this time. The Group believes that the resulting liability, if any, net of amounts recoverable from insurance or other sources. will not have a material adverse effect on its consolidated results of operations, financial position or cash flows.

      The Company has been sued by Parexpro (Portugal), for termination without cause of employment agreements and solicitation of a significant number of highly qualified staff in the field of reservoir evaluation, misappropriation of confidential information and documentation, clients, and loss of profits resulting therefrom.

F-37

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      In June 2005, Lisbon Appeal Court confirmed the decision of Lisbon Commercial Court and, in July 2005, Parexpro introduced a new assignation on the Lisbon Civil Court, aiming the same persons and companies on the same basis.

      This new action is currently processed by Lisbon Civil Court.

      The Company does not expect this claim to have any material impact on the Group’s results of operation, financial position, or cash flows. Thus, no provision was recorded in the consolidated financial statements.

NOTE 18 — ANALYSIS BY OPERATING SEGMENT AND GEOGRAPHIC ZONE

      The following tables present revenues, operating income and identifiable assets by operating segment, revenues by geographic zone (by origin) as well as net sales by geographic zone based on the location of the customer. The Group principally services the oil and gas exploration and production industry and currently operates in two industry segments:

• Geophysical services, which consist of (i) land seismic acquisition, (ii) marine seismic acquisition, (iii) other geophysical acquisition, including activities not exclusively linked to oilfield services, and (iv) data processing, and data management;

• Geophysical products, which consist of the manufacture and sale of equipment involved in seismic data acquisition, such as recording and transmission equipment and vibrators for use in land seismic acquisition. and software development and sales.

      Inter-company sales between the two segments are made at prices approximating market prices and relate primarily to equipment sales made by the geophysical products segment to the geophysical services segment. These inter-segment sales, the related operating income recognized by the geophysical products segment, and the related effect on capital expenditures and depreciation expense of the geophysical services segment are eliminated in consolidation and presented in the column “Eliminations and Adjustments” in the tables that follow.

      Operating income represents operating revenues and other operating income less expenses of the relevant industry segment. It includes non-recurring and unusual items, which are disclosed in the operating segment if material. General corporate expenses, which include Group management, financing, and legal activities, have been included in the column “Eliminations and Adjustments” in the tables that follow. The Group does not disclose financial expenses or revenues by operating segment because these items are not followed by the segment management and because financing and investment are mainly managed at the corporate level.

      Identifiable assets are those used in the operations of each industry segment and geographic zone. Unallocated and corporate assets consist primarily of financial assets, including cash and cash equivalents, and the Group’s corporate headquarters in Massy.

      Net sales originating in France include export sales of approximately €189 million in 2005 and € 231 million in 2004.

      In 2005, the Group’s two most significant customers accounted for 9.8% and 4.4% of the Group’s consolidated revenues compared with 6.8% and 5.4% in 2004.

F-38

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Analysis by operating segment

	Geophysical		Geophysical		Eliminations and			Consolidated
2005	services		products		Adjustments			Total
	(in millions of euros)
Revenues from unaffiliated customers		552.3		317.6		—			869.9
Inter-segment revenues		0.6		61.2		(61.8	)		—
Operating revenues		552.9		378.8		(61.8	)		869.9
Other income from ordinary activities		1.9		—		—			1.9
Total income from ordinary activities		554.8		378.8		(61.8	)		871.8
Operating income (loss)		25.2		79.8		(29.9	)(a)		75.1
Equity income (loss) of investees		12.9		0.1		—			13.0
Capital expenditures(b)		165.5		21.6		(19.6	)		167.5
Depreciation and amortization(c)		132.9		18.2		(5.2	)		145.9
Corporate assets amortization		—		—		—			—
Investments in companies under equity method		—		—		—			—
Identifiable assets		1,105.4		412.7		(113.4	)		1,404.7
Unallocated and corporate assets									160.4
Total assets									1,565.1
of which equity method companies		42.0		2.4					44.4
Identifiable liabilities		575.5		179.8		(59.5	)		695.8
Unallocated and corporate liabilities									159.1
Total liabilities									854.9

(a)	Includes general corporate expenses of € 15.8 million.
(b)	Includes (i) investments in multi-clients surveys of €31.9 million, (ii) equipment acquired under capital lease of €17.4 million, (iii) capitalized development costs in the Services segment of €3.5 million, and (iv) capitalized development costs in the Products segment of € 4.6 million.
(c)	Includes multi-clients surveys amortization of € 69.6 million.

F-39

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

	Geophysical			Geophysical		Eliminations and			Consolidated
2004	services			products		Adjustments			Total
	(in millions of euros)
Revenues from unaffiliated customers		388.0			299.4		—			687.4
Inter-segment revenues		1.3			14.2		(15.5	)		—
Operating revenues		389.3			313.6		(15.5	)		687.4
Other income from ordinary activities		0.4			—		—			0.4
Total income from ordinary activities		389.7			313.6		(15.5	)		687.8
Operating income (loss)		(19.8	)		64.5		1.0	(a)		45.7
Equity income (loss) of investees		10.0			0.3		—			10.3
Capital expenditures(b)		94.0			14.2		(0.9	)		107.3
Depreciation and amortization(c)		121.8			15.5		(5.0	)		132.3
Corporate assets amortization		—			—		—			—
Investments in companies under equity method										—
Identifiable assets		540.8			311.9		(44.9	)		807.8
Unallocated and corporate assets										163.4
Total assets										971.2
of which equity method companies		28.6			2.2					30.8
Identifiable liabilities		230.7			129.6		(38.4	)		321.9
Unallocated and corporate liabilities										247.0
Total liabilities										568.9

(a)	Includes general corporate expenses of € 13.0 million.
(b)	Includes (i) investments in multi-clients surveys of €51.1 million, (ii) equipment acquired under capital lease of €8.7 million, (iii) capitalized development costs in the Services segment of €1.9 million, and (iv) capitalized development costs in the Products segment of € 2.7 million.
(c)	Includes multi-clients surveys amortization of € 66.5 million.

Analysis by geographic zone

     Analysis of operating revenues by location of customers

	2005			2004
	(in millions of euros)
France		7.8	1%		14.1	2%
Rest of Europe		182.5	21%		124.1	18%
Asia-Pacific/Middle East		297.3	34%		274.5	40%
Africa		90.6	10%		67.0	10%
Americas		291.7	34%		207.7	30%
Consolidated total		869.9	100%		687.4	100%

F-40

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     Analysis of operating revenues by origin

	2005			2004
	(in millions of euros)
France		227.4	26%		244.5	36%
Rest of Europe		133.2	15%		64.8	9%
Asia-Pacific/Middle East		185.1	21%		131.7	19%
Africa		50.2	6%		50.7	7%
Americas		274.0	32%		195.7	29%
Consolidated total		869.9	100%		687.4	100%

      Outside France, the U.S. is the only country which is deemed material with 13% and 21% of consolidated revenues by origin in 2004 and 2005 respectively.

      Due to the constant change in work locations, the Group does not track its assets based on country of origin or ownership.

Analysis of operating revenues by category

	2005			2004
	(in millions of euros)
Sales of goods		296.6	34 %		281.3	41%
Services rendered		468.6	54%		339.9	49%
Royalties (after-sales)		97.4	11%		60.9	9%
Leases		7.3	1%		5.3	1%
Consolidated total		869.9	100%		687.4	100%

NOTE 19 — RESEARCH AND DEVELOPMENT EXPENSES

      Analysis of research and development expenses is as follows:

	December 31,
	2005			2004
	(in millions
	of euros)
Research and development costs — gross, incurred		(43.5	)		(35.5	)
Development costs capitalized		8.2			4.6
Research and development expensed		(35.3	)		(30.9	)
Government grants recognized in income		4.2			2.1
Research and development costs — net		(31.1	)		(28.8	)

      Research and development expenditures related primarily to:

• for the geophysical services segment, projects concerning data processing services; and

• for the products segment, projects concerning seismic data recording equipment.

F-41

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTE 20 — OTHER REVENUES AND EXPENSES

	December 31,
	2005			2004
	(in millions
	of euros)
Assets depreciation		—			0.3
Restructuring costs		(0.2	)		(11.0	)
Variation of reserves for restructuring		0.1			11.1
Other non-recurring revenues		—			3.5
Other non-recurring expenses		(0.4	)		(0.6	)
Non-recurring revenues (expenses) — net		(0.5	)		3.3
Exchange gains (losses) on hedging contracts		(2.9	)		4.5
Gains (losses) on sales of assets		(1.0	)		11.5
Other revenues (expenses) — net		(4.4	)		19.3

Year ended December 31, 2005

      The provision for restructuring booked in 2003 was reversed for € 0.1 million in 2005 once the restructuring expenses were incurred.

      Exchange gains & losses on hedging contracts corresponded to the impact of financial hedging instruments allocated to the operating revenues of the period.

      “Gain on sale of assets” related primarily to € 1.2 million loss on damaged seismic recording equipment of the vessel “Amadeus”.

Year ended December 31, 2004

      The provision for restructuring booked in 2003 was reversed for € 11 million in 2004 once the restructuring expenses were incurred.

      “Other non-recurring revenues” were principally related to insurance indemnities to be received for the loss of the Company’s seismic vessel, the “CGG Mistral” recorded for an amount of € 1.8 million.

      Exchange gains & losses on hedging contracts correspond to the impact of financial hedging instruments allocated to the operating revenues of the period.

      “Gain on sale of assets” included primarily a gain of €7.9 million on the disposal of PGS shares and a gain of € 2.2 million on the disposal of a building.

NOTE 21 — COST OF FINANCIAL DEBT

      Cost of financial debt includes expenses related to financial debt, composed of bonds, debt component of convertible bonds, bank loans, capital-lease obligations and other financial borrowings, net of income provided by cash and cash equivalents.

F-42

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Analysis of cost of financial debt is as follows:

	December 31,
	2005			2004
	(in millions
	of euros)
Current interest expenses related to financial debt		(22.2	)		(25.7	)
Financial cost on early redemption of bonds		(9.4	)		(4.3	)
Interest expenses and financial expenses related to the Bridge loan put in place for the acquisition of Exploration Resources		(14.2	)		—
Income provided by cash and cash equivalents		3.5			2.2
Cost of financial debt, net		(42.3	)		(27.8	)

      As described in note 12, we redeemed and paid accrued interest on all of the remaining outstanding U.S.$150 million aggregate principal amount of our 10⁵/8% senior notes due 2007 on May 31, 2005. The premium and the unamortized portion of the deferred expenditures linked to this redemption as well as the overlapped interests on the month of May 2005 amounted to €9.4 million and were recognized as “Cost of financial debt”.

      This repayment of $150 million follows a first repayment of $75 million decided by the Board of Directors held on December 8, 2004. According to the indenture, such early redemption implied the payment of a premium representing 5.3125% of the total redemption amount, i.e. US $4.0 million. The redemption of the Notes actually took place on January 26, 2005. The premium and the unamortized portion of the deferred expenditures linked to this redemption, amounting to €4.3 million, were recognized in the profit and loss as “Cost of financial debt” at December 31, 2004.

NOTE 22 — OTHER FINANCIAL INCOME (LOSS)

      Analysis of other financial income (loss) is as follows:

	December 31,
	2005			2004
	(in millions
	of euros)
Exchange gains and losses, net		(1.8	)		3.9
Other financial income		1.6			0.5
Premium paid for the nearly conversion of the convertible bonds		(8.9	)		—
Write-off of issuance costs on convertible bonds recognized as
expense at the time of the early conversion		(3.7	)		—
Other financial expenses		(1.7	)		(3.6	)
Other financial income (loss)		(14.5	)		0.8

      At December 31, 2004, “Other financial expenses” included mainly the variance of the fair value of financial hedging instruments that did not qualify as investment hedge for an expense of € 2.0 million.

F-43

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTE 23 — INCOME TAXES

Income tax

      Income tax expense consists in:

	December 31,
	2005			2004
	(in millions
	of euros)
France
• current income taxes		(0.4	)		(0.3	)
• deferred taxes and other(b)					0.1
		(0.4	)		(0.2	)
Foreign countries
• current income taxes(a)		(30.9	)		(21.9	)
• deferred taxes and other(b)		4.7			11.2
		(26.2	)		(10.7	)
Total income tax expense		(26.6	)		(10.9	)

(a)	includes withholding taxes
(b)	includes principally deferred income and expense taxes

      The Company and its subsidiaries compute income taxes in accordance with the applicable tax rules and regulations of the numerous taxi authorities where the Group operates. The tax regimes and income tax rates legislated by these taxing authorities vary substantially. In foreign countries, income taxes are often accrued based on deemed profits calculated as a percentage of sales as defined by local government tax authorities.

      In accordance with the provisions of French tax law, the Company elected on January 1, 1991 to file a consolidated tax return for French subsidiaries in which the Company holds an interest of more than 95% from the beginning of the relevant year. The Company does not obtain any French tax credits in respect of income taxes paid abroad.

      The main difference between the effective tax rate and the legal tax rate enacted in France at December 31, 2005 is the loss of the French tax group in 2005, for which no deferred tax income and asset were recorded in the

F-44

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

year. The reconciliation between income tax expense in the income statement and the theoretical tax charge is detailed below:

Net income attributable to shareholders	(7.8	)
Income tax expense	(26.6	)
Income before tax	18.8
Differences on taxable basis:
Equity in income (loss) of affiliates	(13.0	)
Net loss of the French tax group(a)	74.8
Theoretical taxable base excluding French tax group	80.6
Income tax rate enacted in France	34.93%
Theoretical tax	(28.2	)
Differences on income taxes:
Income tax on Argas’s income paid by CGG(b)	(1.9	)
Deferred tax income on carry-forward losses at CMG	2.4
Differences on income tax rate	1.1
Income tax	(26.6	)

(a)	the theoretical deferred tax income related to the loss of the French tax group in 2005, estimated to € 26,1 million, was not booked in the Group income statement in 2005.
(b)	CGG, as shareholder of Argas, is directly required to pay income tax for Argas in Saudi Arabia for its share in Argas.

      Due to the mobile nature of seismic acquisition activities, current relationships between the French and foreign components of such tax items are not reliable indicators of such relationships in future periods.

Net operating loss carried forward

      In both France and foreign jurisdictions where income tax is not determined based on deemed profits calculated as a percentage of sales, the main significant temporary differences between financial and tax reporting relate to net operating loss carried forward.

      Net operating loss carried forward available in France and foreign jurisdictions, and not recognized as deferred tax assets at December 31, 2005, amounted to €317.3 million, including € 98 million of capital losses available in France at December 31, 2005 and are currently scheduled to expire as follows:

				Foreign
	France			countries
	(in millions of euros)
2006		98.0	(a)		—
2007		—			—
2008		—			—
2009		—			—
2010		—			3.3
2011 and thereafter		—			37.9
Available indefinitely		107.1			70.9
Total		205.1			112.1

(a) Capital losses

F-45

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Net operating loss carried forward in France include both losses available for carried forward to reduce future French income tax payable by the consolidated tax Group as well as losses dating prior to January 1, 1991, which are only available to reduce future income tax of the individual subsidiaries of the Group.

      Consequently, the Group has recorded valuation allowances to fully provide for the potential tax benefit of carried forward losses by entities that have a recent history of generating losses

      Tax losses carried forward and not recorded as a deferred tax asset mainly relate to French tax losses for Euros of €107.1 million at current rate (after consequences of Tax audit — see below) and of € 98.0 million for capital losses and United Kingdom tax losses incurred of GBP 24.5 million. After taking into account the financial forecasts, the Group decided not to record any deferred tax assets in respect of these tax losses available in future years.

Deferred tax assets and liabilities

      Net deferred tax assets and liabilities are as follows:

	December 31,
	2005			2004
	(in millions
	of euros)
Deferred tax assets — temporary differences		17.0			23.8
Deferred tax assets — tax losses carried forward(a)		14.6			7.7
Total Deferred tax assets		31.6			31.5
Total Deferred tax liabilities		56.9			26.7
Total deferred tax. net		(25.3	)		4.8

(a) relating to loss carry forwards in United Kingdom, Mexico, Norway and United States.

      The expectation of CMG’s positive tax results, confirmed in 2005 by a taxable result, led at December 31, 2005 to the recognition of a deferred tax income of € 2.4 million representing CMG’s net operating loss carried forward (MXN98.0 million) net of temporary differences (MXN16.9 million) at December 31, 2005, at the enacted Mexican tax rates of 28% to 29% depending on the fiscal year of application.

      Sercel Inc.’s positive tax planning, confirmed in 2004 by a taxable result had led in 2004 to the recognition of a deferred tax income of € 10.4 million representing Sercel Inc.’s net operating loss carried forward (U.S.$24.7 million) and temporary differences (U.S.$10.1 million), at the enacted U.S. tax rate of 35%.

      As of December 31, 2005, the deferred tax situation in France resulting from temporary differences between consolidated and taxable results resulted in a net deferred taxable basis of € 76 million, whereby no deferred tax asset was recorded.

Tax position and tax audit

      In 2002 the Company received a verification notice from the French taxation authorities requesting documentation with respect to corporate tax and value added tax. The corporate tax audit covers the 1991 through 2001 fiscal year as required by French law for use of net operating loss carry forwards. As a consequence of this tax audit (symmetrical corrections and application of new rules), we have reviewed the calculation of income tax for the fiscal years subsequent to the fiscal period reviewed.

      Moreover, in 2003, Sercel S.A. and Sercel Holding S.A. were subject to a tax audit from the French taxation authorities with respect to corporate taxes and value added taxes. The audit covers the 2001 and 2002 fiscal years.

F-46

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

The consequences of those controls, partially contested at December 31, 2005 are taken into account in the books of the corresponding entities and partially offset within the French tax group system.

      We are currently discussing all those tax reassessments with tax authorities. Whatever the conclusion of these discussions be, the tax reassessment related to the audited fiscal years 1991 to 2001 would be offset against net operating loss carried forward. We thus consider that no additional income tax is due for fiscal years 1991 to 2001.

      We estimate the final risk of tax reassessment for the 2002 fiscal year on the French consolidated tax group to be € 0.5 million income tax to be due. When the discussions with tax authorities conclude, the Group will make a request for the additional income tax in fiscal year 2002 to be offset against the net operating tax loss carried forward in fiscal year 2003.

      As a consequence, the risk linked to the tax reassessment will only affect net operating loss carried forward. We thus provided for only the additional contributions (not covered by the carry-back of net operating losses) and for the likely overdue interests at December 31, 2005 for a non-material amount.

      On March 18, 2005, CGG Americas Inc. received a correspondence from the U.S. Internal Revenue Service regarding an upcoming standard tax audit scheduled for the second quarter of 2005 covering CGG America’s 2003 tax return. This tax audit is currently in progress and we do not expect any material adjustment.

      Undistributed earnings of subsidiaries and the Group’s share of undistributed earnings of companies accounted for using the equity method amounted to €811.6 million at December 31, 2005 and to € 201.9 million at December 31, 2004. The Group has booked deferred tax liabilities for taxes on part of these earnings, in particular on undistributed reserves that did not support tax in the Norwegian companies under the tax tonnage scheme.

NOTE 24 — PERSONNEL

      The analysis of personnel is as follows:

		Year ended
		December 31,
		2005		2004
Personnel employed under French contracts
	Geophysical services		821		797
	Products		654		622
Personnel employed under local contracts			2.477		2.250
Total			3.952		3.669
Including field staff of:			579		475

      The total cost of personnel employed by consolidated subsidiaries was €223.8 million in 2005 and € 203.1 million in 2004.

F-47

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTE 25 — DIRECTORS’ REMUNERATION

      Directors’ remuneration was as follows.

	Au 31 décembre
	2005		2004
	(en euros)
Short-term employee benefit excluding tax on salary(1)		3,026,474		2,939,051
Long-term employee benefit — pension(2)		26,331		19,576
Long-term employee benefit — supplemental pension(3)		2,050,972		—
Share-based payments(4)		170,676		240,724

(1)	Includes gross remunerations and attendance fees paid during the year but excludes attendance fees paid to the President of the Board of Directors, respectively €37,873 in 2005 and € 39,886 in 2004.
(2)	Cost of services rendered
(3)	Corresponding to a supplemental pension implemented by the end of 2004 and transferred to an insurance company; the amount above mentioned is the contribution paid in 2005 to this company.
(4)	Expense in the income statement related to the stock-options plan. No stock-options was attributed in 2005 to directors.

NOTE 26 — RELATED PARTY TRANSACTIONS

Operating transactions

      Louis Dreyfus Armateurs (“LDA”) provides ship management services for a portion of our fleet. Charter parties associated with these services are concluded on an arm’s length basis. Debt to LDA was €6.0 million as of December 31, 2005. Total net charges paid throughout the year for the provision of ship management services were €0.8 million, and the future commitments for such services to LDA were € 23.3 million.

      LDA and the Group own Geomar, a company accounted for under the equity method. Geomar is the owner of the CGG Alizé seismic vessel. LDA has a 51% controlling stake and we have a 49% stake in Geomar. Amounts paid to Geomar by the Group during the year were €8.8 million, while future charter party amounts due to Geomar were €12.0 million. Debt to Geomar was € 0.9 million at December 31, 2005.

      The sales of geophysical products from Sercel to Argas, a 49% owned affiliate, were € 8.1 million, representing 0.9% of the Group revenues in 2005. These transactions were concluded on an arm’s length basis.

      Sales of geophysical products from Sercel to Xian Peic, a 40% owned affiliate, were € 2.9 million, representing 0.3% of Group revenues in 2005. These transactions were concluded on an arm’s length basis.

Financing

      No credit facility or loan was granted to the Company by shareholders during the three periods presented.

F-48

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTE 27 — SUPPLEMENTARY CASH FLOW INFORMATION

      Cash paid for income taxes and interest was as follows:

	Year ended
	December 31,
	2005		2004
	(in millions
	of euros)
Financial expenses paid		62.6		29.1
Income taxes paid		31.7		17.0

      The “Financial expenses paid” include mainly €3.0 million premium paid for the repayment of the 10⁵/8% bonds maturity 2007 in January 2005, €4.0 million of issuing fees on the 7¹/2% bonds maturity 2015 issued in april 2005, €14.2 million of issuing fees and interest expenses related to the credit line of $375 million used for acquisition of Exploration Resources, repaid partially in December 2005 and € 8.9 million of premium paid to the bondholders having converted its bonds in November 2005 (see note 12).

      The “Other non-cash items” include mainly the cancellation of the non-cash expense related to the variance on derivative on convertible bonds (see note 12) and, in 2005, to the reclassification of the cash-out of the € 8.9 million of premium paid to the bondholders having converted its bonds in November 2005 from “Cash from operations” to “Financial expenses paid”.

      The “Impact of changes in exchange rate on financial items” corresponds notably to the elimination of the unrealized exchange gains (losses) resulting from the gross financial debt in U.S. dollars located in those subsidiaries whose functional currency is euro; this elimination amounted to €15.8 million in 2005 and € (12.9) million in 2004 and was mostly netted off in 2004 by the elimination of the unrealized loss on the cash in U.S. dollars.

      Non-cash investing and financing transactions that are excluded from the consolidated statements of cash flows consisted of the following:

	Year ended
	December 31,
	2005		2004
	(in millions
	of euros)
Equipment acquired under capital leases		17.4		8.7

NOTE 28 — SUBSEQUENT EVENTS

      On January 2006, we offered an additional $165 million (the “Additional Notes”) of our dollar-denominated 7¹/2% Senior Notes due 2015 issued in April 2005 (the “Existing Notes”) in a private placement to certain eligible investors. The notes were issued at a price of 103¹/4 % of their principal amount, resulting in a Yield-to-Worst of 6.9%. The notes were issued on February 3rd, 2006 and the net proceeds from the Additional Notes are used mainly to repay on February 10, 2006, $140.3 million remaining under CGG’s $375 million bridge credit facility used to finance the acquisition of Exploration Resources.

F-49

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTE 29 — LIST OF PRINCIPAL CONSOLIDATED SUBSIDIARIES AND COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD AS OF DECEMBER 31, 2005

      Certain dormant or insignificant subsidiaries of the Group have not been included in the list below.

			% of
Siren Number(a)	Consolidated companies	Head Office	interest
403 256 944	CGG Marine SAS	Massy, France		100.0
351 834 288	Geocal SARL	Massy, France		100.0
966 228 363	Geoco SAS	Paris, France		100.0
378 040 497	Sercel SA	Carquefou, France		100.0
410 072 110	CGG Explo SARL	Massy, France		100.0
866 800 154	Sercel Holding SA	Carquefou, France		100.0
	CGG Americas. Inc.	Houston, United States		100.0
	CGG do Brasil Participaçoes Ltda	Rio do Janeiro, Brazil		100.0
	CGG Canada Services Ltd.	Calgary, Canada		100.0
	CGG International SA	Geneva, Switzerland		100.0
	CGG (Nigeria) Ltd.	Lagos, Nigeria		100.0
	CGG Marine Resources Norge A/S	Hovik, Norway,		100.0
	CGG Offshore UK Ltd.	United Kingdom		100.0
	CGG India Private Ltd.	New Delhi, India		40.0
	Exploration Resources ASA	Bergen, Norway		100.0
	Exploration Investment Resources AS	Bergen, Norway		100.0
	Exploration Investment Resources II AS	Bergen, Norway		100.0
	Exploration Vessel Resources AS	Bergen, Norway		100.0
	Exploration Vessel Resources II AS	Bergen, Norway		100.0
	Multiwave Geophysical Company ASA and its subsidiaries	Bergen, Norway		100.0
	Companía Mexicana de Geofisica	Mexico City, Mexico,		100.0
	Companhia de Geologia e Geofisica Portuguesa	Lisbon, Portugal		100.0
	Exgeo CA	Caracas, Venezuela		100.0
	Geoexplo	Almaty, Kazakhstan		100.0
	Geophysics Overseas Corporation Ltd.	Nassau, Bahamas		100.0
	CGG Australia Services Pty Ltd.	Sydney, Australia		100.0
	CGG Asia Pacific(b)	Kuala Lumpur, Malaisia		33.2
	Petroleum Exploration Computer Consultants Ltd.	Forest Row, United Kingdom		100.0
	CGG Vostok	Moscow, Russia		100.0
	PT CGG Indonesia	Jakarta, Indonesia		100.0
	Sercel Australia	Sydney, Australia		100.0
	Hebei Sercel JunFeng(c)	Hebei, China		51.0
	Sercel Inc.	Tulsa, United States		100.0
	Sercel Singapore Pte Ltd.	Singapore, Singapore		100.0
	Sercel England Ltd.	Somercotes, United Kingdom		100.0
	Sercel Canada Ltd.	Calgary, Canada		100.0

(a)	Siren number is an individual identification number for company registration purposes under French law.
(b)	the consolidation of CGG Asia Pacific, in which CGG owns 33.2% of the ordinary shares and 30% of the total shares is compliant with IFRS.
(c)	Sercel JunFeng is fully consolidated since, according to the management agreement, the Group has operating control of the company.

F-50

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

			% of
Siren number(a)	Accounted for using the equity method	Head Office	interest
413 926 320	Geomar SAS	Paris. France		49.0
	Argas Ltd.	Al-Khobar. Saudi Arabia		49.0
	JV Xian Peic/ Sercel Limited	Xian. China		40.0
	VS Fusion	Houston. United States		49.0

NOTE 30 — RECONCILIATION FROM FRENCH ACCOUNTING PRINCIPLES TO IFRS

Reconciliation of shareholders’ equity at January 1, 2004 and at December 31, 2004

	Shareholders’ equity
											Income and											Total
											expense											shareholders’
	Balance at						Movements		Movements		recognized			Cumulative			Balance at					equity and
	January 1,			Net			in stock-		in treasury		directly in			translation			December 31,			Minority		minority
	2004			income			options		shares		equity			adjustment			2004			interest		interest
	(in million of euros)
Total under French accounting principles		396.6			11.1					0.6					(12.6	)		395.7			9.1		404.8
(a) Tangible assets (IAS 16)		7.2			(0.1	)												7.1					7.1
(b) Employee benefits (IAS 19)		0.7			(0.4	)									(0.1	)		0.2					0.2
(c) Currency translation (IAS 21)		—			4.0										(4.0	)		—					—
(d) Treasury shares (IAS 32)		(0.8	)		(1.4	)				2.0								(0.2	)				(0.2	)
(e) Goodwill amortization (IAS 36)		—			6.2										(0.4	)		5.8					5.8
(f) Development costs (IAS 38)		3.2			4.4										(0.1	)		7.5					7.5
(g) Financial instruments (IAS 39)		12.8			(2.0	)						(5.5	)					5.3					5.3
(h) Financial debt (IAS 39)		0.3			(0.4	)												(0.1	)				(0.1	)
(h) Convertible bonds derivative (IAS 39)		—			(23.5	)												(23.5	)				(23.5	)
(i) Stock-options (IFRS 2)		—			(0.5	)		0.5										—					—
(j) Revenue recognition (IAS 11)		—			(2.4	)												(2.4	)				(2.4	)
Impact of IFRS restatements before deferred tax and minority interests		420.0			(5.0	)		0.5		2.6		(5.5	)		(17.2	)		395.4			9.1		404.5
Impact of deferred tax		(0.8	)		(1.4	)												(2.2	)				(2.2	)
Total under IFRS		419.2			(6.4	)		0.5		2.6		(5.5	)		(17.2	)		393.2			9.1		402.3

      Information about IFRS restatements is disclosed in paragraph 1. Main IFRS restatements.

F-51

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Reconciliation of balance sheet at January 1, 2004

	French
	Accounting
ASSETS	Principles			Ref.		Reclassifications			Ref.		Restatements			IFRS
	(in millions of euros)
Cash and cash equivalents		96.4													96.4
Trade accounts and notes receivable		165.5			(k)		4.6								170.1
Inventories and work-in-progress		64.0					(1.6	)							62.4
Income tax assets		—			(l)		3.6								3.6
Other current assets		57.9			(h)(l)		(12.2	)		(g)		7.7			53.4
Total current assets		383.8					(5.6	)				7.7			385.9
Deferred tax assets		—			(l)		20.0								20.0
Investments and other financial assets		41.5			(k)(l)(m)		(2.5	)		(g)		4.3			43.3
Investments in companies under equity method		33.0			(m)		(6.1	)							26.9
Property, plant and equipment, net		216.0			(n)		(7.3	)		(a)		7.2			215.9
Goodwill and intangible assets, net		205.1			(n)		8.9			(f)		3.2			217.2
Total non-current assets		495.6					13.0					14.7			523.3
TOTAL ASSETS		879.4					7.4					22.4			909.2
LIABILITIES
Bank overdrafts		3.2					—								3.2
Current portion of financial debt		24.6					—								24.6
Trade accounts and notes payable		78.6					0.2								78.8
Accrued payroll costs		47.7					(0.4	)		(b)		0.2			47.5
Income tax payable		18.3					(1.4	)							16.9
Advance billings to customers		16.9					—								16.9
Provisions — current portion		—			(o)		20.1								20.1
Other current liabilities		44.8			(o)		(23.5	)							21.3
Total current liabilities		234.1					(5.0	)				0.2			229.3
Deferred tax liabilities		—			(l)		18.0					0.8			18.8
Provisions — non-current portion		—			(o)		13.6			(b)		(0.9	)		12.7
Financial debt		207.8			(h)		(5.4	)		(h)		(0.3	)		202.1
Other non-current liabilities		32.1			(l)(o)		(13.8	)							18.3
Total non-current liabilities		239.9					12.4					(0.4	)		251.9
Common stock		23.4					—								23.4
Additional paid-in-capital		292.7					—								292.7
Retained earnings		132.1			(c)		(51.6	)				14.2			94.7
Treasury shares		—					—			(d)		(0.8	)		(0.8	)
Income and expenses recognized directly in equity		—					—			(g)		9.2			9.2
Cumulative translation adjustment		(51.6	)		(c)		51.6								—
Total shareholders’ equity		396.6					—					22.6			419.2
Minority interests		8.8					—					—			8.8
Total shareholders’ equity and minority interests		405.4					—					22.6			428.0
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		879.4					7.4					22.4			909.2

F-52

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Information about IFRS restatements is disclosed in paragraph 1. Main IFRS restatements. Information about IFRS reclassifications is disclosed in paragraph 2. Main IFRS reclassifications.

Reconciliation of net income for the year ended at December 31, 2004

		French
		Accounting
		Principles			Ref.		Reclassifications			Ref.		Restatements			IFRS
		(in million of euros)
Operating revenues			692.7										(5.3	)		687.4
Other revenues of ordinary activities						(q)		0.4					—			0.4
Total revenues of ordinary activities			692.7					0.4					(5.3	)		687.8
Cost of operations			(556.0	)							(b)(f)		2.0			(554.0	)
Gross profit			136.7					0.4					(3.3	)		133.8
Research and development expenses, net			(33.5	)							(f)		4.7			(28.8	)
Selling, general and administrative expenses, net			(79.5	)		(h)		1.5			(a)(i)		(0.6	)		(78.6	)
Other revenues (expenses), net			12.0			(h)		4.3			(d)(g)		3.0			19.3
Operating income			35.7					6.2					3.8			45.7
Expenses related to financial debt						(h)		(29.6	)		(h)		(0.4	)		(30.0	)
Income provided by cash and cash equivalents						(h)		2.2								2.2
Cost of net financial debt						(h)		(27.4	)		(h)		(0.4	)		(27.8	)
Variance on derivative on convertible bonds											(h)		(23.5	)		(23.5	)
Other financial incomes (expenses), net						(p)		3.2			(c)(g)		(2.4	)		0.8
Financial incomes (expenses), net			(22.4	)		(q)		22.4								—
Exchange gains (losses), net			4.4			(p)		(4.4	)							—
Income before income taxes			17.7					—					(22.5	)		(4.8	)
Income taxes			(9.7	)									(1.2	)		(10.9	)
Income (loss) from consolidated companies			8.0					—			(e)(f)(j)		(23.7	)		(15.7	)
Equity in income of affiliates			10.3													10.3
Goodwill amortization			(6.2	)							(e)		6.2			—
Net income			12.1					—					(17.5	)		(5.4	)
Attributable to:
	— Shareholders		11.1					—					(17.5	)		(6.4	)
	— Minority interests		1.0					—					—			1.0

      Information about IFRS restatements is disclosed in paragraph 1. Main IFRS restatements.

      Information about IFRS reclassifications is disclosed in paragraph 2. Main IFRS reclassifications.

F-53

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Reconciliation of balance sheet at December 31, 2004

	French
	Accounting
ASSETS	Principles			Ref.		Reclassifications			Ref.		Restatements			IFRS
	(in millions of euros)
Cash and cash equivalents		130.8								(d)		(0.2	)		130.6
Trade accounts and notes receivable		191.7			(k)		13.1			(j)		(8.0	)		196.8
Inventories and work-in-progress		81.4					—			(j)		5.4			86.8
Income tax assets		—			(l)		4.0			(j)		0.2			4.2
Other current assets		58.3			(l)(h)		(14.9	)		(g)		5.3			48.7
Total current assets		462.2					2.2					2.7			467.1
Deferred tax assets		—			(l)		31.5								31.5
Investments and other financial assets		31.9			(k)(l)(m)		(19.4	)							12.5
Investments in companies under equity method		36.6			(m)		(5.8	)							30.8
Property, plant and equipment, net		204.5			(n)		(7.5	)		(a)		7.1			204.1
Goodwill and intangible assets, net		204.4			(n)		7.5			(e)(f)		13.3			225.2
Total non-current assets		477.4					6.3					20.4			504.1
TOTAL ASSETS		939.6					8.5					23.1			971.2
LIABILITIES
Bank overdrafts		2.8					—								2.8
Current portion of financial debt		73.1					—								73.1
Trade accounts and notes payable		97.8					0.5								98.3
Accrued payroll costs		47.8					(0.2	)							47.6
Income tax payable		24.9					(0.9	)							24.0
Advance billings to customers		13.2					—								13.2
Provisions — current portion		—			(o)		14.2								14.2
Other current liabilities		41.0			(o)		(18.2	)							22.8
Total current liabilities		300.6					(4.6	)							296.0
Deferred tax liabilities		—			(l)		24.5					2.2			26.7
Provisions — non-current portion		—			(o)		16.2			(b)		(0.2	)		16.0
Financial debt		194.1			(h)		(7.3	)		(h)		(10.3	)		176.5
Derivative on convertible bonds										(h)		33.9			33.9
Other non-current liabilities		40.1			(l)(o)		(20.3	)							19.8
Total non-current liabilities		234.2					13.1					25.6			272.9
Common stock		23.4					—								23.4
Additional paid-in-capital		173.4					—								173.4
Retained earnings		252.0			(c)		(52.2	)				14.7			214.5
Treasury shares		—					0.6			(d)		1.2			1.8
Net income — attributable to shareholders		11.1					—					(17.5	)		(6.4	)
Income and expenses recognized directly in equity		—					—			(g)		3.7			3.7
Cumulative translation adjustment		(64.2	)		(c)		51.6			(c)		(4.6	)		(17.2	)
Total shareholders’ equity		395.7					—					(2.5	)		393.2
Minority interests		9.1					—					—			9.1
Total shareholders’ equity and minority interests		404.8					—					(2.5	)		402.3
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		939.6					8.5					23.1			971.2

F-54

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Information about IFRS restatements is disclosed in paragraph 1. Main IFRS restatements.

      Information about IFRS reclassifications is disclosed in paragraph 2. Main IFRS reclassifications.

1.   Main IFRS restatements

          (a)  Tangible assets (IAS 16)

      Distinct components of a tangible asset are accounted for separately when its estimated useful life are materially different. We identified some components on certain constructions and the corresponding amortization was restated according to its specific useful life and its residual value in “Property, plan and equipment” at January 1, 2004, with a positive impact of €7.2 million on shareholders’ equity, as well as the depreciation expense for the year ended at December 31, 2004, with a negative impact of € 0.1 million in the income statement.

          (b)  Employee benefits (IAS 19)

      Actuarial gains and losses on pension and other post-employment benefit plans (IAS 19): cumulative unrecognized actuarial gains and losses on pension and other post-employment benefit plans at January 1, 2004 were recognized in shareholders’ equity in the opening balance sheet, with a positive impact of €0.7 million on shareholders’ equity, and the corresponding amortization of actuarial gains and losses for the year ending at December 31, 2004 was cancelled, with a negative impact of € 0.4 million in the income statement.

          (c)  Currency translation (IAS 21)

      The accumulated total of translation adjustments at January 1, 2004 were reversed against consolidated reserves, with no impact on shareholders’ equity. As a consequence, the loss related to the liquidation of Kantwell, corresponding to the cumulative currency translation adjustment of Kantwell at January 1, 2004 was cancelled in the income statement of the twelve-months period ending at December 31, 2004, with a positive impact of € 4.0 as Other financial incomes (expenses) in the income statement.

          (d)  Treasury shares (IAS 32)

      Treasury shares valued at their cost price were presented as a reduction of shareholders’ equity, with a negative impact of €0.8 million at January 1, 2004. Gains from the sale of such securities recognized in the income statement under French accounting principles for the year ended at December 31, 2004 were cancelled and recognized under shareholders’ equity, with a negative impact of € 1.4 million in the income statement.

          (e)  Goodwill amortization (IAS 36)

      Upon transition to IFRS, goodwill will no longer be amortized starting January 1, 2004. As a consequence the goodwill amortization expense for the twelve-months period ending at December 31, 2004 was reversed, with a positive impact of € 5.0 million net of deferred tax in the income statement.

          (f)  Development costs (IAS 38)

      As a consequence of the implementation of new rules of IAS 38 (Intangible assets) for capitalization of development costs with the retrospective method, development costs previously recognized as expenses under French accounting principles were capitalized as Intangible assets on January 1, 2004 with a positive impact of €2.4 million on shareholders’ equity. For the year ending at December 31, 2004, development costs previously recognized as Research and development expenses under French accounting principles and complying requirements for capitalization amounted to €4.7 million and were capitalized. A depreciation expense for capitalized development costs, amounting to €0.3 million was recognized as Cost of operations over the year ended at

F-55

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

December 31, 2004. The total impact of those adjustments, net of deferred tax was a positive impact of € 4.2 million in the income statement for the year ended at December 31, 2004.

      We implemented information systems to identify development costs that should be capitalized. Nevertheless, it was not possible to have a fully retrospective application of standard IAS 38, due to a lack of measurable information.

          (g)  Financial instruments (IAS 39)

      IAS standards 32 — 39 on financial instruments have been applied as from January 1, 2004.

      As a consequence, PGS investment was reassessed at its fair value at January 1, 2004 in Investments and other financial assets, with a positive impact on shareholders’ equity of €4.3 million. PGS was sold during the twelve months period ending December 31, 2004 and the € 4.3 million restatement was reversed directly in equity.

      Financial hedging instruments (forward exchange contracts) were reassessed at its fair value at January 1, 2004 in Other current assets, with a positive impact of €8.5 million euros, including €4.9 million unrealized gains recognized directly in equity for those financial instruments that qualified for hedge accounting as cash-flow hedge, and €3.6 million unrealized gains recognized in retained earnings for those financial instruments that did not qualify for hedge accounting. The total impact on shareholders’ equity was € 8.5 million euros at January 1, 2004.

      At December 31, 2004, financial hedging instruments (forward exchange contracts) were reassessed at its fair value for a total amount of €5.3 million euros in Other current assets. Thus, the negative variance of the fair value of financial hedging instruments for the twelve months period ending at December 31, 2004 amounted to €3.8 million, including a negative impact of €1.2 million recognized directly in equity for those financial instruments that qualified for hedge accounting as cash-flow hedge, and a negative impact of € 2.6 million recognized as Other financial incomes (expenses) in the income statement for those financial instruments that did not qualify for hedge accounting.

      Furthermore, the impact of forward exchange contracts that qualified for hedge accounting and that related to revenues recognized of the year ended at December 31, 2004 was reclassified from Other financial incomes (expenses) to Other revenues in Operating income, for a total amount of € 4.4 million.

          (h)  Financial debt (IAS 32 & IAS 39)

      Implementing IFRS (IAS 38) led us to reclassify issuance costs related to financial debt, previously presented as Other current assets, as a decrease in financial debt of €5.4 million at January 1, 2004 and of €7.3 million at December 31, 2004. For the year ended December 31, 2004, the amortization of issuance costs, calculated according to the straight-forward method, as well as the premium related to the redemption of bonds were reclassified as Cost of financial debt for a total amount of €5.8 million, previously recognized as Sales, General and Administrative expenses for €1.5 million and as Other expenses for €4.3 million. In addition, the amortization of issuance costs was reassessed according to the effective interest rate method over the lifetime of the debt with a negative impact on Cost of financial debt of € 0.4 million in the income statement for the year ended at December 31, 2004.

      The $85 million 7.75% convertible bonds due 2012 issued by CGG on November 4, 2004 (described in our Annual Report on Form 20F for the year ended December 31, 2004) were previously wholly accounted for as financial debt under French GAAP. Under IFRS, as the convertible bonds are denominated in U.S. dollars and convertible into new ordinary shares denominated in Euros, the embedded conversion option has been bifurcated and accounted separately within long-term liabilities. The conversion option and the debt component were initially recognized at fair value on issuance. Subsequent changes of the fair value of the embedded derivatives

F-56

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

have been booked to the consolidated income statement. As a result of bifurcating the embedded conversion option, the debt component of the convertible debt instrument was issued at a discount of € 10.5 million.

      The fair value of the debt had not changed significantly as of December 31, 2004 from the time it was issued in November 2004. The amount of the debt component to be recorded within the financial statements has been discounted at the rate of 10.75%, the rate borne by comparable indebtedness without a conversion option. This debt discount is amortized to interest expense until maturity of the convertible bonds.

      The fair value of the embedded derivative has been determined using a binomial model. The fair value increased from €10.4 million at the initial recognition of the debt to €33.9 million at December 31, 2004, principally as a result of an increase in the CGG share price. This resulted in aggregate expense of € 23.5 million on the year ended December 31, 2004, reflected in “Other financial expense”. The main assumptions used for the year-end valuation are an implicit volatility of 25%, a cost of share borrowing of 3% and a credit-risk premium of 4.5% at December 31, 2004.

          (i)  Stock-options (IFRS 2)

      Fair value of stock-options granted since November 7, 2002, previously not recognized under French accounting principles, was recognized under IFRS with a negative impact in the income statement of € 0.5 million for the year ended at December 31, 2004.

          (j)  Revenue recognition (IAS 11)

      The principles in applying the stage of completion method, as specified under IAS 11, have been carried out at December 31, 2004, with a reduction in Operating revenues of €5.3 million, a reduction in Cost of Operations of €2.7 million and a reduction in Income tax of € 0.2 million on the fiscal year ended December 31, 2004.

2.   Main IFRS reclassifications

     Balance sheet

          (a)  Long-term portion of trade accounts receivables

      Long-term portion of trade accounts receivables previously presented as Long-term receivables under French accounting principles was presented as Trade accounts receivables under IFRS.

          (b)  Income tax and deferred tax

      Income tax assets previously presented under Other current assets and income tax liabilities previously presented under Other current liabilities under French accounting principles were presented under IFRS as a separate caption in the balance sheet. Deferred tax assets previously presented under Other current assets or Long-term receivables and deferred tax liabilities previously presented under Other current liabilities or Other long-term liabilities under French accounting principles were presented under IFRS as a separate caption in the balance sheet.

          (c)  Advances to companies accounted for under equity method

      Advances to companies accounted for under equity method previously presented as Investments in and advances to companies under the equity method under French accounting principles were presented as Investments and other financial assets under IFRS.

F-57

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

          (d)  Computer software

      Computer software previously presented as Property, plant and equipment under French accounting principles was presented as Intangible assets under IFRS.

          (e)  Provisions

      Provisions previously presented under Other current liabilities or Other long-term liabilities under French accounting principles were presented under IFRS as a separate caption in the balance sheet.

     Profit and loss

          (a)  Exchange gains and losses

      Exchange gains and losses previously presented as a separate caption under French accounting principles were presented as Other financial income (expenses) under IFRS.

          (b)  Other revenues of ordinary activities

      Discounting on present value of long-term receivables previously presented as “Other financial income (expenses”) under French accounting principles are presented as “Other revenues from ordinary activities” under IFRS.

3.   Main IFRS impacts on cash-flow statement

	French
	gaaps			Reclassification(a)			Reclassification(b)			Reclassification(c)			Others			IFRS
	(amounts in millions of euros)
Net cash provided by operating activities		91.9			29.1			(2.2	)		7.9			0.2			126.9
Net cash from investing activities		(100.1	)											(0.7	)		(100.8	)
Net cash provided by financing activities		44.2			(29.1	)		2.0						0.5			17.6
Effect of exchange rates on cash		(1.6	)								(7.9	)					(9.5	)
Net increase (decrease) in cash and cash equivalents		34.4						(0.2	)								34.2
Cash and cash equivalents at beginning of year		96.4															96.4
Cash and cash equivalents at end of year		130.8						(0.2	)								130.6

(a)	Financial expenses paid
(b)	Treasury shares
(c)	Foreign exchange effect on cash and cash equivalents in USD

NOTE 31 — RECONCILIATION TO U.S. GAAP

A — SUMMARY OF DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES FOLLOWED BY THE GROUP AND U.S. GAAP

      The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union, which differ in certain significant respects from U.S. GAAP. These differences relate primarily to the following items, and the necessary adjustments are shown in the tables in section B below.

F-58

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Goodwill

      Under IFRS, we no longer amortize goodwill beginning January 1, 2004. Under US GAAP, we no longer amortize goodwill beginning January 1, 2002.

Deferred taxes

      Under IFRS, deferred tax assets or liabilities, related to non-monetary assets or liabilities that are remeasured from the local currency into the functional currency using historical exchange rates and that result from changes in exchange rates, are recognized.

      Under U.S. GAAP, deferred tax liabilities or assets are not recognized for differences related to assets and liabilities that, under FASB Statement N°52 (“Foreign Currency Translation”), are remeasured from the local currency into the functional currency using historical exchange rates and that result from changes in exchange rates.

Currency translation adjustment

      Under IFRS, the accumulated total of translation adjustments at January 1, 2004 has been reversed against consolidated reserves. As a consequence, all gains and losses linked to the currency translation adjustment on entities that are sold or that exit our scope of consolidation scope are computed on the basis of the restated currency translation adjustment.

      Under U.S. GAAP, historical values are maintained for currency translation adjustment and thus for calculation of gains and losses linked to the currency translation adjustment on entities that are sold or that exit our scope of consolidation.

Stock-based compensation

      Under IFRS, stock options granted to employees are included in the financial statements using the following principles: the stock option’s fair value is determined on the granting date and is recognized in personnel costs on a straight-line basis over the period between the grant date and the exercise date — corresponding to the vesting period. Stock option fair value is calculated using the Black-Scholes model, only for stock-options plans granted since November 7, 2002.

      Under US GAAP, CGG has decided to early adopt the FAS123 (R) standard and to apply the “modified prospective” method as of January 1st, 2005. Compensation costs for requisite services rendered over the period are recognised at their fair value through the income statement. This method applies to all plans granted by the group. At year end December 31, 2004, compensation costs on stock options plans granted to employee were valued as the excess if any, of the market price of the underlying shares at the date of grant over the exercise price of the option. This cost is recognised through income statement on all stock options plans granted by the Group (intrinsic value method). The restatement at fair value at year end December 31, 2004 of stock options granted to employees is presented in the pro forma disclosures.

Development costs

      Under IFRS, expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized if:

• the project is clearly defined, and costs are separately identified and reliably measured,

• the product or process is technically and commercially feasible,

• the Group has sufficient resources to complete development.

F-59

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      Under U.S. GAAP, all expenditures related to research and development are recognized as an expense in the income statement.

Convertible bonds

      For US GAAP purposes, as regards convertible bonds, there is an embedded derivative that can not be reliably assessed, corresponding to the early redemption clause (see note 12 to our consolidated annual financial statements). The probability of occurrence of this clause being uncertain, the related embedded derivative cannot be measured reliably and thus is not recognized by the Group in its U.S. GAAP financial statements.

Derivative instruments and hedging activity

      Under IFRS, long-term contracts in foreign currencies (primarily U.S. dollar) are not considered to include embedded derivatives when such contracts are routinely denominated in this currency (primarily U.S. dollars) in the industry.

      Under U.S. GAAP, such an exemption does not exist and embedded derivatives in long-term contracts in foreign currencies (primarily U.S. dollar) are recorded in the balance sheet at fair value. Revenues and expenses with a non-U.S. dollar client or supplier are recognized at the forward exchange rate negotiated at the beginning of the contract. The variation of fair market value of the embedded derivative foreign exchange contracts is recognized in the income statement in the line item “Other financial income (loss)”.

Comprehensive income

      Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. In our consolidated financial statements, the concept of comprehensive income corresponds to the caption Gains and losses directly recognized in equity in IFRS consolidated statements.

      In U.S. GAAP financial statements, comprehensive income and its components must be displayed in a statement of comprehensive income.

      For us, these statements include in addition to net income:

• changes in the cumulative translation adjustment related to consolidated foreign subsidiaries,

• changes in the fair value of derivative instruments designed as cash flow hedges meeting the criteria established by SFAS 133; and

• changes in the amount of the additional minimum pension liability due to actuarial losses.

F-60

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

B — RECONCILIATION OF NET INCOME AND SHAREHOLDERS’ EQUITY TO U.S. GAAP

Consolidated Net Income^(a)

	December 31,
	2005			2004
				(restated)
	(in millions
	of euros)
Net loss) as reported in Consolidated Statements of operations		(7.8	)		(6.4	)
Deferred tax (FAS 109)		2.7			(3.4	)
Loss on extinguishment of debt (APB 26)		(2.8	)		2.8
Stock options		(1.5	)		0.3
Cancellation of IFRS long-term contracts adjustment		(2.4	)		2.4
Cancellation of IFRS tangible assets adjustment		0.2			0.1
Cancellation of IFRS currency translation adjustment		3.6			(4.0	)
Cancellation of IFRS capitalization of development costs		(6.1	)		(4.2	)
Available for sale security (FAS 115)		—			1.3
Derivative instruments (FAS 133)		22.4			(9.1	)
Net income (loss) under U.S. GAAP		8.3			(20.2	)

(a) Restatements are presented net of tax..

Shareholders’ equity

	December 31,
	2005			2004
				(restated)
	(in millions
	of euros)
Shareholders’ equity as reported in the Consolidated Balance Sheets		698.5			393.2
Goodwill amortization (FAS 142)		13.4	(b)		12.6	(b)
Deferred tax (FAS 109)		(8.3	) (b)		(9.6	)(b)
Loss on extinguishment of debt (APB 26)		—			2.8
Stock options		(2.5	)		(0.6	)
Cancellation of IFRS long-term contracts adjustment		—			2.4
Cancellation of IFRS tangible assets adjustment		(6.9	)		(7.1	)
Cancellation of IFRS capitalization of development costs		(13.6	)		(6.5	)
Derivative instruments (FAS 133)		8.9			(15.0	)
Shareholders’ equity under U.S. GAAP		689.5			372.2

(a)	All adjustments disclosed above are net of tax effects, if applicable.
(b)	This amount is net of currency translation adjustment effect.

F-61

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

CONDENSED US GAAP INCOME STATEMENT AND BALANCE SHEET

Condensed US GAAP income statement

		December 31,
		2005			2004
		(amounts in millions of euros
		except per share data)
Operating revenues			860.8			709.5
Cost of operations			(665.4	)		(559.5	)
Gross profit			195.4			150.0
Research and development expenses — net			(39.3	)		(33.5	)
Selling, general and administrative expenses			(92.7	)		(79.7	)
Other revenues (expenses) — net			(1.5	)		18.2
Operating income (loss)			61.9			55.0
Cost of financial debt, net			(46.6	)		(22.4	)
Variance on derivative on convertible bonds			(11.5	)		(23.5	)
Other financial income (loss)			14.7			(23.6	)
Equity in income (losses) of affiliates			13.0			10.3
Income (loss) of consolidated companies before income taxes and minority interests			31.5			(4.2	)
Income taxes			(22.2	)		(15.0	)
Minority interests			(1.0	)		(1.0	)
Net income (loss)			8.3			(20.2	)
Dilutive weighted average number of shares outstanding			12,095,925			11,681,406
Dilutive potential shares from stock-options(1)			261,855			83,211
Dilutive potential shares from convertible bonds(2)			252,500			233,333
Adjusted weighted average shares and assumed option exercises when dilutive			12,357,779			11,681,406
Net income (loss) per share
	Basic for shareholder		0.69			(1.73	)
	Diluted for shareholder		0.67			(1.73	)

(1)	anti-dilutive for year ended at December 31, 2004.
(2)	anti-dilutive for years ended at December 31, 2004 and December 31, 2005.

F-62

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Condensed US GAAP balance sheet

	December 31,
	2005		2004
	(amounts in
	millions of euros)
ASSETS
Current assets		608.5		480.2
Long-term assets		965.4		495.6
Total Assets		1,573.8		975.8
LIABILITIES
Current liabilities		509.9		325.8
Long term liabilities		362.7		268.6
Minority interests		11.7		9.1
Shareholders equity		689.5		372.2
Total Liabilities		1,573.8		975.8

Statement of Comprehensive income (loss)^(a)

	December 31,
	2005			2004
	(in million
	of euros)
Net income (loss) under US GAAP		8.3			(20.2	)
Other comprehensive income (loss)
— Changes in the cumulative translation adjustment		23.3			(13.6	)
— Changes in the fair value of available-for-sale securities		—			(7.8	)
— Changes in the fair value of derivative instruments		(4.1	)		(2.8	)
Comprehensive income (loss) under U.S. GAAP		27.5			(43.1	)

(a) All adjustments disclosed above are net of tax effects, if applicable.

Statement of Accumulated Other Comprehensive Loss^(a)

	December 31,
	2005			2004
	(in million
	of euros)
— Cumulative Translation adjustment		(41.9	)		(65.2	)
— Fair value of derivative instruments		(1.4	)		2.7
Accumulated Other Comprehensive loss under U.S. GAAP		(43.3	)		(62.5	)

(a) All adjustments disclosed above are net of tax effects, if applicable.

C — ADDITIONAL U.S. GAAP DISCLOSURES

Stock option plans

      No stock-options were granted in 2004 and 2005.

F-63

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

      For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense on a straight-line basis over the options’ vesting period. The Company’s pro forma information is detailed below:

		December 31, 2004
		(in millions of
		euros except for
		income (loss) per
		share information)
Net loss, as reported		€	(20.2	)
Add: total stock-based employee compensation expense included in reported net income, net of related tax effect			0.2
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(3.8	)
Pro forma U.S. GAAP net loss			(23.8	)
Earnings per share:
	Basic for common stock holder — as reported		(1.73	)
	Basic for common stock holder — pro forma		(2.03	)
	Diluted for common stock holder — as reported		(1.73	)
	Diluted for common stock holder — pro forma		(2.03	)

      The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the existing model, in management’s opinion, does not necessarily provide a single measure of the fair value of its employee stock options.

Derivative financial instruments

     Fair Value Hedge and Cash Flow Hedge

      The ineffectiveness of cash-flow hedges for the year 2005 and 2004 amounted to €23.7 million and € (13) million respectively, and is reported in the “Exchange gains (losses), net” line item of the condensed statements of operations.

      Gains/(losses) accumulated in Comprehensive income were €(1.4) million and € 2.7 million as of December 31, 2005 and 2004.

     Hedge of the net investment in a foreign operation

      A portion of the amount of our outstanding bond denominated in U.S. dollar and of our bridge loan credit facility has been designated as a hedge of the investment in U.S. dollar. The net amount of gains/(losses) that has been included in the cumulative translation adjustment was €(22.0) million and € 4.9 million during the year 2005 and 2004 respectively.

F-64

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

Restructuring plan

      The evolution of the restructuring reserve under U.S. GAAP during the year ended December 31, 2005, related to the Land SBU restructuring plan initiated after December 31, 2003 was as follows:

	Year ended December 31, 2005
	Balance at											Balance at
	beginning of				Deductions		Deductions					end of
	year		Additions		(used)		(unused)			Other(a)		year
	(in millions of euros)
Termination benefits		0.4		0.2		—		—			—		0.6
Other associated costs		0.5		0.1		—		(0.4	)		—		0.2
Total		0.9		0.3		—		(0.4	)		—		0.8

(a) Includes the effects of exchange rate changes

      The evolution of the restructuring reserve under U.S. GAAP during the year ended December 31, 2004, related to the Land SBU restructuring plan initiated after December 31, 2003 was as follows:

	Year ended December 31, 2004
	Balance at												Balance at
	beginning of				Deductions			Deductions					end of
	year		Additions		(used)			(unused)			Other(a)		year
	(in millions of euros)
Termination benefits		10.8		—		(10.4	)					—		0.4
Contract termination costs		0.6		—		(0.4	)		(0.2	)		—		0.0
Other associated costs		0.7		—		(0.2	)		—			—		0.5
Total		12.1		—		(11.0	)		—			—		0.9

(a) Includes the effects of exchange rate changes

      The major type of costs associated with the exit or disposal activities of our Services segment initiated in 2003 are presented as follows:

	Total				Cumulative
	amount		Amount incurred		amount incurred
	expected		as of Dec. 31, 2005		as of Dec. 31, 2005
	(in millions of euros)
Termination benefits		10.8		—		10.4
Contract termination costs		0.4		—		0.4
Other associated costs		1.6		—		1.1
Total		12.8		—		11.8

Recently issued U.S. accounting pronouncements

     FASB Interpretation No. 47 “Accounting for Conditional Asset Retirement Obligations”

      In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (“FIN 47”). FIN 47 clarifies that an entity must record a liability for a “conditional” asset retirement obligation if the fair value of the obligation can be reasonably estimated. The adoption of FIN 47 did not have a material effect on our financial condition or results of operations.

F-65

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

     SFAS No. 151, “Inventory Costs an amendment of ARB No. 43, Chapter 4”

      In November 2004, the FASB issued SFAS No. 151, “Inventory Costs an amendment of ARB No. 43, Chapter 4.” SFAS No. 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and requires the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. The Group does not expect the adoption of SFAS No. 151 to have a material effect on our consolidated financial position or results of operations.

     Events occurred subsequently to the closing of IFRS financial statements

      On March 13, 2006, CGG Marine Resources Norge AS concluded a medium term financing agreement for U.S.$26.5 million with a bank. The purpose of this agreement is to finance the acquisition of newly-developed “Sentinel” streamers for the Offshore business. This financing is guaranteed by a pledge on the equipment.

      On March 27, 2006, the Group signed a Memorandum of Understanding with Industrialization & Energy Services Company (TAQA), its long term Saudi Partner in ARGAS. By this Agreement TAQA will acquire 49% of the capital of CGG Ardiseis, a newly formed CGG subsidiary dedicated to Land & Shallow Water Seismic Data Acquisition in the Middle East. CGG will hold the remaining 51%. CGG Ardiseis, whose headquarters are located in Dubai, will provide its clients with the whole range of CGG Land and Shallow Water Acquisition Services, focusing on Eye-D, the latest CGG technology for full 3D seismic imaging. As part of the Agreement, CGG Ardiseis activities in the Gulf Cooperation Council (GCC) countries will be exclusively operated by ARGAS (Arabian Geophysical and Surveying Company), which is 51% owned by TAQA and 49% by CGG.

      On March 29, 2006, Exploration Resources concluded a credit facility of U.S.$70 million. The proceeds from this credit facility will finance seismic equipment for the vessels “C-Orion” and “Geo-Challenger” and the conversion of the “Geo-Challenger” from a cable laying vessel to a 3D seismic vessel.

      On March 31, 2006, the Norwegian government decided not to award production licenses on blocks where the survey Moere is located. As this decision is changing previous estimate of future sales, this € 4.6 million survey will be fully depreciated at March 31, 2006.

F-66

COMPAGNIE GENERALE DE GEOPHYSIQUE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

D — CONDENSED CONSOLIDATING INFORMATION FOR CERTAIN SUBSIDIARIES

      The following table presents condensed consolidating financial information in IFRS for the Company, on the one hand, and CGG Canada Services Ltd, CGG Americas, Inc., CGG Marine Resources Norge A/ S, Sercel Inc., Sercel Australia Pty Ltd and Sercel Canada Ltd, taken as a group (the “Subsidiary Group”), on the other hand, as of and for the years ended December 31, 2005 and 2004. The column “Sercel Subsidiary Group” includes Sercel Inc., Sercel Australia Pty Ltd and Sercel Canada Ltd.

														Sercel
				Subsidiary				Consolidating						Subsidiary
IFRS	CGG			Group		Others		adjustments			Consolidated			Group
	(in € millions)
2005
Total assets		799.8			600.3		1,082.5		(917.5	)		1,565.1			205.9
Operating revenues		221.3			307.5		668.9		(327.8	)		869.9			146.5
Operating income (loss)		(26.4	)		60.7		76.6		(35.8	)		75.1			10.9
Net income (loss)		(29.5	)		37.0		108.3		(122.6	)		(6.8	)		6.3
2004
Total assets		623.6			341.7		718.3		(712.4	)		971.2			150.8
Operating revenues		190.7			227.8		589.6		(320.7	)		687.4			104.8
Operating income (loss)		(45.2	)		36.2		64.5		(9.8	)		45.7			6.8
Net income (loss)		(38.2	)		31.7		78.7		(77.6	)		(5.4	)		14.2

F-67

Arabian Geophysical & Surveying Company Limited

FINANCIAL STATEMENTS

31 DECEMBER 2005

F-68

AUDITORS’ REPORT TO THE PARTNERS OF

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

      We have audited the accompanying balance sheet of Arabian Geophysical & Surveying Company Limited, expressed in Saudi Riyals, as of 31 December 2005, 2004 and 2003 and the related statements of income, cash flows and changes in partners’ equity for the years then ended. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

      We conducted our audit in accordance with generally accepted auditing standards in the Kingdom of Saudi Arabia, which are substantially the same as those followed in the United States of America. 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 that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Arabian Geophysical & Surveying Company Limited, as of 31 December 2005, 2004 and 2003 and the results of its operations and its cash flows for the years then ended in conformity with accounting standards generally accepted in the Kingdom of Saudi Arabia.

      Accounting principles generally accepted in the Kingdom of Saudi Arabia vary in certain significant respects from accounting principles generally accepted in the United States of America. The significant differences between the accounting principles generally accepted in the Kingdom of Saudi Arabia and those generally accepted in the United States of America so far as concerns the financial statements referred to are summarised in note 20 to the accompanying financial statements.

for Ernst & Young

Abdulaziz Saud Alshubaibi

Certified Public Accountant

Saudi Registration No. 339

Alkhobar, Saudi Arabia

26 January 2006

F-69

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

BALANCE SHEET

			As at 31 December 2005
	Note		2005		2004		2003
			SR		SR		SR
ASSETS EMPLOYED
PROPERTY AND EQUIPMENT		3		148,187,403		121,111,759		174,344,719
CURRENT ASSETS
Inventories		4		11,181,732		7,961,714		4,890,999
Accounts receivable and prepayments		5		127,578,318		101,800,723		85,954,484
Bank balances and cash				115,622,483		104,151,363		85,090,860
				254,382,533		213,913,800		175,936,343
CURRENT LIABILITIES
Accounts payable and accruals		6		22,433,138		12,078,475		29,952,747
Current portion of term loans		7		—		—		30,900,000
Zakat and income tax payable		8		15,908,684		17,166,077		12,390,391
				38,341,822		29,244,552		73,243,138
NET CURRENT ASSETS				216,040,711		184,669,248		102,693,205
				364,228,114		305,781,007		277,037,924
FUNDS EMPLOYED
PARTNERS’ EQUITY
Capital		9		36,000,000		36,000,000		36,000,000
Statutory reserve		10		18,000,000		18,000,000		18,000,000
General reserve		11		4,646,910		4,646,910		4,646,910
Capital reserve		12		13,999,304		13,392,139		6,961,297
Reserve for employees’ training		13		3,000,000		3,000,000		3,000,000
Retained earnings				272,939,576		217,433,007		162,775,989
				348,585,790		292,472,056		231,384,196
NON CURRENT LIABILITIES
Term loans		7		—		—		34,866,667
Employees’ terminal benefits				15,642,324		13,308,951		10,787,061
				15,642,324		13,308,951		45,653,728
				364,228,114		305,781,007		277,037,924

The attached notes 1 to 20 form part of these financial statements.

F-70

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

INCOME STATEMENT

			Year ended 31 December 2005
	Note		2005			2004			2003
			SR			SR			SR
Contracts revenue				359,398,833			324,889,670			306,295,873
Operating costs				(262,462,397	)		(227,316,493	)		(223,800,880	)
GROSS PROFIT				96.936,436			97,573,177			82,494,993
General and administration expenses		14		(5,253,509	)		(4,870,222	)		(5,038,543	)
INCOME FROM MAIN OPERATIONS				91,682,927			92,702,955			77,456,450
Other income		15		4,439,959			7,778,330			812,163
Other expenses		16		—			(40,740	)		(1,150,521	)
Financial charges				(9,152	)		(1,352,685	)		(3,633,632	)
NET INCOME FOR THE YEAR				96,113,734			99,087,860			73,484,460

The attached notes 1 to 20 form part of these financial statements.

F-71

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

STATEMENT OF CASH FLOWS

		Year ended 31 December 2005
		2005			2004			2003
		SR			SR			SR
OPERATING ACTIVITIES
Net income for the year			96,113,734			99,087,860			73,484,460
Adjustments for:
	Depreciation		76,023,171			62,855,322			64,333,171
	(Profit)/loss on sale of property and equipment		(607,165	)		(6,430,842	)		858,820
			171,529,740			155,512,340			138,676,451
Changes in operating assets and liabilities:
	Inventories		(3,220,018	)		(3,070,715	)		1,418,358
	Receivables		(25,777,595	)		(15,846,239	)		31,543,715
	Payables		26,270,446			18,880,156			10,241,576
Cash from operations			168,802,573			155,475,542			181,880,100
Employees’ terminal benefits, net			2,333,373			2,521,890			2,350,914
Zakat and income tax paid			(17,173,176	)		(12,598,742	)		(11,424,355	)
Net cash from operating activities			153,962,770			145,398,690			172,806,659
INVESTING ACTIVITIES
Purchase of property and equipment			(103,265,814	)		(10,789,409	)		(13,436,425	)
Proceeds from sale of property and equipment			774,164			7,597,889			6,365,240
Net cash used in investing activities			(102,491,650	)		(3,191,520	)		(7,071,185	)
FINANCING ACTIVITIES
Term loans, net			—			(65,766,667	)		(111,650,000	)
Dividends paid			(40,000,000	)		(57,380,000	)		(18,620,000	)
Net cash used in financing activities			(40,000,000	)		(123,146,667	)		(130,270,000	)
INCREASE IN BANK BALANCES AND CASH			11,471,120			19,060,503			35,465,474
Bank balances and cash at the beginning of the year			104,151,363			85,090,860			49,625,386
BANK BALANCES AND CASH AT THE END OF THE YEAR			115,622,483			104,151,363			85,090,860

The attached notes 1 to 20 form part of these financial statements.

F-72

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

STATEMENT OF CHANGES IN PARTNERS’ EQUITY

	Year ended 31 December 2005
										Reserve for
			Statutory		General		Capital			employees’			Retained
	Capital		reserve		reserve		reserve			training			earnings			Total
	SR		SR		SR		SR			SR			SR			SR
Balance at 31 December 2002		36,000,000		18,000,000		4,646,910		7,820,117			3,000,000			126,432,709			195,899,736
Net income for the year		—		—		—		—			—			73,484,460			73,484,460
Provision for zakat and income tax (note 8)		—		—		—		—			—			(12.390,391	)		(12,390,391	)
Zakat and income tax reimburseable by the partners		—		—		—		—			—			12,390,391			12,390,391
Transfer from capital reserve (note 12)		—		—		—		(858,820	)		—			858,820			—
Transfer to retained earnings		—		—		—		—			(2,134,170	)		2.134,170			—
Transfer to reserve for employees’ training (note 13)		—		—		—		—			2,134,170			(2,134,170	)		—
Dividends relating to 2002		—		—		—		—			—			(38,000,000	)		(38,000,000	)
Balance at 31 December 2003		36,000,000		18,000,000		4,646,910		6,961,297			3,000,000			162,775,989			231,384,196
Net income for the year		—		—		—		—			—			99,087,860			99,087,860
Provision for zakat and income tax (note 8)		—		—		—		—			—			(17,374,428	)		(17,374,428	)
Zakat and income tax reimburseable by the partners		—		—		—		—			—			17,374,428			17,374,428
Transfer to capital reserve (note 12)		—		—		—		6,430,842			—			(6,430,842	)		—
Transfer to retained earnings		—		—		—		—			(2,077,836	)		2,077,836			—
Transfer to reserve for employees’ training (note 13)		—		—		—		—			2,077,836			(2,077,836	)		—
Dividends relating to 2003		—		—		—		—			—			(38,000,000	)		(38,000,000	)
Balance at 31 December 2004		36,000,000		18,000,000		4,646,910		13,392,139			3,000,000			217,433,007			292,472,056
Net income for the year		—		—		—		—			—			96,113,734			96,113,734
Provision for zakat and income tax (note 8)		—		—		—		—			—			(15,915,783	)		(15,915,783	)
Zakat and income tax reimburseable by the partners		—		—		—		—			—			15,915,783			15,915,783
Transfer to capital reserve (note 12)		—		—		—		607,165			—			(607,165	)		—
Transfer to retained earnings		—		—		—		—			(1,730,387	)		1,730,387			—
Transfer to reserve for employees’ training (note 13)		—		—		—		—			1,730,387			(1,730,387	)		—
Dividends relating to 2004		—		—		—		—			—			(40,000,000	)		(40,000,000	)
Balance at 31 December 2005		36,000,000		18,000,000		4,646,910		13,999,304			3,000,000			272,939,576			348,585,790

The attached notes 1 to 20 form part of these financial statements.

F-73

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

31 December 2005

1     ACTIVITIES

      The company is a Limited Liability Company registered in Saudi Arabia under Commercial Registration number 2051001444 dated 28 Muharram 1389H corresponding to 15 March 1969.

      The company is engaged in geophysical and related activities necessary for the exploration and development of hydro-carbons.

      The company is owned 51% by Industrialisation and Energy Services Company, a (closed) joint stock company registered in Saudi Arabia and 49% by Compagnie Generale de Geophysique (CGG), a company registered in France.

2     SIGNIFICANT ACCOUNTING POLICIES

      The financial statements have been prepared in accordance with accounting standards generally accepted in the Kingdom of Saudi Arabia. The significant accounting policies adopted are as follows:

Accounting convention

      The financial statements are prepared under the historical cost convention.

Depreciation

      Freehold land is not depreciated. All property and equipment are initially recorded at cost. Depreciation is provided on all property and equipment on a straight line basis at rates calculated to write off the cost of each asset over its expected useful life.

Inventories

      Inventories are valued at the lower of cost and net realisable value after making due allowance for any obsolete or slow moving items. Cost is determined on a first-in first-out basis (see note 4).

Zakat and income tax

      Zakat and income tax are provided for in accordance with Saudi Arabian fiscal regulations. The liability is charged to retained earnings. Accordingly, any reimbursements by the partners of such zakat and income tax are credited to retained earnings.

Employees’ terminal benefits

      Provision is made for amounts payable under the Saudi Arabian labour law applicable to employees’ accumulated periods of service at the balance sheet date.

Contract revenue and profit recognition

      Contract revenues represents the value of work performed, which comprise the billed and accrued, value of work executed by the company during the year. The value of work performed but not billed at the balance sheet date is treated as unbilled receivable.

F-74

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (continued)

Foreign currencies

      Transactions in foreign currencies are recorded in Saudi Riyals at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the statement of income.

Expenses

      Employee related costs, depreciation and training expenses are charged to operating costs. All other expenses are classified as general and administration expenses.

3     PROPERTY AND EQUIPMENT

      The estimated useful lives of the assets for the calculation of depreciation are as follows:

Camp and Geophysical equipment	3 to 5 years (2004: 51/3  years)
Vehicles	4 to 5 years (2004: 4 to 51/3  years)
Others	4 to 5 years (2004: 51/3  years)

				Camp and
		Freehold		Geophysical									Total			Total			Total
		land		equipment			Vehicles			Others			2005			2004			2003
		SR		SR			SR			SR			SR			SR			SR
Cost:
	At the beginning of the year		1,382,000		366,802,316			58,922,918			4,215,639			431,322,873			457,716,818			521,502,125
	Additions		9,512,745		76,520,246			17,077,632			155,191			103,265,814			10,789,409			13,436,425
	Disposals		—		(14,816,565	)		(1,064,266	)		(60,620	)		(15,941,451	)		(37,183,354	)		(77,221,732	)
	At the end of the year		10,894,745		428,505,997			74,936,284			4,310,210			518,647,236			431,322,873			457,716,818
Accumulated depreciation:
	At the beginning of the year		—		256,770,716			50,125,766			3,314,632			310,211,114			283,372,099			289,036,600
	Charge for the year		—		70,992,252			4,691,143			339,776			76,023,171			62,855,322			64,333,171
	Disposals		—		(14,649,584	)		(1,064,251	)		(60,617	)		(15,774,452	)		(36,016,307	)		(69,997,672	)
	At the end of the year		—		313,113,384			53,752,658			3,593,791			370,459,833			310,211,114			283,372,009
Net book amounts:
	At 31 December 2005		10,894,745		115,392,613			21,183,626			716,419			148,187,403
	At 31 December 2004		1,382,000		110,031,600			8,797,152			901,007						121,111,759
	At 31 December 2003		1,382,000		163,572,447			8,508,014			882,258									174,344,719

      During the year, the company changed its accounting estimate in respect of the useful lives of property and equipment to properly reflect the remaining useful life of the assets. The change resulted in an increase in depreciation charge for the year by approximately SR 9 million, consequently the income for the year is reduced by the same amount. This change in depreciation rates also has an affect on the net income of future periods up to 2010.

4     INVENTORIES

	2005		2004		2003
	SR		SR		SR
Equipment spares and others		8,535,353		6,697,432		4,813,651
Goods in transit		2,646,379		1,264,282		77,348
		11,181,732		7,961,714		4,890,999

F-75

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (continued)

      Saudi Arabian accounting standards require that the cost of inventories should be determined using the weighted average method. The company is in the process of changing its computer system to enable it to use the weighted average method. In the meantime, the cost of inventories has been determined on a first-in first-out method. It is estimated that if the company had used the weighted average method, the cost of inventories would not have been materially different.

      Inventories are held for internal use only and are not intended for resale.

5     ACCOUNTS RECEIVABLE AND PREPAYMENTS

	2005		2004		2003
	SR		SR		SR
Trade accounts receivable		57,120,568		48,034,478		24,033,667
Retentions receivable		41,892,370		35,159,374		51,263,358
Amounts due from partners (note 17)		14,996,318		16,856,091		7,617,984
Unbilled receivables		7,596,342		—		—
Advances to suppliers		1,661,670		208,164		723,577
Other receivables		1,843,450		307,976		996,515
Prepaid expenses		2,467,600		1,234,640		1,319,383
		127,578,318		101,800,723		85,954,484

      All services rendered by the company during the year were to two customers under four contracts (2004: one customer under three contracts). All trade accounts receivable are due from these two customers and all retentions receivable are due from one of these customers. The customers would normally pay the amount billed within 30 to 60 days of the date of the invoice and the balance, held as retentions, upon submission of zakat and income tax clearance certificate for the relevant year.

      Amounts due from the partners represents SR 2,652,675 (2004: SR 2,478,777 and 2003: Nil) due from the Saudi partner and SR 13,256,542 (2004: SR 14,894,518 and 2003: SR 11,100,507) from CGG (less any pending amount due to the partner) in respect of zakat and income tax respectively (see note 8).

6     ACCOUNTS PAYABLE AND ACCRUALS

	2005		2004		2003
	SR		SR		SR
Trade accounts payable		10,943,801		6,718,682		6,583,563
Amount due to a partner		—		—		17,051,226
Amounts due to affiliates (note 17)		1,268,815		293,909		826,766
Accrued expenses		8,083,410		3,967,197		4,209,785
Other payables		2,137,112		1,098,687		1,281,407
		22,433,138		12,078,475		29,952,747

      According to the terms offered by the suppliers, trade accounts payable are normally settled within 30 to 100 days of the date of invoice.

      In 2003, amount due to a partner represented dividend payable of SR 19,380,000 to the Saudi partner (less amount due from the partner in respect of zakat).

F-76

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (continued)

7     TERM LOANS

	2005		2004		2003
	SR		SR		SR
Bank loans		—		—		65,766,667
Less: Non current portion		—		—		34,866,667
Current portion		—		—		30,900,000

8     ZAKAT AND INCOME TAX

a)  Zakat

      The zakat provision relating to the Saudi partner consists of:

	2005		2004		2003
	SR		SR		SR
Provision for the year		2,652,142		2,271,559		1,289,884
Prior years		567		207,308		143
Charge for the year		2,652,709		2,478,867		1,290,027

      The Saudi partner’s provision is based on his share as follows:

	2005			2004			2003
	SR			SR			SR
Equity		127,230,749			98,625,940			99,908,866
Opening provisions and other adjustments		8,317,565			5,501,401			4,302,435
Book value of long term assets		(98,450,756	)		(65,182,687	)		(91,370,769	)
		37,097,558			38,944,654			12,840,532
Zakatable income for the year		68,988,128			51,917,716			38,754,818
Zakat base		106,085,686			90,862,370			51,595,350

b)  Income tax

      The income tax provision relating to the foreign partner consists of:

	2005		2004		2003
	SR		SR		SR
Provision for the year		13,256,542		14,894,518		11,100,507
Prior year		6,532		1,043		1,646
Charge for the year		13,263,074		14,895,561		11,102,153

      Income tax has been provided for based on the estimated taxable income at 20% (2004 and 2003: various rates up to 30%).

      The differences between the financial and taxable/ zakatable income are mainly due to adjustments for certain costs/ claims based on the relevant fiscal regulations.

F-77

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (continued)

c)     Movement in provision

      The movement in the zakat and income tax provision was as follows:

	2005			2004			2003
	SR			SR			SR
At the beginning of the year		17,166,077			12,390,391			11,422,566
Provided during the year		15,915,783			17,374,428			12,392,180
Payments during the year		(17,173,176	)		(12,598,742	)		(11,424,355	)
At the end of the year		15,908,684			17,166,077			12,390,391

d)     Status of assessments

      Zakat and income tax assessments have been agreed with the Department of Zakat and Income Tax (DZIT) up to 1991 and from 1994 to 1996. Decisions for the years 1992 and 1993 have been received from the Higher Appeal Committee (HAC) and the company is awaiting for the revised assessment from the DZIT. A revised assessment for the years 1997 to 2000 has been raised by the DZIT showing an overpayment of SR 1 million. An amended assessment from the DZIT is awaited after correction of an error in the revised assessment. Assessment for the years 2001 and 2002 has also been received from the DZIT demanding an additional amount of SR 4.6 million. The company has appealed against this assessment.

      Assessments for the years 2003 and 2004 have not yet been received.

9     CAPITAL

      Capital is divided into 36,000 authorised, issued and fully paid up shares of SR 1,000 each (2004 and 2003: 36,000 shares).

10     STATUTORY RESERVE

      In accordance with Saudi Arabian Regulations for Companies, the company must set aside 10% of its net income in each year until it has built up a reserve equal to one half of the capital. This having been achieved, the company has resolved to discontinue such transfers. The reserve is not available for distribution.

11     GENERAL RESERVE

      There are no restrictions on the distribution of this reserve.

12     CAPITAL RESERVE

      An amount equal to the profit on disposal of property, plant and equipment is transferred from retained earnings to capital reserve and vice versa in case of loss. Although the capital reserve is a free reserve, yet it is not intended to be distributed.

F-78

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (continued)

13     RESERVE FOR EMPLOYEES’ TRAINING

	2005			2004			2003
	SR			SR			SR
At the beginning of the year		3,000,000			3,000,000			3,000,000
Transfer to retained earnings		(1,730,387	)		(2,077,836	)		(2,134,170	)
Transfer from retained earnings		1,730,387			2,077,836			2,134,170
At the end of the year		3,000,000			3,000,000			3,000,000

      In accordance with the company’s articles of association, the company can allocate up to 10% of the net income for the year, subject to a maximum accumulation of SR 3 million, for training programmes for Saudi Arabian nationals.

      An amount equal to expenses incurred on training during the year has been transferred to retained earnings.

14     GENERAL AND ADMINISTRATION EXPENSES

	2005		2004		2003
	SR		SR		SR
Rent		1,082,246		1,178,503		1,271,583
Printing and stationery		1,014,003		872,659		886,376
Postage, fax and telephone		570,271		587,883		642,201
Other		2,586,989		2,231,177		2,238,383
		5,253,509		4,870,222		5,038,543

15     OTHER INCOME

	2005		2004		2003
	SR		SR		SR
Profit on sale of plant and equipment		607,165		6,430,842		—
Income from bank deposits		3,748,749		1,347,488		812,163
Other		84,045		—		—
		4,439,959		7,778,330		812,163

16     OTHER EXPENSES

	2005		2004		2003
	SR		SR		SR
Loss on sale of plant and equipment		—		—		858,820
Exchange loss		—		40,740		291,701
		—		40,740		1,150,521

17     RELATED PARTY TRANSACTIONS

      In the ordinary course of its business activities, the company transacts with its affiliates. Such transactions mainly relate to purchase of fixed assets and equipment spares. During the year, SR 31.2 million (2004: SR 3.3 million and 2003: SR 5.9 million) of the company’s geophysical equipment has been acquired from affiliates. The company also acquired SR 5.6 million (2004: SR 4.5 million and 2003: SR 5.2 million) of its

F-79

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (continued)

equipment spares and services requirements from its affiliates. Prices and terms of payments of these transactions are approved by the management. Amounts due from and due to the partners and affiliates are disclosed in notes 5 and 6, respectively.

18     CAPITAL COMMITMENTS

      The directors have authorised future capital expenditure amounting to SR 33 million (2004: SR 6.5 million and 2003: SR 8.6 million).

19     CONTINGENT LIABILITY

      The company’s banker has issued payment guarantees to the DZIT amounting to SR 9,129,001 (2004: SR 9,129,001 and 2003: SR 9,129,001). The bankers of the foreign partner have provided counter guarantees to the company’s banker on its behalf.

20 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES FOLLOWED BY THE COMPANY AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

      The financial statements of the company have been prepared in accordance with accounting standards generally accepted in the Kingdom of Saudi Arabia. For purposes of these financial statements, the following are the significant (recognition, measurement, presentation and disclosure) differences between the company’s accounting principles used and United States Generally Accepted Accounting Principles (US GAAP).

a. Following is a reconciliation of net income to US GAAP:

		2005			2004			2003
		SR			SR			SR
Net income under Saudi accounting standards			96,113,734			99,087,860			73,484,460
US GAAP adjustments:
	Provision for zakat and income tax (note 8(c))		(15,915,783	)		(17,374,428	)		(12,390,391	)
	Net over payment of zakat and income tax (refer below)		904,631			—			—
	Deferred tax adjustment for the year		3,787,829			43,367			84,968
Net income under US GAAP			84,890,411			81,756,799			61,179,037
Difference in net income between Saudi Standards and US GAAP			11,223,323			17,331,061			12,305,423
Difference in partners’ equity between Saudi Accounting Standards and US GAAP (due to cumulative effect of current and prior years’ adjustments)			13,680,456			20,735,296			15,794,626

      Net over payment relates to the years from 1997 through 2000.

      The zakat and income tax assessed for the years 2001 and 2002 is SR 3,384,450 (i.e. an additional liability of SR 4,595,128 as there was an overpayment of SR 1,210,678 per zakat and income tax return) which has not been taken into consideration in the above reconciliation as the assessment has been appealed against and the final amount ultimately payable cannot be determined with reasonable accuracy (refer note 8(d)).

F-80

ARABIAN GEOPHYSICAL & SURVEYING COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (continued)

b. Following is a reconciliation of partners’ equity for differences with US GAAP:

	2005			2004			2003
	SR			SR			SR
Partners’ equity under Saudi accounting standards		348,585,790			292,472,056			231,384,196
Cumulative effect of current and prior year adjustments (note 20(a))		(13,680,456	)		(20,735,296	)		(15,794,626	)
Partners’ equity under US GAAP		334,905,334			271,736,760			215,589,570

c. Dividends paid

      Dividends paid during the year amounting to SR 40,000,000 (2004: SR 38,000,000 and 2003: SR 38,000,000) included payments to the partners on account of zakat and income tax equalisation.

d. Fair values

      Financial instruments comprise of financial assets and liabilities.

      Financial assets consist of bank balances and cash and receivables. Financial liabilities consist of payables and accrued expenses.

      Fair values of financial assets and liabilities are not materially different from their carrying values at the balance sheet date.

F-81

Y01365

EX-1.1

Exhibit 1

COMPAGNIE GENERALE DE GEOPHYSIQUE

Public Company with a Registered Capital of €34 310 734

Head Office : 1, rue Léon Migaux, Massy, Essonne

Trade Register Evry No. 969 202 241

ARTICLES OF ASSOCIATION

PART I

FORM — OBJECT — NAME — HEAD OFFICE — TERM

Article 1 — FORM OF THE CORPORATION

A Corporation has been formed between the holders of the shares hereinafter issued and those which may be issued subsequently, which Corporation shall be governed by the laws in force and these Articles of Association.

Article 2 — OBJECT

The corporate object is as follows:

Development and operation in any form and under any conditions whatsoever, of all and any business relating to the geophysical survey of the soil and subsoil in any all countries, on behalf of third parties or on its own behalf.

Direct or indirect participation in any business, firm or company whose object would be likely to promote the corporate object.

And, generally, any business, industrial, mining, financial, personal or real property operations relating directly or indirectly to the above object without limitation or reserve.

Article 3 — CORPORATE NAME

The corporate name is the following :

COMPAGNIE GENERALE DE GEOPHYSIQUE

Article 4 — HEAD OFFICE

The Head Office is established at rue Léon Migaux No. 1, MASSY (Essonne), France.

It may be transferred to any other place in the same “département” (County) or to one of the adjacent “départements” by mere decision of the Board of Directors, subject to said decision being ratified by the earliest Ordinary Shareholders’ Meeting, and it may be transferred anywhere else by a decision of the Extraordinary Meeting.

Offices, agencies and branch offices may be established in any countries.

Article 5 — TERM

The Corporation has been founded for a term of ninety-nine years as from the date of its final incorporation, barring cases of early winding up or further extension, as provided for in these Articles of Association.

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PART II

REGISTERED CAPITAL — SHARES

Article 6 — REGISTERED CAPITAL

1.	The registered capital amounts to 34 310 734 euros divided into 17 155 367 shares of 2 euros each.
2.	The registered capital may be increased either by the issuance of new shares or by raising the face value of existing shares.
	The new shares shall be paid up either in cash or by offsetting liquidated claims against the Corporation, or by drawing on reserves, earnings or share premiums, or by assets contributed in kind, or by conversion of debentures or bonds.
	The new shares are issued at their face value or at face value increased by a share premium; they can be either ordinary or preferential shares enjoying some advantages over the other shares and granting priority rights on earnings or assets, or any other indirect privilege.
	The Extraordinary Shareholders’ Meeting alone is entitled to decide an increase in capital, upon the Board of Director’s report. However, when the increase in capital is made by drawing on reserves, earnings or share premiums, the Shareholder’s Meeting deciding thereon deals with the matter under the requirements of quorum and majority of the Ordinary Shareholder’s Meetings.
	In the event of capital increase in cash, the old capital shall first be fully paid up, and the shareholders are entitled to the preferential allotment of new stock granted to them by law.
3.	Earnings and reserves other than the legal reserve may be assigned to amortization of the Corporation’s capital by decision of the Extraordinary Shareholder’s Meeting. Said amortization may be carried out only by equal repayment on each share of same class, and does not involve any reduction of the capital.
4.	The Extraordinary Shareholders’ Meeting may also decide or authorize the reduction of the corporation’s registered capital for any reason and in any way whatsoever, especially by reason of losses or by means of partial refund or purchase of the shares, by reduction of their number or face value, but under no circumstances should the reduction of capital affect shareholder’s equality.

Article 7 — SHARES

1.	Fully paid up shares are either registered shares or bearer shares, at the shareholder’s option.
	They are subject to entry in an account under the terms and procedures provided by law.
	Said account is kept by the Corporation or a representative appointed by the Corporation if securities are requested in the registered form ; it is kept by an authorized trustee if securities are requested in the form of bearer shares.
	The Corporation may at any time make use of the legal and regulatory provisions for the purpose of identifying the owners of shares granting immediately or at a later date a voting right in Shareholders’ meetings.

