Asset Purchase Agreement - ABASCO Inc. and ITS Environmental Services Inc.


 
                           ASSET PURCHASE AGREEMENT

    THIS ASSET PURCHASE AGREEMENT ('Agreement') is made and entered into as of
September 25, 1997, by and between ABASCO, Inc. a Texas corporation ('Buyer'),
and ITS ENVIRONMENTAL SERVICES INC., a Delaware corporation ('Seller').

    WHEREAS, Seller is a corporation which has been engaged in the development,
design, manufacture and marketing of a diverse line of oil spill recovery and
response products (the 'Business') under the name 'ABASCO' and other names; and

    WHEREAS, Buyer is the assignee of LaSalle Marine Corp. ('LaSalle') under
that certain Letter Agreement between LaSalle and Seller dated September 5,
1997, and desires to acquire all of the assets used by Seller in the Business or
owned by the Business (except for certain assets excluded pursuant to Section
1.2 hereof) and Seller desires to sell the assets to Buyer on the terms and
conditions set forth in this Agreement.

    NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements made herein, the parties hereto agree as follows:

     1.  Assets.

          1.1 Purchase and Sale of Assets. Based upon and subject to the terms,
covenants, conditions, representations and warranties set forth in this
Agreement, on the Closing Date (as defined below), Buyer shall purchase and
Seller shall sell, transfer and assign to Buyer the assets described in this
Section 1.1 (the 'Assets'). No other assets of Seller shall be sold,
transferred, or assigned to Buyer other than those set forth in Sections 1.1.1
through 1.1.10 below, The Assets shall be sold, transferred and assigned to
Buyer, free and clear of any liabilities (other than those expressly assumed by
Buyer under Section 2.1 below), claims, liens, charges or encumbrances of any
nature whatsoever. The Assets include the following:

           1.1.1 Inventory. Title and all other rights to all inventory
     (including spare parts inventory) listed on Schedule 1.1.1 attached to this
     Agreement.

           1.1.2 Equipment. Title and all Seller's rights to all equipment
     listed on Schedule 1.1.2 attached to this Agreement.

 
          1.1.3 Name. All right, title and interest held or owned by Seller in
     and to the use of the name 'ABASCO', any variations thereof worldwide and
     all goodwill and other intangibles pertaining thereto.

          1.1.4 Patents, Trademarks and Copyrights. All right, title and
     interest in and to all patents owned, or applied for, by Seller, including,
     without limitation, those patents listed on Schedule 1.1.4 (the 'Patents')
     and other rights and privileges associated therewith worldwide, together
     with all trademarks, trademark registrations and applications therefor,
     copyrights, 'know-how', slogans, trade names, trade secrets, logos, labels
     and other trade rights used in the Business worldwide, whether or not
     registered, used or useful in the Business, and any goodwill or other
     intangibles associated therewith worldwide (collectively sometimes
     hereinafter called 'Trade Rights').

          1.1.5 Capital Assets. All capital assets, tools, raw materials,
     furniture, fixtures, and vehicles of Seller listed on Schedule 1.1.5
     attached to this Agreement.

          1.1.6 Sales Materials. All catalogs, brochures, advertising materials,
     production data and purchasing and sales materials (including forms of
     purchase orders, sales orders and invoices) of Seller.

          1.1.7 Contracts. All contracts, including all outstanding purchase
     orders issued by and/or to Seller related to the Business, listed on
     Schedule 1.1.7, including the real property lease for the premises located
     at 363 W. Canino Road.

         1.1.8 Design and Manufacturing Rights. All design and manufacturing
     rights of Seller.

         1.1.9 Cash and Accounts Receivable from Sales Accruing On or after the
     Effective Date. All cash and accounts receivable from sales accruing to
     Seller on or after the Effective Date but before the Closing Date.

         1.1.10 Other Assets. All existing customer lists, supplier lists, books
     and records (or copies thereof), accounts and all other tangible and
     intangible assets (including rights to manufacturers' and/or suppliers'
     warranties on assets purchased from Seller by Buyer, and rights to claims
     and causes of action relating to those assets) of Seller used in connection

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  with the Business, except those assets described in Section 1.2 below and
  except those contracts not expressly listed on Schedule 1.1.7.

  1.2 Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, Buyer shall not purchase and Seller shall not sell, transfer or
assign to Buyer any assets except the Assets. Without limiting the generality of
the foregoing, it is expressly agreed that Buyer shall not purchase and Seller
shall not sell, transfer or assign to Buyer:

         1.2.1 Accounts Receivable. Any accounts receivable of the Seller
     ('Accounts Receivable') other than those transferred and assigned under
     Section 1.1.9 above.

         1.2.2   Cash. Any cash of the Seller other than the cash transferred
     and assigned under Section 1.1.9 above.

         1.2.3   Employment Agreements. Any employment agreements, consulting
     agreements, or other personnel agreements to which Seller is a party.

