EXHIBIT 10.2
AGREEMENT FOR PURCHASE AND SALE
This Agreement for Purchase and Sale (the "Agreement"), is made and entered
as of December 17, 1999, by and among Black Warrior Wireline Corp., a Delaware
corporation ("Seller"), the parties listed as purchasers on the signature page
below (collectively, the "Purchaser") and sets forth the terms and conditions of
the sale and purchase of one or more Convertible Promissory Notes in the
aggregate original principal amount of up to $7,000,000, with at least
$3,000,000 being issued as of the date hereof and substantially in the form
attached hereto as Exhibit A (the "Notes").
WHEREAS, Seller desires to issue and sell to Purchaser, and Purchaser
desires to purchase and accept from Seller, the Notes in the form of Exhibit A,
on the terms and subject to the conditions set forth herein and in the amounts
set forth, for each Purchaser, on the signature page for such Purchaser to this
Agreement.
WHEREAS, the obligations of Seller under the Notes are secured by that
certain Borrower Security Agreement between Seller and the Purchaser, dated as
of the date hereof, as may be amended or modified (the "Security Agreement").
WHEREAS, Seller and Purchaser desire to make certain representations,
warranties and agreements in connection with the purchase and sale of the Notes
contemplated hereby.
WHEREAS, Seller desires to sell to Purchaser warrants ("Warrants") to
purchase shares of Seller's common stock, par value $0.005 per share (the
"Common Stock"), for a number of shares as set forth on the signature page of
each Purchaser hereto which Warrants shall be delivered to Purchaser or, at
Purchaser's discretion, to Purchaser's designee, at the time of each advance of
the Note Consideration, and which Warrants shall have the terms and be subject
to the conditions set forth in the form of Warrants attached hereto as Exhibit
B.
WHEREAS, Seller desires to grant to Purchaser certain registration rights
in respect of the Common Stock that may be acquired on conversion of the Notes
and on the exercise of the Warrants, which registration rights shall have the
terms and be subject to the conditions set forth in the Registration Rights
Agreement dated as of the date hereof between Seller and Purchaser as amended
and modified (the "Registration Rights Agreement").
WHEREAS, St. James Capital, L.P. and SJMB, L.P., each a Delaware limited
partnership (together, "St. James") have agreed to subordinate the indebtedness
of the Seller (other than any indebtedness hereunder) to the indebtedness owing
to the Purchaser hereunder pursuant to the terms of a Subordination Agreement
among St. James and the Purchaser dated the date hereof (the "Junior
Subordination Agreement").
WHEREAS, this Agreement, the Notes, the Security Agreement, the Warrants,
the Junior Subordination Agreement, and the Registration Rights Agreement are
collectively referred to herein as the "Transaction Documents".
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein, the parties agree as follows:
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ARTICLE I
PURCHASE AND SALE
1.1 Purchase and Sale of the Notes and the Warrants. Subject to the terms
of this Agreement, Seller agrees to and does hereby issue, sell and deliver the
Notes and the Warrants to Purchaser at the Closing (as defined herein), and
Purchaser agree to and do hereby purchase and accept the Notes and the Warrants
from Seller.
1.2 Consideration for Purchase of the Notes. Subject to the terms of this
Agreement (including Section 1.5 hereof), Purchaser hereby agrees to pay to
Seller, by check or wire transfer to the account of Seller, up to $7,000,000,
with at least $3,000,000 being as of the date hereof, as the consideration for
the purchase of the Notes (the "Note Consideration").
1.3 Consideration for Purchase of the Warrants. Subject to the terms of
this Agreement, Purchaser hereby agree to pay by check or wire transfer to the
account of Seller $0.000487805 per share subject to the Warrants as the
consideration for the purchase of each of the Warrants issued and to be issued
hereunder (the "Warrant Consideration"; the Note Consideration and the Warrant
Consideration are collectively referred to herein as the "Consideration"). Each
new Purchaser pursuant to Section 1.5 shall pay Warrant Consideration to Seller
in an amount equal to $0.000487805 per share subject to the Warrants.
