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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1997 Commission File Number 33-22097-NY
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2908692
(State or jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
5151 SAN FELIPE, SUITE 450
HOUSTON, TEXAS 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including are code: (713) 621-7911
Indicate by checkmark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 1 5(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [_]
The number of shares of the Registrant's Common Stock, par value .00001 per
share, outstanding at November 13, 1997, was 29,704,261.
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BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
TABLE OF CONTENTS
Page
----
PART I. Financial Information 3
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to the Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. Other Information 11
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PART I FINANCIAL INFORMATION
- -----------------------------
ITEM 1. FINANCIAL STATEMENTS
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, September 30,
1997 1997
------- -------------
(unaudited)
ASSETS
------
CURRENT ASSETS:
<S> <C> <C>
Cash $ 1,339 $ 2,754,580
Receivables - trade and other, net -- 2,249,357
Inventories and supplies -- 1,119,316
Prepaid expenses -- 239,903
---------- -----------
Total current assets 1,339 6,363,156
---------- -----------
PROPERTY AND EQUIPMENT:
Firefighting equipment -- 5,905,403
Shop and other equipment -- 1,133,328
Vehicles -- 119,263
Furniture, fixtures and office equipment -- 245,174
---------- -----------
-- 7,403,168
Accumulated depreciation and amortization -- (275,637)
---------- -----------
-- 7,127,531
---------- -----------
OTHER ASSETS:
Deferred financing costs and other
assets - net -- 111,865
Goodwill - net -- 871,761
---------- -----------
Total assets $ 1,339 $14,474,313
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 4,641 $ 1,242,994
Accrued liabilities and customer advances -- 96,277
Notes payable - current portion -- 2,250,934
---------- -----------
Total current liabilities 4,641 3,590,205
---------- -----------
12% SENIOR SUBORDINATED NOTES -- 90,000
SHAREHOLDERS' EQUITY:
Common stock 19 283
Additional paid-in capital 725,734 11,101,049
Accumulated deficit (729,055) (307,224)
---------- -----------
Total shareholders' equity (3,302) 10,794,108
---------- -----------
Total liabilities and shareholders' equity $ 1,339 $14,474,313
========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements
3
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BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1996 1997
-------- --------
(unaudited) (unaudited)
<S> <C> <C>
REVENUES $ -- $2,094,510
COSTS AND EXPENSES:
Operating expenses -- 1,190,639
General and administrative 300 699,916
Depreciation and amortization -- 196,158
----------- ----------
300 2,086,713
----------- ----------
OPERATING INCOME (LOSS) (300) 7,797
OTHER INCOME (EXPENSES) -- (90,326)
----------- ----------
INCOME (LOSS) BEFORE INCOME TAXES (300) (82,529)
INCOME TAX EXPENSE -- 6,272
----------- ----------
NET INCOME (LOSS) $ (300) $ (88,801)
=========== ==========
NET INCOME (LOSS) PER SHARE $ -- $ --
=========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 1,913,815 18,422,991
============ ==========
</TABLE>
See accompanying notes to these consolidated financial statements
4
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BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1996 1997
-------- ---------
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (300) $ (88,801)
Adjustments to reconcile net income (loss) to
Net cash provided by (used in) operating activities:
Depreciation and amortization -- 196,158
Net effect of changes in assets and liabilities
related to operating accounts (35) 1,656,208
--------- -----------
Net cash provided by (used in) operating activities (335) 1,763,565
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Boots & Coots, operating assets -- (3,743,480)
Acquisition of ABASCO, Inc. -- (1,589,844)
--------- -----------
Net cash used in investing activities -- (5,333,324)
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issued -- 6,323,000
--------- -----------
Net cash provided by financing activities -- 6,323,000
--------- -----------
NET INCREASE (DECREASE) IN CASH (335) 2,753,241
CASH, beginning of period 2,526 1,339
--------- -----------
CASH, end of period $ 2,191 $ 2,754,580
========= ===========
</TABLE>
See accompanying notes to these consolidated financial statements
5
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BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with Generally Accepted Accounting Principles for interim
financial information and with the instructions to Form 10-KSB and rule 10-01 of
Regulation S-X. They do not include all information and notes required by
Generally Accepted Accounting Principles for complete financial statements. The
accompanying financial statements include all adjustments, which in the opinion
of management are necessary in order to make the financial statements not be
misleading.
The accompanying consolidated financial statements should be read in conjunction
with the Audited Financial Statements for the Year Ended June 30, 1997 and the
notes thereto contained in the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1997.
The results of operations for the three-month period ended September 30, 1997
are not necessary indicative of the results to be expected for the full year.
NOTE B - GENERAL
Boots & Coots International Well Control, Inc. (the Company) was incorporated
under the laws of Delaware on April 28, 1988 as Havenwood Ventures, Inc.
("Havenwood"). The principal activities from inception have been organizational
matters and the sale and issuance of shares of its $.00001 par value common
stock and preliminary development of a theme park, which was disposed of during
fiscal 1991. Havenwood had no operations from fiscal 1992 through fiscal 1997
and during such time continued to pursue acquisition opportunities. On July 29,
1997, Havenwood completed a merger transaction with IWC Services, Inc. ("IWC"),
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and under the plan of merger (i) the outstanding voting securities of the
Company were reverse split in the ratio of one post-split share for every 135
pre-split shares held by a shareholder, provided, however, that no single
shareholder's share ownership was reduced to fewer than 100 post-split shares;
(ii) certain principal shareholders of the Company surrendered a total of
740,740 post-split shares to the Company for cancellation, leaving a total of
1,173,074 shares of common stock issued and outstanding on the closing date;
(iii) each issued and outstanding share of common stock of IWC was converted
into 2.30 post-merger shares of the Company's common stock, amounting to
approximately 15,502,000 post-merger shares in the aggregate; (iv) outstanding
options and warrant to purchase shares of the authorized and unissued common
stock of IWC were converted into substantially similar options and warrants to
purchase shares of the Company's authorized and unissued common stock, and (v)
IWC became a wholly-owned subsidiary of the Company with the former IWC
shareholders, as a group, acquiring shares representing approximately 92% of the
resulting capitalization of the Company. Following the completion of the
transactions, there were approximately 18,630,000 shares of the Company's common
stock issued and outstanding, on a fully diluted basis. Immediately after the
merger, all the officers and directors of the Company resigned and were replaced
by representatives of IWC.
IWC commenced operations on May 4, 1995 through its wholly-owned subsidiary Hell
Fighters, Inc. On July 1, 1997, IWC announced it had reached an agreement to
acquire all of the operating assets of Boots & Coots, L.P. ("Boots & Coots"), a
diversified well blowout, industrial and marine firefighting company. This
acquisition was closed on July 31, 1997 with the Company: (i) paying at closing
$369,432 cash to Boots & Coots and placing in escrow $680,568 cash to pay
certain debts of Boots & Coots; (ii) issuing two promissory notes, payable
September 2, 1997, to Boots & Coots in the aggregate principal amount of
$4,760,077; and (iii) issuing to Boots & Coots a contractual right to receive
$1,000,000 in common stock of the Company. The promissory notes are secured by
the acquired assets of Boots & Coots, and may be extended at the option of the
Company to September 15, 1997.
After completion of the merger with Havenwood and the Boots & Coots acquisition,
the name of the Company was changed to Boots & Coots International Well Control,
Inc. Accordingly, results of operations for the three months ended September 30,
1996 are not comparable to results of operations for the three months ended
September 30, 1997. In addition, a significant portion of the Company's revenues
are derived from blowout control of Critical and Non-critical Events, including
oil and gas wells. The timing and magnitude of such events result from acts of
nature, equipment failures or human error and therefore are not specifically
predictable. Accordingly, the Company's revenues from such services can vary
significantly from period to period.
On September 25, 1997, the Company formed a wholly-owned subsidiary company,
ABASCO, Inc., to purchase the assets of ITS Environmental, a manufacturer of
oil spill containment booms, mops and
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other oil field emergency equipment. The Company paid $1,589,844 cash and issued
300,000 shares of Common Stock to acquire the manufacturing equipment, inventory
and customer lists.
NOTE C - SHAREHOLDERS' EQUITY
On August 7, 1997, the Company issued a Private Placement of 6,500,000 shares of
Common Stock, $0.00001 par, at $1.00 per share under Rule 506 of Regulation D of
the Securities and Exchange Act of 1933. Placement Agents could increase the
shares available by up to fifteen percent or 975,000 shares of Common Stock. The
minimum purchase was 25,000 shares. The Placement raised $7,475,000 in gross
proceeds with net proceeds to the Company of $6,481,500. The proceeds
from the offering are to be used to retire subordinated debentures and for
working capital for general corporate purposes.
Holders of the Company's 12% Senior Subordinated Notes were offered, effective
as of September 12, 1997, the election to exercise the warrants into common
stock of the Company at an exchange rate of $.75 per share with payment
accomplished through surrender and retirement of their notes. An aggregate face
amount of $2,900,000 of notes were converted into an aggregate of 3,866,653
shares of common stock with $193,000 recognized as a nonrecurring charge to
operations for inducement costs, pursuant to Statement of Financial Accounting
Standards No. 84 - Induced Conversions of Convertible Debt, during the three
months ended September 30, 1997.
