EXHIBIT 10.3
BANK OF AMERICA

                                                              SECURITY AGREEMENT
                                                     (RECEIVABLES AND INVENTORY)


1. THE SECURITY. The undersigned OYO Instruments, Inc. ("Guarantor") hereby
assigns and grants to Bank of America Texas, N.A. ("Bank") a security interest
in the following described property ("Collateral"):

      A. All of the following, whether now owned or hereafter acquired by
         Guarantor: accounts, contract rights, chattel paper, instruments,
         deposit accounts and general intangibles.
      B. All inventory now owned or hereafter acquired by Guarantor. C. All
         negotiable and nonnegotiable documents of title now owned or hereafter
         acquired by Guarantor covering any of the above-described property.
      D. All rights under contracts of insurance now owned or hereafter acquired
         by Guarantor covering any of the above-described property.
      E. All  proceeds  now owned or  hereafter  acquired by Guarantor of any 
         of the above-described property.
      F. All books and records now owned or hereafter acquired by Guarantor
         pertaining to any of the above-described property, including but not
         limited to any computer-readable memory and any computer hardware or
         software necessary to process such memory ("Books and Records").

2. THE INDEBTEDNESS. The Collateral secures and will secure all Indebtedness of
Oyo Geospace Corporation ("Borrower") to Bank. For the purposes of this
Agreement, "Indebtedness" means all loans and advances made by Bank to Borrower
and all other obligations and liabilities of Borrower to Bank, whether now
existing or hereafter incurred or created, whether voluntary or involuntary,
whether due or not due, whether absolute or contingent, with respect to that
certain Business Loan Agreement between Borrower and Bank and dated of even date
herewith (the "Loan Agreement"). Unless Guarantor shall have otherwise agreed in
writing, Indebtedness, for the purposes of this Agreement, shall not include
"consumer credit" subject to the disclosure requirements of the Federal Truth in
Lending Act or any regulations promulgated thereunder.

3. GUARANTOR'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. Guarantor covenants
and warrants that unless compliance is waived by Bank in writing:

      A. Guarantor is the owner of the Collateral and has good right, title and
         authority to pledge, sell, transfer and assign the Collateral.
      B. There is no financing statement or other document creating or
         evidencing a lien now on file in any public office covering any of the
         Collateral, nor is there any lien or encumbrance on any of the
         Collateral.
      C. Guarantor shall execute and deliver such financing statements, and do
         such other things, as Bank may from time to time require in order to
         perfect and preserve the security interest hereby granted and the
         priority of such security interest.
      D. If any amount payable under or in connection with any of the Collateral
         shall become evidenced by any promissory note or other instrument, such
         instrument shall be immediately pledged to Bank hereunder and Guarantor
         shall deliver to Bank such instrument, duly endorsed in a manner
         satisfactory to Bank.
      E. Guarantor will properly preserve the Collateral; defend the Collateral
         against any adverse claims and demands; and keep accurate Books and
         Records.
      F. Guarantor has notified Bank in writing of, and will notify Bank in
         writing prior to any change in, the locations of (i) Guarantor's place
         of business or Guarantor's chief executive office if Guarantor has more
         than one place of business, and (ii) any Collateral, including the
         Books and Records.
      G. Guarantor will notify Bank in writing prior to any change in
         Guarantor's name, identity or business structure.
      H. Guarantor will maintain and keep in force insurance covering the
         Collateral as required by the Loan Agreement. INSURANCE IS REQUIRED IN
         CONNECTION WITH THE INDEBTEDNESS SECURED BY THIS SECURITY AGREEMENT.
         THE GUARANTOR SHALL HAVE THE OPTION OF FURNISHING THE REQUIRED
         INSURANCE EITHER THROUGH EXISTING POLICIES OF INSURANCE OWNED OR
         CONTROLLED BY THE GUARANTOR OR OF PROCURING AND FURNISHING EQUIVALENT
         INSURANCE COVERAGES THROUGH ANY INSURANCE COMPANY AUTHORIZED TO
         TRANSACT BUSINESS IN TEXAS.

                                                                               1

<PAGE>

      I. Guarantor has not granted and will not grant any security interest in
         any of the Collateral except to Bank, and will keep the Collateral free
         of all liens, claims, security interests and encumbrances of any kind
         or nature except the security interest of Bank.
      J. Guarantor will not sell, lease, agree to sell or lease, or otherwise
         dispose of, or remove from Guarantor's place of business (i) any
         inventory except in the ordinary course of business as heretofore
         conducted by Guarantor, or (ii) any other Collateral except with the
         prior written consent of Bank.
      K. Guarantor will promptly notify Bank in writing of any event which
         affects the value of the Collateral, the ability of Guarantor or Bank
         to dispose of the Collateral, or the rights and remedies of Bank in
         relation thereto, including, but not limited to, the levy of any legal
         process against any Collateral and the adoption of any marketing order,
         arrangement or procedure affecting the Collateral, whether governmental
         or otherwise.
      L. If any Collateral is or becomes the subject of any registration
         certificate or negotiable document of title, including any warehouse
         receipt or bill of lading, Guarantor shall immediately deliver such
         document to Bank.
      M. Until Bank exercises its rights to make collection, Guarantor will
         diligently collect all Collateral.

4. ADDITIONAL OPTIONAL REQUIREMENTS. Guarantor agrees that Bank may at its
option at any time, whether or not Borrower is in default:

      A. Require Guarantor to deliver to Bank (i) copies of or extracts from the
         Books and Records, and (ii) information on any contracts or other
         matters affecting the Collateral.
      B. Examine the Collateral, including the Books and Records, and make
         copies of or extracts from the Books and Records, and for such purposes
         enter at any reasonable time upon the property where any Collateral or
         any Books and Records are located.
      C. Require Guarantor to obtain Bank's prior written consent to any sale,
         lease, agreement to sell or lease, or other disposition of any
         inventory other than in the ordinary course of business.

Guarantor further agrees that if Borrower is in default, Bank may:

      AA.Require Guarantor to segregate all collections and proceeds of the
         Collateral so that they are capable of identification and deliver daily
         such collections and proceeds to Bank in kind.
      BB.Require Guarantor to deliver to Bank any instruments or chattel paper
         constituting Collateral or proceeds of Collateral.
      CC.Notify any account debtors, any buyers of the Collateral, or any other
         persons of Bank's interest in the Collateral.
      DD.Require Guarantor to direct all account debtors to forward all payments
         and proceeds of the Collateral to a post office box under Bank's
         exclusive control.
      EE.Demand and collect any payments and proceeds of the Collateral. In
         connection therewith Guarantor irrevocably authorizes Bank to endorse
         or sign Guarantor's name on all checks, drafts, collections, receipts
         and other documents, and to take possession of and open the mail
         addressed to Guarantor and remove therefrom any payments and proceeds
         of the Collateral.

5. DEFAULTS. The occurrence of any event described in Section 9 of the Loan
Agreement shall constitute a default hereunder.

