Document:

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                                                                    Exhibit 10.1

                           RECAPITALIZATION AGREEMENT

         This Recapitalization Agreement ("Agreement") is entered into this 6th
day of October, 2005 between Black Warrior Wireline Corp., a Delaware
corporation, (the "Company") and the person signing this Agreement on the
Signature Page hereof (the "Holder" and, collectively with each of the other
persons signing counterpart copies of this Agreement, the "Holders"), such
Holder having the address set forth on the Signature Page to this agreement.

                                   BACKGROUND

         A. The Company has outstanding as of September 30, 2005, an aggregate
of $42,477,902 of principal and accrued interest on its promissory notes (the
"Notes") which, as extended, are due and payable on February 14, 2008.

         B. The principal and accrued interest on the Notes is convertible into
shares of the Company's Common Stock, $0.0005 par value (the "Common Stock") at
a conversion price of $0.75 for each share of Common Stock, subject to
anti-dilution adjustment, or an aggregate of 56,637,203 shares of Common Stock
as of September 30, 2005, based on the interest accrued on the Notes through
that date.

         C. The Company also has outstanding as of September 30, 2005 common
stock purchase warrants (the "Warrants") to purchase an aggregate of 70,761,185
shares of Common Stock at an excise price of $0.75 per share, subject to
anti-dilution adjustment.

         D. In order to simplify and clarify its equity capital structure, the
Company is seeking to eliminate and reduce the amount of derivative securities
it has outstanding.

         E. The Company desires that the Holder, together with the other Holders
on the terms provided herein (i) exchange the Holder's Warrants (the "Holder
Warrants") for shares of Common Stock at the exchange ratio of one (1) share of
Common Stock for each three (3) Holder Warrants, and (ii) convert the principal
of and accrued interest on the Holder's Notes (the "Holder Notes") into shares
of Common Stock at the conversion price of $0.75 of principal and accrued
interest per share of Common Stock. The shares of Common Stock issued in
exchange for Holder Warrants are herein referred to as an "Exchange Share" and
on conversion of Holder Notes are herein referred to as "Conversion Shares".

         F. The Holder desires to convert the Holder Notes into Conversion
Shares and transfer and exchange the Holder Warrants for Exchange Shares on the
terms set forth herein.
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         G. Concurrently with entering into this Agreement, the Company has
entered into Recapitalization Agreements with St. James Capital Partners, L.P.
and SJMB, L.P. (the "St. James Partnerships"), and subsequent to entering into
this Agreement, the Company proposes to enter into Recapitalization Agreements
with each other holder of Notes and Warrants other than the Holders and the St.
James Partnerships (herein all holders of Notes and Warrants, including the
Holders and the St. James Partnerships, are collectively referred to as the
"Derivatives Holders" and the Derivatives Holders other than the Holders and the
St. James Partnerships are referred to as the "Other Derivatives Holders")
pursuant to which the Company will during the Exchange Period (as defined in
such Recapitalization Agreements with the Other Derivatives Holders) offer to
the Other Derivatives Holders to exchange its shares of Common Stock for
Warrants held by the Other Derivatives Holders at an exchange ratio of one (1)
Exchange Share for each three (3) Warrants. The Recapitalization Agreement dated
October 6, 2005 entered into by the Company with SJMB, L.P., among other
provisions, provides for the sale by SJMB, L.P. and the purchase by the Company
of 5,017,481 shares of the Company's Common Stock issued on conversion of a
portion of the interest that had accrued on the Notes held by SJMB, L.P. Herein,
such shares are referred to as the "SJMB Shares."

         H. After the expiration of the Exchange Period, the Company intends to
undertake to complete an Underwritten Offering (as defined herein). Pursuant to
a Registration Rights Agreement dated December 17, 1999 (the "Registration
Rights Agreement") between the Company and the Other Derivatives Holders the
Other Derivatives Holders have the right to request that their Conversion Shares
and, as such agreement is to be amended, their Exchange Shares, be included in
such registration and sold in the Underwritten Offering.

         I. Herein each three (3) Warrants are referred to as a "Warrant Unit"
and each Warrant Unit or Exchange Share to be sold by any Derivatives Holder,
either to the Company or in the Underwritten Offering, is referred to as an
"Exchange Share Equivalent."

                                    AGREEMENT

             NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements, covenants, representations and warranties contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, each intending to be legally bound,
hereby agree as follows:

             Certain terms used herein as defined terms are defined in Article
VIII hereof, unless the context should otherwise require.

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                                    ARTICLE I
                              THE WARRANT EXCHANGE

         1.1.     Exchange by Holder of Warrants for Shares of Common Stock.

                  1.1.1.   Subject to the terms and conditions of this
                           Agreement, the Holder herewith transfers and assigns
                           to the Company the Holder Warrants in exchange for
                           shares of the Common Stock of the Company at the
                           exchange rate of three (3) Warrants for each one (1)
                           share of Common Stock.

                  1.1.2.   In order to consummate the foregoing transaction,
                           upon execution of this Agreement, the Holder shall
                           deliver to the Company, at its address set forth in
                           subparagraph 7.3 hereof, (i) this Agreement in
                           duplicate executed on the Signature Page hereof, (ii)
                           the original executed Holder Warrants, (iii) the
                           executed warrant assignment attached hereto as
                           Addendum A (the "Warrant Assignment").

                  1.1.3.   Concurrently with the execution of this Agreement and
                           promptly upon receipt by the Company of (i) the
                           execution copies of this Agreement bearing Holder's
                           signature and (ii) the original executed Holder
                           Warrants, and (iii) executed Warrant Assignment, the
                           Company shall deliver to the Holder (A) an execution
                           copy of this Agreement signed on behalf of the
                           Company. The Company shall retain custody of the
                           certificates for the Exchange Shares for delivery
                           upon the sale of those shares to the Company as
                           provided in paragraph 4.3 hereof, subject the
                           paragraphs 3.2 and 4.4 hereof.

         1.2      Treatment of Fractional Shares. The Company shall not be
                  required to issue fractional shares of Common Stock in
                  exchange for the Holder Warrants. If more than one Holder
                  Warrant shall be presented for exchange by the Holder, the
                  number of full shares of Common Stock which shall be issuable
                  upon such exchange shall be computed on the basis of the
                  aggregate number of whole shares of Common Stock issuable in
                  exchange for the Holder Warrants so presented. If any fraction
                  of a share of Common Stock would, except for the provisions of
                  this paragraph, be issuable in exchange for Holder Warrants,
                  the Company shall pay to the Holder an amount in cash
                  calculated by it to be equal to the market price of one share
                  of Common Stock on the last Business Day of the Exchange
                  Period multiplied by such fraction computed to the nearest
                  whole cent.

         1.3      Effect of this Agreement. This Agreement for the exchange of
                  the Holder's Warrants for Exchange Shares shall be binding
                  upon the parties hereto upon execution of this Agreement by
                  both parties and neither party shall have the right to
                  terminate, revoke or rescind its agreements herein or the
                  exchange of Holder's Warrants for Exchange Shares. Such
                  exchange shall be an unconditional completed transaction
                  irrespective of whether or not the Underwritten Offering is
                  completed.

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         1.4      Resale Restrictions on Exchange Shares. Holder understands,
                  covenants and agrees that the Exchange Shares issued shall
                  have such restrictions on the resale of those shares as are
                  required under the Securities Act. In effecting resales of
                  such Exchange Shares, such shares will be deemed to be
                  "restricted securities" as defined under Rule 144 and, unless
                  such offer and resale has been registered under the Securities
                  Act, the resale will be subject to the restrictions and
                  limitations of Rule 144. Holder agrees that a legend may be
                  affixed to the certificate for the Exchange Shares issued to
                  Holder and stop transfer instructions can be placed against
                  the transfer of the Exchange Shares in accordance with the
                  foregoing.

                                   ARTICLE II
                        CONVERSION OF SUBORDINATED NOTES

         2.1      Agreement of Holder to Convert Principal and Interest of
                  Notes.

                  2.1.1    The Holder agrees irrevocably to convert at the
                           Closing Time of the Underwritten Offering the full
                           principal amount and all interest accrued on the
                           Holder Notes through the Interest Expiration Date (as
                           defined below) into shares of Common Stock, such
                           conversion to be effected automatically as of the
                           Closing Time and without further act by or on behalf
                           of the Holder.

                  2.1.2.   For the purpose of effecting the conversion of the
                           Holder Notes in accordance with subparagraph 2.1.1,
                           at the Closing Time of the Underwritten Offering, the
                           Holder shall deliver to the Company, at the location
                           set as the place for closing the Underwritten
                           Offering, the original executed Holder Notes,
                           together with a completed and executed Notice of
                           Conversion (the "Notice of Conversion") in the form
                           attached hereto as Addendum B, and the completed and
                           executed Stock Assignment (the "Stock Assignment") in
                           the form attached hereto as Addendum C. "

2.2. Treatment of Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the conversion of the Holder Notes. If more
than one Holder Note shall be presented for conversion by the Holder, the number
of full shares of Common Stock which shall be issuable upon such conversion
shall be computed on the basis of the aggregate number of whole shares of Common
Stock issuable on conversion for all the Holder Notes so presented. If any
fraction of a share of Common Stock would, except for the provisions of this
paragraph, be issuable on the conversion of this Note or Notes so presented, the
Company shall pay an amount in cash calculated by it to be equal to the market
price of one share of Common Stock on the Interest Expiration Date multiplied by
such fraction computed to the nearest whole cent.

