exv4w1






Exhibit 4.1



THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED PURSUANT TO A WARRANT ISSUANCE AGREEMENT, DATED OCTOBER 23,
2009, BETWEEN THE ISSUER OF THE WARRANT AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON
FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THIS INSTRUMENT. ANY SALE OR OTHER TRANSFER NOT
IN COMPLIANCE WITH THE TERMS OF THIS INSTRUMENT WILL BE VOID.




WARRANT

to purchase

Shares of the Common Stock of

ION Geophysical Corporation

a Delaware Corporation




Issue Date: October 27, 2009                    




     1. Definitions. Unless the context otherwise requires, when used herein the following
terms shall have the meanings indicated.



     “affiliate” has the meaning ascribed to it in the Warrant Issuance Agreement.



     “Adjusted Exercise Price” has the meaning set forth in Section 2(C).



     “Appraisal Procedure” means a procedure whereby two independent appraisers, one chosen
by the Company and one by the Warrantholder (or if there is more than one Warrantholder, a majority
in interest of Warrantholders), shall mutually agree upon the determinations then the subject of
appraisal. Each party shall deliver a notice to the other appointing its appraiser within fifteen
(15) days after the Appraisal Procedure is invoked. If within 30 days after appointment of the two
appraisers they are unable to agree upon the amount in question, a third independent appraiser
shall be chosen within ten (10) days thereafter by the mutual consent of such first two appraisers.
The decision of the third appraiser so appointed and chosen shall be given within thirty (30) days
after the selection of such third appraiser. If three appraisers shall be appointed and the
determination of one appraiser is disparate from the middle determination by more than twice the
amount by which the other determination is disparate from the middle determination, then the
determination of such appraiser shall be excluded, the remaining two determinations shall be
averaged and such average shall be binding and conclusive upon the Company and the Warrantholder;
otherwise, the average of all three determinations shall be binding upon the Company and the
Warrantholder. The costs of conducting any Appraisal Procedure shall be borne by the Company.



     “Board of Directors” means the board of directors of the Company, including any duly
authorized committee thereof.



     “Bridge Funding” has the meaning ascribed to it in the Warrant Issuance Agreement.



     “Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Company’s stockholders.



     “business day” means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New York or the State of Texas
generally are authorized or required by law or other governmental actions to close.



 









 





     “Capital Stock” means (A) with respect to any Person that is a corporation or company,
any and all shares, interests, participations or other equivalents (however designated) of capital
or capital stock of such Person and (B) with respect to any Person that is not a corporation or
company, any and all partnership or other equity interests of such Person.



     “CFIUS” means the Committee on Foreign Investments in the United States.



     “CFIUS Approval” means any of the following: (i) CFIUS shall have provided notice to
the Company and the Original Warrantholder to the effect that a review or investigation of the
Proposed Transaction has been concluded, and that a determination has been made that there are no
unresolved U.S. national security concerns; (ii) CFIUS shall have provided notice to the Company
and the Original Warrantholder to the effect that a review or investigation of the Proposed
Transaction has been concluded, and that a determination has been made that mitigation efforts are
necessary to resolve the U.S. national security concerns of CFIUS and the Company and the Original
Warrantholder shall have agreed on such mitigation efforts and entered into such agreements that
permit CFIUS to confirm that there are no unresolved U.S. national security concerns or (iii) the
period of time for any applicable review process by CFIUS and any subsequent Presidential decision
whether to take action under Exon-Florio shall have expired, and the President of the United States
shall not have taken action to block or prevent the consummation of the Proposed Transaction under
Exon-Florio on the basis that they threaten to impair the national security of the United States or
otherwise.



     “CFIUS Regulations” means the regulations set forth in Title 31, part 800 of the Code
of Federal Regulations that implement Exon-Florio.



     “Common Stock” means the Company’s common stock, par value US$0.01 per share.



     “Company” means ION Geophysical Corporation, a Delaware corporation.



     “conversion” has the meaning set forth in Section 13(B).



     “Convertible Notes” has the meaning ascribed to it in the Warrant Issuance Agreement.



     “convertible securities” has the meaning set forth in Section 13(B).



     “Credit Agreement” means the Amended and Restated Credit Agreement dated as of July 3,
2008 (as amended, modified and supplemented from time to time (including by the Sixth Amendment to
the Amended and Restated Credit Agreement), the “Credit Agreement”), among the Company, ION
International S.À.R.L., a Luxembourg private limited company (société à responsabilité limitée),
the guarantors, HSBC Bank USA, N.A., ABN AMRO Incorporated, as Joint Lead Arranger and Joint
Bookrunner and the lenders named therein.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.



     “Exercise Approvals” means the collective reference to the Shareholder Approvals and
the Regulatory Approvals.



     “Exercise Price” means an amount initially equal to $2.80, subject to adjustments
pursuant to Sections 2 and 13.



     “Exon-Florio” means Section 721 of Title VII of the Defense Production Act of 1950, as
amended.



     “Expiration Time” has the meaning set forth in Section 3(A).



