EXHIBIT 10.28
[On Barclays' letterhead]
To: Madison Energy France S.C.S.
(formerly Madison/Chart Energy S.C.S.) ("MEF")
(the "BORROWERS' AGENT")
To: Madison Oil Company Europe ("MOCE")
Madison Oil France S.A. ("MOF")
Madison Energy France S.C.S.
(the "BORROWERS")
To: Madison Oil Company ("MOC")
Madison Petroleum Inc. ("MPI")
Madison Oil Company Europe
Madison Oil France X.X.
Xxxxxxx Energy France S.C.S.
Madison (Turkey) Inc ("MADISON TURKEY")
Madison Oil Turkey Inc ("MOTI")
(the "GUARANTORS")
To: Toreador Resources Corporation
(the "TOREADOR")
[ ] December, 2002
WAIVER AND CONSENT - VARIOUS ISSUES
We refer to the Revolving Credit Facility Agreement dated 30th March, 2001
between the Borrowers, the Guarantors, Barclays Capital as Arranger, the Banks
(as defined therein) and Barclays Bank PLC as Facility Agent, Technical Agent,
Ancillary Bank and US Security Trustee as amended (the "CREDIT AGREEMENT"). We
also refer to a waiver and consent letter dated 8th November, 2001 relating to
the merger of MOC with Toreador (the "MERGER WAIVER LETTER") and to a waiver and
consent letter dated 21 March, 2002 relating to various issues (the "MARCH
WAIVER LETTER").
All of the Banks, the Ancillary Bank and the Hedging Bank, have authorised the
Facility Agent to enter into this letter on their behalf.
1. INTERPRETATION
In this letter, unless otherwise defined or the context otherwise
requires:
(a) terms defined or used in the Credit Agreement have the same
meaning in this letter;
(b) references to specific numbered clauses are clauses of the
Credit Agreement;
(c) references to paragraphs are, unless stated otherwise,
references to paragraphs of this letter;
(d) "EQUITY ISSUE PROCEEDS" means the proceeds (whether in cash or
in kind) of any equity or capital issue (to include, without
limitation, share placement, the issue of
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preferred stock or subordinated loan stock or any other
similar instrument) (the "EQUITY ISSUE");
(e) "FRENCH PERMITTED PAYMENTS" means:
(i) the costs referred to in paragraphs (a)(i) and (b) of
the definition of "Permitted Payment" in the Credit
Agreement; and
(ii) any general and administrative expenditure relating
to any Borrowing Base Interest, Borrowing Base
Petroleum or Borrowing Base Asset;
(f) "MERGER AGREEMENT" means the merger agreement dated as of 3rd
October, 2001 between MOC, Toreador and MOC Acquisition
Corporation (a wholly-owned subsidiary of Toreador) pursuant
to which, subject to the satisfaction of certain conditions,
MOC and MOC Acquisition Corporation will merge and MOC shall
be the surviving corporation;
(g) "STRATEGIC PLAN" means the strategic plan submitted to the
Facility Agent by Toreador on 12th December, 2002;
(h) "SUBORDINATION AGREEMENT" means the Subordination Agreement
dated 30th March, 2001 between members of the Madison Group as
debtors, the Facility Agent and MOF, MOC, MOCE and MPI.
(i) "SUBORDINATION AND SUPPORT AGREEMENT" means the subordination
and support agreement between Toreador, MOC and the Facility
Agent dated November, 2001 entered into in connection with the
Merger Waiver Letter;
(j) "SURPLUS SALES PROCEEDS" means, in relation to any US asset of
the Toreador Group, the net sale proceeds paid to or to the
order of any member of the Toreador Group from the sale of
that asset after deduction of any amounts thereof required by
the Bank of Texas to be paid to them in repayment of
outstanding loans to Toreador;
(k) "TOREADOR GROUP" means, at any time Toreador and all of its
Subsidiaries for the time being;
(l) "TOREADOR GUARANTEE" means a Toreador subordinated guarantee
of all of the obligations of the Obligors under the Finance
Documents;
(m) "TOREADOR SUBORDINATED REVOLVING CREDIT AGREEMENT" means the
subordinated revolving credit agreement dated as of 3rd
October, 2001 between MOC and Toreador pursuant to which
Xxxxxxxx agrees to advance by way of loan certain monies to
MOC;
(n) "TOREADOR SUBORDINATED REVOLVING CREDIT NOTE" means the
subordinated revolving credit note dated as of 3rd October,
2001 between MOC and Toreador;
(o) "TRINIDADIAN PERMITTED PAYMENTS" means
(i) the costs referred to in paragraph (a)(i) of the
definition of "Permitted Payment" in the Credit
Agreement except that reference to Borrower Borrowing
Asset, Borrowing Base Petroleum or Borrowing Base
Interest in
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that definition shall be construed as a reference to
Trinidadian Interest, Trinidadian Petroleum and
Trinidadian Asset);
(ii) any taxes that are attributable to the Trinidadian
Asset and are payable by Trans Dominion Holdings
Limited or any other member of the Toreador Group;
