Exhibit 10.33
 
 
FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER
 
This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of February
26, 2008 (the “Effective Date”) is executed among ION GEOPHYSICAL CORPORATION,
formerly known as Input/Output, Inc., a Delaware corporation (the “Borrower”),
the Subsidiaries of the Borrower listed on the signature pages hereto as
Guarantors, the banks and other financial institutions party hereto (the
“Lenders”) and CITIBANK, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”).
 
INTRODUCTION
 
A. WHEREAS, the Borrower (under the name “Input/Output, Inc.”), the Guarantors,
the certain financial institutions, as lenders, and the Administrative Agent are
parties to that certain Credit Agreement dated as of March 22, 2007 (as amended
or modified prior to the date hereof, the “Credit Agreement”).
 
B. WHEREAS, Borrower has now requested that the Administrative Agent and the
Lenders modify the Credit Agreement and change certain terms thereof, and the
Administrative Agent and the Lenders have agreed to do so; and
 
C. WHEREAS, Borrower, Administrative Agent and the Lenders wish to execute this
Amendment to evidence such agreement;
 
THEREFORE, the Borrower, the Guarantors, the Lenders and the Administrative
Agent hereby agree as follows:
 
ARTICLE I
AMENDMENT
 
SECTION 1.1 Definitions. All capitalized terms used herein and not otherwise
defined shall have the meanings given in the Credit Agreement.
 
SECTION 1.2 Amendment to Section 1.01. Section 1.01 of the Credit Agreement is
hereby amended to include the following new definitions and to restate the
definitions of “Fixed Charge Coverage Ratio” and “Total Funded Debt” as follows:
 
“Domestic Fixed Charge Coverage Ratio” means, at any date, the ratio of (i)
Consolidated EBITDA of the Borrower and its Domestic Subsidiaries less the sum
of: (A) cash income tax expense of the Borrower and its Domestic Subsidiaries,
(B) non-financed Consolidated Capital Expenditures and (C) capitalized research
and development costs of the Borrower and its Domestic Subsidiaries; to (ii) the
(A) scheduled payments of lease payments of the Borrower and its Domestic
Subsidiaries, (B) scheduled payments of principal of Indebtedness of the
Borrower and its Domestic Subsidiaries, (C) Consolidated Interest Expense of the
Borrower and its Domestic Subsidiaries actually paid and (D) dividends paid in
cash by the Borrower, in each case for the period of four consecutive fiscal
quarters most recently ended on or prior to such date for which financial
information is available.
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“Domestic Leverage Ratio” means, at any date, the ratio of (i) Domestic Total
Funded Debt as such date to (ii) Consolidated EBITDA of the Borrower and its
Domestic Subsidiaries for the four consecutive fiscal quarters most recently
ended on or prior to such date for which financial information is available.
 
“Domestic Total Funded Debt” means all funded Consolidated Indebtedness of the
Borrower and its Domestic Subsidiaries, plus Capital Lease Obligations of the
Borrower and its Domestic Subsidiaries and issued letters of credit of the
Borrower and its Domestic Subsidiaries.
 
“Fixed Charge Coverage Ratio” means, at any date, the ratio of (i) Consolidated
EBITDA of the Borrower and its Subsidiaries less the sum of: (A) cash income tax
expense of the Borrower and its Subsidiaries, (B) non-financed Consolidated
Capital Expenditures and (C) capitalized research and development costs of the
Borrower and its Subsidiaries; to (ii) the (A) scheduled payments of lease
payments of the Borrower and its Subsidiaries, (B) scheduled payments of
principal of Indebtedness of the Borrower and its Subsidiaries, (C) Consolidated
Interest Expense of the Borrower and its Subsidiaries actually paid and (D)
dividends paid by the Borrower in cash, in each case for the period of four
consecutive fiscal quarters most recently ended on or prior to such date for
which financial information is available.
 
“Total Funded Debt” means all Funded Consolidated Indebtedness of the Borrower
and its Subsidiaries, plus Capital Lease Obligations of the Borrower and its
Subsidiaries, plus issued letters of credit of the Borrower and its
Subsidiaries.
 
