SUBSCRIPTION AGREEMENT

1.

DEFINITIONS

4

2.

ISSUE OF THE BONDS AND SUBSCRIPTION

4

3.

CONDITIONS PRECEDENT TO THE ISSUE AND SUBSCRIPTION OF THE BONDS

5

4.

PAYMENT OF THE SUBSCRIPTION PRICE

8

5.

ARRANGEMENT FEE AND EXPENSES

8

6.

REPRESENTATIONS AND WARRANTIES

10

7.

COVENANTS OF THE COMPANY

19

8.

MUTUAL COVENANTS

21

9.

COVENANTS OF THE SUBSCRIBERS

21

10.

GOVERNANCE

22

11.

TAX

24

12.

INDEMNIFICATION

24

13.

NOTICES

26

14.

MISCELLANEOUS

27

15.

SUBSTITUTION OF SUBSCRIBERS

28

16.

CONFIDENTIALITY

28

17.

EXCLUSIVITY

29

18.

GOVERNING LAW AND JURISDICTION

29

19.

OTHER AGREEMENTS

29

(1)

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE , a French société anonyme with a share capital of 23,363,436 euros having its registered office at 1, rue Léon Migaux-Massy, 91300 with registered number 969 202 241 RCS Evry (the “ Company ”), and

(2)

ONEX PARTNERS LP , a limited partnership organised under the laws of Delaware with its registered office at 1209, Orange Street, Wilmington, Delaware 19801, U.S.A. c/o The Corporation Trust Company,

(3)

ONEX AMERICAN HOLDINGS II LLC , a limited liability company organised under the laws of Delaware with its registered office at 15, East Dover Street, Dover (Kent County), Delaware 19901, U.S.A.,

(4)

ONEX US PRINCIPALS LP , a limited partnership organised under the laws of Delaware with its registered office at United Corporate Services, 15 E. North Street, Dover, Delaware 19901, U.S.A.,

(5)

CGG EXECUTIVE INVESTCO, LLC , a limited liability company organised under the laws of Delaware with its registered office at 874, Walker Road, Suite C, Dover (Kent County), Delaware, 19904, U.S.A.,

(6)

ONEX CORPORATION , a corporation organised under the laws of the Province of Ontario with its registered office at 161, Bay Street, P.O. Box 700, Toronto, Ontario M5J 2S1, Canada (“ Onex ”) (Onex Corporation being a party to this Agreement solely with respect to sections 5.1, 5.3, 5.4 and 8.1).

1.1

Terms beginning with capitalised letters shall have the meaning given to them in the Terms and Conditions (as defined in section 2.2) save for the terms expressly defined in this Agreement.

1.2

A reference to a section or schedule, unless the context otherwise requires, is a reference to a section or schedule to this Agreement.

1.3

An expression of notice, agreement, waiver or satisfaction, pursuant to the terms of this Agreement, by one Subscriber will constitute notice, agreement, waiver or satisfaction for all the Subscribers.

1.4

The headings and sub-titles are for information purposes only and have no bearing on the interpretation of this Agreement.

2.1

On the Issue Date (as defined in section 4.1), upon the terms and subject to the conditions of this Agreement, the Company agrees to issue to the Subscribers, and the Subscribers undertake to subscribe for, the Bonds for the Subscription Price (as defined in section 4.2) in accordance with the allocation set forth in schedule A.

2.2

The Company and the Subscribers each agree that the terms and conditions of the Bonds (the “ Terms and Conditions ”), if and when issued in accordance with the terms and subject to the conditions of this Agreement, shall be the terms and conditions set forth in schedule B (the “ Draft Terms and Conditions ”) together with any amendments or modifications expressly and specifically required (a) by the Autorité des Marchés Financiers (the “ AMF ”) or (b) by reason of any change in laws and regulations coming into force prior to the Issue Date.

