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DATE: December 22, 1999
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ )
COMPROMISE AGREEMENT WITH RELEASE
This Agreement is made and entered into this 22nd day of December,
1999, among Black Warrior Wireline Corp., in its own name, and as successor by
merger to ▇▇▇▇▇ Wireline Co., Inc. ("BWWC"), Bendover Company, formerly known as
Diamondback Directional, Inc. ("Bendover"), ▇▇▇▇ ▇▇▇▇ ("▇▇▇▇") and ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ("▇▇▇▇▇▇").
WITNESSETH
WHEREAS, the parties have certain agreements and business
relationships, some of which are in dispute, and some of which are the subject
of that certain lawsuit styled Bendover Company vs. ▇▇▇▇▇ Wireline Co., Inc., et
al, numbered 99-05-02669-CV pending in the District Court of ▇▇▇▇▇▇▇▇▇▇ County,
Texas, 9th Judicial Circuit (the "Lawsuit"); and
WHEREAS, the parties desire to compromise their disputes, enter into
new agreements, provide for the dismissal of the Lawsuit and grant one another
mutual releases;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and the documents to be exchanged pursuant hereto, the parties
do hereby agree as follows:
I.
NOTES, STOCK, ETC.
1.1 EXCHANGE OF EXISTING NOTES. Effective as of December 20, 1999, that
certain $3 Million Promissory Note due August 31, 1999, and that certain Amended
Promissory Note for Net Receivables due August 31, 1999 (collectively, the
"Original Notes"), running from BWWC to Bendover, are hereby canceled and
exchanged for the stock described in Section 1.2 and the Promissory Note
described in Section 1.3. Interest shall be paid on the Original Notes as set
forth in Section 1.5 hereof. Bendover shall return the Original Notes to BWWC.
1.2 STOCK AND ISSUANCE. In lieu of principal in the amount of $2
Million due under the Original Notes, BWWC shall issue to Bendover 2,666,666 of
its common stock ( "Stock"), at the price of seventy-five cents ($0.75).
1.3 NEW NOTE. In lieu of the balance of the principal due on the
Original Notes, which is agreed by the parties to be $1,182,890.25, BWWC shall
issue to Bendover the promissory note (the
"New Note") in said amount, in the form attached hereto as Exhibit 1.3, said
note being due on January 15, 2001, providing for a pre-default interest rate of
ten percent (10%), providing for periodic payment of interest and principal as
provided therein. The schedule of interest and principal payments provided in
the New Note shall be subject to the obligations of Section II of this
agreement. The note shall be secured by a security package in pari passu to the
debt of BWWC to St ▇▇▇▇▇ Capital Partners, LP and SJMB, LP issued prior to
December 16, 1999. BWWC shall cause St ▇▇▇▇▇ to cause its attorneys to draft the
security agreements, financing statements and other documents needed to put in
place this security package, and deliver same to Bendover not earlier than
January 14, 2000.
1.4 INVESTMENT REPRESENTATION LETTER. Issuance of the stock is subject
to the terms of the Investment Representation Letter to be executed by Bendover
to BWWC in the form attached hereto as Exhibit 1.4.
1.5 ACCRUED INTEREST. Upon the closing of this transaction, BWWC shall
pay to Bendover accrued interest due on the Original Notes in the compromise sum
of $273,813.24, which Bendover warrants and represents to be all interest due by
BWWC to Bendover through December 20, 1999.
1.6 REGISTRATION RIGHTS AGREEMENT. The Stock and the New Note are
subject to the terms of the Registration Rights Agreement to be executed by BWWC
and Bendover in the form attached hereto as Exhibit 1.6.
1.7 SUBORDINATION AGREEMENT. Immediately following funding of the
amounts due hereunder, Bendover shall execute the Subordination Agreement with
Fleet in the form attached as Exhibit 1.7, and deliver same to the attorney for
Fleet by facsimile and by mail, with a copy to the attorney for BWWC.
Notwithstanding said subordination agreement, BWWC shall use its best efforts to
secure permission of Fleet to pay interest per the New Note.
II.
COOPERATION, FUTURE FINANCING
This agreement is being closed contemporaneously with the sale by BWWC
of Three and one-half Million Dollars ($3,500,000) of new subordinated notes
(the"December,1999Notes"), as well as the Sixth Forbearance Agreement, Sixth
Amendment and Waiver to Loan and Security Agreement with BWWC's senior secured
lender, Fleet Capital Corporation (the "Forbearance"). Pursuant to the
Forbearance, among other matters, BWWC must be refinanced by February 29, 2000.
BWWC is currently negotiating with Coast Business Credit toward refinancing.
