Document:

EXHIBIT 10.2

                         AGREEMENT FOR PURCHASE AND SALE

     This Agreement for Purchase and Sale (the "Agreement"), is made and entered
as of December 17, 1999, by and among Black Warrior  Wireline  Corp., a Delaware
corporation  ("Seller"),  the parties listed as purchasers on the signature page
below (collectively, the "Purchaser") and sets forth the terms and conditions of
the  sale  and  purchase  of one or more  Convertible  Promissory  Notes  in the
aggregate  original  principal  amount  of  up  to  $7,000,000,  with  at  least
$3,000,000  being  issued as of the date  hereof and  substantially  in the form
attached hereto as Exhibit A (the "Notes").

     WHEREAS,  Seller  desires  to issue and sell to  Purchaser,  and  Purchaser
desires to purchase and accept from Seller,  the Notes in the form of Exhibit A,
on the terms and subject to the  conditions  set forth herein and in the amounts
set forth, for each Purchaser,  on the signature page for such Purchaser to this
Agreement.

     WHEREAS,  the  obligations  of Seller  under the Notes are  secured by that
certain Borrower Security  Agreement between Seller and the Purchaser,  dated as
of the date hereof, as may be amended or modified (the "Security Agreement").

     WHEREAS,  Seller  and  Purchaser  desire to make  certain  representations,
warranties and agreements in connection  with the purchase and sale of the Notes
contemplated hereby.

     WHEREAS,  Seller  desires to sell to  Purchaser  warrants  ("Warrants")  to
purchase  shares of  Seller's  common  stock,  par value  $0.005  per share (the
"Common  Stock"),  for a number of shares as set forth on the signature  page of
each  Purchaser  hereto which  Warrants  shall be delivered to Purchaser  or, at
Purchaser's discretion,  to Purchaser's designee, at the time of each advance of
the Note  Consideration,  and which Warrants shall have the terms and be subject
to the conditions set forth in the form of Warrants  attached  hereto as Exhibit
B.

     WHEREAS,  Seller desires to grant to Purchaser certain  registration rights
in respect of the Common Stock that may be acquired on  conversion  of the Notes
and on the exercise of the Warrants,  which  registration  rights shall have the
terms and be  subject to the  conditions  set forth in the  Registration  Rights
Agreement  dated as of the date hereof  between  Seller and Purchaser as amended
and modified (the "Registration Rights Agreement").

     WHEREAS,  St. James Capital,  L.P. and SJMB,  L.P., each a Delaware limited
partnership (together,  "St. James") have agreed to subordinate the indebtedness
of the Seller (other than any indebtedness  hereunder) to the indebtedness owing
to the Purchaser  hereunder  pursuant to the terms of a Subordination  Agreement
among  St.  James  and  the  Purchaser   dated  the  date  hereof  (the  "Junior
Subordination Agreement").

     WHEREAS, this Agreement,  the Notes, the Security Agreement,  the Warrants,
the Junior  Subordination  Agreement,  and the Registration Rights Agreement are
collectively referred to herein as the "Transaction Documents".

NOW,  THEREFORE,  in  consideration  of the  premises  and the  representations,
warranties and agreements herein, the parties agree as follows:

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                                    ARTICLE I

                                PURCHASE AND SALE

     1.1 Purchase and Sale of the Notes and the  Warrants.  Subject to the terms
of this Agreement,  Seller agrees to and does hereby issue, sell and deliver the
Notes and the  Warrants to  Purchaser  at the Closing (as defined  herein),  and
Purchaser  agree to and do hereby purchase and accept the Notes and the Warrants
from Seller.

     1.2 Consideration  for Purchase of the Notes.  Subject to the terms of this
Agreement  (including  Section 1.5 hereof),  Purchaser  hereby  agrees to pay to
Seller,  by check or wire transfer to the account of Seller,  up to  $7,000,000,
with at least $3,000,000 being as of the date hereof,  as the  consideration for
the purchase of the Notes (the "Note Consideration").

     1.3  Consideration  for Purchase of the  Warrants.  Subject to the terms of
this Agreement,  Purchaser  hereby agree to pay by check or wire transfer to the
account  of  Seller  $0.000487805  per  share  subject  to the  Warrants  as the
consideration  for the purchase of each of the Warrants  issued and to be issued
hereunder (the "Warrant  Consideration";  the Note Consideration and the Warrant
Consideration are collectively referred to herein as the "Consideration").  Each
new Purchaser pursuant to Section 1.5 shall pay Warrant  Consideration to Seller
in an amount equal to $0.000487805 per share subject to the Warrants.

     1.4 Origination  Fee. Seller agrees to pay Purchaser at Closing and at each
other time an advance of the Note Consideration is made, an origination fee (the
"Origination  Fee") equal to 0.002% of the entire  amount of each Note,  for the
payment of the Note Consideration.  Seller shall pay to each new Purchaser under
Section 1.5 an  Origination  Fee equal to 0.002% of the entire amount of the new
Note purchased by such new Purchaser.

     1.5 Sale of Additional Notes. Seller agrees to use its best efforts to sell
additional  Notes such that the  aggregate  principal  amount of Notes issued is
$5,000,000. Each purchaser of such additional Notes shall assume the obligations
and  obtain  the  rights of a  Purchaser  hereunder  and under each of the other
Transaction  Documents,  including,  without limitation,  financing  statements,
pursuant  to  documentation  reasonably  acceptable  to the  Seller and the then
existing  Purchasers.  The Company  shall have the option of selling  additional
Notes of up to $2,000,000 in an aggregate principal amount (resulting in a total
maximum  aggregate amount of Notes sold equal to $7,000,000) upon the same terms
and  conditions  of this Section 1.5.  Each new Note shall be issued in form and
substance substantially the same as the form of Note attached as Exhibit A. Each
sale of any  additional  Note shall occur on or prior to February 15, 2000.  The
Seller shall issue to each such Purchaser,  Warrants to purchase Common Stock of
the Seller,  substantially in the form of the Warrants attached as Exhibit B and
for a number of shares proportionate to the amount of the Note purchased by such
Purchaser as reflected in the Warrants.

     1.6 Subordination. Purchaser agrees that the indebtedness hereunder and the
security  granted  therefor  are  subject to the  Subordination  Agreement  (the
"Senior  Subordination  Agreement") with Fleet Capital  Corporation (the "Senior
Lender"),  pursuant to which Purchaser  subordinates its security  interests and
rights to the  security  interests  of the  Senior  Lender.  Each

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new  Purchaser  pursuant  to Section  1.5 shall  assume the  obligations  of the
Purchaser  under the  Subordination  Agreement  as a condition  precedent to the
purchase of any additional Note.

                                   ARTICLE II

                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller  represents  and  warrants to Purchaser  that each of the  following
statements (i) are true and correct on the date hereof and (ii) will be true and
correct  in all  material  respects  on  the  date  each  advance  of  the  Note
Consideration is made:

     2.1 Organization,  Standing and Qualification. Seller is a corporation duly
organized,  validly existing and in good standing under the laws of the state of
its  incorporation  and has all requisite  corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now being
conducted.  Seller  is  licensed  and  qualified  to do  business  as a  foreign
corporation in each jurisdiction in which the character of its properties, owned
or leased,  or the nature of its activities makes such  qualification or license
necessary.

     2.2 Authority;  No Defaults.  Subject to Section 3.2 hereof, Seller has all
requisite corporate power and authority to enter into the Transaction  Documents
and to  consummate  the  transactions  contemplated  thereby.  The execution and
delivery of the Transaction  Documents and the  consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate action
on the part of Seller.  Subject to Section 3.2 hereof, the Transaction Documents
have been executed and delivered by Seller and  constitute the valid and binding
obligation of Seller,  enforceable  in accordance  with their terms,  subject to
bankruptcy,  insolvency,  moratorium and other similar laws affecting creditors'
rights  generally and general  principles of equity  (regardless of whether such
enforceability  is considered  in a proceeding in equity or at law).  Subject to
Section 3.2 hereof,  the execution and delivery of the Transaction  Documents do
not, and the  consummation of the transactions  contemplated  hereby and thereby
will not,  conflict  with or result  in a breach of or the  acceleration  of any
obligation  under,  or constitute a default or event of default (or event which,
with  notice or lapse of time or both,  would  constitute  a default or event of
default) under, any provision of any charter, bylaw, indenture,  mortgage, lien,
lease, agreement,  contract,  instrument,  order, judgment, decree, ordinance or
regulation,  or any restriction to which any property of Seller is subject or by
which  Seller is bound,  the  effect of which  would be  materially  adverse  to
Seller.  Seller is not, nor does Seller have knowledge that it is alleged to be,
in material violation or default of any applicable law, statute,  order, rule or
regulation  promulgated or judgment entered by any court,  administrative agency
or  commission  or other  governmental  agency or  instrumentality,  domestic or
foreign (a  "Governmental  Entity"),  relating to or  affecting  the  operation,
conduct or  ownership  of the  property or business of Seller  other than vendor
judgments to be satisfied with the Note Consideration.

     2.3 Approvals.  Subject to Section 3.2 hereof, there is no legal impediment
to the execution and delivery of the  Transaction  Documents by Seller or to the
consummation  of  the  transactions  contemplated  thereby,  and  no  filing  or
registration  with,  or  authorization,  consent or approval of, a  Governmental
Entity,  shareholders or any other third party is necessary for the consummation
by Seller of the transactions contemplated thereby.

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     2.4 Charter and Bylaws. Seller has furnished to Purchaser true and complete
copies of its charter and bylaws,  each as amended to date and as  presently  in
effect.

     2.5 SEC Documents.

          (a) Seller  has made all  filings  with the  Securities  and  Exchange
     Commission  ("SEC") that it has been required to make under the  Securities
     Act of 1933, as amended (the "Securities Act"), and the Securities Exchange
     Act of 1934,  as amended  (the  "Exchange  Act") since  December  31, 1998.
     Seller has  provided to  Purchaser  true,  complete  and correct  copies of
     Seller's  annual report on Form 10-K  ("Seller's Form 10-K") for the fiscal
     year  ended  December  31,  1998,  together  with all  amendments  thereto,
     Seller's  quarterly report on Form 10-Q for the fiscal quarters ended March
     31,  1999,  June  30,  1999  and  September  30,  1999,  together  with all
     amendments  thereto,  and any and all  filings  with the SEC made by Seller
     (including all requested exhibits to such filings) since the filing of said
     Form 10-K (all  such  documents  that  have  been  filed  with the SEC,  as
     amended,  are  referred  to as the  "Seller  SEC  Documents").  As of their
     respective dates, and except as amended,  Seller SEC Documents  complied in
     all material  respects with the  requirements  of the Securities Act or the
     Exchange  Act,  as the  case  may be,  and  none of  Seller  SEC  Documents
     contained  any untrue  statement  of a material  fact or omitted to state a
     material  fact  required  to be stated  therein  or  necessary  to make the
     statements  therein,  in light of the  circumstances  under which they were
     made, not misleading.