and
(iii) any general and administrative expenditure relating
to any Trinidadian Interest, Trinidadian Petroleum
and Trinidadian Asset;
(p) "TURKISH CAPITAL REPATRIATION" means any amounts paid to
Toreador or any Obligor in relation to the repatriation of the
registered capital of any member of the Toreador Group in
Turkey;
(q) "TURKISH PERMITTED PAYMENTS" means:
(i) the costs referred to in paragraph (a)(i) of the
definition of "Permitted Payment" in the Credit
Agreement except that reference to Borrower Borrowing
Asset, Borrowing Base Petroleum or Borrowing Base
Interest in that definition shall be construed as a
reference to Turkish Interest, Turkish Petroleum and
Turkish Asset);
(ii) any taxes payable by XXXX and Xxxxxxx Turkey; and
(iii) any general and administrative expenditure relating
to any Turkish Interest, Turkish Petroleum and
Turkish Asset;
(r) "TURKISH/TRINIDADIAN ASSET" means:
(i) (A) the Cendere oil field in Turkey;
(B) the Zeynel oil field in Turkey;
(C) the Boyabet oil field in Turkey; and
(D) the Thrace Basin in Turkey,
(each a "TURKISH ASSET"); and
(ii) the Bonasse oil field in Trinidad and Tobago and the
related Southwest Cedros Peninsular Exploration
Licence (the "TRINIDADIAN ASSET");
(s) "TURKISH/TRINIDADIAN INTEREST" means:
(i) all of the Obligors' present and future interest in a
Turkish Asset and all agreements, facilities or
insurances relative to that Turkish Asset or to
Turkish Petroleum (the "TURKISH INTEREST"); and
(ii) all of the Obligors' present and future interest in a
Trinidadian Asset and all agreements, facilities or
insurances relative to that Trinidadian Asset or to
Trinidadian Petroleum (the "TRINIDADIAN INTEREST");
(t) "TURKISH/TRINIDADIAN PETROLEUM" means:
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(i) in respect of a Turkish Asset, all petroleum won and
saved from that Turkish Asset that accrues to the
Turkish Interest in that Turkish Asset (including,
without limitation, any such petroleum that is
royalty petroleum) ("TURKISH PETROLEUM"); and
(ii) in respect of a Trinidadian Asset, all petroleum won
and saved from that Trinidadian Asset that accrues to
the Trinidadian Interest in that Trinidadian Asset
(including, without limitation, any such petroleum
that is royalty petroleum) ("TRINIDADIAN PETROLEUM");
(u) "VOTING AGREEMENT" means the voting agreement dated as of 3rd
October, 2001 between Xxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx X.
Xxxxxx and PHD Partners, LP;
(v) "WARRANT" means the warrants to be issued pursuant to the
Warrant Letter; and
(w) "WARRANT LETTER" means the warrant letter dated 21st March,
2002 between Toreador and the Arranger, as amended.
2. WAIVERS AND CONSENTS
2.1 WAIVER OF BREACHES OF FINANCE DOCUMENTS
Subject to the terms and conditions of this letter, Barclays Bank PLC,
as Facility Agent confirms that the Banks have agreed to waive the
following breaches of the Finance Documents:
(a) all currently outstanding breaches of Clause 6.1 (Repayment),
as amended by the March Waiver Letter;
(b) all currently outstanding breaches of Clause 16 (Forecasts),
as amended by the March Waiver Letter;
(c) all currently outstanding breaches of Clause 19.4
(Notification of Default);
(d) all currently outstanding breaches of Clause 19.5 (Compliance
Certificates); and
(e) failure by Xxxxxxxx to issue and deliver Warrants to Barclays
Nominees (Branches) Limited in accordance with the Warrant
Letter.
2.2 MERGER WAIVER AND CONSENT
Barclays Bank PLC, as Facility Agent, consents to the merger of
Toreador and MOC and confirms that the Banks have agreed to waive the
following Events of Default:
(a) under Clauses 19.12(a) (Mergers and acquisitions) and 20.3
(Breach of other obligations) and Clause 20.20(d) (Change of
control) constituted by MOC entering into and performing the
Merger Agreement and the Voting Agreement and by the
occurrence of the Effective Time (as that term is defined in
the Merger Agreement);
(b) under Clauses 19.13 (Other Financial Indebtedness) and 20.3
(Breach of other obligations) constituted by MOC incurring any
of the indebtedness referred to in paragraph 8
(Characterisation of Toreador Payments) below;
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(c) under Clauses 19.14 (Loans) and 20.3 (Breach of other
obligations) constituted by MOC making loans to the Borrower
referred to in paragraph 8 (Characterisation of Toreador
Payments) below; and
(d) under Clauses 19.13 (Other Financial Indebtedness) and 20.3
(Breach of other obligations) constituted by the Borrowers
being deemed to have borrowed from MOC as referred to in
paragraph 8 (Characterisation of Toreador Payments) below.
