BY THE CHIEF FINANCIAL OFFICER OF BORROWING AGENT,
ARE BASED ON UNDERLYING ASSUMPTIONS WHICH PROVIDE A REASONABLE BASIS FOR THE
PROJECTIONS CONTAINED THEREIN AND REFLECT BORROWERS' JUDGMENT BASED ON PRESENT
CIRCUMSTANCES OF THE MOST LIKELY SET OF CONDITIONS AND COURSE OF ACTION FOR THE
PROJECTED PERIOD.
(B)
THE CONSOLIDATED AND CONSOLIDATING BALANCE SHEETS OF BORROWERS, THEIR
SUBSIDIARIES AND SUCH OTHER PERSONS DESCRIBED THEREIN (INCLUDING THE ACCOUNTS OF
ALL SUBSIDIARIES FOR THE RESPECTIVE PERIODS DURING WHICH A SUBSIDIARY
RELATIONSHIP EXISTED) AS OF DECEMBER 31, 2006, AND THE RELATED STATEMENTS OF
INCOME, CHANGES IN STOCKHOLDER'S EQUITY, AND CHANGES IN CASH FLOW FOR THE PERIOD
ENDED ON SUCH DATE, ALL ACCOMPANIED BY REPORTS THEREON CONTAINING OPINIONS
WITHOUT QUALIFICATION BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, COPIES OF
WHICH HAVE BEEN DELIVERED TO AGENT, HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP,
CONSISTENTLY APPLIED (EXCEPT FOR CHANGES IN APPLICATION IN WHICH SUCH
ACCOUNTANTS CONCUR AND PRESENT FAIRLY THE FINANCIAL POSITION OF BORROWERS AND
THEIR SUBSIDIARIES AT SUCH DATE AND THE RESULTS OF THEIR OPERATIONS FOR SUCH
PERIOD.
SINCE MARCH 31, 2007, THERE HAS BEEN NO CHANGE IN THE CONDITION,
FINANCIAL OR OTHERWISE, OF BORROWERS OR THEIR SUBSIDIARIES AS SHOWN ON THE
CONSOLIDATED BALANCE SHEET AS OF SUCH DATE AND NO CHANGE IN THE AGGREGATE VALUE
OF MACHINERY, EQUIPMENT AND REAL PROPERTY OWNED BY BORROWERS AND THEIR
RESPECTIVE SUBSIDIARIES, EXCEPT CHANGES IN THE ORDINARY COURSE OF BUSINESS, NONE
OF WHICH INDIVIDUALLY OR IN THE AGGREGATE HAS BEEN MATERIALLY ADVERSE.
5.6.
Entity Names.
Other than Geokinetics Exploration, Inc. formerly known
as Trace Energy Services Ltd., no Borrower has been known by any other corporate
name in the past five years and does not sell Inventory under any other name
except as set forth on Schedule 5.6, nor has any Borrower been the surviving
corporation of a merger or consolidation or acquired all or substantially all of
the assets of any Person during the preceding five (5) years.
5.7.
O.S.H.A. and Environmental Compliance.
(A)
EACH BORROWER HAS DULY COMPLIED WITH, AND ITS FACILITIES, BUSINESS,
ASSETS, PROPERTY, LEASEHOLDS, REAL PROPERTY AND EQUIPMENT ARE IN COMPLIANCE IN
ALL MATERIAL RESPECTS WITH, THE PROVISIONS OF THE FEDERAL OCCUPATIONAL SAFETY
AND HEALTH ACT, THE ENVIRONMENTAL PROTECTION ACT, RCRA AND ALL OTHER
ENVIRONMENTAL LAWS, AND ANY CANADIAN EQUIVALENT THEREOF WITH RESPECT TO THE
FOREGOING STATUTES; THERE HAVE BEEN NO OUTSTANDING CITATIONS, NOTICES OR ORDERS
OF NON-COMPLIANCE ISSUED TO ANY BORROWER OR RELATING TO ITS BUSINESS, ASSETS,
PROPERTY, LEASEHOLDS OR EQUIPMENT UNDER ANY SUCH LAWS, RULES OR REGULATIONS.
(B)
EACH BORROWER HAS BEEN ISSUED ALL REQUIRED FEDERAL, STATE AND LOCAL
LICENSES, CERTIFICATES OR PERMITS RELATING TO ALL APPLICABLE ENVIRONMENTAL LAWS.
(C)
(I) THERE ARE NO VISIBLE SIGNS OF RELEASES, SPILLS, DISCHARGES, LEAKS OR
DISPOSAL (COLLECTIVELY REFERRED TO AS "RELEASES") OF HAZARDOUS SUBSTANCES AT,
UPON, UNDER OR WITHIN ANY REAL PROPERTY OR ANY PREMISES LEASED BY ANY BORROWER;
(II) THERE ARE NO UNDERGROUND
62
STORAGE TANKS OR POLYCHLORINATED BIPHENYLS ON THE REAL PROPERTY OR ANY PREMISES
LEASED BY ANY BORROWER; (III) NEITHER THE REAL PROPERTY NOR