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2.	Share assignment is finalized through account-to-account transfer.
	Shares that are not fully paid up by the amounts due are not assignable.
	Any shareholder holding directly or indirectly a portion amounting to 1 percent of the stock capital or of the voting rights or a multiple of this percentage shall give notice to the Company of the number of shares or voting rights he holds, within five trading days from the date on which one of these thresholds was exceeded. Pursuant to applicable regulations, in the event of failure to comply with this notification requirement, and upon request of one or several shareholders holding at least 1 percent of the capital, such request being recorded in the minutes of the Meeting, those shares in excess of the fraction that should have been declared shall be deprived of their voting rights from the date of said Meeting and for any other subsequent Meeting to be held until the expiry of a 2-year period following the date on which the required notification of the passing of the threshold will have been regularized.
	Similarly, any shareholder whose shareholding is reduced below one of these thresholds shall give notice thereof to the Corporation within the same 5-day period.
3.	Shares are indivisible with regard to the Corporation. Co-owners of jointly held shares are bound to have themselves represented by only one of the two shareholders or by a sole proxy; in the event of disagreement, such proxy shall be appointed by the president of the Commercial Court deciding the case in Chambers at the request of the first mover of the contending co-owners.
	The voting right is exercised by the owner of securities held in pledge or as security, i.e. by the usufructuary at the Ordinary Shareholder’s Meetings, and by the bare-owner at the Extraordinary Shareholder’s Meeting.
4.	At the time of application, it is compulsory that shares applied for in cash be fully paid up by at least one quarter of their face value and, as the case may be, by the entire share premium.
	The share value surplus is payable from time to time, within a maximum period of five years as from the day when the increase of capital became final, at the times and under the terms specified by the Board of Directors.
	Shareholders are given notice of calls for funds at least fifteen days before the time specified for each payment, either by registered letter sent to the shareholders or by a notice published in a legal announcement gazette of the Head Office district.
	Sums due on the value of the shares not fully paid up yield a day-by-day interest calculated at a rate of seven percent (7 %) as from the date of their failing due, without there being any need for legal action or formal summons to pay.
	To obtain payment of the fraction of shares not fully paid up and called, the Corporation is entitled to forced execution, action for guarantee and penalties as provided by law.
5.	Every share is entitled to a portion of earnings and ownership of the capital stock in proportion to the amount of stock it represents.
	Any shares, both old and new, are fully assimilated when they bear same bonus, provided they are of same type and of same nominal stock paid up for the same value. In the event of dividend distribution as in the event of full or part reimbursement of their nominal stock, they receive the same net value, any taxes and duties they may be liable to being evenly distributed among them.
	Ownership of a share implies de jure adhesion to the Corporation’s Articles of Association and to the decisions of the Shareholder’s Meeting.
	Any rights and duties attached to a share follow the share certificate and pass into the hands of the new owner, whoever he may be.

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The heirs, assigns or creditors of a shareholder may not, for any reason whatsoever, require that seals be affixed to the Corporation’s assets or property, or demand the partition or sale by auction thereof, or meddle in any way whatsoever in the acts of its management; in order to exercise their rights, they must abide by the corporate accounts and decisions made by the Shareholders’ Meeting.

The shareholders are responsible for the corporation’s liabilities only up to the face value of the shares they hold.

Whenever it is necessary to hold several shares to exercise any right whatsoever, in the case of exchange, pooling or allotment of shares, or as a result of an increase or reduction of capital, a merger or any other transaction concerning the Corporation, the holders of isolated shares or of a number of shares less than that required, may exercise said rights, provided only they arrange to pool and, as the case may be, purchase or sell the required number of share certificates.

PART III

MANAGEMENT OF THE CORPORATION

Article 8 — BOARD OF DIRECTORS

1.	The Corporation is managed by a Board of at least six members and at most fifteen members appointed during the Corporation’s lifetime by the Ordinary Shareholders’ Meeting, unless a decision increases this maximum to a higher number in the event of merger.
2.	A legal entity may be duly appointed as a Director.
	When appointed, any such legal entity must appoint a permanent representative who is bound by the same conditions and duties and incurs the same liabilities just as if he were a director in his own name, without prejudice to the joint liability of the legal entity which he represents. If the legal entity dismisses its representative, it must proceed to his replacement at the same time.
3.	In the event of vacancy by decease or by the resignation of one or several directors, the Board of Directors may — between two Shareholder’s Meetings — make temporary appointments.
	The director appointed in replacement of another director remains in office only for the term remaining to run of his predecessor’s term of office.
	When the number of directors has fallen below the legal minimum required, the remaining directors must immediately convene the Ordinary Shareholder’s Meeting with a view to completing membership of the Board.
	When the number of directors has fallen below the number required by the Articles of Association — without however being less than the legal minimum — the Board of Directors must proceed to make temporary appointments with a view to completing its membership within a period of three months from the day the vacancy occurred.
	Any temporary appointments made the Board are subject to ratification by the earliest Ordinary Shareholders’ Meeting. Failing ratification, the decisions made and the acts accomplished previously by the Board shall remain nonetheless valid.

- 5 -

4.	The directors are appointed for a six-year term.
	The office of a director comes to an end at the end of the Ordinary Shareholders’ Meeting deciding on the last financial statements and held within the year during which said term of office expires.
	The Board is renewed every year by an adequate number of members so that the term of office of each director shall not exceed six years. Renewal takes place by order of seniority of appointment.
	Directors are always eligible for re-election.
	They may be dismissed at any time by the Ordinary Shareholders’ Meeting.
5.	Throughout his term of office, each director must own at least one share.
6.	The Board of Directors determines the strategy of the Company and sees its implementation. Subject to the powers expressly attributed to shareholders’ meetings, and within the limits of the purpose of the Company, it considers any question relating to the proper functioning of the Company and by discussion settle the affairs which concern it.
	The Board of Directors carries out any controls and checks it deems necessary. The Chairman or the Chief Executive Officer of the company must provide each Director with all documents and information necessary for the accomplishment of his mission.
7.	The Board of Directors may confer on one or more of its Members or on third parties, whether they are shareholders or not, any special mandates for one or more specific objectives. It may decide to create committees responsible for examining questions which it or its Chairman submit to them for their opinion. It will establish the composition and the attributions of committees which exercise their activity under its authority.

Article 9 — RESOLUTIONS OF THE BOARD OF DIRECTORS

1.	From among its members, the Board of Directors elects a chairman who must be a natural person. The Board decides the amount of his compensation.
	The chairman is appointed for a period which may not exceed that of his office as a director. He is eligible for re-election.
	The Board may dismiss him at any time.
	The Chairman’s office comes to an end at the latest after the annual Ordinary Shareholders’ Meeting following the date on which he reaches the age of 65. However, the Board of Directors may further extend the office of the Chairman, once or several times for a total period not to exceed three years.
	The Chairman organises and directs the Board’s work on which he reports to the General Meeting. He ensures that the organs of the Company function properly and in particular makes sure that the Directors are able to carry out their mission.
	If it deems appropriate, the Board also appoints one or several vice-chairmen selected from among its members.
	Should the Chairman, vice-chairman (or vice-chairmen) happen to be absent, the Board shall appoint, for each meeting, one of the members present to carry out the duties of chairman.
	Should the Chairman die or be temporarily indisposed, the Board of Directors may delegate a Member of the Board to carry out the function of Chairman.
	Furthermore, the Board appoints a Secretary, who need not be one of the shareholders.

- 6 -

2.	The Board of Directors meets when summoned to do so by the Chairman, as often as required in the Company’s interests, either at the Head Office or in any other place indicated in the summons.
	When a meeting has not been held for more than two months, at least one third of the Members of the Board may request the Chairman to convene a meeting with a predetermined agenda. The Managing Director may also ask the Chairman to convene a meeting of the Board of Directors with a predetermined agenda.
	Any director may give by a written document a proxy to another director to represent him at a Board Meeting. Each director may have only one power of attorney in a single meeting.
	The actual presence of at least half the members of the Board is required for the resolutions to be valid.
	Resolutions are carried by a majority of votes of the members attending or represented. In case of equal voting, the Chairman of the Board has a casting vote ; However, should the meeting be chaired by a person other than the Chairman of the Board, then the chairman of the meeting does not have a casting vote
	An attendance book is kept which is signed by the directors participating in the meeting of the Board.
	The directors, as well as any person likely to attend the board meetings are bound to secrecy with regard to any information of a confidential nature and supplied as such by the Chairman of the Board.
3.	The resolutions of the Board of Directors are recorded by minutes entered in a special minute-book or on loose sheets, in accordance with regulations.
	The minutes are signed by the chairman of the meeting and by at least one director. In case of prevention of the chairman of the meeting, the minutes are signed by at least two directors.
	Copies or abstracts of the minutes of resolutions are validly certified by the Chairman of the Board, one managing director temporarily delegated to take over the duties of chairman or an authorized representative qualified for this purpose.
	The number of directors in office and also their presence or representation at a meeting of the Board of Directors, is adequately evidenced by the production of a copy or abstract of said minutes.

Article 10 — GENERAL MANAGEMENT

1.	Principles of organisation :
	In accordance with the legal provisions, the general management of the Company will be assumed under his responsibility either by the Chairman of the Board of Directors or by another natural person, whether he is a Member of the Board or not, who is appointed by the Board of Directors with the title of Chief Executive Officer.
	The choice between these two means of exercising general management will be made by the Board of Directors, who must inform the shareholders and third parties of this, in accordance with the law.
	The deliberations of the Board of Directors relating to the choice of the means of exercising general management will be taken on a majority vote by the Members of the Board who are present or represented.
	The option selected by the Board of Directors must be retained for a period that may not be less than one year.

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	At the end of the period set by the Board of Directors, the Board must once more deliberate on the means of exercising general management.
	Should the management of the Company be assumed by the Chairman of the Board the following dispositions relating to the Chief Executive Officer will apply to him.
2.	The Chief Executive Officer
	The Board of Directors will establish the duration of the mandate of the Chief Executive Officer and determine his remuneration. Should the function of Chief Executive Officer be assumed by the Chairman of the Board of Directors, the Chief Executive Officer will be appointed for the duration of his mandate as Chairman.
	The functions of Chief Executive Officer will terminate at the latest at the end of the ordinary general meeting which follows the date on which he reaches the age of 65 years. However, the Board of Directors may extend the Chief Executive Officer ‘s term of office beyond this limit, all at once or on several occasions, for a total duration that may not exceed three years.
	The Chief Executive Officer may be revoked at any time by the Board of Directors. Should the Chief Executive Officer not assume the functions of Chairman of the Board of Directors, his revocation may give rise to damages and interest, if the decision is taken without due cause.
	The Chief Executive Officer represents the Company in its relationships with third parties and may delegate to any special representative he chooses part of his powers.
	Within the legal limits, the Chief Executive Officer is invested with the most extensive powers to act in the Company’s name under all circumstances. However, with regard to the in-house rules and without this limitation being enforceable against third parties, the Board of Directors may limit the extent of his powers.
3.	Chief Operating Officers :
	At the proposal of the Chief Executive Officer, whether this function is assumed by the Chairman of the board of Directors or by another person, The Board of Directors may appoint one or more natural persons, whether they are Members of the Board or not, in charge of assisting the Chief Executive Officer, with the title of Chief Operating Officers.
	The maximum number of Chief Operating Officers is fixed at five.
	In agreement with the Chief Executive Officer, the Board of Directors will determine the extent and duration of the powers granted to the Chief Operating Officers.
	The functions of a Chief Operating Officer will be terminated at the end of the ordinary general meeting which follows the date on which he reaches the age of 65 years. However, the Board of Directors may, on a proposal from the Chief Executive Officer extend the term of office of the Chief Operating Officer, all at once or on several occasions, beyond this limit one or more times, for a total duration that may not exceed three years.
	The Chief Operating Officer holds the same powers as the Chief Executive Officer vis a vis third parties.
	The Board of Directors will determine the remuneration of the Chief Operating Officers.
	Should the functions of the Chief Executive Officer cease or be impeded, the Chief Operating Officers retain their functions and attributions until a new Chief Executive Officer is appointed, unless the board of Directors decides otherwise.
	The Chief Operating Officers may be revoked at any time by the Board of Directors on a proposal by the Chief Executive Officer.
4.	Acts concerning the Company are signed either by the Chief Executive Officer or by a Chief Operating Officer or by any special holder of a power of attorney.

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Article 11 — BOARD MEMBERS’ COMPENSATION

The Shareholders’ Meeting may allow the Directors an annual fixed sum as attendance fees, the amount of which remains unchanged until further decision.

The Board allocates these attendance fees between its members in the manner it deems appropriate.

Article 12 — REGULATED AGREEMENTS

1.	The agreements referred to in Article L.225-38 of the Commercial Code are subject to the prior consent of the Board of Directors and to approval by the Shareholders’ Meeting under the provisions of law.
	These provisions are not applicable to agreements bearing on routine transactions, which are concluded under normal conditions.
2.	It is forbidden to directors other than legal entities to take out loans with the Corporation in any form whatsoever or to have the Corporation grant them an overdraft in current account or otherwise; it is also forbidden to have the Corporation stand surety for them or back their commitments in respect of third parties.
	The same prohibition applies to Managing Directors and to permanent representatives of legal entity-directors. It also applies to the spouses, ascendants or descendants of the persons referred to in this paragraph and also to any trustee.

Article 13 — OBSERVERS

The board of directors may appoint one or several Observers to a maximum number of 3.

In case of a vacancy resulting from death or resignation of one or several Observers, the board of directors may proceed to appointments on a temporary basis.

The Observers shall be appointed for a 6 year period ending at the end of the general meeting convened to approve the financial statements of the latest fiscal year and held within the year during which their tenure lapse.

The Observers are convened to the board of directors’ meetings and will take part in the discussions in an advisory capacity, however their absence cannot render such discussions void.

PART IV

SHAREHOLDERS’ MEETINGS

Article 14 — GENERAL RULES

1.	The shareholders meet every year at an Ordinary Shareholders’ Meeting, on the day and at the time and place indicated in the notice of convening; said meeting takes place within the first six months following the closing of the financial year, subject to the extension of this period by order of the Presiding Judge of the Commercial Court deciding on petition or request.
	The ordinary Shareholders’ Meeting may furthermore be convened extraordinarily.

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	The extraordinary Shareholders’ Meeting is convened whenever it is required to amend these Articles of Association.
2.	The Shareholders’ Meeting is convened by the Board of Directors.
	The Board is bound to convene a Shareholder’s Meeting when requested to do so by a group of shareholders representing at least one quarter of the Corporation’s stock capital. In that case, the call should be sent out at the latest during the same month as the registered letter is sent by the shareholders wishing to convene the meeting.
	The Shareholders’ Meeting may also be convened by the Auditors or by an attorney-in-fact appointed by the Courts in the cases provided for by law.
	The Shareholders’ Meeting meets at the head office or at any other place as may be indicated in the notice of convening.
3.	The Shareholders’ Meetings shall be convened under the terms and within the periods provided by law.
4.	The agenda shall be prepared by the author of the notice of convening. However, one or more shareholders representing at least the percentage of stock capital provided for by law, are entitled to require that draft resolutions be put on the agenda under the terms provided by law.
	The meeting cannot consider a matter that has not been put on the agenda. However, it may under circumstances dismiss one or more directors and provide for their replacement.
5.	The Board of Directors shall either send off or make available to the shareholders any documents provided by law.
6.	The Shareholders’ Meeting is composed of all the shareholders, whatever the number of shares they hold.
	The right of assisting in Meetings for the owners of registered shares depends on the registration of the shareholder or the intermediary envisaged in Article L.228-1 of the Commercial Code in the shares account of the Company five days before the meeting and for the owners of bearer shares to the transmission, within the same period, to the places indicated on the notice of convocation, of a certificate from an authorised financial intermediary confirming the unavailability of the shares registered in the account up to the date of the General Meeting.
	A shareholder may be represented by another shareholder or by his spouse, and if he is a non-resident he may, in addition, be represented by the a registered intermediary ; in this respect, the representative must justify his mandate.
	Any shareholder may receive the powers of attorney given by other shareholders with a view to being represented at a Meeting, without any other limits than those established by the legal provisions specifying the maximum number of votes to be used by the same person, both in his/her own name and as a proxy.
	The legal representatives of shareholders who are disqualified by law and natural persons representing legal entities which are shareholders may attend the Meetings, whether they are themselves shareholders or not.
	Each shareholder has as many votes as the shares he possesses or represents subject to the provisions set out below.
	As from May 22 1997, a double voting right is allocated to all registered and fully paid-up shares registered in the name of the same holder for at least two years.
	In the event of an increase in capital by incorporation of reserves, profits or paid in capital, this double voting right is granted as soon as they are issued, to registered shares allocated free to a shareholder at the rate of the former shares for which he benefits from this right.

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	The double voting right ceases ipso jure for any share having been subject to a conversion to the bearer or a transfer of ownership subject to exceptions provided for by law.
	Any shareholder can vote by mail, using a form prepared and sent to the Corporation as provided by law.
	Any voting forms received by the Corporation less than three days before the day of a Shareholders’ meeting shall not be taken into consideration.
	Any shareholder attending a Shareholders’ Meeting will not be entitled to vote through a proxy or by mail.
	Any shareholder may also, if the Board of Directors or its Chairman allows at the time of the convocation to a general meeting, assist this meeting via visio-conference or by electronic telecommunication or tele-transmission means subject to and in accordance with the conditions laid down by the legislation or the regulations in force. This shareholder is then considered to be present at this meeting when calculating the quorum and the majority.
7.	The Shareholders’ Meeting is presided over by the Chairman of the Board or, in his absence, by the person or one of the persons who convened the Meeting.
	In the event a meeting has been called by the Auditors, a court-appointed proxy or the liquidators, the meeting shall be chaired by the person or one of the persons calling the meeting.
	The duties of scrutineers are carried out by the two members of the Meeting having the largest number of voting rights and accepting said duties.
	The officers’ committee appoints a secretary, who need not be a shareholder.
	An attendance sheet shall be kept and initialed by the shareholders or their proxies ; it shall be certified true by the members of the officers’ committee and deposited at the head office.
8.	The resolutions of the Shareholders’ Meeting are recorded in Minutes which are signed by the members of the officers’ committee. The minutes are entered in a special minute-book or in a loose-leaf ledger or binder, in accordance with legal regulations.
	Copies or abstracts of the minutes of the Shareholders’ Meetings are validly certified true by the Chairman of the Board or by a director carrying out the duties of Managing Director. They may also be certified true by the Secretary to the Meeting.
9.	The Shareholders’ Meeting, regularly formed, represents all the shareholders without any exception ; its resolutions are binding upon all shareholders, even those who were absent, dissenting or legally disqualified.

Article 15 — ORDINARY SHAREHOLDERS’ MEETINGS

1.

The Ordinary Shareholders’ Meeting may validly proceed under the quorum and majority conditions provided for by law.

2.

The Ordinary Shareholders Meetings hears the reports of the Board of Directors and of the Auditors ; It discusses, approves or adjusts the financial statements, determines the dividends and directors’ fees, appoints or dismisses directors and auditors, gives them full discharge for performance of their duties, ratifies cooptations of directors, decides on any covenants subject to prior consent, cancels any covenants made without prior consent, grants authority to the Board of Directors for acts exceeding the powers granted to it and considers any proposals carried on its agenda that do not fall within the powers of the Extraordinary Shareholders’ Meeting.

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Article 16 — EXTRAORDINARY SHAREHOLDERS’ MEETINGS

1.	Extraordinary Shareholders’ Meetings are formed regularly and may validly proceed under the quorum and majority conditions provided for by law.
2.	The Extraordinary Shareholders’ Meeting may amend the Articles of Association in all or any of their provisions, provided that they do not increase the shareholders’ liabilities, excepting the shareholders’ obligation to buy or sell fractions in the case of share pooling, increase or reduction of capital, merger or split.
	In particular, the Extraordinary Meeting may change the Corporation’s nationality under the provisions laid down by the law, or it may change the Corporation’s life, decide its merger or split with another company or companies, wind it up before due date, transform it into a corporation of any other type under the terms and conditions provided by law.

PART V

AUDITORS

Article 17 — APPOINTMENT AND DUTIES OF THE AUDITORS

Under the provisions of law, the Ordinary Shareholders’ Meeting appoints at least two auditors and, if necessary, one or more deputy Auditors.

The Auditors are vested with the duties and powers conferred on them by law.

Their compensation is determined according to the regulations in force.

PART VI

FINANCIAL STATEMENTS AND APPROPRIATION OR DISTRIBUTION OF EARNINGS

Article 18 — FINANCIAL STATEMENTS

The Corporation’s fiscal year starts on January first and ends on December thirty-first.

At the close of every financial year, the Board of Directors draws up an inventory of the various items of assets and liabilities existing at that date.

The Board also prepares the financial statements, including the balance sheet, profit & loss statement and a note to the financial statements and, if case may be, consolidated financial statements including a consolidated balance-sheet and profit & loss statement and a note to the financial statements.

The Board prepares a report about the Corporation’s position in the last fiscal year and, if case may be, that of the group of companies controlled by the Corporation, about their predictable development, the major events that have occurred since the closing of the fiscal year, and their research and development efforts.

Said documents are made available to the Auditors under the terms provided for by law.

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In the cases provided by law, the Board shall also prepare financial management documents that are to be analyzed in reports about the Corporation’s development.

Article 19 — EARNINGS

Out of the earnings of the fiscal year, reduced if necessary by previous losses, at least five percent shall be first appropriated to form the reserve fund required by law, until said reserve fund has reached one tenth of the stock capital.

The balance, increased by retained earnings, if any, forms the distributable earnings.

Any amounts that the Shareholders’ Meeting would decide, either on proposal by the Board or by its own decision, to allocate to one or more general or special reserve funds or to carry forward, shall be withdrawn from said earnings.

The balance shall be distributed among the shareholders as a dividend.

The terms and conditions for the payment of dividends are determined by the Shareholders’ Meeting or, failing such, by the Board of Directors.

The Shareholders’ meeting deciding on the financial statements is entitled to give each shareholder, for the dividend or part of the dividend to be distributed or for any advance payments on a dividend, the choice between payment of the dividend in cash or in stock.

PART VII

WINDING UP — LIQUIDATION — DISPUTES

Article 20 — WINDING UP — LIQUIDATION

On the expiry of the term provided for by the Articles of Association, or in case of early winding-up for any reason whatsoever, the Shareholders’ Meeting or, if case may be, the Commercial Court, specifies the liquidation procedure, appoints one or more liquidators and specifies their powers.

Subject to the restrictions provided by Law, the Liquidators have the most extensive powers for the purpose of realizing, even by amicable agreement, all of the Corporation’s assets and wiping out its liabilities. On grounds of a resolution of the Extraordinary Shareholders’ Meeting, they may make contribution or agree to the transfer of the whole of the property and assets, rights, shares and bonds of the liquidated corporation.

The net proceeds of liquidation after settlement of liabilities shall be used to entirely reimburse the stock capital fully paid up and not redeemed, any surplus being distributed either in cash or securities among the shareholders.

Article 21 — DISPUTES

Any disputes likely to arise during the lifetime of the Corporation or during its liquidation, either between the shareholders and the Corporation or among the shareholders themselves, in relation to, or on account of corporate affairs, are referred to the jurisdiction of the Competent Courts in the judicial area of the Corporate Head Office.

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To this effect, in case of dispute, each shareholder shall elect domicile within the judicial area of the aforementioned Courts, and any and all summons or notices will be validly and regularly served to this domicile.

Failing election of domicile, all and any summons or notices shall be validly served to the office of the Public Prosecutor (District Attorney) attached to the District Court (“Tribunal de Grande Instance”) of the place of the Corporate Head Office.

Updated March 31^st, 2006

Certified true copy,
	Michel PONTHUS
	Secretary

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EX-4.15

Exhibit 4.15

Execution Copy

U.S.$165,000,000

Compagnie Généralé de Géophysique

7¹/2% Senior Notes due 2015

PURCHASE AGREEMENT

21 April 2005

CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
BNP PARIBAS SECURITIES CORP.
   As representatives of the Purchasers (as defined below)
   c/o Credit Suisse First Boston (Europe) Limited (“CSFB”)
   One Cabot Square
   London, England E14 4QJ

Dear Sirs:

     1. Introductory.

    (a) Compagnie Généralé de Géophysique (the “Company”), a société anonyme incorporated under the laws of France and registered at the Evry Commercial Registry under Number B 969 202 241 (69B00224), proposes, subject to the terms and conditions stated herein, to issue and sell to the initial purchasers named in Schedule A hereto (the “Purchasers”) U.S.$165,000,000 in aggregate principal amount of its 7¹/2% Senior Notes due 2015 (the “Notes” or “Securities”) to be issued under an indenture, dated on or about 28 April 2005 (the “Indenture”), among the Company, the Guarantors (as defined below) and JPMorganChase Bank, National Association, as trustee (the “Trustee”).

    (b) The Securities may be sold by the Purchasers pursuant to Regulation S (“Regulation S”) under the U.S. Securities Act of 1933 (the “Securities Act”) to investors outside of the United States of America and pursuant to Rule 144A (“Rule 144A”) under the Securities Act to qualified institutional buyers in the United States of America.

    (c) Application has been made to list the Notes on the Luxembourg Stock Exchange.

     The Company’s obligations under the Securities, including the due and punctual payment of interest on the Offered Securities, shall be unconditionally guaranteed pursuant to the Indenture (each a “Guarantee", and collectively, the “Guarantees”) on a senior basis by each of the Company’s subsidiaries indicated as Guarantors on Schedule B hereto (together, the “Guarantors”).

     The holders of the Securities will be entitled to the benefits of a Registration Rights Agreement dated as of the date hereof among the Company and the Purchasers (the “Registration Rights Agreement”) in substantially the form of Exhibit A hereto, pursuant to which the Company agrees to file a registration statement (the “Exchange Offer/Shelf Registration Statement”) with the Securities Exchange Commission (the “Commission”) registering the exchange of a new series of 7¹/2% Senior Notes due 2015 of the Company

1

Exhibit 4.15

and the guarantees of the new series of 7¹/2% Senior Notes due 2015 of the Company (such notes and guarantees of such notes, the “Exchange Securities”) for the Securities and/or the resale of the Securities under the Securities Act.

     Capitalised terms not otherwise defined herein shall have the meaning ascribed to such terms in the Indenture.

     The Company hereby agrees with the several Purchasers as follows:

     2. Representations and Warranties of the Company and Guarantors. The Company represents and warrants to, and agrees with, and, to the extent applicable to the Guarantors and Guarantees, each Guarantor represents and warrants to, and agrees with, the several Purchasers that as of the date of this Agreement and the Closing Date (as defined below):

    (a) A preliminary offering circular dated 18 April 2005 and an offering circular dated 21 April 2005 relating to the Securities to be offered by the Purchasers have been prepared by the Company. Such preliminary offering circular (the “Preliminary Offering Circular”) and offering circular (the “Offering Circular”), in each case as supplemented from time to time as of the date of this Agreement and as of the Closing Date (as defined herein), are hereinafter collectively referred to as the “Offering Document”. The Preliminary Offering Circular, as of its date, and the Offering Circular, as of the date of this Agreement and as of the Closing Date, do not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The information (the “Additional Issuer Information”) required to be delivered to holders and prospective purchasers of the Securities pursuant to the Indenture in accordance with Rule 144A(d)(4) under the Securities Act does not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding two sentences do not apply to statements in or omissions from the Offering Document made in reliance upon and in conformity with written information furnished to the Company by the Purchasers through CSFB specifically for use therein, it being understood and agreed that the only such information furnished by the Purchasers consists of the following information in the Offering Document: the table entitled “Initial Purchasers” under the caption “Plan of Distribution” and the second paragraph thereafter under the caption “Plan of Distribution”.

    (b) The Company has been duly incorporated, is validly existing under the laws of France, with full power and authority (corporate and other) to own and lease its properties and conduct its business as described in the Offering Document; and the Company is lawfully qualified to do business in all other jurisdictions in which its ownership or leasing of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not individually or in the aggregate have a material adverse effect on the condition (financial or otherwise), business, prospects or results of operations of the Company and its subsidiaries taken as a whole (“Material Adverse Effect”).

    (c) Each subsidiary of the Company set forth on Schedule B hereto has been duly organized and is validly existing under the laws of the jurisdiction of its organization, with full power and authority (corporate and other) to own and lease its property and conduct its business as described in the Offering Document; and subsidiary of the Company is lawfully qualified to do business in all other jurisdictions in which its ownership or leasing of property or the conduct of its business requires such qualification except where the failure to be so qualified would not individually or in the aggregate have a Material Adverse Effect; all of the issued and outstanding capital stock of the Company and each subsidiary of the Company has been duly authorized and validly issued under the laws of the jurisdiction of its incorporation and is fully paid and non-assessable; and except as shown on Schedule B hereto the capital stock of each subsidiary of the Company is owned, directly or through subsidiaries,

2

Exhibit 4.15

by the Company, free from liens, encumbrances and defects. Schedule B hereto sets forth a complete list of each subsidiary (excluding dormant or insignificant subsidiaries) with the relevant jurisdiction of incorporation or organization, the Company’s direct and indirect ownership thereof and whether such subsidiary is a Guarantor.

    (d) The Company has the power and authority (corporate and other) to enter into the Indenture, the Securities, the Registration Rights Agreement, the Exchange Securities and this Agreement and any documents entered into in connection therewith, in each case to which it is a party.

    (e) Each Guarantor has the power and authority (corporate and other) to enter into the Indenture, the Guarantees, the Registration Rights Agreement, the Exchange Securities and this Agreement and any documents entered into in connection therewith, in each case to which it is a party.

    (f) The Indenture has been duly authorized by the Company and by each Guarantor, the Securities have been duly authorized by the Company, when the Securities are delivered and paid for pursuant to this Agreement on the Closing Date (as defined below), the Indenture will have been duly executed and delivered, such Securities will have been duly executed, authenticated, issued and delivered and will conform to the description thereof contained in the Offering Document, and (assuming due authorization, execution and delivery by the Indenture by the Trustee) the Indenture and such Securities will constitute valid and legally binding obligations of the Company and each Guarantor, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general principles of equity.

    (g) The Indenture has been duly qualified under the United States Trust Indenture Act of 1939, as amended (the “TIA”), and conforms in all material respects to the requirements of the TIA and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder.

    (h) Each Guarantee to be endorsed on the Securities by each of the Guarantors has been duly authorized by such Guarantor and, on the Closing Date, will have been duly executed and delivered by each such Guarantor and will conform in all material respects to the description thereof contained in the Offering Document; when the Securities have been issued, executed and authenticated in accordance with the Indenture and delivered to and paid for by the Purchasers in accordance with the terms of this Agreement, the Guarantee of each Guarantor endorsed thereon (assuming due authorization, execution and delivery of the Indenture by the Trustee and due authentication of the Securities by the Trustee) will constitute valid and legally binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general equity principles.

    (i) The Registration Rights Agreement has been duly authorized, and on the Closing Date the Registration Rights Agreement will have been duly executed and delivered, will conform to the description thereof contained in the Offering Document and (assuming due authorization, execution and delivery by the Purchasers) will constitute a valid and legally binding obligation of the Company and each Guarantor, enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general principles of equity.

    (j) The Exchange Securities have been duly authorized and, when the Exchange Securities have been delivered in exchange for the Securities in accordance with the terms of the exchange offer provided for in the Registration Rights Agreement, such Exchange Securities will have been duly executed, authenticated, issued and delivered and will conform to the description thereof contained in the Offering Document, and such the Exchange Securities will (assuming due authentication thereof by

3

Exhibit 4.15

the Trustee) constitute valid and legally binding obligations of the Company and the Guarantors, enforceable against each of them in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity.

    (k) The guarantee to be endorsed on the Exchange Securities by each Guarantor has been duly authorized by such Guarantor and, when issued, will have been duly executed and delivered by each such Guarantor; and when the Exchange Securities have been issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the guarantee of each Guarantor endorsed thereon will constitute valid and legally binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and to general equity principles.

    (l) Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Purchasers for a brokerage commission, finder’s fee or like payment in connection with the offer and sale of the Securities, other than the fees payable to the Purchasers in connection with the offer and sale of the Securities.

    (m) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement, the Indenture or the Registration Rights Agreement, in connection with the issuance and sale of the Securities or the issuance and exchange of the Exchange Securities for the Securities, except, in each case, such as have been or, prior to the Closing Date, will be obtained, and other than such as may be required under US state securities or “Blue Sky” laws and the receipt by the Company of an order from the Commission declaring the Exchange Offer/Shelf Registration Statement effective.

    (n) None of the Company or any subsidiary of the Company is (i) in violation of its respective articles of association, charter, by-laws or other constitutive documents, (ii) in default, and no event has occurred which, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject except for such default or event which would not, individually or in the aggregate, have a Material Adverse Effect or (iii) in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property assets may be subject for such default or event which would not, individually or in the aggregate, have a Material Adverse Effect.

    (o) Except as disclosed in the Offering Document, under current laws and regulations of France, Luxembourg and the United States (each, a “Relevant Jurisdiction”, and collectively, the “Relevant Jurisdictions”) and any political subdivisions and taxing authorities thereof or therein, all interest, principal, premium, if any, and other payments due or made on the Securities and the Exchange Securities may be paid by the Company to the holders thereof in U.S. Dollars that may be converted into foreign currency and freely transferred out of each of the Relevant Jurisdictions and all such payments made to holders thereof who are non-residents of the Relevant Jurisdictions will not be subject to income, withholding or other taxes under laws and regulations of any of the Relevant Jurisdictions for tax purposes or any political subdivision or taxing authority thereof or therein (provided that this clause does not apply to any tax of whatever nature that may be imposed by a relevant jurisdiction as a result of Securities or Exchange Securities being held through a permanent establishment, an agent or a fixed base situated in such relevant jurisdiction) and any tax that may be imposed by a Relevant Jurisdiction pursuant to the Directive 2003/48/CE on the taxation of savings income and without the necessity of obtaining any governmental authorization in any of the Relevant

4

Exhibit 4.15

Jurisdictions or any political subdivision or taxing authority thereof or therein, provided in the case of the United States that either (i) the payments are made to a “clearing organization” within the meaning of U.S. Treasury Regulation Section 1.6049-4(c)(1)(ii)(M), or (ii) the holder has provided the Company or the relevant paying agent with an applicable Form W-8.

    (p) No capital, transfer, stamp duty, stamp duty reserve or other documentary, issuance or transfer taxes or duties (other than, in the case of France, timbres de dimension, the amount of which is nominal and the non-payment of which does not affect the validity of this Agreement) are payable by or on behalf of the Purchasers in any Relevant Jurisdiction, or any political sub-division or taxing authority thereof or therein on (i) the creation, issue or delivery by the Company of the Securities pursuant hereto or the sale thereof, (ii) the creation, issue or delivery by the Company of the Exchange Securities or the exchange of the Securities therefor, (iii) the execution of the Indenture, the Registration Rights Agreement, this Agreement and any documents entered into in connection therewith, or (iv) the consummation of the transactions contemplated by this Agreement.

    (q) The execution, delivery and performance of the Indenture, the Guarantees, this Agreement, the Registration Rights Agreement, and the issuance and sale of the Securities and the issuance and exchange of the Exchange Securities for the Securities and compliance with the terms and provisions hereof and thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any subsidiary of the Company, or any of their respective properties except for any such breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect, or (ii) any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject except for any such breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect, or (iii) the charter or by-laws of the Company or any such subsidiary.

    (r) This Agreement has been duly authorized, executed and delivered by the Company and constitutes valid and legally binding obligations of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general principles of equity and except in connection with rights to indemnification and contribution thereunder that may be limited by federal or state securities laws or public policy relating thereto.

    (s) Except as disclosed in the Offering Document, the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them; and except as disclosed in the Offering Document, the Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or to be made thereof by them.

    (t) Neither the Company nor any of its subsidiaries has taken any action nor, so far as the Company is aware, have any steps been taken or legal proceedings been started or threatened against it or any of its subsidiaries for winding-up, dissolution or reorganization, or for the appointment of a receiver, administrative receiver, or administrator, trustee or similar officer of it or any of its subsidiaries or any assets of it or any of its subsidiaries.

    (u) The Company and its subsidiaries possess adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by them except where the failure to do so would not, individually or in the aggregate, have a Material Adverse Effect and have not received any notice of proceedings relating to the revocation or

5

Exhibit 4.15

modification of any such certificate, authority or permit that, if determined adversely to the Company or any of its subsidiaries, which would, individually or in the aggregate, have a Material Adverse Effect.

    (v) No labour dispute with the employees of the Company or any subsidiary of the Company exists or, to the knowledge of the Company, is imminent that might have a Material Adverse Effect.

    (w) The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, “intellectual property rights”) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

    (x) Neither the Company nor any of its subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “environmental laws”), (ii) owns or operates any real property contaminated with any substance that is subject to any environmental laws, (iii) is liable for any off-site disposal or contamination pursuant to any environmental laws or (iv) is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.

    (y) Except as described in the Offering Document, there are no pending actions, suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under the Indenture, this Agreement or the Registration Rights Agreement or which are otherwise material in the context of the sale of the Securities or the exchange of the Exchange Securities for the Securities; and no such actions, suits or proceedings are, to the Company’s knowledge, threatened or contemplated.

    (z) The financial statements and the related notes included in the Offering Document present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles in France (“French GAAP”), applied on a consistent basis.

    (aa) The reconciliation of the Company’s financial statements referred to in paragraph (aa) above as reconciled with generally accepted accounting principles in the United States (“U.S. GAAP”) and filed on Form 20-F comply with the requirements of Form 20-F.

    (bb) The information set forth in the Offering Document in Note 28 to the Company’s consolidated financial statements under the heading “Summary of Differences Between Accounting Principles followed by the Group and U.S. GAAP” and in “Managements Discussion and Analysis of Financial Condition and Results of Operations — Trend Information — Transition to IFRS Accounting” includes a fair summary, in all material respects, of the differences, as they relate to the Company’s consolidated financial statements, between French GAAP and U.S. GAAP and French GAAP and IFRS, although the Company has not prepared a reconciliation between French GAAP and IFRS which, if prepared, could indicate additional differences.

6

Exhibit 4.15

    (cc) Except as disclosed in the Offering Document, since the date of the latest audited financial statements included in the Offering Document, there has been no material adverse change, nor any development or event involving a prospective material loss or adverse change, in the condition (financial or other), business, prospects, properties or results of operations of the Company and its subsidiaries taken as a whole, and, except as disclosed in or contemplated by the Offering Document, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock, nor since the date of the latest audited financial statements included in the Offering Document has there been any material loss or interference with the business of the Company and its subsidiaries from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Document.

    (dd) The Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”), and files reports with the Commission on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

    (ee) The Company is not an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the “Investment Company Act”); and the Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Offering Document, will not be an “investment company” as defined in the Investment Company Act.

    (ff) Except as described in the Offering Document, neither the Company, nor any of its subsidiaries is currently or has reason or notice to believe that it will be in the future a party to, or directly or indirectly concerned in, an agreement, arrangement, understanding or practice (whether or not legally binding) which may (i) contravene any treaty, regulation or directive of the European Community relating to competition or restraint of trade, or any competition or restraint of trade laws of any other jurisdiction, (ii) be registrable, unenforceable or void or rendering the Company, its subsidiaries or any of their respective officers, directors or employees liable to administrative, civil or criminal proceedings under any competition legislation, or restraint of trade regulation or similar legislation, or (iii) be the subject of any investigation by an competent authority in respect of any provision of any competition legislation, or restraint of trade regulation or similar legislation in any jurisdiction. Neither the Company nor any of its subsidiaries is currently, or has reason to believe that it will be, engaged in (whether on its own or jointly with any other person) any conduct which amounts to the abuse of a dominant position in a market which may affect competition within the European Union or any part of it.

    (gg) No event of default exists under any contract, indenture, mortgage, loan, agreement, note, lease or other agreement or instrument constituting “Indebtedness” (as defined in the Indenture) that either singly or in the aggregate could result in or is capable of resulting in a Material Adverse Effect.

    (hh) No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.

    (ii) Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement, the offer and sale of the Securities in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act by reason of Section 4(2) thereof, Rule 144A (“Rule 144A”) thereunder and Regulation S thereunder (“Regulation S”).

7

Exhibit 4.15

    (jj) Neither the Company nor any of its respective affiliates, nor any person acting on its or their behalf (i) has, within the six-month period prior to the date hereof, offered or sold, directly or indirectly, in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Securities or any security of the same class or series as the Securities, or (ii) has offered or will offer or sell the Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S under the Securities Act, by means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S. The Company, its affiliates and any person acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S. The Company has not entered and will not enter into any contractual arrangement with respect to the distribution of the Securities except for this Agreement.

    (kk) The proceeds of the sale of the Securities will be used to redeem and pay accrued interest on all outstanding aggregate principal amount of Company’s 10⁵/ 8 % Senior Notes due 2007.

    (ll) No “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has informed the Company or any Guarantor that it is considering imposing) any condition (financial or otherwise) on the Company’s or any Guarantor’s retaining any rating assigned to the Company or any Guarantor, any securities of the Company or, (ii) has indicated to the Company that it is considering (a) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (b) any change in the outlook for any rating of the Company or any Guarantor or any securities of the Company or any Guarantor.

    (mm) Application has been made to list the Securities on the Luxembourg Stock Exchange.

    (nn) The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with French GAAP and/or IFRS, as applicable, and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, except, in each case, with regard to matters set forth in the Offering Document.

    (oo) Neither the Company nor any of its subsidiaries, and none of their respective properties or assets, has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, executing or otherwise) under the laws of any jurisdiction in which it has been incorporated or in which any of its property or assets are held.

    (pp) To ensure the legality, validity, enforceability and admissibility into evidence of each of this Agreement, the Indenture, the Securities, the Guarantees, the Exchange Securities, the Registration Rights Agreement or any other document to be furnished hereunder or thereunder in any of the Relevant Jurisdictions, it is not necessary that any of this Agreement, the Indenture, the Securities, the Guarantees, the Exchange Securities, the Registration Rights Agreement or such other document be filed or recorded with any court or any other authority in any of the Relevant Jurisdictions or that any stamp or similar tax (other than, in the case of France, timbres de dimension) be paid in the Relevant Jurisdictions on or in respect of any of this Agreement, the Indenture, the Securities, the Guarantees, the Exchange Securities, the Registration Rights Agreement or any such other document.

8

Exhibit 4.15

    (qq) The Company (immediately after and giving effect to the issuance of the Securities) will be Solvent. As used in this paragraph, the term “Solvent” means, with respect to the Company and to a particular date, that on such date (a) the present value of the Company’s assets is not less than the Company’s liabilities, each as calculated in accordance with French GAAP; (b) assuming the sale of the Securities as contemplated by this Agreement and the Offering Document, the Company should be able to pay its respective debts as they become absolute and mature; and (c) the capital remaining in the Company would not be unreasonably small for the business in which the Company is engaged after giving due consideration to the prevailing practice in the industry in which such entity 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 is likely to become an actual or matured liability.

    (rr) Except as disclosed in the Offering Document, no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on shares of such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.

    (ss) The Company has not distributed and, prior to the later to occur of (i) the Closing Date and (ii) the completion of the distribution of the Securities, will not distribute any material referring to the offering and sale of the Securities other than the Offering Document or other materials, if any, permitted by the Securities Act and the Financial Services and Markets Act 2000 (“FSMA”) (or regulations promulgated pursuant to the Securities Act or FSMA).

    (tt) In connection with the distribution of the Securities, (i) the Company has not offered or sold, and will not offer or sell, directly or indirectly, any Securities to the public in France, (ii) offers and sales of Securities in France will be made only to qualified investors in accordance with Article 412-1 of the French Code Monétaire et Financier, and Decree no. 98-880 dated 1 October 1998 and (iii) the Company has not distributed or caused to be distributed and will not distribute or cause to be distributed in France, the Preliminary Offering Circular or the Offering Circular or any other offering material relating to the Securities other than to investors to whom offers and sales of Securities in France may be made as described above.

    (uu) Mazars & Guérard and Barbier Frinault & Autres Ernst & Young, who have certified certain financial statements of the Company and its consolidated subsidiaries for each of the years ended 31 December 2003 and 31 December 2004, and Barbier Frinault & Autres and Ernst & Young Audit, who have certified certain financial statements of the Company and its consolidated subsidiaries for the year ended 31 December 2002 and have delivered their reports in respect of the financial statements of the Company and its consolidated subsidiaries for each such year with respect to the audited consolidated financial statements and schedules included in the Offering Document, are, and have been in all such periods for which such financial statements are so included, independent auditors with respect to the Company in accordance with French GAAP and are independent public accountants within the meaning of the Securities Act and the rules and regulations promulgated thereunder.

    (vv) Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities in violation of applicable law. The Company has not taken any action or omitted to take any action (such as issuing any press release relating to the Securities without an appropriate legend) which may result in the loss by any of the Purchasers of the ability to rely on any stabilisation safe harbour provided under FSMA. The Company has been informed of the guidance relating to stabilisation provided by the Financial Services Authority, in particular in Section MAR 2 Annex 2G of the Financial Services Authority Handbook.

9

Exhibit 4.15

    (ww) The statistical, market-related, industry and similar data included in the Offering Document is based on or derived from sources that, to the knowledge of the Company, having made all reasonable inquiry, are reliable and accurate, and the disclosure of such data in the Offering Document is not misleading in any material respect.

    (xx) Each of the Company and the Company’s subsidiaries has filed all non-U.S., U.S. federal, state and local tax returns that are required to be filed, or has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect) and, except as set forth in the Offering Document, has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable or made adequate reserve of provision for, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a Material Adverse Effect.

    (yy) The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged taking into account the Company and its subsidiaries’ level of risk and the cost of insurance coverage; all policies of insurance and fidelity or surety bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and instruments; there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause that will have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole; none of the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and none of the Company nor any of its subsidiaries has any reason to believe as of the date of this Agreement that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

    (zz) The Company has the power to submit and, pursuant to this Agreement, has legally, validly, effectively and irrevocably submitted to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York, in connection with any suit, action or proceeding arising out of or relating to this Agreement, and has the power to designate, appoint and empower and, pursuant to this Agreement has legally, validly, effectively and irrevocably designated, appointed and empowered an agent for service of process in any suit, action or proceeding, as provided herein.

    (aaa) No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Offering Document has been made or reaffirmed without a reasonable basis or has been disclosed other than as in good faith.

    (bbb) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements relating to money laundering applicable to the Company and its subsidiaries and, so far as the Company is aware, any related or similar statutes, rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened, and neither the Company nor any of its subsidiaries nor, to the knowledge of the Company or any director, officer or employee of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds, (iii) caused the Company or any of its subsidiaries to be in violation of any provision of the U.S. Foreign Corrupt Practices Act of

10

Exhibit 4.15

1977 or other national or local law regulating payments to governmental officials or employees; or (iv) made any unlawful payment, except, in each case, with regard to matters set forth in the Offering Document.

     3. Purchase, Sale and Delivery of Securities. On the basis of the representations, warranties and agreements herein set forth, but subject to the terms and conditions herein contained, the Company agrees to sell to the several Purchasers, and the several Purchasers agree, severally and not jointly, to purchase from the Company, at a purchase price of 98.25% of the principal amount thereof plus accrued interest (if any) from April 28, 2005 to the Closing Date (as hereinafter defined), the respective principal amounts of Notes set forth opposite their names in Schedule A hereto.

     The Company will deliver, against payment of the purchase price, the Notes to be offered and sold by the Purchasers in reliance on Regulation S (the “Regulation S Notes”) in the form of one or more permanent global Notes in registered form without interest coupons (the “Regulation S Global Notes”) which will be deposited with the Trustee, in its capacity as custodian for the Depository Trust Company (“DTC”), and registered in the name of Cede & Co., as nominee for DTC. The Company will deliver against payment of the purchase price the Notes to be purchased by each Purchaser hereunder and to be offered and sold by each Purchaser in reliance on Rule 144A under the Securities Act (the “144A Notes”) in the form of one or more permanent global notes in registered form without interest coupons (the “Restricted Global Notes”, along with the Regulation S Global Notes, each a “Global Note”), which will be deposited with the Trustee as Custodian for DTC and registered in the name of Cede & Co., as nominee for DTC. The Regulation S Global Notes and the Restricted Global Notes shall be assigned separate CUSIP Numbers. The Restricted Global Notes shall include the legend regarding restrictions on transfer set forth under “Transfer Restrictions” in the Offering Document.

     Payment for the Regulation S Notes and the 144A Notes shall be made by the Purchasers in wire transfer (same day) funds to an account of the Company or an account as the Company may direct at a bank acceptable to the Purchasers at the office of Vinson & Elkins R.L.L.P., London at 10.00 A.M. (London time), on 28 April 2005, or at such other time not later than five full business days thereafter as the Purchasers and the Company shall mutually determine, such time being herein referred to as the “Closing Date”, against delivery to the Trustee, as custodian for DTC, of (i) the Regulation S Global Notes representing all of the Regulation S Notes and (ii) the Restricted Global Notes representing all of the 144A Notes. The Regulation S Global Notes and the Restricted Global Notes will be made available for checking at the office of Vinson & Elkins R.L.L.P. at least 24 hours prior to the Closing Date.

     In consideration of the agreement by the Purchasers to severally subscribe and pay for the Notes as aforesaid, the Company shall pay to the Purchasers a combined management, underwriting and selling commission of 1.75% of the principal amount of the Notes plus VAT (if applicable). The Purchasers shall be entitled to deduct the said commission from the purchase price by way of set-off.

     CSFB (the “Stabilising Agent”), on behalf of the Purchasers, may, to the extent permitted by applicable law, over-allot and effect transactions in any over-the-counter market or otherwise, in connection with the distribution of the Securities, with a view to stabilising or maintaining the market price of the Securities at levels other than those which might prevail in the open market but in doing so the Stabilising Agent shall act as principal and not as agent of the Company and any loss resulting from over-allotment or stabilisation shall be borne, and any profit arising therefrom shall be beneficially retained, by the Stabilising Agent. Nothing in this fifth paragraph of Section 3 shall be construed so as to require the Company to issue in excess of U.S.$165,000,000 million principal amount of Securities.

     As between the Company and the Purchasers, any loss resulting from stabilisation shall be borne, and any profit arising therefrom shall be retained, by the Purchasers as set out in the Agreement Among Purchasers.

     4. Representations by Purchasers; Resale by Purchasers.

11

Exhibit 4.15

    (a) Each Purchaser severally represents and warrants to the Company and the Guarantors that it has duly authorized, executed and delivered this Agreement and is an institutional “accredited investor” within the meaning of Regulation D under the Securities Act.

    (b) Each Purchaser severally acknowledges that the Securities and the Guarantees have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons, except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Each Purchaser severally represents and agrees that it has offered and sold the Securities and will offer and sell the Securities (i) as part of their distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering and the Closing Date, only in accordance with Rule 144A (“Rule 144A”) or Rule 903 under the Securities Act. Accordingly, neither such Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Securities. Accordingly, neither such Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Securities, and such Purchaser, its affiliates and all persons acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S. Each Purchaser severally agrees that, at or prior to confirmation of sale of the Securities, other than a sale pursuant to Rule 144A, such Purchaser will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases the Securities from it during the restricted period a confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the date of the commencement of the offering and the closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meanings given to them by Regulation S.”

    Terms used in this subsection (b) have the meanings given to them by Regulation S of the Securities Act.

    (c) Each Purchaser severally agrees that it and each of its affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the Securities except for any such arrangements with other Purchasers or affiliates of the other Purchasers or with the prior written consent of the Company.

    (d) Each Purchaser severally agrees that neither it nor any of its affiliates nor any person acting on its or their behalf will offer or sell the Securities in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, but not limited to, (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or disseminated via the internet, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. Each Purchaser severally agrees, with respect to resales made in reliance on Rule 144A of any of the Securities, to deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.

    (e) Each Purchaser severally represents and agrees that (i) it has not offered or sold and prior to the expiry of a period of six months from the Closing Date will not offer or sell any Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring,

12

Exhibit 4.15

holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received by it in connection with the issue or sale of any Securities in circumstances in which section 21(1) of FSMA does not apply to the Company; and (iii) it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.

    (f) Each Purchaser severally represents and agrees that it has complied and will comply in all material respects with all applicable laws and regulations in each jurisdiction in which it offers and distributes any offering materials relating to the offering or offers or sells the Notes.

     5. Certain Agreements of the Company. The Company agrees with the several Purchasers that:

    (a) If, at any time prior to the completion of the resale of the Securities by the Purchasers, any event occurs as a result of which the Offering Document as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any such time to amend or supplement the Offering Document to comply with any applicable law, the Company promptly will notify the Purchasers of such event and promptly will prepare, at its own expense, an amendment or supplement which will correct such statement or omission or effect such compliance. The Company will advise the Purchasers promptly of any proposal to amend or supplement the Offering Document and will not effect such amendment or supplementation without the Purchasers’ consent. Neither the Purchasers’ consent to, nor the Purchasers’ delivery to offerees or investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6.

    (b) The Company will furnish to the Purchasers copies of the Preliminary Offering Circular, the Offering Circular and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Purchasers reasonably request. At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, the Company will promptly make available to the Purchasers and, upon request of holders and prospective purchasers of the Securities, to such holders and purchasers, copies of the information required to be delivered to holders and prospective purchasers of the Securities pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of the Securities. The Company will pay the expenses of printing and distributing to the Purchasers and any such holders or prospective purchasers all such documents.

    (c) The Company will arrange for the qualification of the Securities for sale and the determination of their eligibility for investment under the laws of such jurisdictions in Europe, the United States and Canada as the Purchasers reasonably designate and will continue such qualifications in effect so long as required for the resale of the Securities by the Purchasers, provided that the Company will not be required to qualify as a foreign corporation or to file a general consent to service of process in any such jurisdiction.

    (d) During the period of two years after the Closing Date, the Company will, upon request, furnish to the Purchasers and any holder of Securities a copy of the restrictions on transfer applicable to the Securities.

13

Exhibit 4.15

    (e) In connection with the offering, until CSFB shall have notified the Company and the other Purchasers of the completion of the resale of the Securities, neither the Company not any of its affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Securities or attempt to induce any person to purchase any Offered Securities; and neither it nor any of its affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Securities. During the period of two years after the Closing Date, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been reacquired by any of them, unless pursuant to a registration statement under the Securities Act.

    (f) During the period of two years after the Closing Date, the Company will not be or become an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act.

    (g) Prior to the Closing Date and for 40 days subsequent to the Closing Date, neither the Company nor any of its subsidiaries will issue any press release or other communication directly or indirectly or hold any press conference with respect to the issue of the Securities, the Company or any of its subsidiaries, the condition, financial or otherwise (except for routine communications in the ordinary course of business and consistent with past practice, including the Company’s disclosure of results at and for the three months ended March 31, 2005 and 2004), or the earnings, business affairs or business prospects of the Company or any of its subsidiaries, without the prior consent of the Purchasers.

    (h) The Company agrees to pay all expenses (together with VAT, where applicable) incidental to the performance of its obligations under this Agreement and the Indenture, including, subject to receipt of sufficiently itemized accounts (i) the fees, disbursements and expenses of the Company’s legal advisors; (ii) the fees, disbursements and expenses of the Company’s accountants; (iii) the fees, disbursements and expenses of the Purchasers’ legal advisors, Vinson & Elkins RLLP and Bernard Hertz Bejot; (iv) the fees and expenses of the Trustee or any paying agent and their respective professional advisors; (v) all expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Securities and the Exchange Securities, the preparation and printing of this Agreement, the Securities, the Indenture, the Registration Rights Agreement, the Preliminary Offering Circular and the Offering Circular and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the Securities and the Exchange Securities; (vi) the cost of listing the Securities and the Exchange Securities and qualifying the Securities and the Exchange Securities for trading on the Luxembourg Stock Exchange and any expenses incidental thereto, including those of the Luxembourg listing agent; (vii) the cost of qualifying the Securities and the Exchange Securities for trading in The Portal^sm Market (“PORTAL”) of the NASDAQ Stock Market, Inc. and any expenses incidental thereto; (viii) the cost of any advertising approved by the Company in connection with the issue of the Securities; (ix) any expenses (including fees and disbursements of counsel) incurred in connection with qualification of the Securities for sale under the laws of such jurisdictions in Europe, the United States and Canada as the Purchasers designate and the printing of memoranda relating thereto; (x) any fees charged by investment rating agencies for the rating of the Securities; and (xi) expenses incurred in distributing the Preliminary Offering Circular and the Offering Circular (including any amendments and supplements thereto) to the Purchasers. The Company agrees to pay or reimburse the Purchasers (to the extent incurred by them) for all reasonable travel expenses of the Purchasers and the Company’s officers and employees and any other reasonable expenses of the Purchasers and the Company in connection with attending or hosting meetings with prospective purchasers of the Securities from the Purchasers. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Purchasers set forth in Section 7 hereof is not satisfied, because this Agreement is terminated or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on their part to be performed or satisfied hereunder (other than solely by reason of a default by an Purchaser on its obligations hereunder

14

Exhibit 4.15

after all conditions hereunder have been satisfied in accordance herewith), the Company agrees to promptly reimburse the Purchasers upon demand for all reasonable out-of-pocket expenses (including reasonable fees, disbursements and charges of Vinson & Elkins R.L.L.P. and Bernard Hertz Bejot, the Purchasers’ legal advisors) that shall have been incurred by the Purchasers in connection with the proposed purchase and sale of the Securities. The Company shall not be liable to the Purchasers for loss of contemplated profits from the transactions covered by this Agreement. Other than as set forth in this Section 5(h) each of the parties hereto shall bear all out-of-pocket costs and expenses incurred by them.

    (i) In connection with the offering, until the Purchasers shall have notified the Company of the completion of the resale of the Securities, neither the Company nor any of its affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Securities or attempt to induce any person to purchase any Securities; and neither they nor any of their affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Securities.

    (j) After the date of the initial offering of the Securities by the Purchasers and until the day which is 90 days after the Closing Date, the Company will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the Securities Act relating to, any debt securities issued or guaranteed by the Company and having a maturity of more than one year from the date of issue, or any options or derivatives in respect of such debt securities, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of the Purchasers; provided that this provision shall not prohibit the filing of any registration statement to comply with the terms of the Registration Rights Agreement, the issuance of the Exchange Securities, borrowings under the credit facilities existing on the date hereof or secured financings of accounts receivables and inventory. The Company will not at any time offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, pledge, contract or disposition would cause the exemption afforded by Rule 144A or the safe harbour of Regulation S to cease to be applicable to the offer and sale of the Securities.

    (k) The Company will indemnify and hold harmless the Purchasers against any documentary, stamp or similar issuance tax that may be imposed by the United States, Luxembourg or the Republic of France (other than, in the case of France, the fixed registration duty and timbres de dimension), including any interest and penalties, that may be payable by the Purchasers on the creation, issuance and sale of the Securities and on the execution and delivery of this Agreement. All payments to be made by the Company hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Company is compelled by law to deduct or withhold such taxes, duties or charges. In that event, the Company shall pay such additional amounts as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made. If such withholding or deduction of tax is due, the Purchasers and the Company shall promptly co-operate in completing any procedural formalities necessary for the Company to avoid such withholding or deduction of tax. The Company will not be required to pay such additional amounts to a Purchaser if the Company is able to demonstrate that the payment of additional amounts could have been made to the Purchaser without a withholding or deduction of tax had that Purchaser complied with its obligations to cooperate with the Company.

    (l) The Company will use its reasonable best efforts to have the Securities and the Exchange Securities admitted to trading on the Luxembourg Stock Exchange and will maintain such listing as long as the Securities or the Exchange Securities are outstanding; provided, however, that if the Company can no longer maintain such listing, the Company will use all reasonable commercial

15

Exhibit 4.15

efforts to obtain and maintain the listing of the Notes and the Exchange Securities on another recognized stock exchange.

    (m) The Company shall take all reasonable action necessary to enable Standard & Poor’s Ratings Services, a division of the McGraw Hill, Inc. (“S&P”), and Moody’s Investors Service Inc. (“Moody’s”) to provide and/or confirm their respective credit ratings of the Securities.

    (n) The Company will cooperate with the Purchasers and use its reasonable best endeavours to permit the Securities to be designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. relating to trading in The Portal Market and to permit the Securities to be eligible for clearance and settlement through DTC, including preparation and filing with DTC of a Letter of Representations signed by the Company.

    (o) The Company will not, and will not cause its respective affiliates to, nor will the Company authorize or knowingly permit any person acting on its behalf (excluding the Purchasers, as to whom no agreement is made) to, solicit any offer to buy or sell the Securities by means of any form of general solicitation or general advertising within the meaning of Regulation D under the Securities Act or in any manner involving a public offering within the meaning of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and the Company will not offer, sell, contract to sell or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act or the safe harbour afforded by Regulation D thereunder to cease to be applicable to the offering and sale of the Securities as contemplated by this Agreement and the Offering Circular.

    (p) The Company undertakes that, if the provisions of the EU Directive 2003/48/EC dated 3 June 2003 are implemented, it will use its best endeavours to ensure that the Company maintains a paying agent in a European Union member state that will not be obligated to withhold or deduct tax pursuant to the proposed European Union Directive on the taxation of savings income.

    (q) The Company will use its reasonable best endeavours to do and perform all things required or necessary to be done and performed under this Agreement by it prior to the Closing Date and to satisfy all conditions precedent to the delivery of the Securities.

     6. Conditions of the Obligations of the Purchasers. The obligations of the Purchasers to purchase and pay for the Securities will be subject to the accuracy of the representations and warranties on the part of the Company, to the accuracy of the statements of officers of the Company made pursuant to the provisions hereof, to the performance by the Company of their obligations hereunder, in each case, in all material respects, and to the following conditions precedent:

    (a) The Purchasers shall have received a comfort letter or letters, dated the date of this Agreement, of Mazars & Guérard and Barbier Frinault & Autres Ernst & Young, on the one hand, and Barbier Frinault & Autres and Ernst & Young Audit, on the other hand, in form and substance satisfactory to the Purchasers concerning the financial information with respect to the Company set forth in the Offering Document.

    (b) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of the Purchasers, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Securities; (ii) any downgrading in the rating of any debt securities of the Company by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Securities

16

Exhibit 4.15

Act), or any public announcement or any indication given to the Company that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) or any announcement that the Company has been placed on negative outlook; (iii) any change in U.S., French, international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Purchasers, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, the Luxembourg Stock Exchange or the Eurolist by Euronext Paris or any setting of minimum prices for trading on any such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any banking moratorium declared by U.S. Federal, New York, European Union, English or French authorities; (vi) any major disruption of settlements of securities or clearance services in the United States, the European Union, the United Kingdom or France; (vii) any attack on, outbreak or escalation of hostilities, declaration of war or act of terrorism involving the United States, the European Union, the United Kingdom or France, or any other national or international calamity or emergency if, in the judgment of the Purchasers, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Securities.

    (c) The Purchasers shall have received an opinion, dated the Closing Date, of Linklaters counsel for the Company, covering substantially the items set forth in Exhibit A hereto. The Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

    (d) The Purchasers shall have received opinions, dated the Closing Date, from local counsel for the Company, from local counsel in each of the countries of incorporation of the Guarantors with respect to the valid existence, power and authority, due authorization of the Guarantors and other related matters as the Purchasers may require, in each case satisfactory to the Purchasers. The Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

    (e) The Purchasers shall have received from, Vinson & Elkins R.L.L.P., U.S. counsel for the Purchaser, such opinion or opinions, dated the Closing Date, with respect to the validity of the Securities, the Offering Circular, the exemption from registration for the offer and sale of the Securities by the Company to the Purchasers and the resales by the Purchasers as contemplated hereby and other related matters as the Purchasers may require, in each case satisfactory to the Purchasers. The Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

    (f) The Purchasers shall have received certificates, dated the Closing Date, of the principal executive officer and the principal financial or accounting officer of the Company, in which such officers shall state that the representations and warranties of the Company in this Agreement are true and correct, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, and that, subsequent to the respective dates of the most recent financial statements in the Offering Document there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in the Offering Document.

    (g) The Purchasers shall have received a letter or letters, dated the Closing Date, of Mazars & Guérard and Barbier Frinault & Autres Ernst & Young on the one hand and Barbier Frinault &

17

Exhibit 4.15

Autres and Ernst & Young Audit on the other hand which meets the requirements of subsection (a) of this Section.

    (h) The Purchasers shall have received a comfort letter or letters, dated prior to the Closing Date of Ernst & Young in form and substance to the Purchasers concerning the financial information with respect to Arabian Geophysical & Surveying Company set forth in the Offering Document

    (i) At the Closing Date, the Securities shall have been designated for trading on The Portal Market and cleared for settlement at DTC.

    (j) At the Closing Date, application shall have been made to list the Securities on the Luxembourg Stock Exchange, and such application shall not have been withdrawn or rejected or shall have been approved for listing subject to official notice of issuance.

    (k) At the Closing Date, the Securities shall be rated at least Ba3 by S&P and BB- by Moody’s, and the Company shall have delivered to the Purchasers a letter dated the Closing Date, from each such rating agency, or other evidence satisfactory to the Purchasers, confirming that the Securities have such ratings.

    (l) As of the Closing Date, the Company, the Guarantors and the Trustee shall have entered into the Indenture.

    (m) As of the Closing Date, the Company and the Guarantors shall have entered into the Registration Rights Agreement, in form and substance satisfactory to the Purchasers.

    (n) The Company and its subsidiaries shall have (i) received on or prior to the Closing Date all consents, approvals, authorisations and other orders of, or qualifications with, each court, regulatory authority, governmental body or agency, or third party, and (ii) given all notices required under relevant law and any material agreements, in each case, required to execute, deliver and perform their respective obligations under the Indenture, the Securities, the Guarantees, the Exchange Securities, the Registration Rights Agreement and this Agreement, except, in each case, such as may be required under state securities laws and except for the order of the Commission declaring the Exchange Offer Registration Statement or Shelf Registration Statement effective.

     The Company will furnish the Purchasers with such copies of such conformed copies of such opinions, certificates, letters and documents as the Purchasers reasonably request. The Purchasers may in their sole discretion waive compliance with any conditions to the obligations of the Purchasers hereunder.

     7. Indemnification and Contribution.

    (a) The Company undertakes to each Purchaser that it will indemnify and hold harmless each such Purchaser, its partners, directors and officers and each person, if any, who controls each Purchaser within the meaning of Section 15 of the Securities Act (each, a “Relevant Party”), against any losses, claims, damages or liabilities, joint or several, to which such Relevant Party may become subject, under the Securities Act or the Exchange Act or otherwise (each, a “Loss”), insofar as such Loss (or any action in respect thereof) arises out of or is based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, including any Loss (or any action in respect thereof) arising out of or based upon the Company’s failure to perform its obligations under Section 5(a) of this Agreement, and the Company shall pay to such Relevant Party on demand an

18

Exhibit 4.15

amount equal to such Loss. No Relevant Party shall have any duty or obligation, whether as fiduciary or trustee for any Relevant Party or otherwise, to recover any such payment or to account to any other person for any amounts paid to it under this Section 7. The Company will reimburse each Relevant Party for any legal or other expenses incurred by such Relevant Party in connection with investigating or defending any such Loss (or action in respect thereof) upon demand as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such Loss (or any action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company made by the Purchasers through CSFB specifically for use in the Offering Document, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below.

    (b) Each Purchaser will severally and not jointly indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Purchasers through CSFB specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information consists of the following information in the Offering Document furnished on behalf of the Purchasers through CSFB: the table entitled “Initial Purchasers” under the caption “Plan of Distribution” and the second paragraph thereafter under the caption “Plan of Distribution”; provided, however, that the Purchasers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company’s failure to perform its obligations under Section 5(a) of this Agreement.

    (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defences) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defence thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defence thereof, the indemnifying party will not be liable to such indemnified party under this section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defence thereof other than reasonable costs of investigation; provided, however, that the indemnifying party shall only be obligated to pay the fees, disbursements and other charges of one counsel (and one additional local counsel for each applicable jurisdiction) to the indemnified parties in connection with any single matter, unless an indemnified party has a legal position that differs from the other indemnified parties or may be subject to different claims and defences than the other indemnified

19

Exhibit 4.15

parties, in which case the indemnifying party shall be obligated to pay the fees, disbursements and other charges of one additional counsel for such indemnified party. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of fault, culpability or failure to act by or on behalf of any indemnified party.

    (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Securities 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) above but also the relative fault of the Company on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts and commissions received by the Purchasers from the Company under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased by it were resold exceeds the amount of any damages which the Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.

    (e) The obligations of the Company under this Section shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any of the Purchasers within the meaning of the Securities Act or the Exchange Act; and the obligations of the Purchasers under this Section shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act.

     8. Default of Purchasers. If any Purchaser or Purchasers default in their obligations to purchase Securities hereunder and the aggregate principal amount of Securities that such defaulting Purchaser or Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of Securities, the non-defaulting Purchaser or Purchasers may make arrangements satisfactory to the Company for the purchase of such Securities by other persons, including any of the Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Securities that such defaulting Purchasers agreed but failed to purchase. If any Purchaser or Purchasers so default and the aggregate principal amount of Securities with

20

Exhibit 4.15

respect to which such default or defaults occur exceeds 10% of the total principal amount of Securities and arrangements satisfactory to the non-defaulting Purchasers and the Company for the purchase of such Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Purchaser or the Company, except as provided in Section 9. As used in this Agreement, the term “Purchaser” includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser from liability for its default.

     9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Purchaser, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Securities. If this Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the Securities by the Purchasers is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Company and the Purchasers pursuant to Section 7 shall remain in effect. If the purchase of the Securities by the Purchasers is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 8 or the occurrence of any event specified in clause (iii), (iv), (v), (vi) or (vii) of Section 6(b), the Company will reimburse the Purchasers for all out-of-pocket expenses (including fees and disbursements of counsel plus VAT where applicable) reasonably incurred by them in connection with the offering of the Securities.

     10. Notices. All communications hereunder will be in writing and, if sent to the Purchasers will be mailed, delivered or faxed to the Purchasers, c/o Credit Suisse First Boston (Europe) Limited, One Cabot Square, London E14 4QJ, United Kingdom, Attention: High Yield Capital Markets, facsimile number +44 20 7890 2312 or, if sent to the Company, will be mailed or delivered or faxed to it at Tour Montparnasse 33 avenue du Maine 75755 Paris Cedex 15, Attention: Mr. Michel Ponthus and Mr. Stephane-Paul Frydman, facsimile number + 33 1 64 47 34 31. Any such notice shall take effect, in the case of delivery, at the time of delivery, in the case of mail two business days after the same was deposited in the post (first class postage prepaid) and, in the case of facsimile, at the time of completion of the transmission.

     11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 7. No purchaser of Securities from any Purchaser shall be deemed to be a successor merely by reason of such purchase.

     12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. Delivery of an executed signature page to this Agreement by facsimile shall be as effective as delivery of a manually executed document.

     13. Representation of Purchasers. CSFB will act for the several Purchasers in connection with this purchase, and any action under this Agreement taken by CSFB will be binding upon all the Purchasers.

     14. Applicable Law and Jurisdiction.

    (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

    (b) The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

21

Exhibit 4.15

    (c) The Company irrevocably appoints CT Corporation, 111 8th Avenue, New York, New York 10011, as its authorized agent in New York, upon which process may be served in any such suit or proceeding, and agrees that service of process upon such agent, and written notice of said service to the Company by the person serving the same to the address provided in Section 10, shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company further agrees to take any and all action as may be necessary to maintain such designation and appointment of such agent in full force and effect for a period of eight years from the date of this Agreement.

     15. Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

     16. Currency. The obligation of the Company in respect of any sum due to any Purchaser or other indemnified party, as applicable, shall, notwithstanding any judgment in a currency other than Euro, not be discharged until the first business day, following receipt by such Purchaser or other indemnified party, as applicable, of any sum adjudged to be so due in such other currency, on which (and only to the extent that) such Purchaser or other indemnified party, as applicable, is able in accordance with normal banking procedures purchase Euro with such other currency; if the Euro so purchased are less than the sum originally due to such Purchaser or other indemnified party, as applicable, hereunder, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Purchaser or other indemnified party, as applicable, against such loss. If the Euro so purchased are greater than the sum originally due to such Purchaser or other indemnified party, as applicable, hereunder, such Purchaser or other indemnified party, as applicable, agrees to pay to the Company an amount equal to the excess of the Euro so purchased over the sum originally due to such Purchaser or other indemnified party, as applicable, hereunder.

     References in this Agreement to this Agreement, the Paying Agency Agreement and the Indenture shall be deemed to include such agreements or deeds as amended, varied or supplemented from time to time.

[Signature page follows.]

22

Exhibit 4.15

     If the foregoing is in accordance with the Purchasers’ understanding of our agreement, kindly sign and return to us one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the Purchasers in accordance with its terms.

Very truly yours,


Compagnie Generale de Geophysique
 

By:  

Name:  

Title:  

CGG Americas Inc.
 

By:  

Name:  

Title:  

CGG Canada Services Ltd
 

By:  

Name:  

Title:  

CGG Marine Resources Norge A/S
 

By:  

Name:  

Title:  

Sercel Inc.
 

By:  

Name:  

Title:  

Sercel Australia Pty Ltd
 

By:  

Name:  

Title:  

Sercel Canada Ltd.
 

By:  

Name:  

Title:  

23

Exhibit 4.15

The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.

CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
	BY:
	Name:
	Title:
	BY:
	Name:
	Title:
BNP PARIBAS SECURITIES CORP.
	BY:
	Name:
	Title:
RBC CAPITAL MARKETS CORPORATION
	BY:
	Name:
	Title:
NATEXIS BANQUES POPULAIRES
	BY:
	Name:
	Title:

24

SCHEDULE A

	Principal Amount of
Purchaser	Securities
Credit Suisse First Boston (Europe) Limited	U.S.$80,850,000
BNP Paribas Securities Corp.	U.S.$64,350,000
RBC Capital Markets Corporation	U.S.$13,200,000
Natexis Banques Populaires	U.S.$6,600,000
Total	U.S.$165,000,000

A-1

SCHEDULE B

Subsidiaries

		% Share Capital
	Jurisdiction of	held directly or
Company Subsidiaries	Organization	indirectly			Guarantor
CGG Marine SAS	France		100.0	%
Geocal SARL	France		100.0	%
Geoco SAS	France		100.0	%
Sercel SA	France		100.0	%
CGG Explo SARL	France		100.0	%
Sercel Holding SA	France		100.0	%
CGG Americas, Inc.	Texas		100.0	%	Yes
CGG do Brasil Participacoes Ltda.	Brasil		100.0	%
CGG Canada Services Ltd.	Alberta		100.0	%	Yes
CGG International SA	Switzerland		100.0	%
CGG (Nigeria) Ltd.	Nigeria		100.0	%
CGG Marine Resources Norge A/S	Norway		100.0	%	Yes
CGG Offshore UK Ltd.	United Kingdom		100.0	%
CGG Pan India Ltd.	India		40.0	%
CGG Selva	Peru		100.0	%
Compania Mexicana de Geofisica	Mexico		100.0	%
Compaghia de Geologica e Geofisica Portuguesa	Portugal		100.0	%
Exgeo CA	Venezuala		100.0	%
Geoexplo	Kazakhstan		100.0	%
Geophysics Overseas Corporation Ltd.	Bahamas		100.0	%

B-1

		% Share Capital
	Jurisdiction of	held directly or
Company Subsidiaries	Organization	indirectly			Guarantor
CGG Australia Services Pty Ltd.	Australia		100.0	%
CGG Asia Pacific	Malaysia		33.2	%
Petroleum Exploration Computer Consultants Ltd	United Kingdom		100.0	%
PT Alico	Indonesia		100.0	%
Sercel Australia Pty Ltd.	Australia		100.0	%	Yes
Hebei Sercel JunFeng	China		100.0	%
Sercel Inc.	Oklahoma		100.0	%	Yes
Sercel Singapore Pte Ltd.	Singapore		100.0	%
Sercel England Ltd.	United Kingdom		100.0	%
Sercel Canada Ltd.	New Brunswick		100.0	%	Yes

B-2

EXHIBIT A

[Form of Linklaters opinion to come]

EXH A-1

EX-4.16

Execution Copy

Exhibit 4.16

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

AND

THE GUARANTORS PARTY HERETO

$165,000,000

7¹/2% Senior Notes due 2015

REGISTRATION RIGHTS AGREEMENT

Dated as of April 28, 2005

CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
BNP PARIBAS SECURITIES CORP.
RBC CAPITAL MARKETS CORPORATION
NATEXIS BANQUES POPULAIRES

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of April 28, 2005 by and among Compagnie Générale de Géophysique, a corporation organized under the laws of the Republic of France (the “Company”),CGG Americas Inc., CGG Canada Services Ltd, CGG Marine Resources Norge A/S, Sercel Inc., Sercel Australia Pty Ltd, Sercel Canada Ltd and any subsidiary of the Company that becomes a guarantor of the Notes (as defined below) subsequent to the date hereof pursuant to the terms of the Indenture (as defined below) (each a “Guarantor” and, collectively, the “Guarantors”), and Credit Suisse First Boston (Europe) Limited, BNP Paribas Securities Corp., RBC Capital Markets Corporation and Natexis Banques Populaires (each an “Initial Purchaser” and, collectively, the “Initial Purchasers”), who have agreed to purchase $165,000,000 aggregate principal amount of the Company’s 7¹/2% Senior Notes due 2015 (the “Initial Notes”) pursuant to the Purchase Agreement (as defined below).

     This Agreement is made pursuant to the Purchase Agreement, dated April 21, 2005 (the “Purchase Agreement”), by and among the Company and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Initial Notes, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 6(k) of the Purchase Agreement. Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Indenture (as defined).

     The parties hereby agree as follows:

SECTION 1.
DEFINITIONS

     As used in this Agreement, the following capitalized terms shall have the following meanings:

     Act: The U.S. Securities Act of 1933, as amended.

     Advice: As defined in Section 6(d) hereof.

     Affiliate: As defined in Rule 144 under the Act.

     Broker-Dealer: Any broker or dealer registered under the Exchange Act.

     Closing Date: The date hereof.

     Commission: The U.S. Securities and Exchange Commission.

     Company: As defined in the preamble hereto.

     Consummate: The Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the

COMPAGNIE GENERALE DE GEOPHYSIQUE
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REGISTRATION RIGHTS AGREEMENT

keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Initial Notes that were validly tendered and not withdrawn by Holders thereof pursuant to the Exchange Offer.

     Damages Payment Date: With respect to the Initial Notes, each Interest Payment Date.

     Effectiveness Target Date: As defined in Section 5 hereof.

     Exchange Act: The U.S. Securities Exchange Act of 1934, as amended.

     Exchange Offer: The offer, registered by the Company under the Act pursuant to a Registration Statement, of the Exchange Notes to the Holders of all outstanding Transfer Restricted Securities validly tendered and not withdrawn in such exchange offer by such Holders.

     Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

     Exchange Notes: The Company’s 7¹/2% Senior Notes due 2015 to be issued pursuant to the Indenture (a) in the Exchange Offer and (b) as contemplated by Section 6(c)(xii) hereof.

     Exempt Resales: The transactions in which the Initial Purchasers propose to sell the Initial Notes (i) to certain “qualified institutional buyers,” as such term is defined in Rule 144A under the Act and (ii) outside the United States to certain non-U.S. Persons pursuant to the requirements of Rule 903 under the Act.

     Guarantor: As defined in the preamble hereto.

     Holder and Holders: As defined in Section 2(b) hereof.

     Indemnified Holder: As defined in Section 8(a) hereof.

     Indenture: The Indenture, dated as of April 28, 2005, between the Company and JPMorgan Chase Bank, National Association, as the Trustee, pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

     Initial Notes: As defined in the preamble hereto.

     Initial Purchaser and Initial Purchasers: As defined in the preamble hereto.

     Interest Payment Date: Each May 15 and November 15, beginning with November 15, 2005.

COMPAGNIE GENERALE DE GEOPHYSIQUE
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     NASD: The National Association of Securities Dealers, Inc.

     Notes: The Initial Notes and the Exchange Notes.

     Prospectus: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

     Record Holder: With respect to any Damages Payment Date relating to Notes, each Person who is a Holder of Notes on the record date with respect to the Interest Payment Date on which such Damages Payment Date shall occur.

     Registration Default: As defined in Section 5 hereof.

     Registration Statement: Any registration statement of the Company relating to (a) an offering of Exchange Notes and the Subsidiary Guarantees pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case, which is filed pursuant to the provisions of this Agreement and including the related Prospectus.

     Shelf Filing Deadline: As defined in Section 4 hereof.

     Shelf Registration Statement: As defined in Section 4 hereof.

     Subsidiary Guarantees: The joint and several guarantees of the Company’s payment obligations under the Notes by the Guarantors to the extent required by the terms of the Indenture.

     TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture.

     Transfer Restricted Securities: Each (a) Initial Note until (i) the date on which such Initial Note has been exchanged by a Person other than a Broker-Dealer for an Exchange Note in the Exchange Offer, (ii) the date on which such Initial Note has been disposed of in accordance with the Shelf Registration Statement in a transaction registered thereunder and the purchasers thereof have been issued Exchange Notes or (iii) the date on which such Initial Note is distributed to the public pursuant to Rule 144 under the Act or may be distributed to the public pursuant to Rule 144(k) under the Act and (b) Exchange Note until, following the exchange by a Broker-Dealer in the Exchange Offer of an Initial Note for an Exchange Note, the date on which such Exchange Note is sold pursuant to the “Plan of Distribution” contemplated in the Exchange Offer Registration Statement to a purchaser who receives from such Broker-Dealer on or prior to the date of such sale a copy of the Prospectus contained in the Exchange Offer Registration Statement.

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     Underwritten Registration or Underwritten Offering: A registration or an offering in which securities of the Company are sold to an underwriter for reoffering to the public.

SECTION 2.
SECURITIES SUBJECT TO THIS AGREEMENT

     (a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

     (b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder” and, collectively, the “Holders”) whenever such Person owns Transfer Restricted Securities of record.

SECTION 3.
REGISTERED EXCHANGE OFFER

     (a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Company and the Guarantors shall (i) cause to be filed with the Commission on or before the 120th day after the Closing Date, a Registration Statement under the Act relating to the Exchange Notes, the Subsidiary Guarantees and the Exchange Offer, (ii) use their reasonable best efforts to cause such Registration Statement to become effective on or before the 180th day after the Closing Date, (iii) in connection with the foregoing, file (A) all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Act and (C) subject to the proviso in Section 6(c)(xi) hereof, cause all necessary filings in connection with the registration and qualification of the Exchange Notes and the Subsidiary Guarantees to be made under the Blue Sky laws of such jurisdictions as are necessary to permit the Exchange Offer to be Consummated, and (iv) upon the effectiveness of such Registration Statement, commence, and within the time periods contemplated by Section 3(b) hereof Consummate, the Exchange Offer. The Exchange Offer Registration Statement shall be on the appropriate form under the Act permitting registration of the Exchange Notes to be offered in exchange for the Initial Notes that are Transfer Restricted Securities and permitting resales of the Exchange Notes held by Broker-Dealers that tendered into the Exchange Offer Initial Notes that such Broker-Dealers acquired for their own account as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates) as contemplated by Section 3(c) below.

     (b) The Company and the Guarantors shall cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days. The Company and the Guarantors shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the

COMPAGNIE GENERALE DE GEOPHYSIQUE
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REGISTRATION RIGHTS AGREEMENT

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Exchange Notes and the Subsidiary Guarantees shall be included in the Exchange Offer Registration Statement. The Company and the Guarantors shall use their reasonable best efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in any event on or prior to the 210th day after the Closing Date.

     (c) The Company and the Guarantors shall indicate in a “Plan of Distribution” section contained in the Exchange Offer Registration Statement that any Broker-Dealer who holds Notes that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company or any of its Affiliates) may exchange such Transfer Restricted Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of the Exchange Notes received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by such Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Transfer Restricted Securities held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.

     The Company and the Guarantors shall use their reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by and subject to the provisions of Sections 6(a) and 6(c) below to the extent necessary to ensure that the related Prospectus is available for resales of Notes acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company or any of its Affiliates), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of one year from the Consummation Date or such shorter period as will terminate when no Transfer Restricted Securities covered by such Registration Statement are outstanding.

     The Company and the Guarantors shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such period in order to facilitate such resales.

SECTION 4.
SHELF REGISTRATION

     (a) Shelf Registration. If (i) the Company and the Guarantors are not required to file an Exchange Offer Registration Statement or not permitted to Consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with) or (ii) any Holder of

COMPAGNIE GENERALE DE GEOPHYSIQUE
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Transfer Restricted Securities notifies the Company in writing prior to the 20th Business Day following the Consummation of the Exchange Offer that (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not available for such resales by such Holder, then the Company and the Guarantors shall use their reasonable best efforts to:

     (x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”) relating to all Transfer Restricted Securities in the case of Section 4(a)(i) or the Transfer Restricted Securities specified in any notice in the case of Section 4(a)(ii) on or prior to the earliest to occur of (1) the 90th day after the date on which the Company determines that it is not required to file the Exchange Offer Registration Statement as a result of Section 4(a)(i) hereof and (2) the 90th day after the date on which the Company receives notice from a Holder of Transfer Restricted Securities as contemplated by Section 4(a)(ii) above (such earliest date being the “Shelf Filing Deadline”), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and

     (y) cause such Shelf Registration Statement to be declared effective by the Commission on or before the 180th day after the Shelf Filing Deadline.

     The Company and the Guarantors shall use their reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, until the earlier of (a) two years following the Closing Date and (b) such earlier date when no Transfer Restricted Securities covered by such Shelf Registration Statement remain outstanding.

     Holders of Transfer Restricted Securities that do not give the written notice within the 20 Business Day period set forth above in this Section 4(a), if required to be given, will no longer have any registration rights pursuant to this Section 4 and will not be entitled to any Liquidated Damages pursuant to Section 5 hereof in respect of the Company’s obligations with respect to the Shelf Registration Statement.

     (b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 10 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus

COMPAGNIE GENERALE DE GEOPHYSIQUE
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included therein. No Holder of Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof if such Holder shall have failed to provide all such reasonably requested information within such period. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

SECTION 5.
LIQUIDATED DAMAGES

     If (i) any of the Registration Statements required by this Agreement to be filed is not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any of such Registration Statements has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the “Effectiveness Target Date”), whether or not the Company and the Guarantors have breached any obligations to use their reasonable best efforts to cause any such Registration Statement to be declared effective, (iii) the Exchange Offer has not been Consummated within 210 days of the Closing Date with respect to the Exchange Offer Registration Statement or (iv) subject to Section 6(c)(i) hereof, any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within 10 Business Days by a post-effective amendment to such Registration Statement that cures such failure and that is itself declared effective within 10 Business Days of the date of filing of such post-effective amendment (each such event referred to in clauses (i) through (iv), a “Registration Default”), the Company and the Guarantors hereby jointly and severally agree to pay liquidated damages to each Holder of Transfer Restricted Securities in an amount equal to $.05 per week per $1,000 principal amount of Transfer Restricted Securities held by such Holder for each week or portion thereof that the Registration Default continues with respect to the first 90-day period immediately following the occurrence of such Registration Default. The amount of the liquidated damages shall increase by an additional $.05 per week per $1,000 in principal amount of Transfer Restricted Securities with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages of $.30 per week per $1,000 principal amount of Transfer Restricted Securities provided that the Company shall in no event be required to pay Liquidated Damages for more than one Registration Default at any given time. All accrued liquidated damages shall be paid to Record Holders by the Company on each Damages Payment Date following the accrual thereof, in the same manner as provided in the Indenture and the Notes for the payment of interest on the Notes. Following the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, the accrual of liquidated damages with respect to such Transfer Restricted Securities will cease.

     All obligations of the Company and the Guarantors set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.

COMPAGNIE GENERALE DE GEOPHYSIQUE
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SECTION 6.
REGISTRATION PROCEDURES

     (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all of the applicable provisions of Section 6(c) below, shall use their reasonable best efforts to effect such exchange and to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

     (i) If in the reasonable opinion of counsel to the Company there is a question as to whether the Exchange Offer is permitted by applicable law, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate the Exchange Offer for such Transfer Restricted Securities and to permit the resale of Exchange Notes by Broker-Dealers that tendered in the Exchange Offer Initial Notes that such Broker-Dealers acquired for their own account as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates) being sold in accordance with the intended method or methods of distribution thereof. The Company and the Guarantors hereby agree to use their reasonable best efforts to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy.

     (ii) As a condition to its participation in the Exchange Offer, each Holder of Transfer Restricted Securities (including, without limitation, any Holder who is a Broker-Dealer) shall furnish, upon the request of the Company, prior to the Consummation of the Exchange Offer, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that, at the time of Consummation of the Exchange Offer, (A) any Exchange Notes received by such Holder will be acquired in the ordinary course of its business, (B) such Holder will have no arrangement or understanding with any person to participate in distribution of the Initial Notes or the Exchange Notes within the meaning of the Act, (C) if the Holder is not a Broker-Dealer or is a Broker-Dealer but will not receive Exchange Notes for its own account in exchange for Initial Notes, neither the Holder nor any such other Person is engaged in or intends to participate in a distribution of the Exchange Notes, and (D) such Holder is not an Affiliate of the Company. If the Holder is a Broker-Dealer that will receive Exchange Notes for its own account in exchange for Initial Notes, it will represent that the Initial Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities, and will acknowledge that it will deliver a prospectus meeting the requirements of the Act in connection with any resale of such Exchange Notes. It is understood that, by acknowledging that it will deliver, and by delivering, a prospectus meeting the requirements of the Act in connection with any resale of such Exchange Notes, the Holder is not admitting that it is an “underwriter” within the meaning of the Act.

COMPAGNIE GENERALE DE GEOPHYSIQUE
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REGISTRATION RIGHTS AGREEMENT

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     (iii) Prior to effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall provide a supplemental letter to the Commission (A) stating that the Company and the Guarantors are registering the Exchange Offer in reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any no-action letter obtained pursuant to clause (i) above and (B) including a representation that neither the Company nor any Guarantor has entered into any arrangement or understanding with any Person to distribute the Exchange Notes to be received in the Exchange Offer and that, to the best of the Company’s information and belief, each Holder participating in the Exchange Offer is acquiring the Exchange Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes received in the Exchange Offer.

     (b) Shelf Registration Statement. In connection with the Shelf Registration Statement, if required, the Company and the Guarantors shall comply with all the provisions of Section 6(c) below and shall use their reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company pursuant to Section 4(b) hereof) and, pursuant thereto, the Company and the Guarantors will prepare and file with the Commission in accordance with Section 4(a) hereof a Shelf Registration Statement to effect such registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof.