NOTE D - STOCK OPTION PLAN
In November 1996, IWC Services adopted its 1996 Incentive Stock Plan (the
"Incentive Stock Plan") which was subsequently approved by the written consent
of IWC Service's shareholders. The Incentive Stock Plan authorized the Board of
Directors to provide a number of key employees with incentive compensation
commensurate with their positions and responsibilities. The Incentive Stock Plan
permitted the grant of incentive equity awards covering up to 500,000 shares of
common stock. In connection with the acquisition of IWC Services by the Company,
the Company issued incentive stock options covering and aggregate of 460,000
shares of common stock to persons who were the beneficial owners of 200,000
options that were previously granted by IWC services. These incentive stock
options are exercisable by the holders thereof for a period of 10 years from the
original date of grant at an exercise price of $0.43 per share. No incentive
options have been exercised as September 30, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion is intended to assist in an understanding of the
consolidated financial position and results of operations of Boots & Coots
International Well Control, Inc. (the "Company") for the three months ended
September 30, 1996 and 1997. The following discussion should be read in
conjunction with the Unaudited Consolidated Financial Statements and the notes
thereto included elsewhere herein. The following discussion includes certain
forward-looking statements.
8
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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
The following discussion does not include results of operations of Boots &
Coots. Accordingly, the historical results described below are not necessarily
indicative of future levels of revenues and expenses.
The following unaudited table shows the pro forma combined results of operations
of the Company and IWC Services for the three months ended September 30, 1996
and September 30, 1997 and are not comparative in nature.
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1996 1997
-------- --------
(unaudited) (unaudited)
<S> <C> <C>
REVENUES $ 414,425 $2,094,510
COSTS AND EXPENSES:
Operating expenses 350,400 1,190,639
General and administrative 197,634 699,916
Depreciation and amortization 17,796 196,158
---------- ----------
565,830 2,086,713
---------- ----------
OPERATING INCOME (LOSS) (151,830) 7,797
OTHER INCOME (EXPENSES) (1,633) (90,326)
---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES (153,040) (82,529)
INCOME TAX EXPENSE -- 6,272
---------- ----------
NET INCOME (LOSS) $ (153,040) $ (88,801)
========== ==========
</TABLE>
Comparison of Three Months Ended September 30, 1996 (Unaudited) with Three
Months Ended September 30, 1997. Revenues were $414,425 for the three months
ended September 30, 1996 compared to $2,094,510 for the three months ended
September 30, 1997. This increase was the result of increased market share from
diversification of the Company's client base.
Operating expenses were $350,400 for the three month period ended September 30,
1996, compared to $1,190,639 for the comparable period in 1997. The increase was
the result of increased revenues during the same period.
General and administrative expenses were $197,634 for the three month period
ended September 30, 1996, compared to $699,916 for the comparable period in
1997. The increase was primarily the result of investments in expanded corporate
infrastructure and expanded marketing and advertising to increase market share
and diversify the Company's client base.
Depreciation and amortization expense increased from $17,796 for the three month
period ended September 30, 1996, compared to $196,158 for the comparable period
in 1997, primarily as the result of equipment additions made in fiscal 1997.
Other income (expenses) was $1,633 for the three month period ended September
30, 1996, compared to a net expense of $90,326 for the comparable period in
1997, resulting primarily from higher interest expense on financed equipment
purchases made during the 1997 period and interest expense on the Notes sold
through April 30, 1997.
Income taxes for the three month period ended September 30, 1996 was $0 compared
to $6,272 for the comparable period in 1997. Substantially all of the balance of
income taxes for the three month period ended September 30, 1997 represents
foreign taxes withheld on various international projects.
The Company sustained a net loss of $153,040 for the three month period ended
September 30, 1996, compared to net loss of $88,801 for the comparable period in
1997 as a result of the revenue and expense variations discussed above.
9
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LIQUIDITY AND CAPITAL RESOURCES
The Company's capital resources consist of capital raised directly by the
Company ("Direct Capital") and capital raised through strategic alliances, joint
ventures and similar arrangements ("Indirect Capital"). In general, the amount
and availability of Direct Capital and Indirect Capital will affect the scope of
the Company's operations, its profitability and the speed of its growth. While
the Company has historically relied on Direct Capital for substantially all of
its business activities, it is anticipated that a significant portion of the
capital required for the establishment by the Company of additional Fire
Stations may be financed with Indirect Capital.
The Company had working capital of ($3,302) and $2,772,951 at June 30, 1997 and
September 30, 1997, respectively. The increase is due to the Private Placement
discussed in Note C - Shareholder's Equity and the mergers discussed in Note B -
General.
The Company believes it has sufficient cash, together with cash resources
available from working capital and cash flow from operations, to carry out its
business plan over the upcoming twelve month period, including the beginning of
a program for the establishment of additional regional Fire Stations and
implementation of a multi-year marketing program for the Halliburton Alliance.
However, there is no assurance at this time that the planned future results of
operations will be achieved.
10
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PART II - OTHER INFORMATION
--------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------- ----------------------
10.1 Asset Purchase Agreement dated September 25, 1997 between ABASCO,
Inc. and ITS Environmental Services, Inc.
10.2 Stock Purchase Agreement dated September 25, 1997 between Boots &
Coots International Well Control, Inc., ABASCO, Inc. and LaSalle
Cattle Company, Inc.
b) FORM 8-K FILED ON AUGUST 13, 1997 REGARDING CHANGES IN CONTROL OF THE
REGISTRANT, ACQUISITION OF ASSETS, CHANGES IN REGISTRANT'S CERTIFYING
ACCOUNTANT, OTHER EVENTS AND RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
IS INCORPORATED HEREIN BY REFERENCE.
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, thereunto duly authorized.
Date: November 26, 1997 Boots & Coots International Well
Control, Inc.
By: /s/ THOMAS L. EASLEY
------------------------------------
Thomas L. Easley
Chief Financial Officer
(Principal Financial and Accounting Officer)
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as of
September 25, 1997, by and between ABASCO, Inc. a Texas corporation ("Buyer"),
and ITS ENVIRONMENTAL SERVICES INC., a Delaware corporation ("Seller").
WHEREAS, Seller is a corporation which has been engaged in the development,
design, manufacture and marketing of a diverse line of oil spill recovery and
response products (the "Business") under the name "ABASCO" and other names; and
WHEREAS, Buyer is the assignee of LaSalle Marine Corp. ("LaSalle") under
that certain Letter Agreement between LaSalle and Seller dated September 5,
1997, and desires to acquire all of the assets used by Seller in the Business or
owned by the Business (except for certain assets excluded pursuant to Section
1.2 hereof) and Seller desires to sell the assets to Buyer on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements made herein, the parties hereto agree as follows:
1. Assets.
1.1 Purchase and Sale of Assets. Based upon and subject to the terms,
covenants, conditions, representations and warranties set forth in this
Agreement, on the Closing Date (as defined below), Buyer shall purchase and
Seller shall sell, transfer and assign to Buyer the assets described in this
Section 1.1 (the "Assets"). No other assets of Seller shall be sold,
transferred, or assigned to Buyer other than those set forth in Sections 1.1.1
through 1.1.10 below, The Assets shall be sold, transferred and assigned to
Buyer, free and clear of any liabilities (other than those expressly assumed by
Buyer under Section 2.1 below), claims, liens, charges or encumbrances of any
nature whatsoever. The Assets include the following:
1.1.1 Inventory. Title and all other rights to all inventory
(including spare parts inventory) listed on Schedule 1.1.1 attached to this
Agreement.
1.1.2 Equipment. Title and all Seller's rights to all equipment
listed on Schedule 1.1.2 attached to this Agreement.
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1.1.3 Name. All right, title and interest held or owned by Seller in
and to the use of the name "ABASCO", any variations thereof worldwide and
all goodwill and other intangibles pertaining thereto.
1.1.4 Patents, Trademarks and Copyrights. All right, title and
interest in and to all patents owned, or applied for, by Seller, including,
without limitation, those patents listed on Schedule 1.1.4 (the "Patents")
and other rights and privileges associated therewith worldwide, together
with all trademarks, trademark registrations and applications therefor,
copyrights, "know-how", slogans, trade names, trade secrets, logos, labels
and other trade rights used in the Business worldwide, whether or not
registered, used or useful in the Business, and any goodwill or other
intangibles associated therewith worldwide (collectively sometimes
hereinafter called "Trade Rights").
1.1.5 Capital Assets. All capital assets, tools, raw materials,
furniture, fixtures, and vehicles of Seller listed on Schedule 1.1.5
attached to this Agreement.
1.1.6 Sales Materials. All catalogs, brochures, advertising materials,
production data and purchasing and sales materials (including forms of
purchase orders, sales orders and invoices) of Seller.
1.1.7 Contracts. All contracts, including all outstanding purchase
orders issued by and/or to Seller related to the Business, listed on
Schedule 1.1.7, including the real property lease for the premises located
at 363 W. Canino Road.
1.1.8 Design and Manufacturing Rights. All design and manufacturing
rights of Seller.
1.1.9 Cash and Accounts Receivable from Sales Accruing On or after the
Effective Date. All cash and accounts receivable from sales accruing to
Seller on or after the Effective Date but before the Closing Date.
1.1.10 Other Assets. All existing customer lists, supplier lists, books
and records (or copies thereof), accounts and all other tangible and
intangible assets (including rights to manufacturers' and/or suppliers'
warranties on assets purchased from Seller by Buyer, and rights to claims
and causes of action relating to those assets) of Seller used in connection
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with the Business, except those assets described in Section 1.2 below and
except those contracts not expressly listed on Schedule 1.1.7.
1.2 Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, Buyer shall not purchase and Seller shall not sell, transfer or
assign to Buyer any assets except the Assets. Without limiting the generality of
the foregoing, it is expressly agreed that Buyer shall not purchase and Seller
shall not sell, transfer or assign to Buyer:
1.2.1 Accounts Receivable. Any accounts receivable of the Seller
("Accounts Receivable") other than those transferred and assigned under
Section 1.1.9 above.
