Forbearance and Extension Agreement and Modification Agreement - Comerica Bank and Boots & Coots International Well Control Inc.


             THIRD AMENDMENT TO FORBEARANCE AND EXTENSION AGREEMENT
                           AND MODIFICATION AGREEMENT

         This Third Amendment to Forbearance and Extension Agreement and
Modification Agreement (the "AMENDMENT") by and among the undersigned entities
identified as Bank and Obligors is entered into effective this 31st day of July,
2000 (the "AMENDMENT EFFECTIVE DATE").

                                    RECITALS:

         WHEREAS, Bank and Obligors are parties to a Forbearance and Extension
Agreement dated as of May 31, 2000, as amended by the First Amendment to
Forbearance and Extension Agreement dated as of June 15, 2000 and as amended by
the Second Amendment to Forbearance and Extension Agreement dated as of June 30,
2000 (the "Forbearance Agreement"); and

         WHEREAS, Bank and Obligors have agreed, on the terms and conditions
herein set forth, that the Forbearance Agreement be amended in certain respects:

         NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, IT IS AGREED:

         1. Definitions. Terms used herein which are defined in the Forbearance
Agreement shall have the same meanings when used herein unless otherwise
provided herein.

         2. Amendments to Forbearance Agreement. On and after the Amendment
Effective Date, the Forbearance Agreement shall be amended as follows:

         (a) Paragraph 1 of the Forbearance Agreement is hereby amended to read
in its entirety as follows:

                  1. At the specific request of the Obligors, Bank hereby agrees
         to forbear from exercising any remedy available to Bank upon the
         occurrence of any Event of Default or Default (as such terms are
         defined in the Loan Agreement described and identified on SCHEDULE 1
         hereof, as are all defined terms used herein unless otherwise
         specifically defined herein) existing as of the date hereof under the
         Loan Documents (described and identified on SCHEDULE 1 hereto) until
         the earlier of (a) a Triggering Event (hereinafter defined) or (b)
         August 31, 2000 (the earlier of which to occur is herein referred to as
         the Termination Date).

         (b) Paragraph 2 of the Forbearance Agreement is hereby amended to read
in its entirety as follows:

                  2. Without in any way waiving any existing Event of Default
         and at the request of the Obligors, Bank hereby agrees to extend the
         Maturity Date of the Obligations from July 31, 2000 to the earlier of
         August 31, 2000 or the occurrence of a Triggering Event.

         3. Amendments to Loan Documents. As a material inducement to Bank to
enter into this Amendment each of the Obligors, notwithstanding anything to the
contrary contained in any Loan Document, hereby agree that effective as of the
Amendment Effective Date:

THIRD AMENDMENT TO FORBEARANCE AND EXTENSION AGREEMENT
AND MODIFICATION AGREEMENT - Page 1

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                  (a) the interest rate payable with respect to the Loans shall
         be equal to the lesser of the Ceiling Rate or the Base Rate plus three
         and one-half percent (3.5%);

                  (b) on the Termination Date, Obligors shall pay to Bank a
         $50,000 Forbearance Fee (herein so called) plus the $50,000 Forbearance
         Fee previously due and not paid by Obligors pursuant to a prior
         forbearance for a total of $100,000;

                  (c) Eligible Accounts and Eligible Inventory shall not include
         any Accounts or Inventory of any Foreign Subsidiary, including but not
         limited to Baylor Company Limited;

                  (d) the Bank shall immediately engage appraisers acceptable to
         Obligors to provide a new appraisal for the machinery and equipment at
         Baylor Company Limited. From and after the receipt by Bank of such
         appraisal the Eligible Equipment component of the Borrowing Base shall
         be the lesser of the amount reflected in the existing appraisal or the
         amount reflected in the new appraisal; and

                  (e) Obligors shall provide on or before August 3, 2000, August
         10, 2000, August 17, 2000, August 24, 2000 and August 31, 2000 a
         rolling forecast of twelve week cash requirements for the next twelve
         weeks.

