Exhibit 10.1
RECAPITALIZATION AGREEMENT
This Recapitalization Agreement ("Agreement") is entered into this 6th
day of October, 2005 between Black Warrior Wireline Corp., a Delaware
corporation, (the "Company") and the person signing this Agreement on the
Signature Page hereof (the "Holder" and, collectively with each of the other
persons signing counterpart copies of this Agreement, the "Holders"), such
Holder having the address set forth on the Signature Page to this agreement.
BACKGROUND
A. The Company has outstanding as of September 30, 2005, an aggregate
of $42,477,902 of principal and accrued interest on its promissory notes (the
"Notes") which, as extended, are due and payable on February 14, 2008.
B. The principal and accrued interest on the Notes is convertible into
shares of the Company's Common Stock, $0.0005 par value (the "Common Stock") at
a conversion price of $0.75 for each share of Common Stock, subject to
anti-dilution adjustment, or an aggregate of 56,637,203 shares of Common Stock
as of September 30, 2005, based on the interest accrued on the Notes through
that date.
C. The Company also has outstanding as of September 30, 2005 common
stock purchase warrants (the "Warrants") to purchase an aggregate of 70,761,185
shares of Common Stock at an excise price of $0.75 per share, subject to
anti-dilution adjustment.
D. In order to simplify and clarify its equity capital structure, the
Company is seeking to eliminate and reduce the amount of derivative securities
it has outstanding.
E. The Company desires that the Holder, together with the other Holders
on the terms provided herein (i) exchange the Holder's Warrants (the "Holder
Warrants") for shares of Common Stock at the exchange ratio of one (1) share of
Common Stock for each three (3) Holder Warrants, and (ii) convert the principal
of and accrued interest on the Holder's Notes (the "Holder Notes") into shares
of Common Stock at the conversion price of $0.75 of principal and accrued
interest per share of Common Stock. The shares of Common Stock issued in
exchange for Holder Warrants are herein referred to as an "Exchange Share" and
on conversion of Holder Notes are herein referred to as "Conversion Shares".
F. The Holder desires to convert the Holder Notes into Conversion
Shares and transfer and exchange the Holder Warrants for Exchange Shares on the
terms set forth herein.
G. Concurrently with entering into this Agreement, the Company has
entered into Recapitalization Agreements with St. ▇▇▇▇▇ Capital Partners, L.P.
and SJMB, L.P. (the "St. ▇▇▇▇▇ Partnerships"), and subsequent to entering into
this Agreement, the Company proposes to enter into Recapitalization Agreements
with each other holder of Notes and Warrants other than the Holders and the St.
▇▇▇▇▇ Partnerships (herein all holders of Notes and Warrants, including the
Holders and the St. ▇▇▇▇▇ Partnerships, are collectively referred to as the
"Derivatives Holders" and the Derivatives Holders other than the Holders and the
St. ▇▇▇▇▇ Partnerships are referred to as the "Other Derivatives Holders")
pursuant to which the Company will during the Exchange Period (as defined in
such Recapitalization Agreements with the Other Derivatives Holders) offer to
the Other Derivatives Holders to exchange its shares of Common Stock for
Warrants held by the Other Derivatives Holders at an exchange ratio of one (1)
Exchange Share for each three (3) Warrants. The Recapitalization Agreement dated
October 6, 2005 entered into by the Company with SJMB, L.P., among other
provisions, provides for the sale by SJMB, L.P. and the purchase by the Company
of 5,017,481 shares of the Company's Common Stock issued on conversion of a
portion of the interest that had accrued on the Notes held by SJMB, L.P. Herein,
such shares are referred to as the "SJMB Shares."
H. After the expiration of the Exchange Period, the Company intends to
undertake to complete an Underwritten Offering (as defined herein). Pursuant to
a Registration Rights Agreement dated December 17, 1999 (the "Registration
Rights Agreement") between the Company and the Other Derivatives Holders the
Other Derivatives Holders have the right to request that their Conversion Shares
and, as such agreement is to be amended, their Exchange Shares, be included in
such registration and sold in the Underwritten Offering.
I. Herein each three (3) Warrants are referred to as a "Warrant Unit"
and each Warrant Unit or Exchange Share to be sold by any Derivatives Holder,
either to the Company or in the Underwritten Offering, is referred to as an
"Exchange Share Equivalent."