     (c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Notes by Broker-Dealers as contemplated herein), the Company and the Guarantors shall during the periods specified in Sections 3 and 4 hereof, as applicable:

     (i) use their reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements (including, if required by the Act or any regulation thereunder, financial statements of the Guarantors, if any) for the period specified in Section 3 or 4 hereof, as applicable; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or (B) not to be effective and usable for the resale of Transfer Restricted Securities during the period required by this Agreement, the Company and the Guarantors shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use their reasonable best efforts to cause such amendment to be declared effective and such Registration

COMPAGNIE GENERALE DE GEOPHYSIQUE
7¹/2% SENIOR NOTES DUE 2015
REGISTRATION RIGHTS AGREEMENT

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Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter; provided, however, if (A) the full Board of Directors of the Company determines in good faith that it is in the best interests of the Company not to disclose the existence of or facts surrounding any proposed or pending material corporate transaction involving the Company or any of its subsidiaries and (B) the Company notifies the Holders, pursuant to Section 6(c)(iii)(D) hereof, within two Business Days after such Board of Directors makes such determination, the Company may allow the Shelf Registration Statement to fail to be effective and usable as a result of such nondisclosure for up to 120 days during the period of effectiveness required by Section 4 hereof, but in no event for a period in excess of 45 consecutive days;

     (ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

     (iii) except in the case of the Exchange Offer Registration Statement, advise the underwriter(s), if any, and selling Holders promptly and, if requested by any such Person, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Company and the Guarantors shall use their reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

COMPAGNIE GENERALE DE GEOPHYSIQUE
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     (iv) in the case of a Shelf Registration Statement, furnish to each of the selling Holders and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (but excluding any documents incorporated by reference as a result of the Company’s periodic reporting requirements under the Exchange Act), and neither the Company nor any Guarantors shall file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (excluding all such documents incorporated by reference as a result of the Company’s periodic reporting requirements under the Exchange Act) to which a selling Holder of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object within five Business Days after the receipt thereof. A selling Holder or underwriter, if any, shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

     (v) in the case of a Shelf Registration Statement, promptly following the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the selling Holders and to the underwriter(s), if any, make the Company’s representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

     (vi) in the case of a Shelf Registration Statement, make available at reasonable times for inspection by the selling Holders, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney or accountant retained by such selling Holders or any of the underwriter(s), all relevant financial and other records and pertinent corporate documents and properties of the Company and the Guarantors and cause the Company’s and the Guarantors’ officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement subsequent to the filing thereof and prior to its effectiveness; provided, however, that the foregoing inspection and information gathering (i) shall be coordinated on behalf of the selling Holders, underwriters, or any representative thereof, by one counsel, who shall be Vinson & Elkins R.L.L.P. or such other counsel as may be chosen by the Holders of a majority in principal amount of Transfer Restricted Securities, and (ii) shall not be available for any such Holder who does not agree in writing to hold such information in confidence.

     (vii) in the case of a Shelf Registration Statement, if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such

COMPAGNIE GENERALE DE GEOPHYSIQUE
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information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

     (viii) in the case of a Shelf Registration Statement, furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

     (ix) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company and the Guarantors hereby consent, subject to Section 6(d) hereof, to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto; provided that such use of the Prospectus and any amendment or supplement thereto and such offering and sale conforms to the Plan of Distribution set forth in the Prospectus and complies with the terms of this Agreement and all applicable laws and regulations thereunder;

     (x) in the event of an Underwritten Registration, enter into such customary agreements (including an underwriting agreement), make such customary representations and warranties, deliver such customary documents and certificates, and take all such other customary actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and, without limiting the generality of the foregoing, the Company and the Guarantors shall:

     (A) furnish to each underwriter upon the effectiveness of the Shelf Registration Statement:

     (1) a certificate, dated the date of effectiveness of the Shelf Registration Statement, signed on behalf of the Company by two senior officers, one of whom must be its Senior Executive Vice President,

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Finance and Human Resources, confirming, as of such date, the matters addressed in the officers’ certificate delivered pursuant to Section 6(e) of the Purchase Agreement with respect to the transactions contemplated by the Shelf Registration Statement;

     (2) an opinion or opinions, dated the date of effectiveness of the Shelf Registration Statement, of counsel for the Company and the Guarantors covering the matters referred to in Section 6(c) and (d) of the Purchase Agreement with respect to the transactions contemplated by the Shelf Registration Statement; and

     (3) a customary comfort letter, dated as of the date of effectiveness of the Shelf Registration Statement, from the Company’s independent accountants if such comfort letter shall be issuable to the underwriters in accordance with the relevant accounting industry pronouncements, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with primary underwritten offerings, and substantially in the form of the comfort letters delivered pursuant to Section 6(a) of the Purchase Agreement; and

     (B) deliver such other documents and certificates as may be reasonably requested by such parties and which are customarily delivered in Underwritten Offerings.

     (xi) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s) may reasonably request and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that neither the Company nor the Guarantors shall be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject;

     (xii) issue, upon the request of any Holder of Initial Notes covered by the Shelf Registration Statement, Exchange Notes, having an aggregate principal amount equal to the aggregate principal amount of Initial Notes being sold by such Holder, such Exchange Notes to be registered in the name of the purchaser(s) of such Notes, as the case may be; in return, the Initial Notes held by such Holder shall be surrendered to the Company for cancellation;

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     (xiii) in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such authorized denominations and registered in such names as the Holders or the underwriter(s), if any, may reasonably request at least two Business Days prior to any sale of Transfer Restricted Securities made by such underwriter(s);

     (xiv) if any fact or event contemplated by clause (c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

     (xv) provide a CUSIP number for all Exchange Notes not later than the effective date of the Registration Statement and provide the Trustee under the Indenture with one or more global certificates for the Exchange Notes that are in a form eligible for deposit with The Depository Trust Company;

     (xvi) in the case of a Shelf Registration Statement, cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of the NASD;

     (xvii) otherwise use their reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for a twelve-month period commencing after the effective date of the Registration Statement;

     (xviii) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use their reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

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     (xix) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 or Section 15 of the Exchange Act.

     (d) Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will keep such notice confidential and forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof, or until it is advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each 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 Transfer Restricted Securities that was current at the time of receipt of such notice. If the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, 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 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof or shall have received the Advice.

SECTION 7.
REGISTRATION EXPENSES

     (a) All expenses incident to the Company’s or the Guarantors’ performance of or compliance with this Agreement will be borne by the Company and the Guarantors regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchasers or Holders with the NASD (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of the NASD)); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company and the Guarantors and, subject to Section 7(b) below, counsel for the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing Notes on a national securities exchange or automated quotation system, if any; and (vi) all fees and disbursements of independent public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).

     The Company and the Guarantors will, in any event, bear their internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or any Guarantor. The Company

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shall not be responsible for any other expenses or costs, including but not limited to commissions, fees and discounts of underwriters, brokers, dealers and agents.

     (b) In connection with any Registration Statement required by this Agreement (excluding the Exchange Offer Registration Statement), the Company and the Guarantors will reimburse the Holders of Transfer Restricted Securities being tendered in the Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Vinson & Elkins R.L.L.P. or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared; provided that, except in the case of an Underwritten Offering, the fees and expenses of such counsel to be reimbursed by the Company shall not exceed $25,000.

SECTION 8.
INDEMNIFICATION

     (a) The Company and the Guarantors jointly and severally, agree to indemnify and hold harmless (i) each Holder, (ii) each Initial Purchaser, (iii) each person, if any, who controls any Holder or an Initial Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or Initial Purchaser or any controlling person (any person referred to in clauses (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, liabilities, claims, damages and expenses whatsoever (including but not limited to reasonable attorneys’ fees and any and all reasonable expenses whatsoever incurred in investigating, preparing or defending against any investigation or litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus, or in any supplement thereto or amendment thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company and the Guarantors will not be liable in any such case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the any of the Holders expressly for use therein. This indemnity agreement will be in addition to any liability that the Company and the Guarantors may otherwise have, including under this Agreement.

     (b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company, each of the Guarantors and each person, if any, who

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controls the Company or any Guarantor within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each of their respective officers, directors, employers, partners, representatives and agents to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to information relating to such Holder furnished in writing by such Holder for use in any Registration Statement, or in any amendment thereof or supplement thereto; provided, however, that in no case shall any selling Holder be liable or responsible for any amount in excess of proceeds received by such Holder upon the sale of the Notes giving rise to such indemnification obligation. This indemnity will be in addition to any liability that the Holders may otherwise have, including under this Agreement.

     (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability that it may have under this Section 8 or otherwise except to the extent that it has been prejudiced in any material respect by such failure). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume and control the defense thereof with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it that are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses of counsel shall be borne by the indemnifying parties; provided, however, that the indemnifying party under subsection (a) or (b) above shall only be liable for the legal expenses of one counsel (in addition to any local counsel) for all indemnified parties. Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement of any claim or action effected without its prior written consent; provided that such consent was not unreasonably withheld.

SECTION 9.
CONTRIBUTION

     In order to provide for contribution in circumstances in which the indemnification provided for in Section 8 is for any reason held to be unavailable or is insufficient to hold harmless a party indemnified thereunder, the Company and the Guarantors on the one hand, and

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the Holders on the other hand, shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnification provision (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages, liabilities and expenses suffered by the Company and the Guarantors any contribution received by the Company and the Guarantors from Persons, other than a Holder, who may also be liable for contribution, including persons who control the Company and the Guarantors within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) to which the Company, the Guarantors or any Holder may be subject, (i) in such proportion as is appropriate to reflect the relative fault of the Company and the Guarantors on one hand, and each Holder, on the other hand, in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative fault referred to in clause (i) above but also other relevant equitable considerations. The relative fault of the Company and the Guarantors on one hand, and of each Holder, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Guarantors or such Holder and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Guarantors and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to above. Notwithstanding the provisions of this Section 9, (i) in no case shall any Holder be required to contribute any amount in excess of the amount by which the proceeds received by such Holder upon the sale of the Transfer Restricted Securities giving rise to such obligation exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9, (A) each Person, if any, who controls any of the Holders within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the respective officers, directors, partners, employees, representatives and agents of such Holder or any controlling Person shall have the same rights to contribution as the Holders, and each Person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same rights to contribution as the Company and the Guarantors subject in each case to clauses (i) and (ii) of this Section 9. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this Section 9, notify such party or parties from whom contribution may be sought, but the failure to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 9 or otherwise, except to the extent it or they have been prejudiced in any material respect by such failure. No party shall be liable for contribution with respect to any action or

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claim settled without its prior written consent; provided that such written consent was not unreasonably withheld.

SECTION 10.
RULE 144A

     The Company and the Guarantors hereby agree with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available, upon request, to any Holder of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A.

SECTION 11.
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS

     No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

SECTION 12.
SELECTION OF UNDERWRITERS

     The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Company; provided, however, that such investment bankers and managers must be reasonably satisfactory to the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering.

SECTION 13.
MISCELLANEOUS

     (a) No Inconsistent Agreements. The Company and the Guarantors shall not, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company’s or any Guarantor’s securities under any agreement in effect on the date hereof.

     (b) [Intentionally omitted.]

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     (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities; provided, however, that the Company may amend this Agreement to include or exclude a Guarantor as a party hereto if, pursuant to the terms of the Indenture, such Guarantor is required to provide a Subsidiary Guarantee for the Notes or is released from such obligation. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered.

     (d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telecopier, or air courier guaranteeing overnight delivery:

     (i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

     (ii) if to the Company or any Guarantor:

Compagnie Générale de Géophysique
1, rue Léon Migaux
91341 Massy
France
Telecopier No.: 33-1-67-47-34-32
Attention: Chief Financial Officer

with a copy to:

Linklaters & Alliance
25, rue de Marignan
75008 Paris
France
Telecopier No.: 33-1-43-59-41-96
Attention: Tom O’Neill

     All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

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     Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

     (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, the successors and assigns of subsequent Holders of Transfer Restricted Securities; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.

     (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

[Signature page to follow]

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

Compagnie Générale de Géophysique
By:
	Name:
	Title:
CGG Americas Inc.
By:
	Name:
	Title:
CGG Canada Services Ltd
By:
	Name:
	Title:
CGG Marine Resources Norge A/S
By:
	Name:
	Title:
Sercel Inc.
By:
	Name:
	Title:
Sercel Australia Pty Ltd
By:
	Name:
	Title:
Sercel Canada Ltd.
By:
	Name:
	Title:

SIGNATURE PAGE TO COMPAGNIE GENERALE DE GEOPHYSIQUE
7¹/2% SENIOR NOTES DUE 2015
REGISTRATION RIGHTS AGREEMENT

Accepted and agreed to as of
the date first above written:

Credit Suisse First Boston (Europe) Limited
BNP Paribas Securities Corp.
RBC Capital Markets Corporation
Natexis Banques Populaires

By:     Credit Suisse First Boston (Europe) Limited

By:  

Name:  

Title:  

EX-4.17

Exhibit 4.17

US$375,000,000

SINGLE CURRENCY TERM FACILITY AGREEMENT

dated 1 September 2005

for

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

arranged by
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
and
BNP PARIBAS

with

CREDIT SUISSE, LONDON BRANCH
acting as Agent

BNP PARIBAS
acting as Security Agent

CityPoint
33rd Floor
1 Ropemaker Street
London EC2Y 9UE

CONTENTS

CLAUSE		PAGE
SECTION 1 INTERPRETATION			1
1.	Definitions and Interpretation		1
SECTION 2 THE FACILITY			23
2.	The Facility		23
3.	Purpose		24
4.	Conditions of Utilisation		25
SECTION 3 UTILISATION			28
5.	Utilisation		28
SECTION 4 REPAYMENT, PREPAYMENT AND CANCELLATION			33
6.	Repayment		33
7.	Prepayment and cancellation		33
SECTION 5 COSTS OF UTILISATION			40
8.	Interest		40
9.	Interest Periods		42
10.	Changes to the calculation of interest		43
11.	Fees		45
12.	TAX GROSS UP AND INDEMNITIES		46
13.	Increased costs		49
14.	Other indemnities		50
15.	Mitigation by the Lenders		52
16.	Costs and expenses		52
SECTION 7 GUARANTEE			53
17.	Guarantee and indemnity		53
SECTION 8 REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT			56
18.	Representations		56
19.	Information undertakings		62
20.	FINANCIAL CONDITION		67
21.	General undertakings		71
22.	Events of Default		82
SECTION 9 CHANGES TO PARTIES			89

(i)

CLAUSE		PAGE
23.	Changes to the Lenders		89
24.	Changes to the Obligors		92
SECTION 10 THE FINANCE PARTIES			94
25.	Role of the Agent, the Arrangers and the Security Agent		94
26.	Conduct of business by the Finance Parties		107
27.	Sharing among the Finance Parties		107
SECTION 11 ADMINISTRATION			109
28.	Payment mechanics		109
29.	Set-off		112
30.	Notices		112
31.	Calculations and certificates		114
32.	Partial invalidity		114
33.	Remedies and waivers		114
34.	Amendments and waivers		114
35.	Counterparts		115
SECTION 12 GOVERNING LAW AND ENFORCEMENT			116
36.	Governing law		116
37.	Enforcement		116

(ii)

THIS AGREEMENT is dated 1 September 2005 and made between:

(1)	COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE, a société anonyme incorporated in France, having its registered office at 1 rue Léon Migaux, 91300 Massy and registered at the Evry commercial registry under number 969 202 241 R.C.S. Evry (the “Borrower”);
(2)	THE COMPANIES listed in Part 1 of Schedule 1 as original guarantors (the “Original Guarantors”);
(3)	CREDIT SUISSE FIRST BOSTON INTERNATIONAL and BNP PARIBAS (the “Arrangers”);
(4)	THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 as lenders (the “Original Lenders”);
(5)	CREDIT SUISSE, LONDON BRANCH as agent of the other Finance Parties (the “Agent”); and
(6)	BNP PARIBAS as security agent of the other Finance Parties (the “Security Agent”).

IT IS AGREED as follows:

SECTION 1
INTERPRETATION

1.	DEFINITIONS AND INTERPRETATION
1.1	Definitions
	In this Agreement:
	“Acceptable Bank” means:

(a)	a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor’s Rating Services or Fitch Ratings Ltd or A3 or higher by Moody’s Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or
(b)	any other bank or financial institution approved by the Agent.

“Accession Letter” means a document substantially in the form set out in Schedule 6 (Form of Accession Letter).

“Accounting Reference Date” means 31 December.

1

“Acquisition” means the acquisition by the Borrower of Shares pursuant to the Initial Purchase, the Mandatory Offer Purchase, the Squeeze-Out Purchase and the Non Offer Purchases.

“Acquisition Costs” means all brokers’ commissions, fees, costs and expenses, stamp, registration and other Taxes specifically contemplated under this Agreement and legal fees incurred by the Borrower or any other member of the Group in each case in connection with the Acquisition or the Transaction Documents provided that Acquisition Costs shall not exceed $375,000,000 less the amount equal to the maximum number of Shares acquired by the Borrower multiplied by the purchase price per share.

“Acquisition Documents” means any share purchase agreement or other document evidencing the agreement between the Borrower and any vendor to effect a purchase of Shares or otherwise relating to the Acquisition, including the Offer Document and the Squeeze-Out Offer Document.

“Additional Cost Rate” has the meaning given to it in Schedule 4 (Mandatory Cost formula).

“Additional Guarantor” means a company which becomes an Additional Guarantor in accordance with Clause 24 (Changes to the Obligors).

“Advance” means any of the Initial Advance, Mandatory Offer Advance, Squeeze-Out Advance and the Non Offer Advance, as applicable, and “Advances” shall be construed accordingly.

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

“Auditors” means the external auditors of the Borrower.

“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

“Available Commitment” means a Lender’s Commitment minus:

(a)	the amount of its participation in any outstanding Loans; and
(b)	in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date.

“Available Facility” means the aggregate for the time being of each Lender’s Available Commitment.

“Availability Period” means:

(a)	for the Initial Advance on 1 September 2005;
(b)	for the Mandatory Offer Advance from and including the date of this Agreement to and including the date falling nine weeks after the date on which the Offer Document is posted; and

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(c) for each of the Squeeze-Out Advance and each Non Offer Advance from and including the date of this Agreement to and including the date falling one year after the initial Utilisation.

“Base Case Model” means the base case model prepared by the Borrower and delivered to the Agent prior to the date of this Agreement.

“Base Currency” means US$.

“Blocked Account” means an account of the Borrower with the Security Agent withdrawals from which may only be made in accordance with Clause 4.6 (Release from Blocked Account).

“Borrowings” has the meaning given to that term in Clause 20 (Financial Condition).

“Break Costs” means the amount (if any) by which:

(a) the interest (excluding the Margin and Mandatory Costs) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London and Paris.

“Capital Expenditure” has the meaning given to that term in Clause 20 (Financial Condition).

“Cash Equivalent Investments” means at any time:

(a)	certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank;
(b)	any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security;
(c)	commercial paper not convertible or exchangeable to any other security:

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(i)	for which a recognised trading market exists;
(ii)	issued by an issuer incorporated in the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State;
(iii)	which matures within one year after the relevant date of calculation; and
(iv)	which has a credit rating of either A-1 or higher by Standard & Poor’s Rating Services or Fitch Ratings Ltd or P-1 or higher by Moody’s Investor Services Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating;

(d)	sterling bills of exchange eligible for rediscount at the Bank of England and accepted by an Acceptable Bank (or their dematerialised equivalent);
(e)	any investment accessible within 30 days in money market funds which have a credit rating of either A-1 or higher by Standard & Poor’s Rating Services or Fitch Rating Ltd or P-1 or higher by Moody’s Investor Services Limited and which invest substantially all their assets in securities of the types described in sub-paragraphs (a) to (d) above; or
(f)	any other debt security approved by the Majority Lenders,

in each case, to which any member of the Group is beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security Interest (other than one arising under the Security Documents).

“Cashflow” has the meaning given to that term in Clause 20 (Financial Condition).

“Charged Property” means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.

“Code” means the rules relating to offers for listed companies as set out in the (Norwegian) Securities Trading Act no. 79 of 19 June 1997, The Oslo Stock Exchange Regulations dated 17 January 1994 no. 30 and the Norwegian Public Limited Companies Act no. 45 of 13 June 1997.

“Commitment” means:

(a)	in relation to each Original Lender, the amount set opposite its name under the heading “Commitment” in Part II of Schedule 1 (The Original Parties) and the amount of any other Commitment transferred to it under this Agreement; and
(b)	in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

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“Commitment Letter” means the letter so entitled and entered into by the Borrower on 1 September 2005.

“Compliance Certificate” means a certificate substantially in the form set out in Schedule 8 (Form of Compliance Certificate).

“Confidentiality Undertaking” means a confidentiality undertaking substantially in a recommended form of the LMA as set out in Schedule 10 (LMA Form of Confidentiality Undertaking) or in any other form agreed between the Borrower and the Agent.

“Constitutional Documents” means the statuts of the Borrower.

“Continuing Directors” means, as of any date of determination, any member of the board of directors who (a) was a member of the board of directors on the date of this Agreement or (b) was nominated for election to the board of directors with the approval of, or whose election to the board of directors was ratified by, at least a majority of the members of the board of directors who were members of the board of directors on the date of this Agreement or who were so elected to the board of directors thereafter.

“Debt Refinancing Securities” means the debt securities subject to the debt engagement letter dated 1 September 2005 between the Borrower and the Managers.

“Default” means an Event of Default or any event or circumstance specified in Clause 22 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

“Delegate” means any delegate, agent, attorney or co-trustee appointed by the Security Agent.

“Disruption Event” means either or both of:

(a)	material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b)	the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(i)	from performing its payment obligations under the Finance Documents; or
(ii)	from communicating with other Parties in accordance with the terms of the Finance Documents,

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(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

“Environmental Claim” means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.

“Environmental Law” means any applicable law or regulation which relates to:

(a)	the pollution or protection of the environment;
(b)	harm to or the protection of human health;
(c)	the conditions of the workplace; or
(d)	any emission or substance capable of causing harm to any living organism or the environment.

“Environmental Permits” means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group.

“Equity Refinancing Securities” means the equity securities subject to the equity engagement letter dated 1 September 2005 between the Borrower and the Managers.

“Event of Default” means any event or circumstance specified as such in Clause 22 (Events of Default).

“Excess Cashflow” has the meaning given to that term in Clause 20 (Financial Condition).

“Existing Bonds” means the existing 71/2% Senior Notes due 2015 of the Borrower.

“Extension Request” has the meaning given to it in Clause 2.2 (Request for Extension).

“Facility” means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

“Facility Office” means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

“Fee Letter” means any letter or letters dated on or about the date of this Agreement between the Arrangers and the Borrower (or the Agent and the Borrower or the Security Agent and the Borrower) setting out any of the fees referred to in Clause 11 (Fees).

“Final Maturity Date” means 1 September 2006 (save as extended under Clause 2.4 (Extension of Facility)).

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“Finance Document” means this Agreement, the Commitment Letter, the Offer Guarantee, any Accession Letter, any Compliance Certificate, any Fee Letter, any Resignation Letter, any Selection Notice, any Security Document, any Utilisation Request and any other document designated as a “Finance Document” by the Agent and the Borrower.

“Finance Party” means the Agent, the Arrangers, the Security Agent or a Lender.

“Financial Indebtedness” means any indebtedness for or in respect of:

(a)	moneys borrowed;
(b)	any amount raised by acceptance under any acceptance credit facility;
(c)	any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d)	the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;
(e)	receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f)	any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
(g)	any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
(h)	any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
(i)	the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.

“Financial Quarter” has the meaning given to that term in Clause 20 (Financial Condition).

“Financial Year” has the meaning given to that term in Clause 20 (Financial Condition).

“GAAP” means IFRS.

“Group” means the Borrower and its Subsidiaries for the time being.

“Guarantor” means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 24 (Changes to the Obligors).

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“Holding Company” means, in relation to a company, corporation or other entity, any other company, corporation or other legal entity in respect of which the former company, corporation or other entity is a Subsidiary.

“IFRS” means International Financial Reporting Standards issued and/or adopted by the International Accounting Standards Board.

“Initial Advance” means a loan made or to be made under the Facility for the Initial Purchase, as defined in Clause 3.1(a).

“Intellectual Property” means:

(a)	any patents, trade marks, service marks, designs, business names, copyrights, design rights, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests, whether registered or unregistered; and
(b)	the benefit of all applications and rights to use such assets of each member of the Group.

“Interest Period” means, in relation to a Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.4 (Default interest).

“Joint Venture” means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.

“Legal Reservations” means:

(a)	the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
(b)	the time barring of claims under any statute of limitations, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; and
(c)	similar principles, rights and defences under the laws of any Relevant Jurisdiction.

“Lender” means:

(a)	any Original Lender; and
(b)	any bank, financial institution or credit institution (établissement de crédit) in France (or which is recognised as such in accordance with EU regulations), trust, fund or other entity which has become a Party in accordance with Clause 23 (Changes to the Lenders),

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which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

“LIBOR” means, in relation to any Loan:

(a)	the applicable Screen Rate; or
(b)	(if no Screen Rate is available for dollars the currency or Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,

as of the Specified Time on the Quotation Day for the offering of deposits in the currency of that Loan and for a period comparable to the Interest Period for that Loan.

“LMA” means the Loan Market Association.

“Loan” means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan.

“Majority Lenders” means:

(a)	if there are no Loans then outstanding, a Lender or Lenders whose Commitments aggregate more than 662/3% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 662/3% of the Total Commitments immediately prior to the reduction); or
(b)	at any other time, a Lender or Lenders whose participations in the Loans then outstanding aggregate more than 662/3% of all the Loans then outstanding.

“Managers” means Credit Suisse First Boston International and BNP Paribas, as Managers of an offering or offerings of Refinancing Securities.

“Mandatory Cost” means the percentage rate per annum calculated by the Agent in accordance with Schedule 4 (Mandatory Cost formula).

“Mandatory Offer Advance” means a loan made or to be made under the Facility for the Mandatory Offer Purchase, as defined in Clause 3.1(b).

“Margin” means the rate calculated in accordance with Clause 8.3 (Margin Ratchet).

“Material Adverse Effect” means in the opinion of the Majority Lenders a material adverse effect on:

(a)	the business, operations, property, condition (financial or otherwise) or prospects of the Group taken as a whole; or
(b)	the ability of an Obligor to perform its obligations under the Finance Documents; or
(c)	the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to any of, the Finance Documents

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or the rights or remedies of any Finance Party under any of the Finance Documents.

“Material Subsidiary” means, at any time, a Subsidiary of the Borrower whose total assets, revenues and / or ORBDA as defined in Clause 20.1 (Financial Definitions) then equal or exceed ten per cent. of the total assets, revenues and / or ORBDA of the Group.

For this purpose:

(a)	the consolidated total assets, revenues and / or ORBDA of a Subsidiary of the Borrower will be determined from its financial statements (unconsolidated if it has Subsidiaries) upon which the latest audited financial statements of the Group have been based;
(b)	if a Subsidiary of the Borrower becomes a member of the Group after the date on which the latest audited financial statements of the Group have been prepared, the consolidated total assets, revenues and / or ORBDA of that Subsidiary will be determined from its latest financial statements;
(c)	the consolidated total assets, revenues and / or ORBDA of the Group will be determined from its latest audited financial statements, adjusted (where appropriate) to reflect the total assets, revenues and / or ORBDA of any company or business subsequently acquired or disposed of; and
(d)	if a Material Subsidiary disposes of all or substantially all of its assets to another Subsidiary of the Borrower, it will immediately cease to be a Material Subsidiary and the other Subsidiary (if it is not already) will immediately become a Material Subsidiary; the subsequent financial statements of those Subsidiaries and the Group will be used to determine whether those Subsidiaries are Material Subsidiaries or not.
	If there is a dispute as to whether or not a company is a Material Subsidiary, a certificate of the auditors of the Borrower will be, in the absence of manifest error, conclusive.

“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that as to the last Month of any period:

(a)	(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b)	if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(c)	if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

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“Moody’s” means Moody’s Investor Service Limited.

“NOK” means Norwegian kroner, being the lawful currency of Norway.

“Non Offer Advance” means a loan made or to be made under the Facility for any Non Offer Purchase.

“Obligor” means the Borrower or a Guarantor.

“Offer” means the mandatory offer for the Shares to be made by or on behalf of the Borrower on the terms and conditions set out in the Offer Document, as the same may be amended in compliance with this Agreement.

“Offer Document” means the document in the agreed form to be delivered to the shareholders of the Target containing the Offer.

“Offer Expiry Date” means the earliest date on which all of the following have occurred:

(i)	all payments in respect of acceptances of the Offer have been made;
(ii)	no further acceptances of the Offer are possible; and
(iii)	all procedures under the Code which are capable of being implemented have been completed and all payments required by those sections to (or for the benefit of) shareholders in the Target have been made in full.

“Offer Guarantee” means a guarantee to be issued by one or more of the Arrangers and their affiliates in respect of the Offer substantially in the form set out in Schedule 14 (Form of Offer Guarantee) with such changes as may be agreed to reflect the terms of the Offer otherwise as required by the relevant Norwegian authorities and in the latter case, acceptable to the providers of such guarantees.

“Offer Guarantee Issuer” means one or more of the Arrangers and their affiliates which accedes to this Agreement in a form satisfactory to the Agent as an “Offer Guarantee Issuer” prior to the date of issue of the Offer Guarantee.

“Original Financial Statements” means:

(a)	in relation to the Borrower its consolidated audited financial statements for the year ended 31 December 2004;
(b)	in relation to Target, its unaudited pro forma financial statements for its Financial Year ended 31 December 2004;
(c)	in relation to each Original Obligor other than the Borrower, its financial statements for its Financial Year ended 31 December 2004; and
(d)	in relation to any other Obligor, its audited financial statements delivered to the Agent as required by Clause 24 (Changes to the Obligors).

“Original Obligor” means the Borrower and each Original Guarantor.

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“Participating Member State” means any member state of the European Communities that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.

“Party” means a party to this Agreement.

“Permitted Acquisition” means:

(a)	the Acquisition;
(b)	an acquisition by way of merger provided that the merger is permitted under paragraph (b) of the definition of Permitted Merger;
(c)	the acquisition of, or investment in, any share or interest in any Permitted Joint Venture, provided that such Permitted Joint Venture is with respect to the Borrower’s land seismic business or otherwise the acquisition of or investment therein, does not exceed $10,000,000 in the aggregate;
(d)	the acquisition by a member of the Group of any share, interest or asset sold, leased, transferred or otherwise disposed of by another member of the Group in circumstances constituting a Permitted Disposal;
(e)	the acquisition by a member of the Group of Cash Equivalent Investments;
(f)	an acquisition by a member of the Group to which the Agent (on the instructions of the Majority Lenders) shall have given prior written consent; or
(g)	an acquisition that is a Qualifying Acquisition.

“Permitted Disposal” means any sale, lease, transfer or other disposal:

(a)	made in the ordinary course of trading of the disposing entity;
(b)	of access to multi-client data libraries owned by any member of the Group, but not including the sale, lease, transfer or other disposal of the ownership interests therein;
(c)	of assets in exchange for other assets comparable or superior as to type, value and quality;
(d)	the sale, transfer or disposal of assets by the Borrower or any member of the Group consisting of one 2D seismic vessel, in exchange for equity, joint venture interests or other consideration, if as a result of such disposal the person receiving such property becomes a Subsidiary of the Borrower;
(e)	made by (i) an Obligor to another Obligor or (ii) a non Obligor to another non Obligor or (iii) a non Obligor to an Obligor or (iv) an Obligor to a non Obligor subject to a maximum aggregate amount for all such disposals under this sub-clause (iv) of $25,000,000 during the term of the Facility;
(f)	constituting the creation of any Permitted Security;

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(g)	to which the Agent (on the instructions of the Majority Lenders) shall have given prior written consent; or
(h)	where the higher of the market value or consideration receivable (when aggregated with the higher of the market value or consideration receivable for any other sale, lease, transfer or other disposal by the Group in any related transaction) does not exceed in aggregate $15,000,0000 (or its equivalent in another currency or currencies).

“Permitted Financial Indebtedness” means:

(a)	any Financial Indebtedness arising or permitted under any Finance Document;
(b)	any Financial Indebtedness not exceeding $60,000,000 arising under the credit facility dated 12 March 2004 between, among others, the Borrower and Natexis Banques Populaires as Agent (the “Existing Facility”);
(c)	any Financial Indebtedness to finance capital expenditure of the Target (including up-grades, conversions and seismic equipment) up to a maximum amount of $70,000,000 (the “Capex Facilities”);
(d)	any Permitted Guarantee;
(e)	any Financial Indebtedness permitted under Clause 21.27 (Treasury Transactions);
(f)	any Financial Indebtedness arising under a Permitted Joint Venture up to a maximum aggregate amount of $15,000,000 (or its equivalent in another currency or currencies) at any one time outstanding;
(g)	any Financial Indebtedness incurred by a member of the Group to which the Agent (on the instructions of the Majority Lenders) shall have given prior written consent;
(h)	any Financial Indebtedness arising under a finance or capital lease the aggregate principal amount of which when aggregated with the Financial Indebtedness under each other finance or capital lease entered into by members of the Group does not at any one time exceed $10,000,000 (or its equivalent in another currency or currencies) but excluding the time charter of the Geocharter;
(i)	the Existing Bonds;
(j)	the Debt Refinancing Securities;
(k)	any Financial Indebtedness listed in Schedule 17 (Existing Financial Indebtedness); or
(l)	any Financial Indebtedness (other than falling within (g) of the definition of Financial Indebtedness) incurred by any Obligor not falling within paragraphs (a) to (h) above, the aggregate outstanding principal amount of which does not

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at any one time exceed $15,000,000 (or its equivalent in another currency or currencies).

“Permitted Guarantee” means:

(a)	any guarantee arising under the Finance Documents;
(b)	any guarantee issued by a member of the Group in the ordinary course of business;
(c)	any guarantee issued by a member of the Group in respect of the Financial Indebtedness of another member of the Group;
(d)	any guarantee or indemnity or liability to which the Agent (acting on the instructions of the Majority Lenders) has consented in writing; or
(e)	all guarantees, indemnities and liabilities (other than those permitted pursuant to paragraphs (a) to (d) above) the aggregate amount of which is less than $5,000,000 (or its equivalent in another currency or currencies) at any one time outstanding.

“Permitted Joint Venture” means:

(a)	any Joint Venture to which the Agent (acting on the instructions of the Majority Lenders) has given prior written consent; or
(b)	any Joint Venture where:

(i)	no Default is continuing on the date of the acquisition of or investment in, or transfer or loan to, or guarantee, Security or Quasi Security for the obligations of, the Joint Venture or would occur as a result of the acquisition of or investment in, or transfer or loan to, or guarantee, Security or Quasi Security for the obligations of, a Joint Venture;
(ii)	the Joint Venture carries on, or is, a business substantially the same as that carried on by the Group; and
(iii)	the Joint Venture does not have any material contingent off-balance sheet, environmental, litigation or other liability save to the extent for which adequate reserves are being maintained in accordance with GAAP and/or in respect of which the relevant vendor (if any) has indemnified that member of the Group.

“Permitted Loan” means:

(a)	any loan granted by a member of the Group in the ordinary course of business;
(b)	any loan granted by a member of the Group to another member of the Group;
(c)	any loan consented to which the Agent (acting on the instructions of the Majority Lenders) shall have given prior written consent; or

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(d) all loans and credits (other than those permitted pursuant to paragraphs (a) to (c) above) the aggregate amount of which is less than $5,000,000 (or its equivalent in another currency or currencies) at any one time outstanding.

“Permitted Merger” means:

(a)	an acquisition by way of merger provided that the acquisition is a Permitted Acquisition;
(b)	an amalgamation, demerger, merger, consolidation or corporate reconstruction on a solvent basis of a member of the Group where all of the business and assets of that member remain within the Group and if that member of the Group was an Obligor immediately prior to that amalgamation, demerger, merger, consolidation or corporate reconstruction, all of the business and assets of that member are retained by one or more other Obligors or a company which becomes an Obligor upon such merger,
	and:

(A)	the surviving entity of that amalgamation, demerger, merger, consolidation or corporate reconstruction is liable for the obligations of the member of the Group it has merged with; and
(B)	the surviving entity of that amalgamation, demerger, merger, consolidation or corporate reconstruction is incorporated in the same jurisdiction as that member of the Group; or

(c) an amalgamation, demerger, merger, consolidation or corporate reconstruction on a solvent basis of any members of the Group that are not Obligors.

“Permitted Security” means:

(a)	any Security granted pursuant to the terms of the Existing Facility prior to the date that the first Loan is made under the Facility;
(b)	any Security granted pursuant to the terms of the Capex Facilities;
(c)	any Security listed in Schedule 9 (Existing Security) except to the extent the principal amount secured by that Security exceeds the amount as stated in that Schedule (or, if higher, the maximum amount of the relevant facility as stated in that Schedule);
(d)	any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its cash management arrangements for the purpose of netting debit and credit balances;
(e)	any lien arising by operation of law and in the ordinary course of business;
(f)	any sale of receivables on recourse terms or any Security constituted by any title transfer or retention of title or conditional sale arrangements, in each case which are entered into by any member of the Group in the normal course of its business up to a maximum aggregate amount of $10,000,000;

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(g) any Security over or affecting any asset acquired by a member of the Group after the date of this Agreement if:

(i)	the Security was not created in contemplation of the acquisition of that asset by a member of the Group;
(ii)	the principal amount (or, if higher, the maximum principal amount of the relevant facility) secured has not been increased in contemplation of, or since the acquisition of that asset by a member of the Group; and
(iii)	the Security is removed or discharged within six months of the date of acquisition of such asset if not otherwise permitted under this Agreement;

(h) any Security over or affecting any asset of any company which becomes a member of the Group after the date of this Agreement, where the Security is created prior to the date on which that company becomes a member of the Group, if:

(i)	the Security was not created in contemplation of the acquisition of that company;
(ii)	the principal amount (or, if higher, the maximum principal amount of the relevant facility) secured has not increased in contemplation of or since the acquisition of that company; and
(iii)	the Security is removed or discharged within six months of the date of acquisition of such asset if not otherwise permitted under this Agreement;

(i)	any Security entered into pursuant to any Finance Document;
(j)	any Security created in respect of any tax assessment or governmental charge or claim provided that (i) the aggregate amount secured by such Security is less than EUR 2,000,000 (or its equivalent in another currency or currencies), (ii) that such assessment, charge or claim is being contested in good faith, (iii) adequate reserves are being maintained for such assessment, charge or claim, (iv) payment in respect of such assessment, charge or claim can be lawfully withheld and (v) any such assessment, charge or claim which relates to an amount in excess of EUR 1,000,000 (or its equivalent in another currency or currencies) has been notified to the Agent;
(k)	any Security to which the Agent (acting on the instructions of the Majority Lenders) shall have given prior written consent;
(l)	any Security securing Financial Indebtedness arising or permitted under paragraph (h) of the definition of Permitted Financial Indebtedness; or
(m)	any Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security given by any member of the Group other than any

16

permitted under paragraphs (a) to (l) above) does not exceed $10,000,000 (or its equivalent in another currency or currencies) at any one time outstanding.

“Permitted Share Issue” means:

(a)	the issue by the Borrower of shares in respect of the conversion, redemption or payment of interest of the bonds issued prior to the date of this Agreement by the Borrower with a redemption date in 2012;
(b)	the issue by the Borrower of shares, the proceeds of which issue are used towards the repayment or prepayment of the Facility;
(c)	the issue by the Borrower of any shares pursuant to any share option scheme or issue of free shares to senior management of the Group; or
(d)	distributions in the form of shares by any member of the Group (other than the Borrower) to its shareholders on a pro rata basis; or
(e)	the issue of shares by an Obligor to an Obligor and issue of shares by a non-Obligor to a non-Obligor.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organisation, limited liability company or government or other entity.

“Qualifying Acquisition” means an acquisition of any business or all of the issued share capital of a limited liability company if:

(a)	the aggregate net expenditures in such acquisitions for members of the Group is less than US$25,000,000 (or its equivalent in another currency or currencies);
(b)	if the relevant company, business, undertaking, person, partnership or similar arrangement had been consolidated, on a pro forma basis, in the most recent set of consolidated financial statements delivered by the Borrower in accordance with Clause 19.1 (Financial statements), all requirements of Clause 22.2 (Financial covenants and other obligations) would have been satisfied on the date that such requirements were tested by reference to such consolidated financial statements in accordance with Clause 20.3 (Financial Testing); and
(c)	the relevant company, business, undertaking, person, partnership or similar arrangement carries on, or is, a business substantially the same as that carried on by the Group.

“Qualifying Lender” has the meaning given to it in Clause 12 (Tax GrossUp and Indemnities).

“Quarter Date” means the last day of a Financial Quarter.

“Quasi-Security” has the meaning given to that term in Clause 21.13 (Negative pledge).

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“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.

“Reference Banks” means BNP Paribas, Calyon, Lloyds Bank and HSBC plc or such other banks as may be appointed by the Agent in consultation with the Borrower.

“Refinancing Securities” means the Debt Refinancing Securities and the Equity Refinancing Securities.

“Relevant Interbank Market” means the London interbank market.

“Relevant Jurisdiction” means, in relation to an Obligor:

(a)	its jurisdiction of incorporation;
(b)	any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated;
(c)	any jurisdiction where it conducts its business; and
(d)	the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.

“Relevant Period” has the meaning given to that term in Clause 20 (Financial Condition).

“Repeating Representations” means each of the representations set out in Clause 18.2 (Status) to Clauses 18.7 (Governing law and enforcement), Clause 18.11 (No default), Clause 18.13 (Original Financial Statements), Clause 18.19 (Ranking) to Clause 18.21 (Legal and beneficial ownership) and Clause 18.25 (Centre of main interests and establishments).

“Resignation Letter” means a letter substantially in the form set out in Schedule 7 (Form of Resignation Letter).

“Screen Rate” means the British Bankers’ Association International Settlement Rate for dollars for the relevant period the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period for the relevant period, displayed on the appropriate page of the Telerate screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower and the Lenders.

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“Secured Parties” means each Finance Party from time to time party to this Agreement.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Security” means a mortgage, charge, pledge, lien, assignment or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

“Security Documents” means the share pledge agreement in respect of the Shares to be delivered to the Agent under paragraph 3(e) of Part I of Schedule 2 (Conditions Precedent) together with any other document entered into by any Obligor creating or expressed to create any Security over all or any part of its assets in respect of the obligations of any of the Obligors under any of the Finance Documents.

“Selection Notice” means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with Clause 9 (Interest Periods).

“Shares” means all the issued shares in the capital of the Target (including any shares of the Target issued or to be issued whilst the Offer remains open for acceptance).

“Specified Time” means a time determined in accordance with Schedule 15 (Specified Time).

“Squeeze-Out Advance” means a loan made or to be made under the Facility for any Squeeze-Out Purchase, as defined in Clause 3.1(c).

“Squeeze-Out Offer” means any minority buy-out offer made by the Borrower in respect of the Shares.

“Squeeze-Out Offer Document” means the document in the agreed form to be delivered to the shareholders of the Target containing the Squeeze-Out Offer.

“Standard & Poor’s” means Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies Inc.

“Subsidiary” means, in relation to any company, (i) another company which is controlled by it within the meaning of article L.233-3 of the French Code de Commerce or (ii) fully consolidated in its consolidated financial statements in accordance with article L.233-16 of the French Code de Commerce.

“Syndication Date” means the day on which the Arrangers confirm that the primary syndication of the Facility has been completed.

“Target” means Exploration Resources ASA, a company incorporated under the law of Norway with registered number 987 264 020.

“Target Group” means the Target and its Subsidiaries.

“Term-Out Advance” means a term loan made or to be made under Clause 2.4 (Extension of Facility).

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“Total Commitments” means the aggregate of the Commitments being US$375,000,000 at the date of this Agreement.

“Transaction Documents” means the Acquisition Documents and the Finance Documents.

“Transaction Security” means the Security granted in favour of the Finance Parties by any Obligor pursuant to each Security Document.

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower.

“Transfer Date” means, in relation to a transfer, the later of:

(a)	the proposed Transfer Date specified in the Transfer Certificate; and
(b)	the date on which the Agent executes the Transfer Certificate.

	“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.
	“USD”, “$” and “dollars” denote the lawful currency of the United States of America.
	“Utilisation” means a utilisation of the Facility.
	“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Loan is to be made.
	“Utilisation Request” means a notice substantially in the form set out in Part I of Schedule 3 (Requests).
1.2	Construction

(a) Unless a contrary indication appears, any reference in this Agreement to:

(i)	the “Agent”, the “Arrangers”, any “Finance Party”, any “Lender”, any “Obligor” or any “Party” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;
(ii)	“assets” includes present and future properties, revenues and rights of every description;
(iii)	“corporate reconstruction” includes in relation to any company any contribution of part of its business in consideration of shares (apport partiel d’actifs) and any demerger (scission) implemented in accordance with articles L.236-1 to L.236-24 of the French Code de Commerce; any merger and any transmission universelle de patrimonie;

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(iv)	a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended or novated;
(v)	a “guarantee” includes any “cautionnement”, “aval” and any “garantie” which is independent from the debt to which it relates;
(vi)	“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(vii)	“merger” includes any fusion implemented in accordance with articles L.236-1 to L.236-24 of the French Code de Commerce;
(viii)	a “person” includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) or two or more of the foregoing;
(ix)	a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, compliance with which is customary for the persons to whom it is addressed) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
(x)	a “security interest” includes any type of security (sûreté réelle) and transfer by way of security;
(xi)	Providing “cash cover” for an Offer Guarantee means paying an amount in the currency of the Offer Guarantee to an interest-bearing account in the name of the Borrower and the following conditions being met:

(A)	the account is with the Agent (if the cash cover is to be provided for all the Lenders);
(B)	until no amount may be drawn under that Offer Guarantee and provided that the Offer Guarantee Issuer has been reimbursed in full for any drawings under that Offer Guarantee, withdrawals from the account may only be made to pay amounts due and payable to the Offer Guarantee Issuer under this Agreement in respect of that Offer Guarantee; and
(C)	the Borrower has executed a security document over that account, in form and substance satisfactory to the Agent, creating a first ranking security interest over that account.

(xii) “repaying” or “prepaying” an Offer Guarantee means:

(A) providing cash cover for that Offer Guarantee;

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(B)	the maximum amount payable under the Offer Guarantee being reduced or cancelled in accordance with its terms; or
(C)	the Offer Guarantee Issuer being otherwise satisfied that they have no further liability under that Offer Guarantee,
	and the amount by which an Offer Guarantee is repaid or prepaid under sub-paragraphs (xii)(A) and (xii)(B) above is the amount for the relevant cash cover or reduction or cancellation as applicable.

(xiii)	a provision of law is a reference to that provision as amended or re-enacted; and
(xiv)	a time of day is a reference to London time.

(b)	Section, Clause and Schedule headings are for ease of reference only.
(c)	Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(d)	A Default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived or remedied.

1.3	Third party rights
	A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Agreement

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SECTION 2
THE FACILITY

2.	THE FACILITY
2.1	The Facility
	Subject to the terms of this Agreement, the Lenders make available to the Borrower a US Dollar term loan facility in an aggregate amount of US$375,000,000 with the option to extend all outstanding Loans under the Facility by a Term-out Advance for a further six months.
2.2	Request for Extension

(a)	The Borrower may request that any outstanding Loans under the Facility owed by it on the Final Maturity Date be extended for a further six months in a single Term-out Advance with effect from the Final Maturity Date.
(b)	Such request (the “Extension Request”) shall be made by notice in writing not less than one month before the Facility Maturity Date.
(c)	Once issued such notice shall be unconditional and irrevocable.
(d)	Only one Extension Request may be made.

2.3	Notification to Lenders
	Promptly after receiving it, the Agent shall forward a copy of any Extension Request to each Lender.
2.4	Extension of Facility

(a) If:

(i)	the Borrower has delivered a valid Extension Request to the Agent under Clause 2.2 (Request for Extension);
(ii)	the Repeating Representations are correct in all material respects;
(iii)	no Default or Event of Default is outstanding; and
(iv)	the Borrower has paid to the Agent any fee required by the Lenders,

	all outstanding Loans on the Facility Maturity Date shall at the sole option of the Majority Lenders, be converted and consolidated into, and treated as, a single Term-out Advance drawn by the Borrower and the Final Maturity Date in respect of the Facility shall be extended to six months after the anniversary of the date of this Agreement.
(b)	The first Interest Period for such Term-out Advance shall commence on the Final Maturity Date and its duration shall be determined in accordance with Clause 9.1 (Selection of Interest Periods).

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2.5 Finance Parties’ rights and obligations

(a)	The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
(b)	The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.
(c)	A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

3.	PURPOSE
3.1	Purpose
	The Borrower shall apply all amounts borrowed by it under the Facility towards the purchase of Shares at a purchase price of not more than NOK 340 per Share (including discharging its obligations towards the Lenders with respect to the Offer Guarantee, if applicable) and Acquisition Costs:

(a)	with respect to the Initial Advance, funding the initial acquisition by it of a block of not less than 50 per cent. plus one Share of the issued and outstanding Shares (the “Initial Purchase”);
(b)	with respect to the Mandatory Offer Advance, funding, subsequent to the Initial Purchase, any acquisition by way of mandatory public offer for all of the issued and outstanding Shares not purchased in the Initial Purchase or pursuant to a Non Offer Purchase (the “Mandatory Offer Purchase”;
(c)	with respect to the Squeeze-Out Advance, financing the further acquisition by way of squeeze out offer by it of any remaining issued and outstanding Shares not purchased in the Initial Purchase, the Mandatory Offer Purchase or a Non Offer Purchase (the “Squeeze-Out Purchase”); and
(d)	with respect to each Non Offer Advance, financing the acquisition by it of any issued and outstanding Shares not purchased in the Mandatory Purchase or Squeeze-Out Purchase (a “Non Offer Purchase”).

	In respect of a Mandatory Offer Advance, the Borrower may also request a Utilisation in the form of issuance of an Offer Guarantee in respect of the Offer.
3.2	Monitoring
	No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

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4.	CONDITIONS OF UTILISATION
4.1	Initial conditions precedent

(a)	The Borrower may not deliver a Utilisation Request unless the Agent has received all of the documents and other evidence listed in paragraphs 1 to 3 inclusive of Part I of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.
(b)	The Borrower may not deliver a Utilisation Request for an Offer Guarantee unless the Agent has received all the documents and other evidence listed in paragraph 4 of Part 1 of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.
(c)	The Borrower may not deliver a Utilisation Request for a Mandatory Offer Advance unless the Agent has received all the documents and other evidence listed in paragraph 5 of Part 1 of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders upon being so satisfied.
(d)	The Borrower may not deliver a Utilisation Request for a Squeeze-Out Advance unless the Agent has received all the documents and other evidence listed in paragraph 6 of Part 1 of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.
(e)	The Borrower may not deliver a Utilisation Request for a Non Offer Purchaser unless the Agent has received all the documents and other evidence listed in paragraph 7 of Part 1 of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders upon being so satisfied.

4.2	Further conditions precedent for all Advances
	Subject to Clause 4.3 with respect to the Mandatory Offer Advance and the Squeeze-Out Advance only, the Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) if on the date of the Utilisation Request and on the proposed Utilisation Date:

(a)	no Default is continuing or would result from the proposed Loan; and
(b)	the Repeating Representations to be made by each Obligor are true in all material respects.

4.3 Certain Funds

(a) Notwithstanding any failure to satisfy Clause 4.1(e) (Further conditions precedent for all Advances), in order to give certainty of funding for the Loans to be drawn for making a Mandatory Offer Advance or a Squeeze-Out Offer Advance or deemed to be drawn for the purpose of reimbursing the Offer

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	Guarantee Issuers for any amounts paid by them under the Offer Guarantee, the conditions set out in Clause 4.1(e) (Further conditions precedent for all Advances) shall not apply to such Loans and such Loans shall be made notwithstanding a Default or the expiry of the Availability Period.
(b)	Notwithstanding paragraph (a) above, if Clause 4.2 (Further conditions precedent for all Advances) is not satisfied in relation to a Loan or deemed Loan referred to in paragraph (a) above, there shall be an Event of Default and, following the making of the relevant Loan, all rights, remedies and entitlements shall be available to the Finance Parties to the extent they would have been available but for this Clause 4.3, even though they have not been exercised or available prior to such day.
(c)	The obligations of each Lender to participate in any Loan to be used for the purpose of making a Mandatory Offer Advance, a Non Offer Advance or a Squeeze-Out Offer Advance are subject to the further condition precedent that:

(i)	the Agent has received a copy of one or more contract notes or certificate in accordance with Clause 21.31 (The Offer) from the broker or receiving agent to the Offer dated on or about the date for the making of that Loan; and
(ii)	such contract notes or certificates demonstrate that the aggregate of the amounts paid and payable in respect of purchases of Shares on the relevant Utilisation Date are at least equal to the aggregate of the principal amount of that Loan.

4.4 Maximum number of Loans

(a)	The Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation 6 or more Loans would be outstanding.
(b)	The Borrower may not request that a Loan be divided if, as a result of the proposed division, 6 or more Loans would be outstanding.

4.5	Loans for Non-Offer Purchases
	The proceeds of each Loan used for a Non-Offer Purchase shall be credited directly either (i) to the Blocked Account (and the provisions of Clause 4.6 (Release from Blocked Account) shall apply and/or (ii) to the extent required, to the relevant broker, to be used to make payments for Non-Offer Purchases of Shares.
4.6	Release from Blocked Account

(a) Where payments for Non-Offer Purchases, the Mandatory Offer Purchase or the Squeeze-Out Offer Purchase (and/or any related Acquisition Costs) are to be made using the proceeds of Loans previously made available to the Borrower by way of transfer to the Blocked Account, the Agent shall instruct, promptly upon receipt of a copy of the broker’s contract note or broker’s certificate specifying the number of Shares acquired and the relevant settlement date (and/or notice received from the Borrower stating the related Acquisition Costs), the Security Agent to release monies credited to the

26

Blocked Account to be applied towards such purchases (and/or any related Acquisition Costs).

(b)

Any sums standing to the credit of the Blocked Account after the date on which the Squeeze-Out Offer is launched or, if none is launched the date on which the Borrower notifies the Agent that it will not achieve 90 per cent. ownership of the share capital of the Target, shall be applied to pay Acquisition Costs, if applicable to transfer necessary amounts to the account established for the purpose of holding monies for the Squeeze-Out Offer and, to the extent of any remainder, in prepayment of the Facility.

4.7

Loans for Squeeze-Out Offer Purchases

The proceeds of each Loan used to pay consideration for the Squeeze-Out Offer Purchases (together with amounts transferred from the Blocked Account for the same purpose) equal in aggregate to the amount due under the Squeeze-Out Offer to shareholders in the Target, shall be credited directly to an account with a bank authorised to do banking business in Norway and which account is established for the purpose of holding monies due to shareholders under the Squeeze-Out Offer.

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SECTION 3
UTILISATION

5.	UTILISATION
5.1	Delivery of a Utilisation Request
	The Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time with the exception of the Initial Advance for which the Utilisation Request may be submitted on the Utilisation Date.
5.2	Completion of a Utilisation Request

(a) The Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(i)	it specifies whether the Utilisation is by way of Loan or Offer Guarantee;
(ii)	the proposed Utilisation Date is a Business Day within the Availability Period;
(iii)	the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and
(iv)	the proposed Interest Period complies with Clause 9 (Interest Periods).

(b) Only one Loan may be requested in each Utilisation Request.

5.3 Currency and amount

(a)	The currency specified in a Utilisation Request must be dollars or NOK.
(b)	The amount of the proposed Loan must be an amount which is not more than the Available Facility and which is a minimum of US$10,000,000 or, if less, the Available Facility.

5.4 Lenders’ participation

(a)	If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.
(b)	The amount of each Lender’s participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
(c)	The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan by the Specified Time.

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5.5 Offer Guarantee Utilisation Mechanics

(a)

The Arrangers agree that they shall (or will procure that one of their affiliates shall) enter into an Offer Guarantee on the Utilisation Date specified in the relevant Utilisation Request and which shall be no earlier than the date on which the Offer Document is posted subject to the terms of this Agreement;

(b)

Notwithstanding Clause 5.2 (Completion of a Utilisation Request), a Loan deemed to be made for the purpose of discharging the Borrower’s obligations to the Lenders in the event of a claim made by the Offer Guarantee Issuers on the Lenders pursuant to Clause 5.6 (Offer Guarantees), shall notwithstanding the occurrence of any Default or the expiry of the Availability Period, be made to the Borrower as follows:

(i)	a Utilisation Request shall be deemed to have been made in respect of such Loan;
(ii)	the Utilisation Date for such Loan will be the date of the notification of such Loan to the Borrower by the Agent;
(iii)	the principal amount of such Loan will be:

(A)	less than or equal to the Available Facility; and
(B)	the US dollar equivalent (as determined by the Agent) of an amount equal to the amount paid or payable by the Offer Guarantee Issuers pursuant to the Offer Guarantee or by the Lenders to the Offer Guarantee Issuers in accordance with paragraph (b) of Clause 5.6 (Offer Guarantee);

(iv)	each such Loan shall be in dollars and shall have an Interest Period selected by the Agent after consultation, if reasonably practicable, with the Borrower; and
(v)	the proceeds of such Loan will be credited directly to the account of the Offer Guarantee Issuers in the event of any shortfall in amounts owed by the Lenders to the Offer Guarantee Issuers or in the event the Lenders have not paid the Offer Guarantee Issuers or set-off against the liability of the Borrower to the Lenders pursuant to Clause 5.6 (Offer Guarantee), as the case may be.

(c)	Each Offer Guarantee Issuer shall promptly notify the Agent in writing of (i) any amounts paid by it under any Offer Guarantee and (ii) any amounts which are received by it from any Lender pursuant to this Clause 5.5 prior to the relevant Utilisation Date. Upon receiving such notification, the Agent shall notify the Parties.
(d)	Notwithstanding the obligation of each Lender to make available its participation in any Loan requested in accordance with the provisions of this Clause 5.5 (Offer Guarantee Utilisation Mechanics), such Offer Guarantee Issuer will be deemed to have made available a Loan to the Borrower in any amount equal to the amount set out in paragraph (c)(i) above, less the amount

29

	set out in paragraph (c)(ii) above and such Borrower shall be deemed to have participated in such deemed Loan in that amount.
(e)	The rights and obligations in respect of the Loan deemed to have been made in accordance with this Clause 5.5 of any Lender who has failed to pay any amounts due to the Offer Guarantee Issuers shall be deemed to have been transferred pro tanto in accordance with the provisions of Clause 23 (Changes to the Lenders) to the relevant Offer Guarantee Issuer and such Offer Guarantee Issuer shall be a New Lender in accordance with the provisions of Clause 23 (Changes to the Lenders) in respect of such amount. For the avoidance of doubt, the Borrower may make no request for a Utilisation hereunder in respect of such amounts and no such request shall be deemed to be made.
(f)	Any Lender failing to make available any amount due to the Offer Guarantee Issuers in the event a claim has been made by the Offer Guarantee Issuers on the Lenders pursuant to Clause 5.6 (Offer Guarantee) shall indemnify the Offer Guarantee Issuers against any cost (including but not limited to any fee payable in accordance with Clause 23.3 (Assignment or Transfer Fee)), loss or liability which any Offer Guarantee Bank may sustain by reason of or arising in any way in connection with or by reference to its failure to perform its obligations in respect of such amount.
(g)	If a Utilisation Request is deemed given in accordance with this Clause 5.5 (Offer Guarantee Utilisation Mechanics), a further Utilisation Request may be made at any time thereafter by the Arrangers (and the Borrower hereby appoints the Arrangers as its lawful attorneys to do so) with regard to any Acquisition Costs associated with the Offer.

5.6 Offer Guarantee

(a)	If no (or insufficient) Loans have been made available to fund amounts required to be paid to the Offer Guarantee Issuers in respect of Shares to be purchased pursuant to the Offer, as applicable, and the Offer Guarantee Issuers are required to pay any amounts pursuant to the Offer Guarantee, the Offer Guarantee Issuers shall immediately notify the Agent of the claim under an Offer Guarantee and the Agent shall immediately notify the Lenders.
(b)	Notwithstanding any provision of this Agreement to the contrary each Lender shall (pro rata to its aggregate Commitment as a proportion of the sum of the Total Commitments but in an amount not more than its Available Commitment) immediately on demand pay the Offer Guarantee Issuers the amount of any payment made or required to be made by each of the Offer Guarantee Issuers in respect of a claim under an Offer Guarantee. This obligation shall be binding on each such Lender, notwithstanding the occurrence of any Event of Default. For the avoidance of doubt, the Lenders’ obligation under this Clause shall not be subject to any Availability Period.
(c)	If the Lenders are required to pay any amount to the Offer Guarantee Issuers pursuant to paragraph (b) above, the Borrower:

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(i)	agrees to pay to the Agent for the Lenders immediately on demand from the Agent an amount equal to and in the same currency as each amount payable by the Lenders under paragraph (b) above; and
(ii)	undertakes to indemnify each Finance Party from and against any cost, loss or liability which that Finance Party may incur or sustain by reason of or arising in any way whatsoever in connection with or by reference to its performance of the obligations expressed to be assumed by it in respect of paragraph (b) above.

(d) The Borrower (and in the case of paragraph (i), the Lenders) unconditionally and irrevocably:

(i)	authorises and directs the Offer Guarantee Issuers and each Lender to pay any amount claimed under and in accordance with an Offer Guarantee or paragraph (b) above without carrying out any investigation or requesting the agreement of any Obligor that the amount so demanded or paid is or was due and notwithstanding that any Obligor may dispute the validity of any such request, demand or payment and whether the notification of any demand under any Offer Guarantee was received by an Offer Guarantee Issuer by fax or letter and an Offer Guarantee Issuer shall be entitled to rely on such fax or letter as being genuine without further investigation and failure to make such investigation is agreed by the Lenders not to constitute negligence or misconduct;
(ii)	confirms that no Finance Party shall be concerned with the legality of the claim or any others underlying transactions;
(iii)	agrees that its obligations under this Clause will not be affected by:

(A)	the sufficiency, accuracy or genuineness of any claim or any other document; or
(B)	any incapacity of, or limitation on the powers of, any person signing a claim or other document.

(e) Each of the Lenders and the Borrower agrees that its respective obligations under this Clause 5.6 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 5.6 (whether or not known to it or any other person), including:

(i)	any time, waiver or consent granted to or composition with any Obligor, a Finance Party or any other person;
(ii)	the release of any Obligor, any Finance Party or any other person under the terms of any composition or arrangement with any creditor of the relevant person;
(iii)	the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against or

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	security over assets of, any Obligor or any other person or arising under an Offer Guarantee or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(iv)	any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor, any Finance Party or any other person;
(v)	any amendment (however fundamental), replacement or extension of or increase in liabilities under or reopening or renewal of an Offer Guarantee or this Agreement, a Finance Document or any other document or security;
(vi)	any unenforceability, illegality, or invalidity of any obligation of any person under any Finance Document, an Offer Guarantee or any other document or security; or
(vii)	any insolvency or similar proceedings.

(f) The obligations of the Borrower under this Clause 5 shall be in addition to and shall not be in any way prejudiced by any collateral or other security now or hereafter held by any Finance Party as security or any lien to which that Finance Party may be entitled.

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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION

6.	REPAYMENT
6.1	Repayment of Loans
	Except for a Term-out Advance, the Borrower shall repay each Loan in full by no later than the Final Maturity Date. The Borrower shall repay any Term Out Advance no later than six months after the Final Maturity Date.
6.2	Reborrowing
	The Borrower may not reborrow any part of the Facility which is repaid.
7.	PREPAYMENT AND CANCELLATION
7.1	Definitions
	For the purposes of this Clause 7:
	“Debt Offer” means an offering to the public or any third party of Debt Refinancing Securities made pursuant to the provisions of Clause 21.34 (Refinancing Securities);
	“Equity Offer” means an offering to the public or any third party of shares or other equity instruments in any member of the Group, including without limitation any offering of Equity Securities made pursuant to the provisions of Clause 21.34 (Refinancing Securities);
	“Net Debt Proceeds” means the net cash proceeds from any Debt Offer, where “net cash proceeds” means all cash proceeds received in a Debt Offer less all legal fees, accountants’ fees, consultant and other costs and expenses reasonably and actually incurred in connection with such Debt Offer;
	“Net Disposal Proceeds” means the cash proceeds (including any amount received in repayment of intercompany debt) of any disposal (other than a Permitted Disposal) of any asset of any member of the Group after deducting:

(a)	legal fees, accountant’s fees, consultant and other customary fees and other costs and expenses reasonably and actually incurred in connection with such disposal;
(b)	VAT paid or payable by the seller due to such disposal;
(c)	any other tax incurred and required to be paid by the seller in connection with such disposal (as reasonably determined by the seller, acting in good faith, on the basis of existing rates and taking account of any available credit, deduction or allowance);
(d)	amounts required to be applied to the repayment of financial indebtedness (other than under a Revolving Credit Facility) secured by a lien on the asset disposed of and not otherwise prohibited by this Agreement; and

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(e) cash reserved or escrowed for sale indemnities save to the extent released and not paid to the purchaser;

	“Net Equity Proceeds” means the first US$225,000,000 of net cash proceeds received from any Equity Offer other than Equity Offers that generate net cash proceeds of less than US$25,000,000 until such time as the aggregate net cash proceeds of all such Equity Offers exceed US$25,000,000 after which the net cash proceeds from all equity offers shall count towards the first US$225,000,000, where “net cash proceeds” means all cash proceeds received in an Equity Offer less all legal fees, accountant’s fees, consultant and other costs and expenses reasonably and actually incurred in connection with such Equity Offer; and
	“Net Insurance Proceeds” means the cash proceeds of any insurance claim (other than in relation to third party liabilities that are actually applied to meet such liabilities or in relation to consequential loss policies that are actually applied to cover operating losses or business interruption) received by any member of the Group (after deducting legal fees, accountants’ fees, consultant and other customary fees and other costs and expenses reasonably and actually incurred by any member of the Group in relation to such claim) other than any proceeds which are applied to the replacement, reinstatement and/or repair of the assets in respect of which the relevant insurance claim was made as soon as reasonably practicable and, in any event, within twelve months of receipt of such proceeds (or such longer period as agreed by the Agent acting reasonably) and other than any proceeds required to be paid over to a holder of security over the asset that is the subject of the claim.
	“Net Proceeds” means the Net Disposal Proceeds, Net Insurance Proceeds, Net Debt Proceeds or Net Equity Proceeds.
7.2	Illegality

(a) If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan:

(i)	that Lender shall promptly notify the Agent upon becoming aware of that event;
(ii)	upon the Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and
(iii)	the Borrower shall repay that Lender’s participation in the Loans made to that Borrower on the last day of the Interest Period for each Loan occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

(b) If it becomes unlawful for an Offer Guarantee Issuer to issue or leave outstanding any Offer Guarantee, then:

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(i)	that Offer Guarantee Issuer, as applicable, shall promptly notify the Agent upon becoming aware of that event;
(ii)	the Agent shall promptly notify the Borrower, and the Offer Guarantee Issuer shall not be obliged to issue any Offer Guarantee; and
(iii)	the Borrower shall procure the release of each Offer Guarantee issued by that Offer Guarantee Issuer and outstanding at such time or provide cash cover in respect of any amount outstanding thereunder.

7.3 Change of control

(a) Upon the occurrence of a “Change of Control”:

(i)

the Borrower shall promptly notify the Agent upon becoming aware of the Change of Control;

(ii)

if a Lender so requires and notifies the Agent within seven days of the Borrower notifying the Agent of the Change of Control the Agent shall, by not less than 30 days notice to the Borrower, cancel the Commitment of that Lender and declare the participation of that Lender in all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Commitment of that Lender will be cancelled and all such outstanding amounts will become immediately due and payable.

(b) For the purpose of paragraph (a) above “Change of Control” shall be deemed to have occurred upon the occurrence of any of the following:

(i)	the sale, lease, transfer, conveyance or other disposition (other than by merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Borrower and its Subsidiaries, taken as a whole;
(ii)	the adoption, by shareholders of the Borrower, of a voluntary plan relating to the liquidation or dissolution of the Borrower;
(iii)	the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person or persons acting in concert becomes the beneficial owner, directly or indirectly through one or more intermediaries, of more than 50% of the voting power of the outstanding voting shares of the Borrower; or
(iv)	the first day on which more than a majority of the members of the board of directors of the Borrower are not continuing directors.

(c) For the purpose of paragraph (a) above “acting in concert” has the meaning given in article L.233-10 of the French Code de Commerce.

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7.4	Mandatory Prepayment of Proceeds
	On receipt by any member of the Group of Net Proceeds, the Borrower shall apply the full amount of such Net Proceeds received in prepayment of the Loans subject to Clause 7.9(g) (Restrictions).
7.5	[Intentionally deleted]
7.6	Voluntary cancellation
	The Borrower may, if it gives the Agent not less than three Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of US$10,000,000) of the Available Facility. Any cancellation under this Clause 7.6 shall reduce the Commitments of the Lenders rateably.
7.7	Voluntary prepayment of Loans

(a)	The Borrower may, if it gives the Agent not less than 5 Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of any Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of US$10,000,000).
(b)	A Loan may only be prepaid after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).

7.8 Right of repayment and cancellation in relation to a single Lender

(a) If:

(i)	any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 12.2 (Tax gross-up); or
(ii)	any Lender claims indemnification from the Borrower under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs),

	the Borrower may, whilst the circumstance giving rise to the requirement for indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender’s participation in the Loans.
(b)	On receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.
(c)	On the last day of each Interest Period which ends after the Borrower has given notice under paragraph (a) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower to which the Loan is outstanding shall repay that Lender’s participation in that Loan.

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7.9 Restrictions

(a)	Any notice of cancellation or prepayment given by any Party under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
(b)	Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.
(c)	The Borrower may not reborrow any part of the Facility which is prepaid.
(d)	The Borrowers shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
(e)	No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
(f)	If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate.
(g)	Clause 7.4 (Mandatory Prepayment of Proceeds) shall not apply to the extent that it would be unlawful to do so, provided that the Borrower has (and it shall procure that the relevant member(s) of the Group have) used all reasonable endeavours to:

(i)	avoid such unlawfulness and to pay such Net Proceeds into an account which is subject to security, in form and substance satisfactory to the Security Agent (acting reasonably), in favour of the Lenders to secure all of the obligations of the Obligors under the Finance Documents; and
(ii)	facilitate cash movement within the Group (taking into account the need for cash resources of relevant members of the Group) to enable an amount equal to the prepayment to be made,

until the relevant unlawfulness no longer applies.

7.10 Replacement of a Non-Consenting Lender or Non-Funding Lender

(a) In this Clause 7.10 and in Clause 7.11 (Replacement of a Lender):

(i) “Non-Consenting Lender” means any Lender which does not agree to a consent, waiver or amendment if:

(A) the Borrower or the Agent has requested a consent under or waiver or amendment of any provision of any Finance Document;

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(B)	that consent, waiver or amendment requires the agreement of all the Lenders; and
(C)	the Majority Lenders have agreed to that consent, waiver or amendment,

(ii) “Non-Funding Lender” means:

(A)	any Lender which has failed to make or participate in any Loan as required by this Agreement; or
(B)	any Lender which has given notice to a Borrower or the Agent that it does not intend to make or participate in any Loan as required by this Agreement or has repudiated its obligation to do so.

(b) If:

(i)	any Lender becomes a Non-Consenting Lender; or
(ii)	any Lender becomes a Non-Funding Lender,

the Borrower or the Majority Lenders may, if it gives or, as the case may be, they give the Agent and that Lender not less than 15 Business Days’ prior notice, arrange for the transfer of the whole (but not part only) of that Lender’s Commitment and participations in the Loans at par to a new or existing Lender willing to accept that transfer.

7.11 Replacement of a Lender

(a) The replacement of a Lender pursuant to this Clause 7.11 or Clause 7.10 (Replacement of a Non-Consenting Lender or Non-Funding Lender) shall be subject to the following conditions:

(i)	no Finance Party shall have any obligation to find a replacement Lender;
(ii)	any replacement of a Non-Consenting Lender must take place no later than 60 days after the earlier of (A) the date of the Non-Consenting Lender notified the Agent of its refusal to agree to the relevant consent waiver or amendment and (B) the deadline (being not less than 15 Business Days after the Lender received the request for the relevant consent, waiver or amendment) by which the Non-Consenting Lender failed to reply to that request;
(iii)	any replacement of a Non-Funding Lender must take place no later than 60 days of it failing to make or participate in a Loan or giving notice under paragraph (a)(ii)(B) of Clause 7.10 (Replacement of a Non-Consenting Lender or Non-Funding Lender);
(iv)	any Lender replaced pursuant to this Clause 7.11 or Clause 7.10 (Replacement of a Non-Consenting Lender or Non-Funding Lender)

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	shall not be required to refund, or to pay to surrender to any other Lender, any of the fees or other amounts received by that Lender under any Finance Document; and
(v)	any replacement pursuant to this Clause 7.11 or Clause 7.10 (Replacement of a Non-Consenting Lender or Non-Funding Lender) of a Lender which is the Agent shall not affect its role as the Agent.

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SECTION 5
COSTS OF UTILISATION

8.	INTEREST
8.1	Calculation of interest
	The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

(a)	Base Margin (as defined in Clause 8.3) (Margin Ratchet);
(b)	US$ LIBOR; and
(c)	Mandatory Cost, (if any).

	for the first six months, plus 0.50 per cent per annum during the first three month period thereafter, plus 1.00 per cent per annum during the next three month period thereafter and plus 2.00 per cent per annum during the remaining period to the Final Maturity Date.
8.2	Payment of interest
	The Borrower shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six monthly intervals after the first day of the Interest Period).
8.3	Margin Ratchet

(a)	The “Base Margin” will be based upon the Existing Bonds’ credit rating and calculated in accordance with Clauses 8.3(b) and (c) (Margin Ratchet).
(b)	The Base Margin will, on each date on which a credit rating is assigned to the Existing Bonds by either Moody’s or Standard & Poor’s after the date of this Agreement, be equal to the percentage rate specified in the table below and set opposite the relevant credit rating assigned to the Existing Bonds at that time.

	Rating
Moody’s	Standard & Poor’s	Margin
		(per cent. per annum)
BB- or higher	Ba3 or higher	4.25
B+	B1	5.25
B	B2	5.75
B- or lower	B3 or lower	6.25

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(c)	If at any time there is a difference in the long term credit rating assigned to the Borrower by each of Moody’s and Standard & Poor’s (or only one such agency assigns a credit rating to the Existing Bonds) the Margin will be determined on the basis of the lower (or the only) such rating unless, in the case of a difference in ratings, such ratings are more than one notch apart in which case the Margin will be determined on the basis of the rating which is one notch above the lower of those ratings.
(d)	If at any time neither Moody’s nor Standard & Poor’s assigns a credit rating to the Existing Bonds the Base Margin will, in the absence of agreement to the contrary pursuant to paragraph (h) below, be six point two five per cent. (6.25%) per annum.
(e)	Any adjustment to the Base Margin (whether upwards or downwards) in accordance with paragraphs (b), (c) or (d) above will apply for each Loan with effect from:

(i)	the date of announcement of any relevant change to the credit rating assigned to the Existing Bonds in the case of a rating downgrade;
(ii)	the date of published confirmation of any relevant change to the credit rating assigned to the Existing Bonds in the case of a rating upgrade; and/or
(iii)	the date on which a credit rating ceases to be assigned to the Existing Bonds by either Moody’s or Standard & Poor’s.

(f)	Promptly upon the directors of the Borrower becoming aware of the same the Borrower shall inform the Agent in writing if any change in the credit rating assigned by either Moody’s or Standard & Poor’s to the Existing Bonds are published, confirmed or announced or if a credit rating ceases to be assigned to the Existing Bonds by either Moody’s or Standard & Poor’s.
(g)	The Borrower will use its reasonable endeavours to ensure that both Moody’s and Standard & Poor’s assign a credit rating to the Existing Bonds.
(h)	If save as a result of a neglect or breach of this Agreement by the Borrower neither Moody’s nor Standard & Poor’s assigns a rating to the Existing Bonds and the Borrower so requires, the Borrower and the Agent shall enter into negotiations for a period of not more than 30 days with a view to agreeing an alternative basis for determining the Base Margin.
(i)	Any alternative basis agreed will, with the prior consent of all the Lenders and the Borrower, be binding on all the Parties.

8.4 Default interest

(a) If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is one per cent higher than the rate which would have been payable if the overdue amount had, during the period

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	of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 8.4 shall be immediately payable by the Obligor on demand by the Agent.
(b)	If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:

(i)	the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and
(ii)	the rate of interest applying to the overdue amount during that first Interest Period shall be one per cent. higher than the rate which would have applied if the overdue amount had not become due.

(c) Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable only if, within the meaning of Article 1154 of the French Code civil, such interest is due for a period of at least one year.

8.5	Notification of rates of interest
	The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.
8.6	Effective Global Rate (Taux Effectif Global)
	For the purposes of Articles L313-1 et seq, R 313-1 and R313-2 of the Code de la Consommation, the Parties acknowledge that by virtue of certain characteristics of the Facility (and in particular the variable interest rate applicable to Loans and the Borrower’s right to select the currency and the duration of the Interest Period of each Loan) the taux effectif global cannot be calculated at the date of this Agreement. However, the Borrower acknowledges that it has received from the Agent a letter substantially in the form of Schedule 13 (Form of TEG letter) containing an indicative calculation of the taux effectif global, based on figured examples calculated on assumptions as to the taux de période and durée de période set out in the letter. The Parties acknowledge that that letter forms part of this Agreement.
9.	INTEREST PERIODS
9.1	Selection of Interest Periods

(a)	The Borrower may select an Interest Period for a Loan in the Utilisation Request for the Loan or (if the Loan has already been borrowed) in a Selection Notice.
(b)	Each Selection Notice for a Loan is irrevocable and must be delivered to the Agent by the Borrower.

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(c)	If the Borrower fails to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will, subject to Clause 9.2 (Changes to Interest Periods), be one Month.
(d)	Subject to this Clause 9, the Borrower may select an Interest Period of one or three Months or any other period agreed between the Borrower and the Agent (acting on the instructions of all the Lenders).
(e)	An Interest Period for a Loan shall not extend beyond the Final Maturity Date.
(f)	Each Interest Period for a Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period.

9.2	Changes to Interest Periods
	If the Agent makes any change to an Interest Period referred to in this Clause 9.2, it shall promptly notify the Borrower and the Lenders.
9.3	Non-Business Days
	If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
9.4	Consolidation and division of Loans

(a) Subject to paragraph (b) below, if two or more Interest Periods:

(i)	relate to Loans; and
(ii)	end on the same date,

	those Loans will, unless the Borrower specifies to the contrary in the Selection Notice for the next Interest Period, be consolidated into, and treated as, a single Loan on the last day of the Interest Period.
(b)	Subject to Clause 4.4 (Maximum number of Loans) and Clause 5.3 (Currency and amount), if the Borrower requests in a Selection Notice that a Loan be divided into two or more Loans, that Loan will, on the last day of its Interest Period, be so divided into the amounts specified in that Selection Notice, being an aggregate amount equal to the amount of the Loan immediately before its division.

10.	CHANGES TO THE CALCULATION OF INTEREST
10.1	Absence of quotations
	Subject to Clause 10.2 (Market disruption), if US$ LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable US$ LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

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10.2 Market disruption

(a) If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then the rate of interest on each Lender’s share of that Loan for the Interest Period shall be the percentage rate per annum which is the sum of:

(i)	the Margin;
(ii)	the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and
(iii)	the Mandatory Cost, if any, applicable to that Lender’s participation in the Loan.

(b) In this Agreement “Market Disruption Event” means:

(i)	at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Agent to determine US$ LIBOR for the relevant Interest Period; or
(ii)	before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed 35 per cent. of that Loan) that the cost to it or them of obtaining matching deposits in the Relevant Interbank Market would be in excess of US$ LIBOR.

10.3 Alternative basis of interest for funding

(a)	If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.
(b)	Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

10.4 Break Costs

(a)	The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.
(b)	Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

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11.	FEES
11.1	Commitment fee

(a)	The Borrower shall pay to the Agent (for the account of each Lender) a fee computed at the rate of 0.50 per cent. per annum on that Lender’s Available Commitment for the Availability Period.
(b)	The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender’s Commitment at the time the cancellation is effective.

11.2	Arrangement fee
	The Borrower shall pay to the Arrangers an arrangement fee in the amount and at the times agreed in a Fee Letter.
11.3	Agency fee
	The Borrower shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
11.4	Security Agency fee
	The Borrower shall pay to the Security Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
11.5	Other Fees
	The Borrower shall pay to the Arrangers other fees in the amounts and at the time, as may be set out in a Fee Letter.
11.6	Offer Guarantee fee and fronting fee

(a)	The Borrower shall pay to the Agent (for the account of each Lender) a fee equal to the Base Margin on that Lender’s participation in the Offer Guarantee.
(b)	The Borrower shall pay to the Agent on behalf of the Offer Guarantee Issuers a fronting bank fee equal to 0.125 per cent. per annum on the amount of the Offer Guarantee.
(c)	The accrued Offer Guarantee fee and fronting fee shall be payable on the last day of each successive period of one month after the date of issue of the Offer Guarantee.

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SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

12.	TAX GROSS UP AND INDEMNITIES
12.1	Tax Definitions

(a) In this Agreement:

“Protected Party” means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

“Qualifying Lender” means a Lender which:

(i)	has its Facility Office in France; or
(ii)	fulfils the conditions imposed by French law taking into account, as the case may be, any double taxation agreement in force on the date (subject to the completion of any necessary procedural formalities), in order for that payment not to be subject to (or as the case may be, to be exempt from) any Tax Deduction.

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document.

“Tax Payment” means an increased payment made by a Borrower to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).

“Treaty Lender” means a Lender which is entitled to that payment under a double taxation agreement (subject to the completion of any necessary procedural formalities) without a Tax Deduction.

(b) Unless a contrary indication appears, in this Clause 12 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

12.2 Tax gross-up

(a)	Each Borrower shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b)	The Borrower shall promptly upon becoming aware that a Borrower must make a Tax Deduction (or that there is any change in the rate or the basis of a

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	Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and that Borrower.
(c)	If a Tax Deduction is required by law to be made by a Borrower, the amount of the payment due from that Borrower to a Finance Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(d)	A Borrower is not required to make an increased payment to a Lender under paragraph (c) above for a Tax Deduction in respect of tax imposed by France from a payment of interest on a Loan, if on the date on which the payment falls due:

(i)

the payment could have been made to the relevant Lender without a Tax Deduction if it was a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law, regulation or double taxation agreement, or any published practice or concession of any relevant taxing authority; or

(ii)

the relevant Lender is a Treaty Lender and the Borrower making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under paragraph (g) below.

(e)	If a Borrower is required to make a Tax Deduction, that Borrower shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(f)	Within thirty (30) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
(g)	A Treaty Lender and each Borrower which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Borrower to obtain authorisation to make that payment without a Tax Deduction.
(h)	Each Lender represents that, as at the date of this Agreement or, if it becomes a party to this Agreement after the date of this Agreement, on the date it becomes party to this Agreement, it is a Qualifying Lender.

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12.3 Tax indemnity

(a)	The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
(b)	Paragraph (a) above shall not apply:

(i) with respect to any Tax assessed on a Finance Party:

(A)	under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
(B)	under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,

	if that Tax is imposed on or calculated by reference to the net income of that Finance Party which is received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
(ii)	to the extent a loss, liability or cost:

(A)	is compensated for by an increased payment under Clause 12.2 (Tax gross-up); or
(B)	would have been compensated for by an increased payment under Clause 12.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 12.2 (Tax gross-up) applied.

(c)	A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.
(d)	A Protected Party shall, on receiving a payment from a Borrower under this Clause 12.3, notify the Agent.

12.4	Tax Credit
	If a Borrower makes a Tax Payment and the relevant Finance Party determines that:

(a)	a Tax Credit is attributable to that Tax Payment; and
(b)	that Finance Party has obtained, utilised and retained that Tax Credit,

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the Finance Party shall pay an amount to that Borrower which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been made by that Borrower.

12.5 Stamp taxes

The Borrower shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

12.6 Value added tax

(a) All consideration expressed to be payable under a Finance Document by any Party to a Finance Party shall be deemed to be exclusive of any VAT. If VAT is chargeable, on any supply made by any Finance Party to any Party in connection with a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT.

(b) Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that it is not entitled to credit or repayment of the VAT.

13.	INCREASED COSTS
13.1	Increased Costs

(a)

Subject to Clause 13.3 (Exceptions) the Borrower shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement.

(b)

In this Agreement “Increased Costs” means:

(i)	a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;
(ii)	an additional or increased cost; or
(iii)	a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

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13.2 Increased cost claims

(a)	A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.
(b)	Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

13.3 Exceptions

(a) Clause 13.1 (Increased Costs) does not apply to the extent any Increased Cost is:

(i)	attributable to a Tax Deduction required by law to be made by an Obligor;
(ii)	compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied);
(iii)	compensated for by the payment of the Mandatory Cost; or
(iv)	attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.

(b) In this Clause 13.3, a reference to a “Tax Deduction” has the same meaning given to the term in Clause 12.1 (Tax Definitions).

14.	OTHER INDEMNITIES
14.1	Currency indemnity

(a) If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

(i)	making or filing a claim or proof against that Obligor;
(ii)	obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

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(b) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2	Other indemnities
	The Borrower shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

(a)	the occurrence of any Event of Default;
(b)	a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 27 (Sharing among the Finance Parties);
(c)	funding, or making arrangements to fund, its participation in the Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Lender alone); or
(d)	the Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower or the Borrower.

14.3	Indemnity to the Agent
	The Borrower shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:

(a)	investigating any event which it reasonably believes is a Default; or
(b)	acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.

14.4	Indemnity to the Security Agent
	The Borrower shall promptly indemnify the Security Agent and every delegate against any cost, loss or liability incurred by it as a result of:

(a)	the taking, holding, protection or enforcement of any Transaction Security;
(b)	the exercise of any rights, powers, discretion and remedies vested in the Security Agent and each delegate by the Finance Documents or by law; and
(c)	any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents.

The Security Agent may in priority to any payment to the other Finance Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.

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15.	MITIGATION BY THE LENDERS
15.1	Mitigation

(a)

Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.2 (Illegality), Clause 12.2 (Tax gross-up), Clause 13 (Increased costs) or paragraph 3 of Schedule 4 (Mandatory Cost formula) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

(b)

Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

15.2 Limitation of liability

(a)	The Borrower shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).
(b)	A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

16.	COSTS AND EXPENSES
16.1	Transaction expenses
	The Borrower shall promptly on demand pay the Agent and the Arrangers the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication of:

(a)	this Agreement and any other documents referred to in this Agreement; and
(b)	any other Finance Documents executed after the date of this Agreement.

16.2	Amendment costs
	If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 28.9 (Change of currency), the Borrower shall, within three Business Days of demand, reimburse the Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent in responding to, evaluating, negotiating or complying with that request or requirement.
16.3	Enforcement costs
	The Borrower shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.

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SECTION 7
GUARANTEE

17.	GUARANTEE AND INDEMNITY
17.1	Guarantee and indemnity
	Each Guarantor irrevocably and unconditionally jointly and severally:

(a)	guarantees to each Finance Party punctual performance by the Borrower of its obligations under the Finance Documents;
(b)	undertakes with each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
(c)	indemnifies each Finance Party immediately on demand against any cost, loss or liability suffered by that Finance Party if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.

17.2	Continuing guarantee
	This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
17.3	Reinstatement
	If any payment by an Obligor or any discharge given by a Finance Party (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event:

(a)	the liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and
(b)	each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, avoidance or reduction had not occurred.

17.4	Waiver of defences
	The obligations of each Guarantor under this Clause 17 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 17 (without limitation and whether or not known to it or any Finance Party) including:

(a) any time, waiver or consent granted to, or composition with, any Obligor or other person;

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(b)	the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(c)	the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(d)	any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
(e)	any amendment (however fundamental) or replacement of a Finance Document or any other document or security;
(f)	any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
(g)	any insolvency or similar proceedings.

17.5	Immediate recourse
	Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
17.6	Appropriations
	Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

(a)	refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
(b)	hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Clause 17.

17.7	Deferral of Guarantors’ rights
	Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:

(a) to be indemnified by an Obligor;

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(b)	to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents; and/or
(c)	to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party.

17.8	Additional security
	This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
17.9	Limitations of Liability of Norwegian Guarantors
	Notwithstanding anything to the contrary contained herein, the liabilities of the Norwegian Guarantor under the Finance Documents shall be limited if (and only if) required by an application of the provisions of the Norwegian Limited Liabilities Companies Act (in Norwegian: “aksjeloven”), prohibited loans and guarantees (Section 8-7), as amended, supplemented and/or re-enacted from time to time.

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SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

18.	REPRESENTATIONS
8.1	General
	Each Obligor makes the representations and warranties set out in this Clause 18 to each Finance Party.
18.2	Status

(a)	It and each of its Subsidiaries is a limited liability corporation (except Sea Survey II which is an unlimited liability corporation), duly incorporated and validly existing under the law of its jurisdiction of incorporation.
(b)	It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.

18.3	Binding obligations
	Subject to the Legal Reservations:

(a)	the obligations expressed to be assumed by it in each Transaction Document to which it is a party or under which it is otherwise obligated to perform are legal, valid, binding and enforceable obligations; and
(b)	(without limiting the generality of paragraph (a) above), each Security Document to which it is a party or under which it is otherwise obligated to perform creates the security interests which that Security Document purports to create and those security interests are valid and effective.

18.4	Non-conflict with other obligations
	The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents and the granting of the Security do not and will not conflict with:

(a)	any law or regulation applicable to it;
(b)	the constitutional documents of any member of the Group; or
(c)	any agreement or instrument (being a material agreement or instrument in the case of a member of the Group which is not an Obligor) binding upon it or any member of the Group or any of its or any member of the Group’s assets or constitute a default or termination event (however described) under any such agreement or instrument.

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18.5 Power and authority

(a)	It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which it is or will be a party or under which it is obligated to perform and the transactions contemplated by those Transaction Documents.
(b)	No limit on its powers will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.

18.6 Validity and admissibility in evidence

(a) All Authorisations required or desirable:

(i)

to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party or under which it is obligated to perform; and

(ii)

to make the Transaction Documents to which it is a party or under which it is obligated to perform admissible in evidence in its Relevant Jurisdictions other than any actions specifically referred to in the legal opinions delivered under Part I and Part II of Schedule 2 (Conditions Precedent) and which are not taken by the Finance Parties (where such actions are actions to be taken voluntarily by the Finance Parties),

	have been obtained or effected and are in full force and effect.
(b)	All Authorisations necessary for the conduct of the business, trade and ordinary activities of members of the Group have been obtained or effected and are in full force and effect.

18.7 Governing law and enforcement

(a)	The choice of law specified in each Finance Document as the governing law of that Finance Documents will be recognised and enforced in its Relevant Jurisdictions.
(b)	Any judgment obtained in England (or in the jurisdiction of the governing law of that Finance Document) in relation to a Finance Document will be recognised and enforced in its Relevant Jurisdictions.

18.8	Insolvency
	No:

(a)	corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 22.7 (Insolvency proceedings); or
(b)	creditors’ process described in Clause 22.8 (Creditors’ process),

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has been taken or, to the knowledge of the Borrower, threatened in relation to a member of the Group; and none of the circumstances described in Clause 22.6 (Insolvency) applies to a member of the Group.

18.9	No filing or stamp taxes
	Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents other than any actions specifically referred to in the legal opinions delivered under Part I and Part II of Schedule 2 (Conditions Precedent) and which are not taken by the Finance Parties (where such actions are actions to be taken voluntarily by the Finance Parties).
18.10	Deduction of Tax
	It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document.
18.11	No default

(a)

No Event of Default and, on the date of this Agreement and the Closing Date, no Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.

