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                                                                    EXHIBIT 10.3


                          Foothill Capital Corporation
              11111 Santa Monica Boulevard, Suite 1500 Los Angeles,
               California 90025-3333 Tel (310) 453-7261 Fax (310)
                                    453-7420

                               As of May 24, 2002

Elliott Associates, L.P. 712 Fifth
Avenue, 36th Floor New York, NY  10019
Attention: Dan Gropper Fax No.:
212-974-2092

Grant Geophysical, Inc. 16850 Park
Row Houston, TX  77084
Attention: William H. Freeman Fax No.:
281-398-9996

                  Re:  Cash Collateral Account

Ladies and Gentlemen:

         Reference is made to that certain Loan and Security Agreement (as
amended, the "Loan Agreement"), dated as of May 11, 1999, as amended, among
Grant Geophysical, Inc. ("Borrower"), Elliott Associates, L.P. ("EALP"), as a
Lender, and Foothill Capital Corporation ("Foothill"), as Agent (the "Agent")
and a Lender (and, together with EALP, the "Lenders"), pursuant to which the
Lenders agreed to extend credit to Borrower. To induce Foothill to increase the
credit available to Borrower under the Loan Agreement, EALP, Borrower, and
Foothill hereby agree as follows:

         1. Cash Collateral. To induce Foothill to make FCC Supplemental Loans
(as defined in the Loan Agreement), EALP may, in its sole and absolute
discretion, deliver to Foothill from time to time cash deposits (together with
all payments of interest thereon as provided in section 2 hereof, the "Cash
Collateral"). EALP hereby pledges, transfers and assigns to Agent, on behalf of
the Lenders, and grants to Agent, on behalf of the Lenders, as additional
security for the payment and performance of the Obligations of Borrower under
the FCC Supplemental Loan (as such terms are defined in the Loan Agreement), a
continuing security interest in and to: (i) the Cash Collateral and all of
EALP's right, title and interest therein and to all cash, property or rights
transferred to or deposited in accounts maintained with Foothill from time to
time by EALP or on behalf of EALP, as additional collateral hereunder; and (ii)
any and all proceeds of the foregoing. This pledge, assignment and grant of
security interest shall secure payment of the Obligations of Borrower under the
FCC Supplemental Loan and all other amounts payable by Borrower or EALP to Agent
arising under the FCC Supplemental Loan. EALP represents and warrants that
Agent's security interest in the Cash Collateral is a valid, first priority,
perfected security interest in the Cash Collateral and EALP has not granted a
security interest in or assigned any of its rights in the Cash Collateral to any
other person or entity. EALP agrees that if an Event of Default under the Loan
Agreement or any other Loan Document shall occur and be continuing, Agent may,
after five (5) business days' prior written notice to EALP of the occurrence of
such Event of Default, withdraw and apply all


Cash Collateral Account Agreement--Page 1


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collected funds from the Cash Collateral to the Obligations of Borrower under
the FCC Supplemental Loan in such order, proportion and priority as Agent may
determine in its sole discretion, without further consent of EALP or Borrower;
provided, that Agent shall not withdraw such funds from the Cash Collateral (A)
if such Event of Default is cured during the 5-Day Standstill Period (as defined
in Section 9.3(b) of the Loan Agreement) or during the Standstill Period (as
defined in Section 9.5(f) of the Loan Agreement), or (B) during the Standstill
Period if, within the 5-Day Standstill Period, EALP shall notify Agent that EALP
is exercising its Purchase Right (as defined in the Loan Agreement) in
accordance with Section 9.5 of the Loan Agreement. Agent's right to withdraw and
apply amounts in the Cash Collateral shall be in addition to all other rights
and remedies provided to Agent under the Loan Agreement and the other Loan
Documents and at law or in equity. EALP and Borrower agree that Foothill shall
be entitled to commingle the Cash Collateral with Foothill's general or other
funds and that the Cash Collateral is held as collateral for the Obligations of
Borrower under the FCC Supplemental Loan and is not held by Agent in trust for
EALP or Borrower or in a similar fiduciary capacity. Foothill shall have no
obligation to invest the Cash Collateral.

         2. Interest on Cash Collateral. Foothill agrees to pay to EALP interest
on the average daily balance of Cash Collateral at the per annum rate announced
by Wells Fargo Bank, National Association, as its 90-day certificate of deposit
rate and in effect on the date of the initial deposit hereunder (the rate to be
adjusted automatically following each increase or decrease in such rate to the
rate in effect on the first business day following each ninety-day period
thereafter), which shall be payable monthly in arrears by depositing the amount
payable into the Cash Collateral account and which amount shall then constitute
additional Cash Collateral.

         3. Release of Cash Collateral. At any time and from time to time, but
not more frequently than twice each month, to the extent that the aggregate
amount in the Cash Collateral account exceeds the sum of (i) the unpaid balance
of the FCC Supplemental Loan, plus (ii) interest to accrue on the FCC
Supplemental Loan to the first day of the next month, plus (iii) $100,000 (such
excess is hereafter called the "Excess Collateral"), EALP may request, in
writing, that a sum not less than $100,000 and not in excess of the Excess
Collateral shall be released to EALP and Agent shall, as soon as practicable
thereafter, release such sum to EALP; provided that, such release shall not be
made to the extent that Borrower has made a request for an FCC Supplemental
Loan, that has been acknowledged by Elliott (in writing), and not yet funded. In
addition, in the event that EALP purchases the Foothill Obligations (as defined
in the Loan Agreement) in accordance with Section 9.5 of the Loan Agreement,
then as soon as practicable following the execution of the Assignment and
Acceptance (as defined in the Loan Agreement), the payment of the Purchase Price
(as defined in the Loan Agreement), and delivery of any required Release
Agreements and Indemnity (as each is defined in the Loan Agreement), Agent shall
release all Cash Collateral to EALP, upon written request therefor, and transmit
all monies held in the Cash Collateral account to an account designated by EALP
to Agent, whereupon this letter agreement shall terminate and be of no further
force or effect.

         4. General. This letter agreement shall be construed under and governed
by the laws of the State of New York, and may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
shall be deemed an original and all of which together shall be deemed to be one
and the same agreement. Delivery of an executed counterpart of this letter by
telefacsimile shall be equally effective as delivery of a manually executed
counterpart. No amendment hereof shall be effective without the consent of each
of Foothill, EALP and Borrower. Headings in this agreement are for convenience
of reference only and shall not be used to construe the agreement. Time is of
the essence. This letter agreement is binding upon, and inures to the benefit
of, the parties hereto, their successors and assigns.


Cash Collateral Account Agreement--Page 2

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                                            Very truly yours,

                                            FOOTHILL CAPITAL CORPORATION,
                                            a California corporation


                                            By: /s/ VICTOR BARWIG
                                               ------------------------------
                                            Title:  Sr. Vice President
                                                   --------------------------


Read, accepted and agreed to
as of the date first above written:

Elliott Associates, L.P.
By: Elliott Capital Advisors, L.P.,
    as general partner
By: Braxton Associates, Inc.,
    as general partner

By: /s/ ELLIOT GREENBERG
    --------------------------------
Name:   Elliot Greenberg
    --------------------------------
Title: Vice President
      ------------------------------


GRANT GEOPHYSICAL, INC.,
a Delaware corporation


By: /s/ RICHARD F. MILES
    --------------------------------
Name:   Richard F. Miles
      ------------------------------
Title:  President & CEO
       -----------------------------



Cash Collateral Account Agreement--Page 3