Document:

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                                                                   Exhibit 10.21

                               EXCHANGE AGREEMENT

         This Exchange Agreement, dated as of the 6th day of August, 2002 (this
"Agreement"), is by and between Input/Output, Inc., a Delaware corporation (the
"Company"), and SCF-IV, L.P., a Delaware limited partnership ("SCF").

                                   WITNESSETH:

         WHEREAS, SCF is the legal and beneficial owner of (i) 40,000 shares of
the Company's Series B Preferred Stock, par value $0.01 per share ("Series B
Shares"), and (ii) 15,000 shares of the Company's Series C Preferred Stock, par
value $0.01 per share ("Series C Shares");

         WHEREAS, the Company and SCF have agreed, in accordance with the terms
of this Agreement, for SCF to transfer and assign the Series B Shares and Series
C Shares owned by SCF to the Company in exchange for (i) $30 million in cash
payable by the Company to SCF, (ii) an unsecured promissory note of the Company
payable to SCF in the original principal amount of $31 million maturing on May
7, 2004 and (iii) a warrant having a three-year term to purchase 2,673,517
shares of the Company's common stock, par value $.01 per share ("Common Stock"),
at an exercise price of $8.00 per share;

         NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements contained herein, and the receipt of such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

                                    ARTICLE 1
                                  THE EXCHANGE

         1.1 Exchange. Contemporaneously with the execution and delivery hereof,
but subject in all respects to the terms and conditions hereof, (a) SCF has
sold, conveyed and transferred (and by these presents sells, conveys and
transfers) the Series B Shares and Series C Shares beneficially owned by it to
the Company, and the Company hereby acknowledges receipt of the Series B Shares
and the Series C Shares in exchange for the consideration recited herein, and
(b) the Company has sold, conveyed and transferred (and by these presents sells,
conveys and transfers) to SCF (i) $30 million in cash (payable by wire transfer
of same day funds from the Company to an account designated in writing by SCF to
the Company), (ii) an unsecured promissory note of the Company payable to SCF
(the "Note") in the form set forth in Exhibit A attached hereto and (iii) a
warrant to purchase 2,673,517 shares of Common Stock (the "Warrant") in the form
set forth in Exhibit B attached hereto, and SCF hereby acknowledges receipt of
such consideration. In addition, the Company and SCF shall contemporaneously
with the execution and delivery hereof, execute and deliver a registration
rights agreement regarding the registration of the shares of Common Stock to be
issued upon exercise of the Warrant (the "Registration Rights Agreement")
substantially in the form set forth in Exhibit C attached hereto.

         1.2 Deliveries. Contemporaneously with the execution and delivery
hereof on this date (the "Closing Date"), the parties shall make the following
deliveries to each other.

                  (a)      SCF shall deliver to the Company:

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                           (1) the certificates evidencing all of the Series B
         Shares and Series C Shares beneficially owned by SCF, together with
         stock powers duly executed in blank for each certificate;

                           (2) a duly executed counterpart of the Registration
         Rights Agreement; and

                           (3) a duly executed resignation of David C. Baldwin
         from the Board of Directors of the Company and any and all other
         offices and positions of the Company (and its subsidiaries and
         affiliates) which he holds.

                  (b)      The Company shall deliver to SCF:

                           (1) $30 million in cash by wire transfer of same day
         funds;

                           (2) the duly executed Note;

                           (3) the duly executed Warrant; and

                           (4) the duly executed counterpart of the Registration
         Rights Agreement.

                                    ARTICLE 2
                               REPRESENTATIONS AND
                            WARRANTIES OF THE COMPANY

         The Company hereby represents and warrants to SCF as follows:

         2.1 Organization, Standing and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own its
properties and carry on its business as now being conducted. The Company is duly
qualified or licensed to transact business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than such
jurisdictions where the failure to be so qualified or licensed or to be in good
standing, individually or in the aggregate, has not had and could not reasonably
be expected to have a material adverse effect on the business, operations,
properties, condition (financial or otherwise), results of operations, assets,
liabilities or prospects of the Company and its subsidiaries, taken as a whole.

         2.2      Authority and Approvals.

                  (a) The Company has all requisite corporate power and
authority to enter into this Agreement and each of the other agreements
contemplated hereby and to consummate each of the transactions and perform each
of the obligations contemplated hereby and thereby. The execution and delivery
of this Agreement and each of the other agreements and instruments contemplated
hereby and the consummation of each of the transactions and the performance of
each of the obligations contemplated hereby and thereby have been duly
authorized by all

                                      -2-
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necessary corporate action on the part of the Company. This Agreement and the
other agreements and instruments contemplated hereby have been duly executed and
delivered by the Company. This Agreement and each of the other agreements and
instruments contemplated hereby constitute a valid and binding obligation of the
Company enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or in law).