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                                   ARTICLE III
                              UNDERWRITTEN OFFERING

         3.1. Commercially Reasonable Efforts of the Company. The Company agrees
that it shall promptly after the expiration of the Exchange Period use its
commercially reasonable efforts to complete an Underwritten Offering. Such
commercially reasonable efforts shall include, among other things, contacting
and soliciting prospective investment bankers to act as underwriters or agents
of the Company in effecting such transaction, providing to the prospective
investment bankers such financial and other information concerning the Company
as may be reasonably requested, providing reasonable access to the management of
the Company, its advisors and the Company's facilities as is requested by the
prospective investment bankers, fulfilling the Company's obligations set forth
in this Article II and otherwise enabling such investment bankers to have the
opportunity to engage in "due diligence" activities with respect to the Company
and its management, and completing the Underwritten Offering on such terms as
will yield Net Proceeds, after deducting such amount of Net Proceeds as are to
be retained by the Company for its corporate purposes, sufficient to enable the
Company to purchase all the Conversion Shares, SJMB Shares and such number of
Exchange Share Equivalents as are to be purchased by the Company, subject to
paragraph 3.2 hereof, at the Closing Time of the Underwritten Offering.

         3.2. Terms of Underwritten Offering. If the managing underwriter of the
Underwritten Offering concludes in its reasonable judgment that the number of
shares to be registered for selling shareholders would materially adversely
affect such offering and that the number of Conversion Shares and Exchange
Shares to be registered in such offering shall be reduced, the Holders, St.
James Capital Partners, L.P. and SJMB, L.P., under the terms this Agreement and
the other Recapitalization Agreements such persons have entered into with the
Company, severally and not jointly agree that the number of Conversion Shares,
SJMB Shares and Exchange Share Equivalents to be purchased from them by the
Company at the Closing Time shall be reduced in accordance with Addendum D
hereto to the extent necessary in order that the number of Conversion Shares and
Exchange Shares to be registered for sale in the Underwritten Offering by the
Other Derivatives Holders will no longer, in the reasonable judgment of the
managing underwriter, materially adversely affect the Underwritten Offering.

         3.3. Underwritten Offering Defined. An "Underwritten Offering" means a
sale of such number of shares of Common Stock of the Company conducted on such
terms and conditions, in compliance with the provisions of the Securities Act,
and at such price per share of Common Stock and on other terms and conditions as
the Company may in its sole and exclusive discretion determine to complete and
as will result in sufficient Net Proceeds, subject to paragraph 3.2 hereof, to
enable the Company to purchase not less than all the Conversion Shares, SJMB
Shares and Exchange Share Equivalents to be sold by the Underbrink Family
Entities and the St. James Partnerships and purchased by the Company, provided,
however, that the Underbrink Family Entities and the St. James Partnerships
shall only be obligated to sell their Conversion Shares, SJMB Shares and
Exchange Share Equivalents to the Company if the purchase price paid per
Conversion Share, SJMB Share and Exchange Share Equivalent is not less than
$0.75 per share (before reflecting stock splits, divisions, reverse stock splits
or share combinations).

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         3.4. Net Proceeds Defined. "Net Proceeds" means the total proceeds
received by the Company from a sale of shares of its Common Stock in a
Underwritten Offering after deducting selling, underwriting and other
commissions and expenses and fees, and before deducting legal, accounting and
printing expenses and all other expenses of the Company related to the
Underwritten Offering.

         3.5. Net Price Per Share. As used herein, "Net Price Per Share" means
the Net Proceeds received by the Company in the Underwritten Offering divided by
the number of shares of Common Stock sold by the Company in the Underwritten
Offering.

         3.6. Closing Time Defined. "Closing Time" means the time at which all
conditions to the closing of the Underwritten Offering have been met or waived
and the Company issues and delivers the shares of Common Stock sold for the
consideration paid for such shares.

         3.7. Agreements. In connection with the Underwritten Offering, the
Company agrees to execute such underwriting or selling agreements and such other
agreements and documents, including indemnification provisions, as are
customarily entered into in connection with such transactions and provide its
cooperation and the cooperation of its officers and employees in effecting the
Underwritten Offering.

                                   ARTICLE IV
    SALE TO COMPANY OF CONVERSION SHARES AND EXCHANGE SHARES AT CLOSING TIME
                            OF UNDERWRITTEN OFFERING

         4.1. Sale of Conversion Shares at the Closing Time of the Underwritten
Offering. Provided that the Net Price Per Share to be paid to the Holder by the
Company at the Closing Time of the Underwritten Offering is not less than $0.75
per share (before reflecting stock splits, divisions, reverse stock splits or
share combinations) and subject to paragraph 3.2 hereof, the Holder agrees to
sell to the Company the Holder's Conversion Shares and the Company agrees to
purchase at the Closing Time all the Holder's Conversion Shares and all other
Holders' Conversion Shares out of the Net Proceeds of the Underwritten Offering
and in accordance with Article II hereof. The Holder agrees to accept the Net
Price Per Share determined as provided in paragraph 3.5 hereof for Holder's
Conversion Shares, provided that the Net Price Per Share is not less than $0.75
per share (before reflecting stock splits, divisions, reverse stock splits or
share combinations.)

         4.2. Interest Expiration Date. For the purpose of facilitating the sale
of the Conversion Shares at the Closing Time of the Underwritten Offering, the
Holder agrees that interest on the Holder Notes shall cease to accrue on the
last day of the month preceding the month in which the Closing Time occurs
(herein such date is referred to as the "Interest Expiration Date").

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         4.3. Sale of Exchange Shares at Closing Time of Underwritten Offering.
Provided that the Net Price Per Share to be paid to the Holder by the Company at
the Closing Time of the Underwritten Offering is not less than $0.75 for each
Exchange Share sold (before reflecting stock splits, divisions, reverse stock
splits or share combinations) and subject to paragraph 3.2 hereof, the Holder
hereby agrees to sell to the Company the Holder's Exchange Shares and the
Company agrees to purchase at the Closing Time all the Holder's Exchange Shares.
At the Closing Time, Holder agrees to execute and deliver to the Company, at the
location set as the place for closing the Underwritten Offering, the exchange
share assignment attached hereto as Addendum E (the "Exchange Share
Assignment"). The Holder agrees to accept the Net Price Per Share determined as
provided in paragraph 3.5 hereof for his Exchange Shares, provided that the Net
Price Per Share is not less than $0.75 per share (before reflecting stock
splits, divisions, reverse stock splits or share combinations.).

         4.4. Delivery of Exchange Shares to Holder. In the event the
Underwritten Offering has not been completed on or before June 30, 2006, the
Company will deliver to Holder (at the address set forth on the Signature Page)
the Holder's Exchange Shares and the Holder's agreement to sell to the Company
and the Company's agreement to purchase from the Holder the Exchange Shares is
terminated.

         4.5. Expiration of Agreement to Convert Notes. In the event that the
Underwritten Offering has not been completed on or before June 30, 2006, the
Holder shall have no further obligation to convert the Holder Notes and accrued
interest into shares of Common Stock and sell such Conversion Shares to the
Company pursuant to this Agreement and the Company shall have no further
obligation to purchase such shares.

                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

         5.1. Company Representations and Warranties. The Company represents and
         warrants to the Holder as of the date hereof, as of the Closing Time,
         and as of the Warrant Exchange Date as set forth below:

                  (a) The Company is duly organized and in good standing under
                  the laws of the State of Delaware. The Company has all
                  corporate power and authority to execute and deliver this
                  Agreement and to perform its obligations hereunder. The
                  execution, delivery and performance of this Agreement has been
                  duly and validly authorized by the board of directors of the
                  Company and no other corporate proceedings on the part of the
                  Company are necessary to authorize or consummate this
                  Agreement. This Agreement has been duly and validly executed
                  and delivered by the Company, and (assuming the due
                  authorization, execution and delivery hereof by the Holder)
                  constitutes the legal, valid and binding obligation of the
                  Company, enforceable against the Company in accordance with
                  its terms, except as may be limited by bankruptcy, insolvency,
                  moratorium, reorganization or similar laws affecting the
                  rights of creditors generally and of general principles of
                  equity.

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                  (b) The execution, delivery and performance by the Company of
                  this Agreement does not and will not contravene, conflict
                  with, constitute a violation or breach of, (i) the
                  organizational documents of the Company, (ii) any laws binding
                  upon or applicable to the Company or by which any of its
                  assets or properties is bound or (iii) any material contract
                  to which the Company is a party or by which any of its assets
                  or properties is bound.

                  (c) The Conversion Shares when issued and the Exchange Shares
                  if and when issued to Holder will be duly authorized and
                  validly issued, fully paid and non-assessable.

