AGREEMENT

EXHIBIT 4.1

FINAL EXECUTION COPY

AGREEMENT

This AGREEMENT, dated June 25, 1998 (the “Agreement”), by and among Mr. G. Xxxxxx Xxxxxx, III and Xx. Xxxxxxx X. Xxx, individuals whose business address is 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Xxx Global Energy Fund, L.P., a Texas limited partnership (“Xxx Global”), Gralee Capital Corporation, a Texas corporation, (“Gralee Capital”), and Gralee Partners, L.P., a Texas limited partnership (“Gralee Partners” and, together with Xx. Xxxxxx, Xx. Xxx, Xxx Global and Gralee Capital, collectively referred to as the “Gralee Persons”); Xx. Xxxxx Xxxxxxxx Xxxx and Xx. Xxxxxx Xxxxxx Xxxx, individuals whose business address is 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Firethorn I Limited Partnership, a Massachusetts limited partnership (“Firethorn”), The Xxxxxx Xxxx Xxxx 1983 Trust (the “HBF Trust”), the Xxxxxx Xxxxxxxx Xxxx 1985 Trust (the “AFF Trust”), the Xxxxxxxx Irrevocable Trust (the “Xxxxxxxx Trust”), and Dane, Falb, Stone & Co., Inc., a Massachusetts corporation (“Xxxx Xxxx” and, together with Xx. Xxxx, Xx. Xxxx, the HBF Trust, the AFF Trust and Firethorn, collectively referred to as the “Xxxx Xxxx Persons”); Toreador Royalty Corporation, a Delaware corporation (the “Company”); and the other persons identified on Exhibit A, (together with the Company, collectively referred to as the “Company Related Parties”). The Gralee Persons, the Xxxx Xxxx Persons and the Company Related Parties are sometimes collectively referred to herein as the “Parties.”

W I T N E S S E T H:

WHEREAS, the Gralee Persons and the Xxxx Xxxx Persons have indicated to the Company’s Board of Directors as constituted on the date hereof (the “Current Board”) that they desire one or more of their respective designees to be nominated for election to the Board of Directors of the Company (the “Board”) at the 1998 annual meeting of stockholders of the Company at which the election of directors is to be considered (the “1998 Annual Meeting”);

WHEREAS, the Gralee Persons and the Xxxx Xxxx Persons have also indicated to the Current Board their intention to solicit proxies for the election of their respective designees and in opposition to the slate of nominees of the Current Board (the “Proxy Contest”);

WHEREAS, each of the Gralee Persons and the Xxxx Xxxx Persons has determined that its and the Company’s best interests would be served by (i) not engaging in the Proxy Contest, and (ii) the receipt of the other rights and benefits set forth herein;

WHEREAS, the Company has determined that the best interests of the Company and its stockholders would be served by (i) not engaging in the Proxy Contest and avoiding any further proxy contest with any Gralee Person or Xxxx Xxxx Person until December 31, 2000, and (ii) the receipt of other rights and benefits set forth herein;

WHEREAS, the Gralee Persons, the Xxxx Xxxx Persons and certain other stockholders of the Company have entered into a Stockholder Voting Agreement regarding nominations to the Board (the “Stockholder Voting Agreement”); and

WHEREAS, the Board has heretofore adopted the resolutions attached hereto as Exhibit B (the “Resolutions”);

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein the Parties hereby agree as follows:

1. Definitions of Certain Agreement Terms. For purposes of this Agreement, the terms hereinafter set forth shall have the following definitions unless otherwise specifically stated:

“Common Stock” means the common stock, par value $.15625 per share, of the Company.

“Company Securities” means any securities issued by the Company, including the Common Stock and any other debt or equity securities of the Company that are outstanding as of the date hereof or may hereafter be issued.

“Person” means any individual, corporation, association, general or limited partnership, limited liability company, limited liability partnership, joint venture, trust, estate, other entity or organization or group.

2. Date of 1998 Annual Meeting. The Company will hold its 1998 Annual Meeting on July 23, 1998. The Company agrees that it will not postpone the annual meeting, or adjourn the annual meeting, except to the extent necessary to finalize the results of the meeting.

