SENIOR INCREASING RATE NOTE

Exhibit 10.2

SENIOR INCREASING RATE NOTE

     For value received, ION Geophysical Corporation a Delaware corporation (the “Borrower”), promises to pay to the order of Jefferies Finance CP Funding LLC or its assigns (the “Lender”) the principal sum of FORTY MILLION EIGHT HUNDRED SIXTEEN THOUSAND THREE HUNDRED TWENTY-SEVEN UNITED STATES DOLLARS AND FIFTY-THREE CENTS ($40,816,327.53) and to pay interest on the outstanding principal of this Senior Increasing Rate Note (this “Note”), in accordance with the terms of this Note.

     1.  Maturity . The Borrower shall repay the unpaid principal in full, together with all accrued and unpaid interest thereon, on December 31, 2008 (the “Maturity Date”). All payments under this Note whether for interest, fees, if any, or principal shall be paid in United States dollars in immediately available funds and shall be applied first against accrued and unpaid interest, then against any unpaid fees and then against principal.

     2.  Interest . Interest shall accrue and be payable in arrears on the unpaid principal balance of this Note monthly on the same day of each month corresponding to the date hereof (or if such day is not a business day, then on the next succeeding business day) and on the Maturity Date, commencing on the date hereof and continuing until repayment of this Note, in full, at the rate of 13.50% per annum, calculated on the basis of a 360-day year and actual days elapsed; provided that for any day occurring on or subsequent to the date that is two months after the date hereof such rate shall be 14.00% per annum. After the occurrence and during the continuation of a Default or an Event of Default, the outstanding principal amount of this Note and all other amounts payable hereunder shall bear interest at 4.00% above the rate then applicable to such principal amount and be payable in cash on demand.

     3.  Optional Prepayment . The Borrower may prepay, in whole or in part, at any time, without premium or prepayment penalty, any unpaid principal balance hereof or accrued and unpaid interest thereon (to the date of such prepayment) prior to the Maturity Date. All payments hereunder shall be credited first to accrued but unpaid interest, and then to principal.

     4.  Ranking . This Note shall constitute a senior debt obligation of the Borrower and shall rank equally in right of payment with all other existing and future senior debt obligations of the Borrower (including the Senior Credit Facility) and senior in right of payment with all existing and future subordinated debt obligations of the Borrower.

     5.  Representations and Warranties . The Borrower for itself and for its Subsidiaries represents and warrants to the Lender both as of the date hereof and the date that the ARAM Acquisition is consummated that:

     (a) Organization . Each Obligor and its Subsidiaries (i) is duly organized, validly existing and if applicable, in good standing under the Laws of the jurisdiction of its organization, (ii) has the requisite power and authority to conduct its business in each jurisdiction as it is presently being conducted, and (iii) is duly qualified or licensed to conduct business and if applicable, is in good standing, in each such jurisdiction other than any jurisdiction where the failure to so qualify, could not reasonably be expected to result in a Material Adverse Effect. No proceeding to dissolve any Obligor is pending or, to the Borrower’s knowledge, threatened.

     (b) Authority Relative to the Note Documents . Each Obligor has the power and authority to execute and deliver the Note Documents to which it is a party and to perform its obligations thereunder. The Transactions have been duly authorized by all necessary corporate, limited liability company or partnership action on the part of each Obligor that is a party thereto. Each Note

Document to which an Obligor is a party has been duly and validly executed and delivered by such Obligor party thereto and constitutes the legal, valid and binding obligations of such Obligor, enforceable against such Obligor in accordance with their respective terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights and remedies generally and to the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding at Law or in equity).