         1.2.4   Insurance Policies. Any insurance policies belonging to Seller
     or on which Seller must pay premiums.

         1.2.5 Drilling Services Inventory. All inventory of ITS Drilling
     Services currently on Seller's premises, as described and listed on
     Schedule 1.2.5, and any inventory of ITS Drilling Services ordered or
     purchased by or on behalf of Seller before or after the Effective Date that
     is shipped to or received at 363 W. Canino Road, Houston, Texas.

     2.  Liabilities.

          2.1 Liabilities Assumed. Buyer shall accept the assignment and assume
responsibility for all unfilled orders from customers of Seller assigned to
Buyer pursuant to Section 1.1.7, shall assume responsibility for all outstanding
quotes issued to customers of Seller, which are set forth in Schedule 2.1 shall
assume responsibility of payment for purchase orders for inventory items that
have been placed by Seller prior to, on, or after the Effective Date but that
will not have been delivered until after the Effective Date and shall assume and
perform all of Seller's obligations under the contracts assigned to Buyer
pursuant to Section 1.1.7, including the real property lease for the premises
located at 363 W. Canino Road. Additionally, Buyer shall assume responsibility
for any liability or obligation arising out of any breach by Buyer after the
Closing Date (including the failure of 

                                      -3-

 
Buyer to perform, or negligent or improper performance in accordance with its
terms) of any agreement, contract, commitment, lease, permit or other
undertaking. Buyer shall further assume responsibility for all liabilities and
claims which arise out of or are based upon any service performed or product
sold by or on behalf of Buyer after the Effective Date. The liabilities assumed
by Buyer pursuant to this Section 2.1 shall hereinafter be collectively referred
to as the 'Assumed Liabilities.'

     2.2 Excluded Liabilities. Buyer is not assuming and shall not pay, perform,
or discharge any debt, liability, obligation, understanding, arrangement or
contract, whether written or oral or existing, contingent or inchoate, except
the Assumed Liabilities. Without limiting the scope of the foregoing, it is
expressly agreed that Buyer shall not assume:

          2.2.1 Any obligations, liabilities or expenses of Seller for any
     brokerage or finder's commission relating to this Agreement, the purchase
     of the Assets or any of the transactions contemplated hereby or thereby.

          2.2.2 Any federal, state or local income or other tax (i) payable with
     respect to the Business, operations, assets or properties of Seller for any
     period prior to the Closing Date, or (ii) incident to or arising as a
     consequence of the negotiation or consummation by Seller of this Agreement
     and the transactions contemplated hereby, including any sales or other
     taxes imposed upon the transfer and delivery of the Assets to Buyer.

         2.2.3 Any liability or obligation under or in connection with assets
     not included In the Assets.

          2.2.4 Except as set forth in Section 2.1 above, any obligations or
     liabilities arising out of actions taken, work done or contracts entered
     into by Seller before or after the Closing Date.

          2.2.5 Any liability or obligation arising out of any breach by Seller
     prior to the Closing Date (including the failure of Seller to perform, or
     negligent or improper performance in accordance with its terms) of any
     agreement, contract, commitment, lease, permit or other undertaking.

          2.2.6 Any liability or claim which arises out of or is based upon any
     service performed or product sold by or on behalf of Seller prior to the
     Effective Date, including without limitation, any claim relating to any
     product 

                                      -4-

 
     delivered in connection with the performance of such service and any claim
     seeking recovery for consequential damage, lost revenue, income, or
     punitive or exemplary damages.

          2.2.7 Any obligations or liabilities of Seller arising under ERISA
     with respect to any employee benefit plan of Seller, or any other
     obligations or liabilities arising under such plans or arrangements of
     Seller.

         2.2.8 Any accounts payable of Seller other than those expressly assumed
     by Buyer under Section 2.1 above.

     3.  Purchase Price.

          3.1 Purchase Price. Subject to the adjustment described hereinafter,
if any, the amount to be paid by Buyer to Seller as consideration for the Assets
and the assumption of the Assumed Liabilities (the 'Purchase Price') shall be
the sum of One Million Three Hundred and Thirty-Nine Thousand Eight Hundred
Forty Three United States Dollars and Seventy-Six Cents (U.S. $1,339,843.76)

          3.2 Settlement. After Closing, and subject to the terms and
conditions hereinafter set forth, a settlement will be made for revenues
retained by Seller and for expenses paid by Seller on a dollar-for-dollar basis
to reflect all items (other than those described in Section 2.2.1 above) that
accrued on or after September 12, 1997 (the 'Effective Date') but before the
Closing Date other than those specific items listed on Schedule 3.2. The
determination of the revenue and expense items to be factored into the
Settlement shall be conducted at the expense of Buyer by Hein & Associates LLP.
Such determination shall be made by within ninety (90) days after the Closing
Date. Those items accruing on or after the Effective Date that have been
specifically identified in Schedule 3.2 shall be reimbursed to Seller by Buyer
within fifteen (15) days of the Closing Date.

