Document:

<PAGE>   1

              CERTIFICATE OF DESIGNATION OF RIGHTS AND PREFERENCES

                                   RELATING TO

                   SERIES D CUMULATIVE JUNIOR PREFERRED STOCK

         Boots & Coots International Well Control, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Corporation"), DOES HEREBY CERTIFY:

         FIRST: That the Board of Directors of said Corporation effective the
20th day of June, 2000, adopted the following resolution:

         RESOLVED, that out of the Corporation's 5,000,000 authorized shares of
preferred stock, par value $0.00001 per share ("Preferred Stock"), there shall
be a series of Preferred Stock designated and known as "Series D Cumulative
Junior Preferred Stock" consisting of 3,500 shares ("Series D Stock") with an
aggregate face value of $350,000 ($100 per share); which shall have the
following relative rights, preferences, voting powers, qualifications and
privileges:

         1. Voting.

         1A. General Voting Rights. Except as may be otherwise provided in
subparagraph 1B, the terms of the Series D Stock or by law, the Series D Stock
shall be entitled to notice of all stockholders' meetings in accordance with the
Corporation's By-laws.

         1B. Separate Voting Rights. In addition to the general voting rights
set forth in subparagraph 1A, but subject to the qualifications hereinafter set
forth, the holders of the Series D Stock shall have the right to vote,
separately as a single class, at a meeting of the holders of the Series D Stock
or by such holders' written consent or at any annual or special meeting of the
stockholders of the Corporation on any of the following matters: (i) the
creation, authorization, or issuance of any class or series of shares ranking on
an parity with or senior to the Series D Stock with respect to dividends or upon
the liquidation, dissolution, or winding up of the Corporation, and (ii) any
agreement or other corporate action which would adversely affect the powers,
rights, or preferences of the holders of the Series D Stock. A majority of the
shares of Series D Stock, represented in person or by proxy, shall constitute a
quorum at any meeting of the holders of the Series D Stock. Action may be taken
at any meeting of the Series D Stock holders at which a quorum is present by the
holders of a majority of the shares of Series D Stock represented at such
meeting in person or by proxy. The holders of Series D Stock may take action, in
lieu of a meeting, by a written consent signed by the holders of such number of
shares of Series D Stock as is required to approve such action at any meeting of
the holders of Series C Stock.

         2. Dividends.

         2A. Cumulative Dividends. The holders of record of the Series D Stock
shall be entitled to receive cumulative dividends at a rate of eight percent
(8%) per annum on the face value ($100 per share) denominated thereon (subject
to adjustment for stock splits, stock dividends, reorganization,
reclassification or similar events) (the "Adjusted Face Value"). At the

<PAGE>   2

discretion of the Corporation, any and all dividends, when paid, shall be
payable in additional shares of Series D Stock in lieu of cash. On and after the
first Dividend Payment Date which is eighteen months after the date of issuance
of the Series D Stock, any holder of the Series D Stock may elect to have
dividends paid in cash.

         2B. Payment. Dividends on shares of Series D Stock that have not been
redeemed shall be payable quarterly in arrears, when and as declared by the
Board, commencing on September 30, 2000, and continuing on each December 31,
March 31, June 30 and September 30, or the next business day if such date falls
on a Saturday, Sunday, or legal holiday (each such date being hereinafter
referred to as a "Dividend Payment Date"), of each year to holders of record as
they appear on the records of the Corporation on any record date not exceeding
sixty (60) days preceding such Dividend Payment Date. Dividends in arrears may
be declared by the Board and paid at any time out of funds legally available
therefor, without reference to any regular Dividend Payment Date, to holders of
record on any record date, not exceeding sixty (60) days preceding the payment
date thereof, as may be fixed by the Board.

         2C. Default in Payment. Dividends on the Series D Stock shall commence
to accrue and shall be cumulative from and after the date of initial issuance
thereof, whether or not declared by the Board. To the extent that dividends
remain unpaid after the applicable Dividend Payment Date, they shall accrue
interest at a rate of ten percent (10%) per annum until paid and shall be a
continuing obligation of the Corporation. Cash dividends paid on the shares of
Series D Stock in an amount less than the total amount of dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.

