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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Earliest Event Reported: December 17, 1997
ENVIRONMENTAL SAFEGUARDS, INC.
(Exact name of registrant as specified in its charter)
Nevada 000-21953 87-0429198
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or organization) Identification No.)
2600 South Loop West, Suite 645
Houston, Texas 77054
(Address of principal executive offices, including zip code)
(713) 641-3838
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On December 17, 1997, Environmental Safeguards, Inc. (the "Company"),
entered into a Purchase Agreement (the "Purchase Agreement") with Parker
Drilling Company and Parker Drilling Investment Company, (collectively,
"Parker") which provided for the acquisition by the Company, through it's
wholly owned subsidiary, National Fuel & Energy, Inc. ("NFE"), of Parker's 50%
interest in OnSite Technology L.L.C. ("OnSite") resulting in NFE becoming the
owner of 100% of the interest in OnSite. Pursuant to the terms of the Purchase
Agreement, the Company paid $8,000,000 for the 50% interest and repaid a
$3,000,000 loan that had been made to the Company by an affiliate of Parker.
As part of the transaction, Parker returned to the Company 300,000 unexercised
warrants to purchase the Company's common stock. The acquisition was the
result of negotiations between the Company and Parker and was based on numerous
factors including the Company's estimate of the net worth of OnSite, and the
future business prospects of OnSite.
The Company's sources of funds to effect the acquisition was the sale
of $8,000,000 of new Series B and Series C Preferred Stock and the borrowing of
$6,000,000 from an investor group consisting of Cahill, Warnock Strategic
Partners Fund, L.P., Strategic Associates, L.P., Newpark Resources, Inc. and
James H. Stone, who is the Chairman of Stone Energy Corporation. Pursuant to
the financing, David Warnock will be appointed as a Director of the Company.
As a result of the financing, the Company retained approximately
$3,000,000 after the transaction to use for working capital and general
corporate purposes.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) and (b) Financial Statements and Information
As of the date of the filing of this Current Report on Form 8-K,
the financial statements and proforma financial information
required by Items 7(a) and 7(b) are not available. Such financial
statements will be filed no later than March 2, 1997.
(c) Exhibits
4.1 Certificate of Designation, Preferences, Rights and
Limitations of Series B Convertible Preferred Stock.
4.2 Certificate of Designation, Preferences, Rights and
Limitations of Series C Preferred Stock.
10.1 Purchase Agreement dated December 17, 1997, among the
Company, Parker Drilling Investment Company and
Parker Drilling Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENVIRONMENTAL SAFEGUARDS, INC.
Date: December 29, 1997 By: /s/ James S. Percell
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James S. Percell, President
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibits Description
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<S> <C>
4.1 Certificate of Designation, Preferences, Rights and Limitations of
Series B Convertible Preferred Stock.
4.2 Certificate of Designation, Preferences, Rights and Limitations of
Series C Preferred Stock.
10.1 Purchase Agreement dated December 17, 1997, among the Company, Parker
Drilling Investment Company and Parker Drilling Company.
</TABLE>
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EXHIBIT 4.1
CERTIFICATE OF THE DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
ENVIRONMENTAL SAFEGUARDS, INC.
Environmental Safeguards, Inc. (hereinafter referred to as the
"Corporation" or "Company"), a corporation organized and existing under the laws
of the State of Nevada,
DOES HEREBY CERTIFY:
That, the Articles of Incorporation of the Corporation authorizes the
issuance of 10,000,000 shares of Preferred Stock, $.001 par value per share, and
expressly vests in the Board of Directors of the Corporation the authority to
issue any or all of said shares in one or more series and by resolution or
resolutions to establish the designation, number, full or limited voting powers,
or the denial of voting powers, preferences and relative, participating,
optional, and other special rights and the qualifications, limitations,
restrictions and other distinguishing characteristics of each series to be
issued:
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation, the Series B Convertible Preferred
Stock, par value $.001 with a stated value of $5,000.00 ("Preferred Stock"), is
hereby authorized and created, said series to consist of up to 5,000,000
shares. The voting powers, preferences and relative, participating, optional
and other special rights, and the qualifications, limitations or restrictions
thereof shall be as follows:
1. DIVIDENDS ON PREFERRED STOCK
(a) The holders of Preferred Stock shall be entitled to receive
out of funds legally available therefor, dividends at the same rate as
dividends (other than dividends paid in additional shares of Common
Stock) are paid with respect to the outstanding shares of the Company's
Common Stock, $.001 par value per share ("Common Stock"), (treating each
share of Preferred Stock as being equal to the number of shares of
Common Stock into which each such share of Preferred Stock could be
converted pursuant to the provisions of Section 2 hereof with such
number determined as of the record date for the determination of holders
of Common Stock entitled to receive such dividend).
(b) Dividends in Kind. In the event the Company shall make or
issue, or shall fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution with
respect to the Common Stock payable in (i) securities of the Company
other than shares of Common Stock or (ii) assets, then and in each such
event the holders of Preferred Stock shall receive, at the same time
such distribution is made with respect to Common Stock, the number of
securities or such other assets of the
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Company which they would have received had their Preferred Stock been
converted into Common Stock immediately prior to the record date for
determining holders of Common Stock entitled to receive such
distribution.
2. CONVERSION OF PREFERRED STOCK INTO COMMON STOCK
(a) Each holder of shares of Preferred Stock may, at his option
and at any time and from time to time, convert any or all such shares,
plus all dividends accrued and unpaid on such Preferred Stock up to the
conversion date, on the terms and conditions set forth in this Section
2, into fully paid and non-assessable shares of the Corporation's Common
Stock except that with respect to any shares of Preferred Stock called
for redemption, the conversion right shall terminate at the close of
business on the business day prior to the Redemption Date, unless
default is made in the payment of the Redemption Price. The number of
shares of Common Stock into which each share of Preferred Stock may be
converted shall be determined by multiplying the number of shares of
Preferred Stock to be converted by $1.06 and dividing the result by the
Conversion Price (as defined herein) in effect at the time of
conversion. The "Conversion Price" per share at which shares of Common
Stock shall be issuable upon conversion of any shares of Preferred Stock
shall initially be $1.06, subject to adjustment provided below.
(b) To exercise his conversion privilege, the holder of any
shares of Preferred Stock shall surrender to the Corporation during
regular business hours at the principal executive offices of the
Corporation or the offices of the transfer agent for the Preferred Stock
or at such other place as may be designated by the Corporation, the
certificate or certificates for the shares to be converted, duly
endorsed for transfer to the Corporation (if required by it),
accompanied by written notice stating that the holder irrevocably elects
to convert such shares. Conversion shall be deemed to have been
effected on the date when such delivery is made, and such date is
referred to herein as the "Conversion Date." Within five (5) business
days after the date on which such delivery is made, the Corporation
shall issue and send (with receipt to be acknowledged) to the holder
thereof or the holder's designee, at the address designated by such
holder, a certificate or certificates for the number of full shares of
Common Stock to which the holder is entitled as a result of such
conversion, and cash with respect to any fractional interest of a share
of Common Stock as provided in paragraph (c) of this Section 2. The
holder shall be deemed to have become a stockholder of record of the
number of shares of Common Stock into which the shares of Preferred
Stock have been converted on the applicable Conversion Date unless the
transfer books of the Corporation are closed on that date, in which
event he shall be deemed to have become a stockholder of record of such
shares on the next succeeding date on which the transfer books are
open, but the Conversion Price shall be that in effect on the Conversion
Date. Upon conversion of only a portion of the number of shares of
Preferred Stock represented by a certificate or certificates surrendered
for conversion, the Corporation shall within three (3) business days
after the date on which such delivery is made, issue and send (with
receipt to be acknowledged) to the holder
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thereof or the holder's designee, at the address designated by such
holder, a new certificate covering the number of shares of Preferred
Stock representing the unconverted portion of the certificate or
certificates so surrendered.