1.4 Origination Fee. Seller agrees to pay Purchaser at Closing and at each
other time an advance of the Note Consideration is made, an origination fee (the
"Origination Fee") equal to 0.002% of the entire amount of each Note, for the
payment of the Note Consideration. Seller shall pay to each new Purchaser under
Section 1.5 an Origination Fee equal to 0.002% of the entire amount of the new
Note purchased by such new Purchaser.
1.5 Sale of Additional Notes. Seller agrees to use its best efforts to sell
additional Notes such that the aggregate principal amount of Notes issued is
$5,000,000. Each purchaser of such additional Notes shall assume the obligations
and obtain the rights of a Purchaser hereunder and under each of the other
Transaction Documents, including, without limitation, financing statements,
pursuant to documentation reasonably acceptable to the Seller and the then
existing Purchasers. The Company shall have the option of selling additional
Notes of up to $2,000,000 in an aggregate principal amount (resulting in a total
maximum aggregate amount of Notes sold equal to $7,000,000) upon the same terms
and conditions of this Section 1.5. Each new Note shall be issued in form and
substance substantially the same as the form of Note attached as Exhibit A. Each
sale of any additional Note shall occur on or prior to February 15, 2000. The
Seller shall issue to each such Purchaser, Warrants to purchase Common Stock of
the Seller, substantially in the form of the Warrants attached as Exhibit B and
for a number of shares proportionate to the amount of the Note purchased by such
Purchaser as reflected in the Warrants.
1.6 Subordination. Purchaser agrees that the indebtedness hereunder and the
security granted therefor are subject to the Subordination Agreement (the
"Senior Subordination Agreement") with Fleet Capital Corporation (the "Senior
Lender"), pursuant to which Purchaser subordinates its security interests and
rights to the security interests of the Senior Lender. Each
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new Purchaser pursuant to Section 1.5 shall assume the obligations of the
Purchaser under the Subordination Agreement as a condition precedent to the
purchase of any additional Note.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that each of the following
statements (i) are true and correct on the date hereof and (ii) will be true and
correct in all material respects on the date each advance of the Note
Consideration is made:
2.1 Organization, Standing and Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now being
conducted. Seller is licensed and qualified to do business as a foreign
corporation in each jurisdiction in which the character of its properties, owned
or leased, or the nature of its activities makes such qualification or license
necessary.
2.2 Authority; No Defaults. Subject to Section 3.2 hereof, Seller has all
requisite corporate power and authority to enter into the Transaction Documents
and to consummate the transactions contemplated thereby. The execution and
delivery of the Transaction Documents and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate action
on the part of Seller. Subject to Section 3.2 hereof, the Transaction Documents
have been executed and delivered by Seller and constitute the valid and binding
obligation of Seller, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, moratorium and other similar laws affecting creditors'
rights generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Subject to
Section 3.2 hereof, the execution and delivery of the Transaction Documents do
not, and the consummation of the transactions contemplated hereby and thereby
will not, conflict with or result in a breach of or the acceleration of any
obligation under, or constitute a default or event of default (or event which,
with notice or lapse of time or both, would constitute a default or event of
default) under, any provision of any charter, bylaw, indenture, mortgage, lien,
lease, agreement, contract, instrument, order, judgment, decree, ordinance or
regulation, or any restriction to which any property of Seller is subject or by
which Seller is bound, the effect of which would be materially adverse to
Seller. Seller is not, nor does Seller have knowledge that it is alleged to be,
in material violation or default of any applicable law, statute, order, rule or
regulation promulgated or judgment entered by any court, administrative agency
or commission or other governmental agency or instrumentality, domestic or
foreign (a "Governmental Entity"), relating to or affecting the operation,
conduct or ownership of the property or business of Seller other than vendor
judgments to be satisfied with the Note Consideration.
2.3 Approvals. Subject to Section 3.2 hereof, there is no legal impediment
to the execution and delivery of the Transaction Documents by Seller or to the
consummation of the transactions contemplated thereby, and no filing or
registration with, or authorization, consent or approval of, a Governmental
Entity, shareholders or any other third party is necessary for the consummation
by Seller of the transactions contemplated thereby.