          (b) The  financial  statements  of Seller  included  in the Seller SEC
     Documents  comply  as to  form in all  material  respects  with  applicable
     accounting requirements and with the published rules and regulations of the
     SEC with respect  thereto,  have been prepared in accordance with generally
     accepted  accounting  principles  ("GAAP")  applied on a  consistent  basis
     during  the  periods  involved  (except  as may be  indicated  in the notes
     thereto or, in the case of the unaudited  statements,  as permitted by Form
     10-Q) and fairly present (subject, in the case of the unaudited statements,
     to normal recurring audit adjustments) the consolidated  financial position
     of Seller as of the  dates  thereof  and the  consolidated  results  of its
     operations and cash flows for the periods then ended.  Since  September 30,
     1999, (i) there have been no material adverse changes in Seller's business,
     operations or financial  condition and (ii) Seller's  operations  have been
     conducted in the ordinary course of business except as disclosed in writing
     to Purchaser.

     2.6 Litigation. Except as set forth on Schedule 2.6, as of the date of this
Agreement,  there is no suit, action, proceeding or investigation pending or, to
the best knowledge of Seller,  threatened  against or affecting  Seller,  nor is
there any  outstanding  judgment,  order,  writ,  injunction  or decree  against
Seller, which judgment would have a material adverse effect on Seller. Except as
set forth on  Schedule  2.6,  Seller is not  subject to any court  order,  writ,
injunction, decree, settlement agreement or judgment that contains or orders any
on-going   obligations,   whether   prohibitory  or  mandatory  in  nature,  the
performance of which would have a material adverse effect on Seller.

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     2.7  Capitalization.  Seller has authorized capital stock of (a) 12,500,000
shares of Common  Stock of which,  as of the date  hereof,  there are  4,812,260
shares issued and  outstanding,  and (b) 2,500,000  shares of preferred stock of
which, as of the date hereof, there are no shares issued and outstanding. All of
the issued and  outstanding  shares of Common Stock were duly and validly issued
and are fully paid and non-assessable.  None of the outstanding shares of Common
Stock has been issued in  violation of any  preemptive  rights of the current or
past  stockholders  of Seller.  As of the date  hereof,  Seller has reserved for
issuance  (i) an  aggregate  of  1,062,250  shares of Common  Stock  issuable on
issuance of stock options to employees,  officers,  directors and other persons,
and the Board of  Directors of Seller has  approved  amendments  to the plans in
respect  of such  options to  increase  the shares  available  thereunder  to an
aggregate of 1,735,450  shares of Common  Stock,  subject to the approval of the
shareholders  of Seller,  and (ii) an aggregate of  36,601,652  shares of Common
Stock  issuable  on  the  exercise  of  outstanding  warrants,  options,  or  of
convertible securities other than those listed in (i) above. Except as set forth
on Schedule 2.7 or  described  above in (i) and (ii),  there are no  outstanding
options,  warrants or rights to subscribe  for, or  commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for,  shares  of  the  capital  stock  of  Seller  or  contracts,   commitments,
understandings  or  arrangements by which Seller is or may be obligated to issue
additional  shares  of its  capital  stock or  options,  warrants,  or rights to
purchase  or acquire any  additional  shares of its  capital  stock.  Subject to
Section  3.2  hereof,  all of the Common  Stock  issued on the  exercise  of the
Warrants  will  be  fully  paid,  non-assessable  and  free  and  clear  of  any
Encumbrances.  As used in this  Agreement,  the  term  "Encumbrance"  means  and
includes (i) any  security  interest,  mortgage,  deed of trust,  lien,  charge,
pledge,  proxy, adverse claim, equity, power of attorney,  or restriction of any
kind,  including  but not limited to, any  restriction  or servitude on the use,
transfer,  receipt of income,  or other exercise of any attributes of ownership,
and (ii) any Uniform Commercial Code financing statement or other public filing,
notice or record that by its terms  purports  to  evidence or notify  interested
parties  of any of the  matters  referred  to in  clause  (i)  that has not been
terminated or released by another proper public filing, notice or record.

     2.8 Subsidiaries. Seller has no subsidiaries.

     2.9  Liabilities.  Except  as set  forth in  Schedule  2.9,  Seller  has no
liabilities or obligations,  either accrued, absolute,  contingent, or otherwise
that have a material  adverse  effect on the value or  business  of Seller,  and
Seller has no knowledge of any potential  liability that it reasonably  believes
would  likely  result in a material  adverse  effect on the value or business of
Seller, other than those (a) reflected or reserved against in the balance sheets
reported on Seller's Form 10-Q for the fiscal quarter ended  September 30, 1999,
or (b) incurred in the ordinary course of business since September 30, 1999.

     2.10 Licenses,  Permits,  Authorizations,  Etc. Seller holds all approvals,
authorizations,  consents,  licenses, orders, franchises,  rights, registrations
and permits of any type required to operate its business as presently conducted.
The  execution  and  delivery  of this  Agreement  and the  consummation  of the
transactions   contemplated   hereby   will  not   result  in  any   revocation,
cancellation,  suspension or modification  of any such approval,  authorization,
consent license, order, franchise, right, registration or permit.

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     2.11 Title to Assets; Encumbrances. Except as set forth in Schedule 2.11:

          (a)  Seller has good and  indefeasible  title to its  assets,  whether
     real, personal or intangible, free and clear of all Encumbrances except (i)
     liens for current taxes and  assessments  not yet due or being contested in
     good faith by appropriate proceedings,  (ii) mechanic's liens arising under
     the  operation  of law for  actions  contested  in good  faith or for which
     payment  arrangements  have been made,  (iii) liens  granted or incurred by
     Seller in the ordinary  course of its  business or financing of  equipment,
     office  space,  furniture  and  computers  in the  ordinary  course  of its
     business,  and  (iv)  easements,  rights  of way,  encroachments  or  other
     restrictions  or matters  affecting  title  which do not prevent the assets
     from being used for the purpose for which they are currently being used;

          (b) There are no parties in  possession of any of the assets of Seller
     other than personal  property held by third parties in the  reasonable  and
     ordinary course of business. Seller enjoys full, free and exclusive use and
     quiet  enjoyment of its assets and its rights  pertaining  thereto.  Seller
     enjoys peaceful and undisturbed  possession under all leases under which it
     is a lessee, and all such leases are legal,  valid and binding  obligations
     of Seller, enforceable against Seller in accordance with their terms.

     2.12 Taxes and  Returns.  Seller has filed all  required  tax  returns  and
reports.  Seller has paid all taxes,  assessments and  governmental  charges and
penalties which it has incurred, except such as are being or may be contested in
good faith by appropriate  proceedings.  Seller is not delinquent in the payment
of any tax,  assessment or governmental  charge.  No deficiencies  for any taxes
have been proposed,  asserted,  or assessed against Seller,  and no requests for
waivers of the time to assess any such tax are pending. For the purposes of this
Agreement,  the term  "tax"  (including,  with  correlative  meaning,  the terms
"taxes" and  "taxable")  shall  include all  federal,  state,  local and foreign
income, profits,  franchise,  gross receipts,  payroll, sales, employment,  use,
property,  withholding,  excise and other taxes,  duties or  assessments  of any
nature whatsoever,  together with all interest,  penalties and additions imposed
with respect to such amounts.

     2.13  Insurance.  Each  policy  of  property,  fire and  casualty,  product
liability, worker's compensation, professional liability and title insurance and
other forms of insurance (except group,  health and life policies) and each bond
issued  or  posted  by any  person  with  respect  to any  operations  or  other
activities  of Seller  is, to the  knowledge  of Seller,  the  legal,  valid and
binding obligation of the insurer or bond issuer, enforceable in accordance with
its terms,  and is in an amount and provides for coverage as is customary in the
ordinary business practices of Seller's industry.

     2.14 Patents,  Trademarks,  Etc. Seller is not using, and does not have any
plan to manufacture, use or sell anything which would violate or infringe on any
patent or proprietary right (of which Seller is aware) of any other person, firm
or  corporation  or which  would  require  a license  under  any such  patent or
proprietary  right.  Seller has not received any  communications  alleging  that
Seller has violated or, by  conducting  its business as proposed,  would violate
any of the patents, trademarks, service marks, tradenames,  copyrights, works of
authorship  or trade  secrets or other  proprietary  rights in  processes of any
other person or entity.

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     2.15 Material  Contracts and Obligations.  Attached hereto as Schedule 2.15
is a list of all material agreements of any nature to which Seller is a party or
by which it or any of its properties is bound, including without limitation, the
Master Service  Agreement with the ten top customers (based on dollar volume) of
Seller,  all employment  and consulting  agreements,  loan  agreements,  leases,
purchase  contracts,  employee  benefit,  bonus,  pension,  stock option,  stock
purchase  and  similar  plans  and  arrangements,   and  distributor  and  sales
representative  agreements.  True and complete copies of such written agreements
have been provided to Purchaser.  All such  agreements  and contracts are valid,
binding  and in full  force and  effect.  Seller is not in default on any of the
agreements listed on Schedule 2.15.

     2.16 Compliance.  Except as set forth on Schedule 2.16, Seller has complied
in all material  respects with all laws,  and is not in violation of any charter
or other corporate restrictions or any law, ordinance, requirement,  regulation,
judgment,  injunction, award, decree, or other order applicable to its business.
There is no term or provision of any mortgage, indenture, contract, agreement or
instrument to which Seller is a party or by which it is bound,  any provision of
any state or federal judgment, decree, order, injunction, writ, statute, rule or
regulation  applicable  to or binding upon Seller,  which  materially  adversely
affects  or,  in the  future is  reasonably  likely  to  affect  materially  and
adversely the business, prospects, condition, affairs or operations of Seller or
any of its  properties  or assets.  To the  knowledge of Seller,  no employee of
Seller is in violation of any term of any employment  contract,  patent or other
proprietary  information disclosure agreement or any other contract or agreement
relating to the employment of such employee with Seller.