             (b) The execution and delivery of this Agreement and the other
agreements and instruments contemplated hereby and the consummation of the
transactions contemplated hereby and thereby do not conflict with or violate
(i) the organizational documents of the Company, (ii) any material agreement to
which the Company is a party or to which its properties are subject or (iii) any
law applicable to it, in each case in a manner that could reasonably be expected
to have a material adverse effect on the business, operations, properties,
condition (financial or otherwise), results of operations, assets, liabilities
or prospects of the Company and its subsidiaries, taken as a whole.

             (c) No approval, authorization or consent from any governmental
entity is required by or with respect to the Company in connection with the
execution and delivery of this Agreement or any other agreement or instrument
contemplated hereby by the Company or the consummation by the Company of the
transactions contemplated hereby or thereby, except for any such approvals,
authorizations or consents, the failure of which to be made or obtained (i) has
not had and could not reasonably be expected to have a material adverse effect
on the business, operations, properties, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole and (ii) has
not impaired and could not reasonably be expected to impair the ability of the
Company to perform its obligations under this Agreement or any other agreement
or instrument contemplated hereby in any material respect.

         2.3 No Brokers or Finders. No agent, broker, finder or investment or
commercial banker, or other person or firm engaged by or acting on behalf of the
Company in connection with the negotiation, execution or performance of this
Agreement is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement, other than any such fees or
commissions paid to Simmons & Co. and such other fees and commissions that have
been disclosed to SCF and as to which the Company shall have full
responsibility.

         2.4 Status of Securities. The issuance of the Warrant and the
reservation and issuance of the shares of Common Stock to be issued by the
Company upon exercise or conversion of the Warrant (the "Underlying Shares")
have been duly authorized by all necessary corporate action on the part of the
Company. The Warrant and the Underlying Shares, when issued upon exercise or
conversion of the Warrant in accordance with the terms thereof, will be validly
issued, fully paid and non-assessable. The issuance of the Warrant and the
issuance and sale of the Underlying Shares will not be subject to the preemptive
rights of any person.

         2.5 No Other Representations. Notwithstanding anything to the contrary
contained in this Agreement, it is the express understanding of the Company that
SCF is not making any

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representation or warranty whatsoever, express or implied, other than those
representations and warranties of SCF expressly set forth in this Agreement.

                                    ARTICLE 3
                               REPRESENTATIONS AND
                                WARRANTIES OF SCF

         3.1 Organization, Standing and Power. SCF is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite partnership power and authority to own, lease and
operate its properties and to carry on its business as now being conducted and
to execute and deliver this Agreement and the other agreements contemplated
hereby to which SCF is a party and to consummate the transactions contemplated
hereby and thereby.

         3.2      Authority and Approvals.

                  (a) The execution and delivery of this Agreement and the other
agreements contemplated hereby to which SCF is a party have been duly and
properly authorized by all necessary partnership action on the part of SCF. This
Agreement and the other agreements contemplated hereby to which it is a party
have been duly executed and delivered by SCF and constitute the valid and
legally binding obligations of SCF, enforceable against it in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

                  (b) No approval, authorization or consent from any
governmental entity is required by or with respect to SCF in connection with the
execution and delivery of this Agreement or any other agreement contemplated
hereby by SCF or the consummation by SCF of the transactions contemplated hereby
or thereby, except for any such approvals, authorizations or consents the
failure of which to be made or obtained has not impaired and could not
reasonably be expected to impair the ability of SCF to perform its obligations
under this Agreement or any other agreement contemplated hereby in any material
respect.

         3.3 Series B Shares and Series C Shares. SCF has good title to the
Series B Shares and the Series C Shares, free and clear of any lien, claim,
security interest or other encumbrance, including, without limitation, any
restriction on transfer and any claim of any creditor, partner or affiliate of
SCF on the Series B Shares or the Series C Shares. Upon exchange of the Series B
Shares and the Series C Shares as provided in this Agreement, the Company will
acquire good title to the Series B Shares and the Series C Shares free and clear
of any lien, claim, security interest or other encumbrance.

         3.4 No Brokers or Finders. No agent, broker, finder or investment or
commercial banker, or other person or firm engaged by or acting on behalf of SCF
in connection with the negotiation, execution or performance of this Agreement
is or will be entitled to any brokerage or finder's or similar fee or other
commission as a result of this Agreement, other than any such

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fees or commissions that have been disclosed to the Company and as to which SCF
shall have full responsibility.

         3.5 No Other Representations. Notwithstanding anything to the contrary
contained in this Agreement, it is the express understanding of SCF that the
Company is not making any representation or warranty whatsoever, express or
implied, other than those representations and warranties of the Company
expressly set forth in this Agreement.

                                    ARTICLE 4
                           SECURITIES LAWS PROVISIONS

         4.1 Investment Intent. The Note, the Warrant and the Underlying Shares
will be acquired for its own account for investment and with no intention of
distributing or reselling such Warrant or such Underlying Shares or any part
thereof or interest therein in any transaction which would be in violation of
the securities laws of the United States of America or any applicable state or
any foreign country or jurisdiction.

