REVOLVING CREDIT AND SECURITY AGREEMENT

Exhibit 10.1

REVOLVING CREDIT

AND

SECURITY AGREEMENT

PNC BANK, NATIONAL ASSOCIATION
(AS LENDER AND AS AGENT)

WITH

INPUT/OUTPUT, INC., a Delaware corporation
GLOBAL CHARTER CORPORATION, a Delaware corporation
GMG/AXIS, INC., a Delaware corporation
GX TECHNOLOGY CORPORATION, a Texas corporation
I/O EXPLORATION PRODUCTS (U.K.), INC., a Delaware corporation
I/O EXPLORATION PRODUCTS (U.S.A.), INC., a Delaware corporation
I/O MARINE SYSTEMS, INC., a Louisiana corporation
I/O OF AUSTIN, INC., a Delaware corporation
I/O SENSORS, INC., a Delaware corporation
I/O TEXAS, LP, a Delaware limited partnership
and
IPOP MANAGEMENT, INC., a Delaware corporation
(BORROWER)

May 24, 2005

TABLE OF CONTENTS

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LIST OF EXHIBITS AND SCHEDULES

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REVOLVING CREDIT AND SECURITY AGREEMENT

      THIS REVOLVING CREDIT AND SECURITY AGREEMENT dated as of May 24, 2005, by and among, INPUT/OUTPUT, INC ., a corporation organized under the laws of the State of Delaware (“IO”), GLOBAL CHARTER CORPORATION , a corporation organized under the laws of the State of Delaware (“Global Charter”), GMG/AXIS, INC. , a corporation organized under the laws of the State of Delaware (“GMG Axis”), GX TECHNOLOGY CORPORATION , a corporation organized under the laws of the State of Texas (“GX Technology”), I/O EXPLORATION PRODUCTS (U.K.), INC ., a corporation organized under the laws of the State of Delaware (“IO Exploration (UK)”), I/O EXPLORATION PRODUCTS (U.S.A.), INC ., a corporation organized under the laws of the State of Delaware (“IO Exploration (USA)”), I/O MARINE SYSTEMS, INC., a corporation organized under the laws of the State of Louisiana (“IO Marine), I/O OF AUSTIN, INC., a corporation organized under the laws of the State of Delaware (“IO Austin”), I/O SENSORS, INC ., a corporation organized under the laws of the State of Delaware (“IO Sensors”), I/O TEXAS, LP , a limited partnership organized under the laws of the State of Delaware (“IO Texas”), and IPOP MANAGEMENT, INC ., a corporation organized under the laws of the State of Delaware (“IPOP”)(each, a “Borrower” and collectively, “Borrowers”), the financial institutions which are now or which hereafter become a party hereto (collectively, the “Lenders” and individually a “ Lender ”) and PNC BANK, NATIONAL ASSOCIATION (“ PNC ”), as agent for Lenders (PNC, in such capacity, the “ Agent ”).

     IN CONSIDERATION of the mutual covenants and undertakings herein contained, Borrower, Lenders and Agent hereby agree as follows:

I            DEFINITIONS.

     1.1. Accounting Terms. As used in this Agreement, the Other Documents or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to the extent not defined, shall have the respective meanings given to them under GAAP; provided, however, whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of Borrower for each fiscal year of the Term ended December 31.

     1.2. General Terms. For purposes of this Agreement the following terms shall have the following meanings:

     “ Acceptances ” shall mean any existing and future drafts as to which Borrower or beneficiary under a Letter of Credit is the drawer, which are processed and accepted for payment by Agent or other accepting bank in its absolute discretion.

     “ Accountants ” shall have the meaning set forth in Section 9.7 hereof.

     “ Advance Rates ” shall mean, collectively, the Receivables Advance Rate and the Inventory Advance Rate as defined in Section 2.1.

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     “ Advances ” shall mean and include the Revolving Advances, Letters of Credit, and Acceptances.

     “ Affiliate ” of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) for purposes of Section 7.10, any Person who is a director, managing member, general partner or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the power, direct or indirect, to vote 50% or more of the voting power for the election of directors (or the individuals performing similar functions) of such Person.

     “ Agent ” shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.

     “ Agreement ” shall mean this Revolving Credit and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

     “ Anti-Terrorism Laws ” shall mean any Applicable Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA PATRIOT Act, the Applicable Laws comprising or implementing the Bank Secrecy Act, and the Applicable Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Applicable Laws may from time to time be amended, renewed, extended, or replaced).