         5.2. Holder's Representations and Warranties. The Holder represents and
         warrants to the Company as of the date hereof, as of the Closing Time
         of the Underwritten Offering, and as of the Warrant Exchange Date as
         set forth below:

                  (a) If the Holder is other than a natural person:

                           (i) the Holder is an entity duly organized, validly
                  existing and in good standing under the laws of the
                  jurisdiction under which it was organized and has all
                  requisite power and authority to execute and deliver this
                  Agreement and to perform its obligations hereunder. The
                  execution, delivery and performance of this Agreement has been
                  duly and validly authorized by the governing body, if any, of
                  the Holder and no other proceedings on the part of the Holder
                  are necessary to authorize or consummate this Agreement. This
                  Agreement has been duly and validly executed and delivered by
                  the Holder, and (assuming the due authorization, execution and
                  delivery hereof by the Company) constitutes the legal, valid
                  and binding obligation of the Holder, enforceable against the
                  Holder in accordance with its terms, except as may be limited
                  by bankruptcy, insolvency, moratorium, reorganization or
                  similar laws affecting the rights of creditors generally and
                  of general principles of equity.

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                           (ii) The execution, delivery and performance by the
                  Holder of this Agreement does not and will not contravene,
                  conflict with, constitute a violation or breach of, constitute
                  (with or without notice or lapse of time or both) a default
                  under, result in or give to any person any right of payment or
                  reimbursement, termination, cancellation, modification or
                  acceleration, loss of a material benefit under or result in
                  the creation or imposition of any lien upon or create in any
                  other person any claim against any of the Holder Notes or
                  Holder Warrants, or shares of Common Stock issued or issuable
                  to Holder under the terms of this Agreement, under any of the
                  terms, conditions or provisions of (i) the organizational
                  documents of the Holder, (ii) any laws binding upon or
                  applicable to the Holder or by which any of its assets or
                  properties is bound or (iii) any material contract to which
                  the Holder is a party or by which any of its assets or
                  properties is bound.

                  (b) If the Holder is a natural person:

                           (i) The Holder has the legal capacity to execute,
                  deliver and perform the terms of this Agreement and no other
                  consents or other proceedings on the part of the Holder are
                  necessary to authorize the execution, delivery or performance
                  of this Agreement or consummate this Agreement. This Agreement
                  has been duly and validly executed and delivered by the
                  Holder, and (assuming the due authorization, execution and
                  delivery hereof by the Company) constitutes the legal, valid
                  and binding obligation of the Holder, enforceable against the
                  Holder in accordance with its terms, except as may be limited
                  by bankruptcy, insolvency, moratorium, reorganization or
                  similar laws affecting the rights of creditors generally and
                  of general principles of equity.

                           (ii) The execution, delivery and performance by the
                  Holder of this Agreement does not and will not contravene,
                  conflict with, constitute a violation or breach of, constitute
                  (with or without notice or lapse of time or both) a default
                  under, result in or give to any person any right of payment or
                  reimbursement, termination, cancellation, modification or
                  acceleration, loss of a material benefit under or result in
                  the creation or imposition of any lien upon or create in any
                  other person any claim against any of the Holder Notes or
                  Holder Warrants, or shares of Common Stock issued or issuable
                  to Holder under the terms of this Agreement, under any of the
                  terms, conditions or provisions of (i) any laws binding upon
                  or applicable to the Holder or by which any of his or her
                  assets or properties is bound or (ii) any material contract to
                  which the Holder is a party or by which any of its assets or
                  properties is bound.

                  (c) No consent, waiver, approval or action of, filing with or
                  notice to any governmental entity or third party is necessary
                  or required under any of the terms, conditions or provisions
                  of any law or any contract to which the Holder is a party or
                  by which any of its assets or properties is bound for the
                  execution, delivery and performance by the Holder of this
                  Agreement.

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                  (d) The Holder is the record and beneficial owner of the
                  Holder Notes and Holder Warrants adjacent to the Holder's name
                  on the Signature Page hereof, free and clear of any liens,
                  claims, rights of others or encumbrances.

                  (e) The sale and transfer of the Conversion Shares to the
                  Company at the Closing Time of the Underwritten Offering is
                  and will be free and clear of all liens, claims, rights of
                  others and encumbrances.

                  (f) To the extent sold by the Holder to the Company at the
                  Closing Time of the Underwritten Offering, the sale and
                  transfer of the Exchange Shares to the Company at the Closing
                  Time of the Underwritten Offering is and will be free and
                  clear of all liens, claims, rights of others and encumbrances.

                  (g) The sale, transfer and exchange of the Warrants to the
                  Company on the date hereof is free and clear of all liens,
                  claims, rights of others and encumbrances.

                                   ARTICLE VI
                                OTHER AGREEMENTS

                  6.1 Adjustments. It's anticipated that the Company will
         combine, by way of a reverse stock split, its outstanding shares of
         Common Stock into a smaller number of shares. The conversion price of
         the Notes shall be adjusted for such share combination in accordance
         with the terms set forth in the Notes. The exchange ratio for the
         Warrants shall be adjusted so that both the number of Warrants
         exchanged and the number of shares of Common Stock issued in exchange
         is adjusted in proportion to the terms of the share combination.

                  6.2. Prohibition of Transfers of Notes and Exchange Shares.
         Effective as of the date hereof and through June 30, 2006, the Holder
         will not sell, assign, pledge, encumber, transfer, negotiate or
         otherwise dispose of the Holder Notes or Exchange Shares or any
         interest therein or in the shares issuable on conversion of the Holder
         Notes or enter into any contract or understanding to do so or relating
         to the Holder Notes or Exchange Shares or the shares issuable on
         conversion or exercise thereof other than as contemplated by this
         Agreement.

                  6.3 No Prohibition Against Conversion. Notwithstanding
         anything to the contrary herein, the Holder may at any time on or prior
         to June 30,2006, convert any portion or all of the principal and
         accrued interest on the Holder Notes into shares of Common Stock,
         provided any shares of Common Stock received by the Holder as a result
         of such conversion shall be "Conversion Shares" for the purposes of
         this Agreement and the rights and obligations of the parties hereto and
         shall be subject to the provisions of paragraphs 6.2 and 6.4 hereof.

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                  6.4 No Conflicting Agreements; Compliance with Agreement.
         Holder will act in good faith and use commercially reasonable efforts
         to take, or cause to be taken, all actions, execute all documents and
         do, or cause to be done, all things necessary, proper or advisable to
         consummate and make effective the transactions contemplated by this
         Agreement as promptly as practicable. Holder shall refrain from taking
         directly or indirectly, any action that would impair Holder's or the
         Company's ability to consummate the transactions contemplated by this
         Agreement. Holder shall not enter into any agreement in conflict with
         this Agreement or which would impair Holder's or the Company's ability
         to fulfill the terms of this Agreement or make false or misleading any
         of Holder's representations, warranties or agreements herein.

                  6.5 Holder's Acknowledgement. The Holder acknowledges that the
         Company now possesses and may hereafter possess certain non-public
         information concerning the Company and its prospects and proposed
         transactions beyond the transactions contemplated in this Agreement
         that may or may not be independently known to the Holder or other
         Derivatives Holders (the "Company Non-Public Information") which
         information may constitute material information. The Holder agrees to
         the terms and conditions of this Agreement notwithstanding that it is
         aware that Company Non-Public Information may exist and that the
         Company has not disclosed any Company Non-Public Information to Holder
         or, if such information has been disclosed, it has been disclosed under
         the terms of a confidentiality agreement. The Holder acknowledges that
         it is a sophisticated investor and is acting independently with respect
         to the transactions set forth in this Agreement and that the Company
         has no obligations to the Holder to disclose such Company Non-Public
         Information and it has no fiduciary obligations to the Holder.
         Additionally, the Holder acknowledges that it has adequate information
         concerning the transactions contemplated in this Agreement, and the
         business and financial condition of the Company and its prospects, to
         make an informed decision regarding entering into this Agreement, and
         it has done so independently and without reliance upon the Company and,
         based upon such information as the Holder has deemed appropriate, made
         its own analysis and decision to enter into this Agreement with the
         Company. Holder understands and acknowledges that the market value of
         the Company's shares of Common Stock after the Closing Time of the
         Underwritten Offering may exceed the price realized by the Holder out
         of the Net Proceeds of the Underwritten Offering.

                  6.6 Amendment of Registration Rights Agreement. The Company
         and the Holder agree that the Registration Rights Agreement dated
         December 17,1999 to which the Holder is a party is amended to include
         in the definition of "Registrable Securities" the Exchange Shares to be
         received by the Holder in exchange for its Warrants as provided herein.

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                                   ARTICLE VII
                                     GENERAL

         7.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware.

         7.2 Entire Agreement; Amendment. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject hereof. This Agreement, or any provision hereof, may be amended, waived,
discharged or terminated upon the written consent of the parties hereto.

         7.3 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed:

             If to the Holder, at the address set forth on the Signature Page or
at such other address as the Holder shall have furnished to the Company in
writing;

             If to the Company:

             Black Warrior Wireline Corp.
             100 Rosecrest,
             Columbus, MS 39701
             Attention:  William Jenkins, President

or a such other address as the Company shall have furnished to the Holder. Each
such notice or other communication shall, for all purposes of this Agreement, be
treated as effective upon receipt.

         7.4 Delays or Omissions. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party to this
Agreement shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party to this Agreement, shall be cumulative and not alternative.

         7.5 Counterparts. This Agreement may be executed in separate
counterparts, each of which shall collectively and separately constitute one
agreement and shall be binding upon the parties hereto.