         4.2 Status. SCF covenants and agrees with the Company that at the date
hereof, it is an accredited investor as defined in Rule 501(a) under the United
States Securities Act of 1933, as amended (the "Securities Act"), and has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the Company and an investment in the Warrant and the
Underlying Shares, and is able to bear the economic risk of such investment.

         4.3 Access to Information. SCF represents and acknowledges that it (a)
has had access to and the opportunity to review the Company's properties,
assets, financial statements, contracts and other books and records and has made
such investigation with respect thereto as it deems necessary to enter into the
transactions contemplated hereby, (b) has been afforded the opportunity to ask
appropriate representatives of the Company questions concerning the business,
assets, financial condition and prospects of the company and (c) has been solely
responsible for its own due diligence investigation of the Company and its
business, for its own analysis of the merits and risks of an investment in the
Warrant and the Underlying Shares, and for its own analysis of the terms of the
investment in the Warrant and the Underlying Shares.

         4.4 Transfer Restrictions. If SCF should decide to dispose of the Note,
the Warrant or any of the Underlying Shares, SCF understands and agrees that it
may do so only pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration under the
Securities Act. In connection with any offer, resale, pledge or other transfer
(individually and collectively, a "Transfer") of the Note, the Warrant or any of
the Underlying Shares other than pursuant to an effective registration
statement, the Company may require that the transferor of the Note, the Warrant
or any such Underlying Shares provide to the Company an opinion of counsel which
opinion and counsel shall be reasonably satisfactory to the Company, to the
effect that such Transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
and any applicable state or foreign securities laws. SCF agrees to the
imprinting, so long as appropriate, of

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substantially the following legend on the Note, the Warrant and certificates
representing any of the Underlying Shares:

                  THE SECURITIES (THE "SECURITIES") EVIDENCED HEREBY HAVE NOT
         BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
         AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
         HOLDER AGREES THAT IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE
         TRANSFER (INDIVIDUALLY AND COLLECTIVELY, A "TRANSFER") THE SECURITIES
         EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
         STATEMENT UNDER THE SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION
         FROM REGISTRATION UNDER THE SECURITIES ACT. IF THE PROPOSED TRANSFER IS
         TO BE MADE OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST,
         PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AND THE TRANSFER AGENT
         SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
         REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
         TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE OR FOREIGN
         SECURITIES LAW.

         The legend set forth above may be removed if and when the Note, the
Warrant or the Underlying Shares, as the case may be, are disposed of pursuant
to an effective registration statement under the Securities Act or the opinion
of counsel referred to above has been provided to the Company. The Note, the
Warrant and the share certificates representing the Underlying Shares shall also
bear any additional legends required by applicable federal, state or foreign
securities laws, which legends may be removed when, in the opinion of counsel to
the Company, the same are no longer required under the applicable requirements
of such securities laws. SCF agrees that, in connection with any Transfer of the
Note, the Warrant or any of the Underlying Shares by it pursuant to an effective
registration statement under the Securities Act, it will comply with all
prospectus delivery requirements of the Securities Act. The Company makes no
representation, warranty or agreement as to the availability of any exemption
from registration under the Securities Act with respect to the Note, the Warrant
or any resale of the Underlying Shares.

         4.5      Indemnification.

                  (a) The Company agrees to indemnify SCF and its Affiliates (as
defined below) and hold SCF and its Affiliates harmless from and against any and
all liabilities, losses, damages, costs and expenses of any kind (including,
without limitation, the reasonable fees and disbursements of SCF's counsel in
connection with any investigative, administrative or judicial proceeding), which
may be incurred by SCF or such Affiliates as a result of any claims made against
SCF or such Affiliates by any person that relate to or arise out of (i) any
breach by the

                                      -6-
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Company of any of its representations, warranties or covenants contained in this
Agreement, the Note or the Warrant, or (ii) any litigation, investigation or
proceeding instituted by any person with respect to this Agreement, the Note,
the Warrant or the Underlying Shares (excluding, however, any such litigation,
investigation or proceeding which arises solely from the acts or omissions of
SCF or its Affiliates). Notwithstanding anything to the contrary above, it is
expressly understood between the parties hereto that the Company pursuant to
this Section 4.5 shall not be responsible for or assume any of the investment
risk associated with any securities purchased hereunder. For the purposes of
this Section 4.5(a), "Affiliate" means, with respect to any person, any other
person directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such person; for the purposes of this
definition, the term "control" (and the correlative terms "controlling,"
"controlled by" and "under common control with") means possession of the power,
whether by contract, equity ownership or otherwise, to direct the policies or
management of a person.