6. BANK'S REMEDIES AFTER DEFAULT. In the event of any default Bank may do any
one or more of the following, all without demand, presentment, protest, notice
of protest, notice of intention to accelerate, notice of acceleration, or other
notice of any kind, all of which are hereby waived by Guarantor to the extent
permitted by applicable law:
      A. Declare any Indebtedness immediately due and payable.
      B. Enforce the security interest given hereunder pursuant to the Uniform
         Commercial Code and any other applicable law.
      C. Exercise a right of setoff against any deposit account of Guarantor
         maintained with Bank by applying such account to the Indebtedness.

                                                                               2

<PAGE>

      D. Require Guarantor to assemble the Collateral, including the Books and
         Records, and make them available to Bank at a place designated by Bank.
      E. Enter upon the property where any Collateral, including any Books and
         Records, are located and take possession of such Collateral and such
         Books and Records, and use such property (including any buildings and
         facilities) and any of Guarantor's equipment, if Bank deems such use
         necessary or advisable in order to take possession of, hold, preserve,
         process, assemble, prepare for sale or lease, market for sale or lease,
         sell or lease, or otherwise dispose of, any Collateral.
      F. Grant extensions and compromise or settle claims with respect to the
         Collateral for less than face value, all without prior notice to
         Guarantor.
      G. Have a receiver appointed by any court of competent jurisdiction to
         take possession of the Collateral.
      H. Take such measures as Bank may deem necessary or advisable to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, and Guarantor hereby irrevocably
         constitutes and appoints Bank as Guarantor's attorney-in-fact to
         perform all acts and execute all documents in connection therewith.

7.    MISCELLANEOUS.

      A. Any waiver, express or implied, of any provision hereunder and any
         delay or failure by Bank to enforce any provision shall not preclude
         Bank from enforcing any such provision thereafter.
      B. Guarantor shall, at the request of Bank, execute such other agreements,
         documents, instruments, or financing statements in connection with this
         Agreement as Bank may reasonably deem necessary to perfect and preserve
         the security interests created by this Security Agreement.
      C. All notes, security agreements, subordination agreements and other
         documents executed by Guarantor or furnished to Bank in connection with
         this Agreement must be in form and substance satisfactory to Bank.
      D. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS
         OF THE STATE OF TEXAS, TO THE JURISDICTION OF WHICH THE PARTIES HERETO
         SUBMIT.
      E. All rights and remedies herein provided are cumulative and not
         exclusive of any rights or remedies otherwise provided by law. Any
         single or partial exercise of any right or remedy shall not preclude
         the further exercise thereof or the exercise of any other right or
         remedy.
      F. All terms not defined herein are used as set forth in the Uniform
         Commercial Code.
      G. In the event of any action by Bank to enforce this Agreement or to
         protect the security interest of Bank in the Collateral, or to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, Guarantor agrees to pay immediately the
         costs and expenses thereof, together with reasonable attorney's fees
         and allocated costs for in-house legal services. Notwithstanding the
         foregoing, if the Indebtedness was extended primarily for the purchase
         of one or more motor vehicles (other than a heavy commercial vehicle),
         the expense for which the Guarantor shall be liable pursuant to this
         section 7 (g) shall not exceed the following: all amounts actually
         incurred by the Bank as court costs; attorneys' fees assessed by a
         court; and the reasonable cost actually expended for repossessing,
         storing, preparing for sale, or selling any Collateral.


8. NO ORAL AGREEMENTS. THIS WRITTEN SECURITY AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[The remainder of this page is intentionally left blank.]

                                                                               3
<PAGE>

9.    SIGNATURES

      This document is executed by Guarantor as of June 26, 1998.


LENDER:                                     GUARANTOR:

BANK OF AMERICA TEXAS, N.A.                 OYO INSTRUMENTS, INC.

By: /s/ GEORGE M. SMITH                      By: /s/ THOMAS T. MCENTIRE
        George M. Smith, Vice President              Thomas T. McEntire, CFO


ADDRESS WHERE NOTICES TO THE BANK      ADDRES WHERE NOTICES TO THE 
ARE TO BE SENT:                        GUARANTOR ARE TO BE SENT:  

Bank of America Texas, N.A.                 9777 West Gulf Bank, Suite 10
Houston Commercial Lending, #2552           Houston, Texas 77040
333 Clay Street, Ste. 3600
Houston, Texas 77002

                                                                               4

<PAGE>
BANK OF AMERICA
                                                              SECURITY AGREEMENT
                                                     (RECEIVABLES AND INVENTORY)

1. THE SECURITY. The undersigned Concord Technologies, Inc. ("Guarantor") hereby
assigns and grants to Bank of America Texas, N.A. ("Bank") a security interest
in the following described property ("Collateral"):

      A. All of the following, whether now owned or hereafter acquired by
         Guarantor: accounts, contract rights, chattel paper, instruments,
         deposit accounts and general intangibles.
      B. All inventory now owned or hereafter acquired by Guarantor. C. All
         negotiable and nonnegotiable documents of title now owned or hereafter
         acquired by Guarantor covering any of the above-described property.
      D. All rights under contracts of insurance now owned or hereafter acquired
         by Guarantor covering any of the above-described property.
      E. All proceeds  now owned or  hereafter  acquired by Guarantor of any of
         the above-described property.
      F. All books and records now owned or hereafter acquired by Guarantor
         pertaining to any of the above-described property, including but not
         limited to any computer-readable memory and any computer hardware or
         software necessary to process such memory ("Books and Records").

2. THE INDEBTEDNESS. The Collateral secures and will secure all Indebtedness of
Oyo Geospace Corporation ("Borrower") to Bank. For the purposes of this
Agreement, "Indebtedness" means all loans and advances made by Bank to Borrower
and all other obligations and liabilities of Borrower to Bank, whether now
existing or hereafter incurred or created, whether voluntary or involuntary,
whether due or not due, whether absolute or contingent, with respect to that
certain Business Loan Agreement between Borrower and Bank and dated of even date
herewith (the "Loan Agreement"). Unless Guarantor shall have otherwise agreed in
writing, Indebtedness, for the purposes of this Agreement, shall not include
"consumer credit" subject to the disclosure requirements of the Federal Truth in
Lending Act or any regulations promulgated thereunder.