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2.4 Charter and Bylaws. Seller has furnished to Purchaser true and complete
copies of its charter and bylaws, each as amended to date and as presently in
effect.
2.5 SEC Documents.
(a) Seller has made all filings with the Securities and Exchange
Commission ("SEC") that it has been required to make under the Securities
Act of 1933, as amended (the "Securities Act"), and the Securities Exchange
Act of 1934, as amended (the "Exchange Act") since December 31, 1998.
Seller has provided to Purchaser true, complete and correct copies of
Seller's annual report on Form 10-K ("Seller's Form 10-K") for the fiscal
year ended December 31, 1998, together with all amendments thereto,
Seller's quarterly report on Form 10-Q for the fiscal quarters ended March
31, 1999, June 30, 1999 and September 30, 1999, together with all
amendments thereto, and any and all filings with the SEC made by Seller
(including all requested exhibits to such filings) since the filing of said
Form 10-K (all such documents that have been filed with the SEC, as
amended, are referred to as the "Seller SEC Documents"). As of their
respective dates, and except as amended, Seller SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and none of Seller SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(b) The financial statements of Seller included in the Seller SEC
Documents comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the
SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form
10-Q) and fairly present (subject, in the case of the unaudited statements,
to normal recurring audit adjustments) the consolidated financial position
of Seller as of the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended. Since September 30,
1999, (i) there have been no material adverse changes in Seller's business,
operations or financial condition and (ii) Seller's operations have been
conducted in the ordinary course of business except as disclosed in writing
to Purchaser.
2.6 Litigation. Except as set forth on Schedule 2.6, as of the date of this
Agreement, there is no suit, action, proceeding or investigation pending or, to
the best knowledge of Seller, threatened against or affecting Seller, nor is
there any outstanding judgment, order, writ, injunction or decree against
Seller, which judgment would have a material adverse effect on Seller. Except as
set forth on Schedule 2.6, Seller is not subject to any court order, writ,
injunction, decree, settlement agreement or judgment that contains or orders any
on-going obligations, whether prohibitory or mandatory in nature, the
performance of which would have a material adverse effect on Seller.
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2.7 Capitalization. Seller has authorized capital stock of (a) 12,500,000
shares of Common Stock of which, as of the date hereof, there are 4,812,260
shares issued and outstanding, and (b) 2,500,000 shares of preferred stock of
which, as of the date hereof, there are no shares issued and outstanding. All of
the issued and outstanding shares of Common Stock were duly and validly issued
and are fully paid and non-assessable. None of the outstanding shares of Common
Stock has been issued in violation of any preemptive rights of the current or
past stockholders of Seller. As of the date hereof, Seller has reserved for
issuance (i) an aggregate of 1,062,250 shares of Common Stock issuable on
issuance of stock options to employees, officers, directors and other persons,
and the Board of Directors of Seller has approved amendments to the plans in
respect of such options to increase the shares available thereunder to an
aggregate of 1,735,450 shares of Common Stock, subject to the approval of the
shareholders of Seller, and (ii) an aggregate of 36,601,652 shares of Common
Stock issuable on the exercise of outstanding warrants, options, or of
convertible securities other than those listed in (i) above. Except as set forth
on Schedule 2.7 or described above in (i) and (ii), there are no outstanding
options, warrants or rights to subscribe for, or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of Seller or contracts, commitments,
understandings or arrangements by which Seller is or may be obligated to issue
additional shares of its capital stock or options, warrants, or rights to
purchase or acquire any additional shares of its capital stock. Subject to
Section 3.2 hereof, all of the Common Stock issued on the exercise of the
Warrants will be fully paid, non-assessable and free and clear of any
Encumbrances. As used in this Agreement, the term "Encumbrance" means and
includes (i) any security interest, mortgage, deed of trust, lien, charge,
pledge, proxy, adverse claim, equity, power of attorney, or restriction of any
kind, including but not limited to, any restriction or servitude on the use,
transfer, receipt of income, or other exercise of any attributes of ownership,
and (ii) any Uniform Commercial Code financing statement or other public filing,
notice or record that by its terms purports to evidence or notify interested
parties of any of the matters referred to in clause (i) that has not been
terminated or released by another proper public filing, notice or record.