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements, covenants, representations and warranties contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, each intending to be legally bound,
hereby agree as follows:
Certain terms used herein as defined terms are defined in Article
VIII hereof, unless the context should otherwise require.
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ARTICLE I
THE WARRANT EXCHANGE
1.1. Exchange by Holder of Warrants for Shares of Common Stock.
1.1.1. Subject to the terms and conditions of this
Agreement, the Holder herewith transfers and assigns
to the Company the Holder Warrants in exchange for
shares of the Common Stock of the Company at the
exchange rate of three (3) Warrants for each one (1)
share of Common Stock.
1.1.2. In order to consummate the foregoing transaction,
upon execution of this Agreement, the Holder shall
deliver to the Company, at its address set forth in
subparagraph 7.3 hereof, (i) this Agreement in
duplicate executed on the Signature Page hereof, (ii)
the original executed Holder Warrants, (iii) the
executed warrant assignment attached hereto as
Addendum A (the "Warrant Assignment").
1.1.3. Concurrently with the execution of this Agreement and
promptly upon receipt by the Company of (i) the
execution copies of this Agreement bearing Holder's
signature and (ii) the original executed Holder
Warrants, and (iii) executed Warrant Assignment, the
Company shall deliver to the Holder (A) an execution
copy of this Agreement signed on behalf of the
Company. The Company shall retain custody of the
certificates for the Exchange Shares for delivery
upon the sale of those shares to the Company as
provided in paragraph 4.3 hereof, subject the
paragraphs 3.2 and 4.4 hereof.
1.2 Treatment of Fractional Shares. The Company shall not be
required to issue fractional shares of Common Stock in
exchange for the Holder Warrants. If more than one Holder
Warrant shall be presented for exchange by the Holder, the
number of full shares of Common Stock which shall be issuable
upon such exchange shall be computed on the basis of the
aggregate number of whole shares of Common Stock issuable in
exchange for the Holder Warrants so presented. If any fraction
of a share of Common Stock would, except for the provisions of
this paragraph, be issuable in exchange for Holder Warrants,
the Company shall pay to the Holder an amount in cash
calculated by it to be equal to the market price of one share
of Common Stock on the last Business Day of the Exchange
Period multiplied by such fraction computed to the nearest
whole cent.
1.3 Effect of this Agreement. This Agreement for the exchange of
the Holder's Warrants for Exchange Shares shall be binding
upon the parties hereto upon execution of this Agreement by
both parties and neither party shall have the right to
terminate, revoke or rescind its agreements herein or the
exchange of Holder's Warrants for Exchange Shares. Such
exchange shall be an unconditional completed transaction
irrespective of whether or not the Underwritten Offering is
completed.
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1.4 Resale Restrictions on Exchange Shares. Holder understands,
covenants and agrees that the Exchange Shares issued shall
have such restrictions on the resale of those shares as are
required under the Securities Act. In effecting resales of
such Exchange Shares, such shares will be deemed to be
"restricted securities" as defined under Rule 144 and, unless
such offer and resale has been registered under the Securities
Act, the resale will be subject to the restrictions and
limitations of Rule 144. Holder agrees that a legend may be
affixed to the certificate for the Exchange Shares issued to
Holder and stop transfer instructions can be placed against
the transfer of the Exchange Shares in accordance with the
foregoing.
ARTICLE II
CONVERSION OF SUBORDINATED NOTES
2.1 Agreement of Holder to Convert Principal and Interest of
Notes.
2.1.1 The Holder agrees irrevocably to convert at the
Closing Time of the Underwritten Offering the full
principal amount and all interest accrued on the
Holder Notes through the Interest Expiration Date (as
defined below) into shares of Common Stock, such
conversion to be effected automatically as of the
Closing Time and without further act by or on behalf
of the Holder.
2.1.2. For the purpose of effecting the conversion of the
Holder Notes in accordance with subparagraph 2.1.1,
at the Closing Time of the Underwritten Offering, the
Holder shall deliver to the Company, at the location
set as the place for closing the Underwritten
Offering, the original executed Holder Notes,
together with a completed and executed Notice of
Conversion (the "Notice of Conversion") in the form
attached hereto as Addendum B, and the completed and
executed Stock Assignment (the "Stock Assignment") in
the form attached hereto as Addendum C. "
2.2. Treatment of Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the conversion of the Holder Notes. If more
than one Holder Note shall be presented for conversion by the Holder, the number
of full shares of Common Stock which shall be issuable upon such conversion
shall be computed on the basis of the aggregate number of whole shares of Common
Stock issuable on conversion for all the Holder Notes so presented. If any
fraction of a share of Common Stock would, except for the provisions of this
paragraph, be issuable on the conversion of this Note or Notes so presented, the
Company shall pay an amount in cash calculated by it to be equal to the market
price of one share of Common Stock on the Interest Expiration Date multiplied by
such fraction computed to the nearest whole cent.