3. GUARANTOR'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. Guarantor covenants
and warrants that unless compliance is waived by Bank in writing:

      A. Guarantor is the owner of the Collateral and has good right, title and
         authority to pledge, sell, transfer and assign the Collateral.
      B. There is no financing statement or other document creating or
         evidencing a lien now on file in any public office covering any of the
         Collateral, nor is there any lien or encumbrance on any of the
         Collateral.
      C. Guarantor shall execute and deliver such financing statements, and do
         such other things, as Bank may from time to time require in order to
         perfect and preserve the security interest hereby granted and the
         priority of such security interest.
      D. If any amount payable under or in connection with any of the Collateral
         shall become evidenced by any promissory note or other instrument, such
         instrument shall be immediately pledged to Bank hereunder and Guarantor
         shall deliver to Bank such instrument, duly endorsed in a manner
         satisfactory to Bank.
      E. Guarantor will properly preserve the Collateral; defend the Collateral
         against any adverse claims and demands; and keep accurate Books and
         Records.
      F. Guarantor has notified Bank in writing of, and will notify Bank in
         writing prior to any change in, the locations of (i) Guarantor's place
         of business or Guarantor's chief executive office if Guarantor has more
         than one place of business, and (ii) any Collateral, including the
         Books and Records.
      G. Guarantor will notify Bank in writing prior to any change in
         Guarantor's name, identity or business structure.
      H. Guarantor will maintain and keep in force insurance covering the
         Collateral as required by the Loan Agreement. INSURANCE IS REQUIRED IN
         CONNECTION WITH THE INDEBTEDNESS SECURED BY THIS SECURITY AGREEMENT.
         THE GUARANTOR SHALL HAVE THE OPTION OF FURNISHING THE REQUIRED
         INSURANCE EITHER THROUGH EXISTING POLICIES OF INSURANCE OWNED OR
         CONTROLLED BY THE GUARANTOR OR OF PROCURING AND FURNISHING EQUIVALENT
         INSURANCE COVERAGES THROUGH ANY INSURANCE COMPANY AUTHORIZED TO
         TRANSACT BUSINESS IN TEXAS.
                                                                               1

<PAGE>

      I. Guarantor has not granted and will not grant any security interest in
         any of the Collateral except to Bank, and will keep the Collateral free
         of all liens, claims, security interests and encumbrances of any kind
         or nature except the security interest of Bank.
      J. Guarantor will not sell, lease, agree to sell or lease, or otherwise
         dispose of, or remove from Guarantor's place of business (i) any
         inventory except in the ordinary course of business as heretofore
         conducted by Guarantor, or (ii) any other Collateral except with the
         prior written consent of Bank.
      K. Guarantor will promptly notify Bank in writing of any event which
         affects the value of the Collateral, the ability of Guarantor or Bank
         to dispose of the Collateral, or the rights and remedies of Bank in
         relation thereto, including, but not limited to, the levy of any legal
         process against any Collateral and the adoption of any marketing order,
         arrangement or procedure affecting the Collateral, whether governmental
         or otherwise.
      L. If any Collateral is or becomes the subject of any registration
         certificate or negotiable document of title, including any warehouse
         receipt or bill of lading, Guarantor shall immediately deliver such
         document to Bank.
      M. Until Bank exercises its rights to make collection, Guarantor will
         diligently collect all Collateral.

4. ADDITIONAL OPTIONAL REQUIREMENTS. Guarantor agrees that Bank may at its
option at any time, whether or not Borrower is in default:

      A. Require Guarantor to deliver to Bank (i) copies of or extracts from the
         Books and Records, and (ii) information on any contracts or other
         matters affecting the Collateral.
      B. Examine the Collateral, including the Books and Records, and make
         copies of or extracts from the Books and Records, and for such purposes
         enter at any reasonable time upon the property where any Collateral or
         any Books and Records are located.
      C. Require Guarantor to obtain Bank's prior written consent to any sale,
         lease, agreement to sell or lease, or other disposition of any
         inventory other than in the ordinary course of business.

Guarantor further agrees that if Borrower is in default, Bank may:

      AA.Require Guarantor to segregate all collections and proceeds of the
         Collateral so that they are capable of identification and deliver daily
         such collections and proceeds to Bank in kind.
      BB.Require Guarantor to deliver to Bank any instruments or chattel paper
         constituting Collateral or proceeds of Collateral.
      CC.Notify any account debtors, any buyers of the Collateral, or any other
         persons of Bank's interest in the Collateral.
      DD.Require Guarantor to direct all account debtors to forward all payments
         and proceeds of the Collateral to a post office box under Bank's
         exclusive control.
      EE.Demand and collect any payments and proceeds of the Collateral. In
         connection therewith Guarantor irrevocably authorizes Bank to endorse
         or sign Guarantor's name on all checks, drafts, collections, receipts
         and other documents, and to take possession of and open the mail
         addressed to Guarantor and remove therefrom any payments and proceeds
         of the Collateral.

5. DEFAULTS. The occurrence of any event described in Section 9 of the Loan
Agreement shall constitute a default hereunder.

6. BANK'S REMEDIES AFTER DEFAULT. In the event of any default Bank may do any
one or more of the following, all without demand, presentment, protest, notice
of protest, notice of intention to accelerate, notice of acceleration, or other
notice of any kind, all of which are hereby waived by Guarantor to the extent
permitted by applicable law:

      A. Declare any Indebtedness immediately due and payable.
      B. Enforce the security interest given hereunder pursuant to the Uniform
         Commercial Code and any other applicable law.
      C. Exercise a right of setoff against any deposit account of Guarantor
         maintained with Bank by applying such account to the Indebtedness.

                                                                               2

<PAGE>

      D. Require Guarantor to assemble the Collateral, including the Books and
         Records, and make them available to Bank at a place designated by Bank.
      E. Enter upon the property where any Collateral, including any Books and
         Records, are located and take possession of such Collateral and such
         Books and Records, and use such property (including any buildings and
         facilities) and any of Guarantor's equipment, if Bank deems such use
         necessary or advisable in order to take possession of, hold, preserve,
         process, assemble, prepare for sale or lease, market for sale or lease,
         sell or lease, or otherwise dispose of, any Collateral.
      F. Grant extensions and compromise or settle claims with respect to the
         Collateral for less than face value, all without prior notice to
         Guarantor.
      G. Have a receiver appointed by any court of competent jurisdiction to
         take possession of the Collateral.
      H. Take such measures as Bank may deem necessary or advisable to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, and Guarantor hereby irrevocably
         constitutes and appoints Bank as Guarantor's attorney-in-fact to
         perform all acts and execute all documents in connection therewith.

7.    MISCELLANEOUS.

      A. Any waiver, express or implied, of any provision hereunder and any
         delay or failure by Bank to enforce any provision shall not preclude
         Bank from enforcing any such provision thereafter.
      B. Guarantor shall, at the request of Bank, execute such other agreements,
         documents, instruments, or financing statements in connection with this
         Agreement as Bank may reasonably deem necessary to perfect and preserve
         the security interests created by this Security Agreement.
      C. All notes, security agreements, subordination agreements and other
         documents executed by Guarantor or furnished to Bank in connection with
         this Agreement must be in form and substance satisfactory to Bank.
      D. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS
         OF THE STATE OF TEXAS, TO THE JURISDICTION OF WHICH THE PARTIES HERETO
         SUBMIT.
      E. All rights and remedies herein provided are cumulative and not
         exclusive of any rights or remedies otherwise provided by law. Any
         single or partial exercise of any right or remedy shall not preclude
         the further exercise thereof or the exercise of any other right or
         remedy.
      F. All terms not defined herein are used as set forth in the Uniform
         Commercial Code.
      G. In the event of any action by Bank to enforce this Agreement or to
         protect the security interest of Bank in the Collateral, or to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, Guarantor agrees to pay immediately the
         costs and expenses thereof, together with reasonable attorney's fees
         and allocated costs for in-house legal services. Notwithstanding the
         foregoing, if the Indebtedness was extended primarily for the purchase
         of one or more motor vehicles (other than a heavy commercial vehicle),
         the expense for which the Guarantor shall be liable pursuant to this
         section 7 (g) shall not exceed the following: all amounts actually
         incurred by the Bank as court costs; attorneys' fees assessed by a
         court; and the reasonable cost actually expended for repossessing,
         storing, preparing for sale, or selling any Collateral.