1.2.2 Cash. Any cash of the Seller other than the cash transferred
and assigned under Section 1.1.9 above.
1.2.3 Employment Agreements. Any employment agreements, consulting
agreements, or other personnel agreements to which Seller is a party.
1.2.4 Insurance Policies. Any insurance policies belonging to Seller
or on which Seller must pay premiums.
1.2.5 Drilling Services Inventory. All inventory of ITS Drilling
Services currently on Seller's premises, as described and listed on
Schedule 1.2.5, and any inventory of ITS Drilling Services ordered or
purchased by or on behalf of Seller before or after the Effective Date that
is shipped to or received at 363 W. Canino Road, Houston, Texas.
2. Liabilities.
2.1 Liabilities Assumed. Buyer shall accept the assignment and assume
responsibility for all unfilled orders from customers of Seller assigned to
Buyer pursuant to Section 1.1.7, shall assume responsibility for all outstanding
quotes issued to customers of Seller, which are set forth in Schedule 2.1 shall
assume responsibility of payment for purchase orders for inventory items that
have been placed by Seller prior to, on, or after the Effective Date but that
will not have been delivered until after the Effective Date and shall assume and
perform all of Seller's obligations under the contracts assigned to Buyer
pursuant to Section 1.1.7, including the real property lease for the premises
located at 363 W. Canino Road. Additionally, Buyer shall assume responsibility
for any liability or obligation arising out of any breach by Buyer after the
Closing Date (including the failure of
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Buyer to perform, or negligent or improper performance in accordance with its
terms) of any agreement, contract, commitment, lease, permit or other
undertaking. Buyer shall further assume responsibility for all liabilities and
claims which arise out of or are based upon any service performed or product
sold by or on behalf of Buyer after the Effective Date. The liabilities assumed
by Buyer pursuant to this Section 2.1 shall hereinafter be collectively referred
to as the "Assumed Liabilities."
2.2 Excluded Liabilities. Buyer is not assuming and shall not pay, perform,
or discharge any debt, liability, obligation, understanding, arrangement or
contract, whether written or oral or existing, contingent or inchoate, except
the Assumed Liabilities. Without limiting the scope of the foregoing, it is
expressly agreed that Buyer shall not assume:
2.2.1 Any obligations, liabilities or expenses of Seller for any
brokerage or finder's commission relating to this Agreement, the purchase
of the Assets or any of the transactions contemplated hereby or thereby.
2.2.2 Any federal, state or local income or other tax (i) payable with
respect to the Business, operations, assets or properties of Seller for any
period prior to the Closing Date, or (ii) incident to or arising as a
consequence of the negotiation or consummation by Seller of this Agreement
and the transactions contemplated hereby, including any sales or other
taxes imposed upon the transfer and delivery of the Assets to Buyer.
2.2.3 Any liability or obligation under or in connection with assets
not included In the Assets.
2.2.4 Except as set forth in Section 2.1 above, any obligations or
liabilities arising out of actions taken, work done or contracts entered
into by Seller before or after the Closing Date.
2.2.5 Any liability or obligation arising out of any breach by Seller
prior to the Closing Date (including the failure of Seller to perform, or
negligent or improper performance in accordance with its terms) of any
agreement, contract, commitment, lease, permit or other undertaking.
2.2.6 Any liability or claim which arises out of or is based upon any
service performed or product sold by or on behalf of Seller prior to the
Effective Date, including without limitation, any claim relating to any
product
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delivered in connection with the performance of such service and any claim
seeking recovery for consequential damage, lost revenue, income, or
punitive or exemplary damages.
2.2.7 Any obligations or liabilities of Seller arising under ERISA
with respect to any employee benefit plan of Seller, or any other
obligations or liabilities arising under such plans or arrangements of
Seller.
2.2.8 Any accounts payable of Seller other than those expressly assumed
by Buyer under Section 2.1 above.
3. Purchase Price.
3.1 Purchase Price. Subject to the adjustment described hereinafter,
if any, the amount to be paid by Buyer to Seller as consideration for the Assets
and the assumption of the Assumed Liabilities (the "Purchase Price") shall be
the sum of One Million Three Hundred and Thirty-Nine Thousand Eight Hundred
Forty Three United States Dollars and Seventy-Six Cents (U.S. $1,339,843.76)
3.2 Settlement. After Closing, and subject to the terms and
conditions hereinafter set forth, a settlement will be made for revenues
retained by Seller and for expenses paid by Seller on a dollar-for-dollar basis
to reflect all items (other than those described in Section 2.2.1 above) that
accrued on or after September 12, 1997 (the "Effective Date") but before the
Closing Date other than those specific items listed on Schedule 3.2. The
determination of the revenue and expense items to be factored into the
Settlement shall be conducted at the expense of Buyer by Hein & Associates LLP.
Such determination shall be made by within ninety (90) days after the Closing
Date. Those items accruing on or after the Effective Date that have been
specifically identified in Schedule 3.2 shall be reimbursed to Seller by Buyer
within fifteen (15) days of the Closing Date.
3.3 Closing Payment and Payment of Settlement. At the Closing, Buyer
shall pay to Seller in same day funds the sum of One Million Three Hundred and
Thirty-Nine Thousand Eight Hundred Forty Three United States Dollars and
Seventy-Six Cents (U.S. $1,339,843.76) in the event that the Settlement
described in Section 3.2 results in a net amount due to Seller, Buyer shall pay
the such amount in same day funds to Seller within two (2) business days after
the determination of such amount by Hein & Associates LLP. In the event that the
Settlement described in Section 3.2 results in a net amount due to Buyer, Seller
shall pay the such amount in same day funds to Buyer within two (2) business
days after the determination of such amount by Hein & Associates LLP.
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4. Representations and Warranties of Seller. Except as set forth in the
disclosure schedule accompanying this Agreement (the "Disclosure Schedule") and
subject to Section 9.1 hereof, Seller represents and warrants to Buyer that the
statements contained in this Article 4 are correct and complete as of the date
of this Agreement. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER MAKES
NO, AND DISCLAIMS ANY AND ALL, OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND,
WHETHER EXPRESSED OR IMPLIED, INCLUDING THOSE OF MERCHANTABILITY AND FITNESS FOR
ANY PARTICULAR PURPOSE.
4.1 Organization and Standing. Seller is a corporation duly organized
and existing under the laws of the State of Delaware and is in good
standing under such laws. Seller has requisite corporate power to own
properties owned by it and to conduct business as being conducted by it.
4.2 Corporate Power. Seller has all requisite corporate power to enter
into this Agreement and will have at the Closing Date all requisite
corporate power to sell the Assets and to carry out and perform its
obligations under the terms of this Agreement.
4.3 Subsidiaries. Seller has no subsidiaries and Seller does not own
of record or beneficially any capital stock or equity interest or
investment in any other corporation, association or business entity.
4.4 Authorization. All corporate action on the part of Seller, its
directors and shareholders necessary for the authorization, execution,
delivery and performance by Seller of this Agreement and the consummation
of the transactions contemplated herein has been taken or will taken prior
to the Closing. This Agreement is a valid and binding obligation of Seller,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and reorganization laws. The execution, delivery and performance
by Seller of this Agreement and compliance therewith will not result in
any violation of and will not conflict with, or result in a breach of any
of the terms of, or constitute a default under, any provision of state or
Federal Law to which Seller, the Business or the Assets are subject,
Seller's Articles of Incorporation of By-Laws, or any mortgage, indenture,
agreement, instrument, judgment, decree, order, rule or regulation or other
restriction to which Seller is a party or by which it is bound, or result
in the creation of any mortgage, pledge, lien, encumbrance or charge upon
any of the properties or assets of Seller pursuant to any such term.
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4.5 Asset Statement. The "Asset Statement" set forth in the Disclosure
Schedule has been prepared in accordance with generally accepted accounting
principles as of March 31, 1997.
4.6 Outstanding Debt. Seller has no outstanding indebtedness for
borrowed money and is not a guarantor or otherwise contingently liable for
any such indebtedness. There exists no default under the provisions of any
instrument evidencing such indebtedness or of any agreement relating
thereto.
4.7 Absence of Undisclosed Liabilities. Except as set forth in the
Disclosure Schedule, Seller has no material liabilities.
4.8 Title. Seller has good and marketable title to the Assets and the
Assets are, and will be transferred to Buyer, free and clear of any
liabilities, liens, charges, encumbrances, adverse claims, options to
purchase or restrictions or conditions on transfer.
4.9 Name. Seller owns and possesses the exclusive rights to use the
name "ABASCO" and all variations thereof.
4.10 Litigation. There is no suit, action, arbitration or legal,
administrative or other proceeding or governmental investigation threatened
or pending against or affecting the Business or the Assets, nor does Seller
know or have reasonable grounds to know of any basis for any such action or
proceeding. There is no pending or threatened action, proceeding or
investigation for any injunction, writ, preliminary restraining order or
any order of any nature issued by any court or governmental agency,
domestic or foreign, of competent jurisdiction directing the transactions
contemplated by this Agreement not be consummated, and no such injunction,
writ, preliminary restraining order or such other order has been issued or
is in effect. There is no suit, action or other proceeding, pending or
threatened, before any court or governmental agency in which it is sought
to obtain damages or other relief in connection with this Agreement or any
of the transactions contemplated hereby and Seller knows of no basis for
such suit, action or other proceeding.