(c) No fractional shares of Common Stock or scrip shall be
issued upon conversion of shares of Preferred Stock. If more than one
share of Preferred Stock shall be surrendered for conversion at any one
time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Preferred Stock so surrendered. Instead
of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of any shares of Preferred Stock, the
Corporation shall make an adjustment in respect of such fractional
interest equal to the fair market value of such fractional interest, to
the nearest 1/100th of a share of Common Stock, in cash at the Current
Market Price (as defined below) on the business day preceding the
effective date of the conversion. The "Current Market Price" of
publicly traded shares of Common Stock of the Corporation for any day
shall be deemed to be the average of the daily "Closing Prices" for the
10 consecutive trading days preceding the Conversion Date. The "Closing
Price" shall mean the last reported sales price on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on the National Association of Securities
Dealers Automated Quotations System, or, if the Common Stock is not
listed or admitted to trading on any national securities exchange or
quoted on the National Association of Securities Dealers Automated
Quotations System, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Corporation for that
purpose.
(d) The Corporation shall at all times reserve for issuance
and maintain available, out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of the Preferred
Stock, the full number of shares of Common Stock deliverable upon the
conversion of all Preferred Stock from time to time outstanding. The
Corporation shall from time to time (subject to obtaining necessary
director and stockholder action), in accordance with the laws of the
State of Nevada, increase the authorized number of shares of its Common
Stock if at any time the authorized number of shares of its Common Stock
remaining unissued shall not be sufficient to permit the conversion of
all of the shares of Preferred Stock at the time outstanding.
(e) If any shares of Common Stock to be reserved for the
purpose of conversion of shares of Preferred Stock require registration
or listing with, or approval of, any governmental authority, stock
exchange or other regulatory body under any federal or state law or
regulation or otherwise, including registration under the Securities Act
of 1933, as amended, and appropriate state securities laws, before such
shares may be validly issued or delivered upon conversion, the
Corporation will in good faith and as expeditiously as possible meet
such registration, listing or approval, as the case may be.
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(f) All shares of Common Stock which may be issued upon
conversion of the shares of Preferred Stock will upon issuance by the
Corporation be validly issued, fully paid and non-assessable and free
from all taxes, liens and charges with respect to the issuance thereof.
(g) The Conversion Price in effect shall be subject to
adjustment from time to time as follows:
(i) Stock Splits, Dividends and Combinations. In the
event that the Corporation shall at any time subdivide the
outstanding shares of Common Stock, or shall pay or make a
dividend or distribution on any class of capital stock of the
Corporation in Common Stock, the Conversion Price in effect
immediately prior to such subdivision or the issuance of such
dividend shall be proportionately decreased, and in case the
Corporation shall at any time combine the outstanding shares of
Common Stock, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased, effective at
the close of business on the date of such subdivision, dividend
or combination, as the case may be.
(ii) Non-Cash Dividends, Stock Purchase Rights, Capital
Reorganization and Dissolutions. In the event:
(A) that the Corporation shall take a record of
the holders of its Common Stock for the purpose of
entitling them to receive a dividend, or any other
distribution, payable otherwise than in cash; or
(B) that the Corporation shall take a record of
the holders of its Common Stock for the purpose of
entitling them to subscribe for or purchase any shares of
stock of any class or other securities, or to receive any
other rights; or
(C) of any capital reorganization of the
Corporation, reclassification of the capital stock of the
Corporation (other than a subdivision or combination of
its outstanding shares of Common Stock), consolidation or
merger of the Corporation with or into another
corporation, share exchange for all outstanding shares of
Common Stock under a plan of exchange to which the
Corporation is a party, or conveyance of all or
substantially all of the assets of the Corporation to
another corporation; or
(D) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
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then, and in any such case, the Corporation shall cause to
be mailed to the holders of record of the outstanding
Preferred Stock, at least 10 days prior to the date
hereinafter specified, a notice stating the date on which
(x) a record is to be taken for the purpose of such
dividend, distribution or rights, or (y) such
reclassification, reorganization, consolidation, merger,
share exchange, conveyance, dissolution, liquidation or
winding up is to take place and the date, if any is to be
fixed, as of which holders of Corporation securities of
record shall be entitled to exchange their shares of
Corporation securities for securities or other property
deliverable upon such reclassification, reorganization,
consolidation, merger, share exchange, conveyance,
dissolution, liquidation or winding up.
(iii) Issuances at Less than the Conversion Price.
Upon the issuance by the Corporation of Common Stock, or
any right, warrant or option to purchase Common Stock or
any security convertible into or exchangeable for Common
Stock, or any obligation or any share of stock convertible
into or exchangeable for Common Stock for a consideration
per share less than the Conversion Price of the Preferred
Stock in effect immediately prior to the time of such
issue or sale other than an issuance of stock or
securities pursuant to paragraph (i) of this Section 2(g),
the issuance of shares of Common Stock upon exercise of
options and warrants granted prior to the date of initial
issuance of the Preferred Stock, shares of Common Stock
issued upon the exercise of stock options granted pursuant
to the corporation's employee stock option plan in effect
from time to time (and as amended if approved by the
stockholders of the Corporation), or shares of Common
Stock issued in bona fide acquisitions (stock or asset)
approved by the Board of Directors or stockholders of the
Corporation, then forthwith upon such issue or sale, the
Conversion Price of the Preferred Stock shall be reduced
to a price (calculated to the nearest cent) determined by
dividing:
(A) an amount equal to the sum of (x) the
number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied
by the then existing Conversion Price of the
Preferred Stock, (y) the number of shares of Common
Stock issuable upon conversion or exchange of any
obligations or of any shares of stock of the
Corporation outstanding immediately prior to such
issue or sale multiplied by the then existing
Conversion Price of the Preferred Stock, and (z) an
amount equal to the aggregate "consideration
actually received" by the Corporation upon such
issue or sale; by
(B) the sum of the number of shares of
Common Stock outstanding immediately after such
issue or sale and the number of shares of Common
Stock issuable upon conversion or exchange of any
obligations or of any share of stock of the
Corporation outstanding immediately after such
issue or sale.
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For purposes of this paragraph 2(g)(iii), the following
provisions will be applicable:
(A) In the case of an issue or sale for cash of
shares of Common Stock, the "consideration actually received"
by the Corporation therefor shall be deemed to be the amount
of cash received, before deducting therefrom any commissions
or expenses paid by the Corporation.
(B) In case of the issuance (otherwise than upon
conversion or exchange of obligations or shares of stock of
the Corporation) of additional shares of Common Stock for a
consideration other than cash or a consideration partly other
than cash, the amount of the consideration other than cash
received by the Corporation for such shares shall be deemed to
be the fair value of such consideration as determined in good
faith by the Board of Directors.
(C) In case of the issuance by the Corporation in
any manner of any rights to subscribe for or to purchase
shares of Common Stock, or any options for the purchase of
shares of Common Stock or stock convertible into Common Stock,
all shares of Common Stock or stock convertible into Common
Stock to which the holders of such rights or options shall be
entitled to subscribe for or purchase pursuant to such rights
or options shall be deemed to be "outstanding" as of the date
of the offering of such rights or the granting of such
options, as the case may be, and the aggregate consideration
named in such rights or options for the shares of Common Stock
or stock convertible into Common Stock covered thereby, plus
the consideration, if any, received by the Corporation for
such rights or options, shall be deemed to be the
"consideration actually received" by the Corporation (as of
the date of the offering of such rights or the granting of
such options, as the case may be) for the issuance of such
shares.