          3.3 Closing Payment and Payment of Settlement. At the Closing, Buyer
shall pay to Seller in same day funds the sum of One Million Three Hundred and
Thirty-Nine Thousand Eight Hundred Forty Three United States Dollars and
Seventy-Six Cents (U.S. $1,339,843.76) in the event that the Settlement
described in Section 3.2 results in a net amount due to Seller, Buyer shall pay
the such amount in same day funds to Seller within two (2) business days after
the determination of such amount by Hein & Associates LLP. In the event that the
Settlement described in Section 3.2 results in a net amount due to Buyer, Seller
shall pay the such amount in same day funds to Buyer within two (2) business
days after the determination of such amount by Hein & Associates LLP.

                                      -5-

 
     4. Representations and Warranties of Seller. Except as set forth in the
disclosure schedule accompanying this Agreement (the 'Disclosure Schedule') and
subject to Section 9.1 hereof, Seller represents and warrants to Buyer that the
statements contained in this Article 4 are correct and complete as of the date
of this Agreement. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER MAKES
NO, AND DISCLAIMS ANY AND ALL, OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND,
WHETHER EXPRESSED OR IMPLIED, INCLUDING THOSE OF MERCHANTABILITY AND FITNESS FOR
ANY PARTICULAR PURPOSE.

          4.1 Organization and Standing. Seller is a corporation duly organized
     and existing under the laws of the State of Delaware and is in good
     standing under such laws. Seller has requisite corporate power to own
     properties owned by it and to conduct business as being conducted by it.

          4.2 Corporate Power. Seller has all requisite corporate power to enter
     into this Agreement and will have at the Closing Date all requisite
     corporate power to sell the Assets and to carry out and perform its
     obligations under the terms of this Agreement.

          4.3 Subsidiaries. Seller has no subsidiaries and Seller does not own
     of record or beneficially any capital stock or equity interest or
     investment in any other corporation, association or business entity.

          4.4 Authorization. All corporate action on the part of Seller, its
     directors and shareholders necessary for the authorization, execution,
     delivery and performance by Seller of this Agreement and the consummation
     of the transactions contemplated herein has been taken or will taken prior
     to the Closing. This Agreement is a valid and binding obligation of Seller,
     enforceable in accordance with its terms, subject to applicable bankruptcy,
     insolvency and reorganization laws. The execution, delivery and performance
     by Seller of this Agreement and compliance therewith will not result in
     any violation of and will not conflict with, or result in a breach of any
     of the terms of, or constitute a default under, any provision of state or
     Federal Law to which Seller, the Business or the Assets are subject,
     Seller's Articles of Incorporation of By-Laws, or any mortgage, indenture,
     agreement, instrument, judgment, decree, order, rule or regulation or other
     restriction to which Seller is a party or by which it is bound, or result
     in the creation of any mortgage, pledge, lien, encumbrance or charge upon
     any of the properties or assets of Seller pursuant to any such term.

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          4.5 Asset Statement. The 'Asset Statement' set forth in the Disclosure
     Schedule has been prepared in accordance with generally accepted accounting
     principles as of March 31, 1997.

          4.6 Outstanding Debt. Seller has no outstanding indebtedness for
     borrowed money and is not a guarantor or otherwise contingently liable for
     any such indebtedness. There exists no default under the provisions of any
     instrument evidencing such indebtedness or of any agreement relating
     thereto.

          4.7 Absence of Undisclosed Liabilities. Except as set forth in the
     Disclosure Schedule, Seller has no material liabilities.

          4.8 Title. Seller has good and marketable title to the Assets and the
     Assets are, and will be transferred to Buyer, free and clear of any
     liabilities, liens, charges, encumbrances, adverse claims, options to
     purchase or restrictions or conditions on transfer.

          4.9 Name. Seller owns and possesses the exclusive rights to use the
     name 'ABASCO' and all variations thereof.

          4.10 Litigation. There is no suit, action, arbitration or legal,
     administrative or other proceeding or governmental investigation threatened
     or pending against or affecting the Business or the Assets, nor does Seller
     know or have reasonable grounds to know of any basis for any such action or
     proceeding. There is no pending or threatened action, proceeding or
     investigation for any injunction, writ, preliminary restraining order or
     any order of any nature issued by any court or governmental agency,
     domestic or foreign, of competent jurisdiction directing the transactions
     contemplated by this Agreement not be consummated, and no such injunction,
     writ, preliminary restraining order or such other order has been issued or
     is in effect. There is no suit, action or other proceeding, pending or
     threatened, before any court or governmental agency in which it is sought
     to obtain damages or other relief in connection with this Agreement or any
     of the transactions contemplated hereby and Seller knows of no basis for
     such suit, action or other proceeding.