3.1

Mutual Conditions

3.1.1

the receipt of all governmental and regulatory approvals necessary for the issuance of the Bonds to the Subscribers and the issuance of Shares pursuant to the Bonds, including the approval by the AMF ( visa ) on the Note d’Opération (the “ Note d’Opération ”) filed with the AMF on 20 September 2004 and all approvals required to permit the issuance and listing on the first market ( Premier Marché ) of Euronext Paris S.A. of up to 4,599,900 Shares as soon as (i) the Bonds are converted in whole or in part into Shares in accordance with the Terms and Conditions (“ Conversion of Bonds ”), (ii) the Bonds are redeemed by the Company at maturity in accordance with the Terms and Conditions through the issuance of new Shares (“ Redemption of Bonds ”), or (iii) Shares are issued by the Company for purposes of paying interest which has accrued on the Bonds in accordance with the Terms and Conditions (“ Share Interest Payment ”);

3.1.2

the approval by shareholders of the Company at the ordinary and extraordinary general meeting of the shareholders of the Company held in accordance with section 7.1 hereof (the “ Shareholders’ Meeting ”) of (a) the issuance of the Bonds to the Subscribers and the issuance of Shares pursuant to the Bonds, (b) the creation and reservation of the Shares into which the Bonds may be converted, redeemed or issued as payment of interest, in favour of the holders of the Bonds, and (c) the corresponding suppression of shareholders’ preferential subscription rights on the Bonds and the Shares into which the Bonds may be converted, redeemed or issued as payment of interest; and

3.1.3

(i) there shall not be in effect any statute, regulation, order, decree or judgment in any jurisdiction which makes illegal or enjoins or prevents any of the matters set forth in section 3.1.2; and (ii) there shall not have been commenced by any unrelated third party, and be continuing, any action, proceedings or order which seeks to prevent or enjoin the completion of any of the matters referred to in section 3.1.2 and/or any action required to be taken by the Board of Directors in order to cause the issuance of the Bonds to the Subscribers.

3.2

Company’s Conditions

3.2.1

the Subscribers shall have paid the Subscription Price (as defined in section 4.2) to the Company on the Issue Date in accordance with the terms and subject to the conditions of this Agreement;

3.2.2

there shall have been no amendments or modifications to any of sections 3.2 to 3.8, inclusive, 5.1 to 5.7, inclusive, 6.1 or 6.2 of the Draft Terms and Conditions that are, individually or in the aggregate, adverse to the Company from a financial point of view; provided , however , that the Company shall be entitled to the benefit of this condition only if the Company has fully complied with its covenants in section 7.7;

3.2.3

the representations and warranties of the Subscribers set out in section 6.2 of this Agreement shall be true and accurate in all respects as though expressly made at and as of the Issue Date; and

3.2.4

the Subscribers shall have delivered to the Company a certificate signed by the Officers of the Subscribers in the form set out in schedule C.

3.3

Subscriber’s Conditions

3.3.1

the Company shall have delivered to the Subscribers all of the documents and information specified in schedule D in form and in substance satisfactory to the Subscribers;

3.3.2

(a) the Company shall have complied with its obligations pursuant to section 7.4 below and (b) the Subscribers shall be reasonably satisfied with the results of their due diligence investigations (conditions (a) and (b) will be deemed to have been satisfied if the Subscribers shall not have notified the Company to the contrary in writing on or prior to 22 October 2004);

3.3.3

no material adverse change shall have occurred in the business, affairs, assets, financial performance or condition or prospects of the Company or of the Group (as defined in section 6.1.1) (a “ Material Adverse Event ”) between 1 September 2004 and the Issue Date;

3.3.4

there shall not have been any change in national or international financial, political or economic conditions, currency exchange rates, exchange controls or banking and capital markets conditions as would be likely to materially prejudice dealings in the Shares or the value of the Shares, the rights of the Subscribers under the Bonds, the value of the Bonds or the obligations of the Company under the Bonds;

3.3.5

the representations and warranties of the Company set out in section 6.1 shall be true and accurate in all respects as though expressly made at and as of the Issue Date;

3.3.6

the Company shall have satisfied all of the covenants on its part to be performed or satisfied hereunder on or before the Issue Date;

3.3.7

all third-party approvals required under any credit facility, indenture, contractual or other obligation binding or affecting the Company in connection with the issuance of the Bonds to the Subscribers and the issuance of Shares upon conversion of the Bonds shall have been received on terms satisfactory to the Subscribers;

