<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 5)
Under The Securities Exchange Act Of 1934
Toreador Royalty Corporation
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, Par Value $0.15625 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
891041105
- --------------------------------------------------------------------------------
(CUSIP Number)
Janice V. Sharry, Esq.
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
(214) 651-5562
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 13, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), (f) or (g), check the following
box / /.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 891041105
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lee Global Energy Fund, L.P.
75-2569264
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 858,300
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
858,300
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
858,300
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.68% (1)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
(1) Based on 5,146,771 shares of Common Stock issued and outstanding as of June
12, 1998 as disclosed in the Issuer's definitive proxy material filed with
the Securities and Exchange Commission on July 1, 1998.
<PAGE> 3
This Amendment No. 5 to Schedule 13D (this "Amendment") amends and
supplements the Amendment No. 4 to Schedule 13D filed by Lee Global Energy Fund,
L.P. (the "Fund"), by furnishing the information set forth below. Unless set
forth below, all previous Items are unchanged.
Item 4. Purpose of Transaction.
Item 4 is hereby amended in its entirety as follows:
Pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement")
(a copy of which is being filed as Exhibit 7.6 hereto and is incorporated herein
by reference), dated as of July 13, 1998, entered into by and between the Fund
and Peter R. Vig ("Vig"), (i) the Fund purchased 100,000 shares of the Common
Stock, par value $.15625 (the "Common Stock"), of Toreador Royalty Corporation
(the "Company") from Vig on July 13, 1998 and (ii) Vig agreed to sell to the
Fund and the Fund agreed to buy from Vig 190,900 shares of Common Stock of the
Company on July 17, 1998 or such other date and time as is mutually agreed to by
Vig and the Fund (the "Closing Date"). The parties have agreed to extend this
date to July 31, 1998. The 190,900 shares of Common Stock constitute Vig's
remaining beneficial ownership interest in the Company, and represent
approximately 5.65% of the issued and outstanding shares of Common Stock of the
Company. The purchase price per share of the Common Stock is $3.375 and the
aggregate purchase price for the 290,900 shares of Common Stock is $981,787.50.
The consideration for 190,900 shares of Common Stock will be paid pursuant to a
promissory note (a copy of which is being filed as Exhibit 7.7 hereto and is
incorporated herein by reference) and will be secured by a collateral pledge
agreement (a copy of which is being filed as Exhibit 7.8 hereto and is
incorporated herein by reference) to be executed on the Closing Date.
Except as set forth above, the Fund has no plans or proposals with
respect to any of the matters set forth in paragraphs (a) through (j) of Item 4
of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) - (b) The Fund beneficially owns 858,300 shares of the Company's
Common Stock (the "Shares") (which is approximately 16.68% of the Shares
outstanding on June 12, 1998 as disclosed in the Issuer's definitive proxy
material filed with the Securities and Exchange Commission on July 1, 1998). The
Fund has sole voting and dispositive power with respect to the Shares.
As a result of being a party to that certain Stockholder Agreement (a
copy of which was previously filed as Exhibit 7.5 to Amendment No. 4 to Schedule
13D and is incorporated herein by reference), entered into by and among Mr. G.
Thomas Graves, III, Mr. William I. Lee, Lee Global Energy Fund, L.P., Gralee
Capital Corp., and Gralee Partners, L.P.; Mr. Peter Lawrence Falb, Mr. Edward
Nathan Dane, Firethorn I Limited Partnership, the Hilary Bell Falb 1983 Trust,
the Alison Forslund Falb 1985 Trust, the Forslund Irrevocable Trust, and Dane,
Falb, Stone & Co., Inc. (collectively referred to as the "Dane Falb Persons");
and Mr. John V. Ballard, Mr. J. W. Bullion, Mr. Thomas P. Kellogg, Jr., Mr. John
Mark McLaughlin, Mr. Peter R. Vig, and Mr. Jack L. Woods, the Fund may be deemed
to have indirect beneficial ownership of, and shared voting power with respect
to, an additional 26.08% of the Company's Common Stock, consisting of 853,500
Shares beneficially owned by the Dane Falb Persons (16.58%) (as represented in
their 13D/A filed with the Securities and Exchange Commission on July 1, 1998),
197,924 Shares beneficially owned by Mr. John V. Ballard, Mr. J. W. Bullion, Mr.
Thomas P. Kellogg, Jr. and Mr. Jack L. Woods (3.85%) (as represented in the
Issuer's definitive proxy material filed with the Securities and Exchange
Commission on July 1, 1998), and 290,536 Shares beneficially owned by Mr. John
Mark
<PAGE> 4
McLaughlin (5.65%) (as represented in his 13D filed with the Securities and
Exchange Commission on July 10, 1998).
