-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H+cXm056wIuyxEU5aqxTRxLEeWTsPx7fOdgnQo1Vfa9YKiyCJzkCSO0phsvbuS3v bibQFsXuxZSf7bOvhXXj4A== 0000950129-97-005461.txt : 19971231 0000950129-97-005461.hdr.sgml : 19971231 ACCESSION NUMBER: 0000950129-97-005461 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971217 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971230 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENVIRONMENTAL SAFEGUARDS INC/TX CENTRAL INDEX KEY: 0001017616 STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953] IRS NUMBER: 870429198 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21953 FILM NUMBER: 97746034 BUSINESS ADDRESS: STREET 1: 2600 SOUTH LOOP WEST STREET 2: 445 CITY: HOUSTON STATE: TX ZIP: 77054 BUSINESS PHONE: 7136413838 MAIL ADDRESS: STREET 1: 2600 SOUTH LOOP WEST STREET 2: SUITE 445 CITY: HOUSTON STATE: TX ZIP: 77054 8-K 1 ENVIRONMENTAL SAFEGUARDS, INC. - DATED 12/17/97 1 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Earliest Event Reported: December 17, 1997 ENVIRONMENTAL SAFEGUARDS, INC. (Exact name of registrant as specified in its charter) Nevada 000-21953 87-0429198 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation or organization) Identification No.) 2600 South Loop West, Suite 645 Houston, Texas 77054 (Address of principal executive offices, including zip code) (713) 641-3838 (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- 2 Item 2. Acquisition or Disposition of Assets On December 17, 1997, Environmental Safeguards, Inc. (the "Company"), entered into a Purchase Agreement (the "Purchase Agreement") with Parker Drilling Company and Parker Drilling Investment Company, (collectively, "Parker") which provided for the acquisition by the Company, through it's wholly owned subsidiary, National Fuel & Energy, Inc. ("NFE"), of Parker's 50% interest in OnSite Technology L.L.C. ("OnSite") resulting in NFE becoming the owner of 100% of the interest in OnSite. Pursuant to the terms of the Purchase Agreement, the Company paid $8,000,000 for the 50% interest and repaid a $3,000,000 loan that had been made to the Company by an affiliate of Parker. As part of the transaction, Parker returned to the Company 300,000 unexercised warrants to purchase the Company's common stock. The acquisition was the result of negotiations between the Company and Parker and was based on numerous factors including the Company's estimate of the net worth of OnSite, and the future business prospects of OnSite. The Company's sources of funds to effect the acquisition was the sale of $8,000,000 of new Series B and Series C Preferred Stock and the borrowing of $6,000,000 from an investor group consisting of Cahill, Warnock Strategic Partners Fund, L.P., Strategic Associates, L.P., Newpark Resources, Inc. and James H. Stone, who is the Chairman of Stone Energy Corporation. Pursuant to the financing, David Warnock will be appointed as a Director of the Company. As a result of the financing, the Company retained approximately $3,000,000 after the transaction to use for working capital and general corporate purposes. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) and (b) Financial Statements and Information As of the date of the filing of this Current Report on Form 8-K, the financial statements and proforma financial information required by Items 7(a) and 7(b) are not available. Such financial statements will be filed no later than March 2, 1997. (c) Exhibits 4.1 Certificate of Designation, Preferences, Rights and Limitations of Series B Convertible Preferred Stock. 4.2 Certificate of Designation, Preferences, Rights and Limitations of Series C Preferred Stock. 10.1 Purchase Agreement dated December 17, 1997, among the Company, Parker Drilling Investment Company and Parker Drilling Company. 2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ENVIRONMENTAL SAFEGUARDS, INC. Date: December 29, 1997 By: /s/ James S. Percell ----------------------------- James S. Percell, President 4 INDEX TO EXHIBITS
Exhibits Description - -------- ----------- 4.1 Certificate of Designation, Preferences, Rights and Limitations of Series B Convertible Preferred Stock. 4.2 Certificate of Designation, Preferences, Rights and Limitations of Series C Preferred Stock. 10.1 Purchase Agreement dated December 17, 1997, among the Company, Parker Drilling Investment Company and Parker Drilling Company.
EX-4.1 2 CERT OF DESIGNATION OF SERIES B CONVERTIBLE STOCK 1 EXHIBIT 4.1 CERTIFICATE OF THE DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES B CONVERTIBLE PREFERRED STOCK OF ENVIRONMENTAL SAFEGUARDS, INC. Environmental Safeguards, Inc. (hereinafter referred to as the "Corporation" or "Company"), a corporation organized and existing under the laws of the State of Nevada, DOES HEREBY CERTIFY: That, the Articles of Incorporation of the Corporation authorizes the issuance of 10,000,000 shares of Preferred Stock, $.001 par value per share, and expressly vests in the Board of Directors of the Corporation the authority to issue any or all of said shares in one or more series and by resolution or resolutions to establish the designation, number, full or limited voting powers, or the denial of voting powers, preferences and relative, participating, optional, and other special rights and the qualifications, limitations, restrictions and other distinguishing characteristics of each series to be issued: RESOLVED, that pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation, the Series B Convertible Preferred Stock, par value $.001 with a stated value of $5,000.00 ("Preferred Stock"), is hereby authorized and created, said series to consist of up to 5,000,000 shares. The voting powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof shall be as follows: 1. DIVIDENDS ON PREFERRED STOCK (a) The holders of Preferred Stock shall be entitled to receive out of funds legally available therefor, dividends at the same rate as dividends (other than dividends paid in additional shares of Common Stock) are paid with respect to the outstanding shares of the Company's Common Stock, $.001 par value per share ("Common Stock"), (treating each share of Preferred Stock as being equal to the number of shares of Common Stock into which each such share of Preferred Stock could be converted pursuant to the provisions of Section 2 hereof with such number determined as of the record date for the determination of holders of Common Stock entitled to receive such dividend). (b) Dividends in Kind. In the event the Company shall make or issue, or shall fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution with respect to the Common Stock payable in (i) securities of the Company other than shares of Common Stock or (ii) assets, then and in each such event the holders of Preferred Stock shall receive, at the same time such distribution is made with respect to Common Stock, the number of securities or such other assets of the 2 Company which they would have received had their Preferred Stock been converted into Common Stock immediately prior to the record date for determining holders of Common Stock entitled to receive such distribution. 2. CONVERSION OF PREFERRED STOCK INTO COMMON STOCK (a) Each holder of shares of Preferred Stock may, at his option and at any time and from time to time, convert any or all such shares, plus all dividends accrued and unpaid on such Preferred Stock up to the conversion date, on the terms and conditions set forth in this Section 2, into fully paid and non-assessable shares of the Corporation's Common Stock except that with respect to any shares of Preferred Stock called for redemption, the conversion right shall terminate at the close of business on the business day prior to the Redemption Date, unless default is made in the payment of the Redemption Price. The number of shares of Common Stock into which each share of Preferred Stock may be converted shall be determined by multiplying the number of shares of Preferred Stock to be converted by $1.06 and dividing the result by the Conversion Price (as defined herein) in effect at the time of conversion. The "Conversion Price" per share at which shares of Common Stock shall be issuable upon conversion of any shares of Preferred Stock shall initially be $1.06, subject to adjustment provided below. (b) To exercise his conversion privilege, the holder of any shares of Preferred Stock shall surrender to the Corporation during regular business hours at the principal executive offices of the Corporation or the offices of the transfer agent for the Preferred Stock or at such other place as may be designated by the Corporation, the certificate or certificates for the shares to be converted, duly endorsed for transfer to the Corporation (if required by it), accompanied by written notice stating that the holder irrevocably elects to convert such shares. Conversion shall be deemed to have been effected on the date when such delivery is made, and such date is referred to herein as the "Conversion Date." Within five (5) business days after the date on which such delivery is made, the Corporation