(b)

No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which has or is reasonably likely to have a Material Adverse Effect.

18.12 No misleading information

(a)	Any factual information provided by any member of the Group to any of the Finance Parties was true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the information is expressed to be given.
(b)	No event or circumstance has occurred or arisen and no information has been omitted from the information provided and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in the information provided being untrue or misleading in any material respect.
(c)	All material information provided to a Finance Party by or on behalf of the Borrower in connection with the Acquisition on or before the date of this Agreement and not superseded before that date is accurate and not misleading in any material respect and all projections prepared by the Borrower which are

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	provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied.
(d)	All other written information provided by any member of the Group (excluding the Target and its Subsidiaries) (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.

18.13 Original Financial Statements

(a)	The Borrower’s Original Financial Statements were prepared in accordance with GAAP consistently applied and the Original Financial Statements of each other Obligor were prepared in accordance with applicable generally accepted accounting principles consistently applied.
(b)	Its Original Financial Statements fairly present its financial condition and results of operations for the relevant financial year.
(c)	There has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group excluding the Target Group and the Acquisition, in the case of the Borrower) since the date of the Original Financial Statements.
(d)	The Original Financial Statements of the Borrower do not consolidate the results, assets or liabilities of any person or business which does not form part of the Group.
(e)	Its most recent financial statements delivered pursuant to Clause 19.1 (Financial Statements):

(i)	have been prepared in accordance with GAAP (in the case of the Borrower) and generally applicable accounting principles (for each other Obligor); and
(ii)	fairly present its consolidated or unconsolidated as the case may be financial condition as at the end of, and consolidated or unconsolidated as the case may be results of operations for, the period to which they relate.

(f)	As at each Quarter Date, there has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Borrower) since the date of the immediately preceding Quarter Date.
(g)	The budgets and forecasts supplied under this Agreement were arrived at after careful consideration and have been prepared in good faith on the basis of recent historical information and on the basis of assumptions which were reasonable as at the date they were prepared and supplied.

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18.14	No proceedings pending or threatened
	No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any of its Subsidiaries.
18.15	No breach of laws

(a)	It has not (and none of its Subsidiaries has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
(b)	No labour disputes are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against any member of the Group which have or are reasonably likely to have a Material Adverse Effect.

18.16 Environmental laws

(a)	Each member of the Group is in compliance with Clause 21.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.
(b)	No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any member of the Group where that claim has or is reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect.

18.17 Taxation

(a)	It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax returns and it is not (and none of its Subsidiaries is) overdue in the payment of any amount in respect of Tax of US$10,000,000 (or its equivalent in any other currency) or more.
(b)	No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any of its Subsidiaries) with respect to Taxes such that a liability of, or claim against, any member of the Group of US$10,000,000 (or its equivalent in any other currency) or more is reasonably likely to arise.

18.18 Security and Financial Indebtedness

(a)	No Security or Quasi-Security exists over all or any of the present or future assets of any member of the Group other than as permitted by this Agreement.
(b)	No member of the Group has any Financial Indebtedness outstanding other than as permitted by this Agreement.

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18.19	Ranking
	The Transaction Security has or will have first ranking priority and it is not subject to any prior ranking or pari passu ranking Security.
18.20	Good title to assets
	It and each of its Subsidiaries has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.
18.21	Legal and beneficial ownership

(a)	It and each of its Subsidiaries is the sole legal and beneficial owner of the respective assets over which it purports to grant Security.
(b)	All the Shares acquired prior to the date of this Agreement are, and those acquired after the date of this Agreement will be, legally and beneficially owned by the Borrower free from any claims, third party rights or competing interests.

18.22	Shares
	The shares of any member of the Group which are subject to the Transaction Security are fully paid and not subject to any option to purchase or similar rights. The constitutional documents of companies whose shares are subject to the Transaction Security do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Transaction Security.
18.23	Intellectual Property
	It and each of its Subsidiaries:

(a)	is the sole legal and beneficial owner of or has licensed to it on normal commercial terms all the Intellectual Property which is material in the context of its business and which is required by it in order to carry on its business as it is being conducted;
(b)	does not (nor does any of its Subsidiaries), in carrying on its businesses, infringe any Intellectual Property of any third party in any respect which would be reasonably likely to have a Material Adverse Effect; and
(c)	has taken all formal or procedural actions (including payment of fees) required to maintain any material Intellectual Property owned by it.

18.24	Accounting reference date
	The Accounting Reference Date of each Obligor and Material Subsidiary is 31 December.

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18.25	Centre of main interests and establishments
	For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the “Regulation”), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in its jurisdiction of incorporation and it has no “establishment” (as that term is used in Article 2(h) of the Regulations) in any other jurisdiction.
18.26	Terms of the Offer
	The Offer Documents and the Squeeze-Out Offer Documents and any other document referred to in paragraphs 4 and 5 of Part 1 of Schedule 2 (Conditions Precedent Documents) under the heading “Offer Conditions” and “Squeeze-Out Offer Conditions”, respectively delivered to the Agent under this Agreement contain all the material terms of the Offer and the Squeeze-Out Offer Conditions, respectively.
18.27	Times when representations made

(a)	Save as set out in paragraph (f), all the representations and warranties in this Clause 18 are made by each Original Obligor on the date of this Agreement.
(b)	The representations and warranties in Clause 18.12 (No misleading information) are deemed to be made by each Obligor on the Syndication Date.
(c)	The Repeating Representations are deemed to be made by each Obligor on the date of each Utilisation Request, on each Utilisation Date and on the first day of each Interest Period (except that those contained in paragraphs (a), (b), (d) and (e) of Clause 18.13 (Original Financial Statements) will cease to be so made once subsequent financial statements have been delivered under this Agreement and those in paragraph (c) shall not be repeated after the date of this Agreement).
(d)	The Repeating Representations in this Clause 18 except Clause 18.12 (No misleading information), are deemed to be made by each Additional Obligor on the day on which it becomes (or it is proposed that it becomes) an Additional Obligor.
(e)	The representations and warranties set out in Clause 18.26 (Terms of The Offer) are made on the date of the launch of the Offer.
(f)	Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made.

19.	INFORMATION UNDERTAKINGS
	The undertakings in this Clause 19 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

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	In this Clause 19:
	“Annual Financial Statement” means the financial statements for a Financial Year delivered pursuant to paragraph (a) of Clause 19.1 (Financial statements).
	“Monthly Report” means the consolidated income statement together with estimated consolidated net debt delivered pursuant to paragraph (c) of Clause 19.1 (Financial statements) in the form set out in Schedule 16 (Form or Monthly Report).
	“Quarterly Financial Statement” means the financial statements delivered pursuant to paragraph (b) of Clause 19.1 (Financial statements).
19.1	Financial statements
	The Borrower shall supply to the Agent in sufficient copies for all the Lenders:

(a) as soon as they are available, but in any event within 180 days after the end of each of its Financial Years:

(i)	its audited consolidated financial statements for that Financial Year; and
(ii)	the audited or unaudited (if audited not available) financial statements (consolidated if appropriate) of each Obligor for that Financial Year. The unaudited financial statements will be signed by the Chief Financial Officer of the relevant Obligor,

(b)	within 60 days after the end of each of the first and third quarter of each Financial Year (and within 75 days after the end of the second quarter of each Financial Year) its unaudited consolidated financial statements for that Financial Quarter; and
(c)	as soon as they are available, but in any event within 30 days after the end of each month a Monthly Report for that month (to include a cumulative consolidated income statement for the Financial Year to date).

19.2 Provision and contents of Compliance Certificate

(a)	The Borrower shall supply a Compliance Certificate to the Agent quarterly with each set of its Financial Statements delivered under Clause 19.1(b) above.
(b)	The Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with Clause 20 (Financial Condition).
(c)	Each Compliance Certificate shall be signed by two authorised officers of the Borrower and, if required to be delivered with the consolidated Annual Financial Statements of the Borrower, shall be reported on by the Borrower’s Auditors in the form agreed by the Borrower and the Majority Lenders.

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19.3 Requirements as to financial statements

(a)	The Borrower shall procure that each set of Annual Financial Statements and Quarterly Financial Statements includes a balance sheet, profit and loss account and cashflow statement. In addition the Borrower shall procure that each set of Annual Financial Statements shall be audited by the Auditors.
(b)	Each set of financial statements delivered pursuant to Clause 19.1 (Financial statements):

(i)	shall be certified by an authorised officer of the relevant company as presenting fairly in accordance with applicable accounting standards its financial condition and operations as at the date as at which those financial statements were drawn up;
(ii)	in the case of consolidated financial statements (annual and quarterly) of the Group, shall be accompanied by a statement by the management of the Borrower comparing actual performance for the period to which the financial statements relate to:

(A)	the projected performance for that period set out in the Budget; and
(B)	the actual performance for the corresponding period in the preceding Financial Year of the Group; and

(iii) in the case of the Borrower, shall be prepared in accordance with GAAP and accounting practices applied in the preparation of the Base Case Model, unless, in relation to any set of financial statements, the Borrower notifies the Agent that there has been a change in GAAP or the accounting practices and its Auditors deliver to the Agent:

(A)	a description of any change necessary for those financial statements to reflect GAAP or accounting practices upon which the Base Case Model was prepared; and
(B)	sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether Clause 20 (Financial condition) has been complied with and to make an accurate comparison between the financial position indicated in those financial statements and the Base Case Model.

	Any reference in this Agreement to any financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Base Case Model was prepared.
(c)	If the Agent wishes to discuss the financial position of any member of the Group with the Auditors, the Agent may notify the Borrower, stating the questions or issues which the Agent wishes to discuss with the Auditors. In this event, the Borrower must ensure that the Auditors are authorised (at the reasonable expense of the Borrower):

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(i)	to discuss the financial position of each member of the Group with the Agent on request from the Agent; and
(ii)	to disclose to the Agent for the Finance Parties any information which the Agent may reasonably request.

19.4 Budget

(a)	The Borrower shall supply to the Agent in sufficient copies for all the Lenders, as soon as the same become available but in any event within 30 days after the start of each of its Financial Years, an annual budget for that financial year.
(b)	The Borrower shall ensure that each budget:

(i)	is in a form reasonably acceptable to the Agent and includes, projected financial covenant calculations on a quarterly and annual basis a projected consolidated profit and loss and cashflow statement for the Group and on an annual basis the projected balance sheet;
(ii)	is prepared in accordance with GAAP and the accounting practices and financial reference periods applied to financial statements under Clause 19.1 (Financial statements); and
(iii)	has been approved by the board of directors of the Borrower.

(c) If the Borrower updates or changes the budget, it shall promptly within 15 days of the update or change being made deliver to the Agent, in sufficient copies for each of the Lenders, such updated or changed budget together with a written explanation of the main changes in that budget, which may be that presented to the board of directors of the Borrower.

19.5	Presentations
	Once in every financial year, or more frequently if requested to do so by the Agent if the Agent reasonably suspects a Default is continuing or may have occurred or may occur, at least two authorised officers of the Borrower (one of whom shall be the chief financial officer) must give a presentation to the Finance Parties about:

(a)	the on-going business and financial performance of the Group; and
(b)	any other matter which a Finance Party may reasonably request relating to any such suspected Default.

19.6 Year-end

(a)	The Borrower shall not change its Accounting Reference Date.
(b)	The Borrower shall not change its quarterly accounting period.

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19.7	Information: miscellaneous
	The Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

(a)	at the same time as they are dispatched, copies of all documents dispatched by the Borrower to its shareholders generally (or any class of them) or dispatched by the Borrower or any Obligor to its creditors generally (or any class of them);
(b)	promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;
(c)	promptly upon becoming aware of the relevant claim, the details of any disposal or insurance claim which will require a prepayment under Clause 7.4 (Mandatory Prepayment of Proceeds); and
(d)	promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any member of the Group (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement, any Auditor’s letter to the board of directors or management of the Group in connection with the audited financial statements of the Group, any changes to senior management of the Borrower and an up to date copy of its shareholders’ register (or equivalent in its jurisdiction of incorporation), to the extent such document exists), as any Finance Party through the Agent may reasonably request.

19.8 Notification of default

(a)	Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(b)	Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate signed by two of its senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

19.9 “Know your customer” checks

(a) If:

(i)	the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
(ii)	any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement; or

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(iii) a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

	obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied with the results of all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(b)	Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied with the results of all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(c)	The Borrower shall, by not less than 10 Business Days’ prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant to Clause 24 (Changes to the Obligors).
(d)	Following the giving of any notice pursuant to paragraph (c) above, if the accession of such Additional Obligor obliges the Agent or any Lender to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied with the results of all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Obligor.

20.	FINANCIAL CONDITION
20.1	Financial Definitions
	In Clause 20 (Financial Condition) the following terms have the following meanings:
	“Cash” means, at any time, cash at banks (including short-term deposits) denominated in any currency and credited to an account in the name of a member of

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the Group with a bank and to which such member of the Group is alone beneficially entitled and for so long as (a) such cash is repayable on demand with or without penalty (save that where cash is repayable with a penalty such penalty shall be taken into account in determining the amount of such cash), (b) repayment of such cash is not contingent on the prior discharge of any other indebtedness of any Group member or of any other person whatsoever or on the satisfaction of any other condition and (c) such cash is freely transferable to a Borrower.

“Capital Expenditure” means investments made in multi-client surveys as such item appears in the consolidated accounts “Document de Référence” (or, if different, the figure that would appear in the item so entitled in the consolidated financial statements of the Borrower presented in the same manner as and prepared in accordance with the principles and accounting practices followed for preparation of the financial statements in the Base Case Model) PLUS purchase of tangible and intangibles or property, plant and equipment as the case may be plus equipment acquired under capital lease.

“Financial Quarter” means the period commencing on the day after one Quarter Date and ending on the next Quarter Date.

“ORBDA” (Operating Result Before Depreciation and Amortisation, previously denominated “Adjusted ORBDA”) is defined as operating income (loss) excluding non-recurring revenues (expenses) plus depreciation, amortisation and additions (deductions) to valuation allowances of assets and add-back of dividends received from equity companies.

“Total Interest Costs” means, with respect to any person for any period, the sum, without duplication, of the following:

(a)

the consolidated interest expense of such person and its restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with capital lease obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of all payments made or received (if any) pursuant to Treasury Transactions in respect of interest rates but excluding amortization of debt issuance costs and non-cash charges other than non-cash interest expenses related to convertible bonds) and

(b)

the consolidated interest expense of such person and its restricted Subsidiaries that was capitalised during such period.

“Relevant Period” means:

(a)	each period of twelve months ending on the last day of the Borrower’s financial year; and
(b)	each period of twelve months ending on the last day of each Financial Quarter of the Borrower’s financial year.

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“Total Net Debt” means, at any time (without double counting), the aggregate indebtedness, after deducting Cash at Borrower, in respect of:

(a)	moneys borrowed in respect of bank debt;
(b)	all amounts outstanding under any Finance Document;
(c)	any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock (excluding Investor Loans) or any similar instrument;
(d)	any amount raised pursuant to any issue of shares which are expressed to be redeemable before 2015 and all obligations to purchase, retire, defease or otherwise acquire for value, before 2015, any share capital of any person or any warrants, rights or options to acquire such share capital before such date in respect of transactions which, in each such case, have the commercial effect of a borrowing or which finance a member of the Group or the Group’s operations or capital requirements;
(e)	the amount of any liability in respect of any lease or hire purchase contract which is a Finance Lease;
(f)	the amount of any liability in respect of any advance or deferred purchase agreement if the primary reason for entering into such agreement is to raise finance;
(g)	receivables sold or discounted (other than on a non-recourse basis);
(h)	any agreement or option to re-acquire an asset if the primary reason for entering into such agreement or option is to raise finance; and
(i)	any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing save for financing by trade creditors.

20.2	Financial Condition
	The Borrower shall ensure that the financial condition of the Group shall be such that:

(a) ORBDA: Total Interest Costs for each Relevant Period specified in column 1 below shall not be less than the ratio set out in column 2 below opposite such Relevant Period.

Column 1
Any Relevant Period	Column 2
expiring in the year	Ratio
rolling 12 month period ending
31 December 2005		6.2x
31 March 2006		5.0x
30 June 2006		4.2x
30 September 2006		3.7x
31 December 2006		3.9x

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(b) Net Debt Cover: Net Debt Cover in respect of each Relevant Period specified in column 1 below shall not be more than the ratio set out in column 2 below opposite such Relevant Period.

Column 1
Any Relevant Period	Column 2
expiring in the year	Ratio
rolling 12 month period ending
31 December 2005		2.60x
31 March 2006		2.60x
30 June 2006		2.65x
30 September 2006		2.65x
31 December 2006		2.40x

“Net Debt Cover”, means the ratio of Total Net Debt denominated in euro and divided by the euro/dollar closing exchange rate for the Relevant Period (as indicated in the Borrower’s consolidated financial statements relating to the period ending on the last day of such Relevant Period) to ORBDA denominated in euro and divided by the euro/dollar average exchange rate for the Relevant Period (as indicated in the Borrower’s consolidated financial statements relating to the period ending on the last day of such Relevant Period).

(c)

Capital Expenditure: The Group shall not in any rolling 12 month period ending on a Quarter Date incur Capital Expenditure in excess of the amount (or its equivalent) set out in column 2 below as applicable for such rolling 12 month period ending on a Quarter Date (or part thereof):

Column 1	Column 2
Initial Period or Financial	Maximum Expenditure
rolling 12 month period ending	€000,000
31 December 2005	€	230
31 March 2006	€	280
30 June 2006	€	255
30 September 2006	€	225
31 December 2006	€	190

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20.3	Financial Testing
	The financial covenants set out in this Clause 20 (Financial Condition) shall be tested by reference to and as at the date of each of the financial statements and/or each Compliance Certificate delivered pursuant to Clause 19.1 (Financial Statements).
20.4	Auditor’s Verification
	The Agent may, at any time if it has reasonable grounds for believing that the figures prepared by the Borrower are incorrect, inaccurate or incomplete, request that the Borrower recalculate such figures (and the Borrower shall do so promptly) and if, thereafter, the Agent believes that such recalculated figures are incorrect, inaccurate or incomplete, at the Borrower’s expense require the auditors of the Group to verify the figures supplied by the Borrower in connection with the financial conditions set out in Clause 20.2 (Financial Condition).
	The Agent may, in accordance with this Clause 20.4, request verification of any figure or calculation made in a Compliance Certificate delivered under Clause 19.2 (Provision and contents of Compliance Certificate) and/or any figure contained in the financial statements delivered under Clause 19 (Information Undertaking) which is relevant to the calculation of the financial conditions referred to above.
	If such auditors fail to verify such figures to the reasonable satisfaction of the Agent after being requested to do so, the Agent may appoint an independent firm of accountants to carry out an appropriate investigation and give a certificate in a form and content reasonably satisfactory to the Agent certifying or verifying the relevant figures and satisfaction of the above financial conditions shall be determined be reference to the figures so verified or certified even if the audited or management accounts for the same date or period have not yet been published.
20.5	Accounting Terms
	All accounting expressions to the extent not otherwise defined herein shall be construed in accordance with International Financial Reporting Standards.
21.	GENERAL UNDERTAKINGS
	The undertakings in this Clause 21 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
	Authorisations and compliance with laws

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21.1	Authorisations
	Each Obligor shall promptly:

(a)	obtain, comply with and do all that is necessary to maintain in full force and effect; and
(b)	supply certified copies to the Agent of,

any Authorisation required under any law or regulation of a Relevant Jurisdiction to:

(i)	enable it to perform its obligations under the Finance Documents;
(ii)	ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and
(iii)	carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.

21.2	Compliance with laws
	Each Obligor shall (and the Borrower shall ensure that each member of the Group will) comply in all respects with all laws to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
21.3	Environmental compliance
	Each Obligor shall (and the Borrower shall ensure that each member of the Group will):

(a)	comply with all Environmental Law;
(b)	obtain, maintain and ensure compliance with all requisite Environmental Permits;
(c)	implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

	where failure to do so has or is reasonably likely to have a Material Adverse Effect.
21.4	Environmental claims
	Each Obligor shall (through the Borrower), promptly upon becoming aware of the same, inform the Agent in writing of:

(a) any Environmental Claim against any member of the Group which is current, pending or threatened; and

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(b) any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,

	where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
21.5	Taxation

(a) Each Obligor shall (and the Borrower shall ensure that each member of the Group will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i)	such payment is being contested in good faith;
(ii)	adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 19.1 (Financial statements); and
(iii)	such payment can be lawfully withheld.

	Restrictions on business focus
21.6	Merger
	No Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction except for a Permitted Merger.
21.7	Change of business
	The Borrower shall procure that no substantial change is made to the general nature of the business of the Borrower, the Obligors or the Group taken as a whole from that carried on by the Target Group at the date of this Agreement.
21.8	Acquisitions

(a) No Obligor shall (and the Borrower shall ensure that no other member of the Group will):

(i)	acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them); or
(ii)	incorporate a company.
(iii)	Paragraph (i) above does not apply to an acquisition of a company, of shares, securities or a business or undertaking (or, in each case, any interest in any of them) or the incorporation of a company which is a Permitted Acquisition.

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	Restrictions on dealing with assets and Security
21.9	Joint ventures

(a) Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall ensure that no member of the Group will):

(i)	enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or
(ii)	transfer any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing).

(b) Paragraph (a) above does not apply to any acquisition (or agreement to acquire) any interest in a Joint Venture or transfer of assets (or agreement to transfer assets) to a Joint Venture or loan made to or guarantee given in respect of the obligations of a Joint Venture if such transaction is a Permitted Acquisition, a Permitted Disposal or a Permitted Joint Venture.

21.10	Preservation of assets
	Each Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary or desirable in the conduct of its business.
21.11	Pari passu ranking
	Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
21.12	Acquisition Documents

(a)	The Borrower shall promptly pay all amounts payable to the vendor under any relevant Acquisition Documents as and when they become due (except to the extent that any such amounts are being contested in good faith by a member of the Group and where adequate reserves are set aside for any such payment).
(b)	The Borrower shall, (and the Borrower will procure that each relevant member of the Group will), take all reasonable and practical steps to preserve and enforce its rights (or the rights of any other member of the Group) and pursue any claims and remedies arising under any Acquisition Documents.

21.13	Negative pledge
	In this Clause 21.13, “Quasi-Security” means a transaction described in paragraph (b) below.

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Except as permitted under paragraph (c) below:

(a)	No Obligor shall (and the Borrower shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.
(b)	No Obligor shall (and the Borrower shall ensure that no other member of the Group will):

(i)	sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;
(ii)	sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(iii)	enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(iv)	enter into any other preferential arrangement having a similar effect,

	in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
(c)	Paragraphs (a) and (b) above do not apply to any Security or (as the case may be) Quasi-Security, which is a Permitted Security.

21.14 Disposals

(a)	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall ensure that no member of the Group will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
(b)	Paragraph (a) above does not apply to any sale, lease, transfer or other disposal which is a Permitted Disposal.

21.15 Arm’s length basis

(a)	Except as permitted by paragraph (b) below, no Obligor shall (and the Borrower shall ensure no member of the Group will) enter into any transaction with any Affiliate that is not an Obligor, except on arm’s length terms and for full market value.
(b)	The following transactions shall not be a breach of this Clause 21.15:

(i)	intra-Group loans permitted under Clause 21.16 (Loans or credit);
(ii)	fees, costs and expenses payable under the Transaction Documents in the amounts set out in the Transaction Documents delivered to the

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	Agent under Clause 4.1 (Initial conditions precedent) or agreed by the Agent;
(iii)	any employment agreement or other employee compensation plan or arrangement (including stock option plans) entered into by the Borrower or any member of the Group in the ordinary course of business of the Borrower or such member of the Group; and
(iv)	loans or advances to officers, directors and employees of the Borrower or any member of the Group made in the ordinary course of business and consistent with past practices of the Borrower and the Group in an aggregate amount not to exceed €1,000,000 outstanding at any one time.

	Restrictions on movement of cash — cash out
21.16	Loans or credit

(a)	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall ensure that no member of the Group will) be a creditor in respect of any Financial Indebtedness.
(b)	Paragraph (a) above does not apply to a Permitted Loan.

21.17 No Guarantees or indemnities

(a)	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall ensure that no member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person.
(b)	Paragraph (a) does not apply to a guarantee which is a Permitted Guarantee.

21.18 Dividends and share redemption

(a) Except as permitted under paragraph (b) below, the Borrower shall ensure that no member of the Group will:

(i)	declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital) other than (except in the case of the Borrower) dividends to members of the Group or dividends paid by non-wholly owned members of the Group other than the Borrower to shareholders who are not members of the Group made on a pro rata basis;
(ii)	repay or distribute any dividend or share premium reserve;
(iii)	pay or allow any member of the Group to pay any management, advisory or other fee to or to the order of any of the shareholders of the Borrower; or

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(iv) redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so.

	Restrictions on movement of cash — cash in
21.19	Financial Indebtedness

(a)	Except as permitted under paragraph (b) below, no Obligor shall (and the Borrower shall ensure that no member of the Group will) incur or allow to remain outstanding any Financial Indebtedness.
(b)	Paragraph (a) above does not apply to Financial Indebtedness which is a Permitted Financial Indebtedness.

21.20	Share capital
	No Obligor shall (and the Borrower shall ensure no member of the Group will) issue any shares except pursuant to a Permitted Share Issue.
	Miscellaneous
21.21	Insurance

(a)	Each Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.
(b)	All insurances must be with reputable independent insurance companies or underwriters.

21.22 Pensions

(a)

The Borrower shall ensure that all pension schemes operated by or maintained for the benefit of members of the Group and/or any of its employees are fully funded in accordance with the governing provisions of the scheme and as may be required by applicable laws with any shortfall advised by actuaries of recognised standing being rectified in accordance with those governing provisions and that no action or omission is taken by any member of the Group in relation to such a pension scheme which has or is reasonably likely to have a Material Adverse Effect.

(b)

The Borrower shall promptly notify the Agent of any material change in the rate of contributions to any pension schemes mentioned in (a) above paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise).

21.23	Access
	Each Obligor shall, and the Borrower shall ensure that each member of the Group will, (not more than once in every Financial Year unless the Agent reasonably suspects a Default is continuing or may occur) permit the Agent and/or the Security

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	Agent and/or accountants or other professional advisers and contractors of the Agent or Security Agent free access at all reasonable times and on reasonable notice at the risk and cost of the Obligor or Borrower to (a) the premises, assets, books, accounts and records of each member of the Group and (b) meet and discuss matters with its senior management.
21.24	Intellectual Property
	Each Obligor shall and the Borrower shall procure that each Group member will:

(a)	preserve and maintain the subsistence and validity of the Intellectual Property necessary for the business of the relevant Group member;
(b)	use reasonable endeavours to prevent any infringement in any material respect of the Intellectual Property;
(c)	make registrations and pay all registration fees and taxes necessary to maintain the Intellectual Property in full force and effect and record its interest in that Intellectual Property;
(d)	not use or permit the Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Intellectual Property which may materially and adversely affect the existence or value of the Intellectual Property or imperil the right of any member of the Group to use such property; and
(e)	not discontinue the use of the Intellectual Property,

21.25	Amendments
	No Obligor shall (and the Borrower shall ensure that no member of the Group will) amend, vary, novate, supplement, supersede, waive or terminate any term of a Transaction Document or any other document delivered to the Agent pursuant to Clauses 4.1 (Initial conditions precedent) or Clause 24 (Changes to the Obligors) except in writing in accordance with the provisions of Clause 34 (Amendments and Waivers).
21.26	Financial assistance
	Each Obligor shall (and the Borrower shall procure each member of the Group will) comply in all respects with Sections 151 to 158 of the United Kingdom Companies Act 1985 and any equivalent legislation in other jurisdictions including in relation to the execution of the Security Documents and payment of amounts due under this Agreement.
21.27	Treasury Transactions
	No Obligor shall (and the Borrower will procure that no members of the Group will) enter into any Treasury Transaction, other than:

(i) spot and forward delivery foreign exchange contracts entered into in the ordinary course of business and not for speculative purposes; and

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(ii) any Treasury Transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of a member of the Group for a period of not more than 12 months and not for speculative purposes.

21.28 Further assurance

(a) Each Obligor shall (and the Borrower shall procure that each member of the Group will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):

(i)	to perfect the Security created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;
(ii)	to confer on the Security Agent or confer on the Finance Parties Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Security Documents; and/or
(iii)	to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.

(b) Each Obligor shall (and the Borrower shall procure that each member of the Group shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.

21.29	Syndication
	The Borrower and the Obligors shall each provide reasonable assistance to the Arrangers in the preparation of an information memorandum and the primary syndication of the Facility (including, without limitation, by making its senior management available for the purpose of making presentations to, or meeting, potential lending institutions) and will comply with all reasonable requests for information from potential syndicate members prior to completion of syndication.
21.30	Terms of the Offer
	The Offer Document and any other document referred to in paragraph 3 of Part 1 of Schedule 2 (Conditions Precedent) under the heading Offer Conditions delivered to the Agent under this Agreement contain all the material terms of the Offer.

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21.31 The Offer

(a) Except with the prior written consent of the Majority Lenders, the Borrower must not:

(i)	increase, or do anything which might result in an increase of, the cash element of the offer price for the Target Shares to which the Offer or the Squeeze-Out Offer relates above a price per share of NOK 340;
(ii)	amend or vary any other term or condition of the Offer or the Squeeze-Out Offer in any material respect;
(iii)	do or permit to be done (otherwise than on the instructions of the Norwegian authorities) anything which would cause any material term or condition of the Offer or the Squeeze-Out Offer to be regarded as having been waived, withdrawn or satisfied;
(iv)	save as required by the Norwegian authorities, waive, withdraw or fail to enforce any material term or condition of the Offer or the Squeeze-Out Offer;
(v)	issue any press release or make any statement or announcement which makes reference to the Facility or to some or all of the Finance Parties or to the Finance Documents, unless required by law, the Code, the Norwegian Stock Exchange (in which case the Borrower must notify the Agent as soon as practicable upon becoming aware of the requirement).

(b) The Borrower must:

(i)	comply with the Code (subject to any waivers granted by the Norwegian Stock Exchange), and all other applicable statutes, laws and regulations relevant in the context of the Offer or the Squeeze-Out Offer;
(ii)	promptly supply to the Agent:

(A)	copies of all documents, certificates, notices or announcements received or issued by it (or on its behalf) in relation to the Offer;
(B)	at the time of giving any Utilisation Request for a Loan to be used to acquire any Shares a copy of a contract note from the broker or certificate from the broker as to the levels of acceptances of the Offer for cash consideration and as to the amounts actually paid or due to be paid to shareholders; and
(C)	any other information regarding the Offer as the Agent may reasonably request;

(c) If the Borrower becomes aware of a circumstance or event which if not waived, would entitle Borrower (with the Norwegian Stock Exchange’s

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	consent, if needed) to lapse or withdraw the Offer, it must promptly notify the Agent.
(d)	The Borrower must ensure it will promptly give notice to the Agent of the occurrence of the Offer Expiry Date.

21.32	Compulsory acquisition
	The Borrower must diligently pursue its rights to ensure that all of the Target Shares are acquired by it and promptly commence squeeze-out procedures in relation to the Shares as soon as it is entitled to do so.
21.33	Take Private
	The Borrower must ensure that the Shares are delisted from the Stock Exchange in Oslo and that the Target is converted into as a private limited company and, in each case, that all procedures necessary to effect this have been completed, as soon as practicable after the date on which it holds 90% or more of the share capital of the Target.
21.34	Refinancing Securities

(a)	The Obligors will use all reasonable endeavours to (i) cause the issuer of the Debt Refinancing Securities and the Borrower, as issuer of the Equity Refinancing Securities, to offer and sell the Debt Refinancing Securities and the Equity Refinancing Securities, as the case may be, in any one or a series of offerings in an amount sufficient to refinance in full the Facility, (ii) to issue, offer and sell Equity Refinancing Securities in an amount (nominal and premium) at least equal to 50% of the Total Commitments and (iii) to pay all fees and expenses related thereto, as promptly as practicable after the date of the initial Utilisation.
(b)	The Borrower will cause all members of the Group, their counsel and their auditors to reasonably assist and facilitate the Managers, in their capacity as underwriters of the Refinancing Securities, in completing due diligence, including providing access to Group personnel, legal and tax advisors and facilities at such reasonable times as shall be requested.
(c)	The Borrower will deliver to the Managers, in their capacity as underwriters of the Refinancing Securities, completed printed preliminary offering circulars for the distribution of the Refinancing Securities in a form customary for offerings underwritten by the Managers, in their capacity as underwriters of the Refinancing Securities, in the debt and equity, as the case may be, securities markets suitable to use on a road show. The Borrower will deliver completed final offering circulars in accordance with the Manager’s customary market practice in such markets.
(d)	The Borrower will cause senior management of the Borrower and of the issuer of any Debt Refinancing Securities to participate in road shows for the sale of the Refinancing Securities and other customary marketing efforts.

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(e)	Prior to such road show or road shows, the Borrower will prepare materials for, and participate in, presentations to the appropriate rating agencies to obtain ratings for the Debt Refinancing Securities.
(f)	Upon the pricing and the closing of the offering or offerings of Refinancing Securities, the Borrower will cause (i) its auditors, Target’s auditors and any other required auditors to deliver, in each case, to the Managers, in their capacity as underwriter of the Refinancing Securities and as representatives of the several underwriters, a comfort letter or letters, as appropriate, in a form customary for the Managers’ offering of securities in the relevant debt or equity markets and (ii) its legal counsel to deliver customary legal opinions and “10b-5 letters” to the Managers, in their capacity as underwriters of the Refinancing Securities and as representatives of the several underwriters.
(g)	The indenture for and the terms and conditions of any high yield Debt Refinancing Securities will be substantially in the form of the indenture for, and terms and conditions of, the Borrower’s high yield debt securities issued in April 2005, modified as appropriate to reflect changes in the financial condition and prospects of the Borrower and the Group, prevailing conditions and terms that are customary in the market for high yield debt securities by European issuers, or otherwise in form and substance reasonably satisfactory to the Managers and following consultation with the Borrower.
(h)	If any U.S. Dollar-denominated Debt Refinancing Securities are issued in a transaction not registered under the Securities Act, such Refinancing Securities shall be entitled to the benefit of a registration rights agreement to be entered into by the issuer of the Debt Refinancing Securities substantially in the form of the registration rights agreement for the Borrower’s high yield debt securities issued in April 2005.
(i)	The Borrower will use all reasonable efforts to list any high yield Debt Refinancing Securities on the Luxembourg Stock Exchange (or another exchange reasonably satisfactory to the Managers) and to maintain such listing for so long as any such Debt Refinancing Securities are outstanding.

22.	EVENTS OF DEFAULT
	Each of the events or circumstances set out in Clause 22 is an Event of Default.
22.1	Non-payment
	An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

(a)	its failure to pay is caused by administrative or technical error; and
(b)	payment is made within 2 Business Days of its due date.

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22.2 Financial covenants and other obligations

(a)	Any requirement of Clause 20 (Financial condition) is not satisfied or an Obligor does not comply with the provisions of Clauses 21.8 (Acquisitions), 21.6 (Merger), 21.13 (Negative Pledge), 21.14 (Disposals) and 21.31 (The Offer) or Clause 21 (General Undertakings).
(b)	An Obligor does not comply with any provision of any Security Document.

22.3 Other obligations

(a)	An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 22.1 (Non-payment) and Clause 22.2 (Financial covenants and other obligations)).
(b)	No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 5 Business Days (or in the case of any Event of Default under Clause 19 (Information Undertakings), 10 Business Days) of the Agent giving notice to the Borrower or relevant Obligor or the Borrower or an Obligor becoming aware of the failure to comply.

22.4	Misrepresentation
	Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
22.5	Cross default

(a)	Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period.
(b)	Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
(c)	Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).
(d)	Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).
(e)	No Event of Default will occur under this Clause 22.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than €5,000,000 (or its equivalent in any other currency or currencies).

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22.6 Insolvency

(a)	A member of the Group is unable or admits inability to pay its debts as they fall due or declared to be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
(b)	The value of the assets of any Obligor is less than its liabilities (taking into account contingent and prospective liabilities).
(c)	A moratorium is declared in respect of any indebtedness of any member of the Group. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
(d)	The Borrower or any member of the Group which conducts business in France is in a state of cessation des paiements, or any member of the Group becomes insolvent for the purpose of any insolvency law.

22.7 Insolvency proceedings

(a) Any corporate action, legal proceedings or other procedure or step is taken in relation to:

(i)	the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor;
(ii)	a composition, compromise, assignment or arrangement with any creditor of any member of the Group;
(iii)	the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any member of the Group or any of its assets; or
(iv)	enforcement of any Security over any assets of any member of the Group,

	or any analogous procedure or step is taken in any jurisdiction.
(b)	Paragraph (a) shall not apply to:

(i) any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement or, if earlier, the date on which it is advertised; or

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(ii) any corporate action, legal proceedings or other procedure or step which is part of a solvent reorganisation of any member of the Group permitted under this Agreement.

(c)	The Borrower or any member of the Group commences proceedings for règlement amiable in accordance with articles L.611 3 to L.611 6 of the French Code de Commerce.
(d)	A judgement for redressement judiciaire, cession totale de l’entreprise or liquidation judiciaire is entered in relation to the Borrower or any member of the Group under articles L.620 1 to L.628 3 of the French Code de Commerce.

22.8	Creditors’ process
	Any expropriation, attachment, sequestration, distress or execution or any of the enforcement proceedings provided for in French law no. 91 650 of 9 July 1991, or any analogous process in any jurisdiction affects any asset or assets of a member of the Group having an aggregate value of €5,000,000 and is not discharged within 14 days.
22.9	Unlawfulness and invalidity

(a)	It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Transaction Security created or expressed to be created or evidenced by the Security Documents ceases to be effective or any subordination created under the Intercreditor Agreement is or becomes unlawful.
(b)	Any obligation or obligations of any Obligor under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely effects the interests of the Lenders under the Finance Documents.
(c)	Any Finance Document ceases to be in full force and effect or any Transaction Security ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective.

22.10	Cessation of business
	Any Obligor or Material Subsidiary suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business except as a result of a disposal which is a Permitted Disposal or a Permitted Merger.
22.11	Change of ownership

(a)	An Obligor (other than the Borrower) ceases to be a wholly-owned (directly or indirectly) Subsidiary of the Borrower; or
(b)	An Obligor ceases to own at least the same percentage of shares in a Material Subsidiary,

except, in either case, as a result of a disposal which is a Permitted Disposal or a Permitted Merger.

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22.12	Audit qualification
	The Auditors of the Group qualify the audited annual consolidated financial statements of the Borrower.
22.13	Expropriation
	The authority or ability of any Obligor or Material Subsidiary to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Obligor or Material Subsidiary or any of its assets.
22.14	Repudiation and rescission of agreements
	An Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Finance Document or any Transaction Security.
22.15	Litigation
	Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Transaction Documents or the transactions contemplated in the Transaction Documents or against any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect.
22.16	Offer Documents
	Rescission of any of the Offer Document, the Squeeze-Out Offer Document or any other document related to any of the terms and conditions of the Offer and the Squeeze-Out Offer.
22.17	Security Documents
22.18	Any member of the Group does not enter into any Security Documents within the period contemplated by reason of any failure by any person to complete any financial assistance or corporate benefit procedures.
22.19	Material adverse change
	Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.
22.20	Acceleration
	On and at any time after the occurrence of an Event of Default which is continuing the Agent may without mise en demeure or any other judicial or extra judicial step, and shall if so directed by the Majority Lenders, by notice to the Borrower but subject to the mandatory provisions of articles L.620 1 to L.628 3 of the French Code de Commerce:

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(a)	declare that cash cover in respect of each outstanding Offer Guarantee is payable on demand at which time it shall become immediately due and payable; and/or
(b)	declare that cash cover in respect of each outstanding Offer Guarantee is payable on demand at which time it shall immediately become due and payable on demand by the Agent on the instructions of the Majority Lenders; and/or
(c)	cancel the Total Commitments at which time they shall immediately be cancelled;
(d)	declare that all or part of the Utilisations, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; and/or
(e)	declare that all or part of the Utilisations be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or
(f)	exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

22.21 Clean-up Period

(a) If on the date of the first Utilisation any event or circumstance has occurred with respect to any member of the Target Group of which the Borrower was unaware and which would constitute a Default (the “Relevant Default”):

(i)	promptly upon becoming aware of its occurrence, the Borrower shall notify the Agent of that Relevant Default and the related event or circumstance (and the steps, if any, being taken to remedy it); and
(ii)	subject to paragraph (b) below, during the Clean-up Period that Relevant Default shall not constitute a Default and the Agent shall not be entitled to give any notice under Clause 22.20 (Acceleration) with respect to that Relevant Default until (if that Relevant Default is then continuing) the earlier of:

(A)	the date immediately after the end of the Clean-up Period;
(B)	the date (if any) on which the Relevant Default becomes incapable of remedy within the Clean-Up Period; and
(C)	the date (if any) on which a Material Adverse Effect occurs or becomes reasonably likely to occur.

(b) Paragraph (a)(ii) above shall not apply with respect to any Relevant Default (i) under Clauses 22.6 (Insolvency) or 22.7 (Insolvency proceedings) or (ii) is not capable of remedy within the Clean-Up Period.

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(c) For the avoidance of doubt, paragraph (a)(ii) above shall not restrict the Agent’s right to give any notice under Clause 22.20 (Acceleration) with respect to any Default which is not a Relevant Default.

“Clean-Up Period” means the period from the date of signing of the Facility Agreement to the date falling 90 days thereafter.

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SECTION 9
CHANGES TO PARTIES

23.	CHANGES TO THE LENDERS
23.1	Assignments and transfers by the Lenders
	Subject to this Clause 23, a Lender (the “Existing Lender”) may:

(a)	assign any of its rights; or
(b)	transfer by novation any of its rights and obligations,

	to another bank or financial institution or credit institution (établissement de crédit) to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”).
23.2	Conditions of assignment or transfer

(a)	The consent of the Borrower is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is to another Lender or an Affiliate of a Lender.
(b)	The consent of the Borrower to an assignment or transfer must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by the Borrower within that time.
(c)	The consent of the Borrower to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase to the Mandatory Cost.
(d)	An assignment will only be effective on:

(i)	receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and
(ii)	performance by the Agent of all necessary “know your customer” or other similar checks under all applicable laws regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender.

(e)	A transfer will only be effective if the procedure set out in Clause 23.5 (Procedure for transfer) is complied with.
(f)	If:

(i) a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

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(ii) as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax gross-up and indemnities) or Clause 13 (Increased Costs),

	then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.
23.3	Assignment or transfer fee
	The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of US$1,500.
23.4	Limitation of responsibility of Existing Lenders

(a) Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

(i)	the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
(ii)	the financial condition of any Obligor;
(iii)	the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or
(iv)	the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

(b) Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

(i)	has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
(ii)	will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

(c) Nothing in any Finance Document obliges an Existing Lender to:

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(i)	accept a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause 23; or
(ii)	support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.

23.5 Procedure for transfer

(a)	Subject to the conditions set out in Clause 23.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.
(b)	The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.
(c)	On the Transfer Date:

(i)	to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the “Discharged Rights and Obligations”);
(ii)	each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;
(iii)	the Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Arrangers and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and
(iv)	the New Lender shall become a Party as a “Lender”.

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23.6	Copy of Transfer Certificate to Borrower
	The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, send to the Borrower a copy of that Transfer Certificate.
23.7	Disclosure of information
	Any Lender may disclose to any of its Affiliates and any other person:

(a)	to (or through) whom that Lender assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under this Agreement;
(b)	with (or through) whom that Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or any Obligor; or
(c)	to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation,

	any information about any Obligor, the Group and the Finance Documents as that Lender shall consider appropriate.
24.	CHANGES TO THE OBLIGORS
24.1	Assignments and transfer by Obligors
	No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
24.2	Additional Guarantors

(a)	Prior to, or simultaneous with, any Subsidiary becoming a guarantor on the Existing Bonds, the Borrower shall cause that Subsidiary to become an Additional Guarantor.
(b)	Subject to compliance with the provisions of paragraph (c) and (d) of Clause 19.9 (“Know your customer” checks), the Borrower may request that any of its Subsidiaries become an Additional Guarantor.
(c)	A Subsidiary shall become an Additional Guarantor when:

(i)	the Borrower delivers to the Agent a duly completed and executed Accession Letter; and
(ii)	the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions Precedent) in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent.

(d) The Agent shall notify the Borrower and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the

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documents and other evidence listed in Part II of Schedule 2 (Conditions Precedent).

24.3	Repetition of Representations
	Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
24.4	Resignation of a Guarantor

(a)	The Borrower may request that a Guarantor (other than the Borrower) ceases to be a Guarantor by delivering to the Agent a Resignation Letter.
(b)	The Agent shall accept a Resignation Letter and notify the Borrower and the Lenders of its acceptance if:

(i)	no Default is continuing or would result from the acceptance of the Resignation Letter (and the Borrower has confirmed this is the case); and
(ii)	all the Lenders have consented to the Borrower’s request.

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SECTION 10
THE FINANCE PARTIES

25.	ROLE OF THE AGENT, THE ARRANGERS AND THE SECURITY AGENT
25.1	Appointment of the Agent

(a)	Each other Finance Party appoints the Agent to act as its agent under and in connection with the Finance Documents.
(b)	Each other Finance Party authorises the Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

25.2 Duties of the Agent

(a)	The Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.
(b)	Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(c)	If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.
(d)	If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Arranger) under this Agreement it shall promptly notify the other Finance Parties.
(e)	The Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

25.3	Role of the Arranger
	Except as specifically provided in the Finance Documents, the Arrangers has no obligations of any kind to any other Party under or in connection with any Finance Document.
25.4	No fiduciary duties

(a)	Nothing in this Agreement constitutes the Agent or the Arrangers as a trustee or fiduciary of any other person.
(b)	Neither the Agent nor the Arrangers shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

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25.5	Business with the Group
	The Agent and the Arrangers may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
25.6	Rights and discretions of the Agent

(a) The Agent may rely on:

(i)	any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and
(ii)	any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

(b) The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

(i)	no Default has occurred (unless it has actual knowledge of a Default arising under Clause 22.1 (Non-payment));
(ii)	any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and
(iii)	any notice or request made by the Borrower (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors.

(c)	The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.
(d)	The Agent may act in relation to the Finance Documents through its personnel and agents.
(e)	The Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
(f)	Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arrangers is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

25.7 Majority Lenders’ instructions

(a) Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.

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(b)	Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.
(c)	The Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.
(d)	In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.
(e)	The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.

25.8	Responsibility for documentation
	Neither the Agent nor the Arrangers:

(a)	is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arrangers, an Obligor or any other person given in or in connection with any Finance Document or the Information Memorandum; or
(b)	is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.

25.9 Exclusion of liability

(a)	Without limiting paragraph (b) below (and without prejudice to the provisions of paragraph (e) of Clause 28.10 (Disruption to Payment Systems etc.) , the Agent will not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.
(b)	No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this Clause.
(c)	The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

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(d) Nothing in this Agreement shall oblige the Agent or the Arrangers to carry out any “know your customer” or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent and the Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arrangers.

25.10	Lenders’ indemnity to the Agent
	Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 28.10 (Disruption to Payment Systems etc.) notwithstanding the Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).
25.11	Resignation of the Agent

(a)	The Agent may resign and appoint one of its Affiliates acting through an office in France as successor by giving notice to the other Finance Parties and the Borrower.
(b)	Alternatively the Agent may resign by giving notice to the other Finance Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Agent.
(c)	If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b) above within 30 days after notice of resignation was given, the Agent (after consultation with the Borrower) may appoint a successor Agent (acting through an office in France).
(d)	The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.
(e)	The Agent’s resignation notice shall only take effect upon the appointment of a successor.
(f)	Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 25. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

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(g) After consultation with the Borrower, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with paragraph (b) above. In this event, the Agent shall resign in accordance with paragraph (b) above.

25.12 Confidentiality

(a)	In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
(b)	If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

25.13 Relationship with the Lenders

(a)	The Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(b)	Each Lender shall supply the Agent with any information required by the Agent in order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost formula).

25.14

Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent and the Arrangers that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

(a)	the financial condition, status and nature of each member of the Group;
(b)	the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(c)	whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
(d)	the adequacy, accuracy and/or completeness of the Information Memorandum and any other information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement

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or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

25.15	Reference Banks
	If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Borrower) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.
25.16	Agent’s Management Time
	Any amount payable to the Agent under Clause 14.3 (Indemnity to the Agent), Clause 16 (Costs and Expenses) and Clause 25.10 (Lenders’ indemnity to the Agent) shall include the cost of utilising the Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause 11 (Fees).
25.17	Deduction from amounts payable by the Agent
	If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
25.18	Trust
	The Security Agent declares that it shall hold the Transaction Security on trust for the Secured Parties on the terms contained in this Agreement. Each of the parties to this Agreement agrees that the Security Agent shall have only those duties, obligations and responsibilities expressly specified in this Agreement or in the Security Documents (and no others shall be implied).
25.19	No Independent Power
	The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any rights or powers arising under the Security Documents except through the Security Agent.
25.20	Security Agent’s Instructions
	The Security Agent shall:

(a) unless a contrary indication appears in a Finance Document, act in accordance with any instructions given to it by the Agent and shall be entitled to assume that (i) any instructions received by it from the Agent are duly given by or on behalf of the Majority Lenders or, as the case may be, the Lenders in accordance with the terms of the Finance Documents and (ii) unless it has

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	received actual notice of revocation that any instructions or directions given by the Agent have not been revoked;
(b)	be entitled to request instructions, or clarification of any direction, from the Agent as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers and discretions and the Security Agent may refrain from acting unless and until those instructions or clarification are received by it; and
(c)	be entitled to, carry out all dealings with the Lenders through the Agent and may give to the Agent any notice or other communication required to be given by the Security Agent to the Lenders.

25.21	Security Agent’s Actions
	Subject to the provisions of this Clause 25:

(a)	the Security Agent may, in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Finance Documents which in its absolute discretion it considers to be for the protection and benefit of all the Secured Parties; and
(b)	at any time after receipt by the Security Agent of notice from the Agent directing the Security Agent to exercise all or any of its rights, remedies, powers or discretions under any of the Finance Documents, the Security Agent may, and shall if so directed by the Agent, take any action as in its sole discretion it thinks fit to enforce the Transaction Security.

25.22	Security Agent’s discretions
	The Security Agent may:

(a)	assume (unless it has received actual notice to the contrary in its capacity as Security Agent for the Secured Parties) that (i) no Default has occurred and no Obligor is in breach of or default under its obligations under any of the Finance Documents and (ii) any right, power, authority or discretion vested in any person has not been exercised.
(b)	if it receives any instructions or directions from the Agent to take any action in relation to the Transaction Security, assume that all applicable conditions under the Finance Documents for taking that action have been satisfied.
(c)	engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts (whether obtained by the Security Agent or by any other Secured Party) whose advice or services may at any time seem necessary, expedient or desirable.
(d)	rely upon any communication or document believed by it to be genuine and, as to any matters of fact which might reasonably be expected to be within the knowledge of a Finance Party or an Obligor, upon a certificate signed by or on behalf of that person.

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(e) refrain from acting in accordance with the instructions of the Agent or Lenders (including bringing any legal action or proceeding arising out of or in connection with the Finance Documents) until it has received any indemnification and/or security that it may in its absolute discretion require (whether by way of payment in advance or otherwise) for all costs, losses and liabilities which it may incur in bringing such action or proceedings.

25.23	Security Agent’s Obligations
	The Security Agent shall promptly inform the Agent of:

(a)	the contents of any notice or document received by it in its capacity as Security Agent from any Obligor under any Finance Document; and
(b)	the occurrence of any Default or any default by an Obligor in the due performance of or compliance with its obligations under any Finance Document of which the Security Agent has received notice from any other party to this Agreement.

25.24	Excluded Obligations
	The Security Agent shall not:

(a)	be bound to enquire as to the occurrence or otherwise of any Default or the performance, default or any breach by an Obligor of its obligations under any of the Finance Documents;
(b)	be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account;
(c)	be bound to disclose to any other person (including any Secured Party) (i) any confidential information or (ii) any other information if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty;
(d)	be under any obligations other than those which are specifically provided for in the Finance Documents; or
(e)	have or be deemed to have any duty, obligation or responsibility to, or relationship of trust or agency with, any Obligor.

25.25	Exclusion of Security Agent’s liability
	Unless caused directly by its gross negligence or wilful misconduct the Security Agent shall not accept responsibility or be liable for:

(a) the adequacy, accuracy and/or completeness of any information supplied by the Security Agent or any other person in connection with the Finance Documents or the transactions contemplated in the Finance Documents, or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the Finance Documents;

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(b)	the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security;
(c)	any losses to any person or any liability arising as a result of taking or refraining from taking any action in relation to any of the Finance Documents or the Transaction Security or otherwise, whether in accordance with an instruction from an Agent or otherwise;
(d)	the exercise of, or the failure to exercise, any judgment, discretion or power given to it by or in connection with any of the Finance Documents, the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the Finance Documents or the Transaction Security; or
(e)	any shortfall which arises on the enforcement of the Transaction Security.

25.26	No proceedings
	No Party (other than the Security Agent) may take any proceedings against any officer, employee or agent of the Security Agent in respect of any claim it might have against the Security Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Security Agent may rely on this Clause subject to Clause 1.3 (Third party rights) and the provisions of the Third Parties Act.
25.27	Own responsibility
	It is understood and agreed by each Secured Party that at all times that Secured Party has itself been, and will continue to be, solely responsible for making its own independent appraisal of and investigation into all risks arising under or in connection with the Finance Documents including but not limited to:

(a)	the financial condition, creditworthiness, condition, affairs, status and nature of each of the Obligors;
(b)	the legality, validity, effectiveness, adequacy and enforceability of each of the Finance Documents and the Transaction Security and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the Finance Documents or the Transaction Security;
(c)	whether that Secured Party has recourse, and the nature and extent of that recourse, against any Obligor or any other person or any of their respective assets under or in connection with the Finance Documents, the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under to or in connection with the Finance Documents;
(d)	the adequacy, accuracy and/or completeness of any information provided by any person in connection with the Finance Documents, the transactions

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	contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the Finance Documents; and
(e)	the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any security interest affecting the Charged Property,

	and each Secured Party warrants to the Security Agent that it has not relied on and will not at any time rely on the Security Agent in respect of any of these matters.
25.28	No responsibility to perfect Transaction Security
	The Security Agent shall not be liable for any failure to:

(a)	require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged Property;
(b)	obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any of the Finance Documents or the Transaction Security;
(c)	register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any applicable laws in any jurisdiction or to give notice to any person of the execution of any of the Finance Documents or of the Transaction Security;
(d)	take, or to require any of the Obligors to take, any steps to perfect its title to any of the Charged Property or to render the Transaction Security effective or to secure the creation of any ancillary security interest under the laws of any jurisdiction; or
(e)	require any further assurances in relation to any of the Security Documents.

25.29 Insurance by Security Agent

(a)

The Security Agent shall not be under any obligation to insure any of the Charged Property, to require any other person to maintain any insurance or to verify any obligation to arrange or maintain insurance contained in the Finance Documents. The Security Agent shall not be responsible for any loss which may be suffered by any person as a result of the lack of or inadequacy of any such insurance.

(b)

Where the Security Agent is named on any insurance policy as an insured party, it shall not be responsible for any loss which may be suffered by reason of, directly or indirectly, its failure to notify the insurers of any material fact relating to the risk assumed by the insurers or any other information of any kind, unless any Secured Party has requested it to do so in writing and the Security Agent has failed to do so within fourteen days after receipt of that request.

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25.30	Custodians and Nominees
	The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any assets of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.
25.31	Acceptance of Title
	The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, the right and title as each of the Obligors may have to any of the Charged Property and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.
25.32	Refrain from Illegality
	The Security Agent may refrain from doing anything which in its opinion will or may be contrary to any relevant law, directive or regulation of any jurisdiction which would or might otherwise render it liable to any person, and the Security Agent may do anything which is, in its opinion, necessary to comply with any law, directive or regulation.
25.33	Business with the Obligors
	The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with any of the Obligors.
25.34	Releases
	Upon a disposal of any of the Charged Property:

(a)	pursuant to the enforcement of the Transaction Security by a receiver or the Security Agent; or
(b)	if that disposal is permitted under the Finance Documents,
(c)	the Security Agent shall (at the cost of the Obligors) release that property from the Transaction Security and is authorised to execute, without the need for any further authority from the Secured Parties, any release of the Transaction Security or other claim over that asset and to issue any certificates of non-crystallisation of floating charges that may be required or desirable.

25.35	Winding up of Trust
	If the Security Agent, with the approval of the Majority Lenders, determines that (a) all of the obligations secured by any of the Security Documents have been fully and finally discharged and (b) none of the Secured Parties is under any commitment, obligation or liability (actual or contingent) to make advances or provide other

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	financial accommodation to any Obligor pursuant to the Finance Documents, the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents.
25.36	Perpetuity Period
	The perpetuity period under the rule against perpetuities, if applicable to this Agreement, shall be the period of eighty years from the date of this Agreement.
25.37	Powers Supplemental
	The rights, powers and discretions conferred upon the Security Agent by this Agreement shall be supplemental to the Agent Acts 1925 and 2000 and in addition to any which may be vested in the Security Agent by general law or otherwise.
25.38	Agent division separate
	In acting as agent for the Secured Parties, the Security Agent shall be regarded as acting through its Agent division which shall be treated as a separate entity from any of its other divisions or departments and any information received by any other division or department of the Security Agent may be treated as confidential and shall not be regarded as having been given to the Security Agent’s Agent division.
25.39	Disapplication
	Section 1 of the Agent Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Agent Acts 1925 and 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Agent Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.
25.40	Resignation of Security Agent

(a)	The Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Parties (or to the Agent on behalf of the Lenders).
(b)	Alternatively the Security Agent may resign by giving notice to the other Parties (or to the Agent on behalf of the Lenders) in which case the Majority Lenders may appoint a successor Security Agent.
(c)	If the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph (b) above within 30 days after the notice of resignation was given, the Security Agent (after consultation with the Agent) may appoint a successor Security Agent.
(d)	The retiring Security Agent shall, at its own cost, make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the

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	purposes of performing its functions as Security Agent under the Finance Documents.
(e)	The Security Agent’s resignation notice shall only take effect upon (i) the appointment of a successor and (ii) the transfer of all of the Transaction Security to that successor.
(f)	Upon the appointment of a successor, the retiring Security Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of Clauses 25 (Role of the Agent, the Arrangers and the Security Agent). Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(g)	The Majority Lenders may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above. In this event, the Security Agent shall resign in accordance with paragraph (b) above.

25.41 Delegation

(a)	The Security Agent may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any of the rights, powers and discretions vested in it by any of the Finance Documents.
(b)	The delegation may be made upon any terms and conditions (including the power to sub-delegate) and subject to any restrictions as the Security Agent may think fit in the interests of the Secured Parties and it shall not be bound to supervise, or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of any delegate or sub-delegate.

25.42 Additional Agents

(a)	The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate agent or as a co-agent jointly with it (i) if it considers that appointment to be in the interests of the Secured Parties or (ii) for the purposes of conforming to any legal requirements, restrictions or conditions which the Security Agent deems to be relevant or (iii) for obtaining or enforcing any judgment in any jurisdiction, and the Security Agent shall give prior notice to the Borrower and the Agent of that appointment.
(b)	Any person so appointed shall have the rights, powers and discretions (not exceeding those conferred on the Security Agent by this Agreement) and the duties and obligations that are conferred or imposed by the instrument of appointment.
(c)	The remuneration that the Security Agent may pay to any person, and any costs and expenses incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.

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26.	CONDUCT OF BUSINESS BY THE FINANCE PARTIES
	No provision of this Agreement will:

(a)	interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b)	oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
(c)	oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

27.	SHARING AMONG THE FINANCE PARTIES
27.1	Payments to Finance Parties
	If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from an Obligor other than in accordance with Clause 28 (Payment Mechanics) and applies that amount to a payment due under the Finance Documents then:

(a)	the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;
(b)	the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 28 (Payment Mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and
(c)	the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 28.5 (Partial payments).

27.2	Redistribution of payments
	The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) in accordance with Clause 28.5 (Partial payments).
27.3	Recovering Finance Party’s rights

(a)	On a distribution by the Agent under Clause 27.2 (Redistribution of payments), the Recovering Finance Party will be subrogated to the rights of the Finance Parties which have shared in the redistribution.
(b)	If and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph (a) above, the relevant Obligor shall be liable to the

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Recovering Finance Party for a debt equal to the Sharing Payment which is immediately due and payable.

27.4	Reversal of redistribution
	If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

(a)

each Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 27.2 (Redistribution of payments) shall, upon request of the Agent, pay to the Agent for account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay); and

(b)

that Recovering Finance Party’s rights of subrogation in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing Finance Party for the amount so reimbursed.

27.5 Exceptions

(a)	This Clause 27 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.
(b)	A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(i)	it notified that other Finance Party of the legal or arbitration proceedings; and
(ii)	that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

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SECTION 11
ADMINISTRATION

28.	PAYMENT MECHANICS
28.1	Payments to the Agent

(a)

On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

(b)

Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London) with such bank as the Agent specifies.

28.2	Distributions by the Agent
	Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 28.3 (Distributions to an Obligor) and Clause 28.4 (Clawback) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days’ notice with a bank in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London).
28.3	Distributions to an Obligor
	The Agent may (with the consent of the Obligor or in accordance with Clause 29 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
28.4	Clawback

(a)

Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

(b)

If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

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28.5 Partial payments

(a) If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:

(i)	first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Agent under the Finance Documents;
(ii)	secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;
(iii)	thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and
(iv)	fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

(b)	The Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (iv) above.
(c)	Paragraphs (a) and (b) above will override any appropriation made by an Obligor.

28.6	No set-off by Obligors
	All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
28.7	Business Days

(a)	Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
(b)	During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

28.8 Currency of account

(a)	Subject to paragraphs (b) and (c) below, the US dollar is the currency of account and payment for any sum due from an Obligor under any Finance Document.
(b)	Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

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(c) Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

28.9 Change of currency

(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(i)	any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrower); and
(ii)	any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).

(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

28.10	Disruption to Payment Systems etc.
	If either the Agent determines (in its discretion) that a Disruption Event has occurred or the Agent is notified by the Borrower that a Disruption Event has occurred:

(a)	the Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances;
(b)	the Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in paragraph (a) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
(c)	the Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
(d)	any such changes agreed upon by the Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 34 (Amendments and Waivers);
(e)	the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other

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	category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 28.10; and
(f)	the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

29.	SET-OFF
	A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
30.	NOTICES
30.1	Communications in writing
	Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
30.2	Addresses
	The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

(a)	in the case of the Borrower, that identified with its name below;
(b)	in the case of each Lender or any other Original Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and
(c)	in the case of the Agent, that identified with its name below,

	or any substitute address or fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days’ notice.
30.3	Delivery

(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

(i)	if by way of fax, when received in legible form; or
(ii)	if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

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	and, if a particular department or officer is specified as part of its address details provided under Clause 30.2 (Addresses), if addressed to that department or officer.
(b)	Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent’s signature below (or any substitute department or officer as the Agent shall specify for this purpose).
(c)	All notices from or to an Obligor shall be sent through the Agent.
(d)	Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.

30.4	Notification of address and fax number
	Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to Clause 30.2 (Addresses) or changing its own address or fax number, the Agent shall notify the other Parties.
30.5	Electronic communication

(a) Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:

(i)	agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
(ii)	notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
(iii)	notify each other of any change to their address or any other such information supplied by them.

(b) Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

30.6 English language

(a)	Any notice given under or in connection with any Finance Document must be in English.
(b)	All other documents provided under or in connection with any Finance Document must be:

(i) in English; or

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(ii) if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

31.	CALCULATIONS AND CERTIFICATES
31.1	Accounts
	In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
31.2	Certificates and Determinations
	Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
31.3	Day count convention
	Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
32.	PARTIAL INVALIDITY
	If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
33.	REMEDIES AND WAIVERS
	No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
34.	AMENDMENTS AND WAIVERS
34.1	Required consents

(a) Subject to Clause 34.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.

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(b) The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause.

34.2 Exceptions

(a) An amendment or waiver that has the effect of changing or which relates to:

(i)	the definition of “Majority Lenders” in Clause 1.1 (Definitions);
(ii)	an extension to the date of payment of any amount under the Finance Documents save any extension of the Final Maturity Date by 6 months pursuant to Clause 2.4 (Extension of Facility);
(iii)	a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
(iv)	an increase in or an extension of any Commitment;
(v)	a change to the Borrower or Guarantors;
(vi)	any provision which expressly requires the consent of all the Lenders;
(vii)	Clause 2.5 (Finance Parties’ rights and obligations), Clause 23 (Changes to the Lenders) or this Clause 34;
(viii)	any release of any Transaction Security or change to the scope of the Charged Property,

shall not be made without the prior consent of all the Lenders.

(b) An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arrangers may not be effected without the consent of the Agent, the Security Agent or the Arrangers.

35.	COUNTERPARTS
	Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

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SECTION 12
GOVERNING LAW AND ENFORCEMENT

36.	GOVERNING LAW
	This Agreement is governed by English law.
37.	ENFORCEMENT
37.1	Jurisdiction

(a)	The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a “Dispute”).
(b)	The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
(c)	This Clause 37.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

37.2	Service of process
	Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

(a)	irrevocably appoints CGG Offshore UK Limited as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
(b)	agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

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SCHEDULE 1
The Original Parties

Part I
The Original Obligors

Name of Borrower	Registration number (or equivalent, if any)
Compagnie Générale de Géophysique

Name of Original Guarantor	Registration number (or equivalent, if any)
Sercel Inc.
Sercel Canada Ltd.
Sercel Australia Pty Ltd
CGG Americas Inc.
CGG Canada Services Ltd.
CGG Marine Resources Norge A/S

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Part II
The Original Lenders

Name of Original Lender	Commitment
Credit Suisse First Boston International	187,500,000
BNP Paribas	187,500,000

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SCHEDULE 2
Conditions Precedent

Part I
Conditions Precedent to Initial Advance

1. Original Obligors

(a)	A K-bis extract or equivalent for the Borrower, not more than one month old.
(b)	A copy of the constitutional documents (statuts) of each Original Obligor.
(c)	A copy of a resolution of the board of directors (conseil d’administration) of each Original Obligor:

(i)	approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;
(ii)	authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and
(iii)	authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request and Selection Notice) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party.

(c)	A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above.
(d)	A copy of a resolution signed by all the holders of the issued shares in each Original Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which the Original Guarantor is a party to the extent required by applicable law.
(e)	A certificate of the Borrower (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on any Original Obligor to be exceeded.
(f)	A certificate of an authorised signatory of the relevant Original Obligor certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

2. Legal opinions

(a) A legal opinion of Vinson & Elkins, legal advisers to the Arrangers and the Agent in England, substantially in the form distributed to the Original Lenders prior to signing this Agreement.

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(b)	A legal opinion of Norwegian counsel to the Arrangers and the Agent substantially in the form distributed to the Original Lenders prior to signing this Agreement.
(c)	If an Original Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Arrangers and the Agent or the Borrower in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement.

3. Other documents and evidence

(a)	Evidence that any process agent referred to in Clause 37.2 (Service of process), if not an Original Obligor, has accepted its appointment.
(b)	A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.
(c)	The Original Financial Statements of each Original Obligor.
(d)	Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 (Fees) and Clause 16 (Costs and expenses) have been paid or will be paid by the first Utilisation Date.
(e)	Duly executed share pledge and duly executed power of attorney in favour of the Original Lenders substantially in the form set out in Schedule 12 (Form of Power of Attorney) authorising the Original Lenders to enter into the Share Pledge Agreement on behalf of the Borrower.

Offer Conditions

4. Offer Guarantee Issuance Conditions

(a)	The Offer Document.
(b)	Evidence that all necessary filings have been made, clearances have been obtained, or relevant waiting or other time periods under any applicable law or regulation of any jurisdiction have expired, lapsed or terminated.
(c)	Evidence that all other necessary authorisations for launch and consummation of the Offer have been obtained.
(d)	Evidence of the necessary arrangements with the VPS account holder for the perfection of security over the acquired Shares in favour of the Security Agent.

5. Offer Settlement Conditions

(a) A certificate from the Borrower confirming that:

(i) the Offer has closed and specifying the level of acceptances;

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(ii)	Clause 21.31 (The Offer) has been complied with;
(iii)	no material term or condition of the Offer has been waived or amended in any respect without the consent of the Majority Lenders; and
(iv)	the Borrower has not agreed any arrangements with any governmental regulatory or similar authority in order to satisfy any term or condition of the Offer without the consent of the Majority Lenders.

6. Squeeze-Out Offer Settlement Conditions

(a)	The Squeeze-Out Offer Document.
(b)	A certificate from the Borrower confirming that Clause 21.31 (The Offer) has been complied with.
(c)	Evidence that all other necessary authorisations for launch and consummation of the Squeeze-Out Offer have been obtained.
(d)	Evidence of the necessary arrangements with the VPS account holder for the perfection of security over the acquired Shares in favour of the Security Agent.

7.	Non Offer Settlement Conditions
	Evidence of the necessary arrangements with the VPS account holder for the perfection of security over the acquired Shares in favour of the Security Agent.

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Part II
Conditions Precedent Required to be
Delivered by an Additional Obligor

1.	A K-bis extract for the Additional Obligor not more than one month old.
2.	An Accession Letter, duly executed by the Additional Obligor and the Borrower.
3.	A copy of the constitutional documents of the Additional Obligor.
4.	A copy of a resolution of the board of directors of the Additional Obligor:

(a)	approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;
(b)	authorising a specified person or persons to execute the Accession Letter on its behalf; and
(c)	authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices (including, in relation to an Additional Borrower, any Utilisation Request or Selection Notice) to be signed and/or despatched by it under or in connection with the Finance Documents.

5.	A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above.
6.	A copy of a resolution signed by all the holders of the issued shares of the Additional Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which the Additional Guarantor is a party if required under applicable law.
7.	A certificate of the Additional Obligor (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded.
8.	A certificate of an authorised signatory of the Additional Obligor certifying that each copy document listed in this Part II of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.
9.	A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.
10.	If available, the latest audited financial statements of the Additional Obligor.

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11.	A legal opinion of Vinson & Elkins, legal advisers to the Arrangers and the Agent in England.
12.	If the Additional Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Arrangers and the Agent in the jurisdiction in which the Additional Obligor is incorporated.
13.	If the proposed Additional Obligor is incorporated in a jurisdiction other than England and Wales, evidence that the process agent specified in Clause 37.2 (Service of process), if not an Obligor, has accepted its appointment in relation to the proposed Additional Obligor.

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SCHEDULE 3
Requests

Part I
Utilisation Request

From:
To: [Borrower]
[Agent]

Dated:
Dear Sirs

Compagnie Générale de Géophysique — US$375,000,000 Facility Agreement
dated 1 September 2005 (the “Agreement”)

1.	We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
2.	We wish to borrow the Loan on the following terms:

Proposed Utilisation Date:	[     ] (or, if that is not a Business Day, the next Business Day)
Amount:	[     ] or, if less, the Available Facility
Interest Period:	[     ]

3.	We confirm that each condition specified in Clause 4.2 (Further conditions precedent for all Advances) is satisfied on the date of this Utilisation Request.
4.	The Loan is made for the following purpose [l].
5.	The proceeds of this Loan should be credited to [account].
6.	This Utilisation Request is irrevocable.

Yours faithfully

authorised signatory for
[name of the Borrower]

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Part II
Selection Notice

From:
To: [Borrower]
[Agent]

Dated:
Dear Sirs

Compagnie Générale de Géophysique — US$375,000,000 Facility Agreement
dated 1 September 2005 (the “Agreement”)

1.	We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.
2.	We refer to the Loan with an Interest Period ending on [     ].
3.	[We request that the above Loan be divided into [     ] Loans with the following amounts and Interest Periods:]
	or
	[We request that the next Interest Period for the Loan is [     ]].
4.	This Selection Notice is irrevocable.

Yours faithfully

authorised signatory for
[name of the Borrower]

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SCHEDULE 4
Mandatory Cost formula

1.	The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England and/or the Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.
2.	On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum.
3.	The Additional Cost Rate for any Lender lending from a Facility Office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that Facility Office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that Facility Office.
4.	The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Agent as follows:

(a) in relation to a sterling Loan:

AB + C(B - D) + E x 0.01	per cent. per annum
100-(A + C)

(b) in relation to a Loan in any currency other than sterling:

E x 0.01	per cent. per annum.
300

Where:

A	is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of England to comply with cash ratio requirements.
B	is the percentage rate of interest (excluding the Margin and the Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of interest

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	specified in paragraph (a) of Clause 9.3 (Default interest)1) payable for the relevant Interest Period on the Loan.
C	is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.
D	is the percentage rate per annum payable by the Bank of England to the Agent on interest bearing Special Deposits.
E	is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

5. For the purposes of this Schedule:

(a)	“Eligible Liabilities” and “Special Deposits” have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;
(b)	“Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;
(c)	“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate); and
(d)	“Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.

6.

In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.

7.

If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.

¹ If this schedule is not being used with one of the LMA multicurrency term and/or revolving facility agreements but is being used with one of the LMA single currency term and/or revolving facility agreements or the LMA leveraged facility agreement, this clause reference will need to be changed to Clause 8.3 or Clause 14.3 respectively.

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8. Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information on or prior to the date on which it becomes a Lender:

(a)	the jurisdiction of its Facility Office; and
(b)	any other information that the Agent may reasonably require for such purpose.

Each Lender shall promptly notify the Agent of any change to the information provided by it pursuant to this paragraph.

9.	The percentages of each Lender for the purpose of A and C above and the rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a Facility Office in the same jurisdiction as its Facility Office.
10.	The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects.
11.	The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12.	Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all Parties.
13.	The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all Parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all Parties.

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SCHEDULE 5
Form of Transfer Certificate

To:
From: [     ] as Agent
[The Existing Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)

Dated:

Compagnie Générale de Géophysique, S.A. — US$375,000,000 Facility Agreement
dated 1 September 2005 (the “Agreement”)

1.	We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
2.	We refer to Clause 23.5 (Procedure for transfer):

(a)	The Existing Lender and the New Lender agree to the Existing Lender transferring (cession) to the New Lender by novation all or part of the Existing Lender’s Commitment, rights and obligations referred to in the Schedule in accordance with Clause 23.5 (Procedure for transfer).
(b)	The proposed Transfer Date is [     ].
(c)	The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 30.2 (Addresses) are set out in the Schedule.

3.	The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (c) of Clause 23.4 (Limitation of responsibility of Existing Lenders).
[4/5].	This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.
[5/6].	This Transfer Certificate is governed by English law.

THE SCHEDULE
Commitment/rights and obligations to be transferred

[insert relevant details]
[Facility Office address, fax number and attention details for notices
and account details for payments,]

[Existing Lender]	[New Lender]
By:	By:

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This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [ ].

[Agent]

By:

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SCHEDULE 6
Form of Accession Letter

To:
From: [     ] as Agent
[Subsidiary] and [Borrower]

Dated:

Dear Sirs

Compagnie Générale de Géophysique — US$375,000,000 Facility Agreement
dated 1 September 2005 (the “Agreement”)

1.	We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.
2.	[Subsidiary] agrees to become an Additional Guarantor and to be bound by the terms of the Agreement as an Additional Guarantor pursuant to Clause 24.2 (Additional Guarantors)] of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction].
3.	[Subsidiary’s] administrative details are as follows:
	Address:
	Fax No:
	Attention:
4.	This Accession Letter is governed by English law.
	[This Guarantor Accession Letter is entered into by deed.]

[Borrower] [Subsidiary]

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SCHEDULE 7
Form of Resignation Letter

To:
From: [     ] as Agent
[resigning Obligor] and [Borrower]

Dated:

Dear Sirs

Compagnie Générale de Géophysique — US$375,000,000 Facility Agreement
dated 1 September 2005 (the “Agreement”)

1.	We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.
2.	Pursuant to Clause 24.4 (Resignation of a Guarantor), we request that [resigning Obligor] be released from its obligations as a Guarantor under the Agreement.
3.	We confirm that:

(a)	no Default is continuing or would result from the acceptance of this request; and
(b)	[          ]

4. This Resignation Letter is governed by English law.

[Borrower]	[Subsidiary]
By:	By:

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SCHEDULE 8
Form of Compliance Certificate

To:
From: [     ] as Agent
[Borrower]

Dated:

Dear Sirs

Compagnie Générale de Géophysique — US$375,000,000 Facility Agreement
dated 1 September 2005 (the “Agreement”)

1.	We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
2.	We confirm that: [Insert details of covenants to be certified]
3.	[We confirm that no Default is continuing.]

Signed:
	Officer Of [Borrower]	Officer Of [Borrower]

[insert applicable certification language]

for and on behalf of
[name of auditors of the Borrower]

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SCHEDULE 9
Existing Security

(June 30, 2005)

				Amount
			Maximum Facility	Outstanding
Name of the Borrower	Bank	Facility Type	Amount	(30/06/2005)	Due date
Sercel	CIO Nantes	Factoring of receivables	€1,552,000	€1,552,000		04/2006
CGG Marine Resources Norge	CIC Paris	Medium Term Loan	US$20,610,485	US$10,263,459		09/2010
CGG Americas	Canowill	Mortgage	US$135,000	US$135,000		12/2005
Sercel Inc.	ECP	Mortgage	US$2,452,000	US$2,452,000		12/2014
Sercel England	Natwest	Mortgage	£192,000	£192,000		12/2008
Compagnie Générale de Géophysique	BNP	Capital lease	€2,546,000	€2,546,000		2007
Compagnie Générale de Géophysique	Dresdner	Capital lease	€355.000	€355.000		2006
Compagnie Générale de Géophysique	Dresdner	Capital lease	€228.000	€228.000		2006
Compagnie Générale de Géophysique	Dresdner	Capital lease	€687.000	€687.000		2006
Compagnie Générale de Géophysique	Dresdner	Capital lease	€2.000	€2.000		2005
Compagnie Générale de Géophysique	Econocom	Capital lease	€167.000	€167.000		2006
Compagnie Générale de Géophysique	Econocom	Capital lease	€105.000	€105.000		2006
Compagnie Générale de Géophysique	Econocom	Capital lease	£38,000	£38,000		2006
Compagnie Générale de Géophysique	Econocom	Capital lease	€169.000	€169.000		2006
Compagnie Générale de Géophysique	Slibail	Capital lease	€6 ,699,000	€6 ,699,000		2005
Compagnie Générale de Géophysique	Sogelease	Capital lease	€743.000	€743.000		2006
Compagnie Générale de Géophysique	Grenke	Capital lease	€131.000	€131.000		2006
Compagnie Générale de Géophysique	IBM	Capital lease	€195.000	€195.000		2007
Compagnie Générale de Géophysique	Natexis	Capital lease	€24.000	€24.000		2005
CGG Marine	LDA	Capital lease	US$3,211,640	US$3,211,640		2006
CGG Marine	LDA	Capital lease	US $3,303,530	US $3,303,530		2006
CGG Marine	Seven Seas	Capital lease	US$1,405,090	US$1,405,090		2007
CGG Marine	IBM	Capital lease	€65.000	€65.000		2007
CGG Marine Resources Norge AS	TMI	Capital lease	US$16,798,000	US$16,798,000		2008
Sercel England	Lombart	Capital lease	£86,000	£86,000		2006

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SCHEDULE 10
LMA Form of Confidentiality Undertaking

[Letterhead of Seller]

From: [l] (the “Seller”)

To:

[l] [as agent/broker of] [l] (the “Purchaser”)

[insert name of Potential Purchaser/Purchaser’s agent/broker]

Re: The Agreement

Borrowers: Compagnie Générale de Géophysique
Date:
Amount:
Agent:

Dear Sirs,

We understand that you are considering acquiring an interest in the Agreement (the “Acquisition”). In consideration of us agreeing to make available to you certain information, by your signature of a copy of this letter you agree as follows:

1.	CONFIDENTIALITY UNDERTAKING
	You undertake (a) to keep the Confidential Information confidential and not to disclose it to anyone except as provided for by paragraph 2 below, (b) to use the Confidential Information only for the Permitted Purpose and (c) to use all reasonable endeavours to ensure that any person to whom you pass any Confidential Information (unless disclosed under paragraph 2(d) below) acknowledges and complies with the provisions of this letter as if that person were also a party to it.
2.	PERMITTED DISCLOSURE
	We agree that you may disclose Confidential Information:
(a)	to members of the Purchaser Group and their officers, directors, employees and professional advisers to the extent necessary for the Permitted Purpose and to any auditors (commissaires aux comptes) of members of the Purchaser Group;
(b)	subject to the requirements of the Agreement, in accordance with the Permitted Purpose so long as any prospective purchaser has delivered a letter to you in equivalent form to this letter;
(c)	subject to the requirements of the Agreement, to any person to (or through) whom you assign or transfer (or may potentially assign or transfer) all or any of the rights,

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	benefits and obligations which you may acquire under the Agreement or with (or through) whom you enter into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, the Agreement or the Borrower or any member of the Group in each case so long as that person has delivered a letter to you in equivalent form to this letter; and
(d)	(i) where requested or required by any court of competent jurisdiction or any competent judicial, governmental, supervisory or regulatory body, (ii) where required by the rules of any stock exchange on which the shares or other securities of any member of the Purchaser Group are listed or (iii) where required by the laws or regulations of any country with jurisdiction over the affairs of any member of the Purchaser Group.
3.	NOTIFICATION OF REQUIRED OR UNAUTHORISED DISCLOSURE
	You agree (to the extent permitted by law) to inform us of the full circumstances of any disclosure under paragraph 2(d) or upon becoming aware that Confidential Information has been disclosed in breach of this letter.
4.	RETURN OF COPIES
	If we so request in writing, you shall return all Confidential Information supplied to you by us and destroy or permanently erase all copies of Confidential Information made by you and use all reasonable endeavours to ensure that anyone to whom the Purchaser has supplied any such Confidential Information destroys or permanently erases such Confidential Information and any copies made by them, in each case save to the extent that you are required to retain any such Confidential Information by any applicable law, rule or regulation or by any competent judicial, governmental, supervisory or regulatory body or in accordance with internal policy, or where the Confidential Information has been disclosed under paragraph 2(d) above.
5.	CONTINUING OBLIGATIONS
	The obligations in this letter are continuing and, in particular, shall survive the termination of any discussions or negotiations between you and us. Notwithstanding the previous sentence, the obligations in this letter shall cease (a) if you become a party to or otherwise acquire (by assignment or sub-participation) an interest, direct or indirect, in the Agreement or (b) twelve months after you have returned all Confidential Information supplied to you by us and destroyed or permanently erased all copies of Confidential Information made by you (other than any such Confidential Information or copies which have been disclosed under paragraph 2 above (other than sub-paragraph 2(a)) or which, pursuant to paragraph 4 above, are not required to be returned or destroyed).

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6.	NO REPRESENTATION; CONSEQUENCES OF BREACH, ETC
	You acknowledge and agree that neither we nor any member of the Group nor any of our or their respective officers, employees or advisers (each a “Relevant Person”) (i) make any representation or warranty, express or implied, as to, or assume any responsibility for, the accuracy, reliability or completeness of any of the Confidential Information or any other information supplied by us or the assumptions on which it is based or (ii) shall be under any obligation to update or correct any inaccuracy in the Confidential Information or any other information supplied by us or be otherwise liable to you or any other person in respect to the Confidential Information or any such information.
7.	NO WAIVER; AMENDMENTS, ETC
	This letter sets out the full extent of your obligations of confidentiality owed to us in relation to the information the subject of this letter. No failure or delay in exercising any right, power or privilege hereunder will operate as a waiver thereof nor will any single or partial exercise of any right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privileges hereunder. The terms of this letter and your obligations hereunder may only be amended or modified by written agreement between us.
8.	INSIDE INFORMATION
	You acknowledge that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation relating to insider dealing and you undertake not to use any Confidential Information for any unlawful purpose.
9.	GOVERNING LAW AND JURISDICTION
(a)	This letter (including the agreement constituted by your acknowledgement of its terms) is governed by French law.
(b)	The parties submit to the non-exclusive jurisdiction of the [tribunaux du ressort de la Cour d’appel] de Paris.
10.	DEFINITIONS
	In this letter (including the acknowledgement set out below) terms defined in the Agreement shall, unless the context otherwise requires, have the same meaning and:
	“Borrower” means Compagnie Générale de Géophysique.
	“Confidential Information” means any information relating to any and each of the Borrowers, its financial, commercial or legal situation the Group, the Agreement and/or the Acquisition provided to you by us or any of our affiliates or advisers, in whatever form, and includes information given orally and any document, electronic

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file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that (a) is or becomes public knowledge other than as a direct or indirect result of any breach of this letter or (b) is known by you before the date the information is disclosed to you by us or any of our affiliates or advisers or is lawfully obtained by you thereafter, other than from a source which is connected with the Group and which, in either case, as far as you are aware, has not been obtained in violation of, and is not otherwise subject to, any obligation of confidentiality;

“Group” means Compagnie Générale de Géophysique and its Subsidiaries for the time being;

“Permitted Purpose” means subject to the terms of this letter, [passing on information to a prospective purchaser for the purpose of] considering and evaluating whether to enter into the Acquisition; and

“Purchaser Group” means you, each of your holding companies and Subsidiaries and each Subsidiary of each of your holding companies.

“Subsidiary” means, in relation to any company, another company which is controlled by it within the meaning of article L.233-3 of the French Code de commerce.

Please acknowledge your agreement to the above by signing and returning the enclosed copy.

Yours faithfully

For and on behalf of
[Seller]

To: [Seller]

Each of the Borrowers and each other member of the Group

We acknowledge and agree to the above:

For and on behalf of
[Potential Purchaser]

138

SCHEDULE 11
Form of Share Pledge Agreement

Execution Version

SHARE PLEDGE AGREEMENT
Dated ________ , 2005

between

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE
as Pledgor
and

BNP PARIBAS
as Security Agent

in respect of shares in:
EXPLORATION RESOURCES ASA

WIERSHOLM, MELLBYE & BECH, advokatfirma AS
Ruseløkkveien 26
P.O. Box 1400 Vika
N-0115 Oslo, Norway

Tel: + 47 210 210 00
Fax: + 47 210 210 01

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THIS SHARE PLEDGE AGREEMENT (this “Share Pledge Agreement”) is entered into on ___, 2005

BETWEEN:

(1)	COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE, a société anonyme incorporated in France, having its registered office at 1 rue Léon Migaux, 91300 Massy and registered at the Evry registry under number 969 202 241 R.C.S. Evry (the “Pledgor”); and
(2)	BNP PARIBAS, acting as security agent (the “Security Agent”).

W H E R E A S :

(A)

Pursuant to a USD 375,000,000 term loan facility agreement dated on or about 31 August, 2005 (the “Facility Agreement”) between inter alia (i) the Pledgor as borrower, (ii) the Arranger, (iii) the Original Lenders, (iv) the Agent, and (v) the Security Agent (all as defined therein, and hereinafter collectively referred to as the “Finance Parties”), the Original Lenders have made available to the Pledgor a secured credit facility of up to USD 375,000,000 for the purposes described therein.

(B)

It is a condition under the Facility Agreement that the Pledgor enters into this Share Pledge Agreement, which shall secure all amounts owed by the Pledgor to the Finance Parties under the Facility Agreement.

NOW THEREFORE IT IS HEREBY AGREED as follows:

1.	DEFINITIONS AND INTERPRETATION
1.1	In this Share Pledge Agreement:
	“Company” means Exploration Resources ASA, a company incorporated under the laws of Norway with business enterprise no. 987 264 020.
	“Enforcement Act” means the Norwegian Enforcement Act 1992.
	“Event of Default” shall have the meaning ascribed to such term in the Facility Agreement         .
	“Financial Securities Act” means the Norwegian Act on Financial Securities of 2004.
	“Liens Act” means the Norwegian Liens Act 1980.
	“Secured Liabilities” means all the Pledgor’s present and future obligations owed to the Finance Parties (whether actual or contingent) under the Facility Agreement from time to time.
	“Security Assets” means:

(i) the VPS Account;

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(ii)	all the Pledgor’s shares in the Company both present and future registered on the VPS Account;
(iii)	any and all rights derived from the securities on the VPS Account from time to time (including without limitation any dividend shares (in Norwegian: “fondsaksjer”) and any subscription rights).

	“Security Period” means the period beginning on the date of this Share Pledge Agreement and ending on the date on which the Secured Liabilities have been unconditionally and irrevocably paid and discharged in full.
	“VPS” means the Norwegian Central Securities Depository (VPS ASA) (in Norwegian: “Verdipapirsentralen ASA”).
	“VPS Account” means the Pledgor’s VPS account no. 11090 057 4994.
	“VPS Account Manager” means Carnegie ASA.
1.2	Capitalised expressions used herein shall bear the same meaning as set out in the Facility Agreement unless the context otherwise requires or specified herein.
2.	SECURITY
2.1	As first priority security for the Secured Liabilities, the Pledgor hereby pledges to the Security Agent (for the benefit of the Finance Parties) the Security Assets together with all moneys paid or payable in respect of the Security Assets as at the date of this Share Pledge Agreement or in the future.
2.2	The security interests created by this Share Pledge Agreement shall also cover any dividends and distributions of any kind payable by the Company to the Pledgor in respect of the Security Assets and also any dividend shares (“fondsaksjer”) and any other right or asset which may be comprised by a share pledge pursuant to Section 1-6 of the Liens Act.
2.3	If an Event of Default has occurred and is continuing and subject to the provisions of Clause 5.1 below, any dividends or distributions payable in respect of the Security Assets shall be paid directly to the Security Agent, and any such dividends or distributions received by the Security Agent are hereby pledged as security for the Secured Liabilities, save that any dividend shares shall be pledged hereunder immediately upon the issue thereof.
2.4	The Pledgor shall give notice of the security created by this Share Pledge Agreement to the VPS Account Manager in the form of Schedule 1 hereto, and shall procure that the VPS Account Manager acknowledges the same by returning to the Security Agent the acknowledgment attached as Annex 1 to the notice and registers the security created by this Share Pledge Agreement against the VPS Account.
2.5	The Pledgor hereby undertakes to pledge and register any future shares it may acquire in the Company in favour of the Security Agent.
2.6	The Pledgor’s liability hereunder shall not exceed USD 375,000,000 with the addition of interest, costs and expenses.
3.	REPRESENTATIONS AND WARRANTIES
3.1	The Pledgor hereby represents and warrants on each day during the Security Period, that:

(i) this Share Pledge Agreement constitutes the valid, binding and enforceable obligations of the Pledgor;

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(ii)	no consent or other approval is required from any public authority in Norway or elsewhere for the execution or delivery of or performance under this Share Pledge Agreement by the Pledgor;
(iii)	its entry into and performance of this Share Pledge Agreement and the transactions contemplated hereby do not conflict with (a) any applicable law, regulation or judicial or official order of Norway, (b) its constitutional documents or (c) any documents which are binding on it or its assets;
(iv)	its pledge in accordance with the terms of this Share Pledge Agreement creates valid and perfected first priority liens on the Security Assets securing the payment and performance of the Secured Liabilities;
(v)	it is the legal and beneficial owner of, and has good and marketable title to, the Security Assets;
(vi)	it has not issued or granted any options, warrants, calls or commitments of any character relating to the Security Assets;
(vii)	the Security Assets are not subject to any pledge, lien, mortgage, hypothecation, security interest, charge, option or other encumbrance whatsoever, except the lien and security interest created by this Share Pledge Agreement; and
(viii)	the Security Assets have been duly and validly issued and are fully paid up.

