AGREEMENT FOR PURCHASE AND SALE
This Agreement for Purchase and Sale (the "Agreement"), is made and entered
as of October 30, 1998, by and between Black Warrior Wireline Corp., a Delaware
corporation ("Black Warrior"), and SJMB, L.P., a Delaware limited partnership
(the "Purchaser"), and its assigns or transferees pursuant to Section 5.5 and
sets forth the terms and conditions of the sale and purchase of a 10%
Convertible Promissory Note in the original principal amount of up to
$2,000,000, substantially in the form attached hereto as Exhibit A (the "Note").
For purposes of this Agreement, the term "Seller" is defined to mean Black
Warrior and the Active Subsidiary (defined in Section 2.8 below).
WHEREAS, Seller desires to issue and sell to Purchaser, and Purchaser
desires to purchase and accept from Seller, the Note in the form of Exhibit A,
on the terms and subject to the conditions set forth herein.
WHEREAS, the obligations of Seller under the Note are secured by that
certain Borrower Security Agreement between Seller and St. Xxxxx Capital
Partners, L.P., a Delaware limited partnership ("SJCP"), dated as of June 5,
1997, as may be amended or modified and as amended on March 1, 1998 to include
the Purchaser and as further amended as of the date herewith, (the "Security
Agreement"), that certain Subsidiary Security Agreement (herein so called)
between the subsidiaries of Black Warrior and SJCP dated as of June 5, 1997, as
may be amended or modified and as amended on March 1, 1998 to include the
Purchaser and as further amended as of the date herewith (the "Subsidiary
Security Agreement"), and are guaranteed by that certain Subsidiary Guaranty by
the subsidiaries of Black Warrior in favor of SJCP, dated as of June 5, 1997, as
may be amended or modified and as amended on March 1, 1998 to include the
Purchaser and as further amended as of the date herewith (the "Subsidiary
Guaranty").
WHEREAS, Seller and Purchaser desire to make certain representations,
warranties and agreements in connection with the purchase and sale of the Note
contemplated hereby.
WHEREAS, Seller desires to sell to Purchaser warrants ("Warrants") to
purchase, in the aggregate, 1,333,333 shares of Seller's common stock, par value
$0.0005 per share (the "Common Stock"), 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 for a number of shares of Common
Stock equal to two-thirds (2/3) of the principal pursuant amount of such
advance, 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 Note
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 June 5, 1997 between Seller and SJCP as amended on March
1, 1998, to include the Purchaser and as further amended and modified (the
"Registration Rights Agreement").
WHEREAS, this Agreement, the Note, the Security Agreement, the Subsidiary
Security Agreement, the Subsidiary Guaranty, the Warrants, 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:
ARTICLE I
PURCHASE AND SALE
1.1 Purchase and Sale of the Note and the Warrants. Subject to the terms of
this Agreement, Seller agrees to and does hereby issue, sell and deliver the
Note and the Warrants to Purchaser at the Closing (as defined herein), and
Purchaser agree to and do hereby purchase and accept the Note and the Warrants
from Seller.
1.2 Consideration for Purchase of the Note. Subject to the terms of this
Agreement, Purchaser hereby agrees to pay to Seller, by check or wire transfer
to the account of Black Warrior, $2,000,000, as the consideration for the
purchase of the Note (the "Note Consideration"), in one or more advances, which
advances shall be made at Purchaser's sole and absolute discretion. Purchaser
hereby agrees to exercise reasonable good faith in the exercise of its
discretion. Interest under the Note shall accrue on amounts actually advanced.
1.3 Acknowledgment of Prior Advances. Seller hereby acknowledges that
$500,000 of the total $2,000,000 Note Consideration has, as of the date of this
Agreement, been advanced by Purchaser for Seller's account.
1.4 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 Black Warrior $0.03 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").
1.5 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 2% of the entire amount of each such advance, for
the payment of the Note Consideration.
1.6 Subordination. Purchaser agrees that the indebtedness hereunder and the
security granted therefor are subject to the 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, except for Purchasers's security interest in certain offshore
skids owned by the Seller.