shall issue and send (with receipt to be acknowledged) to the holder thereof or the holder's designee, at the address designated by such holder, a certificate or certificates for the number of full shares of Common Stock to which the holder is entitled as a result of such conversion, and cash with respect to any fractional interest of a share of Common Stock as provided in paragraph (c) of this Section 2. The holder shall be deemed to have become a stockholder of record of the number of shares of Common Stock into which the shares of Preferred Stock have been converted on the applicable Conversion Date unless the transfer books of the Corporation are closed on that date, in which event he shall be deemed to have become a stockholder of record of such shares on the next succeeding date on which the transfer books are open, but the Conversion Price shall be that in effect on the Conversion Date. Upon conversion of only a portion of the number of shares of Preferred Stock represented by a certificate or certificates surrendered for conversion, the Corporation shall within three (3) business days after the date on which such delivery is made, issue and send (with receipt to be acknowledged) to the holder 2 3 thereof or the holder's designee, at the address designated by such holder, a new certificate covering the number of shares of Preferred Stock representing the unconverted portion of the certificate or certificates so surrendered. (c) No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Preferred Stock. If more than one share of Preferred Stock shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Preferred Stock so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of any shares of Preferred Stock, the Corporation shall make an adjustment in respect of such fractional interest equal to the fair market value of such fractional interest, to the nearest 1/100th of a share of Common Stock, in cash at the Current Market Price (as defined below) on the business day preceding the effective date of the conversion. The "Current Market Price" of publicly traded shares of Common Stock of the Corporation for any day shall be deemed to be the average of the daily "Closing Prices" for the 10 consecutive trading days preceding the Conversion Date. The "Closing Price" shall mean the last reported sales price on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, on the National Association of Securities Dealers Automated Quotations System, or, if the Common Stock is not listed or admitted to trading on any national securities exchange or quoted on the National Association of Securities Dealers Automated Quotations System, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock Exchange member firm selected from time to time by the Corporation for that purpose. (d) The Corporation shall at all times reserve for issuance and maintain available, out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of the Preferred Stock, the full number of shares of Common Stock deliverable upon the conversion of all Preferred Stock from time to time outstanding. The Corporation shall from time to time (subject to obtaining necessary director and stockholder action), in accordance with the laws of the State of Nevada, increase the authorized number of shares of its Common Stock if at any time the authorized number of shares of its Common Stock remaining unissued shall not be sufficient to permit the conversion of all of the shares of Preferred Stock at the time outstanding. (e) If any shares of Common Stock to be reserved for the purpose of conversion of shares of Preferred Stock require registration or listing with, or approval of, any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise, including registration under the Securities Act of 1933, as amended, and appropriate state securities laws, before such shares may be validly issued or delivered upon conversion, the Corporation will in good faith and as expeditiously as possible meet such registration, listing or approval, as the case may be. 3 4 (f) All shares of Common Stock which may be issued upon conversion of the shares of Preferred Stock will upon issuance by the Corporation be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. (g) The Conversion Price in effect shall be subject to adjustment from time to time as follows: (i) Stock Splits, Dividends and Combinations. In the event that the Corporation shall at any time subdivide the outstanding shares of Common Stock, or shall pay or make a dividend or distribution on any class of capital stock of the Corporation in Common Stock, the Conversion Price in effect immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and in case the Corporation shall at any time combine the outstanding shares of Common Stock, the Conversion Price in effect immediately prior to such combination shall be proportionately increased, effective at the close of business on the date of such subdivision, dividend or combination, as the case may be. (ii) Non-Cash Dividends, Stock Purchase Rights, Capital Reorganization and Dissolutions. In the event: (A) that the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend, or any other distribution, payable otherwise than in cash; or (B) that the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase any shares of stock of any class or other securities, or to receive any other rights; or (C) of any capital reorganization of the Corporation, reclassification of the capital stock of the Corporation (other than a subdivision or combination of its outstanding shares of Common Stock), consolidation or merger of the Corporation with or into another corporation, share exchange for all outstanding shares of Common Stock under a plan of exchange to which the Corporation is a party, or conveyance of all or substantially all of the assets of the Corporation to another corporation; or (D) of the voluntary or involuntary dissolution, liquidation or winding up of the Corporation; 4 5 then, and in any such case, the Corporation shall cause to be mailed to the holders of record of the outstanding Preferred Stock, at least 10 days prior to the date hereinafter specified, a notice stating the date on which (x) a record is to be taken for the purpose of such dividend, distribution or rights, or (y) such reclassification, reorganization, consolidation, merger, share exchange, conveyance, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which holders of Corporation securities of record shall be entitled to exchange their shares of Corporation securities for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, share exchange, conveyance, dissolution, liquidation or winding up. (iii) Issuances at Less than the Conversion Price. Upon the issuance by the Corporation of Common Stock, or any right, warrant or option to purchase Common Stock or any security convertible into or exchangeable for Common Stock, or any obligation or any share of stock convertible into or exchangeable for Common Stock for a consideration per share less than the Conversion Price of the Preferred Stock in effect immediately prior to the time of such issue or sale other than an issuance of stock or securities pursuant to paragraph (i) of this Section 2(g), the issuance of shares of Common Stock upon exercise of options and warrants granted prior to the date of initial issuance of the Preferred Stock, shares of Common Stock issued upon the exercise of stock options granted pursuant to the corporation's employee stock option plan in effect from time to time (and as amended if approved by the stockholders of the Corporation), or shares of Common Stock issued in bona fide acquisitions (stock or asset) approved by the Board of Directors or stockholders of the Corporation, then forthwith upon such issue or sale, the Conversion Price of the Preferred Stock shall be reduced to a price (calculated to the nearest cent) determined by dividing: (A) an amount equal to the sum of (x) the number of shares of Common Stock outstanding immediately prior to such issue or sale multiplied by the then existing Conversion Price of the Preferred Stock, (y) the number of shares of Common Stock issuable upon conversion or exchange of any obligations or of any shares of stock of the Corporation outstanding immediately prior to such issue or sale multiplied by the then existing Conversion Price of the Preferred Stock, and (z) an amount equal to the aggregate "consideration actually received" by the Corporation upon such issue or sale; by (B) the sum of the number of shares of Common Stock outstanding immediately after such issue or sale and the number of shares of Common Stock issuable upon conversion or exchange of any obligations or of any share of stock of the Corporation outstanding immediately after such issue or sale. 5 6 For purposes of this paragraph 2(g)(iii), the following provisions will be applicable: (A) In the case of an issue or sale for cash of shares of Common Stock, the "consideration actually received" by the Corporation therefor shall be deemed to be the amount of cash received, before deducting