     “ Applicable Base Rate Margin ” is in accordance with the table below:

     Adjustments, if any, in the Applicable Base Rate Margin shall be implemented quarterly, on a prospective basis, as of the first day of the fiscal quarter following the date of delivery to Agent of the quarterly unaudited or annual audited (as applicable) financial statements evidencing the need for an adjustment, commencing with the financial statements for the period ending June 30, 2005. Said statements shall be accompanied by an executed Compliance Statement setting forth the reasons for the change in the Fixed Charge Coverage Ratio and the corresponding adjustment to the Applicable Base Rate Margin. In the event the Fixed Charge Coverage Ratio has changed such that a different rate is applicable, the rate shall be effective as of the first day of the month following receipt by Agent of the quarterly financial statements evidencing such change. Failure to timely deliver such financial statements, shall, in addition to any other remedy provided for in this Agreement, result in an increase in the Applicable Base Rate Margin to the highest level set forth in the foregoing grid until the first day of the first fiscal month following the delivery of said financial statements, demonstrating that such increase is not required. If an Event of Default has occurred and is continuing at the time any reduction in

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the Applicable Base Rate Margin is to be implemented, that reduction shall be deferred until the first day of the first fiscal month following the date on which such Event of Default is waived or cured. Nothing set forth herein in this definition shall limit the applicability of the Default Rate in the event of a failure to comply with Section 9.8 of this Agreement.

     “ Applicable Eurodollar Rate Margin ” is in accordance with the table below:

     Adjustments, if any, in the Applicable Eurodollar Rate Margin shall be implemented quarterly, on a prospective basis, as of the first day of the fiscal quarter following the date of delivery to Agent of the quarterly unaudited or annual audited (as applicable) financial statements evidencing the need for an adjustment, commencing with the financial statements for the period ending June 30, 2005. Said statements shall be accompanied by an executed Compliance Statement setting forth the reasons for the change in the Fixed Charge Coverage Ratio and the corresponding adjustment to the Applicable Eurodollar Rate Margin. In the event the Fixed Charge Coverage Ratio has changed such that a different rate is applicable, the rate shall be effective as of the first day of the month following receipt by Agent of the quarterly financial statements evidencing such change. Failure to timely deliver such financial statements, shall, in addition to any other remedy provided for in this Agreement, result in an increase in the Applicable Eurodollar Rate Margin to the highest level set forth in the foregoing grid until the first day of the first fiscal month following the delivery of said financial statements, demonstrating that such increase is not required. If an Event of Default has occurred and is continuing at the time any reduction in the Applicable Eurodollar Rate Margin is to be implemented, that reduction shall be deferred until the first day of the first fiscal month following the date on which such Event of Default is waived or cured. Nothing set forth herein in this definition shall limit the applicability of the Default Rate in the event of a failure to comply with Section 9.8 of this Agreement.

     “ Applicable Law ” shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Other Document or contract in question, including all applicable common law and equitable principles; all provisions of all applicable state, federal and foreign constitutions, statutes, rules, regulations and orders of any Governmental Body, and all orders, judgments and decrees of all courts and arbitrators.

     “ Authority ” shall have the meaning set forth in Section 4.19(d).

     “ Banker’s Acceptance Rate ” shall mean with respect to any Acceptance hereunder, a discount charge (calculated with respect to the face amount of such Acceptance on the basis of a 360-day year for the number of days from the date such Acceptance is accepted by the accepting bank (the “ Acceptance Date ”) to its maturity date) at a rate per annum equal to the sum of (a) the

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discount rate in the New York banker’s acceptance market on the Acceptance Date as determined by the accepting bank in its sole discretion, plus (b) one and one-half percent (1.50%).

     “ Base Rate ” shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without notice, on the effective date of any change in such rate. This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.

     “ Blocked Accounts ” shall have the meaning set forth in Section 4.15(h).

     “ Blocked Account Bank ” shall have the meaning set forth in Section 4.15(h).

     “ Blocked Person ” shall have the meaning set forth in Section 5.24(b) hereof.

     “ Borrower ” shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Person.

     “ Borrower’s Account ” shall have the meaning set forth in Section 2.8.

     “ Borrowing Agent ” shall be Input/Output, Inc. in its capacity as agent for all Borrowers pursuant to Section 15.1 hereof.

     “ Borrowing Base Certificate ” shall mean a certificate in substantially the form of Exhibit 1.2 duly executed by the President, Chief Financial Officer, Treasurer or Controller of the Borrowing Agent and delivered to the Agent, appropriately completed, by which such officer shall certify to Agent the Formula Amount and calculation thereof as of the date of such certificate.