(D) In case of the issuance or issuances by the
Corporation in any manner of any obligations or of any shares
of stock of the Corporation that shall be convertible into or
exchangeable for Common Stock, all shares of Common Stock
issuable upon the conversion or exchange of such obligations
or shares shall be deemed to be issued as of the date such
obligations or shares are issued, and the amount of the
"consideration actually received" by the Corporation for such
additional shares of Common Stock shall be deemed to be the
total of (x) the amount of consideration received by the
Corporation upon the issuance of such obligations or shares,
as the case may be, plus (y) the aggregate consideration, if
any, other than such obligations or shares, receivable by
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the Corporation upon such conversion or exchange, except in
adjustment of dividends.
(E) The amount of the "consideration actually
received" by the Corporation upon the issuance of any rights
or options referred to in subparagraph (C) above or upon the
issuance of any obligations or shares which are convertible or
exchangeable as described in subparagraph (D) above, and the
amount of the consideration, if any, other than such
obligations or shares so convertible or exchangeable,
receivable by the Corporation upon the exercise, conversion or
exchange thereof shall be determined in the same manner
provided in subparagraphs (A) and (B) above with respect to
the consideration received by the Corporation in case of the
issuance of additional shares of Common Stock. Upon the
expiration of any rights or options referred to in subparagraph
(C), or the termination of any right of conversion or exchange
referred to in subparagraph (D), or any change in the number
of shares of Common Stock deliverable upon exercise of such
options or rights or upon conversion of or exchange of such
convertible or exchangeable securities, the Conversion Prices
then in effect shall forthwith be readjusted to such
Conversion Prices as would have obtained had the adjustments
made upon the issuance of such options, rights or convertible
or exchangeable securities been made upon the basis of the
delivery of only the number of shares of Common Stock actually
delivered or to be delivered upon the exercise of such rights
or options or upon the conversion or exchange of such
securities.
(h) Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to paragraph 2(g), the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof, and prepare and
furnish to each holder of Preferred Stock a certificate signed by an
officer of the Corporation setting forth (i) such adjustment or
readjustment, (ii) the Conversion Price at the time in effect, and
(iii) the number of shares of Common Stock and the amount, if any, of
other property which at the time would be received upon the conversion
of such holder's shares.
(i) In case any shares of Preferred Stock shall be
converted pursuant to Section 2(f) hereof, or purchased or otherwise
acquired by the Corporation, the shares so converted, purchased or
acquired shall be restored to the status of authorized but unissued
shares of preferred stock, without designation as to class or series,
and may thereafter be reissued, but not as shares of Preferred Stock.
(j) Effective upon the closing of a Qualified Public
Offering (as hereinunder defined) all of the then outstanding
Preferred Stock shall automatically be converted into Common Stock at
the applicable Conversion Price then in effect. For purposes hereof,
the
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term "Qualified Public Offering" shall mean the closing of a firm
commitment underwritten public offering pursuant to a registration
statement filed and declared effective under the Securities Act of
1933, as amended, (the "Act") covering the offer and sale of Common
Stock to the public in which the aggregate proceeds to the Company
equal or exceed $25,000,000 and in which the price per share of Common
Stock is at least $5.00 per share. All holders of record of shares of
Preferred Stock will be given at least 10 days' prior written notice
of the date fixed and the place designated for mandatory conversion of
all such shares of Preferred Stock pursuant to this Section 2(j). On
or before the date fixed for conversion, each holder of shares of
Preferred Stock shall surrender his or its certificate or certificates
for all such shares to the Company at the place designated in such
notice, and shall thereafter receive certificates for the number of
shares of Common Stock to which such holder is entitled pursuant to
this Section 2(j). Within five (5) business days after the date of
such mandatory conversion and the surrender of the certificate or
certificates for Preferred Stock, the Company shall cause to be issued
and delivered to such holder a certificate or certificates for the
number of full shares of Common Stock issuable on such conversion in
accordance with the provisions hereof and cash as provided in Section
2(c) in respect of any fraction of a share of Common Stock otherwise
issuable upon such conversion.
3. VOTING
(a) Except for election of directors, as otherwise required
by law or set forth herein, the shares of Preferred Stock shall be
entitled to vote, together with the shares of the Corporation's Common
Stock, on all matters presented at any annual or special meeting of
stockholders of the Corporation, or may act by written consent in the
same manner as the holders of the Corporation's Common Stock, upon the
following basis: each holder of Preferred Stock shall be entitled to
cast such number of votes for each share of Preferred Stock held by
such holder on the record date fixed for such meeting, or on the
effective date of such written consent, as shall be equal to the
number of shares of the Corporation's Common Stock into which each of
such holder's shares of Preferred Stock is convertible immediately
after the close of business on the record date fixed for such meeting
or the effective date of such written consent. The Preferred Stock
and any other stock having voting rights shall vote together as one
class, except as provided by law and in paragraph 5 hereof.
(b) Without limiting the foregoing, so long as the Preferred
Stock is outstanding and unconverted to Common Stock, the holders of
the Preferred Stock, voting separately as a class, shall be entitled
to elect one member of the Board of Directors.
4. LIQUIDATION RIGHTS
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders
of shares of Preferred Stock then outstanding
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shall be entitled to receive out of assets of the Corporation
available for distribution to stockholders, before any distribution of
assets is made to holders of any other class of capital stock of the
Corporation, an amount equal to $1.06 per share, plus accumulated and
unpaid dividends thereon to the date fixed for distribution
("Liquidation Amount").
(b) A consolidation or merger of the Corporation (in the
event that the Corporation is not the surviving entity) or sale of all
or substantially all of the Corporation's assets shall be regarded as
a liquidation, dissolution or winding up of the affairs of the Company
within the meaning of this Section 4. In the event of such a
liquidation as contemplated by this Section 4(b), the holders of
Preferred Stock shall be entitled to receive an amount equal to the
greater of the Liquidation Amount or that which such holders would
have received if they had converted their Preferred Stock into Common
Stock immediately prior to such liquidation or winding up (without
giving effect to the liquidation preference of or any dividends on any
other capital stock ranking prior to the Common Stock).
(c) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation which
involves the distribution of assets other than cash, the Corporation
shall promptly engage competent independent appraisers to determine
the value of the assets to be distributed to the holders of shares of
Preferred Stock and the holders of shares of Common Stock. The
Corporation shall, upon receipt of such appraiser's valuation, give
prompt written notice to each holder of shares of Preferred Stock of
the appraiser's valuation.
5. LIMITATIONS
(a) So long as twenty-five percent (25%) of the shares of
Preferred Stock are outstanding, the Corporation shall not:
(i) create, authorize or issue shares of any class
or series of stock, or any security convertible into such class or
series ranking senior to or on parity with the Preferred Stock either
as to payment of dividends or as distributions in the event of a
liquidation, dissolution or winding up of the Corporation; or
(ii) amend, alter or repeal any provision of the
Articles of Incorporation or Bylaws of the Corporation so as to affect
adversely the relative rights, preferences, qualifications,
limitations or restrictions (including, without limitation, expanding
the number of members on the Board of Directors) of the Preferred
Stock; or
(iii) declare or pay any dividend on its Common
Stock if any dividends are unpaid on the Preferred Stock; or
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(iv) redeem for cash any other securities issued
by the Company; or
(v) directly or indirectly, enter into any merger,
consolidation or other reorganization in which the Company shall no be
the surviving corporation, unless the surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in
writing to assume the obligations of the Company under the Certificate
of Designation.
(b) The provisions of this paragraph 5 shall not in any way
limit the right and power of the Corporation to issue bonds, notes,
mortgages, debentures, common stock, preferred stock ranking junior to the
terms of the Preferred Stock and other obligations, and to incur
indebtedness to banks and to other lenders.
IN WITNESS WHEREOF, ENVIRONMENTAL SAFEGUARDS, INC. has caused its
corporate seal to be hereunto affixed and this certificate to be signed by
JAMES S. PERCELL, its president, and RONALD BIANCO, its assistant secretary,
this ___ day of ________________, 1997.