therefrom any commissions or expenses paid by the Corporation. (B) In case of the issuance (otherwise than upon conversion or exchange of obligations or shares of stock of the Corporation) of additional shares of Common Stock for a consideration other than cash or a consideration partly other than cash, the amount of the consideration other than cash received by the Corporation for such shares shall be deemed to be the fair value of such consideration as determined in good faith by the Board of Directors. (C) In case of the issuance by the Corporation in any manner of any rights to subscribe for or to purchase shares of Common Stock, or any options for the purchase of shares of Common Stock or stock convertible into Common Stock, all shares of Common Stock or stock convertible into Common Stock to which the holders of such rights or options shall be entitled to subscribe for or purchase pursuant to such rights or options shall be deemed to be "outstanding" as of the date of the offering of such rights or the granting of such options, as the case may be, and the aggregate consideration named in such rights or options for the shares of Common Stock or stock convertible into Common Stock covered thereby, plus the consideration, if any, received by the Corporation for such rights or options, shall be deemed to be the "consideration actually received" by the Corporation (as of the date of the offering of such rights or the granting of such options, as the case may be) for the issuance of such shares. (D) In case of the issuance or issuances by the Corporation in any manner of any obligations or of any shares of stock of the Corporation that shall be convertible into or exchangeable for Common Stock, all shares of Common Stock issuable upon the conversion or exchange of such obligations or shares shall be deemed to be issued as of the date such obligations or shares are issued, and the amount of the "consideration actually received" by the Corporation for such additional shares of Common Stock shall be deemed to be the total of (x) the amount of consideration received by the Corporation upon the issuance of such obligations or shares, as the case may be, plus (y) the aggregate consideration, if any, other than such obligations or shares, receivable by 6 7 the Corporation upon such conversion or exchange, except in adjustment of dividends. (E) The amount of the "consideration actually received" by the Corporation upon the issuance of any rights or options referred to in subparagraph (C) above or upon the issuance of any obligations or shares which are convertible or exchangeable as described in subparagraph (D) above, and the amount of the consideration, if any, other than such obligations or shares so convertible or exchangeable, receivable by the Corporation upon the exercise, conversion or exchange thereof shall be determined in the same manner provided in subparagraphs (A) and (B) above with respect to the consideration received by the Corporation in case of the issuance of additional shares of Common Stock. Upon the expiration of any rights or options referred to in subparagraph (C), or the termination of any right of conversion or exchange referred to in subparagraph (D), or any change in the number of shares of Common Stock deliverable upon exercise of such options or rights or upon conversion of or exchange of such convertible or exchangeable securities, the Conversion Prices then in effect shall forthwith be readjusted to such Conversion Prices as would have obtained had the adjustments made upon the issuance of such options, rights or convertible or exchangeable securities been made upon the basis of the delivery of only the number of shares of Common Stock actually delivered or to be delivered upon the exercise of such rights or options or upon the conversion or exchange of such securities. (h) Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to paragraph 2(g), the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof, and prepare and furnish to each holder of Preferred Stock a certificate signed by an officer of the Corporation setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of such holder's shares. (i) In case any shares of Preferred Stock shall be converted pursuant to Section 2(f) hereof, or purchased or otherwise acquired by the Corporation, the shares so converted, purchased or acquired shall be restored to the status of authorized but unissued shares of preferred stock, without designation as to class or series, and may thereafter be reissued, but not as shares of Preferred Stock. (j) Effective upon the closing of a Qualified Public Offering (as hereinunder defined) all of the then outstanding Preferred Stock shall automatically be converted into Common Stock at the applicable Conversion Price then in effect. For purposes hereof, the 7 8 term "Qualified Public Offering" shall mean the closing of a firm commitment underwritten public offering pursuant to a registration statement filed and declared effective under the Securities Act of 1933, as amended, (the "Act") covering the offer and sale of Common Stock to the public in which the aggregate proceeds to the Company equal or exceed $25,000,000 and in which the price per share of Common Stock is at least $5.00 per share. All holders of record of shares of Preferred Stock will be given at least 10 days' prior written notice of the date fixed and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to this Section 2(j). On or before the date fixed for conversion, each holder of shares of Preferred Stock shall surrender his or its certificate or certificates for all such shares to the Company at the place designated in such notice, and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled pursuant to this Section 2(j). Within five (5) business days after the date of such mandatory conversion and the surrender of the certificate or certificates for Preferred Stock, the Company shall cause to be issued and delivered to such holder a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof and cash as provided in Section 2(c) in respect of any fraction of a share of Common Stock otherwise issuable upon such conversion. 3. VOTING (a) Except for election of directors, as otherwise required by law or set forth herein, the shares of Preferred Stock shall be entitled to vote, together with the shares of the Corporation's Common Stock, on all matters presented at any annual or special meeting of stockholders of the Corporation, or may act by written consent in the same manner as the holders of the Corporation's Common Stock, upon the following basis: each holder of Preferred Stock shall be entitled to cast such number of votes for each share of Preferred Stock held by such holder on the record date fixed for such meeting, or on the effective date of such written consent, as shall be equal to the number of shares of the Corporation's Common Stock into which each of such holder's shares of Preferred Stock is convertible immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent. The Preferred Stock and any other stock having voting rights shall vote together as one class, except as provided by law and in paragraph 5 hereof. (b) Without limiting the foregoing, so long as the Preferred Stock is outstanding and unconverted to Common Stock, the holders of the Preferred Stock, voting separately as a class, shall be entitled to elect one member of the Board of Directors. 4. LIQUIDATION RIGHTS (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Preferred Stock then outstanding 8 9 shall be entitled to receive out of assets of the Corporation available for distribution to stockholders, before any distribution of assets is made to holders of any other class of capital stock of the Corporation, an amount equal to $1.06 per share, plus accumulated and unpaid dividends thereon to the date fixed for distribution ("Liquidation Amount"). (b) A consolidation or merger of the Corporation (in the event that the Corporation is not the surviving entity) or sale of all or substantially all of the Corporation's assets shall be regarded as a liquidation, dissolution or winding up of the affairs of the Company within the meaning of this Section 4. In the event of such a liquidation as contemplated by this Section 4(b), the holders of Preferred Stock shall be entitled to receive an amount equal to the greater of the Liquidation Amount or that which such holders would have received if they had converted their Preferred Stock into Common Stock immediately prior to such liquidation or winding up (without giving effect to the liquidation preference of or any dividends on any other capital stock ranking prior to the Common Stock). (c) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation which involves the distribution of assets other than cash, the Corporation shall promptly engage competent independent appraisers to determine the value of the assets to be distributed to the holders of shares of Preferred Stock and the holders of shares of Common Stock. The Corporation shall, upon receipt of such appraiser's valuation, give prompt written notice to each holder of shares of Preferred Stock of the appraiser's valuation. 