3.3.8

the Company shall have delivered to the Subscribers a certificate signed by an Officer of the Company in the form set out in schedule E;

3.3.9

Mr. Andrew J. Sheiner shall have been elected to the Board of Directors of the Company, such appointment becoming effective upon the payment by the Subscribers of the Subscription Price to the Company;

3.3.10

the Registration Rights Agreement executed and delivered by the Company in the form set out in schedule F (the “ Registration Rights Agreement ”) shall remain in full force and effect;

3.3.11

the Subscribers shall have received legal opinions from counsel to the Company, the substantial forms of which are set out in schedules G and H, that are reasonably satisfactory in form and scope to the Subscribers; and

3.3.12

there shall have been no amendments or modifications to any of sections 3.2 to 3.8, inclusive, 5.1 to 5.7, inclusive, 6.1 or 6.2 of the Draft Terms and Conditions that are, individually or in the aggregate, adverse to the Subscribers from a financial point of view (including, for clarity, provisions in respect of timing and process).

The Subscribers shall promptly notify the Company if they have conclusively determined that one or more of the conditions set forth in this section 3.3 will not be satisfied by the Company on the Issue Date or waived by the Subscribers.

3.4

Failure to Satisfy Conditions Precedent

3.4.1

Except as otherwise agreed upon by the Subscribers and the Company, if the mutual conditions referred to in section 3.1 have not been satisfied (or waived in whole or in part by both the Subscribers and the Company, in writing), either the Subscribers or the Company can terminate this Agreement and, as a result, the Subscribers will cease to have any obligation to subscribe to the Bonds and the Company will cease to have any obligation to issue the Bonds.

3.4.2

Except as otherwise waived in whole or in part by the Subscribers in writing on or before the Issue Date, if the conditions precedent set forth in section 3.3 have not been satisfied and the Subscribers have so notified the Company, the Subscribers can terminate this Agreement and, as a result, the Subscribers will cease to have any obligation to subscribe to the Bonds and the Company will cease to have any obligation to issue the Bonds.

3.4.3

Except as otherwise waived in whole or in part by the Company in writing on or before the Issue Date, if the condition precedent set forth in section 3.2 has not been satisfied and the Company has so notified the Subscribers, the Company

can terminate this Agreement and, as a result, the Subscribers will cease to have any obligation to subscribe to the Bonds and the Company will cease to have any obligation to issue the Bonds.

3.4.4

If the Subscribers or the Company terminate this Agreement pursuant to sections 3.4.1, 3.4.2 or 3.4.3 above, each party shall cease to have any obligation or liability to each other under this Agreement, except as described in sections 5.3 and 14.4.

4.

PAYMENT OF THE SUBSCRIPTION PRICE

4.1

The issue of the Bonds shall take place on the day (the “ Issue Date ”) that is (i) three (3) Business Days after the later of the date of the Shareholders’ Meeting and the date that all required regulatory approvals for the issuance of the Bonds and the issuance of Shares upon conversion of the Bonds have been obtained by the Company or (ii) such other date agreed upon by the Company and the Subscribers in writing; provided that in no event shall the Issue Date be any later than 31 December 2004. If the Issue Date does not occur on or prior to 31 December 2004, this Agreement will terminate automatically on 1 January 2005, except as described in sections 5.3 and 14.4. The Issue Date shall be a Business Day and shall be notified by the Company to the Subscribers no later than three (3) Business Days prior to such date.

4.2

On the Issue Date, and in accordance with the terms and subject to the conditions of this Agreement, the Subscribers shall pay to the Company in US Dollars an aggregate amount equal to 100% of the principal amount of the Bonds (being US$ 84,980,000) (the “ Subscription Price ”) and the Company shall issue the Bonds to the Subscriber in accordance with the allocation set forth in schedule A.

4.3

Payment Terms

4.3.1

The Subscription Price will be paid into an account of the Company denominated in US Dollars in accordance with the transfer instructions to be delivered to the Subscribers not later than three (3) Business Days prior to the Issue Date.