                                      -7-

 
          4.11 Patents, Trademarks, Trade Rights, Etc. Except for the Patents
     identified on Schedule 1.1.4 hereto, there are no patents, patent
     applications, inventions, licenses, trade names, trademarks or service
     marks, trademark or service mark registrations or applications, copyrights,
     copyright applications or registrations, processes, designs, trade secrets,
     know how, and other similar proprietary rights, data or Trade Rights that
     relate to the Assets or the Business. Seller owns and has the right to use
     the Assets, including the Patents, and all such proprietary rights and data
     that relate to the Assets. There are no claims of infringement against
     Seller threatened or pending in any court pertaining to the use by Seller
     of the Assets, or any of the foregoing items, and Seller has not received
     any notice that the use by Seller of any of the Assets infringes the
     proprietary rights of any parson or entity. Seller is not currently
     operating under license agreements from any person or entity relating to
     the use of any of the Assets or any of the foregoing items.

          4.12 Consents and Compliance with Law. Except as set forth in the
     Disclosure Schedule, Seller has not violated or is currently in violation
     of, and the consummation of the transactions contemplated hereby will not
     cause any violation of, any order of any governmental entity or any law,
     ordinance, regulation, order, requirement, statute, rule, permit,
     concession, grant, franchise, license or other governmental authorization
     relating or applicable to the Assets or the Business, except, with respect
     to any prior or current violation, where the violation would not have a
     material adverse effect on the Business.

          4.13 Taxes. All federal, state, payroll and local taxes called for by
     any federal, state or local returns or reports, or due or claimed to be due
     by the Internal Revenue Service or any other taxing authority upon Seller
     or upon or measured by any of its properties, assets, sales or income, have
     been or will be properly paid. None of the Assets is subject to any lien
     for taxes that are delinquent or due and payable.

          4.14 Contracts; Insurance. Except as set forth in the Disclosure
     Schedule, Seller has no currently existing contract, obligation or
     commitment (written or oral) of any material nature, including without
     limitation the following:

                                      -8-

 
               (a) Employment, bonus or consulting agreements, pension, profit
          sharing, deferred compensation, stark bonus, retirement, stock option,
          stock purchase, phantom stock or similar plans, including agreements
          evidencing rights to purchase securities of Seller and agreements
          among shareholders of Seller and Seller;

               (b) Loan or other agreements, notes, indentures, or instruments
          relating to or evidencing indebtedness for borrowed money, or
          mortgaging, pledging or granting or creating a lien or security
          interest or other encumbrance on any of Seller's property or any
          agreement or instrument evidencing any guaranty by Seller of payment
          or performance by any other person;

               (c) Agreements with dealers, sales representatives, brokers or
          other distributors, jobbers, advertisers or sales agencies;

               (d) Agreements with any labor union or collective bargaining
          organization or other labor agreements;

               (e) Any contract or series of contracts with the same person for
          the furnishing or purchase of machinery, equipment, goods or services,
          including without limitation agreements with processors and
          subcontractors, except contracts entered into in the ordinary course
          of business;

               (f) Any joint venture contract or arrangement or other agreement
          involving a sharing of profits or expenses to which Seller is a party;

               (g) Agreements limiting the freedom of Seller to compete in any
          line of business or in any geographic area or with any person;

               (h) Agreements providing for disposition of the Business, assets
          or shares of Seller, agreements of merger or consolidation to which
          Seller is a party or letters of intent with respect to the foregoing;

               (i) Agreements involving or letters of intent with respect to the
          acquisition of the business, assets or shares of any other business;
          and

                                      -9-

 
               (j)  Insurance policies.

     Seller has complied with all the material provisions of all contracts to
     which Seller is a party and all commitments undertaken by Seller and/or to
     which Seller is obligated, and Seller is not in default thereunder. All of
     such contracts and agreements are valid, binding and in full force effect
     in accordance with their terms and conditions subject to bankruptcy,
     insolvency and reorganization laws, and there is no existing default
     thereunder or breach thereof, to the best knowledge of Seller, by any other
     party thereto.

          4.15 Employees. To the best of the knowledge and belief of Seller/ no
     employee of Seller is in violation of any term of any employment contract,
     patent disclosure agreement, non-competition agreement, or any other
     contract or agreement or any restrictive covenant relating to the right of
     any such employee to be employed by Seller or to provide services to Seller
     because of the nature of the Business conducted or to use trade secrets or
     proprietary information of others and the employment of the Seller's
     employees does not subject Seller to any material liability. Seller is not
     a party to any collective bargaining agreement covering any of its
     employees.

