SECURITIES PURCHASE AGREEMENT
EXHIBIT 10.21
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this “Agreement”) dated and accepted as of the date set forth on the signature page hereof, by and among Toreador Resources Corporation, a Delaware corporation (the “Company”), and Xxxxx X. Xxxxxxxx (the “Purchaser”).
The Company wishes to sell to the Purchaser, and the Purchaser wishes to buy, on the terms and subject to the conditions set forth in this Agreement, shares (the “Preferred Shares”) of the Company’s Series A-1 Convertible Preferred Stock, par value $1.00 per share (the “Preferred Stock”). The Preferred Shares are convertible pursuant to the terms of a Certificate of Designation relating to the Preferred Stock, the form of which is attached hereto as Exhibit A (the “Certificate of Designation”) into shares (the “Conversion Shares”) of the Company’s Common Stock, par value $0.15625 per share (the “Common Stock”). Dividends on the Preferred Shares are payable, subject to the terms and conditions of the Certificate of Designation, in cash. The Preferred Shares and the Conversion Shares are collectively referred to herein as the “Securities”.
The sale of the Preferred Shares by the Company to the Purchaser will be effected in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“Regulation D”), as promulgated by the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”).
The Company and the Purchaser hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES.
1.1 Agreement to Purchase and Sell. Upon the terms set forth herein, the Company agrees to sell and the Purchaser agrees to purchase 2,000 Preferred Shares at a purchase price equal to Twenty-Five Dollars ($25.00) per Preferred Share (cumulatively, the “Purchase Price”). The Purchaser shall pay the Purchase Price at the closing (the “Closing”) by check or wire transfer of immediately available funds pursuant to wire transfer instructions provided by the Company.
1.2 Certain Definitions. When used herein, (A) “business day” shall mean any day on which the New York Stock Exchange and commercial banks in the city of New York are open for business, (B) an “affiliate” of a party shall mean any person or entity controlling, controlled by or under common control with that party and (C) “control” shall mean, with respect to an entity, the ability to direct the business, operations or management of such entity, whether through an equity interest therein or otherwise.
2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby makes the following representations and warranties to the Company and agrees with the Company that, as of the date of this Agreement:
2.1 Authorization; Enforceability. This Agreement and the Registration Rights Agreement have been duly and validly executed and delivered by the Purchaser. This Agreement constitutes the Purchaser's valid and legally binding obligation, enforceable in accordance with its terms.
2.2 Accredited Investor; Investment Intent. The Purchaser is an accredited investor as that term is defined in Rule 501(a) of Regulation D, and is acquiring the Preferred Shares solely for Purchaser’s own account for investment purposes as a principal and not with a present view to the public resale or distribution of all or any part thereof, except pursuant to sales that are exempt from the registration requirements of the Securities Act and/or sales registered under the Securities Act; provided, however, that in making such representation, the Purchaser does not agree to hold the Securities for any minimum or specific term and reserves the right to sell, transfer or otherwise dispose of the Securities at any time in accordance with the provisions of this Agreement and with Federal and state securities laws applicable to such sale, transfer or disposition.
2.3 Information. The Company has provided the Purchaser with information regarding the business, operations and financial condition of the Company, and has granted to the Purchaser the opportunity to ask questions of and receive answers from representatives of the Company, its officers, directors, employees and agents concerning the Company and materials relating to the terms and conditions of the purchase and sale of the Preferred Shares hereunder. The Purchaser understands that the investment in the Preferred Shares involves a high degree of risk. The Purchaser has sought such accounting, legal and tax advice as the Purchaser has deemed necessary to make an informed investment decision with respect to the acquisition of the Preferred Shares.
2.4 Limitations on Disposition. The Purchaser acknowledges that, except as provided in the Registration Rights Agreement, the Securities have not been and are not being registered under the Securities Act and may not be transferred or resold without registration under the Securities Act or unless pursuant to an exemption therefrom.