5. LIMITATIONS (a) So long as twenty-five percent (25%) of the shares of Preferred Stock are outstanding, the Corporation shall not: (i) create, authorize or issue shares of any class or series of stock, or any security convertible into such class or series ranking senior to or on parity with the Preferred Stock either as to payment of dividends or as distributions in the event of a liquidation, dissolution or winding up of the Corporation; or (ii) amend, alter or repeal any provision of the Articles of Incorporation or Bylaws of the Corporation so as to affect adversely the relative rights, preferences, qualifications, limitations or restrictions (including, without limitation, expanding the number of members on the Board of Directors) of the Preferred Stock; or (iii) declare or pay any dividend on its Common Stock if any dividends are unpaid on the Preferred Stock; or 9 10 (iv) redeem for cash any other securities issued by the Company; or (v) directly or indirectly, enter into any merger, consolidation or other reorganization in which the Company shall no be the surviving corporation, unless the surviving corporation shall, prior to such merger, consolidation or reorganization, agree in writing to assume the obligations of the Company under the Certificate of Designation. (b) The provisions of this paragraph 5 shall not in any way limit the right and power of the Corporation to issue bonds, notes, mortgages, debentures, common stock, preferred stock ranking junior to the terms of the Preferred Stock and other obligations, and to incur indebtedness to banks and to other lenders. IN WITNESS WHEREOF, ENVIRONMENTAL SAFEGUARDS, INC. has caused its corporate seal to be hereunto affixed and this certificate to be signed by JAMES S. PERCELL, its president, and RONALD BIANCO, its assistant secretary, this ___ day of ________________, 1997. ENVIRONMENTAL SAFEGUARDS, INC. By: ------------------------------- JAMES S. PERCELL, President By: ------------------------------- RONALD BIANCO, Assistant Secretary THE STATE OF TEXAS ) ) COUNTY OF HARRIS ) BEFORE ME, the undersigned authority, on this day personally appeared James S. Percell, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL of office this ____ day of December, 1997. ---------------------------------- NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS 10 11 THE STATE OF TEXAS ) ) COUNTY OF HARRIS ) BEFORE ME, the undersigned authority, on this day personally appeared Ronald Bianco, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL of office this ____ day of December, 1997. --------------------------------- NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS 11 EX-4.2 3 CERT OF DESIGNATION OF SERIES C PREFERRED STOCK 1 EXHIBIT 4.2 CERTIFICATE OF THE DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES C PREFERRED STOCK OF ENVIRONMENTAL SAFEGUARDS, INC. Environmental Safeguards, Inc. (hereinafter referred to as the "Corporation" or "Company"), a corporation organized and existing under the laws of the State of Nevada, DOES HEREBY CERTIFY: That, the Articles of Incorporation of the Corporation authorizes the issuance of 10,000,000 shares of Preferred Stock, $.001 par value per share, and expressly vests in the Board of Directors of the Corporation the authority to issue any or all of said shares in one or more series and by resolution or resolutions to establish the designation, number, full or limited voting powers, or the denial of voting powers, preferences and relative, participating, optional, and other special rights and the qualifications, limitations, restrictions and other distinguishing characteristics of each series to be issued: RESOLVED, that pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation, the Series C Preferred Stock, par value $.001("Series C Preferred Stock"), is hereby authorized and created, said series to consist of up to 400,000 shares, with a stated value of $10.00 per share. The voting powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof shall be as follows: 1. DIVIDENDS ON SERIES C PREFERRED STOCK (a) The holders of Series C Preferred Stock shall be entitled to receive out of funds legally available therefor, dividends in an annual amount equal to the prime rate plus one and one-half percent (1 1/2%) as reported by NationsBank of Maryland, N.A. on the outstanding stated value of the Series C Preferred Stock (which initially is $4,000,000.00). The dividends shall be calculated as of the last day of each quarter, and shall be payable quarterly in arrears (the "Dividend Payment") with the first quarterly payment due for the quarter ending March 31, 1998. The Dividend Payment is due five (5) days after the close of each quarter. The initial dividend shall accrue from the date of issuance of the Series C Preferred Stock and shall be payable with the quarterly payment for the quarter ending March 31, 1998. 2. NO CONVERSION OF SERIES C PREFERRED STOCK INTO COMMON STOCK The Series C Preferred Stock is not convertible into the Corporation's Common Stock. 2 3. NO VOTING OF SERIES C PREFERRED STOCK Except as required by law, each holder of Series C Preferred Stock shall not be entitled to vote on any matters. 4. LIQUIDATION RIGHTS (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series C Preferred Stock then outstanding shall be entitled to receive out of assets of the Corporation available for distribution to stockholders, before any distribution of assets is made to holders of any other class of capital stock of the Corporation, except Series B Convertible Preferred Stock, an amount equal to $10.00 per share, plus accumulated and unpaid dividends thereon to the date fixed for distribution ("Liquidation Amount"). (b) A consolidation or merger of the Corporation (in the event that the Corporation is not the surviving entity) or sale of all or substantially all of the corporation's assets shall be regarded as a liquidation, dissolution or winding up of the affairs of the Corporation within the meaning of this Section 4. In the event of such a liquidation as contemplated by this Section 4(b), the holders of Series C Preferred Stock shall be entitled to receive an amount equal to the Liquidation Amount. (c) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation which involves the distribution of assets other than cash, the Corporation shall promptly engage competent independent appraisers to determine the value of the assets to be distributed to the holders of shares of this Series C Preferred Stock other preferred stock, and the holders of shares of Common Stock. The Corporation shall, upon receipt of such appraiser's valuation, give prompt written notice to each holder of shares of Series C Preferred Stock of the appraiser's valuation. 5. REDEMPTION AT THE DISCRETION OF THE CORPORATION (a) The Corporation, at its sole discretion, may redeem any and/or all of the shares of Series C Preferred Stock as may be outstanding from time to time (the "Redemption Date"), upon thirty days written notice to holders (the "Redemption Notice"). (b) The Redemption Price (the "Redemption Price") for each share of Series C Preferred Stock shall be $10.00, plus accumulated and unpaid dividends thereon to the date fixed for redemption. 2 3 (c) The notice required by clause 5(a) above shall be delivered by the Corporation to each holder of record of Series C Preferred Stock, at such holder's address as shown on the records of the Corporation; provided, however, that the Corporation's failure to give such Redemption Notice shall in no way affect the Corporation's right to redeem the Series C Preferred Stock. (d) The Redemption Notice shall contain the following information: (i) the Redemption Date and the Redemption Price; and (ii) the number of shares of Series C Preferred Stock being redeemed. (e) Surrender of Certificates. Each holder of shares of Series C Preferred Stock to be redeemed shall surrender the certificate(s) representing such shares to the Corporation at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares as set forth in this Section 5 shall be paid to the order of the person whose name appears in such certificate(s) and each surrendered certificate shall be canceled and retired. In the event some but not all of the shares of Series C Preferred Stock represented by a certificate(s) surrendered by a holder are being redeemed, the Corporation shall execute and deliver to or on the order of the holder, at the expense of the Corporation, a new certificate representing the number of shares of Series C Preferred Stock which were not redeemed. (f) All shares of Series C Preferred Stock so redeemed shall have the status of authorized but unissued Series C Preferred Stock, but such shares so redeemed shall not be reissued as shares of the series of Series C Preferred Stock created hereby. IN WITNESS WHEREOF, ENVIRONMENTAL SAFEGUARDS, INC. has caused its corporate seal to be hereunto affixed and this certificate to be signed by JAMES S. PERCELL, its