     “ Business Day ” shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in East Brunswick, New Jersey and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.

     “ Capital Expenditures ” shall mean expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations, which, in accordance with GAAP, would be classified as capital expenditures.

     “ Capitalized Lease Obligation ” shall mean any Indebtedness of Borrower represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

     “ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

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     “ Change of Control ” shall mean the occurrence of any event which, in Agent’s sole opinion, results in a change of control of Borrowing Agent. For purposes of this definition, “control of Borrowing Agent” shall mean the power, direct or indirect, to vote 50% or more of the voting power for the election of directors (or the individuals performing similar functions) of Borrowing Agent.

     “ Charge or Charges ” shall mean all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other authority, domestic or foreign (including the Pension Benefit Guaranty Corporation or any environmental agency or superfund), upon the Collateral, Borrower or any of its Affiliates.

     “ Closing Date ” shall mean May 24, 2005 or such other date as may be agreed to by the parties hereto.

     “ Code ” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

     “ Collateral ” shall mean and include:

          (a) all Receivables;

          (b) all Equipment;

          (c) all General Intangibles;

          (d) all Inventory;

          (e) all Investment Property;

          (f) 100% of all Domestic Subsidiary Stock and 65% of all Foreign Subsidiary Stock;

          (g) all of Borrower’s right, title and interest in and to, whether now owned or hereafter acquired and wherever located, (i) its respective goods and other property including, but not limited to, all merchandise returned or rejected by Customers, relating to or securing any of the Receivables; (ii) all of Borrower’s rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional amounts due to Borrower from any Customer relating to the Receivables; (iv) other property, including warranty claims, relating to any goods securing the Obligations; (v) all of Borrower’s contract rights, rights of payment which have been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit

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and money; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if and when obtained by Borrower, all real and personal property of third parties in which Borrower has been granted a lien or security interest as security for the payment or enforcement of Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any other goods, personal property or real property now owned or hereafter acquired in which Borrower has expressly granted a security interest or may in the future grant a security interest to Agent hereunder, or in any amendment or supplement hereto or thereto, or under any other agreement between Agent and Borrower;

          (h) all of Borrower’s ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by Borrower or in which it has an interest), computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e), (f), or (g) of this Paragraph; and

          (i) all proceeds and products of (a), (b), (c), (d), (e), (f), (g), and (h) in whatever form, including, but not limited to: cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.

     “ Commitment Percentage ” of any Lender shall mean the percentage set forth below such Lender’s name on the signature page hereof as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(b) hereof.

     “ Commitment Transfer Supplement ” shall mean a document in the form of Exhibit 16.3 hereto, properly completed and otherwise in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances under this Agreement.

     “ Compliance Certificate ” shall mean a compliance certificate to be signed by the Chief Financial Officer, Treasurer or Controller of Borrower, which shall (i) state the following: that, based on an examination sufficient to permit such officer to make an informed statement, no Default or Event of Default exists, or if such is not the case, specifying such Default or Event of Default, its nature, when it occurred, whether it is continuing and the steps being taken by Borrower with respect to such default and, such certificate shall have appended thereto calculations which set forth Borrower’s compliance with the requirements or restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8 and 7.11; (ii) set forth in reasonable detail the basis for the continuance of, or any change in, the Applicable Base Rate Margin for Domestic Rate Loans, or Applicable Eurodollar Rate Margin for Eurodollar Loans; and (iii) state to the best of his knowledge, that Borrower is in compliance in all material respects with all federal, state and local Environmental Laws, and to the extent Borrower is not in compliance in all material respects, with the foregoing laws, the certificate shall set forth with specificity all areas of non-compliance and the proposed action Borrower will implement in order to achieve the required compliance.

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     “ Consents ” shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, necessary to carry on Borrower’s business or necessary (including to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the execution, delivery or performance of this Agreement, the Other Documents, including any Consents required under all applicable federal, state or other Applicable Law.

     “ Consigned Inventory ” shall mean Inventory of Borrower that is in the possession of another Person on a consignment, sale or return, or other basis that does not constitute a final sale and acceptance of such Inventory.

     “ Controlled Group ” shall mean, at any time, the Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with Borrower, are treated as a single employer under Section 414 of the Code.

     “ Customer ” shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with Borrower, pursuant to which Borrower is to deliver any personal property or perform any services.