ENVIRONMENTAL SAFEGUARDS, INC.
By:
-------------------------------
JAMES S. PERCELL, President
By:
-------------------------------
RONALD BIANCO, Assistant Secretary
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
James S. Percell, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this ____ day of December,
1997.
----------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
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THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
Ronald Bianco, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this ____ day of December,
1997.
---------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
11
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EXHIBIT 4.2
CERTIFICATE OF THE DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS OF
SERIES C PREFERRED STOCK
OF
ENVIRONMENTAL SAFEGUARDS, INC.
Environmental Safeguards, Inc. (hereinafter referred to as the
"Corporation" or "Company"), a corporation organized and existing under the
laws of the State of Nevada,
DOES HEREBY CERTIFY:
That, the Articles of Incorporation of the Corporation authorizes the
issuance of 10,000,000 shares of Preferred Stock, $.001 par value per share,
and expressly vests in the Board of Directors of the Corporation the authority
to issue any or all of said shares in one or more series and by resolution or
resolutions to establish the designation, number, full or limited voting
powers, or the denial of voting powers, preferences and relative, participating,
optional, and other special rights and the qualifications, limitations,
restrictions and other distinguishing characteristics of each series to be
issued:
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation, the Series C Preferred Stock, par
value $.001("Series C Preferred Stock"), is hereby authorized and created, said
series to consist of up to 400,000 shares, with a stated value of $10.00 per
share. The voting powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations or restrictions
thereof shall be as follows:
1. DIVIDENDS ON SERIES C PREFERRED STOCK
(a) The holders of Series C Preferred Stock shall be
entitled to receive out of funds legally available therefor, dividends
in an annual amount equal to the prime rate plus one and one-half
percent (1 1/2%) as reported by NationsBank of Maryland, N.A. on the
outstanding stated value of the Series C Preferred Stock (which
initially is $4,000,000.00). The dividends shall be calculated as of
the last day of each quarter, and shall be payable quarterly in
arrears (the "Dividend Payment") with the first quarterly payment due
for the quarter ending March 31, 1998. The Dividend Payment is due
five (5) days after the close of each quarter. The initial dividend
shall accrue from the date of issuance of the Series C Preferred Stock
and shall be payable with the quarterly payment for the quarter ending
March 31, 1998.
2. NO CONVERSION OF SERIES C PREFERRED STOCK INTO COMMON STOCK
The Series C Preferred Stock is not convertible into the
Corporation's Common Stock.
<PAGE> 2
3. NO VOTING OF SERIES C PREFERRED STOCK
Except as required by law, each holder of Series C Preferred
Stock shall not be entitled to vote on any matters.
4. LIQUIDATION RIGHTS
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders
of shares of Series C Preferred Stock then outstanding shall be
entitled to receive out of assets of the Corporation available for
distribution to stockholders, before any distribution of assets is
made to holders of any other class of capital stock of the Corporation,
except Series B Convertible Preferred Stock, an amount equal to $10.00
per share, plus accumulated and unpaid dividends thereon to the date
fixed for distribution ("Liquidation Amount").
(b) A consolidation or merger of the Corporation (in the
event that the Corporation is not the surviving entity) or sale of all
or substantially all of the corporation's assets shall be regarded as
a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this Section 4. In the event of such
a liquidation as contemplated by this Section 4(b), the holders of
Series C Preferred Stock shall be entitled to receive an amount equal
to the Liquidation Amount.
(c) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation which
involves the distribution of assets other than cash, the Corporation
shall promptly engage competent independent appraisers to determine
the value of the assets to be distributed to the holders of shares of
this Series C Preferred Stock other preferred stock, and the holders
of shares of Common Stock. The Corporation shall, upon receipt of such
appraiser's valuation, give prompt written notice to each holder of
shares of Series C Preferred Stock of the appraiser's valuation.
5. REDEMPTION AT THE DISCRETION OF THE CORPORATION
(a) The Corporation, at its sole discretion, may redeem
any and/or all of the shares of Series C Preferred Stock as may be
outstanding from time to time (the "Redemption Date"), upon thirty
days written notice to holders (the "Redemption Notice").
(b) The Redemption Price (the "Redemption Price") for
each share of Series C Preferred Stock shall be $10.00, plus
accumulated and unpaid dividends thereon to the date fixed for
redemption.
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(c) The notice required by clause 5(a) above shall be
delivered by the Corporation to each holder of record of Series C
Preferred Stock, at such holder's address as shown on the records of
the Corporation; provided, however, that the Corporation's failure to
give such Redemption Notice shall in no way affect the Corporation's
right to redeem the Series C Preferred Stock.
(d) The Redemption Notice shall contain the following
information:
(i) the Redemption Date and the Redemption Price;
and
(ii) the number of shares of Series C Preferred
Stock being redeemed.
(e) Surrender of Certificates. Each holder of shares of
Series C Preferred Stock to be redeemed shall surrender the
certificate(s) representing such shares to the Corporation at the
place designated in the Redemption Notice, and thereupon the
Redemption Price for such shares as set forth in this Section 5 shall
be paid to the order of the person whose name appears in such
certificate(s) and each surrendered certificate shall be canceled and
retired. In the event some but not all of the shares of Series C
Preferred Stock represented by a certificate(s) surrendered by a
holder are being redeemed, the Corporation shall execute and deliver
to or on the order of the holder, at the expense of the Corporation, a
new certificate representing the number of shares of Series C
Preferred Stock which were not redeemed.
(f) All shares of Series C Preferred Stock so redeemed
shall have the status of authorized but unissued Series C Preferred
Stock, but such shares so redeemed shall not be reissued as shares of
the series of Series C Preferred Stock created hereby.
IN WITNESS WHEREOF, ENVIRONMENTAL SAFEGUARDS, INC. has caused its
corporate seal to be hereunto affixed and this certificate to be signed by
JAMES S. PERCELL, its president, and RONALD BIANCO, its assistant secretary,
this ___ day of ________________, 1997.
ENVIRONMENTAL SAFEGUARDS, INC.
By
------------------------------------
JAMES S. PERCELL, president
By
------------------------------------
RONALD BIANCO, Assistant Secretary
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THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
James S. Percell, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this _____ day of December,
1997.
------------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
Ronald Bianco, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this _____ day of December, 1997.
------------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
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EXHIBIT 10.19
PURCHASE AGREEMENT
PURCHASE AGREEMENT ("Agreement") dated as of December 10, 1997 and effective as
of December 17, 1997 by and among Environmental Safeguards, Inc., a Nevada
company ("Buyer"), Parker Drilling Investment Company, an Oklahoma corporation
("Seller") and Parker Drilling Company, a Delaware corporation ("Parker").
WITNESSETH:
WHEREAS, Seller owns and desires to sell to Buyer all of its capital
account of OnSite Technology, LLC ("OnSite"), which capital account represents
50% of the issued and outstanding capital of OnSite (the "Seller's Capital");
WHEREAS, Buyer has agreed to purchase the Seller's Capital from Seller
for the consideration stated herein, subject to the satisfaction of the
conditions provided herein;
WHEREAS, Parker Drilling Company, a Delaware corporation, and parent
company of Seller and Casuarina, Ltd., a Bermuda corporation, have made certain
representations and undertaken certain obligations as provided herein;
NOW, THEREFORE, in consideration of the foregoing and the following
representations, warranties, covenants, agreements and indemnities, and other
good and valuable consideration, the parties hereto agree as follows:
1. PURCHASE AND TRANSFER OF SHARES.
1.1 Definitions.
"AGREEMENT" has the meaning set forth in the preamble.
"BUYER" means Environmental Safeguards, Inc.
"BUYER TERMINATION EVENT" has the meaning set forth in Section 11.1(b).