4.	COVENANTS
4.1	The Pledgor hereby covenants that during the Security Period:

(i)	it shall, at its own cost, warrant and defend the rights and interests of the Security Agent (on behalf of the Finance Parties) conferred by this Share Pledge Agreement over the Security Assets against the claims and demands of all persons whomsoever, subject always, however, to necessary authorisations from the Finance Parties;
(ii)	it shall not sell, assign, transfer (save for intragroup reorganisation permitted by the Facility Agreement), charge, further pledge or encumber in any manner any part of the Security Assets or suffer to exist any encumbrance on them except for the pledge created hereby;
(iii)	it shall not arrange, vote for, consent to or accomplish the issue of any new shares or instruments which may be converted into shares in the Company without the prior written consent of the Security Agent, such consent always, inter alia, to be subject to such shares or (as the case may be) convertible instrument being pledged to the Security Agent hereunder immediately upon the issue thereof;
(iv)	it shall execute a pledge in a form satisfactory to the Security Agent (for the benefit of the Finance Parties) over any further shares in the Company it may acquire during the Security Period;
(v)	it shall not take any action in connection with or agree to any amendment of the articles of association of the Company or take any other action with respect to the shares in the Company, which could reasonably be expected to (a) impair or affect the value of the Security Assets, and/or (b) be prejudicial to the interests of the Security Agent or the Finance Parties. However, provided that the Security Assets at all times remain pledged in favour of the Security Agent, any amendments to the articles of association of the Company, required pursuant to clause 21.37 of the Facility

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	Agreement, in order to effect a de-listing of the shares of the Company, a re-registration of the Company as a private limited company and a removal of the shares of the Company from registration in the VPS shall be permitted; and
(vi)	it will, subject to an occurrence of an Event of Default which is continuing unremedied and unwaived and Clause 5.1 below, ensure that all dividends and distributions of any kind payable in respect of the Security Assets are paid directly to the Security Agent.

5.	ENFORCEMENT OF SECURITY
5.1	Upon the occurrence of an Event of Default which is continuing the Security Agent shall be entitled to:

(i)	(a) immediately sell all or any part of the Security Assets through the Security Agent as provided for in the Financial Securities Act, or (b) transfer ownership to all or any part of the Security Assets to the Security Agent as provided for in the Financial Securities Act;
(ii)	(a) immediately sell all or any part of the Security Assets through an independent authorised broker as provided for in Section 1-3 of the Enforcement Act, or (b) require a sale by a manager appointed by the court, or in any other manner that the Security Agent may find expedient in accordance with the Enforcement Act
(iii)	exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Security Assets as if it where the absolute owner thereof;
(iv)	collect any dividends and distributions due in respect of the Security Assets and apply them against the Secured Liabilities in accordance with the provisions of the Facility Agreement; and/or
(v)	do all other things in relation to the Security Assets permitted by applicable law.

5.2 Upon the occurrence of an Event of Default which is continuing the Security Agent shall, if enforcement proceedings are commenced pursuant to the Enforcement Act and upon having given 14 days’ notice to the Pledgor or such lesser period of notice (if any) permitted from time to time by the Enforcement Act, be entitled to:

(i)	subject to the provisions of the Enforcement Act or any succeeding Act, require the forced use of the Security Assets and thereby exercise all voting rights in connection therewith or require a sale by forced auction through the courts or forced sale by a manager appointed by the courts of all or any part of the Security Assets;
(ii)	subject to a separate agreement as provided for in Section 1-3 of the Enforcement Act having been entered into between the relevant parties after such Event of Default has occurred, to sell, assign or convert into money all or any part of the Security Assets in such a manner and upon such terms (i.e. by private sale) and for such consideration (whether in cash, securities or other assets) as is then agreed;
(iii)	apply any and all proceeds of such sales against the Secured Liabilities, and keep and hold any surplus as security for any amount owing (actual or contingent) in accordance with the Facility Agreement but not yet due; and
(iv)	take any other action in relation to the Security Assets permitted by the Enforcement Act, the Financial Securities Act or the Liens Act.

6.	FURTHER ASSURANCES
6.1	The Pledgor shall, at its own expense, take whatever action the Security Agent may require, for:

(i) perfecting or protecting the security intended to be created by this Share Pledge Agreement over the Security Assets;

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(ii)	upon an Event of Default having occurred and which is continuing, facilitating the realisation of the Security Assets or the exercise of any right, power or discretion exercisable by the Security Agent or any of its delegates or sub-delegates in respect of the Security Assets, subject to the provisions of the Enforcement Act;
(iii)	the execution of any transfer, conveyance, assignment or assurance of any property whether to the Security Agent or its nominees, and the giving of any notice, order or direction and the making of any registration which in any such case the Security Agent may think expedient.

7.	ASSIGNMENT
	The Security Agent may assign or transfer its rights hereunder to any other bank and/or financial institution in the event that such company assumes the function of the Security Agent under the Facility Agreement.
8.	VOTING RIGHTS
8.1	Until such time as an Event of Default has been declared the Pledgor shall, without the prior written consent of the Security Agent, be entitled to vote or cause to be voted in respect of any and all of the Security Assets and give or cause to be given consents, waivers and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or taken which:

(i)	might result in a merger, demerger, or other reorganisation of the Company not permitted by the Facility Agreement; or
(ii)	would have the effect of amending the articles of association of the Company in any manner which would be reasonably likely to materially adversely affect (in terms of value, enforceability or otherwise) the pledge hereby created. However, provided that the Security Assets at all times remain pledged in favour of the Security Agent, any amendments to the articles of association of the Company, required pursuant to clause 21.37 of the Facility Agreement, in order to effect a de-listing of the shares of the Company, a re-registration of the Company as a private limited company and a removal of the shares of the Company from registration in the VPS shall be permitted; or
(iii)	would have the effect of materially changing the terms of the Security Assets (except to the extent permitted under the terms of the Facility Agreement) or materially prejudicing the security hereunder; or
(iv)	would have the effect of impeding the ability of the Security Agent to transfer any of the Security Assets; or
(v)	would be inconsistent with or conflict with any of the Security Documents; or
(vi)	would impair the validity or enforceability of the security created hereby; or
(vii)	would impair the value of the Security Assets.

8.2 Upon the occurrence of an Event of Default and for as long as the same is continuing, the Security Agent, on behalf of and after consultation with the Finance Parties (circumstances so permitting), may exercise all voting and other rights attached to the shares, including, without limitation, the right to convene shareholders’ meetings and waive notice and other

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requirements in connection therewith, and the Security Agent has the sole and exclusive right and authority to exercise such voting and consensual rights and powers.

9.	POWER OF ATTORNEY
	The Pledgor hereby appoints the Security Agent as the Pledgor’s attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise from time to time in the Security Agent’s discretion but only after the occurrence and during the continuance of an event of default, to take any action (including without limitation exercising voting rights in respect of the shares as set out in Clause 8.2 hereof) and to execute any instrument which the Security Agent may deem necessary or advisable in order to accomplish the purposes of this Share Pledge Agreement, including to receive, endorse and collect all instruments payable to the Pledgor representing any dividend, interest payment or other distribution in respect of the Security Assets or any part thereof and to give full discharge for the same. To the extent possible under Norwegian law, this power of attorney is irrevocable.
10.	INVALIDITY
	Should any provision of this Share Pledge Agreement be or become invalid, void or unenforceable, all remaining provisions and terms hereof shall remain in full force and effect and shall in no way be invalidated, impaired or affected thereby. The parties hereto agree that they will negotiate in good faith and will replace the invalid, void or unenforceable provision with a valid and enforceable provision which reflects as much as possible the intention of the parties as referred in the provision thus replaced.
11.	GOVERNING LAW AND JURISDICTION
	This Share Pledge Agreement shall be construed, governed and performed according to the laws of Norway and the parties hereto hereby submit with respect of this Share Pledge Agreement to the non-exclusive jurisdiction of the Norwegian courts, the venue to be the Oslo District Court.

This Share Pledge Agreement has been entered into on the date stated on the first page hereof.

For and on behalf of	For and on behalf of
[the Borrower]	[the Security Agent]

145

Schedule 1

To: [l]

Dear Sirs

NOTICE OF PLEDGE OF SHARES AND VPS ACCOUNT

Pursuant to a share pledge agreement (the “Share Pledge Agreement”) dated ___, 2005 in favour of [l] acting as security agent (the “Security Agent”), a copy of which is attached thereto, we have irrevocably pledged to the Security Agent with first priority all securities registered on our VPS account no. [l] (the “Account”) .

Capitalised terms used herein but not defined herein shall have the meanings given to them in the Share Pledge Agreement.

The instructions herein contained cannot be revoked or varied by us without the prior written consent of the Security Agent.

Please ensure that:

—	the first priority security created by the Share Pledge Agreement is registered against the Account;
—	the Security Agent receives promptly an acknowledgment (in the form attached hereto as Annex 1) of receipt of this Notice of Pledge;
—	a note is made in the register to the effect that the Account and the securities registered on the Account are pledged in favour of the Security Agent under the terms of the Share Pledge Agreement;
—	a note is registered against the Account preventing the Pledgor from dealing with the securities registered on the Account without the prior written consent of the Security Agent.
—	the Security Agent’s address and contact details:
	[l]
	___, 2005
	For and on behalf of [The Borrower]

146

Annex 1
[l]
(as Security Agent)

ACKNOWLEDGMENT OF NOTICE OF PLEDGE

We acknowledge receipt of a notice of pledge dated ___, 2005 from [the Borrower] to ourselves notifying us that [the Borrower] VPS account no. [l] (the “Account”) has been pledged in favour of yourselves in accordance with the terms of a share pledge agreement dated ___, 2005.

A copy of the notice of pledge is attached hereto. Capitalised terms used in the notice of pledge shall have the same meaning herein.

We confirm that the security created by the Share Pledge Agreement has been registered against the Share Pledge Agreement recorded in the VPS. Furthermore, we confirm that it has been registered that [the Borrower] is not entitled to deal with the securities registered on the Account without your prior written consent.

We attach hereto a true and correct transcript of the Account evidencing (i) all the securities registered on the Account in [l] and (ii) the registration on first priority of the security created by the Share Pledge Agreement.

Dated ___, 2005

For and on behalf of
[l]

147

SCHEDULE 12
Form of Power of Attorney

I, the undersigned [l], acting as [l] of [the Borrower], a [l] with a registered capital of [l] Euros whose registered office is located at [l] and registered with the Registry of Commerce and Companies of [l] under the number [l] (hereinafter the “Pledgor”),

duly authorized by a decision of the board of directors of the Borrower dated [l],

hereby grant as of the date hereof and until the end of the Security Period, as defined in the Share Pledge Agreement referred to below, full irrevocable power and authority to :

- [l], — —

with full power of substitution (hereinafter the “Security Agent”),
acting on its own behalf, as well as agent for :

([l] hereinafter collectively the “Original Lenders ”)

to, without notice to, or the consent of, Pledgor :

— execute on behalf of Pledgor the Share Pledge Agreement dated -— 2005 between the Pledgor and the Security Agent (hereinafter the “Share Pledge Agreement”) and any other security agreement and such other documents of title required to be provided under the Single Currency Term Facility Agreement dated [l] and the Share Pledge Agreement;

— execute on behalf of Pledgor the “Pledge of VPS Account”, a draft of which is attached hereto, pertaining to the shares pledged by Pledgor under the Share Pledge Agreement ;

— give notice of the security created by the Share Pledge Agreement to the VPS Account Manager and procure that the VPS Account Manager acknowledges the same as set under the conditions set forth in section 2.4 of the Share Pledge Agreement ;

— only after the occurrence and during the continuance of an event of default as defined in the Share Pledge Agreement, take any action (including without limitation exercising voting rights in respect of the shares as set out in Clause 8.2 of the Share Pledge Agreement) and execute any instrument which the Security Agent may deem necessary or advisable in order to accomplish the purposes of the Share Pledge Agreement, including to receive, endorse and collect all instruments payable to the Pledgor representing any dividend, interest payment or other distribution carried out under the Share Pledge Agreement and give full discharge, and more generally :

— take any and all action, carry out any and all necessary formalities, and execute any and all documents and instruments which may be necessary or useful to implement and effect the purposes of the Share Pledge Agreement, file, register or notify it with appropriate authorities, on behalf of, in the place and name of Pledgor, from time to time in Original Lenders’ discretion for the duration of the Share Pledge Agreement. In this respect, I hereby confirm that I have irrevocably instructed the Pledgor’s solicitors to take such steps as necessary to perfect the security created by the Share Pledge Agreement.

148

If for any reason, the Security Agent or the Original Lenders are unable to act on behalf of, in the place and name of Pledgor under this Power of Attorney, I, [l], acting under the same quality and authorization as that set forth above, undertake, upon request from the Security Agent and/or any or all of the Original Lenders, to immediately and at the Pledgor’s own costs, take or have any representative of the Pledgor take, any and all action, carry out any and all necessary formalities, and execute any and all documents, including if necessary the Pledge of VPS Account, and instruments which may be necessary or useful to effect the purposes of the Share Pledge Agreement and its enforcement, file, register or notify it with appropriate authorities.

Moreover, I, [l], acting under the same quality and authorization as that set forth above, hereby declare, confirm and warrant that I have irrevocably instructed the Pledgor’s solicitors at Pledgor’s expense to register the Original Lenders as the new Members of the Target as defined in the Single Currency Term Facility Agreement and issue them with new share certificates upon enforcement of the Share Pledge Agreement.

I acknowledge and agree that no failure on the part of the Security Agent and/or any or all of the Original Lenders to exercise and no delay in exercising, and no course of dealing with respect to, any right or power granted under this Power of Attorney shall operate as a waiver thereof, nor shall any single or partial exercise of any right or power under this Power of Attorney preclude any other or further exercise thereof.

I acknowledge and agree that this Power of Attorney shall be binding upon and inure to the benefit of Pledgor and Original Lenders and their respective successors, and assigns, except that Pledgor may not assign any of its rights or obligations under this Power of Attorney without the prior written consent of Original Lenders.

I declare and warrant that this Power of Attorney supersedes any and all prior commitments, power of attorney, agreements, whether written or oral, relating to the subject matter hereof. The provisions of this Power of Attorney may be amended or waived only by an instrument in writing signed by the parties hereto with the requisite consent of Original Lenders.

This Power of Attorney shall be governed by, and interpreted under French law. The Pledgor and the Security Agent submit to the jurisdiction of the courts of Paris.

 
 
Executed in
on  
 
 
 

[l]
[the Borrower]  
[Security Agent]

149

SCHEDULE 13
FORM OF TEG LETTER

From:
To: [the Agent]
[the Borrower]

[date]

Dear Sirs,

We refer to the $375,000,000 agreement (the “Facility Agreement”) dated [l] and made between, inter alia, Compagnie Générale de Géophysique as Borrowers and Credit Suisse, Paris Branch as Agent. Terms defined in the Facility Agreement shall have the same meaning in this notice.

This is the letter referred to in Clause 8.6 (Effective Global Rate (Taux Effectif Global)) of the Facility Agreement.

The floating nature of the interest rate applicable to the Loans makes it impossible to specify a taux effectif global applicable for the duration of the Facility Agreement.

However, in order to meet the requirements of article L. 313-1 et seq. R. 313-1 and R. 313-2 of the French Code de la consommation and in accordance with the provisions of Clause 8.6 (Effective Global Rate (Taux Effectif Global)) of the Facility Agreement, we set out below an indicative calculation of the taux effectif global, based on the assumptions set out in this letter.

Assumed LIBOR and Margin:

LIBOR:
Margin: [to be completed by the Agent]
[to be completed by the Agent]

Based on the assumptions set out above (and including the Margin, all fees and expenses relating to the Loans), the interest rate (taux de période) for an Interest Period (durée de période) of [to be completed by the Agent] months would be [to be completed by the Agent] % per annum and the effective global rate (taux effectif global annuel) would be [to be completed by the Agent]% per annum.

150

The calculations set out in this letter are for illustrative purposes only and shall not bind the parties to the Facility Agreement. Nothing expressed or implied in this letter constitutes any commitment on the part of any of the Finance Parties.

Yours sincerely,  
 
 
 

[l]
For and on behalf
of [the Agent]  
 
 
 
 
 

Receipt acknowledged

[l]
For and on behalf of
[the Borrower]

151

SCHEDULE 14
Form of Offer Guarantee

Date: [l]

Bank guarantee issued in connection with the mandatory offer to purchase all remaining shares in Target by [l] (“Offeror”).

In connection with the mandatory offer by the Offeror for the acquisition of all the issued and outstanding shares of Target (the “Shares”), in accordance with the Norwegian Securities Trading Act 1997 No 79, Section 4-1 (the “Offer”), and based on the offering document for the Offer dated [l] (the “Offer Document”) and at the request of and for the account of the Offeror we, [Bank1] and we [Bank2] (the “Guarantors”), unconditionally guarantee as for own debt (Norwegian “selvskyldnergaranti”) the payment of NOK340 per Share to shareholders of Target who have accepted the Offer in accordance with the terms of the Offer Document.

Each Guarantor’s liability under this guarantee is limited to its Guarantee Proportion of the Principal Guarantee Amount.

As used herein, the term “Principal Guarantee Amount” means: NOK[l] which is equal to the maximum payable by the Offeror pursuant to the offer price of NOK340 per share of Target multiplied with all [l] shares of Target not already owned by the Offeror plus [l]% interest per annum for a period of up to four weeks calculated from the date of settlement of the Offer.

"Guarantee Proportion” means: [l] 50 per cent.
[l] 50 per cent.

Claims under this guarantee may be made only after the date of due payment in accordance with the terms of the Offer and must be received by the Guarantors before 16.00 hours on [l], after which time this guarantee lapses, and shall be returned to [l]. Claims must be made in writing and may be made to any of the Guarantors and claims made on any one of the Guarantors shall be effective on all Guarantors in respect of the deadline for submitting a claim:

Address:

Telefax: [          ]

[          ]

Claims under this guarantee shall be accompanied by:

(i)	evidence that the claimant is the owner of the shares relating to the acceptance;
(ii)	a statement by the claimant that no payment has been received for the shares relating to the acceptance; and

152

(iii) a copy of the duly completed acceptance form.

Settlement will be made against transfer of the shares in question.

Pursuant to Section 10, cf. Section 3, of the Regulations of 15 December 1997, no. 1307 regarding the requirements for guarantees in respect of mandatory offers the Principal Guarantee Amount may be reduced after expiry of the acceptance period of the Offer provided that Oslo Bors permits it.

The liability of the Guarantors under this Bank Guarantee is several and not joint and neither [l] as agent for the Guarantors under this Bank Guarantee nor any Guarantors shall be liable for the failure of any other Guarantor to perform its obligations under this Bank Guarantee.

This guarantee shall be governed by and construed in accordance with Norwegian law.

[l]

as agent for the Guarantors

153

SCHEDULE 15
Specified Time

“D-     ” refers to the number of Business Days before the relevant Utilisation Date/the first day of the relevant Interest Period.

	Loans in USD
Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery of a Utilisation Request)) or a Selection Notice (Clause 9.1 (Selection of Interest Periods))	D-3 10:00 a.m.
Agent notifies the Lenders of the Loan in accordance with Clause 5.4 (Lenders’ participation)	D-3 11.00 a.m.
LIBOR is fixed	Quotation Day as of 11:00 a.m.

154

SCHEDULE 16
Form of Monthly Report

INCOME STATEMENT
2005 — Update [l] as of [l]
(in M€)

			Q1 - 0X	Q2 - 0X	HY1 - 0X	Q3 - 0X	Q4 - 0X	HY2 - 0X	Y - 0X	Y - 0X
			1 € = [l] $	[l]	1 € = [l] $	1 € = [l] $	1 € = [l] $	1 € = [l] $	1 € = [l] $	1 € = [l] $
Land	Revenues
		EBIT
Offshore	Revenues
		EBIT
Processing	Revenues
		EBIT
Eliminations		EBIT
SERVICES	Revenues
		EBIT
PRODUCTS	Revenues
		EBIT
Eliminations	Revenues
GROUP	Revenues
		EBIT
Headquarters
Consolidation
Restructuring & Other
EBIT
Cost of Financial Debt
Other Financial Items
Income Tax
Minority interest
Net Income

155

SCHEDULE 17
EXISTING FINANCIAL INDEBTEDNESS

(June 30, 2005)

						Amount
				Maximum Facility		Outstanding
Name of the Borrower	Bank	Facility Type		Amount		(30/06/2005)	Due date
Compagnie Générale de Géophysique	KBC	Overdraft		€300.000		0		At sight
Compagnie Générale de Géophysique	Natwest London	Overdraft		£500,000		£306,347		At sight
Compagnie Générale de Géophysique	Dhofar al Omani Al Fransi Mascate (Oman)	Overdraft		OMR 100,000		0		01/2006
Compagnie Générale de Géophysique	BCP	Overdraft		EGP 3,000,000	EGP 2,847,908			12/2005
Compagnie Générale de Géophysique / CGG Marine / Sercel	Natexis (agent)	Revolving Credit Facility		US$60,000,000		0		03/2007
Sercel	CIO Nantes	Overdraft		€200.000		€200.000		At sight
Sercel	CIO Nantes	Factoring of receivables		€1,552,000		€1,552,000		04/2006
Sercel	CRCA	Medium Term Loan		€1,400,000		€1,400,000		06/2006
Sercel	CRCA	Medium Term Loan		US$2,553,000		US$2,553,000		01/2008
Sercel	BCME	Medium Term Loan		US$300,000		US$300,000		10/2005
Sercel	BCME	Medium Term Loan		US$1,750,000		US$1,750,000		12/2007
Sercel	BCME	Medium Term Loan		US$1,250,000		US$1,250,000		12/2008
Sercel	BCME	Medium Term Loan		US$3,000,000		US$3,000,000		06/2010
Sercel	CIO Nantes	Medium Term Loan		US$800,000		US$800,000		04/2007
CGG Marine Resources Norge	CIC Paris	Medium Term Loan		US$20,610,485		US$10,263,459		09/2010
CGG Pan India Ltd	ICICI	Overdraft		INR 10,000,000	INR 9,100,000			06/2006
CGG Pan India Ltd	ICICI	Medium Term Loan		INR 38,400,000	INR 38,400,000			06/2006
EXGEO	Venezolano de Credito	Overdraft	VEB 10,000,000,000		VEB 10,000,000,000			12/2005
CGG do Brasil	Sudameris	Overdraft		US$1,000,000		US$949,344		12/2005
CGG do Brasil	Bicbanco	Overdraft		US$1,500,000		0		12/2005
CGG Americas	Amegy	Overdraft		US$1,000,000		0		12/2005
CGG Canada	RBC	Overdraft		C$800,000		0		12/2005
CGG Americas	Canowill	Mortgage		US$135,000		US$135,000		12/2005
Sercel Inc.	ECP	Mortgage		US$2,452,000		US$2,452,000		12/2014
Sercel England	Natwest	Mortgage		£192,000		£192,000		12/2008

156

				Amount
			Maximum Facility	Outstanding
Name of the Borrower	Bank	Facility Type	Amount	(30/06/2005)		Due date
Compagnie Générale de Géophysique	CSFB	High Yield Bond	US$165,000,000	US$	165,000,000		2015
Compagnie Générale de Géophysique		Convertible Bond	US$84,890,000		$85.000.000		2014

				Amount
			Maximum Facility	Outstanding
Name of the Borrower	Bank	Facility Type	Amount	(30/06/2005)	Due date
Compagnie Générale de Géophysique	BNP	Capital lease	€2,546,000	€2,546,000		2007
Compagnie Générale de Géophysique	Dresdner	Capital lease	€355.000	€355.000		2006
Compagnie Générale de Géophysique	Dresdner	Capital lease	€228.000	€228.000		2006
Compagnie Générale de Géophysique	Dresdner	Capital lease	€687.000	€687.000		2006
Compagnie Générale de Géophysique	Dresdner	Capital lease	€2.000	€2.000		2005
Compagnie Générale de Géophysique	Econocom	Capital lease	€167.000	€167.000		2006
Compagnie Générale de Géophysique	Econocom	Capital lease	€105.000	€105.000		2006
Compagnie Générale de Géophysique	Econocom	Capital lease	£38,000	£38,000		2006
Compagnie Générale de Géophysique	Econocom	Capital lease	€169.000	€169.000		2006
Compagnie Générale de Géophysique	Slibail	Capital lease	€6,699,000	€6,699,000		2005
Compagnie Générale de Géophysique	Sogelease	Capital lease	€743.000	€743.000		2006
Compagnie Générale de Géophysique	Grenke	Capital lease	€131.000	€131.000		2006
Compagnie Générale de Géophysique	IBM	Capital lease	€195.000	€195.000		2007
Compagnie Générale de Géophysique	Natexis	Capital lease	€24.000	€24.000		2005
CGG Marine	LDA	Capital lease	US$3,211,640	US$3,211,640		2006
CGG Marine	LDA	Capital lease	US $3,303,530	US $3,303,530		2006
CGG Marine	Seven Seas	Capital lease	US$1,405,090	US$1,405,090		2007
CGG Marine	IBM	Capital lease	€65.000	€65.000		2007
CGG Marine Resources Norge AS	TMI	Capital lease	US$16,798,000	US$16,798,000		2008
Sercel England	Lombart	Capital lease	£86,000	£86,000		2006

157

The Borrower

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

Address:

Fax No:

Attention: Tour Montparnasse — 33 avenue du Maine — 75755 Paris cedex 15

+33 (0)1 64 47 34 31

Mr Stéphane-Paul Frydman

By:

The Original Guarantors

SERCEL, INC.

By:

SERCEL CANADA LTD

By:

SIGNED by	)
	)
as attorney for SERCEL	)
AUSTRALIA PTY LTD under	)
power of attorney dated	)
	)
in the presence of:	)
	) )
	)
Signature of witness	)	By executing this agreement the
	)	attorney states that the attorney has
	)	received no notice of revocation of
Name of witness (block letters)	)	the power of attorney

158

CGG AMERICAS INC

By:

CGG CANADA SERVICES LTD

By:

CGG MARINE RESOURCES NORGE AS

By:

159

The Arrangers

BNP PARIBAS

By:

CREDIT SUISSE

By:

The Original Lenders

BNP PARIBAS

By:

CREDIT SUISSE FIRST BOSTON INTERNATIONAL

By:

The Agent

CREDIT SUISSE, LONDON BRANCH

Address:

Fax No:

Attention:

By:

160

The Security Agent

BNP PARIBAS

Address:

Fax No:

Attention:

By:

161

EX-4.18

Exhibit 4.18

EXECUTION VERSION

Dated 30 September 2005

BETWEEN

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE
as Original Borrower and Parent Guarantor
CGG AMERICAS, INC.
as US Borrower
CREDIT SUISSE, PARIS BRANCH
and
BNP PARIBAS
as Arrangers and Original Lenders
with
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
and
BNP PARIBAS, OSLO BRANCH
as Offer Guarantee Issuers
and
SERCEL, INC., SERCEL CANADA LTD., SERCEL AUSTRALIA PTY LTD, CGG
AMERICAS, INC., CGG CANADA SERVICES LTD., CGG MARINE RESOURCES
NORGE A/S

as Original Guarantors

with

CREDIT SUISSE, LONDON BRANCH

acting as Agent
BNP PARIBAS
acting as Security Agent

AMENDMENT AND RESTATEMENT, ACCESSION AND NOVATION AGREEMENT
relating to US$375,000,000 Single Currency Term Facility Agreement
originally dated 1 September 2005 between, among others,
Compagnie Générale de Géophysique as Borrower,
Credit Suisse, London Branch as Agent and BNP Paribas as Security Agent
as amended and restated by an Amendment and Restatement Agreement
dated 14 September 2005

CityPoint
33rd Floor
1 Ropemaker Street
London EC2Y 9UE

TABLE OF CONTENTS

1.	INTERPRETATION	2
2.	AMENDMENTS	2
3.	ACCESSION OF CGG AMERICAS, INC. AS US BORROWER	2
4.	ACCESSION OF ORIGINAL BORROWER AS PARENT GUARANTOR	2
5.	NOVATION OF LOANS AND TRANSFER OF SHARES	3
6.	EFFECT OF NOVATION	3
7.	REPRESENTATIONS AND WARRANTIES	4
8.	INCORPORATION	5
9.	GUARANTEE	5
10.	SECURITY	6
11.	GOVERNING LAW	6
12.	INCORPORATION OF TERMS	6
13.	COUNTERPARTS	6
SCHEDULE 1 SECOND AMENDED AND RESTATED FACILITY AGREEMENT		8
SCHEDULE 2 CONDITIONS PRECEDENT DOCUMENTS		9

(i)

THIS AMENDMENT AND RESTATEMENT, ACCESSION AND NOVATION AGREEMENT (this “Agreement”) is dated 30 September 2005 and made between:

(1)	COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE, a société anonyme incorporated in France, having its registered office at 1 rue Léon Migaux, 91300 Massy and registered at the Evry commercial registry under number 969 202 241 R.C.S. Evry (the “Original Borrower” and the “Parent Guarantor");
(2)	CGG AMERICAS, INC. a corporation incorporated in Texas (the “US Borrower”);
(3)	SERCEL, INC., SERCEL CANADA LTD., SERCEL AUSTRALIA PTY LTD, CGG AMERICAS, INC., CGG CANADA SERVICES LTD., CGG MARINE RESOURCES NORGE A/S as original guarantors (the “Original Guarantors”);
(4)	CREDIT SUISSE, PARIS BRANCH and BNP PARIBAS (the “Arrangers” and the “Original Lenders”);
(5)	CREDIT SUISSE FIRST BOSTON INTERNATIONAL and BNP PARIBAS, OSLO BRANCH as offer guarantee issuers (the “Offer Guarantee Issuers”);
(6)	CREDIT SUISSE, LONDON BRANCH as agent of the other Finance Parties (the “Agent”); and
(7)	BNP PARIBAS as security agent of the other Finance Parties (the “Security Agent”).

BACKGROUND:

A.	This Agreement is supplemental to and amends a facility agreement originally dated 1 September 2005 between, among others, Compagnie Générale de Géophysique as Borrower, Credit Suisse, London Branch as Agent and BNP Paribas as Security Agent (the “Original Facility Agreement”) as amended and restated by an Amendment and Restatement Agreement dated 14 September 2005 (the “Amended and Restated Facility Agreement”) and as further amended and restated by this Agreement (the “Facility Agreement”).
B.	The US Borrower wishes to accede to and become a borrower under the Facility Agreement.
C.	The Parent Guarantor wishes to agree to accede to the Facility Agreement in the additional capacity of Parent Guarantor in order to guarantee the US Borrower’s obligations under the Facility Agreement.
D.	The Original Guarantors wish to agree to (i) guarantee the obligations of the US Borrower under the Facility Agreement and (ii) guarantee the guarantee obligations of the Parent Guarantor under the Facility Agreement (except that, pending resolution of certain issues of Norwegian law, the Norwegian Guarantor will not guarantee the obligations of the US Borrower or guarantee the guarantee obligations of the Parent Guarantor with respect to the US Borrower).
E.	The Original Borrower wishes to (i) novate 45 per cent. of the Loans made to it and (ii) transfer 45 per cent. of the shares owned by it in the Target to the US Borrower.

F. The Parties to the Original Facility Agreement wish to consent to the amendments to the Facility Agreement, the accession of the US Borrower and the Parent Guarantor and the novation of the Loans and the transfer of the shares in the Target contemplated by this Agreement.

IT IS AGREED as follows:

1.	INTERPRETATION
1.1	Definitions
	Capitalised terms defined in the Original Facility Agreement have, unless expressly defined in this Agreement, the same meaning in this Agreement.
1.1	Construction
	The provisions of Clause 1.2 (Construction) of the Original Facility Agreement apply to this Agreement as though they were set out in full in this Agreement except that references to the Facility Agreement are to be construed as references to this Agreement.
2.	AMENDMENTS

(a)	The Amended and Restated Facility Agreement will be amended in the manner set out in the Schedule (Second Amended and Restated Facility Agreement) so that it reads for all purposes as if it were restated in the form set out in the Schedule (Second Amended and Restated Facility Agreement) from the Effective Date.
(b)	The Effective Date is the date on which the Agent notifies the Original Borrower and the Lenders that it has received all of the documents set out in Schedule 2 (Documentary conditions precedent) in form and substance satisfactory to the Agent.
(c)	If the Agent fails to give the notification referred to in paragraph (b) on or before the date falling one month after the date of this Agreement, the Amended and Restated Facility Agreement will not be amended in the manner contemplated by this Agreement.

3.	ACCESSION OF CGG AMERICAS, INC. AS US BORROWER
	The US Borrower agrees to accede to the Facility Agreement and become an additional borrower and to be bound by the terms of the Facility Agreement and any other Finance Document as the US Borrower.
4.	ACCESSION OF ORIGINAL BORROWER AS PARENT GUARANTOR
	The Parent Guarantor agrees to accede to the Facility Agreement and become an additional guarantor and to be bound by the terms of the Facility Agreement and any other Finance Document as the Parent Guarantor.

2

5. NOVATION OF LOANS AND TRANSFER OF SHARES

(a)	The Original Borrower and the US Borrower agree to the Original Borrower transferring to the US Borrower by novation 45 per cent. of the Loans made by the Lenders to the Original Borrower and 45 per cent. of the Original Borrower’s shares in the Target.
(b)	The amount of the Loans to be novated is US$168,750,000.
(c)	The number of shares in the Target to be transferred is 3,064,500.
(d)	The Transfer Date for both the Loans and the shares in the Target shall be the Effective Date.
(e)	The US Borrower confirms that it will be able to pay interest in respect of the Loans under any Finance Document without any Tax Deduction.
(f)	The parties to this Agreement agree to the Original Borrower transferring to the US Borrower by novation 45 per cent. of the Original Borrower’s Loans and 45 per cent. of the shares in the Target owned by the Original Borrower.

6. EFFECT OF NOVATION

(a) On the Effective Date:

(i)	subject to the down stream guarantee of the Parent Guarantor in Clause 17.1(c) of the Facility Agreement being in full force and effect, each of the Lenders and the Original Borrower shall be released from further obligations towards one another under the Finance Documents (in respect of the 45 per cent. of the Loans that are subject to the novation only) and their respective rights against one another under the Finance Documents (in respect of the 45 per cent. of the Loans that are subject to the novation only) shall be cancelled (being the “Discharged Rights and Obligations”). For the avoidance of doubt, except as provided in the foregoing sentence, the obligations of the Original Borrower shall remain in full force and effect;
(ii)	each of the Lenders and the US Borrower shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Lender and the US Borrower have assumed and/or acquired the same in place of that Lender and the Original Borrower;
(iii)	the Obligors and the US Borrower shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the US Borrower been an Original Borrower with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Obligors and the Original Borrower shall, subject to the down stream guarantee of the Parent Guarantor in Clause 17.1(c) of the Facility Agreement being in full force and effect, each be released from further obligations to each other

	under the Finance Documents (in respect of the 45 per cent. of the Loans that are subject to the novation only); and
(iv)	the US Borrower shall become a Party as a Borrower in addition to already being a Party as an Original Guarantor and the Parent Guarantor shall become a Party as a Guarantor in addition to already being a Party as a Borrower.

7.	REPRESENTATIONS AND WARRANTIES
	The representations and warranties set out in this Clause are made on the date of this Agreement to each Finance Party by each Obligor.
7.1	Corporate structure
	The Original Borrower is the owner of 100 per cent. of the Shares and 100 per cent. of the share capital of the US Borrower.
7.2	US Borrower
	The US Borrower is a corporation duly incorporated under the laws of Texas and a wholly owned Subsidiary of the Original Borrower.
7.3	Default
	No Default is continuing or reasonably likely to occur as a result of:

(a)	the US Borrower becoming a Borrower and assuming part of the rights and obligations of the Original Borrower;
(b)	the Parent Guarantor becoming a Guarantor; or
(c)	the Original Guarantors guaranteeing (i) the obligations of the US Borrower under the Facility Agreement or (ii) guaranteeing the guarantee obligations of the Parent Guarantor under the Facility Agreement.

7.4	Powers and authority
	It has the power to enter into and perform, and has taken all necessary action to authorise the entry into and performance of, this Agreement and the other Finance Documents and the transactions contemplated by this Agreement and the other Finance Documents.
7.5	Legal validity
	Subject to the Legal Reservations, this Agreement and the other Finance Documents constitute its legally binding, valid and enforceable obligations.
7.6	Non-conflict
	The entry into and performance by it of, and the transactions contemplated by, this Agreement and the other Finance Documents do not and will not conflict with:

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(a)	any law or regulation applicable to it; or
(b)	its constitutional documents; or
(c)	any agreement or instrument which is binding on it or any of its assets.

7.7	Authorisations
	All Authorisations required or desirable to enable it lawfully to enter into, exercise its rights and comply with its obligations in this Agreement and the other Finance Documents have been obtained or effected (as appropriate) and are in full force and effect.
7.8	Facility Agreement
	The representations and warranties set out in Clause 18 (Representations) of the Facility Agreement are true as if made on the date of this Agreement and as if references in that Clause 18 to the Facility Agreement were references to the Facility Agreement as amended and restated by this Agreement, with reference to the facts and circumstances existing on such date.
8.	INCORPORATION

(a)	This Agreement is a Finance Document.
(b)	Save as amended by this Agreement, the Amended and Restated Facility Agreement will remain in full force and effect and the Amended and Restated Facility Agreement and this Agreement will, from the Effective Date, be read and construed as one document.
(c)	Except as otherwise provided in this Agreement, the Finance Documents remain in full force and effect.
(d)	No waivers are given under this Agreement by any Finance Party in respect of any breach of, or other Default under, any of the Finance Documents.

9.	GUARANTEE
	On the Effective Date, each Obligor:

(a)	confirms its acceptance of the Facility Agreement;
(b)	agrees that it is bound as an Obligor by the terms of the Facility Agreement; and
(c)	confirms that its guarantee under Clause 17 (Guarantee and indemnity) of the Facility Agreement, except as otherwise provided therein:

(i) continues in full force and effect on the terms of the Facility Agreement;

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(ii)	extends to the obligations of the Obligors under the Finance Documents;
(iii)	applies (on the same terms) to the obligations of the US Borrower; and
(iv)	applies (on the same terms) to the Parent Guarantor’s guarantee of the obligations of the US Borrower.

(d) the Parent Guarantor confirms that its guarantee under Clause 17 (Guarantee and indemnity) applies (on the same terms as those provided by the other Guarantors except for the Norwegian Guarantor) to the obligations of the US Borrower.

10.	SECURITY
10.1	Confirmation
	On the Effective Date:

(a)	each Borrower confirms that any Security created by it under the Security Documents extends to the obligations of the Obligors under the Finance Documents subject to any limitations set out in the Security Documents;
(b)	each Obligor confirms that the obligations of the Obligors arising under the Facility Agreement are included in the Secured Liabilities in the Security Documents subject to any limitations set out in the Security Documents; and
(c)	each Obligor confirms that the Security created under the Security Documents continues in full force and effect on the terms of the respective Security Documents.

10.2	No new Security Interest
	No part of this Agreement is intended to or will create registrable Security.
11.	GOVERNING LAW
	This Agreement is governed by English law.
12.	INCORPORATION OF TERMS
	The provisions of Clause 30 (Notices) and Clause 37 (Enforcement) of the Original Facility Agreement shall be incorporated into this Agreement as if set out in full in this Agreement and as if references in those clauses to “this Agreement” are references to this Agreement.
13.	COUNTERPARTS
	This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

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This Agreement has been entered into on the date stated at the beginning of this Agreement.

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SCHEDULE 1
SECOND AMENDED AND RESTATED FACILITY AGREEMENT

8

SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS

1.	A copy of the constitutional documents (statuts) of each Obligor or, if the Agent already has a copy, a certificate of an authorised signatory of each Obligor confirming that the copy in the Agent’s possession is still correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.
2.	A copy of a resolution of the board of directors (conseil d’administration) of each Obligor approving the terms of, and the transactions contemplated by, this Agreement.
3.	A specimen of the signature of each person authorised on behalf of each Obligor to sign this Agreement.
4.	A certificate of an authorised signatory of each Borrower certifying that each copy document specified in this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.
5.	A certificate of the US Borrower (signed by a director) confirming that borrowing or guaranteeing, as appropriate, 45 per cent. of the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on the US Borrower to be exceeded.
6.	A copy of any other authorisation or other document, opinion or assurance which the Agent has notified to either Borrower is necessary or desirable in connection with the entry into and performance of, and the transactions contemplated by, this Agreement or for the validity and enforceability of this Agreement.
7.	A legal opinion of Norwegian counsel to the Arrangers and the Agent substantially in the form distributed to the Original Lenders prior to the signing of this Agreement.
8.	If an Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Borrowers in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
9.	Evidence that all fees and expenses then due and payable from the Original Borrower in respect of this Agreement have been paid.
10.	Evidence of the opening of VPS account number 11090 061 7140 in the name of the US Borrower.
11.	A Norwegian law Share Sale and Purchase Agreement duly executed by the Original Borrower and the US Borrower.
12.	A Notice of Transfer to the VPS Account Manager duly executed by the Original Borrower transferring 45 per cent. of the shares held by the Original Borrower in the Target to the US Borrower.

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13.	An Acknowledgement of Transfer Notice from the VPS Account Manager.
14.	A Norwegian law release statement duly executed by the Security Agent releasing 45% of the shares held by the Original Borrower in the Target from the Share Pledge Agreement.
15.	A VPS transcript evidencing that the US Borrower holds 45% of the Target shares.
16.	A form of joint disclosure statement to Oslo Børs.
17.	A VPS transcript evidencing that the Borrower holds 55% of the Target shares.
18.	A duly executed US Borrower Share Pledge Agreement and duly executed power of attorney in favour of the Security Agent substantially in the form set out in Schedule 12 (Form of Power of Attorney) to the Facility Agreement authorising the Security Agent to enter into the US Borrower Share Pledge Agreement on behalf of the US Borrower.
19.	A Notice of Pledge of Shares and VPS Account duly executed by the US Borrower and an Acknowledgement of Notice of Pledge duly executed by Carnegie ASA.
20.	Evidence that the process agent referred to in Clause 37.2 (Service of process) of the Original Facility Agreement has accepted its appointment in relation to the Facility Agreement.
21.	A New York and US Federal law legal opinion from Linklaters substantially in the form distributed to the Original Lenders prior to the signing of this Agreement, including confirmation that the execution and delivery of the Facility Agreement and the performance by the Obligors of their respective obligations thereunder will not result in a default or breach of the Indenture dated 28 April 2005 among the Original Borrower, the Original Guarantors, JP Morgan Chase Bank and National Association as trustee or the United States Investment Company Act 1940, as amended.
22.	The duly executed Demand Securities Letter.
23.	The duly executed Monthly Report Letter.

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EXECUTION PAGE — AMENDMENT AND RESTATEMENT, ACCESSION AND
NOVATION AGREEMENT

SIGNATORIES

The Borrowers

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

By:

CGG AMERICAS, INC.

By:

The Parent Guarantor

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

By:

The Original Guarantors

SERCEL, INC.

By:

SERCEL CANADA LTD.

By:

SIGNED by	)
	)
as attorney for SERCEL	)
AUSTRALIA PTY LTD under	)
power of attorney dated	)
	)
in the presence of:	)
	)
	)
	)
Signature of witness	)	By executing this agreement the
	)	attorney states that the attorney has
	)	received no notice of revocation of
Name of witness (block letters)	)	the power of attorney

CGG AMERICAS, INC.

By:

CGG CANADA SERVICES LTD.

By:

CGG MARINE RESOURCES NORGE A/S

By:

EXECUTION PAGE — AMENDMENT AND RESTATEMENT, ACCESSION AND
NOVATION AGREEMENT

The Arrangers

BNP PARIBAS

By:

CREDIT SUISSE, PARIS BRANCH

By:

The Original Lenders

BNP PARIBAS

By:

CREDIT SUISSE, PARIS BRANCH

By:

The Offer Guarantee Issuers

CREDIT SUISSE FIRST BOSTON INTERNATIONAL

By:

BNP PARIBAS, OSLO BRANCH

By:

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The Agent

CREDIT SUISSE, LONDON BRANCH

By:

The Security Agent

BNP PARIBAS

By:

EX-4.19

Exhibit 4.19

November 15, 2005

Compagnie Générale de Géophysique

Rights Offering

Underwriting Agreement

BNP PARIBAS

CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
RBC Capital Markets Corporation
(collectively, the “Managers”)

c/o BNP Paribas
16 boulevard des Italiens
75009 Paris
France

Credit Suisse First Boston (Europe) Limited (“CSFB”)
One Cabot Square
London, England E14 4QJ

Ladies and Gentlemen:

     Compagnie Générale de Géophysique (the “Company”), a société anonyme incorporated under the laws of France and registered at the Evry Commercial Registry under Number B 969 202 241 (69B00224), proposes, subject to the terms and conditions stated herein, to increase its share capital by issuing new shares by attributing preferential subscription rights (the “Subscription Rights”, which term includes any rights attributed to the shares issued to holders of stock options upon exercise thereof or upon conversion of the Convertible Bonds (as defined herein) prior to the date of suspension specified in the Note d’Opération (as defined herein)) to its shareholders, permitting the holders of the Subscription Rights to subscribe for up to 4,327,776 newly issued ordinary shares (the “New Shares”) of the Company (the offer of the New Shares is referred to herein as the “Offering”). The Managers named above have severally agreed to procure subscribers for the New Shares not subscribed by rights holders, failing which to subscribe for the New Shares themselves, in each case on the terms and subject to the conditions set forth herein.

     In accordance with the delegation of powers granted to it by the extraordinary general meeting of shareholders on May 12, 2005, the Company’s Board of Directors at its meeting of November 14, 2005 delegated to the Chairman and Chief Executive Officer all powers necessary to conduct the Offering and determine its terms. On November 15, 2005, the Chairman and Chief Executive Officer determined the terms of and decided to proceed with the Offering.

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     Subscription for New Shares is reserved in priority for owners of existing shares, by virtue of their preferential subscription rights guaranteed to them by law, as well as assignees of such rights, who may subscribe as of right (à titre irréductible) for 6 New Share(s) for every 19 Subscription Rights. The New Shares that are not subscribed on this basis will be distributed and allotted to persons holding Subscription Rights and wishing to subscribe for additional New Shares (à titre réductible) up to the number requested, or if insufficient New Shares are available, pro rata to their Subscription Rights. The subscription period will begin on November 21, 2005 and close on December 2, 2005 (the “Subscription Period”). The Subscription Rights will be tradable during the Subscription Period and such Subscription Rights will be separated (détachés) from the shares on November 21, 2005 and traded separately on Eurolist by Euronext Paris (“Eurolist”) on the same day and until the end of the Subscription Period.

     The New Shares will be the subject of an application for listing on Eurolist to take effect on December 16, 2005. The New Shares will be listed on Eurolist on the same line as the existing shares.

     The New Shares will be offered in a public offering in France and in and outside France in an international offering to institutional investors. The Subscription Rights and the New Shares have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Accordingly, the procedures implemented in connection with the Subscription Rights provide that they may only be exercised: (i) in the United States, upon certification that the subscriber is a qualified institutional buyer (as defined in Rule 144A under the Securities Act), pursuant to the exemption from registration under Section 4(2) under the Securities Act, and (ii) in offshore transactions in reliance on Regulation S under the Securities Act (“Regulation S”). The same procedures will apply to the offer and sale by the Managers of any New Shares subscribed by them pursuant to this Agreement.

     In connection with the offer, issue and sale of the New Shares, the Company has prepared an offering circular dated November 15, 2005 (as amended or supplemented, including the material incorporated by reference therein, the “Offering Circular”) and a French prospectus dated November 15, 2005 (as amended or supplemented, the “Prospectus”, and together with the Offering Circular, the “Offering Documents”). The Offering Circular incorporates by reference, among other documents, Amendment No.2 (“Amendment No.2”) to the Company’s annual report on Form 20-F (the “Form 20-F”) for the year ended December 31, 2004, filed with the Securities and Exchange Commission (the “SEC”) on October 31, 2005 and the Company’s reports on Form 6-K furnished to the SEC and identified as incorporated by reference in the Offering Circular. The Prospectus, which was granted visa number 05-764 from the Autorité des marchés financiers (the “AMF”), consists of the Company’s Document de Référence registered with the AMF on April 18, 2005 under number D.05-0475, as updated on November 15, 2005 under number D. D.05-0475-A01 (the “Document de Référence”), and the Company’s Note d’Opération dated November 15, 2005 (the “Note d’Opération”). A legal notice about the Offering will be published in the Bulletin des annonces légales obligatoires (“BALO”) on November 18, 2005.

     The Company hereby agrees with the several Managers as follows:

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1. Representations, Warranties and Agreements of the Company. The Company represents and warrants to, and agrees with, the several Managers that as of the date of this Agreement and the Closing Date (as defined in Section 3(c) below):

     (a) The Offering Circular, as of its date and as of the Closing Date, and the Prospectus as of its date and as of the Closing Date, did not and, as applicable, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Offering Documents made in reliance upon and in conformity with written information furnished to the Company by the Managers specifically for use therein, it being understood and agreed that the only such information furnished by the Managers consists of the following information in the Offering Documents: the table entitled “Manager” under the caption “Plan of Distribution” in the Offering Circular.

     (b) On the date the Prospectus received the visa from the AMF, the Prospectus conformed in all material respects to the requirements set forth by applicable French law or AMF regulations. In connection with the update to the Document de Référence and the visa of the AMF on the Prospectus, the statutory auditors of the Company have provided to the Company, with a copy to the AMF, letters (lettres de fin de travaux) as contemplated by Article 212-15 of the Règlement général of the AMF that do not contain any reservations, qualifications or observations other than as reflected in the statements (attestations) of the Chairman and Chief Executive Officer of the Company included in the update to the Document de Référence under Section 1.2 and the Prospectus under Section 1 “Responsable du prospectus"; copies of such letters are attached as Exhibit 1(b) hereto; such letters have not been amended, supplemented or superseded. The press releases issued by the Company with respect to the launch of the Offering and the pricing of the Offering conformed in all material respects to the requirements set forth by applicable French law or AMF regulations. The Form 20-F complies in all material respects as to form with the requirements of the Securities Act and the rules and regulations thereunder.

     (c) The Company has been duly incorporated, is validly existing as a société anonyme under the laws of France, with full power and authority (corporate and other) to own and lease its properties and conduct its business as described in the Offering Documents; and the Company is lawfully qualified to do business in all other jurisdictions in which its ownership or leasing of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), business, prospects or results of operations of the Company and its subsidiaries taken as a whole (“Material Adverse Effect”).

     (d) Each subsidiary of the Company set forth on Schedule 2 hereto has been duly organized and is validly existing under the laws of the jurisdiction of its organization, with full power and authority (corporate and other) to own and lease its property and conduct its business as described in the Offering Documents; and each subsidiary of the Company is lawfully qualified to do business in all other jurisdictions in

4

which its ownership or leasing of property or the conduct of its business requires such qualification except where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect; all of the issued and outstanding capital stock of the Company and each subsidiary of the Company has been duly and validly authorized and issued under the laws of the jurisdiction of its incorporation and is fully paid and, if applicable, non-assessable; and except as set forth in Schedule 2 hereto, the capital stock of each subsidiary of the Company is owned, directly or through subsidiaries, by the Company, free and clear of all liens, encumbrances and defects, except as disclosed in the Offering Documents; there are no outstanding securities convertible into or exchangeable for, or warrants, rights or options to purchase from the Company, or obligations of the Company to issue, common stock or any other class of capital stock of the Company, except as disclosed in the Offering Documents.

     (e) The Company has the power and authority (corporate and other) to enter into this Agreement and any documents entered into in connection herewith, in each case to which it is a party.

     (f) The New Shares have been duly and validly authorized by the Company and, when issued against payment therefor and when the depositary certificate required by Article L. 225-146 of the French Commercial Code is issued as provided herein, will be duly and validly issued and fully paid.

     (g) All dividends and other distributions declared and payable on the shares of capital stock of the Company in Euro may under the current laws and regulations of France be converted into foreign currency that may be freely transferred out of France without the necessity of obtaining any Governmental Authorization (as defined below) in France.

     (h) Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Managers for a brokerage commission, finder’s fee or like payment in connection with the Offering, other than the fees payable to the Managers in connection with the Offering.

     (i) No consent, approval, authorization, or order of, or filing with, any Governmental Agency (as defined below) (each, a “Governmental Authorization”) is required for the consummation of the transactions contemplated by this Agreement in connection with the Offering, except, in each case, such as have been or, prior to the Closing Date, will be obtained, and except as may be required under US state securities or “Blue Sky” laws.

     (j) None of the Company or any subsidiary of the Company is (i) in violation of its respective articles of association, charter, by-laws or other constitutive documents, (ii) in default, and no event has occurred which, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject except for such default or event

5

which would not, individually or in the aggregate, have a Material Adverse Effect or (iii) in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject, except for such violation which would not, individually or in the aggregate, have a Material Adverse Effect.

     (k) No stamp or other issuance or transfer taxes or duties (other than fixed rate duty and timbres de dimension, the non-payment of which does not affect the validity of this Agreement) are payable to or in France or any political subdivision or taxing authority thereof or therein by or on behalf of the Managers in connection with the sale and delivery by the Company of the New Shares to or for the respective accounts of the Managers or the sale and delivery by such Managers of the New Shares to the initial purchasers thereof (provided that no deed evidencing the sale of the Shares is executed in France), or the consummation of any transaction contemplated by this Agreement in connection with the issuance, sale and delivery of the New Shares, and generally no capital gains, income or withholding taxes are payable in France by the Managers who are non-French residents for French tax purposes and who are not acting through a permanent establishment or representative located in France in connection with the sale and delivery by such Managers of the New Shares to the initial purchasers thereof or the consummation of any transaction contemplated by this Agreement in connection with the sale and delivery of the New Shares (provided that such provision shall not apply to future resales and deliveries of the Shares); for the avoidance of doubt, the payment of commissions and fees pursuant to this agreement is subject to applicable French tax law and the sale of the New Shares by the Managers may be subject to the French impôt de bourse.

     (l) The issuance of the New Shares pursuant to the exercise of the Subscription Rights or pursuant to this Agreement, and the compliance by the Company with the terms and provisions hereof and the consummation of the transactions herein contemplated, will not result in a breach or violation of any of the terms or provisions of, or constitute a default under, (i) any statute, rule, regulation or order of any governmental agency or body or stock exchange authority or any court, domestic or foreign, having jurisdiction over the Company or any subsidiary of the Company, or any of their respective properties (each, a “Governmental Agency”), except for such breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect, or (ii) any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject except for any such breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect, or (iii) the charter or by-laws of the Company or any such subsidiary.

     (m) This Agreement has been duly authorized and executed by the Company and constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general principles of equity and except in connection with rights to indemnification and contribution thereunder that may be limited by federal or state securities laws or public policy relating thereto.

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     (n) Except as disclosed in the Offering Documents, the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them; and except as disclosed in the Offering Documents, the Company and its subsidiaries hold any leased (including by way of charter party) real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or to be made thereof by them.

     (o) Neither the Company nor any of its subsidiaries has taken any action nor, so far as the Company is aware, have any steps been taken or legal proceedings been started or threatened against it or any of its subsidiaries for winding-up, dissolution or reorganization, or for the appointment of a receiver, administrative receiver, or administrator, trustee or similar officer of it or any of its subsidiaries or any assets of it or any of its subsidiaries.

     (p) The Company and its subsidiaries possess adequate certificates, authorities or permits issued by appropriate Governmental Agencies necessary to conduct the business now operated by them except where the failure to do so would not, individually or in the aggregate, have a Material Adverse Effect, and have not received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or any of its subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect.

     (q) No labor dispute with the employees of the Company or any subsidiary of the Company exists or, to the knowledge of the Company, is imminent that might have a Material Adverse Effect.

     (r) The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, “intellectual property rights”) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect.

     (s) Neither the Company nor any of its subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any Governmental Agency relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “environmental laws”), (ii) owns or operates any real property contaminated with any substance that is subject to any environmental laws, (iii) is liable for any off-site disposal or contamination pursuant to any environmental laws or (iv) is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would, individually or in the aggregate, have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.

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     (t) Except as described in the Offering Documents, there are no pending actions, suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under this Agreement or which are otherwise material in the context of the Offering; and no such actions, suits or proceedings are, to the Company’s knowledge, threatened or contemplated.

     (u) The audited consolidated financial statements of the Company as of and for the years ended December 31, 2002, 2003 and 2004 and notes thereto, included or incorporated by reference in each of the Offering Documents, present fairly in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated therein, and the results of operations, shareholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified therein; such historical consolidated financial statements have been prepared by reference to the requirements of French generally accepted accounting principles (“French GAAP”) applied on a consistent basis throughout the periods involved, and comply with all applicable French laws and regulations.

     (v) The 2004 IFRS transition information dated November 15, 2005 included or incorporated by reference in the Offering Documents presents the expected impact of the transition to international accounting standards and international financing reporting standards provided for by European Regulation 1606/2002 of 19 July 2002 on the opening balance sheet as at January 1, 2004, the balance sheet as at December 31, 2004 and income statement of the year ended December 31, 2004 (the “2004 IFRS Transition Information”). The 2004 IFRS Transition Information do not constitute a complete set of financial statements under IAS/IFRS, which would be necessary to provide, in accordance with these standards, a fair view of the assets, liabilities, financial position and results of the Company. The 2004 IFRS Transition Information have been prepared in accordance with the basis of preparation set out in the explanatory note on transition to IFRS included or incorporated by reference in the Offering Documents which indicates (a) how IFRS 1 and the other international accounting standards adopted in the European Union have been applied and (b) the standards, interpretations, rules and accounting methods which should be applicable for the preparation of the consolidated accounts for the year 2005 under IFRS. However, as disclosed or incorporated by reference in each of the Offering Documents, following confirmation of the International Accounting Standards Board (“IASB”) policy published on September 30, 2005, the Company has been required to change the accounting treatment of its Convertible Bonds as described therein with the effects on such financial statements described therein.

     (w) The unaudited consolidated financial statements of the Company as of and for the six months ended June 30, 2005, prepared under IFRS, and the notes thereto, included in the Prospectus, present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates indicated therein, and the results of operations, shareholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified therein; such

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consolidated financial statements have been prepared by reference to the requirements of the accounting standards enacted by the IASB and approved by the European Union, applied on a basis consistent with the Company’s IFRS consolidated financial statements as of and for the year ended December 31, 2004; provided, however, (i) as indicated therein, the full financial effect of reporting under IFRS as it will be applied by the Company and reported in its first IFRS financial statements cannot be determined with certainty and may be subject to change and (ii) as disclosed or incorporated by reference in each of the Offering Documents, following confirmation of the IASB policy published on September 30, 2005, the Company has been required to change the accounting treatment of its Convertible Bonds as described therein with the effects on such financial statements described therein.

     (x) The unaudited consolidated financial statements of the Company as of and for the nine months ended September 30, 2005, prepared under IFRS, and the notes thereto, included or incorporated by reference in each of the Offering Documents, present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates indicated therein, and the results of operations, shareholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified therein; such consolidated financial statements have been prepared by reference to the requirements of the accounting standards enacted by the IASB and approved by the European Union, applied on a basis consistent with the Company’s IFRS consolidated financial statements as of and for the year ended December 31, 2004; provided, however, (i) as indicated therein, the full financial effect of reporting under IFRS as it will be applied by the Company and reported in its first IFRS financial statements cannot be determined with certainty and may be subject to change and (ii) as disclosed or incorporated by reference in each of the Offering Documents, following confirmation of the IASB policy published on September 30, 2005, the Company has been required to change the accounting treatment of its Convertible Bonds as described therein with the effects on such financial statements described therein.

     (y) The unaudited pro forma consolidated income statements of Exploration Resources ASA (“Exploration Resources”) as of and for the year ended December 31, 2004, and the unaudited consolidated income statements of Exploration Resources for the nine months ended September 30, 2005, in each case as they appear in the relevant columns of the Company’s unaudited pro forma consolidated financial statements referred to in paragraph (z) below, have been prepared, in all material respects, in accordance with the basis of preparation set out in such unaudited pro forma consolidated financial statements referred to in paragraph (z) below; all significant assumptions regarding the operations, assets and liabilities of Exploration Resources as to its inception as a separate stand-alone company on January 1, 2005 have been reflected in the pro forma adjustments.

     (z) The unaudited pro forma IFRS consolidated income statement and balance sheet of the Company and the notes thereto as of and for the year ended December 31, 2004, and the unaudited pro forma IFRS consolidated income statement and the notes thereto for the nine months ended September 30, 2005, included or incorporated by reference in each of the Offering Documents have been prepared on a basis that is consistent with the accounting policies of the Company reflected in the 2004

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IFRS Transition Information; all significant assumptions have been reflected in such pro forma financial information such that such pro forma financial information has been properly compiled on the basis stated in each of the Offering Documents.

     (aa) The Company’s financial statements as of and for the years ended December 31, 2002, 2003 and 2004, referred to in paragraph (u) above, as reconciled with generally accepted accounting principles in the United States (“U.S. GAAP”) and, in the case of the financial statements for the years ended December 31, 2002 and 2003, filed on Form 20-F and, in the case of financial statements for the year ended December 31, 2004, on Amendment No. 2 to Form 20-F, comply with the requirements of Form 20-F and of the Securities Exchange Act of 1934, as amended, and the rules and regulations adopted thereunder.

     (bb) (i) The information set forth in Note 28 to the Company’s consolidated financial statements under the heading “Summary of Differences Between Accounting Principles followed by the Group and U.S. GAAP” and included or incorporated by reference in the Offering Circular, (ii) the information included as “Transition to International Financial Reporting Standards” in the Company’s Form 6-K dated November 15, 2005 and included or incorporated by reference in the Offering Circular and (iii) the information in Notes 10 and 11 with respect to the Company’s IFRS interim financial statements, included in the Company’s Form 6-K dated November 10, 2005 and included or incorporated by reference in the Offering Circular include a fair summary, in all material respects, of the differences, as they relate to the Company’s consolidated financial statements as of and for the relevant period, between French GAAP and U.S. GAAP, French GAAP and IFRS and U.S. GAAP and IFRS, as the case may be.

     (cc) Except as disclosed in or incorporated by reference in the Offering Documents, since the date of the latest audited financial statements included in the Offering Documents, there has been no material adverse change, nor any development or event involving a prospective material loss or adverse change, in the condition (financial or other), business, prospects, properties or results of operations of the Company and its subsidiaries taken as a whole, and, except as disclosed in or contemplated by the Offering Documents, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock, nor since the date of the latest audited financial statements included in the Offering Documents has there been any material loss or interference with the business of the Company and its subsidiaries from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Documents.

     (dd) Except as described in or incorporated by reference in the Offering Documents, neither the Company, nor any of its subsidiaries is currently or has reason or notice to believe that it will be in the future a party to, or directly or indirectly concerned in, an agreement, arrangement, understanding or practice (whether or not legally binding) which may (i) contravene any treaty, regulation or directive of the European Community relating to competition or restraint of trade, or any competition or restraint of trade laws of any other jurisdiction, (ii) be registrable, unenforceable or void or rendering the

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Company, its subsidiaries or any of their respective officers, directors or employees liable to administrative, civil or criminal proceedings under any competition legislation, or restraint of trade regulation or similar legislation, or (iii) be the subject of any investigation by a competent authority in respect of any provision of any competition legislation, or restraint of trade regulation or similar legislation in any jurisdiction. Neither the Company nor any of its subsidiaries is currently, or has reason to believe that it will be, engaged in (whether on its own or jointly with any other person) any conduct which amounts to the abuse of a dominant position in a market which may affect competition within the European Union or any part of it.

     (ee) The Company is not an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the “Investment Company Act”); and the Company is not and, after giving effect to the Offering and the application of the proceeds thereof as described in the Offering Documents, will not be an “investment company” as defined in the Investment Company Act.

     (ff) The Company believes it was not a “passive foreign investment company” (“PFIC”) within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended, during the year ended December 31, 2004, and the Company does not expect that it will become a PFIC in the foreseeable future.

     (gg) Assuming the accuracy of the representations and warranties of the Managers in this Agreement, the offer and sale of the New Shares in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act by reason of Section 4(2) thereof and Regulation S thereunder.

     (hh) Neither the Company nor any of its respective affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act, an “Affiliate”), nor any person acting on its or their behalf (i) has, within the six-month period prior to the date hereof, offered or sold, directly or indirectly, in the United States (as such term is defined in Regulation S) shares or any security of the same class or series as the New Shares in a manner that could give rise to a requirement to register the New Shares or the Subscription Rights under the Securities Act; or (ii) has offered or will offer or sell the Subscription Rights or the New Shares (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S, by means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S. The Company has not entered and will not enter into any contractual arrangement with respect to the distribution of the Subscription Rights or the New Shares except for this Agreement.

     (ii) The Company is a foreign private issuer within the meaning of Rule 902 under the Securities Act, and there is no substantial U.S. market interest (as defined in Regulation S) for the Company’s ordinary shares.

     (jj) The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are

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executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with French GAAP and/or IFRS, as applicable, and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, except, in each case, with regard to matters set forth in the Offering Documents.

     (kk) Neither the Company nor any of its subsidiaries, and none of their respective properties or assets, has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, executing or otherwise) under the laws of any jurisdiction in which it has been incorporated or in which any of its property or assets are held.

     (ll) To ensure the legality, validity, enforceability and admissibility into evidence of this Agreement or any other document to be furnished hereunder in France, it is not necessary that this Agreement or such other document be filed or recorded with any court or any other authority in France or that any stamp or similar tax (other than timbres de dimension) be paid in France on or in respect of this Agreement or any such other document.

     (mm) The Company has not distributed and, prior to the later to occur of (i) the Closing Date and (ii) the completion of the Offering, will not distribute any material referring to the Offering other than the Offering Documents or other materials, if any, permitted by the Securities Act (or regulations promulgated pursuant to the Securities Act).

     (nn) Mazars & Guérard and Barbier Frinault & Autres Ernst & Young Audit, who have certified certain financial statements of the Company and its consolidated subsidiaries for each of the years ended December 31, 2003 and December 31, 2004, and Barbier Frinault & Autres and Ernst & Young Audit, who have certified certain financial statements of the Company and its consolidated subsidiaries for the year ended December 31, 2002 and have delivered their reports in respect of the financial statements of the Company and its consolidated subsidiaries for each such year with respect to the audited consolidated financial statements and schedules included in the Offering Documents, are, and have been in all such periods for which such financial statements are so included, independent auditors with respect to the Company in accordance with applicable French laws and regulations and independent public accountants within the meaning of the Securities Act and the rules and regulations promulgated thereunder.

     (oo) Ernst & Young AS, who have certified certain pro forma financial statements of the Company’s subsidiary Exploration Resources for the year ended December 31, 2004 and have delivered their report in respect of such financial statements, are, and have been in the period covered by such financial statements and for the nine months ended September 30, 2005, independent auditors with respect to the Company in accordance with applicable Norwegian laws and regulations.

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     (pp) Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Company’s ordinary shares in violation of applicable law. To the extent that information is required to be publicly disclosed under Articles 631-7 et seq. of the Règlement général of the AMF ( the “Stabilizing Rules”) before stabilizing transactions can be undertaken in compliance with the safe harbor provided under such Stabilizing Rules, such information has been adequately publicly disclosed (within the meaning of the Stabilizing Rules).

     (qq) The statistical, market-related, industry and similar data included in the Offering Documents is based on or derived from sources that, to the knowledge of the Company, having made all reasonable inquiry, are reliable and accurate, and the disclosure of such data in the Offering Documents is not misleading in any material respect.

     (rr) Each of the Company and the Company’s subsidiaries has filed all non-U.S., U.S. federal, state and local tax returns that are required to be filed, or has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect) and, except as set forth in the Offering Documents, has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable or made adequate reserve of provision for, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a Material Adverse Effect.

     (ss) The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are customary in the businesses in which they are engaged taking into account the Company and its subsidiaries’ level of risk and the cost of insurance coverage; all policies of insurance and fidelity or surety bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and instruments; there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause that will have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole; none of the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and none of the Company nor any of its subsidiaries has any reason to believe as of the date of this Agreement that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

     (tt) No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Offering Documents has been made or reaffirmed without a reasonable basis or has been disclosed other than as in good faith.

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     (uu) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements relating to money laundering applicable to the Company and its subsidiaries and, so far as the Company is aware, any related or similar statutes, rules, regulations or guidelines, issued, administered or enforced by any Governmental Agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any Governmental Agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened, and neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer or employee of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) caused the Company or any of its subsidiaries to be in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977 or other national or local law regulating payments to governmental officials or employees; or (iv) made any unlawful payment, except, in each case, with regard to matters set forth in the Offering Documents.

     (vv) The acquisition by the Company of Exploration Resources did not result in a breach or violation of any of the terms or provisions of, or constitute a default under, (i) any statute, rule, regulation or order of any Governmental Agency; (ii) any agreement or instrument to which the Company or any of the Company’s subsidiaries is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject, except as disclosed in the Offering Documents; or (iii) the charter or by-laws of the Company or any such subsidiary.

     (ww) Assuming the approval of the amendment of the terms of the Company’s 7.75% USD 85 million convertible bonds due 2012, issued on November 4, 2004 (the “Convertible Bonds”) at the extraordinary shareholders’ meeting to be held on November 16, 2005, the amendment of such terms will have been duly authorized by all necessary corporate action by the Company and the shares to be issued on conversion of the Convertible Bonds will, upon such conversion, be validly issued and fully paid.

2. Subscription, Offer and Sale.

     (a) On the basis of the representations, warranties and agreements herein set forth, but subject to the terms and conditions herein contained, each Manager hereby agrees, severally but not jointly, to procure subscribers for, failing which to subscribe and pay for itself, the percentage of New Shares set forth opposite its name in Schedule 1 to this Agreement, to the extent such New Shares shall not have been subscribed for at the close of the Subscription Period after the exercise of the Subscription Rights, up to an aggregate maximum of 4,327,776 New Shares for all the Managers, at a price of EUR 51 per share (the “Subscription Price”) on the Closing Date (as defined in Section 3(c) below).

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     (b) The Company and the Managers agree that this Agreement does not constitute a firm underwriting (garantie de bonne fin) under Article L. 225-145 of the French Commercial Code.

3. Subscription, Payment and Delivery; Commissions.

     (a) The subscriptions and payments of holders of Subscription Rights (except for those referred to in Section 3(b) below) will be received free of charge during the Subscription Period, by any authorized financial intermediaries in France (the “Depositary Institutions”).

     (b) The subscriptions and payments of shareholders who hold registered shares in the form nominatif pur will be received free of charge during the same period by BNP Paribas Securities Services, as agent of the Company.

     (c) The date of closing will be December 16, 2005 (the “Closing Date”). On the Closing Date, (i) the Depositary Institutions, including BNP Paribas Securities Services, as agent of the Company in respect of nominatif pur shares, will transfer into the account of BNP Paribas Securities Services, as centralizing agent, the funds corresponding to the subscriptions received by them as intermediaries and, (ii) where applicable, the Managers will transfer or cause to be transferred, into the same account, the funds corresponding to the payment of the New Shares subscribed for pursuant to their underwriting commitment (or, if applicable, through the exercise of the Subscription Rights held by the Managers); BNP Paribas Securities Services, as centralizing agent, will transfer the funds so paid to an account “Augmentation de capital”, opened in its books. The Company shall instruct BNP Paribas Securities Services to issue the depositary certificate required by Article L. 225-146 of the French Commercial Code.

     (d) On the Closing Date after the depositary certificate required by Article L. 225-146 of the French Commercial Code is furnished by BNP Paribas Securities Services, all of the New Shares will be created and registered in an account opened with BNP Paribas Securities Services, which will proceed with the necessary transfers.

     (e) On the Closing Date after the depositary certificate required by Article L. 225-146 of the French Commercial Code is furnished by BNP Paribas Securities Services, the Company shall instruct BNP Paribas Securities Services to transfer, for value on the Closing Date, to an account opened with BNP Paribas in the name of the Company, the funds referred to in Section 3(c) above, after deducting the gross amount of commissions and expenses referred to Sections 3(h) — (i) below.

     (f) As soon as possible on or after the Closing Date, BNP Paribas Securities Services will pay directly to the Depositary Institutions the amount of the Commission de Guichet (as defined below) to which they are entitled;

     (g) On the Closing Date, the Underwriting and Management Commission and the Selling Commission (as defined below) will be paid by BNP Paribas Securities Services on behalf of the Company to BNP Paribas, for the account of the

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Managers and the Depositary Institutions in accordance with the provisions set out in Section 3(f) above.

     (h) In consideration for underwriting and managing the Offering, the Company will pay to the Managers a combined underwriting and management commission equal to 3.25% of the aggregate gross sale proceeds of the Offering (the “Underwriting and Management Commission ”). 1% of the aggregate gross sale proceeds of the Offering shall represent the management commission, to be split between the Managers pro rata to their respective underwriting commitments as set forth in Schedule 1 hereto (with a praecipium of 50 percent to be shared equally between BNP Paribas and CSFB), and 2.25% of the aggregate gross sale proceeds of the Offering shall represent the underwriting commission, to be split between the Managers pro rata to their respective underwriting commitments as set forth in Schedule 1 hereto.

     (i) The Managers will receive a selling commission equal to 0.8% of the aggregate gross sale proceeds of the New Shares for which they will subscribe or cause to be subscribed or through the exercise of the Subscription Rights that they have acquired, in each case by way of their respective underwriting commitments as set forth in Schedule 1 hereto (the “Selling Commission”). The Depositary Institutions will receive a selling commission equal to 0.8% of the aggregate gross sale proceeds of the New Shares subscribed to through such Depositary Institutions, subject to a minimum of EUR 10 and a maximum of EUR 300 per order (the “Commission de Guichet”).

4. Representations, Warranties and Agreements of the Managers.

     (a) Each Manager severally acknowledges that the Subscription Rights and New Shares have not been and will not be registered under the Securities Act and may not be offered or sold except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Each Manager severally represents and agrees that it has offered and sold the New Shares and will offer and sell the New Shares only (A) in the United States to persons it reasonably believes to be qualified institutional buyers (as defined in Rule 144A under the Securities Act) acquiring such shares for their own account or for the account of another qualified institutional investor and who provide the Managers and the Company with a letter in the form of Exhibit 4(a) to the Agreement or (B) in offshore transactions pursuant to Rule 903 of Regulation S. Accordingly, neither such Manager nor its Affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the New Shares.

     (b) Each Manager severally agrees that it and each of its Affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the New Shares except for any such arrangements with other Managers or Affiliates of the other Managers or with the prior written consent of the Company.

     (c) Each Manager severally agrees that neither it nor any of its affiliates nor any person acting on its or their behalf will offer or sell the New Shares in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, but not limited to,

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(i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or disseminated via the Internet, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

     (d) Each Manager severally represents, warrants and agrees that: (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the Subscription Rights or New Shares in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Subscription Rights or New Shares in, from or otherwise involving the United Kingdom.

     (e) Each Manager severally represents and agrees that it has complied and will comply in all material respects with all applicable laws and regulations in each jurisdiction in which it offers and distributes any offering materials relating to the Offering or offers or sells the New Shares.

     (f) Each Manager severally represents, warrants and agrees that: in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is or was implemented in that Relevant Member State (the “Relevant Implementation Date”), it will not make an offer of the New Shares or the Subscription Rights to the public in that Relevant Member State prior to the publication of a prospectus in relation to the New Shares and the Subscription Rights which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of New Shares to the public in that Relevant Member State at any time:

     (1) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

     (2) to any legal entity which has two or more of the following (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or

     (3) in any other circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

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     For the purposes of the preceding paragraphs, the expression “offer of New Shares or the Subscription Rights to the public” in relation to any New Shares or Subscription Rights in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the New Shares and/or the Subscription Rights to be offered so as to enable an investor to decide to purchase or subscribe for the New Shares or the Subscription Rights, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

     (g) The Managers shall conduct stabilization activities only in accordance with all applicable laws and regulations in the jurisdictions in which they conduct such activities, and shall not undertake activities in respect of the Subscription Rights or the New Shares in a manner that would constitute price manipulation in violation of applicable laws and regulations.

5. Certain Agreements of the Company. The Company agrees with the several Managers that:

     (a) If, at any time prior to the completion of the resale of any Shares subscribed by Managers, any event occurs as a result of which the Offering Documents as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any such time to amend or supplement the Offering Documents to comply with any applicable law or regulation or any rule of Euronext Paris or to amend documents incorporated by reference in the Offering Circular to comply with any applicable rule or regulation of the SEC, the Company promptly will notify the Managers of such event and promptly will prepare, at its own expense, an amendment or supplement which will correct such statement or omission or effect such compliance. The Company will advise the Managers promptly of any proposal to amend or supplement the Offering Documents and will not effect such amendment or supplement without the Managers’ consent. Neither the Managers’ consent to, nor the Managers’ delivery to offerees or investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6.

     (b) The Company will notify the Managers promptly if it appears that one of its representations or warranties given herein has become untrue at any time prior to payment being made to the Company on the Closing Date.

     (c) The Company will furnish to the Managers copies of the Offering Circular and Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Managers reasonably request.

     (d) If the Company receives notice from the SEC to the effect that the SEC intends to review the Form 20-F, or otherwise concerning the Form 20-F, the Company shall forthwith notify the Managers and shall send to the Managers a copy of any communications relating to the Form 20-F received from the SEC.

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     (e) The Company undertakes to use its best efforts to obtain the listing of the New Shares on Eurolist; and the Company undertakes to file with the New York Stock Exchange a Supplemental Listing Application and such other documents as the rules of the New York Stock Exchange may require with respect to the New Shares.

     (f) The Company will use its best efforts to cause the Subscription Rights and New Shares to be admitted to clearance through Euroclear France.

     (g) During the period beginning from the date hereof and continuing to and including the date 180 days after the Closing Date, the Company agrees not to offer, sell, issue, contract to sell, pledge, grant any option to purchase or otherwise dispose of, except as provided hereunder, any ordinary shares or any securities of the Company that are substantially similar to the New Shares, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, ordinary shares or any such substantially similar securities, or make any short sale, engage in any hedging or other transaction that is designed to or that reasonably could be expected to lead to or result in a sale or disposition of ordinary shares or such substantially similar securities (even if such disposition would be by someone other than the Company), or enter into a transaction with similar economic effect, or publicly announce its intention to do any of the foregoing, in each case, without the prior written consent of the Managers; provided, however, that the Company may, without first obtaining such consent: (i) grant stock options in accordance with past practice pursuant to a stock option plan described in the Offering Documents, or issue shares upon the exercise of any stock options so granted or previously granted pursuant to plans that are described in the Offering Documents; (ii) issue or transfer shares in the context of acquisitions in which the party receiving such shares agrees to be bound by restrictions substantially identical to those set forth in this paragraph (g) in respect of such shares for the remainder of the duration of the restrictions on the Company up to an aggregate maximum of 10% of the share capital outstanding as of the Closing Date; (iii) issue or sell shares to its employees, or to employees of its affiliates, in connection with a capital increase reserved to employees; (iv) transfer shares pursuant to its existing liquidity agreement described in the Offering Documents; and (v) issue or sell shares pursuant to the conversion of Convertible Bonds.

     (h) The Company shall provide to the Managers a duly executed copy of an undertaking from Institut Français du Pétrole to the effect that it will not transfer any shares it holds in the Company (including the New Shares it receives upon exercise of its Subscription Rights) during the period beginning the date hereof and continuing to and including 120 days after the Closing Date, substantially in the form set forth in Exhibit 5(h) hereto.

     (i) The Company shall provide to the Managers a duly executed copy of an undertaking from The Bank of New York, as depositary of the Company’s American Depositary Receipt facility, to the effect that, from the date hereof and until the fortieth day after the Closing Date, deposits in, or pre-releases of American Depositary Receipts of the Company from, such facility shall not be accepted unless the person requesting to make such deposit or pre-release provides a written certification in the form of Exhibit 5(i).

19

     (j) Prior to the Closing Date and for 40 days subsequent to the Closing Date, except if required under applicable laws or regulations, neither the Company nor any of its subsidiaries will issue any press release or other communication directly or indirectly or hold any press conference with respect to the Offering, the Company or any of its subsidiaries, the condition, financial or otherwise (except for routine communications in the ordinary course of business and consistent with past practice), or the earnings, business affairs or business prospects of the Company or any of its subsidiaries, without the prior consent of the Managers, such consent not to be unreasonably withheld.

     (k) The Company agrees to pay all expenses (together with VAT, where applicable) incidental to the performance of its obligations under this Agreement, including, subject to receipt of sufficiently itemized accounts (i) the fees, disbursements and expenses of the Company’s legal advisors; (ii) the fees, disbursements and expenses of the Company’s accountants; (iii) the fees, disbursements and expenses of the Managers’ legal advisors, Cleary Gottlieb Steen & Hamilton LLP up to a maximum amount of EUR 400,000; (iv) all expenses in connection with the preparation and printing of this Agreement, the Offering Circular and the Prospectus and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the New Shares; (v) any expenses (including reasonable fees and disbursements of counsel) incurred in connection with qualification of New Shares for sale under the laws of such jurisdictions in Europe, the United States and Canada as the Managers designate and the printing of memoranda relating thereto; (vi) expenses incurred in distributing the Offering Circular and the Prospectus (including any amendments and supplements thereto) to the Managers; (vii) all expenses associated with the listing of the Subscription Rights and the New Shares on Eurolist, as well as the fees payable to the AMF and all commissions payable to Eurolist and any other French or foreign market authority; (viii) the cost of legal and financial announcements; (ix) the centralisation fee due to BNP Paribas Securities Services in the amount of EUR 60,000; and (x) all other costs and expenses incident to the performance of the Company’s obligations hereunder which are not otherwise specifically provided for in this Agreement. The Company agrees to pay or reimburse the Managers (to the extent incurred by them) for all out-of-pocket expenses (including but not limited to reasonable expenses of the Managers’ due diligence investigation, consultants’ fees, travel expenses and disbursements and fees and expenses of counsel) incurred by it in connection with its obligations hereunder. If the transactions contemplated in this Agreement are not consummated because any condition to the obligations of the Managers set forth in Section 6 hereof is not satisfied, because this Agreement is terminated or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on their part to be performed or satisfied hereunder (other than solely by reason of a default by a Manager on its obligations hereunder after all conditions hereunder have been satisfied in accordance herewith), the Company agrees to promptly reimburse the Managers upon demand for all reasonable out-of-pocket expenses (including reasonable fees, disbursements and charges of Cleary Gottlieb Steen & Hamilton LLP, the Managers’ legal advisors, up to the EUR 400,000 maximum amount) that shall have been incurred by the Managers in connection with the proposed purchase and sale of the New Shares. The Company shall not be liable to the Managers for loss of contemplated profits from the transactions covered by this Agreement. Other than as set forth in this Section 5(k)

20

each of the parties hereto shall bear all out-of-pocket costs and expenses incurred by them.

     (l) The Company will indemnify and hold harmless the Managers against any documentary, stamp or similar issuance tax that may be imposed by the Republic of France (other than the fixed registration duty and timbres de dimension), including any interest and penalties, that may be payable by the Managers on the issuance and initial sale of the New Shares and on the execution and delivery of this Agreement. For the avoidance of doubt, the Managers will pay all of their own costs and expenses, including share transfer taxes, on resales of any of the New Shares by them. All payments to be made by the Company hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Company is compelled by law to deduct or withhold such taxes, duties or charges. In that event, the Company shall pay such additional amounts as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made. If such withholding or deduction of tax is due, the Managers and the Company shall promptly co-operate in completing any procedural formalities necessary for the Company to avoid such withholding or deduction of tax. The Company will not be required to pay such additional amounts to a Manager if the Company is able to demonstrate that the payment of additional amounts could have been made to the Manager without a withholding or deduction of tax had that Manager complied with its obligations to cooperate with the Company.

     (m) The Company will not, and will cause its respective Affiliates not to, nor will the Company authorize or knowingly permit any person acting on its behalf (excluding the Managers, as to whom no agreement is made) to, solicit any offer to buy or sell the Subscription Rights or New Shares by means of any form of general solicitation or general advertising within the meaning of Regulation D under the Securities Act (“Regulation D”) or in any manner involving a public offering within the meaning of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and the Company will not offer, sell, contract to sell or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act to cease to be applicable to the Offering as contemplated by this Agreement and the Offering Documents.

     (n) None of the Company, its Affiliates or any person acting on its or their behalf (other than the Managers) will engage in any directed selling efforts (as that term is defined in Regulation S) with respect to the Subscription Rights or New Shares; provided, however, that the Company makes no undertaking as to the actions of any Manager or any person acting on behalf of them.

     (o) The Company will use its reasonable best endeavors to do and perform all things required or necessary to be done and performed under this Agreement by it prior to the Closing Date and to satisfy all conditions precedent to the delivery of the New Shares.

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6. Conditions of the Obligations of the Managers. The several obligations of each Manager to purchase and pay for the New Shares on the Closing Date as provided herein are subject to the accuracy of the representations and warranties on the part of the Company, to the accuracy of the statements of officers of the Company made pursuant to the provisions hereof and to the performance by the Company of its obligations hereunder, in each case, in all material respects, and to the following additional conditions:

     (a) The Managers shall have received a comfort letter, dated the date of this Agreement, of Mazars & Guérard and Barbier Frinault & Autres Ernst & Young Audit substantially in the form attached hereto as Exhibit 6(a) concerning the financial information with respect to the Company set forth in the Offering Circular.

     (b) The Managers shall have received a comfort letter, dated the date of this Agreement, of Ernst & Young AS substantially in the form attached hereto as Exhibit 6(b) concerning the pro forma financial information with respect to Exploration Resources set forth in the Offering Circular.

     (c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of the Managers, is material and adverse and makes it impractical or inadvisable to proceed with completion of the Offering or the sale of and payment for the New Shares; (ii) any change in U.S., French, international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Managers, be likely to prejudice materially the success of the proposed Offering, whether in the primary market or in respect of dealings in the secondary market; (iii) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange or Euronext Paris or any setting of minimum prices for trading on any such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (iv) any banking moratorium declared by U.S. Federal, New York, European Union, English or French authorities; (v) any major disruption of settlements of securities or clearance services in the United States, the European Union, the United Kingdom or France; or (vi) any attack on, outbreak or escalation of hostilities, declaration of war or act of terrorism involving the United States, the European Union, the United Kingdom or France, or any other national or international calamity or emergency if, in the judgment of the Managers, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the Offering or sale of and payment for the New Shares.

     (d) The Managers shall have received from Linklaters, counsel for the Company, an opinion and negative comfort letter, dated the Closing Date, substantially in the form attached hereto as Exhibit 6(d). The Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

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     (e) The Managers shall have received opinions, dated the Closing Date, from internal counsel for the Company substantially in the form attached hereto as Exhibit 6(e).

     (f) The Managers shall have received from Cleary Gottlieb Steen & Hamilton LLP, counsel for the Managers, an opinion and negative comfort letter, dated the Closing Date, as to such matters as the Managers may reasonably request. The Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

     (g) The Managers shall have received certificates, dated the Closing Date, of the principal executive officer and the principal financial or accounting officer of the Company, in which such officers shall state that the representations and warranties of the Company in this Agreement are true and correct, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, and that, subsequent to the respective dates of the most recent financial statements in the Offering Documents there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in the Offering Documents.

     (h) The Managers shall have received a letter, dated the Closing Date, of Mazars & Guérard and Barbier Frinault & Autres Ernst & Young Audit that meets the requirements of subsection (a) of this Section.

     (i) The Managers shall have received a letter, dated the Closing Date, of Ernst & Young AS that meets the requirements of subsection (b) of this Section.

     (j) The notice relating to the issue of the New Shares shall have been published in the BALO.

     (k) The notice of Euronext concerning the separation (détachement) of the Subscription Rights, the issue of the New Shares and their listing on Eurolist shall have been published.

     (l) The Managers shall have received a duly executed copy of the letter from the Institut Français du Pétrole described in Section 5(h) of this Agreement in a form reasonably satisfactory to the Managers.

     (m) The Managers shall have received a duly executed copy of the letter from The Bank of New York described in Section 5(i) of this Agreement in a form reasonably satisfactory to the Managers.

     (n) The Company shall have (i) received on or prior to the Closing Date all consents, approvals, authorizations and other orders of, or qualifications with, each court, regulatory authority, governmental body or agency, or third party, and (ii) given all notices required under relevant law and any material agreements, in each case,

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required to execute, deliver and perform its obligations under this Agreement and the New Shares.

     (o) No order preventing or suspending the use of the Prospectus shall have been issued by the AMF, nor shall any challenge to the visa of the AMF on the Prospectus have been filed with any court.

     (p) The letters (lettres de fin de travaux) delivered by the auditors to the Company, with a copy to the AMF, as described in Section 1(b) hereof, shall have remained in full force and effect, and shall not have been amended, supplemented or superseded.

     The Company will furnish the Managers with such copies of such conformed copies of such opinions, certificates, letters and documents as the Managers reasonably request. The Managers may in their sole discretion waive compliance with any conditions to the obligations of the Managers hereunder.

7. Indemnification and Contribution.

     (a) The Company undertakes to each Manager that it will indemnify and hold harmless each such Manager, its partners, directors and officers and each person, if any, who controls each Manager within the meaning of Section 15 of the Securities Act (each, a “Relevant Party”), against any losses, claims, damages or liabilities, joint or several, to which such Relevant Party may become subject, under the Securities Act or the Exchange Act or otherwise (each, a “Loss”), insofar as such Loss (or any action in respect thereof) arises out of or is based upon any untrue statement or alleged untrue statement of any material fact contained in an Offering Document, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, including any Loss (or any action in respect thereof) arising out of or based upon the Company’s failure to perform its obligations under Section 5(a) of this Agreement, and the Company shall pay to such Relevant Party on demand an amount equal to such Loss. No Relevant Party shall have any duty or obligation, whether as fiduciary or trustee for any Relevant Party or otherwise, to recover any such payment or to account to any other person for any amounts paid to it under this Section 7. The Company will reimburse each Relevant Party for any legal or other expenses incurred by such Relevant Party in connection with investigating or defending any such Loss (or action in respect thereof) upon demand as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such Loss (or any action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company made by the Managers through BNP Paribas and CSFB specifically for use in the Offering Documents, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below.

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     (b) Each Manager will severally and not jointly indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in an Offering Document, or any amendment or supplement thereto or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Managers specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information consists of the following information in the Offering Documents furnished to the Company by the Managers specifically for use therein: the table entitled “Manager” under the caption “Plan of Distribution” in the Offering Circular; provided, however, that the Managers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company’s failure to perform its obligations under Section 5(a) of this Agreement.

