FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND FOREIGN SECURITY AGREEMENT, LIMITED WAIVER AND RELEASE

Exhibit 10.4

FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT AND FOREIGN SECURITY AGREEMENT,
LIMITED WAIVER AND RELEASE

     This Fourth Amendment to Amended and Restated Credit Agreement and Foreign Security Agreement, Limited Waiver and Release (the “Fourth Amendment” or “this Amendment ”) is made and entered into effective as of the 30th day of December, 2008 (the “ Fourth Amendment Effective Date ”), by and among ION GEOPHYSICAL CORPORATION, a Delaware corporation (the “ Domestic Borrower ”), ION INTERNATIONAL S.À R.L., a Luxembourg private limited company ( société à responsabilité limitée ), having its registered office at 560A rue de Neudorf, L-2220 Luxembourg, with a share capital of EUR12,500, and registered with the Luxembourg Register of Commerce and Companies under the number B-135.679 (the “ Foreign Borrower ” and together with the Domestic Borrower, the “ Borrowers ”), the Guarantors party hereto (the “ Guarantors ”), the Lenders party hereto, and HSBC BANK USA, N.A., as administrative agent (the “ Administrative Agent ”).

RECITALS

     WHEREAS, the above-named parties have entered into that certain Amended and Restated Credit Agreement dated as of July 3, 2008, as amended by that certain First Amendment to Amended and Restated Credit Agreement and Domestic Security Agreement dated as of September 17, 2008, that certain Second Amendment to Amended and Restated Credit Agreement dated as of October 17, 2008, and that certain Third Amendment to Amended and Restated Credit Agreement dated as of December 29, 2008 (and as may be further amended, restated, modified or supplemented from time to time, the “ Credit Agreement ”), by and among the Borrowers, the Guarantors, the Lenders and the Administrative Agent; and

     WHEREAS, the Borrowers have requested that the Lenders and the Administrative Agent amend certain provisions to the Credit Agreement, and said parties are willing to do so subject to the terms and conditions set forth herein, provided that the Domestic Borrower and Domestic Guarantors ratify and confirm all of their respective obligations under the Credit Agreement and each other Loan Document to which each is a party and that the Foreign Borrower and Foreign Guarantors ratify and confirm all of their respective obligations under the Credit Agreement and each other Loan Document to which each is a party.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Amendment, Borrowers, Guarantors, the Lenders party hereto and the Administrative Agent agree as follows:

     1.  Defined Terms . Unless otherwise defined herein, capitalized terms used herein have the meanings assigned to them in the Credit Agreement.

     2.  Amendments . (a) The Credit Agreement is hereby amended as follows:

     (i) Amendments to Section 1.01 . Section 1.01 is hereby amended by deleting the following definitions and restating them in their entirety to read as follows:

     “ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ¹ / 2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page 1 (or on any successor or substitute page) at approximately 11:00 a.m London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.”

     “ Applicable Margin ” means, on any day, for any Revolving Loan, the applicable per annum percentage set forth at the appropriate intersection in the Revolving Loans table shown below, and, for the Term Loans, the applicable per annum percentage set forth at the appropriate intersection in the Term Loans table shown below, each of which is based on the Leverage Ratio for the most recently ended trailing four-quarter period with respect to which the Domestic Borrower is required to have delivered the financial statements and Compliance Certificate pursuant to Section 5.01 hereof (as such Leverage Ratio is reflected in the Compliance Certificate delivered under Section 5.01(c) by the Domestic Borrower in connection with such financial statements):

Revolving Loans

Term Loans

Each change in the Applicable Margin shall take effect on each date on which such financial statements and Compliance Certificate are required to be delivered pursuant to Section 5.01 , commencing with the date on which such financial statements and Compliance Certificate are required to be delivered for the four-quarter period ending June 30, 2008. Notwithstanding the foregoing, for the two (2) quarterly periods following the date of the First Amendment Effective Date, the Applicable Margin shall

be determined at Level IV. In the event that any financial statement delivered pursuant to Section 5.01 is shown to be inaccurate when delivered (regardless of whether this Agreement or the Revolving Loan Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, and only in such case, then the Domestic Borrower shall immediately (i) deliver to the Administrative Agent corrected financial statements for such Applicable Period, (ii) determine the Applicable Margin for such Applicable Period based upon the corrected financial statements, and (iii) immediately pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 2.16(a) . This provision is in addition to the rights of the Administrative Agent and the Lenders with respect to Section 2.11(d) and their other respective rights under this Agreement. If the Domestic Borrower fails to deliver the financial statements and corresponding Compliance Certificate to the Administrative Agent at the time required pursuant to Section 5.01 , then effective as of the date such financial statements and corresponding Compliance Certificate were required to the delivered pursuant to Section 5.01 , the Applicable Margin shall be determined at Level IV and shall remain at such level until the date such financial statements and corresponding Compliance Certificate are so delivered by the Domestic Borrower. The Applicable Margin for the Term Loans shall be increased by 0.25% at all levels, and the Applicable Margin for the Revolving Loans shall be increased by 0.50% at all levels, in each case, commencing on the First Amendment Effective Date and ending on the date the Domestic Borrower repays the Revolving Loans borrowed for the purpose of financing the ARAM Acquisition.