8. NO ORAL AGREEMENTS. THIS WRITTEN SECURITY AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[The remainder of this page is intentionally left blank.]

                                                                               3
<PAGE>

9.    SIGNATURES

      This document is executed by Guarantor as of June 26, 1998.


LENDER:                                     GUARANTOR:

BANK OF AMERICA TEXAS, N.A.                 CONCORD TECHNOLOGIES, INC.


By: /s/ GEORGE M. SMITH                     By: /s/ THOMAS T. MCENTIRE
        George M. Smith, Vice President             Thomas T. McEntire, CFO



ADDRESS WHERE NOTICES TO THE BANK           ADDRESS WHERE NOTICES TO THE 
ARE TO BE SENT:                             GUARANTOR ARE TO BE SENT:

Bank of America Texas, N.A.                 1830 Kersten
Houston Commercial Lending, #2552           Houston, Texas 77043-3118
333 Clay Street, Ste. 3600
Houston, Texas 77002

                                                                               4

<PAGE>
BANK OF AMERICA
                                                              SECURITY AGREEMENT
                                                     (RECEIVABLES AND INVENTORY)

1. THE SECURITY. The undersigned 5404330 and More Royalties Company
("Guarantor") hereby assigns and grants to Bank of America Texas, N.A. ("Bank")
a security interest in the following described property ("Collateral"):

      A. All of the following, whether now owned or hereafter acquired by
         Guarantor: accounts, contract rights, chattel paper, instruments,
         deposit accounts and general intangibles.
      B. All inventory now owned or hereafter acquired by Guarantor. C. All
         negotiable and nonnegotiable documents of title now owned or hereafter
         acquired by Guarantor covering any of the above-described property.
      D. All rights under contracts of insurance now owned or hereafter acquired
         by Guarantor covering any of the above-described property.
      E. All proceeds  now owned or hereafter acquired by Guarantor of any of 
         the above-described property.
      F. All books and records now owned or hereafter acquired by Guarantor
         pertaining to any of the above-described property, including but not
         limited to any computer-readable memory and any computer hardware or
         software necessary to process such memory ("Books and Records").

2. THE INDEBTEDNESS. The Collateral secures and will secure all Indebtedness of
Oyo Geospace Corporation ("Borrower") to Bank. For the purposes of this
Agreement, "Indebtedness" means all loans and advances made by Bank to Borrower
and all other obligations and liabilities of Borrower to Bank, whether now
existing or hereafter incurred or created, whether voluntary or involuntary,
whether due or not due, whether absolute or contingent, with respect to that
certain Business Loan Agreement between Borrower and Bank and dated of even date
herewith (the "Loan Agreement"). Unless Guarantor shall have otherwise agreed in
writing, Indebtedness, for the purposes of this Agreement, shall not include
"consumer credit" subject to the disclosure requirements of the Federal Truth in
Lending Act or any regulations promulgated thereunder.

3. GUARANTOR'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. Guarantor covenants
and warrants that unless compliance is waived by Bank in writing:

      A. Guarantor is the owner of the Collateral and has good right, title and
         authority to pledge, sell, transfer and assign the Collateral.
      B. There is no financing statement or other document creating or
         evidencing a lien now on file in any public office covering any of the
         Collateral, nor is there any lien or encumbrance on any of the
         Collateral.
      C. Guarantor shall execute and deliver such financing statements, and do
         such other things, as Bank may from time to time require in order to
         perfect and preserve the security interest hereby granted and the
         priority of such security interest.
      D. If any amount payable under or in connection with any of the Collateral
         shall become evidenced by any promissory note or other instrument, such
         instrument shall be immediately pledged to Bank hereunder and Guarantor
         shall deliver to Bank such instrument, duly endorsed in a manner
         satisfactory to Bank.
      E. Guarantor will properly preserve the Collateral; defend the Collateral
         against any adverse claims and demands; and keep accurate Books and
         Records.
      F. Guarantor has notified Bank in writing of, and will notify Bank in
         writing prior to any change in, the locations of (i) Guarantor's place
         of business or Guarantor's chief executive office if Guarantor has more
         than one place of business, and (ii) any Collateral, including the
         Books and Records.
      G. Guarantor will notify Bank in writing prior to any change in
         Guarantor's name, identity or business structure.
      H. Guarantor will maintain and keep in force insurance covering the
         Collateral as required by the Loan Agreement. INSURANCE IS REQUIRED IN
         CONNECTION WITH THE INDEBTEDNESS SECURED BY THIS SECURITY AGREEMENT.
         THE GUARANTOR SHALL HAVE THE OPTION OF FURNISHING THE REQUIRED
         INSURANCE EITHER THROUGH EXISTING POLICIES OF INSURANCE OWNED OR
         CONTROLLED BY THE GUARANTOR OR OF PROCURING AND FURNISHING EQUIVALENT
         INSURANCE COVERAGES THROUGH ANY INSURANCE COMPANY AUTHORIZED TO
         TRANSACT BUSINESS IN TEXAS.

                                                                               1

<PAGE>

      I. Guarantor has not granted and will not grant any security interest in
         any of the Collateral except to Bank, and will keep the Collateral free
         of all liens, claims, security interests and encumbrances of any kind
         or nature except the security interest of Bank.
      J. Guarantor will not sell, lease, agree to sell or lease, or otherwise
         dispose of, or remove from Guarantor's place of business (i) any
         inventory except in the ordinary course of business as heretofore
         conducted by Guarantor, or (ii) any other Collateral except with the
         prior written consent of Bank.
      K. Guarantor will promptly notify Bank in writing of any event which
         affects the value of the Collateral, the ability of Guarantor or Bank
         to dispose of the Collateral, or the rights and remedies of Bank in
         relation thereto, including, but not limited to, the levy of any legal
         process against any Collateral and the adoption of any marketing order,
         arrangement or procedure affecting the Collateral, whether governmental
         or otherwise.
      L. If any Collateral is or becomes the subject of any registration
         certificate or negotiable document of title, including any warehouse
         receipt or bill of lading, Guarantor shall immediately deliver such
         document to Bank.
      M. Until Bank exercises its rights to make collection, Guarantor will
         diligently collect all Collateral.

4. ADDITIONAL OPTIONAL REQUIREMENTS. Guarantor agrees that Bank may at its
option at any time, whether or not Borrower is in default:

      A. Require Guarantor to deliver to Bank (i) copies of or extracts from the
         Books and Records, and (ii) information on any contracts or other
         matters affecting the Collateral.
      B. Examine the Collateral, including the Books and Records, and make
         copies of or extracts from the Books and Records, and for such purposes
         enter at any reasonable time upon the property where any Collateral or
         any Books and Records are located.
      C. Require Guarantor to obtain Bank's prior written consent to any sale,
         lease, agreement to sell or lease, or other disposition of any
         inventory other than in the ordinary course of business.

