exv10w2






Exhibit 10.2




RELEASE AGREEMENT




     This Release Agreement is entered into this 30th day of December, 2008 by and among (i) ION
Geophysical Corporation, a Delaware corporation (“ION”), (ii) 3226509 Nova Scotia Company,
a Nova Scotia unlimited liability company (“Buyer”), (iii) ARAM Systems Ltd., an Alberta
corporation (“ARAM”), (iv) Canadian Seismic Rentals Inc., an Alberta corporation
(“CSRI” and, together with ARAM, the “Acquired Entities”), (v) Maison Mazel Ltd.
(formerly known as 1236929 Alberta Ltd.) an Alberta corporation (“Maison Mazel”) and (vi)
the individuals and entities (including Maison Mazel) designated as “Sellers” on the signature
pages of this Release Agreement (each individually, a “Seller” and collectively,
“Sellers” and, together with the Acquired Entities, the “Seller Parties”). ION,
Buyer and the Seller Parties are sometimes referred to herein as the “Parties.”
Capitalized terms used herein, unless otherwise defined herein, shall have the respective meanings
ascribed thereto in the Purchase Agreement (as defined below).



W
I T N E S S E T H:




     WHEREAS, the Parties entered into that certain Amended and Restated Share Purchase Agreement,
dated as of September 17, 2008 (the “Purchase Agreement”), whereby ION agreed to purchase
from the Sellers certain issued and outstanding shares of ARAM and CSRI;



     WHEREAS, pursuant to that certain Assignment and Assumption Agreement dated as of September
17, 2008 by and between ION and Buyer, ION assigned all of its rights and delegated all of its
obligations under the Purchase Agreement to Buyer, but remained liable to the Sellers for all of
such delegated obligations;



     WHEREAS, contemporaneously with the execution and delivery of this Release Agreement, (i)
Buyer and Maison Mazel are amending and restating the terms of the Buyer Note pursuant to the terms
and conditions of that certain Amended and Restated Subordinated Promissory Note bearing even date
herewith (the “Amended and Restated Note”), (ii) ION and Maison Mazel are amending and
restating the terms of the Guaranty pursuant to the terms and conditions of that certain Amended
and Restated Guaranty bearing even date herewith (herein so called) and (iii) ION, Buyer and the
Acquired Entities are assigning to Maison Mazel their rights, title and interests in and to the
Income Tax Receivables in payment and satisfaction of Buyer’s and ION’s obligations under and
related to the Buyer Additional Note and the Additional Guaranty pursuant to the terms and
conditions of that certain Assignment Agreement bearing even date herewith (the “Assignment
Agreement”);



     WHEREAS, the Parties desire to modify certain of their respective rights and obligations with
respect to the requirement to deposit Escrow Funds, purchase price adjustments and indemnification,
under the Purchase Agreement; and



     WHEREAS, in furtherance of the Parties’ intentions, Buyer, on its own behalf and on behalf of
each of the Buyer Indemnified Parties, desires to release the Sellers of and from their obligations
to indemnify the Buyer Indemnified Parties for breaches of the representations and warranties
contained in the Purchase Agreement;



1









 





     NOW, THEREFORE, in consideration of the premises and for good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the Parties agree as follows:


1. Termination of Escrow Agreement. Concurrently with the execution and delivery of this
Release Agreement, ION, Buyer and Maison Mazel, acting through their respective Representatives,
shall deliver joint written instructions to the Escrow Agent to terminate the Escrow Agreement in
accordance with its terms; provided that the fees and expenses of the Escrow Agent are paid
in full in accordance with the terms of the Escrow Agreement. The Parties shall do all things
necessary or appropriate, and shall execute and deliver any and all such documents, instruments or
certificate, as may be reasonably required to evidence the termination of the respective parties’
obligations under the Escrow Agreement and the satisfaction of the parties’ liabilities thereunder.
Without limitation of the generality of the foregoing, (a) Buyer shall have no obligation to, and
shall not, deposit any amounts in escrow with the Escrow Agent; and (b) no principal, interest or
any other amounts payable on the Buyer Note (as such Buyer Note is amended and restated) shall be
deposited by the Buyer in escrow with Escrow Agent.