     2.17 Employees.  Seller has obtained employment  agreements,  some of which
contain nondisclosure and assignment of invention provisions and non-competition
provisions,  with Seller from some  employees  and  consultants  of Seller whose
employment  responsibility  requires  access  to  confidential  and  proprietary
information of Seller, in a form satisfactory to Purchaser.  Seller has complied
in all material respects with all applicable and material state and federal laws
respecting  employment  and  employment  practices,   terms  and  conditions  of
employment,  wages and hours and other laws related to employment, and there are
no arrears in the payment of wages, or social security taxes.

     2.18 Transactions with Affiliates and Stockholders.  Except as set forth on
Schedule 2.18, no stockholder,  officer, director or employee of Seller, nor any
"affiliate"  or  "associate"  of such  persons (as such terms are defined in the
rules and  regulations  promulgated  under the  Securities  Act), is presently a
party  to  any  transaction  with  Seller,  including  without  limitation,  any
contract,  agreement  or other  arrangement  providing  for the  employment  of,
furnishing of services by, rental of real or personal property from or otherwise
requiring payments to, any such person or entity.

     2.19 Books and Records.  The minute books of Seller furnished to counsel to
Purchaser for review contain  complete and accurate  records of all meetings and
other  corporate  actions of its  stockholders  and its Board of  Directors  and
committees  thereof.  The stock  ledger  and stock  transfer  records  of Seller
furnished by American  Stock Transfer & Trust Company to Purchaser for review is
complete  and  reflects  all  issuances,  transfers  of which  Seller  is aware,
repurchases and cancellations of shares of capital stock of Seller.

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     2.20  Stockholder  Agreements.  Except as set forth in Schedule  2.20 or as
contemplated by this Agreement, there are no agreements,  written or oral, which
are (i)  between  Seller and any  holder of its  capital  stock,  or (ii) to the
knowledge  of Seller,  among any persons  holding  five  percent (5%) or more of
Seller's capital stock,  relating to the  acquisition,  disposition or voting of
the capital stock of Seller.

     2.21 ERISA.  Except as disclosed on Schedule  2.21,  Seller has no employee
benefit plans subject to the Employment Retirement Income Security Act of 1974.

     2.22 Accounts  Receivable.  All accounts  receivable  of Seller  (including
those  reflected  on the  Balance  Sheet or  acquired on or prior to the Closing
Date) arose in the ordinary  and usual  course of business of Seller,  represent
valid obligations due to Seller and have been collected or are, to Seller's best
knowledge, collectible in the ordinary and usual course of business of Seller in
the aggregate  recorded  amounts  thereof in accordance with their terms less in
the case of accounts  receivable  reflected  in the  Financial  Statements,  all
allowance  for doubtful  accounts  marked  therein,  and in the case of accounts
receivable thereafter, all allowances for doubtful accounts consistent with past
practices of Seller.

     2.23 Hazardous Wastes and Substances.  Neither the operations of Seller nor
the use of its  assets  violates  any  applicable  federal,  state or local law,
statute,  ordinance,  rule,  regulation,  memorandum of understanding,  order or
notice  requirement  pertaining  to  the  collection,  transportation,  storage,
treatment, discharge, release or disposal of hazardous or non-hazardous waste or
substances,  including without  limitation (i) the  Comprehensive  Environmental
Response,  Compensation  and  Liability  Act of 1980 (42 U.S.C,  ss.ss.  9601 et
seq.),  as amended  from time to time on or before the Closing  Date  ("CERCLA")
(including,  without limitation, as amended pursuant to the Superfund Amendments
and Reauthorization Act of 1986), and such regulations  promulgated under CERCLA
on or before the Closing Date, (ii) the Resources  Conservation and Recovery Act
of 1976 (42 U.S.C.  ss.ss.  6901 et seq.), as amended from time to time ("RCRA")
on or before the Closing  Date,  and such  regulations  promulgated  under RCRA,
(iii) any applicable federal, state or local laws or regulations relating to the
environment  in  effect  on the  Closing  Date  (collectively,  the  "Applicable
Environmental  Laws").  Except  as  disclosed  on  Schedule  2.23,  none  of the
operations  of Seller has ever been  conducted  nor have any of its assets  been
used in such a manner as to  constitute  a  violation  of any of the  Applicable
Environmental  Laws.  No notice  has been  served  on  Seller  by any  person or
Governmental Entity regarding any existing,  pending or threatened investigation
or inquiry  related to violations  under any  Applicable  Environmental  Law, or
regarding any claims for corrective action, remedial obligations or contribution
for  removal  costs or  damages  under  any  Applicable  Environmental  Law,  or
regarding the  designation  of Seller or any of its  affiliates as a potentially
responsible party for any facility under the Applicable  Environmental Laws, nor
does any fact or  circumstance  exist  which,  if disclosed  publicly,  would be
reasonably  likely to result in the service on Seller of any such notice.  There
has been no action taken, or omitted to be taken by Seller which has caused,  or
would be reasonably likely to cause, a "release" of any "hazardous substance" at
any "facility," without limitation,  within the meaning of such terms as defined
in the Applicable Environmental Laws.

                                       8
<PAGE>

     2.24  Disclosures.  Neither  this  Agreement  nor any  Exhibit or  Schedule
hereto,  nor any  certificate  or other  instrument  furnished  to  Purchaser or
Purchaser  or  its  counsel  by  Seller  in  connection  with  the  transactions
contemplated  hereby,  contains any untrue statement of a material fact or omits
to state a material  fact  necessary in order to make the  statements  contained
herein or therein, in the light of the circumstances under which they were made,
not misleading.

                                   ARTICLE III

                                    COVENANTS

     3.1 New Subsidiaries. Seller agrees that any entity of which Seller obtains
control  (directly or  indirectly)  of more than 50% of the  outstanding  voting
stock or equity  interests  shall  execute a Subsidiary  Security  Agreement and
Subsidiary   Guaranty,   substantially  in  form  and  substance  acceptable  to
Purchaser.

     3.2  Capitalization.  Seller  agrees  that,  at or before  its next  annual
shareholders  meeting, the Seller shall secure an amendment to Seller's Articles
or Certificate of Incorporation to increase the number of shares that the Seller
is authorized  to issue to a number  sufficient to authorize the issuance of the
current  outstanding  shares of the Seller and all shares that are issuable upon
the conversion of all of the Seller's  convertible notes and securities and upon
the exercise of any warrants or options to purchase the Seller's Common Stock.

                                   ARTICLE IV

                                   THE CLOSING

     4.1 Time and Place.  Subject to the  provisions of Section 1.2 herein,  the
closing of the purchase and sale of an aggregate  amount of at least  $3,000,000
of the Notes and the associated Warrants (the "Closing") will take place as of a
date agreed to by the parties (the  "Closing  Date"),  at the offices of Gardere
Wynne Sewell & Riggs, L.L.P., unless another time and place are agreed to by the
parties.

     4.2  Conditions to the  Obligation of Seller.  The  obligation of Seller to
effect  the  Closing  is  subject  to  Purchaser  delivering,  or  causing to be
delivered, to Seller at the Closing an aggregate of at least $3,006,000.

     4.3 Conditions to the Obligation of Purchaser.  The obligation of Purchaser
to effect the  Closing is subject to payment by Seller of the  Origination  Fee.
The obligation of Purchaser is further subject to Seller delivering,  or causing
to be delivered, to Purchaser at the Closing the following documents:

          4.3.1 copies,  certified by the Secretary of State of Delaware as of a
     recent  date,  of the  charter of Seller and all  amendments  thereto and a
     certificate  of an  Officer  of Seller  certifying  that there have been no
     amendments to such charter since such date;

                                       9
<PAGE>

          4.3.2  copies,  certified by the Secretary of each of Seller as of the
     Closing Date, of the bylaws of each of Seller, and all amendments thereto;

          4.3.3 copies, certified by a certificate of the Secretary of Seller as
     of the Closing Date, of resolutions  duly adopted by the board of directors
     of  Seller,  authorizing  the  execution  and  delivery  by  Seller  of the
     Transaction  Documents and all other agreements attached hereto as Exhibits
     or  contemplated  herein,  the  completion  of the  sale of the  Notes  and
     Warrants  and the taking of all such other  corporate  action as shall have
     been  required as a condition to, or in  connection  with,  the sale of the
     Notes and Warrants;

          4.3.4 the Agreement;

          4.3.5  the  Notes  for  an  aggregate  principal  amount  of at  least
     $3,000,000;

          4.3.6 Warrants to purchase up to an aggregate of 28,700,000  shares of
     Common Stock;

          4.3.7 the Registration Rights Agreement;

          4.3.8 the Security Agreement;

          4.3.9 the Junior Subordination Agreement;

          4.3.10 Bendover conversion and settlement documents;

          4.3.11 an opinion of Rosen, Cook, Sledge and Davis, counsel to Seller,
     in form and substance  acceptable to Purchaser and  addressing  the matters
     set forth in Sections 2.1, 2.2, 2.3, 2.7 and 2.8; and

          4.3.12 a  certificate  of an Officer of Seller to the effect  that the
     representations  and warranties of Seller herein contained shall be true as
     of and at the  Closing  Date with the same  effect  as though  made at such
     date, except as affected by transactions  permitted or contemplated by this
     Agreement;  and further to the effect that Seller shall have  performed and
     complied with all covenants  required by this  Agreement to be performed or
     complied with by each before the Closing Date.

                                    ARTICLE V

                               GENERAL PROVISIONS

     5.1  Survival  of   Representations,   Warranties   and   Agreements.   The
representations,  warranties  and agreements  contained in this Agreement  shall
survive the Closing.

     5.2 Notices.  All notices or other communications which are required or may
be given  under this  Agreement  shall be in writing and shall be deemed to have
been duly given  when  delivered  in person,  transmitted  by  telecopier  (with
receipt  confirmed)  or mailed by  registered  or  certified  first  class mail,
postage prepaid,  return receipt  requested to the parties hereto at the

                                       10
<PAGE>

address set forth below (as the same may be changed  from time to time by notice
similarly  given) or the last known business or residence  address of such other
person as may be designated by either party hereto in writing.