Guarantor further agrees that if Borrower is in default, Bank may:

      AA.Require Guarantor to segregate all collections and proceeds of the
         Collateral so that they are capable of identification and deliver daily
         such collections and proceeds to Bank in kind.
      BB.Require Guarantor to deliver to Bank any instruments or chattel paper
         constituting Collateral or proceeds of Collateral.
      CC.Notify any account debtors, any buyers of the Collateral, or any other
         persons of Bank's interest in the Collateral.
      DD.Require Guarantor to direct all account debtors to forward all payments
         and proceeds of the Collateral to a post office box under Bank's
         exclusive control.
      EE.Demand and collect any payments and proceeds of the Collateral. In
         connection therewith Guarantor irrevocably authorizes Bank to endorse
         or sign Guarantor's name on all checks, drafts, collections, receipts
         and other documents, and to take possession of and open the mail
         addressed to Guarantor and remove therefrom any payments and proceeds
         of the Collateral.

5. DEFAULTS. The occurrence of any event described in Section 9 of the Loan
Agreement shall constitute a default hereunder.

6. BANK'S REMEDIES AFTER DEFAULT. In the event of any default Bank may do any
one or more of the following, all without demand, presentment, protest, notice
of protest, notice of intention to accelerate, notice of acceleration, or other
notice of any kind, all of which are hereby waived by Guarantor to the extent
permitted by applicable law:
      A. Declare any Indebtedness immediately due and payable.
      B. Enforce the security interest given hereunder pursuant to the Uniform
         Commercial Code and any other applicable law.

                                                                               2

<PAGE>

      C. Exercise a right of setoff against any deposit account of Guarantor
         maintained with Bank by applying such account to the Indebtedness.
      D. Require Guarantor to assemble the Collateral, including the Books and
         Records, and make them available to Bank at a place designated by Bank.
      E. Enter upon the property where any Collateral, including any Books and
         Records, are located and take possession of such Collateral and such
         Books and Records, and use such property (including any buildings and
         facilities) and any of Guarantor's equipment, if Bank deems such use
         necessary or advisable in order to take possession of, hold, preserve,
         process, assemble, prepare for sale or lease, market for sale or lease,
         sell or lease, or otherwise dispose of, any Collateral.
      F. Grant extensions and compromise or settle claims with respect to the
         Collateral for less than face value, all without prior notice to
         Guarantor.
      G. Have a receiver appointed by any court of competent jurisdiction to
         take possession of the Collateral.
      H. Take such measures as Bank may deem necessary or advisable to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, and Guarantor hereby irrevocably
         constitutes and appoints Bank as Guarantor's attorney-in-fact to
         perform all acts and execute all documents in connection therewith.

7.    MISCELLANEOUS.

      A. Any waiver, express or implied, of any provision hereunder and any
         delay or failure by Bank to enforce any provision shall not preclude
         Bank from enforcing any such provision thereafter.
      B. Guarantor shall, at the request of Bank, execute such other agreements,
         documents, instruments, or financing statements in connection with this
         Agreement as Bank may reasonably deem necessary to perfect and preserve
         the security interests created by this Security Agreement.
      C. All notes, security agreements, subordination agreements and other
         documents executed by Guarantor or furnished to Bank in connection with
         this Agreement must be in form and substance satisfactory to Bank.
      D. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS
         OF THE STATE OF TEXAS, TO THE JURISDICTION OF WHICH THE PARTIES HERETO
         SUBMIT.
      E. All rights and remedies herein provided are cumulative and not
         exclusive of any rights or remedies otherwise provided by law. Any
         single or partial exercise of any right or remedy shall not preclude
         the further exercise thereof or the exercise of any other right or
         remedy.
      F. All terms not defined herein are used as set forth in the Uniform
         Commercial Code.
      G. In the event of any action by Bank to enforce this Agreement or to
         protect the security interest of Bank in the Collateral, or to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, Guarantor agrees to pay immediately the
         costs and expenses thereof, together with reasonable attorney's fees
         and allocated costs for in-house legal services. Notwithstanding the
         foregoing, if the Indebtedness was extended primarily for the purchase
         of one or more motor vehicles (other than a heavy commercial vehicle),
         the expense for which the Guarantor shall be liable pursuant to this
         section 7 (g) shall not exceed the following: all amounts actually
         incurred by the Bank as court costs; attorneys' fees assessed by a
         court; and the reasonable cost actually expended for repossessing,
         storing, preparing for sale, or selling any Collateral.


8. NO ORAL AGREEMENTS. THIS WRITTEN SECURITY AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[The remainder of this page is intentionally left blank.]

                                                                               3
<PAGE>

9.    SIGNATURES

      This document is executed by Guarantor as of June 26, 1998.


LENDER:                                   GUARANTOR:

BANK OF AMERICA TEXAS, N.A.               5404330 AND MORE ROYALTIES COMPANY


By: /s/ GEORGE M. SMITH                   By: /s/ GARY D. OWENS
        George M. Smith, Vice President           Gary D. Owens, President


ADDRESS WHERE NOTICES TO THE BANK         ADDRESS WHERE  NOTICES TO THE 
ARE TO BE SENT:                           GUARANTOR ARE TO BE SENT:

Bank of America Texas, N.A.               101 Convention Center Drive, Suite 850
Houston Commercial Lending, #2552         Las Vegas, Nevada 89109
333 Clay Street, Ste. 3600
Houston, Texas 77002

                                                                               4
<PAGE>
BANK OF AMERICA
                                                              SECURITY AGREEMENT
                                                     (RECEIVABLES AND INVENTORY)

1. THE SECURITY. The undersigned Geo Space Corporation ("Guarantor") hereby
assigns and grants to Bank of America Texas, N.A. ("Bank") a security interest
in the following described property ("Collateral"):

      A. All of the following, whether now owned or hereafter acquired by
         Guarantor: accounts, contract rights, chattel paper, instruments,
         deposit accounts and general intangibles.
      B. All inventory now owned or hereafter acquired by Guarantor. C. All
         negotiable and nonnegotiable documents of title now owned or hereafter
         acquired by Guarantor covering any of the above-described property.
      D. All rights under contracts of insurance now owned or hereafter acquired
         by Guarantor covering any of the above-described property.
      E. All proceeds now owned or hereafter acquired by Guarantor of any of the
         above-described property.
      F. All books and records now owned or hereafter acquired by Guarantor
         pertaining to any of the above-described property, including but not
         limited to any computer-readable memory and any computer hardware or
         software necessary to process such memory ("Books and Records").

2. THE INDEBTEDNESS. The Collateral secures and will secure all Indebtedness of
Oyo Geospace Corporation ("Borrower") to Bank. For the purposes of this
Agreement, "Indebtedness" means all loans and advances made by Bank to Borrower
and all other obligations and liabilities of Borrower to Bank, whether now
existing or hereafter incurred or created, whether voluntary or involuntary,
whether due or not due, whether absolute or contingent, with respect to that
certain Business Loan Agreement between Borrower and Bank and dated of even date
herewith (the "Loan Agreement"). Unless Guarantor shall have otherwise agreed in
writing, Indebtedness, for the purposes of this Agreement, shall not include
"consumer credit" subject to the disclosure requirements of the Federal Truth in
Lending Act or any regulations promulgated thereunder.