3. CONSOLIDATION OF WAIVER LETTERS
Subject to the terms and conditions of this letter, Barclays Bank PLC,
as Facility Agent, confirms that the Banks have agreed to permanently
waive any and all Events of Default that have arisen under the Merger
Waiver Letter and the March Waiver Letter and all the parties to this
letter agree that the Merger Waiver Letter and the March Waiver Letter
shall be terminated and of no further effect (save in relation to the
waivers granted under those letters).
4. REPAYMENT
4.1 REPAYMENT
Clause 6.1 (Repayment) shall be suspended in accordance with paragraph
4.2 (Term of Suspension) below and, during the term of suspension,
shall be replaced with the following provisions:
(a) the Borrowers shall on the last Business Day of each month
commencing on 31st December, 2002 repay an amount of the Loans
equal to the greater of:
(i) $300,000 (in the case of 31st December, 2002),
$150,000 (in the case of 31st January, 2003),
$400,000 (in the case of any other month); and
(ii) the aggregate of French Revenue, Turkish Revenue and
Trinidadian Revenue received during that month less
French Permitted Payments, Turkish Permitted Payments
and Trinidadian Permitted Payments (as such terms are
defined in paragraph 7.5 (Turkish and Trinidadian
Revenue)) .
(b) Xxxxxxxx agrees to pay to the Facility Agent on the last day
of each month an amount sufficient to ensure that the
Borrowers have sufficient funds to comply with their repayment
obligations under sub paragraph (a) above.
(c) Toreador and each Obligor agrees to use best endeavours to
procure that further amounts are applied in repayment of the
Loans so as to ensure that the Loans are repaid by a minimum
of $400,000 on the last Business Day of January, 2003,
$500,000 on the last Business Day of February, 2003 and March,
2003 and $400,000 on the last Business Day of any other month
(the "TARGET REPAYMENT").
(d) Toreador and each Obligor agrees to use best endeavours to
procure that, in addition to the repayments referred to in sub
paragraphs (a) and (c) above, the Loans are repaid as soon as
reasonably practicable by a further amount equal to $300,000
(in relation to the November, 2002 and December, 2002
repayments) plus any subsequent shortfalls in the Target
Repayment in any months.
4.2 TERM OF SUSPENSION
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Clause 6.1 (Repayment) shall be suspended until such time as (i) the
then applicable Forecast prepared after the date of this letter in
accordance with Clause 16 (Forecasts) of the Credit Agreement and
paragraph 5 (Forecasts) of this letter indicates a Relevant NPV to
Total Indebtedness of not less than 1.5:1; and (ii) the outstanding
Loans do not exceed the Total Commitments.
4.3 TURKISH CAPITAL REPATRIATION PREPAYMENT
If, during the suspension of Clause 6.1 (Repayment) in accordance with
paragraph 4.2 (Term of Suspension) above, any Obligor receives any
Turkish Capital Repatriation, the Borrowers shall apply an amount equal
to that Turkish Capital Repatriation (less any amount thereof that is
reinvested in Turkey solely for the purposes of maximising future
Turkish Capital Repatriations as detailed in the Strategic Plan) in
prepayment of the Loans (and Clause 7.7(b) (Miscellaneous provisions)
shall apply to any such prepayment).
4.4 ASSET SALE PROCEEDS PREPAYMENT
If, during the suspension of Clause 6.1 of the Credit Agreement in
accordance with paragraph 4.2 (Term of Suspension) above, any member of
the Toreador Group sells any of its US assets, Toreador agrees to pay
to the Facility Agent an amount equal to the Surplus Sale Proceeds and
such payment shall be deemed to be a prepayment of Loans by the
Borrowers in an aggregate principal amount equal to the Surplus Sale
Proceeds (and Clause 7.7(b) (Miscellaneous provisions) shall apply to
any such prepayment).
4.5 TRINIDADIAN ASSET SALES PREPAYMENT
(a) Subject to sub paragraph (b) below, if any member of the
Toreador Group sells or transfer any of its interest in the
Trinidadian Assets (either directly or indirectly, including
by way of share sale), Toreador agrees to pay to the Facility
Agent an amount equal to the net sale proceeds of such sale
and such payment shall be deemed to be a prepayment of Loans
by the Borrowers in an aggregate principal amount equal to the
net sale proceeds (and Clause 7.7(b) (Miscellaneous
provisions) shall apply to any such prepayment).
(b) No member of the Toreador Group will sell or transfer (either
directly or indirectly, including by way of share sale or
intra group transfer) any of its interest in the Trinidadian
Assets without the prior written consent of the Facility
Agent.