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"CLOSING" and "CLOSING DATE" have the meanings set forth in Section
2.3.
"CORPORATE CHARTER DOCUMENTS" has the meaning set forth herein.
"DAMAGES" has the meanings set forth in Section 5.2.
"EVSF INDEBTEDNESS" mean that certain loan in the amount of
US$3,000,000 which was made to Buyer by Casuarina on or about December 19,
1996.
"ONSITE CAPITAL" means the authorized and issued capital of OnSite.
"ONSITE TECHNOLOGY LLC" means that certain limited liability company
organized and existing under the laws of the State of Oklahoma.
"PARKER" means Parker Drilling Company, a Delaware corporation.
"PURCHASE PRICE" means the price paid to purchase the Seller's Capital
pursuant to, and as same may be adjusted under, the provisions of Section 2.2.
"SELLER" means Parker Drilling Investment Company.
"SELLER TERMINATION EVENT" has the meaning set forth in Section
11.1(c).
"SELLER'S CAPITAL" means Seller's capital ownership in OnSite which
will be transferred to Buyer at Closing.
"TO THE BEST OF [A PERSON'S] KNOWLEDGE", as used in this Agreement,
with respect to any party, means and applies to the actual knowledge of such
party, its officers, agents or employees and the knowledge a prudent person
should be aware of having made a reasonable investigation into the
circumstances.
"WARRANTS", shall mean those certain warrants to purchase 300,000
shares of common stock of the Buyer issued in favor of Parker Drilling Company
by Buyer in connection with the EVSF Indebtedness to Casuarina.
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1.2 Sale of Seller's Capital.
Subject to the terms and conditions of this Agreement, on the Closing
Date, Seller agrees to sell, transfer and deliver the Seller's Capital to
Buyer, free and clear of all liens, charges, pledges and encumbrances, and on
such date Buyer agrees to purchase and take delivery of title to the Seller's
Capital.
2. PURCHASE PRICE; PAYMENT.
2.1 Purchase Price.
(a) The purchase price for the Seller's Capital shall be
EIGHT MILLION UNITED STATES DOLLARS (U.S. $8,000,000) ("Purchase Price"),
payable in cash at the Closing.
(b) All payments of the Purchase Price and other sums due
hereunder shall be made in U.S. Dollars at Closing in immediately available
funds to Seller by wire transfer to Seller's bank account, which account shall
be designated in writing to Buyer at least two (2) Business Days prior to the
Closing, or as otherwise instructed by Seller in writing.
2.2 Closing.
The "Closing" of the purchase and sale provided for in this
Agreement shall take place at the offices of counsel for the Buyer, Axelrod,
Smith & Kirshbaum, on the Closing Date, or at such other time and place as the
parties hereto shall mutually agree in writing. Unless extended by agreement
in writing of the parties, which date is referred to herein as the "Closing
Date", the Closing Date shall in any event take place on or about December 17,
1997.
2.3 Closing Deliveries.
At the Closing:
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(a) Seller shall deliver to Buyer certificates or other
legal indicia of ownership representing the Seller's Capital, duly endorsed to
Buyer or its wholly owned subsidiary, together with such instruments of
transfer required by applicable law, which shall transfer to Buyer or its
wholly owned subsidiary good and marketable (legal and beneficial) title to the
Seller's Capital, free and clear of all liens and encumbrances;
(b) Parker shall deliver to Buyer certificates
representing the Warrants, unexercised, which shall be canceled at Closing;
(c) Seller shall ensure that the note representing the
EVSF Indebtedness is delivered to Buyer, marked, "Canceled";
(d) Buyer shall deliver to Seller the Purchase Price;
(e) Each party shall deliver to the other party all other
documents, instruments and certificates required to be delivered pursuant to
the terms of this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF SELLER AND PARKER.
Seller and Parker, as of the Closing Date, represent and warrant to
Buyer as follows:
3.1 Organization and Good Standing.
Seller and Parker each is a corporation duly organized, validly
existing and in good standing under the laws of Oklahoma and Delaware
respectively. Seller's and Parker's Articles or Certificate of Incorporation,
By-Laws and other organizational documents are in full force and effect and
valid under the laws of Oklahoma or Delaware, as appropriate, and no provision
thereof would preclude any of the transactions contemplated by this Agreement.
Seller's and Parker's organizational documents, as appropriate in this context,
are hereinafter referred to as "Corporate Charter Documents."
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3.2 Authority.
Seller and Parker each has all necessary corporate power and authority
to execute and deliver this Agreement and all agreements, instruments and
documents to be executed and delivered pursuant hereto, to transfer and deliver
the Seller's Capital to Buyer at the Closing, to deliver the unexercised
Warrants marked 'Canceled" to Buyer, to consummate the transactions
contemplated by the Agreement and to perform all terms and conditions required
to be performed pursuant hereto. The execution and delivery of this Agreement
and all agreements, instruments and documents to be executed and delivered by
Seller and Parker hereunder, the performance by Seller and Parker of all the
terms and conditions hereof and thereof to be performed by each respective
party, and the consummation of the transactions contemplated hereby by each
respective party have been duly authorized by all necessary corporate action of
the board of directors and/or shareholders of Seller and Parker, as
appropriate, and no other corporate authorizations are necessary with respect
thereto. All persons who have executed and delivered this Agreement, and all
persons who will execute and deliver the Seller's Capital, the canceled
Warrants and other agreements, documents, instruments and certificates to be
executed and delivered hereunder by Seller or Parker, as appropriate, have been
duly authorized by all necessary board of director and/or shareholder actions
on the part of Seller or Parker.
3.3 Enforceability: Conflicts, etc.
This Agreement constitutes a legal, valid and binding obligation of
Seller and Parker and is enforceable against each respective party in
accordance with its terms. Neither the execution and delivery of this
Agreement by Seller and Parker, nor the
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consummation of the transactions contemplated hereby to be performed by said
parties hereto will (a) violate or conflict with any provision of the Corporate
Charter Documents of Seller or Parker, as amended to date, or (b) violate or
conflict with any provision of any law, rule, regulation, order, permit,
certificate, writ, judgment, injunction, decree, determination, award or other
decision of any court or governmental agency binding upon Seller or Parker.
Neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated hereby will result in a breach of, or constitute
a default (or with notice or lapse of time or both would result in a breach of
or constitute a default) under, or otherwise give any person the right to
terminate any lease, license, contract or other agreement or instrument to
which Seller or Parker is a party. Neither the execution and delivery by
Seller and Parker of this Agreement nor the consummation of the transactions
contemplated hereby will result in, or require, the creation or imposition of
any mortgage, deed of trust, pledge, lien, security interest, or other charge
or encumbrance of any nature upon or with respect to any of the assets or
equipment now owned by Seller or Parker.
3.4 Title to Seller's Capital; Parker's Warrants.
Seller will have at Closing, full legal and beneficial title
to all of the Seller's Capital, free and clear of all liens and encumbrances.
The Seller's Capital will be duly authorized, validly issued, fully paid and
nonassessable and constitute 100% of Seller's ownership interest in OnSite.
Seller will, by delivery to Buyer of certificates or other legal indicia of
ownership properly endorsed representing the Seller's Capital at the Closing,
have transferred, delivered and vested in Buyer good and marketable (legal and
beneficial) title to the whole of the Seller's Capital free and clear of all
liens, pledges,
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encumbrances, security interests, claims, charges and restrictions whatsoever.
Except for the rights of Buyer, there are no outstanding agreements, options,
warrants or other rights of any kind whatsoever entitling any person to
purchase or acquire an interest in any of the Seller's Capital. The
certificates or other legal indicia of ownership representing Seller's Capital
delivered at the Closing and the signatures and endorsements thereof or
instruments of transfer delivered therewith will be valid and genuine.