     (c) No Violation . The Transactions will not:

     (i) result in a breach of the articles or certificate of incorporation, bylaws, partnership agreement or limited liability company agreement of the Borrower or any other Obligor or any resolution adopted by the Board of Directors, shareholders, partners, members or managers of any Obligor;

     (ii) result in the imposition of any Lien on any of the Equity Interests of any Obligor or any of its assets other than the Liens created under the Senior Credit Facility;

     (iii) result in, or constitute an event that, with the passage of time or giving of notice or both, would be, a breach, violation or default (or give rise to any right of termination, cancellation, prepayment or acceleration) under (i) any agreement to which any Obligor or any of its Subsidiaries is a party, under which any Obligor or any of its Subsidiaries have or may acquire rights or obligations or by which its properties or assets may be bound or (ii) under any Governmental Approval held by, or relating to the business of the Borrower or any of its Subsidiaries, in each case that could reasonably be expected to have a Material Adverse Effect;

     (iv) require any Obligor to obtain any consent, waiver, approval, exemption, authorization or other action of, or make any filing with or give any notice to, any Person except (A) such as have been obtained or made and are in full force and effect, (B) consents, waivers, approvals, exemptions, authorizations other actions, filings and notices the failure of which to obtain or make could not reasonably be expected to have a Material Adverse Effect or (C) a Current Report on Form 8-K to be made with the Commission pursuant to the Securities Exchange Act of 1934 (“Exchange Act”) describing this Note and the Guaranty; or

     (v) violate any Law or Order applicable to any Obligor or by which its properties or assets may be bound, except where such violation could not reasonably be expected to result in a Material Adverse Effect.

     (d) Litigation . No action, suit or proceeding is pending as of the date hereof before any Governmental Authority or arbitration panel, or to the knowledge of the Borrower or any of its Subsidiaries, is threatened, (i) (A) involving the Transactions (other than as described in clause (ii) below), or (B) against any Obligor or any of its Subsidiaries regarding the business or assets owned or used by the Borrower or any of its Subsidiaries that, individually or in the aggregate, if in either case was adversely determined could reasonably be expected to have a Material Adverse Effect or (ii) which purports to affect the legality, validity or enforceability of this Note or any other Note Document.

     (e) Investment Company Status . Neither the Borrower nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

     (f) Solvency . With respect to the Borrower on a consolidated basis with its Subsidiaries, immediately following the making of the loan evidenced hereby and after giving effect to the application of the proceeds thereof, and with respect to each Guarantor, as of the date hereof, (a) the fair market value of its assets will exceed its debts and liabilities; (b) the present fair saleable value of its property will be greater than the amount that will be required to pay the probable liability of its

debts and other liabilities; (c) it will be able to pay its debts and liabilities as they become absolute and mature; and (d) it will not have unreasonably small capital with which to conduct its business as such business is now conducted and is proposed to be conducted following the date hereof.

     (g) Disclosure . The Borrower has disclosed to the Lender all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the other reports, financial statements, certificates or other information furnished by or on behalf of any Obligor to the Lender in connection with the negotiation of this Note or delivered hereunder (as modified or supplemented by other information so furnished prior to the date hereof) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

     (h) Margin Stock . No part of the loan evidenced hereby shall be used at any time, to purchase or carry margin stock (within the meaning of Regulation U) or to extend credit to others for the purpose of purchasing or carrying any margin stock. Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purposes of purchasing or carrying any such margin stock. No part of the proceeds of the loan evidenced hereby will be used for any purpose which violates, or which is inconsistent with, any regulations promulgated by the Board.

     (i) Senior Credit Facility Representations and Warranties . The representations and warranties of the Borrower set forth in the Senior Credit Facility and each other Loan Document (as defined therein) are true and correct in all material respects; provided , that to the extent such representations and warranties were made as of a specific date, the same shall be true and correct in all material respects as of such specific date. No Default (as defined in the Senior Credit Facility) exists.

     (j) Guarantors . Each Domestic Subsidiary of the Borrower that is a Domestic Guarantor is a party to the Guaranty.