4.6 MISCELLANEOUS
(a) The following amendments to the Credit Agreement effected by
paragraph 4 of the Merger Waiver Letter and paragraph 13 of
the March Waiver Letter remain effective and are restated as
follows:
(i) if the Borrowers repay or prepay any outstanding
Loan, then the Total Commitments shall, immediately
upon that repayment or prepayment being made,
automatically be reduced by an amount equal to the
principal so repaid or prepaid;
(ii) Clause 6.2 shall be amended so the words "Tranche A"
is inserted before "Tranche B" and the words ", but
any amount repaid under Tranche A may
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subsequently be re-borrowed on and subject to the
provisions of the Agreement" are deleted; and
(iii) Clause 7.7(c) shall be amended so that the words "Any
amount prepaid under Tranche A may subsequently be
re-borrowed on and subject to the terms of this
Agreement but" are deleted and the words "Tranche A,"
are inserted before "Tranche B";
(b) The Borrowers shall ensure that the last day of an Interest
Period for one or more Loans coincides with the date
repayments or prepayments are to be made under this letter,
and shall select Interest Periods accordingly and for this
purpose (but not otherwise) the Borrowers may select an
Interest Period of less than one month.
(c) Amounts prepaid in accordance with paragraphs 4.3 (Turkish
Capital Repatriation Prepayment) to 4.5 (Trinidadian Asset
Sales Prepayment) shall not be applied against or reduce the
repayment obligations under paragraph 4.1 (Repayment).
5. FORECASTS
The calculation of the Relevant NPV on each Calculation Date in
accordance with Clause 16.1(d)(i) (General) shall be suspended for the
duration of the suspension of Clause 6.1 (Repayment) in accordance with
paragraph 4 (Repayment) above.
6. INFORMATION COVENANTS
6.1 STRATEGIC PLAN
(a) Toreador shall by no later than 31st January, 2003 provide to
the Facility Agent an update of the Strategic Plan
incorporating the following information in reasonable detail:
(i) details of the progress achieved in relation to each
of the four options outlined in the Strategic Plan;
(ii) Toreador's assessment of the likelihood of each
option referred to above coming to fruition by 31st
March, 2003; and
(iii) details of any other option being pursued by Toreador
with a view to restoring a Relevant NPV to Total
Indebtedness of not less than 1.5:1 by 31st March,
2003.
(b) Toreador shall immediately notify the Facility Agent if it
becomes aware that any of the four options outlined in the
Strategic Plan is no longer being pursued by Toreador or the
proposed counterparty or, as a result of any other event or
circumstance, is unlikely to come to fruition by 31st March,
2003, providing reasonable detail of the particular event or
circumstances and (without prejudice to sub paragraph (a)
above), within seven days of such notification, an updated
Strategic Plan.
6.2 CASHFLOW FORECASTS
(a) On or before 31st December, 2002, Toreador shall provide to
the Facility Agent a detailed cashflow forecast for all of the
Toreador Group's operations for 2003 and shall notify the
Facility Agent of any events or circumstances that are likely
to cause
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a deviation from the forecast cashflow to the extent that it
is likely to prevent the Borrowers complying with the
repayment schedule in paragraph 4.1 (Repayment) or cause
liquidity problems in the Toreador Group, providing details of
the particular events or circumstances and a revised forecast.
(b) Toreador shall provide to the Facility Agent, on a weekly
basis, a certificate signed by the Chief Financial Officer of
Toreador certifying that that the Toreador Group has
sufficient working capital to continue trading and that the
Toreador Group's cashflow situation is manageable.
6.3 OTHER INFORMATION
Toreador shall promptly notify the Facility Agent:
(a) of the receipt by any member of the Toreador Group of any
Turkish Capital Repatriation (and the amount thereof that is
to be reinvested in Turkey solely for the purposes of
maximising future Turkish Capital Repatriations) or Surplus
Sale Proceeds; and
(b) if any creditor of any member of the Toreador Group takes any
enforcement action, or notifies any member of the Toreador
Group of its intention to take enforcement action, in relation
to any amounts owing to it.
7. COVENANTS
7.1 CAPITAL EXPENDITURE RESTRICTIONS
(a) The Obligors shall procure that no Obligor shall make, nor
incur any obligation or liability for or in respect of any
capital expenditure outside of the United States except for
(i) capital expenditure that a prudent operator would expend
to maintain (rather than develop) the relevant assets; or (ii)
capital expenditure that is funded from free cash that is
available to the Toreador Group after making all of the
repayments to the Finance Parties contemplated under paragraph
4 (Repayment) of this letter and all other payments required
to be made to Bank of Texas.
(b) Toreador shall by no later than 10th January, 2003 provide to
the Facility Agent a capital expenditure budget for the first
half of 2003 for all of the Toreador Group's operations that
is in form and substance satisfactory to the Facility Agent.
(c) Toreador shall within ten days of the end of each month
provide to the Facility Agent a cashflow reconciliation for
that month for all of the members of the Toreador Group (in
the form of the Schedule to this letter), reconciling the
sources of funds and uses of funds and including details of
that month's capital expenditures.
(e) Paragraph (i) of Clause 19.22 (Capital expenditure), shall not
apply.
7.2 TURKISH CAPITAL REPATRIATION
Toreador and the Obligors shall use best endeavours to maximise Turkish
Capital Repatriation proceeds within as short a time frame as is
reasonably practicable.