                                       12
<PAGE>

         7.6 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.

         7.7 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.

         7.8 Enforcement of Agreement. Holder acknowledges and agrees that the
Company could by damaged irreparably if any of the provisions of this Agreement
are not performed in accordance with their specific terms. Accordingly, the
Holder agrees that, (i) it will waive, in any action for specific performance,
the defense of adequacy of a remedy at law, and (ii) in addition to any other
right or remedy to which the Company may be entitled, at law or in equity, the
Company will be entitled to enforce any provision of this Agreement by a decree
of specific performance and to temporary, preliminary and permanent injunctive
relief to prevent breaches or threatened breaches of any of the provisions of
this Agreement, without posting any bond or other undertaking.

         7.9 Binding on Successors and Assigns. Subject to paragraph 6.2 hereof,
the provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, administrators, successors and
assigns. No party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the consent of the other party
hereto. Any purported assignment in violation hereof shall be null and void.

                                  ARTICLE VIII

                                   DEFINITIONS

         "AGREEMENT" is defined in the first paragraph of this Agreement.

         "BUSINESS DAY" means any day that is not a Saturday, a Sunday or a day
         on which banks are required or permitted to be closed in the State of
         Mississippi.

         "CLOSING TIME" is defined in paragraph 3.6 of this Agreement.

         "COMMON STOCK" is defined in paragraph B of this Agreement.

         "COMPANY" is defined in the first paragraph of this Agreement.

         "COMPANY NON-PUBLIC INFORMATION" is defined in paragraph 6.4 of this
         Agreement.

          "CONVERSION SHARES" is defined in paragraph E of this Agreement.

                                       13
<PAGE>

         "DERIVATIVES HOLDERS" is defined in paragraph G of this Agreement.

         "EXCHANGE PERIOD" is defined in paragraph G of this Agreement.

         "EXCHANGE SHARE" is defined in paragraph E of this Agreement.

         "EXCHANGE SHARE ASSIGNMENT" is defined in paragraph 4.3 of this
         Agreement.

         "EXCHANGE SHARE EQUIVALENT" is defined in paragraph I of this
         Agreement.

         "HOLDER" is defined in the first paragraph of this Agreement.

         "HOLDER NOTES" is defined in paragraph E of this Agreement.

         "HOLDER WARRANTS" is defined in paragraph E of this Agreement.

         "HOLDERS" is defined in the first paragraph of this Agreement.

         "INTEREST EXPIRATION DATE" is defined in paragraph 4.2 of this
         Agreement.

         "NET PRICE PER SHARE" is defined in paragraph 3.5 of this Agreement.

         "NET PROCEEDS" is defined in paragraph 3.4 of this Agreement.

         "NOTES" is defined in paragraph A of this Agreement.

         "NOTICE OF CONVERSION" is defined in paragraph 2.1.2 of this Agreement.

         "OTHER DERIVATIVES HOLDERS" is defined in paragraph G of this
         Agreement.

         "REGISTRATION RIGHTS AGREEMENTS" is defined in paragraph H of this
         Agreement.

         "SJMB SHARES" is defined in paragraph G of this Agreement.

         "ST. JAMES PARTNERSHIPS" is defined in paragraph G of this Agreement.

         "STOCK ASSIGNMENT" is defined in paragraph 2.1.2 of this Agreement.

         "UNDERWRITTEN OFFERING" is defined in paragraph 3.3 of this Agreement.

         "WARRANTS" is defined in paragraph C of this Agreement.

         "WARRANT ASSIGNMENT" is defined in paragraph 1.1.2 of this Agreement.

         "WARRANT UNIT" is defined in paragraph G of this Agreement.

                                       14
<PAGE>

                                 SIGNATURE PAGE

                  In Witness Whereof, the parties hereto have caused this
Recapitalization Agreement to be duly executed as of the day and year first
above written.

COMPANY                     BLACK WARRIOR WIRELINE CORP.

                            By /s/ William L. Jenkins
                               ----------------------
                               William L. Jenkins, President

HOLDERS
                            CHARLES E. UNDERBRINK

                            /s/ Charles E. Underbrink
                            -------------------------

         HOLDER'S NOTES AND WARRANTS:
         1. Number of Warrants purchasable from Holder is 3,055,000.

         2. Principal amount of Notes held by Holder is $750,000, plus accrued
interest

         HOLDER'S ADDRESS IS:       245 Stewart Drive
                                    Merritt Island, FL 32952

                                            NORTHGATE, L.L.C.

                                            /s/ Charles E. Underbrink
                                            -------------------------

                                            Name: Charles E. Underbrink
                                                  ------------------------------

                                            Title:   President
                                                  ------------------------------

         HOLDER'S NOTES AND WARRANTS:
         1. Number of Warrants purchasable from Holder is 4,358,558.

         2. Principal amount of Notes held by Holder is $282,620.59, plus
accrued interest

         HOLDER'S ADDRESS IS:       245 Stewart Drive
                                    Merritt Island, FL 32952

                                       15
<PAGE>

                                            HUB, INC.

                                            /s/ Charles E. Underbrink
                                            -------------------------

                                            Name: Charles E. Underbrink
                                                  ------------------------------

                                            Title:   President
                                                  ------------------------------

         HOLDER'S NOTES AND WARRANTS:
         1. Number of Warrants purchasable from Holder is 3,984,851.

         2. Principal amount of Notes held by Holder is $594,753.85, plus
accrued interest

         HOLDER'S ADDRESS IS:       245 Stewart Drive
                                    Merritt Island, FL 32952

                                            CHARLES E. UNDERBRINK, IRA,
                                            GUARANTY & TRUST CO. TTEE
                                            ACCOUNT NUMBER 80426141

                                            /s/ Charles E. Underbrink
                                            -------------------------

                                            Name: Charles E. Underbrink
                                                  ------------------------------

                                            Title
                                                 -------------------------------

         HOLDER'S NOTES AND WARRANTS:
         1. Number of Warrants purchasable from Holder is 335,000.

         2. Principal amount of Notes held by Holder is $50,000, plus accrued
interest

         HOLDER'S ADDRESS IS:       245 Stewart Drive
                                    Merritt Island, FL 32952

                                            CHARLES E. UNDERBRINK IRREVOCABLE
                                            TRUST DATED 10/10/92 FOR THE
                                            BENEFIT OF PIPER AURORA UNDERBRINK

                                            /s/ Charles E. Underbrink
                                            -------------------------

                                            Name: Charles E. Underbrink
                                                  ------------------------------

                                            Title: Grantor
                                                   -----------------------------

         HOLDER'S NOTES AND WARRANTS:
         1. Number of Warrants purchasable from Holder is 205,000.

         2. Principal amount of Notes held by Holder is $0, plus accrued
interest

         HOLDER'S ADDRESS IS:       245 Stewart Drive
                                    Merritt Island, FL 32952

                                       16
<PAGE>

                                                                      ADDENDUM A

                               WARRANT ASSIGNMENT

                  For value received, ___________________________, hereby sells,
assigns, and transfers unto Black Warrior Wireline Corp., in accordance with the
terms of the Recapitalization Agreement between the Company and the undersigned,
the within Warrants, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Ronald Whitter attorney, to
transfer such Warrants on the books of the Company, with full power of
substitution.

         Number of Warrants covered by this assignment:
                                                       ----------------

WITNESS:                            HOLDER:

                                    By:
-------------------------               ----------------------------------

Date:             ,2005
      -----------------

                                       17
<PAGE>

                                                                      ADDENDUM B

                              NOTICE OF CONVERSION

                  The undersigned, the holder of the below identified
Convertible Promissory Notes ("Holder Notes") issued by Black Warrior Wireline
Corp. ("Company"), hereby elects to convert the principal and accrued interest
of the Holder Notes into shares of Company Common Stock in accordance with the
terms of the Holder Notes and in accordance with the terms of the
Recapitalization Agreement between the undersigned and the Company. The
conversion price is $0.75 per share.

         Holder Notes to be converted:

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

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

WITNESS:                            HOLDER:

                                    By:
--------------------------              ----------------------------------

Date:             ,2005
      -----------------

                                       18
<PAGE>

                                                                      ADDENDUM C

                                STOCK ASSIGNMENT

                  For value received, ___________________________, hereby sells,
assigns, and transfers unto Black Warrior Wireline Corp., in accordance with the
terms of the Recapitalization Agreement between the Company and the undersigned,
the within shares of Common Stock, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Ronald Whitter
attorney, to transfer such shares of Common Stock on the books of the Company,
with full power of substitution.

         Number of shares of Common Stock covered by this assignment:
                                                                      ----------

         Certificate No(s)____________________________________________________

WITNESS:                            HOLDER:

                                    By:
-------------------------               -----------------------------

Date:             ,2005
      -----------------

                                       19
<PAGE>

                                                                      ADDENDUM D

             PRIORITY OF CUTBACK OF SHARES IN UNDERWRITTEN OFFERING

         The following procedures only apply in the event that the managing
underwriter of the Underwritten Offering advises the Company that in its
judgment the number of shares of Common Stock to be included in the Underwritten
Offering must be reduced:

PRIORITY ONE: The first securities to be cut back out of the sale to the Company
are those shares (including Conversion Shares, Exchange Shares and any other
shares) held by the Underbrink Family Entities to be purchased by the Company at
the Closing Time. Mr. Charles E. Underbrink, a director of our company and his
family affiliates, including Northgate, L.L.C., Hub, Inc., Charles E. Underbrink
IRA, and the Charles E. Underbrink Irrevocable Trust dated 10/10/92 for the
benefit of Piper Aurora Underbrink, but excluding St. James Capital Partners,
L.P. and SJMB, L.P. are herein collectively referred to as the "Underbrink
Family Entities."