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     “Fair Market Value” means, with respect to any security or other property, the fair
market value of such security or other property as determined by the Board of Directors, acting in
good faith or, with respect to Section 14, as determined by the Original Warrantholder acting in
good faith. If the Warrantholder objects in writing to the Board of Director’s calculation of fair
market value within 10 days of receipt of written notice thereof and the Warrantholder and the
Company are unable to agree on fair market value during the 10-day period following the delivery of
the Warrantholder’s objection, the Appraisal Procedure may be invoked by either party to determine
Fair Market Value by delivering written notification thereof not later than the 30th day
after delivery of the Warrantholder’s objection.



     “HKIAC” has the meaning set forth in Section 16.



     “Initial Number” has the meaning set forth in Section 13(B).



     “Issuance Certificate” has the meaning set forth in Section 4(A).



     “Issue Date” means October 27, 2009.



     “Market Price” means, with respect to a particular security, on any given day, (a) if
the security is listed on a national securities exchange, the last sale price, regular way, of such
security on such date or, in case no such sale takes place on such day, the average of the last
closing bid and ask prices, regular way, in either case on the principal national securities
exchange on which the applicable securities are listed or admitted to trading; or (b) if not listed
or admitted to trading on any national securities exchange, or if the security is not then listed
or admitted to trading on any national securities exchange, but is designated as a national market
system security, the last trading price of the security on such date; or (c) if there shall have
been no trading on such date or if the security is not so designated, the average of the reported
closing bid and asked price of the security, on such date as shown by NASDAQ and reported by any
member firm of the NYSE selected by the Company; or (d) if none of the above is applicable, a
market price per share determined in good faith by the Board of Directors, which shall be deemed to
be “Market Price” unless the Warrantholder requests that the Company obtain an opinion of a
nationally recognized investment banking firm chosen by the Company (who shall bear the expense)
and reasonably acceptable to such requesting Warrantholder, in which event the Market Price shall
be as determined by such investment banking firm.



     “Maximum Share Number” means the number equal to the Stated Value divided by the
Exercise Price.



     “Notice of Exercise” has the meaning set forth in Section 3(B).



     “NYSE” means the New York Stock Exchange.



     “Original Warrantholder” means BGP Inc., China National Petroleum Corporation. Any
actions specified to be taken by the Original Warrantholder hereunder may only be taken by such
Person or a member of the Original Warrantholder Group and not by any other Warrantholder.



     “Original Warrantholder Group” means the Original Warrantholder and its affiliates.



     “Outside Date” has the meaning set forth in Section 2(C).



     “Per Share Fair Market Value” has the meaning set forth in Section 13(C).



     “Permitted Transactions” has the meaning set forth in Section 13(B).



     “Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.



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     “Pro Rata Repurchases” means any purchase of Shares by the Company or any affiliate
thereof pursuant to (A) any tender offer or exchange offer subject to Section 13(e) or 14(e) of the
Exchange Act or Regulation 14E promulgated thereunder or (B) any other offer available to
substantially all holders of Common Stock, in the case of both (A) or (B), whether for cash, shares
of Capital Stock of the Company, other securities of the Company, evidences of indebtedness of the
Company or any other Person or any other property (including, without limitation, shares of Capital
Stock, other securities or evidences of indebtedness of a subsidiary), or any combination thereof,
effected while this Warrant is outstanding. The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the Company under any
tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any
Pro Rata Repurchase that is not a tender or exchange offer.



     “Proposed Transaction” means the transactions substantially as contemplated in the
Transaction Term Sheet.



     “Registration Rights Agreement” has the meaning ascribed to it in the Warrant Issuance
Agreement.



     “Regulatory Approvals” with respect to the Warrantholder, means, to the extent
applicable and required to permit the Warrantholder to exercise this Warrant for Shares and to own
such Common Stock without the Warrantholder being in violation of applicable law, rule or
regulation, the receipt of any necessary approvals and authorizations of, filings and registrations
with, notifications to, or expiration or termination of any applicable waiting period under any
applicable law, rule or regulation, including, the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.



     “SEC” means the U.S. Securities and Exchange Commission.



     “SEC Reports” has the meaning ascribed to it in the Warrant Issuance Agreement.



     “Securities Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.



     “Shareholder Approvals” means only those shareholder approvals necessary to (A)
approve the exercise of this Warrant for Shares for purposes of Section 312.03 of the NYSE Listed
Company Manual, and/or (B) amend the certificate of incorporation to increase the number of
authorized shares of Common Stock to the extent necessary to permit the exercise of this Warrant.



     “Shares” means shares of Common Stock and any Capital Stock (or other property) for or
into which Common Stock hereafter is exchanged, converted, reclassified or recapitalized by the
Company or pursuant to a Change of Control to which the Company is a party.



     “Stated Value” means an amount initially equal to US$40,000,000, subject to
adjustments from time to time pursuant to Sections 2 and 13.