2.5 Legend. The Purchaser understands that the certificates representing the Securities will bear at issuance a restrictive legend in substantially the following form:
| “The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and may not be offered or sold unless a registration statement under the Securities Act and applicable state securities laws shall have become effective with regard thereto, or an exemption from registration under the Securities Act and applicable state securities laws is available in connection with such offer or sale. Such securities are issued subject to the provisions of (i) the Certificate of Designation relating to the Series A-1 Convertible Preferred Stock of Toreador Resources Corporation (the “Company”), (ii) a Securities Purchase Agreement by and among the Company and the Purchaser signatory thereto (the “Purchaser”) and (iii) a Registration Rights Agreement by and among the Company and the Purchaser.” |
Notwithstanding the foregoing, it is agreed that, as long as (A) the resale or transfer (including without limitation a pledge) of any of the Securities is registered pursuant to an effective registration statement, (B) such Securities can be sold pursuant to Rule 144 under the Securities Act (“Rule 144”) and a registered broker dealer provides to the Company a customary broker’s Rule 144 letter and the Purchaser delivers to the Company a customary seller’s representation letter and a copy of any Form 144 which may have been required to be filed by such Holder pursuant to Rule 144, or (C) such Securities are eligible for resale under Rule 144(k), such Securities shall be issued without any legend or other restrictive language and, with respect to Securities upon which such legend is stamped, the Company shall issue new certificates without such legend to the holder upon request.
2.6 No Governmental Review. The Purchaser understands that no United States Federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
2.7 Residency. The Purchaser is a resident of that state or jurisdiction specified on the Purchaser’s signature page to this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties to the Purchaser and agrees with the Purchaser that, as of the date of this Agreement:
3.1 Organization, Good Standing and Qualification. Each of the Company and its subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite corporate power and authority to carry on its business as now conducted. Each of the Company and its subsidiaries is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a material adverse effect on the consolidated business or financial condition of the Company and its subsidiaries taken as a whole. The term “subsidiaries” shall mean entities in which the Company has an equity interest of 50% or greater.
3.2 Authorization; Consents. The Company has the requisite corporate power and authority to enter into and perform its obligations under (i) this Agreement, (ii) the Registration Rights Agreement and (iii) all other agreements, documents, certificates or other instruments delivered by the Company contemporaneously herewith (the instruments described in (i), (ii) and (iii) being collectively referred to herein as the “Transaction Documents”), to execute and perform its obligations under the Certificate of Designation, to issue and sell the Preferred Shares to such Purchaser in accordance with the terms hereof, and to issue the Conversion Shares upon conversion of the Preferred Shares in accordance with the Certificate of Designation. All corporate action on the part of the Company by its officers, directors and stockholders necessary for (A) the authorization, execution and delivery of, and the performance by the Company of its obligations under, the Transaction Documents and (B) the authorization, execution and filing of, and the performance by the Company of its obligations under, the Certificate of Designation has been taken, and no further consent or authorization of the Company, its Board of Directors, its stockholders, any governmental agency or organization (other than such approval as may be required under the Securities Act and applicable state securities laws in respect of the Registration Rights Agreement), or any other person or entity is required (pursuant to any rule of the National Association of Securities Dealers, Inc., other than with respect to the listing of the Conversion Shares on the Nasdaq National Market System, or otherwise).
3.3 Enforcement. The Transaction Documents and the Certificate of Designation constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except as such enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, (ii) general principles of equity and (iii) as to indemnification under the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), principles of public policy.
3.4 Disclosure Documents; Agreements; Financial Statements; Other Information. The Company has filed with the Commission: (i) the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, as amended, (ii) Quarterly Report on Form 10-Q for the quarter ended Xxxxx 00, 0000, (xxx) all Current Reports on Form 8-K required to be filed with the Commission since December 31, 2002 and (iv) the Company’s definitive Proxy Statement for its 2003 Annual Meeting of Stockholders (collectively, the “Disclosure Documents”). Each Disclosure Document, as of the date of the filing thereof with the Commission, conformed in all material respects to the requirements of the Exchange Act, and the rules and regulations thereunder and, as of the date of such filing, such Disclosure Document did not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the Disclosure Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied at the times and during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end adjustments).
3.5 Valid Issuance. The Preferred Shares are duly authorized and, when issued, sold and delivered in accordance with the terms hereof, (i) will be duly and validly issued, fully paid and nonassessable, free and clear of any taxes, liens, claims, preemptive or similar rights or encumbrances imposed by or through the Company, (ii) based in part upon the representations of such Purchaser in this Agreement, will be issued, sold and delivered in compliance with all applicable Federal and state securities laws and (iii) will be entitled to all of the rights, preferences and privileges set forth in the Certificate of Designation. The Conversion Shares are duly authorized and reserved for issuance and, when issued upon conversion of the Preferred Shares in accordance with the terms of the Certificate of Designation, will be duly and validly issued, fully paid and nonassessable, free and clear of any taxes, liens, claims, preemptive or similar rights or encumbrances imposed by or through the Company. As of the date hereof, there are 37,000 shares of Preferred Stock issued and outstanding.