          4.16 ERISA. Seller does not maintain, sponsor, or contribute to any
     program or arrangement that is an 'employee pension benefit plan', an
     'employee welfare benefit plan' or a 'multiemployer plan', as those terms
     are defined in Sections 3(2), 3(l), and 3(37) of the Employee Retirement
     Income Security Act of 1914. Listed in the Disclosure Schedule are all
     material incentive or benefit arrangements of Seller that existed
     immediately prior to Closing.

          4.17 License Permits. Seller has obtained all material licenses,
     permits and authorizations required by applicable laws or regulations
     pertaining to the business.

          4.18 Condition of Tangible Assets. All of the tangible assets
     comprising the Assets are in operating condition.

          4.19 All Assets. The Assets constitute all of the assets used in the
     conduct of the Business as now conducted.

          4.20 Insurance Policies. The Disclosure Schedule contains a
     description of all insurance policies (specifying the insurer, the amount
     of coverage, the type of insurance and

                                      -10-

 
     the policy number) maintained by the Seller on the Assets, Business and
     personnel pertaining thereto.

          4.21 Environmental Protection Laws. None of Seller, the Business or
     the Assets are now, nor to the best knowledge of Seller, have any of
     Seller, the Business or the Assets been in the past, in violation of any
     applicable governmental law or regulation related to environmental
     protection, air pollution, hazardous materials or other similar matters.

          4.22 Customer List. The Disclosure Schedule sets forth a true, correct
     and complete list of all customers of Seller to which Seller has sold or
     provided products or services during the twelve (12) months immediately
     proceeding the date hereof.

          4.23 Representations and Warranties at Closing. All representations
     and warranties of Seller contained in this Agreement shall be true on and
     as of the Closing Date and shall survive the Closing Date.

     5. Representations, Warranties and Covenants of Buyer. Buyer makes the
representations, warranties and covenants to Seller set forth below, each of
which is true and accurate and which shall constitute a condition precedent to
the Seller's obligations under this Agreement.

          5.1 Organization and Good Standing of Buyer. Buyer is a corporation
     duly organized under the laws of the State of Texas, and has full corporate
     power to carry on its business as now conducted and has corporate authority
     to purchase, and accept the Assets and to assume the Assumed Liabilities.

          5.2 Authority of Buyer. The execution by Buyer of this Agreement and
     related documents contemplated by or described in this Agreement and the
     consummation of the purchase provided for herein, have been duly authorized
     by the board of directors of Buyer. Buyer has full corporate power and
     authority to enter into and carry out the provisions of this Agreement and
     the documents contemplated or described herein and Buyer's performance of
     the provisions of this Agreement and said documents shall not constitute a
     violation or breach of any provision of Buyer's articles of incorporation
     or bylaws.

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          5.3 Representations and Warranties at Closing. All representations and
     warranties of Buyer contained in a this Agreement shall be true on and as
     of the Closing Date and shall survive the Closing Date.

     6.   Post-Closing Covenants.

          6.1  Certain Covenants of Seller.

          6.1.1 Use of Name. From and after the closing Date, except as
     otherwise agreed by Buyer in writing, Seller agrees that neither it nor any
     of its affiliates shall use the name 'ABASCO' or variations thereof. Seller
     hereby expressly consents to and shall defend Buyer's right to the use by
     Buyer of the name 'ABASCO' and variations thereof.

          6.1.2 Transfer Costs. Seller shall pay in advance of the Closing Date
     all costs, if any, of transferring the Assets to Buyer, including expenses
     of physical delivery of possession of the Assets to Buyer, freight and
     transportation costs, postage, insurance costs, transfer taxes, sales
     taxes, stamp taxes, importation and exportation fees, taxes and duties, and
     any other expenses costs, fees, taxes, duties, levies, premiums or charges
     relating to delivering title and physical possession of the Assets to
     Buyer.

          6.1.3 Best Efforts. Upon the terms and subject to the conditions
     hereof, Seller shall use its best efforts to take, or cause to be taken,
     all action and to do, or cause to be done, all things necessary, proper or
     advisable to consummate and make effective the transactions contemplated by
     this Agreement.

          6.1.4 Employee Matters. As of the Closing Date, Seller will: (a)
     terminate all of its employees, consultants, and other persons providing
     personnel services for Seller; (b) terminate all agreements relating
     thereto; and (c) pay its employees all wages, commissions and accrued
     vacation pay earned up to the time of termination, including overtime pay.