     “ ARAM Sellers’ Note ” means that certain unsecured promissory note, in an aggregate principal amount not in excess of $35,000,000, issued by 3226509 Nova Scotia Company, a Nova Scotia unlimited liability company and successor by assignment to the Domestic Borrower under the ARAM Purchase Agreement, made to the favor of the sellers of ARAM and certain of its Affiliates pursuant to the terms of the ARAM Purchase Agreement, which as amended, shall not mature earlier than September 17, 2013.”

     “ Commitment Fee Rate ” means, on any day, the applicable per annum percentage set forth at the appropriate intersection in the table shown below, based on the Leverage Ratio for the most recently ended trailing four-quarter period with respect to which the Domestic Borrower is required to have delivered the financial statements pursuant to Section 5.01 hereof (as such Leverage Ratio is reflected in the Compliance Certificate delivered under Section 5.01(c) by the Domestic Borrower in connection with such financial statements):

Each change in the Commitment Fee Rate shall take effect on each date on which such financial statements and Compliance Certificate are required to be delivered pursuant to Section 5.01 , commencing with the date on which such financials statements and Compliance Certificate are required to be delivered for the four-quarter period ending June 30, 2008. Notwithstanding the foregoing, for the period from the Effective Date through the date the financial statements and Compliance Certificate are required to be delivered pursuant to Section 5.01 for the fiscal quarter ended June 30, 2008, the Commitment Fee Rate shall be determined at Level I. In the event any financial statement delivered pursuant to Section 5.01 is shown to be inaccurate when delivered (regardless of whether this Agreement or the Revolving Loan Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to a higher Commitment Fee Rate for any period (an “ Applicable Commitment Fee Period ”) than the Commitment Fee Rate applied for such Applicable Commitment Fee Period, and only in such case, then the Domestic Borrower shall immediately (i) deliver to the Administrative Agent corrected financial statements for such Applicable Commitment Fee Period, (ii) determine the Commitment Fee Rate for such Applicable Commitment Fee Period based on the corrected financial statements, and (iii) immediately pay to the Administrative Agent the additional accrued commitment fees owing as a result of such increased Commitment Fee Rate for such Applicable Commitment Fee Period, which payment shall be promptly applied in accordance with Section 2.16(a) . This provision is in addition to the rights of the Administrative Agents and Lenders with respect to Section 2.11(d) and their other respective rights under this Agreement. If the Domestic Borrower fails to deliver the financial statements and corresponding Compliance Certificate to the Administrative Agent at the time required pursuant to Section 5.01 , then effective as of the date such financial statements and corresponding Compliance Certificate were required to the delivered pursuant to Section 5.01 , the Commitment Fee Rate shall be determined at Level IV and shall remain at such level until the date such financial statements and corresponding Compliance Certificate are so delivered by the Domestic Borrower.”

     “ Interim Junior Financing ” means one or more interim or bridge loans or financings, including, without limitation, the Short Term Interim Junior Financing, in a principal amount not exceeding $135,000,000 in the aggregate at any time outstanding, issued from time to time by any party to the Domestic Borrower as an intermediate financing vehicle to be refinanced or repaid from the proceeds of, or converted into, the Long Term Junior Financing on terms reasonably satisfactory to the Administrative Agent.

     “ Long Term Junior Financing ” means (i) the unsecured notes, loans or debentures in the original principal amount of up to $135,000,000, or (ii) any extension of the Interim Junior Financing beyond January 31, 2010, which, in each case, shall have a stated maturity date not earlier than September 17, 2013 and shall be on terms reasonably satisfactory to the Administrative Agent.

     “ Revolving Loan Commitment ” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.07 or (b) increased from time to time pursuant to Section 2.18 or (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 2.18 or 10.04 . The initial amount of each Lender’s Revolving Loan Commitment is set forth on Schedule 2.01 , or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Loan Commitment, as applicable. The initial aggregate amount of the Lenders’ Revolving Loan Commitments is $100,000,000 or an Equivalent Amount computed in an Alternative Currency.”

     “ Short Term Interim Junior Financing ” means one or more unsecured loans, with a maturity date of no later than December 31, 2008, and in an original principal amount not exceeding $41,000,000, made by any party to the Domestic Borrower as an intermediate financing vehicle to be repaid from the proceeds of any other Interim Junior Financing or the Long Term Junior Financing, on terms reasonably satisfactory to the Administrative Agent; provided the maturity date may be extended to a date that is not earlier than January 31, 2010, with such extension on terms reasonably satisfactory to the Administrative Agent, or if the maturity date thereof is not so extended, such loans are refinanced with the proceeds of unsecured loans of like principal amount having a maturity date that is not earlier than January 31, 2010, and funded by the lender of the existing loans that are to be so refinanced and/or one or more of its affiliates on terms reasonably satisfactory to the Administrative Agent.”

     (b) Section 1.01 is hereby further amended by adding the following definition thereto in the proper alphabetical order.

     “ Fourth Amendment Effective Date ” means December 30, 2008.

     “ Sale/Leaseback Agreemen t” means a five-year amortizing equipment lease financing facility in the original principal amount not exceeding $41,000,000, entered into by Domestic Borrower or one or more of its Subsidiaries, pursuant to which Domestic Borrower or such Subsidiaries shall sell and lease back equipment or inventory, primarily located in Canada, on terms reasonably satisfactory to the Administrative Agent.”

     (c) Section 1.01 is hereby further amended by amending and restating paragraph (w) of the definition of Permitted Liens to read as follows:

     “ (w) Liens to secure Capital Lease Obligations permitted under Sections 6.01(g) and 6.01(s) ; provided