                  (b) Any person entitled to indemnification hereunder will (i)
give prompt notice to the Company of any claim with respect to which it seeks
indemnification (but omission of such notice shall not relieve the Company from
liability hereunder except to the extent that it is actually prejudiced by such
failure to give notice) and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest may exist between such indemnified party and the
Company with respect to such claim, permit the Company to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party. If
such defense is not assumed by the Company, the Company will not be subject to
any liability for any settlement made without its consent (but such consent will
not be unreasonably withheld). The Company will not consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of an unconditional release from all liability in respect to such claim or
litigation. If the Company elects not to or is not entitled to assume the
defense of a claim, it will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified with respect to such claim,
unless an actual conflict of interest exists between such indemnified party and
any other of such indemnified parties with respect to such claim, in which event
the Company will be obligated to pay the fees and expenses of such additional
counsel or counsels.

                                    ARTICLE 5
                                  MISCELLANEOUS

         5.1 No Waiver; Modification in Writing. No failure or delay on the part
of the Company or SCF in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given without the written consent of the Company
and SCF. Any amendment, supplement or modification of or to any provision of
this Agreement, or any waiver of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for which
made or given. Except where notice is specifically required by this

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Agreement, no notice to or demand on any party hereto in any case shall entitle
the other party to any other or further notice or demand in similar or other
circumstances.

         5.2 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of applicable law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated herein are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated herein are
consummated as originally contemplated to the fullest extent possible.

         5.3 Fees and Expenses. Each party shall be responsible for its own
expenses and the expenses of its legal and other advisors in conjunction with
the negotiation, execution and performance of this Agreement.

         5.4 Parties in Interest. This Agreement shall be binding upon and,
except as provided below, inure solely to the benefit of each party hereto and
their successors and assigns, and noting in this Agreement, express or implied,
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.

         5.5 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by facsimile or
mailed by registered or certified mail (return receipt requested) or Federal
Express or another recognized overnight courier to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

                  (a)      If to SCF, to:

                           SCF-IV, L.P.
                           600 Travis, Suite 6600
                           Houston, Texas  77002
                           Attention:  Anthony DeLuca
                           Facsimile:  (713) 227-7850

                  (b)      If to the Company, to:

                           Input/Output, Inc.
                           12300 Parc Crest Drive
                           Stafford, Texas  77477
                           Attention:  Mr. C. Robert Bunch
                           Facsimile:  (281) 879-3632

         Any of the above addresses may be changed at any time by notice given
as provided above; provided, however, that any such notice of change of address
shall be effective only upon

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receipt. All notices, requests or instructions given in accordance herewith
shall be deemed received on the date of delivery, if hand delivered, on the date
of receipt, if telecopies, three business days after the date of mailing, if
mailed by registered or certified mail, return receipt requested, and one
business day after the date of sending, if sent by Federal Express or other
recognized overnight courier.

         5.6 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.

         5.7 Entire Agreement. This Agreement (including the Exhibits hereto)
and the other documents contemplated herein constitute the entire agreement of
the parties hereto with respect to the subject matter hereof and thereof and
supersede all prior agreements, letters of intent and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and thereof.

         5.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAW PROVISIONS.

         5.9 Public Announcements. The Company and SCF shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to this Agreement or the transactions contemplated hereby, except
for statements required by law or by any listing agreements with or rules of any
national securities exchange or made in disclosures reasonably determined as
required to be filed pursuant to the applicable law.

         5.10 Assignment. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any of the parties
hereto, whether by operation of law or otherwise.

         5.11 Headings. The headings of this Agreement are for convenience of
reference only and are not part of the substance of this Agreement.

         5.12 Termination of Prior Registration Rights Agreement. The parties
hereto agree that the Purchase Agreement dated April 21, 1999 and the
Registration Rights Agreement dated May 7, 1999, each between the Company and
SCF, are hereby terminated and of no further force or effect.

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<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer as of the date first
written above.

                                         INPUT/OUTPUT, INC.

                                         By       /s/ C. Robert Bunch
                                         Name:    C. Robert Bunch
                                         Title:   Vice President

                                                     SCF-IV, L.P.

                                         By:  SCF-IV, G.P., Limited Partnership,
                                         its general partner

                                         By: L.E. Simmons & Associates,
                                         Incorporated, its general partner

                                         By:      /s/ Andrew L. Waite
                                         Name:    Andrew L. Waite
                                         Title:   Managing Director

                                      -10-<PAGE>
                                                                   EXHIBIT 10.22

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY
STATE SECURITIES OR BLUE SKY LAWS (COLLECTIVELY, THE "ACTS") NOR IS ANY SUCH
REGISTRATION OR QUALIFICATION CONTEMPLATED. THIS PROMISSORY NOTE MAY NOT BE SOLD
OR OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS REGISTERED OR
QUALIFIED UNDER THE APPROPRIATE ACTS OR AN OPINION OF COUNSEL IS RECEIVED BY THE
MAKER (WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE MAKER)
TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. THE HOLDER OF THIS
PROMISSORY NOTE HAS AGREED TO SUCH RESTRICTIONS.