         2D. Dividends on Common or Junior Stock. No dividend or distribution
(other than a dividend or distribution paid in Common Stock or in any other
Junior Stock (as defined below)) shall be declared or paid or set aside for
payment on the Common Stock or on any other Junior Stock, nor shall any Common
Stock or any other Junior Stock be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation (except
by conversion into or exchange for shares of Common Stock or other Junior Stock)
unless, in each case, full cumulative dividends on all outstanding shares of the
Series D Stock shall have been declared and paid through and including the most
recent Dividend Payment Date.

         2E. Dividends on Senior Stock. The Corporation shall be entitled to
declare and distribute, at any time, a dividend (including, but not limited to,
a dividend or distribution paid in Common Stock or in any other Junior Stock
Parity Stock, or Senior Stock, as the terms are defined below) on any Senior
Stock of the Corporation, and the Corporation shall be entitled to redeem,
acquire, or purchase, at any time, the Corporation's Senior Stock.

         "Junior Stock" shall mean the Common Stock, Series B Convertible
Preferred Stock, and all other equity securities of the Corporation over which
the Series D Stock has preference or priority in the payment of dividends, in
the distribution of assets, upon redemption and upon dissolution, liquidation or
winding up, voluntary or involuntary, of the Corporation.

         "Parity Stock" shall mean the 10% Junior Redeemable Convertible
Preferred Stock of the Corporation, Series C Cumulative Convertible Junior
Preferred Stock, and any other stock or

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<PAGE>   3

class of stock, the holders of which shall be entitled to the receipt of
dividends or of amounts distributable upon redemption or upon dissolution,
liquidation or winding up of the Corporation, whether voluntary or involuntary,
in proportion to their respective dividend rates or liquidation prices or
values, without preference or priority, one over the other, as between the
holders of such stock or class of stock and the holders of shares of the Series
D Stock.

         "Senior Stock" shall mean the Series A Cumulative Senior Preferred
Stock of the Corporation and any other stock or class of stock the holders of
which shall be entitled to the receipt of dividends or of amounts distributable
upon redemption or upon dissolution, liquidation or winding up of the
Corporation, voluntary or involuntary, as the case may be, in preference or
priority to the holders of shares of the Series D Stock.

         3. Liquidation. Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any distribution or
payment is made with respect to any Junior Stock, holders of each share of
Series D Stock shall be entitled to be paid an amount equal to the greater of
(i) the face value denominated thereon (subject to adjustment for stock splits,
stock dividends, reorganizations, reclassification or other similar events) (the
"Adjusted Face Value") plus, in the case of each share, an amount equal to all
dividends accrued or declared but unpaid thereon, computed to the date payment
thereof is made available, or (ii) such amount per share of Series D Stock as
would have been payable had each such share been converted to Warrants pursuant
to paragraph 4 hereof and exercised for shares of Common Stock immediately prior
to such liquidation, dissolution or winding up, provided such amount described
in this clause (ii) shall not exceed $2,975,000, and the holders of Series D
Stock shall not be entitled to any further payment, such amount payable with
respect to Series D Stock being sometimes referred to as the "Liquidation
Payments". If upon such liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets to be distributed
among the holders of Series D Stock, and any and all Parity Stock, after
distribution on any Senior Stock, shall be insufficient to permit payment to the
holders of Series D Stock of the amount distributable to such parties, then the
entire assets of the Corporation available to be so distributed, if any, shall
be distributed among the holders of the Series D Stock and the holders of any
and all Parity Stock pro rata so that the amount of assets distributed with
respect to the Series D Stock and the Parity Stock shall bear to each other the
same ratio that liquidation payments due per share of Series D Stock and Parity
Stock bear to each other. Upon any such liquidation, dissolution or winding up
of the Corporation, after the holders of Series D Stock and any Parity Stock
shall have been paid in full the entire Liquidation Payments to which they shall
be entitled, the remaining net assets of the Corporation may be distributed to
the holders of Junior Stock. Written notice of such liquidation, dissolution or
winding up, stating a payment date, the amount of the Liquidation Payments and
the place where said Liquidation Payments shall be payable, shall be delivered
in person, mailed by certified or registered mail, return receipt requested, or
sent by reputable overnight courier service, not less than 20 days prior to the
payment date stated therein, to the holders of record of Series D Stock entitled
to such Liquidation Payments, such notice to be addressed to each such holder at
its address as shown by the records of the Corporation. The consolidation or
merger of the Corporation into or with any other entity or entities which
results in the exchange of outstanding shares of the Corporation for securities
or other consideration issued or paid or caused to be issued or paid by any such
entity or affiliate thereof (other than a merger to reincorporate the
Corporation in a different jurisdiction), and the sale, lease, abandonment,
transfer or other disposition by the Corporation of all or substantially

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<PAGE>   4

all its assets, shall be deemed to be a liquidation, dissolution or winding of
the Corporation within the meaning of the provisions of this paragraph 3
("Deemed Liquidation").

