3226509 NOVA SCOTIA COMPANY AMENDED AND RESTATED SUBORDINATED PROMISSORY NOTE

Exhibit 10.6

THIS AMENDED AND RESTATED SUBORDINATED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

3226509 NOVA SCOTIA COMPANY
AMENDED AND RESTATED SUBORDINATED PROMISSORY NOTE

(Guaranteed by ION GEOPHYSICAL CORPORATION)

      FOR VALUE RECEIVED , 3226509 NOVA SCOTIA COMPANY, a Nova Scotia unlimited liability company, as the “ Company ”, promises to pay to MAISON MAZEL LTD. (formerly known as 1236929 ALBERTA LTD.), an Alberta corporation, as “ Payee ”, in lawful money of the United States of America, the principal sum of THIRTY-FIVE MILLION AND NO/100 DOLLARS (US$35,000,000.00), together with accrued interest thereon at such rates and at such time or times as provided for herein. As more fully set forth in Section 17 hereof, this Amended and Restated Subordinated Promissory Note (this “ Note ”) (i) restates and amends that certain Promissory Note dated September 18, 2008 issued by the Company to the Payee in the original principal amount of US$35,000,000.00 (the “ Original Note ”) pursuant to that certain Amended and Restated Share Purchase Agreement by and among ION Geophysical Corporation, a Delaware corporation and the indirect owner of all of the outstanding equity interests of the Company (“ ION ”), the Payee, ARAM Systems Ltd., Canadian Seismic Rentals Inc. and the other “ Sellers ” (as that term is defined therein), dated as of September 17, 2008 (such agreement, as amended prior to the date hereof and as it may be further amended, restated, modified or supplemented, being referred to herein as the “ Share Purchase Agreement ”), and (ii) adds the subordination provisions contained in Section 7 hereof.

     Capitalized terms used herein that are not defined in this Note shall have the respective meanings assigned to such terms in the Share Purchase Agreement.

     The following is a statement of the rights of Payee and the conditions to which this Note is subject, and to which the Payee hereof, by the acceptance of this Note, agrees:

      1.  Definitions . In addition to the terms specifically defined elsewhere in this Note, the following capitalized terms as used herein have the following meanings:

          (a) “ Company ” means the entity executing this Note and its successors and permitted assignees.

          (b) “ Payee ” shall mean the Person specified in the introductory paragraph of this Note, or any Person who shall at such time be the permitted assignee of this Note.

          (c) “ Senior Credit Facility ” shall mean that certain Amended and Restated Credit Agreement, dated as of July 3, 2008, by and among ION and ION International S.à r.l, as the borrowers, the Subsidiaries of ION party thereto as guarantors, the financial institutions party thereto as lenders, HSBC Bank USA, N.A., as administrative agent, and the other agents named therein party thereto, as such agreement has been amended prior to the date of this Note, and as it may be further amended, restated, modified or supplemented.

          (d) “ Senior Obligations ” shall mean all principal (and premium, if any), interest (including, without limitation, interest occurring after an insolvency, bankruptcy or similar proceeding, whether or not such interest is an allowed claim in any such proceeding), amounts reimbursable, fees, expenses, penalties, indemnities, costs of enforcement and other amounts due or that may become due in connection with (i) the obligations of ION and its Subsidiaries under the Senior Credit Facility, (ii) the obligations of ION and certain of its Subsidiaries under that certain Bridge Loan Agreement, dated as of December 30, 2008, by and among ION, as the borrower, the Subsidiaries of ION party thereto as guarantors, the financial institutions party thereto as lenders, and Jefferies Finance LLC, as administrative agent (as amended, restated, supplemented or otherwise modified from time to time, the “ Bridge Loan Facility ”), (iii) the liabilities of ION and its Subsidiaries with respect to capital leases and obligations arising pursuant to the ‘Sale/Leaseback Agreement’ (as such term is defined in the Senior Credit Facility), (iv) all guaranties by ION and its Subsidiaries of the obligations described in clauses (i) – (iii) above, and (v) any debentures, notes or other evidence of indebtedness issued in exchange for, or in the refinancing of, such Senior Obligations, or any indebtedness arising from the payment and satisfaction of any such Senior Obligations by a guarantor.

          (e) “ Subordinated Obligations ” shall mean all obligations with respect to this Note, including, without limitation, principal, premium, if any, interest payable pursuant to the terms of this Note (including, without limitation, upon acceleration or otherwise), together with and including any amounts received or receivable upon the exercise of rights of action (including, without limitation, claims for damages) or otherwise in respect of this Note.