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4.11 Patents, Trademarks, Trade Rights, Etc. Except for the Patents
identified on Schedule 1.1.4 hereto, there are no patents, patent
applications, inventions, licenses, trade names, trademarks or service
marks, trademark or service mark registrations or applications, copyrights,
copyright applications or registrations, processes, designs, trade secrets,
know how, and other similar proprietary rights, data or Trade Rights that
relate to the Assets or the Business. Seller owns and has the right to use
the Assets, including the Patents, and all such proprietary rights and data
that relate to the Assets. There are no claims of infringement against
Seller threatened or pending in any court pertaining to the use by Seller
of the Assets, or any of the foregoing items, and Seller has not received
any notice that the use by Seller of any of the Assets infringes the
proprietary rights of any parson or entity. Seller is not currently
operating under license agreements from any person or entity relating to
the use of any of the Assets or any of the foregoing items.
4.12 Consents and Compliance with Law. Except as set forth in the
Disclosure Schedule, Seller has not violated or is currently in violation
of, and the consummation of the transactions contemplated hereby will not
cause any violation of, any order of any governmental entity or any law,
ordinance, regulation, order, requirement, statute, rule, permit,
concession, grant, franchise, license or other governmental authorization
relating or applicable to the Assets or the Business, except, with respect
to any prior or current violation, where the violation would not have a
material adverse effect on the Business.
4.13 Taxes. All federal, state, payroll and local taxes called for by
any federal, state or local returns or reports, or due or claimed to be due
by the Internal Revenue Service or any other taxing authority upon Seller
or upon or measured by any of its properties, assets, sales or income, have
been or will be properly paid. None of the Assets is subject to any lien
for taxes that are delinquent or due and payable.
4.14 Contracts; Insurance. Except as set forth in the Disclosure
Schedule, Seller has no currently existing contract, obligation or
commitment (written or oral) of any material nature, including without
limitation the following:
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(a) Employment, bonus or consulting agreements, pension, profit
sharing, deferred compensation, stark bonus, retirement, stock option,
stock purchase, phantom stock or similar plans, including agreements
evidencing rights to purchase securities of Seller and agreements
among shareholders of Seller and Seller;
(b) Loan or other agreements, notes, indentures, or instruments
relating to or evidencing indebtedness for borrowed money, or
mortgaging, pledging or granting or creating a lien or security
interest or other encumbrance on any of Seller's property or any
agreement or instrument evidencing any guaranty by Seller of payment
or performance by any other person;
(c) Agreements with dealers, sales representatives, brokers or
other distributors, jobbers, advertisers or sales agencies;
(d) Agreements with any labor union or collective bargaining
organization or other labor agreements;
(e) Any contract or series of contracts with the same person for
the furnishing or purchase of machinery, equipment, goods or services,
including without limitation agreements with processors and
subcontractors, except contracts entered into in the ordinary course
of business;
(f) Any joint venture contract or arrangement or other agreement
involving a sharing of profits or expenses to which Seller is a party;
(g) Agreements limiting the freedom of Seller to compete in any
line of business or in any geographic area or with any person;
(h) Agreements providing for disposition of the Business, assets
or shares of Seller, agreements of merger or consolidation to which
Seller is a party or letters of intent with respect to the foregoing;
(i) Agreements involving or letters of intent with respect to the
acquisition of the business, assets or shares of any other business;
and
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(j) Insurance policies.
Seller has complied with all the material provisions of all contracts to
which Seller is a party and all commitments undertaken by Seller and/or to
which Seller is obligated, and Seller is not in default thereunder. All of
such contracts and agreements are valid, binding and in full force effect
in accordance with their terms and conditions subject to bankruptcy,
insolvency and reorganization laws, and there is no existing default
thereunder or breach thereof, to the best knowledge of Seller, by any other
party thereto.
4.15 Employees. To the best of the knowledge and belief of Seller/ no
employee of Seller is in violation of any term of any employment contract,
patent disclosure agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant relating to the right of
any such employee to be employed by Seller or to provide services to Seller
because of the nature of the Business conducted or to use trade secrets or
proprietary information of others and the employment of the Seller's
employees does not subject Seller to any material liability. Seller is not
a party to any collective bargaining agreement covering any of its
employees.
4.16 ERISA. Seller does not maintain, sponsor, or contribute to any
program or arrangement that is an "employee pension benefit plan", an
"employee welfare benefit plan" or a "multiemployer plan", as those terms
are defined in Sections 3(2), 3(l), and 3(37) of the Employee Retirement
Income Security Act of 1914. Listed in the Disclosure Schedule are all
material incentive or benefit arrangements of Seller that existed
immediately prior to Closing.
4.17 License Permits. Seller has obtained all material licenses,
permits and authorizations required by applicable laws or regulations
pertaining to the business.
4.18 Condition of Tangible Assets. All of the tangible assets
comprising the Assets are in operating condition.
4.19 All Assets. The Assets constitute all of the assets used in the
conduct of the Business as now conducted.
4.20 Insurance Policies. The Disclosure Schedule contains a
description of all insurance policies (specifying the insurer, the amount
of coverage, the type of insurance and
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the policy number) maintained by the Seller on the Assets, Business and
personnel pertaining thereto.
4.21 Environmental Protection Laws. None of Seller, the Business or
the Assets are now, nor to the best knowledge of Seller, have any of
Seller, the Business or the Assets been in the past, in violation of any
applicable governmental law or regulation related to environmental
protection, air pollution, hazardous materials or other similar matters.
4.22 Customer List. The Disclosure Schedule sets forth a true, correct
and complete list of all customers of Seller to which Seller has sold or
provided products or services during the twelve (12) months immediately
proceeding the date hereof.
4.23 Representations and Warranties at Closing. All representations
and warranties of Seller contained in this Agreement shall be true on and
as of the Closing Date and shall survive the Closing Date.
5. Representations, Warranties and Covenants of Buyer. Buyer makes the
representations, warranties and covenants to Seller set forth below, each of
which is true and accurate and which shall constitute a condition precedent to
the Seller's obligations under this Agreement.
5.1 Organization and Good Standing of Buyer. Buyer is a corporation
duly organized under the laws of the State of Texas, and has full corporate
power to carry on its business as now conducted and has corporate authority
to purchase, and accept the Assets and to assume the Assumed Liabilities.
5.2 Authority of Buyer. The execution by Buyer of this Agreement and
related documents contemplated by or described in this Agreement and the
consummation of the purchase provided for herein, have been duly authorized
by the board of directors of Buyer. Buyer has full corporate power and
authority to enter into and carry out the provisions of this Agreement and
the documents contemplated or described herein and Buyer's performance of
the provisions of this Agreement and said documents shall not constitute a
violation or breach of any provision of Buyer's articles of incorporation
or bylaws.
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5.3 Representations and Warranties at Closing. All representations and
warranties of Buyer contained in a this Agreement shall be true on and as
of the Closing Date and shall survive the Closing Date.
6. Post-Closing Covenants.
6.1 Certain Covenants of Seller.
6.1.1 Use of Name. From and after the closing Date, except as
otherwise agreed by Buyer in writing, Seller agrees that neither it nor any
of its affiliates shall use the name "ABASCO" or variations thereof. Seller
hereby expressly consents to and shall defend Buyer's right to the use by
Buyer of the name "ABASCO" and variations thereof.
6.1.2 Transfer Costs. Seller shall pay in advance of the Closing Date
all costs, if any, of transferring the Assets to Buyer, including expenses
of physical delivery of possession of the Assets to Buyer, freight and
transportation costs, postage, insurance costs, transfer taxes, sales
taxes, stamp taxes, importation and exportation fees, taxes and duties, and
any other expenses costs, fees, taxes, duties, levies, premiums or charges
relating to delivering title and physical possession of the Assets to
Buyer.
6.1.3 Best Efforts. Upon the terms and subject to the conditions
hereof, Seller shall use its best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement.
6.1.4 Employee Matters. As of the Closing Date, Seller will: (a)
terminate all of its employees, consultants, and other persons providing
personnel services for Seller; (b) terminate all agreements relating
thereto; and (c) pay its employees all wages, commissions and accrued
vacation pay earned up to the time of termination, including overtime pay.
6.1.5 Insurance. Seller shall, at Buyer's expense continue Seller's
existing insurance coverage relating to the business and add Buyer as an
additional insured to such coverage until such time that Buyer has obtained
its own insurance coverage for such matters and claims currently covered by
Seller's existing insurance coverage relating to
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the Business, but in no event for a period longer than three (3) months
after the Closing Date. Notwithstanding the foregoing, however, Seller
shall not be required to continue any health and/or life insurance coverage
for employees for a period of thirty (30) days after the closing date, and
Buyer shall not be named as an additional insured on such employee
insurance.
6.1.6 Accounting support. Seller shall provide, at Seller's expense,
reasonable accounting support for the operation of the Business by Buyer
until January 31, 1998. Such support will constitute the maintenance of
books and records on Seller's accounting system in a format equivalent to
that used prior to Closing.
6.2 Certain Covenants of Buyer.
6.2.1 Assumption of Liabilities. Buyer shall assume all liability and
responsibility for the Assumed Liabilities (as defined in Section 2.1).
6.2.2 Employment of Chuck LaBounty. Immediately upon Closing, Buyer
shall employ Chuck LaBounty for compensation, and under terms and
conditions, similar to those under which he was employed by Seller
immediately prior to Closing.
6.2.3 Completion of Certain Orders. Buyer will complete those orders
identified in Schedule 6.2.3 under the terms and conditions set forth in
Schedule 6.2.3.
6.2.4 Storage of Drilling Services Inventory. Buyer agrees to store
until March 1, 1996, the parts and inventory belonging to ITS Drilling
Services Inc. that are currently located at 363 W. Canino Road or that will
be delivered to that address prior to March 1, 1998.