          (a) If to Seller: Black Warrior Wireline Corp.
                            3748 Highway #45 North
                            Columbus, Mississippi  39701
                            Attn:  William L. Jenkins

          (b) If to Purchaser:  At the addresses set forth on the signature page
     of Purchaser

     5.3 Miscellaneous.  This Agreement (i) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among  the  parties,  or  any of  them,  with  respect  to  the  subject  matter
hereof,(ii) shall be binding upon and inure to the benefit of the parties hereto
and their  respective  successors and assigns and is not intended to confer upon
any other  person any rights or remedies  hereunder,  (iii) shall be governed in
all respects, including validity,  interpretation and effect, by the laws of the
State of Delaware  and (iv) may be executed  in two or more  counterparts  which
together shall constitute a single agreement.

     5.4  Publicity.  Seller and Purchaser  promptly  shall advise and cooperate
with the other prior to issuing,  or permitting any of its directors,  officers,
employees  or  Purchaser  to  issue,  any press  release  with  respect  to this
Agreement  or  the  transactions   contemplated   hereby.   Notwithstanding  the
foregoing, without the prior consent of Purchaser, neither Seller nor any of its
directors,  officers, employees or Purchaser shall issue any press release which
includes the name of Purchaser or any of Purchaser's affiliates.

     5.5 Assignment.

          (a)  Neither  this  Agreement  nor  any of the  rights,  interests  or
     obligations  hereunder shall be assigned by Seller (whether by operation of
     law or otherwise) without the prior written consent of the Purchaser.

          (b) Purchaser may assign its rights and obligations  hereunder,  under
     the Notes, the Warrants or any other Transaction  Document,  subject to the
     terms hereof and upon prior  written  notice to Seller.  Each such assignee
     (an "Assignee") shall execute an Assignment and Acceptance substantially in
     the form of Exhibit G. Upon the execution of such Assignment and Acceptance
     by such Assignee, (i) the Assignee shall be a "Purchaser" hereunder and, to
     the extent provided in the Assignment and Acceptance, shall have the rights
     and obligations of a Purchaser hereunder,  and (ii) the assigning Purchaser
     (an  "Assignor")  shall,  to the  extent  provided  in the  Assignment  and
     Acceptance, be released from its obligations hereunder.

          (c) An Assignor hereunder shall, if requested by the Assignee, deliver
     the Notes and  Warrants in favor of such  Assignor  to the Seller,  and the
     Seller shall issue

                                       11
<PAGE>

     replacement Notes and Warrants in favor of the Assignor and the Assignee in
     the amounts  and for such shares as are  indicated  in the  Assignment  and
     Acceptance.  The replacement Warrants shall be issued for an exercise price
     per share  equal to the  exercise  price set  forth in the  Warrants  to be
     delivered to Seller under this Section 5.5(c).

     5.6 Schedules. All statements contained in any exhibit, schedule, appendix,
certificate or other instrument delivered by or on behalf of the parties hereto,
or in connection with the transactions contemplated hereby, are an integral part
of this Agreement and shall be deemed representations and warranties hereunder.

     5.7   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of which  constitutes  an  original  execution  and,  in the
aggregate, constitute a single document.

     5.8  Expense   Reimbursement.   Seller  will  reimburse  Purchaser  all  of
Purchaser's direct costs relating to the negotiation,  documentation and closing
of the transactions contemplated by this Agreement, including without limitation
the direct fees and expenses of counsel for Purchaser.

                                       12
<PAGE>

     5.9 Restrictions on Transfer.

          (a) Purchaser  shall not transfer  their rights under the Notes except
     by the  grant of a  security  interest  to its  lender  or  lenders,  or as
     provided by Section 5.5  hereof.  As between a Purchaser  and its lender or
     lenders,  the Notes are  transferrable in the same manner and with the same
     effect as in the case of a  negotiable  instrument  payable to a  specified
     person.  Any lender to which Holder grants a security interest in the Notes
     shall be  entitled  to  exercise  all  remedies  to which it is entitled by
     contract or by law, including (without  limitation)  transferring the Notes
     into its own name or into the name of any purchaser at any sale  undertaken
     in connection with enforcement by such lender of its remedies.

          (b)  Purchaser  shall not  transfer  the  Warrants or any new warrants
     described  in Section  1.4 of this  Agreement,  except as  provided  in the
     Warrants and provided  further that the Warrants may be  distributed to the
     partners of the Purchaser.

     5.10 Expenses of Dispute  Resolution.  If any action at law or in equity is
necessary  to enforce or  interpret  the terms of this  Agreement  or any of the
other  Transaction  Documents,   the  prevailing  party  shall  be  entitled  to
reasonable  attorneys' fees,  costs, and necessary  disbursements in addition to
any other relief to which it may be entitled.

     Each  Purchaser  acknowledges  that  it  has,  independent  of and  without
reliance  upon any other  Purchaser  or any  information  provided  by any other
Purchaser  and  based on the  financial  statements  of  Seller  and such  other
documents  and  information  as it has deemed  appropriate,  made its own credit
analysis  and  decision  to enter  into  this  Agreement.  Each  Purchaser  also
acknowledges  that it will,  independent of and without  reliance upon any other
Purchaser  and  based  on  such  documents  and  information  as it  shall  deem
appropriate at that time, continue to make its own credit decisions in taking or
not taking action under this Agreement and any other documents relating thereto.

     5.11  Power of  Attorney.  Each  Purchaser  hereby  appoints,  and each new
Purchaser under Section 1.5 shall appoint,  SJMB, L.P. as its  attorney-in-fact,
with full power of  substitution,  solely for the  purposes of (a)  negotiating,
executing and  delivering the Senior  Subordination  Agreement and (b) executing
and filing Seller Security  Agreements and financing  statements.  This power of
attorney  shall not extend to the  negotiation,  execution  and  delivery of the
Junior Subordination Agreement.

     5.12  Representation.  Each party to this Agreement  other than SJMB,  L.P.
acknowledges  that  Gardere  Wynne  Sewell  &  Riggs,  L.L.P.  has  represented,
represents  and shall  represent  only SJMB,  L.P. with respect to the drafting,
negotiation, execution and delivery of the Transaction Documents and any related
documents or  instruments,  and that each party has had adequate  opportunity to
consult  with its own counsel in  connection  therewith  and any other aspect of
this  transaction.  Each party to this  Agreement  further  acknowledges  that a
portion of the proceeds  will be used to reimburse St. James for expenses it has
previously incurred.

                                       13
<PAGE>

                             SELLER'S SIGNATURE PAGE

     IN WITNESS  WHEREOF,  Seller has signed this Agreement as of the date first
written above.

                                                BLACK WARRIOR WIRELINE CORP.

                                                By:
                                                   -----------------------------
                                                     John L. Thompson, Director

                                       14
<PAGE>

                           PURCHASER'S SIGNATURE PAGE

     IN WITNESS  WHEREOF,  Purchaser  has signed this  Agreement  as of the date
first written above.

                                           -------------------------------------

Address:
                                           -------------------------------------
-----------------------------------        John L. Thompson and Charles E.
                                           Underbrink, tenants in common
-----------------------------------

-----------------------------------        -------------------------------------
                                           Social Security/Tax I.D. - Thompson

                                           -------------------------------------
                                           Social Security/Tax I.D. - Underbrink

Note Principal Amount:         $750,000
                           -----------------

Number of Warrants:           3,075,000
                           -----------------

                                       15
<PAGE>

                           PURCHASER'S SIGNATURE PAGE

     IN WITNESS  WHEREOF,  Purchaser  has signed this  Agreement  as of the date
first written above.

Address:                                     -----------------------------------
                                                 [Name of Purchaser]
--------------
--------------

Note Principal Amount: _____________         -----------------------------------
Number of Warrants: ________________              [Signature of Purchaser]

                                       16
<PAGE>

                           PURCHASER'S SIGNATURE PAGE

     IN WITNESS  WHEREOF,  Purchaser  has signed this  Agreement  as of the date
first written above.

Address:                                     -----------------------------------
                                                 [Name of Purchaser]
--------------
--------------

Note Principal Amount: _____________         -----------------------------------
Number of Warrants: ________________              [Signature of Purchaser]

                                       17
<PAGE>

                           PURCHASER'S SIGNATURE PAGE

     IN WITNESS  WHEREOF,  Purchaser  has signed this  Agreement  as of the date
first written above.

Address:                                     -----------------------------------
                                                 [Name of Purchaser]
--------------
--------------

Note Principal Amount: _____________         -----------------------------------
Number of Warrants: ________________              [Signature of Purchaser]

                                       18EXHIBIT 10.3

THE SECURITIES  REPRESENTED  BY THIS NOTE AND THE COMMON STOCK ISSUABLE  THEREBY
HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
"SECURITIES ACT") OR ANY OTHER APPLICABLE SECURITIES LAWS AND, ACCORDINGLY,  THE
SECURITIES REPRESENTED BY THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER,  OR  IN  A  TRANSACTION  EXEMPT  FROM
REGISTRATION  UNDER,  THE  SECURITIES  ACT  AND IN  ACCORDANCE  WITH  ANY  OTHER
APPLICABLE SECURITIES LAWS.

THIS NOTE IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT,  WHICH AGREEMENT
IS INCORPORATED HEREIN BY REFERENCE.

                          BLACK WARRIOR WIRELINE CORP.

                    $____________ CONVERTIBLE PROMISSORY NOTE

$________________ Houston, Texas        _________________

     BLACK WARRIOR WIRELINE CORP., a Delaware  corporation  (hereinafter  called
the  "Company,"  which term  includes  any  directly  or  indirectly  controlled
subsidiaries or successor entities), for value received,  hereby promises to pay
to  ________________________________  (hereinafter called the "Holder"),  or its
registered  assigns,  the  principal  sum of up to  _____________________Dollars
($_____________),  together  with  interest on the amount of such  principal sum
from time to time  outstanding,  payable in accordance  with the terms set forth
below.  It is the intention of the parties that the principal  sums of this Note
shall be  advanced,  subject to the  Agreement  of Purchase and Sale between the
Company and the Holder dated as of December 17, 1999 (the "Agreement").

     THE  OBLIGATIONS OF THE COMPANY  CONTAINED IN THIS NOTE ARE SUBJECT TO THAT
CERTAIN BORROWER SECURITY AGREEMENT BETWEEN THE COMPANY AND HOLDER,  DATED AS OF
DECEMBER ___, 1999, AS MAY BE AMENDED OR MODIFIED (THE "SECURITY AGREEMENT").