                                 PROMISSORY NOTE

$31,000,000.00                    Houston, Texas                  August 6, 2002

         1. FOR VALUE RECEIVED, the undersigned, INPUT/OUTPUT, INC., a Delaware
corporation ("Maker"), hereby promises to pay to the order of SCF-IV, L.P., a
Delaware limited partnership, or its registered assigns ("Payee"), at 600
Travis, Suite 6600, Houston, Texas 77002 (or such other address as Payee shall
so notify Maker), on May 7, 2004 (the "Maturity Date"), in lawful money of the
United States of America, the principal amount of Thirty-One Million and No/100s
Dollars ($31,000,000.00), and to pay interest accruing on the unpaid principal
balance hereof from the date of the issuance of this Note until due and payable,
in accordance with Section 2 hereof.

         2. From August 6, 2002 through May 7, 2003, the unpaid principal
balance of this Note shall bear interest at a rate per annum of eight percent
(8%) ("Initial Interest Rate"). From May 8, 2003 until the Maturity Date, the
unpaid principal balance of this Note shall bear interest at a rate per annum of
thirteen percent (13%). Interest on the outstanding principal balance of this
Note shall be due and payable in quarterly installments commencing on November
7, 2002, and on each February 7, May 7, August 7 and November 7 thereafter until
the Maturity Date or until all outstanding principal and interest on this Note
shall have been paid in full. In the event that the principal amount of this
Note is not paid in full when such amount becomes due and payable, interest per
annum at the lesser of (i) the Maximum Rate (as defined below) and (ii) the
Initial Interest Rate plus ten percent (10%) shall continue to accrue on the
balance of any unpaid principal until such balance is paid.

         3. Whenever any payment to be made hereunder shall be stated to be due
on a day that is not a Business Day (as defined below), the payment shall be
made on the next succeeding Business Day and such extension of time shall be
included in the computation of the amount of interest due hereunder. Interest
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding the last day)
occurring in the period for which such interest is payable.

                                            /s/ CRB
                                           -------------------------------------
                                                Initials for Identification

                                  Page 1 of 9
<PAGE>

         4. Maker shall have the right and privilege of prepaying the
outstanding principal balance, plus accrued and unpaid interest thereon, in
whole or in part, at any time or from time to time without premium or penalty
and upon not less than two Business Days' notice to the holder hereof. All
amounts prepaid shall be applied first to accrued and unpaid interest and the
balance, if any, shall be applied to the payment of the principal amount.

         5. The terms set forth below shall have the meanings assigned to such
terms as used in this Note:

                  "Affiliate" shall mean with respect to any person, any other
         person directly, or indirectly through one or more intermediaries,
         controlling, controlled by or under common control with such person.

                  "Applicable Law" shall mean the law in effect from time to
         time and applicable to the transactions between Payee and Maker
         pursuant to this Note which lawfully permits the charging and
         collection of the highest permissible lawful non-usurious rate of
         interest on such transactions, including laws of the State of Texas,
         and to the extent controlling and providing for a higher lawful rate of
         interest, laws of the United States of America. It is intended that the
         Texas Finance Code shall be included in the laws of the State of Texas
         in determining Applicable Law and, for the purpose of applying the
         Texas Finance Code, the interest ceiling applicable to transactions
         under the Texas Finance Code shall be the applicable weekly ceiling
         from time to time in effect as described in and computed in accordance
         with Section 303 of the Texas Finance Code (V.T.C.A, Finance Code
         ss.303). Chapter 346 of the Texas Finance Code (which regulates certain
         revolving credit loan accounts and revolving tri-party accounts) shall
         not apply to this Note.

                  "Business Day" shall mean any day on which banks are open for
         general banking business in the State of Texas, other than on Saturday,
         Sunday, a legal holiday or any other day on which banks in the State of
         Texas are required or authorized by law or executive order to close.

                  "Debt" shall mean, as of the date of the consolidated balance
         sheet contained in the most recent Annual Report on Form 10-K or
         Quarterly Report on Form 10-Q (as the case may be) filed by Maker with
         the Securities and Exchange Commission, without duplication and in each
         case as determined on a consolidated basis in accordance with GAAP, the
         aggregate amount of (i) obligations created or assumed by Maker or a
         subsidiary for the repayment of borrowed money, (ii) all indebtedness
         of Maker or a subsidiary under a revolving credit or similar agreement
         obligating the lender or lenders to extend credit, (iii) all
         obligations under leases which shall have been, in accordance with
         GAAP, initially classified by Maker as capital leases on the balance
         sheet of Maker or a subsidiary, and (iv) all guarantees of Debt of
         other persons by Maker or a subsidiary or in which Maker or a
         subsidiary otherwise assures a creditor against loss of the debtor to
         the extent of the lesser of the amount of such Debt and the

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         maximum stated amount of such guarantee or assurance against loss
         (except that guarantees by Maker of Debt of a subsidiary and
         guarantees of a subsidiary of Debt of Maker or any other subsidiary
         shall not be double-counted for purposes of Section 6(a) of this
         Note); provided, however, the term "Debt" shall specifically not
         include any indebtedness or other obligations related to (i) the
         sale/leaseback involving the Maker's headquarters in Stafford, Texas
         entered into by the Maker with NL Ventures III Stafford, L.P. on
         August 20, 2001 or (ii) the Common Stock Purchase Warrant issued on
         the date hereof by the Maker to the Payee.