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ARTICLE III
UNDERWRITTEN OFFERING
3.1. Commercially Reasonable Efforts of the Company. The Company agrees
that it shall promptly after the expiration of the Exchange Period use its
commercially reasonable efforts to complete an Underwritten Offering. Such
commercially reasonable efforts shall include, among other things, contacting
and soliciting prospective investment bankers to act as underwriters or agents
of the Company in effecting such transaction, providing to the prospective
investment bankers such financial and other information concerning the Company
as may be reasonably requested, providing reasonable access to the management of
the Company, its advisors and the Company's facilities as is requested by the
prospective investment bankers, fulfilling the Company's obligations set forth
in this Article II and otherwise enabling such investment bankers to have the
opportunity to engage in "due diligence" activities with respect to the Company
and its management, and completing the Underwritten Offering on such terms as
will yield Net Proceeds, after deducting such amount of Net Proceeds as are to
be retained by the Company for its corporate purposes, sufficient to enable the
Company to purchase all the Conversion Shares, SJMB Shares and such number of
Exchange Share Equivalents as are to be purchased by the Company, subject to
paragraph 3.2 hereof, at the Closing Time of the Underwritten Offering.
3.2. Terms of Underwritten Offering. If the managing underwriter of the
Underwritten Offering concludes in its reasonable judgment that the number of
shares to be registered for selling shareholders would materially adversely
affect such offering and that the number of Conversion Shares and Exchange
Shares to be registered in such offering shall be reduced, the Holders, St.
▇▇▇▇▇ Capital Partners, L.P. and SJMB, L.P., under the terms this Agreement and
the other Recapitalization Agreements such persons have entered into with the
Company, severally and not jointly agree that the number of Conversion Shares,
SJMB Shares and Exchange Share Equivalents to be purchased from them by the
Company at the Closing Time shall be reduced in accordance with Addendum D
hereto to the extent necessary in order that the number of Conversion Shares and
Exchange Shares to be registered for sale in the Underwritten Offering by the
Other Derivatives Holders will no longer, in the reasonable judgment of the
managing underwriter, materially adversely affect the Underwritten Offering.
3.3. Underwritten Offering Defined. An "Underwritten Offering" means a
sale of such number of shares of Common Stock of the Company conducted on such
terms and conditions, in compliance with the provisions of the Securities Act,
and at such price per share of Common Stock and on other terms and conditions as
the Company may in its sole and exclusive discretion determine to complete and
as will result in sufficient Net Proceeds, subject to paragraph 3.2 hereof, to
enable the Company to purchase not less than all the Conversion Shares, SJMB
Shares and Exchange Share Equivalents to be sold by the ▇▇▇▇▇▇▇▇▇▇ Family
Entities and the St. ▇▇▇▇▇ Partnerships and purchased by the Company, provided,
however, that the ▇▇▇▇▇▇▇▇▇▇ Family Entities and the St. ▇▇▇▇▇ Partnerships
shall only be obligated to sell their Conversion Shares, SJMB Shares and
Exchange Share Equivalents to the Company if the purchase price paid per
Conversion Share, SJMB Share and Exchange Share Equivalent is not less than
$0.75 per share (before reflecting stock splits, divisions, reverse stock splits
or share combinations).
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3.4. Net Proceeds Defined. "Net Proceeds" means the total proceeds
received by the Company from a sale of shares of its Common Stock in a
Underwritten Offering after deducting selling, underwriting and other
commissions and expenses and fees, and before deducting legal, accounting and
printing expenses and all other expenses of the Company related to the
Underwritten Offering.
3.5. Net Price Per Share. As used herein, "Net Price Per Share" means
the Net Proceeds received by the Company in the Underwritten Offering divided by
the number of shares of Common Stock sold by the Company in the Underwritten
Offering.
3.6. Closing Time Defined. "Closing Time" means the time at which all
conditions to the closing of the Underwritten Offering have been met or waived
and the Company issues and delivers the shares of Common Stock sold for the
consideration paid for such shares.