         4. Redemption.

         4A. Optional Redemption. The Corporation may, at its option, at any
time commencing on the initial date of issuance of the Series D Stock, redeem
all or any portion of the outstanding shares of Series D Stock.

         4B. Redemption Price and Payment. The Series D Stock to be redeemed on
the Redemption Date (as defined in paragraph 4C hereof) shall be redeemed by
either, (i) paying for each share an amount equal to the Adjusted Face Value,
plus an amount equal to all dividends accrued or declared but unpaid thereon
(the "Cash Redemption Price"), computed to the Redemption Date, with such
payment being made in full on the Redemption Date to the holders entitled
thereto, or (ii) by issuing Warrants to purchase a number of shares of the
Corporation's $0.00001 par value common stock, at an exercise price of $0.75 per
share,equal to 2 shares for each $ 1.00 of the Adjusted Face Value , plus all
dividends accrued or declared but unpaid thereon, computed to the Redemption
Date, with such Warrants being delivered to the holders entitled thereto, on the
Redemption Date.

         4C. Redemption Mechanics. The Corporation must give the holder(s) of
the Series D Stock at least thirty (30) days prior written notice (the
"Redemption Notice") of such redemption. The Redemption Notice will be sent to
the holder(s) of Series D Stock at the address indicated of record on the
Corporation's stockholders' list and will indicate (a) the number of shares of
Series D Stock held by such holder or holders, (b) the number of shares being
redeemed by the Corporation, and (c) the date on which such redemption shall
take place (such date being referred to herein as the "Redemption Date"), which
date shall not be fewer than thirty (30) days from the date the applicable
Redemption Notice is delivered from the Corporation by delivery in person,
certified or registered mail, return receipt requested, postage prepaid or by
reputable overnight courier service, charges prepaid to the holder. From and
after the close of business on the Redemption Date, unless there shall have been
a default in the payment of the Redemption Price, all rights of holders of
shares of Series D Stock being redeemed (except the right to receive the
Redemption Price) shall cease with respect to such shares, and such shares shall
not thereafter be transferred on the books of the Corporation or be deemed to be
outstanding for any purpose whatsoever.

         4D. Redeemed or Otherwise Acquired Shares to be Retired. Any shares of
Series D Stock redeemed pursuant to this paragraph 5 or otherwise acquired by
the Corporation in any manner whatsoever shall be canceled and shall not under
any circumstances be reissued; and the Corporation may from time to time take
such appropriate corporate action as may be necessary to reduce accordingly the
number of authorized shares of Series D Stock.

         4E. Priority of Redemption. The Series D Stock shall have priority over
shares of all Junior Stock, including but not limited to Common Stock, with
respect to the rights of redemption set forth in this paragraph 5. In the event
the Corporation has insufficient funds to redeem all of the Series D Stock at
the then applicable Redemption Price, the Corporation shall not be permitted to
redeem shares of Junior Stock until such time as the Corporation has redeemed
all of the issued and outstanding Series D Stock.

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<PAGE>   5

         4F. Surrender of Certificates. Each holder of shares of Series D Stock
to be redeemed shall surrender the certificate(s) representing such shares to
the Corporation at the principal offices of the Corporation or such other place
as the Corporation may designate in writing on the Redemption Date and upon the
payment of the full Redemption Price for such shares as set forth in this
Paragraph 5 to the order of the person whose name appears on such
certificate(s), each surrendered certificate shall be canceled and retired. In
the event some but not all of the shares of Series D 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 D
Stock which were not redeemed.