president, and RONALD BIANCO, its assistant secretary, this ___ day of ________________, 1997. ENVIRONMENTAL SAFEGUARDS, INC. By ------------------------------------ JAMES S. PERCELL, president By ------------------------------------ RONALD BIANCO, Assistant Secretary 3 4 THE STATE OF TEXAS ) ) COUNTY OF HARRIS ) BEFORE ME, the undersigned authority, on this day personally appeared James S. Percell, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL of office this _____ day of December, 1997. ------------------------------------ NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS THE STATE OF TEXAS ) ) COUNTY OF HARRIS ) BEFORE ME, the undersigned authority, on this day personally appeared Ronald Bianco, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL of office this _____ day of December, 1997. ------------------------------------ NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS 4 EX-10.1 4 PURCHASE AGREEMENT - DATED 10/17/97 1 EXHIBIT 10.19 PURCHASE AGREEMENT PURCHASE AGREEMENT ("Agreement") dated as of December 10, 1997 and effective as of December 17, 1997 by and among Environmental Safeguards, Inc., a Nevada company ("Buyer"), Parker Drilling Investment Company, an Oklahoma corporation ("Seller") and Parker Drilling Company, a Delaware corporation ("Parker"). WITNESSETH: WHEREAS, Seller owns and desires to sell to Buyer all of its capital account of OnSite Technology, LLC ("OnSite"), which capital account represents 50% of the issued and outstanding capital of OnSite (the "Seller's Capital"); WHEREAS, Buyer has agreed to purchase the Seller's Capital from Seller for the consideration stated herein, subject to the satisfaction of the conditions provided herein; WHEREAS, Parker Drilling Company, a Delaware corporation, and parent company of Seller and Casuarina, Ltd., a Bermuda corporation, have made certain representations and undertaken certain obligations as provided herein; NOW, THEREFORE, in consideration of the foregoing and the following representations, warranties, covenants, agreements and indemnities, and other good and valuable consideration, the parties hereto agree as follows: 1. PURCHASE AND TRANSFER OF SHARES. 1.1 Definitions. "AGREEMENT" has the meaning set forth in the preamble. "BUYER" means Environmental Safeguards, Inc. "BUYER TERMINATION EVENT" has the meaning set forth in Section 11.1(b). 1 2 "CLOSING" and "CLOSING DATE" have the meanings set forth in Section 2.3. "CORPORATE CHARTER DOCUMENTS" has the meaning set forth herein. "DAMAGES" has the meanings set forth in Section 5.2. "EVSF INDEBTEDNESS" mean that certain loan in the amount of US$3,000,000 which was made to Buyer by Casuarina on or about December 19, 1996. "ONSITE CAPITAL" means the authorized and issued capital of OnSite. "ONSITE TECHNOLOGY LLC" means that certain limited liability company organized and existing under the laws of the State of Oklahoma. "PARKER" means Parker Drilling Company, a Delaware corporation. "PURCHASE PRICE" means the price paid to purchase the Seller's Capital pursuant to, and as same may be adjusted under, the provisions of Section 2.2. "SELLER" means Parker Drilling Investment Company. "SELLER TERMINATION EVENT" has the meaning set forth in Section 11.1(c). "SELLER'S CAPITAL" means Seller's capital ownership in OnSite which will be transferred to Buyer at Closing. "TO THE BEST OF [A PERSON'S] KNOWLEDGE", as used in this Agreement, with respect to any party, means and applies to the actual knowledge of such party, its officers, agents or employees and the knowledge a prudent person should be aware of having made a reasonable investigation into the circumstances. "WARRANTS", shall mean those certain warrants to purchase 300,000 shares of common stock of the Buyer issued in favor of Parker Drilling Company by Buyer in connection with the EVSF Indebtedness to Casuarina. 2 3 1.2 Sale of Seller's Capital. Subject to the terms and conditions of this Agreement, on the Closing Date, Seller agrees to sell, transfer and deliver the Seller's Capital to Buyer, free and clear of all liens, charges, pledges and encumbrances, and on such date Buyer agrees to purchase and take delivery of title to the Seller's Capital. 2. PURCHASE PRICE; PAYMENT. 2.1 Purchase Price. (a) The purchase price for the Seller's Capital shall be EIGHT MILLION UNITED STATES DOLLARS (U.S. $8,000,000) ("Purchase Price"), payable in cash at the Closing. (b) All payments of the Purchase Price and other sums due hereunder shall be made in U.S. Dollars at Closing in immediately available funds to Seller by wire transfer to Seller's bank account, which account shall be designated in writing to Buyer at least two (2) Business Days prior to the Closing, or as otherwise instructed by Seller in writing. 2.2 Closing. The "Closing" of the purchase and sale provided for in this Agreement shall take place at the offices of counsel for the Buyer, Axelrod, Smith & Kirshbaum, on the Closing Date, or at such other time and place as the parties hereto shall mutually agree in writing. Unless extended by agreement in writing of the parties, which date is referred to herein as the "Closing Date", the Closing Date shall in any event take place on or about December 17, 1997. 2.3 Closing Deliveries. At the Closing: 3 4 (a) Seller shall deliver to Buyer certificates or other legal indicia of ownership representing the Seller's Capital, duly endorsed to Buyer or its wholly owned subsidiary, together with such instruments of transfer required by applicable law, which shall transfer to Buyer or its wholly owned subsidiary good and marketable (legal and beneficial) title to the Seller's Capital, free and clear of all liens and encumbrances; (b) Parker shall deliver to Buyer certificates representing the Warrants, unexercised, which shall be canceled at Closing; (c) Seller shall ensure that the note representing the EVSF Indebtedness is delivered to Buyer, marked, "Canceled"; (d) Buyer shall deliver to Seller the Purchase Price; (e) Each party shall deliver to the other party all other documents, instruments and certificates required to be delivered pursuant to the terms of this Agreement. 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND PARKER. Seller and Parker, as of the Closing Date, represent and warrant to Buyer as follows: 3.1 Organization and Good Standing. Seller and Parker each is a corporation duly organized, validly existing and in good standing under the laws of Oklahoma and Delaware respectively. Seller's and Parker's Articles or Certificate of Incorporation, By-Laws and other organizational documents are in full force and effect and valid under the laws of Oklahoma or Delaware, as appropriate, and no provision thereof would preclude any of the transactions contemplated by this Agreement. Seller's and Parker's organizational documents, as appropriate in this context, are hereinafter referred to as "Corporate Charter Documents." 4 5 3.2 Authority. Seller and Parker each has all necessary corporate power and authority to execute and deliver this Agreement and all agreements, instruments and documents to be executed and delivered pursuant hereto, to transfer and deliver the Seller's Capital to Buyer at the Closing, to deliver the unexercised Warrants marked 'Canceled" to Buyer, to consummate the transactions contemplated by the Agreement and to perform all terms and conditions required to be performed pursuant hereto. The execution and delivery of this Agreement and all agreements, instruments and documents to be executed and delivered by Seller and Parker hereunder, the performance by Seller and Parker of all the terms and conditions hereof and thereof to be performed by each respective party, and the consummation of the transactions contemplated hereby by each respective party have been duly authorized by all necessary corporate action of the board of directors and/or shareholders of Seller and Parker, as appropriate, and no other corporate authorizations are necessary with respect thereto. All persons who have executed and delivered this Agreement, and all persons who will execute and deliver the Seller's Capital, the canceled Warrants and other agreements, documents, instruments and certificates to be executed and delivered hereunder by Seller or Parker, as appropriate, have been duly authorized by all necessary board of director and/or shareholder actions on the part of Seller or Parker. 3.3 Enforceability: Conflicts, etc. This Agreement constitutes a legal, valid and binding obligation of Seller and Parker and is enforceable against each respective party in accordance with its terms. Neither the execution and delivery of this Agreement by Seller and Parker, nor the 5 6 consummation of the transactions contemplated hereby to be performed by said parties hereto will (a) violate or conflict with any provision of the Corporate Charter Documents of Seller or Parker, as amended to date, or (b) violate or conflict with any provision of any law, rule, regulation, order, permit, certificate, writ, judgment, injunction, decree, determination, award or other decision of any court or governmental agency binding upon Seller or Parker. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby will result in a breach of, or constitute a default (or with notice or lapse of time or both would result in a breach of or constitute a default) under, or otherwise give any person the right to terminate any lease, license, contract or other agreement or instrument to which Seller or Parker is a party. Neither the execution and delivery by Seller and Parker of this Agreement nor the consummation of the transactions contemplated hereby will result in, or require, the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest, or other charge or encumbrance of any nature upon or with respect to any of the assets or equipment now owned by Seller or Parker. 3.4 Title to Seller's Capital; Parker's Warrants. Seller will have at Closing, full legal and beneficial title to all of the Seller's Capital, free and clear of all liens and encumbrances. The Seller's Capital will be duly authorized, validly issued, fully paid and nonassessable and constitute 100% of Seller's ownership interest in OnSite. Seller will, by delivery to Buyer of certificates or other legal indicia of ownership properly endorsed representing the Seller's Capital at the Closing, have transferred, delivered and vested in Buyer good and marketable (legal and beneficial) title to the whole of the Seller's Capital free and clear of all liens, pledges, 6 7 encumbrances, security interests, claims, charges and restrictions whatsoever. Except for the rights of Buyer, there are no outstanding agreements, options, warrants or other rights of any kind whatsoever entitling any person to purchase or acquire an interest in any of the Seller's Capital. The certificates or other legal indicia of ownership representing Seller's Capital delivered at the Closing and the signatures and endorsements thereof or instruments of transfer delivered therewith will be valid and genuine. Parker will have at Closing, full legal and beneficial title to the Warrants, free and clear of all liens and encumbrances. Except for the rights of Buyer, there are no outstanding agreements or other rights of any kind whatsoever entitling any person to purchase or acquire an interest in the Warrants. 3.5 Capitalization. Other than the rights of Buyer herein, there are no outstanding or authorized options, warrants, rights, calls or commitments of any character relating to the Seller's Capital, and there are no outstanding securities or other instruments convertible into or exchangeable for the Seller's Capital and no commitments to issue such securities or instruments. 3.6 Payment of Expenses of Brokers or Finders. No broker or other third party has been retained in connection with this transaction and SELLER HEREBY DEFENDS, INDEMNIFIES AND HOLDS HARMLESS BUYER from any brokerage or finders' fees or agents' commissions or their like payment in connection with this Agreement alleged to be due by or through Seller or as a result of the action of Seller. 7 8 3.7 Consents. No consent, approval, or authorization of, or registration or filing with, any person, including any governmental authority or other regulatory agency is required of Seller or Parker in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. 3.8 Tax Matters. Seller's sale of its capital in Onsite will be a technical termination of the partnership for tax purposes only under the provision of the Internal Revenue Code of 1986, as amended, and, consequently, a termination of the tax year for OnSite on the Closing Date. 4. REPRESENTATIONS AND WARRANTIES BY BUYER. Buyer hereby represents and warrants to Seller as follows: 4.1 Organization and Good Standing. Buyer is a corporation duly organized, validly existing and in good standing under the laws of Nevada and is duly authorized to carry on business and is in good standing in the State of Texas. 4.2 Authority. Buyer has all the requisite power and authority to execute and deliver this Agreement, and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Buyer and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no other corporate action, including any action by the shareholders of Buyer, is necessary to authorize this Agreement or the transactions 8 9 contemplated hereby. This Agreement has been duly executed and delivered by Buyer and is a legal, valid and binding obligation of Buyer enforceable against it in accordance with its terms. The Buyer will have at the Closing full corporate power and authority to make and perform this Agreement, purchase and take delivery of the Seller's Capital and perform all other transactions contemplated herein. 4.3 No Violation, Enforceability. This Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable against it in accordance with its terms. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby in accordance with the terms hereto will violate or conflict with any provision of the Articles of Incorporation, By-laws and other applicable organizational documents of Buyer, or violate the provisions of or result in the acceleration of performance under any material mortgage, lien, lease, agreement, instrument, order, judgment or decree to which Buyer is a party or by which it or any of its property is bound, and will not violate or conflict with any other material restriction to which Buyer is subject. 4.4 Brokers or Finders. No broker or other third party has been retained in connection with this transaction and BUYER HEREBY DEFENDS, INDEMNIFIES AND HOLDS HARMLESS SELLER from any brokerage or finders' fees or agents' commissions or their like payment in connection with this Agreement alleged to be due by or through Buyer or as a result of the action of Buyer. 4.5 Notice; Approvals. Buyer need not give any notice to, make any filing with, or obtain any 9 10 authorization or consent or approval of any person or governmental authority in order to consummate the transactions contemplated hereby. 5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION. 5.1 Survival. All of the express representations, warranties, covenants, indemnities and agreements of the parties hereto contained in this Agreement shall survive the Closing for a two (2) year period, except for representations and warranties under (a) Sections 3.4 which shall survive until five (5) days after the end of any applicable statutes of limitation, unless there is no applicable statute of limitations period in which case they will survive for ten (10) years and (b) the agreements and covenants under Sections 8.1 and 8.2, which each shall survive AS provided therein. 5.2 Indemnification by Seller and Parker. (a) SELLER AND PARKER EACH SHALL, AND DO HEREBY AGREE, TO DEFEND, INDEMNIFY AND HOLD HARMLESS BUYER, ITS OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS FROM AND AGAINST, AND SHALL PAY TO BUYER, THE FULL AMOUNT OF, ANY LOSS, CLAIM, DAMAGE OR EXPENSE (INCLUDING REASONABLE ATTORNEYS' FEES) INCURRED EITHER DIRECTLY FROM, RESULTING FROM OR ARISING OUT OF ANY OF THE FOLLOWING: (i) ANY MISREPRESENTATION, BREACH OF WARRANTY, OR NONFULFILLMENT OF ANY MATERIAL AGREEMENT ON THE PART OF SELLER OR PARKER, RESPECTIVELY, CONTAINED IN THIS AGREEMENT OR IN ANY STATEMENT OR CERTIFICATE FURNISHED TO BUYER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY; 10 11 (ii) ANY MATERIAL INACCURACY IN ANY CERTIFICATE OR OTHER DOCUMENT DELIVERED BY SELLER OR PARKER, RESPECTIVELY, TO BUYER PURSUANT TO ANY OF THE PROVISIONS OF, OR IN CONNECTION WITH, THIS AGREEMENT; AND (iii) ANY ACTIONS, JUDGMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEY'S FEES AND ALL OTHER EXPENSES INCURRED IN INVESTIGATING, PREPARING, OR DEFENDING ANY LITIGATION OR PROCEEDING, COMMENCED OR THREATENED) INCIDENT TO ANY OF THE FOREGOING OR THE ENFORCEMENT OF THIS SECTION 5.2. THE AGGREGATE AMOUNT OF SUCH LOSSES, LIABILITIES, CLAIMS, COSTS, EXPENSES, AND FEES ARE HEREINAFTER REFERRED TO AS "DAMAGES". (b) IN ANY CASE, SELLER AND PARKER SHALL EACH HAVE NO LIABILITY FOR (i) ANY DAMAGES OR CLAIM WHICH DOES NOT EXCEED $25,000 OR (ii) THE FIRST $25,000 OF ANY CLAIM OR DAMAGES FOR EACH INCIDENT GIVING RISE TO DAMAGES OR CLAIM OR (iii) ANY DAMAGES OR CLAIMS BASED ON INFORMATION KNOWN TO BUYER AT OR PRIOR TO CLOSING. 