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

     1.1  Definitions.  For all  purposes  of this  Note,  except  as  otherwise
expressly  provided  or unless the  context  otherwise  requires:  (a) the terms
defined in this Article  have the meanings  assigned to them in this Article and
include  the  plural  as well as the  singular;  (b) all  accounting  terms  not
otherwise  defined herein have the meanings  assigned to them in accordance with
generally accepted accounting principles as promulgated from time to time by the
Association  of  Independent  Certified  Public  Accountants;  and (c) the words
"herein,"  "hereof" and  "hereunder"  and other words of similar import refer to
this  Note as a whole  and  not to any  particular  Article,  Section  or  other
subdivision.

     "Board of Directors" means the board of directors of the Company as elected
from time to time or any duly authorized committee of that board.

     "Business Day" means each Monday, Tuesday,  Wednesday,  Thursday and Friday
which  is  not a day  on  which  banking  institutions  in  Houston,  Texas  are
authorized or obligated by law or executive order to be closed.

     "Common Stock" means shares of common stock, par value $0.005 per share, of
the Company.

     "Conversion  Price" means the price per share determined in accordance with
Articles  IV and V (as  adjusted in  accordance  with the terms of this Note) at
which shares of Common Stock shall be  delivered  to Holder upon  conversion  of
this Note.

     "Default"  means any event  which is, or after  notice or  passage  of time
would be, an Event of Default.

     "Event of Default" has the meaning specified in Section 3.1.

     "Indebtedness" of any Person means all indebtedness of such Person, whether
outstanding on the date of this Note or hereafter created,  incurred, assumed or
guaranteed,  (a) for the  principal of and premium,  if any, and interest on all
debts of the Person  whether  outstanding on the date of this Note or thereafter
created  (i) for money  borrowed  by such Person  (including  capitalized  lease
obligations),  (ii) for money borrowed by others  (including  capitalized  lease
obligations) and guaranteed,  directly or indirectly,  by such Person,  or (iii)
constituting purchase money indebtedness, or indebtedness secured by property at
the time of the acquisition of such property by such Person,  for the payment of
which  the  Person is  directly  or  contingently  liable;  (b) for all  accrued
obligations  of the Person in respect of any  contract,  agreement or instrument
imposing an obligation upon the Person to pay over funds; (c) for all trade debt
of the Person;  and (d) for all deferrals,  renewals,  extensions and refundings
of, and amendments,  modifications  and supplements to, any of the  indebtedness
referred to in (a), (b) or (c) above.

                                       2
<PAGE>

     "Maturity  Date",  when used with respect to this Note,  means  January 15,
2001 (or such earlier  date upon which this Note  becomes due and payable  under
Section 3.2).

     "Note"  means this  Convertible  Promissory  Note,  as  hereafter  amended,
modified, substituted or replaced.

     "Person" means any  individual,  corporation,  limited  liability  company,
partnership,  joint venture,  association,  joint-stock company,  trust, estate,
other  entity,  unincorporated  organization  or  government  or any  agency  or
political subdivision thereof.

     "Subsidiary"  means a  corporation  or other  entity  more  than 50% of the
outstanding  voting stock of which,  or more than 50% of the equity  interest in
which, is owned, directly or indirectly,  by the Company or by one or more other
Subsidiaries  of the Company,  or by any  combination  of the Company and one or
more other Subsidiaries.  For purposes of this definition,  "voting stock" means
stock which  ordinarily has voting power for the election of directors,  whether
at all times or only so long as no senior  class of stock has such voting  power
by reason of any contingency.

     "Transaction Documents" shall have the meaning assigned to such term in the
Agreement.

                                   ARTICLE II

                             COMMITMENT AND ADVANCES

     2.1  Advances.  Subject  to the terms and  conditions  and  relying  on the
representations  and  warranties  set forth herein and in the other  Transaction
Documents,  Holder  agrees to advance  to the  Company a sum  equaling  the Note
principal amount in one advance.

     2.2  Interest.  From the date of this  Note  through  September  30,  2000,
interest shall accrue hereunder on the unpaid outstanding  principal sum of this
Note at a rate equal to ten percent (10%) per annum calculated on the basis of a
360-day year.  From October 1, 2000 through the Maturity  Date,  interest  shall
accrue hereunder on the unpaid outstanding  principal sum of this Note at a rate
equal to fifteen  percent  (15%) per annum  calculated on the basis of a 360-day
year.  All past due amounts of  principal  and interest  shall bear  interest at
fifteen percent (15%) per annum  calculated on the basis of a 360-day year until
paid.

     2.3 Payment of Principal  and  Interest.  The principal and all accrued and
unpaid interest under this Note shall be due and payable in full on the Maturity
Date. At any time,  the Holder may, at its option and in lieu of cash,  elect to
be paid all  accrued  and unpaid  interest  owed to Holder by the Company in the
form of Common Stock,  based on a price per share equal to the Conversion  Price
(the "Price Per  Share").  The amount of all accrued and unpaid  interest on the
Maturity  Date shall be  divided  by the Price Per Share into a whole  number of
shares of Common Stock, with the remainder, if any, being paid in cash.

                                       3
<PAGE>

     2.4 Prepayments.  Subject to Holder's right to convert,  at any time before
the  Maturity  Date,  the  Company  may prepay  this Note,  in whole or in part,
without  penalty or  discount,  upon five days' prior  written  notice  given to
Holder  pursuant  to Section  7.5.  All  payments  made under this Note shall be
applied  first to accrued  interest,  and the  balance,  if any,  to  principal;
provided, however, that interest shall accrue on any remaining principal balance
and shall be payable at the rate provided above.

     2.5 Manner of Payment. Cash payments of principal and interest on this Note
will be made by  delivery  of a check to Holder at its  address  as set forth in
this Note or a wire transfer pursuant to instructions from Holder.

     2.6 Use of Proceeds.  The proceeds of all advances shall be used to provide
working  capital  required  by the  Company.  No portion of the  proceeds of any
Advance  under this Note shall be used by the  Company in any manner  that might
cause the borrowing or the application of such proceeds to violate Regulation U,
Regulation  T, or Regulation X or any other  regulation  of the Federal  Reserve
Board or to violate the  Securities  Exchange Act of 1934,  as amended,  in each
case as in effect on the date of such borrowing and such use of proceeds.

                                   ARTICLE III

                                    REMEDIES

     3.1 Events of Default. An "Event of Default" occurs if:

          (a) the Company defaults in the payment or mandatory prepayment of the
     principal or interest on this Note when such principal or interest  becomes
     due and payable and such default remains uncured for a period of five days;
     or

          (b) the Company  defaults in the  performance  of any covenant made by
     the Company,  and such default  remains  uncured for a period of 45 days in
     and of (i) that  certain  Agreement  for Purchase and Sale dated as of even
     date herewith (the  "Purchase  Agreement");  (ii) the Common Stock Purchase
     Warrants  issued  by the  Company  to Holder  pursuant  to the terms of the
     Purchase Agreement and dated as of the date hereof (the "Warrants");  (iii)
     the Registration Rights Agreement; (iv) the Security Agreement; or (v) this
     Note (other than a default in the  performance  of a covenant  specifically
     addressed  elsewhere in this Section  3.1);  provided that a default in the
     performance of any covenant in Sections 8(a), 8(b), 8(c), 8(d), 8(e), 8(f),
     8(h), 8(i),  8(j),  8(k),  8(l), 8(m) or 8(n) of the Security  Agreement or
     Section  6.1 of this Note  shall be an Event of  Default  immediately  upon
     occurrence; or

          (c) any representation or warranty made by the Company in the Purchase
     Agreement,  the Warrants,  the Registration Rights Agreement,  the Security
     Agreement  or this Note or in any  certificate  furnished by the Company in
     connection with the consummation of the transaction contemplated thereby or
     hereby,  is untrue in any material respect as of the date of making thereof
     and such default remains uncured for a period of 45 days; or

                                       4
<PAGE>

          (d) the Company  defaults in the payment when due (whether by lapse of
     time, by declaration, by call for redemption or otherwise) of the principal
     of or  interest  on  any  Indebtedness  of  the  Company  (other  than  the
     Indebtedness  evidenced by this Note) having an aggregate  principal amount
     in excess of $100,000 or on any  Indebtedness  of the Company to any of its
     stockholders and such default remains uncured for a period of 45 days; or

          (e) a court of competent  jurisdiction  enters a judgment or judgments
     against the  Company,  or any  property or assets of the  Company,  for the
     payment  of money  aggregating  $100,000  or more in excess  of  applicable
     insurance  coverage  (other than the judgment  disclosed on Schedule 3.1(e)
     hereto) and such default remains uncured for a period of 45 days; or

          (f) a court of competent jurisdiction enters (i) a decree or order for
     relief in respect of the Company in an involuntary case or proceeding under
     any applicable federal or state bankruptcy,  insolvency,  reorganization or
     other  similar  law or (ii) a  decree  or order  adjudging  the  Company  a
     bankrupt or insolvent,  or approving as properly  filed a petition  seeking
     reorganization,  arrangement, adjustment or composition of or in respect of
     the Company  under any  applicable  federal or state law, or  appointing  a
     custodian, receiver,  liquidator,  assignee, trustee, sequestrator or other
     similar  official of the Company or of any substantial part of the property
     of the Company or ordering the winding up or  liquidation of the affairs of
     the Company and any such decree or order of relief or any such other decree
     or order  remains  unstayed for a period of 90 days from its date of entry;
     or

          (g) the Company  commences a voluntary  case or  proceeding  under any
     applicable federal or state bankruptcy, insolvency, reorganization or other
     similar law or any other case or proceeding to be adjudicated a bankrupt or
     insolvent,  or the  Company  files a  petition,  answer or consent  seeking
     reorganization or relief under any applicable  federal or state law, or the
     Company  makes an  assignment  for the benefit of  creditors,  or admits in
     writing its inability to pay its debts generally as they become due; or

          (h) the  Company  (1)  merges or  consolidates  with or into any other
     Person  (unless the  Company is the  surviving  or  acquiring  party);  (2)
     dissolves or liquidates; or (3) sells all or any substantial portion of its
     assets.