     “trading day” means (A) if the Common Stock is not traded on any national or regional
securities exchange or association or over-the-counter market, a business day or (B) if the Common
Stock is traded on any national or regional securities exchange or association or over-the-counter
market, a business day on which such relevant exchange or quotation system is scheduled to be open
for business and on which the Common Stock (i) is not suspended from trading on any national or
regional securities exchange or association or over-the-counter market for any period or periods
aggregating one half hour or longer; and (ii) have traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the primary market for the
trading of the Common Stock.



     “Transaction Term Sheet” means the Term Sheet, dated as of October 23, 2009, between
the Company and the Original Warrantholder.



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     “Triggering Event” has the meaning set forth in Section 2(C).



     “U.S. GAAP” means United States generally accepted accounting principles.



     “Warrant” means this Warrant, issued pursuant to the Warrant Issuance Agreement.



     “Warrant Issuance Agreement” means the Warrant Issuance Agreement, dated as of October
23, 2009, as amended from time to time, between the Company and the Original Warrantholder,
including all exhibits and annexes thereto.



     “Warrantholder” has the meaning set forth in Section 2(A).



     2. Number of Shares; Exercise Price; Adjustments.



     (A) This certifies that, for value received, the Original Warrantholder or its permitted
assigns and transferees (any of such Persons, the “Warrantholder”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, to acquire from the Company, in whole or
in part, after the receipt of all applicable Exercise Approvals, if any, up to the Maximum Share
Number of fully paid and nonassessable Shares, at a purchase price per Share equal to the Exercise
Price; provided that the number of Shares issuable under the Warrant, the Exercise Price and the
Stated Value are subject to adjustments as provided herein, and all references to “Common Stock,”
“Shares” and, “Exercise Price” and “Stated Value” herein shall be deemed to include any such
adjustment or series of adjustments.



     (B) If any outstanding principal amount under the Convertible Notes is converted to Shares in
accordance with the terms of such Convertible Notes and the Credit Agreement, the Stated Value
shall be reduced by the principal amount so converted and the Maximum Share Number shall be
adjusted accordingly.



     (C) Solely in the case that all aspects of the Proposed Transaction cannot be completed by
March 31, 2010 (the “Outside Date”) due to, in the reasonable judgment of the Original
Warrantholder, the occurrence of a statement, order or other indication from the relevant United
States regulatory agencies or other bodies with jurisdiction to review and approve the Proposed
Transaction (including, but not limited to, CFIUS) that all aspects of the Proposed Transaction as
described in the Transaction Term Sheet and the definitive documents to be generated pursuant
thereto would not be approved, would be opposed, objected to or sanctioned or that the terms of the
Proposed Transaction, or the Original Warrantholder Group’s business and operations, would be
required to be altered in order to obtain approval (or upon the earlier abandonment by the Original
Warrantholder of the Proposed Transaction due to such statement, order or indication) (each, a
“Triggering Event”), the Exercise Price shall be adjusted to equal the Adjusted Exercise
Price. The “Adjusted Exercise Price” shall be equal to the lesser of (i) 75% of the lowest
trading price over a ten (10) consecutive trading day period, beginning on and inclusive of the
first (1st) trading day following the public announcement of such failure to complete
the Proposed Transaction (or abandonment thereof) or (ii) the Exercise Price immediately prior to
such adjustment, as may be required to be adjusted if the adjustments set forth in Section 13 would
apply to adjust the Exercise Price. For the avoidance of doubt, any adjustment to the Exercise
Price required by this Section 2(C) shall not be exclusive of other adjustments contemplated or
required by Section 13.



     3. Exercise of Warrant; Term.



     (A) To the extent permitted by applicable laws and regulations and after the receipt of
applicable Exercise Approvals, if any, the right to purchase Shares represented by this Warrant is
exercisable, in whole or in part by the Warrantholder, at any time or from time to time commencing
from the Issue Date up to 5:00 p.m., New York City time on the earlier of (i) December 31, 2010 or
(ii) such time that the Maximum Share Number is equal to zero and no Share is issuable pursuant to
this Warrant (the “Expiration Time”); provided that the Original Warrantholder
shall only exercise its right to purchase Shares represented by this warrant (i) in a manner
consistent with CFIUS Approval; (ii) in a manner that would constitute a non-control transaction
or passive investment under



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CFIUS Regulations; (iii) as part of a transaction that will involve a transfer of such shares
to a “U.S. person ” as defined in the CFIUS Regulations or (iv) in any combination of the means set
forth in items (i) to (iii) of this proviso; and provided further that the previous proviso
shall have no bearing whatsoever on the ability of the Original Warrantholder to transfer this
warrant, in whole or in part, as may otherwise be permitted by the terms of this Warrant and the
Warrant Issuance Agreement.