                  "Dividend Payment" shall mean dividends (in cash or Property)
         on, or other payments or distributions on account of, or the purchase
         or redemption of, any shares of any class of capital stock of Maker,
         but excluding dividends payable in respect of shares of common stock of
         Maker through the issuance of additional shares of common stock of
         Maker, and any redemption or exchange of any capital stock of Maker for
         common stock of Maker.

                  "GAAP" shall mean United States generally accepted accounting
         principles.

                  "Maximum Rate" shall mean the maximum lawful non-usurious rate
         of interest, if any, which Payee is permitted to charge Maker on the
         loan evidenced by this Note from time to time under Applicable Law.

                  "Net Worth" shall mean, as of the date of the consolidated
         balance sheet contained in the most recent Annual Report on Form 10-K
         or Quarterly Report on Form 10-Q filed by Maker with the Securities and
         Exchange Commission, stockholders' equity of Maker and its
         subsidiaries, as determined on a consolidated basis in accordance with
         GAAP.

                  "Person" shall mean any individual, partnership, joint
         venture, firm, corporation, limited liability company or partnership,
         association, trust or other enterprise or any government or political
         subdivision or any agency, department or instrumentality thereof.

                  "Property" shall mean any right or interest in or to property
         or assets of any kind, whether real, personal or mixed and whether
         tangible or intangible and including capital stock or other ownership
         interests of any Person.

                  "Total Capitalization" shall mean the sum of Debt plus Net
         Worth.

                  "Unrestricted Cash" shall mean, as of any date, without
         duplication, cash, cash equivalents and the amount of any investments
         in non-Affiliates of Maker maturing within six months of the date of
         issuance or purchase thereof (or if such investments have no maturity
         date, which may, at the option of Maker, be redeemed for cash without
         penalty for full face value within six months), in each case as
         determined on a consolidated basis in accordance with GAAP and that is

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         not otherwise pledged, reserved, restricted or committed, as security
         or otherwise, under any contractual or legal obligation and with
         respect to which such cash, cash equivalents and investments may be
         used to pay this Note without contravening any contractual or legal
         obligation.

         6. Maker covenants and agrees that prior to the Maturity Date and until
payment in full of the indebtedness evidenced hereunder:

                  (a) Maker shall maintain a ratio of Debt to Total
         Capitalization that does not exceed 0.35 to 1.00; provided, however,
         Maker shall be permitted to maintain a ratio of Debt to Total
         Capitalization of greater than 0.35 to 1.00 so long as the Maker's
         Unrestricted Cash is greater than or equal to the remaining outstanding
         principal amount of this Note;

                  (b) Maker shall not declare or make any Dividend Payment,
         except that (i) Maker shall be permitted to repurchase shares of its
         common stock on the open market and in privately negotiated purchases,
         provided that the aggregate amount expended by Maker for repurchases of
         its common stock during the twelve (12) month period beginning on the
         date hereof and continuing until the first anniversary of the date
         hereof (and for each successive 12-month period thereafter) shall not
         exceed $5,000,000 with respect to any such 12-month period; and (ii)
         Maker shall be permitted to acquire shares of its common stock in
         connection with any surrender and delivery of such shares to Maker in
         payment of the exercise price or to pay withholding obligations by
         employees, directors and consultants in connection with their exercise
         of stock options under Maker's equity compensation or benefit plans as
         in effect from time to time;

                  (c) Within five (5) Business Days following the filing by the
         Maker of a Quarterly Report on Form 10-Q or an Annual Report on Form
         10-K with the Securities and Exchange Commission, the Maker shall
         deliver to the Payee a certificate of a senior financial officer of
         Maker to the effect that (i) no Event of Default has occurred and is
         continuing (or describing any such Event of Default), (ii) no breach of
         any covenant contained herein has occurred and is continuing (or
         describing any such breach) and (iii) setting forth in reasonable
         detail the computations necessary to determine whether Maker is in
         compliance with clause (a) of this Section 6 as of the date of the
         consolidated balance sheet contained in such Form 10-Q or Form 10-K;

                  (d) Maker shall, immediately upon becoming aware of the
         occurrence of any Event of Default, or of any event that, if it
         continues uncured, will, with the passage of time or notice or both,
         constitute an Event of Default, provide written notice to Payee
         describing the same and the steps being taken by Maker with respect
         thereto; and

                  (e) Upon the occurrence and during the continuance of an Event
         of Default or any event that, if it continues uncured, will, with the
         passage of time or notice or both, constitute an Event of Default,
         Maker shall deliver to Payee, promptly when available and in any event
         within 30 days after the end of each month of each fiscal year,
         consolidated balance sheets of Maker and its subsidiaries as of the end
         of such month,

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         together with consolidated statements of earnings and consolidated
         statements of cash flow for such month and for the period beginning
         with the first day of such fiscal year and ending on the last day of
         such month, certified by an officer of Maker to have been prepared in
         accordance with GAAP and to present fairly the financial condition and
         results of operations of Maker and its subsidiaries, on a consolidated
         basis, at the date and for the periods indicated therein.