         5. Restrictions and Limitations. For so long as any shares of Series D
Stock remain outstanding, and subject to the right of holders of Series D Stock
to vote on certain matters separately as a class pursuant to paragraph IB
hereof, the Corporation shall not, without the approval of the holders of at
least a majority of the then outstanding shares of Series D Stock:

                  (i) redeem, purchase or otherwise acquire for value (or pay
into or set aside a sinking fund for such purpose) any shares of Junior Stock;

                  (ii) amend, repeal or change any provision of, or add any
provision to, this  Designation of Preferences;

                  (iii) amend, repeal or change any provision of the
Corporation's Restated and Amended Certificate of Incorporation or By-laws if
such action would materially adversely impact the Series D Stock or the
designation, powers, preferences and rights and the qualifications, limitations
and/or restrictions thereof provided for herein;

         SECOND: That the aforesaid resolution was duly adopted in accordance
with the applicable provisions of the General Corporation Law of the State of
Delaware.

         IN WITNESS WHEREOF, said Corporation has caused this Designation of
Preferences to be signed by Larry H. Ramming, its Chief Executive Officer, and
attested by Brian Krause, its Assistant Secretary, this the 20th day of June
2000, and by execution hereof does declare and certify that this is the act and
deed of the Corporation and the facts herein stated are true.

                                       -----------------------------------------
                                       Larry H. Ramming, Chief Executive Officer

                                       -----------------------------------------
                                       Brian Krause, Assistant Secretary

                                       5<PAGE>   1
                             FORBEARANCE AGREEMENT

         This Agreement (the "AGREEMENT") by and among the undersigned entities
identified as Bank and Obligors is entered into effective this 21st day of
December, 1999.

         The parties hereto agree 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 an
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) under the Loan Documents
(described and identified on SCHEDULE 1 hereto) until the earlier of (a) a
Triggering Event (hereinafter defined) or (b) April 30, 2000 (the earlier of
which to occur is herein referred to as the Termination Date).

         2. In consideration of the forbearance agreed to in Paragraph 1 hereof
the Obligors hereby agree to enter into and deliver to Bank on the effective
date of this Agreement, a Release and Covenant Not to Sue (the "RELEASE") in
the form of ANNEX 1 hereto.

         3. As a material inducement to Bank to enter into the forbearance
provided in Paragraph 1 hereof, the Obligors agree to deliver the following
financial reports to the Bank:

                  a. on or before the 20th of each month with respect to the
         prior month (1) monthly financial statements; (2) monthly comparison
         of Budget against actual results for such time period broken down by
         each operating unit and Subsidiary; and (3) the Baylor Management
         Report (herein so called);

                  b. on or before the 10th of each month with respect to the
         prior month (1) an accounts payable aging detailed by each unit or
         Subsidiary; (2) accounts receivable aging broken down by each unit or
         Subsidiary; and (3) a backlog report for each unit or Subsidiary;

                  c. on Wednesday of each calendar week, a rolling forecast of
         twelve week cash requirements for the next twelve weeks;

                  d. on or before the 5th business day of each month, a
         Borrowing Base Certificate in the form attached hereto as ANNEX 2 as
         of the last day of the preceding month; and

                  e. within one business day of preparation, a copy of any
         reports prepared by Conway, Del Genio, Gries & Co., LLC (the
         "Consultants"), consultants to the Obligors when and as received by
         Borrower. Borrower shall not be required to continue the employment of
         Consultants, but may terminate said employment at any time in
         Borrower's sole discretion.

         4. From and after the effective date hereof, the interest rate on the
Obligations shall accrue at the Base Rate plus three percent (3%); provided
that such accrued interest shall be payable on the first day of each month at a
rate equal to the Base Rate plus one percent (1%) with the differential of two
percent (2%) due on the Termination Date. Borrower hereby covenants and agrees
to pay such interest on such dates.

FORBEARANCE AGREEMENT - Page 1

<PAGE>   2

         5. Obligors shall pay Bank a Forbearance Fee (herein so called) of
$100,000.00 due on the Termination Date, provided, however, that in the event
Bank is paid in full on or before February 29, 2000, such fee shall be reduced
by fifty percent (50%).

         6. Bank hereby agrees to negotiate in good faith to enter into
mutually satisfactory terms and documentation to effectuate the Prudential
Insurance Company of America ("PRUDENTIAL") proposal to provide a credit
facility to the Obligors (the "NEW LIQUIDITY"), provided that (1) Obligors
shall be prohibited from paying any amounts on such New Liquidity to Prudential
in the event that Obligors are in breach of any covenant contained in the
Transaction Documents; (2) the principal of the New Liquidity shall be repaid
only from the net proceeds received by any of the Obligors from any equity
offering after the date hereof; (3) Prudential shall agree not to receive any
payment on its 11.28% Senior Subordinated Notes due July 23, 2006 outstanding
in an aggregate principal amount of $30,000,000 while any portion of the
Obligations are outstanding; and (4) the Obligors shall only pay the
Consultants from fundings by Prudential. The Obligors hereby covenant and agree
to comply with the prohibitions contained in the immediately preceding
sentence.