3.7. Agreements. In connection with the Underwritten Offering, the
Company agrees to execute such underwriting or selling agreements and such other
agreements and documents, including indemnification provisions, as are
customarily entered into in connection with such transactions and provide its
cooperation and the cooperation of its officers and employees in effecting the
Underwritten Offering.
ARTICLE IV
SALE TO COMPANY OF CONVERSION SHARES AND EXCHANGE SHARES AT CLOSING TIME
OF UNDERWRITTEN OFFERING
4.1. Sale of Conversion Shares at the Closing Time of the Underwritten
Offering. Provided that the Net Price Per Share to be paid to the Holder by the
Company at the Closing Time of the Underwritten Offering is not less than $0.75
per share (before reflecting stock splits, divisions, reverse stock splits or
share combinations) and subject to paragraph 3.2 hereof, the Holder agrees to
sell to the Company the Holder's Conversion Shares and the Company agrees to
purchase at the Closing Time all the Holder's Conversion Shares and all other
Holders' Conversion Shares out of the Net Proceeds of the Underwritten Offering
and in accordance with Article II hereof. The Holder agrees to accept the Net
Price Per Share determined as provided in paragraph 3.5 hereof for Holder's
Conversion Shares, provided that the Net Price Per Share is not less than $0.75
per share (before reflecting stock splits, divisions, reverse stock splits or
share combinations.)
4.2. Interest Expiration Date. For the purpose of facilitating the sale
of the Conversion Shares at the Closing Time of the Underwritten Offering, the
Holder agrees that interest on the Holder Notes shall cease to accrue on the
last day of the month preceding the month in which the Closing Time occurs
(herein such date is referred to as the "Interest Expiration Date").
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4.3. Sale of Exchange Shares at Closing Time of Underwritten Offering.
Provided that the Net Price Per Share to be paid to the Holder by the Company at
the Closing Time of the Underwritten Offering is not less than $0.75 for each
Exchange Share sold (before reflecting stock splits, divisions, reverse stock
splits or share combinations) and subject to paragraph 3.2 hereof, the Holder
hereby agrees to sell to the Company the Holder's Exchange Shares and the
Company agrees to purchase at the Closing Time all the Holder's Exchange Shares.
At the Closing Time, Holder agrees to execute and deliver to the Company, at the
location set as the place for closing the Underwritten Offering, the exchange
share assignment attached hereto as Addendum E (the "Exchange Share
Assignment"). The Holder agrees to accept the Net Price Per Share determined as
provided in paragraph 3.5 hereof for his Exchange Shares, provided that the Net
Price Per Share is not less than $0.75 per share (before reflecting stock
splits, divisions, reverse stock splits or share combinations.).
4.4. Delivery of Exchange Shares to Holder. In the event the
Underwritten Offering has not been completed on or before June 30, 2006, the
Company will deliver to Holder (at the address set forth on the Signature Page)
the Holder's Exchange Shares and the Holder's agreement to sell to the Company
and the Company's agreement to purchase from the Holder the Exchange Shares is
terminated.
4.5. Expiration of Agreement to Convert Notes. In the event that the
Underwritten Offering has not been completed on or before June 30, 2006, the
Holder shall have no further obligation to convert the Holder Notes and accrued
interest into shares of Common Stock and sell such Conversion Shares to the
Company pursuant to this Agreement and the Company shall have no further
obligation to purchase such shares.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Company Representations and Warranties. The Company represents and
warrants to the Holder as of the date hereof, as of the Closing Time,
and as of the Warrant Exchange Date as set forth below:
(a) The Company is duly organized and in good standing under
the laws of the State of Delaware. The Company has all
corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement has been
duly and validly authorized by the board of directors of the
Company and no other corporate proceedings on the part of the
Company are necessary to authorize or consummate this
Agreement. This Agreement has been duly and validly executed
and delivered by the Company, and (assuming the due
authorization, execution and delivery hereof by the Holder)
constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the
rights of creditors generally and of general principles of
equity.
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(b) The execution, delivery and performance by the Company of
this Agreement does not and will not contravene, conflict
with, constitute a violation or breach of, (i) the
organizational documents of the Company, (ii) any laws binding
upon or applicable to the Company or by which any of its
assets or properties is bound or (iii) any material contract
to which the Company is a party or by which any of its assets
or properties is bound.