3. Press Release. Promptly after execution and delivery of this Agreement, the Company shall issue the press release in the form of Exhibit C attached hereto. No Party to this Agreement nor any of their respective affiliates, associates or representatives shall issue any other press release or other publicly available document that is inconsistent with, or is otherwise contrary to, the statements in such press release. Each of the Parties agrees that until December 31, 2000, neither such Party nor such Party’s affiliates shall make any statement or take any action (other than a sale of Company Securities) that is critical or disparaging of the other Parties or the management of the Company.

4. SEC Filings. All Company filings with the Securities and Exchange Commission will be submitted to each member of the Board elected at the 1998 Annual Meeting, the 1999 annual meeting at which the election of directors is to be considered, and the 2000 annual meeting of stockholders at which the election of directors is to be considered, prior to the filing thereof by the Company.

5. Actions prior to 1998 Annual Meeting. Prior to the 1998 Annual Meeting, the Company Related Parties agree that such parties will not take any action to (i) amend the Company’s Certificate of Incorporation, as amended, or Bylaws, as amended, or (ii) amend, change, alter or repeal the Resolutions.

6. Representations and Warranties of the Gralee Persons. The Gralee Persons jointly and severally represent and warrant to the Company Related Parties as follows:

(a) Each Gralee Person has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

(b) This Agreement has been duly and validly authorized, executed and delivered by each Gralee Person, and constitutes a valid and binding obligation of each Gralee Person, enforceable in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency or other laws affecting the enforcement of creditors’ rights generally.

7. Representations and Warranties of the Xxxx Xxxx Persons. The Xxxx Xxxx Persons jointly and severally represent and warrant to the Company Related Parties as follows:

(a) Each Xxxx Xxxx Person has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

(b) This Agreement has been duly and validly authorized, executed and delivered by each Xxxx Xxxx Person, and constitutes a valid and binding obligation of each Xxxx Xxxx Person, enforceable in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency or other laws affecting the enforcement of creditors’ rights generally.

8. Representations and Warranties of the Company. The Company Related Parties hereby represent and warrant to the Gralee Persons and the Xxxx Xxxx Persons as follows:

(a) The Company has the corporate power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

(b) This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency or other laws affecting the enforcement of creditors’ rights generally.

9.	Release of Claims.

(a) Each of the Parties (a “Releasing Party”), on behalf of itself and all of its affiliates, successors and assigns, jointly and severally releases and discharges each of the other Parties, together with its present and former affiliates, officers, directors,

employees, agents, attorneys, successors and assigns (each, a “Released Person”), from any and all claims, losses, demands, liabilities, obligations, indemnities, charges and causes of action (collectively, “Claims”) of any and all nature whatsoever whether based on tort, contract, statute, equitable theory of recovery, or otherwise, whether now known, unknown, unforeseen, or unsuspected, which the Releasing Party may now or in the future have jointly or severally against the Released Persons, individually or in combination with others, from the beginning of time until the effective date of this Agreement and which arise out of any Released Person’s activities to the date hereof with respect to, or are in any way connected with, the Company, including without limitation the issuance, acquisition, ownership, holding, or voting of any Company Securities, the management or conduct of the Company’s affairs by any Released Person acting as or entitled to nominate a member of the Board.

(b) With respect to the releases set forth above, each person or entity granting or receiving such a release (i) agrees that such releases do not preclude any Party hereto from seeking to enforce any undertaking or promise contained in the Settlement Documents (as defined below) or from seeking redress for the breaches of any representation or warranty contained in the Settlement Documents; (ii) agrees not to directly or indirectly encourage or pursue with or before any federal, state or other governmental agency, authority or court any claim or complaint against any of the Released Persons, including but not limited to any such claim or complaint relating to matters covered by the Settlement Documents (other than the enforcement of any undertaking or promise contained therein); and (iii) agrees not to challenge, and shall use its best efforts to cause each of its affiliates, associates and representatives not to challenge, the validity of any provisions of the Settlement Documents.

(c) Except as may be otherwise required by law, the Gralee Persons and the Xxxx Xxxx Persons will not encourage or cooperate with plaintiffs in any subsequently initiated derivative, class action or stockholder litigation related to the Company Related Parties. In the event that any part of this Agreement is temporarily, preliminarily or permanently enjoined or restrained by a court of competent jurisdiction, the Parties hereto shall use their commercially reasonable efforts to cause any such injunction or restraining order to be vacated or dissolved or otherwise declared or determined to be of no further force or effect.