     (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying 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 under this section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the indemnifying party shall only be obligated to pay the fees, disbursements and other charges of one counsel (and one additional local counsel for each applicable jurisdiction) to the indemnified parties in connection with any single matter, unless an indemnified party has a legal position that differs from the other indemnified parties or may be subject to different claims and defenses than the other indemnified parties, in which case the indemnifying party shall be obligated to pay the fees, disbursements and other charges of one additional counsel for

25

such indemnified party. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of fault, culpability or failure to act by or on behalf of any indemnified party.

     (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Managers on the other from the Offering 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) above but also the relative fault of the Company on the one hand and the Managers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Managers on the other shall be deemed to be in the same proportion as the total net proceeds from the Offering (before deducting expenses) received by the Company bear to the total discounts and commissions received by the Managers from the Company under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Managers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Manager shall be required to contribute any amount in excess of the amount by which the total subscription price for the New Shares forming part of such Manager’s underwriting commitment exceeds the amount of any damages which the Manager has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Managers’ obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.

     (e) The obligations of the Company under this Section shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any of the Managers within the meaning of the Securities Act or the Exchange Act; and the obligations of the Managers under this Section shall be in addition to any liability which the respective Managers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act.

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8. Defaulting Managers. If any Manager or Managers default in their obligations to purchase New Shares hereunder and the aggregate number of New Shares that such defaulting Manager or Managers agreed but failed to purchase does not exceed one-eleventh of the aggregate number of all of the New Shares to be purchased at the time of delivery of the New Shares, the non-defaulting Manager or Managers may make arrangements satisfactory to the Company for the purchase of such New Shares by other persons, including any of the Managers, but if no such arrangements are made by the Closing Date, the non-defaulting Managers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the New Shares that such defaulting Managers agreed but failed to purchase. If any Manager or Managers so default and the aggregate number of New Shares with respect to which such default or defaults occur exceeds one-eleventh of the aggregate number of all of the New Shares to be purchased at the time of delivery of the New Shares and arrangements satisfactory to the non-defaulting Managers and the Company for the purchase of such New Shares by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Manager or the Company, except as provided in Section 9. As used in this Agreement, the term “Manager” includes any person substituted for a Manager under this Section. Nothing herein will relieve a defaulting Manager from liability for its default.

9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the Managers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Manager, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the New Shares. If this Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the New Shares by the Managers is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Company and the Managers pursuant to Section 7 shall remain in effect. If the purchase of the New Shares by the Managers is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 8 or the occurrence of any event specified in clause (ii), (iii), (iv), (v) or (vi) of Section 6(c), the Company will reimburse the Managers for all out-of-pocket expenses (including fees and disbursements of counsel plus VAT where applicable) reasonably incurred by them in connection with the Offering.

10. Notices. All communications hereunder will be in writing and, if sent to the Managers will be mailed, delivered or faxed to the Managers, c/o BNP Paribas, 16 boulevard des Italiens, 75009 Paris, France, Attention: Equity Syndicate, telephone number: +33 1 44 95 41 00, facsimile number: +33 1 42 99 25 38 and Credit Suisse First Boston (Europe) Limited, One Cabot Square, London E14 4QJ, United Kingdom, Attention: Nick Williams/Stephane Gruffat, facsimile number + 44 207 888 3335 or, if sent to the Company, will be mailed or delivered or faxed to it at Tour Montparnasse 33 avenue du Maine 75755 Paris Cedex 15, Attention: Mr. Michel Ponthus and Mr. Stephane-Paul Frydman, facsimile number + 33 1 64 47 34 31. Any such notice shall take effect, in the case of delivery, at the time of delivery, in the case of mail two business

27

days after the same was deposited in the post (first class postage prepaid) and, in the case of facsimile, at the time of completion of the transmission.

11. Representation of Managers. BNP Paribas and CSFB will act for the several Managers in connection with this Agreement, and any action under this Agreement taken by BNP Paribas and CSFB will be binding upon all the Managers.

12. Applicable Law and Jurisdiction. This Agreement shall be governed by the laws of France. Each of the Company and the Managers submits to the non-exclusive jurisdiction of the Tribunal de Commerce of Paris for purposes of any suit or proceeding arising out of or relating to this Agreement, and waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding.

13. Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

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Very truly yours, Compagnie Générale de Géophysique
BY:
	Name:
	Title:

The foregoing Agreement
is hereby confirmed and accepted
as of the date first above written.

BNP PARIBAS
	BY:
		Name:
		Title:
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
	BY:
		Name:
		Title:
RBC CAPITAL MARKETS CORPORATION
	BY:
		Name:
		Title:

29

SCHEDULE 1

Underwriting Commitments of the Managers

				Maximum number of
				New Shares to be
Role	Manager	%		Subscribed
Joint Global Coordinator Lead Manager and Bookrunner	BNP Paribas		37.5		1,622,916
Joint Global Coordinator Lead Manager and Bookrunner	CSFB		37.5		1,622,916
Joint Lead Manager	RBC Capital Markets Corporation		25.0		1,081,944
	Total		100.0		4,327,776

SCHEDULE 2

List of Subsidiaries

CGG Marine SAS

Geocal SARL

Geoco SAS

Sercel SA

CGG Explo SARL

Sercel Holding SA

CGG Americas, Inc.

CGG do Brasil Participacoes Ltda.

CGG Canada Services Ltd.

CGG International SA

CGG (Nigeria) Ltd.

CGG Marine Resources Norge A/S

CGG Offshore UK Ltd.

CGG Pan India Ltd.

Compania Mexicana de Geofisica

Exgeo CA

Geoexplo

Geophysics Overseas Corporation Ltd

CGG Australia Services Pty Ltd.

CGG Asia Pacific

Sercel Australia Pty Ltd.

Hebei Sercel JunFeng

Sercel Inc.

Sercel Singapore Pte Ltd.

Sercel England Ltd.

Sercel Canada Ltd.

Exploration Resources ASA

     Multiwave

EXHIBIT 1(b)

Lettres de fin de travaux

EXHIBIT 4(a)

Form of Investor Letter

[Date]

Compagnie Générale de Géophysique
Tour Maine-Montparnasse
33, avenue du Maine
B. P. 191
75755 Paris Cedex 15
France
Attn: Vice President, Legal Affairs

With a copy to:
[Insert Name of relevant Financial Intermediary through which the shares and/or the rights are held]

Ladies and Gentlemen:

In connection with our proposed exercise of Preferential Subscription Rights (the “Rights”) to purchase Shares (“Shares”) of Compagnie Générale de Géophysique (the “Company”), or our purchase of shares in the related underwritten offering, we confirm that:

We are a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

We understand and acknowledge that the Shares have not been and will not be registered under the Securities Act and that we will receive the Shares in a transaction exempt from the registration requirements of the Securities Act.

We represent that we are acquiring the Shares for our own account (or for the account of a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) for which we are acting as duly authorized fiduciary or agent), in each case for investment and (subject, to the extent necessary, to the disposition of our property being at all times within our control) not with a view to any distribution of the Shares.

We have received a copy of the Offering Circular dated November 15, 2005 relating to the offering of the Shares and such other information as we deem necessary in order to make our investment decision. We acknowledge that we have read and agreed to the matters stated in the section “Notice to Investors” of the Offering Circular.

We understand and agree that none of the Shares may be transferred, sold, delivered, hypothecated or encumbered (collectively, a “transfer”) unless such transfer is made outside the United States in compliance with Rule 903 or 904 of Regulation S under the Securities Act.

We agree not to deposit the Shares in an unrestricted American Depositary Receipt facility.

We understand that these representations and undertakings are required in connection with United States securities laws and irrevocably authorize the Company to produce this letter to any interested party in any administrative or legal proceedings or official enquiry with respect to the matters covered herein.

We undertake promptly, and in any event prior to any attempted exercise of the Rights, to inform the Company if, at any time prior to December 16, 2005, any of the foregoing statements ceases to be true.

Very truly yours,

[Name of Investor]

By:  

Name:  

Title:  

Exhibit 5(h)

Form of Undertaking from Institut Français du Pétrole

le 15 novembre 2005

BNP Paribas

Credit Suisse First Boston Limited

en qualité de Coordinateurs Globaux,
pour le compte des établissements garants (« les Garants »)

Messieurs,

     Nous nous référons à votre engagement en qualité de Coordinateurs Globaux — Chefs de File et Teneurs de Livre Associés, de l’augmentation de capital avec maintien du droit préférentiel de souscription des actionnaires d’un montant de [•] euros (l’« Augmentation de Capital ») de la société Compagnie Générale de Géophysique, société anonyme au capital de 23.666.180 euros, dont le siège social est situé 1, rue Léon Migaux, 91300 Massy, immatriculée au Registre du Commerce et des Sociétés d’Evry sous le numéro 969 202 241 (« CGG « ).

     La présente lettre vous est adressée conformément aux dispositions du contrat de garantie conclu entre CGG et vous relativement à l’Augmentation de Capital.

     Nous vous confirmons par la présente que l’IFP s’engage irrévocablement, envers chaque Garant, pendant une période commençant à la date de la note d’opération relative à l’Augmentation de Capital et expirant 120 jours après la date du règlement-livraison des actions à émettre dans le cadre de l’Augmentation de Capital, à ne pas annoncer, procéder, ni s’engager à procéder, directement ou indirectement, à une quelconque émission, offre, opération ou promesse de cession, de nantissement ou de toute autre forme de disposition d’une quelconque autre manière (y compris, notamment, par opération d’appel public à l’épargne, par voie de placement privé auprès d’investisseurs institutionnels, par cession de gré à gré, par voie de prêts de titres ou par voie de conclusion d’un produit dérivé ou assimilé ou d’une opération de couverture) d’actions de CGG ou autres titres donnant droit ou pouvant donner droit, immédiatement ou à terme, à une quotité de son capital (les « Titres »), ni à conclure une quelconque autre opération ayant un effet économique équivalent (y compris, notamment, en transférant le bénéfice économique des Titres de CGG, que ce transfert donne lieu à un règlement en espèces ou par remises de Titres de CGG) à l’exception de la cession des droits préférentiels de souscription attachées aux actions.

Fait à                     ,

Exhibit 5(i)

Undertaking of The Bank of New York and Form of Written Certification

[•], 2005

The Bank of New York, ADR Depositary
101 Barclay Street, 22W
New York, New York 10286

Attention: Depositary Receipt Department

Dear Sir or Madam:

In connection with (i) our deposit today of ordinary shares, €2 nominal value per share (“Deposited Shares”), of Compagnie Générale de Géophysique, a company organized under the laws of France (the “Company”), in exchange for American Depositary Shares (“ADSs”) to be issued pursuant to the Deposit Agreement, dated as of May 6, 1997 (the “Deposit Agreement”), among the Company, The Bank of New York, as depositary, and the holders and beneficial owners of ADSs evidenced by American Depositary Receipts issued thereunder, or (ii) the pre-release to us today of ADSs on the basis of a guarantee to deposit ordinary shares of the Company, €2 nominal value per share, in respect of the ADSs issued in pre-release (such shares to be deposited also being “Deposited Shares” for purposes of this letter), the undersigned certifies that:

     (1) the undersigned is not the Company or an Affiliate (as such term is defined in Regulation D under the U.S. Securities Act of 1933, as amended) of the Company and, if acting on behalf of another person, such person is not the Company and has confirmed that it is not an Affiliate of the Company or acting on behalf of the Company or an Affiliate of the Company;

     AND

     (2) either (a) the undersigned acquired the Deposited Shares prior to November 15, 2005 or, if the undersigned is acting on behalf of another person, such person acquired the Deposited Shares prior to November 15, 2005;

     OR

     (b) although the Deposited Shares were acquired on or after November 15, 2005, the undersigned or, if acting on behalf of another person, such person, (x) did not acquire the Deposited Shares from the Company in the Company’s €[•] million capital increase with preferential subscription rights, (y) was and is located outside the United States, and (z) acquired the Deposited Shares though the facilities of Euronext Paris by means of a customary brokerage transaction.

In addition, the undersigned understands (and, if acting on behalf of another person, that person understands) that (X) under the terms of the Deposit Agreement, any person making a deposit of Deposited Shares is deemed to represent and warrant that (i) such Deposited Shares and the certificates therefor are duly authorized, validly issued, fully paid, non-assessable and legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Deposited Shares have been validly waived or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Deposited Shares are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, (v) the Deposited Shares are not, and the ADSs issuable upon deposit will not be, Restricted Securities (as defined in the Deposit Agreement), and (vi) the Deposited Shares presented for

deposit have not been stripped of any rights or entitlements, and (Y) if any representations or warranties contained herein are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person making the deposit of the Deposited Shares, to take any and all actions necessary to correct the consequences thereof.

[Name of Depositor]
By:
	(Authorized Signature)
	Name: Title:

Exhibit 6(a)

Form of Comfort Letter from Mazars & Guérard and Barbier Frinault & Autres Ernst
& Young Audit

BARBIER FRINAULT & AUTRES	MAZARS & GUERARD
ERNST & YOUNG Audit	MAZARS
41, rue Ybry, 92576	Le Vinci — 4, Allée de l’Arche, 92075
Neuilly-sur-Seine Cedex	La Défense Cedex

November 15, 2005

The Board of Directors of
Compagnie Générale de Géophysique
1, rue Léon Migaux
91341 Massy Cedex
France

     And

BNP Paribas
16 boulevard des Italiens
75009 Paris

and

Credit Suisse First Boston (Europe) Limited (“CSFB”)
One Cabot Square
London, England E14 4QJ

on their own behalf and as representatives of the several managers (the “Managers”) in connection with the international offering of up to 4 327 776 ordinary shares issued by Compagnie Générale de Géophysique (the “Shares”).

Dear Sirs,

This comfort letter is issued exclusively in connection with the private placement of the Shares (i) to “qualified investors” (within the meaning of article 3.2(a) of Directive 2003/71/EC) in France and in other member states of the European Union and (ii) to institutional investors outside the European Union including “qualified institutional buyers” as defined under Rule 144A under the Act (as defined below) (the “International Offering”) pursuant to the Offering Circular dated November 15, 2005 prepared by Compagnie Générale de Géophysique in connection with the International Offering (the “Offering Circular”). It is not intended and does not cover the public offering of the Shares in France and, as applicable, other European Union member states, through an “offer to the public” as defined in Directive 2003/71/EC.

We have audited in accordance with French generally accepted auditing standards (“French GAAS”) and in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“US GAAS”) the consolidated balance sheets of Compagnie Générale de Géophysique (the

“Company”) and its subsidiaries as of December 31, 2004 and 2003 and the related consolidated statements of operations, cash flows and shareholders’ equity for each of the two years in the period ended December 31, 2004, and accompanying Notes.

Barbier Frinault & Autres and Ernst & Young Audit have audited in accordance with auditing standards generally accepted in France and the United States the consolidated balance sheet of the Company and its subsidiaries as of December 31, 2002 and the related consolidated statement of operations, cash flows and shareholders’ equity for the year ended December 31, 2002, and accompanying Notes.

These consolidated financial statements as of and for the years ended December 31, 2004, 2003 and 2002 (the “Audited Financial Statements”) are included in the Company’s 2004 Form 20-F/A, as filed with the SEC on April 18, 2005 and amended on September 19, 2005 and October 31, 2005(the “2004 Form 20-F”) on October 31, 2005 and incorporated by reference in the Offering Circular . The Audited Financial Statements were prepared in accordance with generally accepted accounting principles in France (“French GAAP”) and include a reconciliation as of and for the same periods to generally accepted accounting principles in the United States (“US GAAP”) in accordance with the financial statements requirements of Item 18 of Form 20-F. Our report issued in accordance with US GAAS dated April 11, 2005, except for Note 28, as to which the date is October 28, 2005, and our report issued in accordance with US GAAS dated May 9, 2003 with respect thereto are also incorporated by reference in the Offering Circular.

We have audited, in accordance with French Professional Practice Guide dated December 9, 2004 adopted by the “Conseil National” of the “Compagnie Nationale des Commissaires aux Comptes” (National Association of Statutory Auditors) and with professional guidance included in Question 2 of “First Time Adoption of International Financial Reporting Standards — Guidance for Auditors on Reporting Issues” issued by IFAC in August 2004, the 2004 IFRS Transition Financial Information included as “Transition to International Financial Reporting Standards” as amended in the Company’s Report on Form 6-K dated November 15, 2005 and comprising consolidated balance sheets as of January 1, 2004 and December 31, 2004 and a consolidated statement of operations for the year ended December 31, 2004 together with reconciliations presenting the impact of the Company’s first-time adoption of IFRS on consolidated shareholders’ equity as of January 1 and December 31, 2004 and net income of the Company for the year ended December 31, 2004 (the “2004 IFRS Transition Information”). The 2004 IFRS Transition Information was prepared as part of the Company’s first-time adoption of International Financial Reporting Standards (IFRS) and is incorporated by reference in the Offering Circular. The 2004 IFRS Transition Information does not constitute a complete set of financial statements under IAS/IFRS because it has been prepared as part of the first-time adoption of IFRS as adopted by the European Union in respect of the preparation of the IFRS consolidated financial statements of the Company as of and for the year ended December 31, 2005. The 2004 IFRS Transition Information does not include comparative information because of the January 1, 2004 transition date selected by the Company under IFRS 1, nor all the explanatory notes required by IFRS as adopted in the European Union that would be necessary to provide, in accordance with these standards, a fair view of the assets, liabilities, financial position and results of the Company. The 2004 IFRS Transition Information was prepared in accordance with the basis of preparation set out in Sections 1 and 3 of the 2004 IFRS Transition Information, which describe how IFRS have been applied under IFRS 1, including the assumptions management has made about the standards and interpretations expected to be effective, and the policies expected to be adopted when management prepares the first complete set of IFRS consolidated financial statements of the Company as of and for the year ended December 31, 2005. Our report dated November 15, 2005 with respect thereto is also incorporated by reference in the Offering Circular and includes the following emphasis paragraphs:

“Without qualifying our opinion, we draw your attention to:

• Introduction “Transition to the IFRS” to the 2004 IFRS financial information which explain why the comparative information to be disclosed in the consolidated financial statements for the period ending December, 31, 2005 may differ from the information provided in the accompanying interim consolidated financial statements,;

• introduction “transition to IFRS” and notes 3.11 and 4.5 h) to the 2004 IFRS financial information which describe the reasons and the nature of the restatements of the 2004 IFRS financial information as of December 31, 2004 accompanying our special purpose audit report dated May 11, 2005 and their impacts of the profit and loss of the Company.

Moreover, we draw attention to the fact that the Company has prepared the 2004 IFRS financial information as part of its conversion to IFRS, as adopted in the European Union for the preparation of consolidated financial statements for the year ending 2005. The 2004 IFRS financial information does not constitute a complete set of consolidated IFRS financial statements and therefore does not provide a fair presentation of the Company’s financial position, results of operations and cash flows in accordance with IFRS.”

This letter is being furnished in reliance upon your representation to us that:

a. You are knowledgeable with respect to the due diligence review process that would be performed if this placement of securities were being registered pursuant to the Securities Act of 1933 (the “Act”).

b. In connection with the offering of the Shares, the review process you have performed is substantially consistent with the due diligence review process that you would have performed if this placement of securities were being registered pursuant to the Act.

In connection with the Offering Circular:

1. We are independent statutory auditors with respect to the Company as required by the laws of the French Republic and under the professional rules of the “Compagnie Nationale des Commissaires aux Comptes” and independent registered public accountants with respect to the Company within the meaning of the Act, as amended, and the applicable rules and regulations thereunder adopted by the Securities and Exchange Commission (the “SEC”) and the Public Company Accounting Oversight Board (United States)(the “PCAOB”).

2. In our opinion, the consolidated financial statements and financial statement schedules audited by us and included in the 2004 Form 20-F and the Offering Circular comply as to form in all material respects with the applicable accounting requirements of the Securities Exchange Act of 1934, as amended, and the related rules and regulations adopted by the SEC.

3. We have not audited any consolidated financial statements of the Company as of any date or for any period subsequent to December 31, 2004. The purpose (and, therefore, the scope) of our audit for the year ended December 31, 2004 was to enable us to express our opinion on the consolidated financial statements as of December 31, 2004 and for the year then ended, but not on the consolidated financial statements for any interim period within that year. Therefore, we are unable to and do not express any opinion on the unaudited consolidated balance sheet, unaudited consolidated statements of operations and cash flows as of September 30, 2005 and for the nine months then ended or on the financial position, results of operations or cash flows of the Company and its subsidiaries as of any date or for any period subsequent to December 31, 2004.

4. For purposes of this letter, we have read the 2005 minutes of the meetings of the shareholders, of the Board of Directors of the Company as set forth in the minute books through November 9, 2005,

officials of the Company having advised us that the minutes of all such meetings through that date were set forth therein, and have carried out other procedures to November 9, 2005, as follows (our work did not extend to the period from November 10, 2005 to November 15, 2005 inclusive).

5. With respect to the period from January 1, 2005 to September 30, 2005, we have:

(i) performed in accordance with Professional Practice Guide dated July 13, 2005 adopted by the "Conseil National” of the “Compagnie Nationale des Commissaires aux Comptes” the procedures specified under Standard 3-101 issued by the “Compagnie Nationale des Commissaires aux Comptes” for a review of interim consolidated financial statements on the unaudited consolidated interim balance sheet as of September 30, 2005 and related unaudited consolidated interim statements of operations and of cash flows for the nine months ended September 30, 2005 and September 30, 2004 included in the Offering Circular (the “Unaudited consolidated interim financial statements”) and

(ii) inquired of certain officials of the Issuer who have responsibility for financial and accounting matters as to whether the Unaudited consolidated interim financial statements” referred to under (i) above were prepared as part of the Issuer’s transition to IFRS in accordance with the basis of preparation set out in Note 1 to such unaudited consolidated interim financial statements.

Nothing came to our attention as result of the foregoing procedures that would cause us to believe the the Unaudited consolidated interim financial statements do not present fairly in all material respects the financial position of the Issuer and its operations as of and for the nine months ended September 30, 2005 as part of the Issuer’s transition to IFRS in accordance with the basis of preparation set out in Note 1 to such unaudited consolidated interim financial statements. Without qualifying our conclusion, we draw your attention to:

• note “presentation of financial information” and note 1 to the interim consolidated financial statements which presents the options used for disclosure of interim consolidated financial statements as of September 30, 2005, that do not include all the information required in the notes by IFRS as adopted in the European Union and that would allow to give a true and fair view of the financial position of the group and the result of its operations according to that framework;

• note “presentation of financial information” and note 1 to the interim consolidated financial statements which explain why the comparative information to be disclosed in the consolidated financial statements for the period ending December 31, 2005 and in the interim consolidated financial statements for the nine-month period ending September 30, 2006 may differ from the information provided in the accompanying interim consolidated financial statements;

• note 1 — “Summary of significant accounting policies” and note 6 — “financial debt” to the interim consolidated financial statements which describe the accounting policies adopted for the treatment in profit and loss statement of an expense of €38 million related to the change in fair value of the conversion option embedded in the convertible debt denominated in US dollar.

6. With respect to the period from October 1, 2005 to November 9, 2005, Company officials have advised us that no financial statements as of any date or for any period subsequent to September 30, 2005 are available; accordingly, the procedures carried out by us with respect to changes in financial statement items after September 30, 2005 have, of necessity, been limited to inquiring of Company officials who have responsibility for financial and accounting matters as to whether, at November 9, 2005, there was any change in Common stock or Shareholders’ equity or any increase in Net debt, defined as Financial debt (excluding fair value of embedded equity conversion option) less Cash and cash equivalents, measured in accordance with IFRS on a consistent basis as compared with the corresponding amounts shown on the September 30, 2005 unaudited consolidated balance sheet referred to in the introductory paragraphs to this letter and incorporated by reference in the Offering Circular.

On the basis of these inquiries and our reading of the minutes as described in 4 above, nothing came to our attention that would cause us to believe that, at November 9, 2005, there was any change, except as disclosed in the Offering Circular in Common stock, or any increase in excess of €75 million in Net debt, defined as Financial debt (excluding fair value of embedded equity conversion option) less Cash and cash equivalents measured in accordance with IFRS on a consistent basis as compared with the corresponding amounts shown on the September 30, 2005 unaudited consolidated balance sheet referred to in the introductory paragraphs to this letter and incorporated by reference in the Offering Circular.

6. For purposes of this letter, we have also read the items identified by you on the attached pages of the Offering Circular and have performed the following procedures, which were applied as indicated with respect to the symbols explained below:

A	Compared the numbers and Euros amounts to amounts in the Audited Financial Statements incorporated by reference in the Offering Circular and found such amounts to be in agreement after giving effect to rounding if applicable.
B	Compared the Euros amounts to amounts in the unaudited consolidated interim financial statements as of and for the nine months ended September 30, 2005 included or incorporated by reference in the Offering Circular and found such amounts to be in agreement after giving effect to rounding if applicable.
C	Compared the Euros amounts to amounts in the 2004 IFRS Transition Information incorporated by reference in the Offering Circular and found such amounts to be in agreement after giving effect to rounding if applicable.
D	Compared the Euros amounts not derived directly from the Audited Financial Statements, the unaudited consolidated interim financial statements as of and for the nine months ended September 30, 2005 or from the 2004 IFRS Transition Information included or incorporated by reference in the Offering Circular to amounts in the Company’s accounting records and found such amounts to be in agreement after giving effect to rounding if applicable.
E	Compared the Euros amounts to amounts not derived directly from the Audited Financial Statements, the unaudited consolidated interim financial statements as of and for the nine months ended September 30, 2005 or from the 2004 IFRS Transition Information included or incorporated by reference in the Offering Circular and that could not be compared directly to amounts in the Company’s accounting records, to amounts in analyses prepared by the Company from its accounting records and found such amounts to be in agreement after giving effect to rounding if applicable.
F	Proved the arithmetic accuracy of the percentages or amounts based on data in the audited consolidated financial statements, unaudited consolidated interim financial statements, IFRS transition information, accounting records and analyses referred to in A, B, C, D and E above, respectively.
G	Proved the arithmetic accuracy of the convenience translation from Euros to U.S. dollars, using the exchange rate referred to in the Offering Circular (No representation is made that the Euros amounts could have been, or could be converted to U.S. dollars at these rates or at any other rates).
H	We read the unaudited pro forma consolidated balance sheet as of December 31, 2004 and the unaudited pro forma statement of income of the Company for the nine months ended September 30, 2005 and for the year ended December 31, 2004 (the “Pro Forma Financial

Information”) and inquired of certain officials of the Company who have responsibility for financial and accounting matters as to whether all significant assumptions regarding the acquisition of Exploration Resources ASA by the Company had been reflected in the pro forma adjustments and whether the Pro Forma Financial Information has been prepared in compliance with the accounting policies of the Company reflected in its 2004 IFRS Transition Financial Information.

Those officials referred to above stated, in response to our inquiries, that (i) all significant assumptions had been reflected in the pro forma adjustments so that the Pro Forma Financial Information is properly compiled on the basis stated in the Offering Circular and (ii) that basis is consistent with the accounting policies of the Company reflected in the 2004 IFRS Transition Financial Information. Such Pro Forma Financial Information was not prepared and shall not be construed as prepared in accordance with Article 11 of SEC Regulation S-X.

The foregoing procedures are less in scope than an examination, the objective of which is the expression of an opinion on management’s assumptions, the pro forma adjustments, and the application of those adjustments to historical financial information. Accordingly we do not express such an opinion for purpose of the International Offering and make no representation about the sufficiency of the foregoing procedures for your purposes in this comfort letter.

7. Our audit of the consolidated financial statements for the periods referred to in the introductory paragraphs of this letter comprised audit tests and procedures deemed necessary for the purpose of expressing an opinion on such financial statements taken as a whole. For none of the periods referred to therein, nor for any other period, did we perform audit tests for the purpose of expressing an opinion on individual balances of accounts or summaries of selected transactions such as those covered by the procedures enumerated above, and, accordingly, we express no opinion thereon.

8. It should be understood that we make no representations as to questions of legal interpretation or as to the sufficiency for your purposes of the procedures enumerated in the preceding paragraphs; also such procedures would not necessarily reveal any material misstatement of the information identified in the preceding paragraphs as set forth in the Offering Circular. Further, we have addressed ourselves solely to the foregoing data and make no representations as to the adequacy of disclosures or whether any material facts have been omitted.

9. The foregoing procedures do not constitute an audit conducted in accordance with generally accepted auditing standards in France and/or the auditing standards of the PCAOB. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

10. We make no representation as to whether the International Offering will take place or the number of the Shares to be sold in the International Offering.

11. This letter, including its attachment, is solely for the information of the Company and to assist the Managers in conducting and documenting their investigation of the affairs of the Company in connection with the International Offering of the Shares covered by the Offering Circular, and it is not to be used, circulated, quoted, or otherwise referred to within or without the Managers’ group for any other purpose, including but not limited to the registration, purchase, or sale of securities, nor is it to be filed with or referred to in whole or in part in the Offering Circular or any other document, except that reference may be made to it in the underwriting agreement or in any list of closing documents pertaining to the International Offering of the Shares covered by the Offering Circular.

12. This letter shall be governed by, and construed in accordance with French law. The courts of France (represented by the Cour d’Appel de Paris) shall have exclusive jurisdiction in relation to any claim, dispute or difference concerning this letter and any matter arising from it. Each party irrevocably waives any right it may have to object an action being brought in those Courts, to claim that the action has been brought in an inconvenient forum, or to the claim that those Courts do not have jurisdiction.

Very truly yours,

BARBIER FRINAULT & AUTRES	MAZARS & GUERARD
ERNST & YOUNG Audit	MAZARS
Represented by	Represented by
Pascal Macioce	Philippe Castagnac

Exhibit 6(b)

Form of Comfort Letter from Ernst & Young AS

[Ernst & Young AS Letterhead]

Exploration Resources

and

Compagnie Générale de Géophysique
For the attention of the Board of Directors
1, rue Léon Migaux
91341 Massy Cedex
France

     And

BNP Paribas
16 boulevard des Italiens
75009 Paris

and

Credit Suisse First Boston (Europe) Limited
One Cabot Square
London, England E144QJ

on their own behalf and as representatives of the several managers (the “Managers”) in connection with the international offering of up to xxx ordinary shares issued by Compagnie Générale de Géophysique (the “Shares”).

November 15, 2005

Dear Sirs,

We have audited in accordance with the Norwegian Act on Auditing and Auditors and auditing standards and practices generally accepted in Norway (“Norwegian GAAS”) the consolidated financial statements of Rieber Shipping ASA as of December 31, 2004 and for the year then ended. These consolidated financial statements were prepared in accordance with accounting standards, principles and practices generally accepted in Norway (“Norwegian GAAP”). Our report dated February 17, 2005 with respect thereto is included in the prospectus of Exploration Resources filed with the Oslo Stock Exchange on February 17, 2005.

Exploration Resources prepared its 2004 pro forma condensed income statement and balance sheet in accordance with Norwegian GAAP as they were included in the registration document filed with the Oslo Stock Exchange on February 17, 2005 as a carve-out from Rieber Shipping ASA audited consolidated financial statements as of and for the year ended December 31, 2004 prepared in accordance with Norwegian GAAP.

For purpose of the “Unaudited condensed pro forma consolidated financial information” of Compagnie Générale de Géophysique (“CGG”) included in the International Offering Circular dated November 15, 2005 prepared by CGG in connection with the offering of up to xx ordinary shares

issued by Compagnie Générale de Géophysique (the “Shares”), Exploration Resources applied accounting principles adjustments to its 2004 pro forma balance sheet and income statement and to its nine months ended September 30, 2005 income statement to reflect such statements on a consistent International Financial Reporting Standards (IFRS) basis as part of CGG transition to IFRS as described under note entitled “Financial statements used to prepare the pro forma financial data” in the “Unaudited condensed pro forma consolidated financial information” included in the International Offering Circular. The resulting 2004 pro forma balance sheet and income statement of Exploration Resources appear under the column “Exploration Resource Group pro forma” in the tables entitled “Unaudited pro forma balance sheet as at December 31, 2004” and “Unaudited pro forma statement of operations for the year ended December 31, 2004” respectively which are included in the “Unaudited condensed pro forma consolidated financial information” of CGG included in the International Offering Circular.

In connection with the International Offering Circular of CGG referred to above:

1. We are independent auditors with respect to Exploration Resources ASA and with respect to Compagnie Générale de Géophysique as required by Norwegian law.

2. We have not audited any consolidated financial statements of Exploration Resources as of any date or for any period subsequent to its inception on January 1, 2005. Therefore, we are unable to and do not express any opinion on the unaudited consolidated balance sheet and unaudited consolidated statement of income as of September 30, 2005 and for the nine months then ended or on the financial position, results of operations or cash flows of the Company and its subsidiaries as of any date or for any period subsequent to its inception on January 1, 2005.

3. For purposes of this letter, we have read the 2005 minutes of the meetings of the shareholders and of the Board of Directors of Exploration Resources as set forth in the minute books through November 9, 2005, officials of Exploration Resources having advised us that the minutes of all such meetings through that date were set forth therein, except for the meetings of the Board of Directors held on [x], 2005, for which minutes have not been approved. With respect to the meetings held on [x], 2005 we have reviewed the draft minutes including a summary of the topics discussed at the meeting. We have carried out other procedures to November 9, 2005, as follows (our work did not extend to the period from November 10, 2005 to November 15, 2005 inclusive):

a. With respect to the opening balance sheet as of January 1, 2005, we have audited the accompanying preliminary opening IFRS balance sheet and related notes of the Exploration Resources ASA as at 1 January 2005 presented in Norwegian kroner included in the attached “Transition to International Financial Reporting Standards” document prepared by Exploration Resources (the “Opening Balance Sheet”). This Opening Balance Sheet is the responsibility of the company’s management. It has been prepared as part of Exploration Resources conversion to IFRS. Our responsibility is to express an opinion on this Opening Balance Sheet based on our audit.

We conducted our audit in accordance with International Standards on Auditing (ISA 800). Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the Opening Balance Sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Opening Balance Sheet. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Opening Balance Sheet. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, except for the absence of a comprehensive explanatory footnotes on the assets and liabilities balances, the Opening Balance Sheet as at 1 January 2005 has been prepared, in

all material respects, in accordance with the basis set out in Notes 1 to 3, which describes how IFRS have been applied under IFRS 1, including the assumptions management has made about the standards and interpretations published as at September 30, 2005, and the policies expected to be adopted, when management prepares its first complete set of IFRS financial statements as at 31 December 2005.

Without further qualifying our opinion we draw attention to the fact that, under IFRS, only a complete set of financial statements comprising a balance sheet, income statement, statement of changes in equity, and cash flow statement, together with comparative financial information and explanatory notes, can provide a fair presentation of the Company’s financial position, results of operations and cash flows in accordance with IFRS. We also draw attention to the fact that Notes 1 to 3 explain why there is a possibility that the Opening Balance Sheet may require adjustments before constituting the final opening IFRS balance sheet.

b. With respect to the period from January 1, 2005 to September 30, 2005, we have:

(1) read the unaudited consolidated balance sheet as of September 30, 2005 and the unaudited consolidated statement of income for the nine months ended September 30, 2005 translated into Euros as the reporting currency of CGG, in which currency the unaudited consolidated statement of income is included under the column “Exploration Resources Group” in the tabular presentation of the pro forma financial information of CGG (i.e. the “Unaudited condensed pro forma consolidated financial information” of CGG) presented in the International Offering Circular; and

(2) inquired of certain officials of Exploration Resources who have responsibility for financial and accounting matters as to whether the unaudited consolidated balance sheet and income statement referred to under b.(1) above have been prepared, in all material respects, in accordance with the basis of preparation set out in Note “Financial statements used to prepare the pro forma financial data” to the pro forma financial information of Compagnie Générale de Géophysique (i.e. the “Unaudited condensed pro forma consolidated financial information” of CGG) in the International Offering Circular which describes how IFRS have been applied under IFRS 1, consistent with IFRS standards and interpretations as published as at September 30, 2005.

Those officials stated that the unaudited consolidated financial balance sheet and statement of income of Exploration Resources described in a.(1) above have been prepared, in all material respects, in accordance with the basis of preparation set out in Note “Financial statements used to prepare the pro forma financial data” to the pro forma financial information of Compagnie Générale de Géophysique (i.e. the “Unaudited condensed pro forma consolidated financial information” of CGG) in the International Offering Circular which describes how IFRS have been applied under IFRS 1, consistent with IFRS standards and interpretations as published as at September 30, 2005. We draw your attention to the fact that there is a possibility that the opening balance sheet and interim financial statements may require adjustment before constituting the final opening IFRS balance sheet and interim financial statements. We make no representations regarding the nature or amounts of the adjustments, if any, necessary for the unaudited consolidated financial information to comply with IFRS as at December 31, 2005. Further, under IFRS, only a complete set of financial statements comprising a balance sheet, income statement, statement of changes in equity, and cash flow statement, together with comparative financial information and explanatory notes, present fairly, in all material respects, the Company’s financial position, results of operations and cash flows in accordance with IFRS.

4. For purposes of this letter, we have also read the items identified by you on the attached pages of the International Offering Circular and have performed the following procedures, which were applied as indicated with respect to the symbols explained below:

A	Compared the Euros amounts to amounts in the unaudited consolidated balance sheet as of September 30, 2005 and the unaudited consolidated statement of income for the nine months ended September 30, 2005 and found such amounts to be in agreement after giving effect to rounding if applicable.
B	Read the unaudited pro forma consolidated balance sheet of Exploration Resources as of December 31, 2004 and the unaudited pro forma statement of income of Exploration Resources for the year ended December 31, 2004 and the translation of such pro forma balance sheet and statement of income into Euros as the reporting currency as they are included under the column “Exploration Resource Group pro forma” in the tables entitled “Unaudited pro forma balance sheet as at December 31, 2004” and “Unaudited pro forma statement of operations for the year ended December 31, 2004” respectively which are included in the “Unaudited condensed pro forma consolidated financial information” of CGG included in the International Offering Circular and inquired of certain officials of Exploration Resources who have responsibility for financial and accounting matters as to whether (i) all significant assumptions regarding the operations, assets and liabilities of Exploration Resources prior to its inception as a separate stand alone company on January 1, 2005 had been reflected in the pro forma adjustments and (ii) the pro forma balance sheet and statement of income of Exploration Resources as of and for the year ended December 31, 2004 have been prepared in compliance with the basis of preparation set out in Note “Financial statements used to prepare the pro forma financial data” to the pro forma financial information of Compagnie Générale de Géophysique (i.e. the “Unaudited condensed pro forma consolidated financial information” of CGG) in the International Offering Circular.
	Those officials referred to above stated, in response to our inquiries, that (i) all significant assumptions had been reflected in the pro forma adjustments so that the pro forma balance sheet and statement of income of Exploration Resources as of and for the year ended December 31, 2004 are properly compiled on the basis stated in the International Offering Circular and (ii) that basis is consistent with the basis of preparation set out in Note “Financial statements used to prepare the pro forma financial data” to the pro forma financial information of Compagnie Générale de Géophysique (i.e. the “Unaudited condensed pro forma consolidated financial information” of CGG) in the International Offering Circular.
	The pro forma balance sheet and statement of income of Exploration Resources as of and for the year ended December 31, 2004 were not prepared and shall not be construed as prepared in accordance with Article 11 of SEC Regulation S-X.
	The foregoing procedures are less in scope than an examination, the objective of which is the expression of an opinion on management’s assumptions, the pro forma adjustments, and the application of those adjustments to historical financial information. Accordingly we do not express such an opinion for purpose of the International Offering Circular and make no representation about the sufficiency of the foregoing procedures for your purposes in this comfort letter.

5. It should be understood that we have no responsibility for establishing (and did not establish) the scope and nature of the procedures enumerated in paragraphs 2 through 4 above; rather, the procedures enumerated therein are those that the requesting party asked us to perform. Accordingly,

we make no representations as to questions of legal interpretation or as to the sufficiency for your purposes of the procedures enumerated in the preceding paragraphs; also such procedures would not necessarily reveal any material misstatement of the information identified in the preceding paragraphs as set forth in the International Offering Circular. Further, we have addressed ourselves solely to the foregoing data and make no representations as to the adequacy of disclosures or whether any material facts have been omitted. This letter relates only to the financial statement items of Exploration Resources specified above and does not extend to any financial statement of Exploration Resources taken as a whole.

6. The foregoing procedures do not constitute an audit conducted in accordance with generally accepted auditing standards in Norway, International Standards on Auditing and/or the auditing standards of the PCAOB. Had we performed additional procedures or had we conducted an audit or a review of Exploration Resources condensed consolidated financial statements as of and for the nine months ended September 30, 2005 in accordance with International Standards on Auditing, other matters might have come to our attention that would have been reported to you.

7. These procedures should not be taken to supplant any additional inquiries or procedures that you would undertake in your consideration of the proposed offering.

8. We make no representation as to whether the offering of the Shares will take place or the number of the Shares to be sold in the offering.

9. This letter, including its attachment, is solely [for the information of Exploration Resources and Compagnie Générale de Géophysique and] to assist the Managers in conducting and documenting their investigation of the affairs of Compagnie Générale de Géophysique in connection with the offering of the Shares covered by the International Offering Circular, and it is not to be used, circulated, quoted, or otherwise referred to within or without the Managers group for any other purpose, including but not limited to the registration, purchase, or sale of securities, nor is it to be filed with or referred to in whole or in part in the International Offering Circular or any other document, except that reference may be made to it in the [underwriting agreement] or in any list of closing documents pertaining to the Offering of the Shares covered by the International Offering Circular.

10. We have no responsibility to update this letter for events and circumstances occurring after November 9, 2005.

Very truly yours,

Exhibit 6(d)

Form of Opinion and Negative Comfort Letter from Linklaters

Exhibit 6(e)

Form of Opinion from Internal Counsel for the Company

EX-4.20

Exhibit 4.20

U.S.$165,000,000

Compagnie Générale de Géophysique

7¹/2% Senior Notes due 2015

PURCHASE AGREEMENT

27 January 2006

CREDIT SUISSE SECURITIES (EUROPE) LIMITED
BNP PARIBAS SECURITIES CORP.

c/o Credit Suisse Securities (Europe) Limited (“CS”)
One Cabot Square
London, England E14 4QJ

Dear Sirs:

1. Introductory.

             (a) Compagnie Générale de Géophysique (the “Company”), a société anonyme incorporated under the laws of France and registered at the Evry Commercial Registry under Number B 969 202 241 (69B00224), proposes, subject to the terms and conditions stated herein, to issue and sell to the initial purchasers named in Schedule A hereto (the “Purchasers”) U.S.$165,000,000 in aggregate principal amount of its 7¹/2% Senior Notes due 2015 (the “Notes” or “Securities”) to be issued under the indenture, dated 28 April 2005 (the “Indenture”), among the Company, the Guarantors (as defined below) and JPMorganChase Bank, National Association, as trustee (the “Trustee”), such Notes representing a single series of securities with and having the same terms and conditions as, the U.S.$165,000,000 aggregate principal amount of the 7¹/2% Senior Notes due 2015 issued on 28 April 2002 (the “Initial Securities”).

             (b) The Securities may be sold by the Purchasers pursuant to Regulation S (“Regulation S”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”) to investors outside of the United States of America and pursuant to Rule 144A (“Rule 144A”) under the Securities Act to qualified institutional buyers in the United States of America.

             (c) Application has been made to list the Notes on the Euro MTF Market of the Luxembourg Stock Exchange.

             The Company’s obligations under the Securities, including the due and punctual payment of interest on the offered Securities, shall be unconditionally guaranteed pursuant to the Indenture (each a “Guarantee", and collectively, the “Guarantees”) on a senior basis by each of the Company’s subsidiaries indicated as Guarantors on Schedule B hereto (together, the “Guarantors”).

             The holders of the Securities will be entitled to the benefits of a Registration Rights Agreement dated as of the date hereof among the Company and the Purchasers (the “Registration Rights Agreement”) in substantially the form of Exhibit A hereto, pursuant to which the Company agrees to file a registration

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statement (the “Exchange Offer/Shelf Registration Statement”) with the United States Securities and Exchange Commission (the “Commission”) registering the exchange of a new series of 7¹/2% Senior Notes due 2015 of the Company and the guarantees of the new series of 7¹/2% Senior Notes due 2015 of the Company (such notes and guarantees of such notes, the “Exchange Securities”) for the Securities and/or the resale of the Securities under the Securities Act.

             Capitalised terms not otherwise defined herein shall have the meaning ascribed to such terms in the Indenture.

             The Company hereby agrees with the several Purchasers as follows:

2.      Representations and Warranties of the Company and Guarantors. The Company represents and warrants to, and agrees with, and, to the extent applicable to the Guarantors and Guarantees, each Guarantor represents and warrants to, and agrees with, the several Purchasers that as of the date of this Agreement and the Closing Date (as defined below):

             (a) A preliminary offering circular dated 26 January 2006 and an offering circular dated 27 January 2006 relating to the Securities to be offered by the Purchasers have been prepared by the Company. Such preliminary offering circular (the “Preliminary Offering Circular”) and offering circular (the “Offering Circular”), in each case as supplemented from time to time as of the date of this Agreement and as of the Closing Date (as defined herein), are hereinafter collectively referred to as the “Offering Document”. The Preliminary Offering Circular, as of its date, and the Offering Circular, as of the date of this Agreement and as of the Closing Date, do not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The information (the “Additional Issuer Information”) required to be delivered to holders and prospective purchasers of the Securities pursuant to the Indenture in accordance with Rule 144A(d)(4) under the Securities Act does not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding two sentences do not apply to statements in or omissions from the Offering Document made in reliance upon and in conformity with written information furnished to the Company by the Purchasers through CS specifically for use therein, it being understood and agreed that the only such information furnished by the Purchasers consists of the following information in the Offering Document: the table entitled “Initial Purchasers” under the caption “Plan of Distribution” and the second paragraph thereafter under the caption “Plan of Distribution”.

             (b) The Company has been duly incorporated, is validly existing under the laws of France, with full power and authority (corporate and other) to own and lease its properties and conduct its business as described in the Offering Document; and the Company is lawfully qualified to do business in all other jurisdictions in which its ownership or leasing of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not individually or in the aggregate have a material adverse effect on the condition (financial or otherwise), business, prospects or results of operations of the Company and its subsidiaries taken as a whole (“Material Adverse Effect”).

             (c) Each subsidiary of the Company set forth on Schedule B hereto has been duly organized and is validly existing under the laws of the jurisdiction of its organization, with full power and authority (corporate and other) to own and lease its property and conduct its business as described in the Offering Document; and each such subsidiary of the Company is lawfully qualified to do business in all other jurisdictions in which its ownership or leasing of property or the conduct of its business requires such qualification except where the failure to be so qualified would not individually or in the aggregate have a Material Adverse Effect; all of the issued and outstanding capital stock of the Company and each such subsidiary of the Company has been duly authorized and validly issued under the laws of the jurisdiction of its incorporation and is fully paid and non-assessable; and except as shown on Schedule

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B hereto, the capital stock of each such subsidiary of the Company is owned, directly or through subsidiaries, by the Company, free from liens, encumbrances and defects. Schedule B hereto sets forth a complete list of each subsidiary (excluding dormant or insignificant subsidiaries) with the relevant jurisdiction of incorporation or organization, the Company’s direct and indirect ownership thereof and whether such subsidiary is a Guarantor.

             (d) The Company had the power and authority (corporate and other) to enter into the Indenture, as of its date, and has the power and authority (corporate and other) to enter into the Securities, the Registration Rights Agreement, the Exchange Securities and this Agreement and any documents entered into in connection therewith, in each case to which it is a party.

             (e) Each Guarantor had the power and authority (corporate and other) to enter into the Indenture, as of its date, respectively, and has the power and authority (corporate and other) to enter into Indenture, the Guarantees, the Registration Rights Agreement, the Exchange Securities and this Agreement and any documents entered into in connection therewith, in each case to which it is a party.

             (f) The Indenture has been duly authorized by the Company and by each Guarantor, the Securities have been duly authorized by the Company, when the Securities are delivered and paid for pursuant to this Agreement on the Closing Date (as defined below), the Indenture will have been duly executed and delivered, such Securities will have been duly executed, authenticated, issued and delivered and will conform to the description thereof contained in the Offering Document, and (assuming due authorization, execution and delivery by the Trustee) the Indenture and such Securities will constitute valid and legally binding obligations of the Company and each Guarantor, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general principles of equity.

             (g) The Indenture has been duly qualified under the United States Trust Indenture Act of 1939, as amended (the “TIA”), and conforms in all material respects to the requirements of the TIA and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder.

             (h) Each Guarantee to be endorsed on the Securities by each of the Guarantors has been duly authorized by such Guarantor and, on the Closing Date, will have been duly executed and delivered by each such Guarantor and will conform in all material respects to the description thereof contained in the Offering Document; when the Securities have been issued, executed and authenticated in accordance with the Indenture and delivered to and paid for by the Purchasers in accordance with the terms of this Agreement, the Guarantee of each Guarantor endorsed thereon (assuming due authentication of the Securities by the Trustee) will constitute valid and legally binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general equity principles.

             (i) The Registration Rights Agreement has been duly authorized, and on the Closing Date the Registration Rights Agreement will have been duly executed and delivered, will conform to the description thereof contained in the Offering Document and (assuming due authorization, execution and delivery by the Purchasers) will constitute a valid and legally binding obligation of the Company and each Guarantor, enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general principles of equity.

             (j) The Exchange Securities have been duly authorized and, when the Exchange Securities have been delivered in exchange for the Securities in accordance with the terms of the exchange offer provided for in the Registration Rights Agreement, such Exchange Securities will have been duly

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executed, authenticated, issued and delivered and will conform to the description thereof contained in the Offering Document, and such the Exchange Securities will (assuming due authentication thereof by the Trustee) constitute valid and legally binding obligations of the Company and the Guarantors, enforceable against each of them in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity.

             (k) The guarantee to be endorsed on the Exchange Securities by each Guarantor has been duly authorized by such Guarantor and, when issued, will have been duly executed and delivered by each such Guarantor; and when the Exchange Securities have been issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the guarantee of each Guarantor endorsed thereon will constitute valid and legally binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and to general equity principles.

             (l) Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Purchasers for a brokerage commission, finder’s fee or like payment in connection with the offer and sale of the Securities, other than the fees payable to the Purchasers in connection with the offer and sale of the Securities.

             (m) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement, the Indenture or the Registration Rights Agreement, in connection with the issuance and sale of the Securities or the issuance and exchange of the Exchange Securities for the Securities, except, in each case, such as have been or, prior to the Closing Date, will be obtained, and other than such as may be required under US state securities or “Blue Sky” laws and the receipt by the Company of an order from the Commission declaring the Exchange Offer/Shelf Registration Statement effective.

             (n) None of the Company or any subsidiary of the Company is (i) in violation of its respective articles of association, charter, by-laws or other constitutive documents, (ii) in default, and no event has occurred which, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject except for such default or event which would not, individually or in the aggregate, have a Material Adverse Effect or (iii) in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property assets may be subject for such default or event which would not, individually or in the aggregate, have a Material Adverse Effect.

             (o) Except as disclosed in the Offering Document, under current laws and regulations of France, Luxembourg and the United States (each, a “Relevant Jurisdiction”, and collectively, the “Relevant Jurisdictions”) and any political subdivisions and taxing authorities thereof or therein, all interest, principal, premium, if any, and other payments due or made on the Securities and the Exchange Securities may be paid by the Company to the holders thereof in U.S. Dollars that may be converted into foreign currency and freely transferred out of each of the Relevant Jurisdictions and all such payments made to holders thereof who are non-residents of the Relevant Jurisdictions will not be subject to income, withholding or other taxes under laws and regulations of any of the Relevant Jurisdictions for tax purposes or any political subdivision or taxing authority thereof or therein (provided that this clause does not apply to any tax of whatever nature that may be imposed by a relevant jurisdiction as a result of Securities or Exchange Securities being held through a permanent establishment, an agent or a fixed base situated in such relevant jurisdiction) and any tax that may be

4

imposed by a Relevant Jurisdiction pursuant to the Directive 2003/48/CE on the taxation of savings income and without the necessity of obtaining any governmental authorization in any of the Relevant Jurisdictions or any political subdivision or taxing authority thereof or therein, provided in the case of the United States that either (i) the payments are made to a “clearing organization” within the meaning of U.S. Treasury Regulation Section 1.6049-4(c)(1)(ii)(M), or (ii) the holder has provided the Company or the relevant paying agent with an applicable Form W-8.

             (p) No capital, transfer, stamp duty, stamp duty reserve or other documentary, issuance or transfer taxes or duties (other than, in the case of France, timbres de dimension, the amount of which is nominal and the non-payment of which does not affect the validity of this Agreement) are payable by or on behalf of the Purchasers in any Relevant Jurisdiction, or any political sub-division or taxing authority thereof or therein on (i) the creation, issue or delivery by the Company of the Securities pursuant hereto or the sale thereof, (ii) the creation, issue or delivery by the Company of the Exchange Securities or the exchange of the Securities therefor, (iii) the execution of the Indenture, the Registration Rights Agreement, this Agreement and any documents entered into in connection therewith, or (iv) the consummation of the transactions contemplated by this Agreement.

             (q) The execution, delivery and performance of the Indenture, the Guarantees, this Agreement, the Registration Rights Agreement, and the issuance and sale of the Securities and the issuance and exchange of the Exchange Securities for the Securities and compliance with the terms and provisions hereof and thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any subsidiary of the Company, or any of their respective properties except for any such breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect, or (ii) any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject except for any such breach or violation which would not, individually or in the aggregate, have a Material Adverse Effect, or (iii) the charter or by-laws of the Company or any such subsidiary.

             (r) This Agreement has been duly authorized, executed and delivered by the Company and constitutes valid and legally binding obligations of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability from time to time in effect relating to or affecting creditors’ rights and to general principles of equity and except in connection with rights to indemnification and contribution thereunder that may be limited by federal or state securities laws or public policy relating thereto.

             (s) Except as disclosed in the Offering Document, the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them; and except as disclosed in the Offering Document, the Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or to be made thereof by them.

             (t) Neither the Company nor any of its subsidiaries has taken any action nor, so far as the Company is aware, have any steps been taken or legal proceedings been started or threatened against it or any of its subsidiaries for winding-up, dissolution or reorganization, or for the appointment of a receiver, administrative receiver, or administrator, trustee or similar officer of it or any of its subsidiaries or any assets of it or any of its subsidiaries.

             (u) The Company and its subsidiaries possess adequate certificates, licenses, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now

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operated by them except where the failure to do so would not, individually or in the aggregate, have a Material Adverse Effect and have not received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or any of its subsidiaries, which would, individually or in the aggregate, have a Material Adverse Effect.

             (v) No labour dispute with the employees of the Company or any subsidiary of the Company exists or, to the knowledge of the Company, is imminent that might have a Material Adverse Effect.

             (w) The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, “intellectual property rights”) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

             (x) Neither the Company nor any of its subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “environmental laws”), (ii) owns or operates any real property contaminated with any substance that is subject to any environmental laws, (iii) is liable for any off-site disposal or contamination pursuant to any environmental laws or (iv) is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.

             (y) Except as described in the Offering Document, there are no pending actions, suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under the Indenture, this Agreement or the Registration Rights Agreement or which are otherwise material in the context of the sale of the Securities or the exchange of the Exchange Securities for the Securities; and no such actions, suits or proceedings are, to the Company’s knowledge, threatened or contemplated.

             (z) The consolidated annual financial statements and the related notes of the Company included in the Offering Document present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles in France (“French GAAP”), applied on a consistent basis.

             (aa) The consolidated annual financial statements and consolidated interim financial statements and the related notes of Exploration Resources ASA (“Exploration Resources”) included in the Offering Document present fairly the financial position of Exploration Resources and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, respectively, and such financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”), applied on a consistent basis.

             (bb) The reconciliation of the Company’s financial statements referred to in paragraph (z) above as reconciled with U.S. GAAP and filed on Form 20-F/A comply with the requirements of Form 20-F.

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             (cc) The consolidated annual and consolidated interim financial statements and the related notes of the Company included in the Offering Document present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, respectively, and such financial statements have been prepared in conformity with the accounting principles established by the International Financial Reporting Standards (“IFRS”), applied on a consistent basis.

             (dd) The reconciliation to IFRS of the Company’s financial information included in Note 10 to the Company’s consolidated interim financial statements and included in the Offering Document complies with the applicable requirements and standards of IFRS.

             (ee) The information set forth in the Offering Document in Note 10 to the Company’s consolidated interim financial statements under the heading “Reconciliation for the Period Ended September 30, 2004 French GAAP —IFRS,” Note 11 to the Company’s consolidated interim financial statements under the heading “Reconciliation to U.S. GAAP,” Note 28(A) to the Company’s annual consolidated financial statements under the heading “Summary of Differences Between Accounting Principles followed by the Group and U.S. GAAP,” and in “Transition to International Financial Reporting Standards” attached as Annex A to the Offering Document includes a fair summary, in all material respects, of the differences, as they relate to the Company’s consolidated financial statements, between French GAAP and IFRS and French GAAP and U.S. GAAP, respectively, for the periods indicated.

             (ff) Except as disclosed in the Offering Document, since the date of the latest audited financial statements included in the Offering Document, there has been no material adverse change, nor any development or event involving a prospective material loss or adverse change, in the condition (financial or other), business, prospects, properties or results of operations of the Company and its subsidiaries taken as a whole, and, except as disclosed in or contemplated by the Offering Document, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock, nor since the date of the latest audited financial statements included in the Offering Document has there been any material loss or interference with the business of the Company and its subsidiaries from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Document.

             (gg) The Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”), and files reports with the Commission on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

             (hh) The Company is not an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the “Investment Company Act”); and the Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Offering Document, will not be an “investment company” as defined in the Investment Company Act.

             (ii) Except as described in the Offering Document, neither the Company, nor any of its subsidiaries is currently or has reason or notice to believe that it will be in the future a party to, or directly or indirectly concerned in, an agreement, arrangement, understanding or practice (whether or not legally binding) which may (i) contravene any treaty, regulation or directive of the European Community relating to competition or restraint of trade, or any competition or restraint of trade laws of any other jurisdiction, (ii) be registrable, unenforceable or void or rendering the Company, its subsidiaries or any of their respective officers, directors or employees liable to administrative, civil or criminal proceedings under any competition legislation, or restraint of trade regulation or similar

7

legislation, or (iii) be the subject of any investigation by an competent authority in respect of any provision of any competition legislation, or restraint of trade regulation or similar legislation in any jurisdiction. Neither the Company nor any of its subsidiaries is currently, or has reason to believe that it will be, engaged in (whether on its own or jointly with any other person) any conduct which amounts to the abuse of a dominant position in a market which may affect competition within the European Union or any part of it.

             (jj) No event of default exists under any contract, indenture, mortgage, loan, agreement, note, lease or other agreement or instrument constituting “Indebtedness” (as defined in the Indenture) that either singly or in the aggregate could result in or is capable of resulting in a Material Adverse Effect.

             (kk) No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.

             (ll) Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement, the offer and sale of the Securities in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act by reason of Section 4(2) thereof, Rule 144A (“Rule 144A”) thereunder and Regulation S thereunder (“Regulation S”).

             (mm) Neither the Company nor any of its respective affiliates, nor any person acting on its or their behalf (i) has, within the six-month period prior to the date hereof, offered or sold, directly or indirectly, in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Securities or any security of the same class or series as the Securities, or (ii) has offered or will offer or sell the Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S under the Securities Act, by means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S. The Company, its affiliates and any person acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S. The Company has not entered and will not enter into any contractual arrangement with respect to the distribution of the Securities except for this Agreement.

             (nn) The net proceeds of the sale of the Securities will be applied in the manner described under the “Use of Proceeds” section in the Offering Document.

             (oo) No “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has informed the Company or any Guarantor that it is considering imposing) any condition (financial or otherwise) on the Company’s or any Guarantor’s retaining any rating assigned to the Company or any Guarantor, any securities of the Company or, (ii) has indicated to the Company that it is considering (a) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (b) any change in the outlook for any rating of the Company or any Guarantor or any securities of the Company or any Guarantor.

             (pp) Application has been made to list the Securities on the Euro MTF Market of the Luxembourg Stock Exchange.

             (qq) The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with French GAAP and/or IFRS, as applicable, and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s

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general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, except, in each case, with regard to matters set forth in the Offering Document.

             (rr) Neither the Company nor any of its subsidiaries, and none of their respective properties or assets, has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, executing or otherwise) under the laws of any jurisdiction in which it has been incorporated or in which any of its property or assets are held.

             (ss) To ensure the legality, validity, enforceability and admissibility into evidence of each of this Agreement, the Indenture, the Securities, the Guarantees, the Exchange Securities, the Registration Rights Agreement or any other document to be furnished hereunder or thereunder in any of the Relevant Jurisdictions, it is not necessary that any of this Agreement, the Indenture, the Securities, the Guarantees, the Exchange Securities, the Registration Rights Agreement or such other document be filed or recorded with any court or any other authority in any of the Relevant Jurisdictions or that any stamp or similar tax (other than, in the case of France, timbres de dimension) be paid in the Relevant Jurisdictions on or in respect of any of this Agreement, the Indenture, the Securities, the Guarantees, the Exchange Securities, the Registration Rights Agreement or any such other document.

             (tt) The Company (immediately after and giving effect to the issuance of the Securities) will be Solvent. As used in this paragraph, the term “Solvent” means, with respect to the Company and to a particular date, that on such date (a) the present value of the Company’s assets is not less than the Company’s liabilities, each as calculated in accordance with French GAAP; (b) assuming the sale of the Securities as contemplated by this Agreement and the Offering Document, the Company should be able to pay its respective debts as they become absolute and mature; and (c) the capital remaining in the Company would not be unreasonably small for the business in which the Company is engaged after giving due consideration to the prevailing practice in the industry in which such entity 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 is likely to become an actual or matured liability.

             (uu) Except as disclosed in the Offering Document, no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on shares of such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.

             (vv) The Company has not distributed and, prior to the later to occur of (i) the Closing Date and (ii) the completion of the distribution of the Securities, will not distribute any material referring to the offering and sale of the Securities other than the Offering Document or other materials, if any, permitted by the Securities Act and the Financial Services and Markets Act 2000 (“FSMA”) (or regulations promulgated pursuant to the Securities Act or FSMA).

             (ww) In connection with the distribution of the Securities, (i) the Company has not offered or sold, and will not offer or sell, directly or indirectly, any Securities to the public in France, (ii) offers and sales of Securities in France will be made only to qualified investors in accordance with Articles L.411-2 and D.411-1 of the French Code monétaire et financier, and (iii) the Company has not distributed or caused to be distributed and will not distribute or cause to be distributed in France, the Preliminary Offering Circular or the Offering Circular or any other offering material relating to the Securities other than to investors to whom offers and sales of Securities in France may be made as described above.

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             (xx) Mazars & Guérard and Barbier Frinault & Autres Ernst & Young Audit, who have certified certain financial statements of the Company and its consolidated subsidiaries for each of the years ended 31 December 2003 and 31 December 2004, and Barbier Frinault & Autres and Ernst & Young Audit, who have certified certain financial statements of the Company and its consolidated subsidiaries for the year ended 31 December 2002 and have delivered their reports in respect of the financial statements of the Company and its consolidated subsidiaries for each such year with respect to the audited consolidated financial statements and schedules included in the Offering Document, are, and have been in all such periods for which such financial statements are so included, independent auditors with respect to the Company in accordance with French GAAP and are independent registered public accountants within the meaning of the Securities Act and the rules and regulations promulgated thereunder.

             (yy) Ernst & Young AS who have certified certain financial statements of Exploration Resources for the year ended December 31, 2004 and have delivered their reports in respect of the financial statements of Exploration Resources for such year with respect to the audited consolidated financial statements and schedules included in the Offering Document, are, and have been in all such periods for which such financial statements are so included, independent auditors in accordance with U.S. GAAP and are independent registered public accountants within the meaning of the Securities Act and the rules and regulations promulgated thereunder.

             (zz) Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities in violation of applicable law. The Company has not taken any action or omitted to take any action (such as issuing any press release relating to the Securities without an appropriate legend) which may result in the loss by any of the Purchasers of the ability to rely on any stabilisation safe harbour provided under FSMA. The Company has been informed of the guidance relating to stabilisation provided by the Financial Services Authority, in particular in Section MAR 2 Annex 2G of the Financial Services Authority Handbook.

             (aaa) The statistical, market-related, industry and similar data included in the Offering Document is based on or derived from sources that, to the knowledge of the Company, having made all reasonable inquiry, are reliable and accurate, and the disclosure of such data in the Offering Document is not misleading in any material respect.

             (bbb) Each of the Company and the Company’s subsidiaries has filed all non-U.S., U.S. federal, state and local tax returns that are required to be filed, or has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect) and, except as set forth in the Offering Document, has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable or made adequate reserve of provision for, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a Material Adverse Effect.

             (ccc) The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged taking into account the Company and its subsidiaries’ level of risk and the cost of insurance coverage; all policies of insurance and fidelity or surety bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and instruments; there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause that will have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole; none of the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and none of the Company nor any of its subsidiaries has any

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reason to believe as of the date of this Agreement that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

             (ddd) The Company has the power to submit and, pursuant to this Agreement, has legally, validly, effectively and irrevocably submitted to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York, in connection with any suit, action or proceeding arising out of or relating to this Agreement, and has the power to designate, appoint and empower and, pursuant to this Agreement has legally, validly, effectively and irrevocably designated, appointed and empowered an agent for service of process in any suit, action or proceeding, as provided herein.

             (eee) No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Offering Document has been made or reaffirmed without a reasonable basis or has been disclosed other than as in good faith.

             (fff) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements relating to money laundering applicable to the Company and its subsidiaries and, so far as the Company is aware, any related or similar statutes, rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened, and neither the Company nor any of its subsidiaries nor, to the knowledge of the Company or any director, officer or employee of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds, (iii) caused the Company or any of its subsidiaries to be in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977 or other national or local law regulating payments to governmental officials or employees; or (iv) made any unlawful payment, except, in each case, with regard to matters set forth in the Offering Document.

             (ggg) Neither the Company, nor any of its subsidiaries nor any of their respective directors, officers, employees or affiliates, to the best of the Company’s knowledge after due inquiry, is a person with whom transactions are currently prohibited under any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of Treasury (“OFAC”) or equivalent European Union measure; the Company agrees that it will not directly or indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any person or entity, or any subsidiary, joint venture partner or sub-division of such other person or entity, for the purpose of financing the activities of any person with whom transactions are currently prohibited under any U.S. sanctions administered by OFAC or any equivalent European Union measure.

             (hhh) At September 30, 2005, the Company would have had, on the combined consolidated pro forma basis indicated in the Offering Document (and any amendment or supplement thereto), a capitalization as set forth therein. The pro forma financial statements of the Company included in the Offering Document (and any amendment or supplement thereto) have been prepared in all material respects in accordance with the accounting requirements of Article 11 of Regulation S-X of the Commission; the assumptions used in the preparation of such pro forma financial statements are, in the opinion of the management of the Company, reasonable; and the pro forma adjustments reflected in such pro forma financial statements have been properly applied to the historical amounts in compilation of such pro forma financial statements. The financial statements are those required to be included and comply as to form with the applicable accounting requirements of the Securities Exchange Act of 1934,

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as amended, and the related rules and regulations adopted by the SEC as if the Offering Document were a prospectus forming part of a registration statement on Form F-4 under the Securities Act, except, that the unaudited financial statements of the Company in the Preliminary Offering Circular do not contain information with respect to the subsidiary guarantors as required by Rule 3-10 of Regulation S-X and, except, only in the case of, the unaudited financial statements of Exploration Resources, where the failure to so comply would not cause the Offering Document to include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

             3. Purchase, Sale and Delivery of Securities. On the basis of the representations, warranties and agreements herein set forth, but subject to the terms and conditions herein contained, the Company agrees to sell to the several Purchasers, and the several Purchasers agree, severally and not jointly, to purchase from the Company, at a purchase price of 101.00% of the principal amount thereof plus accrued interest (if any) from November 15, 2005 to the Closing Date (as hereinafter defined), the respective principal amounts of Notes set forth opposite their names in Schedule A hereto.

             The Company will deliver, against payment of the purchase price, the Notes to be offered and sold by the Purchasers in reliance on Regulation S (the “Regulation S Notes”) in the form of one or more permanent global Notes in registered form without interest coupons (the “Regulation S Global Notes”) which will be deposited with the Trustee, in its capacity as custodian for the Depository Trust Company (“DTC”), and registered in the name of Cede & Co., as nominee for DTC. The Company will deliver against payment of the purchase price the Notes to be purchased by each Purchaser hereunder and to be offered and sold by each Purchaser in reliance on Rule 144A under the Securities Act (the “144A Notes”) in the form of one or more permanent global notes in registered form without interest coupons (the “Restricted Global Notes”, along with the Regulation S Global Notes, each a “Global Note”), which will be deposited with the Trustee as Custodian for DTC and registered in the name of Cede & Co., as nominee for DTC. The Regulation S Global Notes and the Restricted Global Notes shall be assigned separate CUSIP Numbers. The Restricted Global Notes shall include the legend regarding restrictions on transfer set forth under “Transfer Restrictions” in the Offering Document.

             Payment for the Regulation S Notes and the 144A Notes shall be made by the Purchasers in wire transfer (same day) funds to an account of the Company or an account as the Company may direct at a bank acceptable to the Purchasers at the office of Vinson & Elkins R.L.L.P., London at 10.00 A.M. (London time), on 3 February 2006, or at such other time not later than five full business days thereafter as the Purchasers and the Company shall mutually determine, such time being herein referred to as the “Closing Date”, against delivery to the Trustee, as custodian for DTC, of (i) the Regulation S Global Notes representing all of the Regulation S Notes and (ii) the Restricted Global Notes representing all of the 144A Notes. The Regulation S Global Notes and the Restricted Global Notes will be made available for checking at the office of Vinson & Elkins R.L.L.P. at least 24 hours prior to the Closing Date.

             In consideration of the agreement by the Purchasers to severally subscribe and pay for the Notes as aforesaid, the Company shall pay to the Purchasers a combined management, underwriting and selling commission of 2.25% of the principal amount of the Notes plus VAT (if applicable). The Purchasers shall be entitled to deduct the said commission from the purchase price by way of set-off.

             CS (the “Stabilising Agent”), on behalf of the Purchasers, may, to the extent permitted by applicable law, over-allot and effect transactions in any over-the-counter market or otherwise, in connection with the distribution of the Securities, with a view to stabilising or maintaining the market price of the Securities at levels other than those which might prevail in the open market but in doing so the Stabilising Agent shall act as principal and not as agent of the Company and any loss resulting from over-allotment or stabilisation shall be borne, and any profit arising therefrom shall be beneficially retained, by the Stabilising Agent. Nothing in this fifth paragraph of Section 3 shall be construed so as to require the Company to issue in excess of U.S.$165,000,000 million principal amount of Securities.

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             As between the Company and the Purchasers, any loss resulting from stabilisation shall be borne, and any profit arising therefrom shall be retained, by the Purchasers as set out in the Agreement Among Purchasers.

4. Representations by Purchasers; Resale by Purchasers.

             (a) Each Purchaser severally represents and warrants to the Company and the Guarantors that it has duly authorized, executed and delivered this Agreement and is an institutional “accredited investor” within the meaning of Regulation D under the Securities Act.

             (b) Each Purchaser severally acknowledges that the Securities and the Guarantees have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons, except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Each Purchaser severally represents and agrees that it has offered and sold the Securities and will offer and sell the Securities (i) as part of their distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering and the Closing Date, only in accordance with Rule 144A (“Rule 144A”) or Rule 903 under the Securities Act. Accordingly, neither such Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Securities. Accordingly, neither such Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Securities, and such Purchaser, its affiliates and all persons acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S. Each Purchaser severally agrees that, at or prior to confirmation of sale of the Securities, other than a sale pursuant to Rule 144A, such Purchaser will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases the Securities from it during the restricted period a confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the date of the commencement of the offering and the closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meanings given to them by Regulation S.”

Terms used in this subsection (b) have the meanings given to them by Regulation S of the Securities Act.

             (c) Each Purchaser severally agrees that it and each of its affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the Securities except for any such arrangements with other Purchasers or affiliates of the other Purchasers or with the prior written consent of the Company.

             (d) Each Purchaser severally agrees that neither it nor any of its affiliates nor any person acting on its or their behalf will offer or sell the Securities in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, but not limited to, (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or disseminated via the internet, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. Each Purchaser severally agrees, with respect to resales made in reliance on Rule 144A of any of the Securities, to deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Securities has been made in

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reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.

             (e) Each Purchaser severally represents, warrants and agrees that (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received by it in connection with the issue or sale of any Securities in circumstances in which section 21(1) of FSMA does not apply to the Company or the Guarantors; and (ii) it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.

             (f) In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Purchaser represents, warrants and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of Securities to the public in that Relevant Member State prior to the publication of a prospectus in relation to the securities which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Securities to the public in that Relevant Member State at any time:

                   (i)       to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

                   (ii)       to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than EUR43,000,000 and (3) an annual net turnover of more than EUR50,000,000, as shown in its last annual or consolidated accounts;

                   (iii)       to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of CS for any such offer; or

                   (iv)       in any other circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Securities to the public” in relation to any securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase the securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

             (g) Each Purchaser severally represents and agrees that it has complied and will comply in all material respects with all applicable laws and regulations in each jurisdiction in which it offers and distributes any offering materials relating to the offering or offers or sells the Notes.

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5. Certain Agreements of the Company. The Company agrees with the several Purchasers that:

             (a) If, at any time prior to the completion of the resale of the Securities by the Purchasers, any event occurs as a result of which the Offering Document as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any such time to amend or supplement the Offering Document to comply with any applicable law, the Company promptly will notify the Purchasers of such event and promptly will prepare, at its own expense, an amendment or supplement which will correct such statement or omission or effect such compliance. The Company will advise the Purchasers promptly of any proposal to amend or supplement the Offering Document and will not effect such amendment or supplementation without the Purchasers’ consent. Neither the Purchasers’ consent to, nor the Purchasers’ delivery to offerees or investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6.

             (b) The Company will furnish to the Purchasers copies of the Preliminary Offering Circular, the Offering Circular and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Purchasers reasonably request. At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, the Company will promptly make available to the Purchasers and, upon request of holders and prospective purchasers of the Securities, to such holders and purchasers, copies of the information required to be delivered to holders and prospective purchasers of the Securities pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of the Securities. The Company will pay the expenses of printing and distributing to the Purchasers and any such holders or prospective purchasers all such documents.

             (c) The Company will arrange for the qualification of the Securities for sale and the determination of their eligibility for investment under the laws of such jurisdictions in Europe, the United States and Canada as the Purchasers reasonably designate and will continue such qualifications in effect so long as required for the resale of the Securities by the Purchasers, provided that the Company will not be required to qualify as a foreign corporation or to file a general consent to service of process in any such jurisdiction.

             (d) During the period of two years after the Closing Date, the Company will, upon request, furnish to the Purchasers and any holder of Securities a copy of the restrictions on transfer applicable to the Securities.

             (e) In connection with the offering, until CS shall have notified the Company and the other Purchasers of the completion of the resale of the Securities, neither the Company not any of its affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Securities or attempt to induce any person to purchase any Offered Securities; and neither it nor any of its affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Securities. During the period of two years after the Closing Date, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been reacquired by any of them, unless pursuant to a registration statement under the Securities Act.

             (f) During the period of two years after the Closing Date, the Company will not be or become an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act.

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             (g) Prior to the Closing Date and for 40 days subsequent to the Closing Date, neither the Company nor any of its subsidiaries will issue any press release or other communication directly or indirectly or hold any press conference with respect to the issue of the Securities, the Company or any of its subsidiaries, the condition, financial or otherwise (except for routine communications in the ordinary course of business and consistent with past practice, including the Company’s disclosure of results at and for the twelve months ended December 31, 2005 and 2004), or the earnings, business affairs or business prospects of the Company or any of its subsidiaries, without the prior consent of the Purchasers.

             (h) The Company agrees to pay all expenses (together with VAT, where applicable) incidental to the performance of its obligations under this Agreement and the Indenture, including, subject to receipt of sufficiently itemized accounts (i) the fees, disbursements and expenses of the Company’s legal advisors; (ii) the fees, disbursements and expenses of the Company’s accountants; (iii) the fees, disbursements and expenses of the Purchasers’ legal advisors, Vinson & Elkins RLLP and Bernard Hertz Bejot; (iv) the fees and expenses of the Trustee or any paying agent and their respective professional advisors; (v) all expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Securities and the Exchange Securities, the preparation and printing of this Agreement, the Securities, the Indenture, the Registration Rights Agreement, the Preliminary Offering Circular and the Offering Circular and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the Securities and the Exchange Securities; (vi) the cost of listing the Securities and the Exchange Securities and qualifying the Securities and the Exchange Securities for trading on the Euro MTF Market of the Luxembourg Stock Exchange and any expenses incidental thereto, including those of the Luxembourg listing agent; (vii) the cost of qualifying the Securities and the Exchange Securities for trading in The Portal^sm Market (“PORTAL”) of the NASDAQ Stock Market, Inc. and any expenses incidental thereto; (viii) the cost of any advertising approved by the Company in connection with the issue of the Securities; (ix) any expenses (including fees and disbursements of counsel) incurred in connection with qualification of the Securities for sale under the laws of such jurisdictions in Europe, the United States and Canada as the Purchasers designate and the printing of memoranda relating thereto; (x) any fees charged by investment rating agencies for the rating of the Securities; and (xi) expenses incurred in distributing the Preliminary Offering Circular and the Offering Circular (including any amendments and supplements thereto) to the Purchasers. The Company agrees to pay or reimburse the Purchasers (to the extent incurred by them) for all reasonable travel expenses of the Purchasers and the Company’s officers and employees and any other reasonable expenses of the Purchasers and the Company in connection with attending or hosting meetings with prospective purchasers of the Securities from the Purchasers. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Purchasers set forth in Section 7 hereof is not satisfied, because this Agreement is terminated or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on their part to be performed or satisfied hereunder (other than solely by reason of a default by an Purchaser on its obligations hereunder after all conditions hereunder have been satisfied in accordance herewith), the Company agrees to promptly reimburse the Purchasers upon demand for all reasonable out-of-pocket expenses (including reasonable fees, disbursements and charges of Vinson & Elkins R.L.L.P. and Bernard Hertz Bejot, the Purchasers’ legal advisors) that shall have been incurred by the Purchasers in connection with the proposed purchase and sale of the Securities. The Company shall not be liable to the Purchasers for loss of contemplated profits from the transactions covered by this Agreement. Other than as set forth in this Section 5(h) each of the parties hereto shall bear all out-of-pocket costs and expenses incurred by them.

             (i) In connection with the offering, until the Purchasers shall have notified the Company of the completion of the resale of the Securities, neither the Company nor any of its affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Securities or attempt to induce any person to purchase any

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Securities; and neither they nor any of their affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Securities.

             (j) After the date of the initial offering of the Securities by the Purchasers and until the day which is 90 days after the Closing Date, the Company will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the Securities Act relating to, any debt securities issued or guaranteed by the Company and having a maturity of more than one year from the date of issue, or any options or derivatives in respect of such debt securities, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of the Purchasers; provided that this provision shall not prohibit the filing of any registration statement to comply with the terms of the Registration Rights Agreement, the issuance of the Exchange Securities, borrowings under the credit facilities existing on the date hereof or secured financings of accounts receivables and inventory. The Company will not at any time offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, pledge, contract or disposition would cause the exemption afforded by Rule 144A or the safe harbour of Regulation S to cease to be applicable to the offer and sale of the Securities.

             (k) The Company will indemnify and hold harmless the Purchasers against any documentary, stamp or similar issuance tax that may be imposed by the United States, Luxembourg or the Republic of France (other than, in the case of France, the fixed registration duty and timbres de dimension), including any interest and penalties, that may be payable by the Purchasers on the creation, issuance and sale of the Securities and on the execution and delivery of this Agreement. All payments to be made by the Company hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Company is compelled by law to deduct or withhold such taxes, duties or charges. In that event, the Company shall pay such additional amounts as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made. If such withholding or deduction of tax is due, the Purchasers and the Company shall promptly co-operate in completing any procedural formalities necessary for the Company to avoid such withholding or deduction of tax. The Company will not be required to pay such additional amounts to a Purchaser if the Company is able to demonstrate that the payment of additional amounts could have been made to the Purchaser without a withholding or deduction of tax had that Purchaser complied with its obligations to cooperate with the Company.

             (l) The Company will use its reasonable best efforts to have the Securities and the Exchange Securities admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange and will maintain such listing as long as the Securities or the Exchange Securities are outstanding; provided, however, that if the Company can no longer maintain such listing, the Company will use all reasonable commercial efforts to obtain and maintain the listing of the Notes and the Exchange Securities on another recognized stock exchange.

             (m) The Company shall take all reasonable action necessary to enable Standard & Poor’s Ratings Services, a division of the McGraw Hill, Inc. (“S&P”), and Moody’s Investors Service Inc. (“Moody’s”) to provide and/or confirm their respective credit ratings of the Securities.

             (n) The Company will cooperate with the Purchasers and use its reasonable best endeavours to permit the Securities to be designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. relating to trading in The Portal Market and to permit the Securities to be eligible for clearance and settlement through DTC, including preparation and filing with DTC of a Letter of Representations signed by the Company.

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             (o) The Company will not, and will not cause its respective affiliates to, nor will the Company authorize or knowingly permit any person acting on its behalf (excluding the Purchasers, as to whom no agreement is made) to, solicit any offer to buy or sell the Securities by means of any form of general solicitation or general advertising within the meaning of Regulation D under the Securities Act or in any manner involving a public offering within the meaning of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and the Company will not offer, sell, contract to sell or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act or the safe harbour afforded by Regulation D thereunder to cease to be applicable to the offering and sale of the Securities as contemplated by this Agreement and the Offering Circular.

             (p) The Company undertakes that, since the provisions of the EU Directive 2003/48/EC dated 3 June 2003 have been implemented with effect from July 1, 2005, it will use its best endeavours to ensure that the Company maintains a paying agent in a European Union member state that will not be obligated to withhold or deduct tax pursuant to such European Union Directive on the taxation of savings income.

             (q) The Company will use its reasonable best endeavours to do and perform all things required or necessary to be done and performed under this Agreement by it prior to the Closing Date and to satisfy all conditions precedent to the delivery of the Securities.

             6.  Conditions of the Obligations of the Purchasers. The obligations of the Purchasers to purchase and pay for the Securities will be subject to the accuracy of the representations and warranties on the part of the Company, to the accuracy of the statements of officers of the Company made pursuant to the provisions hereof, to the performance by the Company of their obligations hereunder, in each case, in all material respects, and to the following conditions precedent:

             (a) The Purchasers shall have received a comfort letter or letters, dated the date of this Agreement, of Mazars & Guérard and Barbier Frinault & Autres Ernst & Young, on the one hand, and Barbier Frinault & Autres and Ernst & Young Audit, on the other hand, in form and substance satisfactory to the Purchasers concerning the financial information with respect to the Company set forth in the Offering Document.

             (b) The Purchasers shall have received a comfort letter or letters, dated the date of this Agreement, of Ernst & Young AS, in form and substance satisfactory to the Purchasers concerning the financial information with respect to Exploration Resources set forth in the Offering Document.

             (c) The Purchasers shall have received a comfort letter or letters, dated the date of this Agreement, of Ernst & Young in form and substance satisfactory to the Purchasers concerning the financial information with respect to Arabian Geophysical & Surveying Company set forth in the Offering Document.

             (d) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of the Purchasers, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Securities; (ii) any downgrading in the rating of any debt securities of the Company by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement or any indication given to the Company that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of

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such rating) or any announcement that the Company has been placed on negative outlook; (iii) any change in U.S., French, international, financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Purchasers, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, the Luxembourg Stock Exchange or the Eurolist by Euronext Paris or any setting of minimum prices for trading on any such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any banking moratorium declared by U.S. Federal, New York, European Union, English or French authorities; (vi) any major disruption of settlements of securities or clearance services in the United States, the European Union, the United Kingdom or France; (vii) any attack on, outbreak or escalation of hostilities, declaration of war or act of terrorism involving the United States, the European Union, the United Kingdom or France, or any other national or international calamity or emergency if, in the judgment of the Purchasers, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Securities.

             (e) The Purchasers shall have received an opinion, dated the Closing Date, of Linklaters, counsel for the Company, covering substantially the items set forth in Exhibit A hereto. The Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

             (f) The Purchasers shall have received opinions, dated the Closing Date, from local counsel for the Company, from local counsel in each of the countries of incorporation of the Guarantors with respect to the valid existence, power and authority, due authorization of the Guarantors and other related matters as the Purchasers may require, in each case satisfactory to the Purchasers. The Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

             (g) The Purchasers shall have received from Vinson & Elkins R.L.L.P., U.S. counsel for the Purchaser, such opinion or opinions, dated the Closing Date, with respect to the validity of the Securities, the Offering Circular, the exemption from registration for the offer and sale of the Securities by the Company to the Purchasers and the resales by the Purchasers as contemplated hereby and other related matters as the Purchasers may require, in each case satisfactory to the Purchasers. The Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

             (h) The Purchasers shall have received certificates, dated the Closing Date, of the principal executive officer and the principal financial or accounting officer of the Company, in which such officers shall state that the representations and warranties of the Company in this Agreement are true and correct, certify as to the outstanding Net debt and Shareholders’ equity (as such terms are described in the Offering Document) as of a date that is reasonably acceptable to the Purchasers, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, and that, subsequent to the respective dates of the most recent financial statements in the Offering Document there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, prospects, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in the Offering Document.

             (i) The Purchasers shall have received a comfort letter or letters, dated the Closing Date, of Mazars & Guérard and Barbier Frinault & Autres Ernst & Young on the one hand and Barbier Frinault & Autres and Ernst & Young Audit on the other hand which meets the requirements of subsection (a) of this Section.

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             (j) The Purchasers shall have received a comfort letter or letters, dated the Closing Date, of Ernst & Young AS which meets the requirements of subsection (b) of this Section.

             (k) The Purchasers shall have received a comfort letter or letters, dated the Closing Date of Ernst & Young which meets the requirements of subsection (c) of this Section.

             (l) At the Closing Date, the Securities shall have been designated for trading on The Portal Market and cleared for settlement at DTC.

             (m) At the Closing Date, application shall have been made to list the Securities on the Euro MTF Market of the Luxembourg Stock Exchange, and such application shall not have been withdrawn or rejected or shall have been approved for listing subject to official notice of issuance.

             (n) At the Closing Date, the Securities shall be rated at least Ba3 by S&P and BB- by Moody’s, and the Company shall have delivered to the Purchasers a letter dated the Closing Date, from each such rating agency, or other evidence satisfactory to the Purchasers, confirming that the Securities have such ratings.

             (o) As of the Closing Date, the Company, the Guarantors and the Trustee shall have entered into the Indenture.

             (p) As of the Closing Date, the Company and the Guarantors shall have entered into the Registration Rights Agreement, in form and substance satisfactory to the Purchasers.

             (q) The Company and its subsidiaries shall have (i) received on or prior to the Closing Date all consents, approvals, authorisations and other orders of, or qualifications with, each court, regulatory authority, governmental body or agency, or third party, and (ii) given all notices required under relevant law and any material agreements, in each case, required to execute, deliver and perform their respective obligations under the Indenture, the Securities, the Guarantees, the Exchange Securities, the Registration Rights Agreement and this Agreement, except, in each case, such as may be required under state securities laws and except for the order of the Commission declaring the Exchange Offer Registration Statement or Shelf Registration Statement effective.

             The Company will furnish the Purchasers with such copies of such conformed copies of such opinions, certificates, letters and documents as the Purchasers reasonably request. The Purchasers may in their sole discretion waive compliance with any conditions to the obligations of the Purchasers hereunder.

7. Indemnification and Contribution.

             (a) The Company undertakes to each Purchaser that it will indemnify and hold harmless each such Purchaser, its partners, directors and officers and each person, if any, who controls each Purchaser within the meaning of Section 15 of the Securities Act (each, a “Relevant Party”), against any losses, claims, damages or liabilities, joint or several, to which such Relevant Party may become subject, under the Securities Act or the Exchange Act or otherwise (each, a “Loss”), insofar as such Loss (or any action in respect thereof) arises out of or is based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, including any Loss (or any action in respect thereof) arising out of or based upon the Company’s failure to perform its obligations under Section 5(a) of this Agreement, and the Company shall pay to such Relevant Party on demand an amount equal to such Loss. No Relevant Party shall have any duty or obligation, whether as fiduciary

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or trustee for any Relevant Party or otherwise, to recover any such payment or to account to any other person for any amounts paid to it under this Section 7. The Company will reimburse each Relevant Party for any legal or other expenses incurred by such Relevant Party in connection with investigating or defending any such Loss (or action in respect thereof) upon demand as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such Loss (or any action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company made by the Purchasers through CS specifically for use in the Offering Document, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below.

             (b) Each Purchaser will severally and not jointly indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Purchasers through CS specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information consists of the following information in the Offering Document furnished on behalf of the Purchasers through CS: the table entitled “Initial Purchasers” under the caption “Plan of Distribution” and the second paragraph thereafter under the caption “Plan of Distribution”; provided, however, that the Purchasers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company’s failure to perform its obligations under Section 5(a) of this Agreement.

             (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defences) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defence thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defence thereof, the indemnifying party will not be liable to such indemnified party under this section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defence thereof other than reasonable costs of investigation; provided, however, that the indemnifying party shall only be obligated to pay the fees, disbursements and other charges of one counsel (and one additional local counsel for each applicable jurisdiction) to the indemnified parties in connection with any single matter, unless an indemnified party has a legal position that differs from the other indemnified parties or may be subject to different claims and defences than the other indemnified parties, in which case the indemnifying party shall be obligated to pay the fees, disbursements and other

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charges of one additional counsel for such indemnified party. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of fault, culpability or failure to act by or on behalf of any indemnified party.

             (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Securities 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) above but also the relative fault of the Company on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts and commissions received by the Purchasers from the Company under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased by it were resold exceeds the amount of any damages which the Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.

             (e) The obligations of the Company under this Section shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any of the Purchasers within the meaning of the Securities Act or the Exchange Act; and the obligations of the Purchasers under this Section shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act.

             8.  Default of Purchasers. If any Purchaser or Purchasers default in their obligations to purchase Securities hereunder and the aggregate principal amount of Securities that such defaulting Purchaser or Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of Securities, the non-defaulting Purchaser or Purchasers may make arrangements satisfactory to the Company for the purchase of such Securities by other persons, including any of the Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Securities that such defaulting Purchasers agreed but failed to purchase. If any Purchaser or Purchasers so default and the aggregate principal amount of Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of Securities and

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arrangements satisfactory to the non-defaulting Purchasers and the Company for the purchase of such Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Purchaser or the Company, except as provided in Section 9. As used in this Agreement, the term “Purchaser” includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser from liability for its default.