          6.1.5 Insurance. Seller shall, at Buyer's expense continue Seller's
     existing insurance coverage relating to the business and add Buyer as an
     additional insured to such coverage until such time that Buyer has obtained
     its own insurance coverage for such matters and claims currently covered by
     Seller's existing insurance coverage relating to

                                      -12-

 
     the Business, but in no event for a period longer than three (3) months
     after the Closing Date. Notwithstanding the foregoing, however, Seller
     shall not be required to continue any health and/or life insurance coverage
     for employees for a period of thirty (30) days after the closing date, and
     Buyer shall not be named as an additional insured on such employee
     insurance.

          6.1.6 Accounting support. Seller shall provide, at Seller's expense,
     reasonable accounting support for the operation of the Business by Buyer
     until January 31, 1998. Such support will constitute the maintenance of
     books and records on Seller's accounting system in a format equivalent to
     that used prior to Closing.

     6.2  Certain Covenants of Buyer.

          6.2.1 Assumption of Liabilities. Buyer shall assume all liability and
     responsibility for the Assumed Liabilities (as defined in Section 2.1).

          6.2.2 Employment of Chuck LaBounty. Immediately upon Closing, Buyer
     shall employ Chuck LaBounty for compensation, and under terms and
     conditions, similar to those under which he was employed by Seller
     immediately prior to Closing.

          6.2.3 Completion of Certain Orders. Buyer will complete those orders
     identified in Schedule 6.2.3 under the terms and conditions set forth in
     Schedule 6.2.3.

          6.2.4 Storage of Drilling Services Inventory. Buyer agrees to store
     until March 1, 1996, the parts and inventory belonging to ITS Drilling
     Services Inc. that are currently located at 363 W. Canino Road or that will
     be delivered to that address prior to March 1, 1998.

     7. Further Assurances. Seller, from time to time after the Closing Date, at
Buyer's request, will execute, acknowledge and deliver to Buyer such other
instruments of conveyance and transfer and will take such other actions and
execute and deliver such other documents, certifications and further assurances
as Buyer may reasonably require in order to vest more effectively in Buyer, or
to put Buyer more fully in possession of, any of the Assets, or to better enable
Buyer to complete, perform or discharge any of the liabilities or obligations
assumed by Buyer pursuant to Section 2.1 hereof. Buyer and Seller hereby
covenant and agree to use their respective best efforts to take such action to
execute such 

                                      -13-

 
documents and instruments as may be reasonably required by the other to more
effectively effectuate the purposes of this Agreement from time to time after
the Closing Date.

     8. Closing. The closing of the purchase and sale of the Assets (the
'Closing') shall take place upon the execution of this Agreement by both parties
hereto, and the date on which the Closing takes place shall be referred to
herein as the 'Closing Date'.

         8.1   Delivery to Buyer. At the Closing Seller shall deliver to Buyer
     the following:

                (a) a Bill of Sale covering the Assets in the form attached as
          Schedule 8.1 to this Agreement with appropriate schedules attached
          thereto;

                (b) such further deeds, bills of sale, endorsements/
          assignments, documents of title, and other good and sufficient
          instruments of conveyance and transfer, in form reasonably
          satisfactory to Buyer, as shall be effective to vest in Buyer all of
          the Sellers' title to, and interest in, the Assets under applicable
          law;

                (c) a certified copy of resolutions duly adopted by the board of
          directors and stockholders of Seller authorizing and approving the
          execution and delivery of this Agreement and performance by Seller of
          its obligations hereunder;

                (d) a certificate, dated the Closing Date and executed by the
          president of the Seller, certifying that Seller has performed all the
          agreements and covenants of Seller specified in this Agreement to be
          performed by Seller on or before the Closing Date

              (e) Possession of the Assets to be conveyed pursuant to this
          Agreement

          8.2 Payment of Purchase Price. At the Closing Buyer shall pay to
     Seller in same day funds the amount required to be paid at Closing under
     Section 3.3 above.

          8.3 Delivery of Assets. At the Closing Seller shall deliver to Buyer
     the Assets.

                                      -14-

 
     9.  Indemnification.

         9.1 Indemnification by Seller. Seller agrees to indemnify, defend and
hold Buyer and each of its officers, directors, employees, agents, stockholders
and controlling Persons and their respective successors and assigns (each, a
Buyer Indemnified Party') harmless from and against and, in respect of the
entirety of Adverse Consequences actually suffered, incurred or realized by such
party, arising out of or resulting from any breach of representation or warranty
or breach of any covenant or agreement made or undertaken by Seller in this
Agreement, including the Disclosure Schedule and all excluded liabilities,  
provided, that (A) Seller shall not have any obligation to indemnify Buyer from
and against any Adverse Consequences until Buyer has suffered Adverse
Consequences by reason of all such matters in excess of $100,000 (after which
point Seller will be obligated to provide indemnification from and against the
full amount of Adverse Consequences, subject to the limitation in the following
clause) and (B) to the extent the Adverse Consequences Buyer has suffered by
reason of the matters set forth in this Section exceeds the Purchase Price;
Seller shall not have any obligation to indemnify Buyer from and against any
further Adverse Consequences by reason of such matters. For purposes of this
Article 9 the term 'Adverse Consequences' shall mean any and all liabilities,
losses, damages, demands, assessments, claims, costs and expenses (including
interest, awards, judgments, penalties, settlements, fines, costs and expenses
incurred in connection with investigating and defending any claims or causes of
action (including, without limitation, attorneys' fees and expenses); provided
that it shall not include Excluded Liabilities for which Seller shall be wholly
liable. Any 'materiality' qualifies to any representation shall not be given
effect for the purposes of determining whether Buyer is entitled to
indemnification hereunder.