2.8 Subsidiaries. Seller has no subsidiaries.
2.9 Liabilities. Except as set forth in Schedule 2.9, Seller has no
liabilities or obligations, either accrued, absolute, contingent, or otherwise
that have a material adverse effect on the value or business of Seller, and
Seller has no knowledge of any potential liability that it reasonably believes
would likely result in a material adverse effect on the value or business of
Seller, other than those (a) reflected or reserved against in the balance sheets
reported on Seller's Form 10-Q for the fiscal quarter ended September 30, 1999,
or (b) incurred in the ordinary course of business since September 30, 1999.
2.10 Licenses, Permits, Authorizations, Etc. Seller holds all approvals,
authorizations, consents, licenses, orders, franchises, rights, registrations
and permits of any type required to operate its business as presently conducted.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in any revocation,
cancellation, suspension or modification of any such approval, authorization,
consent license, order, franchise, right, registration or permit.
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2.11 Title to Assets; Encumbrances. Except as set forth in Schedule 2.11:
(a) Seller has good and indefeasible title to its assets, whether
real, personal or intangible, free and clear of all Encumbrances except (i)
liens for current taxes and assessments not yet due or being contested in
good faith by appropriate proceedings, (ii) mechanic's liens arising under
the operation of law for actions contested in good faith or for which
payment arrangements have been made, (iii) liens granted or incurred by
Seller in the ordinary course of its business or financing of equipment,
office space, furniture and computers in the ordinary course of its
business, and (iv) easements, rights of way, encroachments or other
restrictions or matters affecting title which do not prevent the assets
from being used for the purpose for which they are currently being used;
(b) There are no parties in possession of any of the assets of Seller
other than personal property held by third parties in the reasonable and
ordinary course of business. Seller enjoys full, free and exclusive use and
quiet enjoyment of its assets and its rights pertaining thereto. Seller
enjoys peaceful and undisturbed possession under all leases under which it
is a lessee, and all such leases are legal, valid and binding obligations
of Seller, enforceable against Seller in accordance with their terms.
2.12 Taxes and Returns. Seller has filed all required tax returns and
reports. Seller has paid all taxes, assessments and governmental charges and
penalties which it has incurred, except such as are being or may be contested in
good faith by appropriate proceedings. Seller is not delinquent in the payment
of any tax, assessment or governmental charge. No deficiencies for any taxes
have been proposed, asserted, or assessed against Seller, and no requests for
waivers of the time to assess any such tax are pending. For the purposes of this
Agreement, the term "tax" (including, with correlative meaning, the terms
"taxes" and "taxable") shall include all federal, state, local and foreign
income, profits, franchise, gross receipts, payroll, sales, employment, use,
property, withholding, excise and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts.
2.13 Insurance. Each policy of property, fire and casualty, product
liability, worker's compensation, professional liability and title insurance and
other forms of insurance (except group, health and life policies) and each bond
issued or posted by any person with respect to any operations or other
activities of Seller is, to the knowledge of Seller, the legal, valid and
binding obligation of the insurer or bond issuer, enforceable in accordance with
its terms, and is in an amount and provides for coverage as is customary in the
ordinary business practices of Seller's industry.
2.14 Patents, Trademarks, Etc. Seller is not using, and does not have any
plan to manufacture, use or sell anything which would violate or infringe on any
patent or proprietary right (of which Seller is aware) of any other person, firm
or corporation or which would require a license under any such patent or
proprietary right. Seller has not received any communications alleging that
Seller has violated or, by conducting its business as proposed, would violate
any of the patents, trademarks, service marks, tradenames, copyrights, works of
authorship or trade secrets or other proprietary rights in processes of any
other person or entity.
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2.15 Material Contracts and Obligations. Attached hereto as Schedule 2.15
is a list of all material agreements of any nature to which Seller is a party or
by which it or any of its properties is bound, including without limitation, the
Master Service Agreement with the ten top customers (based on dollar volume) of
Seller, all employment and consulting agreements, loan agreements, leases,
purchase contracts, employee benefit, bonus, pension, stock option, stock
purchase and similar plans and arrangements, and distributor and sales
representative agreements. True and complete copies of such written agreements
have been provided to Purchaser. All such agreements and contracts are valid,
binding and in full force and effect. Seller is not in default on any of the
agreements listed on Schedule 2.15.