(c) Since the Fund's filing on Schedule 13D on July 1, 1998, no
transactions in the Company's Common Stock were effected other than that
described in Item 4 above.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Except as set forth in Item 4 and Item 5 hereof, there are no
contracts, arrangements, understandings or relationships between the Fund and
any other person with respect to the securities of the Company.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended in its entirety as follows:
7.6 Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as
of July 13, 1998, entered into by and between the Fund and Peter R. Vig.
7.7 Promissory Note (the "Promissory Note"), dated as of the Closing
Date, to be executed by the Fund.
7.8 Collateral Pledge Agreement (the "Collateral Pledge Agreement"),
dated as of the Closing Date, to be entered into by and between the Fund and
Peter R. Vig.
<PAGE> 5
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: July 16, 1998
LEE GLOBAL ENERGY FUND, L.P.
By: Gralee Partners, L.P., its general partner
By: Gralee Capital Corp., its general
partner
By: /s/ G. THOMAS GRAVES, III
------------------------------
Name: G. Thomas Graves, III
Title: President
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
7.6 Stock Purchase Agreement
7.7 Collateral Pledge Agreement
7.8 Promissory Note
</TABLE>
<PAGE> 1
Exhibit 7.6
STOCK PURCHASE AGREEMENT
This Agreement made as of this 13th day of July, 1998, by and between Peter R.
Vig (the "Seller") and Lee Global Energy Fund, L.P. (the "Purchaser").
R E C I T A L S
A. Seller currently is the beneficial owner of 290,900 shares of
common stock, par value $.15625 per share (the "Shares") of Toreador Royalty
Corporation (the "Company"); and
B. Seller and Purchaser have come to an agreement respecting the fair
value of the Shares taking into account several relevant factors; and
C. Seller wishes to sell, and Purchaser wishes to buy, the Shares on
the following terms and conditions.
NOW, THEREFORE, for and in consideration of the mutual covenants and
undertaking of the parties, it is agreed as follows:
ARTICLE I - STOCK PURCHASE
1.01. Purchase and Sale of Shares. As of the date hereof, Seller hereby
sells and Purchaser hereby purchases from Seller 100,000 Shares. In addition, on
the Closing Date (as hereinafter defined), Seller hereby agrees to sell and
Purchaser hereby agrees to purchase from Seller 190,900 Shares, constituting the
remaining beneficial ownership interest of Seller in the Company. The Shares
constitute approximately 5.65% of the issued and outstanding shares of common
stock of the Company.
1.02 Purchase Price. The purchase price per share is $3.375 and the
aggregate purchase price for the Shares is $981,787.50 (the "Purchase Price").
On the date hereof, in consideration for the Shares, and against delivery of
63,000 Shares, $212,625.00 is being paid by Purchaser to Seller by cashier's
check. Also on the date hereof, Seller shall have taken all action necessary or
required to cause his individual retirement rollover account (the "IRA") held at
Newberger & Co., Inc. to sell to Purchaser 37,000 Shares for $124,875.00. The
remainder of the Purchase Price shall be paid by Purchaser to Seller on the
Closing Date against delivery of the remaining 190,900 Shares pursuant to that
certain Promissory Note attached hereto as Exhibit A and incorporated herein for
all purposes.
1.03 Delivery of Shares. As of the date hereof, Seller is delivering to
Purchaser stock certificate(s) representing 63,000 Shares, duly endorsed in
blank for transfer, and the IRA is selling 37,000 Shares to Purchaser subject to
customary settlement procedures. On the Closing Date, Seller shall deliver to
Purchaser stock certificate(s) representing the remaining 190,900 Shares, duly
endorsed in blank for transfer. If on the Closing Date the 190,900 Shares are
held by Seller in book-entry form, in lieu of physical delivery of stock
certificate(s), Seller shall have
<PAGE> 2
taken all action required by the Depository Trust Company, Cede & Co. or
otherwise to effectuate the transfer of the Shares in accordance with the terms
hereof, to the reasonable satisfaction of Purchaser. In accordance with the
terms of the Promissory Note, on the Closing Date and to secure Purchaser's
payment of the Promissory Note, Purchaser shall pledge to Seller the 190,900
Shares delivered to Purchaser as of the Closing Date in accordance with the
terms of that certain Collateral Pledge Agreement attached hereto as Exhibit B
and incorporated herein by reference.
1.04 Closing. As used herein, "Closing Date" means Friday, July 17,
1998 at 10:00 a.m., Dallas, Texas time or such other date and time as is
mutually agreed to by the parties hereto. The closing of the transactions
contemplated hereby shall occur at the offices of Haynes and Boone, LLP, 3100
NationsBank Plaza, Dallas, Texas 75202.