10. Insurance Coverage. For six years after the date of this Agreement, the Company shall be required to maintain or obtain officers’ and directors’ liability insurance covering the persons who are as of the date of this Agreement covered by the Company’s officers and directors liability insurance policy in such persons’ capacities as officers or directors of the Company with respect to matters existing or occurring at or prior to the date of this Agreement on terms not less favorable than those in effect on the date hereof in terms of coverage and amounts; provided, however, that if the aggregate annual premiums for such insurance at any time during such period shall exceed 200% of the per annum rate of premium currently paid by the Company for such insurance on the date of this Agreement, the Company shall provide the maximum coverage that shall then be available at an annual premium equal to 200% of such rate.

11.	Miscellaneous.

(a) No Duress, etc.. The Parties hereto agree that this Agreement is entered into without duress, in good faith and for sufficient consideration, and that it is fair, just and reasonable to all Parties.

(b) Full Knowledge; Independent Advice, etc.. All Parties have received or have had made available to them all financial and other information they or their counsel considered necessary to an informed judgment concerning this Agreement. Each Party has received independent legal advice, has conducted such investigation as he or his counsel thought appropriate, and has consulted with such other independent advisors as each of them and their counsel deemed appropriate, regarding this Agreement and their rights and asserted rights in connection therewith. None of the Parties is relying upon any representations or statements made by any other Party, or such other Party’s employees, agents, representatives or attorneys, regarding this Agreement or its preparation except to the extent such representations are expressly set forth herein.

(c) Reasonable Efforts. All Parties hereto agree to exercise all commercially reasonable efforts and to take all commercially reasonable steps necessary to effectuate the settlement set forth in this Agreement.

(d) Successors and Assigns. All the terms and provisions of this Agreement shall inure to the benefit of and shall be enforceable by the Parties hereto and their respective heirs, successors and assigns, and upon any corporation or other entity into or with which any Party hereto may merge, combine or consolidate (provided that the Party is the survivor in such merger, combination or consolidation); provided, however, that no Party may assign its rights under this Agreement without the other Parties’ written consent.

(e) Survival of Representations. All representations, warranties and agreements made by the Gralee Persons, the Xxxx Xxxx Persons and the Company Related Parties in this Agreement or pursuant hereto shall survive the date hereof.

(f) Entire Agreement; Amendments. This Agreement, including the documents attached hereto as Exhibits to be executed and delivered concurrently with this Agreement, the Stockholder Voting Agreement, and such additional instruments as may be concurrently executed and delivered pursuant to this Agreement (collectively, the “Settlement Documents”), constitutes the entire understanding of the Parties with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings other than those expressly set forth in the Settlement Documents. This Agreement may be amended only by a written instrument duly executed by the Parties or their respective successors or assigns.

(g) Headings. The section headings contained in this Agreement are for reference purposes only and shall not effect in any way the meaning or interpretation of this Agreement.

(h) Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given if so given) by hand delivery, facsimile or by mail (registered or certified, postage prepaid, return receipt requested) to the respective Parties as follows:

If to the Company Related Parties:

Toreador Royalty Corporation

0000 Xxxxxxx Xxxx

Xxxxx 000

Xxxxxx, Xxxxx 00000

Fax No: (000) 000-0000

with a copy to:

Xxxxxxxx & Xxxxxx, P.C.

0000 Xxxxxxx Xxxxxx

Xxxxx 0000

Xxxxxx, Xxxxx 00000

Attention: Xx. Xxx Xxxxxxxxxxx

Fax No: (000) 000-0000

If to the Gralee Persons:

Gralee Capital Corp.

0000 Xxxx Xxxxxx

Xxxxx 000

Xxxxxx, Xxxxx 00000

Attention: Mr. G.

Xxxxxx Xxxxxx III

Fax No: (000) 000-0000

with a copy to:

Xxxxxx & Xxxxx, LLP

000 Xxxx Xxxxxx

Xxxxx 0000

Xxxxxx, Xxxxx 00000

Attention: Xx. Xxxxxx X. Xxxxxx

Fax No: (000) 000-0000

If to the Xxxx Xxxx Persons:

Dane, Falb, Stone & Co., Inc.