2. Release from Indemnification Provisions of Purchase Agreement. Effective as of the date
hereof, none of the Seller Parties shall have any liability for any Breach of their respective
representations and warranties contained in Section 2.2 or Article 3 of the Purchase Agreement or
in any certificate related to such representations and warranties (except any liability for any
fraudulent act or willful misconduct) and, without limiting the generality of the foregoing:





	 	a.	 	Buyer on its own behalf, and on behalf of each of the Buyer Indemnified Persons
(collectively the “Releasors”), hereby unconditionally releases and forever
discharges each of the Sellers and the Seller Indemnified Persons (the
“Releasees”) jointly and severally from any and all actions or causes of
actions, suits, debts, dues, sums of money, expenses, acts, omissions, claims, costs of
any nature, including costs on a solicitor and client basis, demands, contracts and
covenants, whether express or implied, and for damages, contribution or indemnity,
interest, loss or injury of every nature and kind, known or unknown which the
Releasors, or any of them, may hereto have had, may now have, or may hereinafter have
against the Releasees, or any of them, at law or in equity under any statute for or by
reason of any cause, matter or thing whatsoever arising out of, or related to, any
breach of the representation and warranties of the Sellers or the Seller Parties, or
any of them, contained in Section 2.2 or Article 3 of the Purchase Agreement or in any
certificate related to such representations and warranties (collectively, the
“Released Representations and Warranties”), except for any fraudulent act or
willful misconduct, which are not released hereby.
	 
	 	b.	 	Buyer will defend, indemnify and hold the Releasees, and each of them, harmless
from and against, and shall pay any, and all Damages suffered or incurred by the
Releasees, directly or indirectly, resulting from, relating to, arising out of or
attributable to any claim by the Releasors, or any of them, against the Releasees, or
any of them, in relation to the Released Representations and Warranties.




3. Final Adjustment of Aggregate Purchase Price under Purchase Agreement. The Purchase
Agreement currently provides in Section 1.5 thereof for the adjustment of the Aggregate


2









 






Purchase Price as more particularly set out therein. The Parties agree that the Aggregate Purchase
Price will be finally adjusted as follows:





	 	a.	 	The Buyer will deliver to the Sellers the Closing Statement required to be
delivered as referred to in Section 1.5(e) of the Purchase Agreement on a date
that is within ten (10) Business Days after the Income Tax Receivables assigned to
Maison Mazel pursuant to the Assignment Agreement are received by ION, Buyer and the
Acquired Entities, or any of them, and paid over to and received by Masion Mazel (the
“Receipt Date”);
	 
	 	b.	 	In preparing the Closing Statement, the Buyer will show the amount of any
Income Tax Receivables Adjustment as required pursuant to Section 8 of the
Assignment Agreement;
	 
	 	c.	 	The Aggregate Purchase Price will be adjusted as required by Section
1.5(b) of Purchase Agreement and Section 8 of the Assignment Agreement in
accordance with the provisions set forth in Sections 1.5(f), 1.5(g), 1.5(h),
1.5(i), 1.5(j), 1.5(k) and 1.5(l) of the Purchase Agreement and, in the case of any
Income Tax Receivables Adjustment, in accordance with Section 8 of the
Assignment Agreement, except that:






	 	i.	 	with respect to any adjustments required under Section
1.5(i), the date as of which the Parties shall review the collection
history of the outstanding Receivables accounts of the Acquired Entities and
their subsidiaries and compare such collection history to the Allowance for
Doubtful Receivables as of the Closing Date shall be the Receipt Date instead
of the date provided for in the Purchase Agreement; and
	 
	 	ii.	 	with respect to any adjustments required under Section
1.5(j), the date as of which the Parties shall review CSA Collections and
Net Recoveries regarding the CSA Receivables accounts referred to in
Section 1.5(j) shall be the Receipt Date instead of the date provided
for in the Purchase Agreement;