(c) The Conversion Shares when issued and the Exchange Shares
if and when issued to Holder will be duly authorized and
validly issued, fully paid and non-assessable.
5.2. Holder's Representations and Warranties. The Holder represents and
warrants to the Company as of the date hereof, as of the Closing Time
of the Underwritten Offering, and as of the Warrant Exchange Date as
set forth below:
(a) If the Holder is other than a natural person:
(i) the Holder is an entity duly organized, validly
existing and in good standing under the laws of the
jurisdiction under which it was organized and has all
requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement has been
duly and validly authorized by the governing body, if any, of
the Holder and no other proceedings on the part of the Holder
are necessary to authorize or consummate this Agreement. This
Agreement has been duly and validly executed and delivered by
the Holder, and (assuming the due authorization, execution and
delivery hereof by the Company) constitutes the legal, valid
and binding obligation of the Holder, enforceable against the
Holder in accordance with its terms, except as may be limited
by bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the rights of creditors generally and
of general principles of equity.
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(ii) The execution, delivery and performance by the
Holder of this Agreement does not and will not contravene,
conflict with, constitute a violation or breach of, constitute
(with or without notice or lapse of time or both) a default
under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or
acceleration, loss of a material benefit under or result in
the creation or imposition of any lien upon or create in any
other person any claim against any of the Holder Notes or
Holder Warrants, or shares of Common Stock issued or issuable
to Holder under the terms of this Agreement, under any of the
terms, conditions or provisions of (i) the organizational
documents of the Holder, (ii) any laws binding upon or
applicable to the Holder or by which any of its assets or
properties is bound or (iii) any material contract to which
the Holder is a party or by which any of its assets or
properties is bound.
(b) If the Holder is a natural person:
(i) The Holder has the legal capacity to execute,
deliver and perform the terms of this Agreement and no other
consents or other proceedings on the part of the Holder are
necessary to authorize the execution, delivery or performance
of this Agreement or consummate this Agreement. This Agreement
has been duly and validly executed and delivered by the
Holder, and (assuming the due authorization, execution and
delivery hereof by the Company) constitutes the legal, valid
and binding obligation of the Holder, enforceable against the
Holder in accordance with its terms, except as may be limited
by bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the rights of creditors generally and
of general principles of equity.
(ii) The execution, delivery and performance by the
Holder of this Agreement does not and will not contravene,
conflict with, constitute a violation or breach of, constitute
(with or without notice or lapse of time or both) a default
under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or
acceleration, loss of a material benefit under or result in
the creation or imposition of any lien upon or create in any
other person any claim against any of the Holder Notes or
Holder Warrants, or shares of Common Stock issued or issuable
to Holder under the terms of this Agreement, under any of the
terms, conditions or provisions of (i) any laws binding upon
or applicable to the Holder or by which any of his or her
assets or properties is bound or (ii) any material contract to
which the Holder is a party or by which any of its assets or
properties is bound.
(c) No consent, waiver, approval or action of, filing with or
notice to any governmental entity or third party is necessary
or required under any of the terms, conditions or provisions
of any law or any contract to which the Holder is a party or
by which any of its assets or properties is bound for the
execution, delivery and performance by the Holder of this
Agreement.
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(d) The Holder is the record and beneficial owner of the
Holder Notes and Holder Warrants adjacent to the Holder's name
on the Signature Page hereof, free and clear of any liens,
claims, rights of others or encumbrances.
(e) The sale and transfer of the Conversion Shares to the
Company at the Closing Time of the Underwritten Offering is
and will be free and clear of all liens, claims, rights of
others and encumbrances.
(f) To the extent sold by the Holder to the Company at the
Closing Time of the Underwritten Offering, the sale and
transfer of the Exchange Shares to the Company at the Closing
Time of the Underwritten Offering is and will be free and
clear of all liens, claims, rights of others and encumbrances.
(g) The sale, transfer and exchange of the Warrants to the
Company on the date hereof is free and clear of all liens,
claims, rights of others and encumbrances.
ARTICLE VI
OTHER AGREEMENTS
6.1 Adjustments. It's anticipated that the Company will
combine, by way of a reverse stock split, its outstanding shares of
Common Stock into a smaller number of shares. The conversion price of
the Notes shall be adjusted for such share combination in accordance
with the terms set forth in the Notes. The exchange ratio for the
Warrants shall be adjusted so that both the number of Warrants
exchanged and the number of shares of Common Stock issued in exchange
is adjusted in proportion to the terms of the share combination.