3. GUARANTOR'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. Guarantor covenants
and warrants that unless compliance is waived by Bank in writing:

      A. Guarantor is the owner of the Collateral and has good right, title and
         authority to pledge, sell, transfer and assign the Collateral.
      B. There is no financing statement or other document creating or
         evidencing a lien now on file in any public office covering any of the
         Collateral, nor is there any lien or encumbrance on any of the
         Collateral.
      C. Guarantor shall execute and deliver such financing statements, and do
         such other things, as Bank may from time to time require in order to
         perfect and preserve the security interest hereby granted and the
         priority of such security interest.
      D. If any amount payable under or in connection with any of the Collateral
         shall become evidenced by any promissory note or other instrument, such
         instrument shall be immediately pledged to Bank hereunder and Guarantor
         shall deliver to Bank such instrument, duly endorsed in a manner
         satisfactory to Bank.
      E. Guarantor will properly preserve the Collateral; defend the Collateral
         against any adverse claims and demands; and keep accurate Books and
         Records.
      F. Guarantor has notified Bank in writing of, and will notify Bank in
         writing prior to any change in, the locations of (i) Guarantor's place
         of business or Guarantor's chief executive office if Guarantor has more
         than one place of business, and (ii) any Collateral, including the
         Books and Records.
      G. Guarantor will notify Bank in writing prior to any change in
         Guarantor's name, identity or business structure.
      H. Guarantor will maintain and keep in force insurance covering the
         Collateral as required by the Loan Agreement. INSURANCE IS REQUIRED IN
         CONNECTION WITH THE INDEBTEDNESS SECURED BY THIS SECURITY AGREEMENT.
         THE GUARANTOR SHALL HAVE THE OPTION OF FURNISHING THE REQUIRED
         INSURANCE EITHER THROUGH EXISTING POLICIES OF INSURANCE OWNED OR
         CONTROLLED BY THE GUARANTOR OR OF PROCURING AND FURNISHING EQUIVALENT
         INSURANCE COVERAGES THROUGH ANY INSURANCE COMPANY AUTHORIZED TO
         TRANSACT BUSINESS IN TEXAS.

                                                                               1

<PAGE>

      I. Guarantor has not granted and will not grant any security interest in
         any of the Collateral except to Bank, and will keep the Collateral free
         of all liens, claims, security interests and encumbrances of any kind
         or nature except the security interest of Bank.
      J. Guarantor will not sell, lease, agree to sell or lease, or otherwise
         dispose of, or remove from Guarantor's place of business (i) any
         inventory except in the ordinary course of business as heretofore
         conducted by Guarantor, or (ii) any other Collateral except with the
         prior written consent of Bank.
      K. Guarantor will promptly notify Bank in writing of any event which
         affects the value of the Collateral, the ability of Guarantor or Bank
         to dispose of the Collateral, or the rights and remedies of Bank in
         relation thereto, including, but not limited to, the levy of any legal
         process against any Collateral and the adoption of any marketing order,
         arrangement or procedure affecting the Collateral, whether governmental
         or otherwise.
      L. If any Collateral is or becomes the subject of any registration
         certificate or negotiable document of title, including any warehouse
         receipt or bill of lading, Guarantor shall immediately deliver such
         document to Bank.
      M. Until Bank exercises its rights to make collection, Guarantor will
         diligently collect all Collateral.

4. ADDITIONAL OPTIONAL REQUIREMENTS. Guarantor agrees that Bank may at its
option at any time, whether or not Borrower is in default:

      A. Require Guarantor to deliver to Bank (i) copies of or extracts from the
         Books and Records, and (ii) information on any contracts or other
         matters affecting the Collateral.
      B. Examine the Collateral, including the Books and Records, and make
         copies of or extracts from the Books and Records, and for such purposes
         enter at any reasonable time upon the property where any Collateral or
         any Books and Records are located.
      C. Require Guarantor to obtain Bank's prior written consent to any sale,
         lease, agreement to sell or lease, or other disposition of any
         inventory other than in the ordinary course of business.

Guarantor further agrees that if Borrower is in default, Bank may:

      AA.Require Guarantor to segregate all collections and proceeds of the
         Collateral so that they are capable of identification and deliver daily
         such collections and proceeds to Bank in kind.
      BB.Require Guarantor to deliver to Bank any instruments or chattel paper
         constituting Collateral or proceeds of Collateral.
      CC.Notify any account debtors, any buyers of the Collateral, or any other
         persons of Bank's interest in the Collateral.
      DD.Require Guarantor to direct all account debtors to forward all payments
         and proceeds of the Collateral to a post office box under Bank's
         exclusive control.
      EE.Demand and collect any payments and proceeds of the Collateral. In
         connection therewith Guarantor irrevocably authorizes Bank to endorse
         or sign Guarantor's name on all checks, drafts, collections, receipts
         and other documents, and to take possession of and open the mail
         addressed to Guarantor and remove therefrom any payments and proceeds
         of the Collateral.

5. DEFAULTS. The occurrence of any event described in Section 9 of the Loan
Agreement shall constitute a default hereunder.

6. BANK'S REMEDIES AFTER DEFAULT. In the event of any default Bank may do any
one or more of the following, all without demand, presentment, protest, notice
of protest, notice of intention to accelerate, notice of acceleration, or other
notice of any kind, all of which are hereby waived by Guarantor to the extent
permitted by applicable law:
      A. Declare any Indebtedness immediately due and payable.
      B. Enforce the security interest given hereunder pursuant to the Uniform
         Commercial Code and any other applicable law.
 
                                                                               2

<PAGE>

      C. Exercise a right of setoff against any deposit account of Guarantor
         maintained with Bank by applying such account to the Indebtedness.
      D. Require Guarantor to assemble the Collateral, including the Books and
         Records, and make them available to Bank at a place designated by Bank.
      E. Enter upon the property where any Collateral, including any Books and
         Records, are located and take possession of such Collateral and such
         Books and Records, and use such property (including any buildings and
         facilities) and any of Guarantor's equipment, if Bank deems such use
         necessary or advisable in order to take possession of, hold, preserve,
         process, assemble, prepare for sale or lease, market for sale or lease,
         sell or lease, or otherwise dispose of, any Collateral.
      F. Grant extensions and compromise or settle claims with respect to the
         Collateral for less than face value, all without prior notice to
         Guarantor.
      G. Have a receiver appointed by any court of competent jurisdiction to
         take possession of the Collateral.
      H. Take such measures as Bank may deem necessary or advisable to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, and Guarantor hereby irrevocably
         constitutes and appoints Bank as Guarantor's attorney-in-fact to
         perform all acts and execute all documents in connection therewith.