7.3 TOREADOR EQUITY ISSUES
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(a) Toreador shall use best endeavours to maximise Equity Issue
Proceeds in the period to 31st March, 2003 and shall consult
with the Facility Agent regarding the proportion of those
proceeds that are to be applied in prepayment of the Loans.
(b) Toreador undertakes to and shall procure that its subsidiaries
shall, in connection with any Equity Issue, make full and
proper disclosure in accordance with all applicable laws
and/or requirements of any regulatory authority
7.4 TOREADOR GUARANTEE
Toreador shall, by 17th January, 2003, enter into the Toreador
Guarantee in form and substance satisfactory to the Facility Agent and
procure that by the same date a legal opinion relating thereto is
delivered to the Facility Agent from a reputable law firm in form and
substance satisfactory to the Facility Agent.
7.5 TURKISH AND TRINIDADIAN CASHFLOW
(a) Without prejudice to the Obligors obligations under the Credit
Agreement, MOTI, Madison Turkey, MOC and MCE shall pay, and
Toreador shall procure that MOTI, Madison Turkey, MOC and MCE
pay:
(i) the gross proceeds (without any deductions
whatsoever) of any disposal of Turkish/Trinidadian
Petroleum and Borrowing Base Petroleum;
(ii) any sales tax payable on the amount referred to in
paragraph (i) above; and
(iii) any other amount payable to MOTI, Madison Turkey, MOC
and MCE in respect of any Turkish/Trinidadian
Petroleum or any Borrowing Base Petroleum,
Turkish/Trinidadian Interest or Borrowing Base
Interest or Turkish/Trinidadian Asset or Borrowing
Base Asset except to the extent it is payable under
insurances in respect of liabilities to third
parties, seepage, pollution or the cost of control of
xxxxx,
(the amounts being attributable to Borrowing Base Petroleum,
Borrowing Base Interest or Borrowing Base Asset being "FRENCH
REVENUE", Turkish Petroleum, Turkish Interest and Turkish
Asset being "TURKISH REVENUE" and the amounts being
attributable to Trinidadian Petroleum, Trinidadian Interest
and Trinidadian Asset being "TRINIDADIAN REVENUE"),
LESS
(A) in the case of Trinidadian Revenue, Trinidadian Permitted
Payments for that month ("NET TRINIDADIAN REVENUE"); and
(B) in the case of Turkish Revenue, Turkish Permitted Payments
for that month ("NET TURKISH REVENUE"),
directly to the Dollar Revenue Account, unless any such amount
is received in another currency, in which case (where
applicable) MOTI, Madison Turkey, MCE and MOC shall, and
Toreador shall procure that MOTI, Madison Turkey, MCE or MOC
shall, immediately upon receipt convert that amount to Dollars
and pay them directly to the Dollar Revenue Account.
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(b) Without limiting the Facility Agent's rights under Clause
19.3(d) (Borrowing Base Asset and similar information), the
Borrower's Agent shall supply to the Facility Agent (in
sufficient copies for all of the Banks unless the Facility
Agent agrees otherwise):
(i) the information described in Clause 19.3(a)(i), (ii)
and (iii) (Borrowing Base Asset and similar
information), provided that the wording of that
Clause shall be deemed amended for these purposes
such that each reference to "Borrowing Base Asset"
shall be deemed to be a reference to
Turkish/Trinidadian Asset; and
(ii) any other information relating to a
Turkish/Trinidadian Asset that could change the
expected capital expenditures detailed in Schedule 2
to this letter or impose any additional material
liability on the Obligors; and.
(c) promptly deliver to the Facility Agent such information and
evidence as it may from time to time require in order to check
and verify the amount of any Turkish Revenue, Trinidadian
Revenue, Trinidadian Permitted Payment or Turkish Permitted
Payment.
7.6 TRANS DOMINION HOLDINGS LIMITED
(a) Toreador and the Obligors agree to procure that, by 31st
January, 2003, all of the Toreador Group's shares in Trinidad
Exploration and Development Limited and Trans Dominion
Holdings Limited are pledged to the Facility Agent on behalf
of the Finance Parties by way of a security agreement in form
and substance satisfactory to the Facility Agent and that by
the same date legal opinions relating thereto are delivered to
the Facility Agent from reputable law firms in all relevant
jurisdictions in each case in form and substance satisfactory
to the Facility Agent.
(b) Toreador and the Obligors agree to procure that Trans Dominion
Holdings Limited:
(i) promptly notifies the Facility Agent when Trans
Dominion Holdings Limited enters into any agreement
relating to the Trinidadian Asset, the Trinidadian
Interest or any Trinidadian Petroleum ("RELEVANT
AGREEMENT");
(ii) after notice by the Facility Agent to the Borrower's
Agent that the Facility Agent requires security to be
granted to it for the benefit of the Finance Parties,
enters into an agreement granting a Security Interest
over that Relevant Agreement above in form and
substance satisfactory to the Facility Agent
("SECURITY Document"); and
(iii) delivers a legal opinion from a reputable law firm in
respect of all relevant jurisdictions in a form and
substance satisfactory to the Facility Agent in
relation to each of the Security Documents,
and each Obligor shall do all things reasonably required by
the Facility Agent for the granting, perfecting or protecting
of any security intended to be granted under a Security
Document.