	 	d.	 	After the amounts of all such adjustments are determined, (i) any net amount
owing to the Sellers resulting from such adjustments (together with any interest owing
to the Sellers pursuant to Section 1.5(o) of the Purchase Agreement) shall be
paid, dollar-for-dollar, to the Sellers by Buyer; and (ii) any net amount owing to
Buyer resulting from such adjustments (together with any interest owing to Buyer
pursuant to Section 1.5(o) of the Purchase Agreement) shall be set off against
amounts payable to the Buyer under the Amended and Restated Note; and such payment or
set-off, as the case may be, shall be made within ten (10) Business Days after the date
of receipt by the Sellers of the Closing Statement from Buyer or the resolution of any
dispute in relation thereto pursuant to Section 1.6, as the case may be.




3









 












	 	e.	 	For greater certainty, Section 1.6 of the Purchase Agreement will apply
to the final adjustment of the Aggregate Purchase Price contemplated by this
Section 3.




The adjustments to the Aggregate Purchase Price provided for this Section 3 are intended to
be the full and final adjustment between Buyer and the Sellers of the Aggregate Purchase Price
under Section 1.5 of the Purchase Agreement, as modified by the Assignment Agreement to
provide for the Income Tax Receivables Adjustment, and Buyer and the Sellers agree, there will be
no further adjustments to the Aggregate Purchase Price under Section 1.5 of the Purchase
Agreement.



4. Purchase Agreement. Any terms and conditions of the Purchase Agreement that are
inconsistent with or contrary to the provisions of Sections 2 or 3 of this Release
Agreement shall be, and they hereby are, modified and amended to the extent necessary to give full
force and effect to the provisions of Section 2 and 3 hereof. However, nothing contained
herein shall relieve or excuse the Seller Parties of or from any of their obligations or
liabilities under the Purchase Agreement or otherwise for any breach or violation of their
covenants contained in the Purchase Agreement, nor any of their respective liabilities or
obligations with respect to any purchase price adjustments benefiting Buyer that are required
pursuant to the terms of Section 1.5 of the Purchase Agreement, in each case after giving full
effect to Sections 2 and 3 of this Release Agreement. The Parties agree to use their
respective Best Efforts to amend the terms of the Purchase Agreement to more fully set forth and
reflect the provisions of this Release Agreement, and agree to execute and deliver such other
documents or instruments and perform such actions and do such things to more fully effectuate the
terms of this Release Agreement. The Parties further agree that the releases granted under
Sections 2 and 3 of this Release Agreement are not conditional on the amendment of the
terms of the Purchase Agreement or the execution or delivery of the documents or instruments or the
performance of the actions or the doing of the thing contemplated by the immediately preceding
sentence and any failure to make any such amendments or any failure by the Releasees, or any of
them, to execute or deliver any such document or instrument or to perform any such action or do any
such thing shall not affect the respective rights and obligations of the Parties under Section
2 or 3 of this Release Agreement.



5. Representations and Warranties by Buyer. Buyer represents and warrants to Sellers that
the statements contained in this Section 5 are correct and complete.





	 	a.	 	Buyer has the corporate power and authority to execute and deliver this Release
Agreement and the Amended and Restated Note and to perform its obligations under this
Release Agreement and the Amended and Restated Note. Buyer has taken all action
necessary to authorize the execution and delivery of this Release Agreement and the
Amended and Restated Note and the performance of Buyer’s obligations hereunder and
thereunder, including the release hereunder of the Seller Indemnified Parties, and each
of them, from the Released Representation and Warranties.
	 
	 	b.	 	Buyer has the right to grant to the Releasees, and each of them, on its own
behalf and on behalf of the other Releasors, the release from the Released
Representation and Warranties hereby granted.