7. Further Assurances. Seller, from time to time after the Closing Date, at
Buyer's request, will execute, acknowledge and deliver to Buyer such other
instruments of conveyance and transfer and will take such other actions and
execute and deliver such other documents, certifications and further assurances
as Buyer may reasonably require in order to vest more effectively in Buyer, or
to put Buyer more fully in possession of, any of the Assets, or to better enable
Buyer to complete, perform or discharge any of the liabilities or obligations
assumed by Buyer pursuant to Section 2.1 hereof. Buyer and Seller hereby
covenant and agree to use their respective best efforts to take such action to
execute such
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documents and instruments as may be reasonably required by the other to more
effectively effectuate the purposes of this Agreement from time to time after
the Closing Date.
8. Closing. The closing of the purchase and sale of the Assets (the
"Closing") shall take place upon the execution of this Agreement by both parties
hereto, and the date on which the Closing takes place shall be referred to
herein as the "Closing Date".
8.1 Delivery to Buyer. At the Closing Seller shall deliver to Buyer
the following:
(a) a Bill of Sale covering the Assets in the form attached as
Schedule 8.1 to this Agreement with appropriate schedules attached
thereto;
(b) such further deeds, bills of sale, endorsements/
assignments, documents of title, and other good and sufficient
instruments of conveyance and transfer, in form reasonably
satisfactory to Buyer, as shall be effective to vest in Buyer all of
the Sellers' title to, and interest in, the Assets under applicable
law;
(c) a certified copy of resolutions duly adopted by the board of
directors and stockholders of Seller authorizing and approving the
execution and delivery of this Agreement and performance by Seller of
its obligations hereunder;
(d) a certificate, dated the Closing Date and executed by the
president of the Seller, certifying that Seller has performed all the
agreements and covenants of Seller specified in this Agreement to be
performed by Seller on or before the Closing Date
(e) Possession of the Assets to be conveyed pursuant to this
Agreement
8.2 Payment of Purchase Price. At the Closing Buyer shall pay to
Seller in same day funds the amount required to be paid at Closing under
Section 3.3 above.
8.3 Delivery of Assets. At the Closing Seller shall deliver to Buyer
the Assets.
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9. Indemnification.
9.1 Indemnification by Seller. Seller agrees to indemnify, defend and
hold Buyer and each of its officers, directors, employees, agents, stockholders
and controlling Persons and their respective successors and assigns (each, a
Buyer Indemnified Party") harmless from and against and, in respect of the
entirety of Adverse Consequences actually suffered, incurred or realized by such
party, arising out of or resulting from any breach of representation or warranty
or breach of any covenant or agreement made or undertaken by Seller in this
Agreement, including the Disclosure Schedule and all excluded liabilities,
provided, that (A) Seller shall not have any obligation to indemnify Buyer from
and against any Adverse Consequences until Buyer has suffered Adverse
Consequences by reason of all such matters in excess of $100,000 (after which
point Seller will be obligated to provide indemnification from and against the
full amount of Adverse Consequences, subject to the limitation in the following
clause) and (B) to the extent the Adverse Consequences Buyer has suffered by
reason of the matters set forth in this Section exceeds the Purchase Price;
Seller shall not have any obligation to indemnify Buyer from and against any
further Adverse Consequences by reason of such matters. For purposes of this
Article 9 the term "Adverse Consequences" shall mean any and all liabilities,
losses, damages, demands, assessments, claims, costs and expenses (including
interest, awards, judgments, penalties, settlements, fines, costs and expenses
incurred in connection with investigating and defending any claims or causes of
action (including, without limitation, attorneys' fees and expenses); provided
that it shall not include Excluded Liabilities for which Seller shall be wholly
liable. Any "materiality" qualifies to any representation shall not be given
effect for the purposes of determining whether Buyer is entitled to
indemnification hereunder.
9.2 Indemnification by Buyer. Except to the extent Seller has expressly
agreed to indemnify for such matters, Buyer agrees to indemnify, defend, and
hold Seller and each of its officers, directors, employees, agents, stockholders
and controlling Persons and their respective successors and assigns (each a
"Seller Indemnified Party") harmless from and against and in respect of the
entirety of Adverse Consequences actually suffered, incurred or by such party,
arising out of or resulting from or relating (i) to any misrepresentations or
breaches of any of Buyer's warranties or covenants contained in this Agreement;
and/or (ii) the operation of the Business or use of the Assets after the Closing
Date.
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9.3 Exclusive Remedy. The indemnification provisions in this Article 9 shall
be the exclusive remedy for damages for breach of any representation, warranty,
or covenant herein. Except as provided herein, no representations or warranties
are being provided by Seller or any other Person with respect to the
transactions contemplated hereby. Nothing herein shall prevent any party from
seeking equitable relief.
9.4 Survival. Except for representation relating to federal and state taxes
and environmental liabilities as to which no limitation (other than applicable
statutes of limitation) shall apply, all representations and warranties of Buyer
and Seller contained in this Agreement shall survive the Closing until
September 1, 1999. Any notice or assertion of a claim for indemnification under
this Agreement must be given before September 1, 1999.
10. Transfer of Risk and Title. Subject to consummation of the Closing,
title to the Assets and risk of loss, damage, or destruction shall be deemed to
have passed to Buyer at 12:01 a.m. on the Closing Date. Notwithstanding the
foregoing, however, Seller shall remain liable for any loss, damage, or
destruction to the Assets, of for any damage or injury relating to the assets
that arises out of, or results from, the actions of Seller from 12:01 a.m. on
the Closing Date to the actual time of Closing.
11. Miscellaneous.
11.1 Successors and Assigns. All covenants, conditions,
representations, warranties and agreements of the parties contained herein
shall be binding upon and inure to the benefit of their respective heirs,
beneficiaries, legal representatives, successors and assigns.
11.2 Entire Agreement. This Agreement, including all documents
attached hereto or referenced herein, which are incorporated herein as if
fully set forth, embodies the entire agreement and understanding between
the parties relating to the sale and purchase of the Assets and the
assumption of the Assumed Liabilities and supersedes any prior
understanding or agreements with respect to the subject matter hereof,
including the Letter Agreement between LaSalle and Seller dated September
5, 1997.
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11.3 Amendment. No supplement, modification or amendment of this
Agreement shall be binding upon the parties unless executed in writing by
the party against whom enforcement is sought.
11.4 Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, other than as expressly provided for herein,
each of the parties hereto shall pay the fees and expenses of its
respective counsel, accountants and other experts, and all other expenses
incurred by such party incident to the negotiation, preparation and
execution of this Agreement and consummation of the transactions
contemplated hereby, provided that the expenses of Seller shall not be paid
out of the Assets.
11.5 Invalidity. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to either party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
11.6 Headings. The headings of the Sections and paragraphs of this
Agreement and of the Schedules hereto are included for convenience only and
shall not be deemed to constitute part of this Agreement or to affect the
construction hereof or thereof.
11.7 Construction and References. Words used in this Agreement,
regardless of the number or gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context shall require. Unless
otherwise specified, all references in this Agreement to Sections,
paragraphs or clauses are deemed references to the corresponding Sections,
paragraphs or clauses in this Agreement, and all references in this
Agreement to Schedules are references to the corresponding Schedules
attached to this Agreement.
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11.8 Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof. No waiver of any of the provisions of
this Agreement shall be deemed to or shall constitute a waiver of any other
provisions hereof (whether or not similar).
11.9 Notices. Any notice, request, instruction or other document to be
given hereunder by either party to the other party shall be in writing and
delivered personally, via telecopy (with receipt confirmed) or by
registered or certified mail, postage prepaid:
If to Buyer, to:
Boots & Coots/IWC
5151 San Felipe-Suite 450
Houston, TX 77056
Attn: Charles Phillips, Atty.
Telecopy No. (713) 621-7988
with copies to:
Brown, Parker & Leahy, LLP
1200 Smith St.-Suite 3600
Houston, TX 77002
Telecopy No. (713) 654-1871
Attn: Dallas Parker
If to Seller, to:
ITS Environmental Services Inc.
4669 Southwest Freeway, Suite 400
Houston, Texas 77027
Attn: Kendal Gladys
Telecopy No. (713) 961-8061
with copies to:
Jean-Michel Malek
(same address and telecopy)
or at such other address for a party as shall be specified by like notice.
Any notice which is delivered personally in the manner provided herein
shall be deemed to have been duly given to the party to whom it is directed
upon actual receipt by such party (or its agent for notices hereunder). Any
notice which is addressed and mailed in the manner herein provided shall be
conclusively presumed to have been duly given to the
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party to which it is addressed at the close of business, local time of the
recipient, on the third day after the day it is so placed in the mail. Any
notice which is sent by telecopy shall be deemed to have been duly given to
the party to which it is addressed upon telephonic confirmation of the same
as provided herein. A copy of any notices delivered by telecopy shall
promptly be mailed in the manner herein provided to the party to which such
notice was given.
11.10 Governing Law. This Agreement and all matters connected with the
performance thereof shall be construed, interpreted, and governed in all
respects by the laws of the state of Texas.
11.11 Arbitration. Buyer and Seller agree that any dispute or
controversy arising out of or in connection with this Agreement or any
alleged breach hereof shall be settled exclusively by arbitration in
Houston, Texas pursuant to the rules of the American Arbitration
Association. If the two parties cannot jointly select a single arbitrator
to determine the matter, one arbitrator shall be chosen by each party (or,
if a party fails to make a choice, by the American Arbitration Association
on behalf of such party) and the two arbitrators so chosen will select a
third. The decisions of the single arbitrator jointly selected by the
parties, or, if three arbitrators are selected, the decision of any two of
them, will be final and binding upon the parties and the judgment of a
court of competent jurisdiction may be entered thereon. Fees of the
arbitrators and costs of arbitration (including attorneys' fees) shall be
borne by the parties in such manner as shall be determined by the
arbitrator or arbitrators.