     “ Default ” shall mean an event, circumstance or condition which, with the giving of notice or passage of time or both, would constitute an Event of Default.

     “ Default Rate ” shall have the meaning set forth in Section 3.1 hereof.

     “ Defaulting Lender ” shall have the meaning set forth in Section 2.23(a) hereof.

     “ Depository Accounts ” shall have the meaning set forth in Section 4.15(h) hereof.

     “ Dollar ” and the sign “ $ ” shall mean lawful money of the United States of America.

     “ Domestic Rate Loan ” shall mean any Advance that bears interest based upon the Base Rate.

     “ Domestic Subsidiary Stock ” shall mean Subsidiary Stock of all Domestic Subsidiaries.

     “ Domestic Subsidiaries ” of any Person, shall mean any Subsidiary of such Person that is organized and incorporated in the United States or any State or territory thereof.

     “ Drawing Date ” shall have the meaning set forth in Section 2.12(b) hereof.

     “ Early Termination Date ” shall have the meaning set forth in Section 13.1 hereof.

     “ Earnings Before Interest and Taxes ” shall mean for any period the sum of (i) net income (or loss) of Borrower for such period (excluding extraordinary gains and losses), plus (ii) all

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interest expense of Borrower for such period, plus (iii) all charges against income of Borrower for such period for federal, state, local, and foreign cash taxes paid.

     “ EBITDA ” shall mean for any period the sum of (i) Earnings Before Interest and Taxes for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses for such period (including amortized costs associated with the Multi-Client Data Library, but only for such period as Borrower maintains a combined minimum of $5,000,000.00 in Undrawn Availability and unrestricted cash deposits in the Blocked Accounts).

     “ Eligible Inventory ” shall mean and include Inventory excluding work in process valued at the lower of cost or market value, determined on a FIFO basis, which is not, in Agent’s opinion, obsolete, slow moving or unmerchantable and which Agent, in its sole discretion, shall not deem ineligible Inventory, based on such considerations as Agent may from time to time deem appropriate including whether the Inventory is subject to a perfected, first priority security interest in favor of Agent and no other Lien (other than a Permitted Encumbrance). In addition, Inventory shall not be Eligible Inventory if it (i) does not conform to all standards imposed by any Governmental Body which has regulatory authority over such goods or the use or sale thereof, (ii) is in transit (except as set forth below), (iii) is located outside the continental United States or at a location that is not otherwise in compliance with this Agreement, (iv) constitutes Consigned Inventory, (v) is the subject of an Intellectual Property Claim; (vi) is subject to a License Agreement or other agreement that limits, conditions or restricts Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory, unless Agent is a party to a Licensor/Agent Agreement with the Licensor under such License Agreement; or (vii) or is situated at a location not owned by Borrower unless the owner or occupier of such location has executed in favor of Agent a Lien Waiver Agreement. Eligible Inventory shall include all Inventory in-transit for which title has passed to Borrower, which is insured to the full value thereof and for which Agent shall have in its possession (a) all negotiable bills of lading properly endorsed and (b) all non-negotiable bills of lading issued in Agent’s name.

     “ Eligible Receivables ” shall mean and include with respect to Borrower, each Receivable of Borrower arising in the Ordinary Course of Business and which Agent, in its sole credit judgment, shall deem to be an Eligible Receivable, based on such considerations as Agent may from time to time deem appropriate. A Receivable shall not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other documentary evidence satisfactory to Agent. Notwithstanding the prior sentence, Foreign Approved Receivables valued at up to $10,000,000.00 may be deemed Eligible Receivables for purposes of the Formula Amount, subject to Agent’s sole credit judgment and the exclusions set forth in the following sentence. In addition, no Receivable shall be an Eligible Receivable if:

          (a) it arises out of a sale made by Borrower to an Affiliate of Borrower or to a Person controlled by an Affiliate of Borrower;

          (b) it is unpaid more than ninety (90) days after the original invoice date;

          (c) fifty percent (50%) or more of the Receivables from such Customer are not deemed Eligible Receivables hereunder. Such percentage may, in Agent’s sole discretion, be

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increased or decreased from time to time;

          (d) any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;

          (e) the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing;

          (f) except for sales resulting in Foreign Approved Receivables, the sale is to a Customer outside the continental United States of America, unless the sale is on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent in its sole discretion;

          (g) the sale to the Customer is on a bill-and-hold (unless the goods have been accepted in writing by Customer in a form acceptable to Agent in its sole discretion and the amount due from such sales does not exceed $5,000,000.00 in the aggregate at any time), guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;