7.    MISCELLANEOUS.

      A. Any waiver, express or implied, of any provision hereunder and any
         delay or failure by Bank to enforce any provision shall not preclude
         Bank from enforcing any such provision thereafter.
      B. Guarantor shall, at the request of Bank, execute such other agreements,
         documents, instruments, or financing statements in connection with this
         Agreement as Bank may reasonably deem necessary to perfect and preserve
         the security interests created by this Security Agreement.
      C. All notes, security agreements, subordination agreements and other
         documents executed by Guarantor or furnished to Bank in connection with
         this Agreement must be in form and substance satisfactory to Bank.
      D. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS
         OF THE STATE OF TEXAS, TO THE JURISDICTION OF WHICH THE PARTIES HERETO
         SUBMIT.
      E. All rights and remedies herein provided are cumulative and not
         exclusive of any rights or remedies otherwise provided by law. Any
         single or partial exercise of any right or remedy shall not preclude
         the further exercise thereof or the exercise of any other right or
         remedy.
      F. All terms not defined herein are used as set forth in the Uniform
         Commercial Code.
      G. In the event of any action by Bank to enforce this Agreement or to
         protect the security interest of Bank in the Collateral, or to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, Guarantor agrees to pay immediately the
         costs and expenses thereof, together with reasonable attorney's fees
         and allocated costs for in-house legal services. Notwithstanding the
         foregoing, if the Indebtedness was extended primarily for the purchase
         of one or more motor vehicles (other than a heavy commercial vehicle),
         the expense for which the Guarantor shall be liable pursuant to this
         section 7 (g) shall not exceed the following: all amounts actually
         incurred by the Bank as court costs; attorneys' fees assessed by a
         court; and the reasonable cost actually expended for repossessing,
         storing, preparing for sale, or selling any Collateral.


8. NO ORAL AGREEMENTS. THIS WRITTEN SECURITY AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[The remainder of this page is intentionally left blank.]

                                                                               3
<PAGE>

9.    SIGNATURES

      This document is executed by Guarantor as of June 26, 1998.


LENDER:                                     GUARANTOR:

BANK OF AMERICA TEXAS, N.A.                 GEO SPACE CORPORATION


By:/s/ GEORGE M. SMITH                      By: /s/ THOMAS T. MCENTIRE
       George M. Smith, Vice President              Thomas T. McEntire, CFO


ADDRESS WHERE NOTICES TO THE BANK           ADDRESS WHERE  NOTICES TO THE 
ARE TO BE SENT:                             GUARANTOR ARE TO BE SENT:

Bank of America Texas, N.A.                 7334 North Gessner Road
Houston Commercial Lending, #2552           Houston, Texas 77040
333 Clay Street, Ste. 3600
Houston, Texas  77002

                                                                               4
<PAGE>
BANK OF AMERICA
                                                              SECURITY AGREEMENT
                                                     (RECEIVABLES AND INVENTORY)

1. THE SECURITY. The undersigned Houston Geophysical Products, Inc.
("Guarantor") hereby assigns and grants to Bank of America Texas, N.A. ("Bank")
a security interest in the following described property ("Collateral"):

      A. All of the following, whether now owned or hereafter acquired by
         Guarantor: accounts, contract rights, chattel paper, instruments,
         deposit accounts and general intangibles.
      B. All inventory now owned or hereafter acquired by Guarantor. C. All
         negotiable and nonnegotiable documents of title now owned or hereafter
         acquired by Guarantor covering any of the above-described property.
      D. All rights under contracts of insurance now owned or hereafter acquired
         by Guarantor covering any of the above-described property.
      E. All proceeds now owned or hereafter acquired by Guarantor of any of the
         above-described property.
      F. All books and records now owned or hereafter acquired by Guarantor
         pertaining to any of the above-described property, including but not
         limited to any computer-readable memory and any computer hardware or
         software necessary to process such memory ("Books and Records").

2. THE INDEBTEDNESS. The Collateral secures and will secure all Indebtedness of
Oyo Geospace Corporation ("Borrower") to Bank. For the purposes of this
Agreement, "Indebtedness" means all loans and advances made by Bank to Borrower
and all other obligations and liabilities of Borrower to Bank, whether now
existing or hereafter incurred or created, whether voluntary or involuntary,
whether due or not due, whether absolute or contingent, with respect to that
certain Business Loan Agreement between Borrower and Bank and dated of even date
herewith (the "Loan Agreement"). Unless Guarantor shall have otherwise agreed in
writing, Indebtedness, for the purposes of this Agreement, shall not include
"consumer credit" subject to the disclosure requirements of the Federal Truth in
Lending Act or any regulations promulgated thereunder.

3. GUARANTOR'S REPRESENTATIONS, WARRANTIES, AND COVENANTS. Guarantor covenants
and warrants that unless compliance is waived by Bank in writing:

      A. Guarantor is the owner of the Collateral and has good right, title and
         authority to pledge, sell, transfer and assign the Collateral.
      B. There is no financing statement or other document creating or
         evidencing a lien now on file in any public office covering any of the
         Collateral, nor is there any lien or encumbrance on any of the
         Collateral.
      C. Guarantor shall execute and deliver such financing statements, and do
         such other things, as Bank may from time to time require in order to
         perfect and preserve the security interest hereby granted and the
         priority of such security interest.
      D. If any amount payable under or in connection with any of the Collateral
         shall become evidenced by any promissory note or other instrument, such
         instrument shall be immediately pledged to Bank hereunder and Guarantor
         shall deliver to Bank such instrument, duly endorsed in a manner
         satisfactory to Bank.
      E. Guarantor will properly preserve the Collateral; defend the Collateral
         against any adverse claims and demands; and keep accurate Books and
         Records.
      F. Guarantor has notified Bank in writing of, and will notify Bank in
         writing prior to any change in, the locations of (i) Guarantor's place
         of business or Guarantor's chief executive office if Guarantor has more
         than one place of business, and (ii) any Collateral, including the
         Books and Records.
      G. Guarantor will notify Bank in writing prior to any change in
         Guarantor's name, identity or business structure.
      H. Guarantor will maintain and keep in force insurance covering the
         Collateral as required by the Loan Agreement. INSURANCE IS REQUIRED IN
         CONNECTION WITH THE INDEBTEDNESS SECURED BY THIS SECURITY AGREEMENT.
         THE GUARANTOR SHALL HAVE THE OPTION OF FURNISHING THE REQUIRED
         INSURANCE EITHER THROUGH EXISTING POLICIES OF INSURANCE OWNED OR
         CONTROLLED BY THE GUARANTOR OR OF PROCURING AND FURNISHING EQUIVALENT
         INSURANCE COVERAGES THROUGH ANY INSURANCE COMPANY AUTHORIZED TO
         TRANSACT BUSINESS IN TEXAS.