SECTION 1.3 Amendment to Section 6.01. Section 6.01 of the Credit Agreement is
hereby amended by deleting the word “and” at the end of the existing clause (o),
replacing the period at the end of the existing clause (p) with “; and” and
adding the following new section 6.01(q) at the end of Section 6.01:
 
“(q) Indebtedness not to exceed $150,000,000 in the aggregate until the end of
the Borrower’s 2008 fiscal year and not to exceed $135,000,000 in the aggregate
thereafter owed by I/O International, Ltd., or ION International Sarl, a
Luxembourg Person, to Borrower or any Domestic Subsidiary in connection with
licensing agreements with respect to Intellectual Property, which Indebtedness
may be evidenced by one or more promissory notes. For the avoidance of doubt,
such Indebtedness shall not be a Receivable of Borrower or any Domestic
Subsidiary.”
 
SECTION 1.4 Amendment to Section 6.08. Section 6.08 of the Credit Agreement is
hereby amended by adding the following new section 6.08(i) to the end of Section
6.08:
 
“(i) transactions between or among Affiliates of the Borrower permitted by
Section 6.04;”
 
SECTION 1.5  Addition of Sections 6.17, 6.18 and 6.19. New Sections 6.17, 6.18
and 6.19 are hereby added to the Credit Agreement as follows:
 
“Section 6.17 Minimum Domestic Fixed Charge Coverage Ratio.  The Borrower shall
not permit the Domestic Fixed Charge Coverage Ratio to be less than 1.50 to 1.0.
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Section 6.18 Maximum Domestic Leverage Ratio  The Borrower shall not permit the
Domestic Leverage Ratio to exceed 1.5 to 1.0.
 
Section 6.19 Domestic Asset Coverage Ratio. The Borrower shall not permit the
ratio of (i) the book value of Receivables (to the extent earned by
performance), plus cash on hand and Permitted Investments, plus inventory plus
equipment, in each case, of the Borrower and its Domestic Subsidiaries to (ii)
the aggregate Commitments of the Lenders to be less than 1.75 to 1.0 at any
time.”
 
SECTION 1.6  Waiver. For the avoidance of doubt, the Lenders hereby waive any
breach prior to the date hereof, if any, of (a) Section 5.01(c) of the Credit
Agreement caused by Borrower’s delivery on February 19, 2008, of the Borrowing
Base Certificate and related calculations that was due on January 30, 2008; and
(b) Section 6.01 of the Credit Agreement caused by the existence prior to the
date hereof of any Indebtedness (if any) of the type described in Section 1.3
above.
 
ARTICLE II
MISCELLANEOUS
 
SECTION 2.1 Representations True; No Default. The Borrower and the Guarantors
represent and warrant, as applicable, that:
 
(a) This Amendment has been duly authorized, executed and delivered on their
behalf and the Credit Agreement, together with each other Loan Documents to
which the Borrower and each of the Guarantors is a party, constitute valid and
legally binding agreements of the Borrower and the Guarantors enforceable in
accordance with their terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
reorganization or moratorium or other similar law relating to creditors’ rights
and by general equitable principles which may limit the right to obtain
equitable remedies (regardless of whether such enforceability is considered in a
proceeding, in equity or at law);
 
(b) After giving effect to this Amendment, the representations and warranties of
the Borrower contained in Article III of the Credit Agreement are true and
correct in all material respects on and as of the date hereof as though made on
and as of the date hereof, except to the extent such representations and
warranties relate solely to an earlier date; and
 
(c) After giving effect to this Amendment, there has not occurred and is not
continuing a Default or an Event of Default.
 
SECTION 2.2 Effectiveness. This Amendment shall become effective as of the
Effective Date upon receipt by the Administrative Agent of executed signature
pages hereof from the Borrower, the Guarantors and Lenders constituting at least
the Required Lenders.
 
SECTION 2.3 Expenses, Additional Information. The Borrower shall pay to the
Administrative Agent all reasonable expenses incurred in connection with the
negotiation and execution of this Amendment. The Borrower and the Guarantors
shall furnish to the Administrative Agent all such other documents, consents and
information relating to the Borrower and the Guarantors as the Administrative
Agent may reasonably require to accomplish the purposes hereof.
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SECTION 2.4 Miscellaneous Provisions.
 