1.05 Representations and Warranties of Seller. Seller represents and
warrants to Purchaser that:
(a) Seller is the sole beneficial owner of the Shares, free and clear
of any charge, claim, community property interest, condition, equitable
interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute
of ownership;
(b) the Shares have been duly authorized and validly issued and are
fully paid, nonassessable and not subject to any preemptive rights;
(c) this Agreement and the Collateral Pledge Agreement each constitute
the legal, valid, and binding obligations of Seller and are enforceable
against him in accordance with their terms;
(d) Seller has the absolute and unrestricted right, power, authority,
and capacity to execute this Agreement and the Collateral Pledge
Agreement and to perform his obligations in accordance with the terms
thereof;
(e) this Agreement and the Collateral Pledge Agreement will not result
in any violation of any of the terms and provisions of any other
agreement, including Seller's divorce decree, to which Seller is a
party or to which Seller may otherwise be bound, or of any law, rule,
regulation, judgment, writ, injunction, order or decree governing or
affecting the Shares;
(f) no authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency
or other person are necessary for the execution, delivery or
performance of the sale of the Shares contemplated hereby, or the
validity or enforceability thereof assuming for these purposes that the
representations and warranties of Purchaser set forth in Section 1.06
of this Agreement are true and correct;
(g) Seller has not been granted any rights, proxies or options to
purchase or vote the Shares; and
<PAGE> 3
(h) Seller made a full, complete and informed analysis and judgment
regarding the fairness and reasonableness of the Purchase Price. Seller
believes and affirms that the Purchase Price reflects a fair and
reasonable value for his Shares in the Company at the present time.
1.06 Representations and Warranties of Purchaser. Purchaser
represents and warrants that:
(a) this Agreement, the Promissory Note and the Collateral Pledge
Agreement will not result in any violation of any of the terms and
provisions of any other agreement to which Purchaser is a party or to
which Purchaser may otherwise be bound, or of any law, rule,
regulation, judgment, writ, injunction, order or decree governing or
affecting the Shares;
(b) Purchaser has the absolute and unrestricted right, power,
authority, and capacity to execute this Agreement, the Promissory Note
and the Collateral Pledge Agreement and to perform its obligations in
accordance with their respective terms;
(c) Purchaser is acquiring the Shares for its own account for
investment and not with a view to, or for sale or other disposition in
connection with, any distribution of all or any part thereof, except
(i) in an offering covered by a registration statement filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act") covering the Shares or (ii) pursuant to
an applicable exemption under the Securities Act. In acquiring the
Shares, Purchaser is not offering or selling, and will not offer or
sell, for the Company in connection with any distribution of the
Shares, and Purchaser does not have a participation and will not
participate in any such undertaking or in any underwriting of such an
undertaking except in compliance with applicable U.S. federal and state
securities laws;
(d) Purchaser or its representatives have been furnished with
information regarding the Company and its business, assets, results of
operations and financial condition, and Purchaser or its
representatives have had an opportunity to ask questions of and receive
answers from the Company regarding the Company and its business,
assets, results of operations and financial condition and the terms and
conditions of the issuance of the Shares;
(e) Purchaser is able to fend for itself, can bear the economic risk of
an investment in the Shares, and has such knowledge and experience in
financial and business matters that Purchaser is capable of evaluating
the merits and risks of an investment in the Shares;
(f) Purchaser acknowledges that the Shares were not offered to it by
means of publicly disseminated advertisements of sales literature, nor
is Purchaser aware of any offers made to other persons by such means;
(g) Purchaser acknowledges that the Shares have not been registered
pursuant to the Securities Act or any applicable state securities laws
and as such will be characterized as "restricted securities" under the
federal securities laws, and that under such laws and applicable
regulations, the Shares cannot be sold or otherwise disposed
<PAGE> 4
of without registration under the Securities Act or an exemption
therefrom. Neither Seller nor the Company is obligated to register or
cause the registration of the Shares under the Securities Act.
Purchaser is familiar with Rule 144 promulgated under the Securities
Act, as currently in effect, and understands the resale limitations
imposed thereby and by the Securities Act. Stop transfer instructions
may be issued to the transfer agent for securities of the Company in
connection with the Shares;
(h) Purchaser acknowledges that certificates evidencing the Shares
shall bear a legend indicating that the Shares have not been registered
under applicable U.S. federal and state securities laws and referring
to the restrictions on transferability and sale of the Shares;
(i) Purchaser acknowledges that Seller has relied and will rely on the
statements of Purchaser in this Agreement with respect to the
availability of an exemption from registration of the offering and sale
of the Shares under the Securities Act and applicable state securities
laws; and
(j) Purchaser affirms and believes that the Purchase Price reflects a
fair and reasonable value for the Shares at the present time given the
nature of this sale and the terms and conditions hereof.