5.3 Indemnification by Buyer. (a) BUYER SHALL AND DOES HEREBY AGREE TO DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER, PARKER , AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS FROM AND AGAINST, AND SHALL PAY TO SELLER AND PARKER, THE FULL AMOUNT OF, ANY LOSS, CLAIM, DAMAGE OR EXPENSE (INCLUDING REASONABLE ATTORNEYS' FEES) INCURRED EITHER DIRECTLY FROM, RESULTING FROM OR ARISING OUT OF ANY OF THE FOLLOWING: (i) ANY MISREPRESENTATION, BREACH OF WARRANTY, OR NONFULFILLMENT OF ANY MATERIAL AGREEMENT ON THE PART OF BUYER CONTAINED IN THIS AGREEMENT OR IN ANY STATEMENT OR CERTIFICATE FURNISHED TO SELLER OR PARKER IN 11 12 CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY; (ii) ANY MATERIAL INACCURACY IN ANY CERTIFICATE OR OTHER DOCUMENT DELIVERED BY BUYER TO SELLER OR PARKER PURSUANT TO ANY OF THE PROVISIONS OF, OR IN CONNECTION WITH, THIS AGREEMENT; (iii) ANY ACTIONS, JUDGMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEY'S FEES AND ALL OTHER EXPENSES INCURRED IN INVESTIGATING, PREPARING, OR DEFENDING ANY LITIGATION OR PROCEEDING, COMMENCED OR THREATENED) INCIDENT TO ANY OF THE FOREGOING OR THE ENFORCEMENT OF THIS SECTION 5.3; AND (iv) ANY LOSS, LIABILITY, CLAIM, OBLIGATION, DAMAGES (PHYSICAL OR MONETARY), JUDGMENTS, ORDERS ARISING OUT OF OR RESULTING FROM THE OPERATION OF THE BUSINESS OF ONSITE, SUBSEQUENT TO CLOSING. THE AGGREGATE AMOUNT OF SUCH LOSSES, LIABILITIES, CLAIMS, COSTS, EXPENSES, AND FEES ARE HEREINAFTER REFERRED TO AS "DAMAGES". (b) IN ANY CASE, BUYER SHALL HAVE NO LIABILITY FOR (i) ANY DAMAGES OR CLAIM WHICH DOES NOT EXCEED $25,000 OR (ii) THE FIRST $25,000 OF ANY CLAIM OR DAMAGES FOR EACH INCIDENT GIVING RISE TO DAMAGES OR CLAIM OR (iii) ANY DAMAGES OR CLAIMS BASED ON INFORMATION KNOWN TO SELLER OR PARKER AT OR PRIOR TO CLOSING. 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER. The obligations of Buyer hereunder are, unless waived at the option of Buyer, subject to the satisfaction, on or prior to the Closing Date, of the following conditions: 6.1 Representations. The representations and warranties of Seller and Parker contained in this Agreement shall be true in all material respects on and as of the Closing Date with the 12 13 same effect as though such representations and warranties had been made on and as of such date; all of the covenants and agreements of Seller and Parker and approvals on Seller's or Parker's part to be complied with and performed on or before the Closing pursuant to the terms hereof shall have been complied with and performed in all material respects; and Seller and Parker shall have delivered to Buyer a certificate to such effect dated the Closing Date and signed by its authorized representative. 6.2 Litigation. No action, suit, investigation, or other proceeding or claim shall have been threatened in writing or instituted before any court or by any government or Governmental Agency or instrumentality either (a) to restrain, prohibit or invalidate the transactions contemplated by this Agreement, (b) to impose any material restrictions, limitations or conditions with respect thereto or with respect to Buyer's ownership interests in the Seller's Capital, or (c) to obtain any material damages or other relief in connection with the transactions contemplated by this Agreement. 6.3 Legal Opinions. Buyer shall have received an opinion from counsel to Seller and Parker in support of the representations and warranties set forth herein. 6.4 Deliveries. Seller and Parker shall have effected delivery of all of the items required to be delivered by it at the Closing, including without limitation, all documents necessary to transfer legal title to the Seller's Capital. 6.5 Board Approvals. Seller shall have delivered to Buyer a copy of resolutions of the board of 13 14 directors of Seller duly certified by its Secretary to be true and correct copies, and approving of the transactions contemplated hereby. 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER AND PARKER. The obligations of Seller and Parker hereunder are, unless waived at the option of Seller, subject to the satisfaction, on or prior to the Closing, of the following conditions: 7.1 Representations. The representations and warranties of Buyer contained in this Agreement shall be true in all material respects on and as of the Closing with the same effect as though such representations and warranties had been made on and as of such date; all of the covenants and agreements of Buyer and approvals on Buyer's part to be complied with and performed on or before the Closing pursuant to the terms hereof shall have been complied with and performed in all material respects; and Buyer shall have delivered to Seller a certificate to such effect dated the Closing and signed by its authorized representatives. 7.2 Litigation. No action, suit, investigation, other proceeding or claim shall have been threatened or instituted before any court or before or by any government or Governmental Agency or instrumentality either (a) to restrain, prohibit or invalidate the transactions contemplated by this Agreement, (b) to impose any material restrictions, limitations or conditions with respect thereto, or (c) to obtain any material damages or other relief in connection with the transactions contemplated by this Agreement. 7.3 Legal Opinion. Seller and Parker shall have received an opinion from counsel to Buyer in 14 15 support of the representations and warranties set forth herein. 7.4 Repayment of EVSF Indebtedness. Seller shall have received either (i) a certificate from Casuarina attesting to the repayment in full of the EVSF Indebtedness, including all accrued interest, or (ii) a copy of the note evidencing the EVSF Indebtedness marked "Canceled." 7.5 Deliveries. Buyer shall have effected delivery of all of the items required to be delivered by it on or before the Closing, including without limitation, a certificate evidencing the release of the Letter of Credit given by Parker Drilling Investment Company to Banco Ganadero. 7.6 Board Approval. Buyer shall have delivered to Seller and Parker a copy of the resolutions of its board of directors certified by the Secretary of Buyer, as being true and correct, and approving of the transactions contemplated hereby. 8. COVENANTS OF SELLER AND PARKER PRIOR TO CLOSING. Seller and Parker covenant and agree that, between the date of this Agreement and the Closing, Seller and Parker shall: (a) give prompt written notice to Buyer of any notice received by it of any default or breach or alleged default or breach under any material instrument or agreement to which it is a party or by which it is bound; (b) give prompt written notice to Buyer of the commencement of any action, suit, proceeding or investigation or the assertion of any claim or threat to commence any action, suit, proceeding or investigation, and keep Buyer fully and 15 16 promptly informed as to any developments in any pending action, suit, proceeding or investigation; and (c) promptly notify Buyer in writing if it becomes aware of any fact or condition which makes untrue, or shows to have been untrue, any representation or warranty made by Seller or Parker in this Agreement. 8.2 Certain Restrictions. Between the date of this Agreement and closing, Seller and Parker shall: (a) take all such reasonable and lawful action as may be necessary or appropriate in order to effectuate the transactions contemplated hereby as promptly as possible; or (b) not issue any press release or make any public announcement relating to the subject matter of this Agreement prior to the Closing without the prior written approval of Buyer. (c) No Shop. Between the date of this Agreement and January 3, 1998, Seller and Parker will not in any way, (i) solicit, directly or indirectly, or cause any other person to solicit, any offer to acquire all or any part of the Seller's Capital, (ii) enter into any discussions, negotiations or agreements which contemplate the sale of Seller's Capital to any person or entity, other than Buyer or (iii) provide any person or entity other than Buyer with any information or data of any nature whatsoever relating to the Seller's Capital or the business of OnSite for the purpose of enabling such person or entity to develop a proposal for the acquisition of Seller's Capital. Seller and Parker shall immediately advise Buyer in writing of any inquiries, discussions, negotiations or proposals from or with third parties including the specific terms thereof and the 16 17 identification of the other parties involved. 8.3 Conveyance Of Any Other Interest. To the extent that Seller and Parker have (i) any marketing or manufacturing rights or licenses to use the indirect thermal desorption technology of the Buyer, National Fuel & Energy, Inc. ("NFE") or OnSite, (ii) any rights to the intellectual property and patents owned by the Buyer, NFE or OnSite, (iii) any rights in connection with that certain Memorandum of Understanding dated January 10, 1995 by and between NFE and Parker, or (iv) any rights in the OnSite trademark (collectively, the "Rights"), then in such event all of such Rights are hereby transferred, conveyed and assigned to Buyer as of the Closing Date, free of any assignments, liens, pledges, encumbrances, security interests, claims, charges or restrictions of any kind whatsoever. There are no outstanding agreements, options or other rights of any kind entitling any party to purchase, acquire or obtain any Rights and there are no assignments, liens, pledges, encumbrances, security interests, claims, charges or restrictions of any kind whatsoever in connection with the Rights. 9. COVENANTS OF BUYER PRIOR TO CLOSING. 