Parker will have at Closing, full legal and beneficial title to the Warrants,
free and clear of all liens and encumbrances. Except for the rights of Buyer,
there are no outstanding agreements or other rights of any kind whatsoever
entitling any person to purchase or acquire an interest in the Warrants.
3.5 Capitalization.
Other than the rights of Buyer herein, there are no outstanding or
authorized options, warrants, rights, calls or commitments of any character
relating to the Seller's Capital, and there are no outstanding securities or
other instruments convertible into or exchangeable for the Seller's Capital and
no commitments to issue such securities or instruments.
3.6 Payment of Expenses of Brokers or Finders.
No broker or other third party has been retained in connection with
this transaction and SELLER HEREBY DEFENDS, INDEMNIFIES AND HOLDS HARMLESS
BUYER from any brokerage or finders' fees or agents' commissions or their like
payment in connection with this Agreement alleged to be due by or through
Seller or as a result of the action of Seller.
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<PAGE> 8
3.7 Consents.
No consent, approval, or authorization of, or registration or
filing with, any person, including any governmental authority or other
regulatory agency is required of Seller or Parker in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
3.8 Tax Matters.
Seller's sale of its capital in Onsite will be a technical termination
of the partnership for tax purposes only under the provision of the Internal
Revenue Code of 1986, as amended, and, consequently, a termination of the tax
year for OnSite on the Closing Date.
4. REPRESENTATIONS AND WARRANTIES BY BUYER.
Buyer hereby represents and warrants to Seller as follows:
4.1 Organization and Good Standing.
Buyer is a corporation duly organized, validly existing and
in good standing under the laws of Nevada and is duly authorized to carry on
business and is in good standing in the State of Texas.
4.2 Authority.
Buyer has all the requisite power and authority to execute and
deliver this Agreement, and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Buyer and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action, and no
other corporate action, including any action by the shareholders of Buyer, is
necessary to authorize this Agreement or the transactions
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contemplated hereby. This Agreement has been duly executed and delivered by
Buyer and is a legal, valid and binding obligation of Buyer enforceable against
it in accordance with its terms. The Buyer will have at the Closing full
corporate power and authority to make and perform this Agreement, purchase and
take delivery of the Seller's Capital and perform all other transactions
contemplated herein.
4.3 No Violation, Enforceability.
This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against it in accordance with its terms.
Neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated hereby in accordance with the terms hereto will
violate or conflict with any provision of the Articles of Incorporation,
By-laws and other applicable organizational documents of Buyer, or violate the
provisions of or result in the acceleration of performance under any material
mortgage, lien, lease, agreement, instrument, order, judgment or decree to
which Buyer is a party or by which it or any of its property is bound, and will
not violate or conflict with any other material restriction to which Buyer is
subject.
4.4 Brokers or Finders.
No broker or other third party has been retained in connection
with this transaction and BUYER HEREBY DEFENDS, INDEMNIFIES AND HOLDS HARMLESS
SELLER from any brokerage or finders' fees or agents' commissions or their like
payment in connection with this Agreement alleged to be due by or through Buyer
or as a result of the action of Buyer.
4.5 Notice; Approvals.
Buyer need not give any notice to, make any filing with, or obtain any
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authorization or consent or approval of any person or governmental authority in
order to consummate the transactions contemplated hereby.
5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.
5.1 Survival.
All of the express representations, warranties, covenants,
indemnities and agreements of the parties hereto contained in this Agreement
shall survive the Closing for a two (2) year period, except for representations
and warranties under (a) Sections 3.4 which shall survive until five (5) days
after the end of any applicable statutes of limitation, unless there is no
applicable statute of limitations period in which case they will survive for
ten (10) years and (b) the agreements and covenants under Sections 8.1 and 8.2,
which each shall survive AS provided therein.
5.2 Indemnification by Seller and Parker.
(a) SELLER AND PARKER EACH SHALL, AND DO HEREBY AGREE, TO
DEFEND, INDEMNIFY AND HOLD HARMLESS BUYER, ITS OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS AND ASSIGNS FROM AND AGAINST, AND SHALL PAY TO
BUYER, THE FULL AMOUNT OF, ANY LOSS, CLAIM, DAMAGE OR EXPENSE (INCLUDING
REASONABLE ATTORNEYS' FEES) INCURRED EITHER DIRECTLY FROM, RESULTING FROM OR
ARISING OUT OF ANY OF THE FOLLOWING:
(i) ANY MISREPRESENTATION, BREACH OF WARRANTY, OR
NONFULFILLMENT OF ANY MATERIAL AGREEMENT ON THE PART OF SELLER OR PARKER,
RESPECTIVELY, CONTAINED IN THIS AGREEMENT OR IN ANY STATEMENT OR CERTIFICATE
FURNISHED TO BUYER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY;
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(ii) ANY MATERIAL INACCURACY IN ANY CERTIFICATE OR
OTHER DOCUMENT DELIVERED BY SELLER OR PARKER, RESPECTIVELY, TO BUYER PURSUANT
TO ANY OF THE PROVISIONS OF, OR IN CONNECTION WITH, THIS AGREEMENT; AND
(iii) ANY ACTIONS, JUDGMENTS, COSTS, AND EXPENSES
(INCLUDING REASONABLE ATTORNEY'S FEES AND ALL OTHER EXPENSES INCURRED IN
INVESTIGATING, PREPARING, OR DEFENDING ANY LITIGATION OR PROCEEDING, COMMENCED
OR THREATENED) INCIDENT TO ANY OF THE FOREGOING OR THE ENFORCEMENT OF THIS
SECTION 5.2.
THE AGGREGATE AMOUNT OF SUCH LOSSES, LIABILITIES, CLAIMS, COSTS,
EXPENSES, AND FEES ARE HEREINAFTER REFERRED TO AS "DAMAGES".
(b) IN ANY CASE, SELLER AND PARKER SHALL EACH HAVE NO LIABILITY
FOR (i) ANY DAMAGES OR CLAIM WHICH DOES NOT EXCEED $25,000 OR (ii) THE FIRST
$25,000 OF ANY CLAIM OR DAMAGES FOR EACH INCIDENT GIVING RISE TO DAMAGES OR
CLAIM OR (iii) ANY DAMAGES OR CLAIMS BASED ON INFORMATION KNOWN TO BUYER AT
OR PRIOR TO CLOSING.
5.3 Indemnification by Buyer.
(a) BUYER SHALL AND DOES HEREBY AGREE TO DEFEND, INDEMNIFY AND
HOLD HARMLESS SELLER, PARKER , AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS FROM AND AGAINST, AND SHALL
PAY TO SELLER AND PARKER, THE FULL AMOUNT OF, ANY LOSS, CLAIM, DAMAGE OR
EXPENSE (INCLUDING REASONABLE ATTORNEYS' FEES) INCURRED EITHER DIRECTLY FROM,
RESULTING FROM OR ARISING OUT OF ANY OF THE FOLLOWING:
(i) ANY MISREPRESENTATION, BREACH OF WARRANTY, OR
NONFULFILLMENT OF ANY MATERIAL AGREEMENT ON THE PART OF BUYER CONTAINED IN THIS
AGREEMENT OR IN ANY STATEMENT OR CERTIFICATE FURNISHED TO SELLER OR PARKER IN
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CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY;
(ii) ANY MATERIAL INACCURACY IN ANY CERTIFICATE OR OTHER
DOCUMENT DELIVERED BY BUYER TO SELLER OR PARKER PURSUANT TO ANY OF THE
PROVISIONS OF, OR IN CONNECTION WITH, THIS AGREEMENT;
(iii) ANY ACTIONS, JUDGMENTS, COSTS, AND EXPENSES
(INCLUDING REASONABLE ATTORNEY'S FEES AND ALL OTHER EXPENSES INCURRED IN
INVESTIGATING, PREPARING, OR DEFENDING ANY LITIGATION OR PROCEEDING, COMMENCED
OR THREATENED) INCIDENT TO ANY OF THE FOREGOING OR THE ENFORCEMENT OF THIS
SECTION 5.3; AND
(iv) ANY LOSS, LIABILITY, CLAIM, OBLIGATION, DAMAGES
(PHYSICAL OR MONETARY), JUDGMENTS, ORDERS ARISING OUT OF OR RESULTING FROM THE
OPERATION OF THE BUSINESS OF ONSITE, SUBSEQUENT TO CLOSING.