3.6 No Conflict with Other Instruments. Neither the Company nor any of its subsidiaries is in violation of any provisions of its charter, bylaws or any other governing document as amended and in effect on and as of the date hereof or in default (and no event has occurred which, with notice or lapse of time or both, would constitute a default) under any provision of any instrument or contract to which it is a party or by which it is bound, or of any provision of any Federal or state judgment, writ, decree, order, statute, rule or governmental regulation applicable to the Company, which would have a material adverse effect on the consolidated business or financial condition of the Company and its subsidiaries taken as a whole. The (i) execution, delivery and performance of this Agreement and the other Transaction Documents and (ii) consummation of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Preferred Shares, and the reservation for issuance and issuance of the Conversion Shares) will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or of any of its subsidiaries, which violation, conflict, default, lien, charge or encumbrance would have a material adverse affect on the consolidated business or financial condition of the Company and its subsidiaries taken as a whole, or the triggering of any preemptive or anti-dilution rights or rights of first refusal or first offer on the part of holders of the Company’s securities.
4. COVENANTS OF THE COMPANY.
4.1 Corporate Existence. The Company shall, so long as the Purchaser or any affiliate of the Purchaser beneficially owns any Securities, maintain its corporate existence in good standing and shall pay all taxes owed by it when due except for taxes which the Company reasonably disputes or as to which the failure to pay could not reasonably be expected to have a material adverse effect on the consolidated business or financial condition of the Company and its subsidiaries taken as a whole.
4.2 Provision of Information. Upon written request, the Company shall provide the Purchaser with copies of its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements and other materials sent to stockholders, in each such case promptly after the filing thereof with the Commission, until the conversion or redemption of all of the Preferred Shares held by the Purchaser.
4.3 Form D; Blue-Sky Qualification. The Company agrees to file a Form D with respect to the Securities as required under Regulation D. The Company shall, on or before the Closing, take such action as is necessary to qualify the Preferred Shares for sale under applicable state or “blue-sky” laws or obtain an exemption therefrom.
4.4 Reporting Status. As long as the Purchaser or any affiliate of the Purchaser beneficially owns any Securities and until the date on which any of the foregoing may be sold to the public pursuant to Rule 144(k) (or any successor rule or regulation), (i) the Company shall timely file with the Commission all reports required to be so filed pursuant to the Exchange Act and (ii) the Company shall not terminate its status as an issuer required by the Exchange Act to file reports thereunder even if the Exchange Act or the rules or regulations thereunder would permit such termination.
4.5 Reservation of Common Stock. The Company shall at all times have authorized and reserved for issuance, free from any preemptive rights, solely for the purpose of effecting conversions of the Preferred Shares hereunder, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all of the Preferred Shares in full.
4.6 Use of Proceeds. The Company shall use the proceeds from the sale of the Preferred Shares for general corporate purposes only, in the ordinary course of its business and consistent with past practice and shall not use such proceeds to make a loan to any employee, officer or director of the Company or to repurchase or pay a dividend on shares of Common Stock.
4.7 Quotation on Nasdaq. The Company shall (i) promptly following the closing, take such action as may be necessary to include the Conversion Shares on the Nasdaq National Market System, and (ii) use its best efforts to maintain the designation and quotation, or listing, of the Common Stock on the Nasdaq National Market System, the Nasdaq Small Cap Market, the New York Stock Exchange or the American Stock Exchange.
5. MISCELLANEOUS.
5.1 Survival; Severability. The representations, warranties, covenants and indemnities made by the parties herein shall survive the closing of this Agreement notwithstanding any due diligence investigation made by or on behalf of the party seeking to rely thereon, provided that the representations and warranties contained herein shall survive for two (2) years following the date of this Agreement. 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; provided that in such case the parties shall negotiate in good faith to replace such provision with a new provision which is not illegal, unenforceable or void, as long as such new provision does not materially change the economic benefits of this Agreement to the parties.