PRIORITY TWO: The second shares to be cut back out of the sale to the Company
are the 5,017, 481 shares currently held by SJMB, L.P. to be purchased by the
Company at the Closing Time.

PRIORITY THREE: The third securities to be cut back out of the sale to the
Company are the Exchange Share Equivalents held by the Company's other holders
other than the Underbrink Family Entities. Such cutback will be pro-rata based
on the aggregate number of Exchange Share Equivalents intended to be included in
the Underwritten Offering and to be purchased by the Company at the Closing
Time.

                                       20
<PAGE>

                                                                      ADDENDUM E

                            EXCHANGE SHARE ASSIGNMENT

                  For value received, ___________________________, hereby sells,
assigns, and transfers unto Black Warrior Wireline Corp., in accordance with the
terms of the Recapitalization Agreement between the Company and the undersigned,
the within shares of Common Stock, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Ronald Whitter
attorney, to transfer such shares of Common Stock on the books of the Company,
with full power of substitution.

         Number of shares of Common Stock covered by this assignment:
                                                                      ----------

         Certificate No(s)____________________________________________________

WITNESS:                            HOLDER:

                                    By:
-------------------------               -----------------------------

Date:             ,2005
      ------------------

                                       21<PAGE>

                                                                    Exhibit 10.2
                           RECAPITALIZATION AGREEMENT

         This Recapitalization Agreement ("Agreement") is entered into this 6th
day of October, 2005 between Black Warrior Wireline Corp., a Delaware
corporation, (the "Company") and St. James Capital Partners, L.P., a Delaware
limited partnership (the "Holder"), such Holder having the address set forth on
the Signature Page to this agreement.

                                   BACKGROUND

         A. The Company has outstanding as of September 30, 2005, an aggregate
of $42,477,902 of principal and accrued interest on its promissory notes (the
"Notes") which, as extended, are due and payable on February 14, 2008.

         B. The principal and accrued interest on the Notes is convertible into
shares of the Company's Common Stock, $0.0005 par value (the "Common Stock") at
a conversion price of $0.75 for each share of Common Stock, subject to
anti-dilution adjustment, or an aggregate of 56,637,203 shares of Common Stock
as of September 30, 2005, based on the interest accrued on the Notes through
that date.

         C. The Company also has outstanding as of September 30, 2005 common
stock purchase warrants (the "Warrants") to purchase an aggregate of 70,761,185
shares of Common Stock at an excise price of $0.75 per share, subject to
anti-dilution adjustment.

         D. In order to simplify and clarify its equity capital structure, the
Company is seeking to eliminate and reduce the amount of derivative securities
it has outstanding.

         E. The Company desires that the Holder on the terms provided herein (i)
transfer and assign to the Company the Holder's Warrants (the "Holder
Warrants"), (ii) and (ii) convert the principal of and accrued interest on the
Holder's Notes (the "Holder Notes") into shares of Common Stock (the "Conversion
Shares") at the conversion price of $0.75 of principal and accrued interest per
Conversion Share and agree to sell such Conversion Shares to the Company as
provided herein.

         F. The Holder desires to convert the Holder Notes into Conversion
Shares and transfer and assign to the Company the Holder Warrants and Conversion
Shares on the terms set forth herein.

<PAGE>

         G. Concurrently with entering into this Agreement, the Company has
entered into Recapitalization Agreements with Charles E. Underbrink, Northgate,
L.L.C., Hub, Inc., Charles E. Underbrink IRA, and the Charles E. Underbrink
Irrevocable Trust dated 10/10/92 for the benefit of Piper Aurora Underbrink,
which persons and entities are herein collectively referred to as the
"Underbrink Family Entities," and SJMB, L.P. and subsequent to entering into
this Agreement the Company proposes to enter into Recapitalization Agreements
with each other holder of Warrants, other than the Holder and SJMB, L.P. (herein
the Holder and SJMB,L.P.. are collectively referred to as the "St. James
Partnerships") and the Underbrink Family Entities (herein all holders of Notes
and Warrants, including the St. James Partnerships and the Underbrink Family
Entities, are collectively referred to as the "Derivatives Holders" and the
Derivatives Holders other than the St. James Partnerships and the Underbrink
Family Entities are referred to as the "Other Derivatives Holders") pursuant to
which the Company will during the "Exchange Period" (as defined in such
Recapitalization Agreements with the Other Derivatives Holders) offer to the
Other Derivatives Holders to exchange its shares of Common Stock for Warrants
held by the Other Derivatives Holders at an exchange ratio of one (1) share of
Common Stock (each, an "Exchange Share") for each three (3) Warrants. The
Recapitalization Agreement dated October 6, 2005 entered into by the Company
with SJMB, L.P., among other provisions, provides for the sale by SJMB, L.P. and
the purchase by the Company of 5,017,481 shares of the Company's Common Stock
issued on conversion of a portion of the principal and interest that had accrued
on the Notes held by SJMB, L.P. Herein, such shares are referred to as the "SJMB
Shares."

         H. After the expiration of the Exchange Period, the Company intends to
undertake to complete an Underwritten Offering (as defined herein). Pursuant to
a Registration Rights Agreement dated December 17, 1999 (the "Registration
Rights Agreement") between the Company and the Other Derivatives Holders the
Other Derivatives Holders have the right to request that their Conversion Shares
and, as such agreement is to be amended, their Exchange Shares, be included in
such registration and sold in the Underwritten Offering.

         I. Herein each three (3) Warrants are referred to as a "Warrant Unit"
and each Warrant Unit or Exchange Share to be sold by any Derivatives Holder,
either to the Company or in the Underwritten Offering, is referred to as an
"Exchange Share Equivalent."

                                    AGREEMENT

                  NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements, covenants, representations and warranties contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, each intending to be legally
bound, hereby agree as follows:
                  Certain terms used herein as defined terms are defined in
Article VIII hereof, unless the context should otherwise require.

                                       2
<PAGE>

                                    ARTICLE I
                        CONVERSION OF SUBORDINATED NOTES

1.1      Agreement of Holder to Convert Principal and Interest of Notes.

                             1.1.1 The Holder agrees irrevocably to convert at
                             the Closing Time of the Underwritten Offering the
                             full principal amount and all interest accrued on
                             the Holder Notes through the Interest Expiration
                             Date (as defined below) into shares of Common
                             Stock, such conversion to be effected automatically
                             as of the Closing Time and without further act by
                             or on behalf of the Holder.

                             1.1.2. For the purpose of effecting the conversion
                             of the Holder Notes in accordance with subparagraph
                             1.1.1, at the Closing Time of the Underwritten
                             Offering, the Holder shall deliver to the Company,
                             at the location set as the place for closing the
                             Underwritten Offering, the original executed Holder
                             Notes, together with a completed and executed
                             Notice of Conversion (the "Notice of Conversion")
                             in the form attached hereto as Addendum A, and the
                             completed and executed Stock Assignment (the "Stock
                             Assignment") in the form attached hereto as
                             Addendum B. The Holder Notes, Notice of Conversion
                             and Stock Assignment are herein collectively
                             referred to as the "Conversion Documents."

1.2. Treatment of Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the conversion of the Holder Notes. If more
than one Holder Note shall be presented for conversion by the Holder, the number
of full shares of Common Stock which shall be issuable upon such conversion
shall be computed on the basis of the aggregate number of whole shares of Common
Stock issuable on conversion for all the Holder Notes so presented. If any
fraction of a share of Common Stock would, except for the provisions of this
paragraph, be issuable on the conversion of this Note or Notes so presented, the
Company shall pay an amount in cash calculated by it to be equal to the market
price of one share of Common Stock on the Interest Expiration Date multiplied by
such fraction computed to the nearest whole cent.

                                   ARTICLE II
                              UNDERWRITTEN OFFERING

         2.1. Commercially Reasonable Efforts of the Company. The Company agrees
that it shall promptly after the expiration of the Exchange Period use its
commercially reasonable efforts to complete an Underwritten Offering. Such
commercially reasonable efforts shall include, among other things, contacting
and soliciting prospective investment bankers to act as underwriters or agents
of the Company in effecting such transaction, providing to the prospective
investment bankers such financial and other information concerning the Company
as may be reasonably requested, providing reasonable access to the management of
the Company, its advisors and the Company's facilities as is requested by the
prospective investment bankers, fulfilling the Company's obligations set forth
in this Article II and otherwise enabling such investment bankers to have the
opportunity to engage in "due diligence" activities with respect to the Company
and its management and completing the Underwritten Offering on such terms as
will yield Net Proceeds, after deducting such amount of Net Proceeds as are to
be retained by the Company for its corporate purposes, sufficient to enable the
Company to purchase all the Conversion Shares, and such number of Exchange Share
Equivalents as are to be purchased by the Company, subject to paragraph 2.2
hereof, at the Closing Time of the Underwritten Offering.