THE AGGREGATE AMOUNT OF SUCH LOSSES, LIABILITIES, CLAIMS, COSTS,
EXPENSES, AND FEES ARE HEREINAFTER REFERRED TO AS "DAMAGES".
(b) IN ANY CASE, BUYER SHALL HAVE NO LIABILITY FOR (i) ANY DAMAGES
OR CLAIM WHICH DOES NOT EXCEED $25,000 OR (ii) THE FIRST $25,000 OF ANY CLAIM
OR DAMAGES FOR EACH INCIDENT GIVING RISE TO DAMAGES OR CLAIM OR (iii) ANY
DAMAGES OR CLAIMS BASED ON INFORMATION KNOWN TO SELLER OR PARKER AT OR PRIOR TO
CLOSING.
6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER.
The obligations of Buyer hereunder are, unless waived at the option of
Buyer, subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
6.1 Representations.
The representations and warranties of Seller and Parker contained in
this Agreement shall be true in all material respects on and as of the Closing
Date with the
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same effect as though such representations and warranties had been made on and
as of such date; all of the covenants and agreements of Seller and Parker and
approvals on Seller's or Parker's part to be complied with and performed on or
before the Closing pursuant to the terms hereof shall have been complied with
and performed in all material respects; and Seller and Parker shall have
delivered to Buyer a certificate to such effect dated the Closing Date and
signed by its authorized representative.
6.2 Litigation.
No action, suit, investigation, or other proceeding or claim
shall have been threatened in writing or instituted before any court or by any
government or Governmental Agency or instrumentality either (a) to restrain,
prohibit or invalidate the transactions contemplated by this Agreement, (b) to
impose any material restrictions, limitations or conditions with respect
thereto or with respect to Buyer's ownership interests in the Seller's Capital,
or (c) to obtain any material damages or other relief in connection with the
transactions contemplated by this Agreement.
6.3 Legal Opinions.
Buyer shall have received an opinion from counsel to Seller
and Parker in support of the representations and warranties set forth herein.
6.4 Deliveries.
Seller and Parker shall have effected delivery of all of the
items required to be delivered by it at the Closing, including without
limitation, all documents necessary to transfer legal title to the Seller's
Capital.
6.5 Board Approvals.
Seller shall have delivered to Buyer a copy of resolutions of
the board of
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directors of Seller duly certified by its Secretary to be true and correct
copies, and approving of the transactions contemplated hereby.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER AND PARKER.
The obligations of Seller and Parker hereunder are, unless waived at the
option of Seller, subject to the satisfaction, on or prior to the Closing, of
the following conditions:
7.1 Representations.
The representations and warranties of Buyer contained in this
Agreement shall be true in all material respects on and as of the Closing with
the same effect as though such representations and warranties had been made on
and as of such date; all of the covenants and agreements of Buyer and approvals
on Buyer's part to be complied with and performed on or before the Closing
pursuant to the terms hereof shall have been complied with and performed in all
material respects; and Buyer shall have delivered to Seller a certificate to
such effect dated the Closing and signed by its authorized representatives.
7.2 Litigation.
No action, suit, investigation, other proceeding or claim
shall have been threatened or instituted before any court or before or by any
government or Governmental Agency or instrumentality either (a) to restrain,
prohibit or invalidate the transactions contemplated by this Agreement, (b) to
impose any material restrictions, limitations or conditions with respect
thereto, or (c) to obtain any material damages or other relief in connection
with the transactions contemplated by this Agreement.
7.3 Legal Opinion.
Seller and Parker shall have received an opinion from counsel
to Buyer in
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support of the representations and warranties set forth herein.
7.4 Repayment of EVSF Indebtedness.
Seller shall have received either (i) a certificate from
Casuarina attesting to the repayment in full of the EVSF Indebtedness,
including all accrued interest, or (ii) a copy of the note evidencing the EVSF
Indebtedness marked "Canceled."
7.5 Deliveries.
Buyer shall have effected delivery of all of the items
required to be delivered by it on or before the Closing, including without
limitation, a certificate evidencing the release of the Letter of Credit given
by Parker Drilling Investment Company to Banco Ganadero.
7.6 Board Approval.
Buyer shall have delivered to Seller and Parker a copy of the
resolutions of its board of directors certified by the Secretary of Buyer, as
being true and correct, and approving of the transactions contemplated hereby.
8. COVENANTS OF SELLER AND PARKER PRIOR TO CLOSING.
Seller and Parker covenant and agree that, between the date of this
Agreement and the Closing, Seller and Parker shall:
(a) give prompt written notice to Buyer of any notice
received by it of any default or breach or alleged default or breach under any
material instrument or agreement to which it is a party or by which it is
bound;
(b) give prompt written notice to Buyer of the
commencement of any action, suit, proceeding or investigation or the assertion
of any claim or threat to commence any action, suit, proceeding or
investigation, and keep Buyer fully and
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promptly informed as to any developments in any pending action, suit,
proceeding or investigation; and
(c) promptly notify Buyer in writing if it becomes aware
of any fact or condition which makes untrue, or shows to have been untrue, any
representation or warranty made by Seller or Parker in this Agreement.
8.2 Certain Restrictions.
Between the date of this Agreement and closing, Seller and
Parker shall:
(a) take all such reasonable and lawful action as may be
necessary or appropriate in order to effectuate the transactions contemplated
hereby as promptly as possible; or
(b) not issue any press release or make any public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of Buyer.
(c) No Shop. Between the date of this Agreement and
January 3, 1998, Seller and Parker will not in any way, (i) solicit, directly
or indirectly, or cause any other person to solicit, any offer to acquire all
or any part of the Seller's Capital, (ii) enter into any discussions,
negotiations or agreements which contemplate the sale of Seller's Capital to
any person or entity, other than Buyer or (iii) provide any person or entity
other than Buyer with any information or data of any nature whatsoever relating
to the Seller's Capital or the business of OnSite for the purpose of enabling
such person or entity to develop a proposal for the acquisition of Seller's
Capital. Seller and Parker shall immediately advise Buyer in writing of any
inquiries, discussions, negotiations or proposals from or with third parties
including the specific terms thereof and the
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identification of the other parties involved.
8.3 Conveyance Of Any Other Interest.
To the extent that Seller and Parker have (i) any marketing or
manufacturing rights or licenses to use the indirect thermal desorption
technology of the Buyer, National Fuel & Energy, Inc. ("NFE") or OnSite, (ii)
any rights to the intellectual property and patents owned by the Buyer, NFE or
OnSite, (iii) any rights in connection with that certain Memorandum of
Understanding dated January 10, 1995 by and between NFE and Parker, or (iv) any
rights in the OnSite trademark (collectively, the "Rights"), then in such event
all of such Rights are hereby transferred, conveyed and assigned to Buyer as of
the Closing Date, free of any assignments, liens, pledges, encumbrances,
security interests, claims, charges or restrictions of any kind whatsoever.
There are no outstanding agreements, options or other rights of any kind
entitling any party to purchase, acquire or obtain any Rights and there are no
assignments, liens, pledges, encumbrances, security interests, claims, charges
or restrictions of any kind whatsoever in connection with the Rights.