1.07 Survival; Right to Indemnification. All representations,
warranties, covenants, and obligations in this Agreement, the Promissory Note
and the Collateral Pledge Agreement, and any other certificate or document
delivered pursuant to this Agreement shall survive the Closing Date. The right
to indemnification, payment of damages or other remedy based on such
representations, warranties, covenants, and obligations shall not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, shall not affect the right to indemnification, payment
of damages, or other remedy based on such representations, warranties,
covenants, and obligations.
1.08 Indemnification and Payment of Damages by Seller. Seller shall
indemnify and hold harmless Purchaser for, and shall pay to Purchaser the amount
of, any loss, liability, claim, damage (other than incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising, directly or indirectly, from or in
connection with any breach of any representation, warranty, covenant or
obligation made by Seller in this Agreement, the Promissory Note, the Collateral
Pledge Agreement, or any other certificate or document delivered by Seller
pursuant to this Agreement. The remedies provided in this section shall not be
exclusive of or limit any other remedies that may be available to Purchaser. In
no event shall the indemnification provided for herein and other damages paid by
Seller to Purchaser pursuant to the terms and provisions hereof and the
transactions contemplated hereby (including without limitation those available
under Section 1.07 hereof), in the aggregate exceed the Purchase Price.
<PAGE> 5
1.09 Indemnification and Payment of Damages by Purchaser. Purchaser
shall indemnify and hold harmless Seller for, and shall pay to Seller the amount
of, any loss, liability, claim, damage (other than incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising, directly or indirectly, from or in
connection with any breach of any representation, warranty, covenant or
obligation made by Purchaser in this Agreement, the Promissory Note, the
Collateral Pledge Agreement, or any other certificate or document delivered by
Purchaser pursuant to this Agreement. The remedies provided in this section
shall not be exclusive of or limit any other remedies that may be available to
Seller. In no event shall the indemnification provided for herein and other
damages paid by Purchaser to Seller pursuant to the terms and provisions hereof
and the transactions contemplated hereby (including without limitation those
available under Section 1.07 hereof), in the aggregate exceed the Purchase
Price.
ARTICLE II - MISCELLANEOUS
2.01 Governing Law. THIS STOCK PURCHASE AGREEMENT SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
2.02 Titles and Subtitles. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
2.03 Assignment. This Agreement shall be binding upon and inure to the
benefit of Purchaser, its successors and assigns, and to the benefit of Seller,
his heirs and legal representatives.
2.04 Entire Agreement. This Agreement expresses the entire agreement
between Seller and Purchaser with reference to the subject matter hereof.
2.05 Brokerage and Attorneys' Fees. Each party shall pay its own
brokerage fees in connection with the sale contemplated herein of 37,000 Shares
held by the IRA. Except as otherwise expressly provided in this Agreement, each
party shall bear its respective fees and expenses in connection with this
Agreement and the transactions contemplated hereby. If either party should file
a lawsuit against the other to enforce any right such party has hereunder, the
prevailing party shall also be entitled to recover a reasonable attorneys' fee
and costs of suit in addition to any other relief awarded such prevailing party.
2.06 Notices. Any and all notices permitted or required to be given or
received under this Agreement and any and all agreements and documents
contemplated hereby, may be delivered personally or given by mail, or given by
express courier or by facsimile transmission, addressed or transmitted to the
appropriate party or parties at the address or transmission number set forth
below and shall be effective (i) in the case of personal delivery, when received
(ii) in the case of mail or express courier, the actual receipt by the
addressee; and (iii) in the case of telex or facsimile notices, when received.
The parties may change their respective addresses and transmission numbers by
<PAGE> 6
written notice to all other parties, sent as provided in this
Section 2.06. All notices must be in writing and properly addressed as follows:
If to Seller:
Peter R. Vig
101 Park Avenue, 48th Floor
New York, New York 10178
Telephone: (212) 984-8847
Telecopy: (212) 661-0163
If to Purchaser:
Lee Global Energy Fund, L.P.
4809 Cole Avenue
Suite 107
Dallas, Texas 75205
Telephone: (214) 521-8818
Telecopy: (214) 521-8834
2.07 Legal Counsel. Each of the undersigned has read this Agreement,
has had the opportunity to consult with legal counsel concerning the matters
contained herein, and has either obtained legal counsel with respect to such
matters and the execution of this Agreement, or has voluntarily waived such
right.