         7. As conditions precedent to the effectiveness of this Agreement,
Obligors hereby agree to:

                  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, specifically being $135,000.00 to Bank to reimburse it for
         such amounts due Munsch Hardt Kopf & Harr, P.C. and to E & Y
         Restructuring, L.L.C. Such $135,000.00 shall be payable $100,000.00
         upon execution of this Agreement, and $8,750.00 per month (on the 21st
         day of each month commencing January 21, 2000) until paid in full;

                  b. Execute and deliver to Bank each of the Transaction
         Documents; and

                  c. Cause their counsel, Greenberg, Peden, Siegmyer & Oshman,
         P.C., to deliver to them an opinion upon which Bank can rely opining
         as to the enforceability of this Agreement and the Release in the form
         of ANNEX 3.

         8. In the event upon delivery of any Borrowing Base Certificate as
required by paragraph 3 hereof, the Obligors shall be overadvanced under the
Borrowing Base, Borrower hereby covenants that Borrowers shall pay such
overadvance within five (5) business days from the due date of such Borrowing
Base Certificate.

         9. Obligors hereby covenant that (1) Obligors shall raise at least
gross proceeds of $10 million in a equity offering and be in receipt of a firm
commitment for same, subject only to customary due diligence, on or before
February 29, 2000; and (2) Obligors shall cause the Consultants to allow Bank
to participate in any communication by Consultants to any person not employed
by the Obligors.

         10. Borrower hereby covenants that Borrowers shall pay interest, at
the pay rate as provided for in paragraph 4 hereof, on the Obligations under
the Loan Documents on the first day of each month and shall pay any
reimbursable expense incurred by Bank hereunder within three (3) days of
receipt of notice of the amount thereof.

         11. This Agreement and the Release, (collectively, the "TRANSACTION
DOCUMENTS") embodies the entire agreement of the parties and there are no
contemporaneous oral agreements which in any way modify the same.

FORBEARANCE AGREEMENT - Page 2

<PAGE>   3

         12. Each party hereto represents to each other party herein that:

                  a. Such party is a corporation duly organized, legally
         existing, and in good standing under the laws of the jurisdiction of
         its incorporation, except as may be specified in that certain legal
         opinion of even date herewith issued by Thompson Knight Brown Parker &
         Leahy L.L.P. which is addressed to Obligors; and

                  b. The Transaction Documents provided for herein to be
         delivered at the closing hereunder, will, when executed and delivered,
         constitute the legal, valid, and binding obligation of such party.

         13. The Obligors agree to cooperate with Bank and its representatives
and to allow same to be present on the Obligors premises at all reasonable
business hours for the purpose of monitoring all aspects of the Obligors
business and the Obligors, their officers and employees shall extend the
reasonable cooperation commensurate with sound management of the Obligors
business in permitting the Bank and its representatives to observe and gather
information about the Obligors business, provided, however, the Bank shall
exercise no control over the Obligors.

         14. For purposes hereof the term "TRIGGERING EVENT" shall mean the
occurrence of any one of the following:

                  a. A material judgment adverse to any Obligor shall be
         entered in any legal proceeding and such judgment shall not be stayed
         within five (5) days after the entry of such judgment;

                  b. The Obligors, or any of them, shall (i) execute an
         assignment for the benefit of creditors, or (ii) become or be
         adjudicated a bankrupt or insolvent, or (iii) admit in writing its
         inability to pay its debts generally as they become due, or (iv) apply
         for or agree by consent to the appointment of a supervisor,
         conservator, receiver, trustee, or liquidator of it or of all or a
         substantial part of its assets, or (v) file a voluntary petition
         seeking reorganization or an arrangement with creditors, or to take
         advantage of or seek any other relief under any debtor relief laws,
         (vi) be the subject of an involuntary bankruptcy case commenced under
         11 U.S.C. Section 303 (the United States Bankruptcy Code); or (vii)
         file an answer admitting the material allegations of or consenting to,
         or default in, a petition filed against it in any proceeding under any
         debtor relief laws, or (vii) institute or voluntarily be or become a
         party to any other judicial proceedings intended to effect a discharge
         of its debts, in whole or in part, or a postponement of the maturity
         or the collection thereof, or a suspension of any of the rights of the
         Bank granted in any of the Transaction Documents or Loan Documents;