11.12 Non-Competition Agreement. For a period of three years from the
date hereof, neither Seller nor any Affiliate of Seller shall, within the
areas in which the Business has been conducted in the last two years
preceding the Closing Date, (i) compete directly or indirectly with the
Business engaged in as of the Closing Date, (ii) offer employment to the
then-current employees of the Business or Buyer or (iii) own any interest
in any enterprise that directly or indirectly competes with the Business
engaged in as of the Closing Date. Notwithstanding the foregoing or any
other provision of this Agreement, Seller and/or its Affiliates shall have
the right at any time to engage in any business or activities engaged in by
any Affiliate of Seller as of the Closing Date (other than those activities
identified in the Products/Services Catalog attached listed in Exhibit
11.12), whether or not such
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business or activities directly or indirectly compete with the Business
engaged in as of the Closing Date.
11.13 Non-Disclosure of Confidential Information. Seller agrees that
it will not disclose, and Seller will use its best efforts to prevent
disclosure by any person having any confidential information included
within the Assets.
IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement as of the date first written above.
ITS ENVIRONMENTAL SERVICES INC.
By: /s/ Kendal Gladys 9/25/97
-----------------------------------
Kendal Gladys
President
ABASCO, INC.
By: /s/ Gregory Brown 9/25/97
-----------------------------------
Gregory Brown
President
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is made and entered into this 25th day of
September, 1997 between and among Boots & Coots International Well Control,
Inc., a Delaware Corporation whose principal executive office is located at 5151
San Felipe, Suite 450, Houston, Texas 77056 (referred to herein as "Boots &
Coots"), IWC Services, Inc., a Texas corporation whose principal executive
office is located at 5151 San Felipe, Suite 450, Houston, Texas 77056 ("IWC
Services") ABASCO, Inc., a Texas Corporation whose principal executive office is
located at Three Riverway, Suite 750, Houston, Texas 77056 (referred to herein
as "ABASCO") and LaSalle Cattle Company, Ltd., a Texas Limited Partnership which
is the beneficial owner of 100% of the issued and outstanding equity securities
of ABASCO ("LaSalle").
WHEREAS, LaSalle owns, and has the unrestricted right to sell, transfer and
convey, one hundred percent (100%) of the issued and outstanding capital stock
of ABASCO; and
WHEREAS, IWC Services wishes to acquire one hundred percent (100%) of the
issued and outstanding capital stock of ABASCO, in exchange for authorized but
unissued shares of the $.00001 par value common stock ("Common Stock") of Boots
& Coots; and
WHEREAS, LaSalle has agreed to sell one hundred percent (100%) of the
issued and outstanding capital stock of ABASCO to IWC Services in exchange for
authorized but unissued Common Stock of Boots & Coots, and
WHEREAS, Boots & Coots, ABASCO and LaSalle wish to formalize the
above-mentioned agreement and thereafter accomplish the transactions
contemplated herein on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties hereto have agreed and by these
presents do hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF ABASCO AND LASALLE. ABASCO and LaSalle
hereby jointly and severally make the following express representations and
warranties to Boots & Coots and IWC Services:
(a) ABASCO is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas and has the corporate
power to own its property and carry on its business in the State of Texas.
Certified copies of ABASCO's Certificate of Incorporation and By-Laws have
heretofore been furnished to Boots & Coots by LaSalle and all such copies
are true, correct and complete copies of the original Certificate of
Incorporation and By-Laws, including all amendments thereto.
(b) ABASCO has the corporate authority to issue a total of 1,000
shares of no par value Common Stock, of which 1,000 shares have been
validly issued, are now outstanding and are held of record and beneficially
by LaSalle. All of said shares have been duly and validly issued, are free
and clear of any lien or other encumbrances, and will be delivered to
<PAGE>
IWC Services free and clear of any lien or other encumbrance on the Closing Date
specified herein.
(c) There are no outstanding subscriptions, options, warrants, calls,
commitments, obligations or agreements relating to any of the authorized or
outstanding capital stock of ABASCO. LaSalle owns all of the issued and
outstanding shares of the stock of ABASCO free and clear of all liabilities,
liens, encumbrances, pledges, trusts, voting trusts or stockholders' agreements,
equities, charges, options, conditional sale or title retention agreements,
covenants, restrictions, reservations, commitments, obligations or other burdens
or encumbrances of any nature whatsoever, and the consummation of the purchase
and sale contemplated by this Agreement will transfer to Boots & Coots good and
marketable title to such stock free and clear of any such items.
(d) LaSalle is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Texas, has the power to own its
property and carry on its business in the State of Texas, and has full power
and authority to sell, assign and transfer all shares of ABASCO's Common Stock
upon the terms and conditions provided for in this Agreement.
(e) ABASCO was incorporated by LaSalle on September 23, 1997 and in
connection therewith LaSalle assigned to ABASCO, as consideration for the
issuance of 1,000 shares of ABASCO's common stock, its contractual rights (the
"Contractual Rights") to purchase all of the operating assets of ITS
Environmental Services, Inc. ("ITS"), a wholly-owned subsidiary of International
Tool & Supply Company, Inc. on the terms set forth in the Asset Purchase
Agreement between LaSalle and ITS attached hereto as Exhibit A (the "Asset
Purchase Agreement").
(f) Except for the organization and assignment transactions as specified
above, ABASCO has not:
(1) issued any shares of its capital stock or any stock purchase or
similar rights;
(2) paid or declared any dividends or distributions of capital,
surplus or profits with respect to any of its issued and outstanding shares
of capital stock;
(3) paid or agreed to pay any consideration in redemption of any of
its issued and outstanding shares of capital stock; or
(4) entered into any other transaction or agreement which would, or
might, materially impair the shareholder's equity of ABASCO or the
Contractual Rights.
(g) There are no suits, actions, claims, inquiries or investigations by any
person, or any legal, administrative or arbitration proceedings in which ABASCO
is engaged or which are pending or, to the best knowledge of LaSalle (after due
inquiry), threatened against or affecting ABASCO or any of its properties,
assets or business, or to which ABASCO is or might become a party, or which
question the validity or legality of the transactions
<PAGE>
contemplated herein, (ii) no basis or grounds for any such suit, action, claim,
inquiry, investigation or proceeding exists, and (iii) there is no outstanding
order, writ, injunction or decree of any governmental authority against or
affecting ABASCO or any of its properties, assets or business.
(h) LaSalle's assignment of its rights under the Asset Purchase Agreement
to ABASCO is binding and legally enforceable against LaSalle and ABASCO has good
and marketable title to the Asset Purchase Agreement and all of LaSalle's
interest therein free and clear of any and all liens, encumbrances or
restrictions, subject only to the terms hereof.
(i) There are no unpaid assessments or proposed assessments of Federal
income taxes pending against ABASCO.
(j) LaSalle is acquiring the Common Stock of Boots & Coots solely for its
own account, for investment, and not with a view to any subsequent
"distribution" thereof within the meaning of that term as defined in the
Securities Act of 1993, as amended (said Act and rules and regulations
promulgated thereunder being hereinafter referred to as the "Act"). LaSalle
understands that the Common Stock of Boots & Coots has not been registered under
the Act or the securities laws of any State ("State Act") by reason of specific
exemptions therefrom, which exemptions depend in part upon LaSalle's subjective
investment intent as expressed herein, and that such Common Stock will be
"restricted securities" and transferable by LaSalle only in certain limited
circumstances.
(k) LaSalle hereby represents and warrants to Boots & Coots that it is an
"Accredited Investor" as such term is defined in Regulation D promulgated under
the Act and that it is able to bear the economic risks of an investment in the
Common Stock and is able to protect its own interests in an investment of this
nature.
(l) LaSalle has no employee, consulting or other contractual commitments
and neither has nor participates in any employee benefit plans (including, but
not limited to, pension plans and health or welfare plans), arrangements or
understandings, whether formal or informal.
(m) The Asset Purchase Agreement is a valid, binding and enforceable
agreement of the parties thereto, in full force and effect in accordance with
its terms and conditions and there is no existing default thereunder or breach
thereof by ABASCO or by any other party to the Asset Purchase Agreement. The
assignment of the Asset Purchase Agreement to LaSalle and the transactions
contemplated herein are not contrary to, and are permitted by, agreements, oral
or written, with ITS Environmental Services, Inc., and the terms of the Asset
Purchase Agreement. Copies of all of the documents (or in the case of oral
commitments, descriptions of the material terms thereof) relevant to the Asset
Purchase Agreement have been delivered by LaSalle to Boots & Coots.
(n) LaSalle has full legal right, power and authority to enter into and
deliver this Agreement and to consummate the transactions set forth herein and
to perform all the terms and conditions hereof to be performed by it. The
execution and delivery of this Agreement by LaSalle and the performance of the
transactions contemplated herein have been duly and
<PAGE>
validly authorized by all requisite action of LaSalle, and this Agreement
has been duly and validly executed and delivered by LaSalle and is the
legal, valid and binding obligation of LaSalle, enforceable against LaSalle
in accordance with its terms, except as limited by applicable bankruptcy,
moratorium, insolvency or other similar laws affecting generally the rights
of creditors or by principles of equity.
(o) None of ABASCO, its business or its assets are now, nor have any
of ABASCO, its business or its assets been in the past, in violation of any
applicable governmental requirement related to environmental protection,
air pollution, hazardous materials or other similar matters.