6.2. Prohibition of Transfers of Notes and Exchange Shares.
Effective as of the date hereof and through June 30, 2006, the Holder
will not sell, assign, pledge, encumber, transfer, negotiate or
otherwise dispose of the Holder Notes or Exchange Shares or any
interest therein or in the shares issuable on conversion of the Holder
Notes or enter into any contract or understanding to do so or relating
to the Holder Notes or Exchange Shares or the shares issuable on
conversion or exercise thereof other than as contemplated by this
Agreement.
6.3 No Prohibition Against Conversion. Notwithstanding
anything to the contrary herein, the Holder may at any time on or prior
to June 30,2006, convert any portion or all of the principal and
accrued interest on the Holder Notes into shares of Common Stock,
provided any shares of Common Stock received by the Holder as a result
of such conversion shall be "Conversion Shares" for the purposes of
this Agreement and the rights and obligations of the parties hereto and
shall be subject to the provisions of paragraphs 6.2 and 6.4 hereof.
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6.4 No Conflicting Agreements; Compliance with Agreement.
Holder will act in good faith and use commercially reasonable efforts
to take, or cause to be taken, all actions, execute all documents and
do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement as promptly as practicable. Holder shall refrain from taking
directly or indirectly, any action that would impair Holder's or the
Company's ability to consummate the transactions contemplated by this
Agreement. Holder shall not enter into any agreement in conflict with
this Agreement or which would impair Holder's or the Company's ability
to fulfill the terms of this Agreement or make false or misleading any
of Holder's representations, warranties or agreements herein.
6.5 Holder's Acknowledgement. The Holder acknowledges that the
Company now possesses and may hereafter possess certain non-public
information concerning the Company and its prospects and proposed
transactions beyond the transactions contemplated in this Agreement
that may or may not be independently known to the Holder or other
Derivatives Holders (the "Company Non-Public Information") which
information may constitute material information. The Holder agrees to
the terms and conditions of this Agreement notwithstanding that it is
aware that Company Non-Public Information may exist and that the
Company has not disclosed any Company Non-Public Information to Holder
or, if such information has been disclosed, it has been disclosed under
the terms of a confidentiality agreement. The Holder acknowledges that
it is a sophisticated investor and is acting independently with respect
to the transactions set forth in this Agreement and that the Company
has no obligations to the Holder to disclose such Company Non-Public
Information and it has no fiduciary obligations to the Holder.
Additionally, the Holder acknowledges that it has adequate information
concerning the transactions contemplated in this Agreement, and the
business and financial condition of the Company and its prospects, to
make an informed decision regarding entering into this Agreement, and
it has done so independently and without reliance upon the Company and,
based upon such information as the Holder has deemed appropriate, made
its own analysis and decision to enter into this Agreement with the
Company. Holder understands and acknowledges that the market value of
the Company's shares of Common Stock after the Closing Time of the
Underwritten Offering may exceed the price realized by the Holder out
of the Net Proceeds of the Underwritten Offering.
6.6 Amendment of Registration Rights Agreement. The Company
and the Holder agree that the Registration Rights Agreement dated
December 17,1999 to which the Holder is a party is amended to include
in the definition of "Registrable Securities" the Exchange Shares to be
received by the Holder in exchange for its Warrants as provided herein.
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ARTICLE VII
GENERAL
7.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware.
7.2 Entire Agreement; Amendment. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject hereof. This Agreement, or any provision hereof, may be amended, waived,
discharged or terminated upon the written consent of the parties hereto.
7.3 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed:
If to the Holder, at the address set forth on the Signature Page or
at such other address as the Holder shall have furnished to the Company in
writing;
If to the Company:
Black Warrior Wireline Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
or a such other address as the Company shall have furnished to the Holder. Each
such notice or other communication shall, for all purposes of this Agreement, be
treated as effective upon receipt.
7.4 Delays or Omissions. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party to this
Agreement shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party to this Agreement, shall be cumulative and not alternative.
7.5 Counterparts. This Agreement may be executed in separate
counterparts, each of which shall collectively and separately constitute one
agreement and shall be binding upon the parties hereto.