4.3.2

The Company shall ensure that promptly following the issue of the Bonds the necessary recordings are made in the shareholders’ register held by BNP Paribas Securities Services acting on behalf of the Company.

5.

ARRANGEMENT FEE AND EXPENSES

5.1

The Company undertakes to pay, upon subscription of the Bonds by the Subscribers, to Onex a cash arrangement fee equal to US$ [*].

5.2

Furthermore, the Company, upon subscription of the Bonds by the Subscribers, shall on demand pay in cash to the Subscribers the amount of all reasonable and duly evidenced out-of-pocket costs and expenses incurred by the Subscribers in connection with the transactions contemplated by this Agreement up to a maximum amount of US$ [*] (including legal fees incurred up to the Issue Date).

5.3

In the event that the condition precedent in section 3.1.2 is not satisfied as at the Latest Approval Date (as defined in section 7.1), then, provided that the Subscribers have not delivered to the Company prior to the earlier of the date of the Shareholders’ Meeting and the Latest Approval Date written notice that they have conclusively determined that one or more of the conditions set forth in section 3.3 will not be satisfied by the Company on the Issue Date or waived by the Subscribers, the Company shall pay or cause to be paid a breakage fee of US$ 5,500,000 in cash to Onex (the “ Breakage Fee ”) within five (5) Business Days after the earlier of:

5.3.1

the date of the Shareholders’ Meeting;

5.3.2

29 October 2004, if the Latest Approval Date (as defined in section 7.1) is not extended in accordance with section 7.1;

5.3.3

30 November 2004, if the Latest Approval Date is extended in accordance with section 7.1 (other than clause (i) thereof, in which case clause 5.3.1 above shall apply) to a date that is after 29 October 2004 and on or before 30 November 2004; and

5.3.4

31 December 2004, if the Latest Approval Date is extended in accordance with section 7.1 to a date that is after 30 November 2004 and on or before 31 December 2004.

In the event the Company pays or causes to be paid the Breakage Fee in accordance with the provisions of this section 5.3, the Company shall not be liable to the Subscribers for the reimbursement of the Subscribers’ out-of-pocket expenses as described in section 5.2, nor for any other form of liability or payment of damages, indemnification, compensation of losses, costs and/or expenses to the benefit of the Subscribers, which the Subscribers expressly acknowledge and agree, and the Subscribers shall be deemed to waive any right of action against the Company as well as any right under this Agreement, including any right to damages or any form of indemnification from the Company for any reason whatsoever in connection with or in relation to this Agreement or the transactions contemplated therein, in all cases other than as provided in section 12.4. This Agreement shall automatically terminate upon payment of the Breakage Fee, save for this section 5.3 and sections 12 (to the extent provided in section 12.4), 13, 14 (excluding section 14.4), 16, 17 and 18.

5.4

All consideration due from the Company under this Agreement shall be deemed to be exclusive of any value added tax (“ VAT ”). If VAT is chargeable thereon, an amount equal to such VAT (in addition to the consideration in respect of which it is chargeable) shall be paid to the Subscribers or to Onex, as applicable, in addition to and at the same time as the relevant consideration.

5.5

Where this Agreement requires the Company to reimburse the Subscribers for any costs or expenses incurred by the Subscribers, the Company shall also at the same time pay and indemnify the Subscribers against all VAT incurred by the Subscribers in respect of the costs or expenses save to the extent that the Subscribers are entitled to repayment or credit in respect of such VAT.

6.

REPRESENTATIONS AND WARRANTIES

6.1

Representations and Warranties of the Company

The Company represents and warrants to the Subscribers and agrees with the Subscribers, as follows:

6.1.1

Corporate Existence and Power

The Company and each of the companies controlled by it within the meaning of Article L.233-3 of the Code de commerce (collectively hereinafter the “ Subsidiaries ” and, individually, a “ Subsidiary ”, and the Company and its Subsidiaries collectively hereinafter the “ Group ”) are duly organised and validly existing pursuant to laws and regulations currently in effect and are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and possess, both in France and abroad, all material permits, licenses, approvals and authorizations that are necessary to conduct their respective businesses. The Company is registered with the commercial and companies registry of Evry under no. 969 202 241, its bylaws have been approved in compliance with all applicable law and the members of its Board of Directors and the chairman of such Board of Directors have been duly appointed and perform their respective duties in compliance with French law.