2.16 Compliance. Except as set forth on Schedule 2.16, Seller has complied
in all material respects with all laws, and is not in violation of any charter
or other corporate restrictions or any law, ordinance, requirement, regulation,
judgment, injunction, award, decree, or other order applicable to its business.
There is no term or provision of any mortgage, indenture, contract, agreement or
instrument to which Seller is a party or by which it is bound, any provision of
any state or federal judgment, decree, order, injunction, writ, statute, rule or
regulation applicable to or binding upon Seller, which materially adversely
affects or, in the future is reasonably likely to affect materially and
adversely the business, prospects, condition, affairs or operations of Seller or
any of its properties or assets. To the knowledge of Seller, no employee of
Seller is in violation of any term of any employment contract, patent or other
proprietary information disclosure agreement or any other contract or agreement
relating to the employment of such employee with Seller.
2.17 Employees. Seller has obtained employment agreements, some of which
contain nondisclosure and assignment of invention provisions and non-competition
provisions, with Seller from some employees and consultants of Seller whose
employment responsibility requires access to confidential and proprietary
information of Seller, in a form satisfactory to Purchaser. Seller has complied
in all material respects with all applicable and material state and federal laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours and other laws related to employment, and there are
no arrears in the payment of wages, or social security taxes.
2.18 Transactions with Affiliates and Stockholders. Except as set forth on
Schedule 2.18, no stockholder, officer, director or employee of Seller, nor any
"affiliate" or "associate" of such persons (as such terms are defined in the
rules and regulations promulgated under the Securities Act), is presently a
party to any transaction with Seller, including without limitation, any
contract, agreement or other arrangement providing for the employment of,
furnishing of services by, rental of real or personal property from or otherwise
requiring payments to, any such person or entity.
2.19 Books and Records. The minute books of Seller furnished to counsel to
Purchaser for review contain complete and accurate records of all meetings and
other corporate actions of its stockholders and its Board of Directors and
committees thereof. The stock ledger and stock transfer records of Seller
furnished by American Stock Transfer & Trust Company to Purchaser for review is
complete and reflects all issuances, transfers of which Seller is aware,
repurchases and cancellations of shares of capital stock of Seller.
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2.20 Stockholder Agreements. Except as set forth in Schedule 2.20 or as
contemplated by this Agreement, there are no agreements, written or oral, which
are (i) between Seller and any holder of its capital stock, or (ii) to the
knowledge of Seller, among any persons holding five percent (5%) or more of
Seller's capital stock, relating to the acquisition, disposition or voting of
the capital stock of Seller.
2.21 ERISA. Except as disclosed on Schedule 2.21, Seller has no employee
benefit plans subject to the Employment Retirement Income Security Act of 1974.
2.22 Accounts Receivable. All accounts receivable of Seller (including
those reflected on the Balance Sheet or acquired on or prior to the Closing
Date) arose in the ordinary and usual course of business of Seller, represent
valid obligations due to Seller and have been collected or are, to Seller's best
knowledge, collectible in the ordinary and usual course of business of Seller in
the aggregate recorded amounts thereof in accordance with their terms less in
the case of accounts receivable reflected in the Financial Statements, all
allowance for doubtful accounts marked therein, and in the case of accounts
receivable thereafter, all allowances for doubtful accounts consistent with past
practices of Seller.