     3.2  Acceleration  of Maturity.  This Note and all accrued  interest  shall
automatically  become  immediately  due  and  payable  if an  Event  of  Default
described in Sections  3.1(f),  3.1(g) or 3.1(i) occurs and, this Note shall, at
the  option of the Holder in its sole  discretion,  become  immediately  due and
payable if any other Event of Default occurs,  and in every such case the Holder
of the Note may declare  the  principal  and  interest on the Note to be due and
payable immediately.

                                       5
<PAGE>

                                   ARTICLE IV

                               CONVERSION OF NOTE

     Subject to and upon compliance with the provisions of this Article,  at the
option of Holder,  all or any part of this Note may be converted at any time, at
the principal  amount hereof together with accrued and unpaid interest  thereon,
into fully paid and  nonassessable  shares  (calculated as to each conversion to
the  nearest  1/100 of a share) of Common  Stock.  The  Conversion  Price  shall
initially be $0.75 per share.  Notwithstanding anything else to the contrary set
forth  herein,  the Holder shall have the right to convert this Note pursuant to
the terms set forth herein at any time, including the 30 Business Days following
(i) the Maturity Date or (ii) any prepayment  pursuant to Section 2.5 hereof. If
Holder elects to convert this Note after a prepayment  has been made pursuant to
Section  2.5,  then Holder shall return all or such portion of the funds paid to
Holder as to which Holder has elected to convert.

                                    ARTICLE V

                         ADJUSTMENT OF CONVERSION PRICE

     5.1  Anti-Dilution  Provisions.  The  Conversion  Price shall be subject to
adjustment  from time to time as hereinafter  provided.  Upon each adjustment of
the Conversion  Price,  the holder of this Note shall  thereafter be entitled to
purchase, at the Conversion Price resulting from such adjustment,  the number of
shares of Common Stock  obtained by multiplying  the Conversion  Price in effect
immediately  prior  to such  adjustment  by the  number  of  shares  purchasable
pursuant  hereto  immediately  prior to such adjustment and dividing the product
thereof by the Conversion Price resulting from such adjustment.

     5.2 Adjustment of Conversion Price Upon Issuance of Common Stock.

          5.2.1 (A) If and  whenever  after the date  hereof the  Company  shall
     issue or sell any Common Stock for no  consideration or for a consideration
     per share less than the  Conversion  Price,  issue  convertible  securities
     other than this Note,  issue warrants other than the Warrants  issued as of
     the date  hereof,  grant stock  options,  or issue any other  common  stock
     equivalent (other than shares reserved for issuance to officers, employees,
     directors,  consultants  or advisors  of the  Company  pursuant to existing
     stock option or restricted stock purchase plans) then, forthwith, upon such
     issue or sale,  the  Conversion  Price shall be reduced (but not increased,
     except as otherwise  specifically  provided in Section 5.2.2), to the lower
     price per share  (calculated to the nearest  one-ten  thousandth of a cent,
     but in any event not less than $0.001 per share).

               (B)  Notwithstanding  the  provisions  of this  Section  5.2,  no
     adjustment  shall be made in the  Conversion  Price in the  event  that the
     Company issues, in one or more transactions, (i) Common Stock upon exercise
     of any options  issued to  officers,  directors or employees of the Company
     pursuant to a stock option plan or an

                                       6
<PAGE>

     employment,  severance  or  consulting  agreement  as now or  hereafter  in
     effect, in each case approved by the Board of Directors  (provided that the
     aggregate number of shares of Common Stock which may be issuable, including
     options issued prior to the date hereof,  under all such employee plans and
     agreements  shall at no time  exceed  the  number of such  shares of Common
     Stock  outstanding  on the date  hereof on a fully  diluted  basis that are
     issuable under currently  effective  employee plans and  agreements);  (ii)
     Common  Stock  upon  conversion  of this Note or any other  warrant  issued
     pursuant to the terms of the  Purchase  Agreement;  (iii) Common 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 (iv)  Common  Stock  issued  as  consideration  in
     acquisitions.

          5.2.2  For  purposes  of this  Section  5.2,  the  following  shall be
     applicable:

               (A) Issuance of Rights or Options.  In case at any time after the
     date hereof the Company shall in any manner grant  (whether  directly or by
     assumption  in a merger or  otherwise)  any rights to  subscribe  for or to
     purchase,  or any options for the purchase of, Common Stock or any stock or
     securities   convertible  into  or  exchangeable  for  Common  Stock  (such
     convertible  or  exchangeable  stock  or  securities  being  herein  called
     "Convertible  Securities")  (other than  warrants,  options or  convertible
     securities  issued as  consideration  for or assumed in conjunction with an
     acquisition or to officers,  directors, or employees of the acquired entity
     in  conjunction  therewith),  whether or not such  rights or options or the
     right  to  convert  or  exchange  any  such   Convertible   Securities  are
     immediately exercisable, and the price per share for which shares of Common
     Stock are  issuable  upon the  exercise  of such  rights or options or upon
     conversion  or  exchange  of such  Convertible  Securities  (determined  by
     dividing  (i) the total  amount,  if any,  received  or  receivable  by the
     Company as consideration  for the granting of such rights or options,  plus
     the minimum aggregate amount of additional  consideration,  if any, payable
     to the Company upon the exercise of such rights or options, or plus, in the
     case of such rights or options that relate to Convertible  Securities,  the
     minimum aggregate amount of additional consideration,  if any, payable upon
     the issue or sale of such Convertible Securities and upon the conversion or
     exchange  thereof,  by (ii) the  total  maximum  number of shares of Common
     Stock  issuable  upon the  exercise  of such  rights or options or upon the
     conversion or exchange of all such Convertible Securities issuable upon the
     exercise of such rights or options) shall be less than the Conversion Price
     in effect as of the date of granting such rights or options, then the total
     maximum number of shares of Common Stock issuable upon the exercise of such
     rights or options or upon  conversion  or exchange of all such  Convertible
     Securities  issuable  upon the exercise of such rights or options  shall be
     deemed to be  outstanding  as of the date of the granting of such rights or
     options and to have been  issued for such price per share,  with the effect
     on the  Conversion  Price  specified  in Section  5.2.1  hereof.  Except as
     provided in Section 5.2.2 hereof,  no further  adjustment of the Conversion
     Price shall be made upon the actual  issuance  of such  Common  Stock or of
     such Convertible Securities upon exercise of such rights or options or upon
     the actual  issuance of such Common  Stock upon  conversion  or exchange of
     such Convertible Securities.

                                       7
<PAGE>

               (B) Change in Option Price or Conversion Rate. Upon the happening
     of any of the following events,  namely, if the purchase price provided for
     in any right or option  referred to in Section 5.2.2 above,  the additional
     consideration,  if any,  payable  upon the  conversion  or  exchange of any
     Convertible  Securities referred to in Section 5.2.2(A) hereof, or the rate
     at which any Convertible Securities referred to in Section 5.2.2(A) hereof,
     are convertible  into or exchangeable  for Common Stock shall change (other
     than  under  or  by  reason  of  provisions  designed  to  protect  against
     dilution), the Conversion Price then in effect hereunder shall forthwith be
     readjusted  (increased or decreased,  as the case may be) to the Conversion
     Price that would have been in effect at such time had such rights,  options
     or  Convertible  Securities  still  outstanding  provided  for such changed
     purchase price,  additional  consideration  or conversion rate, as the case
     may be, at the time initially granted, issued or sold. On the expiration of
     any such option or right referred to in Section 5.2.2(A) hereof,  or on the
     termination  of any such right to convert or exchange any such  Convertible
     Securities  referred to in Section  5.2.2(A)  hereof,  the Conversion Price
     then in effect  hereunder  shall  forthwith  be  readjusted  (increased  or
     decreased, as the case may be) to the Conversion Price that would have been
     in effect at the time of such  expiration  or  termination  had such right,
     option or Convertible  Securities,  to the extent  outstanding  immediately
     prior to such  expiration or  termination,  never been  granted,  issued or
     sold, and the Common Stock issuable thereunder shall no longer be deemed to
     be  outstanding.  If the purchase  price  provided for in Section  5.2.2(A)
     hereof  or the rate at which  any  Convertible  Securities  referred  to in
     Section  5.2.2(A)  hereof are convertible  into or exchangeable  for Common
     Stock  shall be reduced at any time under or by reason of  provisions  with
     respect thereto designed to protect against  dilution,  then in case of the
     delivery of Common  Stock upon the  exercise of any such right or option or
     upon  conversion  or  exchange  of any  such  Convertible  Securities,  the
     Conversion Price then in effect  hereunder shall, if not already  adjusted,
     forthwith be adjusted to such amount as would have obtained had such right,
     option or Convertible  Securities never been issued as to such Common Stock
     and had  adjustments  been  made  upon the  issuance  of the  Common  Stock
     delivered  as  aforesaid,  but only if as a result of such  adjustment  the
     Conversion Price then in effect hereunder is thereby reduced.

               (C)  Consideration for Stock. In case at any time Common Stock or
     Convertible Securities or any rights or options to purchase any such Common
     Stock or  Convertible  Securities  shall be issued  or sold for  cash,  the
     consideration  therefore  shall be deemed to be the amount  received by the
     Company  therefore.  In case at any  time  any  Common  Stock,  Convertible
     Securities  or any rights or options to purchase  any such Common  Stock or
     Convertible Securities shall be issued or sold for consideration other than
     cash,  the  amount of the  consideration  other than cash  received  by the
     Company  shall be deemed  to be the fair  value of such  consideration,  as
     determined  reasonably  and in good faith by the Board of  Directors of the
     Company.  In case at any time any Common Stock,  Convertible  Securities or
     any  rights  or  options  to  purchase  any  Common  Stock  or  Convertible
     Securities  shall be issued in connection with any merger or  consolidation
     in  which  the  Company  is  the  surviving  corporation,   the  amount  of
     consideration  received  therefore shall be deemed to be the fair value, as
     determined  reasonably  and in good faith

                                       8
<PAGE>

     by the Board of Directors of the Company, of such portion of the assets and
     business of the  nonsurviving  corporation  as such Board of Directors  may
     determine to be attributable to such Common Stock,  Convertible Securities,
     rights or  options  as the case may be.  In case at any time any  rights or
     options to purchase  any shares of Common Stock or  Convertible  Securities
     shall  be  issued  in  connection  with  the  issuance  and  sale of  other
     securities of the Company,  together consisting of one integral transaction
     in which no  consideration  is  allocated  to such rights or options by the
     parties, such rights or options shall be deemed to have been issued without
     consideration.