6.1.2

The Company has a share capital as of the date hereof of 23,363,436 euros represented by 11,681,718 ordinary shares of the same class giving their holders identical rights and all of the issued and outstanding share capital of the Company has been validly issued and is fully paid.

6.1.3

Except as set forth in the Document de Référence filed with the AMF on 10 May 2004 and all subsequent publicly filed updates and amendments thereto (the “ Document de Référence ”), the Company’s annual report on Form 20-F for the year ended 31 December 2003 (the “ CGG 20-F ”) and Schedule I, there are no outstanding shares, securities, options, commitments, instruments or warrants giving access to a portion of the capital or voting rights of the Company nor any other undertakings to issue such shares, securities, options, commitments, instruments or warrants.

6.1.4

Enforceability

This Agreement, the Terms and Conditions and the Registration Rights Agreement have been duly authorized and, when executed and delivered by the Company, will constitute valid and legally binding agreements which shall be enforceable against the Company in accordance with their terms.

6.1.5

Validity of Bonds and Shares

(a)

On the Issue Date, the Bonds will have been validly authorised by the requisite corporate approvals including all necessary approvals of the Board of Directors and the shareholders of the Company;

(b)

On the Issue Date, subject to the payment of the Subscription Price by the Subscribers, the Bonds will be validly issued and will constitute binding obligations of the Company enforceable in accordance with the Terms and Conditions;

(c)

As of the date of this Agreement, the Board of Directors has taken all actions presently within its power and required by law to cause the issuance of the Bonds to the Subscribers;

(d)

Upon completion of the issuance of the Bonds, the Bonds shall be validly issued, freely transferable and fully paid and there are not at the date of this Agreement and there shall not be at the Issue Date any options, commitments, warrants or other subscription, purchase, pre-emption rights or third-party rights with respect to the Bonds;

(e)

On the Issue Date, the Bonds shall be issued entirely outside France; and

(f)

The Shares to be issued upon conversion, or issued or delivered upon redemption or payment of interest of the Bonds have been duly authorised by the Company and are, in the case of existing Shares and in the case of new Shares will be upon their issuance, validly issued and fully paid and free from any right of pledge or usufruct, preferential subscription right ( droit préférentiel de souscription ) or priority subscription period ( délai de priorité ).

6.1.6

Compliance with Law

(a)

The Company has not since 1 January 2003 violated the continuous disclosure provisions provided by any law, regulation or stock exchange rule applicable to the Company.

(b)

Neither the Company nor any of its Subsidiaries has since 1 January 2003 violated any applicable provision of any law, regulation or stock exchange rule not referred to in paragraph (a) above, except for violations of laws, regulations or rules that have not had and will not have, individually or in the aggregate, a Material Adverse Effect (as defined in section 6.1.8).

6.1.7

Compliance of Contemplated Transactions with Agreements, By-Laws and Laws

(a)

The Company has all third-party approvals required under any credit facility, indenture, contractual or other obligation binding or affecting the Company in connection with (A) the issuance of the Bonds to the Subscribers and (B) the issuance of Shares upon conversion of the Bonds;

(b)

The issuance, subscription, conversion and transfer of the Bonds, the use of the proceeds therefrom, the execution and performance of this Agreement and the Registration Rights Agreement by the Company and the performance by the Company of its obligations pursuant to the Terms and Conditions (x) do not and shall not violate any legislation, regulation or decision applicable to the Company or any of its Subsidiaries, or the provisions of its or their by-laws (y) do not and shall not constitute a breach of any indenture, mortgage, deed of trust, loan agreement (including but not limited to the revolving credit facility agreement (the “ Senior Credit Facility ”) dated 12 March 2004 by and between the Company as principal company, the Company, CGG Marine and Sercel as borrowers, Natexis Banques Populaires as arranger, Natexis Banques Populaires as agent and the Lenders (as such term is used in the Senior Credit Facility) and the Indenture (the “ Indenture ” ) dated as of 22 November 2002, among the Company, any Guarantors (as such term is used in the Indenture) and The Chase Manhattan Bank as trustee, relating to the Company’s Series A and Series B 10-5/8% Senior Notes due 2007 or other agreement or other instrument binding upon the Company or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company except in such case as would not have a Material Adverse Effect, and (z) do not and shall not constitute an event of default allowing any creditor to accelerate any indebtedness for borrowed money contracted or guaranteed by the Company or any of its Subsidiaries.