2.23 Hazardous Wastes and Substances. Neither the operations of Seller nor
the use of its assets violates any applicable federal, state or local law,
statute, ordinance, rule, regulation, memorandum of understanding, order or
notice requirement pertaining to the collection, transportation, storage,
treatment, discharge, release or disposal of hazardous or non-hazardous waste or
substances, including without limitation (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C, ss.ss. 9601 et
seq.), as amended from time to time on or before the Closing Date ("CERCLA")
(including, without limitation, as amended pursuant to the Superfund Amendments
and Reauthorization Act of 1986), and such regulations promulgated under CERCLA
on or before the Closing Date, (ii) the Resources Conservation and Recovery Act
of 1976 (42 U.S.C. ss.ss. 6901 et seq.), as amended from time to time ("RCRA")
on or before the Closing Date, and such regulations promulgated under RCRA,
(iii) any applicable federal, state or local laws or regulations relating to the
environment in effect on the Closing Date (collectively, the "Applicable
Environmental Laws"). Except as disclosed on Schedule 2.23, none of the
operations of Seller has ever been conducted nor have any of its assets been
used in such a manner as to constitute a violation of any of the Applicable
Environmental Laws. No notice has been served on Seller by any person or
Governmental Entity regarding any existing, pending or threatened investigation
or inquiry related to violations under any Applicable Environmental Law, or
regarding any claims for corrective action, remedial obligations or contribution
for removal costs or damages under any Applicable Environmental Law, or
regarding the designation of Seller or any of its affiliates as a potentially
responsible party for any facility under the Applicable Environmental Laws, nor
does any fact or circumstance exist which, if disclosed publicly, would be
reasonably likely to result in the service on Seller of any such notice. There
has been no action taken, or omitted to be taken by Seller which has caused, or
would be reasonably likely to cause, a "release" of any "hazardous substance" at
any "facility," without limitation, within the meaning of such terms as defined
in the Applicable Environmental Laws.
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2.24 Disclosures. Neither this Agreement nor any Exhibit or Schedule
hereto, nor any certificate or other instrument furnished to Purchaser or
Purchaser or its counsel by Seller in connection with the transactions
contemplated hereby, contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which they were made,
not misleading.
ARTICLE III
COVENANTS
3.1 New Subsidiaries. Seller agrees that any entity of which Seller obtains
control (directly or indirectly) of more than 50% of the outstanding voting
stock or equity interests shall execute a Subsidiary Security Agreement and
Subsidiary Guaranty, substantially in form and substance acceptable to
Purchaser.
3.2 Capitalization. Seller agrees that, at or before its next annual
shareholders meeting, the Seller shall secure an amendment to Seller's Articles
or Certificate of Incorporation to increase the number of shares that the Seller
is authorized to issue to a number sufficient to authorize the issuance of the
current outstanding shares of the Seller and all shares that are issuable upon
the conversion of all of the Seller's convertible notes and securities and upon
the exercise of any warrants or options to purchase the Seller's Common Stock.
ARTICLE IV
THE CLOSING
4.1 Time and Place. Subject to the provisions of Section 1.2 herein, the
closing of the purchase and sale of an aggregate amount of at least $3,000,000
of the Notes and the associated Warrants (the "Closing") will take place as of a
date agreed to by the parties (the "Closing Date"), at the offices of Gardere
Wynne Sewell & Riggs, L.L.P., unless another time and place are agreed to by the
parties.
4.2 Conditions to the Obligation of Seller. The obligation of Seller to
effect the Closing is subject to Purchaser delivering, or causing to be
delivered, to Seller at the Closing an aggregate of at least $3,006,000.
4.3 Conditions to the Obligation of Purchaser. The obligation of Purchaser
to effect the Closing is subject to payment by Seller of the Origination Fee.