(p) There are no material facts, liabilities or matters not disclosed
in this Agreement or in the Schedules hereto which might reasonably affect
the willingness of a purchaser to acquire the stock of ABASCO on the terms
(including price) contained herein or that might be expected to adversely
affect ABASCO after Closing.
ABASCO and LaSalle further represent and warrant that all of the representations
and warranties set forth above are true as of the date of this Agreement, shall
be true at the Closing Date and shall survive the closing for a period of three
(3) years from the Closing Date.
2. REPRESENTATIONS AND WARRANTIES OF BOOTS & COOTS. Boots & Coots hereby
makes the following express representations and warranties to LaSalle:
(a) Boots & Coots is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power to own its properties and carry on its business as now
being conducted. IWC Services is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and has
the corporate power to own its properties and carry on its business as now
being conducted. Certified copies of Boots & Coots' Certificate of
Incorporation and By-Laws have heretofore been furnished to LaSalle by
Boots & Coots, and all such copies are true, correct and complete copies of
the Certificate of Incorporation and By-Laws including all amendments
thereto.
(b) Boots & Coots has recently completed a private placement of
7,475,000 shares of its Common Stock at a price of $1 per share pursuant to
the terms and conditions set forth in a Private Offering Memorandum dated
August 7, 1997, a copy of which is attached hereto as Exhibit B and
incorporated herein by reference. Such Private Offering Memorandum
discloses all material facts relating to the business and financial
condition of Boots & Coots and does not omit any material fact required to
be disclosed therein in order to make the disclosures in the Private
Offering Memorandum, in light of the circumstances under which they were
made, not materially false or misleading. Since the date of the Private
Offering Memorandum, and except as disclosed therein, Boots & Coots has
not:
(1) issued any additional shares of its Common Stock, or any
options to acquire such stock, to any person;
<PAGE>
(2) paid or declared any dividends or distributions of capital,
surplus, or profits with respect to any of its issued and outstanding
shares of Common Stock;
(3) paid or agreed to pay any consideration in redemption of any
of its issued and outstanding shares of Common Stock; or
(4) entered into any other transaction or agreement which would,
or might, materially impair the shareholder's equity of Boots & Coots
as reflected in such Balance Sheet.
(c) Boots & Coots has the corporate power and authority to execute and
perform all of its duties and obligations under the terms of this Agreement
and to issue and deliver to LaSalle the shares of Common Stock that are
required to be issued and delivered under the terms of this Agreement.
(d) The execution and delivery of this Agreement and the issuance of
Common Stock required to be issued hereunder have been duly authorized by
all necessary corporate action of Boots & Coots and neither the execution
nor delivery of this Agreement nor the issuance of Common Stock nor the
performance, observance or compliance with the terms and provisions of this
Agreement will violate any provision of any law applicable to Boots & Coots
(other than federal or state securities laws, as to which no representation
is made), any order of any court or other governmental agency, the
Certificate of Incorporation or By-Laws of Boots & Coots or any indenture,
agreement or other instrument to which Boots & Coots is a party, or by
which it or any of its property is bound.
(e) Boots & Coots is not involved in any pending or threatened
litigation which would, or might, materially and adversely affect its
financial condition and which has not been
(1) provided for in its financial statements; or
(2) disclosed in the Private Offering Memorandum.
(f) There are no unpaid assessments or proposed assessments of U.S.
Federal income taxes pending against Boots & Coots. All liabilities for
U.S. Federal and State income or franchise taxes, as shown on the tax
returns filed, or to be filed, by Boots & Coots, have been paid or the
liability therefor has been provided for in the financial statements
included in the Private Offering Memorandum and all U.S. Federal and State
income or franchise taxes for periods subsequent to the periods covered by
said returns likewise have been paid or adequately accrued.
(g) The shares of Common Stock which will be delivered to LaSalle
pursuant to the terms of this Agreement will, on delivery in accordance
with the terms hereof, be duly authorized, validly issued, fully paid and
nonassessable.
Boots & Coots further represents and warrants that all of the representations
and warranties set forth above are true as of the date of this Agreement, shall
be true at the Closing Date and shall survive the closing for a period of three
(3) years from the Closing Date.
<PAGE>
3. CONDITIONS TO THE OBLIGATIONS OF BOOTS & COOTS. The obligations of
Boots & Coots hereunder shall be subject to the following conditions:
(a) The representations and warranties made by ABASCO or LaSalle
herein shall be true and correct in all material respects and all the terms
and conditions of this Agreement to be performed and complied with by
ABASCO and LaSalle have been performed and complied with.
(b) There shall have been no material adverse changes in the financial
condition, business or assets of ABASCO prior to the Closing Date and there
shall have been no material adverse changes in the financial condition,
business or assets of ITS that are the subject of the Asset Purchase
Agreement.
(c) Boots & Coots shall have received the opinion of legal counsel for
ABASCO and LaSalle to the effect that
(1) ABASCO is a corporation duly organized, validly existing and
in good standing under the laws of Texas and has the power and
authority to own its properties and to carry on its business as
presently conducted:
(2) The Asset Purchase Agreement a binding and legally
enforceable agreement to purchase all of the operating assets of ITS
under the terms and conditions set forth in the Asset Purchase
Agreement and ABASCO has good and marketable title to the Asset
Purchase Agreement free and clear of any and all liens, encumbrances
or restrictions;
(3) ABASCO's outstanding Common Stock is validly issued, fully
paid and nonassessable;
(4) This Agreement has been duly executed and delivered by
ABASCO and LaSalle and constitutes the legal, valid and binding
obligation of LaSalle enforceable in accordance with its terms.
4. CONDITIONS TO THE OBLIGATIONS OF LASALLE. The obligations of LaSalle
hereunder are subject to the following conditions:
(a) The representations and warranties made by Boots & Coots herein
shall be true and correct in all material respects and all the terms and
conditions of this Agreement to be performed and complied with by Boots &
Coots have been performed and complied with.
(b) There shall have been no material adverse changes in financial
condition, business or assets of Boots & Coots.
(c) LaSalle shall have received the opinion of legal counsel for Boots
& Coots, to the effect that:
<PAGE>
(1) Boots & Coots is a corporation duly organized and validly
existing under the laws of the State of Delaware and has the power to
own its properties and carry on its business as presently conducted;
(2) the execution, delivery and performance of this Agreement by
Boots & Coots has been duly authorized by all necessary corporate
action and this Agreement constitutes a legal, valid and binding
obligation of Boots & Coots enforceable in accordance with its terms;
and
(3) the Common Stock delivered to LaSalle pursuant to the terms
of this Agreement has been validly issued, is fully paid and
nonassessable.
5. CLOSING DATE. The closing of this Agreement shall take place at the
offices of Boots & Coots in Houston, Texas on the 25th day of September, 1997,
or at such other reasonable time and place as the parties hereto shall agree
upon.
6. EXCHANGE OF SECURITIES. Subject to the terms and conditions set forth
herein, and at the Closing referred to in Section 5 hereof Boots & Coots
will issue and deliver, or cause to be issued and delivered, to and in the name
of LaSalle certificates evidencing 300,000 shares of the authorized but unissued
shares of Boots & Coot's $0.00001 par value Common Stock and concurrently
therewith LaSalle shall deliver or cause to be delivered to IWC Services
certificates evidencing the ownership of 1,000 shares of the issued and
outstanding capital stock of ABASCO, duly endorsed to IWC Services, such shares
representing all of the issued and outstanding capital stock of ABASCO.
7. ACTIONS AT THE CLOSING. At the closing, Boots & Coots and LaSalle will
each deliver, or cause to be delivered, the shares of stock to be exchanged in
accordance with Section 6 of this Agreement and each party shall pay any and all
issuance, transfer or similar taxes required to be paid in connection with the
issuance and the delivery of their own securities. In addition to the
above-mentioned exchange of certificates, the following actions will take place
at the closing.
BOOTS & COOTS WILL DELIVER TO LASALLE:
(a) Duly certified copies of corporate resolutions and other corporate
proceedings taken by Boots & Coots to authorize the execution, delivery and
performance of this Agreement;
(b) The opinion of legal counsel provided for in Section 4(c) hereof;
(c) A certificate executed by a principal officer of Boots & Coots
attesting to the fact that all of the representations and warranties of
Boots & Coots are true and correct as of the Closing Date and that all of
the conditions to the obligations of LaSalle which are to be performed by
Boots & Coots have been performed as of the Closing Date; and
<PAGE>
(d) A certificate of corporate good standing for Boots & Coots from
the State of Delaware which shall be dated no more than 60 days prior to
the Closing Date.
LASALLE AND ABASCO WILL DELIVER TO BOOTS & COOTS:
(a) The opinion of legal counsel provided for in Section 3(e) hereof;
(b) A certificate of corporate good standing for ABASCO from the
Secretary of State of the State of Texas which shall be dated no more than
60 days prior to the Closing Date;
(c) A certificate by a principal officer of ABASCO and LaSalle that
each of the representations and warranties of LaSalle and ABASCO are true
and correct as of the Closing Date and that all of the conditions to the
obligations of Boots & Coots which are to be performed by ABASCO and
LaSalle have been performed as of the Closing Date; and
(d) Resignations of all officers and directors of ABASCO.
8. CONDUCT OF BUSINESS. Between the date hereof and the Closing Date,
ABASCO shall conduct its business in the ordinary course consistent with past
practice and LaSalle will not permit ABASCO to (1) enter into any contract other
than in the ordinary course of business, or (2) declare or make any distribution
in the nature of a dividend or return of capital to LaSalle, without first
obtaining the written consent of Boots & Coots.