          (h) Agent believes, in its sole judgment, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay;

          (i) the Customer is the United States of America, any state or any department, agency or instrumentality of any of them, unless Borrower assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes or ordinances;

          (j) the goods giving rise to such Receivable have not been delivered to Customer in accordance with Customer’s specifications or the services giving rise to such Receivable have not been performed by Borrower in accordance with Customer’s specifications or the Receivable otherwise does not represent a final sale;

          (k) the Receivables of any Customer exceed a dollar credit limit for that single Customer, which shall be determined by Agent, in its sole discretion, to the extent such Customer’s Receivable exceeds such limit;

          (l) the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim which has been asserted, the Customer is also a creditor or supplier of Borrower or the Receivable is otherwise contingent;

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          (m) Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the Ordinary Course of Business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

          (n) any return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed;

          (o) such Receivable is not payable to Borrower; or

          (p) Receivables of a single Customer (either foreign or domestic) which are otherwise Eligible exceed thirty percent (30%) of all aggregate Eligible Receivables or such other credit limit determined by Agent in its sole discretion, but only to the extent such Receivables exceed such limit.

     “ Environmental Complaint ” shall have the meaning set forth in Section 4.19(d) hereof.

     “ Environmental Laws ” shall mean all federal, state and local environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, policies, guidelines, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.

     “ Equipment ” shall mean and include all of Borrower’s goods (other than Inventory) whether now owned or hereafter acquired and wherever located including all equipment, machinery, apparatus, motor vehicles and other rolling stock (excluding rolling stock leased by Borrower from third parties), fittings, furniture, furnishings, fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.

     “ Equity Interests ” of any Person shall mean any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

     “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.

     “ Eurodollar Rate ” shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto the interest rate per annum determined by Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest determined by Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the average of the London interbank offered rates for U.S. Dollars quoted by the British Bankers’ Association as set forth on Moneyline Telerate (or appropriate successor or, if British Banker’s Association or its successor ceases to provide such quotes, a comparable replacement determined by Agent) display page 3750 (or such other

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display page on the Moneyline Telerate system as may replace display page 3750) two (2) Business Days prior to the first day of such Interest Period for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Reserve Percentage. The Eurodollar Rate may also be expressed by the following formula:

Average of London interbank offered rates quoted by BBA as shown on
Eurodollar Rate = Moneyline Telerate Service display page 3750 or appropriate successor
1.00 — Reserve Percentage.

     The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date. The Agent shall give prompt notice to the Borrower of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

     “ Eurodollar Rate Loan ” shall mean an Advance at any time that bears interest based on the Eurodollar Rate.

     “ Event of Default ” shall have the meaning set forth in Article X hereof.

     “ Exchange Act ” shall have the mean the Securities Exchange Act of 1934, as amended.

     “ Executive Order No. 13224 ” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

     “ Federal Funds Effective Rate ” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

     “ Federal Funds Open Rate ” shall mean the rate per annum determined by the Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the “open” rate for federal funds transactions as of the opening of business for federal funds transactions among members of the Federal Reserve System arranged by federal funds brokers on such day, as quoted by Garvin Guybutler Corporation, any successor entity thereto, or any other broker selected by the Agent, as set forth on the applicable Telerate display page; provided, however; that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding Business Day, or if no such rate shall be quoted by a Federal funds broker at such time, such other rate as determined by the Agent in accordance with its usual procedures.

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     “ Fee Letter ” shall mean the fee letter dated as of the Closing Date, between Borrower and PNC.

     “ FIFO ” means the inventory valuation method used and described in the Borrower’s financial statements and in its Form 10-Q and Form 10-K which approximates the conventional first-in-first-out inventory valuation method.

     “ First Quarter Balance Sheet ” shall have the meaning set forth in Section 5.5(a) hereof.

     “ Fixed Charge Coverage Ratio ” shall mean and include, with respect to any fiscal period, the ratio of (a) EBITDA minus the sum of (i) non-financed Capital Expenditures made during such period (exclusive of investments made in the Multi-Client Data Library, but only so long as Borrower maintains a combined minimum of $5,000,000.00 in Undrawn Availability and unrestricted cash deposits in the Blocked Accounts); plus (ii) cash dividends paid during any such period; plus (iii) cash taxes paid during such period to (b) the sum of principal and interest payments on all Indebtedness (exclusive of any fluctuations of the outstanding balance of the Advances, to be determined in Agent’s sole discretion) during such period.