1.7 Future Financings. If Seller, at any time so long as the Note is
outstanding, intends to issue or sell any shares of capital stock, debt
securities or securities convertible into, exchangeable for or exercisable for
shares of capital stock or debt securities (a "Financing"), Seller shall give
Purchaser written notice (the "Offer") of its intent to engage in a Financing,
specifying its basic terms and conditions. If Purchaser gives notice to Seller,
specifying Purchaser's basic terms and conditions, of its intent to provide
Financing on a basis materially similar to the proposal set forth in the Offer
within five (5) business days after receipt of the Offer (a "Financing Notice"),
then Seller shall be obligated to consummate the Financing only with Purchaser
and Purchaser shall be obligated to provide the financing at the time committed
by the third party whose commitment gave rise to the Offer. If Purchaser does
not within five (5) business days after receipt of the Offer give to Seller a
Financing Notice, Purchaser shall be deemed
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to have waived their rights to provide the Financing under this Section, and
Seller may thereafter obtain such Financing from a third party or parties if
such third party Financing is on the same basic terms and conditions as those
set forth in the Offer. Any proposed Financing on terms materially different
from those basic terms and conditions in the Offer deemed waived by Purchaser
shall require a new Offer and compliance by Seller with the provisions of this
Section. Notwithstanding the foregoing, Seller shall not be required to comply
with this Section in connection with: (i) the issuance and sale of Common Stock
or convertible securities in connection with any employee stock option plan,
arrangement or agreement now or hereafter in effect; (ii) the issuance of
capital stock of Seller upon exercise of the Warrants or otherwise issued to
Purchaser or their assigns; (iii) the issuance of capital stock upon exercise of
any stock purchase warrant or option (other than the options referred to in
clause (i) above) or other convertible security outstanding on the date hereof
or hereafter issued; (iv) a public offering of securities; or (v) any loan from
a regular commercial lending source.
1.8 Future Advances. The exercise of Purchaser's discretion in making
advances after the date hereof is conditioned upon the delivery by Seller to
Purchaser of the following:
(a) a written request for such advance at the address for the Purchaser
in Section 5.2 hereof, setting forth (i) the amount requested, (ii) the
account to which such advance is to be funded, and (iii) the proposed use
of such advance, which shall be in accordance with Section 2.19 herein;
(b) a certificate of an officer of Seller certifying that, as of the
date of the advance, no Event of Default hereunder has occurred, that
Seller is in compliance with all covenants herein and that all of the
representations and warranties set forth herein are true and correct as of
such date;
(c) such security documents respecting the assets of the Seller or its
Active Subsidiary as may be reasonably requested by Purchaser;
(d) such other documents, certificates, agreements or instruments as
may be reasonably requested by Purchaser in connection with any or all of
the foregoing; and
(e) payment by Seller of any and all expenses or other amounts due and
owing to Purchaser; and
(f) Warrants to purchase a number of shares of Common Stock equal to
two-thirds (2/3) of the principal amount of such advance.
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. Each of Black Warrior and the
Active Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the state
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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. Each of Black Warrior and the Active Subsidiary 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. Each of Black Warrior and the Active Subsidiary
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. 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). 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.
2.3 Approvals. 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.
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, 1994.
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, 1997, together with all amendments thereto,
Seller's quarterly report on Form 10-Q for the fiscal quarters ended March
31, 1998 and June 30, 1998, 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
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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 June 30, 1998,
(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. 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.
2.7 Capitalization. Black Warrior has authorized capital stock of (a)
____________ shares of Common Stock of which, as of the date hereof, there are
____________ shares issued and outstanding, and (b) _________ 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, Black Warrior has reserved for issuance (i) an aggregate of __________
shares of Common Stock issuable on issuance of stock options to employees,
officers, directors and other persons, and the Board of Directors of Black
Warrior has approved amendments to the plans in respect of such options to
increase the shares available thereunder to an aggregate of __________ shares of
Common Stock, subject to the approval of the shareholders of Black Warrior, and
(ii) an aggregate of __________ 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
Black Warrior or contracts, commitments, understandings or arrangements by which
Black Warrior 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. 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
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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. Schedule 2.8 sets forth the only active subsidiary of
Seller, including state or country of organization and address of its principal
executive offices ("Active Subsidiary"). For purposes of this Agreement and the
other agreements contemplated hereby, the Active Subsidiary is the only
"subsidiary" of Seller. Schedule 2.8 also discloses four inactive corporations
and/or limited partnerships owned by Seller (the "Inactive Organizations"), all
four of which are at this time inactive, defunct, and have no value. No
representation, warranty, financial standard or other provision of this
Agreement, or any agreement contemplated hereby, shall be deemed violated by
virtue of the fact that any of the Inactive Organizations do not meet said
representation, warranty, financial standard or other provision. However, if any
Inactive Organization begins to conduct any business (other than activities to
"wind down" such organization) such Inactive Organization shall be considered an
Active Subsidiary (and cease to be an Inactive Organization) from that point
forward. The Active Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, has
all requisite corporate power and authority to own, to lease or to operate its
properties and to carry on its business as it is now being conducted and is duly
qualified or licensed to do business 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, unless the failure to be so licensed or
qualified would not have a material, adverse effect on Seller. Except as set
forth in Schedule 2.8, all outstanding shares of capital stock of the Active
Subsidiary were duly and validly issued and are fully paid, nonassessable and
owned by Seller or a subsidiary of Seller, free and clear of all Encumbrances.