                                       3
<PAGE>

         2.2. Terms of Underwritten Offering. If the managing underwriter of the
Underwritten Offering concludes in its reasonable judgment that the number of
shares to be registered for selling shareholders would materially adversely
affect such offering and that the number of Conversion Shares and Exchange
Shares to be registered in such offering shall be reduced, the Holder, SJMB,
L.P., and each of the Underbrink Family Entities, under the terms this Agreement
and the other Recapitalization Agreements such persons have entered into with
the Company, severally and not jointly agree that the number of Conversion
Shares, SJMB Shares and Exchange Share Equivalents to be purchased from them by
the Company at the Closing Time shall be reduced in accordance with Addendum C
hereto to the extent necessary in order that the number of Conversion Shares and
Exchange Shares to be registered for sale in the Underwritten Offering by the
Other Derivatives Holders will no longer, in the reasonable judgment of the
managing underwriter, materially adversely affect the Underwritten Offering.

         2.3 Underwritten Offering Defined. An "Underwritten Offering" means a
sale of such number of shares of Common Stock of the Company conducted on such
terms and conditions, in compliance with the provisions of the Securities Act,
and at such price per share of Common Stock and on other terms and conditions as
the Company may in its sole and exclusive discretion determine to complete and
as will result in sufficient Net Proceeds, subject to paragraph 2.2 hereof, to
enable the Company to purchase not less than all the Conversion Shares, SJMB
Shares and Exchange Share Equivalents to be sold by the Underbrink Family
Entities and the St. James Partnerships and purchased by the Company, provided,
however, that the Underbrink Family Entities and the St. James Partnerships
shall only be obligated to sell their Conversion Shares, SJMB Shares and
Exchange Share Equivalents to the Company if the purchase price paid per
Conversion Share, SJMB Share and Exchange Share Equivalent is not less than
$0.75 per share (before reflecting stock splits, divisions, reverse stock splits
or share combinations).

         2.4 Net Proceeds Defined. "Net Proceeds" means the total proceeds
received by the Company from a sale of shares of its Common Stock in a
Underwritten Offering after deducting selling, underwriting and other
commissions and expenses and fees, and before deducting legal, accounting and
printing expenses and all other expenses of the Company related to the
Underwritten Offering.

         2.5 Net Price Per Share. As used herein, "Net Price Per Share" means
the Net Proceeds received by the Company in the Underwritten Offering divided by
the number of shares of Common Stock sold by the Company in the Underwritten
Offering.

                                       4
<PAGE>

         2.6. Closing Time Defined. "Closing Time" means the time at which all
conditions to the closing of the Underwritten Offering have been met or waived
and the Company issues and delivers the shares of Common Stock sold for the
consideration paid for such shares.

         2.7 Agreements. In connection with the Underwritten Offering, the
Company agrees to execute such underwriting or selling agreements and such other
agreements and documents, including indemnification provisions, as are
customarily entered into in connection with such transactions and provide its
cooperation and the cooperation of its officers and employees in effecting the
Underwritten Offering.

                                   ARTICLE III
                SALE TO COMPANY OF CONVERSION SHARES AND WARRANTS
                    AT CLOSING TIME OF UNDERWRITTEN OFFERING

         3.1 Sale of Conversion Shares at the Closing Time of the Underwritten
Offering. Provided that the Net Price Per Share to be paid to the Holder by the
Company at the Closing Time of the Underwritten Offering is not less than $0.75
per share (before reflecting stock splits, divisions, reverse stock splits or
share combinations), the Holder agrees to sell to the Company the Holder's
Conversion Shares and the Company agrees to purchase at the Closing Time all the
Holder's Conversion Shares out of the Net Proceeds of the Underwritten Offering
and in accordance with Article I hereof. The Holder agrees to accept the Net
Price Per Share determined as provided in paragraph 2.5 hereof for Holder's
Conversion Shares, provided that the Net Price Per Share is not less than $0.75
per share (before reflecting stock splits, divisions, reverse stock splits or
share combinations).

         3.2 Interest Expiration Date. For the purpose of facilitating the sale
of the Conversion Shares at the Closing Time of the Underwritten Offering, the
Holder agrees that interest on the Holder Notes shall cease to accrue on the
last day of the month preceding the month in which the Closing Time occurs
(herein such date is referred to as the "Interest Expiration Date").

         3.3 Sale of Warrants at Closing Time of Underwritten Offering. Provided
that the Net Price Per Share to be paid to the Holder by the Company at the
Closing Time of the Underwritten Offering is not less than $0.75 for each
Warrant Unit sold (before reflecting stock splits, divisions, reverse stock
splits or share combinations) and subject to paragraph 2.2 hereof, the Holder
hereby agrees to sell to the Company the Holder's Warrants and the Company
agrees to purchase at the Closing Time all the Holder's Warrants out of the Net
Proceeds of the Underwritten Offering. At the Closing Time, Holder agrees to
execute and deliver to the Company, at the location set as the place for closing
the Underwritten Offering, the warrant assignment attached hereto as Addendum D
(the "Warrant Assignment") with respect to Warrants sold to the Company. The
Holder agrees to accept the Net Price Per Share as the purchase price for each
Warrant Unit sold determined as provided in paragraph 2.5 hereof, provided that
the Net Price Per Share is not less than $0.75 for each Warrant Unit (before
reflecting stock splits, divisions, reverse stock splits or share combinations).

                                       5
<PAGE>

         3.4 Aggregation of Warrants for Payment. If more than one Warrant
certificate shall be delivered at the Closing Time for sale by a Holder, the
purchase price for all such Warrants presented shall be computed on the basis of
the aggregate number of Warrants represented by the Warrant certificates so
delivered. The aggregate purchase price for the Warrants shall be rounded to the
nearest whole cent.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

         4. 1. Company Representations and Warranties. The Company represents
         and warrants to the Holder as of the date hereof, as of the Closing
         Time, and as of the Warrant Exchange Date as set forth below:

                  (a) The Company is duly organized and in good standing under
                  the laws of the State of Delaware. The Company has all
                  corporate power and authority to execute and deliver this
                  Agreement and to perform its obligations hereunder. The
                  execution, delivery and performance of this Agreement has been
                  duly and validly authorized by the board of directors of the
                  Company and no other corporate proceedings on the part of the
                  Company are necessary to authorize or consummate this
                  Agreement. This Agreement has been duly and validly executed
                  and delivered by the Company, and (assuming the due
                  authorization, execution and delivery hereof by the Holder)
                  constitutes the legal, valid and binding obligation of the
                  Company, enforceable against the Company in accordance with
                  its terms, except as may be limited by bankruptcy, insolvency,
                  moratorium, reorganization or similar laws affecting the
                  rights of creditors generally and of general principles of
                  equity.

                  (b) The execution, delivery and performance by the Company of
                  this Agreement does not and will not contravene, conflict
                  with, constitute a violation or breach of, (i) the
                  organizational documents of the Company, (ii) any laws binding
                  upon or applicable to the Company or by which any of its
                  assets or properties is bound or (iii) any material contract
                  to which the Company is a party or by which any of its assets
                  or properties is bound.

                  (c) The Conversion Shares when issued and the Exchange Shares
                  if and when issued to Holder will be duly authorized and
                  validly issued, fully paid and non-assessable.

                                       6
<PAGE>

         4.2. Holder's Representations and Warranties. The Holder represents and
         warrants to the Company as of the date hereof, as of the Closing Time
         of the Underwritten Offering, and as of the Warrant Exchange Date as
         set forth below:

                  (a) the Holder is an entity duly organized, validly existing
                  and in good standing under the laws of the jurisdiction under
                  which it was organized and has all requisite power and
                  authority to execute and deliver this Agreement and to perform
                  its obligations hereunder. The execution, delivery and
                  performance of this Agreement has been duly and validly
                  authorized by the governing body, if any, of the Holder and no
                  other proceedings on the part of the Holder are necessary to
                  authorize or consummate this Agreement. This Agreement has
                  been duly and validly executed and delivered by the Holder,
                  and (assuming the due authorization, execution and delivery
                  hereof by the Company) constitutes the legal, valid and
                  binding obligation of the Holder, enforceable against the
                  Holder in accordance with its terms, except as may be limited
                  by bankruptcy, insolvency, moratorium, reorganization or
                  similar laws affecting the rights of creditors generally and
                  of general principles of equity.

                  (b) The execution, delivery and performance by the Holder of
                  this Agreement does not and will not contravene, conflict
                  with, constitute a violation or breach of, constitute (with or
                  without notice or lapse of time or both) a default under,
                  result in or give to any person any right of payment or
                  reimbursement, termination, cancellation, modification or
                  acceleration, loss of a material benefit under or result in
                  the creation or imposition of any lien upon or create in any
                  other person any claim against any of the Holder Notes or
                  Holder Warrants, or shares of Common Stock issued or issuable
                  to Holder under the terms of this Agreement, under any of the
                  terms, conditions or provisions of (i) the organizational
                  documents of the Holder, (ii) any laws binding upon or
                  applicable to the Holder or by which any of its assets or
                  properties is bound or (iii) any material contract to which
                  the Holder is a party or by which any of its assets or
                  properties is bound.