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7.6 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
7.7 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
7.8 Enforcement of Agreement. Holder acknowledges and agrees that the
Company could by damaged irreparably if any of the provisions of this Agreement
are not performed in accordance with their specific terms. Accordingly, the
Holder agrees that, (i) it will waive, in any action for specific performance,
the defense of adequacy of a remedy at law, and (ii) in addition to any other
right or remedy to which the Company may be entitled, at law or in equity, the
Company will be entitled to enforce any provision of this Agreement by a decree
of specific performance and to temporary, preliminary and permanent injunctive
relief to prevent breaches or threatened breaches of any of the provisions of
this Agreement, without posting any bond or other undertaking.
7.9 Binding on Successors and Assigns. Subject to paragraph 6.2 hereof,
the provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, administrators, successors and
assigns. No party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the consent of the other party
hereto. Any purported assignment in violation hereof shall be null and void.
ARTICLE VIII
DEFINITIONS
"AGREEMENT" is defined in the first paragraph of this Agreement.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the State of
Mississippi.
"CLOSING TIME" is defined in paragraph 3.6 of this Agreement.
"COMMON STOCK" is defined in paragraph B of this Agreement.
"COMPANY" is defined in the first paragraph of this Agreement.
"COMPANY NON-PUBLIC INFORMATION" is defined in paragraph 6.4 of this
Agreement.
"CONVERSION SHARES" is defined in paragraph E of this Agreement.
13
"DERIVATIVES HOLDERS" is defined in paragraph G of this Agreement.
"EXCHANGE PERIOD" is defined in paragraph G of this Agreement.
"EXCHANGE SHARE" is defined in paragraph E of this Agreement.
"EXCHANGE SHARE ASSIGNMENT" is defined in paragraph 4.3 of this
Agreement.
"EXCHANGE SHARE EQUIVALENT" is defined in paragraph I of this
Agreement.
"HOLDER" is defined in the first paragraph of this Agreement.
"HOLDER NOTES" is defined in paragraph E of this Agreement.
"HOLDER WARRANTS" is defined in paragraph E of this Agreement.
"HOLDERS" is defined in the first paragraph of this Agreement.
"INTEREST EXPIRATION DATE" is defined in paragraph 4.2 of this
Agreement.
"NET PRICE PER SHARE" is defined in paragraph 3.5 of this Agreement.
"NET PROCEEDS" is defined in paragraph 3.4 of this Agreement.
"NOTES" is defined in paragraph A of this Agreement.
"NOTICE OF CONVERSION" is defined in paragraph 2.1.2 of this Agreement.
"OTHER DERIVATIVES HOLDERS" is defined in paragraph G of this
Agreement.
"REGISTRATION RIGHTS AGREEMENTS" is defined in paragraph H of this
Agreement.
"SJMB SHARES" is defined in paragraph G of this Agreement.
"ST. ▇▇▇▇▇ PARTNERSHIPS" is defined in paragraph G of this Agreement.
"STOCK ASSIGNMENT" is defined in paragraph 2.1.2 of this Agreement.
"UNDERWRITTEN OFFERING" is defined in paragraph 3.3 of this Agreement.
"WARRANTS" is defined in paragraph C of this Agreement.
"WARRANT ASSIGNMENT" is defined in paragraph 1.1.2 of this Agreement.
"WARRANT UNIT" is defined in paragraph G of this Agreement.
14
SIGNATURE PAGE
In Witness Whereof, the parties hereto have caused this
Recapitalization Agreement to be duly executed as of the day and year first
above written.
COMPANY BLACK WARRIOR WIRELINE CORP.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
HOLDERS
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------
HOLDER'S NOTES AND WARRANTS:
1. Number of Warrants purchasable from Holder is 3,055,000.
2. Principal amount of Notes held by Holder is $750,000, plus accrued
interest
HOLDER'S ADDRESS IS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
NORTHGATE, L.L.C.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Title: President
------------------------------
HOLDER'S NOTES AND WARRANTS:
1. Number of Warrants purchasable from Holder is 4,358,558.
2. Principal amount of Notes held by Holder is $282,620.59, plus
accrued interest
HOLDER'S ADDRESS IS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15
HUB, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Title: President
------------------------------
HOLDER'S NOTES AND WARRANTS:
1. Number of Warrants purchasable from Holder is 3,984,851.
2. Principal amount of Notes held by Holder is $594,753.85, plus
accrued interest
HOLDER'S ADDRESS IS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇,
GUARANTY & TRUST CO. TTEE
ACCOUNT NUMBER ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Title
-------------------------------
HOLDER'S NOTES AND WARRANTS:
1. Number of Warrants purchasable from Holder is 335,000.
2. Principal amount of Notes held by Holder is $50,000, plus accrued
interest
HOLDER'S ADDRESS IS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ IRREVOCABLE
TRUST DATED 10/10/92 FOR THE
BENEFIT OF PIPER ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Title: Grantor
-----------------------------
HOLDER'S NOTES AND WARRANTS:
1. Number of Warrants purchasable from Holder is 205,000.
2. Principal amount of Notes held by Holder is $0, plus accrued
interest
HOLDER'S ADDRESS IS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
16
ADDENDUM A
WARRANT ASSIGNMENT
For value received, ___________________________, hereby sells,
assigns, and transfers unto Black Warrior Wireline Corp., in accordance with the
terms of the Recapitalization Agreement between the Company and the undersigned,
the within Warrants, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ attorney, to
transfer such Warrants on the books of the Company, with full power of
substitution.
Number of Warrants covered by this assignment:
----------------
WITNESS: HOLDER:
By:
------------------------- ----------------------------------
Date: ,2005
-----------------
17
ADDENDUM B
NOTICE OF CONVERSION
The undersigned, the holder of the below identified
Convertible Promissory Notes ("Holder Notes") issued by Black Warrior Wireline
Corp. ("Company"), hereby elects to convert the principal and accrued interest
of the Holder Notes into shares of Company Common Stock in accordance with the
terms of the Holder Notes and in accordance with the terms of the
Recapitalization Agreement between the undersigned and the Company. The
conversion price is $0.75 per share.
Holder Notes to be converted:
-----------------------------
-----------------------------
WITNESS: HOLDER:
By:
-------------------------- ----------------------------------
Date: ,2005
-----------------
18
ADDENDUM C
STOCK ASSIGNMENT
For value received, ___________________________, hereby sells,
assigns, and transfers unto Black Warrior Wireline Corp., in accordance with the
terms of the Recapitalization Agreement between the Company and the undersigned,
the within shares of Common Stock, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
attorney, to transfer such shares of Common Stock on the books of the Company,
with full power of substitution.
Number of shares of Common Stock covered by this assignment:
----------
Certificate No(s)____________________________________________________
WITNESS: HOLDER:
By:
------------------------- -----------------------------
Date: ,2005
-----------------
19
ADDENDUM D
PRIORITY OF CUTBACK OF SHARES IN UNDERWRITTEN OFFERING
The following procedures only apply in the event that the managing
underwriter of the Underwritten Offering advises the Company that in its
judgment the number of shares of Common Stock to be included in the Underwritten
Offering must be reduced:
PRIORITY ONE: The first securities to be cut back out of the sale to the Company
are those shares (including Conversion Shares, Exchange Shares and any other
shares) held by the ▇▇▇▇▇▇▇▇▇▇ Family Entities to be purchased by the Company at
the Closing Time. ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, a director of our company and his
family affiliates, including Northgate, L.L.C., Hub, Inc., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇, and the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Irrevocable Trust dated 10/10/92 for the
benefit of Piper ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, but excluding St. ▇▇▇▇▇ Capital Partners,
L.P. and SJMB, L.P. are herein collectively referred to as the "▇▇▇▇▇▇▇▇▇▇
Family Entities."
PRIORITY TWO: The second shares to be cut back out of the sale to the Company
are the 5,017, 481 shares currently held by SJMB, L.P. to be purchased by the
Company at the Closing Time.
PRIORITY THREE: The third securities to be cut back out of the sale to the
Company are the Exchange Share Equivalents held by the Company's other holders
other than the ▇▇▇▇▇▇▇▇▇▇ Family Entities. Such cutback will be pro-rata based
on the aggregate number of Exchange Share Equivalents intended to be included in
the Underwritten Offering and to be purchased by the Company at the Closing
Time.
20
ADDENDUM E
EXCHANGE SHARE ASSIGNMENT
For value received, ___________________________, hereby sells,
assigns, and transfers unto Black Warrior Wireline Corp., in accordance with the
terms of the Recapitalization Agreement between the Company and the undersigned,
the within shares of Common Stock, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
attorney, to transfer such shares of Common Stock on the books of the Company,
with full power of substitution.
Number of shares of Common Stock covered by this assignment:
----------
Certificate No(s)____________________________________________________
WITNESS: HOLDER:
By:
------------------------- -----------------------------
Date: ,2005
------------------
21