There are no options, warrants or other rights, agreements or commitments
(including preemptive rights) obligating Seller or the Active Subsidiary to
issue, to sell or to transfer any shares of capital stock or other securities of
the Active Subsidiary. There are _____ shares of capital stock of Active
Subsidiary issued and outstanding, all of which has been pledged to Purchaser.
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 June 30, 1998, or
(b) incurred in the ordinary course of business since June 30, 1998.
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.
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
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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 has no patents, trademarks, service
marks, works of authorship, tradenames, brandnames or copyrights. 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.
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.
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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 Use of Proceeds. Seller will not use the Consideration, except (a) to
provide Seller with working capital, and (b) to fund the company capital
expenditure programs. Seller shall not use the Consideration for any other
purpose without the prior consent of Purchaser.
2.20 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 Liberty Transfer 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.
2.21 Stockholder Agreements. Except as set forth in Schedule 2.21 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.
2.22 ERISA. Except as disclosed on Schedule 2.22, Seller has no employee
benefit plans subject to the Employment Retirement Income Security Act of 1974.
2.23 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
8
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.
2.24 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, xx.xx. 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. xx.xx. 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 2.24, 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.
2.25 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 (i) any Inactive Organization
which becomes an Active Subsidiary after the execution of this Agreement and
(ii) any other entity of which Seller obtains control (directly or indirectly)
of more than 50% of the outstanding voting stock or equity interests shall
execute a written agreement to be bound by that certain Subsidiary Security
Agreement dated as of even date herewith, before the events set forth in (i) or
(ii) above have occurred.
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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 the Note and the Warrants (the "Closing")
will take place on a date agreed to by the parties (the "Closing Date"), at the
offices of Gardere, Wynne, Xxxxxx & Xxxxx 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 the Consideration.
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 an Amended and Restated Intercreditor Agreement, executed by the
Senior Lender, subordinating the first and prior lien on the offshore
"skids" held by the Senior Lender to the lien thereon held by Purchaser;
4.3.2 copies, certified by the Secretary of State of Delaware as of a
recent date, of the charter of Black Warrior and all amendments thereto and
a certificate of an Officer of Black Warrior certifying that there have
been no amendments to such charter since such date, and copies, certified
by the Secretary of Active Subsidiary as of the Closing Date, of the
charter of Active Subsidiary and all amendments thereto;
4.3.3 copies, certified by the Secretary of each of Black Warrior and
Active Subsidiary as of the Closing Date, of the bylaws of each of Black
Warrior and Active Subsidiary, respectively, and all amendments thereto;
4.3.4 copies, certified by a certificate of the Secretary of each of
Black Warrior and Active Subsidiary as of the Closing Date, of resolutions
duly adopted by the board of directors of each of Black Warrior and Active
Subsidiary, respectively, authorizing the execution and delivery by each of
Black Warrior and Active Subsidiary, respectively, of the Transaction
Documents and all other agreements attached hereto as Exhibits or
contemplated herein, the completion of the sale of the Note 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 Note and
Warrants;
4.3.5 the Agreement;
4.3.6 the Note;
4.3.7 Warrants to purchase up to 333,333 shares of Common Stock;
4.3.8 the Registration Rights Agreement;
4.3.9 the Security Agreement;
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4.3.10 the Subsidiary Security Agreement;
4.3.11 the Subsidiary Guaranty;
4.3.12 an opinion of Rosen, Cook, Xxxxxx and Xxxxx, 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
4.3.13 a certificate of an Officer of each of Black Warrior and Active
Subsidiary to the effect that the representations and warranties of each of
Black Warrior and Active Subsidiary, respectively, 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 each of Black Warrior and
Active Subsidiary 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 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.
0000 Xxxxxxx #00 Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
(b) If to Purchaser: SJMB, L.P.
000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Mr. Xxx Xxxxx
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.
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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 Note, 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 Note and Warrants in favor of such Assignor to the Seller, and the
Seller shall issue 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, within 10 days
after Purchaser's presentation of an invoice therefor, 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.
5.9 Restrictions on Transfer.
(a) Purchaser shall not transfer their rights under the Note 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 Note is 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
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Holder grants a security interest in the Note shall be entitled to exercise
all remedies to which it is entitled by contract or by law, including
(without limitation) transferring the Note 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.
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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:
----------------------------------------
Xxxxxxx X. Xxxxxxx, President
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PURCHASER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Purchaser has signed this Agreement as of the date
first written above.
SJMB, L.P.
By: SJMB, L.L.C., its General Partner
By:
---------------------------------------
Xxx Xxxxx, Executive Vice President
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