4









 












	 	c.	 	This Release Agreement has been duly authorized, executed and delivered by, and
is Enforceable against, Buyer and each of the other Releasors, and the Amended and
Restated Note, when executed and delivered by Buyer, will be duly authorized, executed
and delivered by, and be Enforceable against, Buyer and guaranteed by ION under the
Amended and Restated Guaranty, in accordance with their respective terms.
	 
	 	d.	 	The execution and delivery of this Release Agreement and the Amended and
Restated Note and the performance by Buyer of its obligations hereunder and thereunder
and the release hereunder of the Releasees from the Released Representations and
Warranties will not (a) Breach any Law or Order to which Buyer is subject or any
provision of its Organizational Documents; (b) Breach any Contract, Order or Permit to
which Buyer is a party or by which it is bound or to which any of its assets is
subject; or (c) require any Consent.




6. Successors. All of the terms, agreements, covenants, representations, warranties and
conditions of this Release Agreement are binding upon, and inure to the benefit of and are
enforceable by, the Parties (and in the case of the Sellers, their respective spouses) and their
respective successors, assigns, heirs, estates and personal representatives.



7. Benefit. Nothing in this Release Agreement, expressed or implied, is intended to confer
on any Person other than the Parties hereto, any claims, rights, remedies, obligations or
liabilities under or by reason of this Release Agreement (except for any third-party beneficiary
rights of the Buyer Indemnified Persons and the Seller Indemnified Persons).



8. Notices. All notices, requests, demands, claims, instructions and other communications
hereunder shall be in writing. Any notice, request, demand, claim, instruction or other
communication to be given hereunder by any Party to the other Parties shall be sent by facsimile
(with confirmation received of the recipient’s number) to the number stated below or shall be
delivered personally or sent by registered or certified mail (postage prepaid and return receipt
requested) to the address stated below.




If to Buyer and to the Acquired Entities:




ION Geophysical Corporation

2105 CityWest Blvd, Suite 400

Houston, Texas 77042-2839

Attention: R. Brian Hanson

Facsimile: (281) 879-3674




Copy to (which shall not constitute notice):




ION Geophysical Corporation

2105 CityWest Blvd, Suite 400

Houston, Texas 77042-2839

Attention: David L. Roland

Facsimile: (281) 879-3600




5









 





And




Mayer Brown LLP

700 Louisiana Street, Suite 3400

Houston, Texas 77002

Attention: Marc H. Folladori

Facsimile: (713) 238-4696




If to Sellers




161 Lochend Drive

Cochrane, Alberta T4C 2H2

Attention: Donald G. Chamberlain

Facsimile: (403) 932-2438




Copy to (which shall not constitute notice):




Borden Ladner Gervais LLP

1000 Canterra Tower

400 Third Avenue S.W.

Calgary, Alberta T2P 4H2

Attention: David C. Whelan

Facsimile: (403) 266-1395



or at such other facsimile number or address for a Party as shall be specified by like notice. Any
notice which is delivered personally in the manner provided herein shall be deemed to have been
duly given to the Party to whom it is directed upon actual receipt by such Party. Any notice which
is sent by facsimile or addressed and mailed in the manner herein provided shall be conclusively
presumed to have been duly given to the Party to which it is addressed on the date indicated on the
facsimile confirmation or the postal receipt. Any Party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.



9. Submission to Jurisdiction. Each Party irrevocably and unconditionally attorns to the
jurisdiction of the courts of the Province of Alberta in any Action arising out of or relating to
this Release Agreement and agrees that all claims in respect of the Action may be heard and
determined in any such court. Each Party also agrees not to bring any Action arising out of or
relating to this Release Agreement in any other court. Each Party waives any objection to venue in
any such Action and any defense of inconvenient forum to the maintenance of any Action so brought
and waives any bond, surety or other security that might be required of any other Party with
respect thereto and waives any right to elect trial by jury. Any Party may make service on any
other Party by sending or delivering a copy of the process to the Party to be served at the address
and in the manner provided for the giving of notices in Section 8. Nothing in this
Section 9 will affect the right of any Party to bring any Action arising out of or relating
to the Transaction Documents to which it is a party in any other court or to serve legal process in
any other manner permitted at Law or in equity. Each Party agrees that a final judgment in any


6









 






Action so brought shall be conclusive and may be enforced by Action on the judgment or in any other
manner provided at Law or in equity.