The obligation of Purchaser is further subject to Seller delivering, or causing
to be delivered, to Purchaser at the Closing the following documents:
4.3.1 copies, certified by the Secretary of State of Delaware as of a
recent date, of the charter of Seller and all amendments thereto and a
certificate of an Officer of Seller certifying that there have been no
amendments to such charter since such date;
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4.3.2 copies, certified by the Secretary of each of Seller as of the
Closing Date, of the bylaws of each of Seller, and all amendments thereto;
4.3.3 copies, certified by a certificate of the Secretary of Seller as
of the Closing Date, of resolutions duly adopted by the board of directors
of Seller, authorizing the execution and delivery by Seller of the
Transaction Documents and all other agreements attached hereto as Exhibits
or contemplated herein, the completion of the sale of the Notes and
Warrants and the taking of all such other corporate action as shall have
been required as a condition to, or in connection with, the sale of the
Notes and Warrants;
4.3.4 the Agreement;
4.3.5 the Notes for an aggregate principal amount of at least
$3,000,000;
4.3.6 Warrants to purchase up to an aggregate of 28,700,000 shares of
Common Stock;
4.3.7 the Registration Rights Agreement;
4.3.8 the Security Agreement;
4.3.9 the Junior Subordination Agreement;
4.3.10 Bendover conversion and settlement documents;
4.3.11 an opinion of Rosen, Cook, Sledge and Davis, counsel to Seller,
in form and substance acceptable to Purchaser and addressing the matters
set forth in Sections 2.1, 2.2, 2.3, 2.7 and 2.8; and
4.3.12 a certificate of an Officer of Seller to the effect that the
representations and warranties of Seller herein contained shall be true as
of and at the Closing Date with the same effect as though made at such
date, except as affected by transactions permitted or contemplated by this
Agreement; and further to the effect that Seller shall have performed and
complied with all covenants required by this Agreement to be performed or
complied with by each before the Closing Date.
ARTICLE V
GENERAL PROVISIONS
5.1 Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained in this Agreement shall
survive the Closing.
5.2 Notices. All notices or other communications which are required or may
be given under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person, transmitted by telecopier (with
receipt confirmed) or mailed by registered or certified first class mail,
postage prepaid, return receipt requested to the parties hereto at the
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address set forth below (as the same may be changed from time to time by notice
similarly given) or the last known business or residence address of such other
person as may be designated by either party hereto in writing.
(a) If to Seller: Black Warrior Wireline Corp.
3748 Highway #45 North
Columbus, Mississippi 39701
Attn: William L. Jenkins
(b) If to Purchaser: At the addresses set forth on the signature page
of Purchaser
5.3 Miscellaneous. This Agreement (i) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter
hereof,(ii) shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns and is not intended to confer upon
any other person any rights or remedies hereunder, (iii) shall be governed in
all respects, including validity, interpretation and effect, by the laws of the
State of Delaware and (iv) may be executed in two or more counterparts which
together shall constitute a single agreement.
5.4 Publicity. Seller and Purchaser promptly shall advise and cooperate
with the other prior to issuing, or permitting any of its directors, officers,
employees or Purchaser to issue, any press release with respect to this
Agreement or the transactions contemplated hereby. Notwithstanding the
foregoing, without the prior consent of Purchaser, neither Seller nor any of its
directors, officers, employees or Purchaser shall issue any press release which
includes the name of Purchaser or any of Purchaser's affiliates.
5.5 Assignment.
(a) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by Seller (whether by operation of
law or otherwise) without the prior written consent of the Purchaser.
(b) Purchaser may assign its rights and obligations hereunder, under
the Notes, the Warrants or any other Transaction Document, subject to the
terms hereof and upon prior written notice to Seller. Each such assignee
(an "Assignee") shall execute an Assignment and Acceptance substantially in
the form of Exhibit G. Upon the execution of such Assignment and Acceptance
by such Assignee, (i) the Assignee shall be a "Purchaser" hereunder and, to
the extent provided in the Assignment and Acceptance, shall have the rights
and obligations of a Purchaser hereunder, and (ii) the assigning Purchaser
(an "Assignor") shall, to the extent provided in the Assignment and
Acceptance, be released from its obligations hereunder.
(c) An Assignor hereunder shall, if requested by the Assignee, deliver
the Notes and Warrants in favor of such Assignor to the Seller, and the
Seller shall issue
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replacement Notes and Warrants in favor of the Assignor and the Assignee in
the amounts and for such shares as are indicated in the Assignment and
Acceptance. The replacement Warrants shall be issued for an exercise price
per share equal to the exercise price set forth in the Warrants to be
delivered to Seller under this Section 5.5(c).
5.6 Schedules. All statements contained in any exhibit, schedule, appendix,
certificate or other instrument delivered by or on behalf of the parties hereto,
or in connection with the transactions contemplated hereby, are an integral part
of this Agreement and shall be deemed representations and warranties hereunder.
5.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which constitutes an original execution and, in the
aggregate, constitute a single document.