                  c. An order, judgment, or decree shall be entered by any
         court of competent jurisdiction approving a petition seeking
         reorganization of Obligors, or any of them, or appointing a
         supervisor, conservator, receiver, trustee, or liquidator of any such
         Obligor or of all or any substantial part of its assets, and such
         order, judgment, or decree is not permanently stayed or reversed
         within thirty (30) calendar days after the entry thereof, or (ii) a
         petition is filed against any Obligor seeking reorganization, an
         arrangement with creditors, or any other relief under any debtor
         relief laws, and such petition is not discharged within thirty (30)
         calendar days after the filing thereof;

                  d. The breach by Obligors, or any of them, of any covenant
         contained in this Agreement; or

FORBEARANCE AGREEMENT - Page 3

<PAGE>   4

                  e. The occurrence of any return item or not sufficient funds
         event for more than five (5) days during any monthly time period.

         15. The Obligors hereby affirm their obligations under the Loan
Documents.

         16. Except as specifically provided in this Agreement, the terms of
the Loan Documents shall remain unchanged except that the Transaction Documents
shall be included within the "LOAN DOCUMENTS". Except as expressly set forth in
this Agreement, nothing herein shall be deemed to constitute a waiver by the
Bank of any rights or remedies available under any of the Loan Documents or
under applicable law.

         17. The Obligors hereby agree to reimburse the Bank upon demand for
the out-of-pocket expenses of the Bank incurred in connection with enforcement
of the Bank's rights and remedies under the Loan Documents, including, without
limitation, the fees and the disbursements of Munsch Hardt Kopf & Harr, P.C.,
counsel for the Bank, in connection with the negotiation, preparation,
execution and administration of the Transaction Documents or enforcement of the
Transaction Documents and in advising the Bank as to its rights and its
remedies under any of the Loan Documents or this Agreement and the fees and
expenses of E&Y Restructuring, L.L.C. The Obligors hereby affirm that all
amounts for which Company is responsible under this paragraph 17 are additional
Obligations as provided for in the Loan Documents.

         18. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Texas and applicable laws of the United States
of America.

         19. This Agreement may be executed in two or more counterparts, and it
shall not be necessary that any one counterparts be executed by all of the
parties hereto. Each fully or partially executed counterpart shall be deemed an
original, but all such counterparts taken together shall constitute but one and
the same instrument. The manual signature of any party hereto that is
transmitted to any other party by facsimile shall be deemed for all purposes to
be an original signature.

         20. Time is of the essence.

         21. Obligors intend pursuant to the Loan Documents to grant Bank a
security interest or lien on each and every asset of each Obligor and in
furtherance thereof, the Obligors hereby covenant and agree to grant Bank, upon
its request, a lien or security interest on any asset which is not currently
subject to a lien or security interest in favor of the Bank pursuant to
documentation consistent with the Loan Documents. The foregoing covenant shall
not apply with respect to more than sixty-five percent (65%) of Obligor's stock
in any controlled foreign corporation.

FORBEARANCE AGREEMENT - Page 4

<PAGE>   5

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

                                          BANK:

                                          COMERICA BANK-TEXAS

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

                                          OBLIGORS:

                                          BOOTS & COOTS INTERNATIONAL WELL
                                          CONTROL, INC.

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

                                          ABASCO, INC.

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

                                          IWC ENGINEERING, INC.

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

FORBEARANCE AGREEMENT - Page 5

<PAGE>   6

                                          IWC SERVICES, INC.

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

                                          HELL FIGHTERS, INC.

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

                                          CODE 3, INC.

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

                                          ITS SUPPLY CORPORATION

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

                                          ELMAGCO, INC.

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

FORBEARANCE AGREEMENT - Page 6

<PAGE>   7

                                          BAYLOR CONTROLS, INC.

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

                                          BAYLOR ELECTRONICS, INC.

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

                                          BAYLOR COMPANY

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

FORBEARANCE AGREEMENT - Page 7

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