                                                                               1

<PAGE>

      I. Guarantor has not granted and will not grant any security interest in
         any of the Collateral except to Bank, and will keep the Collateral free
         of all liens, claims, security interests and encumbrances of any kind
         or nature except the security interest of Bank.
      J. Guarantor will not sell, lease, agree to sell or lease, or otherwise
         dispose of, or remove from Guarantor's place of business (i) any
         inventory except in the ordinary course of business as heretofore
         conducted by Guarantor, or (ii) any other Collateral except with the
         prior written consent of Bank.
      K. Guarantor will promptly notify Bank in writing of any event which
         affects the value of the Collateral, the ability of Guarantor or Bank
         to dispose of the Collateral, or the rights and remedies of Bank in
         relation thereto, including, but not limited to, the levy of any legal
         process against any Collateral and the adoption of any marketing order,
         arrangement or procedure affecting the Collateral, whether governmental
         or otherwise.
      L. If any Collateral is or becomes the subject of any registration
         certificate or negotiable document of title, including any warehouse
         receipt or bill of lading, Guarantor shall immediately deliver such
         document to Bank.
      M. Until Bank exercises its rights to make collection, Guarantor will
         diligently collect all Collateral.

4. ADDITIONAL OPTIONAL REQUIREMENTS. Guarantor agrees that Bank may at its
option at any time, whether or not Borrower is in default:

      A. Require Guarantor to deliver to Bank (i) copies of or extracts from the
         Books and Records, and (ii) information on any contracts or other
         matters affecting the Collateral.
      B. Examine the Collateral, including the Books and Records, and make
         copies of or extracts from the Books and Records, and for such purposes
         enter at any reasonable time upon the property where any Collateral or
         any Books and Records are located.
      C. Require Guarantor to obtain Bank's prior written consent to any sale,
         lease, agreement to sell or lease, or other disposition of any
         inventory other than in the ordinary course of business.

Guarantor further agrees that if Borrower is in default, Bank may:

      AA.Require Guarantor to segregate all collections and proceeds of the
         Collateral so that they are capable of identification and deliver daily
         such collections and proceeds to Bank in kind.
      BB.Require Guarantor to deliver to Bank any instruments or chattel paper
         constituting Collateral or proceeds of Collateral.
      CC.Notify any account debtors, any buyers of the Collateral, or any other
         persons of Bank's interest in the Collateral.
      DD.Require Guarantor to direct all account debtors to forward all payments
         and proceeds of the Collateral to a post office box under Bank's
         exclusive control.
      EE.Demand and collect any payments and proceeds of the Collateral. In
         connection therewith Guarantor irrevocably authorizes Bank to endorse
         or sign Guarantor's name on all checks, drafts, collections, receipts
         and other documents, and to take possession of and open the mail
         addressed to Guarantor and remove therefrom any payments and proceeds
         of the Collateral.

5. DEFAULTS. The occurrence of any event described in Section 9 of the Loan
Agreement shall constitute a default hereunder.

6. BANK'S REMEDIES AFTER DEFAULT. In the event of any default Bank may do any
one or more of the following, all without demand, presentment, protest, notice
of protest, notice of intention to accelerate, notice of acceleration, or other
notice of any kind, all of which are hereby waived by Guarantor to the extent
permitted by applicable law:
      A. Declare any Indebtedness immediately due and payable.
      B. Enforce the security interest given hereunder pursuant to the Uniform
         Commercial Code and any other applicable law.
 
                                                                               2

<PAGE>

      C. Exercise a right of setoff against any deposit account of Guarantor
         maintained with Bank by applying such account to the Indebtedness.
      D. Require Guarantor to assemble the Collateral, including the Books and
         Records, and make them available to Bank at a place designated by Bank.
      E. Enter upon the property where any Collateral, including any Books and
         Records, are located and take possession of such Collateral and such
         Books and Records, and use such property (including any buildings and
         facilities) and any of Guarantor's equipment, if Bank deems such use
         necessary or advisable in order to take possession of, hold, preserve,
         process, assemble, prepare for sale or lease, market for sale or lease,
         sell or lease, or otherwise dispose of, any Collateral.
      F. Grant extensions and compromise or settle claims with respect to the
         Collateral for less than face value, all without prior notice to
         Guarantor.
      G. Have a receiver appointed by any court of competent jurisdiction to
         take possession of the Collateral.
      H. Take such measures as Bank may deem necessary or advisable to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, and Guarantor hereby irrevocably
         constitutes and appoints Bank as Guarantor's attorney-in-fact to
         perform all acts and execute all documents in connection therewith.

7.    MISCELLANEOUS.

      A. Any waiver, express or implied, of any provision hereunder and any
         delay or failure by Bank to enforce any provision shall not preclude
         Bank from enforcing any such provision thereafter.
      B. Guarantor shall, at the request of Bank, execute such other agreements,
         documents, instruments, or financing statements in connection with this
         Agreement as Bank may reasonably deem necessary to perfect and preserve
         the security interests created by this Security Agreement.
      C. All notes, security agreements, subordination agreements and other
         documents executed by Guarantor or furnished to Bank in connection with
         this Agreement must be in form and substance satisfactory to Bank.
      D. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS
         OF THE STATE OF TEXAS, TO THE JURISDICTION OF WHICH THE PARTIES HERETO
         SUBMIT.
      E. All rights and remedies herein provided are cumulative and not
         exclusive of any rights or remedies otherwise provided by law. Any
         single or partial exercise of any right or remedy shall not preclude
         the further exercise thereof or the exercise of any other right or
         remedy.
      F. All terms not defined herein are used as set forth in the Uniform
         Commercial Code.
      G. In the event of any action by Bank to enforce this Agreement or to
         protect the security interest of Bank in the Collateral, or to take
         possession of, hold, preserve, process, assemble, insure, prepare for
         sale or lease, market for sale or lease, sell or lease, or otherwise
         dispose of, any Collateral, Guarantor agrees to pay immediately the
         costs and expenses thereof, together with reasonable attorney's fees
         and allocated costs for in-house legal services. Notwithstanding the
         foregoing, if the Indebtedness was extended primarily for the purchase
         of one or more motor vehicles (other than a heavy commercial vehicle),
         the expense for which the Guarantor shall be liable pursuant to this
         section 7 (g) shall not exceed the following: all amounts actually
         incurred by the Bank as court costs; attorneys' fees assessed by a
         court; and the reasonable cost actually expended for repossessing,
         storing, preparing for sale, or selling any Collateral.


8. NO ORAL AGREEMENTS. THIS WRITTEN SECURITY AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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<PAGE>

9.    SIGNATURES

      This document is executed by Guarantor as of June 26, 1998.


LENDER:                                     GUARANTOR:

BANK OF AMERICA TEXAS, N.A.                 HOUSTON GEOPHYSICAL PRODUCTS, INC.


By: /s/ GEORGE M. SMITH                     By: /s/ THOMAS T. MCENTIRE
        George M. Smith, Vice President             Thomas T. McEntire, CFO

                                                                               
ADDRESS WHERE NOTICES TO THE BANK           ADDRESS WHERE NOTICES TO THE 
ARE TO BE SENT:                             GUARANTOR ARE TO BE SENT:

Bank of America Texas, N.A.                 507 Allen Genoa Road
Houston Commercial Lending, #2552           Houston, Texas 77017
333 Clay Street, Ste. 3600
Houston, Texas 77002


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