         4. No Reliance by Others. None of the provisions of this Amendment
shall inure to the benefit of Obligors or any Person other than Bank;
consequently, Obligors shall not be, and no Person other than the Bank shall be,
entitled to rely upon or raise as a claim or defense, in any manner whatsoever,
the failure of Bank to comply with the provisions of this Amendment. Bank shall
not incur any liability to Obligors or any other Person for any act or omission
of the other.

         5. Limitations. The amendments set forth herein are limited precisely
as written and shall not be deemed to (a) be a consent to, or waiver or
modification of, any other term or condition of the Forbearance Agreement, the
Loan Agreement or any of the other Loan Documents, or (b) except as expressly
set forth herein, prejudice any right or rights which the Bank may now have or
may have in the future under or in connection with the Forbearance Agreement,
the Loan Agreement, the Loan Documents or any of the other documents referred to
therein. Except as expressly modified hereby or by express written amendments
thereof, the terms and provisions of the Forbearance Agreement, the Loan
Agreement, the Notes, and any other Loan Documents or any other documents or
instruments executed in connection with any of the foregoing are and shall
remain in full force and effect. In the event of a conflict between this
Amendment and any of the foregoing documents, the terms of this Amendment shall
be controlling. The representations and warranties made in each Loan Document
are true and correct in all material respects on and as of the Amendment
Effective Date.

         6. Representations and Warranties of the Obligors. To induce the Bank
to execute and deliver this Amendment (which representations shall survive the
execution and delivery of this Amendment), the Obligors represent and warrant to
the Bank that:

                  (a) this Amendment has been duly authorized, executed and
         delivered by it and this Amendment constitutes the legal, valid and
         binding obligation, contract and agreement of the Obligors enforceable
         against them in accordance with its terms, except as enforcement may be
         limited by bankruptcy, insolvency, reorganization, moratorium or
         similar laws or equitable principles relating to or limiting creditors'
         rights generally;

THIRD AMENDMENT TO FORBEARANCE AND EXTENSION AGREEMENT
AND MODIFICATION AGREEMENT - Page 2

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                  (b) the Forbearance Agreement, as amended by this Amendment,
         constitutes the legal, valid and binding obligation, contract and
         agreement of the Obligors enforceable against them in accordance with
         its respective terms, except as enforcement may be limited by
         bankruptcy, insolvency, reorganization, moratorium or similar laws or
         equitable principles relating to or limiting creditors' rights
         generally; and

                  (c) the execution, delivery and performance by the Obligors of
         this Amendment (i) has been duly authorized by all requisite corporate
         action, (ii) does not require the consent or approval of any
         governmental or regulatory body or agency, and (iii) will not (A)
         violate (1) any provision of law, statute, rule or regulation or its
         certificate of incorporation or bylaws, (2) any order of any court or
         any rule, regulation or order of any other agency or government binding
         upon it, or (3) any provision of any material indenture, agreement or
         other instrument to which it is a party or by which its properties or
         assets are or may be bound, including, without limitation, the
         Subordinated Note and Warrant Purchase Agreement dated as of July 23,
         1998 in the principal amount of $30,000,000 for 11.28% Senior
         Subordinated Notes due July 23, 2006 and Common Stock Purchase
         Warrants, or (B) result in a breach or constitute (along or with due
         notice or lapse of time or both) a default under any indenture,
         agreement or other instrument referred to in clause (iii)(A)(3) of this
         Section 4(c).