         7.   If any one of the following events shall occur and be continuing
(an "Event of Default"):

                  (a) Maker shall fail to pay timely when due, the principal of,
         or accrued unpaid interest on, this Note, and such failure to pay
         continues unremedied for a period of two (2) Business Days following
         written notice of such failure from Payee to Maker;

                  (b) Maker shall violate any of the covenants set forth in
         Section 6 hereof and such violation continues unremedied for a period
         of ten (10) Business Days following written notice of such violation
         from Payee to Maker;

                  (c) The institution by Maker of proceedings to be adjudicated
         as bankrupt or insolvent, or the consent by it to institution of
         bankruptcy or insolvency proceedings against it or the filing by it of
         a petition or answer or consent seeking reorganization or release under
         the federal Bankruptcy Act, or any other applicable federal or state
         law, or the consent by it to the filing of any such petition or the
         appointment of a receiver, liquidator, assignee, trustee or other
         similar official of Maker, or any substantial part of its property, or
         the making by it of an assignment for the benefit of creditors, or the
         taking of corporate action by Maker in furtherance of any such action;

                  (d) If, within sixty (60) days after the commencement of an
         action against Maker (and service of process in connection therewith on
         Maker) seeking any bankruptcy, insolvency, reorganization, liquidation,
         dissolution or similar relief under any statute, law or regulation,
         such action shall not have been resolved in favor of Maker or all
         orders or proceedings thereunder affecting the operations or the
         business of Maker stayed, or if the stay of any such order or
         proceeding shall thereafter be set aside, or if, within sixty (60) days
         after the appointment without the consent or acquiescence of Maker of
         any trustee, receiver or liquidator of Maker or of all or any
         substantial part of the properties of Maker, such appointment shall not
         have been vacated or an order of relief against the Maker shall be
         entered in an involuntary case under the federal Bankruptcy Act;

                  (e) Any default shall occur under the terms applicable to any
         Debt of Maker or any subsidiary in an aggregate principal amount which
         exceeds $5,000,000 and such default shall (i) consist of the failure to
         pay such Debt when due (subject to any applicable grace period),
         whether by acceleration or otherwise, or (ii) accelerate the maturity
         of such Debt or permit the holder or holders thereof, or any trustee or
         agent for such holder or holders, to cause such Debt to become due and
         payable prior to its expressed maturity, and a period of thirty (30)
         days shall have elapsed following the occurrence of such default; or

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                  (f) Any consolidation or merger of the Maker, or any issuance
         by the Maker of shares of common stock of Maker, or any consummation of
         a tender or exchange offer involving the capital stock of Maker, occurs
         in which more than 50% of the securities of any class or classes of
         Maker which are ordinarily entitled to elect a majority of the
         corporate directors become owned by any other single person or entity,
         either directly or indirectly;

then, (i) with respect to any of the Events of Default specified in the
preceding clauses (a) and (b), the Payee, at its option, may declare the unpaid
principal portion of this Note to be immediately due and payable, whereupon the
said portion of this Note and all accrued, earned and unpaid interest shall
become immediately due and payable by Maker without demand, presentment for
payment, notice of nonpayment, protest, notice of protest, notice of intent to
accelerate maturity, notice of acceleration of maturity or any other notice of
any kind to Maker, or any other Person liable hereon or with respect hereto, all
of which are hereby expressly waived by Maker and each other person liable
hereon or with respect hereto, anything contained herein or in any other
documents or instruments to the contrary notwithstanding, and (ii) with respect
to any of the Events of Default specified in the preceding clauses (c) and (d),
the unpaid principal portion of this Note and all interest on this Note then
accrued, earned and unpaid shall become automatically due and payable by Maker
without demand, presentment for payment, notice of nonpayment, protest, notice
of protest, notice of intent to accelerate maturity, notice of acceleration of
maturity or any other notice of any kind to Maker or any other Person liable
hereon or with respect hereto, all of which are expressly waived by Maker and
each other Person liable hereon or with respect hereto, anything contained
herein or in any documents or instruments to the contrary notwithstanding.

         8. If this Note is collected by suit or through the U.S. Bankruptcy
Court, or any judicial proceeding, or if this Note is not paid at maturity,
however such maturity may be brought about, and it is placed in the hands of an
attorney for collection (whether or not legal proceedings are instituted), then
Maker agrees to pay, in addition to all other amounts owing hereunder, the
collection costs and reasonable attorneys' fees of the holder hereof.