7.7 THE MERGER AGREEMENT
(a) MOC undertakes not to agree to any waiver, amendment,
termination or cancellation of, or of any term of, the Merger
Agreement or the Voting Agreement.
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(b) Toreador agrees to waive any default, event of default or
breach of representation or warranty under the Merger
Agreement, the Voting Agreement, the Toreador Subordinated
Revolving Credit Agreement and the Toreador Subordinated
Revolving Credit Note constituted by MOC issuing shares to
Barclays Nominees (Branches) Limited, and the Obligors
undertaking to deliver shares, in accordance with paragraph
3(a)(ii) of the Merger Waiver Letter.
7.8 TURKEY
Toreador and MOCE undertake to procure that, by no later than forty
five days after Madison Turkey has received all Turkish Capital
Repatriations that it is entitled to:
(a) Madison Turkey shall have transferred all of its assets,
liabilities, business and undertakings to MOTI and shall be
wound up and dissolved; and
(b) that MOTI shall have discharged in full all of the
consideration for that transfer.
8. CHARACTERISATION OF TOREADOR PAYMENTS
(a) Toreador agrees that any payment made or deemed made to MOC by
Toreador pursuant to this letter, the March Waiver Letter or
the Merger Waiver letter shall be "Junior Debt" for the
purposes of the Subordination and Support Agreement. MOC
agrees that any payment made or deemed made by MOC to any of
the Borrowers pursuant to this letter, the March Waiver Letter
or the Merger Waiver Letter shall be "Junior Debt" for the
purposes of the Subordination Agreement.
(b) An amount equal to each payment made by Toreador to the
Facility Agent in accordance with this letter and for the
avoidance of doubt, any amounts previously paid by Toreador
under paragraph 7(b) of the Merger Waiver Letter or 12(b) of
the March Waiver Letter shall be deemed to be
(i) a non-interest bearing loan made by Toreador to MOC
repayable (subject to the Subordination and Support
Agreement on demand (or a loan on such other terms as
are agreed by MOC and Toreador (in any case subject
to the Subordination and Support Agreement)); and
(ii) a non-interest bearing loan made by MOC to the
Borrowers repayable (subject to the Subordination
Agreement on demand (or a loan on such other terms as
are agreed by MOC and the Borrowers (in any case
subject to the Subordination Agreement)).
(c) The obligations of Toreador to make payments under and in
connection with this letter are absolute, irrevocable and
unconditional and shall not be affected by:
(i) the existence of any dispute, claim, counter-claim,
set-off, defence or other right which Toreador may
have at any time against any Finance Party or MOC,
whether in connection herewith or otherwise;
(ii) the bankruptcy, insolvency, reorganisation, winding
up, dissolution or liquidation, or any change in the
status, function, control or ownership of any
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Obligor or Toreador or the occurrence of any other
proceeding as a result of such bankruptcy;
(iii) any sale, transfer or other disposition by Toreador
of any direct or indirect interest it may have in any
Obligor; and
(iv) any of the obligations of Toreador under or in
connection with this letter being or becoming
illegal, invalid or unenforceable in any respect.
9. AMENDMENT TO THE CREDIT AGREEMENT
The amendments to the Credit Agreement effected by paragraph 4 of the
Merger Waiver Letter and paragraph 13 of the March Waiver Letter remain
effective and are restated as follows:
(a) paragraph (d) in the definition of "Permitted Payment" in
Clause 1.1 (Definitions) shall be deleted and shall be
replaced with:
"(d) [Not used];";
(b) Clause 19.25(a)(iii) (Turkish business) shall be deleted and
shall be replaced with:
"(iii) in any event, does not make any payment to any other
member of the Toreador Group except for payment of
the kind contemplated by paragraph (ii)(B) above;";
(c) for the purposes of 20.3 (Breach of other obligations), 20.4
(Misrepresentation), 20.12 (Unlawfulness), 20.13
(Effectiveness of Security), 20.22 (U.S. Bankruptcy Laws) and
20.23 (ERISA) the word "Obligor" shall be deemed to include
Toreador;
(d) for the purposes of Clauses 20.5 (Cross-default), 20.6
(Insolvency), 20.7 (Insolvency proceedings), 20.8 (Appointment
of receivers and managers), 20.9 (Creditor's processes), 20.10
(Analogous proceedings), 20.11 (Cessation of business) and
20.17 (Litigation) the phrase "member of the Group" shall be
deemed to include Toreador;
(e) Clause 20.20(d) (Change of Control) shall be deleted and shall
be replaced with:
"(d) MOC is not, or ceases to be, a wholly-owned
subsidiary of Toreador Resources Corporation; or";
and
(f) a new Clause 20.20(e) (Change of Control) of the Credit
Agreement shall be inserted as follows:
"(e) any single person, or group of persons acting in
consort (as defined in the City Code on Takeovers and
Mergers) acquires control (as defined in Section 416
of the Income and Corporation Taxes Act 1998) of
Toreador Resources Corporation.".