     “ Foreign Approved Receivables ” shall mean those Receivables which do not arise out of sales to Sanctioned Countries and which are due from (a) foreign affiliates and subsidiaries of domestic energy companies maintaining a Standard and Poor credit rating of BBB or higher, and exhibiting satisfactory creditworthiness as determined by Agent in its reasonable discretion; (b) foreign companies specifically approved in advance by Agent in its sole discretion without added credit enhancement; or (c) other foreign companies backed by a letter of credit or Ex-Im Bank insurance acceptable to PNC in its sole discretion.

     “ Foreign Plan ” shall mean any Plan (without regard to whether it is exempted from coverage under ERISA) maintained outside of, or governed by the laws of a jurisdiction other than, the U.S. primarily for the benefit of individuals substantially all of whom are nonresident aliens.

     “ Foreign Subsidiary ” of any Person, shall mean any Subsidiary of such Person that is not organized or incorporated in the United States or any State or territory thereof.

     “ Foreign Subsidiary Stock ” shall mean Subsidiary Stock of the following Foreign Subsidiaries: Geophysical Instruments AS (Norway); I/O Cayman Islands, Ltd, (Cayman Islands); I/O Marine Systems Limited (UK); I/O U.K., Ltd. (UK); and Sensor Nederland B.V. (Netherlands).

     “ Formula Amount ” shall have the meaning set forth in Section 2.1(a).

     “ Funded Debt ” shall mean, with respect to any Person, without duplication, all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or similar evidences of Indebtedness that by its terms matures more than one year from, or is directly or indirectly renewable or extendible at such Person’s option under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year from the date of creation thereof, and specifically including Capitalized Lease Obligations, current maturities of long-term debt, revolving credit and short-term debt extendible beyond one year at

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the option of the debtor, and also including, in the case of Borrower, the Obligations and, without duplication, Indebtedness consisting of guaranties of Funded Debt of other Persons.

     “ GAAP ” shall mean generally accepted accounting principles in the United States of America in effect from time to time and may include averaging methods and other approximations not inconsistent with the requirements of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Rules and Regulations promulgated thereunder.

     “ General Intangibles ” shall mean and include all of Borrower’s general intangibles, whether now owned or hereafter acquired, including all payment intangibles, all choses in action, causes of action, corporate or other business records, inventions, designs, patents, patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, trademark applications, service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, all claims under guaranties, security interests or other security held by or granted to Borrower to secure payment of any of the Receivables by a Customer (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property of every kind and nature (other than Receivables).

     “ Governmental Acts ” shall have the meaning set forth in Section 2.17.

     “ Governmental Body ” shall mean any nation or government, any state or other political subdivision thereof or any entity, authority, agency, division or department exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.

     “ Guarantor ” shall mean any Person who may hereafter guarantee payment or performance of the whole or any part of the Obligations and “Guarantors” means collectively all such Persons.

     “ Hazardous Discharge ” shall have the meaning set forth in Section 4.19(d) hereof.

     “ Hazardous Substance ” shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the New York State Environmental Conservation Law or any other applicable Environmental Law and in the regulations adopted pursuant thereto.

     “ Hazardous Wastes ” shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other applicable Federal and state laws now in force or hereafter enacted relating to hazardous waste disposal.

     “ Hedge Liabilities ” shall have the meaning provided in the definition of “Lender-Provided Interest Rate Hedge”.

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     “ Increased Tax Burden ” shall mean the additional federal, state or local taxes assumed to be payable by a member of Borrower as a result of Borrower’s status as a limited liability company as evidenced and substantiated by the tax returns filed by Borrower as a limited liability company, with such taxes being calculated for all members at the highest marginal rate applicable to any member.

     “ Indebtedness ” of a Person at a particular date shall mean all obligations of such Person which in accordance with GAAP would be classified upon a balance sheet as liabilities (except capital stock and surplus earned or otherwise) and in any event, without limitation by reason of enumeration, shall include all indebtedness, debt and other similar monetary obligations of such Person whether direct or guaranteed, and all premiums, if any, due at the required prepayment dates of such indebtedness, and all indebtedness secured by a Lien on assets owned by such Person, whether or not such indebtedness actually shall have been created, assumed or incurred by such Person. Any indebtedness of such Person resulting from the acquisition by such Person of any assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of the creation, assumption and incurring of the indebtedness secured thereby, whether or not actually so created, assumed or incurred.