     6.  Covenants .

     (a)  Financial Statements; Other Notices and Information . The Borrower will furnish to the Lender:

     (i) Within ten (10) days after the Borrower is required to file the same with the Commission, copies of the annual reports, quarterly reports and current reports containing financial statements and related financial information (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Borrower may be required to file with the Commission pursuant to Section 13(a) or Section 15(d) of the Exchange Act; provided , however , that the foregoing shall not be deemed to require the Borrower to furnish any current reports filed with the Commission that consist solely or primarily of the Borrower’s public announcement that its quarterly financial results of operations and related financial information each fiscal quarter have been filed; provided , further , however , that if the Borrower is not required to file information, documents or reports pursuant to either of said Sections, then within ten (10) days after the date that the Borrower would have been required to file the same, the Borrower will furnish to the Lender such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; and

     (ii) concurrently with its delivery of any certificate, request, notice, report or other information or communication to the Senior Credit Facility Administrative Agent or any Senior Credit Facility

Lender under or pursuant to the Senior Credit Facility, a copy of the same to the Lender; provided that the foregoing shall not apply to routine communications between or among the Borrower or any of its Subsidiaries and the Senior Credit Facility Administrative Agent or the Issuing Lender, Borrowing Requests, Interest Election Requests or other similar requests, notices, information or communication (it being understood and agreed that the Borrower shall in any event provide to the Lender any certificate, request, notice, report or other information or communication that is provided to the Senior Credit Facility Administrative Agent or any Senior Credit Facility Lender under or pursuant to Section 5.01 or 5.02 of the Senior Credit Facility unless otherwise provided to the Lender pursuant to clause (i) above), or any agreements, information or communications with respect to commitment, underwriting, arrangement or administrative agency fees (except to the extent relating to any consideration to or for the benefit of any Senior Credit Facility Lender for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Senior Credit Facility on any day occurring after the date hereof but prior to the occurrence of the Maturity Date).

     (b)  Notices of Material Events . The Borrower will furnish to the Lender promptly and, in any event, within five (5) Business Days after acquiring knowledge thereof, written notice of the following:

     (i) the occurrence of any Default of which the Borrower has knowledge; and

     (ii) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Obligor or any Subsidiary thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect or that in any manner questions the validity of the Note Documents.

Each notice delivered under this clause (b) shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

     (c)  Books and Records; Inspection Rights . The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.

     (d)  Use of Proceeds . The Borrower covenants and agrees that the proceeds of the loan evidenced hereby will be used only to consummate the ARAM Acquisition and pay fees and expenses in connection therewith. The Borrower covenants and agrees that no part of the proceeds of the loan evidenced hereby will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

     (e)  Additional Guarantors . The Borrower shall at all times cause each Domestic Subsidiary that becomes a Domestic Guarantor to become a party to the Guaranty.

     (f)  Further Assurances . The Borrower will, and will cause each other Obligor to, at its own cost and expense, execute, acknowledge and deliver all such further acts, documents and assurances as may from time to time be reasonably necessary or as the Lender may from time to time reasonably request in order to carry out the intent and purposes of the Note Documents and the Transactions.

     (g)  Constitutive Documents . The Borrower will not, and will not permit any of its Subsidiaries to, amend its charter or by-laws or other constitutive documents in any manner that would adversely and materially affect the rights of the Lender under the Note Documents or its ability to enforce the same.

     (h)  Nature of Business . The Borrower shall not, and shall not permit any of its Subsidiaries to, engage in any business that is substantially different from the businesses of the types conducted by the Borrower and its Subsidiaries on the date hereof and businesses reasonably related thereto.

     (i)  Indebtedness .

     (i) Section 6.01 of the Senior Credit Facility (as in effect on the date hereof) is incorporated by reference herein as if originally appearing herein; provided , that as incorporated by reference herein (i) clause (a) thereof shall be amended and restated in its entirety to read as follows “(a) Indebtedness created hereunder or under any of the Loan Documents, including renewals, extensions and refinancings hereof or thereof in an aggregate principal amount outstanding at any time not to exceed $235,000,000;”; (ii) Schedule 6.01 referred to in clause (b) thereof, shall instead refer to Schedule I hereto; (iii) clause (k) thereof shall be amended and restated in its entirety to read as follows “(k) Subject to the provisions of Section 6.01(s), purchase money Indebtedness, including all extensions, renewals, refinancings and modifications thereof;”; (iv) clause (l) thereof shall be amended and restated in its entirety to read as follows “(l) Subject to the provisions of Section 6.01(s), Subordinated Indebtedness;”; (v) clause (r) thereof shall be amended and restated in its entirety to read as follows “(r) Indebtedness of the Borrower or any Subsidiary under the ARAM Sellers’ Note, the Subordinated Seller Note and any guarantee thereof; and” and (vi) clause (s) thereof shall be amended and restated in its entirety to read as follows “(s) Anything herein to the contrary notwithstanding, the Indebtedness permitted in paragraphs (g), (i), (j), (k), (l) and (p) of this Section 6.01 shall not in the aggregate exceed $20,000,000 at any time outstanding.”