      2.  Interest Accrual . Subject to the provisions of Section 7 hereof, the Company promises to pay interest in accordance with Section 3 hereof on the unpaid principal amount hereof for the period from (and including) the date of the making of the Original Note, to (but excluding) the date that the Indebtedness under this Note shall be paid in full. Interest on the unpaid principal amount of this Note has accrued at the rate of nine percent (9%) per annum (based on a year of 365 or 366 days, as the case may be) for the period that commenced September 18, 2008, until (and including) December 17, 2008; and commencing on (and including) December 18, 2008, until (and including) December 21, 2008, interest on the unpaid principal amount of this Note has accrued at a rate equal to twelve percent (12%) per annum; and commencing on (and including) December 22, 2008, interest on the unpaid principal amount of this Note shall accrue thereafter until paid at a rate equal to fifteen percent (15%) per annum.

      3.  Payment of Interest and Principal . The indebtedness under this Note shall be payable as set forth herein.

          (a) Interest . Subject to the provisions of Section 7 hereof, the interest accrued on this Note shall be payable quarterly on March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 2009.

          (b) Principal . Subject to the provisions of Section 7 hereof, the outstanding principal balance of this Note, together with all accrued and unpaid interest thereon, shall be due and payable on September 17, 2013 (the “ Maturity Date ”).

          (c) Prepayment . This Note may be prepaid, at any time, in whole or in part, with each such prepayment being applied first to accrued and unpaid interest, and then to outstanding principal, upon one (1) Business Day’s prior written notice, without premium or penalty.

          (d) Business Day . Whenever any payment to be made hereunder shall be stated to be due on a date that is not a Business Day, 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.

      4.  Right of Set-Off . The Company shall have the right to withhold and set off against any amount due hereunder, the amount of (a) any indemnification of money Damages to which the Company (or any Buyer Indemnified Person) is entitled under Article 8 of the Share Purchase Agreement, but only subject to and in accordance with the terms of Section 8.11(a) and (b) thereof and with Section 2 of the Release Agreement dated as of December 30, 2008 made by and among ION, the Payee, ARAM Systems Ltd., Canadian Seismic Rentals Inc. and the other Sellers (the “ Release Agreement ”), and (b) any purchase price adjustments payable by Sellers pursuant to Section 1.5 of the Share Purchase Agreement, but only subject to and in accordance with the terms of Section 1.5(a)(v) thereof and with Section 3 of the Release Agreement.

      5.  Events of Default . The occurrence of any of the following shall constitute an “Event of Default” under this Note:

          (a) Failure to Pay . The Company shall fail in any material respect to pay (i) any principal payment on the due date thereof as provided herein or (ii) any interest or other payment required under the terms of this Note on the date due, and such payment shall not have been made within ten (10) Business Days of the Company’s receipt of Payee’s written notice to the Company of such failure to pay; provided, however , that any exercise by the Company in good faith of its right of setoff pursuant to Section 4 above, whether or not ultimately determined to be justified, shall not constitute an Event of Default hereunder;

          (b) Breach of Covenants . The Company shall fail in any material respect to observe or perform any covenant, obligation, condition or agreement contained in this Note and (i) such failure shall continue for thirty (30) days, or (ii) if such failure is not curable within such thirty (30) day period, but is reasonably capable of cure within sixty (60) days, then either (A) such failure shall continue for sixty (60) days or (B) the Company shall not have commenced curative measures in a manner reasonably satisfactory to Payee within such initial thirty (30) day period;

          (c) Voluntary Bankruptcy or Insolvency Proceedings . The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated in full or in part, (v) become “insolvent” (as such term may be defined or interpreted under applicable statutory authority), (vi) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it or (vii) take any action for the purpose of effecting any of the foregoing;

          (d) Involuntary Bankruptcy or Insolvency Proceedings . Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced, and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) days of such commencement; or

          (e) Senior Obligations . ION shall be in default under the terms of any Senior Obligations where (i) such default has resulted in the acceleration of such Senior Obligations prior to its stated maturity, and (ii) the principal amount at maturity of such Senior Obligations under which there has been such a default aggregates $20.0 million or more.

      6.  Rights of Payee upon Default . Upon the occurrence or existence of any Event of Default (other than any Event of Default referred to in Sections 5(c) or 5(d) hereof), and at any time thereafter during the continuance of such Event of Default, Payee may, by written notice to the Company, declare all outstanding obligations payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding; provided , that so long as any Senior Obligations shall be outstanding, such acceleration shall not be effective until the earlier of (i) an acceleration of any such Senior Obligations in accordance with the agreements or instruments evidencing such Senior Obligations or (ii) thirty (30) days after receipt by the Company and each holder of outstanding Senior Obligations (or in the case of holders of Senior Obligations evidenced by the Senior Credit Facility or the Bridge Loan Facility, the applicable administrative agent thereunder) of written notice of such acceleration. Upon the occurrence or existence of any Event of Default described in Sections 5(c) or 5(d) hereof, immediately and without notice, all outstanding obligations payable by the Company hereunder shall automatically become immediately due and payable, without present