             9.  Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Purchaser, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Securities. If this Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the Securities by the Purchasers is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Company and the Purchasers pursuant to Section 7 shall remain in effect. If the purchase of the Securities by the Purchasers is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 8 or the occurrence of any event specified in clause (iii), (iv), (v), (vi) or (vii) of Section 6(b), the Company will reimburse the Purchasers for all out-of-pocket expenses (including fees and disbursements of counsel plus VAT where applicable) reasonably incurred by them in connection with the offering of the Securities.

             10.  Notices. All communications hereunder will be in writing and, if sent to the Purchasers will be mailed, delivered or faxed to the Purchasers, c/o Credit Suisse First Boston (Europe) Limited, One Cabot Square, London E14 4QJ, United Kingdom, Attention: High Yield Capital Markets, facsimile number +44 20 7890 2312 or, if sent to the Company, will be mailed or delivered or faxed to it at Tour Montparnasse 33 avenue du Maine 75755 Paris Cedex 15, Attention: Mr. Thierry Le Roux and Mr. Stephane-Paul Frydman, facsimile number + 33 1 64 47 34 31. Any such notice shall take effect, in the case of delivery, at the time of delivery, in the case of mail two business days after the same was deposited in the post (first class postage prepaid) and, in the case of facsimile, at the time of completion of the transmission.

             11.  Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 7. No purchaser of Securities from any Purchaser shall be deemed to be a successor merely by reason of such purchase.

             12.  Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. Delivery of an executed signature page to this Agreement by facsimile shall be as effective as delivery of a manually executed document.

             13. Representation of Purchasers. CS will act for the several Purchasers in connection with this purchase, and any action under this Agreement taken by CS will be binding upon all the Purchasers.

             14. Absence of Fiduciary Relationship. The Company and the Guarantors acknowledge and agree that:

             (a) The Purchasers have been retained solely to act as underwriters in connection with the sale of the Securities and no fiduciary, advisory or agency relationship between Company or any of the Guarantors, on the one hand, and the Purchasers, on the other, has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Purchasers have advised or are advising the Company or any of the Guarantors on other matters;

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             (b) the price of the Securities set forth in this Agreement was established by the Company and the Guarantors following discussions and arms-length negotiations with the Purchasers, and the Company and the Guarantors are capable of evaluating and understanding, and understand and accept, the terms, risks and conditions of the transactions contemplated by this Agreement;

             (c) the Company and the Guarantors have been advised that the Purchasers and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company or of any of the Guarantors and that the Purchasers have no obligation to disclose such interests and transactions to the Company or any of the Guarantors by virtue of any fiduciary, advisory or agency relationship; and

             (d) the Company and the Guarantors waive, to the fullest extent permitted by law, any claims they may have against the Purchasers for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Purchasers shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company or any of the Guarantors, including shareholders, employees or creditors of the Company or any of the Guarantors, respectively.

15. Applicable Law and Jurisdiction.

             (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

             (b) The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

             (c) The Company irrevocably appoints CT Corporation, 111 8th Avenue, New York, New York 10011, as its authorized agent in New York, upon which process may be served in any such suit or proceeding, and agrees that service of process upon such agent, and written notice of said service to the Company by the person serving the same to the address provided in Section 10, shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company further agrees to take any and all action as may be necessary to maintain such designation and appointment of such agent in full force and effect for a period of eight years from the date of this Agreement.

             16. Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

             17. Severability/Illegality. If any provision in this Agreement shall be held to be illegal, invalid or unenforceable, in whole or in part, under any enactment or rule of law, such provision or part shall (so far as illegal, invalid or unenforceable) be given no effect and deemed not be included in this Agreement but the legality, validity and enforceability of the remainder of this Agreement shall not be affected.

             18. Currency. The obligation of the Company in respect of any sum due to any Purchaser or other indemnified party, as applicable, shall, notwithstanding any judgment in a currency other than Euro, not be discharged until the first business day, following receipt by such Purchaser or other indemnified party, as applicable, of any sum adjudged to be so due in such other currency, on which (and only to the extent that) such Purchaser or other indemnified party, as applicable, is able in accordance with normal banking procedures purchase Euro with such other currency; if the Euro so purchased are less than the sum originally due to such Purchaser or other indemnified party, as applicable, hereunder, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Purchaser or other indemnified party, as applicable,

24

against such loss. If the Euro so purchased are greater than the sum originally due to such Purchaser or other indemnified party, as applicable, hereunder, such Purchaser or other indemnified party, as applicable, agrees to pay to the Company an amount equal to the excess of the Euro so purchased over the sum originally due to such Purchaser or other indemnified party, as applicable, hereunder.

             References in this Agreement to this Agreement, the Paying Agency Agreement and the Indenture shall be deemed to include such agreements or deeds as amended, varied or supplemented from time to time.

[Signature page follows.]

25

     If the foregoing is in accordance with the Purchasers’ understanding of our agreement, kindly sign and return to us one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the Purchasers in accordance with its terms.

Very truly yours,

Compagnie Generale de Geophysique
 

By:  

Name:  

Title:  

CGG Americas Inc.
 

By:  

Name:  

Title:  

CGG Canada Services Ltd
 

By:  

Name:  

Title:  

CGG Marine Resources Norge A/S
 

By:  

Name:  

Title:  

Sercel Inc.
 

By:  

Name:  

Title:  

Sercel Australia Pty Ltd
 

By:  

Name:  

Title:  

Sercel Canada Ltd.
 

By:  

Name:  

Title:  

Signature page to Purchase Agreement

The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.

CREDIT SUISSE SECURITIES (EUROPE) LIMITED

BY:                                                    
Name:
Title:

BY:                                                    
Name:
Title:

BNP PARIBAS SECURITIES CORP.

BY:                                                    
Name:
Title:

Signature page to Purchase Agreement

SCHEDULE A

	Principal Amount
	of
Purchaser	Securities
Credit Suisse Securities (Europe) Limited		U.S.$82,500,000
BNP Paribas Securities Corp.		U.S.$82,500,000
Total		U.S.$165,000,000

A-1

SCHEDULE B

Subsidiaries

		% Share Capital
	Jurisdiction of	held directly or
Company Subsidiaries	Organization	indirectly			Guarantor
CGG Marine SAS	France		100.0	%
Geocal SARL	France		100.0	%
Geoco SAS	France		100.0	%
Sercel SA	France		100.0	%
CGG Explo SARL	France		100.0	%
Sercel Holding SA	France		100.0	%
CGG Americas, Inc.	Texas		100.0	%	Yes
CGG do Brasil Participacoes Ltda.	Brasil		100.0	%
CGG Canada Services Ltd.	Alberta		100.0	%	Yes
CGG International SA	Switzerland		100.0	%
CGG (Nigeria) Ltd.	Nigeria		100.0	%
CGG Marine Resources Norge A/S	Norway		100.0	%	Yes
CGG Offshore UK Ltd.	United Kingdom		100.0	%
CGG Pan India Ltd.	India		40.0	%
CGG Selva	Peru		100.0	%
Compania Mexicana de Geofisica	Mexico		100.0	%
Compaghia de Geologica e Geofisica Portuguesa	Portugal		100.0	%
Exgeo CA	Venezuala		100.0	%
Geoexplo	Kazakhstan		100.0	%
Geophysics Overseas Corporation Ltd.	Bahamas		100.0	%

B-1

		% Share Capital
	Jurisdiction of	held directly or
Company Subsidiaries	Organization	indirectly			Guarantor
CGG Australia Services Pty Ltd.	Australia		100.0	%
CGG Asia Pacific	Malaysia		33.2	%
Petroleum Exploration Computer Consultants Ltd.	United Kingdom		100.0	%
PT Alico	Indonesia		100.0	%
Sercel Australia Pty Ltd.	Australia		100.0	%	Yes
Hebei Sercel JunFeng	China		100.0	%
Sercel Inc.	Oklahoma		100.0	%	Yes
Sercel Singapore Pte Ltd.	Singapore		100.0	%
Sercel England Ltd.	United Kingdom		100.0	%
Sercel Canada Ltd.	New Brunswick		100.0	%	Yes
Exploration Resources ASA	Norway		100.00	%
Multiwave Geophysical Company ASA	Norway		100.00	%
Exploration Vessel Resources	Norway		100.00	%
Exploration Vessel Resources II	Norway		100.00	%
Exploration Investment Resources II	Norway		100.00	%

B-2

EXHIBIT A

[Form of Linklaters opinion to come]

EXH A-1

EX-4.21

EXECUTION VERSION

Exhibit 4.21

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

AND

THE GUARANTORS PARTY HERETO

$165,000,000

7¹/2% Senior Notes due 2015

REGISTRATION RIGHTS AGREEMENT

Dated as of February 3, 2006

CREDIT SUISSE SECURITIES (EUROPE) LIMITED
BNP PARIBAS SECURITIES CORP.

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of February 3, 2006 by and among Compagnie Générale de Géophysique, a corporation organized under the laws of the Republic of France (the “Company”), CGG Americas Inc., CGG Canada Services Ltd, CGG Marine Resources Norge A/S, Sercel Inc., Sercel Australia Pty Ltd, Sercel Canada Ltd and any subsidiary of the Company that becomes a guarantor of the Notes (as defined below) subsequent to the date hereof pursuant to the terms of the Indenture (as defined below) (each a “Guarantor” and, collectively, the “Guarantors”), and Credit Suisse Securities (Europe) Limited and BNP Paribas Securities Corp (each an “Initial Purchaser” and, collectively, the “Initial Purchasers”), who have agreed to purchase $165,000,000 aggregate principal amount of the Company’s 7¹/2% Senior Notes due 2015 (the “Initial Notes”) pursuant to the Purchase Agreement (as defined below).

     This Agreement is made pursuant to the Purchase Agreement, dated January 27, 2006 (the “Purchase Agreement”), by and among the Company and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Initial Notes, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 6(k) of the Purchase Agreement. Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Indenture (as defined).

     The parties hereby agree as follows:

SECTION 1.
DEFINITIONS

     As used in this Agreement, the following capitalized terms shall have the following meanings:

     Act: The U.S. Securities Act of 1933, as amended.

     Advice: As defined in Section 6(d) hereof.

     Affiliate: As defined in Rule 144 under the Act.

     Broker-Dealer: Any broker or dealer registered under the Exchange Act.

     Closing Date: The date hereof.

     Commission: The U.S. Securities and Exchange Commission.

     Company: As defined in the preamble hereto.

     Consummate: The Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Initial Notes that were validly tendered and not withdrawn by Holders thereof pursuant to the Exchange Offer.

     Damages Payment Date: With respect to the Initial Notes, each Interest Payment Date.

     Effectiveness Target Date: As defined in Section 5 hereof.

     Exchange Act: The U.S. Securities Exchange Act of 1934, as amended.

     Exchange Offer: The offer, registered by the Company under the Act pursuant to a Registration Statement, of the Exchange Notes to the Holders of all outstanding Transfer Restricted Securities validly tendered and not withdrawn in such exchange offer by such Holders.

     Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

     Exchange Notes: The Company’s 7¹/2% Senior Notes due 2015 to be issued pursuant to the Indenture (a) in the Exchange Offer and (b) as contemplated by Section 6(c)(xii) hereof.

     Exempt Resales: The transactions in which the Initial Purchasers propose to sell the Initial Notes (i) to certain “qualified institutional buyers,” as such term is defined in Rule 144A under the Act and (ii) outside the United States to certain non-U.S. Persons pursuant to the requirements of Rule 903 under the Act.

     Guarantor: As defined in the preamble hereto.

     Holder and Holders: As defined in Section 2(b) hereof.

     Indemnified Holder: As defined in Section 8(a) hereof.

     Indenture: The Indenture, dated as of April 28, 2005, between the Company and JPMorgan Chase Bank, National Association, as the Trustee, pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

     Initial Notes: As defined in the preamble hereto.

     Initial Purchaser and Initial Purchasers: As defined in the preamble hereto.

     Interest Payment Date: Each May 15 and November 15, beginning with May 15, 2006.

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

- 2 -

     NASD: The National Association of Securities Dealers, Inc.

     Notes: The Initial Notes and the Exchange Notes.

     Prospectus: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

     Record Holder: With respect to any Damages Payment Date relating to Notes, each Person who is a Holder of Notes on the record date with respect to the Interest Payment Date on which such Damages Payment Date shall occur.

     Registration Default: As defined in Section 5 hereof.

     Registration Statement: Any registration statement of the Company relating to (a) an offering of Exchange Notes and the Subsidiary Guarantees pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case, which is filed pursuant to the provisions of this Agreement and including the related Prospectus.

     Shelf Filing Deadline: As defined in Section 4 hereof.

     Shelf Registration Statement: As defined in Section 4 hereof.

     Subsidiary Guarantees: The joint and several guarantees of the Company’s payment obligations under the Notes by the Guarantors to the extent required by the terms of the Indenture.

     TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture.

     Transfer Restricted Securities: Each (a) Initial Note until (i) the date on which such Initial Note has been exchanged by a Person other than a Broker-Dealer for an Exchange Note in the Exchange Offer, (ii) the date on which such Initial Note has been disposed of in accordance with the Shelf Registration Statement in a transaction registered thereunder and the purchasers thereof have been issued Exchange Notes or (iii) the date on which such Initial Note is distributed to the public pursuant to Rule 144 under the Act or may be distributed to the public pursuant to Rule 144(k) under the Act and (b) Exchange Note until, following the exchange by a Broker-Dealer in the Exchange Offer of an Initial Note for an Exchange Note, the date on which such Exchange Note is sold pursuant to the “Plan of Distribution” contemplated in the Exchange Offer Registration Statement to a purchaser who receives from such Broker-Dealer on or prior to the date of such sale a copy of the Prospectus contained in the Exchange Offer Registration Statement.

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

- 3 -

     Underwritten Registration or Underwritten Offering: A registration or an offering in which securities of the Company are sold to an underwriter for reoffering to the public.

SECTION 2.
SECURITIES SUBJECT TO THIS AGREEMENT

     (a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

     (b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder” and, collectively, the “Holders”) whenever such Person owns Transfer Restricted Securities of record.

SECTION 3.
REGISTERED EXCHANGE OFFER

     (a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Company and the Guarantors shall (i) cause to be filed with the Commission on or before the 120th day after the Closing Date, a Registration Statement under the Act relating to the Exchange Notes, the Subsidiary Guarantees and the Exchange Offer, (ii) use their reasonable best efforts to cause such Registration Statement to become effective on or before the 180th day after the Closing Date, (iii) in connection with the foregoing, file (A) all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Act and (C) subject to the proviso in Section 6(c)(xi) hereof, cause all necessary filings in connection with the registration and qualification of the Exchange Notes and the Subsidiary Guarantees to be made under the Blue Sky laws of such jurisdictions as are necessary to permit the Exchange Offer to be Consummated, and (iv) upon the effectiveness of such Registration Statement, commence, and within the time periods contemplated by Section 3(b) hereof Consummate, the Exchange Offer. The Exchange Offer Registration Statement shall be on the appropriate form under the Act permitting registration of the Exchange Notes to be offered in exchange for the Initial Notes that are Transfer Restricted Securities and permitting resales of the Exchange Notes held by Broker-Dealers that tendered into the Exchange Offer Initial Notes that such Broker-Dealers acquired for their own account as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates) as contemplated by Section 3(c) below.

     (b) The Company and the Guarantors shall cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days. The Company and the Guarantors shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

- 4 -

Exchange Notes and the Subsidiary Guarantees shall be included in the Exchange Offer Registration Statement. The Company and the Guarantors shall use their reasonable best efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in any event on or prior to the 210th day after the Closing Date.

     (c) The Company and the Guarantors shall indicate in a “Plan of Distribution” section contained in the Exchange Offer Registration Statement that any Broker-Dealer who holds Notes that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company or any of its Affiliates) may exchange such Transfer Restricted Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of the Exchange Notes received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by such Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Transfer Restricted Securities held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.

     The Company and the Guarantors shall use their reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by and subject to the provisions of Sections 6(a) and 6(c) below to the extent necessary to ensure that the related Prospectus is available for resales of Notes acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company or any of its Affiliates), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of one year from the Consummation Date or such shorter period as will terminate when no Transfer Restricted Securities covered by such Registration Statement are outstanding.

     The Company and the Guarantors shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such period in order to facilitate such resales.

SECTION 4.
SHELF REGISTRATION

     (a) Shelf Registration. If (i) the Company and the Guarantors are not required to file an Exchange Offer Registration Statement or not permitted to Consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with) or (ii) any Holder of

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

- 5 -

Transfer Restricted Securities notifies the Company in writing prior to the 20th Business Day following the Consummation of the Exchange Offer that (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not available for such resales by such Holder, then the Company and the Guarantors shall use their reasonable best efforts to:

     (x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”) relating to all Transfer Restricted Securities in the case of Section 4(a)(i) or the Transfer Restricted Securities specified in any notice in the case of Section 4(a)(ii) on or prior to the earliest to occur of (1) the 90th day after the date on which the Company determines that it is not required to file the Exchange Offer Registration Statement as a result of Section 4(a)(i) hereof and (2) the 90th day after the date on which the Company receives notice from a Holder of Transfer Restricted Securities as contemplated by Section 4(a)(ii) above (such earliest date being the “Shelf Filing Deadline”), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and

     (y) cause such Shelf Registration Statement to be declared effective by the Commission on or before the 180th day after the Shelf Filing Deadline.

The Company and the Guarantors shall use their reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, until the earlier of (a) two years following the Closing Date and (b) such earlier date when no Transfer Restricted Securities covered by such Shelf Registration Statement remain outstanding.

     Holders of Transfer Restricted Securities that do not give the written notice within the 20 Business Day period set forth above in this Section 4(a), if required to be given, will no longer have any registration rights pursuant to this Section 4 and will not be entitled to any Liquidated Damages pursuant to Section 5 hereof in respect of the Company’s obligations with respect to the Shelf Registration Statement.

     (b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 10 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

- 6 -

included therein. No Holder of Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof if such Holder shall have failed to provide all such reasonably requested information within such period. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

SECTION 5.
LIQUIDATED DAMAGES

     If (i) any of the Registration Statements required by this Agreement to be filed is not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any of such Registration Statements has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the “Effectiveness Target Date”), whether or not the Company and the Guarantors have breached any obligations to use their reasonable best efforts to cause any such Registration Statement to be declared effective, (iii) the Exchange Offer has not been Consummated within 210 days of the Closing Date with respect to the Exchange Offer Registration Statement or (iv) subject to Section 6(c)(i) hereof, any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within 10 Business Days by a post-effective amendment to such Registration Statement that cures such failure and that is itself declared effective within 10 Business Days of the date of filing of such post-effective amendment (each such event referred to in clauses (i) through (iv), a “Registration Default”), the Company and the Guarantors hereby jointly and severally agree to pay liquidated damages to each Holder of Transfer Restricted Securities in an amount equal to $.05 per week per $1,000 principal amount of Transfer Restricted Securities held by such Holder for each week or portion thereof that the Registration Default continues with respect to the first 90-day period immediately following the occurrence of such Registration Default. The amount of the liquidated damages shall increase by an additional $.05 per week per $1,000 in principal amount of Transfer Restricted Securities with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages of $.30 per week per $1,000 principal amount of Transfer Restricted Securities provided that the Company shall in no event be required to pay Liquidated Damages for more than one Registration Default at any given time. All accrued liquidated damages shall be paid to Record Holders by the Company on each Damages Payment Date following the accrual thereof, in the same manner as provided in the Indenture and the Notes for the payment of interest on the Notes. Following the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, the accrual of liquidated damages with respect to such Transfer Restricted Securities will cease.

     All obligations of the Company and the Guarantors set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

- 7 -

SECTION 6.
REGISTRATION PROCEDURES

     (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all of the applicable provisions of Section 6(c) below, shall use their reasonable best efforts to effect such exchange and to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

     (i) If in the reasonable opinion of counsel to the Company there is a question as to whether the Exchange Offer is permitted by applicable law, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate the Exchange Offer for such Transfer Restricted Securities and to permit the resale of Exchange Notes by Broker-Dealers that tendered in the Exchange Offer Initial Notes that such Broker-Dealers acquired for their own account as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates) being sold in accordance with the intended method or methods of distribution thereof. The Company and the Guarantors hereby agree to use their reasonable best efforts to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy.

     (ii) As a condition to its participation in the Exchange Offer, each Holder of Transfer Restricted Securities (including, without limitation, any Holder who is a Broker-Dealer) shall furnish, upon the request of the Company, prior to the Consummation of the Exchange Offer, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that, at the time of Consummation of the Exchange Offer, (A) any Exchange Notes received by such Holder will be acquired in the ordinary course of its business, (B) such Holder will have no arrangement or understanding with any person to participate in distribution of the Initial Notes or the Exchange Notes within the meaning of the Act, (C) if the Holder is not a Broker-Dealer or is a Broker-Dealer but will not receive Exchange Notes for its own account in exchange for Initial Notes, neither the Holder nor any such other Person is engaged in or intends to participate in a distribution of the Exchange Notes, and (D) such Holder is not an Affiliate of the Company. If the Holder is a Broker-Dealer that will receive Exchange Notes for its own account in exchange for Initial Notes, it will represent that the Initial Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities, and will acknowledge that it will deliver a prospectus meeting the requirements of the Act in connection with any resale of such Exchange Notes. It is understood that, by acknowledging that it will deliver, and by delivering, a prospectus meeting the requirements of the Act in connection with any resale of such Exchange Notes, the Holder is not admitting that it is an “underwriter” within the meaning of the Act.

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

- 8 -

     (iii) Prior to effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall provide a supplemental letter to the Commission (A) stating that the Company and the Guarantors are registering the Exchange Offer in reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any no-action letter obtained pursuant to clause (i) above and (B) including a representation that neither the Company nor any Guarantor has entered into any arrangement or understanding with any Person to distribute the Exchange Notes to be received in the Exchange Offer and that, to the best of the Company’s information and belief, each Holder participating in the Exchange Offer is acquiring the Exchange Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes received in the Exchange Offer.

     (b) Shelf Registration Statement. In connection with the Shelf Registration Statement, if required, the Company and the Guarantors shall comply with all the provisions of Section 6(c) below and shall use their reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company pursuant to Section 4(b) hereof) and, pursuant thereto, the Company and the Guarantors will prepare and file with the Commission in accordance with Section 4(a) hereof a Shelf Registration Statement to effect such registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof.

     (c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Notes by Broker-Dealers as contemplated herein), the Company and the Guarantors shall during the periods specified in Sections 3 and 4 hereof, as applicable:

     (i) use their reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements (including, if required by the Act or any regulation thereunder, financial statements of the Guarantors, if any) for the period specified in Section 3 or 4 hereof, as applicable; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or (B) not to be effective and usable for the resale of Transfer Restricted Securities during the period required by this Agreement, the Company and the Guarantors shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use their reasonable best efforts to cause such amendment to be declared effective and such Registration

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

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Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter; provided, however, if (A) the full Board of Directors of the Company determines in good faith that it is in the best interests of the Company not to disclose the existence of or facts surrounding any proposed or pending material corporate transaction involving the Company or any of its subsidiaries and (B) the Company notifies the Holders, pursuant to Section 6(c)(iii)(D) hereof, within two Business Days after such Board of Directors makes such determination, the Company may allow the Shelf Registration Statement to fail to be effective and usable as a result of such nondisclosure for up to 120 days during the period of effectiveness required by Section 4 hereof, but in no event for a period in excess of 45 consecutive days;

     (ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

     (iii) except in the case of the Exchange Offer Registration Statement, advise the underwriter(s), if any, and selling Holders promptly and, if requested by any such Person, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Company and the Guarantors shall use their reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

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     (iv) in the case of a Shelf Registration Statement, furnish to each of the selling Holders and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (but excluding any documents incorporated by reference as a result of the Company’s periodic reporting requirements under the Exchange Act), and neither the Company nor any Guarantors shall file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (excluding all such documents incorporated by reference as a result of the Company’s periodic reporting requirements under the Exchange Act) to which a selling Holder of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object within five Business Days after the receipt thereof. A selling Holder or underwriter, if any, shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

     (v) in the case of a Shelf Registration Statement, promptly following the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the selling Holders and to the underwriter(s), if any, make the Company’s representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

     (vi) in the case of a Shelf Registration Statement, make available at reasonable times for inspection by the selling Holders, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney or accountant retained by such selling Holders or any of the underwriter(s), all relevant financial and other records and pertinent corporate documents and properties of the Company and the Guarantors and cause the Company’s and the Guarantors’ officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement subsequent to the filing thereof and prior to its effectiveness; provided, however, that the foregoing inspection and information gathering (i) shall be coordinated on behalf of the selling Holders, underwriters, or any representative thereof, by one counsel, who shall be Vinson & Elkins R.L.L.P. or such other counsel as may be chosen by the Holders of a majority in principal amount of Transfer Restricted Securities, and (ii) shall not be available for any such Holder who does not agree in writing to hold such information in confidence.

     (vii) in the case of a Shelf Registration Statement, if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such

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information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

     (viii) in the case of a Shelf Registration Statement, furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

     (ix) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company and the Guarantors hereby consent, subject to Section 6(d) hereof, to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto; provided that such use of the Prospectus and any amendment or supplement thereto and such offering and sale conforms to the Plan of Distribution set forth in the Prospectus and complies with the terms of this Agreement and all applicable laws and regulations thereunder;

     (x) in the event of an Underwritten Registration, enter into such customary agreements (including an underwriting agreement), make such customary representations and warranties, deliver such customary documents and certificates, and take all such other customary actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and, without limiting the generality of the foregoing, the Company and the Guarantors shall:

     (A) furnish to each underwriter upon the effectiveness of the Shelf Registration Statement:

     (1) a certificate, dated the date of effectiveness of the Shelf Registration Statement, signed on behalf of the Company by two senior officers, one of whom must be its Senior Executive Vice President,

Compagnie Generale de Geophysique
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Finance and Human Resources, confirming, as of such date, the matters addressed in the officers’ certificate delivered pursuant to Section 6(e) of the Purchase Agreement with respect to the transactions contemplated by the Shelf Registration Statement;

     (2) an opinion or opinions, dated the date of effectiveness of the Shelf Registration Statement, of counsel for the Company and the Guarantors covering the matters referred to in Section 6(c) and (d) of the Purchase Agreement with respect to the transactions contemplated by the Shelf Registration Statement; and

     (3) a customary comfort letter, dated as of the date of effectiveness of the Shelf Registration Statement, from the Company’s independent accountants if such comfort letter shall be issuable to the underwriters in accordance with the relevant accounting industry pronouncements, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with primary underwritten offerings, and substantially in the form of the comfort letters delivered pursuant to Section 6(a) of the Purchase Agreement; and

     (B) deliver such other documents and certificates as may be reasonably requested by such parties and which are customarily delivered in Underwritten Offerings.

     (xi) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s) may reasonably request and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that neither the Company nor the Guarantors shall be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject;

     (xii) issue, upon the request of any Holder of Initial Notes covered by the Shelf Registration Statement, Exchange Notes, having an aggregate principal amount equal to the aggregate principal amount of Initial Notes being sold by such Holder, such Exchange Notes to be registered in the name of the purchaser(s) of such Notes, as the case may be; in return, the Initial Notes held by such Holder shall be surrendered to the Company for cancellation;

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     (xiii) in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such authorized denominations and registered in such names as the Holders or the underwriter(s), if any, may reasonably request at least two Business Days prior to any sale of Transfer Restricted Securities made by such underwriter(s);

     (xiv) if any fact or event contemplated by clause (c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

     (xv) provide a CUSIP number for all Exchange Notes not later than the effective date of the Registration Statement and provide the Trustee under the Indenture with one or more global certificates for the Exchange Notes that are in a form eligible for deposit with The Depository Trust Company;

     (xvi) in the case of a Shelf Registration Statement, cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of the NASD;

     (xvii) otherwise use their reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for a twelve-month period commencing after the effective date of the Registration Statement;

     (xviii) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use their reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

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     (xix) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 or Section 15 of the Exchange Act.

     (d) Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will keep such notice confidential and forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof, or until it is advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each 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 Transfer Restricted Securities that was current at the time of receipt of such notice. If the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, 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 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof or shall have received the Advice.

SECTION 7.
REGISTRATION EXPENSES

     (a) All expenses incident to the Company’s or the Guarantors’ performance of or compliance with this Agreement will be borne by the Company and the Guarantors regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchasers or Holders with the NASD (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of the NASD)); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company and the Guarantors and, subject to Section 7(b) below, counsel for the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing Notes on a national securities exchange or automated quotation system, if any; and (vi) all fees and disbursements of independent public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).

     The Company and the Guarantors will, in any event, bear their internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or any Guarantor. The Company

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shall not be responsible for any other expenses or costs, including but not limited to commissions, fees and discounts of underwriters, brokers, dealers and agents.

     (b) In connection with any Registration Statement required by this Agreement (excluding the Exchange Offer Registration Statement), the Company and the Guarantors will reimburse the Holders of Transfer Restricted Securities being tendered in the Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Vinson & Elkins R.L.L.P. or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared; provided that, except in the case of an Underwritten Offering, the fees and expenses of such counsel to be reimbursed by the Company shall not exceed $25,000.

SECTION 8.
INDEMNIFICATION

     (a) The Company and the Guarantors jointly and severally, agree to indemnify and hold harmless (i) each Holder, (ii) each Initial Purchaser, (iii) each person, if any, who controls any Holder or an Initial Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or Initial Purchaser or any controlling person (any person referred to in clauses (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, liabilities, claims, damages and expenses whatsoever (including but not limited to reasonable attorneys’ fees and any and all reasonable expenses whatsoever incurred in investigating, preparing or defending against any investigation or litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus, or in any supplement thereto or amendment thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company and the Guarantors will not be liable in any such case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the any of the Holders expressly for use therein. This indemnity agreement will be in addition to any liability that the Company and the Guarantors may otherwise have, including under this Agreement.

     (b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company, each of the Guarantors and each person, if any, who

Compagnie Generale de Geophysique
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controls the Company or any Guarantor within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each of their respective officers, directors, employers, partners, representatives and agents to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to information relating to such Holder furnished in writing by such Holder for use in any Registration Statement, or in any amendment thereof or supplement thereto; provided, however, that in no case shall any selling Holder be liable or responsible for any amount in excess of proceeds received by such Holder upon the sale of the Notes giving rise to such indemnification obligation. This indemnity will be in addition to any liability that the Holders may otherwise have, including under this Agreement.

     (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability that it may have under this Section 8 or otherwise except to the extent that it has been prejudiced in any material respect by such failure). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume and control the defense thereof with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it that are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses of counsel shall be borne by the indemnifying parties; provided, however, that the indemnifying party under subsection (a) or (b) above shall only be liable for the legal expenses of one counsel (in addition to any local counsel) for all indemnified parties. Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement of any claim or action effected without its prior written consent; provided that such consent was not unreasonably withheld.

SECTION 9.
CONTRIBUTION

     In order to provide for contribution in circumstances in which the indemnification provided for in Section 8 is for any reason held to be unavailable or is insufficient to hold harmless a party indemnified thereunder, the Company and the Guarantors on the one hand, and

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the Holders on the other hand, shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnification provision (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages, liabilities and expenses suffered by the Company and the Guarantors any contribution received by the Company and the Guarantors from Persons, other than a Holder, who may also be liable for contribution, including persons who control the Company and the Guarantors within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) to which the Company, the Guarantors or any Holder may be subject, (i) in such proportion as is appropriate to reflect the relative fault of the Company and the Guarantors on one hand, and each Holder, on the other hand, in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative fault referred to in clause (i) above but also other relevant equitable considerations. The relative fault of the Company and the Guarantors on one hand, and of each Holder, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Guarantors or such Holder and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Guarantors and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to above. Notwithstanding the provisions of this Section 9, (i) in no case shall any Holder be required to contribute any amount in excess of the amount by which the proceeds received by such Holder upon the sale of the Transfer Restricted Securities giving rise to such obligation exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9, (A) each Person, if any, who controls any of the Holders within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the respective officers, directors, partners, employees, representatives and agents of such Holder or any controlling Person shall have the same rights to contribution as the Holders, and each Person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same rights to contribution as the Company and the Guarantors subject in each case to clauses (i) and (ii) of this Section 9. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this Section 9, notify such party or parties from whom contribution may be sought, but the failure to so notify such party or parties shall n ot relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 9 or otherwise, except to the extent it or they have been prejudiced in any material respect by such failure. No party shall be liable for contribution with respect to any action or

Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
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claim settled without its prior written consent; provided that such written consent was not unreasonably withheld.

SECTION 10.
RULE 144A

     The Company and the Guarantors hereby agree with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available, upon request, to any Holder of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A.

SECTION 11.
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS

     No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

SECTION 12.
SELECTION OF UNDERWRITERS

     The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Company; provided, however, that such investment bankers and managers must be reasonably satisfactory to the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering.

SECTION 13.
MISCELLANEOUS

     (a) No Inconsistent Agreements. The Company and the Guarantors shall not, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company’s or any Guarantor’s securities under any agreement in effect on the date hereof.

     (b) [Intentionally omitted.]

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     (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities; provided, however, that the Company may amend this Agreement to include or exclude a Guarantor as a party hereto if, pursuant to the terms of the Indenture, such Guarantor is required to provide a Subsidiary Guarantee for the Notes or is released from such obligation. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered.

     (d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telecopier, or air courier guaranteeing overnight delivery:

     (i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

     (ii) if to the Company or any Guarantor:

Compagnie Générale de Géophysique
1, rue Léon Migaux
91341 Massy
France
Telecopier No.: 33-1-67-47-34-32
Attention: Chief Financial Officer

     with a copy to:

Linklaters & Alliance
25, rue de Marignan
75008 Paris
France
Telecopier No.: 33-1-43-59-41-96
Attention: Tom O’Neill

     All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

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     Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

     (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, the successors and assigns of subsequent Holders of Transfer Restricted Securities; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.

     (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

[Signature page to follow]

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

Compagnie Generale de Geophysique
By:
	Name:
	Title:

CGG Americas Inc.
By:
	Name:
	Title:

CGG Canada Services Ltd
By:
	Name:
	Title:

CGG Marine Resources Norge A/S
By:
	Name:
	Title:

Sercel Inc.
By:
	Name:
	Title:

Sercel Australia Pty Ltd
By:
	Name:
	Title:

Sercel Canada Ltd.
By:
	Name:
	Title:

Signature Page to Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

Accepted and agreed to as of
the date first above written:

Credit Suisse Securities (Europe) Limited
BNP Paribas Securities Corp.

By : Credit Suisse Securities (Europe) Limited
By:
	Name:
	Title:

Signature Page to Compagnie Generale de Geophysique
7¹/2% Senior Notes due 2015
Registration Rights Agreement

EX-4.22

Exhibit 4.22

USD 70,000,000
LONG-TERM FACILITY AGREEMENT

for

Exploration Investment Resources II AS
as Borrower

provided by

The Financial Institutions
listed in Schedule 1
as Lenders

with

DnB NOR Bank ASA
as Mandated Lead Arranger

and

DnB NOR Bank ASA
as Underwriter

and

DnB NOR Bank ASA
as Agent

Dated 29 March 2006

TABLE OF CONTENTS

1	DEFINITIONS AND INTERPRETATION	4
2	THE FACILITY	12
3	PURPOSE	13
4	CONDITIONS PRECEDENT	13
5	DRAWDOWN	13
6	REPAYMENT	14
7	PREPAYMENT AND CANCELLATION	14
8	INTEREST	16
9	INTEREST PERIODS	17
10	CHANGES TO THE CALCULATION OF INTEREST	17
11	FEES	18
12	TAX GROSS-UP AND INDEMNITIES	19
13	INCREASED COSTS	20
14	OTHER INDEMNITIES	20
15	COSTS AND EXPENSES	21
16	SECURITY	22
17	REPRESENTATIONS AND WARRANTIES	22
18	INFORMATION UNDERTAKINGS	26
19	FINANCIAL COVENANTS	28
20	GENERAL UNDERTAKINGS	30
21	VESSEL COVENANTS	32
22	EVENTS OF DEFAULT	36
23	CHANGES TO THE PARTIES	38
24	ROLE OF THE AGENT, SECURITY TRUSTEE AND THE ARRANGER	40
25	SHARING AMONG THE FINANCE PARTIES	44
26	PAYMENT MECHANICS	46
27	SET-OFF	47
28	NOTICES	48
29	CALCULATIONS	49
30	MISCELLANEOUS	49
31	GOVERNING LAW AND ENFORCEMENT	50

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SCHEDULES

1	Lenders and Commitments
2	Conditions precedent
3	Form of Drawdown Notice
4	Form of Compliance Certificate
5	Form of Transfer Certificate
6 A	Form of Assignment of Insurances
6 B	Form of Assignment of Earnings and Charterparties
7	Form of Guarantee

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THIS LONG-TERM FACILITY AGREEMENT is dated 29 March 2006 and made between:

(1) Exploration Investment Resources II AS of Damsgårdsv 125, 5162 Laksevåg, Bergen, Norway, organisation number 984 670 303, as borrower (the “Borrower”);

(2) The banks and financial institutions listed in Schedule 1, as original lenders (together, the “Lenders”);

(3) DnB NOR Bank ASA of Lars Hillesgt 30, N-5020 Bergen, Norway, organisation number 984 851 006, as mandated lead arranger (the “Arranger”);

(4) DnB NOR Bank ASA of Lars Hillesgt 30, N-5020 Bergen, Norway, organisation number 984 851 006, as underwriter (the “Underwriter”); and

(5) DnB NOR Bank ASA of Lars Hillesgt 30, N-5020 Bergen, Norway, organisation number 984 851 006, as facility agent (the “Agent”), and with respect to the Mortgage as security trustee (the “Security Trustee”).

IT IS AGREED as follows:

1    DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Agreement, unless the context otherwise requires:

“Agreement” means this long-term facility agreement, as it may be amended, supplemented and varied from time to time, including its Schedules and any Transfer Certificate.

“Assignment of Charterparties and Earnings” means the first priority assignment of the Charterparties and the Earnings, to be made between the Borrower and the Agent (on behalf of the Finance Parties) as security for the Borrower’s obligations under the Finance Documents, substantially in the form set out in Schedule 6 B (Form of Assignment of Charterparties and Earnings).

“Assignment of Insurances” means the first priority assignment of the Insurances to be made between the Borrower and the Agent (on behalf of the Finance Parties) as security for the Borrower’s obligations under the Finance Documents, substantially in the form set out in Schedule 6 A (Form of Assignment of Insurances).

“Availability Period” means the period from and including the date of this Agreement until 1 June 2006, but only until 30 April 2006 as to Tranche I, or such other date as agreed upon by the Borrower and the Lenders.

“Break Costs” means the amount (if any) by which:

a) the interest which a Lender should have received for the period from the date of receipt of all or part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of such Loan or Unpaid Sum, had the principal amount or Unpaid Sum been paid on the last day of that Interest Period; exceeds

b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the

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relevant interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for business in Bergen, New York and Paris (or any other relevant place of payment under Clause 26 (Payment mechanics).

“CGG” means Compagnie Générale de Géophysique, of 1, rue Léon Migaux, 91341 Massy Cedex, France, being the ultimate holding company of the Borrower, the Charterer and ExRe.

“CGG-Charterparties” means each of the charterparties made between the Borrower and the Charterer for the charter of the Vessels, in form and substance satisfactory to the Agent (on behalf of the Finance Parties).

“C-Orion” means the seismic research vessel C-Orion with call sign YJRV2 and owned by the Borrower and chartered to the Charterer.

“Charterer” means CGG Marine SAS or such other charterers of any of the Vessels from time to time as approved by the Agent (on behalf of the Finance Parties).

“Charterparties” means the CGG-Charterparties and the Geo-Charterparty.

“Commitment” means:

a) in relation to a Lender, the amount set opposite its name under the heading “Commitments” in Schedule 1 (Lenders and Commitments) for the respective Tranche and the amount of any other Commitment transferred to it pursuant to Clause 23.2 (Assignments and transfers by the Lenders); and

b) in relation to any New Lender, the amount of any Commitment transferred to it pursuant to Clause 23.2 (Assignments and transfers by the Lenders),

to the extent not cancelled, reduced or transferred by it under this Agreement.

“Co-ordination Agreement” means the agreement entered into between the Borrower, the Agent (on behalf of the Finance Parties), Geoshipping AS as owner of Geo Challenger and the mortgagees of Geo Challenger regulating the Borrower’s ownership to the Equipment on Geo Challenger and the right to claim redelivery of the Equipment to the Borrower upon an Event of Default or in the event of cancellation of the Geo-Charterparty, in form and substance satisfactory to the Agent (on behalf of the Finance Parties).

“Compliance Certificate” means a certificate substantially in the form as set out in Schedule 4 (Form of Compliance Certificate).

“Default” means an Event of Default or any event or circumstance specified in Clause 22 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

“DOC” means in relation to a Manager a valid document of compliance issued to such Manager pursuant to paragraph 13.2 of the ISM Code.

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“Drawdown Date” means the Business Day on which the Borrower has requested drawdown of a Tranche pursuant to this Agreement or, as the context requires, the date on which such Tranche is actually made.

“Drawdown Notice” means the notice substantially in the form set forth in Schedule 3 (Form of Drawdown Notice).

“Earnings” means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower and which arise out of the use of or operation of any of the Vessels, including (but not limited to):

a) all freight, hire and passage moneys payable to the Borrower, including (without limitation) payments of any nature under any of the Charterparties or any other charter or agreement for the employment, use, possession, management and/or operation of any of the Vessels;

b) any claim under any guarantees related to freight and hire payable to the Borrower as a consequence of the operation of any of the Vessels;

c) compensation payable to the Borrower in the event of any requisition of any of the Vessels or for the use of any of the Vessels by any government authority or other competent authority;

d) remuneration for salvage, towage and other services performed by any of the Vessels payable to the Borrower;

e) demurrage and retention money receivable by the Borrower in relation to any of the Vessels;

f) all moneys which are at any time payable under the Insurances in respect of loss of earnings;

g) if and whenever any of the Vessels is employed on terms whereby any moneys falling within paragraph a) to f) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Vessel; and

h) any other money whatsoever due or to become due to the Borrower from third parties in relation to any of the Vessels, or otherwise.

“Earnings Accounts” means the Borrower’s accounts no. NOK: 5210 05 21644, USD: 5206 04 92794 and GBP: 5203 04 81852 with the Agent of to which all the Earnings shall be paid, the Borrower’s use of the amounts on the Earnings Accounts shall not be restricted in any way unless a Default has occured.

“Environmental Approval” means any permit, licence, consent, approval and other authorisations and the filing of any notification, report or assessment required under any Environmental Law for the operation of any of the Vessels.

“Environmental Claim” means any claim, proceeding or investigation by any party in respect of any Environmental Law or Environmental Approval.

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“Environmental Law” means any applicable law, regulation, convention or treaty in any jurisdiction in which the Borrower conducts business which relates to the pollution or protection of the environment or to the carriage of material which is capable of polluting the environment.

“Equipment” means the seismic equipment to be installed on the Vessels and which shall be owned by the Borrower.

“Event of Default” means any event or circumstance specified as such in Clause 22 (Events of Default).

“ExRe” means Exploration Resources ASA of Damsgårdsveien 125, 5162 Laksevåg, Bergen, Norway, being the holding company of the Borrower.

“Facility” means the five (5) year long-term facility, the terms and conditions of which are set out in this Agreement.

“Factoring Agreement” means a factoring agreement in the amount of USD 70,000,000 (including a declaration of pledge) entered into between the Borrower and the Agent (on behalf of the Lenders) whereby the Borrower pledges to the Agent (on behalf of the Lenders) on first priority all claims arising from the Borrower’s business operation as security for the Borrower’s obligations under the Finance Documents, in form and substance satisfactory to the Agent.

“Final Maturity Date” means five (5) years from the Drawdown Date of Tranche IV, but not later than 1 June 2011

“Finance Documents” means this Agreement, the Security Documents and any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower and/or any of the Guarantors or any other person as security for, or to establish any form of subordination to the Finance Parties under this Agreement or any of the other documents referred to herein or therein.

“Finance Party” means the Agent, the Arranger, the Underwriter and the Lenders.

“Financial Indebtedness” means any obligation (whether incurred as principal or as surety) for the payment or repayment of borrowed money, whether present or future, actual or contingent.

“GAAP” means the generally accepted accounting practice and principles in Norway and/or IFRS (if applicable) (or the French equivalent when used in relation to CGG), as set out in the Norwegian Accounting Act of 17 July 1998 No. 56 and the at all times prevailing accounting standards as issued by the Norwegian Accounting Standards Committee (Norsk Regnskapsstiftelse).

“General Pledge” means a general pledge agreement (driftsl øsørepant) in the amount of USD 70,000,000 (including a declaration of pledge) entered into between the Borrower and the Agent (on behalf of the Finance Parties) whereby the Borrower pledges to the Agent (on behalf of the Finance Parties) on first priority all its equipment, machinery and plant etc as security for the Borrower’s obligations under the Finance Documents, in form and substance satisfactory to the Agent.

“Geo Challenger” means the seismic research vessel with call sign LAPI5 with Geo Rederi AS as registered owner and Geoshipping AS as disponent owner, both of Aastveit 12, 5106 Øvre Ervik, Norway, and time charterered to the Borrower and sub-chartered to the Charterer.

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“Geo-Charterparty” means the time charterparty made between the Borrower (as charterer) and Geoshipping AS (as owner) for the charter of the Geo Challenger, in form and substance satisfactory to the Agent (on behalf of the Finance Parties).

“Guarantees” means the two separate unconditional and irrevocable on-demand guarantees issued by the Guarantors in favour of the Agent (on behalf of the Finance Parties) as security for the Borrower’s obligations under the Finance Documents, substantially in the form as set out in Schedule 7 (Form of Guarantees).

“Guarantors” means CGG and ExRe.

“Insurances” means, in relation to each of the Vessels and the Equipment, all policies and contracts of insurance (which expression includes all entries of such Vessel in a protection and indemnity or war risk association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Borrower (whether in the sole name of the Borrower or in the joint names of the Borrower and any other person) in respect of the Vessels and/or the Equipment or otherwise in connection with the Vessels and/or the Equipment and all benefits thereunder (including claims of whatsoever nature and return of premiums).

“Interest Payment Date” means the last Business Day of each Interest Period.

“Interest Period” means, in relation to a Tranche, each of the successive periods determined in accordance with Clause 9.1 (Selection of Interest Periods), and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

“ISM Code” means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevent.

“ISPS Code” means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization’s (IMO) Diplomatic Conference of December 2002.

“Lenders” means the banks and financial institutions listed in Schedule 1 (Lenders and Commitments) and any New Lender, which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

“LIBOR” means in relation to a Tranche:

a) the rate per annum equal to the offered quotation for deposits in USD ascertained by the Agent to be the rate as displayed on the Reuters’ screen, page LIBOR01, at or about 11:00 hours (London time) on the applicable Quotation Day; or

b) if no such rate is available, the arithmetic mean of the rate per annum at which the Lenders are able to acquire USD in the amount and for the Interest Period of such Tranche in the London interbank market at or about 11:00 hours (London time) on the applicable Quotation Day, as (in the absence of manifest error) conclusively certified by the Agent to the Borrower.

“Loan” means at any time, the aggregate amount outstanding under this Agreement, provided however that the outstanding amount shall never exceed the Total Commitments.

“Majority Lenders” means:

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a) if there are no Loan outstanding, a Lender or Lenders whose Commitments aggregate more than 66.67% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66.67% of the Total Commitments immediately prior to the reduction); or

b) at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66.67% of the Loan.

“Managers” means the technical manager(s) of the Vessels, being Rieber Shipping AS for C-Orion and Geoshipping AS for Geo Challenger, or another reputable technical manager acceptable to the Agent.

“Margin” means one point ten per cent. (1.10%) per annum.

“Market Value” means the fair market value of a Vessel in USD, being the average of valuations of such Vessel obtained from minimum two (2) reputable and independent shipbrokers, acceptable to the Agent. Such valuations to be made when requested by the Agent for the cost and expense of the Borrower, with or without physical inspection of the relevant Vessel (as the Agent may require) on the basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing buyer and seller, on an “as is, where is” basis, free of any existing charter or other contract of employment and/or pool arrangement.

“Material Adverse Effect” means a material adverse effect on:

a) the business, operation, assets or condition (financial or otherwise) of the Borrower and/or any of the Guarantors (as the case may be); or

b) the ability of the Borrower and/or any of the Guarantors (as the case may be) to perform any of its obligations under the Finance Documents.

“Mortgage” means the first priority mortgage and the deed of covenants collateral thereto (if any) or a declaration of pledge (as the case may be), to be executed and recorded by the Borrower against the C-Orion in the Vanuatu Ship Registry (or such other ship registry acceptable to the Agent) as security for the Borrower’s obligations under the Finance Documents in favour of the Agent and Security Trustee (on behalf of the Finance Parties), in form and substance satisfactory to the Agent (on behalf of the Finance Parties).

“New Lender” has the meaning set out in Clause 23 (Changes to the Parties).

“Original Financial Statements” means the unaudited financial statements of the Borrower and each of the Guarantors for the year ended 31 December 2005.

“Party” means a party to this Agreement (including its successors and permitted transferees).

“Quotation Day” means the day occurring two (2) Business Days prior to the commencement of an Interest Period.

“Repayment Date” means the dates for repayment of an installment as determined according to Clause 6.1 (Repayment).

“Security Documents” means all or any security documents as may be entered into from time to time pursuant to Clause 16 (Security).

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“Security Interest” means any mortgage, charge (whether fixed or floating), encumbrance, pledge, lien, assignment by way of security, finance lease, sale and repurchase or sale and leaseback arrangement, sale of receivables on a recourse basis or other security interest or any other agreement or arrangement having the effect of conferring security.

“Security Period”means the period commencing on the date of this Agreement and ending the date on which the Agent notifies the other Finance Parties and the Borrower that:

a) all amounts which have become due for payment by the Borrower or any other party under the Finance Documents have been paid;

b) no amount is owing or has accrued (without yet having become due for payment) under any of the Finance Documents;

c) the Borrower has no future or contingent liability under any provision of this Agreement or the other Finance Documents; and

d) the Agent and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document.

“Share Pledge” means the share pledge agreement to be entered into between ExRe and the Agent whereby all of the shares in the Borrower shall be pledged to the Agent (on behalf of the Finance Parties) as security for ExRe’s obligations under the Guarantee and the Borrower’s obligations under the Finance Documents.

“SMC” means a valid safety management certificate issued for each of the Vessels pursuant to paragraph 13.7 of the ISM Code.

“SMS” means a safety management system for each of the Vessels developed and implemented in accordance with the ISM Code and including the functional requirements duties and obligations that follow from the ISM Code.

“Tax on Overall Net Income” means a Tax imposed on a Finance Party by the jurisdiction under the laws of which it is incorporated, or in which it is located or treated as resident for tax purposes, on:

a)	the net income, profits or gains of that Finance Party world wide; or
b)	such of the net income, profits or gains of that Finance Party as are considered to arise in or relate to or are taxable in that jurisdiction.

“Taxes” means all present and future taxes, levies, imposts, duties, charges, fees, deductions and withholdings, and any restrictions and or conditions resulting in a charge together with interest thereon and penalties in respect thereof and “tax” and “taxation” shall be construed accordingly.

“Total Commitments” means the aggregate of the Lenders’ Commitments, being USD 70,000,000 at the time of this Agreement.

“Total Loss” means, in relation to any Vessel:

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a)	the actual, constructive, compromised, agreed, arranged or other total loss of such Vessel;
b)	any expropriation, confiscation, requisition or acquisition of such Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a governmental or official authority (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to extension) unless it is within one (1) month from the Total Loss Date redelivered to the full control of the Borrower; and
c)	any arrest, capture, seizure or detention of such Vessel (including any hijacking or theft) unless it is within one (1) month from the Total Loss Date redelivered to the full control of the Borrower.

“Total Loss Date” means:

a) in the case of an actual total loss of any Vessel, the date on which it occurred or, if that is unknown, the date when such Vessel was last heard of;

b) in the case of a constructive, compromised, agreed or arranged total loss of any Vessel, the earlier of: (i) the date on which a notice of abandonment is given to the insurers (provided a claim for total loss is admitted by such insurers) or, if such insurers do not forthwith admit such a claim, at the date at which either a total loss is subsequently admitted by the insurers or a total loss is subsequently adjudged by a competent court of law or arbitration panel to have occurred or, if earlier, the date falling six (6) months after notice of abandonment of such Vessel was given to the insurers; and (ii) the date of compromise, arrangement or agreement made by or on behalf of the Borrower with such Vessel’s insurers in which the insurers agree to treat such Vessel as a total loss; or

c) in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred.

“Tranche” means any of the Tranche I, Tranche II, Tranche III and Tranche IV.

“Tranche I” means an amount of USD 10,000,000 for the purpose set out in Clause 3.1 a).

“Tranche II” means an amount of USD 25,000,000 for the purpose set out in Clause 3.1 b).

“Tranche III” means an amount of USD 10,000,000 for the purpose set out in Clause 3.1 c).

“Tranche IV” means an amount of USD 25,000,000 for the purpose set out in Clause 3.1 d).

“Transfer Certificate” means a certificate substantially in the form as set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower.

“Transfer Date” means, in respect of a Transfer (as defined in Clause 23.2 (Assignments and transfers by the Lenders), the proposed Transfer Date as set out in the Transfer Certificate relating to the Transfer.

“Vessels” means C-Orion and Geo Challenger.

“Unpaid Sum” means any sum due and payable but unpaid by the Borrower and/or the Guarantors under the Finance Documents.

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“USD” means United States Dollars, being the lawful currency of the United States of America.

“VAT” means value added tax and any other tax of similar nature.

1.2 Construction

In this Agreement, unless the context otherwise requires:

a)	Clause and Schedule headings are for ease of reference only;
b)	words denoting the singular number shall include the plural and vice versa;
c)	references to Clauses and Schedules are references, respectively, to the Clauses and Schedules of this Agreement;
d)	references to a provision of law is a reference to that provision as it may be amended or re-enacted, and to any regulations made by the appropriate authority pursuant to such law;
e)	references to “control” means the power to appoint a majority of the board of directors or to direct the management and policies of an entity, whether through the ownership of voting capital, by contract or otherwise;
f)	references to “indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of borrowed money, whether present or future, actual or contingent; and
g)	references to a “person” shall include any individual, firm, partnership, joint venture, company, corporation, trust, fund, body, corporate, unincorporated body of persons, or any state or any agency of a state or association (whether or not having separate legal personality).

2 THE FACILITY

2.1 Facility

Subject to the terms of this Agreement, the Lenders make available to the Borrower a USD long-term facility in the aggregate amount equal to the Total Commitments.

2.2 Maximum liability

The aggregate principal amount of the outstanding Loan, including any requested drawdown, shall not on any requested Drawdown Date and/or on the first day of an Interest Period, exceed the Total Commitments.

2.3 Finance Parties’ rights and obligations

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from the Borrower shall be a separate and independent debt. A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

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3 PURPOSE

3.1 Purpose

The Borrower shall apply all amounts borrowed by it hereunder as follows:

a)	As to Tranche I; to refinance the short-term bridge facility of C-Orion dated 31 August 2005.
b)	As to Tranche II; to part-finance the Equipment to C-Orion.
c)	As to Tranche III; to part-finance the upgrading of Geo Challenger.
d)	As to Tranche IV; to part-finance the Equipment to Geo Challenger.

3.2 Monitoring

Without prejudice to the obligations of the Borrower under this Clause 3, no Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4 CONDITIONS PRECEDENT

4.1 Initial conditions precedent

The Borrower may not deliver the Drawdown Notice for a Tranche unless the Agent has received originals or certified copies of all of the documents and other evidence listed in the relevant part of Schedule 2 (Conditions precedent) applicable to such Tranche, in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.

4.2 Further conditions precedent

The Lenders will only be obliged to comply with Clause 5.3 (Lenders’ participation) if on the date of the Drawdown Notice and on the proposed Drawdown Date:

a)	no Default is continuing or would result from drawing of the Tranche; and
b)	the representations and warranties contained in Clause 17 (Representations and warranties) deemed to be repeated on those dates are true and correct in all material respects.

4.3 Waiver of conditions precedent

The conditions specified in this Clause 4 are solely for the benefit of the Lenders and may be waived on their behalf in whole or in part and with or without conditions by the Agent (upon approval by the Lenders, such approval not to be unreasonably withheld or delayed).

5 DRAWDOWN

5.1 Delivery of the Drawdown Notice

The Borrower may utilise the Facility by delivering to the Agent a duly completed Drawdown Notice no later than 10:00 hours (London time) three (3) Business Days prior to the proposed Drawdown Date.

5.2 Completion of the Drawdown Notice

Each Drawdown Notice is irrevocable and will not be regarded as having been duly completed unless:

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a)	the proposed Drawdown Date is a Business Day during the Availability Period,
b)	the proposed Interest Period complies with Clause 9 (Interest Periods); and
c)	the amount of the Loan at the proposed Drawdown Date, including the amount of the relevant Tranche covered by the Drawdown Notice, shall not exceed the Total Commitments.

Only one (1) Tranche may be requested in each Drawdown Notice. Tranche III may be drawn in sub-tranches, as agreed with the Agent in accordance with the process of upgrading Geo Challenger. The Tranches shall be drawn in chronologically order, unless otherwise agreed with the Agent.

5.3 Lenders’ participation

Upon receipt of the Drawdown Notice, the Agent shall notify each Lender of the details of the requested Tranche and the amount of each Lender’s participation in such Tranche. If the conditions set out in this Agreement have been met, each Lender shall no later than 10:00 hours (London time) on the relevant Drawdown Date make available to the Agent for the account of the Borrower an amount equal to its participation in such Tranche to be advanced pursuant to the Drawdown Notice.

6 REPAYMENT

6.1 Repayment

The Borrower shall repay the Loan in ten (10) equal semi-annual consecutive instalments each in the amount of USD 7,000,000. The first instalment is due and payable six months after the Drawdown Date of Tranche IV, however not later than 1 December 2006.

6.2 Final repayment

The Borrower shall in any event repay the Loan and all other amounts outstanding under the Finance Documents in full on the Final Maturity Date.

6.3 Re-borrowing

The Borrower may not re-borrow any part of the Loan which has been repaid.

7 PREPAYMENT AND CANCELLATION

7.1 Mandatory prepayment — Total Loss or sale of C-Orion

If the C-Orion is sold or becomes a Total Loss, the Tranche I and Tranche II shall be prepaid and all the remaining instalments shall be reduced by 50% each:

a) in case of a sale, on or before the date on which the sale is completed by delivery of the C-Orion to the buyer; or

b) in the case of a Total Loss, on the earlier of the date falling ninety (90) days after the Total Loss Date and the receipt by the Agent (on behalf of the Finance Parties) of the proceeds of Insurance relating to such Total Loss (or in the event of a requisition for title of C-Orion, immediately after the occurrence of such requisition of title).

7.2 Mandatory prepayment — termination of the Geo-Charterparty, Total Loss or sale of Geo Challenger

If the Geo-Charterparty is terminated prior to the Final Maturity Date or Geo Challenger is sold (except if sold to the Borrower under the purchase option of the Geo-Charterparty) or becomes a

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Total Loss, the Tranche III and Tranche IV shall be prepaid and all the remaining instalments shall be reduced by 50% each:

a) in case of termination of the Geo-Charterparty, on or before the date on which such termination is effective;

b) in case of a sale (except if sold to the Borrower under the purchase option of the Geo-Charterparty), on or before the date on which the sale is completed by delivery of the Geo Challenger to the buyer; or

c) in the case of a Total Loss, on the earlier of the date falling ninety (90) days after the Total Loss Date and the receipt by the Agent (on behalf of the Finance Parties) of the proceeds of Insurance relating to such Total Loss (or in the event of a requisition for title of Geo Challenger, immediately after the occurrence of such requisition of title).

7.3 Mandatory prepayment — illegality

If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Tranche:

a)	that Lender shall promptly notify the Agent upon becoming aware of that event;
b)	the Agent shall promptly notify the Borrower (specifying the obligations the performance of which is thereby rendered unlawful and the law giving rise to the same) upon receipt of notification in accordance with paragraph a) above; and
c)	upon the Agent notifying the Borrower, that Lenders’ Commitment and participation in such Tranche will be immediately cancelled; and
d)	the Borrower shall prepay that Lender’s participation in the Tranches made to the Borrower on the last day of the Interest Period for each Tranche occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

7.4 Voluntary prepayment

The Borrower may, if it gives the Agent not less than five (5) Business Days prior notice, prepay the whole or any part of the Loan (but if in part, being an amount of minimum USD 5,000,000 and in multiples of USD 1,000,000).

7.5 Voluntary cancellation

The Borrower may, if it gives the Agent not less than five (5) Business Days prior notice, cancel any undrawn Tranches.

7.6 Terms and conditions for prepayments and cancellation

7.6.1 Irrevocable notice

Any notice of prepayment or cancellation by the Borrower under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date upon which the prepayment or cancellation is to be made.

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7.6.2 Additional payments

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

7.6.3 Time of prepayment and cancellation

The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any Tranches except at the times and in the manner expressly provided for in this Agreement.

7.6.4 No reinstatement

No Tranche cancelled under this Agreement may subsequently be reinstated.

7.6.5 No re-borrowing

Any amount prepaid pursuant to this Clause 7 may not be re-borrowed.

7.6.6 Forwarding of notice of prepayment and cancellation

If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to the Borrower or the affected Lender, as appropriate.

7.6.7 Application

Any amount voluntary prepaid or cancelled shall be applied against the remaining instalments set forth in Clause 6.1 (Repayment) in inverse order of maturity and shall reduce rateably each Lenders’ Commitment.

8 INTEREST

8.1 Calculation of interest

The rate of interest for each Tranche for each Interest Period is the percentage rate per annum which is the aggregate of:

a)	the Margin; and
b)	LIBOR.

It is not possible to calculate the effective interest rate on the Facility in advance. The Lenders are nevertheless, according to the Finance Contracts Act (Finansavtaleloven) obliged to give a representative example. Based on utility of 100% of the relevant Tranche and a 6 months LIBOR of 5.068 % per annum, the effective interest rate will be 6.520 %.

8.2 Payment of interest

The Borrower shall pay accrued interest on the Loan on each Interest Payment Date (and if the Interest Period is longer than six (6) months, on the date falling at six (6) monthly intervals after the first day of the Interest Period).

8.3 Default interest

In the event that any payment to be made under the Finance Documents by the Borrower to any Lender is not received by the Agent on the due date therefore, interest will be charged by such Lender from the due date until the date that payment is received at a rate which is equal to the aggregate of (i) the Margin, (ii) a default funding charge of one per cent (1.00%) per annum and (iii) the rate at which deposits from one Business Day to the next in an amount approximately equal to the defaulted amount due to such Lender are offered to such Lender in the London interbank

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market at approximately 11:00 hours (London time) on the due date for payment and on each succeeding Business Day until payment in full of the amount due is received by such Lender; provided that if the Agent determines that such default may be reasonably expected to continue unremedied for a period exceeding one (1) week then it may require by notice to the Borrower that the funding cost shall be determined by reference to the rate at which deposits are offered as aforesaid for periods of such length (not exceeding three (3) months) as it may designate. Interest charged under this Clause 8.3 shall be payable on demand and unless so paid shall be added to the defaulted amount at the end on each month following the due date for payment of such amount.

8.4 Notification of rates of interest

The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.

9 INTEREST PERIODS

9.1 Selection of Interest Periods

a) The Borrower may select an Interest Period for a Tranche in the Drawdown Notice for that Tranche.

b) The Borrower may select an Interest Period of one (1), three (3) or six (6) months or any such other period agreed between the Borrower and the Agent (on behalf of the Lenders).

c) If an Interest Period would otherwise overrun the Final Maturity Date, such Interest Period shall be shortened so that it ends on the Final Maturity Date.

d) Each Interest Period for a Tranche shall start on the relevant Drawdown Date.

9.2 Non-Business Day

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

9.3 Merger of Tranches

a) On the Drawdown Date for Tranche II or as soon as practicable thereafter, Tranche I and Tranche II shall in all respects be merged.

b) On the Drawdown Date for Tranche III or as soon as practicable thereafter, the Loan and Tranche III shall in all respects be merged.

c) On the Drawdown Date for Tranche IV or as soon as practicable thereafter, the Loan and Tranche IV shall in all respects be merged.

9.4 Notification of Interest Periods

The Agent will notify the Borrower and the Lenders of the Interest Periods determined in accordance with this Clause 9.

10 CHANGES TO THE CALCULATION OF INTEREST

10.1 Market disruption

a) If a Market Disruption Event occurs in relation to a Tranche for any Interest Period, then the rate of interest on each Lender’s share of that Tranche for the Interest Period shall be the rate per annum which is the sum of:

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(i)

the Margin; and

(ii)

the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in such Tranche from whatever source it may reasonably select, the Lenders always to use reasonable endeavour to find the best rates available.

b) In this Agreement, “Market Disruption Event” means:

(i)	at or about 11:00 hours (London time) on the Quotation Day for the relevant Interest Period LIBOR is not available; or
(ii)	before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Tranche exceed fifty per cent. (50.00%) of such Tranche) that the cost to it or them of obtaining matching deposits in the London interbank market would be in excess of LIBOR.

10.2 Alternative basis of interest or funding

If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty (30) days) with a view to agreeing a substitute basis for determining the rate of interest. Any alternative basis agreed pursuant to this Clause 10.2 shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties. If no such alternative basis is agreed within said thirty (30) days, the rate of interest shall be determined in accordance with Clause 10.1 (Market disruption).

10.3 Break Costs

The Borrower shall, within three (3) Business Days of demand by a Finance Party, pay to that Finance Party its Break Cost attributable to all or any part of a Tranche or Unpaid Sum being paid by the Borrower on a day other than a Repayment Date for such Tranche or Unpaid Sum.

Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Cost for any Interest Period in which they accrue.

11 FEES

11.1 Commitment fee

The Borrower shall pay to the Agent (for distribution to the Lenders) a commitment fee computed at the rate of zero point fifty per cent. (0.50%) per annum on any undrawn and uncancelled part of the Facility, accruing from 14 February 2006 and up until the Drawdown Date of Tranche IV.

The accrued commitment fee is payable on the Drawdown Date of Tranche IV. Accrued commitment fee shall also be payable on any cancelled Tranche at the date such cancellation comes into effect.

11.2 Flat fee

The Borrower shall pay to the Agent (for distribution to the Underwriter, the Arranger and the Lenders) a flat fee of zero point thirtyfive per cent. (0.35%) of the Total Commitments payable on the Drawdown Date of Tranche I.

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11.3 Agency Fee

The Borrower shall pay to the Agent NOK 50,000 per year, payable for the first time at the Drawdown Date of Tranche I, and then annually thereafter.

12 TAX GROSS-UP AND INDEMNITIES

12.1 Taxes

12.1.1 No withholding

All payments by the Borrower and/or the Guarantors under the Finance Documents shall be made free and clear of and without deduction or withholding for or on account of any Tax or any other governmental or public payment imposed by the laws of any jurisdiction from which or through which such payment is made, unless a Tax deduction or withholding is required by law.

12.1.2 Tax gross-up

The Borrower and/or the Guarantors shall promptly upon becoming aware that it must make a Tax deduction or withholding (or that there is any change in the rate or the basis of a Tax deduction or withholding) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and that Lender.

If a Tax deduction or withholding is required by law to be made by the Borrower and/or the Guarantors:

a) the amount of the payment due from the Borrower and/or the Guarantors shall be increased to an amount which (after making any Tax deduction or withholding) leaves an amount equal to the payment which would have been due if no Tax deduction or withholding had been required; and

b) the Borrower and/or the Guarantors shall make that Tax deduction or withholding within the time allowed and in the minimum amount required by law.

Within thirty (30) days of making either a Tax deduction or withholding or any payment required in connection with that Tax deduction or withholding, the Borrower and/or the Guarantors shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax deduction or withholding has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

12.2 Tax indemnity

The Borrower shall (within three (3) Business Days of demand by the Agent) pay to the Agent for the account of the relevant Finance Party an amount equal to the loss, liability or cost which a Finance Party determines will be or has been (directly or indirectly) suffered for or on account of any Tax by such Finance Party in respect of a Finance Document, save for any Tax on Overall Net Income assessed on a Finance Party or to the extent such loss, liability or cost is compensated under Clause 12.1 (Tax gross-up).

12.3 VAT

All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance Document shall be deemed to be exclusive of any VAT. If VAT is chargeable, the Borrower shall pay to the Agent for the account of such Finance Party (in addition to the amount required pursuant to the Finance Documents) an amount equal to such VAT.

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13 INCREASED COSTS

13.1 Increased Costs

The Borrower shall, upon demand from the Agent, pay for the account of a Finance Party the amount of any Increased Cost incurred by that Finance Party or any of its affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation (including any laws and regulations implementing new or modified capital adequacy requirements) or (ii) compliance with any law or regulation made after the date of this Agreement.

In this Agreement, the term “Increased Costs” means:

a)	a reduction in the rate of return from the Facility or on a Finance Party’s (or its affiliate’s) overall capital;
b)	an additional or increased cost; or
c)	a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its affiliates to the extent that it is attributable to that Finance Party having entered into its Commitments or funding or performing its obligations under any Finance Document.

A Finance Party intending to make a claim pursuant to this Clause 13.1 shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower. Each Finance Party shall as soon as practicable after a demand by the Agent, provide a confirmation showing the amount of its Increased Costs.

13.2 Exceptions

Clause 13.1 (Increased Costs) does not apply to the extent any Increased Costs is:

a)	attributable to a Tax deduction or withholding required by law to be made by the Borrower;
b)	compensated for by Clause 12.1 (Tax gross-up) or Clause 12.2 (Tax Indemnity); or
c)	attributable to the wilful breach by the relevant Finance Party or its affiliates of any law or regulation.

14 OTHER INDEMNITIES

14.1 Currency indemnity

If any sum due from the Borrower under the Finance Documents (a “Sum”), or any order, judgement or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

a)	making or filing a claim or proof against the Borrower;
b)	obtaining or enforcing an order, judgement or award in relation to any litigation or arbitration proceedings,

the Borrower shall as an independent obligation, within three (3) Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out

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of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

The Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2 Other indemnities

The Borrower shall within three (3) Business Days of demand, indemnify each Finance Party against any costs, direct loss or liability incurred by that Finance Party as a result of:

a)	the occurrence of any Event of Default;
b)	a failure by the Borrower to pay any amount due under the Finance Documents on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 25 (Sharing among the Finance Parties);
c)	funding, or making arrangements to fund, its participation in a Tranche requested by the Borrower in a Drawdown Notice if such drawdown is not effected by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Lender alone); or
d)	an amount not being prepaid in accordance with a notice of prepayment given by the Borrower.

14.3 Indemnity to the Agent

The Borrower shall promptly indemnify the Agent against any cost, direct loss or liability incurred by the Agent (acting reasonably) as a result of:

a)	investigating any event which it reasonably believes is a possible Event of Default; or
b)	acting or verifying any notice, request or instruction which it reasonably believes to be genuine, correct or appropriately authorised.

15 COSTS AND EXPENSES

15.1 Transaction expenses

The Borrower shall promptly on demand pay to the Agent and the Arranger the amount of all costs and expenses (including internal and external legal fees/costs) reasonably incurred by any of them in connection with the negotiation, preparation, printing, perfection, execution, registration and syndication of:

a)	this Agreement and any other documents referred to in this Agreement; and
b)	any other Finance Documents executed after the date of this Agreement.

15.2 Amendment and enforcement costs, etc

The Borrower shall, within three (3) Business Days of demand, reimburse the Agent or another Finance Party for the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with:

a) the granting of any release, waiver or consent under the Finance Documents;

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b)	any amendment or variation of any of the Finance Documents; and
c)	the preservation, protection, enforcement or maintenance of, or attempt to preserve or enforce, any of the rights of the Finance Parties under the Finance Documents.

15.3 Survival of termination

The Borrower’s obligation to pay any fees and expenses under any of the Finance Document shall survive the termination date of this Agreement.

16 SECURITY

16.1 Security — Loans

The Borrower’s obligations and liabilities under this Agreement, including (without limitation) the Borrower’s obligation to repay the Loan together with all unpaid interest, default interest, commissions, charges, expenses and any other derived liability whatsoever of the Borrower towards the Lenders and the Agent in connection with this Agreement, shall at any time until all amounts due to the Lenders and the Agent hereunder have been paid and/or repaid in full, be secured by:

a)	the Mortgage;
b)	the Factoring Agreement;
c)	the General Pledge;
d)	the Co-ordination Agreement;
e)	the Assignment of Insurances;
f)	the Assignment of Charterparties and Earnings;
g)	the Guarantees; and
h)	the Share Pledge.

The Borrower undertakes to ensure that the above Security Documents are being duly executed by the parties thereto in favour of the Agent (on behalf of the Finance Parties) on or about the date of this Agreement, legally valid and in full force and effect, and to execute or procure the execution of such further documentation as the Agent may reasonable require in order for the relevant Finance Parties to maintain the security position envisaged hereunder.

17 REPRESENTATIONS AND WARRANTIES

17.1 Representations and warranties by the Borrower

The Borrower represents and warrants to each Finance Party as follows:

17.1.1 Status

The Borrower is a limited liability company (aksjeselskap), duly incorporated and validly existing under the laws of Norway and has the power to own its assets and carry on its business as it is currently being conducted. The Borrower is 100.00% owned by ExRe.

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ExRe is a limited liability company, duly incorporated and validly existing under the laws of Norway and has the power to own its assets and carry on its business as it is currently being conducted. ExRe is ultimately 100.00% owned and controlled by CGG.

CGG is a limited liability company, duly incorporated and validly existing under the laws of France and has the power to own its assets and carry on its business as it is currently being conducted.

17.1.2 Binding obligations

The Finance Documents to which any of the Borrower and/or the Guarantors is a party constitute legal, valid, binding and enforceable obligations, and save as provided herein or therein and/or as have been or shall be completed prior to the relevant Drawdown Date, no registration, filing, payment of tax or fees or other formalities are necessary or desired to render the Finance Documents enforceable against the Borrower and/or the Guarantors (as the case may be), and for the Mortgage to constitute a valid and enforceable first priority mortgages over the C-Orion.

17.1.3 No conflict with other obligations

The entry into and performance by each of the Borrower and the Guarantors of, and the transactions contemplated by, the Finance Documents do not and will not conflict with:

a)	any law or regulation or any order or decree of any governmental agency or court by which the Borrower and/or the Guarantors (as the case may be) is bound;
b)	any constitutional documents of the Borrower and/or the Guarantors (as the case may be); or
c)	any agreement or document to which any of them is a party or by which any of them or any of their assets are bound.

17.1.4 Power and authority

Each of the Borrower and the Guarantors has the power to enter into, perform and deliver, and has taken all necessary actions to authorise its entry into, performance and delivery of, the Finance Documents to which any of them is a party and the transactions contemplated by those Finance Documents.

17.1.5 Authorisations and consents

All authorisations, approvals, consents and other matters, official or otherwise, required by the Borrower and/or the Guarantors in connection with the entering into, performance, validity and enforceability of the Finance Documents and the transactions contemplated hereby and thereby have been obtained or effected and are in full force and effect.

17.1.6 Taxes

Each of the Borrower and the Guarantors has complied with all material taxation laws in all jurisdictions where it is subject to taxation and have paid all material Taxes and other amounts due to governments and other public bodies. No claims are being asserted against any of them with respect to any Taxes or other payments due to public or governmental bodies. Neither the Borrower nor any of the Guarantors is required to make any withholdings or deductions for or on account of Tax from any payment any of them may make under any of the Finance Documents.

17.1.7 No Default

No Event of Default is continuing or might reasonably be expected to result from the making of any Loan. No other event or circumstances is outstanding which constitutes a default or (with the expiry

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of a grace period, giving of notice or the making of any determination or any combination of the foregoing) might constitute a default under any other agreement or instrument which is binding on the Borrower or any of the Guarantors or to which the Borrower’s or any of the Guarantors’ assets are subject which might have a Material Adverse Effect.

17.1.8 No misleading information

Any factual information, documents, exhibits or reports relating to the Borrower and/or the Guarantors and which have been furnished to the Finance Parties by or on behalf of the Borrower or the Guarantors (as the case may be) are complete and correct in all material respects and do not contain any misstatement of fact or omit to state a fact making such information, exhibits or reports misleading in any material respect.

17.1.9 Original Accounts

a) Complete and correct. The Original Financial Statements fairly and accurately represent the assets, liabilities and the financial condition of the Borrower and the Guarantors and have been prepared in accordance with GAAP consistently applied.

b) No undisclosed liabilities. As of the date of the Original Financial Statements, none of the Borrower or the Guarantors had any material liabilities, direct or indirect, actual or contingent, and there is no material, unrealised or anticipated losses from any unfavourable commitments not disclosed by or reserved against in the Original Financial Statements or in the notes thereto.

c) No material change. Since the date of the Original Financial Statements, there has been no material adverse change in the business, operations, assets or condition (financial or otherwise) of the Borrower and/or the Guarantors.

17.1.10 Pari passu ranking

The Borrower’s and/or the Guarantors’ (as the case may be) payment obligations under the Finance Documents rank at least pari passu with the claims of all their other unsecured and unsubordinated creditors, except for obligations preferred by mandatory law applying to companies generally.

17.1.11 No proceedings pending or threatened

No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency, which if adversely determined, might reasonably be expected to have a Material Adverse Effect, have been started or threatened against the Borrower and/or any of the Guarantors.

17.1.12 No existing Security Interest

Save as described in Clause 16 (Security), no Security Interest exists over all or any of the present or future revenues or assets of the Borrower.

17.1.13 No immunity

The execution and delivery by the Borrower and/or any of the Guarantor (as the case may be) of each Finance Document to which any of them is a party constitute, and their exercise of their respective rights and performance of their respective obligations under each Finance Document will constitute, private and commercial acts performed for private and commercial purposes, and none of the Borrower or any of the Guarantors will (except for bankruptcy or any similar proceedings) be entitled to claim for themselves or any or all of their assets immunity from suit, execution, attachment or other legal process in any other proceedings taken in Norway and/or France (as the case may be) in relation to any Finance Document.

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17.1.14 No winding-up

None of the Borrower or any of the Guarantors has taken any corporate action nor have any other steps been taken or legal proceedings been started or threatened against any of them for their reorganisation, winding-up, dissolution or administration or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of any of them or any or any of their assets.

17.1.15 Environmental compliance

The Borrower and the Guarantors (as the case may be) have performed and observed in all material respects all Environmental Laws, Environmental Approvals and all other material covenants, conditions, restrictions or agreements directly or indirectly concerned with any contamination, pollution or waste or the release or discharge of any toxic or hazardous substance in connection with the Vessels.

17.1.16 Environmental Claims

No Environmental Claim has been commenced or is threatened against the Borrower or any of the Guarantors where that claim would be reasonably likely, if adversely determined, to have a Material Adverse Effect.

17.1.17 ISM Code and ISPS Code Compliance

All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, the Managers and the Vessels have been complied with in all material respects.

17.1.18 The Vessels

C-Orion will on the first Drawdown Date be:

a)	in the absolute ownership of the Borrower free and clear of all encumbrances (other than current crew wages and the Mortgage) and the Borrower will be the sole, legal and beneficial owner of C-Orion;
b)	registered in the name of the Borrower with the Vanuatu Ship Registry under the laws and flag of Vanuatu;
c)	operationally seaworthy in every way and fit for service; and
d)	classed with ABS (or such other classification society as acceptable to the Agent), free of all overdue requirements and recommendations.

Geo Challenger will on the first Drawdown Date be:

e)	in the registered ownership of Geo Rederi AS, with Geoshipping AS as disponent owner, and with the Borrower as time charterer in accordance with the Geo-Charterparty:
f)	registered with the Norwegian International Ship Registry under the laws and flag of Norway (or such other flag or registry as acceptable to the Agent);
g)	operationally seaworthy in every way and fit for service; and
h)	classed with DnV (or such other classification society as acceptable to the Agent), free of all overdue requirements and recommendations.

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17.1.19 No money laundering

Each of the Borrower and the Guarantors is acting for its own account in relation to the Facility and in relation to the performance and the discharge of its obligations and liabilities under the Finance Documents and the transactions and other arrangements effected or contemplated by the Finance Documents to which any of the Borrower and/or the Guarantors is a party, and the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat money laundering (as defined in Article 1 of the Directive (91/308/EEC) and Directive 2001/97 of the European Parliament and of 4 December 2001 amending Council Directive 91/308).

17.2 Repetition

The representations and warranties set out in this Clause 17 are deemed to be made by the Borrower on the date of this Agreement and shall be deemed to be repeated with reference to the facts and circumstances then existing:

a)	on the date of a Drawdown Notice;
b)	on each Drawdown Date;
c)	on the first day of each Interest Period; and
d)	in each Compliance Certificate forwarded to the Agent pursuant to Clause 18.1.2 (Compliance certificate) (or, if no such Compliance Certificate is forwarded, on each day such certificate should have been forwarded to the Agent at the latest).

18 INFORMATION UNDERTAKINGS

18.1 General

The Borrower gives the undertakings set out in this Clause 18 to each Finance Party and such undertakings shall remain in force throughout the Security Period.

18.1.1 Financial statements

The Borrower shall supply to the Agent in sufficient copies for all of the Lenders:

a)	as soon as the same become available, but in any event within one hundred and eighty (180) days after the end of each of its financial years, the audited financial statements of the Borrower and each of the Guarantors for that financial year;
b)	as soon as the same become available, but in any event within ninety (90) days after the end of each half-year, the unaudited semi-annual financial statements of the Borrower and each of the Guarantors.

18.1.2 Compliance Certificate

The Borrower shall supply to the Agent, with each set of financial statements delivered pursuant to Clause 18.1.1 b) (Financial statements), a Compliance Certificate signed by an authorised officer of the Borrower and each of the Guarantors setting out (in reasonable detail) computations as to compliance with Clause 19 (Financial covenants) as at the date at which those financial statements were drawn up.

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18.1.3 Requirements as to financial statements

The Borrower shall procure that each set of financial statements delivered pursuant to Clause 18.1.1 (Financial statements) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for the Borrower and the Guarantors unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting practices or reference periods and its (or the Guarantors’ (as the case may be)) auditors deliver to the Agent:

a)	a description of any change necessary for those financial statements to reflect GAAP, accounting practices and reference periods upon which the Borrower’s or the Guarantors’ (as the case may be) Original Financial Statements were prepared; and
b)	sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether Clause 19 (Financial covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Borrower’s or the Guarantors’ (as the case may be) Original Financial Statements.

Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.

18.1.4 Information — miscellaneous

The Borrower shall notify the Agent and/or supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

a)	promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against the Borrower and/or any of the Guarantors, and which might, if adversely determined, have a Material Adverse Effect; and
b)	promptly, such further information regarding the business, operations, assets and conditions (financial or otherwise) of the Borrower and/or any of the Guarantors as any Finance Party (through the Agent) may reasonably request.

18.1.5 Notification of default

The Borrower shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

18.1.6 Notification of Environmental Claims

The Borrower shall inform the Agent in writing as soon as reasonably practicable upon becoming aware of the same:

a)	if any Environmental Claim has been commenced or (to the best of the Borrower’s knowledge and belief) is threatened against the Borrower, any of the Guarantors or any of the Vessels; and
b)	of any fact and circumstances which will or are reasonably likely to result in any Environmental Claim being commenced or threatened against the Borrower, any of the Guarantors or any of the Vessels,

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where the claim would be reasonably likely, if determined against the Borrower, any of the Guarantors or any of the Vessels, to have a Material Adverse Effect.

19 FINANCIAL COVENANTS

19.1 Definitions

For the purposes of the financial covenants set out herein related to ExRe, the following definitions shall apply:

a) “Equity” means at any time the aggregate of:

(i)	the amount paid up or credited as paid up on the issued share capital of ExRe; and
(ii)	the amount standing to the credit of the capital and revenue reserves of ExRe, based on the latest published audited balance sheet of ExRe, but adjusted by, without double-counting:

A	adding any amount standing to the credit of the profit and loss account of ExRe for the period ending on the date of the latest balance sheet to the extent not included in item (ii) above;
B	adding any loans from shareholders of ExRe if such loans are fully subordinated to this Agreement and there is no payment of interests and instalments;
C	deducting any dividend or other distribution declared, recommended or made by ExRe;
D	deducting any amount attributable to an upward revaluation of assets;
E	reflecting any variation in the amount of the issued share capital of the Borrower and the capital and revenue reserves of ExRe after the date of the latest balance sheet;
F	including any amount attributable to minority interests; and
G	excluding any amount attributable to deferred taxation.

b)	“Equity Ratio” means, at any time, the ratio of Equity to Total Assets.
c)	“Total Assets” means, at any time, the aggregate balance sheet total assets.

For the purposes of the financial covenants set out herein related to CGG, the following definitions shall apply:

d) “Consolidated Cashflow” means for any Relevant Period CGG’s consolidated earnings, before:

i.	any interest, discounts or other fees incurred or payable in respect of Financial Indebtedness;
ii.	any provision on account of taxation;

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iii.	any item treated as exceptional or extraordinary items; and
iv.	any amount attributable to depreciation of tangible assets and the amortisation of intangible assets;

after taking into account the net effect of:

i.	any extraordinary or exceptional item received or paid in cash;
ii.	any taxes received or paid in cash;
iii.	any capital expenditure paid or required to be paid;
iv.	any net cash items received or paid (or required to be paid) in relation to the sale or purchase (as the case may be) of any business or assets;
v.	any decrease or increase in consolidated net working capital;
vi.	any capital injection in the form of equity and/or fully subordinated loans received by CGG (on a consolidated basis);
vii.	dividends received in cash from associated companies or other fixed assets investments or any dividends paid;
viii.	realised exchange gains or losses charged; and
ix.	any non-cash items expensed or credited.

e)	“Consolidated Interest Coverage Ratio” means, at any time, the ratio of CGG’s Consolidated Cash Flow to the Consolidated Interest Expense (deducting all interest payments which have to be capitalised).
f)	“Consolidated Interest Expense” means all interest, commissions, periodic fees and other financing charges (whether, in each case, paid, payable or capitalised) incurred by CGG (on a consolidated basis) during a Relevant Period (including the interest element payable under any finance lease).
g)	“Relevant Period” means each period of twelve (12) months.

19.2 Financial covenants

19.2.1 Equity Ratio

The Borrower undertakes to ensure that ExRe’s Equity Ratio (on a consolidated basis) is not at any time less than thirty per cent (30.00%).

19.2.2 Positive working capital

The Borrower shall at all times ensure that ExRe’s (on a consolidated basis) current assets (including any undrawn portion under available credit lines) exceed its current liabilities (including next year’s instalments on long-term debts and capital lease obligations), all as determined in accordance with GAAP.

19.2.3 Consolidated Interest Coverage Ratio

The Borrower shall ensure that CGG’s Consolidated Interest Coverage Ratio is not at any time below 3.00:1.00.

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20 GENERAL UNDERTAKINGS

20.1 General

The Borrower gives the undertakings set out in this Clause 20 to each Finance Party and such undertakings shall remain in force throughout the Security Period.

20.1.1 Authorisations etc.

The Borrower shall promptly:

a)	obtain, comply and do all that is necessary to maintain in full force and effect; and
b)	supply certified copies to the Agent (if so requested) of,

any authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration required under any law or regulation of its jurisdiction of incorporation to enable it or the Guarantor to perform their respective obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in their respective jurisdictions of incorporation of any Finance Document.

20.1.2 Compliance with laws

The Borrower shall comply and shall procure the compliance by the Guarantors in all respects with all laws to which any of them may be subject, if failure so to comply would materially impair their ability to perform their respective obligations under the Finance Documents.

20.1.3 Pari passu ranking

The Borrower shall ensure and procure that the Guarantors ensure that their obligations under the Finance Documents do and will rank at least pari passu with all their other present and future unsecured and unsubordinated obligations, except for those obligations which are preferred by mandatory law applying to companies generally in the jurisdictions of their incorporation or in the jurisdiction in the ports of calls.

20.1.4 Title

a)	The Borrower shall hold legal title to and own the entire beneficial interest in the C-Orion, the Equipment, the Insurances and the Earnings, free of all Security Interest and other interests and rights of every kind, except for those created by the Finance Documents and as set out in Clause 20.1.5 (Negative pledge).
b)	ExRe shall at all times be the direct or indirect owner of 100.00% of the shares in the Borrower, and CGG shall at all times be the direct or indirect owner of 100.00% of the shares in ExRe.

20.1.5 Negative pledge

The Borrower shall not, create or permit to subsist any Security Interest over the C-Orion nor upon any of its present or future undertakings, property, assets, rights or revenues, other than:

a)	Security Interest under the Security Documents;
b)	Security Interests arising in the ordinary course of business; and
c)	Security Interests consented to in writing by the Agent (acting upon instructions from the Majority Lenders).

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Furthermore, the Borrower shall procure that no further Security Interests than those already in effect at the date of this Agreement shall be created or permitted to subsist over the following assets:

a)	the shares in Exploration Vessel Resources AS;
b)	the shares in Exploration Vessel Resources II AS;
c)	the vessels owned by Exploration Vessel Resources AS; and
d)	the vessels owned by Exploration Vessel Resources II AS.

The Borrower undertakes to duly notify the relevant entities of this negative pledge, and if required by the Agent (on behalf of the Finance Parties) to obtain confirmations from such entities acknowledging such negative pledge.

20.1.6 Earnings Accounts

The Borrower shall hold and maintain its Earnings Accounts with the Agent and procure that all Earnings are paid to the Earnings Accounts.

20.1.7 Disposals

The Borrower shall not sell, transfer or otherwise dispose of the whole or any part of its interest in the Vessels without the prior written consent of the Agent (on behalf of the Lenders).

20.1.8 Change of business

The Borrower shall ensure that no substantial change is made to the general nature of the business of the Borrower from that carried out at the date of this Agreement.

20.1.9 No mergers etc.

The Borrower shall not enter into any merger, amalgamation, consolidation with or into any other person or be the subject of reconstruction (in each case except where the Borrower is the surviving entity) or any de-merger, split-up or divest, without the prior written consent of the Lenders.

20.1.10 Environmental compliance

The Borrower shall (and shall procure that the Guarantor will) comply in all material respects with all Environmental Laws subject to the terms and conditions of any Environmental Approval and obtain and maintain any Environmental Approval.

20.1.11 Management

The Borrower shall procure that the Manager(s) shall remain the managers of the Vessels and there shall be no change to such management without the prior written consent of the Agent.

20.1.12 Finance Documents

The Borrower shall procure that none of the Finance Documents are amended or terminated, or any waiver or any material terms thereof are agreed thereunder without the prior written consent of the Agent (on behalf of the Finance Parties).

20.1.13 Listing

CGG shall remain listed on the Paris Stock Exchange and New York Stock Exchange (NYSE).