5.8 Expense Reimbursement. Seller will reimburse Purchaser all of
Purchaser's direct costs relating to the negotiation, documentation and closing
of the transactions contemplated by this Agreement, including without limitation
the direct fees and expenses of counsel for Purchaser.
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5.9 Restrictions on Transfer.
(a) Purchaser shall not transfer their rights under the Notes except
by the grant of a security interest to its lender or lenders, or as
provided by Section 5.5 hereof. As between a Purchaser and its lender or
lenders, the Notes are transferrable in the same manner and with the same
effect as in the case of a negotiable instrument payable to a specified
person. Any lender to which Holder grants a security interest in the Notes
shall be entitled to exercise all remedies to which it is entitled by
contract or by law, including (without limitation) transferring the Notes
into its own name or into the name of any purchaser at any sale undertaken
in connection with enforcement by such lender of its remedies.
(b) Purchaser shall not transfer the Warrants or any new warrants
described in Section 1.4 of this Agreement, except as provided in the
Warrants and provided further that the Warrants may be distributed to the
partners of the Purchaser.
5.10 Expenses of Dispute Resolution. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement or any of the
other Transaction Documents, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and necessary disbursements in addition to
any other relief to which it may be entitled.
Each Purchaser acknowledges that it has, independent of and without
reliance upon any other Purchaser or any information provided by any other
Purchaser and based on the financial statements of Seller and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Purchaser also
acknowledges that it will, independent of and without reliance upon any other
Purchaser and based on such documents and information as it shall deem
appropriate at that time, continue to make its own credit decisions in taking or
not taking action under this Agreement and any other documents relating thereto.
5.11 Power of Attorney. Each Purchaser hereby appoints, and each new
Purchaser under Section 1.5 shall appoint, SJMB, L.P. as its attorney-in-fact,
with full power of substitution, solely for the purposes of (a) negotiating,
executing and delivering the Senior Subordination Agreement and (b) executing
and filing Seller Security Agreements and financing statements. This power of
attorney shall not extend to the negotiation, execution and delivery of the
Junior Subordination Agreement.
5.12 Representation. Each party to this Agreement other than SJMB, L.P.
acknowledges that Gardere Wynne Sewell & Riggs, L.L.P. has represented,
represents and shall represent only SJMB, L.P. with respect to the drafting,
negotiation, execution and delivery of the Transaction Documents and any related
documents or instruments, and that each party has had adequate opportunity to
consult with its own counsel in connection therewith and any other aspect of
this transaction. Each party to this Agreement further acknowledges that a
portion of the proceeds will be used to reimburse St. James for expenses it has
previously incurred.
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SELLER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Seller has signed this Agreement as of the date first
written above.
BLACK WARRIOR WIRELINE CORP.
By:
-----------------------------
John L. Thompson, Director
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PURCHASER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Purchaser has signed this Agreement as of the date
first written above.
-------------------------------------
Address:
-------------------------------------
- ----------------------------------- John L. Thompson and Charles E.
Underbrink, tenants in common
- -----------------------------------
- ----------------------------------- -------------------------------------
Social Security/Tax I.D. - Thompson
-------------------------------------
Social Security/Tax I.D. - Underbrink
Note Principal Amount: $750,000
-----------------
Number of Warrants: 3,075,000
-----------------
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PURCHASER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Purchaser has signed this Agreement as of the date
first written above.
Address: -----------------------------------
[Name of Purchaser]
- --------------
- --------------
Note Principal Amount: _____________ -----------------------------------
Number of Warrants: ________________ [Signature of Purchaser]
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PURCHASER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Purchaser has signed this Agreement as of the date
first written above.
Address: -----------------------------------
[Name of Purchaser]
- --------------
- --------------
Note Principal Amount: _____________ -----------------------------------
Number of Warrants: ________________ [Signature of Purchaser]
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PURCHASER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Purchaser has signed this Agreement as of the date
first written above.
Address: -----------------------------------
[Name of Purchaser]
- --------------
- --------------
Note Principal Amount: _____________ -----------------------------------
Number of Warrants: ________________ [Signature of Purchaser]
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