2.08 Termination. This Agreement may, by written notice given prior to
or on the Closing Date, be terminated by either Purchaser or Seller if either
(i) the closing has not occurred (other than through the failure of any party
seeking to terminate this Agreement to comply fully with its or his obligations
under this Agreement) on or before August 17, 1998 or (ii) a material breach of
any provision of this Agreement has been committed by the other party and such
breach has not been waived in writing.
2.09 Grant of Proxy. At the request of Purchaser, Seller shall grant to
Purchaser an irrevocable proxy to vote the Shares at the Annual Meeting of
Shareholders scheduled on July 23, 1998 or for such other purpose as Purchaser
shall, in its sole discretion, deem necessary or appropriate so long as the
proxy is in conformance with applicable law.
2.10 Distributions. Prior to the Closing Date, Purchaser shall have the
right to receive any and all dividends or other distributions paid or payable
prior to the Closing Date with respect to the Shares, regardless of the record
date therefore.
2.11 Further Assurances. The parties hereby agree to execute and
deliver to each other such other documents and instruments and to do such other
acts and things as may be necessary to effectuate the purpose and intent of this
Agreement and the transactions contemplated hereby.
* * * * *
<PAGE> 7
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
SELLER:
/s/ PETER R. VIG
----------------------------------------------
Peter R. Vig
PURCHASER:
LEE GLOBAL ENERGY FUND, L.P.
By: Gralee Partners, L.P., its general partner
By: Gralee Capital Corp., its general
partner
/s/ G. THOMAS GRAVES, III
----------------------------------------
G. Thomas Graves, III, President
<PAGE> 1
Exhibit 7.7
COLLATERAL PLEDGE AGREEMENT
THIS COLLATERAL PLEDGE AGREEMENT dated as of July 13, 1998, is by and
between Lee Global Energy Fund, L.P. ("Pledgor") and Peter R. Vig ("Pledgee").
R E C I T A L S:
A. Pledgor is indebted to Pledgee in the amount of $644,287.50 pursuant
to a Stock Purchase Agreement between the parties hereto and a Promissory Note
(the "Note").
B. Pledgee has requested security to secure the payment of the Note.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Security Interest and Pledge
As collateral security for the prompt payment of the Note, when due
Pledgor hereby pledges and grants to Pledgee a first priority security interest
in all of its right, title and interest in and to 190,900 shares of common stock
of Toreador Royalty Corporation, all dividends and other property now or
hereafter received in exchange for any or all of such shares and all proceeds of
any of the foregoing (such property being hereinafter sometimes called the
"Collateral").
ARTICLE II
Representations and Warranties
Pledgor represents and warrants to Pledgee that:
Section 2.01. Title. Pledgor owns, legally and beneficially, the
Collateral free and clear of any lien, security interest or other pledge.
Section 2.02 Authority. Pledgor has the absolute and unrestricted
right, power, authority, and capacity to execute and deliver this Agreement, and
the execution and delivery of this Agreement by Pledgor does not and will not
conflict with, or result in the breach of, the provisions of any law, rule,
regulation, judgment, writ, injunction, order or decree applicable to Pledgor.
ARTICLE III
Affirmative and Negative Covenants
<PAGE> 2
Pledgor covenants and agrees with Pledgee that:
Section 3.01. Encumbrances. Pledgor shall not create, permit, or suffer
to exist, and shall defend the Collateral against, any lien, security interest,
or other encumbrance on the Collateral except the pledge and security interest
or Pledgee hereunder, and shall defend Pledgee's rights in the Collateral and
Pledgee's security interest in the Collateral against the claims of all persons
and entities.
Section 3.02. Sale of Collateral. Pledgor shall not sell, assign, or
otherwise dispose of the Collateral or any part thereof without the prior
written consent of Pledgee.
Section 3.03. Adjustments. If Pledgor shall become entitled to receive
or shall receive any shares, whether as an addition to, in substitution of, or
in exchange for the Collateral or otherwise, Pledgor agrees to accept the same
as Pledgee's agent and to hold the same in trust for Pledgee, and to deliver the
same forthwith to Pledgee in the form received, with the appropriate endorsement
of Pledgor, when necessary and/or appropriate to be held by Pledgee as
additional Collateral for the Note, subject to the terms hereof.