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20.1.14 Inter-company loans

In the event that the Borrower is granted any inter-company loans from the Guarantors or any of their related companies, all such loans shall be subordinated to this Facility, and all such inter-company loans shall be documented in an agreement which shall be provided to the Agent (on behalf of the Finance Parties).

21 VESSEL COVENANTS

21.1 General

The Borrower gives the undertakings set out in this Clause 21 to each Finance Party and such undertakings shall remain in force throughout the Security Period.

21.1.1 Insurance

a)	The Borrower shall maintain or ensure that C-Orion is insured against such risks, including but not limited to, Hull and Machinery, Protection & Indemnity (including maximum cover for pollution liability as normally adopted by the industry for similar vessels), Hull Interest and/or Freight Interest and War Risk insurances, in such amounts, on such terms and with such insurers as the Agent shall approve. Similarly, the Borrower shall ensure that its investments in Geo Challenger are sufficiently secured through Geoshipping AS’ insurances with the Borrower entered as co-assured for an amount as approved by the Agent, such approval not to be unreasonably withheld. Furthermore, the Borrower shall maintain or ensure that the Equipment is insured against all customary risks for similar Equipment, in such amounts, on such terms and with such insurers as the Agent shall approve.
b)	The value of the Hull and Machinery insurance for C-Orion shall cover at least eighty per cent. (80.00%) of the Market Value and the aggregate insurance value of C-Orion (except Protection & Indemnity), shall be at least equal to the higher of the Market Value of the C-Orion and one hundred and twenty per cent. (120.00%) of Tranche I.
c)	The Borrower shall procure that the Agent (on behalf of the Finance Parties) is noted as first priority mortgagee in the insurance contracts for the C-Orion and the Equipment, together with the confirmation from the underwriters to the Agent thereof that the notice of assignment with regards to the Insurances and the loss payable clauses are noted in the insurance contracts and that standard letters of undertaking are executed by the insurers.
d)	Not later than at the expiry date of the relevant Insurances the Borrower shall procure the delivery to the Agent of a certificate from the insurance broker(s) through whom the Insurances referred to in paragraph a) have been renewed and taken out in respect of the Vessels with insurance values as required by paragraph b), that such Insurances are in full force and effect and that the Agent (on behalf of the Finance Parties) have been noted by the relevant insurers.
e)	If any of the Insurances referred to in paragraph a) form part of a fleet cover, the Borrower shall procure that the insurers shall undertake to the Agent that they shall not cancel this Insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of any of the Vessels if and when so requested by the Agent.
f)	The Borrower shall procure that the Vessels always are employed in conformity with the terms of the instruments of Insurances (including any warranties expressed or implied

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	therein) and comply with such requirements as to extra premium or otherwise as the insurers may prescribe.
g)	The Borrower will not make any change to the Insurances described under paragraph a) and b) above without the prior written consent of the Agent (on behalf of the Lenders), such consent not to be unreasonably withheld.

21.1.2 Classification and repairs

The Borrower shall keep each of the Vessels in a good, safe and efficient condition consistent with first class ownership and management practice and in particular:

a)	so as to maintain its class at the highest level with DnV, ABS or another classification society approved by the Agent, free of overdue recommendations and qualifications; and
b)	so as to comply with the laws and regulations (statutory or otherwise) applicable to vessels registered under the flag state of the Vessels or to vessels trading to any jurisdiction to which any of the Vessels may trade from time to time.

21.1.3 Restrictions on chartering, appointment of Managers etc.

The Borrower shall not, without the prior written consent of the Agent:

a)	let the Vessels on bareboat charter for any period, except under the Charterparties;
b)	enter into any agreement related to the chartering and operation of any of the Vessels exceeding twelve (12) months, except under the Charterparties;
c)	appoint a Manager for the C-Orion that is not acceptable to the Agent; or
d)	change the classification society of C-Orion, or allow Geoshipping AS to change the classification society of Geo Challenger.

21.1.4 Notification of certain events

The Borrower shall, as soon as it becomes aware of same, immediately notify the Agent of:

a)	any accident to any of the Vessels involving repairs where the costs will or is likely to exceed EUR 1,000,000 (or the equivalent in any other currency);
b)	any requirement or recommendation made by any insurer or classification society or by any competent authority which is not, or cannot be, complied with immediately or within the relevant time limit, if any;
c)	any exercise or purported exercise of any lien on any of the Vessels, the Earnings or the Insurances;
d)	any occurrence as a result of which any of the Vessels has become or is, by the passing of time or otherwise, likely to become a Total Loss; and
e)	any claim for a material breach of the ISM Code or the ISPS Code being made against the Borrower or otherwise in connection with the C-Orion.

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21.1.5 Operation of the Vessels

a) The Borrower shall comply, or procure the compliance in all material respects with the ISM Code and the ISPS Code, all Environmental Laws and all other laws or regulations relating to the C-Orion, its ownership, operation and management or to the business of the Borrower and shall not employ any of the Vessels nor allow their employment:

(i)

in any manner contrary to law or regulation in any relevant jurisdiction including but not limited to the ISM Code; and

(ii)

in the event of hostilities in any part of the world (whether war is declared or not), in any zone which is declared a war zone by any government or by the war risk insurers of any of the Vessels unless the Borrower has (at its expense) effected any special, additional or modified insurance cover which shall be necessary or customary for first class shipowners trading vessels within the territorial waters of such country at such time and has provided evidence of such cover to the Agent.

Without limitation to the generality of this Clause 21.1.5, the Borrower shall comply or procure compliance, with, as applicable, all requirements of the International Convention for the Safety of Life at Sea (SOLAS) 1974 as adopted, amended or replaced from time to time including, but not limited to, the STCW 95, the ISM Code or the ISPS Code.

b)

The Vessels shall be employed under the Charterparties, and the Charterparties shall not be amended or varied without the prior written consent of the Agent (on behalf of the Lenders). The Charterparties shall be approved by the Agent (on behalf of the Finance Parties) and the agreed rates of hire in the Charterparties shall ensure the Borrower’s debt service ability to the satisfaction of the Agent (on behalf of the Finance Parties).

21.1.6 ISM Code compliance

The Borrower will:

a)	procure that each of the Vessels remains subject to a SMS for the duration of the Facility;
b)	procure that a valid and current SMC is maintained for each of the Vessels for the duration of the Facility;
c)	if not itself, procure that the Manager(s) of the Vessels maintains a valid and current DOC for the duration of the Facility;
d)	notify the Agent in writing as soon as it becomes aware of same of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of any of the Vessels or of the DOC of any of the Manager(s); and
e)	notify the Agent in writing as soon as it becomes aware of same of any “accident” or “major non-conformity”, each as those terms is defined in the Guidelines in the application of the IMO International Safety Management Code issued by the International Chamber of Shipping and International Shipping Federation.

21.1.7 Inspections and class records

a) The Borrower shall permit, and shall procure that any charterers permit, one person appointed by the Agent and/or each of the Lenders (for the account of such Lender(s)) to

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	inspect the Vessels once a year for the account of the Borrower upon the Agent giving prior written notice.
b)	The Borrower shall instruct the classification society to send to the Agent, following a written request from the Agent, copies of all class records held by the classification society in relation to the Vessels.

21.1.8 Surveys

The Borrower shall submit to or cause the Vessels to be submitted to such periodic or other surveys as may be required for classification purposes and to ensure full compliance with regulations of the relevant flag state of the Vessels and to supply or cause to be supplied to the Agent copies of all survey reports and confirmations of class issued in respect thereof whenever such is required by the Agent, however limited to once a year.

21.1.9 Arrest

The Borrower shall promptly pay and discharge, or (as to the Geo Challenger) use its best endeavours to ensure that Geoshipping AS promptly pays and discharges:

a)	all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against any of the Vessels, the Earnings or the Insurances;
b)	all tolls, taxes, dues, fines, penalties and other amounts charged in respect of any of the Vessels, the Earnings or the Insurances; and
c)	all other outgoings whatsoever in respect of any of the Vessels, the Earnings and the Insurances,

and forthwith upon receiving a notice of arrest of any of the Vessels, or their detention in exercise or purported exercise of any lien or claim, the Borrower shall procure their release by providing bail or providing the provision of security or otherwise as the circumstances may require.

21.1.10 Total Loss

In the event that any of the Vessels shall suffer a Total Loss, the Borrower shall, within a period of ninety (90) days after the Total Loss Date, obtain and present to the Agent, a written confirmation from the relevant insurers that the claim relating to the Total Loss has been accepted in full, and the Insurance proceeds shall be applied in prepayment of the relevant Tranches in accordance with Clause 7.1 (Mandatory prepayment — Total Loss or sale of C-Orion) and/or Clause 7.2 (Mandatory prepayment — termination of the Geo-Charterparty or Total Loss or sale of Geo Challenger).

21.1.11 Flag, name and registry

The Borrower shall not, without the prior written consent of the Agent (on behalf of the Finance Parties), change the flag or registry of any of the Vessels.

21.1.12 The Equipment

The Equipment shall be installed on board the Vessels and shall not be removed therefrom without the prior witten consent of the Agent (on behalf of the Lenders). In the event that the Agent (on behalf of the Lenders) consents to the removal of any of the Equipment from the respective Vessel, the Borrower shall provide satisfactory security or cash collateral of sufficient value so that the Lenders’ position is not deteriorated.

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21.1.13 Assignment of Charterer’s external charterparties

In the event that the Charterer enters into charterparties for the Vessels with any companies outside the CGG-group with a duration of 12 months or more, the Borrower shall notify the Agent (on behalf of the Finance Parties) in advance, and the Agent (on behalf of the Finance Parties) is entitled to require an assignment of such charterparties to be provided as additional security for the Borrower’s and the Guarantors obligations under the Finance Documents. If required, the Borrower shall procure that such assignment is established and effected as soon as possible, and not later than the commencement of the relevant charterparty.

22 EVENTS OF DEFAULT

22.1 General

Each of the events or circumstances set out in this Clause 22 is an Event of Default.

22.1.1 Non-payment

The Borrower does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:

a)	its failure to pay is caused by administrative or technical error affecting the transfer of funds despite timely payment instructions by the Borrower; and
b)	payment is made within three (3) Business Days of its due date.

22.1.2 Financial covenants

Any requirement in Clause 19 (Financial covenants) is not satisfied and this is continuing for more than ten (10) days.

22.1.3 Other obligations

a)	The Borrower does not comply with any provision of the Finance Documents (other than those referred to in Clause 22.1 (Non-payment) and 22.1.2 (Financial covenants)), except if the failure to comply is capable of remedy and is remedied within three (3) Business Days of the Agent giving notice to the Borrower or the Borrower becoming aware of the failure to comply.
b)	No Event of Default under paragraph a) above in relation to Clause 21.1.9 (Arrest) will occur if the failure to comply is capable of remedy and is remedied within ten (10) Business Days of the Agent giving notice to the Borrower or the Borrower becoming aware of the failure to comply.

22.1.4 Misrepresentations

Any representation or statement made or deemed to be made by the Borrower in the Finance Documents or any other document delivered by or on behalf of the Borrower and/or the Guarantor under or in connection with any of the Finance Documents is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

22.1.5 Cross default

Any Financial Indebtedness of the Borrower and/or any of the Guarantors or their subsidiaries in a principal amount higher than EUR 2,500,000 is not paid when due (or within any applicable grace period provided for in the original agreement, if any, evidencing the same) or becomes prematurely payable or capable of being prematurely declared payable as a consequence of a default with respect thereto or is cancelled or suspended by a creditor of the Borrower or any of the Guarantors.

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22.1.6 Insolvency

a)	Any of the Borrower or the Guarantors is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
b)	The value of the assets of the Borrower and/or any of the Guarantors is less than its liabilities (taking into account contingent and prospective liabilities).
c)	A moratorium is declared in respect of any indebtedness of the Borrower and/or any of the Guarantors.

22.1.7 Insolvency proceedings

Any corporate action, legal proceedings or other procedure or step is taken in relation to:

a)	the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme or arrangement or otherwise) of the Borrower and/or any of the Guarantors;
b)	a composition, compromise, assignment or arrangement with any creditor of the Borrower and/or any of the Guarantors;
c)	the appointment of a liquidator, receiver, administrative receiver, administrator or other similar officer in respect of the Borrower and/or any of the Guarantors; or
d)	enforcement of any Security Interest over any assets of the Borrower and/or any of the Guarantors.

22.1.8 Creditor’s process

Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of the Borrower and/or any of the Guarantors and is not discharged within thirty (30) days and has a Material Adverse Effect.

22.1.9 Unlawfulness

It is or becomes unlawful for the Borrower and/or any of the Guarantors to perform any of their respective obligations under the Finance Documents.

22.1.10 Permits

Any licence, consent, permission or approval required in order to enforce, complete or perform any of the Finance Documents is revoked, terminated or modified having a Material Adverse Effect.

22.1.11 Litigation

There is current, pending or threatened any claims, litigation, arbitration or administrative proceedings against the Borrower and/or any of the Guarantors which might, if adversely determined, have a Material Adverse Effect.

22.2 Acceleration

Upon the occurrence of an Event of Default, the Agent may, and shall if so directed by the Majority Lenders, by written notice to the Borrower:

a) cancel the Total Commitments whereupon they shall immediately be cancelled;

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b)	declare that all or part of the Loan together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents, be either immediately due and payable and/or payable upon demand, whereupon they shall become either immediately due and payable or payable on demand; and/or
c)	start enforcement in respect of the Security Interests established by the Security Documents; and/or
d)	take any other action, with or without notice to the Borrower, exercise any other right or pursue any other remedy conferred upon the Agent or the Finance Parties by any of the Finance Documents or by any applicable law or regulation or otherwise as a consequence of such Event of Default.

23 CHANGES TO THE PARTIES

23.1 No assignment by the Borrower

The Borrower may not assign or transfer or have assumed any part of, or any interest in, its rights and/or obligations under the Finance Documents.

23.2 Assignments and transfers by the Lenders

A Lender (the “Existing Lender”) may at any time assign, transfer or have assumed its rights or obligations under the Finance Documents (a “Transfer”) to:

a)

another Existing Lender or an affiliate of an Existing Lender; or

b)

with the approval of the Borrower (such approval not to be unreasonably withheld and shall not be required in case an Event of Default has occurred and is continuing) to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”).

23.3 Limitations of responsibility of Existing Lenders

23.3.1 Borrower’s performance, etc

Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to the New Lender for:

a)	the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
b)	the financial condition of the Borrower;
c)	the performance and observance by the Borrower of its obligations under the Finance Documents or any other documents; or
d)	the accuracy of any statements (whether written or oral) made in or in connection with the Finance Documents or any other document.

23.3.2 New Lender’s own credit appraisal, etc

Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

a) has made (and will continue to make) its own independent investigation and assessment of the financial condition and affairs of the Borrower and its related entities in connection with

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	its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
b)	will continue to make its own independent appraisal of the creditworthiness of the Borrower and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

23.3.3 Re-transfer to an Existing Lender, etc

Nothing in any Finance Document obliges an Existing Lender to:

a)	accept a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause 23; or
b)	support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by the Borrower of its obligations under the Finance Documents or otherwise.

23.4 Procedure for transfer

Any Transfer shall be effected as follows:

a)	the Existing Lender must notify the Agent of its intention to transfer all or part of its rights and obligations by delivering a duly completed Transfer Certificate to the Agent duly executed by the Existing Lender and the New Lender;
b)	subject to Clause 23.2 (Assignments and transfers by the Lenders), the Agent shall as soon as reasonable possible after receipt of a Transfer Certificate execute the Transfer Certificate and deliver a copy of the same to each of the Existing Lender and the New Lender; and
c)	subject to Clause 23.2 (Assignments and transfers by the Lenders), the Transfer shall become effective on the Transfer Date.

23.5 Effects of the Transfer

On the Transfer Date:

a)	to the extent that in the Transfer Certificate the Existing Lender seeks to transfer its rights and obligations under the Finance Documents, the Borrower and the Existing Lender shall be released from further obligations to one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (the “Discharged Rights and Obligations”);
b)	the Borrower and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as the Borrower and the New Lender have assumed and/or acquired the same in place of the Borrower and the Existing Lender;
c)	the Agent, the Arranger, the New Lender and the other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an original Lender hereunder with the rights and/or obligations acquired or assumed by it as a result of the Transfer and to that extent the Agent, the Arranger and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and

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d) the New Lender shall become a Party as a “Lender”.

23.6 Further assurances

The Borrower undertakes to procure that in relation to any Transfer, the Borrower shall (at its own cost) at the request of the Agent execute such documents as may in the discretion of the Agent be necessary to ensure that the New Lender attains the benefit of the Finance Documents.

23.7 Disclosure of information

Any Lender may disclose:

a)	to any of its affiliates and a potential assignee;
b)	to whom that Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or the Borrower; and
c)	to whom, to the extent that, information is required to be discloses by any applicable law,

such information about the Borrower and the Finance Documents as that Lender shall consider appropriate.

24 ROLE OF THE AGENT, SECURITY TRUSTEE AND THE ARRANGER

24.1 Appointment and authorisation of the Agent and Security Trustee

a)	Each other Finance Party appoints the Agent to act as its agent under and in connection with the Finance Documents, and for purposes of the Mortgage, each other Finance Party appoints the Agent as Security Trustee with respect to the Mortgage.
b)	Each other Finance Party authorises the Agent and the Security Trustee to exercise the rights, powers, authorities and discretions specifically given to the Agent or Security Trustee under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
c)	The Security Trustee shall hold the rights as mortgagee under the Mortgage in trust for the Finance Parties, and its obligations as Security Trustee shall be limited as described in Section 24.2.

24.2 Duties of the Agent and Security Trustee

The Agent and the Security Trustee shall not have any duties or responsibilities except those expressly set forth in the Finance Documents, and the duties of the Agent and the Security Trustee under the Finance Documents are solely mechanical and administrative in nature. The Agent and Security Trustee shall:

a)	promptly forward to a Party the original or a copy of any document which is delivered to it in its capacity as Agent or Security Trustee for the attention of that Party by another Party;
b)	supply the other Finance Parties with all material information which the Agent or Security Trustee receives from the Borrower;
c)	if it receives notice from a Party referring to this Agreement, describing an Event of Default and stating that the circumstance is an Event of Default, promptly notify the Finance Parties; and

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d) if it receives sufficient information; promptly notify the Lenders of the occurrence of any Event of Default arising under Clause 22 (Events of Default).

24.3 Role of the Arranger

Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.

24.4 Relationship

Except with respect to the Mortgage, the relationship between the Agent and the other Finance Parties is that of agent and principal only. Except with respect to the Mortgage, nothing in this Agreement shall be construed as to constitute the Agent or the Finance Parties as trustee or fiduciary for any other person. None of the Agent , the Security Trustee or any of the Finance Parties shall be bound to account to any Finance Party for any sum or the profit element of any sum received by it for its own account. The fiduciary duties of the Security Trustee are limited as described in Section 24.2 above.

24.5 Business with the Borrower

The Agent, Security Trustee and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with the Borrower.

24.6 Rights and discretions of the Agent and Security Trustee

a) The Agent and Security Trustee may rely on:

(i)	any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and
(ii)	any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

b) The Agent and Security Trustee may assume (unless it has received notice to the contrary in its capacity as Agent and Security Trustee for the Lenders) that:

(i)	no Event of Default has occurred (unless it has actual knowledge of an Event of Default under Clause 22.1 (Non-payment)); and
(ii)	any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised.

c)	The Agent and Security Trustee may engage, pay for and rely on the advise or services of any lawyers, accountants, surveyors or other experts.
d)	The Agent and Security Trustee may act in relation to the Finance Documents through its personnel and agents.
e)	The Agent and Security Trustee may disclose to any other Party any information it reasonably believes it has received as agent or Security Trustee under this Agreement.
f)	Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent, the Security Trustee nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of duty of confidentiality or render it liable to any person.

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24.7 Majority Lenders’ instructions

a)	Unless a contrary indication appears in a Finance Document, the Agent and Security Trustee shall (i) exercise any right, power, authority or discretion vested in it as Agent or Security Trustee in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Agent or Security Trustee) and (ii) not be liable for any act (or omission) if it acts in accordance with an instruction of the Majority Lenders.
b)	Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.
c)	The Agent and Security Trustee may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.
d)	In the absence of instructions from the Majority Lenders (or, if appropriate, the Lenders) the Agent and Security Trustee may act (or refrain from acting) as it considers to be in the best interest of the Lenders.
e)	Neither the Agent nor the Security Trustee is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.

24.8 Responsibility for documentation

Neither the Agent, Security Trustee nor the Arranger:

a)	is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Security Trustee the Arranger, the Borrower or any other person in or in connection with any Finance Document; or
b)	is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made in anticipation of or in connection with any Finance Document.

24.9 Exclusion of liability

a)	Without limiting paragraph b) below, the Agent or Security Trustee will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.
b)	No Party (other than the Agent or Security Trustee) may take any proceedings against any officer, employee or agent of the Agent or Security Trustee in respect of any claim it might have against the Agent or Security Trustee or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee and agent of the Agent and the Security Trustee may rely on this Clause.
c)	Neither the Agent nor the Security Trustee will be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent or the Security Trustee if the Agent or the Security Trustee has taken all necessary steps as soon as reasonably practicable to comply with the

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regulations or operating procedures of any recognised clearing or settlement system used by the Agent or Security Trustee for that purpose.

d)

Nothing in this Agreement shall oblige the Agent, Security Trustee or the Arranger to carry out any “know your customer” or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent, Security Trustee and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent, Security Trustee or the Arranger.

24.10 Lenders’ indemnity to the Agent and Security Trustee

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then reduced to zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent and Security Trustee, within three (3) Business Days of demand, against any cost, loss or liability incurred by the Agent or Security Trustee (otherwise than by reason of the Agent’s or the Security Trustee’s gross negligence or wilful misconduct) in acting as Agent or Security Trustee under the Finance Documents (unless the Agent or Security Trustee has been reimbursed by the Borrower pursuant to a Finance Document).

24.11 Resignation of the Agent and/or Security Trustee

a)	The Agent and/or Security Trustee may resign and appoint one of its affiliates as successor by giving notice to the other Finance Parties and the Borrower.
b)	Alternatively the Agent and/or Security Trustee may resign by giving notice to the other Finance Parties and the Borrower in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Agent and/or Security Trustee.
c)	If the Majority Lenders have not appointed a successor Agent and/or Security Trustee in accordance with paragraph b) above within thirty (30) days after notice of resignation was given, the Agent and/or Security Trustee (after consultation with the Borrower) may appoint a successor Agent and/or Security Trustee.
d)	The retiring Agent and/or Security Trustee shall, at its own cost, make available to the successor Agent and/or Security Trustee such documents and records and provide such assistance as the successor Agent and/or Security Trustee may reasonably request for the purposes of performing its functions as Agent and/or Security Trustee under the Finance Documents.
e)	The Agent’s and/or Security Trustee’s resignation notice shall only take effect upon appointment of a successor.
f)	Upon the appointment of a successor, the retiring Agent and/or Security Trustee shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 24. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
g)	After consultation with the Borrower, the Majority Lenders may, by notice to the Agent and/or Security Trustee, require it to resign in accordance with paragraph b) above. In this event, the Agent and/or Security Trustee shall resign in accordance with paragraph b) above.

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24.12 Confidentiality

a)	In acting as agent and security trustee for the Finance Parties, the Agent and Security Trustee shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
b)	If information is received by another division or department of the Agent or Security Trustee, it may be treated as confidential to that division or department and the Agent and/or Security Trustee shall not be deemed to have notice of it.

24.13 Credit appraisal by the Lenders

Without affecting the responsibility of the Borrower for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent, Security Trustee and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document, including (without limitation):

a)	the financial condition, status and nature of the Borrower;
b)	the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
c)	whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document, entered into, made or executed in anticipation of, under or in connection with any Finance Document.

24.14 Conduct of business of the Finance Parties

No provision of this Agreement will:

a)	interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
b)	oblige any Finance Party or the Security Trustee to investigate or claim any credit, relief, remission or repayment available to it or to the extent, order or manner of any claim; or
c)	oblige any Finance Party or the Security Trustee to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

25 SHARING AMONG THE FINANCE PARTIES

25.1 Payment to Finance Parties

If a Finance Party or the Security Trustee (a “Recovering Finance Party”) receives or recovers any amount from the Borrower other than in accordance with Clause 26 (Payment mechanics) and applies that amount to a payment due under the Finance Documents then:

a)	the Recovering Finance Party shall promptly, within three (3) Business Days, notify details of the receipt or recovery to the Agent;
b)	the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received

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	by or made by the Agent and distributed in accordance with Clause 26 (Payment mechanics), without taking account of Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and
c)	the Recovering Finance Party shall, within three (3) Business Days of demand by the Agent, pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 26.5 (Partly payments).

25.2 Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it between the Finance Parties (other than the Recovering Finance Party) in accordance with Clause 26.5 (Partial payments).

25.3 Recovering Finance Party’s rights

a)	On a distribution by the Agent under Clause 25.2 (Redistribution of payments), the Recovering Finance Party will be subrogated to the rights of the Finance Parties which have shared in the redistribution.
b)	If and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph a) above, the Borrower shall be liable to the Recovering Finance Party for a debt equal to the Sharing Payment which is immediately due and payable.

25.4 Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

a)

each Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 25.2 (Redistribution of payments) shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay); and

b)

that Recovering Finance Party’s rights of subrogation in respect of any reimbursement shall be cancelled and the Borrower will be liable to the reimbursing Finance Party for the amount so reimbursed.

25.5 Exceptions

a)	This Clause 25 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the Borrower.
b)	A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as s result of taking legal proceedings, if:

(i) it notified that other Finance Party of the legal proceedings; and

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(ii) that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did do so as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

26 PAYMENT MECHANICS

26.1 Payments to the Agent

All payments by the Borrower or a Lender under the Finance Documents shall be made:

a)	to the Agent to its account with such office or bank as the Agent may from time to time designate in writing to the Borrower or a Lender for this purpose; and
b)	for value on the due date at such times and in such funds as the Agent may specify to the Party concerned as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

26.2 Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 26.3 (Distributions to the Borrower) and 26.4 (Clawback), be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement, to such account as that Party may notify to the Agent by not less than five (5) Business Days’ notice.

26.3 Distributions to the Borrower

The Agent may (with the consent of the Borrower or in accordance with Clause 27 (Set-off)), apply any amount received by it for the Borrower in or towards payment (on the date and in the currency and funds of receipt) of any amount due from the Borrower under the Finance Documents or in or towards purchase of any amount of currency to be so applied.

26.4 Clawback

a)	Where a sum is to be paid to the Agent under the Finance Documents for distribution to another Party, the Agent is not obliged to pay that sum to that other Party until it has been able to establish to its satisfaction that it has actually received that sum.
b)	If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount was paid by the Agent shall on demand refund the same amount to the Agent, together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

26.5 Partial payments

If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by the Borrower under the Finance Documents, the Agent shall apply that payment towards the obligations of the Borrower under the Finance Documents in the following order:

a)	firstly, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent under the Finance Documents;
b)	secondly, in or towards payment pro rata of any accrued interest (including default interest), fee or commissions due but unpaid under this Agreement;

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c)	thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and
d)	fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

26.6 Application following an Event of Default

On either (i) the completion of a sale of a Vessel, either by forced auction or private treaty, or (ii) the receipt of any monies by the Agent pursuant to the sale proceeds of such Vessel (as the case may be), as well as any other proceeds received by the Agent under any of the other Finance Documents, such monies shall be applied in the following order:

a)	firstly, in respect of all costs and expenses whatsoever incurred in connection with or about incidental to the said sale;
b)	secondly, in or towards satisfaction of all prior claims (being any claims, liabilities or debts owed or taking priority in respect of such proceeds over the Security Interests constituted by the Security Documents) secured on such Vessel;
c)	thirdly, in or towards payment pro rata of all sums owed to the Finance Parties under the Finance Documents; and
d)	fourthly, the balance, if any to the Borrower or to its order.

26.7 No set-off by the Borrower

All payments to be made by the Borrower under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

26.8 Payment on non-Business Days

a)	Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
b)	During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

26.9 Currency of account

The Borrower shall pay:

a)	any amount payable under this Agreement, except as otherwise provided for herein, in USD; and
b)	all payments of Costs and Taxes in the currency in which the same were incurred.

27 SET-OFF

A Finance Party may, to the extent permitted by applicable law, set off any matured obligation due from the Borrower under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligations owed by that Finance Party to the Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in

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different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

28 NOTICES

28.1 Communication in writing

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by telefax or letter. Any such notice or communication addressed as provided in Clause 28.2 (Addresses) will be deemed to be given or made as follows:

a)	if by letter, when delivered at the address of the relevant Party;
b)	if by telefax, when received.

However, a notice given in accordance with the above but received on a day which is not a Business Day or after 16:00 hours in the place of receipt will only be deemed to be given at 9:00 hours on the next Business Day in that place.

28.2 Addresses

Any communication or document to be made under or in connection with the Finance Documents shall be made or delivered to the address and telefax number of each Party and marked for the attention of the department or persons set out below and, in case of any New Lender, to the address notified to the Agent:

If to the Agent:	DnB NOR Bank ASA SOL Bergen Att: Credit Administration Lars Hilles gate 30 N-5020 Bergen, Norway Telefax No: +47 55 21 19 24
If to the Borrower:	Exploration Investment Resources II AS Damsgardsv.125, 5162 Laksevaag, Bergen, Norway Att: C.F.O Rakel Simmenes and/or Chairman of the Board Jean-Pierre Sabbagh Telefax No: +47 55 94 77 51
	With copy to Guarantor CGG (however, such copy shall not be a requirement in order for a notice to be valid under this Agreement)
	1 rue Leon Migaux, 91300 Massy, France
	Attn: Finance Division Corporate Yves Goulard and/or Legal Division Services Olivier Louf
	Fax N°: +33 (1) 64 47 39 39

or any substitute address and/or telefax number and/or marked for such other attention as the Party may notify to the other Agent (or the Agent may notify the other Parties if a change is made by the Agent) by not less than five (5) Business Days’ prior notice.

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28.3 Communication with the Borrower

All communication from or to the Borrower shall be sent through the Agent.

28.4 Language

Communication to be given by one Party to another under the Finance Documents shall be given in the English language or, if not in English and if so required by the Agent, be accompanied by a certified English translation and, in this case, the English translation shall prevail unless the document is a statutory or other official document.

29 CALCULATIONS

All sums falling due by way of interest, fees and commissions under the Finance Documents accrue from day-to-day and shall be calculated on the basis of the actual number of days elapsed and a calendar year of 360 days (or 365 days where applicable) and for the actual number of days elapsed. The calculations made by the Agent of any interest rate or any amount payable pursuant to this Agreement shall be conclusive and binding upon the Borrower in the absence of any manifest error.

30 MISCELLANEOUS

30.1 Partial invalidity

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provisions under any law of any other jurisdiction will in any way be affected or impaired.

30.2 Remedies and waivers

No failure to exercise, nor any delay in exercising on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

30.3 Amendments and waivers

30.3.1 Required consents

a)	Subject to Clause 30.3.2 (Exceptions), any term of the Finance Documents may be amended or waived only with the written consent of the Majority Lenders and the Borrower and any such amendment will be binding on all Parties.
b)	The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause.

30.3.2 Exceptions

An amendment to or waiver that has the effect of changing or which relates to:

a)	the definition of “Majority Lenders”;
b)	an extension of the date of any payment of any amount under the Finance Documents;
c)	a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

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d)	an increase in or extension of any Commitment;
e)	a term of the Finance Documents which expressly requires the consent of all the Lenders;
f)	a proposed substitution or replacement of the Borrower; or
g)	a change of Clauses 2.2 (Nature of a Finance party’s rights and obligations), 16 (Security), 21.1.1 (Insurance), 19 (Financial covenants), 23 (Changes to the Parties) and this Clause 30.3,

shall not be made without the prior written consent of all the Lenders.

An amendment or waiver which relates to the rights or obligations of the Agent or the Arranger may not be effected without the consent of the Agent or the Arranger.

30.4 Disclosure of information and confidentiality

Each of the Finance Parties may disclose to each other or to their professional advisers any kind of information which the Finance Parties have acquired under or in connection with any Finance Document. The Parties are obliged to keep confidential all information in respect of the terms and conditions of this Agreement. This confidentiality obligation shall not apply to any information which:

a)	is publicised by a Party as required by applicable laws and regulations;
b)	has entered the public domain or is publicly known, provided that such information is not made publicly known by the receiving Party of such information; or
c)	was or becomes, as the Party is able to demonstrate by supporting documents, available to the such Party on a non-confidential basis prior to the disclosure thereof.

30.5 Conflicting provisions

In case of conflict between this Agreement and the terms of any of the Security Documents, the terms and conditions of this Agreement shall prevail.

31 GOVERNING LAW AND ENFORCEMENT

31.1 Governing law

This Agreement shall be governed by Norwegian law.

31.2 Jurisdiction

a)

For the benefit of each Finance Party, the Borrower agrees that the courts of Bergen, Norway, have jurisdiction to settle any disputes arising out of or in connection with the Finance Documents including a dispute regarding the existence, validity or termination of this Agreement, and the Borrower accordingly submits to the non-exclusive jurisdiction of the Bergen District Court (Bergen tingrett).

b)

Nothing in this Clause 31.2 shall limit the right of the Finance Parties to commence proceedings against the Borrower in any other court of competent jurisdiction. To the extent permitted by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

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* * *

This Agreement has been duly executed in four (4) original copies on the date stated at the beginning of this Agreement.

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SCHEDULE 1
LENDERS AND COMMITMENTS

Tranche I:

Lender	Commitment	%
DnB NOR Bank ASA	USD 10,000,000		100%
[l]
Total:	USD 10,000,000		100.00%

Tranche II:

Lender	Commitment	%
DnB NOR Bank ASA	USD 25,000,000		100%
[l]
Total:	USD 25,000,000		100.00%

Tranche III:

Lender	Commitment	%
DnB NOR Bank ASA	USD 10,000,000		100%
[l]
Total:	USD 10,000,000		100.00%

Tranche IV:

Lender	Commitment	%
DnB NOR Bank ASA	USD 25,000,000		100%
[l]
Total:	USD 25,000,000		100.00%

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SCHEDULE 2
CONDITIONS PRECEDENT

Tranche I:

1	CORPORATE AUTHORISATIONS
1.1	In respect of the Borrower:

a)	Certificate of Incorporation (firmaattest);
b)	Articles of Association (vedtekter);
c)	Resolutions passed at a board meeting of the Borrower evidencing:

(i)	the approval of the terms of, and the transactions contemplated by, the Finance Documents to which it is a party; and
(ii)	the authorisation of its appropriate officer or officers or other representatives to execute the Finance Documents and any other documents necessary for the transactions contemplated by the Finance Documents, on its behalf; and

d) Power of Attorney, to the extent not covered under 1.1. (c).

1.2 In respect of each of the Guarantors:

a)	Certificate of Incorporation;
b)	Articles of Association;
c)	Resolutions passed as a board meeting and/or shareholders meeting of the Guarantor evidencing:

(i)	the approval of the terms of, and the transactions contemplated by, the Guarantee; and
(ii)	the authorisation of its appropriate officer or officers or other representatives to execute the Guarantee on its behalf; and

d) Power of Attorney (notarised if requested by the Agent), to the extent not covered under 1.2. (c).

2 AUTHORISATIONS

All approvals, authorisations and consents required by any government or other authorities for the Borrower and/or the Guarantor to enter into and perform their respective obligations under this Agreement and/or any of the Finance Documents to which any of them is a party.

3 THE C-ORION

In respect of the C-Orion:

a) The relevant CGG-Charterparty;

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b)	Evidence (by way of transcript of registry) that the C-Orion is, or will be, registered in the name of the Borrower in the Vanuatu Ship Registry, that the Mortgage has been, or will in connection with the drawdown of the Tranche be, executed and recorded with its intended first priority against the C-Orion and that no other encumbrances, maritime liens, mortgages or debts whatsoever are registered against the C-Orion;
c)	An updated class certificate related to the C-Orion from the relevant classification society, confirming that the vessel is classed with the highest class in accordance with Clause 21.1.2 (Classification and repairs), free of extensions and overdue recommendations;
d)	Copies of insurance policies/cover notes documenting that insurance cover has been taken out in respect of the C-Orion in accordance with Clause 21.1.1 (Insurance), and evidencing that the Agent’s (on behalf of the Finance Parties) Security Interest in the insurance policies have been noted in accordance with the relevant notices as required under the Assignment of Insurances;
e)	Agreements with the Managers;
f)	The C-Orion’s current SMC;
g)	The Manager’s current DOC; and
h)	The ISPS certificate.

4 FINANCE DOCUMENTS

a)	The Agreement;
b)	The Guarantees;
c)	The Factoring Agreement;
d)	The General Pledge;
e)	The Co-ordination Agreement;
f)	The Share Pledge, including notice, acknowledgment and power of attorney thereunder;
g)	The Assignment of Insurances;
h)	The Assignment of Charterparties and Earnings;
i)	As to C-Orion; Notice of Assignment of Charterparty and Earnings and the Charterers’ acknowledgement thereof;
j)	As to C-Orion; Notice of Assignment of Insurances and the insurers’ acknowledgement thereof; and
k)	The Mortgage (including the deed of covenants (if relevant)).

5 MISCELLANEOUS

a) The Drawdown Notice at least three (3) Business Days prior to the Drawdown Date;

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b)	Evidence that all fees referred to in Clause 11 (Fees), as are payable on or prior to the first Drawdown Date, have or will be paid on its due date;
c)	A Compliance Certificate confirming that the Borrower is in compliance with the financial covenants as set out in Clause 19 (Financial covenants);
d)	All necessary documentation and information as to the corporate structure and to the financial structure and condition of the Borrower and the Guarantors;
e)	The total amount on the Earnings Accounts shall be positive; and
f)	Any other documents as reasonably requested by the Agent.

6 LEGAL OPINIONS

a)	A legal opinion as regards French law matters issued by Ince & Co;
b)	A legal opinion as regards Vanuatu law matters issued by Healy & Bailie;
c)	A legal opinion as regards Norwegian law matters issued by Thommessen Krefting Greve Lund AS; and
d)	Any such other favourable legal opinions in form and substance satisfactory to the Agent from lawyers appointed by the Agent on matters concerning all relevant jurisdictions.

Tranche II:

1 TRANCHE I DOCUMENTS

The documents set out under Schedule 2 — Tranche I above.

2 THE EQUIPMENT

a)	Documentation acceptable to the Agent confirming that the Borrower has invested approximately USD 30,000,000 on the Equipment to and upgrading of the C-Orion.
b)	Insurances as to the Equipment for C-Orion.

3 MISCELLANEOUS

a)	The Drawdown Notice at least three (3) Business Days prior to the Drawdown Date;
b)	A Compliance Certificate confirming that the Borrower is in compliance with the financial covenants as set out in Clause 19 (Financial covenants);
c)	Any other documents as reasonably requested by the Agent.

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Tranche III:

1 TRANCHE I AND II DOCUMENTS

The documents set out under Schedule 2 — Tranche I and Tranche II above.

2 THE GEO CHALLENGER

In respect of the Geo Challenger:

a)	The Geo-Charterparty;
b)	The relevant CGG-Charterparty;
c)	An updated class certificate related to the Geo Challenger from the relevant classification society, confirming that the vessel is classed with the highest class in accordance with Clause 21.1.2 (Classification and repairs), free of extensions and overdue recommendations;
d)	Copies of insurance policies/cover notes documenting that insurance cover has been taken out in respect of the Geo Challenger in accordance with Clause 21.1.1 (Insurance), and evidencing that the Agent’s (on behalf of the Finance Parties) Security Interest in the insurance policies have been noted in accordance with the relevant notices as required under the Assignment of Insurances;
e)	Agreements with the Managers;
f)	The Geo Challenger’s current SMC;
g)	The Manager’s current DOC; and
h)	The ISPS certificate.

3 FINANCE DOCUMENTS

a)	As to Geo Challenger; Notice of Assignment of Charterparty and Earnings and the Charterers’/Geoshipping AS’ acknowledgements thereof; and
b)	As to Geo Challenger; Notice of Assignment of Insurances and the insurers’ acknowledgement thereof.

4 MISCELLANEOUS

a)	The Drawdown Notice at least three (3) Business Days prior to the Drawdown Date;
b)	A Compliance Certificate confirming that the Borrower is in compliance with the financial covenants as set out in Clause 19 (Financial covenants);
c)	Any other documents as reasonably requested by the Agent.

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Tranche IV:

1 TRANCHE I, II AND III DOCUMENTS

The documents set out under Schedule 2 — Tranche I, Tranche II and Tranche III above.

2 THE EQUIPMENT

a)	Documentation acceptable to the Agent confirming that the Borrower has invested approximately USD 65,000,000 on the Equipment to and upgrading of the Geo Challenger.
b)	Insurances as to the Equipment for Geo Challenger.

3 MISCELLANEOUS

a)	The Drawdown Notice at least three (3) Business Days prior to the Drawdown Date;
b)	Evidence that all fees referred to in Clause 11 (Fees), as are payable on or prior to the Drawdown Date of Tranche IV, have or will be paid on its due date;
c)	A Compliance Certificate confirming that the Borrower is in compliance with the financial covenants as set out in Clause 19 (Financial covenants);
d)	Any other documents as reasonably requested by the Agent.

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SCHEDULE 3
FORM OF DRAWDOWN NOTICE

To:	DnB NOR Bank ASA, as Agent
From:	Exploration Investment Resources II AS, as Borrower
Date:	[l]

EXPLORATION INVESTMENT RESOURCES II AS — USD 70,000,000 LONG-TERM FACILITY AGREEMENT DATED 29 MARCH 2006 (THE “AGREEMENT”)

We refer to Clause 5.1 (Delivery of the Drawdown Notice) of the Agreement. Terms defined in the Agreement shall have the same meaning when used in this Drawdown Notice.

1	You are hereby irrevocably notified that we wish to make the following drawdown of Tranche [l]:
	Proposed Drawdown Date:	[               ]
	Principal Amount:	[               ]
	Interest Period:	[               ]
2	The proceeds of the Loan shall be credited to [l] [insert name and number of account].
3	We confirm that, as of the date hereof (i) each condition specified in Clause 4 (Conditions Precedent) of the Agreement is satisfied; (ii) each of the representations and warranties set out in Clause 17 (Representations and warranties) of the Agreement is true and correct; and (iii) no event or circumstances has occurred and is continuing which constitute or may constitute an Event of Default.

Yours sincerely
for and on behalf of
EXPLORATION INVESTMENT RESOURCES II AS

By:
Name:
Title:	[authorised officer]

58

SCHEDULE 4
FORM OF COMPLIANCE CERTIFICATE

To:	DnB NOR Bank ASA, as Agent
From:	Exploration Investment Resources II AS, as Borrower Exploration Resources ASA and Compagnie Générale de Géophysique as Guarantors
Date:	[l] [To be delivered no later than one hundred and eighty (180)/ninety (90) days after each reporting date]

EXPLORATION INVESTMENT RESOURCES II AS — USD 70,000,000 LONG-TERM FACILITY AGREEMENT DATED 29 MARCH 2006 (THE “AGREEMENT”)

We refer to the Agreement. Terms defined in the Agreement have their defined meanings when used in this Compliance Certificate.

1	We hereby represent and warrant that at the date of this Compliance Certificate, we are in compliance with Clause 19 (Financial covenants) of the Agreement and that no Event of Default has occurred.
2	Without limiting the generality of paragraph 1 above, we hereby further represent and warrant as follows.
2.1	For the purpose of Clause 19.2.1 (Equity Ratio), we confirm that ExRe’s Equity Ratio on a consolidated basis is [l]% (minimum 30%). We confirm as per the latest financial statements, ExRe’s Equity on a consolidated basis is NOK [l] and ExRe’s Total Assets on a consolidated basis are NOK [l].
2.2	For the purpose of Clause 19.2.2 (Positive working capital), we confirm that on a consolidated basis ExRe has a positive working capital, and that as per the latest financial statements of ExRe, the:

a)	current assets (including any undrawn portion under available credit lines) are NOK [l]; and
b)	current liabilities (including next year’s instalments on long-term debts and capital lease obligations) are NOK [l].

	all as determined in accordance with GAAP.
2.3	For the purpose of Clause 19.2.3 (Consolidated Interest Coverage Ratio), we confirm that CGG’s Consolidated Interest Coverage Ratio is [l] (minimum 3.00:1.00). As per the latest financial statements, CGG’s Consolidated Cash Flow is [l] and CGG’s Consolidated Interest Expense is [l].

This Compliance Certificate shall be governed by and construed in accordance with Norwegian law.

59

Yours sincerely
for and on behalf of
Exploration Investment Resources II AS

By:
Name:
Title:	[authorised officer]

Compagnie Générale de Géophysique

By:
Name:
Title:	[authorised officer]

Exploration Resources ASA

By:
Name:
Title:	[authorised officer]

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SCHEDULE 5
FORM OF TRANSFER CERTIFICATE

To:	DnB NOR Bank ASA, as Agent
From:	[l] (the “Existing Lender” and [l] (the “New Lender”)
Date:	[l]

EXPLORATION INVESTMENT RESOURCES II AS — USD 70,000,000 LONG-TERM FACILITY AGREEMENT DATED 29 MARCH 2006 (THE “AGREEMENT”)

We refer to the Agreement. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

With reference to Clause 23 (Changes to the Parties):

1	The Existing Lender, in its capacity as Lender under the Agreement, confirms that it participates with [l] per cent. of the Total Commitments.
2	The Existing Lender hereby transfers to the New Lender [l] per cent. of the Total Commitments as specified in the Schedule hereto, and of the equivalent rights and interest in all Finance Documents, and the New Lender hereby accepts such transfer from the Existing Lender in accordance with the terms set out herein and Clause 23 (Changes to the Parties) of the Agreement and assumes the same obligations to the other Finance Parties as it would have been under if it was an original Lender.
3	The proposed Transfer Date is [l], as from which date the Transfer of such portion of the Total Commitments shall take full legal effect.
4	The New Lender confirms that it has received a copy of the Agreement, together with such other information as it has required in connection with this transaction. The New Lender expressly acknowledges and agrees to the limitations on the Existing Lender’s responsibility set out in Clause 23.3 (Limitations of responsibility of Existing Lenders) of the Agreement.
5	The New Lender hereby undertakes to the Existing Lender and the Borrower that it will perform in accordance with the terms and conditions of the Agreement all those obligations which will be assumed by it upon execution of this Transfer Certificate.
6	The address, telefax number and attention details for notices, as well as the account details of the New Lender, are set out in the Schedule.
7	This Transfer Certificate is governed by Norwegian law, with Bergen City Court (Bergen tingrett) as legal venue.

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The Schedule
Commitments/rights and obligations to be transferred

I	Existing Lender:	[l]
II	New Lender:	[l]
III	Total Commitments of Existing Lender:	USD [l]
IV	Aggregate amount transferred:	USD [l]
V	Total Commitments of New Lender:	USD [l]
VI	Transfer Date:	[l]

Administrative Details/Payment Instructions of New Lender

Notices to New Lender:

[l]

[l]

Att: [l]

Telefax no: [l]

[Insert relevant office address, telefax number and attention details for notices and payments to the New Lender.]

Account details of New Lender: [Insert relevant account details of the New Lender.]

Existing Lender:	New Lender:
[l]	[l]
By:	By:
Name:	Name:
Title:	Title:

This Transfer Certificate is accepted and agreed by the Agent (on behalf of the Majority Lenders) and the Borrower and the Transfer Date is confirmed as [       ].

Agent:	Borrower:
DnB NOR Bank ASA	Exploration Investment Resources II AS
By:	By:
Name:	Name:
Title:	Title:

62

SCHEDULE 6 A

FORM OF ASSIGNMENT OF INSURANCES

THIS ASSIGNMENT OF INSURANCES (the “Insurance Assignment”) is made on 29 March 2006 between:

(1)	Exploration Investment Resources II AS of Damsgardsv. 125, 5162 Laksevaag, Bergen, Norway, organisation number 984 670 303, as assignor (the “Assignor”); and
(2)	DnB NOR Bank ASA of Lars Hillesgt. 30, N-5020 Bergen, Norway, organisation number 984 851 006 as agent on behalf of the Finance Parties (as defined in the Agreement as referred to below) (the “Agent”).

Background:

(A)

Pursuant to the terms and conditions of a loan agreement dated 29 March 2006 (the “Agreement”) between Exploration Investment Resources II AS as borrower (the “Borrower”), the banks and financial institutions listed in schedule 1 thereto as lenders (the “Lenders”), DnB NOR Bank ASA as arranger (the “Arranger”), DnB NOR Bank ASA as underwriter (the “Underwriter”) and DnB NOR Bank ASA agent for the Lenders (the “Agent”), the Lenders have agreed to make available to the Borrower a long-term facility in the amount of USD 70,000,000 (the “Loan”); and

(B)

it is a condition precedent to the Lenders making the Loan available to the Borrower that the Assignor executes and delivers, inter alia, this Insurance Assignment and grants the Security Interests set out herein as security for its obligations towards the Finance Parties under the Finance Documents (as defined in the Agreement).

NOW THEREFORE:

1.	INTERPRETATION
1.1	Definitions

In this Insurance Assignment, including the preamble hereto (unless the context otherwise requires), any term or expression defined in the preamble shall have the meanings ascribed to it therein. In addition, terms and expressions not defined herein but whose meanings are defined in the Agreement shall have the meanings set out therein.

1.2 Construction

In this Insurance Assignment, unless the context otherwise requires:

a)	reference to Clauses or Appendices are to be construed as references to clauses or appendices of this Insurance Assignment unless otherwise stated;
b)	references to (or to any specified provision of) this Insurance Assignment or any other document shall be construed as references to this Insurance Assignment, that provision or that document as from time to time amended; and
c)	words importing the plural shall include the singular and vice versa.

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2	ASSIGNMENT OF INSURANCES
2.1	Assignment

To secure the payment and the discharge of the Assignor’s obligations under the Finance Documents and the payment of all sums which from time to time may become due thereunder, and to secure the performance and observance of and compliance with all the covenants, terms and conditions contained in the Finance Documents, the Assignor hereby assigns the Insurances to the Agent (on behalf of the Finance Parties) on first priority.

2.2 Notice and acknowledgement, etc.

The Assignor undertakes to insure and keep the Vessels and the Equipment fully insured in accordance with Clause 21.1.1 (Insurance) of the Agreement; and

a)

in the event that the Insurances, or any one of them, have been taken out on conditions other than the Norwegian Marine Insurance Plan of 1996, version 2003 (as amended from time to time) (the “Plan”), to give all the relevant insurers notice in the form of Appendix 1 (A) hereto, and procure that the said insurers acknowledge receipt of such notice in the form of Appendix 1 (B) hereto or give such other form of notice and procure such other form of acknowledgement as the Agent shall require in writing to the Assignor; and

b)

in the event that the Insurances, or any one of them, have been taken out according to the Plan, to procure written statements from all the relevant insurers and/or approved brokers confirming that the Agent (on behalf of the Finance Parties) has been duly registered as co-insured first priority mortgagee on all such insurance policies taken out for the Vessels and that notice according to the Plan has been duly received by all the relevant insurers.

2.3 Loss Payable

Claims related to the Insurances in respect of an actual or constructive or agreed or arranged or compromised total loss or requisition for title or other compulsory acquisition of any of the Vessels and claims payable in respect of a major casualty, that is to say any claim (or the aggregate of which) exceeding 5% of the Vessel’s Market Value, shall be payable to the Agent. Subject thereto all other claims, unless and until the insurers have received notice from the Agent of an Event of Default which is unremedied under the Agreement in which event all claims shall be payable directly to the Agent up to the Lenders’ mortgage interest, shall be released directly for the repair, salvage or other charges involved or to the Assignor as reimbursement if it has fully repaired the damage and paid all of the salvage or other charges or otherwise in respect of Assignor’s actual costs in connection with repair, salvage and/or other charges. Any amounts paid to the Assignor directly shall be paid to the Earnings accounts.

3 PERFECTION

The Assignor agrees that at any time and from time to time upon the written request of the Agent, it will promptly and duly execute and deliver to the Agent any and all such further instruments and documents as the Agent (on behalf of the Finance Parties) may reasonably deem necessary or desirable to register this Insurance Assignment in any applicable registry, and to maintain and/or perfect the Security Interest created by this Insurance Assignment and the rights and powers herein granted.

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4 ASSIGNMENT

The Agent may assign or transfer its rights hereunder to any person to whom the rights and obligations of the Agent and the Lenders under the Agreement are wholly or partially assigned in accordance with Clause 23 (Changes to the Parties) of the Agreement.

5 NO FURTHER ASSIGNMENT OR PLEDGE

The Assignor shall not, unless prior written consent has been obtained from the Agent, be entitled to further assign or pledge the Insurances.

6 ADDITIONAL AND CONTINUING SECURITY

The Security Interest contemplated by this Insurance Assignment shall be in addition to any other Security Interest granted in accordance with the Agreement, and shall be a continuing security in full force and effect as long as any obligations are outstanding under the Finance Documents.

7 NOTICES

Any communication or document to be made under or in connection with this Insurance Assignment shall be made or delivered to the address and telefax number and marked for the attention of the department or persons set out below:

If to the Agent:	DnB NOR Bank ASA SOL Bergen Att: Credit Administration Lars Hilles gate 30 N-5020 Bergen, Norway Telefax No: +47 55 12 19 24
If to the Assignor:	Exploration Investment Resources II AS Damsgardsv.125, 5162 Laksevaag, Bergen, Norway Att: C.F.O Rakel Simmenes and/or Chairman of the Board Jean-Pierre Sabbagh Telefax No: +47 55 94 77 51

or any substitute address and/or telefax number and/or marked for such other attention as the Assignor may notify to the Agent (or the Agent may notify the Assignor if a change is made by the Agent) by not less than five (5) Business Days’ prior notice.

8	GOVERNING LAW — JURISDICTION
8.1	Governing law

This Insurance Assignment shall be governed by and construed in accordance with the laws of Norway.

8.2 Jurisdiction

a) For the benefit of the Agent and the other Finance Parties, the Assignor agrees that the courts of Bergen, Norway, have jurisdiction to settle any disputes arising out of or in connection with this Insurance Assignment including a dispute regarding the existence, validity or termination of this Insurance Assignment, and the Assignor accordingly submits to the non-exclusive jurisdiction of the Bergen District Court (Bergen tingrett).

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b) Nothing in this Clause 8.2 shall limit the right of the Finance Parties to commence proceeding against the Assignor in any other court of competent jurisdiction. To the extent permitted by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

Assignor:	Agent:
Exploration Investment Resources II AS	DnB NOR Bank ASA
By:	By:
Name:	Name:
Title:	Title:

66

Appendix 1 (A)

FORM OF NOTICE OF ASSIGNMENT
(Assignment of Insurances)

To:  The Insurers

MV “[        ]”

Exploration Investment Resources II AS as owner/bareboat charterer (the “Owner”) of MV C-Orion and MV Geo Challenger respectively (together the “Vessels”) hereby gives you notice that all payments due to us from you in respect of the Vessels have been (by way of security) assigned to DnB NOR Bank ASA, Lars Hillesgt. 30, N-5020 Bergen, Norway, as Agent for certain other banks (the "Mortgagee”) according to an Assignment of Insurances dated 29 March 2006 related to a loan agreement dated 29 March 2006 (the “Agreement”), and that all payments due to us under our policy(-ies) with yourselves must be made in accordance with the instruction, from time to time, of the Mortgagee.

Please note that all claims related to the insurances in respect of claims payable in respect of a major casualty, that is to say any claim (or the aggregate of which) exceeding 5% of the Vessel’s fair market value, shall be payable to the Mortgagee and be applied by the Mortgagee in accordance with the terms of the Agreement. Subject thereto all other claims, unless and until the insurers have received notice from the Mortgagee of a default which is unremedied under the Agreement in which event all claims shall be payable directly to the Mortgagee up to their mortgage interest, shall be released directly for the repair or other charges involved or to the Owner as reimbursement if it has fully repaired the damage and paid all of the charges or otherwise in respect of the Owner’s actual costs in connection with repair and/or other charges. Any amounts paid to the Owner directly shall be paid to the Earnings accounts, account no. [l] with the Mortgagee.

Please note that this instruction may not be varied except with the prior written consent of the Mortgagee.

Please confirm your acknowledgement of the terms of this notice by completing the Acknowledgement attached hereto. Please return the signed and dated Acknowledgement to the Mortgagee at the address set out above.

Place and date: [l], [l]

Yours sincerely
for and on behalf of
Exploration Investment Resources II AS

By:
Name:
Title:	[authorised officer]

67

Appendix 1 (B)

FORM OF ACKNOWLEDGEMENT
(Assignment of Insurances)

To:  DnB NOR Bank ASA
SOL Bergen
Att: Credit Administration
Lars Hillesgt. 30
N-5020 Bergen
Norway
Att.: [l]

We hereby acknowledge receipt of a Notice of Assignment (the “Notice”) from Exploration Investment Resources II AS (the “Owner”) dated [l] related to MV C-Orion and MV Geo Challenger (the “Vessels”).

We have duly noted and do accept that our payments due to the Owner, under the insurance policy(-ies) taken out for the Vessels as an Owners’ Entry pursuant to our rules, shall be made in accordance with the instructions set out in the Notice, including the Loss Payable clause therein, and payment due to the mortgagees will be made to such account as from time to time instructed by DnB NOR Bank ASA, Lars Hillesgt. 30, N-5020 Bergen, Norway, which bank has been duly noted by ourselves as the first priority mortgagee of the said Vessel on its own behalf and on behalf of certain other banks as agent therefore.

Place and date: [l]

Yours sincerely
for and on behalf of
[INSURERS]

By:
Name:
Title:	[authorised officer]

68

SCHEDULE 6 B

FORM OF ASSIGNMENT OF EARNINGS AND CHARTERPARTIES

THIS ASSIGNMENT OF EARNINGS AND CHARTERPARTIES (the “Assignment”) is made on 29 March 2006 between:

(1)	Exploration Investment Resources II AS of Damsgardsv.125, 5162 Laksevaag, Bergen, Norway, organisation number 984 670 303, as assignor (the “Assignor”); and
(2)	DnB NOR Bank ASA of Lars Hillesgt 30, N-5020 Bergen, Norway, organisation number 984 851 006, as facility agent on behalf of the Finance Parties (as defined in the Agreement as referred to below) (the “Agent”).

Background:

(A)

Pursuant to the terms and conditions of a loan agreement dated 29 March 2006 (the “Agreement”) between Exploration Investment Resources II AS as borrower (the “Borrower”), the banks and financial institutions listed in schedule 1 thereto as lenders (the “Lenders”), DnB NOR Bank ASA as arranger (the “Arranger”), DnB NOR Bank ASA as underwriter (the “Underwriter”) and DnB NOR Bank ASA agent for the Lenders (the “Agent”), the Lenders have agreed to make available to the Borrower a long-term facility in the amount of USD 70,000,000 (the “Loan”); and

(B)

it is a condition precedent to the Lenders making the Loan available to the Borrower that the Assignor executes and delivers, inter alia, this Assignment and grants the Security Interests set out herein as security for its obligations towards the Finance Parties under the Finance Documents (as defined in the Agreement).

NOW THEREFORE:

1	INTERPRETATION
1.1	Definitions

In this Assignment, including the preamble hereto (unless the context otherwise requires), any term or expression defined in the preamble shall have the meanings ascribed to it therein. In addition, terms and expressions not defined herein but whose meanings are defined in the Agreement shall have the meanings set out therein.

1.2 Construction

In this Assignment, unless the context otherwise requires:

a)	reference to Clauses or Appendices are to be construed as references to clauses or appendices of this Assignment unless otherwise stated;
b)	references to (or to any specified provision of) this Assignment or any other document shall be construed as references to this Assignment, that provision or that document as from time to time amended; and
c)	words importing the plural shall include the singular and vice versa.

69

2	ASSIGNMENT OF EARNINGS AND CHARTERPARTIES
2.1	Assignment

To secure the payment and the discharge of the Assignor’s obligations under the Finance Documents and the payment of all sums which from time to time may become due thereunder, and to secure the performance and observance of and compliance with all the covenants, terms and conditions contained in the Finance Documents, the Assignor hereby assigns to the Agent (on behalf of the Finance Parties) on first priority all its rights, title and benefits to and under:

a)	the Earnings, and
b)	the Charterparties.

2.2 Notice and acknowledgement, etc.

The Assignor undertakes promptly to give notice of the assignment of the Earnings and the CGG-Charterparties to the Charterer and any other third party from which any of the Earnings may become payable in the form set out in Appendix 1 (A) and procure that any recipient of such notice duly acknowledges receipt of the notice in the form set out in Appendix 1 (B), and furthermore to give notice of the assignment of the Geo-Charterparty to Geoshipping AS in the form set out in Appendix 2 (A) and procure that Geoshipping AS duly acknowledges receipt of the notice in the form set out in Appendix 2 (B).

3 BORROWER’S UNDERTAKINGS

The Borrower undertakes with the Agent (on behalf of the Finance Parties) during the Security Period:

a)	not to agree to any variation of the Charterparties or grant any release or waiver to the Charterer and/or Geoshipping AS (as applicable) of any of their obligations under the Charterparties without the prior written consent of the Agent;
b)	to duly perform its obligations under the Charterparties and to use its best endeavours to ensure that the Charterer and/or Geoshipping AS (as applicable) duly performs its obligations under the Charterparties;
c)	not to terminate the Charterparties for any reason whatsoever or withdraw the Vessel from hire under the Charterparties;
d)	if any court or tribunal having jurisdiction declares, or any rule of law renders any part of this Assignment invalid or unenforceable to execute any further documents required by the Agent to maintain the security created by this Assignment.

4 ENFORCEMENT

Upon the occurrence of an Event of Default which is continuing, the Lenders shall be entitled to put into force and exercise as and when they may see fit any and every power possessed by them by virtue of the assignment contained in Clause 2 hereof and in particular:

a)	to assume and take over all the Borrower’s rights and obligations under the Charterparties, by providing written notice of such to the Charterer and/or Geoshipping AS (as applicable);
b)	to enforce any of their respective rights under the Charterparties or to agree with the Charterer and/or Geoshipping AS (as applicable) to terminate the same on such terms and

70

	conditions as the Lenders and the Charterer and/or Geoshipping AS (as applicable) may mutually agree;
c)	to assign all rights, titles, interests and benefits in and under the Charterparties; and
d)	to collect, recover or compromise and give a good discharge for any money payable to the Borrower by the Charterer and/or Geoshipping AS (as applicable) or any damages recoverable by the Borrower from the Charterer and/or Geoshipping AS (as applicable) under the Charterparties or in connection therewith.

5 PERFECTION

The Assignor agrees that at any time and from time to time upon the written request of the Agent, it will promptly and duly execute and deliver to the Agent any and all such further instruments and documents as the Agent (on behalf of the Finance Parties) may reasonably deem necessary or desirable to register this Assignment in any applicable registry, and to maintain and/or perfect the Security Interest created by this Assignment and the rights and powers herein granted.

6 ASSIGNMENT

The Agent may assign or transfer its rights hereunder to any person to whom the rights and obligations of the Agent and the Lenders under the Agreement are wholly or partially assigned in accordance with Clause 23 (Changes to the Parties) of the Agreement.

7 NO FURTHER ASSIGNMENT OR PLEDGE

The Assignor shall not, unless prior written consent has been obtained from the Agent, be entitled to further assign or pledge the Earnings and/or the Charterparties.

8 ADDITIONAL AND CONTINUING SECURITY

The Security Interest contemplated by this Assignment shall be in addition to any other Security Interest granted in accordance with the Agreement and shall be a continuing security in full force and effect as long as any obligations are outstanding under the Agreement.

9 NOTICES

Any communication or document to be made under or in connection with this Assignment shall be made or delivered to the address and telefax number of each Party and marked for the attention of the department or persons set out below:

If to the Agent:	DnB NOR Bank ASA SOL Bergen Att: Credit Administration Lars Hilles gate 30 N-5020 Bergen, Norway Telefax No: +47 55 21 19 24
If to the Assignor:	Exploration Investment Resources II AS Damsgardsv.125, 5162 Laksevaag, Bergen, Norway Att: C.F.O Rakel Simmenes and/or Chairman of the Board Jean-Pierre Sabbagh Telefax No: +47 55 94 77 51

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or any substitute address and/or telefax number and/or marked for such other attention as the Party may notify to the other Agent (or the Agent may notify the other Parties if a change is made by the Agent) by not less than five (5) Business Days’ prior notice.

10 GOVERNING LAW — JURISDICTION

This Assignment shall be governed by and construed in accordance with the laws of Norway.

The Borrower and the Finance Parties accept Bergen City Court (Bergen tingrett) as non-exclusive venue, but this choice shall not prevent the Agent (on behalf of the Finance Parties) to enforce any rights under this Assignment against assets of the Assignor wherever they may be found.

Assignor:	Agent:
Exploration Investment Resources II AS	DnB NOR Bank ASA
By:	By:
Name:	Name:
Title:	Title:

72

Appendix 1 (A)

FORM OF NOTICE OF ASSIGNMENT

(Assignment of Earnings and Charterparty)

To:  CGG Marine, of 1, rue Léon Migaux, 91341 Massy Cedex, France

MV C-Orion and MV Geo Challenger

We refer to the bare boat charterparties dated 30 December 2005 and [l] respectively (the "Charterparties”) made between you and us, whereby we agreed to let and you agreed to take on charter for the period and upon the terms and conditions therein mentioned MV C-Orion and MV Geo Challenger.

We hereby give you notice that:

a)	by an assignment dated 29 March 2006 (the “Assignment”) made between us and DnB NOR Bank ASA of Lars Hillesgt 30, N-5020 Bergen, Norway, acting as agent on behalf of certain other banks (the “Agent”), related to a loan agreement of even date (the “Agreement”), we have assigned absolutely and have agreed to assign absolutely to and in favour of the Agent all our rights, title and interest, present and future, to the Charterparties and to all payments to be made to us under the Charterparties, including in respect of any breach by you thereunder;
b)	you are hereby irrevocably authorised and instructed to make all payments under the Charterparties to our account with the Agent, being account no NOK: 5210 05 21644, USD: 5206 04 92794 and GBP: 5203 04 81852 (free of any set-off or other deduction other than as allowed in the Charterparties) until such time as the Agent shall direct to the contrary whereupon all instructions or demands for actions shall be made by the Agent and payments are due to the Agent or as it may direct;
c)	the Assignment includes provisions that no amendments, termination or cancellation shall be made to the Charterparties (nor shall you be released from any of your obligations thereunder without the prior written consent of the Agent) and that we shall remain liable to perform all our obligations under the Charterparties and that the Agent shall be under no obligations of any kind whatsoever in respect thereof; and
d)	the Agent, or such party that the Agent may appoint, shall at any time hereafter be entitled, but shall not be obliged, to assume and take over all of our rights and obligations under the Charterparties by providing written notice of such to yourselves.

The authority and instructions herein contained cannot be revoked or varied by us without the written consent of the Agent. The provisions of this notice shall be governed by Norwegian law.

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[Place and date]
 
Yours sincerely
for and on behalf of
Exploration Investment Resources II AS

By:
Name:
Title:	[authorised officer]

74

Appendix 1 (B)

FORM OF ACKNOWLEDGEMENT

(Assignment of Earnings and Charterparties)

To:  DnB NOR Bank ASA
SOL Bergen
Att: Credit Administration
Lars Hillesgt 30
N-5020 Bergen
Norway
Attn: [l]

We acknowledge receipt of the above Notice of Assignment dated [l] 2006 from Exploration Investment Resources II AS. Terms used herein shall have the same meaning as defined therein.

We agree to the assignment set out therein and undertake to be bound by the terms thereof. We confirm that we have received no notice of any previous assignment or pledge of the Charterparties or of all or any part of the charter hire and any monies payable thereunder.

We further confirm that all written statements containing instructions or demanding actions or payments under the Charterparties may until further notice from the Agent to the contrary be made by Exploration Investment Resources II AS and after such notice these instructions shall be given or demands shall be made by the Agent. Payments shall be made to the accounts as specified in the Notice of Assignment.

We have noted and agree that the Agent, or such party as the Agent may appoint, shall at any time hereafter be entitled, but shall not be obliged, to assume and take over all of Exploration Investment Resources II AS’ rights and obligations under the Charterparties by providing written notice of such to ourselves.

This acknowledgement and confirmation shall be governed by Norwegian law.

[Place and date]
 
Yours sincerely
for and on behalf of
CGG Marine

By:
Name:
Title:	[authorised officer]

75

Appendix 2 (A)

FORM OF NOTICE OF ASSIGNMENT

(Assignment of Charterparty)

To:  Geoshipping AS

MV Geo Challenger

We refer to the time charterparty dated ["] (the “Charterparty”) made between you and us, whereby you agreed to let and we agreed to take on charter for the period and upon the terms and conditions therein mentioned MV Geo Challenger.

We hereby give you notice that:

a)	by an assignment dated 29 March 2006 (the “Assignment”) made between us and DnB NOR Bank ASA of Lars Hillesgt 30, N-5020 Bergen, Norway, acting as agent on behalf of certain other banks (the “Agent”), related to a loan agreement of even date (the “Agreement”), we have assigned absolutely and have agreed to assign absolutely to and in favour of the Agent all our rights, title and interest, present and future, to the Charterparties and to all payments to be made to us under the Charterparties, including in respect of any breach by you thereunder;
b)	the Assignment includes provisions that no amendments, termination or cancellation shall be made to the Charterparty (nor shall you be released from any of your obligations thereunder without the prior written consent of the Agent) and that we shall remain liable to perform all our obligations under the Charterpartiy and that the Agent shall be under no obligations of any kind whatsoever in respect thereof; and
c)	the Agent, or such party that the Agent may appoint, shall at any time hereafter be entitled, but shall not be obliged, to assume and take over all of our rights and obligations under the Charterparty, including the purchase option, by providing written notice of such to yourselves.

The authority and instructions herein contained cannot be revoked or varied by us without the written consent of the Agent. The provisions of this notice shall be governed by Norwegian law.

[Place and date]
 
Yours sincerely
for and on behalf of
Exploration Investment Resources II AS

By:
Name:
Title:	[authorised officer]

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Appendix 2 (B)

FORM OF ACKNOWLEDGEMENT

(Assignment of Charterparty)

To:	DnB NOR Bank ASA
	SOL Bergen
	Att: Credit Administration
	Lars Hillesgt 30
	N-5020 Bergen
	Norway
	Attn: [•]

We acknowledge receipt of the above Notice of Assignment dated [•] 2006 from Exploration Investment Resources II AS. Terms used herein shall have the same meaning as defined therein.

We agree to the assignment set out therein and undertake to be bound by the terms thereof. We confirm that we have received no notice of any previous assignment or pledge of the Charterparty or of all or any part of any monies payable thereunder.

We further confirm that all written statements containing instructions or demanding actions or payments under the Charterparty may until further notice from the Agent to the contrary be made by Exploration Investment Resources II AS and after such notice these instructions shall be given or demands shall be made by the Agent.

We have noted and agree that the Agent, or such party as the Agent may appoint, shall at any time hereafter be entitled, but shall not be obliged, to assume and take over all of Exploration Investment Resources II AS’ rights and obligations under the Charterparty, including the purchase option, by providing written notice of such to ourselves.

This acknowledgement and confirmation shall be governed by Norwegian law.

[Place and date]

Yours sincerely
for and on behalf of
Geoshipping AS

By:                                         
Name:
Title: [authorised officer]

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SCHEDULE 7
FORM OF GUARANTEE

THIS GUARANTEE (the “Guarantee”) is executed on 29 March 2006 by:

COMPAGNIE GÉNÉRALE de GÉOPHYSIQUE a limited liability company organised and existing under the laws of France with a capital of EUR [•] having its registered office at 1, rue Léon Migaux, 91341 Massy Cedex, France registered with the [•] under the number [•] (the “Guarantor ”)

[or, in a separate identical guarantee:]

EXPLORATION RESOURCES ASA a limited liability company organised and existing under the laws of Norway with a capital of NOK [•] having its registered office at Damsgårdsveien 125, NO-5162 Laksevåg, Bergen, Norway registered with the Foretaksregisteret under the number NO 987 264 020 (the “Guarantor”)

IN FAVOUR OF

DNB NOR BANK ASA, of Lars Hillesgt. 30, P.O. Box 7100, N-5020 Bergen, Norway (the “Agent”), acting on behalf of the Finance Parties (as defined in the Agreement referred to below).

Background:

(A) Pursuant to the terms and conditions of a loan agreement dated 29 March 2006 (the “Agreement”) between Exploration Investment Resources II AS as borrower (the “Borrower”), the banks and financial institutions listed in schedule 1 thereto as lenders (the “Lenders”), DnB NOR Bank ASA as arranger (the “Arranger”), DnB NOR Bank ASA as underwriter (the “Underwriter”) and DnB NOR Bank ASA agent for the Lenders (the “Agent”), the Lenders have agreed to make available to the Borrower a long-term facility in the amount of USD 70,000,000 (the “Loan”); and

(B) it is a condition precedent to the Lenders making the Loan available to the Borrower that the Guarantor executes and delivers, inter alia, this Guarantee in favour of the Agent (on behalf of the Finance Parties) and grants the Security Interests set out herein as security for its obligations towards the Finance Parties under the Finance Documents (as defined in the Agreement).

NOW THEREFORE:

1 TERMS AND EXPRESSIONS

In this Guarantee including the preamble hereto, unless the context otherwise requires, any term or expression defined in the preamble shall have the meaning described to it therein. In addition terms and expressions defined in the Agreement shall unless the context otherwise requires have the same meaning when used in this Guarantee.

2 GUARANTEE AND INDEMNITY

2.1 Guarantee Obligations

In order to secure the Borrower’s obligations and liabilities (the “Obligations”) under or pursuant to the Finance Documents, the Guarantor as primary obligor (“Selvskyldnerkausjonist”) as and for its own debt and not merely as surety, and jointly and severally with the Borrower hereby guarantees to the Agent (on behalf of the Finance Parties) to be responsible for and hereby guarantee to the Agent (on behalf of the Finance Parties) the due and punctual payment by the Borrower (as and when due under the Finance Documents by acceleration, demand or otherwise) of the Obligations

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and any part thereof on the terms set out in the Finance Documents plus interest thereon, calculated from the date a demand is received under this Guarantee and until payment is made at the default rate according to the Agreement and cost and expenses incurred by any of the Finance Parties in connection with collection under or enforcement of this Guarantee.

2.2 Demand Guarantee

The Guarantor unconditionally and irrevocably undertakes immediately on the first written demand by the Agent from time to time to make payment in accordance with its obligations under Clause 2.1 without any right of recourse, objections or reference to any underlying rights and/or obligations of whatsoever nature, including but not limited to the Finance Documents where such demand is accompanied by a statement of the Agent that a payment has fallen due in respect of the Obligations, and that the Borrower has failed to make such payment when due (for whatsoever reason). Each of such payments so demanded shall be made by the Guarantor immediately to such account(s) as the Agent may from time to time notify in writing.

2.3 Indemnity

The Guarantor unconditionally undertakes immediately on demand by the Agent from time to time to indemnify and hold harmless the Finance Parties in respect of any direct loss incurred any of the Finance Parties as a result of the Finance Documents or any provision thereof being or becoming invalid or unenforceable for any reason whatsoever up to the maximum amount which would otherwise be payable in the event such invalidity or unenforceability had not occurred.

2.4 Scope of Liability

The Guarantor’s liability shall be limited to USD 70,000,000 plus interest, cost, fees and expenses under the Finance Documents.

2.5 Guarantee Period

This Guarantee is a continuing guarantee and shall remain in force until all sums which may be or become payable by the Borrower under the Finance Documents have been paid in full.

2.6 Number of Claims

There is no limit on the number of claims that may be made by the Agent (on behalf of the Finance Parties) under this Guarantee.

2.7 Survival of the Guarantor’s Liability

(a) The Guarantor’s liability to the Finance Parties under this Guarantee shall not be discharged, impaired or otherwise affected by reason of any of the following events or circumstances (regardless of whether any such events or circumstances occur with or without the Guarantor’s knowledge or consent):

(i)	any time, forbearance or other indulgence given or agreed by the Finance Parties with the Borrower or any third party in respect of any of its obligations under the Finance Documents;
(ii)	any legal limitation, disability or incapacity of the Borrower or any third party related to the Finance Documents;
(iii)	any invalidity, irregularity, unenforceability, imperfection or avoidance of or any defect in any security granted by, or the obligations of any party to any of the Finance Documents, or any amendment to or variation thereof, or of any other document or security comprised therein;
(iv)	the liquidation, bankruptcy or dissolution (or proceedings analogous thereto) or the appointment of a receiver for the Borrower or any third party, or the occurrence of any circumstances whatsoever affecting the liability of any party to discharge its obligations under any of the Finance Documents;

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(v)	any challenge, dispute or avoidance by any liquidator of the Borrower or any third party in respect of any claim by the Borrower by right of subrogation in any such liquidation;
(vi)	any release, discharge, renewal, amendment, extension, compromise exchange or realisation of any security, obligation or term of any of the Finance Documents, or any further security for the obligations of the Borrower under the Finance Documents;
(vii)	any failure on the part of the Finance Parties (whether intentional or not) to take or perfect any security agreed to be taken under or in relation to any of the Finance Documents; or
(viii)	any other act, matter or thing which might otherwise constitute a legal discharge of the obligations of the Borrower under the Finance Documents.

(b) The Guarantor specifically waives all rights under the provisions of the Norwegian Financial Services Act of 25 June 1999 no. 46 not being mandatory provisions, including the following provisions (the main contents of the relevant provisions being as indicated in the brackets):

(i)	§ 62 (1) (a) (to be notified of any security the giving of which was a precondition for the Facility, but which has not been validly granted or has lapsed);
(ii)	§ 63 (1) — (2) (to be notified of any event of default under the Finance Documents and to be kept informed thereof);
(iii)	§ 63 (3) (to be notified of any extension granted to the Borrower in payment of principal and/or interest);
(iv)	§ 63 (4) (to be notified of the Borrower’s bankruptcy proceedings or debt reorganisation proceedings and/or any application for the latter);
(v)	§ 65 (3) (that the consent of the Guarantor is required for the Guarantor to be bound by amendments to the Finance Documents that may be detrimental to the Guarantor’s interest);
(vi)	§ 66 (1) — (2) (that the Guarantor shall be released from liabilities hereunder if security which was given, or the giving of which was a precondition for the Facility, is released by the Finance Parties without the consent of the Guarantor);

(vii)	§ 66 (3) (that the Guarantor shall be released from its liabilities hereunder if, without its consent, security the giving of which was a precondition for the Facility, was not validly granted);
(viii)	§ 67 (2) (about reduction of the Guarantor’s liabilities hereunder);

(ix)	§ 67 (4) (that the Guarantor’s liabilities hereunder shall lapse after 10 years, as the Guarantor shall remain liable hereunder as long as any amount is outstanding under the Finance Documents);
(x)	§ 70 (as the Guarantor shall have no right of subrogation into the rights of the Lender under the Finance Documents until and unless the Finance Parties shall have received all amounts due or to become due to them under the Finance Documents);
(xi)	§ 71 (as the Finance Parties shall have no liability first to make demand upon or seek to enforce remedies against the Borrower or any other security provided in respect of the Borrower’s liabilities under the Finance Documents before demanding payment under or seeking to enforce the security created hereunder);

(xii) § 72 (as all interest and default interest due under the Finance Documents shall be secured hereunder);

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(xiii)	§ 73 (1) — (2) (as all costs and expenses related to a default under the Finance Documents shall be secured hereunder); and
(xiv)	§ 74 (1) — (2) (as the Guarantor shall make no claim against the Borrower for payment until and unless the Finance Parties first shall have received all amounts due or to become due to them under the Finance Documents).

3 REPRESENTATIONS AND WARRANTIES

3.1 Representation and Warranties

The Guarantor hereby represents and warrants to the Agent (on behalf of the Finance Parties) that:

3.1.1 Status

it is organised and exists as a company with limited liability and has full power to carry on its business as it is now being conducted;

3.1.2 Powers and Authority

it has the power to enter into and perform, and has taken all necessary corporate or other action to enter into and perform, its obligations under this Guarantee;

3.1.3 Legal Validity

this Guarantee constitutes the legal, valid and binding obligations of it enforceable in accordance with its terms;

3.1.4 Non-conflict

the execution and delivery of, and the performance of the provisions of this Guarantee by it does not and will not contravene (i) any applicable law or regulation or (ii) any contractual restriction binding on it or any of its assets or (iii) any of its constitutional documents;

3.1.5 Disputes

other than as disclosed in annual or quarterly statements or otherwise to the Agent (on behalf of the Finance Parties) in writing, no action, suit, proceeding, litigation or dispute is pending or threatened against it or any of its property or assets before any court, board of arbitration or administrative agency nor is there subsisting any judgment or award given against it before any court, board of arbitration or administrative agency which, in either case, could or might result in any material adverse change in its business condition (financial or otherwise);

3.1.6 Authorizations

all official authorizations or consents required for it to enter into and perform its obligations under this Guarantee have been obtained and are in full force and effect;

3.1.7 No Default

no event of default is outstanding or would result from the making of this Guarantee;

3.2 Repetition

The representations and warranties set out in this Clause 3 are made by the Guarantor on the date of this Guarantee and are deemed to be repeated on every day thereafter.

4 CONTINUING GUARANTEE

This Guarantee shall be:

(a) a continuing guarantee remaining in full force and effect until the Guarantee period has expired pursuant to Clause 2.5 and

(b) in addition to and not in substitution for any other security held by the Finance Parties from time to time in respect of the Obligations under the Finance Documents or any part thereof.

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5 EXCLUSION OF GUARANTOR’S RIGHTS

(a) Until the Obligations have been paid in full, the Guarantor shall not be entitled to share in or succeed to or benefit from (by subrogation or otherwise) any rights which the Finance Parties may have in respect of the Obligations or any security therefore or all or any of the proceeds of such rights or security.

(b) Payment under this Guarantee shall be made free and clear of any set-off for counterclaim, taxes or charges of any kind.

6 ENFORCEMENT

6.1 No Formalities

The Finance Parties shall not be obliged before taking steps to enforce this Guarantee against the Guarantor:

(a)	to obtain judgment against the Borrower or any third party in any court or other tribunal;
(b)	to make or file any claim in a bankruptcy or liquidation of the Borrower or any third party; or
(c)	to take any action whatsoever against the Borrower or any third party under any of the Finance Documents, except giving notice of payment of the relevant part of the Obligations;

and the Guarantor hereby waives all such formalities or rights to which it would otherwise be entitled or which the Finance Parties would otherwise first be required to satisfy or fulfil before proceeding or making demand against the Guarantor hereunder. The Agent (on behalf of the Finance Parties) may take such action as it in its own discretion may consider appropriate against any other person or parties and securities to recover moneys due and payable in respect of the Obligations.

7 UNDERTAKINGS

The Guarantor undertakes from the date of this Guarantee and as long as any amount is outstanding under the Finance Documents that it shall inform the Agent (on behalf of the Finance Parties) forthwith of any event which, in its reasonable opinion, might adversely affect its ability to perform its obligations under this Guarantee or constitute an event of default

8 EVENTS OF DEFAULT

8.1 There shall be an Event of Default if:

(a) the Guarantor is in default of (i) any of its obligations or undertaking under this Guarantee and/or the Agreement or (ii) is in default of any other financial indebtness it may have in a principal amount higher than EUR 2,500,000, which in the opinion of the Agent (on behalf of the Finance Parties), in a material way may effect the Guarantor’s ability to perform its obligations under this Guarantee, provided always that such default can not be declared unless the Guarantor has received a written notice thereof stating that in an event of default there will be declared if not the situation causing the event of default has been remedied within three (3) Banking Days; or

(b) the Guarantor stops or suspends payment of its debts or is unable to or admits inability to pay its debts as they fall due; or

(c) the Guarantor enters into a payment default situation, debt settlement, bankruptcy or insolvency proceedings, or cease or threatens to cease its business activities; or

(d) there is an Event of Default under the Finance Documents.

8.2 Acceleration

The Agent (on behalf of the Finance Parties) may at any time after the occurrence of an Event of Default take all or any of the following action:

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(a) demand that the Guarantor pays to the Agent (on behalf of the Finance Parties) an amount equal to the maximum of Guarantor’s liability, and/or

(b) in case of non-compliance of any payment obligation of the Borrower pursuant to the Agreement, be entitled to enforce, in its sole discretion, all or any part of the Security Documents as may be required to provide full indemnification of the Finance Parties in respect of any amount due but not paid.

9 CROSS DEFAULT

We are aware of and agree that any breach by us of the obligations stated herein automatically implies an Event of Default under the Agreement.

10 ASSIGNMENT

The Agent may assign or transfer its rights hereunder to any person to whom the rights and obligations of the Agent and the Lenders under the Agreement are wholly or partially assigned in accordance with Clause 23 (Changes to the Parties) of the Agreement.

11 ADDITIONAL AND CONTINUING SECURITY

The Security Interest contemplated by this Guarantee shall be in addition to any other Security Interest granted in accordance with the Agreement and shall be a continuing security in full force and effect as long as any obligations are outstanding under the Agreement.

The Borrower’s obligations under the Agreement is secured by the following securities:

a)	the Mortgage;
b)	the Factoring Agreement;
c)	the General Pledge;
d)	the Co-ordination Agreement;
e)	the Assignment of Insurances;
f)	the Assignment of Charterparties and Earnings;
g)	the Guarantees; and
h)	the Share Pledge.

12 NOTICES

Any communication or document to be made under or in connection with this Assignment shall be made or delivered to the address and telefax number of each Party and marked for the attention of the department or persons set out below:

If to the Agent:	DnB NOR Bank ASA
	SOL Bergen
	Att: Credit Administration
	Lars Hilles gate 30
	N-5020 Bergen, Norway
	Telefax No: +47 55 21 19 24

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If to the Guarantor:	COMPAGNIE GÉNÉRALE de GÉOPHYSIQUE
	1, rue Léon Migaux
	91341 Massy Cedex
	France
	Fax no. +33 1 64 47 30 89
	Attn: Finance Manager
[alternatively:]	EXPLORATION RESOURCES ASA
	Damsgårdsveien 125
	NO-5162 Laksevåg, Norway
	Fax no. +47 56 11 31 01
	Attn: Finance Manager

or any substitute address and/or telefax number and/or marked for such other attention as the Party may notify to the other Agent (or the Agent may notify the other Parties if a change is made by the Agent) by not less than five (5) Business Days’ prior notice.

13 GOVERNING LAW — JURISDICTION

This Guarantee shall be governed by and construed in accordance with the laws of Norway.

The Guarantor accepts Bergen City Court (Bergen tingrett) as non-exclusive venue, but this choice shall not prevent the Agent (on behalf of the Finance Parties) to enforce any rights under this Guarantee against assets of the Guarantor wherever they may be found.

We have received a copy of the Agreement.

In witness whereof the Guarantor has duly executed this Guarantee the day and year first written above.

SIGNED for and on behalf of
COMPAGNIE GÉNÉRALE de GÉOPHYSIQUE/ EXPLORATION RESOURCES ASA

                                        
Name:
Title:

84

***

SIGNATORIES

Borrower:
Exploration Investment Resources II AS

By:                                         
Name:
Title:

Lenders:
DnB NOR Bank ASA

By:                                         
Name:
Title:

Arranger:
DnB NOR Bank ASA

By:                                         
Name:
Title:

Agent:
DnB NOR Bank ASA

By:                                         
Name:
Title:

Underwriter:
DnB NOR Bank ASA

By:                                         
Name:
Title:

85

EX-8

Exhibit 8

List of Compagnie Générale de Géophysique SA subsidiaries (March 31, 2006)

(Certain dormant or insignificant subsidiaries of the Group have not been included in the list below)

French Companies	Head Office	% of Interest
CGG Marine SAS	Massy, France		100.0
Sercel Holding SA	Carquefou, France		100.0
Sercel SA	Carquefou, France		100.0

Foreign Companies	Head Office	% of Interest
CGG Americas, Inc	Houston, Texas, United States		100.0
CGG do Brazil Participaçoes Ltda	Rio de Janeiro, Brazil		100.0
CGG Marine Resources Norge	Oslo, Norway		100.0
CGG AP	Kuala Lumpur, Malaysia		33.2
Compania Mexicana de Geofisica	Mexico City, Mexico		100.0
Exploration Resources Norge ASA	Bergen, Norway		100.0
Exploration Investment Resources II A/S	Bergen, Norway		100.0
Sercel England Ltd	Somercous, United Kingdom		100.0
Sercel Inc	Tulsa, Oklahoma, United States		100.0
Sercel Singapore Pte Ltd	Singapore		100.0
Sercel Australia	Sydney, Australia		100.0
Hebei Junfeng	Hebei Province, P.R.C.		51.00

Each of our subsidiaries listed above is organised in the country or U.S. state in which its head office is located, and each such subsidiary does business under its registered name.

EX-12.1

Exhibit 12.1

I, Robert Brunck, Chairman and Chief Executive Officer of the Company, certify that:

1. I have reviewed this annual report on Form 20-F of Compagnie Générale de Géophysique;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	[reserved]
c)	evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal controls over financial reporting.

Date: May 9, 2006

By:  /s/ Robert Brunck                                        
        Robert Brunck
        Chairman and Chief Executive Officer

EX-12.2

Exhibit 12.2.

I, Thierry Le ROUX, Group President, Chief Financial Officer of the Company, certify that:

1. I have reviewed this annual report on Form 20-F of Compagnie Générale de Géophysique;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	[reserved]
c)	evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report) that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of company’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal controls over financial reporting.

Date: May 9, 2006

By:  /s/ Thierry LE ROUX                                        
        Thierry LE ROUX
        Group President, Chief Financial Officer

EX-13.1

Exhibit 13.1.

Written Statement of the Chairman and Chief Executive Officer

pursuant to 18 U.S.C. §1350

     Solely for the purposes of complying with 18 U.S.C. §1350, I, the undersigned Chairman and Chief Executive Officer of Compagnie Générale de Géophysique (the “Company”), hereby certify, based on my knowledge, that the Annual Report on Form 20-F of the Company for the year ended December 31, 2005 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Robert BRUNCK                                        
Robert BRUNCK

May 9, 2006

A signed original of this written statement required by Section 906 has been provided to Compagnie Generale de Geophysique and will be retained by Compagnie Generale de Geophysique and furnished to the Securities and Exchange Commission or its staff upon request.

EX-13.2

Exhibit 13.2.

Written Statement of the Senior Executive Vice President Human Resources & Finance, Chief
Financial Officer pursuant to 18 U.S.C. §1350

     Solely for the purposes of complying with 18 U.S.C. §1350, I, the undersigned Group President, Chief Financial Officer of Compagnie Générale de Géophysique (the “Company”), hereby certify, based on my knowledge, that the Annual Report on Form 20-F of the Company for the year ended December 31, 2005 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thierry LE ROUX                                        
Thierry LE ROUX
May 9, 2006

A signed original of this written statement required by Section 906 has been provided to Compagnie Generale de Geophysique and will be retained by Compagnie Generale de Geophysique and furnished to the Securities and Exchange Commission or its staff upon request.