               (D) Record Date.  In the case the Company  shall take a record of
     the holders of its Common  Stock for the purpose of  entitling  them (i) to
     receive  a  dividend  or other  distribution  payable  in  Common  Stock or
     Convertible  Securities,  or (ii) to subscribe for or purchase Common Stock
     or Convertible Securities,  then such record date shall be deemed to be the
     date of the issuance or sale of the Common Stock or Convertible  Securities
     deemed to have been issued or sold as a result of the  declaration  of such
     dividend  or the  making  of such  other  distribution  or the  date of the
     granting of such right of subscription or purchase, as the case may be.

               (E)  Treasury  Shares.  The  number of  shares  of  Common  Stock
     outstanding  at any given time shall not include  shares owned  directly by
     the Company in treasury,  and the  disposition  of any such shares shall be
     considered  an  issuance  or sale of Common  Stock for the  purpose of this
     Section 5.2.

     5.3 Stock  Dividends.  In case the Company shall declare a dividend or make
any other  distribution upon any shares of the Company,  payable in Common Stock
or Convertible Securities,  any Common Stock or Convertible  Securities,  as the
case may be,  issuable  in payment of such  dividend  or  distribution  shall be
deemed to have been issued or sold without consideration.

     5.4 Stock Splits and Reverse Splits. In the event that the Company shall at
any time subdivide its outstanding  shares of Common Stock into a greater number
of shares,  the Conversion Price in effect immediately prior to such subdivision
shall be  proportionately  reduced and the number of Shares into which this Note
may be converted  immediately prior to such subdivision shall be proportionately
increased,  and conversely,  in the event that the outstanding  shares of Common
Stock  shall at any time be  combined  into a  smaller  number  of  shares,  the
Conversion  Price  in  effect  immediately  prior to such  combination  shall be
proportionately  increased  and the number of Shares into which this Note may be
converted  immediately  prior  to  such  combination  shall  be  proportionately
reduced.  Except as provided in this Section 5.4 no adjustment in the Conversion
Price and no change in the number of Shares  shall be made under this  Article V
as a result of or by reason of any such subdivision or combination.

     5.5  Reorganizations  and Asset  Sales.  If any capital  reorganization  or
reclassification  of the capital  stock of the  Company,  or any  consolidation,
merger or share  exchange  of the  Company  with  another  Person,  or the sale,
transfer  or other  disposition  of all or  substantially  all of its  assets to
another  Person  shall be  effected in such a way that  holders of Common  Stock
shall

                                       9
<PAGE>

be entitled to receive capital stock, securities or assets with respect to or in
exchange for their shares, then the following provisions shall apply:

          5.5.1  As  a  condition  of  such  reorganization,   reclassification,
     consolidation,  merger, share exchange, sale, transfer or other disposition
     (except as otherwise provided below in Section 5.5.3),  lawful and adequate
     provisions  shall be made whereby the holder of this Note shall  thereafter
     have the right to  purchase  and  receive  upon the  terms  and  conditions
     specified  in this Note and in lieu of the shares  immediately  theretofore
     receivable upon the exercise of the rights represented  hereby, such shares
     of capital  stock,  securities  or assets as may be issued or payable  with
     respect to or in exchange for a number of outstanding shares of such Common
     Stock equal to the number of shares  immediately  theretofore so receivable
     had such  reorganization,  reclassification,  consolidation,  merger, share
     exchange  or  sale  not  taken  place,  and in any  such  case  appropriate
     provision reasonably satisfactory to such holder shall be made with respect
     to the rights and  interests of such holder to the end that the  provisions
     hereof (including,  without  limitation,  provisions for adjustments of the
     Conversion Price and of the number of shares  receivable upon the exercise)
     shall thereafter be applicable,  as nearly as possible,  in relation to any
     shares of capital stock,  securities or assets thereafter  deliverable upon
     the exercise of this Note.

          5.5.2 In the event of a merger, share exchange or consolidation of the
     Company with or into another Person as a result of which a number of shares
     of common stock or its equivalent of the successor Person greater or lesser
     than the number of shares of Common Stock outstanding  immediately prior to
     such merger,  share  exchange or  consolidation  are issuable to holders of
     Common Stock, then the Conversion Price in effect immediately prior to such
     merger,  share  exchange  or  consolidation  shall be  adjusted in the same
     manner as though there were a subdivision or combination of the outstanding
     shares of Common Stock.

          5.5.3 The  Company  shall not effect any such  consolidation,  merger,
     share  exchange,  sale,  transfer or other  disposition  unless prior to or
     simultaneously with the consummation thereof the successor Person (if other
     than the Company)  resulting  from such  consolidation,  share  exchange or
     merger or the Person  purchasing or otherwise  acquiring  such assets shall
     have assumed by written instrument  executed and mailed or delivered to the
     Holder hereof at the last address of such Holder  appearing on the books of
     the Company the obligation to deliver to such Holder such shares of capital
     stock,   securities  or  assets  as,  in  accordance   with  the  foregoing
     provisions,  such  Holder  may  be  entitled  to  receive,  and  all  other
     liabilities and obligations of the Company hereunder.  Upon written request
     by the Holder hereof,  such Successor  Person will issue a new Note revised
     to reflect the modifications in this Note effected pursuant to this Section
     5.5.

          5.5.4 If a purchase,  tender or exchange offer is made to and accepted
     by the holders of 50% or more of the  outstanding  shares of Common  Stock,
     the Company shall not effect any consolidation,  merger,  share exchange or
     sale,  transfer or other  disposition  of all or  substantially  all of the
     Company's  assets  with  the  Person  having  made  such  offer

                                       10
<PAGE>

     or with any affiliate of such Person,  unless prior to the  consummation of
     such  consolidation,  merger,  share  exchange,  sale,  transfer  or  other
     disposition   the  holder   hereof  shall  have  been  given  a  reasonable
     opportunity  to then  elect to  receive  upon the  conversion  of this Note
     either the capital  stock,  securities or assets then issuable with respect
     to the Common  Stock or the capital  stock,  securities  or assets,  or the
     equivalent,  issued to previous  holders of the Common Stock in  accordance
     with such offer.

     5.6 Adjustment for Asset  Distribution.  If the Company declares a dividend
or other  distribution  payable  to all  holders  of shares  of Common  Stock in
evidences  of  indebtedness  of the  Company  or  other  assets  of the  Company
(including,  cash (other than  regular cash  dividends  declared by the Board of
Directors),  capital stock (other than Common Stock,  Convertible  Securities or
options or rights thereto) or other  property),  the Conversion  Price in effect
immediately  prior to such  declaration  of such dividend or other  distribution
shall  be  reduced  by an  amount  equal  to the  amount  of  such  dividend  or
distribution  payable per share of Common Stock,  in the case of a cash dividend
or distribution, or by the fair value of such dividend or distribution per share
of  Common  Stock  (as  reasonably  determined  in good  faith  by the  Board of
Directors of the Company),  in the case of any other  dividend or  distribution.
Such reduction  shall be made whenever any such dividend or distribution is made
and shall be  effective as of the date as of which a record is taken for purpose
of such dividend or  distribution  or, if a record is not taken,  the date as of
which  holders  of  record  of  Common  Stock   entitled  to  such  dividend  or
distribution are determined.

     5.7 De Minimis Adjustments. No adjustment in the number of shares of Common
Stock  purchasable  hereunder  shall be required  unless such  adjustment  would
require  an  increase  or  decrease  of at  least  one  share  of  Common  Stock
purchasable  upon  conversion of the Note and no  adjustment  in the  Conversion
Price shall be  required  unless such  adjustment  would  require an increase or
decrease of at least $.01 in the Conversion Price;  provided,  however, that any
adjustments  which by reason of this  Section  5.7 are not  required  to be made
shall be carried  forward and taken into account in any  subsequent  adjustment.
All  calculations  shall  be made to the  nearest  full  share  or  nearest  one
hundredth of a dollar, as applicable.

     5.8 Notice of Adjustment.  Whenever the  Conversion  Price or the number of
Shares  issuable  upon the  conversion  of the Note shall be  adjusted as herein
provided,  or the rights of the holder  hereof  shall  change by reason of other
events specified herein, the Company shall compute the adjusted Conversion Price
and the adjusted number of Shares in accordance  with the provisions  hereof and
shall prepare an Officer's  Certificate  setting  forth the adjusted  Conversion
Price and the adjusted  number of Shares  issuable  upon the  conversion of this
Note or specifying the other shares of stock, securities or assets receivable as
a result of such change in rights,  and showing in  reasonable  detail the facts
and  calculations  upon which such  adjustments or other changes are based.  The
Company shall cause to be mailed to the Holder  hereof copies of such  Officer's
Certificate  together with a notice  stating that the  Conversion  Price and the
number of Shares purchasable upon conversion of this Note have been adjusted and
setting forth the adjusted  Conversion  Price and the adjusted  number of Shares
purchasable upon conversion of this Note.

                                       11
<PAGE>

     5.9 Notifications to Holder. In case at any time the Company proposes:

               (i) to declare  any  dividend  upon its Common  Stock  payable in
          capital  stock  or make any  special  dividend  or other  distribution
          (other than cash dividends) to the holders of its Common Stock;

               (ii) to offer for  subscription pro rata to all of the holders of
          its Common Stock any  additional  shares of capital stock of any class
          or other rights;

               (iii) to effect any capital  reorganization,  or reclassification
          of the capital stock of the Company, or consolidation, merger or share
          exchange of the Company  with  another  Person,  or sale,  transfer or
          other disposition of all or substantially all of its assets; or

               (iv)  to  effect  a   voluntary   or   involuntary   dissolution,
          liquidation or winding up of the Company,

then, in any one or more of such cases, the Company shall give the holder hereof
(a) at least 10 days (but not more  than 90 days)  prior  written  notice of the
date on which the books of the Company  shall  close or a record  shall be taken
for such dividend, distribution or subscription rights or for determining rights
to vote in  respect  of any  such  issuance,  reorganization,  reclassification,
consolidation, merger, share exchange, sale, transfer, disposition, dissolution,
liquidation  or  winding  up,  and  (b)  in  the  case  of  any  such  issuance,
reorganization,  reclassification,  consolidation, merger, share exchange, sale,
transfer, disposition,  dissolution, liquidation or winding up, at least 10 days
(but not more than 90 days) prior written notice of the date when the same shall
take place.  Such notice in accordance with the foregoing  clause (a) shall also
specify, in the case of any such dividend,  distribution or subscription rights,
the date on which the holders of Common  Stock shall be  entitled  thereto,  and
such notice in accordance  with the foregoing  clause (b) shall also specify the
date on which the holders of Common  Stock  shall be entitled to exchange  their
Common Stock,  as the case may be, for securities or other property  deliverable
upon  such  reorganization,   reclassification,   consolidation,  merger,  share
exchange, sale, transfer, disposition,  dissolution,  liquidation or winding up,
as the case may be.