10. Counterparts. This Release Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which together will constitute one and the same
instrument.



11. Headings. The article and section headings contained in this Release Agreement are
inserted for convenience only and shall not affect in any way the meaning or interpretation of this
Release Agreement.



12. Governing Law. This Release Agreement and obligations of the Parties hereunder will be
governed by and construed in accordance with the laws of the Province of Alberta, without giving
effect to any choice of Law principles thereof.



13. Amendments and Waivers. No amendment, modification, replacement, termination or
cancellation of any provision of this Release Agreement will be valid, unless the same shall be in
writing and signed by Buyer and Sellers. No waiver by any Party of any default, misrepresentation
or breach of warranty or covenant hereunder, whether intentional or not, may be deemed to extend to
any prior or subsequent default, misrepresentation or Breach of warranty or covenant hereunder or
affect in any way any rights arising because of any prior or subsequent such occurrence.



14. Construction. The Parties have participated jointly in the negotiation and drafting of
this Release Agreement. If an ambiguity or question of intent or interpretation arises, this
Release Agreement shall be construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party because of the authorship of any
provision of this Release Agreement. Any reference to any federal, provincial, state, local or
foreign Law shall be deemed also to refer to such Law as amended and all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word “including” means
“including without limitation.”



15. Binding Effect. All of the terms of this Release Agreement, as amended from time to
time, shall be binding upon, inure to the benefit of and be enforceable by the respective
successors, assigns, heirs, estates and personal representatives of Buyer and Sellers and each of
them.




[The pages immediately following this page are the signature pages]




7









 








     IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first above written.



	 	 	 	 	 	 	 
	 

	 	ION:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ION GEOPHYSICAL CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ David L. Roland 	 	 
	 

	 	Name:
	 	 

David L. Roland
	 	 
	 

	 	Title:
	 	 Senior Vice President and General Counsel	 	 
	 
	 	 	 	 	 	 
	 

	 	BUYER:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	3226509 NOVA SCOTIA COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ David L. Roland 	 	 
	 

	 	Name:
	 	 

David L. Roland
	 	 
	 

	 	Title:
	 	 Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	ACQUIRED ENTITIES:	 	 
	 
	 	 	 	 	 	 
	 	 	ARAM SYSTEMS LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ David L. Roland 	 	 
	 

	 	Name:
	 	 
David
L. Roland	 	 
	 

	 	Title:
	 	 Director	 	 
	 
	 	 	 	 	 	 
	 	 	CANADIAN SEISMIC RENTALS INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ David L. Roland 	 	 
	 

	 	Name:
	 	 
 David
L. Roland	 	 
	 

	 	Title:
	 	 Vice President	 	 






8









 






	 	 	 	 	 	 	 
	 	 	SELLERS:	 	 
	 
	 	 	 	 	 	 
	 	 	DONALD G. CHAMBERLAIN	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Donald G. Chamberlain 	 	 
	 

	 	Name:
	 	 

Donald G. Chamberlain, individually
	 	 
	 
	 	 	 	 	 	 
	 	 	CHRISTOPHER M. CHAMBERLAIN	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Christopher M. Chamberlain 	 	 
	 

	 	Name:
	 	 

Christopher M. Chamberlain, individually
	 	 
	 
	 	 	 	 	 	 
	 	 	DANIEL C. O’REILLY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Daniel C. O’Reilly 	 	 
	 

	 	Name:
	 	 
 Daniel
C. O’Reilly, individually	 	 
	 
	 	 	 	 	 	 
	 	 	MAISON MAZEL LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Donald G. Chamberlain 	 	 
	 

	 	Name:
	 	 
 Donald
G. Chamberlain	 	 
	 

	 	Title:
	 	 President	 	 
	 
	 	 	 	 	 	 
	 	 	BLUE SKY SERVICES INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Daniel C. O’Reilly  	 	 
	 

	 	Name:
	 	 
 Daniel
C. O’Reilly	 	 
	 

	 	Title:
	 	 President	 	 







9