                  (c) No consent, waiver, approval or action of, filing with or
                  notice to any governmental entity or third party is necessary
                  or required under any of the terms, conditions or provisions
                  of any law or any contract to which the Holder is a party or
                  by which any of its assets or properties is bound for the
                  execution, delivery and performance by the Holder of this
                  Agreement.

                  (d) The Holder is the record and beneficial owner of the
                  Holder Notes and Holder Warrants adjacent to the Holder's name
                  on the Signature Page hereof, free and clear of any liens,
                  claims, rights of others or encumbrances.

                                       7
<PAGE>

                  (e) The sale and transfer of the Conversion Shares to the
                  Company at the Closing Time of the Underwritten Offering is
                  and will be free and clear of all liens, claims, rights of
                  others and encumbrances.

                  (f) To the extent sold by the Holder to the Company at the
                  Closing Time of the Underwritten Offering, the sale and
                  transfer of the Warrants to the Company at the Closing Time of
                  the Underwritten Offering is and will be free and clear of all
                  liens, claims, rights of others and encumbrances.

                  (g) The sale, transfer and exchange of the Warrant Shares to
                  the Company on the Warrant Exchange Date is and will be free
                  and clear of all liens, claims, rights of others and
                  encumbrances.

                                    ARTICLE V
                              THE WARRANT EXCHANGE

         5.1      Exchange by Holder of Warrants for Shares of Common Stock.

                  5.1.1.   In the event an Underwritten Offering has not been
                           completed on or before June 30, 2006, the Holder and
                           the Company agree that the Holder will exchange its
                           Warrants for Exchange Shares on the first Business
                           Day following June 30, 2006 (herein such date is
                           referred to as the "Warrant Exchange Date"). Subject
                           to the terms and conditions of this Agreement, the
                           Holder agrees to transfer and assign to the Company
                           on the Warrant Exchange Date the Holder Warrants in
                           exchange for Exchange Shares at the exchange rate of
                           three (3) Warrants for each one (1) Exchange Share.

                  5.1.2.   In order to consummate the foregoing transaction, the
                           Holder shall deliver to the Company on the Warrant
                           Exchange Date, at its address set forth in
                           subparagraph 7.3 hereof, (i) the original executed
                           Holder Warrants, and (ii) the executed Warrant
                           Assignment attached hereto as Addendum D.

                  5.1.3.   Promptly upon receipt by the Company of the original
                           executed Holder Warrants and executed Warrant
                           Assignment, the Company shall deliver to the Holder,
                           at Holder's address set forth on the Signature Page,
                           a certificate for the number of Exchange Shares which
                           the Holder is entitled to receive pursuant to the
                           terms of this Agreement.

         5.2      Treatment of Fractional Shares. The Company shall not be
                  required to issue fractional shares of Common Stock in
                  exchange for the Holder Warrants. If more than one Holder
                  Warrant shall be presented for exchange by the Holder, the
                  number of Exchange Shares issuable shall be computed on the
                  basis of the aggregate number of whole shares of Common Stock
                  issuable in exchange for the Holder Warrants so presented. If
                  any fraction of a share of Common Stock would, except for the
                  provisions of this paragraph, be issuable in exchange for
                  Exchange Shares, the Company shall pay to the Holder an amount
                  in cash calculated by it to be equal to the closing market
                  price of one share of Common Stock on June 30, 2006 multiplied
                  by such fraction computed to the nearest whole cent.

                                       8
<PAGE>

         5.3      Resale Restrictions on Exchange Shares. Holder understands,
                  covenants and agrees that the Exchange Shares issued shall
                  have such restrictions on the resale of those shares as are
                  required under the Securities Act. In effecting resales of
                  such Exchange Shares, such shares will be deemed to be
                  "restricted securities" as defined under Rule 144 and, unless
                  such offer and resale has been registered under the Securities
                  Act, the resale will be subject to the restrictions and
                  limitations of Rule 144. Holder agrees that a legend may be
                  affixed to the certificate for the Exchange Shares issued to
                  Holder and stop transfer instructions can be placed against
                  the transfer of the Exchange Shares in accordance with the
                  foregoing.

         5.4      Amendment of 1997 Registration Rights Agreement. The Company
                  and the Holder are parties to the Registration Rights
                  Agreement dated June 5, 1997, as amended (the "1997
                  Registration Rights Agreement") between the Company and the
                  Holder, and other holders of Convertible Notes and Warrants.
                  In the event the Holder exchanges its Warrants for Common
                  Shares in accordance with this Article V, the Company and the
                  Holder agree that Section 1.3 of the 1997 Registration Rights
                  Agreement, which section defines the Company's securities the
                  holders of which are entitled to the rights and benefits of
                  the Registration Rights Agreement, is amended to include in
                  the definition of "Registrable Securities" the Exchange Shares
                  to be received by the Holder in exchange for its Warrants as
                  provided herein.

                                   ARTICLE VI
                                OTHER AGREEMENTS

                  6.1 Adjustments. It's anticipated that the Company will
         combine, by way of a reverse stock split, its outstanding shares of
         Common Stock into a smaller number of shares. The conversion price of
         the Notes shall be adjusted for such share combination in accordance
         with the terms set forth in the Notes. The exchange ratio for the
         Warrants shall be adjusted so that both the number of Warrants
         exchanged and the number of shares of Common Stock issued in exchange
         is adjusted in proportion to the terms of the share combination.

                                       9
<PAGE>

                  6.2. Prohibition of Transfers of Notes and Warrants. Effective
         as of the date hereof and through June 30, 2006, the Holder will not
         sell, assign, pledge, encumber, transfer, negotiate or otherwise
         dispose of the Holder Notes or Holder Warrants or any interest therein
         or in the shares issuable on conversion of the Holder Notes or exercise
         of the Holder Warrants or enter into any contract or understanding to
         do so or relating to the Holder Notes or Holder Warrants or the shares
         issuable on conversion or exercise of any thereof other than as
         contemplated by this Agreement.

                  6.3 No Prohibition Against Conversion. Notwithstanding
         anything to the contrary contained herein, the Holder may at any time
         on or prior to June 30, 2006, convert any portion or all of the
         principal and accrued interest on the Holder Notes into shares of
         Common Stock, provided any shares of Common Stock received by the
         Holder as a result of such conversion shall be "Conversion Shares" for
         the purposes of this Agreement and the rights and obligations of the
         parties hereto and shall be subject to the provisions of paragraphs 6.2
         and 6.4 hereof.

                  6.4 No Conflicting Agreements; Compliance with Agreement.
         Holder will act in good faith and use commercially reasonable efforts
         to take, or cause to be taken, all actions, execute all documents and
         do, or cause to be done, all things necessary, proper or advisable to
         consummate and make effective the transactions contemplated by this
         Agreement as promptly as practicable. Holder shall refrain from taking
         directly or indirectly, any action that would impair Holder's or the
         Company's ability to consummate the transactions contemplated by this
         Agreement. Holder shall not enter into any agreement in conflict with
         this Agreement or which would impair Holder's or the Company's ability
         to fulfill the terms of this Agreement or make false or misleading any
         of Holder's representations, warranties or agreements herein.

                  6.5 Holder's Acknowledgement. The Holder acknowledges that the
         Company now possesses and may hereafter possess certain non-public
         information concerning the Company and its prospects and proposed
         transactions beyond the transactions contemplated in this Agreement
         that may or may not be independently known to the Holder or other
         Derivatives Holders (the "Company Non-Public Information") which
         information may constitute material information. The Holder agrees to
         the terms and conditions of this Agreement notwithstanding that it is
         aware that Company Non-Public Information may exist and that the
         Company has not disclosed any Company Non-Public Information to Holder
         or, if such information has been disclosed, it has been disclosed under
         the terms of a confidentiality agreement. The Holder acknowledges that
         it is a sophisticated investor and is acting independently with respect
         to the transactions set forth in this Agreement and that the Company
         has no obligations to the Holder to disclose such Company Non-Public
         Information and it has no fiduciary obligations to the Holder.
         Additionally, the Holder acknowledges that it has adequate information
         concerning the transactions contemplated in this Agreement, and the
         business and financial condition of the Company and its prospects, to
         make an informed decision regarding entering into this Agreement, and
         it has done so independently and without reliance upon the Company and,
         based upon such information as the Holder has deemed appropriate, made
         its own analysis and decision to enter into this Agreement with the
         Company. Holder understands and acknowledges that the market value of
         the Company's shares of Common Stock after the Closing Time of the
         Underwritten Offering may exceed the price realized by the Holder out
         of the Net Proceeds of the Underwritten Offering.

                                       10
<PAGE>

                                   ARTICLE VII
                                     GENERAL

         7.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware.

         7.2 Entire Agreement; Amendment. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject hereof. This Agreement, or any provision hereof, may be amended, waived,
discharged or terminated upon the written consent of the parties hereto.

         7.3 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed:

                  If to the Holder, at the address set forth on the Signature
Page or at such other address as the Holder shall have furnished to the Company
in writing;

                  If to the Company:

                  Black Warrior Wireline Corp.
                  100 Rosecrest,
                  Columbus, MS 39701
                  Attention:  William Jenkins, President

or a such other address as the Company shall have furnished to the Holder. Each
such notice or other communication shall, for all purposes of this Agreement, be
treated as effective upon receipt.