     5.10 Company to Prevent  Dilution.  If any event or condition  occurs as to
which  other  provisions  of this  Article  are not  strictly  applicable  or if
strictly  applicable would not fairly protect the exercise or purchase rights of
this  Note  evidenced  hereby  in  accordance  with  the  essential  intent  and
principles of such provisions, or that might materially and adversely affect the
exercise or purchase  rights of the holder  hereof under any  provisions of this
Note,  then the Company shall make such  adjustments in the  application of such
provisions,  in accordance with such essential  intent and principles,  so as to
protect such  exercise and purchase  rights as  aforesaid,  and any  adjustments
necessary  with  respect  to the  Conversion  Price  and the  number  of  shares
purchasable  hereunder so as to preserve the rights of the holder hereunder.  In
no event shall any such  adjustment have the effect of increasing the Conversion
Price as otherwise  determined pursuant to this Article except in the event of a
combination of shares of the type

                                       12
<PAGE>

contemplated  in Section 5.4 hereof,  and then in no event to an amount  greater
than the Conversion Price as adjusted pursuant to Section 5.4 hereof.

                                   ARTICLE VI

                                    COVENANTS

     The Company covenants and agrees that, so long as this Note is outstanding:

     6.1 Payment of Principal  and Accrued  Interest.  The Company will duly and
punctually pay or cause to be paid the principal sum of this Note, together with
interest  accrued  thereon  from the date  hereof  to the  date of  payment,  in
accordance with the terms hereof.

     6.2 Corporate Existence. The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights  (charter and  statutory) and  franchises;  provided,  however,  that the
Company  shall not be  required to preserve  any such right or  franchise  if it
shall reasonably  determine that the preservation thereof is no longer desirable
in the conduct of its business.

     6.3 Taxes;  Claims;  etc. The Company will  promptly pay and  discharge all
lawful taxes, assessments, and governmental charges or levies imposed upon it or
upon its income or profits, or upon any of its properties,  real,  personal,  or
mixed, before the same shall become in default, as well as all lawful claims for
labor,  materials,  and supplies or otherwise  which, if unpaid,  might become a
lien or charge  upon such  properties  or any part  thereof,  and which  lien or
charge  will have a material  adverse  effect on the  business  of the  Company;
provided, however, that neither the Company shall be required to pay or cause to
be paid any such tax, assessment, charge, levy, or claim prior to institution of
foreclosure  proceedings if the validity thereof shall concurrently be contested
in  good  faith  by  appropriate  proceedings  and if  the  Company  shall  have
established  reserves  deemed by the Company  adequate with respect to such tax,
assessment, charge, levy, or claim.

     6.4  Maintenance  of Existence  and  Properties.  The Company will keep its
material properties in good repair, working order, and condition,  ordinary wear
and tear excepted,  so that the business carried on may be properly conducted at
all times in accordance with prudent business management.

     6.5 SEC  Reports.  The Company  will  deliver to the Holder  within 20 days
after it files them with the SEC, copies of its annual and quarterly reports and
of the information,  documents, and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and  regulations  prescribe)  which
the Company is required or elects to file with the SEC pursuant to Section 13 or
15(d) of the  Securities  Exchange Act of 1934.  The Company will timely  comply
with  its  reporting  and  filing   obligations  under  the  applicable  federal
securities laws.

     6.6 Notice of  Defaults.  The Company  will  promptly  notify the Holder in
writing of the  occurrence of (i) any Event of Default under this Note, and (ii)
any event of default (or if any

                                       13
<PAGE>

event of default  would  result upon any payment with respect to this Note) with
respect to any  Indebtedness  as such event of default is defined  therein or in
the instrument under which it is outstanding,  permitting  holders to accelerate
the maturity of such Indebtedness.

     6.7 Compliance  with Laws. The Company will promptly  comply with all laws,
ordinances and  governmental  rules and regulations to which it is subject,  the
violation of which would materially and adversely affect the Company.

     6.8 Amendments to Charter. The Company will not amend or modify its charter
without the prior  written  consent of Holder.  On or before June 30, 2000,  the
Company will amend its charter as necessary to authorize  the issuance of shares
of its common stock in sufficient  number for purposes of the  conversion of the
Notes and exercise of the Warrants.

     6.9 Mergers  and  Acquisitions.  Without  the  consent of the  Holder,  the
Company will not dissolve, liquidate,  consolidate,  merge or enter into a share
exchange with or sell or transfer all or a substantial  portion of its assets to
any Person.

     6.19 Indebtedness.  Without the consent of the Holder, the Company will not
incur any  indebtedness  for  borrowed  money,  nor grant or suffer to exist any
liens on its  properties  other  than  those  existing  on the date  hereof,  or
refinance existing indebtedness for borrowed money.

                                   ARTICLE VII

                                  MISCELLANEOUS

     7.1 Consent to  Amendments.  This Note may be amended,  and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, if and only if the Company shall obtain the written  consent
to such  amendment,  action or omission to act from the holders of a majority of
the aggregate principal amount of this Note.

     7.2  Benefits  of Note;  No  Impairment  of  Rights  of  Holder  of  Senior
Indebtedness.  Nothing  in this  Note,  express  or  implied,  shall give to any
Person, other than the Company,  Holder, and their successors any benefit or any
legal or equitable right, remedy or claim under or in respect of this Note.

     7.3  Successors  and Assigns.  All  covenants  and  agreements in this Note
contained  by or on behalf of the Company and the Holder shall bind and inure to
the  benefit of the  respective  successors  and  assigns of the Company and the
Holder.

     7.4  Restrictions  on Transfer.  Holder shall not transfer this Note except
(by the grant of a  security  interest)  to its  lender or  lenders.  As between
Holder and its lender or lenders,  this Note is  transferable in the same manner
and with the same effect as in the case of a negotiable  instrument payable to a
specified person.  Any lender to which Holder grants a security interest in this
Note shall be  entitled  to  exercise  all  remedies  to which it is entitled by
contract or by law,

                                       14
<PAGE>

including (without limitation)  transferring this 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.

     7.5  Notice;  Address  of  Parties.   Except  as  otherwise  provided,  all
communications to the Company or Holder provided for herein or with reference to
this Note  shall be deemed to have  been  sufficiently  given or served  for all
purposes on the third  business day after being sent as certified or  registered
mail,  postage  and  charges  prepaid,  to the  following  addresses:  if to the
Company:  Black  Warrior  Wireline  Corp.,  3748  Highway  #45 North,  Columbus,
Mississippi  39701, or at any other address designated by the Company in writing
to Holder;  if to Holder at the address  designated  by Holder to the Company in
writing.

     7.6  Separability  Clause.  In case any  provision  in this  Note  shall be
invalid,  illegal or unenforceable in any jurisdiction,  the validity,  legality
and enforceability of the remaining provisions in such jurisdiction shall not in
any way be affected or impaired thereby;  provided,  however,  such construction
does not destroy the essence of the bargain provided for hereunder.

     7.7  Governing  Law.  This Note  shall be  governed  by, and  construed  in
accordance  with, the internal laws of the State of Delaware  (without regard to
principles of choice of law).

     7.8 Usury. It is the intention of the parties hereto to conform strictly to
the  applicable  laws of the State of Delaware and the United States of America,
and  judicial  or  administrative   interpretations  or  determinations  thereof
regarding the contracting  for,  charging and receiving of interest for the use,
forbearance, and detention of money (hereinafter referred to in this Section 7.8
as "Applicable  Law").  The Holder shall have no right to claim, to charge or to
receive  any  interest  in  excess  of the  maximum  rate of  interest,  if any,
permitted  to be charged on that  portion of the amount  representing  principal
which  is  outstanding   and  unpaid  from  time  to  time  by  Applicable  Law.
Determination  of the rate of interest  for the purpose of  determining  whether
this  Note is  usurious  under  Applicable  Law  shall  be  made by  amortizing,
prorating,  allocating  and  spreading  in equal parts  during the period of the
actual  time of this Note,  all  interest  or other sums  deemed to be  interest
(hereinafter  referred  to in  this  Section  7.8 as  "Interest")  at  any  time
contracted  for,  charged or received from the Company in  connection  with this
Note. Any Interest  contracted for, charged or received in excess of the maximum
rate allowed by Applicable Law shall be deemed a result of a mathematical  error
and a mistake.  If this Note is paid in part prior to the end of the full stated
term of this Note and the Interest  received for the actual  period of existence
of this Note exceeds the maximum rate allowed by  Applicable  Law,  Holder shall
credit the amount of the excess  against any amount owing under this Note or, if
this Note has been paid in full,  or in the event  that it has been  accelerated
prior to maturity, Holder shall refund to the Company the amount of such excess,
and shall not be subject to any of the penalties  provided by Applicable Law for
contracting  for,  charging or receiving  Interest in excess of the maximum rate
allowed by Applicable Law. Any such excess which is unpaid shall be canceled.

     7.9 Purchase Agreement.  This Note is one of a number of notes being issued
and sold  pursuant to that  certain  Agreement  of Purchase and Sale dated as of
December 17,  1999,  among the Company,  Holder and the other  purchasers  named
therein.

                                       15
<PAGE>

     IN WITNESS  WHEREOF,  the  Company has caused  this  instrument  to be duly
executed on the date first above written.

                                             BLACK WARRIOR WIRELINE CORP.

                                             By:
                                                --------------------------------
                                                  William L. Jenkins, President

                                       16

<PAGE>

THE SECURITIES REPRESENTED BY THIS WARRANT AND THE COMMON STOCK ISSUABLE THEREBY
HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW AND, ACCORDINGLY,  THE
SECURITIES REPRESENTED BY THIS WARRANT MAY NOT BE RESOLD,  PLEDGED, OR OTHERWISE
TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN
A  TRANSACTION  EXEMPT  FROM  REGISTRATION  UNDER,  THE  SECURITIES  ACT  AND IN
ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS.

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