     (B) The exercise of the Warrant shall be by (A) the surrender of its Warrant and a notice of
exercise substantially in the form attached hereto (the “Notice of Exercise”), duly
completed and executed on behalf of the Warrantholder, at the principal executive office of the
Company located at 2105 CityWest Blvd., Suite 400, Houston, Texas, 77041-2839, the United States of
America (or such other office or agency of the Company in the United States as it may designate by
notice in writing to the Warrantholder at the address of the Warrantholder appearing on the books
of the Company), and (B) payment of the Exercise Price for the Shares thereby purchased at the
election of the Warrantholder in one of the following manners:



          (i) by tendering in cash, by certified or cashier’s check payable to the order of the Company,
or by wire transfer of immediately available funds to an account designated by the Company; or




          (ii) in the event that the Warrantholder is not able to obtain the applicable approvals in the
People’s Republic of China for its exercise of the Warrant by cash after using its reasonable best
efforts, by having the Company withhold, from the Shares that would otherwise be delivered to the
Warrantholder upon such exercise, Shares issuable upon exercise of the Warrant equal in value to
the aggregate Exercise Price as to which this Warrant is so exercised based on the Market Price of
Shares on the trading day immediately prior to the date on which this Warrant is exercised and the
Notice of Exercise is delivered to the Company pursuant to this Section 3;




     (C) If the Warrantholder does not exercise the Warrant in its entirety, the Warrantholder (or
its designees) will be entitled to receive from the Company within a reasonable time, and in any
event not exceeding three (3) business days, a new warrant in identical form but with a lowered
Stated Value (in addition to any reduction required by Section 2(B)) equal to the Stated Value of
this Warrant minus the product of (i) the number of Shares issued from such partial exercise(s) of
the Warrant (or, if the Warrant is exercised pursuant to Section 3(B)(ii), the number of Shares
actually issued plus the number of Shares withheld as payment of the Exercise Price for such
purchased Shares) and (ii) the aggregate Exercise Price of such exercise(s).



     (D) Without in any way limiting the effect of Section 3(A), the Warrantholder hereby
acknowledges and agrees that if a Triggering Event occurs, its full exercise of this Warrant for
Shares may be subject to applicable Shareholder Approvals.



     (E) Subject to Section 3(A), contemporaneously with the closing of the Proposed Transaction,
the Original Warrantholder, if still in possession of the Warrant at that time, shall be obligated
to exercise the Warrant in full (except to the extent of any conversion of outstanding amount under
the Convertible Notes into Shares contemporaneously with the closing of the Proposed Transaction).



     (F) Contemporaneously with the closing of the Proposed Transaction and after giving effect to
any mandatory exercise of the Warrant, if any, pursuant to Section 3(E), the Warrant shall
terminate.



     4. Issuance of Shares; Authorization; Registration; Listing.



     (A) Certificates for Shares issued upon exercise of this Warrant will be issued in such name
or names as the Warrantholder may designate and will be delivered to such named Person or Persons
within a reasonable time, not to exceed five (5) business days after the date on which this Warrant
has been duly exercised in accordance with the terms of this Warrant. Contemporaneously with the
delivery of such shares certificates, the Company shall deliver a certificate (the “Issuance
Certificate”) to the recipient of the share certificates that the Company’s representations and
warranties as set forth in Section 2.2(l) of the Warrant Issuance Agreement are true and correct as
though made on and as of the date of the Issuance Certificate (other than representations and
warranties that by



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their terms speak as of another date, which representations and warranties shall be true and
correct as of such date); provided that the Company’s representations and warranties given
in the Issuance Certificate shall be qualified by the information set forth or incorporated in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 or its SEC Reports
on or after December 31, 2008 but prior to the date of the Issuance Certificate.



     (B) The Company hereby represents and warrants that any Shares issued upon the exercise of
this Warrant in accordance with the provisions of Section 3 will be duly and validly authorized and
issued, fully paid and nonassessable and free from all taxes, liens and charges (other than liens
or charges created by the Warrantholder, income and franchise taxes incurred in connection with the
exercise of the Warrant or taxes in respect of any transfer occurring contemporaneously therewith).
The Company agrees that the Shares so issued will be deemed to have been issued to the
Warrantholder as of the close of business on the date on which this Warrant and payment of the
Exercise Price are delivered to the Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may then be closed or certificates
representing such Shares may not be actually delivered on such date. Subject to receipt of
Shareholder Approvals, if applicable, the Company will at all times reserve and keep available, out
of its authorized but unissued Common Stock, solely for the purpose of providing for the exercise
of this Warrant, the aggregate number of Shares then issuable upon exercise of this Warrant at any
time.



     (C) Resales of the Shares issued upon the exercise of the Warrant may be registered under the
Securities Act pursuant to the Registration Rights Agreement.



     (D) The Company will (i) procure, at its sole expense, the listing of the Shares issuable upon
exercise of this Warrant at any time, subject to issuance or notice of issuance, on all principal
stock exchanges on which the Common Stock is then listed or traded and (ii) maintain such listings
of the Common Stock at all times after issuance. The Company will use reasonable best efforts to
ensure that the Shares may be issued without violation of any applicable law or regulation or of
any requirement of any securities exchange on which the Common Stock listed or traded.



     5. No Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant. In lieu of any fractional
Share to which the Warrantholder would otherwise be entitled, the Warrantholder shall be entitled
to receive a cash payment equal to the Market Price of the Common Stock on the last trading day
preceding the date of exercise less the pro-rated Exercise Price for such fractional Share, subject
to the terms of the Credit Agreement.