     9.2 Indemnification by Buyer. Except to the extent Seller has expressly
agreed to indemnify for such matters, Buyer agrees to indemnify, defend, and
hold Seller and each of its officers, directors, employees, agents, stockholders
and controlling Persons and their respective successors and assigns (each a
'Seller Indemnified Party') harmless from and against and in respect of the
entirety of Adverse Consequences actually suffered, incurred or by such party,
arising out of or resulting from or relating (i) to any misrepresentations or
breaches of any of Buyer's warranties or covenants contained in this Agreement;
and/or (ii) the operation of the Business or use of the Assets after the Closing
Date.

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    9.3 Exclusive Remedy. The indemnification provisions in this Article 9 shall
be the exclusive remedy for damages for breach of any representation, warranty,
or covenant herein. Except as provided herein, no representations or warranties
are being provided by Seller or any other Person with respect to the
transactions contemplated hereby. Nothing herein shall prevent any party from
seeking equitable relief.

   9.4 Survival. Except for representation relating to federal and state taxes
and environmental liabilities as to which no limitation (other than applicable
statutes of limitation) shall apply, all representations and warranties of Buyer
and Seller contained in this Agreement shall survive the Closing until
September 1, 1999. Any notice or assertion of a claim for indemnification under
this Agreement must be given before September 1, 1999.

     10. Transfer of Risk and Title. Subject to consummation of the Closing,
title to the Assets and risk of loss, damage, or destruction shall be deemed to
have passed to Buyer at 12:01 a.m. on the Closing Date. Notwithstanding the
foregoing, however, Seller shall remain liable for any loss, damage, or
destruction to the Assets, of for any damage or injury relating to the assets
that arises out of, or results from, the actions of Seller from 12:01 a.m. on
the Closing Date to the actual time of Closing.

     11.  Miscellaneous.

          11.1 Successors and Assigns. All covenants, conditions,
     representations, warranties and agreements of the parties contained herein
     shall be binding upon and inure to the benefit of their respective heirs,
     beneficiaries, legal representatives, successors and assigns.

          11.2 Entire Agreement. This Agreement, including all documents
     attached hereto or referenced herein, which are incorporated herein as if
     fully set forth, embodies the entire agreement and understanding between
     the parties relating to the sale and purchase of the Assets and the
     assumption of the Assumed Liabilities and supersedes any prior
     understanding or agreements with respect to the subject matter hereof,
     including the Letter Agreement between LaSalle and Seller dated September
     5, 1997.

                                      -16-

 
        11.3 Amendment. No supplement, modification or amendment of this
     Agreement shall be binding upon the parties unless executed in writing by
     the party against whom enforcement is sought.

        11.4 Expenses. Whether or not the transactions contemplated by this
     Agreement are consummated, other than as expressly provided for herein,
     each of the parties hereto shall pay the fees and expenses of its
     respective counsel, accountants and other experts, and all other expenses
     incurred by such party incident to the negotiation, preparation and
     execution of this Agreement and consummation of the transactions
     contemplated hereby, provided that the expenses of Seller shall not be paid
     out of the Assets.

        11.5 Invalidity. If any term or other provision of this Agreement is
     invalid, illegal or incapable of being enforced by any rule of law, or
     public policy, all other conditions and provisions of this Agreement shall
     nevertheless remain in full force and effect so long as the economic and
     legal substance of the transactions contemplated hereby is not affected in
     any manner materially adverse to either party. Upon such determination that
     any term or other provision is invalid, illegal or incapable of being
     enforced, the parties hereto shall negotiate in good faith to modify this
     Agreement so as to effect the original intent of the parties as closely as
     possible in an acceptable manner to the end that the transactions
     contemplated hereby are fulfilled to the extent possible.

        11.6 Headings. The headings of the Sections and paragraphs of this
     Agreement and of the Schedules hereto are included for convenience only and
     shall not be deemed to constitute part of this Agreement or to affect the
     construction hereof or thereof.