9.1 Buyer covenants and agrees that, between the date of this Agreement and the Closing, Buyer shall: (a) give prompt written notice to Seller and Parker of any notice received by it of any default or breach or alleged default or breach under any material instrument or agreement to which it is a party or by which it is bound; (b) give prompt written notice to Seller and Parker of the commencement of any action, suit, proceeding or investigation or the assertion of any 17 18 claim or threat to commence any action, suit, proceeding or investigation; keep Seller and Parker fully and promptly informed as to any developments in any pending action, suit, proceeding or investigation; (c) promptly notify Seller and Parker in writing if it becomes aware of any fact or condition which makes untrue, or shows to have been untrue, any representation or warranty made by Buyer in this Agreement 9.2 Certain Restrictions. Between the date of this Agreement and closing, Buyer shall: (a) take all such reasonable and lawful action as may be necessary or appropriate in order to effectuate the transactions contemplated hereby as promptly as possible. (b) not issue any press release or make any public announcement relating to the subject matter of this Agreement prior to the Closing without the prior written approval of Seller and Parker. 10. EXPENSES. Buyer, Seller and Parker shall each pay their own expenses in connection with the preparation, execution and consummation of this Agreement, including, without limitation, all legal and accounting expenses and fees and other fees of their representatives or agents. The parties shall each pay their own filing fees and other expenses in connection with any filings required by applicable law and any other regulatory or governmental filings and approvals required for the transactions contemplated hereby. 18 19 11. TERMINATION. 11.1 Causes for Termination. This Agreement may be terminated at or at any time prior to the Closing: (a) by mutual consent in writing of Buyer and Seller; (b) by Buyer (a "Buyer Termination Event"), as follows: (i) if for any reason not the fault or cause or within the control of Buyer or its representatives, the Closing does not occur prior to January 3, 1998; (ii) upon a material breach on the part of Seller or Parker of any representation, warranty, covenant or agreement set forth in this Agreement, or if any representation or warranty of Seller or Parker shall have become untrue in any material respect; (c) by Seller or Parker (a "Seller Termination Event"), as follows: (i) if for any reason not the fault or cause or within the control of Seller or Parker or its representatives, the Closing does not occur prior to January 3, 1998; (ii) upon a material breach on the part of Buyer of any representation, warranty, covenant or agreement set forth in this Agreement, or if any representation or warranty of Buyer shall have become untrue in any material respect 11.2 Effect of Termination. (a) In the event of termination of this Agreement, the parties shall have the right to assert any and all legal and equitable claims against the breaching party for damages or equitable relief, (b) In no event shall either Seller, Parker or Buyer be liable for any 19 20 consequential damages; provided, however that nothing contained in this Agreement shall relieve any party from liability for damages actually incurred as a result of any breach of this Agreement. 12. NOTICES. All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given and delivered, when given in person or by prepaid telegram or telefax, acknowledgment received, or mailed first class, postage prepaid, registered or certified mail, as follows: If to Buyer: Parker Drilling Investment Company Eight East Third Street Tulsa, Oklahoma 74103 Attn: James J. Davis Facsimile: 918 631-1253 If to Seller: Environmental Safeguards, Inc. 2600 South Loop West Suite 645 Houston, Texas 77054 Attn: James S. Percell Facsimile: 713 641-0756 13. CONTINUING COVENANTS REGARDING TAX MATTERS. 13.1 Seller shall cause the federal and state tax return covering the taxable period ending on the Closing Date to be properly prepared and filed after delivering said return to Buyer for its review at least fifteen (15) days prior to the due date (including extensions) for such return. 13.2 Except for the obligation undertaken by Seller in 13.1 above, all further state, federal and franchise tax returns which are required to be filed shall be properly 20 21 prepared and timely filed by Buyer. 13.3 Buyer shall determine (by either an interim closing of the books as of the Closing Date or by proration of the month in which the Closing Date occurs on a daily basis), subject to Seller's approval, the portion of income, gain, loss, deduction or other items attributable to the taxable period which includes the Closing Date. Buyer shall provide Seller with all information required to accurately and timely prepare the return to be filed by Seller under 13.1 above, such information to be provided to Seller no later than thirty (30) days prior to the due date of such tax return. 13.4 Buyer shall grant to Seller access at all reasonable times to all of the information, books and records relating to all tax periods ending on or before the Closing Date to which Buyer has possession or to which it has access and shall afford Seller the right to take extracts therefrom and to make copies thereof to the extent reasonably necessary to permit Seller to prepare the Closing Date tax return or to otherwise conduct negotiations with tax authorities, to implement the provision of or to investigate or defend any claims arising between the parties. hereto. 13.5 Seller shall grant to Buyer access at all reasonable times to all of the information, workpapers and other records in its possession relating to OnSite and shall afford Buyer the right to take extracts therefrom and to make copies thereof, to the extent reasonably necessary to permit Buyer to prepare tax returns or to otherwise conduct negotiations with tax authorities, to implement the provisions of, or to investigate or defend any claims between the parties hereto. 13.6 Each of the parties hereto will preserve and retain all schedules, workpapers and other documents relating to any tax returns of, or with respect to, OnSite, 21 22 or to any claims, audits or other proceedings affecting OnSite until the expiration of all applicable statutes of limitation applicable to all tax periods ending on or before the Closing Date or until the final determination of any pending controversy and any payments that may be required to be made with respect to such taxable period. 13.7 Seller hereby agrees to properly prepare and file an election to adjust the basis of partnership property pursuant to Section 754 of the Code as requested by Buyer. 14. GENERAL. 14.1 Entire Agreement. This Agreement, together with all exhibits hereto, constitutes the entire agreement between the parties relating to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether written or oral, among the parties concerning such subject. 14.2 Amendments. This Agreement may not be amended except by an instrument in writing specifically amending same signed by Seller, Parker and Buyer. 14.3 Waivers. No waiver by a party of any default by the other party in the performance of any provision of this Agreement shall operate or be construed as a waiver of any future default whether of a like or of a different character. 14.4 Headings. The headings used in this Agreement are for the convenience of reference only and shall not be construed to define or limit any of the provisions hereof 22 23 14.5 Severability. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 14.6 Counterparts. This Agreement may be signed in counterpart. 15. GOVERNING LAW. This Agreement shall be construed in accordance with the laws of Oklahoma, excluding, however, any rule of law that would refer the resolution of any issue to the law of a jurisdiction other than Oklahoma. 16. SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective heirs, successors and permitted assigns. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties hereto. 17. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits identified in this Agreement are incorporated herein by reference and made a part hereof. 18. SPECIFIC PERFORMANCE. The parties hereto agree that this Agreement shall be specifically enforceable and the parties hereto hereby waive any defense to such a proceeding in equity that monetary 23 24 damages are sufficient. IN WITNESS WHEREOF, Buyer, Seller and Parker have each caused this Purchase Agreement to be executed as of the date first written above by its duly authorized officers. PARKER DRILLING INVESTMENT COMPANY By: /s/ THOMAS L. WINGERTER ---------------------------- Name: Thomas L. Wingerter ---------------------------- Title: President ---------------------------- ENVIRONMENTAL SAFEGUARDS, INC. By: /s/ JAMES S PERCELL ---------------------------- Name: James S Percell ---------------------------- Title: Chairman, President, CEO ---------------------------- PARKER DRILLING COMPANY By: /s/ JAMES J. DAVIS ---------------------------- Name: James J. Davis ---------------------------- Title: Sr. Vice President-Finance and CFO ---------------------------- 24 -----END PRIVACY-ENHANCED MESSAGE-----