     6. No Rights as Stockholders. This Warrant by itself does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the Company prior to the
date of exercise hereof and the acquisition of Shares pursuant thereto.



     7. Charges, Taxes and Expenses. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company.



     8. Transfer/Assignment.



     (A) Subject to compliance with clause (B) of this Section 8, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company by the registered
holder hereof in person or by duly authorized attorney, and a new warrant or warrants shall be made
and delivered by the Company, in identical form and of the same tenor and date as this Warrant but
registered in the name of one or more transferees, upon surrender of this Warrant, duly endorsed,
and with such adjustments to the Stated Value as may be necessary to reflect any partial transfer,
to the office or agency of the Company described in Section 3. All expenses (other than stock
transfer taxes) and other charges payable in connection with the preparation, execution and
delivery of the new warrants pursuant to this Section 8 shall be paid by the Company.



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     (B) If and for so long as required by the Warrant Issuance Agreement, the certificate for this
Warrant shall contain a legend as set forth in Section 2.3(c) of the Warrant Issuance Agreement.
The Warrantholder shall not transfer any part of the Warrant to the Persons set forth in Schedule
4.3(a) to the Warrant Issuance Agreement.



     (C) The Company will at no time close its transfer books against transfer of this Warrant in
any manner which interferes with the timely exercise of this Warrant.



     (D) Without in any way limiting the effect of and subject to the other provisions of this
Section 8, this Warrant is freely transferable by the Warrantholder at any time, including, but not
limited to, the Original Warrantholder.



     9. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants in identical form and of
like tenor and representing the right to purchase the same aggregate number of Shares, with such
adjustments to the Stated Value as may be necessary to reflect any partial exchange. The Company
shall maintain a registry showing the name and address of the Warrantholder as the registered
holder of this Warrant. This Warrant may be surrendered for exchange or exercise in accordance
with its terms, at the office of the Company, and the Company shall be entitled to rely in all
respects, prior to written notice to the contrary, upon such registry.



     10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity
or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new warrant of like tenor and representing the
right to purchase the same aggregate number of Shares as provided for in such lost, stolen,
destroyed or mutilated Warrant.



     11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a business day,
then such action may be taken or such right may be exercised on the next succeeding day that is a
business day.



     12. Rule 144 Information. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC thereunder
(or, if the Company is not required to file such reports, it will, upon the request of any
Warrantholder, make publicly available such information as necessary to permit sales pursuant to
Rule 144 or Regulation S under the Securities Act), and it will use reasonable best efforts to take
such further action as any Warrantholder may reasonably request, in each case to the extent
required from time to time to enable such holder to, if permitted by the terms of this Warrant and
the Warrant Issuance Agreement, sell this Warrant without registration under the Securities Act
within the exemptions provided by (A) Rule 144 or Regulation S under the Securities Act, as such
rules may be amended from time to time, or (B) any successor rule or regulation hereafter adopted
by the SEC. Upon the written request of any Warrantholder, the Company will deliver to such
Warrantholder a written statement that it has complied with such requirements.



     13. Adjustments and Other Rights. In addition to adjustments provided for in Section
2, the Exercise Price and the number of Shares issuable upon exercise of this Warrant shall be
subject to adjustment from time to time as follows; provided that if more than one
subsection of this Section 13 is applicable to a single event, the subsection shall be applied that
produces the largest adjustment and no single event shall cause an adjustment (pursuant to Sections
2 and/or 13) under more than one subsection of this Section 13 so as to result in duplication:



     (A) Stock Splits, Subdivisions, Reclassifications or Combinations. If the Company
shall (i) declare and pay a dividend or make a distribution on the Common Stock in Shares, (ii)
subdivide or reclassify the outstanding Shares into a greater number of Shares, or (iii) combine or
reclassify the outstanding Shares into a smaller number of Shares, the number of Shares issuable
upon exercise of this Warrant at the time of the record date



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for such dividend or distribution or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the Warrantholder after such date shall
be entitled to purchase the number of Shares which such holder would have owned or been entitled to
receive in respect of the Shares subject to this Warrant after such date had this Warrant been
exercised immediately prior to such date. In such event, the Exercise Price in effect at the time
of the record date for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted to the number obtained by dividing (x) the Stated
Value by (y) the new number of Shares issuable upon exercise of the Warrant determined pursuant to
the immediately preceding sentence.