9. RESTRICTIONS ON TRANSFER. LaSalle understands that because the Common
Stock has not been registered under the Act or any State Act, it must hold the
Common Stock indefinitely, and cannot dispose of any or all of the Common Stock
unless such Common Stock is subsequently registered under the Act and any
applicable State Act, or exemptions from registration are available. LaSalle
acknowledges and understands that it has no independent right to require Boots &
Coots to register the shares of Common Stock. LaSalle further understands that
Boots & Coots may, as a condition to the transfer of any of Common Stock,
require that the request for transfer by LaSalle be accompanied by an opinion of
counsel, in form and substance satisfactory to Boots & Coots, provided at such
Shareholder's expense, to the effect that the proposed transfer is exempt from
registration under the Act and any applicable State Act.
10. REGISTRATION RIGHTS. Under the terms of the Private Offering Memorandum
dated August 7, 1997, Boots & Coots is obligated to file a registration
statement under the Securities Act of 1933 for the registration of the Common
Stock issued in connection therewith as promptly as practicable, to use all
reasonable efforts to have such registration statement declared effective on or
before March 15, 1998, and to maintain the effectiveness of the registration
statement for a period of at least 6 months. Boots & Coots hereby agrees to
include the shares of Common Stock issuable to LaSalle hereunder in such
registration statement on the same terms and conditions as set forth in the
Private Offering Memorandum and to grant LaSalle all of the registration rights
and resale privileges enjoyed by purchasers of the Common Stock described in the
Private Offering Memorandum.
<PAGE>
11. RESTRICTIVE LEGEND. All shares of Common Stock which are issued to
LaSalle pursuant to the terms of this Agreement shall be restricted securities
within the meaning of Regulation D promulgated under the Act. Boots & Coots
shall issue stop transfer instructions to the transfer agent for its Common
Stock with respect to the Stock and shall place the following legend on the
certificates representing such stock:
"The shares represented by this certificate have been acquired
pursuant to a transaction effected in reliance upon an exemption under
the Securities Act of 1933, as amended (the "Act"), and have not been
the subject to a Registration Statement under the Act or any state
securities act. The securities may not be sold or otherwise
transferred in the absence of such registration or applicable
exemption therefrom under the Act or any applicable state securities
act."
12. ACCESS TO INFORMATION. Concurrently herewith, Boots & Coots has
delivered to LaSalle correct and complete copies of all documents and records
requested by LaSalle. In addition, LaSalle have had the opportunity to ask
questions of, and receive answers from, officers and directors of Boots & Coots,
and persons acting on its behalf concerning its business and has received
sufficient information relating to Boots & Coots to enable it to make an
informed decision with respect to the acquisition of the Common Stock.
13. NO SOLICITATION. At no time was LaSalle presented with or solicited by
any leaflet, public promotion meeting, circular, newspaper or magazine article,
radio or television advertisement, or any other form of general advertising in
connection with its acquisition of the Common Stock.
14. EXPENSES. LaSalle and Boots & Coots shall each pay their respective
expenses incident to this Agreement and the transactions contemplated herein,
including all fees of their counsel and accountants, whether or not such
transactions shall be consummated.
15. FINDERS. LaSalle shall indemnify and hold Boots & Coots harmless
against and with respect to all claims or brokerage or other commissions
relative to this Agreement or the transactions contemplated herein, based on any
agreements, arrangements, or understandings claimed to have been made by LaSalle
or ABASCO with any third party. Boots & Coots shall indemnify and hold LaSalle
harmless against and with respect to all claims for brokerage or other
commissions relative to this Agreement or the transactions contemplated herein,
based in any agreements, arrangements, or understandings claimed to have been
made by Boots & Coots with any third party. Each party to this Agreement
represents and warrants to each other party that it has not dealt with and does
not know of any person, firm or corporation asserting a brokerage, finder's or
similar claim in connection with the making or negotiation of this Agreement or
the transactions contemplated herein.
16. ATTORNEY'S FEES. In the event of any litigation among the parties
related to this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees and costs to be fixed by the Court, said fees to include appeal
and collection of judgment.
17. INDEMNIFICATION.
<PAGE>
(a) LaSalle covenants and agrees that it will indemnify, hold harmless
and defend Boots & Coots and IWC Services and their respective officers,
directors, employees, agents, consultants, representatives and affiliates
(collectively, the "Purchaser Indemnified Parties"), at all times from and
after the date of this Agreement, from and against any and all penalties,
demands, damages, punitive damages, losses, liabilities, suits, costs,
costs of any settlement or judgment, claims of any and every kind
whatsoever (including, without limitation, interest and penalties thereon),
and expenses (including, without limitation, reasonable attorneys' fees) of
or to any of the Purchaser Indemnified Parties ("Damages"), which may now
or in the future be paid, incurred or suffered by or asserted against the
Purchaser Indemnified Parties by any person or entity resulting or arising
from or incurred in connection with any one or more of the following:
1. any material misrepresentation, breach of warranty or
nonfulfillment of any covenant or agreement on the part of LaSalle
under this Agreement or from any misrepresentation in or omission from
any list, schedule, certificate or other instrument furnished or to be
furnished to Boots & Coots pursuant to the terms of this Agreement. If
any representation or warranty or any covenant or agreement herein
contains any materiality qualifier with respect thereto, then any
materiality qualifier in such provision with respect thereto shall be
deemed not to apply and shall be read and interpreted as if the
qualification stated herein with respect to materiality was not
contained therein; and
2. all actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including costs of court and
reasonable attorneys' fees) incident to any of the foregoing.
(b) Boots & Coots and IWC Services covenant and agree that they will
indemnify, hold harmless and defend LaSalle and its officers, directors,
employees, agents, consultants, representatives and affiliates (collectively,
the "Seller Indemnified Parties"), at all times from and after the date of this
Agreement, from and against any and all penalties, demands, damages, punitive
damages, losses, liabilities, suits, costs, costs of any settlement or judgment,
claims of any and every kind whatsoever (including, without limitation, interest
and penalties thereon), and expenses (including, without limitation, reasonable
attorneys' fees) of or to any of the Seller Indemnified Parties ("Damages"),
which may now or in the future be paid, incurred or suffered by or asserted
against the Seller Indemnified Parties by any person or entity resulting or
arising from or incurred in connection with any one or more of the following:
1. any material misrepresentation, breach of warranty or
nonfulfillment of any covenant or agreement on the part of Boots & Coots or
IWC Services under this Agreement or from any misrepresentation in or
omission from any list, schedule, certificate or other instrument furnished
or to be furnished to LaSalle pursuant to the terms of this Agreement. If
any representation or warranty or any covenant or agreement herein contains
any materiality qualifier with respect thereto, then any materiality
qualifier in such provision with respect thereto shall be deemed not to
apply and shall be read
<PAGE>
and intepreted as if the qualification stated herein with
respect to materiality was not contained therein; and
2. all actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses (including costs of court and reasonable attorneys'
fees) incident to any of the foregoing.
(c) Upon the discovery of facts giving rise to a claim for indemnity under
the provisions of this Agreement, including receipt by any Seller Indemnified
Party or Purchaser Indemnified Party (collectively, "Indemnified Parties") of
notice of any demand, assertion, claim, action or proceeding, judicial or
otherwise, by any person with respect to any matter as to which any of the
Indemnified Parties are entitled to indemnity under the provisions of this
Agreement (such actions being collectively referred to herein as the "Claim"),
such party will give prompt notice thereof in writing to the indemnifying party
together with a statement of such information respecting any of the foregoing as
it shall then have; provided that any delay in giving or failure to give such
notice shall not limit the Indemnified Party's rights to indemnity hereunder
execpt to the extent that the indemnifying party is shown to have been damaged
by such delay or failure.
(d) With respect to any Claim, the indemnifying party shall assume the
defense of any such proceeding, and shall have the sole discretion to settle or
defend any proceeding; provided that the Indemnified Party shall have the right
to approve any such settlement, which approval shall not be unreasonably
withheld and the indemnifying party shall pay the fees of one firm of defense
counsel unless such counsel determines a conflict exists in which case the
Indemnified Party shall have the right to engage separate counsel.
(e) The indemnifying party shall promptly pay to the Indemnified Party in
cash the amount of any Damages to which such Indemnified Parties may become
entitled by reason of the provisions of this Agreement.
18. MISCELLANEOUS
(a) This Agreement shall be controlled, construed and enforced in
accordance with the laws of the State of Texas.
(b) This Agreement shall not be assignable by either party without prior
written consent of the other.
(c) All paragraph headings herein are inserted for convenience only. This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, which together shall constitute one and the same instrument.
(d) This Agreement sets forth the entire understanding between the parties,
there being no terms, conditions, warranties or representations other than those
contained herein, and no amendments hereto shall be valid unless made in writing
and signed by the parties hereto.
<PAGE>
(e) This Agreement shall be binding upon and shall inure to the
benefit of the heirs, executors, administrators and assigns of Boots &
Coots and LaSalle.
(f) All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail:
IF TO LASALLE: WITH COPIES TO:
LaSalle Cattle Company, Ltd.
3 Riverway, Suite 750
Houston, Texas 77056
IF TO BOOTS & COOTS: WITH COPIES TO:
Boots & Coots International Well Charles T. Phillips, esq.
Control, Inc. 5151 San Felipe, Suite 460
5151 San Felipe, Suite 450 Houston, Texas 77056
Houston, Texas 77056
Attention: Larry H. Ramming
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
By: /s/ Brian Krause
-------------------------------
Its President
ABASCO, INC. LASALLE CATTLE COMPANY, LTD.
By: /s/ Gregory Brown By: /s/ Gregory Brown
------------------------------- -----------------------------
Its President Its General Partner
