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EXHIBIT 10.18
FIRST AMENDMENT TO LOAN AGREEMENT
FIRST AMENDMENT TO LOAN AGREEMENT made as of September 22, 1998, among
TOREADOR ROYALTY CORPORATION, a Delaware corporation, TOREADOR EXPLORATION &
PRODUCTION INC., a Texas corporation, and COMPASS BANK, a state banking
association (the "First Amendment").
R E C I T A L S
A. Toreador Royalty Corporation and Toreador Exploration & Production
Inc. (collectively, the "Borrowers") and Compass Bank (the "Lender") are
parties to a Loan Agreement dated as of November 13, 1997 (the "Original Loan
Agreement").
B. The Borrowers have requested that the Lender modify the Original
Loan Agreement to adjust the Borrowing Base (as therein defined) and to make
certain other changes as are hereinafter set forth. The Lender is agreeable to
such requests, subject to the terms and conditions hereof.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1.0 DEFINITIONS. The defined terms used herein shall have the same
meanings as provided therefor in the Original Loan Agreement, unless the
context hereof otherwise requires or provides. The term "Loan Agreement" means
the Original Loan Agreement as amended by this First Amendment and as the same
may hereafter be amended from time to time.
2.0 BORROWING BASE. The parties agree that as of the date hereof the
Borrowing Base shall be $3,500,000.
3.0 AMENDMENTS TO ORIGINAL LOAN AGREEMENT. The parties agree that the
Original Loan Agreement is hereby amended as follows:
(a) Section 2.6 is hereby amended by changing "$2,000,000" to
"$1,500,000" on the second line thereof.
(b) The Determination Dates set forth in Section 3.1 are
hereby changed from May 1 and November 1 of each year to February 1
and August 1 of each year. References in Section 3.2(a) to the
Determination Date of May 1 shall mean the Determination Date of
August 1, and references in Section 3.2(a) to the date of "April 1"
shall mean "July 1". References in Section 3.2(b) to the Determination
Date of November 1 shall mean February 1, and the date of "October 1"
on the first line of Section 3.2(b) shall mean "January 1".
(c) Section 6.0 is hereby amended by adding thereto a new
Section 6.11 which reads in its entirety as follows:
FIRST AMENDMENT TO LOAN AGREEMENT - Page 1
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"6.11 YEAR 2000. Notify Bank in the event either
Borrower discovers or determines that any computer
application (including those of its suppliers, vendors and
customers) that is material to its or any of its subsidiaries
businesses and operations will not be Year 2000 compliant,
except to the extent that the failure could not reasonably be
expected to have a material adverse effect on the business,
assets, liabilities, operations or condition (financial or
otherwise) of either Borrower or the ability of either
Borrower to perform its obligation under the Loan Documents."
(d) Section 8.0 is hereby amended by adding a new Section
8.11 at the end thereof in its entirety as follows:
"8.11 YEAR 2000 PREPAREDNESS. Each Borrower has (i)
initiated a review and assessment of all areas within its
business and operations (including those affected by
suppliers, vendors and customers) that could be adversely
affected by the `Year 2000 Problem' (that is, the risk that
computer applications used by each Borrower (or its
suppliers, vendors and customers) may be unable to recognize
and perform properly date sensitive functions involving
certain dates prior to and after any date after December 31,
1999), (ii) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable.
Based on the foregoing, each Borrower believes that all
computer applications (including those of its suppliers,
vendors and customers) that are material to its business and
operations are reasonably expected on a timely basis to be
able to perform properly date-sensitive functions for all
dates before and after January 1, 2000, except to the extent
that the failure to do so could not reasonably be expected to
have a material adverse effect on the business, assets,
liabilities, operations or condition (financial or otherwise)
of either Borrower or the ability of either Borrower to
perform its obligation under the Loan Documents."
4.0 CHANGE OF ADDRESS OF NOTICES TO BORROWERS. The new address for all
notices to the Borrowers shall be ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ (fax number ▇▇▇-▇▇▇-▇▇▇▇).
5.0 REPRESENTATIONS AND WARRANTIES. To induce the Lender to enter into
this First Amendment, each Borrower represents and warrants as follows (which
representations and warranties shall survive the execution and delivery
hereof):
5.1 CORPORATE POWER AND AUTHORITY. Each Borrower has the
corporate power and authority to execute, deliver and carry out the
terms and provisions of this First Amendment, and each Borrower has
taken all necessary action (including, without limitation, any consent
of shareholders required by law or by its articles of incorporation or
bylaws) to authorize the execution and delivery of this First
Amendment.
5.2 NO VIOLATION OF AGREEMENTS. Neither the execution nor the
delivery of this First Amendment, nor the consummation of the
transactions contemplated thereby, will contravene any
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provision of applicable law or will conflict or be inconsistent with
the terms, covenants and conditions to any agreement by which either
Borrower is bound or to which either is a party.
5.3 ENFORCEABILITY. The First Amendment has been duly
executed and delivered by each Borrower and constitutes the legal,
valid and binding obligation of each Borrower enforceable in
accordance with its terms, except to the extent that the enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally.
5. 4 NO DEFAULTS. No Event of Default or potential Default
exist.
6.0 NO FURTHER AMENDMENTS. Except as previously amended in writing or
as amended hereby, the Original Loan Agreement shall remain unchanged and all
provisions shall remain fully effective between the parties.
7.0 LIMITATION ON AGREEMENTS. The agreements and amendments set forth
herein are limited precisely as written and shall not be deemed (a) to be a
waiver or waivers of or a consent or a consents to or an amendment of any other
term or condition in the Original Loan Agreement, or (b) to prejudice any right
or rights which the Lender now has or may have in the future under or in
connection with the Original Loan Agreement or any of the Loan Documents or any
of the other documents referred to therein. This First Amendment shall
constitute a Loan Document for all purposes.
8.0 SECTION 26.02 NOTICE. THIS WRITTEN AGREEMENT, TOGETHER WITH ALL OF
THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS AMONG THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES. This First Amendment, together with the other Loan Documents,
embodies the entire agreement between the parties, and supersedes all prior
agreements and understandings relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the date and year first above written.
TOREADOR ROYALTY CORPORATION
By: /S/ G. ▇▇▇▇▇▇ ▇▇▇▇▇▇ III
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G. ▇▇▇▇▇▇ ▇▇▇▇▇▇ III, President
TOREADOR EXPLORATION & PRODUCTION INC.
By: /S/ G. ▇▇▇▇▇▇ ▇▇▇▇▇▇ III
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G. ▇▇▇▇▇▇ ▇▇▇▇▇▇ III, President
COMPASS BANK
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, Banking Officer