     (B) Certain Issuances of Shares or Convertible Securities. If the Company shall issue
Shares (or rights or warrants or other securities exercisable or convertible into or exchangeable
(collectively, a “conversion”) for Shares) (collectively, “convertible securities”)
(other than in connection with (1) the Permitted Transactions (as defined below), (2) a transaction
to which subsection (A) of this Section 13 is applicable, (3) the conversion of the Company’s
outstanding Series D Cumulative Convertible Preferred Stock and (4) the conversion of the
Convertible Notes and the exercise of Warrant) without consideration or at a consideration per
share (or having a conversion price per share) that is less than 95% of the Market Price on the
last trading day preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:



          (i) the number of Shares issuable upon the exercise of this Warrant immediately prior to the
date of the agreement on pricing of such Shares (or of such convertible securities) (the
“Initial Number”) shall be increased to the number obtained by multiplying the Initial
Number by a fraction (1) the numerator of which shall be the sum of (x) the number of Shares of the
Company outstanding on such date and (y) the number of additional Shares issued (or into which
convertible securities may be exercised or convert) and (2) the denominator of which shall be the
sum of (I) the number of Shares outstanding on such date and (II) the number of Shares which the
aggregate consideration receivable by the Company for the total number of Shares so issued (or into
which convertible securities may be exercised or convert) would purchase at the Market Price on the
last trading day preceding the date of the agreement on pricing such shares (or such convertible
securities); and




          (ii) the Exercise Price payable upon exercise of the Warrant shall be adjusted by multiplying
such Exercise Price in effect immediately prior to the date of the agreement on pricing of such
shares (or of such convertible securities) by a fraction, the numerator of which shall be the
number of Shares issuable upon exercise of this Warrant prior to such date and the denominator of
which shall be the number of Shares issuable upon exercise of this Warrant immediately after the
adjustment described in clause (i) above.




     For purposes of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such Shares or convertible securities shall be deemed to be equal
to the sum of the net offering price (after deduction of any related expenses payable to third
parties) of all such securities plus the minimum aggregate amount, if any, payable upon exercise or
conversion of any such convertible securities into Shares; and the “Permitted Transactions”
shall mean issuances (i) as consideration for or to fund the acquisition of businesses and/or
related assets or (ii) in connection with employee benefit plans and compensation related
arrangements in the ordinary course and consistent with past practice approved by the Board of
Directors. Any adjustment made pursuant to this Section 13(B) shall become effective immediately
upon the date of such issuance.



     (C) Other Distributions. In case the Company shall fix a record date for the making
of a distribution of securities, evidences of indebtedness, assets, cash, rights or warrants
(excluding dividends of the Common Stock and other dividends or distributions referred to in
Section 13(A)) to holders of Shares, in each such case, the Exercise Price in effect prior to such
record date shall be reduced immediately thereafter to the price determined by multiplying the
Exercise Price in effect immediately prior to the reduction by the quotient of (x) the Market Price
of the Common Stock on the last trading day preceding the first date on which the Common Stock
trades regularly on the principal national securities exchange on which the Common Stock is listed
or admitted to trading without the right to receive such distribution, minus the amount of cash
and/or the Fair Market Value of the securities, evidences of indebtedness, assets, rights or
warrants to be so distributed in respect of one share of Common Stock (such amount and/or Fair
Market Value, the “Per Share Fair Market Value”) divided by (y) such Market Price on such
date specified in clause (x); such adjustment shall be made successively whenever such a record
date is fixed. In such event, the number of Shares issuable upon the exercise of this Warrant
shall be increased to the number



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obtained by dividing the Stated Value by the new Exercise Price determined in accordance with
the immediately preceding sentence. In the event that such distribution is not so made, the
Exercise Price and the number of Shares issuable upon exercise of this Warrant then in effect shall
be readjusted, effective as of the date when the Board of Directors determines not to distribute
such shares, evidences of indebtedness, assets, rights, cash or warrants, as the case may be, to
the Exercise Price that would then be in effect and the number of Shares that would then be
issuable upon exercise of this Warrant if such record date had not been fixed.



     (D) Certain Repurchases of Common Stock. In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be adjusted to the price determined by
multiplying the Exercise Price in effect immediately prior to the Effective Date of such Pro Rata
Repurchase by a fraction of which the numerator shall be (i) the product of (x) the number of
Shares outstanding immediately before such Pro Rata Repurchase and (y) the Market Price of a Share
on the trading day immediately preceding the first public announcement by the Company or any of its
affiliates of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate purchase
price of the Pro Rata Repurchase, and of which the denominator shall be the product of (i) the
number of Shares outstanding immediately prior to such Pro Rata Repurchase minus the number of
Shares so repurchased and (ii) the Market Price per Share on the trading day immediately preceding
the first public announcement by the Company or any of its affiliates of the intent to effect such
Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon the
exercise of this Warrant shall be adjusted to the number obtained by dividing the Stated Value by
the new Exercise Price determined in accordance with the immediately preceding sentence.



     (E) Business Combinations. In case of any Business Combination or reclassification of
Common Stock (other than a reclassification of Common Stock referred to in Section 13(A)), the
Warrantholder’s right to receive Shares upon exercise of this Warrant shall be converted into the
right to exercise this Warrant to acquire the number of shares of stock or other securities or
property (including cash) which the Common Stock issuable (at the time of such Business Combination
or reclassification) upon exercise of this Warrant immediately prior to such Business Combination
or reclassification would have been entitled to receive upon consummation of such Business
Combination or reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Warrantholder shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholder’s right to exercise this Warrant in exchange for any shares of stock or other
securities or property pursuant to this paragraph. In determining the kind and amount of stock,
securities or the property receivable upon exercise of this Warrant following the consummation of
such Business Combination, if the holders of Common Stock have the right to elect the kind or
amount of consideration receivable upon consummation of such Business Combination, then the
Warrantholder shall have the right to make a similar election (including, without limitation, being
subject to similar proration constraints) upon exercise of this Warrant with respect to the number
of shares of stock or other securities or property which the Warrantholder will receive upon
exercise of this Warrant.