     “ Ineligible Security ” shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

     “ Intellectual Property ” shall mean property constituting under any Applicable Law a patent, patent application, copyright, trademark, service mark, trade name, mask work, trade secret or license or other right to use any of the foregoing.

     “ Intellectual Property Claim ” shall mean the assertion by any Person of a claim (whether asserted in writing, by action, suit or proceeding or otherwise) that Borrower’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other property or asset is violative of any ownership of or right to use any Intellectual Property of such Person.

     “ Interest Period ” shall mean the period provided for any Eurodollar Rate Loan pursuant to Section 2.2(b).

     “ Interest Rate Hedge ” shall mean an interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor or similar agreements entered into by the Borrower or its Subsidiaries in order to provide protection to, or minimize the impact upon, the Borrower, any Guarantor and/or their respective Subsidiaries of increasing floating rates of interest applicable to Indebtedness.

     “ Inventory ” shall mean and include all of Borrower’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in Borrower’s business or used in selling or furnishing such

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goods, merchandise and other personal property, and all documents of title or other documents representing them.

     “ Inventory Advance Rate ” shall have the meaning set forth in Section 2.1(a)(y)(ii) hereof.

     “ Investment Property ” shall mean and include all of Borrower’s now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.

     “ Issuer ” shall mean any Person who issues a Letter of Credit and/or accepts a draft pursuant to the terms hereof.

     “ Leasehold Interests ” shall mean all of Borrower’s right, title and interest in and to the premises identified in Schedule 4.19 .

     “ Lender ” and “ Lenders ” shall have the meaning ascribed to such term in the preamble to this Agreement and shall include each Person which becomes a transferee, successor or assign of any Lender.

     “ Lender-Provided Interest Rate Hedge ” shall mean an Interest Rate Hedge which is provided by any Lender and with respect to which the Agent confirms and meets the following requirements: such Interest Rate Hedge (i) is documented in a standard International Swap Dealer Association Agreement, (ii) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner, and (iii) is entered into for hedging (rather than speculative) purposes. The liabilities of the Borrower to the provider of any Lender-Provided Interest Rate Hedge (the “Hedge Liabilities”) shall be “Obligations” hereunder and otherwise treated as Obligations for purposes of each of the Other Documents. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the Other Documents.

     “ Letter of Credit and Acceptance Fees ” shall have the meaning set forth in Section 3.2.

     “ Letter of Credit Borrowing ” shall have the meaning set forth in Section 2.12(d).

     “ Letter of Credit Sublimit ” shall mean $5,000,000.00.

     “ Letters of Credit ” shall have the meaning set forth in Section 2.9.

     “ License Agreement ” shall mean any agreement between Borrower and a Licensor pursuant to which Borrower is authorized to use any Intellectual Property in connection with the manufacturing, marketing, sale or other distribution of any Inventory of Borrower or otherwise in connection with Borrower’s business operations.

     “ Licensor ” shall mean any Person from whom Borrower obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with Borrower’s manufacture, marketing, sale or other distribution of any Inventory or otherwise in connection with Borrower’s business operations.

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     “ Licensor/Agent Agreement ” shall mean an agreement between Agent and a Licensor, in form and content satisfactory to Agent, by which Agent is given the unqualified right, vis-a-vis such Licensor, to enforce Agent’s Liens with respect to and to dispose of Borrower’s Inventory with the benefit of any Intellectual Property applicable thereto, irrespective of Borrower’s default under any License Agreement with such Licensor.

     “ Lien ” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.

     “ Lien Waiver Agreement ” shall mean an agreement which is executed in favor of Agent by a Person who owns or occupies premises at which any Collateral may be located from time to time and by which, subject to reasonable negotiation between the parties, such Person shall waive any Lien that such Person may ever have with respect to any of the Collateral and shall authorize Agent from time to time to enter upon the premises to inspect or remove the Collateral from such premises or to use such premises to store or dispose of such Inventory.

     “ Material Adverse Effect ” shall mean a material adverse effect on (a) the condition (financial or otherwise), results of operations, assets, business, properties or prospects of Borrowers (taken as a whole), (b) the ability of Borrowers (as a whole) to duly and punctually pay or perform the Obligations in accordance with the terms thereof, (c) the value of the Collateral (as a whole), or (d) Agent’s Liens on the Collateral, or the priority of any such Lien or (e) the practical realization of the benefits of Agent’s and each Lender’s rights and remedies under this Agreement and the Other Documents.

     “ Material Contract ” shall men any contract between Borrower and a third party in which a breach thereof by either party shall result in a Material Adverse Effect.