5.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Purchaser may assign such Purchaser’s rights and obligations hereunder, in connection with any private sale or transfer of the Preferred Shares in accordance with the terms hereof, as long as, as a condition precedent to such transfer, the transferee executes an acknowledgment agreeing to be bound by the applicable provisions of this Agreement, in which case the term “Purchaser” shall be deemed to refer to such transferee as though such transferee were an original signatory hereto. The Company may not assign it rights or obligations under this Agreement.
5.3 No Reliance; Representations by Purchaser. Each party acknowledges that (i) it has such knowledge in business and financial matters as to be fully capable of evaluating this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, (ii) it is not relying on any advice or representation of the other party in connection with entering into this Agreement, the other Transaction Documents or such transactions (other than the representations made in this Agreement or the other Transaction Documents), (iii) it has not received from such party any assurance or guarantee as to the merits (whether legal, regulatory, tax, financial or otherwise) of entering into this Agreement or the other Transaction Documents or the performance of its obligations hereunder and thereunder, and (iv) it has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent that it has deemed necessary, and has entered into this Agreement and the other Transaction Documents based on its own independent judgment and on the advice of its advisors as it has deemed necessary, and not on any view (whether written or oral) expressed by such party.
5.4 Injunctive Relief. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Purchaser and that the remedy or remedies at law for any such breach will be inadequate and agrees, in the event of any such breach, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate and specific performance of such obligations without the necessity of showing economic loss.
5.5 Governing Law; Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of Texas without regard to the conflict of laws provisions thereof. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and Federal courts sitting in the City of Dallas, Dallas County, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
5.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
5.7 Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
5.8 Notices. Any notice, demand or request required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing and shall be deemed given (i) when delivered personally or by verifiable facsimile transmission (with an original to follow) on or before 5:00 p.m., central time, on a business day or, if such day is not a business day, on the next succeeding business day, (ii) on the next business day after timely delivery to a nationally-recognized overnight courier and (iii) on the third business day after deposit in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed to the parties as follows:
| If to the Company: |
|
Toreador Resources Corporation 0000 Xxxx Xxxxxx, Xxxxx 000 Xxxxxx, Xxxxx 00000 Attn.: Chief Executive Officer Fax: 000-000-0000 |
| with a copy to: |
|
Xxxxxx and Xxxxx, LLP 000 Xxxx Xxxxxx, Xxxxx 0000 Xxxxxx, Xxxxx 00000 Attn: Xxxxxx X. Xxxxxx Tel: 000-000-0000 Fax: 000-000-0000 |
and if to the Purchaser, to such address for the Purchaser as shall appear on the signature page hereof executed by the Purchaser, or as shall be designated by the Purchaser in writing to the Company.
5.9 Expenses. The Company and the Purchaser shall pay all costs and expenses that it incurs in connection with the negotiation, execution, delivery and performance of this Agreement.
5.10 Entire Agreement; Amendments. This Agreement and the other Transaction Documents constitute the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Purchaser, and no provision hereof may be waived other than by a written instrument signed by the party against whom enforcement of any such waiver is sought.
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
PURCHASER NAME: Xxxxx X. Xxxxxxxx
| By: | /s/ Xxxxx X. Xxxxxxxx | Dated: December 15, 2003 |
| Name: Xxxxx X. Xxxxxxxx | ||
| Title: Owner |
ADDRESS:
|
000 X. 0xx Xx., X0 Xxxxxxxx, XX 00000 |
Dollar Amount of Series A-1 Preferred Stock to be Purchased: $50,000
Accepted this 15th day of December 2003.
TOREADOR RESOURCES CORPORATION
| By: | /s/ Xxxxxxx X. Xxxx | |
| Name: Xxxxxxx X. Xxxx | ||
| Title: Senior Vice President and Chief Financial Officer |
SCHEDULE OF PURCHASERS
| Purchaser Name | Address | Purchase Price of Series A-1 Preferred Stock |
|---|---|---|
| Xxxxx X. Xxxxxxxx | 000 X. 0xx Xx., X0 Xxxxxxxx, XX 00000 |
$ 50,000 |
EXHIBIT A
SERIES A-1 CONVERTIBLE
PREFERRED STOCK
CERTIFICATE OF DESIGNATIONS
Attached