     (ii) Not in limitation but in furtherance of Section 4 , the Borrower will not incur, and will not permit any Guarantor to incur, subject to clause (i) of this Section 6(i) , any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to this Note and the Guaranty on substantially identical terms; provided , however , that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.

     (iii) The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, repay or prepay all or any portion of the principal amount of either the ARAM Sellers’ Note or the Subordinated Seller Note unless prior, or substantially contemporaneous with, any such repayment or prepayment, the principal amount of this Note, together with all accrued and unpaid interest, fees, if any, and all other monetary obligations that are outstanding hereunder or under any other Note Document have, or will be, paid in full in accordance with the terms of this Note.

     (j)  Drag-Along Fee . The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Senior Credit Facility Lender for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Senior Credit Facility on any day occurring after the date hereof but prior to the occurrence of the Maturity Date (or if earlier, the date that this Note is paid in full) unless such consideration is also paid to the Lender as if (i) the loan evidenced hereby constituted an extension of credit or a commitment in respect thereof under the Senior Credit Facility and (ii) the Lender had consented to such consent, waiver or amendment (it being understood and agreed for the avoidance of doubt that to the extent that the terms of the payment of such consideration provides for an “early” consent fee to be paid to any Senior Credit Facility Lender that consents to such consent, waiver or amendment by a certain deadline that is higher than that to be paid if its consent is provided thereafter, the consideration to be paid hereunder shall be the higher amount); provided , that notwithstanding anything to the contrary in the foregoing, if such consideration is to be paid to any Senior Credit Facility Lender subsequent to the Maturity Date, such consideration shall be paid to the Lender no later than the Maturity Date (or if earlier, the date that this

Note is paid in full). Not in limitation of the immediately preceding sentence but by means of example, if any Senior Credit Facility Lender is offered a waiver fee to waive any default under the Senior Credit Facility equal to 15 basis points of its Revolving Credit Exposures, unused Revolving Loan Commitments, Term Loan Commitments or outstanding Term Loans at such time, as applicable, then the Borrower shall pay to the Lender a fee equal to 15 basis points on the loan evidenced hereby on the earlier of (x) the date such waiver fee is paid to such Senior Credit Facility Lender and (y) the Maturity Date as provided in the proviso to the immediately preceding sentence even if the payment of such waiver fee requires such Senior Credit Facility Lender to be a Senior Credit Facility Lender under the Senior Credit Facility subsequent to the Maturity Date as a condition to the payment thereof.

     7.  Events of Default . If any of the following events (each, an “Event of Default”) shall occur:

     (a) the Borrower shall fail to pay any principal amount of this Note when and as the same shall become due and payable, whether at the due date thereof or otherwise;

     (b) the Borrower shall fail to pay any interest on this Note or any fee or other amount (other than an amount referred to in clause (a) above) payable under this Note or the other Note Documents, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) Business Days;

     (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Note, any other Note Document or any amendment or modification hereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Note or any amendment or modification hereof or waiver hereunder, shall prove to have been incorrect when made or deemed made in any material respect ( provided , that such materiality qualifier shall not apply in instances where a specific representation contains a materiality or Material Adverse Effect qualifier);

     (d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in clause (a) , (b) , (d) , (h) or (i) of Section 6 ;

     (e) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Note (other than those specified in clause (a) , (b) or (d) of this Section), and such failure shall continue un