9. COVENANTS OF BUYER PRIOR TO CLOSING.
9.1 Buyer covenants and agrees that, between the date of this
Agreement and the Closing, Buyer shall:
(a) give prompt written notice to Seller and Parker of
any notice received by it of any default or breach or alleged default or breach
under any material instrument or agreement to which it is a party or by which
it is bound;
(b) give prompt written notice to Seller and Parker of
the commencement of any action, suit, proceeding or investigation or the
assertion of any
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claim or threat to commence any action, suit, proceeding or investigation; keep
Seller and Parker fully and promptly informed as to any developments in any
pending action, suit, proceeding or investigation;
(c) promptly notify Seller and Parker in writing if it
becomes aware of any fact or condition which makes untrue, or shows to have
been untrue, any representation or warranty made by Buyer in this Agreement
9.2 Certain Restrictions.
Between the date of this Agreement and closing, Buyer shall:
(a) take all such reasonable and lawful action as may be
necessary or appropriate in order to effectuate the transactions contemplated
hereby as promptly as possible.
(b) not issue any press release or make any public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of Seller and Parker.
10. EXPENSES.
Buyer, Seller and Parker shall each pay their own expenses in
connection with the preparation, execution and consummation of this Agreement,
including, without limitation, all legal and accounting expenses and fees and
other fees of their representatives or agents. The parties shall each pay
their own filing fees and other expenses in connection with any filings
required by applicable law and any other regulatory or governmental filings and
approvals required for the transactions contemplated hereby.
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11. TERMINATION.
11.1 Causes for Termination.
This Agreement may be terminated at or at any time prior to the
Closing:
(a) by mutual consent in writing of Buyer and Seller;
(b) by Buyer (a "Buyer Termination Event"), as follows:
(i) if for any reason not the fault or cause or
within the control of Buyer or its representatives, the Closing does not occur
prior to January 3, 1998;
(ii) upon a material breach on the part of Seller
or Parker of any representation, warranty, covenant or agreement set forth in
this Agreement, or if any representation or warranty of Seller or Parker shall
have become untrue in any material respect;
(c) by Seller or Parker (a "Seller Termination Event"), as
follows:
(i) if for any reason not the fault or cause or
within the control of Seller or Parker or its representatives, the Closing does
not occur prior to January 3, 1998;
(ii) upon a material breach on the part of Buyer
of any representation, warranty, covenant or agreement set forth in this
Agreement, or if any representation or warranty of Buyer shall have become
untrue in any material respect
11.2 Effect of Termination.
(a) In the event of termination of this Agreement, the
parties shall have the right to assert any and all legal and equitable claims
against the breaching party for damages or equitable relief,
(b) In no event shall either Seller, Parker or Buyer be
liable for any
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consequential damages; provided, however that nothing contained in this
Agreement shall relieve any party from liability for damages actually incurred
as a result of any breach of this Agreement.
12. NOTICES.
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given and delivered, when given in person or by prepaid telegram or
telefax, acknowledgment received, or mailed first class, postage prepaid,
registered or certified mail, as follows:
If to Buyer:
Parker Drilling Investment Company
Eight East Third Street
Tulsa, Oklahoma 74103
Attn: James J. Davis
Facsimile: 918 631-1253
If to Seller:
Environmental Safeguards, Inc.
2600 South Loop West
Suite 645
Houston, Texas 77054
Attn: James S. Percell
Facsimile: 713 641-0756
13. CONTINUING COVENANTS REGARDING TAX MATTERS.
13.1 Seller shall cause the federal and state tax return covering
the taxable period ending on the Closing Date to be properly prepared and filed
after delivering said return to Buyer for its review at least fifteen (15) days
prior to the due date (including extensions) for such return.
13.2 Except for the obligation undertaken by Seller in 13.1 above,
all further state, federal and franchise tax returns which are required to be
filed shall be properly
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prepared and timely filed by Buyer.
13.3 Buyer shall determine (by either an interim closing of the
books as of the Closing Date or by proration of the month in which the Closing
Date occurs on a daily basis), subject to Seller's approval, the portion of
income, gain, loss, deduction or other items attributable to the taxable period
which includes the Closing Date. Buyer shall provide Seller with all
information required to accurately and timely prepare the return to be filed by
Seller under 13.1 above, such information to be provided to Seller no later
than thirty (30) days prior to the due date of such tax return.
13.4 Buyer shall grant to Seller access at all reasonable times to
all of the information, books and records relating to all tax periods ending on
or before the Closing Date to which Buyer has possession or to which it has
access and shall afford Seller the right to take extracts therefrom and to make
copies thereof to the extent reasonably necessary to permit Seller to prepare
the Closing Date tax return or to otherwise conduct negotiations with tax
authorities, to implement the provision of or to investigate or defend any
claims arising between the parties. hereto.
13.5 Seller shall grant to Buyer access at all reasonable times to
all of the information, workpapers and other records in its possession
relating to OnSite and shall afford Buyer the right to take extracts therefrom
and to make copies thereof, to the extent reasonably necessary to permit Buyer
to prepare tax returns or to otherwise conduct negotiations with tax
authorities, to implement the provisions of, or to investigate or defend any
claims between the parties hereto.
13.6 Each of the parties hereto will preserve and retain all
schedules, workpapers and other documents relating to any tax returns of, or
with respect to, OnSite,
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or to any claims, audits or other proceedings affecting OnSite until the
expiration of all applicable statutes of limitation applicable to all tax
periods ending on or before the Closing Date or until the final determination
of any pending controversy and any payments that may be required to be made
with respect to such taxable period.
13.7 Seller hereby agrees to properly prepare and file an election
to adjust the basis of partnership property pursuant to Section 754 of the Code
as requested by Buyer.
14. GENERAL.
14.1 Entire Agreement.
This Agreement, together with all exhibits hereto, constitutes the
entire agreement between the parties relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether written or oral, among the parties
concerning such subject.
14.2 Amendments.
This Agreement may not be amended except by an instrument in writing
specifically amending same signed by Seller, Parker and Buyer.
14.3 Waivers.
No waiver by a party of any default by the other party in the
performance of any provision of this Agreement shall operate or be construed as
a waiver of any future default whether of a like or of a different character.
14.4 Headings.
The headings used in this Agreement are for the convenience of
reference only and shall not be construed to define or limit any of the
provisions hereof
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14.5 Severability.
In the event that any one or more of the provisions contained
in this Agreement or in any other instrument referred to herein, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument.
14.6 Counterparts.
This Agreement may be signed in counterpart.
15. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of
Oklahoma, excluding, however, any rule of law that would refer the resolution
of any issue to the law of a jurisdiction other than Oklahoma.
16. SUCCESSION AND ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit of the
parties named herein and their respective heirs, successors and permitted
assigns. No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other parties hereto.
17. INCORPORATION OF EXHIBITS AND SCHEDULES.
The Exhibits identified in this Agreement are incorporated herein by
reference and made a part hereof.
18. SPECIFIC PERFORMANCE.
The parties hereto agree that this Agreement shall be specifically
enforceable and the parties hereto hereby waive any defense to such a
proceeding in equity that monetary
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damages are sufficient.
IN WITNESS WHEREOF, Buyer, Seller and Parker have each caused this
Purchase Agreement to be executed as of the date first written above by its
duly authorized officers.
PARKER DRILLING INVESTMENT
COMPANY
By: /s/ THOMAS L. WINGERTER
----------------------------
Name: Thomas L. Wingerter
----------------------------
Title: President
----------------------------
ENVIRONMENTAL SAFEGUARDS, INC.
By: /s/ JAMES S PERCELL
----------------------------
Name: James S Percell
----------------------------
Title: Chairman, President, CEO
----------------------------
PARKER DRILLING COMPANY
By: /s/ JAMES J. DAVIS
----------------------------
Name: James J. Davis
----------------------------
Title: Sr. Vice President-Finance
and CFO
----------------------------
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