(a) From and after the Effective Date of this Amendment, the Credit Agreement
shall be deemed to be amended and modified as herein provided, and except as so
amended and modified the Credit Agreement shall continue in full force and
effect.
 
(b) From and after the Effective Date of this Amendment, the Credit Agreement
and this Amendment shall be read and construed as one and the same instrument.
 
(c) From and after the Effective Date of this Amendment, any reference in any of
the Loan Documents to the Credit Agreement shall be a reference to the Credit
Agreement as amended by this Amendment.
 
(d) This Amendment may be signed in any number of counterparts and by different
parties in separate counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
 
(e) The headings herein shall be accorded no significance in interpreting this
Amendment.
 
SECTION 2.5 Binding Effect. As of the Effective Date of this Amendment, this
Amendment shall be binding upon and inure to the benefit of the Borrower, the
Guarantors, Administrative Agent and Lenders and the successors and assigns of
the Administrative Agent and Lenders. The Borrower and the Guarantors shall not
have the right to assign its rights hereunder or any interest herein.
 
SECTION 2.6 Choice of Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
LAWS OF THE UNITED STATES OF AMERICA AND ANY RULES, REGULATIONS OR ORDERS ISSUED
OR PROMULGATED THEREUNDER APPLICABLE TO THE AFFAIRS AND TRANSACTIONS OF THE
LENDERS OTHERWISE PREEMPT NEW YORK LAW, IN WHICH EVENT SUCH FEDERAL LAW SHALL
CONTROL.
 
 
[Signature Page Follows]
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EXECUTED to be effective as of the date first written above.

        BORROWER:       ION GEOPHYSICAL CORPORATION,
a Delaware corporation   
   
   
  By:   /s/ David L. Roland  

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Name: David L. Roland   Title: Senior Vice President and General Counsel

 

              GUARANTORS:       GMG/AXIS, Inc., a Delaware corporation  
   
   
  By:   /s/ David L. Roland  

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Name: David L. Roland   Title: Vice President and Director

 

              GX TECHNOLOGY CORPORATION, a Texas corporation      
   
   
  By:   /s/ David L. Roland  

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Name: David L. Roland   Title: Vice President and Director

 

              BORROWER:       I/O EXPLORATION PRODUCTS (U.K.), Inc.,
a Delaware corporation   
   
   
  By:   /s/ David L. Roland  

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Name: David L. Roland   Title: Vice President and Director

 

 
[Signature Page]

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        I/O EXPLORATION PRODUCTS (U.S.A.), Inc.,
a Delaware corporation      
   
   
  By:   /s/ David L. Roland  

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Name: David L. Roland   Title: Vice President and Director

              I/O MARINE SYSTEMS, INC., a Louisiana corporation      
   
   
  By:   /s/ David L. Roland  

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Name: David L. Roland   Title: Vice President and Director

 

              I/O NEVADA, LLC, a Delaware limited liability company      
   
   
  By:   /s/ Signed  

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Name:   Title:

 

              I/O TEXAS, LP, a Delaware limited partnership           By:  
Input/Output, Inc., a Delaware corporation,
its General Partner
                By:  /s/ David L. Roland    

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Name: David L. Roland
  Title: Senior Vice President and General Counsel

 

 

        IPOP MANAGEMENT, INC., a Delaware corporation      
   
   
  By:   /s/ David L. Roland  

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Name: David L. Roland   Title: Vice President and Director

 

 

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        ADMINISTRATIVE AGENT AND LENDER:       CITIBANK, N.A  
   
   
  By:   /s/ Signed  

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Name:   Title:

 

 
 

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        LENDERS:       WHITNEY NATIONAL BANK  
   
   
  By:   /s/ Signed  

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Name:   Title:

 

 
 

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        PNC BANK, NATIONAL ASSOCIATION      
   
   
  By:   /s/ Signed  

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Name:   Title:

 

 

 

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