Section 3.04. Further Assurances. At any time and from time to time,
upon the request of Pledgee, and at the sole expense of Pledgor, Pledgor shall
promptly execute and deliver all such further instruments and documents and take
such further action as Pledgee may deem necessary or desirable to preserve and
perfect his security interest in the Collateral and carry out the provisions and
purposes of this Agreement, including, without limitation, the execution and
filing of such financing statements as Pledgee may require. A carbon,
photographic, or other reproduction of this Agreement or of any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement and may be filed as a financing statement.
Section 3.05. Notification. Pledgor shall promptly notify Pledgee of
(i) any lien, security interest, encumbrance, or claim made or threatened
against the Collateral, (ii) any material change in the Collateral, including,
without limitation, any material decrease in the value of the Collateral, and
(iii) the occurrence or existence of any Event of Default (hereinafter defined)
or the occurrence or existence of any condition or event that, with the giving
of notice or lapse of time or both, would be an Event of Default.
ARTICLE IV
Rights of Pledgee and Pledgor
Section 4.01. Pledgee's Duty of Care. Pledgee shall have no
responsibility for or obligation or duty with respect to all or any part of the
Collateral. Pledgee shall be deemed to have exercised reasonable care in the
custody of the Collateral if Pledgee takes reasonable action to safeguard the
Collateral.
Section 4.02. Assignment by Pledgee. Pledgee may assign the Note and
any portion thereof and/or the Collateral and any portion thereof, without the
consent of Pledgor.
<PAGE> 3
ARTICLE V
Default
Section 5.01. Events of Default. As used herein, the term "Event of
Default" means the occurrence of any of the following:
(a) the breach by Pledgor of any covenant or obligation of
Pledgor hereunder; or
(b) the occurrence of an Event of Default under the Note.
Section 5.02. Rights and Remedies; Deficiency. If an Event of Default
shall have occurred and be continuing, Pledgee may from time to time in his
discretion, without limitation and without notice, exercise in respect of the
Collateral, in addition to any other rights and remedies provided for herein or
otherwise available to him, all the rights and remedies of a secured party on
default under the Uniform Commercial Code (whether or not the Uniform Commercial
Code applies to the affected Collateral). In the event that the proceeds of any
sale, collection or realization of or upon Collateral by Pledgee are
insufficient to pay the Note and any other amounts to which Pledgee is legally
entitled, Pledgor shall be liable for the deficiency, together with interest
thereon as provided in the Note or (if no interest is so provided) at such other
rate as shall be fixed by applicable law, together with the costs of collection
and the reasonable fees of any attorneys employed by Pledgee to collect such
deficiency.
ARTICLE VI
Miscellaneous
Section 6.01. Expenses; Indemnification. Pledgor hereby indemnifies
Pledgee and holds him harmless against, any and all losses, liabilities, claims,
damages, penalties, judgments, costs, and expenses (including attorneys' fees)
to which he become subject which directly or indirectly arise from or relate to
(i) the negotiation, execution, delivery, performance, administration, or
enforcement of this Agreement, (ii) any of the transactions contemplated by this
Agreement, or (iii) any breach by Pledgor of any representation, warranty,
covenant, or other agreement contained in this Agreement WHETHER OR NOT SUCH
CLAIMS, LOSSES AND LIABILITIES ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR
PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED BY OR ARISE
OUT OF PLEDGEE'S OWN NEGLIGENCE, except to the extent such claims, losses or
liabilities are proximately caused by Pledgee's individual gross negligence or
willful misconduct.
Section 6.02. No Waiver; Cumulative Remedies. No failure on the part of
Pledgee to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
<PAGE> 4
The rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
Section 6.03. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Pledgor and Pledgee and their respective heirs,
successors, and assigns, except that Pledgor and its heirs, successors and
assigns may not assign any rights or obligations under this Agreement without
the prior written consent of the Pledgee.
Section 6.04. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE AND
THE STOCK PURCHASE AGREEMENT DATED OF EVEN DATE HEREWITH BETWEEN PLEDGOR AND
PLEDGEE (THE "STOCK PURCHASE AGREEMENT") EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
The provisions of this Agreement may be amended or waived only by an instrument
in writing signed by the parties hereto.
Section 6.05. Notices. All notices and other communications provided
for in this Agreement shall be given in writing and be personally delivered or
sent to the intended recipient by prepaid registered or certified mail, return
receipt requested, at the address set forth in the Stock Purchase Agreement.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given, if personally delivered, on the date personally
delivered, or, if mailed, on the third business day following the date on which
it is deposited in the United States mail.