        11.7 Construction and References. Words used in this Agreement,
     regardless of the number or gender specifically used, shall be deemed and
     construed to include any other number, singular or plural, and any other
     gender, masculine, feminine or neuter, as the context shall require. Unless
     otherwise specified, all references in this Agreement to Sections,
     paragraphs or clauses are deemed references to the corresponding Sections,
     paragraphs or clauses in this Agreement, and all references in this
     Agreement to Schedules are references to the corresponding Schedules
     attached to this Agreement.

                                      -17-

 
          11.8 Modification and Waiver. Any of the terms or conditions of this
     Agreement may be waived in writing at any time by the party which is
     entitled to the benefits thereof. No waiver of any of the provisions of
     this Agreement shall be deemed to or shall constitute a waiver of any other
     provisions hereof (whether or not similar).

          11.9 Notices. Any notice, request, instruction or other document to be
     given hereunder by either party to the other party shall be in writing and
     delivered personally, via telecopy (with receipt confirmed) or by
     registered or certified mail, postage prepaid:

     If to Buyer, to:

     Boots & Coots/IWC
     5151 San Felipe-Suite 450
     Houston, TX 77056
     Attn: Charles Phillips, Atty.
     Telecopy No. (713) 621-7988

     with copies to:

     Brown, Parker & Leahy, LLP
     1200 Smith St.-Suite 3600
     Houston, TX 77002
     Telecopy No. (713) 654-1871
     Attn: Dallas Parker

     If to Seller, to:

     ITS Environmental Services Inc.
     4669 Southwest Freeway, Suite 400
     Houston, Texas 77027
     Attn: Kendal Gladys
     Telecopy No. (713) 961-8061

     with copies to:
     Jean-Michel Malek
     (same address and telecopy)

     or at such other address for a party as shall be specified by like notice.
     Any notice which is delivered personally in the manner provided herein
     shall be deemed to have been duly given to the party to whom it is directed
     upon actual receipt by such party (or its agent for notices hereunder). Any
     notice which is addressed and mailed in the manner herein provided shall be
     conclusively presumed to have been duly given to the

                                      -18-

 
     party to which it is addressed at the close of business, local time of the
     recipient, on the third day after the day it is so placed in the mail. Any
     notice which is sent by telecopy shall be deemed to have been duly given to
     the party to which it is addressed upon telephonic confirmation of the same
     as provided herein. A copy of any notices delivered by telecopy shall
     promptly be mailed in the manner herein provided to the party to which such
     notice was given.

          11.10 Governing Law. This Agreement and all matters connected with the
     performance thereof shall be construed, interpreted, and governed in all
     respects by the laws of the state of Texas.

          11.11 Arbitration. Buyer and Seller agree that any dispute or
     controversy arising out of or in connection with this Agreement or any
     alleged breach hereof shall be settled exclusively by arbitration in
     Houston, Texas pursuant to the rules of the American Arbitration
     Association. If the two parties cannot jointly select a single arbitrator
     to determine the matter, one arbitrator shall be chosen by each party (or,
     if a party fails to make a choice, by the American Arbitration Association
     on behalf of such party) and the two arbitrators so chosen will select a
     third. The decisions of the single arbitrator jointly selected by the
     parties, or, if three arbitrators are selected, the decision of any two of
     them, will be final and binding upon the parties and the judgment of a
     court of competent jurisdiction may be entered thereon. Fees of the
     arbitrators and costs of arbitration (including attorneys' fees) shall be
     borne by the parties in such manner as shall be determined by the
     arbitrator or arbitrators.

          11.12 Non-Competition Agreement. For a period of three years from the
     date hereof, neither Seller nor any Affiliate of Seller shall, within the
     areas in which the Business has been conducted in the last two years
     preceding the Closing Date, (i) compete directly or indirectly with the
     Business engaged in as of the Closing Date, (ii) offer employment to the
     then-current employees of the Business or Buyer or (iii) own any interest
     in any enterprise that directly or indirectly competes with the Business
     engaged in as of the Closing Date. Notwithstanding the foregoing or any
     other provision of this Agreement, Seller and/or its Affiliates shall have
     the right at any time to engage in any business or activities engaged in by
     any Affiliate of Seller as of the Closing Date (other than those activities
     identified in the Products/Services Catalog attached listed in Exhibit
     11.12), whether or not such

                                     -19-

 
     business or activities directly or indirectly compete with the Business
     engaged in as of the Closing Date.

          11.13 Non-Disclosure of Confidential Information. Seller agrees that
     it will not disclose, and Seller will use its best efforts to prevent
     disclosure by any person having any confidential information included
     within the Assets.

     IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase 
Agreement as of the date first written above.

ITS ENVIRONMENTAL SERVICES INC.


By: /s/ Kendal Gladys         9/25/97
   -----------------------------------
   Kendal Gladys
   President


ABASCO, INC.


By: /s/ Gregory Brown         9/25/97
   -----------------------------------
   Gregory Brown
   President



                                     -20-