         9. It is the intent of Payee and Maker in the execution and performance
of this Note to remain in strict compliance with Applicable Law from time to
time in effect. In furtherance thereof, Payee and Maker stipulate and agree that
none of the terms and provisions contained in this Note shall ever be construed
to create a contract to pay for the use, forbearance or detention of money with
interest at a rate or in an amount in excess of the Maximum Rate or amount of
interest permitted to be charged under Applicable Law. For purposes of this
Note, "interest" shall include the aggregate of all charges which constitute
interest under Applicable Law that are contracted for, charged, reserved,
received or paid under this Note. Maker shall never be required to pay unearned
interest and shall never be required to pay interest at a rate or in an amount
in excess of the Maximum Rate or amount of interest that may be lawfully charged
under Applicable Law. If this Note is prepaid, or if the maturity of this Note
is accelerated for any reason, or if under any other contingency the effective
rate or amount of interest which would otherwise be payable under this Note
would exceed the Maximum Rate or amount of interest Payee or any other holder of
this Note is allowed by Applicable Law to charge, contract for, take,

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reserve or receive, or in the event Payee or any holder of this Note shall
charge, contract for, take, reserve or receive monies that are deemed to
constitute interest which would, in the absence of this provision, increase the
effective rate or amount of interest payable under this Note to a rate or amount
in excess of that permitted to be charged, contracted for, taken, reserved or
received under Applicable Law then in effect, then the principal amount of this
Note or the amount of interest which would otherwise be payable under this Note
or both shall be reduced to the amount allowed under Applicable Law as now or
hereinafter construed by the courts having jurisdiction, and all such moneys so
charged, contracted for, taken, reserved or received that are deemed to
constitute interest in excess of the Maximum Rate or amount of interest
permitted by Applicable Law shall immediately be returned to or credited to the
account of Maker upon such determination. Payee and Maker further stipulate and
agree that, without limitation of the foregoing, all calculations of the rate or
amount of interest contracted for, charged, taken, reserved or received under
this Note which are made for the purpose of determining whether such rate or
amount exceeds the Maximum Rate or amount, shall be made to the extent not
prohibited by Applicable Law, by amortizing, prorating, allocating and spreading
during the period of the full stated term of this Note, all interest at any time
contracted for, charged, taken, reserved or received from Maker or otherwise by
Payee or any other holder of this Note.

         10. Maker and all sureties, endorsers and guarantors (if any) of this
Note waive demand, presentment for payment, notice of nonpayment, protest,
notice of protest, notice of intent to accelerate maturity, notice of
acceleration of maturity and all other notice, filing of suit and diligence in
collecting this Note and agree to the release of any party primarily or
secondarily liable hereon and further agree that it will not be necessary for
any holder hereof, in order to enforce payment of this Note, to first institute
suit or exhaust its remedies against any security herefor, and consent to any
one or more extensions or postponements of time of payment of this Note on any
terms or any other indulgences with respect hereto, without notice thereof to
any of them.

         11. This Note shall be governed by and construed in accordance with the
internal laws of the State of Texas (excluding that body of laws relating to
conflict of laws) and applicable federal laws of the United States of America.

         12. Subject to the restrictions on transfer described in Section 13
below, the rights and obligations of Maker and Payee shall be binding upon and
inure to the benefit of the successors, assigns, heirs administrators and
transferees of the parties.

         13. With respect to any offer, sale or other disposition of this Note,
Payee will give written notice to Maker prior thereto, describing briefly the
manner thereof, together with a written opinion of Payee's counsel, to the
effect that such offer, sale or other distribution may be effected without
registration or qualification (under any federal or state law then in effect).
Promptly upon receiving such written notice and reasonably satisfactory opinion,
if so requested, Maker, as promptly as practicable, shall notify Payee that
Payee may sell or otherwise dispose of this Note, all in accordance with the
terms of the notice delivered to Maker.

         14. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or if mailed by

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registered or certified mail, postage prepaid, at the respective addresses of
the parties as set forth herein. Any party hereto may by notice so given change
its address for future notice hereunder. Notice shall conclusively be deemed to
have been given when personally delivered or when deposited in the mail in the
manner set forth above and shall be deemed to have been received when delivered.

         15. No failure on the part of the Payee to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege under this Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this Note
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

         16.  Any provision of this Note may only be amended or modified with
the Maker's and the Payee's prior written consent

         17. In the event that any one or more of the provisions contained in
this Note shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Note.

         18. THIS NOTE EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN
THE PARTIES HERETO REGARDING THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES HERETO REGARDING THE SUBJECT MATTER HEREOF 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.

         19. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO: (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER; AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

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         EXECUTED, DELIVERED AND EFFECTIVE as of the day and year first written
above.

                                       MAKER:

                                       Input/Output, Inc.

                                       By:       /s/ C. Robert Bunch
                                       Name:     C. Robert Bunch
                                       Title:    Vice President

                                       Address:  12300 Parc Crest Drive
                                                 Stafford, Texas 77477
                                                 Attention: Mr. C. Robert Bunch

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