(c)

Except for the approval ( visa ) of the AMF on the Note d’Opération, no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required to be obtained by the Company for the performance by the Company of its obligations under this Agreement, the Registration Rights Agreement and the Bonds or for the consummation by the Company of the transactions contemplated by this Agreement;

(d)

The issuance of the Bonds hereunder, in accordance with the terms and subject to the conditions of this Agreement, outside of France does not require any decision, publication, notice or authorization to or by the Company or any administrative authority, other than such as have been obtained or shall be obtained by the Company by the Issue Date; and

(e)

All the Shares that are to be delivered pursuant to the Terms and Conditions shall be capable of being immediately listed on Euronext Paris S.A. and shall be so listed when delivered.

6.1.8

Default; Compliance

(a)

Since 1 January 2004, no event has occurred or circumstance arisen that, had the Bonds already been issued, would (whether or not with the giving of notice and/or the passage of time and/or the fulfilment of any other

requirement) constitute an event described under section 3.6 or 3.7 of the Terms and Conditions;

(b)

Neither the Company nor any of its Subsidiaries is in default in the performance of or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement (including but not limited to the Senior Credit Facility and the Indenture), lease or other agreement or instrument to which it is a party or by which it may be bound or to which any of its properties may be subject, for which the failure to perform or observe (i) has had or would be likely to have a material adverse effect on the business, affairs, assets, financial performance or condition, or prospects of the Company or of the Group, taken as a whole, or (ii) materially adversely affects or would be likely to materially adversely affect the capacity of the Company to perform its obligations under the Bonds and this Agreement (both (i) and (ii), a “ Material Adverse Effect ”);

6.1.9

Financial Statements

The audited consolidated and statutory financial statements of the Company for the fiscal years ended 31 December 2003, 2002 and 2001 (the “ Annual Accounts ”) as certified by the statutory auditors of the Company as they appear (or are incorporated by reference) in the Document de Référence and the audited consolidated financial statements for the fiscal years ended 31 December 2003, 2002 and 2001 (the “ 20-F Annual Accounts ”) as they appear in the CGG 20-F give a true and fair view of the financial position of the Company and its consolidated Subsidiaries and of their financial results as at the dates on which such accounts were closed; the Annual Accounts and the 20-F Annual Accounts have been prepared in conformity with generally accepted accounting principles in France; the Annual Accounts and the 20-F Annual Accounts have been certified by the Company’s statutory auditors as required under French and U.S. law, respectively.

6.1.10

No Material Change

Since 1 January 2004 (or in the case of subclause (5) below, 1 September 2004), and except as set forth in the Document de Référence and the CGG 20-F, (1) there has been no variation in the total amount of the share capital and the premiums related to the share capital of the Company nor have the reserves been distributed except as may occur as a result of the exercise of a stock option issued pursuant to the stock option plans described in the Document de Référence; (2) no securities or options exercisable either presently or in the future for shares of the Company have been granted other than with respect to the issuance of the Bonds; (3) except, with respect to this subclause (3) only, for any transaction or agreement entered into or action taken with respect to Petroleum Geo-Services ASA after the date of this Agreement but on or before the Issue Date, neither the Company nor any of its Subsidiaries has entered into any transactions, other than those entered into in the ordinary course of

business, which, individually or in the aggregate, would be material for the Company or the Group; (4) neither the Company nor any of its Subsidiaries has sustained any loss or interference with its business 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 which has or would reasonably be expected to have a Material Adverse Effect; (5) there has not occurred any Material Adverse Event; and (6) there has been no significant chang