         7. Conditions to Effectiveness of This Amendment. This Amendment shall
not become effective until, and shall become effective when, each and every one
of the following conditions shall have been satisfied:

                  (a) pay to Bank all accrued fees and expenses incurred by
         Bank's advisors with respect to the Events of Default under the Loan
         Documents accruing since July 11, 2000, specifically being $20,430.49
         to Bank to reimburse it for such amounts due Munsch Hardt Kopf & Harr,
         P.C. and E&Y Restructuring, L.L.C. Such $20,430.49 shall be payable
         upon execution of this Amendment;

                  (b) Obligors shall have delivered to Bank by August 4, 2000, a
         Borrowing Base Certificate dated effective as of July 31, 2000;

                  (c) executed counterparts of this Amendment, duly executed by
         the Obligors and the Bank, shall have been delivered to the Bank;

                  (d) Obligors shall execute and deliver to Bank a Full Release
         and Covenant Not to Sue (the "RELEASE") in the form of ANNEX 1 attached
         hereto;

                  (f) Obligors shall cause their counsel, Fuqua & Keim, L.L.P.,
         to deliver to them an opinion upon which Bank can rely opining as to
         the enforceability of this Amendment and the Release together with all
         documents and agreements executed in connection therewith in the form
         of ANNEX 2; and

                  (g) the representations and warranties of the Obligors set
         forth in Section 5 hereof are true and correct on and with respect to
         the date hereof.

THIRD AMENDMENT TO FORBEARANCE AND EXTENSION AGREEMENT
AND MODIFICATION AGREEMENT - Page 3

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         Upon receipt of all of the foregoing, this Amendment shall become
effective.

         8. Payment of Expenses. The Obligors agree, whether or not the
transactions hereby contemplated shall be consummated, to reimburse and save the
Bank harmless from and against liability for the payment of all reasonable
substantiated out-of-pocket costs and expenses arising in connection with the
preparation, execution, delivery, amendment, modification, waiver and
enforcement of, or the preservation of any rights under this Amendment,
including, without limitation, the reasonable fees and expenses of any local or
other counsel for Bank, and all stamp taxes (including interest and penalties,
if any), recording taxes and fees, filing taxes and fees, and other charges
which may be payable in respect of, or in respect of any modification of, the
Forbearance and Extension Agreement, the Loan Agreement and the other Loan
Documents. The provisions of this Section shall survive the termination of the
Forbearance and Extension Agreement and the repayment of the Loans.

         9. Governing Law. This Amendment and the rights and obligations of the
parties hereunder and under the Forbearance Agreement shall be construed in
accordance with and be governed by the laws of the State of Texas and the United
States of America.

         10. Descriptive Headings, etc. The descriptive headings of the several
Sections of this Amendment are inserted for convenience only and shall not be
deemed to affect the meaning or construction of any of the provisions hereof.

         11. Entire Agreement. This Amendment and the documents referred to
herein represent the entire understanding of the parties hereto regarding the
subject matter hereof and supersede all prior and contemporaneous oral and
written agreements of the parties hereto with respect to the subject matter
hereof.

         12. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts and all of such
counterparts shall together constitute one and the same instrument. Complete
sets of counterparts shall be lodged with the Obligors and the Bank.

         13. Amended Definitions. As used in the Forbearance Agreement
(including all annexes thereto) and all other instruments and documents executed
in connection therewith, on and subsequent to the Amendment Effective Date, the
term "Agreement" shall mean the Forbearance Agreement as amended by this
Amendment.

         This Amendment is executed effective as of the date referenced above by
duly authorized representatives of each of the entities signatory hereto.

THIRD AMENDMENT TO FORBEARANCE AND EXTENSION AGREEMENT
AND MODIFICATION AGREEMENT - Page 4

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                                      BANK:

                                      COMERICA BANK-TEXAS,
                                      a Texas banking association


                                      By:
                                         ---------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                      OBLIGORS:

                                      BOOTS & COOTS INTERNATIONAL WELL
                                      CONTROL, INC., a Delaware corporation


                                      By:
                                          --------------------------------------
                                      Name: LARRY H. RAMMING
                                           -------------------------------------
                                      Title: CHAIRMAN AND CEO
                                             -----------------------------------