         7.4 Delays or Omissions. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party to this
Agreement shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party to this Agreement, shall be cumulative and not alternative.

                                       11
<PAGE>

         7.5 Counterparts. This Agreement may be executed in separate
counterparts, each of which shall collectively and separately constitute one
agreement and shall be binding upon the parties hereto.

         7.6 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.

         7.7 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.

         7.8 Enforcement of Agreement. Holder acknowledges and agrees that the
Company could by damaged irreparably if any of the provisions of this Agreement
are not performed in accordance with their specific terms. Accordingly, the
Holder agrees that, (i) it will waive, in any action for specific performance,
the defense of adequacy of a remedy at law, and (ii) in addition to any other
right or remedy to which the Company may be entitled, at law or in equity, the
Company will be entitled to enforce any provision of this Agreement by a decree
of specific performance and to temporary, preliminary and permanent injunctive
relief to prevent breaches or threatened breaches of any of the provisions of
this Agreement, without posting any bond or other undertaking.

         7.9 Binding on Successors and Assigns. Subject to paragraph 6.2 hereof,
the provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, administrators, successors and
assigns. No party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the consent of the other party
hereto. Any purported assignment in violation hereof shall be null and void.

                                  ARTICLE VIII

                                   DEFINITIONS

         "1997 REGISTRATION RIGHTS AGREEMENT" is defined in paragraph 5.4 of
         this Agreement.

          "AGREEMENT" is defined in the first paragraph of this Agreement.

                                       12
<PAGE>

         "BUSINESS DAY" means any day that is not a Saturday, a Sunday or a day
         on which banks are required or permitted to be closed in the State of
         Mississippi.

         "CLOSING TIME" is defined in paragraph 2.6 of this Agreement.

         "COMMON STOCK" is defined in paragraph B of this Agreement.

         "COMPANY" is defined in the first paragraph of this Agreement.

         "COMPANY NON-PUBLIC INFORMATION" is defined in paragraph 6.4 of this
         Agreement.

         "CONVERSION DOCUMENTS" is defined in paragraph 1.1.2. of this
         Agreement.

         "CONVERSION SHARES" is defined in paragraph E of this Agreement.

         "DERIVATIVES HOLDERS" is defined in paragraph G of this Agreement.

         "EXCHANGE PERIOD" is defined in paragraph G of this Agreement.

         "EXCHANGE SHARE" is defined in paragraph G of this Agreement.

         "EXCHANGE SHARE EQUIVALENT" is defined in paragraph I of this
         Agreement.

         "HOLDER" is defined in the first paragraph of this Agreement.

         "HOLDER NOTES" is defined in paragraph E of this Agreement.

         "HOLDER WARRANTS" is defined in paragraph E of this Agreement.

         "INTEREST EXPIRATION DATE" is defined in paragraph 3.2 of this
         Agreement.

         "NET PRICE PER SHARE" is defined in paragraph 2.5 of this Agreement.

         "NET PROCEEDS" is defined in paragraph 2.4 of this Agreement.

         "NOTES" is defined in paragraph A of this Agreement.

         "NOTICE OF CONVERSION" is defined in paragraph 1.1.2 of this Agreement.

         "OTHER DERIVATIVES HOLDERS" is defined in paragraph G of this
         Agreement.

         "REGISTRATION RIGHTS AGREEMENT" is defined in paragraph H of this
         Agreement.

         "SJMB SHARES" is defined in paragraph E of this Agreement.

                                       13
<PAGE>

         "ST. JAMES PARTNERSHIPS" is defined in paragraph G of this Agreement.

         "STOCK ASSIGNMENT" is defined in paragraph 1.1.2 of this Agreement.

         "UNDERWRITTEN OFFERING" is defined in paragraph 2.3 of this Agreement.

         "UNDERBRINK FAMILY ENTITIES" is defined in paragraph G of this
         Agreement.

         "WARRANTS" is defined in paragraph C of this Agreement.

         "WARRANT ASSIGNMENT" is defined in paragraph 3.3 of this Agreement.

         "WARRANT EXCHANGE DATE" is defined in paragraph 5.1.1 of this
         Agreement.

         "WARRANT UNIT" is defined in paragraph I of this Agreement.

                                       14
<PAGE>

                                 SIGNATURE PAGE

                  In Witness Whereof, the parties hereto have caused this
Recapitalization Agreement to be duly executed as of the day and year first
above written.

COMPANY                       BLACK WARRIOR WIRELINE CORP.

                              By  /s/ William L. Jenkins
                                  ----------------------
                                  William L. Jenkins, President

HOLDER                        ST. JAMES CAPITAL PARTNERS, L.P.
                              BY ST. JAMES CAPITAL CORP., ITS GENERAL PARTNER

                              BY: /S/ James H. Harrison
                                  ---------------------
                                  James H. Harrison, Chief Financial Officer

HOLDER'S NOTES AND WARRANTS:

1. Number of Warrants purchasable from Holder is 7,320,277

2. Principal amount of Notes held by Holder is $4,900,000, plus accrued interest

HOLDER'S ADDRESS IS:   4299 San Felipe, Suite 120
                         Houston, TX 77096

                                       15
<PAGE>

                                                                      ADDENDUM A

                              NOTICE OF CONVERSION

                  The undersigned, the holder of the below identified
Convertible Promissory Notes ("Holder Notes") issued by Black Warrior Wireline
Corp. ("Company"), hereby elects to convert the principal and accrued interest
of the Holder Notes into shares of Company Common Stock in accordance with the
terms of the Holder Notes and in accordance with the terms of the
Recapitalization Agreement between the undersigned and the Company. The
conversion price is $0.75 per share.

         Holder Notes to be converted:

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

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

HOLDER                       ST. JAMES CAPITAL PARTNERS, L.P.
                             BY ST. JAMES CAPITAL CORP., ITS GENERAL PARTNER

                             BY:
                                 -------------------------------------------
                                  James H. Harrison, Chief Financial Officer

Date:             ,2005
         --------------

                                       16
<PAGE>

                                                                      ADDENDUM B

                                STOCK ASSIGNMENT

                  For value received, ST. JAMES CAPITAL PARTNERS, L.P., hereby
sells, assigns, and transfers unto Black Warrior Wireline Corp., in accordance
with the terms of the Recapitalization Agreement between the Company and the
undersigned, the within shares of Common Stock, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint Ronald
Whitter attorney, to transfer such shares of Common Stock on the books of the
Company, with full power of substitution.

         Number of shares of Common Stock covered by this assignment:
                                                                      ----------

         Certificate No(s)
                          ------------------------------------------------------

HOLDER                      ST. JAMES CAPITAL PARTNERS, L.P.
                            BY ST. JAMES CAPITAL CORP., ITS GENERAL PARTNER

                            BY:
                               ------------------------------------------
                               James H. Harrison, Chief Financial Officer

Date:             ,2005
         --------------

                                       17
<PAGE>

                                                                      ADDENDUM C
             PRIORITY OF CUTBACK OF SHARES IN UNDERWRITTEN OFFERING

         The following procedures only apply in the event that the managing
underwriter of the Underwritten Offering advises the Company that in its
judgment the number of shares of Common Stock to be included in the Underwritten
Offering must be reduced:

PRIORITY ONE: The first securities to be cut back out of the sale to the Company
are those shares (including Conversion Shares, Exchange Shares and any other
shares) held by the Underbrink Family Entities to be purchased by the Company at
the Closing Time. Mr. Charles E. Underbrink, a director of our company and his
family affiliates, including Northgate, L.L.C., Hub, Inc., Charles E. Underbrink
IRA, and the Charles E. Underbrink Irrevocable Trust dated 10/10/92 for the
benefit of Piper Aurora Underbrink, but excluding St. James Capital Partners,
L.P. and SJMB, L.P. are herein collectively referred to as the "Underbrink
Family Entities."

PRIORITY TWO: The second shares to be cut back out of the sale to the Company
are the 5,017, 481 shares currently held by SJMB, L.P. to be purchased by the
Company at the Closing Time.

PRIORITY THREE: The third securities to be cut back out of the sale to the
Company are the Exchange Share Equivalents held by the Company's other holders
other than the Underbrink Family Entities. Such cutback will be pro-rata based
on the aggregate number of Exchange Share Equivalents intended to be sold in the
Underwritten Offering and to be purchased by the Company at the Closing Time.

                                       18
<PAGE>

                                                                      ADDENDUM D

                               WARRANT ASSIGNMENT

                  For value received, ST. JAMES CAPITAL PARTNERS, L.P., hereby
sells, assigns, and transfers unto Black Warrior Wireline Corp., in accordance
with the terms of the Recapitalization Agreement between the Company and the
undersigned, the within Warrants, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Ronald Whitter
attorney, to transfer such Warrants on the books of the Company, with full power
of substitution.

         Number of Warrants covered by this assignment:
                                                        ---------------

HOLDER                         ST. JAMES CAPITAL PARTNERS, L.P.
                               BY ST. JAMES CAPITAL CORP., ITS GENERAL PARTNER

                               BY:
                                  ------------------------------------------
                                  James H. Harrison, Chief Financial Officer

Date:             ,200_
         --------------

                                       19

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