Section 6.06. Applicable Law; Venue; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Texas and the applicable laws of the United States of America. This Agreement
has been entered into in Dallas County, Texas, and it shall be performable for
all purposes in Dallas County, Texas. Any action or proceeding against Pledgor
under or in connection with this Agreement or any other instrument or agreement
securing, evidencing, or relating to the Note may be brought in any state or
federal court in Dallas County, Texas. Pledgor hereby irrevocably (i) submits to
the nonexclusive jurisdiction of such courts, and (ii) waives any objection it
may now or thereafter have as to the venue of any such action or proceedings
brought in such court or that such court is an inconvenient forum. Pledgor
agrees that service of process upon it may be made by certified or registered
mail, return receipt requested, at its address specified or determined in
accordance with the provisions of Section 6.05 of this Agreement. Nothing in
this Agreement or any other instrument or agreement securing, evidencing, or
relating to the Note or any part thereof shall affect the right of Pledgee to
serve process in any other manner permitted by law. Any action or proceeding by
Pledgor against Pledgee may also be brought in a court located in Dallas County,
Texas.
<PAGE> 5
Section 6.07. Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 6.08. Survival. All representations and warranties made in this
Agreement shall survive the execution and delivery of this Agreement, and no
investigation by Pledgee shall affect the representations and warranties of
Pledgor herein or the right of Pledgee to reply upon them.
Section 6.09. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 6.10. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 6.11. Construction. Pledgor and Pledgee acknowledge that each
has had the right to the benefit of legal counsel of its or his own choice and
has been afforded an opportunity to review this Agreement with legal counsel, if
any, and that this Agreement shall be construed as if jointly drafted by Pledgor
and Pledgee.
Section 6.12. Term of Security Agreement. The security interest hereby
granted and all the terms and provisions hereof shall be deemed a continuing
security agreement and shall continue in full force and effect, and all the
terms and provisions hereof shall remain effective as between the parties, until
such time as the Note has been fully paid. Once the note has been paid in full
(including interest) this Agreement shall terminate and be of no further force
and effect and Pledgee shall forthwith deliver the Collateral fully endorsed or
with executed stock powers attached to Pledgor.
* * * * *
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first written above.
PLEDGOR:
LEE GLOBAL ENERGY FUND, L.P.
By: Gralee Partners, L.P., its general partner
By: Gralee Capital Corp., its general
partner
------------------------------------
G. Thomas Graves, III, President
PLEDGEE:
------------------------------------------
Peter R. Vig
<PAGE> 1
Exhibit 7.8
PROMISSORY NOTE
$644,287.50 Dallas, Texas July 13, 1998
FOR VALUE RECEIVED, the undersigned, Lee Global Energy Fund, L.P.
("Maker"), a Texas limited partnership with its mailing address at 4809 Cole
Avenue, Suite 107, Dallas, Texas 75205, promises to pay to the order of Peter R.
Vig ("Payee") at his residence at 101 Park Avenue, 48th Floor, New York, New
York 10178, or such other place as Payee may designate in writing, in lawful
money of the United States of America, the principal sum of Six Hundred
Forty-Four Thousand Two Hundred Eighty-Seven Dollars And 50/100 Dollars
($644,287.50).
This Note has been executed and delivered pursuant to and in accordance
with the terms and conditions of the Stock Purchase Agreement, entered into by
and between Maker and Payee (the "Agreement"), and is subject to the terms and
conditions of the Agreement, which are, by this reference, incorporated herein
and made a part hereof. Capitalized terms used in this Note without definition
shall have the respective meanings set forth in the Agreement. In addition, this
Note is secured by a Collateral Pledge Agreement of even date herewith from
Maker to Payee evidencing a security interest in certain personal property
described therein.
The indebtedness evidenced by this Note shall bear interest at the rate
of 5.75 percent (5.75%) per annum, simple interest. All past due principal and
interest shall bear interest at the highest rate for which Maker may legally
contract under applicable law.
The principal balance of this Note shall be due and payable in one
installment of Six Hundred Forty-Four Thousand Two Hundred Eighty-Seven Dollars
And 50/100 Dollars ($644,287.50) on November 15, 1998. The accrued and unpaid
interest on the outstanding principal balance of this Note shall be due and
payable with the installment of principal. All payments of principal and
interest shall be made by cashier's check.
As used herein, the term "Event of Default" shall mean the occurrence
and continuation of any of the following events:
(a) The failure of Maker to make any payment with respect to
this Note when due; or
(b) The adjudication of Maker as bankrupt, or the taking of
any voluntary action by Maker seeking relief under any provision of the
federal Bankruptcy Code or under any other debtor relief law.