                                      ABASCO, INC.,
                                      a Texas corporation


                                      By:
                                         ---------------------------------------
                                      Name: LARRY H. RAMMING
                                           -------------------------------------
                                      Title: CHAIRMAN AND CEO
                                             -----------------------------------


                                      BAYLOR COMPANY,
                                      a Texas corporation


                                      By:
                                         ---------------------------------------
                                      Name: LARRY H. RAMMING
                                           -------------------------------------
                                      Title: CHAIRMAN AND CEO
                                            ------------------------------------

                                      BAYLOR COMPANY LIMITED,
                                      a company organized under the laws of
                                      England and Wales


                                      By:
                                        ----------------------------------------
                                      Name: LARRY H. RAMMING
                                            ------------------------------------
                                      Title: CHAIRMAN AND CEO
                                            ------------------------------------


THIRD AMENDMENT TO FORBEARANCE AND EXTENSION AGREEMENT
AND MODIFICATION AGREEMENT - Page 5

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BAYLOR CONTROLS, INC.,
a Texas corporation


By:
   -------------------------------
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------

BAYLOR ELECTRONICS, INC.,
a Texas corporation


By:
   -------------------------------        
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------

BOOTS & COOTS/IWC DE VENEZUELA, S.A.,
a company organized under the laws
of Venezuela


By:
    ------------------------------
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------

BOOTS & COOTS OVERSEAS, LTD.,
a company organized under the laws 
of the British Virgin Islands


By:
   -------------------------------
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------

BOOTS & COOTS SPECIAL SERVICES, INC.,
a Texas corporation


By:
   -------------------------------
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------


THIRD AMENDMENT TO FORBEARANCE AND EXTENSION AGREEMENT
AND MODIFICATION AGREEMENT - Page 6

   7

                                      ELMAGCO, INC.,
                                      a Delaware corporation


                                      By:
                                         ---------------------------------------
                                      Name: LARRY H. RAMMING
                                           -------------------------------------
                                      Title: CHAIRMAN AND CEO
                                            ------------------------------------


                                      HELL FIGHTERS, INC.,
                                      a Texas corporation


                                      By:
                                         ---------------------------------------
                                      Name: LARRY H. RAMMING
                                           -------------------------------------
                                      Title: CHAIRMAN AND CEO
                                            ------------------------------------

                                      INTERNATIONAL TOOL & SUPPLY DE VENEZUELA
                                      S.A., a company organized under the laws 
                                      of Venezuela


                                      By:
                                         ---------------------------------------
                                      Name: LARRY H. RAMMING
                                           -------------------------------------
                                      Title: CHAIRMAN AND CEO
                                            ------------------------------------

                                      INTERNATIONAL TOOL & SUPPLY PERU,
                                      a company organized under the laws of Peru


                                      By:
                                        ----------------------------------------
                                      Name: LARRY H. RAMMING
                                           -------------------------------------
                                      Title: CHAIRMAN AND CEO
                                            ------------------------------------

                                      INTERNATIONAL TOOL & SUPPLY UK,
                                      a company organized under the laws of 
                                      England and Wales


                                      By:
                                        ----------------------------------------
                                      Name: LARRY H. RAMMING
                                           -------------------------------------
                                      Title: CHAIRMAN AND CEO
                                            ------------------------------------

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AND MODIFICATION AGREEMENT - Page 7

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INTERNATIONAL WELL CONTROL SERVICES,
LTD., a company organized under the 
laws of the Cayman Islands

By:
   -------------------------------
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------



IWC ENGINEERING, INC.,
a Texas corporation


By:
   -------------------------------   
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------

IWC SERVICES, INC.,
a Texas corporation


By:
   -------------------------------
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------

SCHOTTEL, INC.,
a Delaware corporation


By:
   -------------------------------
Name: LARRY H. RAMMING
     -----------------------------
Title: CHAIRMAN AND CEO
      ----------------------------




THIRD AMENDMENT TO FORBEARANCE AND EXTENSION AGREEMENT
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