     “ Maximum Face Amount ” shall mean, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.

     “ Maximum Loan Amount ” shall mean $25,000,000.00

     “ Maximum Undrawn Amount ” shall mean with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases or decreases provided for in such Letter of Credit, whether or not any such automatic increase or decrease has become effective.

     “ Multiemployer Plan ” shall mean a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA.

     “ Multi-Client Data Library ” shall mean the collection of seismic surveys acquired or performed by Borrower and offered for licensing to Customers on a non-exclusive basis.

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     “ Multiple Employer Plan ” shall mean a Plan which has two or more contributing sponsors (including the Borrower or any member of the Controlled Group) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

     “ Obligations ” shall mean and include any and all loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to Lenders or Agent or to any other direct or indirect subsidiary or affiliate of Agent or any Lender under this Agreement and any Other Document (including any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether or not evidenced by any note, guaranty or other instrument, but which arises under this Agreement and the Other Documents, and any amendments, extensions, renewals or increases thereof, whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, under any interest or currency swap, future, option or other similar agreement, or in any other manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of the Agent’s or any Lenders non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, and all costs and expenses of Agent and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including but not limited to reasonable attorneys’ fees and expenses and all obligations of Borrower to Agent or Lenders to perform acts or refrain from taking any action.

     “ Ordinary Course of Business ” shall mean the ordinary course of Borrower’s business as conducted on the Closing Date.

     “ Other Documents ” shall mean the Revolving Credit Note, the Questionnaire, the Fee Letter, any Lender-Provided Interest Rate Hedge and any and all other agreements, instruments and documents, including guaranties, pledges, powers of attorney, consents, interest or currency swap agreements or other similar agreements and all other writings heretofore, now or hereafter executed by Borrower or any Guarantor and/or delivered to Agent or any Lender in respect of the transactions contemplated by this Agreement.

     “ Out-of-Formula Loans ” shall have the meaning set forth in Section 16.2(b).

     “ Parent ” of any Person shall mean a corporation or other entity owning, directly or indirectly at least 50% of the shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of the Person, or other Persons performing similar functions for any such Person.

     “ Participant ” shall mean each Person who shall be granted the right by any Lender to participate in any of the Advances and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.

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     “ Participation Advance ” shall have the meaning set forth in Section 2.12(d).

     “ Participation Commitment ” shall mean each Lender’s obligation to buy a participation of the Letters of Credit issued hereunder.

     “ Payment Office ” shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any, which it may designate by notice to Borrowing Agent and to each Lender to be the Payment Office.

     “ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.

     “ Pension Benefit Plan ” shall mean at any time any employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained by any member of the Controlled Group for employees of any member of the Controlled Group; or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the Controlled Group for employees of any entity which was at such time a member of the Controlled Group.

     “ Permitted Discretion ” shall mean a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset based lender) business judgment.

     “ Permitted Encumbrances ” shall mean (a) Liens in favor of Agent for the benefit of Agent and Lenders; (b) Liens for taxes, assessments or other governmental charges not delinquent or being Properly Contested in good faith and by appropriate proceedings and with respect to which proper reserves have been taken by Borrower; provided, that, the Lien shall have no effect on the priority of the Liens in favor of Agent or the value of the assets in which Agent has such a Lien and a stay of enforcement of any such Lien shall be in effect; (c) Liens disclosed in the financial statements referred to in Section 5.5; (d) deposits or pledges to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance; (e) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business; (f) Liens arising by virtue of the rendition, entry or issuance against Borrower or any Subsidiary, or any property of Borrower or any Subsidiary, of any judgment, writ, order, or decree for so long as each such Lien (i) is in existence for less than 20 consecutive days after it first arises or is being Properly Contested and (ii) is at all times junior in priority to any Liens in favor of Agent; (g) mechanics’, workers’, materialmen’s or other like Liens arising in the Ordinary Course of Business with respect to obligations which are not due or which are being contested in good faith by Borrower; (h) Liens placed upon fixed assets hereafter acquired to secure a portion of the purchase price thereof, provided that (i) any such lien shall not encumber any other property of Borrower and (ii) the aggregate amount of Indebtedness secured by such Liens incurred as a result of such purchases during any fiscal year shall not exceed the amount provided for in Section 7.6; (i) easements, rights of way, restrictions (including zoning restrictions), encroachments, protrusions, and other similar encumbrances, and minor title deficiencies, in each case whether now or hereafter in existence, which do not materially interfere with the conduct of the business of

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