     (F) Rounding of Calculations; Minimum Adjustments. All calculations under this
Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest
one-hundredth (1/100th) of a share, as the case may be. Any provision of this Section 13 to the
contrary notwithstanding, no adjustment in the Exercise Price or the number of Shares into which
this Warrant is exercisable shall be made if the amount of such adjustment would be less than $0.01
or one-tenth (1/10th) of a Share, but any such amount shall be carried forward and an adjustment
with respect thereto shall be made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so carried forward, shall
aggregate $0.01 or 1/10th of a Share, or more.



     (G) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any
case in which the provisions of this Section 13 shall require that an adjustment shall become
effective immediately after a record date for an event, the Company may defer until the occurrence
of such event (i) issuing to the Warrantholder of this Warrant exercised after such record date and
before the occurrence of such event the additional Shares issuable upon such exercise by reason of
the adjustment required by such event over and above the shares of Common Stock issuable upon such
exercise before giving effect to such adjustment and (ii) paying to such Warrantholder any amount
of cash in lieu of a fractional Share (if paying such cash is permitted by the terms of the Credit
Agreement); provided that the Company upon request shall deliver to such Warrantholder a
due bill or other



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appropriate instrument evidencing such Warrantholder’s right to receive such additional
shares, and such cash, upon the occurrence of the event requiring such adjustment.



     (H) Other Events. If any event occurs as to which the provisions of this Section 13
are not strictly applicable or, if strictly applicable, would not, in the good faith judgment of
the Board of Directors, fairly and adequately protect the purchase rights of the Warrant in
accordance with the essential intent and principles of such provisions, then the Board of Directors
shall make such adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good faith opinion of the
Board of Directors, to protect such purchase rights as aforesaid.



     (I) Statement Regarding Adjustments. Whenever the Exercise Price, the number of
Shares into which this Warrant is exercisable or the Stated Value shall be adjusted as provided in
Section 13, the Company shall forthwith file at the principal office of the Company a statement
showing in reasonable detail the facts requiring such adjustment and the Exercise Price that shall
be in effect and the number of Shares into which this Warrant shall be exercisable after such
adjustment, and the Company shall also cause a copy of such statement to be sent by mail, first
class postage prepaid, to each Warrantholder at the address appearing in the Company’s records.



     (J) Notice of Adjustment Event. In the event that the Company shall propose to take
any action of the type described in this Section 13 (but only if the action of the type described
in this Section 13 would result in an adjustment in the Exercise Price or the number of Shares into
which this Warrant is exercisable or a change in the type of securities or property to be delivered
upon exercise of this Warrant), the Company shall give notice to the Warrantholder, in the manner
set forth in this Section 13(J), which notice shall specify the record date, if any, with respect
to any such action and the approximate date on which such action is to take place. Such notice
shall also set forth the facts with respect thereto as shall be reasonably necessary to indicate
the effect on the Exercise Price and the number, kind or class of shares or other securities or
property which shall be deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least ten (10) days prior
to the date so fixed, and in case of all other action, such notice shall be given at least fifteen
(15) days prior to the taking of such proposed action. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.



     (K) Proceedings Prior to Any Action Requiring Adjustment. As a condition precedent to
the taking of any action which would require an adjustment pursuant to this Section 13, the Company
shall take any action which may be necessary, including obtaining regulatory, NYSE or stockholder
approvals or exemptions, in order that the Company may thereafter validly and legally issue as
fully paid and nonassessable all Shares that the Warrantholder is entitled to receive upon exercise
of this Warrant pursuant to this Section 13.



     (L) Adjustment Rules. Any adjustments pursuant to this Section 13 shall be made
successively whenever an event referred to herein shall occur. If an adjustment in Exercise Price
made hereunder would reduce the Exercise Price to an amount below par value of the Common Stock,
then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the par
value of the Common Stock; provided that the par value of the Common Stock shall not
increase while the Warrant is outstanding.



     14. Exchange. At any time (i) following the date on which the Common Stock is no
longer listed or admitted to trading on a national securities exchange or (ii) following the three
(3) month anniversary of the date on which the Exercise Price is adjusted pursuant to a Triggering
Event and until the receipt of the Shareholder Approvals allowing the full exercise of this Warrant
for the Common Stock, the Warrantholder may cause the Company to exchange all or a portion of this
Warrant for an economic interest (to be determined by the Warrantholder after consultation with the
Company) of the Company classified as permanent equity under U.S. GAAP having a value equal to the
Fair Market Value of the portion of the Warrant so exchanged (provided that, in case of
clause (ii) only, such issuance does not violate any rules of the principal stock exchange on which
the Common Stock is then listed and that if the Company is required to obtain any required
shareholder approval prior to such issuance, the Company shall use its best efforts to obtain such
approval). The Warrantholder shall calculate any Fair Market Value required to be calculated
pursuant to this Section 14, which shall not be subject to the Appraisal Procedure.