00 Xxxxx Xxxxxx

Xxxxxx, Xxxxxxxxxxxxx 00000

Attention: Xx. Xxxxx Xxxx

Fax No: (000) 000-0000

with a copy to:

Xxxxxxxx, Xxxxxx & Finger

000 Xxxx Xxxxxx

Xxxxxxxxxx, Xxxxxxxx 00000

Attn: Xx. Xxxxx Xxxxxxxxxxx

Fax No.: (000) 000-0000

and:

Xxxxxx, Hall & Xxxxxxx

Exchange Place

00 Xxxxx Xxxxxx

Xxxxxx, XX 00000

Attn: Xx. Xxxxx Xxxxxxx

Fax No.: (000) 000-0000

or to such other address as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.

(i) Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without reference to the conflict of laws principles thereof.

(j) Waiver. Any waiver by any Party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a Party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(k) Specific Performance. Each of the Parties acknowledges and agrees that irreparable harm would occur if any provision of this Agreement were not performed in accordance with the terms thereof, or were otherwise breached, and that such harm could not be remedied by an award of damages. Accordingly, the Parties hereto agree that any non-breaching Party shall be entitled to an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof.

(l) Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but each of which together shall constitute one and the same Agreement.

IN WITNESS WHEREOF, and intending to be legally bound hereby, each of the undersigned Parties has executed or caused this Agreement to be executed on the date first above written.

XXX GLOBAL ENERGY FUND, L.P.

By:	Gralee Partners, L.P., its general partner

By: Gralee Capital Corp., its general partner

By: /s/ X.X. Xxxxxx, III
	Name:	X.X. Xxxxxx, III
	Title:	President

GRALEE CAPITAL CORPORATION

By:	/s/ X.X. Xxxxxx, III

Name: X.X. Xxxxxx, III

Title:

President

GRALEE PARTNERS, L.P.

By: Gralee Capital Corp., its general partner

By: /s/ X.X. Xxxxxx, III
	Name:	X.X. Xxxxxx, III
	Title:	President

/s/ G. Xxxxxx Xxxxxx, III
G. Xxxxxx Xxxxxx, III

/s/ Xxxxx Xxxxxxxx Xxxx
Xxxxx Xxxxxxxx Xxxx

/s/ Xxxxxx Xxxxxx Xxxx
Xxxxxx Xxxxxx Xxxx

FIRETHORN I LIMITED PARTNERSHIP

By:	Firethorn II Limited Partnership, its general partner

By:	Eaglerock Corporation, its general partner

By: /s/ Xxxxx X. Xxxx
	Name:	Xxxxx X. Xxxx
	Title:	Treasurer

THE XXXXXX XXXX XXXX 1983 TRUST

By: /s/ Xxxxx X. Xxxx, Trustee

Xxxxx X. Xxxx, Trustee

THE XXXXXX XXXXXXXX XXXX 1985 TRUST

By:	/s/ Xxxxx X. Xxxx, Trustee

Xxxxx X. Xxxx, Trustee

DANE, FALB, STONE & CO., INC.

By:	/s/ Xxxxx X. Xxxx
	Name: Xxxxx X. Xxxx
	Title:	Principal

TOREADOR ROYALTY CORPORATION

By:	/s/ Xxxx Xxxx XxXxxxxxxx
	Name:		Xxxx Xxxx Xxxxxxxxxx
	Title:	Chairman

/s/ Xxxx Xxxx XxXxxxxxxx
Xxxx Xxxx XxXxxxxxxx

/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx

/s/ X. X. Xxxxxxx
X. X. Xxxxxxx

/s/ Xxxxxx X. Xxxxxxx, Xx.
Xxxxxx X. Xxxxxxx, Xx.

/s/ Xxxxx X. Xxx
Xxxxx X. Xxx

/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx

THE XXXXXXXX IRREVOCABLE TRUST

By: /s/ Xxxxx X. Xxxx, Trustee

Xxxxx X. Xxxx, Trustee

Document Metadata

Table of Contents

AGREEMENT

Document Metadata