10. CONFIRMATIONS
10.1 GUARANTEES
13
Each Guarantor agrees, and represents and warrants to each Finance
Party as at the date it executes this letter:
(a) that the arrangements contemplated by this letter, the Merger
Agreement and the Voting Agreement and the entry into and
performance of the Merger Agreement and the occurrence of the
Effective Time (as defined in the Merger Agreement) do not in
any way affect the guarantee and undertakings given by it
under Clause 15 (Guarantee); and
(b) that the guarantee given by it under Clause 15 (Guarantee) is
a continuing guarantee, in full force and effect, and will
extend to the ultimate balance of all sums payable by the
Obligors under the Finance Documents, regardless of the
arrangements contemplated by this letter, the entry into and
performance of the Merger Agreement and the occurrence of the
Effective Time (as defined in the Merger Agreement) and any
intermediate payments or discharge in whole or in part
(including, without limitation, the prepayments contemplated
by this letter).
10.2 MOC
MOC agrees, and represents and warrants to each Finance Party as at the
date it executes this letter:
(a) that the arrangements contemplated by this letter and the
entry into and performance of the Merger Agreement and the
occurrence of the Effective Time (as defined in the Merger
Agreement) do not in any way affect any of the Finance
Documents; and
(b) that its obligations under the Finance Documents are in full
force and effect and are binding on, and enforceable against,
MOC regardless of the arrangements contemplated by this letter
or the entry into and performance of the Merger Agreement and
the occurrence of the Effective Time (as defined in the Merger
Agreement)).
11. REPRESENTATIONS AND WARRANTIES
(a) Toreador and each Obligor makes the following representations
and warranties to each Finance Party in respect of those of
this letter, the Merger Agreement and the Voting Agreement to
which it is a party:
(i) that it has the power to enter into and perform this
letter, the Merger Agreement and the Voting Agreement
and it has taken all necessary action to authorise
the entry into, performance and delivery of this
letter, the Merger Agreement and the Voting
Agreement; and
(ii) that this letter, the Merger Agreement and the Voting
Agreement constitutes its legal, valid and binding
obligation enforceable in accordance with its terms.
(b) Toreador represents and warrants as at the date it executes
this letter, the Toreador Guarantee and each time it issues a
Warrant, that:
(i) that it has the power to enter into and perform this
letter, the Toreador Guarantee, the Warrants and the
Warrant Letter and it has taken all necessary action
to authorise the issue, performance and delivery of
those Warrants; and
14
(ii) this letter, the Toreador Guarantee, the Warrants and
the Warrant Letter will, when issued, constitutes its
legal, valid and binding obligation enforceable in
accordance with its terms.
12. WARRANTS
Xxxxxxxx and the Arranger confirms and agrees that:
(a) the Warrant Letter shall be amended such that the date for
delivery and issue of the Warrants under paragraphs 1 and 2 of
the Warrant Letter shall be 31st December, 2002 and Toreador
shall issue the warrant to Barclays Nominees (Branches)
Limited or such other person or persons as the Facility Agent
may require;
(b) each Warrant shall be in such form as the Facility Agent may
require (acting reasonably);
(c) as amended by sub paragraph (a) above, the Warrant Letter
remains in full force and effect.
13. LEGAL FEES
(a) For the avoidance of doubt, MEF acknowledges and agrees that
the Facility Agent's costs and expenses incurred in connection
with this letter, the Warrant Letter, the Toreador Guarantee
and any other arrangement, new agreement or document
contemplated by this letter fall within Clause 23.1 (Initial
and special costs), and as such, MEF shall immediately on
demand pay those costs and expenses.
(b) The Facility Agent confirms that the payment of the legal fees
of Xxxxx & Xxxxx (the Facility Agent's legal adviser) incurred
in relation to this letter, the Warrant Letter, the Toreador
Guarantee and any other arrangement, new agreement or document
contemplated by this letter shall constitute a Permitted
Payment.
(c) The Obligors shall pay the Permitted Payment referred to in
paragraph (b) above as soon as possible after execution of
this letter from Gross Revenues to the extent any such amount
is available after the payment of any other Permitted Payments
(other than any referred to in paragraph (c)(i) of the
definition of Permitted Payment in Clause 1.1 (Definitions)).