Coast, or another new senior secured lender will require debt holders of BWWC
who are affiliated with BWWC to enter into agreements which are commonly known
as "Subordination Agreements," "Standstill Agreements," etc. Bendover recognizes
this reality and agrees to cooperate in executing such agreements in the future,
and, without limiting the generality of the foregoing, agrees that (i) if the
new loan with Coast closes, it will execute the Subordination Agreement with
Coast in substantially the form attached hereto as Exhibit 2.0 or in such other
form as Coast may request, and (ii) it will execute such subordination
agreements or loan modification agreements as required by the
replacement lender (whether Coast or another lender) provided the holders of the
December, 1999 Notes execute agreements in substantially the same form. Bendover
acknowledged and agrees that these documents may limit the payment of interest
to the holders of the December, 1999 Notes and Bendover until the new senior
lender is paid in full or BWWC achieves certain excess cash flow thresholds.
III.
EMPLOYMENT MATTERS
It is a condition to the closing of this Agreement that the following
employment matters be resolved as follows:
3.1 BWWC shall pay to ▇▇▇▇ the following amounts due to ▇▇▇▇:
Back Salary $29,974.32
Trailer Purchased for Company 7,000.00
Phone ▇▇▇▇ 1,359.00
Car Allowance 2,723.63
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Subtotal $41,056.95
Less amount advanced October 6, 1999 -15,000.00
Total Due ▇▇▇▇ $26,056.95
IV.
DISMISSAL OF LAWSUIT
Immediately following closing, the Lawsuit shall be dismissed with
prejudice.
The parties shall execute and deliver to one another the mutual
releases in the forms attached hereto as Exhibit 4.0 and Exhibit 4.1
V.
BOARD MATTERS
At closing, BWWC shall deliver the Action by Unanimous Consent of its
Directors in the form attached hereto as Exhibit 5.0, by which this transaction
is approved and ▇▇▇▇ ▇▇▇▇ is appointed to the Board of Directors of BWWC.
VI.
CLOSING
Closing shall occur not later than December 17, 1999. It is anticipated
that executed copies of this agreement and the documents and things called for
hereby shall be deposited in trust with the attorney for Bendover, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ of Houston, Texas, who shall hold same pending joint instructions from
the parties hereto with respect to the disbursement thereof. In the interest of
time, the parties agree that facsimile signatures may be used, and shall be as
binding as originally signed documents. However, for additional verification,
the parties agree to replace any facsimile signatures with original signatures
within five (5) business days after the closing.
VII.
MISCELLANEOUS
7.1 NO ASSIGNMENT. Neither this Agreement, nor any right, interest or
obligation hereunder, may be assigned by either of the parties hereto without
the prior written consent of the other party(ies).
7.2 MULTIPLE COUNTERPARTS. Any number of counterparts of this Agreement
may be executed, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one and the
same agreement, binding on both the parties notwithstanding that both parties
have not signed the same counterpart.
7.3 CAPTIONS. The titles of the Articles and Paragraphs and the
captions of this Agreement have been assigned thereto for convenience and
reference only and in no way define, describe, extend, or limit, nor be
construed as limiting, defining or affecting the substantive terms, scope or
intent of this Agreement.
7.4 ENTIRE AGREEMENT, INTEGRATION, AMENDMENT. This Agreement, together
with the accompanying Exhibits attached hereto, constitutes the entire agreement
among the parties hereto, as a complete and final integration thereof. All
understandings and agreement heretofore had between and among the parties are
merged into this Agreement, which alone fully and completely expresses their
understandings, and this Agreement supersedes all prior memoranda,
correspondence, conversations and negotiations. There have been and are no
agreements, representations or warranties between the parties other than those
set forth or provided herein. No representation or warranty made by any party
which is not contained in this Agreement or expressly referred to herein has
been relied on by any party in entering into this Agreement.
7.5 NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given and
delivered upon personal delivery or, if mailed, upon depositing such notice in
the United States mail, with first class postage prepaid, and
(i) If to Black Warrior:
Black Warrior Wireline Corp
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Post Office Box 9188
Columbus, Mississippi 39705
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(ii) If to Bendover:
Bendover Company
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(iii) If to ▇▇▇▇ or ▇▇▇▇▇▇:
Mr. ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any party may change the address to which notices are to be
delivered to such party, by notice given in accordance with this subparagraph to
the other party.
7.6 GOVERNING LAW. The laws of the State of Texas shall govern the
validity, construction, and interpretation of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed, effective on the
date first set forth above.
BLACK WARRIOR WIRELINE CORP.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
BENDOVER COMPANY
By:
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Its:
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