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     15. No Impairment. The Company will not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by the Company,
but will at all times in good faith assist in the carrying out of all the provisions of this
Warrant and in taking of all such action as may be necessary or appropriate in order to protect the
rights of the Warrantholder.



     16. Governing Law. THIS WARRANT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF. EACH OF THE COMPANY AND WARRANTHOLDER AGREES ALL DISPUTES ARISING IN CONNECTION WITH THIS
WARRANT, OR THE BREACH, TERMINATION, INTERPRETATION OR VALIDITY THEREOF, SHALL BE FINALLY SETTLED
BY THE HONG KONG INTERNATIONAL ARBITRATION CENTRE (THE “HKIAC”) PURSUANT TO UNCITRAL RULES
WITH THE COMPANY, ON THE ONE HAND, BEING ENTITLED TO DESIGNATE ONE ARBITRATOR, AND WITH THE
WARRANTHOLDER, ON THE OTHER HAND, BEING ENTITLED TO DESIGNATE ONE ARBITRATOR, WHILE THE THIRD
ARBITRATOR WILL BE SELECTED BY AGREEMENT BETWEEN THE TWO DESIGNATED ARBITRATORS OR, FAILING SUCH
AGREEMENT, WITHIN TEN (10) CALENDAR DAYS OF INITIAL CONSULTATION BETWEEN THE TWO ARBITRATORS, BY
THE HKIAC PURSUANT TO ITS ARBITRATION RULES. IF ANY PARTY FAILS TO DESIGNATE ITS ARBITRATOR WITHIN
20 CALENDAR DAYS AFTER THE DESIGNATION OF THE FIRST OF THE THREE ARBITRATORS, THE HKIAC SHALL HAVE
THE AUTHORITY TO DESIGNATE ANY PERSON WHOSE INTERESTS ARE NEUTRAL TO THE COMPANY AND THE
WARRANTHOLDER AS THE SECOND OF THE THREE ARBITRATORS. THE ARBITRATION SHALL BE CONDUCTED IN
ENGLISH. TO THE EXTENT CONSISTENT WITH UNCITRAL RULES, EACH OF THE COMPANY AND WARRANTHOLDER
HERETO SHALL COOPERATE WITH THE OTHERS IN PROVISION OF INFORMATION DURING ANY DISCOVERY PROCESS
RELATING TO ARBITRATIONS IN CONNECTION WITH THIS WARRANT. THE COMPANY AND WARRANTHOLDER HERETO
FURTHER AGREE THAT, TO THE EXTENT CONSISTENT WITH UNCITRAL RULES, THEY SHALL BE ENTITLED TO SEEK
TEMPORARY AND PERMANENT INJUNCTIVE RELIEF FROM THE ARBITRATORS WITHOUT THE NECESSITY OF PROVING
ACTUAL DAMAGES AND WITHOUT POSTING A BOND OR OTHER SECURITY. EACH OF THE COMPANY AND THE
WARRANTHOLDER AGREES THAT NOTICE MAY BE SERVED UPON THE COMPANY AT THE ADDRESS IN SECTION 19 BELOW
AND UPON THE WARRANTHOLDER AT THE ADDRESS FOR THE WARRANTHOLDER SET FORTH IN THE REGISTRY
MAINTAINED BY THE COMPANY PURSUANT TO SECTION 9 HEREOF. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE COMPANY AND THE WARRANTHOLDER HEREBY UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THE WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.



     17. Binding Effect. This Warrant shall be binding upon any successors or assigns of
the Company.



     18. Amendments. This Warrant may be amended and the observance of any term of this
Warrant may be waived only with the written consent of the Company and the Warrantholder.



     19. Notices. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second business day following the date of dispatch if delivered by a recognized next day
courier service. All notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such notice.



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If to the Company, to:



ION Geophysical Corporation

2105 CityWest Blvd.

Suite 400

Houston, Texas 77042-2839

United States of America

Attention: Mr. David L. Roland

Facsimile: (+001-281) 879 3600





If to the Warrantholder, to the address set forth in the registry maintained by the Company
pursuant to Section 9 hereof.



     20. Entire Agreement. This Warrant and the forms attached hereto, the Warrant
Issuance Agreement and the Registration Rights Agreement contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior and contemporaneous
arrangements or undertakings with respect thereto.



[Remainder of page intentionally left blank]




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 In Witness Whereof, the Company has caused this Warrant to be duly executed by a

duly authorized officer.




Dated: October 27, 2009




	 	 	 	 	 
	 	ION Geophysical Corporation

 	 
	 	By:  	/s/ David L. Roland
 	 
	 	 	Name:  	David L. Roland 	 
	 	 	Title:  	Senior Vice President and General Counsel 	 
	 
	 	Attest:

 	 
	 	By:  	/s/ Debra A. Addington
 	 
	 	 	Name:  	Debra A. Addington 	 
	 	 	Title:  	Legal Assistant 	 
	 




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