Upon the occurrence and during the continuation of an "Event of
Default," Payee may, at its option, without further notice of nonpayment, demand
for payment, presentment for payment, notice of intention to accelerate
maturity, notice of acceleration of maturity, or any other notice or demand of
any kind to Maker, declare the entire unpaid principal balance and accrued
interest on this Note to be immediately due and payable, at which time such
amounts shall become immediately due and payable. Payee may exercise this option
to
<PAGE> 2
accelerate maturity hereof during any default by Maker regardless of any prior
forbearance by Payee.
Maker shall have the right to prepay, at any time and from time to time
without premium or penalty, the entire unpaid principal balance and interest
accrued of this Note or any portion thereof.
It is the intent of Payee and Maker in the execution of this Note and
all other instruments now or hereafter securing this Note to contract in strict
compliance with applicable usury law. In furtherance thereof, the Payee and
Maker stipulate and agree that none of the terms and provisions contained in
this Note, or in any other instrument executed in connection herewith, shall
ever be construed to create a contract to pay for the use, forbearance or
detention of money, interest at a rate in excess of the maximum interest rate
permitted to be charged by applicable law; that neither Maker nor any
guarantors, endorsers or other parties now or hereafter becoming liable for
payment of this Note shall ever be obligated or required to pay interest on this
Note at a rate in excess of the maximum interest that may be lawfully charged
under applicable law; and that the provisions of this paragraph shall control
over all other provisions of this Note and any other instruments now or
hereafter executed in connection herewith which may be in apparent conflict
herewith. The holder of this Note expressly disavows any intention to charge or
collect excessive unearned interest or finance charges in the event the maturity
of this Note is accelerated. If the maturity of this Note shall be accelerated
for any reason or if the principal of this Note is paid prior to the end of the
term of this Note, and as a result thereof the interest received for the actual
period of existence of the loan evidenced by this Note exceeds the applicable
maximum lawful rate, the holder of this Note shall, at its option, either refund
to Maker the amount of such excess or credit the amount of such excess against
the principal balance of this Note then outstanding and thereby shall render
inapplicable any and all penalties of any kind provided by applicable law as a
result of such excess interest. In the event that Payee or any other holder of
this Note shall contract for, charge or receive any amount or amounts and/or any
other thing of value which are determined to constitute interest which would
increase the effective interest rate on this Note to a rate in excess of that
permitted to be charged by applicable law, an amount equal to interest in excess
of the lawful rate shall, upon such determination, at the option of the holder
of this Note, be either immediately returned to maker or credited against the
principal balance of this Note then outstanding, in which event any and all
penalties of any kind under applicable law as a result of such excess interest
shall be inapplicable. By execution of this Note, Maker acknowledges that he
believes the loan evidenced by this Note to be non-usurious and agrees that if,
at any time, Maker should have reason to believe that such loan is in fact
usurious, it will give the holder of this Note notice of such condition and
Maker agrees that said holder shall have ninety (90) days in which to make
appropriate refund or other adjustment in order to correct such condition if in
fact such exists. The term "applicable law" as used in this Note shall mean the
laws of the State of Texas, as such laws now exist or may be changed or amended
or come into effect in the future.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including reasonable attorneys' fees.
2
<PAGE> 3
This Note shall be governed and construed in accordance with the laws
of the State of Texas and the applicable laws of the United States of America.
Maker and each surety, guarantor, endorser, and other party ever liable
for payment of any sums of money payable on this Note jointly and severally
waive notice, presentment, demand for payment, protest, notice of protest and
nonpayment or dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, grace, and all other
formalities of any kind, and consent to all extensions without notice for any
period or periods of time and partial payments, before or after maturity, and
any impairment of any collateral securing this Note, all without prejudice to
the holder. The holder shall similarly have the right to deal in any way, at any
time, with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of any of
said indebtedness, or to release or substitute part or all of the collateral
securing this Note, or to grant any other indulgences or forbearance whatsoever,
without notice to any other party and without in any way affecting the personal
liability of any party hereunder.
THIS NOTE AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED
AND DELIVERED BY MAKER IN CONNECTION WITH THE INDEBTEDNESS EVIDENCED BY THIS
NOTE EMBODY THE FINAL, ENTIRE AGREEMENT OF MAKER AND PAYEE WITH RESPECT TO THE
INDEBTEDNESS EVIDENCED BY THIS NOTE AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE INDEBTEDNESS EVIDENCED BY THIS NOTE AND MAY NOT BE CONTRADICTED
OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF MAKER AND PAYEE. THERE ARE NO ORAL AGREEMENTS BETWEEN MAKER AND
PAYEE.
* * * * *
3
<PAGE> 4
LEE GLOBAL ENERGY FUND, L.P.
By: Gralee Partners, L.P., its general partner
By: Gralee Capital Corp., its general
partner
---------------------------------------
G. Thomas Graves, III, President