14. EVENT OF DEFAULT
If:
(a) any of the provisions of this letter are not complied with;
(b) any shares are not issued in accordance with the Warrants
issued and delivered in accordance with the Warrant Letter;
(c) Toreador does not issue and deliver any of the Warrants on or
before 20th December, 2002;
(d) the Merger Agreement or the Toreador Subordinated Revolving
Credit Agreement is terminated;
15
(e) the Voting Agreement is breached;
(f) the Facility Agent is not satisfied with the substance of any
update or notification provided to it under paragraph 6.1
(Strategic Plan);
(g) Clause 6.1 of the Credit Agreement is not reinstated by 31st
March, 2003 in accordance with paragraph 4.2 (Term of
Suspension);
(h) any representation and warranty in this letter is incorrect
when made or repeated; or
(i) there is any breach of the repayment schedule in paragraph 4
(Repayment) of this letter,
then that event shall constitute an Event of Default under Clause 20
(Default) and the Finance Parties may thereafter exercise all of their
rights in respect thereof under the Finance Documents.
15. DESIGNATION OF FINANCE DOCUMENTS
This letter, the Toreador Guarantee, the Subordination and Support
Agreement, each of the Warrants and the Warrant Letter are a Finance
Document (and each is hereby designated as such by the Facility Agent
and the Borrowers' Agent).
16. CONDITIONS PRECEDENT
(a) The letter and the waivers set out herein shall only take
effect on the date on which the Agent has received an original
of this letter duly executed by all parties and has received
(or waived receipt of):
(i) board resolutions of each of the Obligors and
Toreador authorising the transactions contemplated by
and execution of this letter; and
(ii) specimen signatures of the persons authorised to sign
this letter and any other documents connected to the
Finance Documents on behalf of the Obligors,
(all in form and substance satisfactory to the Facility Agent)
(such date being the "EFFECTIVE DATE").
(b) Toreador and each Obligor represents and warrants as at the
Effective Date that there is no Default outstanding.
17. OTHER PROVISIONS
(a) Nothing in this letter shall affect any right of any Finance
Party, or any obligation of any Obligor, except as expressly
stated above, and each Obligor expressly confirms that all
such rights and obligations shall continue in full force and
effect except to the extent so stated.
(b) This letter does not create any right under the Contracts
(Rights of Third Parties) Act 1999 which is enforceable by any
person who is not a party to this letter.
16
(c) Xxxxxxxx acknowledges and agrees to the provisions of Xxxxxx
28 (Changes to the Parties) and irrevocably authorises the
Facility Agent to execute any duly completed Novation
Certificate on its behalf.
(d) If a provision of this letter is or becomes illegal, invalid
or unenforceable in any jurisdiction, that shall not affect:
(i) the legality, validity or enforceability in that
jurisdiction of any other provision of this letter;
or
(ii) the legality, validity or enforceability, in other
jurisdictions of that or any other provision of this
letter.
(e) Clauses 1.2 (Construction), 28.1 (Transfers by Xxxxxxxx) and
32-37 (inclusive) shall apply to this letter as though set out
in full in this letter, except that:
(i) references in those Clauses to the Credit Agreement
are to be construed as references to this letter;
(ii) each reference to "Obligor" in Clauses 1.2
(Construction), 28.1 (Transfers by Obligors), 35
(Jurisdiction) and 37 (Waiver of Jury Trial) shall be
deemed to include Toreador; and
(iii) the reference to "the Guarantor" in Clause 35.2(f)
(Service of Process) shall be deemed to include
Toreador.
Please countersign this letter (or a copy of it) where marked below to confirm
your agreement to its terms.
Yours faithfully,
/s/ Xxxxxx Xxx
------------------------------
ON BEHALF OF BARCLAYS BANK PLC
AS FACILITY AGENT
We agree with the above.
BORROWERS' AGENT
/s/ Xxxxxxx X. Xxxx
-----------------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 12/31/02
17
BORROWERS
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date: 12/31/02
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date: 12/31/02
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 12/31/02
GUARANTORS
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON OIL COMPANY
Date: 12/31/02
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON PETROLEUM INC
Date: 12/31/02
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON OIL COMPANY EUROPE
Date: 12/31/02
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON OIL FRANCE S.A.
Date: 12/31/02
18
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON ENERGY FRANCE S.C.S.
Date: 12/31/02
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF XXXXXXX (TURKEY) INC
Date: 12/31/02
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF MADISON OIL TURKEY INC
Date: 12/31/02
TOREADOR
/s/ Xxxxxxx X. Xxxx
-----------------------------------
ON BEHALF OF TOREADOR RESOURCES CORPORATION
Date: 12/31/02
19
SCHEDULE 1 - FORM OF CASHFLOW RECONCILIATION
SOURCES OF FUNDS DESCRIPTION
French Operations
Turkish Operations
Trinidadian Operations
US (Toreador) Operations
Other =================
Total
USES OF FUNDS
FRENCH OPEX
CAPEX
G&A
Madison Loan
Other
=======================================
TOTAL FRANCE
TURKISH OPEX
CAPEX
G&A
Madison Loan
Other
=======================================
TOTAL TURKEY
TRINIDADIAN OPEX
CAPEX
G&A
Madison Loan
Other
=======================================
TOTAL TRINIDAD
US OPEX
CAPEX
G&A
Madison Loan
Other
=======================================
Total US (Toreador)
=============================
TOTAL USES OF FUNDS
